Speech by FS at Harvard Business School Association of Hong Kong Signature Conference 2023 (English only) (with photo)
Mr Pickerell (Chairman of Harvard Business School Association of Hong Kong (HBSAHK), Mr Blair Pickerell), Rawen (Co-President of HBSAHK, Mr Rawen Huang), Jolie (Co-President of HBSAHK, Ms Jolie Chow), distinguished speakers, ladies and gentlemen,
Good morning. It's a pleasure to join you for the eighth Signature Conference of the Harvard Business School Association of Hong Kong – the first to take place in three years.
That neatly captures the considered theme that I would speak for the Forum: "A New Start for Hong Kong".
For the next few minutes, allow me to put a spotlight on this promising theme. Through it all, I'll note the challenges we're facing, and the myriad of opportunities there for us long down the road.
Stepping into 2023
First, I can tell you that after a very challenging year of 2022, 2023 would likely be a good year to start with.
Last year, we faced the fifth wave of the pandemic locally; the external environment was extremely challenging, with Russia-Ukraine conflict leading to disruptions in supply chain, high inflation as well as interest rate hikes by central banks around the world. Besides, our connectivity with the Mainland and the world had been severely affected for a prolonged period. As a result, our exports and domestic investments were significantly affected. Fortunately, private consumption held better with the Government's support measures such as the consumption voucher scheme as well as support to the small to medium-sized enterprises.
Stepping into the new year, the external environment will still be quite challenging. There is little sign that geopolitical tensions would retreat, and high inflation and the high interest rate environment in many advanced economies are expected to remain.
But the good news is, the Mainland – which is the strongest backing for Hong Kong's economy – is quickly optimising its anti-epidemic measures, and its economic activities and connection with the rest of the world will gradually return to normal. Last week's The Economist magazine noted that "China's re-opening will be the biggest economic event of 2023". The return of the Mainland means much for Hong Kong. In addition to exports, visitor arrivals, private consumption and fixed investment will all benefit, bringing a revival of business in the tourism, retail and catering sectors. We will likely see a visible rebound for the Hong Kong economy this year.
"A New Start for Hong Kong"
At this Signature Conference where many great minds meet, let us set our sights beyond the short-term cycle.Please allow me to share my optimism with Hong Kong, and the reasons for that, from a more long-term, fundamental perspective.
This all relates to the "new start" for Hong Kong. When I say "new start", it means the 25th anniversary of our return to the motherland in July last year, a time when this new-term Government assumed office.
Last year, as we stepped into our 25th anniversary, half way the guarantee in the Basic Law that our way of life shall remain unchanged for 50 years, some people did cast doubt on what would happen to the "one country, two systems" policy in the years to come.
As a world of audience watched, President Xi told them at the celebration ceremony that this unique governing principle would stay in the long term. And again, the commitment to fully and accurately implementing "one country, two systems" has been recently written into the constitution of the Communist Party of China at its 20th National Congress. And in fact, earlier on, it was written into the constitution of the country.
These are all solemn commitments. "One country, two systems" is not an expedient measure for Hong Kong; it is very important to the country. Especially for those of you who are in the financial sector, you will understand how dear Hong Kong as an IFC (international financial centre) is to the Mainland. The Central Government has made it clear that it highly treasures Hong Kong's role as a super-connector between the Mainland and the rest of the world. It fully supports Hong Kong in maintaining our distinctive status and edges and in improving our competitiveness as an international financial, shipping and trading centre.
That means that Hong Kong's business environment will remain free, open and regulated in alignment with international best practice, and that our common law system and independent exercise of judicial powers will continue to underpin our progress.
So at the time of the new start, Hong Kong indeed stood at a quite favourable position. We had stepped out the disarray tainted by the black-clad violence in 2019; we have put in place the right system of governance by the patriots. And with the strong backing of the country, we are, as President Xi rightly put it, "entering a new phase of becoming more prosperous".
Nonetheless, as a small and open economy, and as a special administrative region of China, the development of Hong Kong is inextricably intertwined with that of our country, Asia and the world. So let me spend a few minutes to share my observations about the mega trends in the world and in our country that are worthy of note.
The global context
The current world is characterised by changes – profound changes unseen in a century.
The world order has been increasingly polarised and divided, and high geopolitical tensions will continue to dominate the scene. It is unfortunate that we are witnessing lasting confrontation and conflicts. Yet competition among economies is growing more intense and acute, not only for businesses but also for talent, capital and enterprises which are essential to high quality and sustainable economic development.
At the same time, the centre of global economic gravity, and to a certain extent, political gravity, is shifting eastwards. Asia is destined to further rise as a major engine of global economic growth, and an abundant source of business and investment opportunities. Our country, China, is a pivotal player leading the way. While Asia is contributing to around 60 per cent of global annual economic growth, China's share is about 30 per cent.
Another note worthy spot is the Middle East. Driven by geopolitical considerations, more and more capital will flow from this region to Asia in their attempt for diversification.
Another fundamental development is the rising importance of innovation and technology. Not only will it change the mode of operation of businesses and relations between businesses and consumers, but also dictate the outcome of competition among different economies.
Bright prospects of our country
As regards our country, I think we should all be assured by its future prospects. At the all-important 20th National Congress of the Communist Party of China which was held just a few months ago, our country has announced a clear goal to realise socialist modernisation between 2020 and 2035, and build itself into a great modern socialist country between 2035 and the middle of this century.
Our country has made firm commitment to the pursuit of high-quality development. At the heart of this is the utilisation of innovation and technology as the prime force of production. It will continue to open up but at a higher standard, and adopt a new pattern of development featuring dual circulation.
Simply put, our country will continue to provide the most solid support for Hong Kong's development. The 14th Five-Year Plan, released in 2021, presents a clear and compelling positioning of Hong Kong in eight traditional and emerging sectors. And the Guangdong-Hong Kong-Macao Greater Bay Area, with a population of 87 million and a per capita GDP of over US$22,000, provides the best entry point for Hong Kong to integrate into the nation's overall development.
The question is: how are we going to chart the way forward in the present global context? How could we grasp the opportunities and weather the challenges?
Transformation of governing philosophy
To cope with the times, our philosophy of governance and economic development must also change, to combine the strengths of a "capable government" with an "efficient market". Where Government's efforts are needed to steer the desired development, we are proactive and catalytic; yet we will leave enough room for the market to function and flourish.
To put this philosophy into practice, we strive to enhance our competitiveness and create a strong impetus for growth so that we can prevail in increasingly fierce competition. This is for our people, particularly for achieving sustainable, more inclusive growth for our future generations.
And we are doing it in a number of ways.
Expanding the capacity for development
As talents and enterprises are essential in fuelling diversified and vibrant economic growth, we have rolled out, in the Chief Executive's maiden Policy Address, bold measures to attract them. This includes the Office for Attracting Strategic Enterprises, or OASES, of which I am personally in charge. We will tailor incentive packages to attract representative and high-potential strategic enterprises from around the globe, and possibly co-invest in them or their projects through the establishment of the $30 billion Co-investment Fund.
Since its promulgation in the Policy Address, we received a large number of enquiries and requests for meeting. Many came from top-notch enterprises; some were of smaller scale engaging in cutting-edge technologies.
Furthermore, to address development constraints, this new-term Government has put land and housing as one of our top priorities. We are working to enhance the quantity, speed and quality of land and housing supply. In particular, the Northern Metropolis and the Central Waters Artificial Islands will be important sources of supply in the decade to come. They will provide the solution space not just for housing, but also for spurring economic development.
Accelerating growth momentum
The Government will also accelerate the growth momentum of the economy through enhancing the competitiveness of sectors that we have advantages and developing new sectors that have potential. For example, in financial services, we never stop improving ourselves. From diversifying our fund raising platform, to deepening the Connect Schemes with the Mainland and promoting the internationalisation of the Renminbi, and to actively advancing green and sustainable finance, asset management, risk management and corporate treasury services, our vision is for Hong Kong, as China's IFC, to take an even greater step forward.
The latest addition, of course, is our commitment to developing the virtual assets market by providing a facilitating environment for the sustainable and responsible development of the sector.
No less essential, we are aggressively pursuing innovation and technology, or I&T, which will be a critical source of sustainable economic growth and quality employment opportunities for our people. Hong Kong long has strong basic research; and over the past few years, we have already built a vibrant I&T ecosystem. But certainly, more work has to be done to promote commercialisation of R&D, foster new industrialisation, strengthen the development of digital economy, and elevate co-operation with the Mainland, particularly with our sister cities in the Greater Bay Area such as Shenzhen which has excellence in marketisation and advanced manufacturing. These are what we have envisioned in the Hong Kong Innovation and Technology Development Blueprint promulgated last month.
Telling the good stories of Hong Kong
Ladies and gentlemen, as we embrace a new start for Hong Kong, there is one thing we cannot miss – that is, to inform the world that Hong Kong is back. That Hong Kong's longstanding reputation – our value to economies, companies, investors and entrepreneurs – has become more vital.
One way of doing so is to get out there and tell the Hong Kong story. It is what I am happy to be doing this morning, speaking to you. It's what I will be doing in Switzerland. Tonight, I will be on a plane for Davos to attend the World Economic Forum's annual meeting to explain to a world of political and business leaders the latest situation of Hong Kong.
Just as we organised the Global Financial Leaders' Investment Summit in November last year joined by about 200 leaders from global financial institutions, many participants told us that after talking to their staff in Hong Kong and meeting their clients here, they took a quite different view of Hong Kong from what they read and heard from the media.
I will also be leading a task force, a Hong Kong team of high-profile business and institutional leaders. We will not only run up the air miles to tell the world, but will also engage a wide array of mega events and programmes to actively invite friends from all over the world to come and see for themselves that Hong Kong is back in business.
Ladies and gentlemen, if I may make a closing remark, in a world that is evolving fast and full of challenges and opportunities, let us not forget that we need to adapt fast and seek to continuously reinvent ourselves. I am proud to say that this has long been the spirit of Hong Kong, as we have always found opportunities in, and thrived on, change.
As we embrace a new start for our city, we need to take a fresh look of ourselves, continue to reinforce our strengths and be honest with our weaknesses. I trust this is also the task of this Signature Conference, which, through the sharing by distinguished speakers at the three panels, will be very enlightening and rewarding.
Last but not least, it is a week from tomorrow we celebrate Chinese New Year. I wish you, and your loved ones, the very best of business, health and prosperity in the Year of the Rabbit. A year of hope and promise for us all.
Ends/Saturday, January 14, 2023
Issued at HKT 12:17
Issued at HKT 12:17