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Press Briefings & Releases

Press Briefings & Releases

CE speaks at Greater China Conference

Following is the speech by the Chief Executive, Mr Tung Chee Hwa, at the "Gala Reception of the Committee of 100 - The 2005 First Greater China Conference" yesterday evening (January 12) (English only):

We welcome the Committee of 100 to Hong Kong. It is an honour for me to be asked to help open the Committee's very first annual Greater China Conference. I have so many wonderful friends who are members of the Committee of 100. And what are great friends for? They play practical jokes on me and they choose the two busiest days of my life, two busiest days of 2005 and ask me to be a dinner speaker. Thank you very much for that!

Honestly, I would have liked to spend more time with you. Unfortunately I'm not going to be able to do so. I'm sure there will be another time because many of you, on a business trip, would come back to Hong Kong and I'm delighted that from time to time I would be able to chat to you individually as you come here. I hope that before long you will have another such gathering in Hong Kong and I hope we will choose the right date. I am afraid you may feel you are seeing too much of me given the media coverage of me today. I must warn you for the next few minutes you will not be able to change channels because I will still be talking.

It is a privilege to be among such a distinguished group of friends here this evening. I love very much the aims of the Committee of 100, and of course, from the very beginning I knew the most important work you have been doing. As someone who had lived in the United States for nine years, I understand how it is for Chinese Americans to move ahead in the US. Now, as Chief Executive of Hong Kong, I am delighted of your other mission, which is being the bridge between two great nations - one is the largest developing nation in the world and the other is the largest, the most powerful country in the world. Bridges are very important and I know you have played an important role and will continue to play an important role in the future.

I'm here, of course, as Chief Executive of Hong Kong and I think my citizens of Hong Kong will not forgive me if I do not now start being a salesman for Hong Kong, telling my friends from America what is happening in Hong Kong. We have gone through seven and a half years of really challenging times. When I first assumed the responsibility of Chief Executive of Hong Kong, my responsibility was trying to make sure "One Country, Two Systems", which was a concept, to turn that concept into an everyday reality.

Seven and a half years have gone by and I can truly say we have done well. "One Country, Two Systems" is being implemented, is being turned into an everyday reality, and the success is really for everybody to see - the freedom, the plurality, the rule of law. All those very fundamental values, those very important, critical success factors for us in Hong Kong are being protected by the Basic Law. As far as democracy is concerned, we are moving forward in accordance with the Basic Law, in accordance with the decision made by the National People's Congress in April last year. We are moving forward in a gradual and orderly manner. There are discussions here in Hong Kong. Some think what we are doing is not fast enough, others probably are somewhat worried it is going too fast. One thing is for sure, the ultimate aim is very clear as stipulated in the Basic Law, that ultimately there will be universal suffrage in Hong Kong and the discussion is on the speed with which we get there eventually. But "One Country, Two Systems" is being successfully implemented here and it is for everyone to see. I think credit goes to the people of Hong Kong who want to make this work, and, of course, the Central Government in Beijing who want to make this work. What I did not expect was the challenge we faced immediately after July 1, 1997. On July 2, 1997, Thailand delinked the Baht with the US dollar. That brought about the onset of the Asian financial turmoil.

I still remember vividly October 23, 1997. I was on my first visit to London and I got a call at night telling me our overnight interest rate had gone up to 300 per cent. We have had some really tough times since then. The Asian financial turmoil brought about the bursting of the asset bubble, which, in turn, over the last six years brought a property price fall of 70 per cent. The globalisation process only meant job migration from a very high-cost city like Hong Kong to across the border, onto the other cities of the Mainland. That created more challenges for us as you can obviously see. In all this, one of our greatest challenges is this, that for the longest time Hong Kong's success was a result of the fact that China was closed. But we all saw what happened in China. China has opened up very rapidly, very successfully. So instead of having the only bridge -- Hong Kong -- there are now many bridges which challenge Hong Kong's position. So how do we position ourselves? It was in that sort of background where we really had to face up to, to reposition ourselves, to overcome the impact of the bursting of the asset bubble and to somehow overcome the difficulties created by globalisation. It took time. It took time to move forward, to create consensus in the community. But we are now moving forward. We know what our positioning is, what our direction is as we move forward. Clearly like many other countries around the world, we need to, and we are uniquely positioned to do this, leverage on China's prosperity and rapid development. So we are now moving ahead, leveraging on China's success and providing the most sophisticated business platform for overseas companies who want to enter the Chinese market and for Chinese companies who wish to go overseas - and there are many in both directions now. We also know that we have many, many unique competitive advantages that others cannot match. We are a free, pluralistic society that upholds the rule of law. We have a very well-established free market economy. We have first-class infrastructure. We have a government which is corruption free, which is efficient, which is professional, and the tax rate is simple and low.

And above all, we have a hinterland which is growing rapidly and supporting our objectives. And where else in Asia, if you look around, where else could you find a place like Hong Kong, so unique, so uniquely positioned and has so much competitive advantages. There is only Hong Kong and we seize on these competitive advantages of ours and we leverage on this and turn this into our advantages in a number of ways: in financial services, to make sure we are the really foremost financial service centre for the Mainland of China. Second, to be a logistics centre. Today, China has just announced that their total world trade amounted to US$1.15 trillion. It is now the third largest trading nation in the world after the United States and Germany. So you can understand why our logistics business would continue to develop very strongly. We will be a centre for tourism, and Disney is going to open its park in September this year.

We have a tremendous group of professionals and experts to provide services in trade and producer services. And we leverage our competitive advantages in these areas to our great advantage. And at the same time during all this difficult time we had the support of the Central Government and at our suggestion agreed to have an agreement between Hong Kong and the Mainland of China, which we call CEPA.

The Central Government also agreed to let us have a first bite of the cherry by having our banks here moving forward providing personal Renminbi services in preparing for the future.

The Central Government also agreed to allow tourists from the Mainland, the increasing affluent middle class, to come as individual visitors with their friends and children.

And to push forward in a very effective way is a further collaboration between the Pearl River Delta and Hong Kong. The relationship that I think is going to be one of the most important as the 21st Century develops.

So, after some very difficult years, six very difficult years, all of a sudden the economy began to turn. And last year was a very good year for us. Our economy grew at 7.5 per cent, property prices, having fallen 70 per cent, had begun to climb. Deflation which has been with us for six and a half years has now ebbed away, unemployment rate started to drop. And we are moving again. Much because we are able to clearly define what our goals are, what our positioning is, how we work with the Central Government, how we take advantage of the opportunities that are presented to us. And, much because Hong Kong really has a group of fairly smart people in the commercial sector, and in all the other sectors taking this huge advantage that we have. So, today I can tell you Hong Kong is moving forward confidently, Hong Kong is moving forward knowing that in the years to come this is the way we are going to develop. In my policy speech today, I talked about my work over the next two and a half years. Of course, economy remains the most important issue for us, and in the economic sector which I think will be the principal subject I am talking about this evening. I just want to tell you that three areas where I mentioned this afternoon as being very important to the work I am going to do over the next two and a half years. One is really to look at what the new areas of economic activities are. And we concluded that as we moved further into a knowledge economy, really creative and cultural industry is one area we could develop ourselves further.

Among all the Asian cities, Hong Kong is really uniquely positioned for this because we do have a free and pluralistic society, our rule of law is being upheld strongly, intellectual property is being protected, as it should. Hong Kong people are very creative and very willing to develop new ideas. Of course we are sort of where the best of the East meets the best of the West. With that sort of culture, we should be able to develop a cultural and creative industry which really moves ahead. I pointed out that in the United Kingdom, over a five- year span from 1997, with the government's deliberate effort, the cultural and creative industry moved from being four percent of GDP to becoming eight percent of GDP. And I would imagine that we should be able to move in that sort of speed also. If we think about the talents we have in our movie industry, in our music industry alone, never mind design and all the other sectors that we are quite strong, we should be able to do well. And the Government's role is an enabling role, it is not a role to do these things. We are not very good at that. It is a role to enable the private sector to move ahead in all these areas. I see an exciting future if the government can provide this enabling role. And also in all these areas, whether it is in movie, whether it is in music, whether it is in design and whether it is in publishing, whether it is in all these areas, if we don't do it, it is for us to lose it to other cities in the region and we just have to get on with it because we do have the competitive advantages to take these things on. Digital entertainment is one area where I think we have a lot of creative people here in Hong Kong to turn this into a tremendously successful economic activity.

And the other issue I talked about is the need to re-invigorate urban areas. For many of you who live here in Hong Kong, as I was saying to my son recently, he travels very often, I said you're very lucky, you come off the airport, you get on a train and your wife picks you up from the train terminal and then you go home somewhere up in the Mid-Levels. But you don't feel the urban decay out there. You don't feel that urban areas need re-invigoration. And the fact is that we do have these areas that need re-invigoration. What it does, also, if we do this, it not only provides jobs, it provides re-invigoration. It also enables us to move forward, to make the place more tolerable, and liveable to our citizens. And also it could be an area where we could create new cultural activities, special characteristics for the urban area that needs renewal. I spent some time talking about urban re-invigoration, urban renewal and how much we need to do. Of course having an eye on economic activities and also the fact that this will create jobs.

And the final point I've made was about the fact that Hong Kong needs to have a new policy to be able to attract all the best talents to come and live and work here without restriction because today, capital follows brains and we need the best of brains to come and live and work here. And we are going to develop a policy to make this possible. Of course, I realise that the only way this is possible is if we make Hong Kong a very attractive place for everybody to come and work here. The honest truth is that if Hong Kong is not attractive, today the brains are very mobile - they can go anywhere they want to go. And this is our challenge.

It's now seven and a half years since I took on this responsibility. I have many friends here. If you ask me how you like this job, I will tell you this. My advice to you is: don't do it. But having said that, I also want to tell you that I am so honoured to be given this unique opportunity to take on this challenge, which I think is wonderful. And, I am grateful for the support of the people here in Hong Kong and many friends from the United States of America and other places, and of course, from the Central Government. This is a unique opportunity for me to be able to do all these things, particularly to be able to preside over a period that we have to implement "One Country, Two Systems", turning it into an everyday reality and to turn around the economy which was really under challenge. For you to understand the difficulties, our GDP deflator or over the last six years fell 23 per cent, and last time it happened was in the United States of America, in the Great Depression it fell 26 per cent. So, you can understand the magnitude of the difficulty we had to go through and we have now come through it, and we are now moving forward confidently.

Hong Kong is going to be very successful and we are riding on China's success. And you know, I'd like just to read to you, part of a speech which I wrote recently. I said for the last few years, we have been building on the theme of Hong Kong being the world city of Asia - the role that New York plays for North and South America and London plays for Europe. What is a world city? It is a city that has developed tremendous strengths in internationally oriented service industries and other high-level corporate service functions, which generate significant level of added value as well as good employment opportunity. The most important of these include financial and business services, corporate and regional headquarters, news and information services, tourism, and cultural and creative industries. The world city is a city that is typically characterised by an outstanding enabling infrastructure, in terms of both "hard" infrastructure, such as transportation and telecommunications, and "soft" infrastructure, like education, training, research and development, and urban planning. The world city is also underpinned by the rule of law, freedom of expression and association, and the free flow of information. By definition, a world city is cosmopolitan and outward looking. Another feature of a world city is that it typically enjoys strong links with its hinterland, supported by a free flow of goods and services and people. The world city is where people from all over the world want to visit for fun, for work, for their children to join schools and universities, and for medical treatment. A world city has per capita income which is higher, usually higher than others within their country. We will continue to push all policy initiatives to enhance and enrich our position as Asia's world city.

For my friends from the United States of America, centuries ago there was a saying "Young man, go West," because that's where you will find challenges and you might even find fortune in gold. Today, I tell my friends from America, don't stop at California, come to Hong Kong because that's where the opportunity is. Thank you very much.

Ends/Thursday, January 13, 2005


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