JIAN ER Express staff
    Backed by the mainland and engaged globally, the Hong Kong Special Administrative Region (HKSAR) will consolidate and enhance its position as an international financial and logistics centre, a preferred tourist destination and a trade and business service hub, its chief executive said yesterday.
    Tung Chee-hwa made the comments at the International Investment Forum, which was part of the Seventh China International Fair for Investment and Trade.
    Delivering a keynote speech to a gathering of about 350 guests from around the world, Tung said Hong Kong is undergoing the painful process of economic restructuring characterized by sluggish growth, rising unemployment and declining salaries, with the advent of globalization and the bursting of the bubble economy.
    However, the movement of the HKSAR up the valueadded chain had begun to produce results.
    ¡°I am pleased to tell you that our economy is showing signs of promise and that market sentiment is improving as a result,¡± Tung said.
    ¡°We believe that after the restructuring, Hong Kong will emerge as a more glittering ¡¯Pearl of the Orient¡¯ and find new roles to play in the economic development of the mainland and its alignment with the world market.¡± Hong Kong¡¯s exports have grown impressively at 15 per manufacturing base for both mainland and international investment.
    Starting from January 1 next year, the mainland will impose zero tariffs on 273 Hong Kong-made products.
    And the scope of the agreement is expected to include more products soon.
    Tung said investors will be drawn mainly to Hong Kong¡¯s higher value-added industries, or assign Hong Kong certain production processes which are considered more appropriate to the city, given the disparities in production and labour costs between Hong Kong and cent during the first half of the year. The HKSAR Government recently raised its 2003 economic forecast from 1.5 per cent to 2 per cent due to the better-then-expected economic results of the SARS-hit second quarter.
    According to Tung, the undergoing economic integration between Hong Kong and the mainland will help generate enormous opportunities for investment and business development.
    The first area where these opportunities will present themselves will be in capital formation and assets and asset management, Tang said.
    Hong Kong is known for its open and free financial system and its batch of financial experts.
    Its banks have attracted deposits worth over US$400 billion and the total value of Hong Kong¡¯s capital market exceeds US$450 billion.
    ¡°To meet the ever-growing demand for capital formation and asset management, Hong Kong will upgrade its financial infrastructure to ensure that it remains a pioneer in developing new financial products, and provide investment vehicles and services from which enterprises and individuals can profit,¡± Tung said.
    Secondly, Hong Kong is a premier location to start and expand a business. As of mid- 2002, about 3,120 multinational corporations had set up 2,171 offices and 948 regional headquarters in Hong Kong.
    Separately, the chief executive said on Sunday after a meeting with Vice-Premier Wu Yi that the central government is considering relaxing immigration rules to allow wealthy mainland investors to seek residency in Hong Kong in order to boost the city¡¯s economy.
    Also, Invest Hong Kong and the Trade and Development Council ¡ª two government organizations dedicated to attracting investment and trade ¡ª will host seminars today to try and woo potential mainland investors.
    In his speech yesterday, Tung went on to say the Closer Economic Partnership Arrangement will make Hong Kong more attractive as a the mainland.
    "Our rising generation of manufacturers will not be engaged in industries that have already been well developed by our neighbours. Instead, it will develop its own special characteristics and markets, complementing the manufacturing sectors of our neighbours or working in partnership with them," he said.
    Looking ahead, Hong Kong will give full play to the strengths of its world-class institutions and its deep pool of talented professionals to help bring the Pearl River Delta up to international standards.
The following is an excerpt of the speech by Acting Financial Secretary Frederick Ma, delivered at the dinner hosted by the Hong Kong Special Administrative Region (HKSAR) last night.

Distinguish Vice-Minister Ma Zhigang, ladies and gentlemen, good evening. It gives me great pleasure to visit Xiamen.
    First of all, on behalf of HKSAR Government, I would like to extend my warmest welcome and heartfelt thanks to all the guests for attending the Hong Kong dinner tonight.
    I am indeed very happy. It is not only because of being able to visit Fujian again, but also because of some encouraging signs of economic recovery in Hong Kong. I believe that the worst for Hong Kong is over.
    Hong Kong has developed in leaps and bounds in the last two months. The strenuous efforts of all Hong Kong people, the full support from the central government and neighboring cities, as well as the improving external environment in the US, Europe and Japan, have helped stimulate SARS-hit local business. The tourism sector benefits most from all these positive factors. The trend is expected to continue and the economic impact should not be undervalued as the arrival of mainland travellers keeps rising following the recent relaxed travel policy.
    The perspective of Hong Kong's economy is optimistic. It is not only because of the encouraging signs of economic recovery, but more importantly, because of the Closer Economic Partnership Arrangement (CEPA) signed recently. CEPA offers new impetus to the development of Hong Kong and the mainland and gives a strong shot into the arm of Hong Kong's economic recovery.
    As a matter of fact, since the signing of CEPA, both the business community and scholars have welcomed the deal, and agree that it will inject new blood into Hong Kong.
    First of all, the zero tariffs on Hong Kong-made goods exported to the mainland will help improve Hong Kong's industry structure by introducing manufacturing of more high-value-added products in the territory. In terms of services and trade, CEPA enables Hong Kong companies to tap the mainland market much earlier than foreign firms.
    We have high expectations on CEPA as it will give Hong Kong substantial benefits and will also offer a great number of business opportunities for our trading partners. Most importantly, we believe CEPA will further enhance Hong Kong's competitiveness.
    With all these years of experience and the implementation of CEPA, Hong Kong will attract more professionals, capital and technology. Its global business, financial, logistics and information centres will also be further cemented.
    In just a few months, CEPA has helped invigorate the economy, promote co-operation and enlarge business opportunities.
    It has unlimited potential as it will be expanded as it develops.
    I firmly believe that Hong Kong and CEPA combined will provide the premier two-way platform for the business community, and contribute to the economic development of our country.


  Henry Tang

    The landmark Closer Economic Partnership Arrangement (CEPA) provides a new platform for businesses in Hong Kong to tap the vast opportunities in the mainland market.
    It will further enhance Hong Kong's role as an international business and financial centre, thus creating new impetus for mainland companies to increase their presence here.
    From 2004 onwards, about 270 categories of goods of Hong Kong origin will get tariff-free entry to the 1.3 billion-strong market on the Chinese mainland. Hong Kong companies in 17 services sectors will also be granted access to the mainland market ahead of China's commitments to the World Trade Organization.
    These are but the beginning of a continuous process of liberalization of the mainland markets for Hong Kong products and companies to be realized through further consultation.