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.