Following is the speech by the Financial Secretary, Mr John C Tsang, at the Hong Kong Management Association Annual Fellowship Dinner 2012 this evening (November 20):
Dennis (Sun), distinguished guests, ladies and gentlemen,
It is my great pleasure to join you all for the Annual Fellowship Dinner.
My thanks to the Hong Kong Management Association (HKMA) for inviting me this year.
I am delighted to see so many friends here, and I am equally pleased to welcome new members this evening.
Some of you may recall that I last had the privilege of speaking at this Fellowship Dinner four years ago, in November 2008. Back then, the global financial crisis was not only affecting economies in Asia but also those in Europe and the US. Also, the US had just elected a new president. His name was Barack Obama. One of his first priorities was to deal with a looming fiscal cliff in the US.
So, I am sure you will understand when I say I felt a sense of déjà vu while preparing my talk for this evening. The key issue just dont seem to go away.
That said, of course much has changed over the past four years. For one thing, in 2008 the topic of my talk was Managing the Crisis. Today, my theme focuses on opportunities for Hong Kong.
I mention all this because it indicates a number of factors.
First, it highlights that the global financial crisis has run deeper and longer than many of us would have predicted four years ago. Full recovery still seems a long way off for some of our major trading partners in Europe and the US.
Second, it indicates, I believe, that Hong Kong has managed the crisis well. Our key economic indicators, such as unemployment, inflation and GDP growth, are all fairly healthy.
Third, the fact that our focus today is on opportunities is a positive sign for our managers, and for the companies that depend on your skills and knowledge.
I am pleased that this positivity was also reflected at the HKMAs Annual Conference last week, under the theme Sustaining Growth in a Dynamic World.
Throughout the global financial crisis, the HKMA has done an excellent job in helping to prepare managers for the challenges of a prolonged economic downturn and for the opportunities ahead.
Allow me to say a few words about the Governments work in preparing for the future amid global economic uncertainties. In particular, I would like to stress the importance of connectivity and how we strive to achieve joined-up growth for our economy.
Part of this work is related to reconnecting elements that have been affected by the disruptive forces of the global economic downturn. These disruptive forces have impacted on our financial markets, on our property sector, on our exports and on our labour market.
To successfully generate interconnected economic growth, we require capable and visionary management at all levels of industry, academia and government.
First of all, we need the right talent and expertise and sheer hard work to maintain Hong Kongs competitiveness. The HKMA has been playing an important role in recent years by providing training and re-training opportunities for people. That has helped to maintain effective management in a rapidly changing environment.
I am confident that Hong Kong has the managerial talent and know-how needed to match the right people and ideas with the necessary resources and capital to take advantage of the opportunities that are emerging. Our managers have also shown great vision in going after new opportunities in Mainland China, across Asia and in other emerging markets.
The Government has been playing its part too. We have been directing a lot of time and energy towards Hong Kongs fast changing role as Chinas global financial centre. Back in 2008, the internationalisation of the Mainland currency, the Renminbi, was little more than a promising idea. Today, the Renminbi is widely predicted to become a major reserve currency in the foreseeable future.
This is a huge opportunity for us in Hong Kong. Banks in our city already handle over 90 per cent of total offshore Renminbi trade settlement. We also have the largest pool of Renminbi liquidity outside the Mainland, and our offshore Renminbi bond market has captured the attention of multinational companies around the world.
The Hong Kong Government has - quite literally - gone the extra mile to promote Hong Kong as an international business and financial centre to partners overseas. We have held roadshows, promotional events and exhibitions in cities around the world to raise awareness of our citys competitive edge.
We have also signed a good number of bilateral accords. These include Free Trade Agreements with New Zealand, Chile and Member States of the European Free Trade Association. Today Hong Kong has double taxation agreements with 26 jurisdictions worldwide, the latest one being Canada. All this helps to promote investment and encourage strong and reliable bilateral relations with our business partners overseas.
Merchandise exports to emerging markets such as India, Brazil and Russia have more than doubled over the past five years. India has become our fourth largest export market. We shall continue to diversify Hong Kongs export markets through stronger trade and investment links with emerging economies and with traditional partners.
All along, our closer economic integration with Mainland China remains Hong Kongs single biggest advantage. We have forged much closer links with the Mainland to open up opportunities in Guangdong Province and throughout the Mainland for local businesses and for foreign firms based in Hong Kong.
CEPA (Mainland and Hong Kong Closer Economic Partnership Arrangement), our free trade arrangement with the Mainland, has been expanded each year since its launch in 2003. CEPA provides tariff-free access to the Mainland for Hong Kong-made products and now covers 48 services sectors. It is the key vehicle for broadly achieving free trade in cross-boundary services by 2015.
Importantly for us, the National 12th Five-Year Plan clearly supports Hong Kongs development as an international centre for trade, shipping and finance - including as Chinas global financial hub and premier offshore Renminbi business centre.
All this is important because strong economic growth in the Mainland is in stark contrast to the anaemic state of many advanced economies. The IMF (International Monetary Fund) projected emerging market economies to grow by 5.6 per cent next year, much faster than the 1.5 per cent expected for the advanced economies. Developing Asia, in particular, is forecast to grow by 7.2 per cent next year.
We have been pursuing an aggressive infrastructure programme to improve connectivity between Hong Kong and the Mainland, as well as boost our production capacity and productivity in the long run.
In addition, we can increase our opportunities by constantly moving up the value chain. This requires upgrading industry, diversifying our economic base and significant investment in education and training.
Ladies and gentlemen, despite the economic challenges of the past four years, we have been able to establish a clear advantage as Chinas global financial hub, capital-rising centre and front office for offshore Renminbi business.
We have trained and re-trained people to improve their job prospects and match their abilities and skills with Hong Kongs move towards a knowledge-based services economy.
And as the growth of developed economies in Europe and the US remains stalled, we have capitalised on Hong Kongs advantage as a free and open economy on the doorstep of Mainland China.
I would like to take this opportunity to thank our managers for their work in overcoming the challenges of the past four years, and carving out new opportunities for doing business.
On one final note, I recall using this event in 2008 to appeal to the HKMA, its members and all our managers to contribute to my budget consultations. I would like to repeat that appeal today as I prepare the 2013-14 Budget.
All your views will be most welcome.
I also congratulate the Management Graduate students who are collecting their diplomas tonight. Well done!
Thank you very much and have a great evening.