HK keen to help SMEs prosper

Secretary for Commerce & Economic Development Gregory So

We have experienced a phenomenal growth in our start-up ecosystem over the past couple of years. For example, the number of co-working spaces and accelerator programmes has increased from three to well over 40, and there are start-up-related events in our city almost every single day.

 

Also, quite a number of our start-ups have made remarkable achievements – some have secured substantial investments, some have been acquired by large corporations, while others have carved their niches in the global marketplace. These trends demonstrate the rising participation of entrepreneurs, mentors and investors in our vibrant ecosystem.

 

You may ask what makes Hong Kong stand out as a start-up hub. First, Hong Kong is a free and competitive economy. We follow the common law legal system and adopt internationally recognised codes of practices in business and commerce. We have a low and simple tax system with no goods and services tax or value-added tax.

 

We have a clean and efficient government and a level playing field for all companies. Indeed, you would expect nothing less from an economy that is consistently ranked as the freest in the world. We have retained the top spot in the Heritage Foundation’s Index of Economic Freedom for 21 years in a row. This status reflects real advantages for starting businesses in Hong Kong.

 

Resource rich

Then, the resources. We know that start-ups and tech enterprises need many things: seed funding, office space, work visa facilitation, communities network, business development support, design support, promotion platforms, market access and serial investment, et cetera.

 

And so we offer an excellent network to address such needs. We have different types of public and private initiatives especially designed to nurture start-ups and attract talents, including incubation programmes, government funding schemes, networking communities and co-working spaces, et cetera.

 

We are also blessed with the geographical advantage. Our location has enabled us to become the key platform between Mainland China and the world in technological collaboration and trading. We are strategically located at the heart of Asia and at the doorstep of Mainland China. Half of the world’s population can be reached within five hours’ flight time from Hong Kong.

 

For start-ups and tech enterprises looking to tap into Asia’s huge market potential, we are the most convenient base, providing world-class transport, and unrivalled logistics and information and communications technology infrastructure.

 

Safeguarding creativity

What else have we done? In line with our policy to promote innovation and technology, Hong Kong has a comprehensive intellectual property protection regime to effectively protect the fruits of innovation and creativity.

 

With overseas IP owners eagerly eyeing the Asian and the Mainland market, Hong Kong is poised to develop into a regional marketplace providing professional services in licensing, franchising and IP registration. Our intermediaries can help manage and add value in the IP trading and management processes.

 

Start-up is indeed an area with huge potential for growth in Hong Kong. I am sure you would be interested to hear what are the potential growth areas where Hong Kong has a unique advantage. Allow me to highlight a few.

 

Potential growth areas

First, FinTech. As a global financial centre and a hub for retailers and brands from around the world, Hong Kong offers an ideal platform for FinTech start-ups and enterprises to facilitate functions such as payment, clearing and settlement systems, big data analytics, cloud computing, information and risk management and network security. Our city may enhance operational efficiency and help open new modes of development for the financial and e-commerce sectors.

 

Second, the Internet of Things (IoT). We are now living in a world full of devices and systems which talk to each other. IoT is indeed a disruptive and transformational technology, and its impact will certainly be felt across all industries and all areas of society. These IoT devices need to be physically manufactured, and this is where Hong Kong comes in.

 

Hong Kong has deep and broad expertise in design and software development. More importantly, we are strategically located next door to Shenzhen, the hardware capital of the world. We have easy access to the Pearl River Delta and its sophisticated supply chain and logistics platform. We have all the ingredients for start-ups and tech enterprises to develop their prototypes, validate their products and develop large-scale manufacturing to bring them to market in the fastest time.

 

Towards smarter cities

The third area is smart city technologies. Multinational corporations such as Schneider Electric are using Hong Kong as the base for developing and testing total solutions and devices. Other major players like Siemens, Hitachi, NEC and Panasonic are also closely watching the market opportunities in this area.

 

With the new phase three development of the Hong Kong Science Park, the expansion plans at the Hong Kong International Airport, and planned developments in the densely populated urban areas of Hong Kong, our city offers unique opportunities for start-ups and large corporations involved in smart city technologies to launch their solutions for Asia from here.

 

Our Government is committed to helping transform Hong Kong into a leading destination and hub for innovation and entrepreneurship. I encourage you all to consider using Hong Kong as your lab, showcase and global launch pad.

 

Hong Kong offers opportunities for technology firms like yours to get a foothold in the massive, yet complex, China market as well as markets across Asia. Apart from business-friendly policies, Hong Kong also has a great location, sophisticated infrastructure and a robust IP protection regime to help innovative companies take off in Asia.

 

Secretary for Commerce & Economic Development Gregory So gave these remarks at the National Institute of the Entrepreneur in Mexico City.

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HK connections open up new markets

Secretary for Commerce & Economic Development Gregory So

Chile has long and strong ties in our part of the world. Your country was the first South American nation to establish an office in our neighbouring Guangdong Province in 1845. Back then, Hong Kong was nothing more than a fishing village.

 

Today, our region is at the heart of global trade and Hong Kong is right in the thick of the action. More than 7,500 overseas and Mainland Chinese companies maintain offices here. About half of them use Hong Kong as regional headquarters or offices.

 

Hong Kong is also a prominent source and destination for foreign direct investment (FDI). According to a recent report of the United Nations Conference on Trade and Development, Hong Kong ranked number two in global FDI inflows, second only to Mainland China. We were also the world’s second largest outward investing economy, second only to the United States. In particular, we have a very significant volume of trade and investment flows with Mainland China.

 

We are a dynamic global city thanks to a number of enduring advantages. These include the rule of law supported by an independent judiciary, a low and simple tax system, and an open and business-friendly environment.

 

We embrace the internationally recognised codes of practice in business and commerce. And we guarantee a level playing field for all companies, and free flows of capital, information and talent. Add it all up, and you can understand why the Washington-based Heritage Foundation has named Hong Kong the world’s freest economy for the past 21 years.

 

We welcome more companies from Chile to take full advantage of Hong Kong’s strengths to connect with new markets in Asia and Mainland China in particular.

 

Enhanced connectivity

Speaking of new markets in Mainland China, I would like to share with you the latest vision from our Central Government, the Belt & Road initiatives. The Belt & Road is a development strategy designed to enhance connectivity and co-operation, and integrate China more fully into the world economy.

 

The “Belt” refers to the New Silk Road Economic Belt, which will link China with Europe through Central and Western Asia. The “Road” is the 21st Century Maritime Silk Road. It will connect China with Southeast Asian countries, as well as Africa and Europe.

 

The Belt & Road initiatives seek to link up different regions in Asia, Europe and Africa, and promote policy co-ordination, infrastructural facilities connectivity, unimpeded trade and investment, deeper financial integration and stronger people-to-people bonding among countries along the routes.

 

The Belt & Road will generate demands and increase the volume and intensity of international trade and investment flow among countries on the routes, as well as the two-way traffic in and out of China.

 

Super-connector role

Hong Kong is well placed to serve as the super-connector for all these exciting developments. For example, being an important financial, commercial and maritime centre in the world, Hong Kong will provide a wide range of professional services for the Mainland enterprises to go global in pursuit of the Belt & Road opportunities.

 

Foreign investors, including those beyond the Belt & Road region, will definitely benefit from these initiatives by establishing a foothold in Hong Kong to seize the business opportunities.

 

Chile is Hong Kong’s second-largest trading partner in South America. Chile has extensive free trade agreements with trade partners, including China and Hong Kong. All these come together nicely when we explore commercially valuable co-operation opportunities between Hong Kong and Chile in the context of the Belt & Road. We encourage Chilean businesses to make use of Hong Kong as an investment springboard or a logistics hub when they venture into the markets of the Belt & Road countries.

 

Free trade commitment

Hong Kong has accumulated a lot of experience in opening up new markets and establishing strong links with partners around the world. For more than three decades, our city’s commitment to free and open trade has contributed to the opening up and reform policies in Mainland China.

 

Hong Kong has always been the “super-connector” connecting Mainland China with the rest of the world. We are happy to share our experience and business connections, as we believe in making the pie bigger rather than getting a bigger share of a small pie.

 

Hong Kong has open borders and, more importantly, our people – including our business people – are very versatile and have open minds. We welcome partners from different parts of the world, and that of course includes Chile.

 

I encourage Chilean companies to take advantage of our Trade Development Council’s close contacts with Mainland businesses. The TDC has a great deal of expertise in matching overseas companies with the right partners in the Mainland. I know the TDC’s representatives here today will be happy to share their insights with you.

 

Tariff-free access

I also encourage Chilean companies to take advantage of the Free Trade Agreement (FTA) between Hong Kong and Chile. Under this FTA, all Chile-origin products enjoy the certainty of tariff-free access to Hong Kong. Chilean services providers also benefit from the enhanced legal certainty of market access in Hong Kong for a wide range of sectors.

 

Beyond that, Chilean companies may also take advantage of the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA), which provides preferential treatment for Hong Kong service suppliers as well as tariff-free treatment for products of Hong Kong origin. CEPA is nationality-neutral. With CEPA, Latin American companies set up in Hong Kong can gain greater and easier access to the Mainland market through Hong Kong.

 

Chile and Hong Kong may be separated by almost 20,000 kilometres of the Pacific Ocean, but we have all the right connections to work together closely. We treasure our partnership with Chile. Not only are we both strong advocates and practitioners of free and open trade and investment, we have also been working side-by-side in numerous fora, including the World Trade Organisation and Asia-Pacific Economic Cooperation (APEC).

 

I look forward to exploring new ways to further strengthen our partnership during this trip. Together, Chile and Hong Kong can enjoy the fruits of stronger bilateral trade. We can also shine a light on the opportunities that free markets bring to our economies, our APEC region and to the rest of the world.

 

Secretary for Commerce & Economic Development Gregory So gave these remarks at a luncheon organised by the Asia Pacific Chamber of Commerce, HSBC and the Chile Pacific Foundation in Santiago, Chile.

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HK, Chile serve as mutual gateways

Secretary for Commerce & Economic Development Gregory So

Chile is our important trading partner, not only because you are our second largest trader partner in South America, but also because we see Chile’s great potential as an emerging market and our gateway to the Latin American markets.

 

That Chile is our first free trade agreement (FTA) partner in Latin America clearly manifests our strong determination to strengthen our bilateral relationship.

 

While Chile and Hong Kong might be half the globe apart, the physical distance has not hindered bilateral trade. Our bilateral merchandise trade has grown at an average of 7% per annum since 2010. And I am glad that many high-quality Chilean goods such as wine, fruits and seafood have found favour with discerning consumers in Hong Kong.

 

The FTA between Hong Kong and Chile, which signifies a major milestone of our trade relations, is approaching its anniversary since its implementation last October.

 

Under the FTA, all Chile-origin products enjoy the certainty of tariff-free access to Hong Kong. Chilean services providers also benefit from enhanced legal certainty of market access in Hong Kong for a wide range of sectors.

 

With the FTA in place, I am sure business sectors of both sides, including those present here today, will factor this into their business plans and make the best use of the valuable new market opportunities.

 

To enhance investment flows between the two economies, Hong Kong and Chile are currently negotiating a more comprehensive agreement on investment promotion and protection under the FTA. I look forward to an early and successful conclusion of the agreement, which would certainly add further impetus to our bilateral investments.

 

Solid investment conduit

Speaking of investment, Hong Kong is both a prominent source and destination for foreign direct investment, or FDI. According to a recent report of the United Nations Conference on Trade & Development, Hong Kong ranked number two in global FDI inflows, second only to Mainland China.

 

We were also the world’s second largest outward investing economy, second only to the United States. In particular, we have a very significant volume of trade and investment flows with Mainland China.

 

With the Central People’s Government’s policy of helping enterprises in Mainland China and Hong Kong to go global together, we are confident that Hong Kong would remain the most important investment conduit for businesses in the Mainland.

 

Chinese companies nowadays are very eager for opportunities to invest and establish a presence overseas. The potential investment from Mainland China to Chile through Hong Kong could be enormous.

 

Besides the role of an investment conduit, Hong Kong also serves as an excellent base for foreign businesses with an eye on the markets of Asia and the Mainland. 

 

Level playing field

Hong Kong is strategically located at the heart of Asia – at the doorstep of Mainland China and the Association of Southeast Asian Nations region. We have an open and business-friendly environment with low and simple taxes. We practice the rule of law, underpinned by judicial independence. We embrace the internationally recognised codes of practice in business and commerce. And we guarantee a level playing field for all companies, and free flows of capital, information and talent.

 

In a nutshell, Hong Kong provides a familiar financial, legal and cultural environment for Chilean companies to access a wide audience in our part of the world. Indeed, you would expect nothing less from an economy that is consistently ranked as the freest in the world. We have retained top spot in the Heritage Foundation’s Index of Economic Freedom for 21 years in a row. This status reflects real advantages for doing businesses with Hong Kong and in Hong Kong.

 

What’s more, Hong Kong is also an ideal showcase for Chilean firms to promote their high-quality goods to consumers across Asia. On its own, Hong Kong is a relatively small city with a population of just 7 million. But when you consider that we received about 61 million visitors last year, including more than 47 million from the Mainland, Hong Kong is an ideal platform for premium Chilean products, such as food and wine, to reach a wide audience in our part of the world.

 

It is no secret that visitors from Mainland China recognise brands and products they see in Hong Kong as something reliable and of premium quality.

 

Partners in wine

Speaking of wine, Hong Kong, being a successful regional wine hub, is Chile’s ideal partner. Our success can be attributed to, among others, the removal of all our wine duties in 2008. Since then, Hong Kong’s wine imports have thrived with a twofold increase to around US$1.1 billion in 2014.

 

I am proud to let you know that Hong Kong has been the world’s number one wine auction centre for the last five years, and the outlook of our wine business remains very positive.

 

Hong Kong and Chile have long been close partners in wine trade. Chile is Hong Kong’s 5th largest wine importing origin by value, and 4th largest by volume. Our close partnership was exemplified in the wine memorandum of understanding signed between the two sides in 2010.

 

Hong Kong has a sizeable group of wine connoisseurs who appreciate good wine and fine cuisines from around the world. And we love Chilean wines. A vivid example is the establishment of the Wines of Chile Academy in Hong Kong earlier this year. Chilean wines like Chardonnay from Casablanca and Cabernet Sauvignon from the Central Valley have quite a following in Hong Kong.

 

Super-connector role

Hong Kong is more than being a major market, but also the gateway to the growing wine market in Mainland China. Our wine re-exports to the Mainland grew 3.5 times since we removed our wine duty in 2008.

 

Our wine hub role becomes even more relevant to Chile, since the Mainland’s tariff for Chilean wines was eliminated earlier this year under the Chile-China Free Trade Agreement.

 

Since the FTA was signed in 2006, the Mainland’s demand for Chilean wines has leaped. So has re-exports through Hong Kong, which has increased over 10 times to US$5.6 million in 2014. There is much room for further expanding our wine trade given the growing demand for wine from the Mainland.

 

Hong Kong has always been the super-connector connecting Mainland China with the rest of the world. As your friend and business partner in Asia, Hong Kong is ready to facilitate your ventures and help grow your businesses.

 

I invite and encourage you all to make greater use of Hong Kong’s unique advantage in terms of our physical proximity with the Mainland, as well as our first class infrastructure and our highly competitive business and professional services.

 

Secretary for Commerce & Economic Development Gregory So gave these remarks at a networking luncheon with the Chilean business community organised by the Hong Kong Trade Development Council in Santiago.

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Scholarship to nurture top students

Chief Executive CY Leung

We are here today to witness the first award presentation of the Hong Kong Scholarship for Excellence Scheme, which was one of the initiatives I announced in my 2014 Policy Address. The scheme recognises our top students, and provides them with broader, more diverse study pathways outside Hong Kong. This is the first scholarship scheme of its kind offered by the Hong Kong SAR Government.

 

My congratulations to the scholars. They have, of course, excelled in their academic pursuits. Their remarkable achievements in extra-curricular activities and community service are equally commendable. They have demonstrated a commitment to excel and also to serve.

 

Keen competition

Competition was keen. A total of 658 applications were received. Seventy-eight will be awarded the scholarship.

 

All awardees announced today received their secondary school education in Hong Kong, following different curricula – the Hong Kong Diploma of Secondary Education or its forerunners, or non-local streams, such as the International Baccalaureate Diploma and GCE Advanced Levels.

 

Among them, 53 will pursue undergraduate and 25 postgraduate study at world-renowned institutions of their choosing.

 

Our awardees have diverse interests and talents, as evidenced by the broad range of disciplines they plan to pursue – natural and social sciences, liberal arts and literature, law, architecture, engineering, music, dance, veterinary science, forensics, forestry and medical robotics. This is encouraging.

 

The eclectic group of scholars reflects Hong Kong’s vibrant variety. They will all return and contribute to Hong Kong the knowledge and skills they gain.

 

Education a priority

Our most important asset is people, our people. Our future depends on the quality of education that our young people receive, locally and overseas. While education is the biggest item of expenditure in the government budget, this Government regards education as the single most important and worthwhile investment.

 

This is the thinking behind the Scheme. We award up to 100 scholarships per year for three years, to provide opportunities to study a diverse range of courses in top universities outside Hong Kong. The Scheme also supports top students without the resources to study overseas.

 

Community expectation

To the scholarship recipients – today we confer on you the prestigious title Hong Kong Scholar. Hold it with pride and remember that it comes with high expectations. It demands from all of you a strong commitment and a sense of responsibility. You will be Hong Kong Student Ambassadors and role models for our young people.

 

I thank the principals, parents and teachers for your dedicated efforts in nurturing these Hong Kong Scholars. For instilling in them good values. For the high-quality teaching that enabled them to excel academically. For encouraging them to serve others.

 

My thanks to Dr Victor Fung and all members of the Steering Committee on the Hong Kong Scholarship for Excellence Scheme for their enthusiasm and contributions over the past year to ensure the successful introduction of the award scheme.

 

I also thank members of the interview panels for the time and effort, and the valuable advice they shared with the administration and students throughout the selection process. It would not have been possible to implement the Scheme smoothly and successfully without their hard work.

 

Once again, I congratulate our scholars. I wish you all an enriching and rewarding experience overseas.

 

Chief Executive CY Leung gave this speech at the Hong Kong Scholarship for Excellence Scheme Award Presentation Ceremony.

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HK welcomes talent

Secretary for Labour & Welfare Matthew Cheung

Many economies are still experiencing the lingering effects of the global financial gloom that began in 2008. The world economic outlook is still clouded by considerable uncertainty and remains volatile.

 

Despite the tight labour markets and low unemployment rates in the more robust economies, youth unemployment rates are invariably far higher than the overall figures. Graduate unemployment remains a problem in many places, as is the issue of an apparent slowing down in upward social mobility.

 

Hong Kong is no exception. Whilst our latest overall unemployment rate for the period April to June 2015 remained at a low level of 3.2%, which is close to full employment, that of youths aged between 20 and 24 stood at 10.1%.

 

Hong Kong is a tiny dot on the map of East Asia. We are a small and externally oriented economy with a population of 7.2 million. However, Hong Kong is a leading international financial and business centre, a premier logistics and aviation hub, as well as an international maritime centre. 

 

Hong Kong is widely regarded as the freest economy in the world and a highly competitive economy. We are well known for our world-class infrastructure, low and simple tax regime, robust banking and financial system, an abundant supply of highly skilled professionals and good corporate governance. We operate a level playing field where local and international companies compete on an equal footing.

 

We have a free and open society, underpinned firmly by an independent judiciary and the rule of law. We enjoy the free flow of information, freedom of expression and association, as well as a free press. Ours is a pluralistic society where issues are fiercely debated on a daily basis.

 

As a Special Administrative Region of the People’s Republic of China since July 1, 1997, Hong Kong has been operating successfully and admirably well under the cardinal and innovative principle of “one country, two systems”. This gives us unique advantages and allows us to enjoy the benefits of being part of a rising China which serves as our economic hinterland, whilst retaining our inherent strengths and features.

 

When you are in Hong Kong, you are in the southern tip and doorstep of China. But then Hong Kong is not just any Chinese city, because we practise “the other system” that provides us with distinct advantages compared to other Chinese cities. Under the nomenclature of “Hong Kong, China”, we can take part in our own right in key international organisations such as the World Trade Organisation and Asia-Pacific Economic Co-operation.

 

As an open, international, cosmopolitan city, Hong Kong welcomes talents, professionals and entrepreneurs from all over the world. We have various admission schemes to facilitate their entry to work, live and settle here.

 

If you are contemplating where to start your career or find an internship, our door is always wide open and the opportunities we offer are promising.

 

As one of the international financial and business hubs, Hong Kong has always been known for our high connectivity with different parts of the world. We have been playing the key role of a “super-connector” between Mainland business enterprises and the rest of the world simply because Hong Kong understands both the Mainland and global interests. This understanding has been our core competence for several decades. Our unique position as the “Chief Knowledge Officer” can help Mainland enterprises “go global”.

 

Hong Kong’s world-famous Victoria Harbour skyline and our fast pace of life give you only a glimpse of the hectic lifestyle of an international financial centre. In stark contrast to the city’s concrete jungle lie our big “green lungs”. In fact, it is worth noting that over 70% of Hong Kong’s total land mass comprises countryside and hilly areas and 40% is officially protected as country parks and marine parks, where a wide variety of flora and fauna are housed.

 

Our exotic and exciting food scene best illustrates Hong Kong’s East-meets-West culture. As you walk into a typical local tea cafe (known as “cha chaan teng”), you will find a diverse range of reasonably priced and affordable food items on offer, from sizzling sirloin steak, Chinese steamed fish and dim sum, Indian curry and Russian borscht soup to French toast, all made into a distinct Hong Kong style incorporating both authentic and local flavours. This fusion menu underlines the openness, diversity, creativity and pragmatism of this dynamic and cosmopolitan city.

 

Whilst Hong Kong is no doubt a largely affluent society, with our Gross Domestic Product per capita currently at about US$40,000, we do have our fair share of social problems. A rapidly ageing population, a shrinking labour force and the poverty situation are but a few of the challenges that make Hong Kong both typical and unique as a living workshop for aspiring leaders like you to develop your problem-solving skills and learn how to contribute to fostering a caring community.

 

Tackling head-on the dual challenge of an ageing population and a dwindling workforce, the Hong Kong Special Administrative Region Government has recently mapped out a holistic population strategy. The game plan consists of some 50 initiatives to promote sustainable growth, unleash the potential of the local workforce, nurture home-grown talents, attract foreign talents, and embrace the opportunities of a growing “silver hair” market. We are also striving to improve the livelihood of our senior citizens such that they can spend their golden years meaningfully and age gracefully in a dignified manner.

 

We always believe that proper planning and the right strategies can turn challenges into opportunities. Our aim is to help those who are in need and to give ample room and opportunities for those who can to realise their potential to the full.

 

To build a caring, fair and compassionate society for all, we channel almost 60% of our recurrent government expenditure into education, social welfare and health – the three main livelihood areas. We put poverty alleviation at the top of our policy agenda. Our strategy is to ensure that we have a reasonable and sustainable social security and welfare system in place for those in need. And, no less important, we should encourage able-bodied young people and adults to become self-reliant and economically productive through employment.

 

As part of the Government’s concerted efforts to tackle poverty and enhance support for the vulnerable, we have introduced the Statutory Minimum Wage, set up the high-powered Commission on Poverty, devised an official poverty line, and rolled out a host of measures targeted at the needy, including the Old Age Living Allowance which has benefitted some 40% of our senior citizens. We will launch the Low-income Working Family Allowance in the first half of next year. This is designed to promote employment and ease child poverty. This flagship policy measure will benefit some 710,000 grass-roots citizens or nearly one-tenth of our population. It is expected to go a long way towards alleviating working poverty.

 

There is no denying that the current-term Government is investing heavily in welfare and poverty alleviation, and rightly so. Welfare spending in this financial year will amount to HK$60 billion (US$7.7 billion), representing a significant 18.4% of total government recurrent expenditure, just after education, which accounts for the lion’s share. But let me hasten to say that we will stop short of going down the road of welfarism. We will not, and should not, adopt a populist approach. That said, we need to do our best to foster a caring society and help the needy. I must admit that this is a fine balancing act and not an easy one to achieve. In building a caring community, we are stepping up our efforts in mobilising the community and enlisting their support. We are leaving no stones unturned in promoting cross-sectoral collaboration among the business sector – riding on the wave of the growing awareness and acceptance of corporate social responsibility, non-governmental organisations, the academia, the professions and the Government.

 

Young people are our future and our future is in your hands. You are to change it, to shape it and to make it better. As you begin to plan for your future, do remember that Hong Kong is happy to be your starting point and launching pad, your collaborator and even your home.

 

Secretary for Labour & Welfare Matthew Cheung gave these remarks at the 6th University Scholars Leadership Symposium.

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