HK-Korea partnership mutually beneficial

Secretary for Transport & Housing Prof Anthony Cheung

Every year, we organise promotion missions to overseas economies to update our business counterparts on our latest logistics development. You may wonder why we have chosen Korea as the destination of this year’s delegation visit. Well, the question should not be why, but why not.

 

Since the 1960s, our two economies have consistently maintained high levels of economic growth, fueled by increasing exports and rapid industrialisation, which enabled us to join the ranks of the world’s developed nations and be dubbed as Asia’s Little Dragons by the mid-1990s.

 

Hong Kong is now among the leading financial centres worldwide, while Korea is an important hub of global manufacturing in automobiles, electronic components and telecommunications equipment.

 

Some common characteristics of our two economies include an educated population and high savings rates. Our economies have also proven to be resilient enough to withstand regional and global economic crises, such as the Asian financial crisis of 1997-98 and the global credit crunch of 2008.

 

Global growth

Resilience is important, in particular at a time when the global economy is uncertain. Last month, the International Monetary Fund revised down its global economic growth forecast for this year, 2015, to 3.1%, 0.4% lower than that made in January. Yet the economic sentiment in emerging Asian economies is still positive. The IMF estimated that developing Asia still maintains growth of 6.5% this year and China 6.8%.

 

Although Mainland China’s exports and imports declined in the first three quarters of this year, its domestic demand still held up well. Contribution of domestic consumption to GDP rose from 51.2% last year to 58.4% in the first three quarters of this year.

 

This will continue to bring about demand for high-end products and create opportunities for Korean manufacturers and Hong Kong’s services and logistics providers. In this respect, it is worth noting that Korea’s exports of consumer goods to Mainland China rose by close to 30% per annum on average during the past five years.

 

HK-Korea links

Hong Kong and Korea are close trading partners. Last year, Korea was Hong Kong’s sixth largest trading partner. The average annual growth rate in bilateral merchandise trade over the five years from 2009 to 2014 was 10.2%. Hong Kong was Korea’s fourth largest export market and third largest investment destination, following the US and the Mainland of China.

 

Some 140 Korean companies have set up regional headquarters, regional offices or local offices in Hong Kong, including Korean Air and Hanjin Shipping. Hong Kong’s logistics companies, such as Kerry Logistics, have also co-operated with Korean enterprises in setting up joint businesses in Korea.

 

Hong Kong has strong transportation linkage with Korea. The air services operated by our respective home carriers between Hong Kong and Korea increased significantly over the past years. To illustrate, this week (week of November 25), there are 194 passenger and cargo scheduled flights between Hong Kong and Korea, up 45% as compared with a similar week in 2011, just four years ago.

 

Nowadays, every week, we have 44 container vessel sailings to Korea, connecting Hong Kong to seven sea ports of Korea, including Busan Port and Incheon Port. Good connectivity facilitates further business investments and logistics co-operation.

 

Hong Kong people like visiting Korea and vice versa. Last year, Korea was Hong Kong’s third largest visitor source market and we are your fifth. We received some 1,251,000 visitors from Korea, an increase of 15.5% over 2013, while over 558,000 Hong Kong people visited Korea, 39.4% more than in 2013. The annual quota of the Hong Kong-Korea Working Holiday Scheme for young people has also just been increased last week from 500 to 1000, to promote more cultural and educational exchanges among our younger generation.

 

If you’ve been to Hong Kong, I suppose you would have noticed that Korean TV dramas, movies, K-Pop artists and of course, Korean food are becoming more popular day by day.

 

I’ve just met your Minister of Land, Infrastructure & Transport and we both believe that there’s more room for co-operation between Hong Kong and Korea.

 

Super-connector role

Other than that, Korean electronic and cosmetic products are among the most sought-after brands in Hong Kong, as well as in Mainland China. These high-value products are time- and temperature-sensitive, the handling of which requires tailor-made supply chain solutions. And that is the reason why we are here, to share with you how Hong Kong can be your best link in your global supply chain.

 

Located at the southern gateway of China, Hong Kong is the best partner for Korea’s companies to enter the South China market by providing quality shipping and logistics services.

 

The Pearl River Delta is one of the richest regions of China, alone contributing 9.1% of Mainland China’s GDP last year. The merchandise trade between Korea and Guangdong Province (just next to Hong Kong) picked up by a rapid average growth of 19% per annum in the past five years. It is estimated that around 30% of such merchandise trade is routed through Hong Kong, generating notable demand for our logistics services.

 

In terms of product types, electrical machinery and telecommunications apparatus together accounted for 60% of our total trade with Korea last year. These products are usually shipped by air. Given Hong Kong’s outstanding global connectivity and excellent aviation services, there is much room for Hong Kong-Korean logistics co-operation, especially in tailor-made logistics services for high-value goods.

 

Home to an international maritime community for over 150 years, Hong Kong plays a leading role in the global shipping industry. Our shipowners together own or manage about 9% of the deadweight tonnage of the world’s merchant fleet.

 

There are over 700 shipping-related companies operating in Hong Kong, providing a great variety of quality maritime services ranging from ship owning, ship agency and management, ship finance, ship broking and marine insurance to maritime legal and arbitration services.

 

Of the top 10 ports in the world, seven are in China, including Hong Kong, and of course Busan Port is also among the top 10 in the world. And Hong Kong has what it takes to become an important international maritime services hub for China and the Asia-Pacific region.

 

Institutional strengths

Hong Kong is your good business partner also because we have very good fundamentals. According to the World Economic Forum’s Global Competitiveness Report recently, Hong Kong ranks first in infrastructure out of 140 economies. From Hong Kong, we can reach all major Asian cities within four hours’ flight time.

 

We have a highly skilled workforce and relatively low costs of doing business. Thanks to the ‘One country, two systems’ constitutional framework, Hong Kong is not just any Chinese city, because we practise “the other system”, that provides us with distinct characteristics and advantages.

 

We enjoy a high degree of autonomy. We have our own currency, the Hong Kong dollar, which is internationally convertible. With our independent judicial system and our well-entrenched rule of law, Hong Kong is a prime centre for solving disputes by arbitration.

 

We are a free port with a simple tax regime and our tax is low, and we have been ranked by the Washington-based Heritage Foundation as the world’s freest economy for the 21st consecutive year.

 

Logistics hub

Hong Kong continues to enhance its multi-modal connectivity such that its position as a regional logistics hub is sustained. Hong Kong International Airport is the busiest cargo airport in the world and the third busiest international passenger airport in the world after Dubai and London Heathrow.

 

More than 100 airlines operate flights from our airport to over 180 destinations worldwide, including more than 45 in the Mainland of China. Last year, our airport handled 63.3 million passengers and 4.38 million tonnes of cargo. Currently, our airport operates on two runways, which are not enough.

 

In order to cope with the forecast air traffic demand in the long term, we are planning for a Three-Runway System involving capital investment of some $141.5 billion (or roughly US$18 billion). This will vastly expand the airport’s capacity to handle around 100 million passengers and close to 9 million tonnes of cargo annually by 2030.

 

Air transport aside, Hong Kong is supported by extensive road and rail infrastructure, offering excellent connections to all major cities in China. Together with our neighbouring cities – Zhuhai and Macau – we are building the Hong Kong-Zhuhai-Macau Bridge. This mega bridge will extend Hong Kong’s hinterland to the newly booming Western Pearl River Delta and beyond to Yunnan Province.

 

When the bridge is commissioned – in 2017 according to the latest assessment – the perk of having this link is a much shortened commuting time from one city to another. For example, a four-hour land journey from the city of Zhuhai to Hong Kong International Airport will be compacted to only 45 minutes.

 

In a world where time is of the essence and efficiency does matter, the completion of this bridge will further enhance Hong Kong’s competitiveness.

 

Port enhanced

Last year, Hong Kong Port handled some 22.2 million TEUs, ranking fourth in the world. We now operate about 350 weekly sailings to some 510 destinations worldwide. By next year, dredging works to deepen our Kwai Tsing Container Terminal Basin and its approach channel from 15 metres to 17.5 metres will be completed, enabling unrestricted access for new-generation ultra-large container vessels to Hong Kong.

 

All these infrastructural upgrades can enhance our multi-modal connectivity as well as our capacity to cater for growing logistics services demand, whether in China or the region.

 

With this connection, the newly launched Belt & Road initiative of China will promote wider regional connectivity and the free flow of goods among more than 60 countries spanning Asia, Europe and Africa, on a scale never seen before. Through upgrading the infrastructural links between the Belt & Road countries, connectivity can be strengthened and regional economic co-operation better facilitated. This will boost demand for international logistics services. With Hong Kong being a regional logistics hub and an international maritime centre, this is another golden opportunity for us to leverage on our comprehensive logistics and transportation network to play an active role in the Belt & Road initiative.

 

We look forward to closer partnership and collaboration with our Korean counterparts, to fully capitalise the opportunities to be brought about by the Belt & Road initiative of China.

 

Secretary for Transport & Housing Prof Anthony Cheung gave these remarks at a luncheon seminar on Hong Kong as a Regional Logistics Hub – The Link in Your Global Supply Chain in Seoul.

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Bureau to leverage emerging ICT trends

Secretary for Innovation & Technology Nicholas Yang

It is indeed my great pleasure to join all of you at the opening of the Hong Kong International Computer Conference 2015, to be among many old and new friends of the information and communications technology, or ICT, industry.

 

We are here today with one common goal: to take ICT innovation and technology development to the next level in an increasingly Internet-driven global economy. In its 38th year, the HKICC has again brought together strategists, industry leaders, innovators, trend-setters and business players from Hong Kong, the Mainland and overseas, to share vision and insights on the latest ICT technology advancements. This year’s innovative theme is hashtag “digital economy”, powered by innovation.

 

The Internet has certainly transformed our world over the past two decades. We all live in a digital economy today, seeing many products, services and business processes undergo incredible transformation. According to the Boston Consulting Group, the digital economy is expected to contribute more than US$4 trillion to the gross domestic product of G20 nations in 2016.

 

The digital economy permeates the world in the form of e-commerce, e-learning, smart devices, social media platforms and so on. Today’s Internet-driven global economy is powered by innovation and technology. Innovation and technology can bring economic growth and employment opportunities, and can also improve people’s quality of living and help on social development.

 

Hong Kong certainly stands out in today’s global digital economy. We have been ranked first in technological infrastructure globally by the World Competitiveness Yearbook for five consecutive years. In terms of innovation, Hong Kong ranks second in Asia-Pacific and 11th in the world in the Global Innovation Index 2015.

 

Innovation hub

As an ICT hub, Hong Kong has high broadband and mobile penetration rates that top the world. Our intellectual property rights are protected by the Copyright Ordinance. Our Personal Data (Privacy) Ordinance ensures the protection of personal data during collection, usage and transfer. The Electronic Transactions Ordinance provides a robust framework for conducting secure e-business. All in all, Hong Kong is a great place for innovation in today’s digital economy.

 

We all know the establishment of the Innovation & Technology Bureau last Friday will pave the way for Hong Kong’s transformation to a knowledge-based economy. The bureau will provide stronger and more focused policy co-ordination together with the understanding and support of Hong Kong people to capture the opportunities from our digital economy, leveraging on the rapidly evolving innovation and technology environment.

 

I would like to congratulate the Hong Kong Computer Society for staging another flagship international conference. I am sure the two-day conference will facilitate in-depth sharing on the latest developments of our digital economy, and inspire us with further insights on using innovation and technology to drive sustainable economic growth. I wish all of you an enjoyable and fruitful sharing at the HKICC 2015.

 

Secretary for Innovation & Technology Nicholas Yang gave these remarks at the Hong Kong International Computer Conference (HKICC) 2015.

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HK has key roles in Belt & Road

Secretary for Commerce & Economic Development Gregory So

What will China look like in the year ahead? Let me quote your founder Michael Bloomberg. This is what he said two months ago in New York at the Navigate the New Silk Road Seminar: “China was very introspective, and now it’s looking out to the world in a really unique way. I think there’s a lot of opportunity, and I think for those of us who deal with China, there’s also a lot of opportunity.”

 

I couldn’t agree more. The visionary and ambitious concepts of the Silk Road Economic Belt & the 21st Century Maritime Silk Road, or Belt & Road in short, will present the world with an abundance of business opportunities in an unprecedented way.

 

This grand strategy encourages closer economic as well as cultural co-operation among some 60-plus economies, particularly those emerging economies spanning Asia, Europe and Africa. Belt & Road is, in essence, an invitation to the international community to join hands to take global and regional co-operation to new heights, in particular in terms of enhancing policy co-ordination, strengthening infrastructural facilities connectivity, facilitating unimpeded trade and investment, deepening financial integration and building people-to-people bonds.

 

Belt & Road will provide the much needed boost for the global economy to overcome its growth bottleneck and become the new growth momentum of the world. The big question for us is what we need to do to leverage on these new opportunities. And that is, I suppose, why we are here at this forum today, to brainstorm and map out a strategy to tap the massive opportunities in the year ahead in China.

 

Open to all

I know that some of you may come from countries that are not geographically covered by the Belt & Road and are generally not associated with the Silk Road. Belt & Road is nonetheless open to all. It is not confined to countries with a specific proximate geography, a specific historical circumstance or a specific economic situation.

 

By creating an open, inclusive and balanced regional economic co-operation architecture, jointly building the Belt & Road is definitely in the interests of the international community.

 

Allow me to spend the next few minutes sharing with you what makes Hong Kong a great partner for overseas businesses as they step out of their geographical boundaries and venture into the vast Belt & Road market.

 

First of all, Hong Kong may serve as the facilitator in financial activities. Belt & Road will trigger soaring investment in infrastructural facilities. As China’s international financial centre, and one of the world’s leading financial capitals, Hong Kong has all it takes, from our world-class market infrastructure and unparalleled business network to the robust legal system, to serve as the fundraising and financial management hub for countries along the Belt & Road.

 

Specifically, Hong Kong is the world’s largest offshore renminbi business centre, providing international investors with renminbi services ranging from cross-border trade settlement to bond issuance. As trade and other economic activities along the Belt & Road expand, so, too, will the demand for renminbi trade settlement. Hong Kong can respond to that demand. After all, we’ve been handling the lion’s share of renminbi trade settlement since its beginnings in 2009.

 

Facilitating finance 

Hong Kong may also serve as the facilitator for trade and businesses. Our strategic geographical location, at the southern gateway to Mainland China, gives us unparalleled trade opportunities. Today, some 20% of the Mainland’s international trade is handled by Hong Kong. We are serving as the super-connector, enabling overseas companies to enter the China market, while assisting Chinese enterprises in going global.

 

From air to road to sea, we provide shippers and suppliers with reliable transportation. Within five hours’ flight time from Hong Kong, we can reach half of the world’s population and most of Asia’s thriving economies. Our port is among the top five busiest in the world. Our international airport is the world’s busiest cargo airport.

 

What’s more? Hong Kong may serve as a professional services hub as well. Hong Kong is blessed with a large pool of world-class professionals, with expertise in areas such as accounting, law, architecture, engineering management and more. These professionals can provide high-quality services beyond the provision of financial capital and expertise. They possess the requisite competence and experience to lead consultancies, construction projects, operations and management of the many infrastructures along the Belt & Road.

 

For Hong Kong to capitalise on the wealth of opportunities of Belt & Road that I just mentioned, we need to learn and understand the business opportunities and potential areas of collaboration with different markets, especially the many emerging markets dominating the landscape along the Belt & Road. We are thus moving proactively to strengthen the ties with these countries on the government-to-government level and to foster a deeper understanding of the political, economic and cultural make-up of these economies.

 

For example, our negotiation of the Hong Kong-Association of Southeast Asian Nations free trade agreement is progressing smoothly and we are looking forward to its successful conclusion in the coming year. The free trade agreement will provide a stable and transparent framework in which regional trade and investment can flourish.

 

Expanding networks

We are also actively expanding our networks of investment promotion and protection agreements, comprehensive avoidance of double taxation agreements and agreements on double taxation relief arrangements for shipping income, with a view to protecting and facilitating business co-operation between Hong Kong and countries along the Belt & Road. These exchanges will no doubt facilitate the drawing up of Hong Kong’s specific strategies in seizing the opportunities ahead of us.

 

The Belt & Road initiative is not only set to fuel the development of the 60-plus economies along the routes; it will also bring great potential to other economies globally. China has offered the world this compelling vision. It will be up to you to explore and grasp the historic opportunities arising from it. Hong Kong is ready to make good use of our unique advantages to facilitate your journey into the Belt & Road.

 

Secretary for Commerce & Economic Development Gregory So gave these remarks at a forum organised by Bloomberg Businessweek.

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Gov’t proactive in AIDS awareness

Financial Secretary John Tsang

Government has made much effort to promote public awareness and understanding about AIDS, and AIDS-related deaths have dropped dramatically due to the introduction of cocktail therapy in the 1990s. However, the number of newly reported HIV infections has increased every year in Hong Kong since the first case was recorded here more than 30 years ago.

 

It is even more distressing to learn that discrimination against people living with HIV/AIDS still exist in our community, and that this wrong perception might have dissuaded some patients from getting tested and receiving life-giving treatment.

 

In this regard, I wish to thank the AIDS Concern charity and the business community for organising this meaningful Love Love Run event; as well as all of you here joining the race today, for making the difference in the fight against AIDS, and for joining hands to build a more inclusive and caring Hong Kong, for the benefit of patients with HIV/AIDS, for everyone, for you and for me. 

 

Financial Secretary John Tsang gave these remarks at the Love Love Run 2015 prize presentation ceremony on November 22.

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HK reinforces unique arts hub status

Chief Secretary Carrie Lam

It gives me great pleasure to join you at the launching of this much-awaited major public art installation, Event Horizon Hong Kong. First of all, I would like to extend my warmest welcome to Sir Antony, the world-renowned Turner Prize winner from Britain who conceived Event Horizon, and to thank him for choosing Hong Kong as the first city in Asia to embrace this significant project.

 

Event Horizon was first shown in London in 2007. After touring to Rotterdam, New York, Sao Paulo and Rio de Janeiro, it is now brought to Hong Kong by the British Council. Its Asian premiere in Hong Kong reinforces our position as an arts hub and an economy where creative industries are set to prosper. Indeed, Hong Kong’s condensed urban environment, unique topography and vertical density provide an ideal setting for Sir Antony’s project. In the coming six months, we will see 31 life-size identical sculptures cast from the artist’s own body perching on rooftops and standing on the ground at Central and Western districts. These solitary figures will look out into space to question the relation between the built world and an inherited earth.

 

Looking skyward

Sir Antony wants Hong Kong to become a place of reverie that invites reflection on human nature and our place in the wider scheme of things. These sculptures are meant to, as he puts it, “activate the skyline in order to encourage people to look around”. Therefore, I will be most happy to join pedestrians on the street to look up and look around to explore the place of the individual in a collective space.

 

Speaking in my other capacity as Chairman of the West Kowloon Cultural District Authority, the Event Horizon installation is most timely. Blessed with 40 hectares of prime waterfront site with over half of it being designated as open space in the approved development plan, the District needs a robust, appropriate and imaginative public art policy. Event Horizon Hong Kong will no doubt help encourage discussions of public art in our city and give our local artists, art administrators and art critics much food for thought.

 

With that context, the Hong Kong Special Administrative Region Government warmly welcomes the installation. Numerous government departments have worked behind the scenes to facilitate the mounting of the sculptures at building tops on government and private buildings, to ensure the necessary approvals are granted in time and to prepare to answer queries and worries from members of the public. I want to thank my civil service colleagues from Home Affairs Bureau, Architectural Services Department, Buildings Department, Fire Services Department, Government Property Agency, Highways Department, Home Affairs Department, Hong Kong Police Force, Lands Department, Leisure & Cultural Services Department including Antiquities & Monuments Office, Post Office, Planning Department and Transport Department. Event Horizon would not have been possible without their collective efforts.

 

Educational art

Apart from being an art installation, Event Horizon is also an education and outreach project. I am delighted to note that a series of educational activities including guided tours, lectures, seminars and workshops will be available to teachers, students and members of the public. These educational efforts would certainly help enhance our understanding of sculptures and public art and encourage dialogues. I am sure everyone will find something of interest. We don’t really need to be a true professional to appreciate and enjoy art.

 

For those who would like to see more of Sir Antony’s works on a permanent basis, I have a piece of good news for you: the West Kowloon Cultural District’s museum for visual culture, M+, has acquired Sir Antony’s landmark installation Asian Field in 2014. The large-scale sculptural installation comprises approximately 200,000 unique, hand-formed clay figurines produced in 2003 by 350 inhabitants of Xiangshan village in Guangdong Province under the guidance of Sir Antony. The M+ collection also has a piece of his fascinating work Matrix. So by the time M+ opens in 2019, you and I will be able to appreciate these magnificent works by Sir Antony.

 

Last but not the least, may I take this opportunity to express my heartfelt gratitude to British Council Hong Kong for bringing this world-class event to Hong Kong. I must also thank its Lead Partner, K11 Art Foundation, and all the organisations and companies which have come together to give their support in different ways. I wish Event Horizon a huge success and Sir Antony a most enjoyable stay in Hong Kong.

 

Chief Secretary Carrie Lam gave these remarks at the “Event Horizon” launch ceremony on November 19.

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Maritime services enhance market access

Financial Secretary John Tsang

Hong Kong-Romanian relations have come a long way in the last few years. Since the reopening of the Consulate General of Romania in Hong Kong in 2008, the number of Romanian citizens living in Hong Kong has picked up, as has our bilateral trade. Last year, total trade between our two economies exceeded US$380 million. That’s an increase of more than 30% over the amount in 2013.

 

The opening of the office of the Romanian Chamber of Commerce in Hong Kong two years ago is another clear testimony of our growing bilateral trade and the potential that it presents.

 

An online feature article – “Seven Reasons Why We Should All Be Moving to Romania Right Now” – recently caught my attention. Those reasons included Romania’s “fast and cheap” Internet, the generally highly affordable cost of living, and, of course, the “fantastic” people and, no surprise here, the “tasty, plentiful and uncostly” wine.

 

All good reasons for considering Romanian residency. And we are clearly aware of the excellent quality of the Romanian wine. Thanks to a Memorandum of Understanding on Hong Kong-Romanian co-operation in the wine industry, Hong Kong’s wine lovers – and there are many – can now enjoy your fine wine in Hong Kong.

 

Yes, Mr Florin Vodita, your State Secretary in the Ministry of Economy, Trade & Tourism, was in Hong Kong in June this year to sign the wine MOU. With that agreement in place, more consumers from Hong Kong, Mainland China and right through the Asian region will soon be discovering, and enjoying, Romania’s fine wine. And doing so plentifully, I’m sure.

 

The MOU is sure to encourage more Romanian wine producers to make good use of Hong Kong’s advantages as a duty-free port with zero duty for wine imports, a regional logistics and business hub, and the world’s largest wine auction centre.

 

The good news doesn’t stop there. This morning, I signed a comprehensive agreement on the avoidance of double taxation with Romania. The agreement means tax certainty for Romanian and Hong Kong investors and companies doing business in each other’s jurisdictions. No less important, it elevates our bilateral relations to a new level.

 

And I’m confident our co-operation will only expand in the coming years, thanks to the ambitious and visionary initiative of the Silk Road Economic Belt and the 21st Century Maritime Silk Road, commonly known as the Belt & Road initiative that was spearheaded by President Xi of China in 2013.

 

This grand and far-reaching initiative aims to expand trans-continental connectivity, to promote economic, political and cultural co-operation from Asia through Africa and on to Europe. I believe it will emerge as a driving force of the world economy in this 21st century.

 

The widespread interest in as well as the enthusiastic response to the establishment of the Asian Infrastructure Investment Bank, the AIIB, underlines that belief. In good time, the AIIB will become a key financial institution supporting infrastructural development all along the Belt & Road.

 

Allow me, over the next few minutes, to share with you some of my thoughts on how Hong Kong can support Romanian business, how we can help you capitalise on the wealth of opportunities emerging from the Belt & Road initiative.

 

Through the Belt & Road initiative, we expect to see soaring investments in infrastructural facilities, deepening financial integration, expanding trade and the building of people-to-people bonds on a global scale.

 

Hong Kong can help make it happen, thanks to the unique advantages presented by our “one country, two systems” arrangement. While being part of China, Hong Kong maintains its own social, financial and economic systems.

 

We have our own currency, which is different from the renminbi of the Mainland, and it’s fully convertible. Capital from all over the world flows freely in and out of Hong Kong on a fair and equitable basis.

 

According to the United Nations World Investment Report 2015, Hong Kong, for the first time, came second in global foreign direct investment, with record amounts of inflows and outflows, at US$103 billion and US$143 billion, respectively.

 

More than just a city of China, Hong Kong’s favourable and transparent business environment, as well as the open and level playing field, has attracted companies from all over the world to establish offices and conduct business in Hong Kong.

 

Traders in all sectors, and from all jurisdictions, can trade freely in Hong Kong. And all persons, businesses and organisations, regardless of their nationality, are treated exactly the same. Every business in Hong Kong can enjoy the same privileges and benefits provided by our international agreements.

 

Consider, for example, CEPA, Hong Kong’s free-trade agreement with the Mainland of China. CEPA provides preferential treatment to Hong Kong service providers, regardless of nationality, as well as tariff-free treatment for products that have been conferred the Hong Kong origin. Working with Hong Kong, Romanian companies can gain the same access to the markets of the Mainland. It’s your ticket to the massive Chinese consumer market and its fast-rising middle class.

 

As an international financial centre, Hong Kong has the experience, the expertise and the connections to serve as the fundraising and financial management hub for the Belt & Road initiative. Hong Kong’s financing options range from public offerings and loan syndication to private equity funds and the raising of funds through Islamic finance.

 

We run the world’s seventh largest stock market in terms of market capitalisation, and we rank second, globally, in equity funds raised through initial public offerings.

 

At the same time, Hong Kong is also the world’s largest offshore renminbi business centre. As trade and other economic activities along the Belt & Road expand, demand for renminbi trade settlement will also rise. Hong Kong’s renminbi trade settlement system is well placed to respond to that demand.

 

Our renminbi debt market has grown rapidly in recent years. It provides a reliable channel for companies issuing renminbi bonds to meet project funding needs. Last year, the issuance of renminbi bonds in Hong Kong totalled some RMB200 billion, a galvanising year-on-year increase of 70%.

 

The growth of Islamic financial services is also promising, given the large Muslim population living along the Belt & Road. In the past 14 months, Hong Kong has issued two Shariah-compliant sukuk. They demonstrate our capabilities in this specialised financial offering. They also reveal the confidence international investors have in Hong Kong’s economic fundamentals.

 

Asset and risk-management services will also be in demand once the Belt & Road projects start their engines. Hong Kong’s wealth and asset management business, I’m pleased to note, has soared in recent years. Indeed, Hong Kong is ideally positioned to act as a global centre for asset management, risk management and corporate treasury functions.

 

Hong Kong boasts a wide variety of insurance services and derivative products as well. They offer sound reason for Romanian companies to manage their risks by setting up captive insurers in Hong Kong.

 

Our pool of world-class professionals is deep and talented, with expertise in finance, accounting, law, architecture, engineering management and more. They have the experience to lead consultancies, construction projects, and the operation and management of infrastructure projects.

 

Our legal professionals work with a world of business every day. They conduct due diligence, ensure contract enforcement and help resolve disputes, all done under the rule of law and our independent judiciary. That makes Hong Kong an ideal centre for resolving potential commercial disputes in business collaborations.

 

On that score, a recent survey by London’s prestigious Queen Mary University named the Hong Kong International Arbitration Centre the third most preferred arbitral centre in the world, just behind London and Paris.

 

Logistics is another key industry that has been driving Hong Kong’s development as an international business centre. Hong Kong boasts the world’s fourth busiest container port, providing some 350 services a week to more than 500 destinations worldwide.

 

About 700 shipping-related companies call Hong Kong home. They offer a wide range of services, from ship management, broking and chartering to finance, marine insurance, legal, arbitration and many other support services.

 

The Maritime Silk Road will create fresh demand for shipping services. With its plan to build a Black Sea-Caspian Sea Freight Corridor, Romania is set to become a hub connecting other inland destinations in Europe to Central Asia and eastwards to China. Romanian logistics companies will find it advantageous to establish a presence in Hong Kong, using our maritime services to tap into the markets of the Belt & Road.

 

Hong Kong offers also unparalleled connectivity for multinational businesses and corporations. Hong Kong International Airport has been the busiest air cargo airport in the world for more than 15 years. Last year, it handled some 4.4 million tonnes of cargo, running about 1,100 flights a day. From Hong Kong, you can reach all major Asian economies within four hours’ flight time. Half the world’s population is just five hours away.

 

Hong Kong has what you need in a strategic partner for the 21st century. We welcome Romanian investment and talent. In Hong Kong, you can take advantage of our low taxes, our world-class business environment and our reassuring legal system, as well as our knowledge in tapping the massive Asian markets.

 

The Belt & Road will be built on collaboration – on deepening the bonds between nations, economies and cultures. On the rewarding future it can offer the companies, and the people, of Hong Kong and Romania.

 

My thanks to the Chamber of Commerce and Industry of Romania and the Hong Kong Trade and Development Council for hosting and supporting today’s seminar, for bringing us together today.

 

I look forward to welcoming our Romanian friends to Hong Kong. And I hope to visit this captivating city again soon – for the fresh lake air in Herastrau Park, a biking trip to Mogosoaia Castle and, certainly, an inviting glass of Romanian wine in the Old Town. On second thought, let’s make that a bottle. Or two.

 

Financial Secretary John Tsang gave these remarks at a business seminar in Bucharest, on Opportunities under the Belt & Road Initiative on November 18.

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Innovation culture benefits us all

Chief Secretary Carrie Lam

It is my great pleasure to join you in this year’s “So French So Innovative” exhibition. My warmest welcome to our friends from France. First of all, on behalf of the Hong Kong Special Administrative Region Government, may I again express our deepest sympathy on the loss of lives and injuries in last week’s terrorist attacks in Paris and extend our condolences to the victims’ families and the people of France.

 

I would like to thank the Consulate General of France, the French Chamber of Commerce and the Hong Kong section of the French Foreign Trade Advisors for organising this wonderful exhibition for the second time since the great success last year.

 

I am sure our citizens will be very impressed and our industry inspired by the very clever French innovations on show today, as much as they have enjoyed French cuisine, wine and fashion.

 

Innovation is increasingly important for enterprises, cities and nations to build competitive advantages. Over the years, the HKSAR Government strives to provide a strategic environment for innovation and technology development through five core strategies, which include providing world-class technology infrastructure; offering financial support for research and development; nurturing talents; strengthening Mainland and international collaboration in science and technology; as well as fostering a vibrant innovation culture.

 

And that’s just the beginning. Development of a vibrant ecosystem with excellent software and hardware support for industry players to collaborate requires long term investment and collaboration amongst the Government, the industry, the academia, and the research sectors.

 

One-stop infrastructural support

To this end, we have Hong Kong Science Park and Cyberport, our flagship infrastructures which offer one-stop infrastructural support services to technology based companies and activities. We have a comprehensive programme of funding schemes under the Innovation & Technology Fund to finance projects that contribute to technology upgrading in manufacturing and service industries, with a goal to reinforce the research culture amongst private companies. We also have implemented a number of programmes, such as incubation programmes operated by the Hong Kong Science Park and the Cyberport, the Technology Start-up Support Scheme for Universities, and the Internship Programme to provide funding support, training and exposure for nurturing our younger generations.

 

To instil a stronger innovative culture, the Government organises a wide range of promotion activities to enhance public awareness of innovation and technology, including the yearly anchor event Innotech Month, which is on the show till December 5 this year.

 

Inter-sector collaboration

More inter-sector collaboration is possible in the near future, particularly in the light of the establishment of our new Innovation & Technology Bureau, this week, sooner, actually on Friday. The setting up of this new bureau, which is quite difficult, after three long years of hard work with the Legislative Council, signifies that innovation and technology are our strategic focuses in driving social and economic development and will be our growth engine for the decades to come.

 

A new Bureau also means the effort to promote innovation and technology development will now be steered by a dedicated high level leadership with stronger policy coordination, creating a more vibrant ecosystem that enables our stakeholders including innovators, entrepreneurs, industrialists and academics to capture the opportunities arising from advancements in technology.

 

With our strong foundation, together with the more focused policy coordination by this new Bureau, I am quite confident that, very soon, Hong Kong will find its place as a major information, communication and technology hub in the region, if not the globe.

 

Eco-friendly living environment

The So French So Innovative Exhibition is very timely for Hong Kong, for all these French creative exhibits will vividly tell our citizens, how innovation and technology are adapted to create a smart and eco-friendly living environment for Hong Kong people, bringing about positive impacts on our daily life, and playing increasing important role in enhancing connectivity, sustainability and creativity.

 

Indeed, our Government also shares the vision to make use of innovation and technology for improving people’s lives and taking care of people’s needs. To this end, we have therefore created a Social Innovation & Entrepreneurship Development Fund to support projects aiming at helping the disadvantaged. I believe that the rich collection of So French So Innovative exhibits, ranging from high-end communications technologies to advanced application to daily health items and security systems, and to how to teach our kids to read, will give us much inspiration. 

 

By the way, I am pleased to note that most of the exhibitors today are companies based in Hong Kong and I have just been introduced to some of them. This is indeed a very wise move. As a matter of fact, according to our latest survey, the number of business operations in Hong Kong with parent companies overseas and in the Mainland climbed to a new record of over 7,900.

 

Hong Kong has always been an attractive place for overseas business thanks to our geographical location, our close economic ties with the Mainland of China due to our unique status under “one Country, two systems”, our respect for rule of law, an independent judiciary and constitutionally-guaranteed rights and freedoms.

 

Basically, Hong Kong has all the essential elements that overseas businesses are looking for.

 

Collaboration on innovation and technology has no border. France is one of the world leaders in innovation. There are plenty of collaboration opportunities between Hong Kong and France on innovation and technology and I am looking forward to seeing more activities on this front.

 

Chief Secretary Carrie Lam gave these remarks at the opening of the So French So Innovative Exhibition.

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HK adapts to meet e-commerce needs

Secretary for Transport & Housing Prof Anthony Cheung

I am going to talk about shopping in a changing world.

 

Last week we had the Singles Day. Next week, we have Thanksgiving. Whether it’s Singles Day, which is hugely celebrated in China, or Thanksgiving in the United States, when it comes to shopping, it also means selling, and it matters to everyone who works along the supply chain.

 

Shoppers are increasingly choosing to spend their money online. Here are some telling statistics: According to forecasts by eMarketer, global e-commerce sales will reach over US$1.5 trillion in 2015. But this accounts for only about 6.7% of total retail sales around the world. China and the United States are by far the world’s leading e-commerce markets, together accounting for more than 55% of global Internet retail sales last year.

 

Of the world’s Internet users, 42% live in Asia. China has more than 650 million Internet users, and their average age is 25 years old, and that means potential. According to China’s National Bureau of Statistics, e-commerce sales on the Mainland of China in the first three quarters of this year accounted for 10% of its total retail sales. Alibaba said shoppers spent more than US$10 billion in the first 14 hours of this year’s Singles Day, surpassing last year’s day-long total of US$9.3 billion.

 

Some in Hong Kong may wonder, with our efficiency and convenience, we don’t really need to do online shopping. Would Hong Kong embrace e-commerce? The answer is yes, and a very definite yes. When we talk about e-commerce, we are not just focusing on our local market, and certainly not just the shopping.

 

We are talking about a much bigger picture – when people shop online, they shop from everywhere. And when you shop from somewhere afar, you need to ship what you shop. And that’s where we come into play.

 

Super-connector role

Hong Kong, as Asia’s world city, as the gateway to China and as the super-connector between the Mainland and the rest of the world, will always be a great partner for anyone who wishes to tap the Chinese markets. From air to road to sea, we provide shippers and suppliers with reliable transportation.

 

As the Chief Secretary, Acting Chief Executive, has just said, within five hours’ flight time from Hong Kong, we can reach half of the world’s population and most of Asia’s thriving economies. Our port is among the top five busiest in the world. Our international airport is the world’s busiest cargo airport.

 

Hong Kong is a global centre for trade, finance, business and communications. You need superb infrastructure and connectivity to support e-commerce. And we have that. The shipping of goods plays a big part in e-commerce. Our strategic location and our role as a regional logistics and international maritime centre are some of our trump cards.

 

Hong Kong is also a hub of managers and professionals conversant with the latest world trends and practices. People working along the supply chain have confidence in the services that we provide.

 

Adaptable to changes

E-commerce is about a constant evolution of shopping behaviour and sales strategies. In Hong Kong, we are adaptable to changes. We are business-savvy. We know how to provide customised solutions to our clients. And we have a good track record of that over decades.

 

This is important because changes can happen really fast in the digital age. Online retail sales may now represent only a small fraction of total retail sales. This only means the growth potential is huge. And we shouldn’t just look at online sales alone, because non-online purchases can also be influenced by the social media.

 

A 2014 McKinsey report found that even though e-commerce represented only 4% of luxury sales, an additional 40% of luxury purchases were in some way influenced by consumers’ digital experience – for example, through online research of an item that is subsequently bought offline.

 

So when you look at a bigger picture, e-commerce is about just everything. It is about all the infrastructure and back-up services after a certain consumer clicks “buy” online. And even today, we are still making sense of what opportunities there are in store for us.

 

Fast evolution

If you want to visualise how far e-commerce has come so far, let me remind you this – it was only in 1994, barely 20 years ago, that Jeff Bezos founded an online bookshop called Cadabra, known today as Amazon.com. And it was only in 1998 that Jack Ma and other founders released their first online marketplace Alibaba.com in Hangzhou. Facebook was only launched in 2004, Twitter in 2006 and first-generation iPhones in 2007. And this year, Amazon opened a store on Alibaba’s Tmall retail platform. It’s indeed a very fast-changing trend that we are talking about.

 

Embracing e-commerce alone will not guarantee success. We need to appreciate the context of change. The shopping experience is moving from the brick-and-mortar stores to the web-enabled devices, but retailers still need to understand their customers.

 

And that’s no easy task. Anyone involved in e-commerce will tell you not to overlook the huge amount of information generated from online browsing history, especially that from the social media.

 

Understanding trends

The information allows merchants to gain deeper insight into customer behaviour and industry trends, hence enabling them to make more accurate and wiser decisions to improve just about every aspect of the business.

 

The biggest challenge for most e-commerce businesses is to collect, store, organise from multiple data sources, as well as to turn structured and non-structured data into meaningful insights.

 

There’s certainly a lot of data waiting to be analysed. And in case you wonder how much is a lot – estimates have it that the retail giant Walmart alone collects more than 2.5 petabytes of data every hour from its customer transactions.

 

So, what is a petabyte? It is one quadrillion bytes. If that’s too much to digest at 9-ish on a Tuesday morning, a quadrillion has 15 zeros after the digit one. So, you can count. Or, if you want to further visualise it, one petabyte is equivalent to 20 million filing cabinets.

 

Rapid insights

Today, e-commerce and big data have changed long-standing ideas about the experience of shopping and the experience of selling. E-commerce gives retailers rapid insights about who is interested in what, and then the information is fed directly to suppliers to keep inventory right.

 

Retailers can profile customers, or more precisely their shopping behaviour, at ease. It’s about efficiency and to-the-point service and responsiveness to market needs.

 

E-commerce generates big data. And big data is powerful. But don’t get me wrong, big data is powerful in a sense that helps us make sense of what we are doing and what we need to do. But it will not avert the need of strong leadership, of good management, of foresight, vision and judgement, and, of course, of care for customers.

 

So, e-commerce and big data are exciting topics that deserve more time and more thoughts into it, and I am sure, throughout this conference, a lot of discussions on these topics. Equally exciting, of course, is China’s unique Belt & Road initiative which is going to transform global trade, to be discussed at length in the first plenary session.

 

Secretary for Transport & Housing Prof Anthony Cheung gave these remarks at the opening of the Asian Logistics & Maritime Conference 2015.

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Gov’t plans new maritime body

Acting Chief Executive Carrie Lam

The business pulse of today’s global economy continues to beat stronger here in Asia than anywhere else in the world. And for the region’s rising economies, it’s the power of logistics that smooths their economic integration, that connects them with the rest of the world.

 

As management maven Tom Peters once said, “Leaders win through logistics”. About the absolute centrality of logistics, Mr Peters had a good deal more to say: “Vision, sure. Strategy, yes. But when you go to war, you need to have both toilet paper and bullets at the right place at the right time.”

 

This is good wartime advice. An oblique reminder, too, that logistics was born for the battlefield and not the office. Today, of course, the vast majority of our logistics players are fixated on meeting the changing needs of the consumer rather than the soldier.

 

Still, whether sustaining armies or driving companies, the practice of logistics calls for much the same strategy: how to get what is needed to where it’s needed – systematically, effectively, efficiently and economically.

 

In that regard, Hong Kong is doing remarkably well. Not surprising, given that logistics and trading, collectively, are one of our four pillar industries, representing about 24% of Hong Kong’s GDP, and employing over 767,000 people and that’s exceeding one-fifth of total employment in Hong Kong.

 

Of course, when it comes to logistics, Hong Kong has an enviable natural advantage. Call it location, location, location. Within four hours, we can reach all major Asian cities. And half the world’s population is no more than five hours away.

 

Beyond the geographic aces we were dealt, Hong Kong is blessed with a multitalented and multilingual workforce.

 

Distinct advantages

Thanks to our “one country, two systems” arrangements, Hong Kong is more – much more – than just any Chinese city. “One country” gives us all the benefits that come with being part of the second largest economy in the world.

 

And for the “two systems” aspect, it presents distinct characteristics and advantages you won’t find anywhere else.

Hong Kong enjoys a high degree of autonomy. We have our own currency, and it’s fully convertible. We have an independent judicial system, and our rule of law is well entrenched.

 

Along with the world’s products, we welcome the world’s people and their companies. They come because they can count on a level playing field for business here in Hong Kong. They come because information here in Hong Kong flows as freely as do people and capital.

 

World’s freest economy

All that freedom hasn’t gone unnoticed. The Washington-based Heritage Foundation has ranked Hong Kong the world’s freest economy for the past 21 years in a row.

 

Business wants freedom. Logistics flourishes in it. Consider the Hong Kong International Airport. It’s been the world’s busiest international cargo airport for more than 15 years. The Airport Councils International has ranked Hong Kong the world’s number one cargo hub since 2010. Our air cargo throughput rose 6%, year on year, in 2014, reaching 4.38 million tonnes.

 

Our Hong Kong port is no slouch, either. It’s consistently among the world’s busiest container ports in terms of throughput, with an annual average of about 23 million TEUs a year over the past decade. Some 350 container vessel sailings take place each week to more than 500 destinations around the world.

 

Of the world’s top 10 ports, seven are in China. That includes, of course, Hong Kong.

 

Global maritime hub

Today, the port of Hong Kong remains one of the world’s busiest. Our Shipping Register is the world’s fourth largest, its gross tonnage having just crossed 100 million in September.

 

Hong Kong companies own or manage about 9% of the world’s merchant fleet in deadweight tonnage. Port infrastructure apart, we are also an international maritime services centre flush with more than 700 companies.

 

They offer an exceptional range of maritime services, from ship management and agency, to ship finance, maritime insurance, maritime legal services and arbitration.

 

To upgrade our maritime services, the Government has a role to play: we are in the process of setting up a new maritime body which will have the capacity to undertake policy research and development, pursue marketing and external relations and develop manpower and training.

 

We house, as well, the only non-Mainland-based branch office of the China Maritime Arbitration Commission. Its presence in Hong Kong enhances our role in the resolution of maritime disputes, and reinforces our standing as a leading centre for international legal and dispute resolution services in the Asia-Pacific region.

 

That role will only expand in future, particularly as China’s new Belt & Road initiative gains traction, and you have heard what Vincent has just said. Indeed, the Belt & Road will deliver a wealth of opportunities for Hong Kong, and for all of you here today.

 

Seizing Belt & Road opportunities

Given the far-reaching promise of the Belt & Road initiative, I’m pleased to note that this conference will devote considerable time, and the expertise of many, to the topic, which will help you seize the opportunities that await the logistics and maritime industries.

 

Hong Kong enjoys good connections with many of the Belt & Road economies. And you can count on Hong Kong to play a significant role as the super-connector between the Mainland and those economies.

 

Our commercial experience and logistics expertise will be in demand as the movement of goods and people becomes ever more frequent under the Belt & Road initiative.

 

About 7,900 companies – from the Mainland and from around the world – keep offices in Hong Kong. Some 75 of the world’s top 100 banks have operations here. I would say these are all the testimonials we need to find our place in the Belt & Road’s fast lane. I invite you, all of you, to join them.

 

Finally I just want to say a few words about a campaign that I have launched yesterday, that is called Appreciate Hong Kong. There are so many things that we, in Hong Kong, should appreciate and should continue to support and the Hong Kong port is one of them.

 

Acting Chief Executive Carrie Lam gave these remarks at the Asian Logistics & Maritime Conference.

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HK condemns terrorist acts

Chief Executive CY Leung

Consul-General, friends of the French community in Hong Kong, ladies and gentlemen,

 

My wife Regina and I, and my government colleagues, want to be with you this evening to express again our support to you and condolences to all those people in France who lost their beloved ones and members of families.

 

Once again, we condemn acts of terrorism which cost lives in France and in other cases in other parts of the world. We want to be here to let you know that Hong Kong stands firmly behind you, behind your government and behind your country.

 

My wife and I have to go to the airport to take an 8 o’clock flight to go to Manila in the Philippines to attend the Asia-Pacific Economic Cooperation meeting, so my apologies for not being able to stay with you. But I want you to know that the people of Hong Kong and the Government of Hong Kong are with you this evening.

 

Chief Executive CY Leung gave these remarks at a vigil in Tamar Park in tribute to the victims of the November 13 Paris attacks.

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