Chief Executive CY Leung
I had the honour of meeting with the Prime Minister this morning, and the Prime Minister and I agreed to take our co-operation to new levels and also to broaden the scope of our co-operation. And I had separate meetings after the meeting with the Prime Minister with the Foreign Minister and the Minister for Finance. And although these were separate meetings, but it was clear to me that there was a consensus among the top leaders of India that we should broaden the scope, and deepen the depth, of co-operation between India and Hong Kong.
Hong Kong, to be sure, is equally pro-business and pro-growth. Indeed, we are the world’s eighth-largest trading economy, and 15th largest exporter of commercial services. We place our faith, and our future, in free trade and innovative enterprise. Good reasons for India and Hong Kong to expand on our strong and longstanding ties – to explore the wealth of new and emerging prospects open to business on both sides.
Hong Kong is an interesting city. It’s a populous city with 7.2 million people living in no more than 1,100 square kilometres. And I should tell you that the total amount of housing land of this 1,100 square kilometres is no more than 10%, and we manage to give people, generally speaking, good quality housing. Of course, there are still many challenges, but generally speaking we have 7.2 million people living in reasonable quality housing units using no more than 10% of our land area. And within 1,100 square kilometres, we have both urban area, suburbs, rural areas and the countryside. All within a mere 1,100 square kilometres. And we have 40% of our land area set aside as country parks, and the nearest entrances to our country parks are no more than 15 minutes’ drive from the hustle bustle of our Central business district. And apparently we have more species of butterflies in Hong Kong than the whole of England. We have pink dolphin in our sea, not far from where the new airport is. So that’s Hong Kong. And we do have some experience when it comes to urbanisation – some positive, some not so positive – which we are quite prepared to share with our friends in India.
Transportation, we rely heavily on public transportation. Car ownership in Hong Kong is no more than 21%. In other words, no more than 21% of the households in Hong Kong own cars, and car usage rate is even smaller. But we provide reasonably affordable, comfortable, safe and efficient public transport. And one of the ways of doing this is to have a rail policy, and the CEO of the Mass Transit Railway corporation is with us today. We plan our stations well. We use every single square foot of our stations and space above the stations. And we also optimise the real estate value of railways and the stations where they serve, so much so that the railway corporation in Hong Kong is the largest real estate company, because they create real estate value by optimising the use of space along and around railways and railway stations.
And that’s why I’m here, in India, leading a high-profile mission of 40 Hong Kong and Mainland business leaders.
That reality – that our mission counts CEOs of major businesses – underscores a critical Hong Kong advantage: our “one country, two systems” arrangement.
The “one country” part of this successful formula means that Hong Kong enjoys unique advantages for being part of China. We enjoy the best market access to the Mainland, and many other benefits that come with being a privileged player in China, the world’s second-largest economy.
As for “two systems”, we offer free market access to Hong Kong, the common law system, rule of law, open and democratic government, independent judiciary and English as one of the official and business languages.
The “one country” and “two systems” arrangement offers opportunities no other city in China, indeed no other economy in the world, can match. It’s a unique role, one that has made Hong Kong a two-way business bridge open to all. We bring the rest of China and the rest of the world together. I like to call Hong Kong the world’s “super-connector”.
There are nearly 8,000 overseas and Mainland companies that maintain offices in Hong Kong. Most take advantage of our peerless ties to the Mainland. No less important, they set up in Hong Kong because capital, information, trade and people flow freely in and out of Hong Kong.
They do so because our tax system is simple and our tax rates low. By the way, our personal tax return is a simple form of four pages printed in large font, and our profits tax ceiling is a mere 16.5 per cent.
We have world-class infrastructure for businesses. Our Internet connection speed is among the world’s fastest. Our household broadband penetration rate, at 83%, is among Asia’s highest. Our mobile subscription rate is a remarkable 229%.
Businesses can also count on our legal system – our judiciary is independent, and our intellectual property regime robust. And there is practically no language barrier – English is used in classrooms, boardrooms and courtrooms.
Equally important, we are the freest economy in the world. In fact, we have been given that status for 22 years in a row by the Heritage Foundation of the United States. In a report just released on Monday, out of the 10 components measured, Hong Kong achieved high score of 90 or above in seven components, with the top positions in three components, namely business freedom, trade freedom and financial freedom. When you run a business in Hong Kong, you don’t have to worry about competition from the Hong Kong Government – we do not own businesses. A complete level playing field for all.
Compelling reasons, I would say, for more Indian companies to consider Hong Kong in your pursuit of markets on the Mainland of China, Southeast Asia and around the world. And if you are still in doubt, of if you have questions to ask, my delegation members are happy to share with you their experience of managing business in this region out of Hong Kong. You can count on them. Our business people are open-minded; they keep looking for new partners because they know there is enough on the table for all and business is not a zero-sum game.
Our role as a global business intermediary is enabled, no less, by the high-powered business and trade systems we’ve shaped and streamlined over the decades and the generations.
We are, for instance, the world’s leading offshore hub for the renminbi. Indeed, banks in Hong Kong handle some 70% of global renminbi payment. In the first 11 months of 2015, renminbi trade settlement managed by banks here totalled RMB6,166 billion – up 10 per cent, year-on-year. Our clearing and settlement system for renminbi trade and related renminbi financial transactions is unrivalled in its efficiency – ideal for enabling India’s trade with China.
That role will only grow as China’s 13th Five-Year Plan gets going next month. Proposals for the plan, outlined late last year, endorse Hong Kong’s renminbi status. The plan also supports our leading role in promoting high value-added financial services, as well as logistics and professional services.
In addition, it states that the Mainland will continue to open its markets to Hong Kong, to expedite our co-operation with Guangdong Province, and to deepen our ties to the Pan-Pearl River Delta region.
When it comes to doing business with China, Hong Kong, of course, has unrivalled experience and expertise. We have, for example, supported the Pearl River Delta’s rise as the world’s factory for more than 35 years. Over that time, we have been instrumental in building the Pan-Pearl River Delta region into a manufacturing and supply-chain powerhouse. We have the management, technical and professional expertise, and we are happy to share them with India.
Business, of course, is made easier, and infinitely more rewarding, when people-to-people bonds – in culture, education, sports and more – are cultivated, allowed to flourish.
In this regard, I see much promise. Our respective tourism attractions, for example, are well known. And it’s encouraging to see that tourists from India to Hong Kong grew nearly 19% in 2014.
New Delhi’s cultural heritage, of course, is celebrated worldwide; in this, the city serves as a kind of mini-India. I’m pleased to note, too, that India’s e-Tourist Visa Scheme was extended, last year, to Hong Kong and the Mainland of China. It will, I’m sure, boost holiday travel from Hong Kong to India.
Culturally, Hong Kong is richer thanks to the large, vital and long-established Indian community in Hong Kong. And I look forward to the signing of an MOU on cultural co-operation between Hong Kong and India.
In education, Hong Kong and India have much to offer each other. Indeed, four Hong Kong universities were ranked among the world’s top 100 universities last year in the QS World University Rankings.
One of them, the Chinese University of Hong Kong, recently established a Visiting Professorship of Indian Studies in concert with the Indian Council for Cultural Relations. I would say that’s an excellent start. And I look forward to more education and research co-operation between us at the post-secondary level.
On science and technology, Hong Kong is also a “super-connector” that provides a platform for mutual co-operation and exchange. Sweden’s Karolinska Institutet, one of the world’s leading medical universities, opens the first overseas research centre this year in Hong Kong. We will also be home to the first Innovation Node of the renowned Massachusetts Institute of Technology.
It also helps that the Hong Kong Government launched our own Innovation and Technology Bureau last November to co-ordinate the science and technology research efforts of our universities and other major Hong Kong research and development centres.
I have just visited the Indian Institute of Technology Delhi this afternoon, and am most impressed by the various cutting edge researches. We welcome, and indeed look forward to, Indian research institutions and businesses to work with Hong Kong, and make use of the platform provided by us to advance and promote science and technology. I look forward to seeing the results of our joint research efforts.
And what about sports? I am pleased to note that our own Hong Kong cricket team will be in India next month for the ICC World T20 cup. New Delhi will be hosting some of the games, and should Hong Kong make it to the Super-10 stage, I’m sure our players will find rousing support right here in the great city of New Delhi.
The Hong Kong Trade Development Council opened an office right here in New Delhi last April. The TDC looks forward to helping Indian companies find a rewarding future with Hong Kong. I also look forward to business and other delegations from India. My delegation and the TDC would be happy to reciprocate your hospitality. I hope, in the not-too-distant future, we could set up high-level roundtable meetings when you are visiting Hong Kong – to explore opportunities, to grow our relationship, together.
Chief Executive CY Leung gave these remarks at a business dinner hosted by the Hong Kong Trade Development Council in New Delhi on February 4.
via Moroccan Trader HK, India can explore prospects