«Letter to Hong Kong» the Chief Executive

August 31, 2011

Good morning everyone,

     This week we had the privilege and honour of welcoming Vice-Premier Li Keqiang to Hong Kong. This was his first visit here in his current role. During his relatively short stay, he tried his best to meet a wide cross section of people, and understand more about our society and economy.

     Underlining the importance of this visit, seven senior officials of full ministerial rank travelled here with the Vice-Premier, including the Minister of Commerce, Chen Deming; the Minister in charge of the National Development and Reform Commission, Zhang Ping; and the Governor of the People's Bank of China, Zhou Xiaochuan.

     This exceedingly high-powered visit happened at a time of increasing uncertainty in the global economy. The US and Europe are grappling with major economic and financial problems that have the potential to plunge the world into another recession. The global economy looks bleak, and this will inevitably affect Hong Kong's highly externally oriented economy.

     The Vice-Premier came with the prime purpose of delivering a keynote speech at a Forum on the 12th Five-Year Plan and Mainland-Hong Kong Economic, Trade and Financial Co-operation. He was responding to the current phase of global economic development. He specifically highlighted the strengths on which Hong Kong can confidently rely because of the ready support from our nation. He assured us that we would be fully armed to meet the challenges that might come our way.

     During the Forum, he announced a raft of new measures that would not only boost Hong Kong's economy in the medium to long term, but would also contribute to the continued opening up and economic reform of our country.

     The 12th Five-Year Plan underscores Hong Kong's importance by featuring it with Macau, for the first time, in a separate chapter in this national economic blueprint, which covers the period 2011 to 2015.

     The Vice-Premier highlighted six areas that will bring benefits both to Hong Kong and the Mainland.

     First of all, Hong Kong's service industries will get even greater access to the Mainland market for both traditional and emerging services sectors. This will include the medical, construction, legal, tourism and testing and certification service sectors where Hong Kong has a special interest and advantage. More significantly, he pledged to liberalise trade in all services between the Mainland and Hong Kong before the end of the Five-Year Plan.

     Second, he offered new measures that would enhance Hong Kong's standing as an international financial centre. These new measures will broaden and deepen our stock market, as well as the banking, insurance and asset management sectors.

     The third aspect is the expansion of the offshore Renminbi market in Hong Kong. We will continue to be the international testing ground for the wider use of RMB for trade settlement, banking, investment, debt issue and treasury bonds. This is an extremely important development for our country and one which, over time, will have major ramifications in the global currency market. And Hong Kong will be at the centre of the action.

     The fourth area revolves around support for Hong Kong's participation in regional and global economic co-operation initiatives. What this means is that the Mainland will vigorously support measures that boost free trade and co-operation opportunities for Hong Kong in both multi-lateral and regional fora such as the WTO, APEC and East Asia. In other words, more access for Hong Kong businesses.

     The fifth area also plays to one of Hong Kong's greatest strengths, and that is our international outlook and deep experience in international markets. Mainland enterprises will make greater efforts to utilise Hong Kong's professional services in "going global". This will cover areas such as business matchmaking, investment expansion, marketing networks and staff training. All this will be in addition to our well-sought-after legal and accounting services. The aim is to combine Hong Kong's global experience and service excellence with the muscle and potential of successful Mainland corporations seeking to expand their horizons.

     Sixth, and finally, there will be much deeper co-operation between Hong Kong, Macau and Guangdong. This will enhance the global competitiveness of the Pearl River Delta, foster regional economic development, and improve the living environment in the whole Delta. It will cover areas such as finance, logistics, transport networks, infrastructure, processing industries, tourism, health care, environmental protection, elderly services, food safety, and water, power and gas supply.  

     Taken as a whole, this comprehensive range of new measures will provide substantial opportunities across a wide spectrum of Hong Kong business activity. This will help us maintain economic growth at a time when global economic conditions are fragile. It will help create jobs in many different sectors. Most of all, it will provide a much more broad-based and sustainable economic footing for Hong Kong moving forward.

     We are indeed fortunate that our national leadership places such great importance on the continued economic prosperity and social stability of Hong Kong. We are grateful for its care and concern. I earnestly hope that everybody and every business in Hong Kong can make the most of the opportunities that are now on the table.

     At the same time it is important to note, as the Vice-Premier emphasised, that the measures announced are designed to play more fully to the respective strengths of the Mainland and Hong Kong - that is, mutually beneficial, multi-dimensional and win-win.

     Over the past 30 years, Hong Kong has played a vital and unique role in the Mainland's opening up and reform. And since 1997, we have been able to play an even greater role by leveraging all of our advantages under "One Country, Two Systems". That process continues apace with the new measures announced this week.

     As the Vice-Premier said in his speech, and I quote, "It is Hong Kong's need and China's need that Hong Kong continues to bring out the unique advantages it has developed over the years and play its irreplaceable role in the Mainland's reform, opening up and modernisation drive."

     This is a tremendous vote of confidence in Hong Kong from the Central Government - in what we have achieved so far but, more important, in what we can achieve together in the future by playing to our strengths and embracing much closer, deeper and broader economic, cultural and social interaction with our nation. It is, indeed, a win-win on so many levels.


  Donald TSANG Yam-kuen  
Donald TSANG Yam-kuen,
Chief Executive