Hong Kong Economic and Trade Office HKETO

Speaking to more than 80 media representatives at a spring dinner reception in Vancouver, Ms Lo said that Hong Kong would continue to “go global” together with the Mainland and act as the premier gateway for overseas enterprises to explore business opportunities in China.

The media dinner was jointly organised by the HKETO and the Canadian office of the Hong Kong Tourism Board.

“As a practical measure to facilitate trade, the Mainland will further open up its service sectors to Hong Kong through the Closer Economic Partnership Arrangement. This would present new opportunities for Hong Kong and those overseas, including in Canada, who would like to do business with Mainland China through Hong Kong,” Ms Lo said.

Hong Kong remains an excellent place for business and is the freest economy in the world, according to the Fraser Institute in Canada and the Heritage Foundation in the United States.

“With the full support of our Central Government under its National 12th Five-Year Plan, Hong Kong will continue to develop and consolidate its status as a global financial centre and an international trading and shipping centre,” Ms Lo said.

“Specifically, the Central Government supports us to further develop Renminbi offshore business and our six new growth industries in the areas of testing and certification services, medical services, innovation and technology, cultural and creative industries, environmental industries and education services.”

According to the World Economic Forum, Hong Kong has the strongest financial system to support economic growth, and it has remained at the top position in the world for three consecutive years in terms of fundraising through initial public offerings.

“There is a saying in Chinese, ‘Tian shi, di li, ren he’, which means that if you want to succeed, you need to do the right thing at the right place, at the right point of time, and with the support of the right people and connections through the right people,” she said.

“In the context of trade, I would think that despite all the uncertainties in the global economy, there is a favourable environment, right here in Canada now, for us to promote business and trade with Hong Kong.”

Ms Lo said that in the coming months, the HKETO would organise a series of trade promotional activities in different Canadian cities with a focus on certain sectors and industries in which there are complementary aspects between Hong Kong and Canada.

The HKETO will continue to support the Hong Kong Trade Development Council in organising Canadian trade missions to Hong Kong, while its Invest Hong Kong desk will provide assistance to Canadian companies that are interested in establishing their business in Hong Kong.

During her two-day visit in Vancouver, Ms Lo also met with the Hong Kong-Canada Business Association and visited some media organisations.

Miss Gloria Lo, the Director of the Hong Kong Economic and Trade Office, speaking at the media spring dinner in Vancouver.

(from left) Ms Karisa Lui, Assistant Manager (Marketing) of Hong Kong Tourism Board in Toronto (HKTB), Michael Lim, Director (Canada, Central and South America) of HKTB, Miss Gloria Lo, Director of the Hong Kong Economic and Trade Office (HKETO), Stephen Siu, Assistant Director of HKETO and Ms Catherine Yuen, Principal Consultant (Western Canada) of HKETO.

The Director of the Hong Kong Economic and Trade Office (HKETO) in Toronto, Miss Gloria Lo, announced today (January 18) at the Dragon Ball media preview that a special reception under the theme will be held at the Dragon Ball on January 28, with both Ms Lo and the Chinese Ambassador to Canada, Mr Zhang Junsai, making presentations.

The annual Dragon Ball presented by the Yee Hong Community Wellness Foundation (Yee Hong) is one of the largest Chinese New Year celebrations in North America. It is supported by several major Canadian corporations and the business sector.

”This reception will feature the latest developments in Hong Kong, with particular emphasis on its achievements and integration with Mainland China on the economic front,” said Miss Lo. “With the full support of China, Hong Kong will strive to maintain and consolidate its status as a global financial centre and an international trade and shipping centre.”

The HKETO has worked with Yee Hong on many occasions in the past to promote Hong Kong and its links with Canada. In fact, Yee Hong itself is closely connected to Hong Kong mainly because of the Hong Kong community’s support and contributions toward the charitable organisation over the years.

“Yee Hong is indeed an exemplary model of serving the community with dedication and professionalism, which is the same spirit that we treasure and share in Hong Kong. We also see the special reception will be a great networking opportunity enhancing the economic and trade ties between Hong Kong and Canada,” Miss Lo added.

Miss Gloria Lo, the Director of the Hong Kong Economic and Trade Office, announcing a special reception under the Hong Kong theme to be held at the annual Dragon Ball.

Miss Gloria Lo (back row, 4th from left), Director of Hong Kong Economic and Trade Office (HKETO); Peter Kwok (back row, 1st from left), HKETO Deputy Director; and Stephen Siu, HKETO Assistant Director (2nd from right), joining other Dragon Ball sponsors for a group picture.

The Financial Secretary, Mr John C Tsang, said today (January 12), “We welcome the Heritage Foundation’s high regard of Hong Kong as the world’s freest economy, a ranking we have held for 18 consecutive years. We are determined to uphold economic freedom in Hong Kong, which is the cornerstone of sustained economic stability, growth and prosperity.

“We see the role of the Government as that of an active facilitator. We provide a business-friendly environment where all firms can compete on a level-playing field. We have sound regulatory regimes in place to ensure the integrity and smooth functioning of a free market. We also strive to remove impediments and provide support in an open and equitable manner to facilitate industries tapping into new markets or new growth industries,” Mr Tsang added.

According to the 2012 Index of Economic Freedom released today, Hong Kong scores 89.9 (on a scale from 0 to 100), well above the world average of 59.5.

Among the 10 economic freedom factors assessed, Hong Kong ranks first in financial and trade freedom, second in investment freedom and property rights, and third in business freedom.

The Heritage Foundation commended Hong Kong’s tax system as simple and efficient. It also considered monetary stability well maintained in Hong Kong.

The Heritage Foundation further complimented Hong Kong’s high-quality legal framework, which provides effective protection of property rights and strong support for the rule of law. In addition, Hong Kong’s regulatory efficiency and openness to global commerce strongly support entrepreneurial dynamism, while overall macroeconomic stability minimises uncertainty. Moreover, there is little tolerance of corruption in Hong Kong.

The Heritage Foundation also noted that Hong Kong’s economic interaction with the Mainland has become more intense and sophisticated, chiefly through strengthened financial linkages, and financial markets that are extremely well capitalised.

The study ranks the degree of economic freedom of 179 economies around the world. The 10 factors assessed are business freedom, trade freedom, fiscal freedom, government spending, monetary freedom, investment freedom, financial freedom, property rights, freedom from corruption and labour freedom.

Singapore and Australia remain second and third respectively according to the Index of Economic Freedom.

Of the other economies in Greater China, the Mainland ranks 138th, Macau ranks 19th and Taiwan ranks 18th.

The reception, jointly hosted by the HKETO, Toronto section of the Hong Kong-Canada Business Association, Hong Kong Trade Development Council, and Hong Kong Tourism Board at Yorkville’s Intercontinental Hotel, was attended by 180 guests from the business and financial sectors, Hong Kong community, media and government representatives, including MP Patrick Brown, Ontario Minister of Tourism, Culture and Sport, the Hon. Michael Chan etc.

Speaking at the reception, Miss Lo said the World Economic Forum has just released its Financial Development Report 2011, in which Hong Kong is ranked 1st among 60 economies in the world, overtaking the United States and United Kingdom.

The study acknowledges Hong Kong’s strengths in financial access, business environment and banking financial services, and in particular, its strong performance in IPO activity and insurance. “This is the first time ever for an Asian city to receive such an honour,” she said.

Miss Lo also said that Hong Kong is full of opportunities for business and investments. “Both Hong Kong and Canada have managed to ride out of the global financial crisis fairly well,” she said. “With the growing interests of the Canadians in Asia markets and the mission of Hong Kong to go global together with Mainland enterprises under the national 12^th Five Year Plan, we see the scope of further enhancing the economic and trade relations between Hong Kong and Canada.”

The HKETO director also shared with the guests the latest news that Mainland China and Hong Kong have signed a new deal under the Closer Economic Partnership Arrangement (CEPA) to further liberalize the service sectors and strengthen cooperation between Hong Kong and the mainland in areas of finance, tourism, innovation and technology, etc.

She said, “With this Supplement VIII to CEPA, Hong Kong service suppliers would be able to enjoy preferential treatment in a total of 47 service sectors in the Mainland market. This also applies to foreign-owned service suppliers operating in Hong Kong.”

“These two achievements are very pleasant Christmas gifts for Hong Kong and would certainly further boost our trade promotion efforts in the coming year,” Miss Lo added.

Miss Gloria Lo, the Director of the Hong Kong Economic and Trade Office speaking at the annual Hong Kong Family Christmas reception in Toronto.

The annual Hong Kong Family Christmas reception in Toronto is jointly hosted by the Hong Kong Economic and Trade Office (HKETO), Toronto section of the Hong Kong-Canada Business Association (HKCBA), Hong Kong Trade Development Council (HKTDC), and Hong Kong Tourism Board (HKTB). Picture shows HKETO Director Miss Gloria Lo joining representatives of the Hong Kong Family in a toast. From left: HKTB Director (Canada, Central & South Americas) Michael Lim, HKTDC Director (Canada) Andrew Yui, Miss Gloria Lo, HKCBA National Chair Robert Armstrong, HKCBA (Toronto Section) Executive Director Bob Brown and HKCBA (Toronto Section) President Peter Lawler.

Witnessed by the Chief Executive, Mr Donald Tsang, and other guests, the Financial Secretary, Mr John C Tsang, and the Vice-Minister of Commerce, Mr Jiang Yaoping, signed Supplement VIII to CEPA today.

Supplement VIII to CEPA provides for a total of 32 services liberalisation and trade and investment facilitation measures, including 23 liberalisation measures in 16 service sectors, and strengthens co-operation in areas such as finance, tourism, innovation and technology. Both sides also agreed to enhance origin criteria under trade in goods, and relax the definition and related requirements of Hong Kong service suppliers. Among the 32 measures, 15 are related to the implementation of measures announced by the Vice-Premier Li Keqiang during his visit to Hong Kong in August. The respective measures are summarised below:

At present, some Hong Kong products have to fulfil the “value-added content” requirement in order to benefit from the zero tariff arrangement under CEPA. Supplement VIII to CEPA allows traders to include the value of raw materials and component parts originated from the Mainland when calculating the “value-added content”. The value allowed to be included into the calculation can be up to half of the “value-added content” (i.e. 15 per cent). The measure facilitates the trade to make use of the zero tariff preferential treatment offered to Hong Kong goods under CEPA.

Market access conditions will be further relaxed in 13 existing sectors, namely, legal; construction; technical testing, analysis and product testing; placement and supply services of personnel; distribution; insurance; banking; securities; hospital; tourism; road transport; qualification examinations for professionals and technicians; and individually owned stores. Liberalisation measures will also be introduced in three new sectors, namely, inter-disciplinary research and experimental development services; services incidental to manufacturing; and library, museum and other cultural services. These will bring the total number of liberalised service sectors under CEPA from 44 to 47, involving a total of 301 liberalistion measures.

On legal, to further develop closer co-operation between the legal professions of the Mainland and Hong Kong, and to explore ways of improving the mode of association of law firms of the two places; and to consider broadening the scope of businesses of Hong Kong residents who have acquired Mainland legal professional qualification and hold a Mainland lawyer’s practice certificate in acting as agents in civil litigation cases in the Mainland relating to Hong Kong residents and juridical persons.

On construction, to allow Hong Kong professionals who have obtained the Mainland’s construction professional qualifications through mutual recognition, to register and practise in Guangdong and enjoy the same treatment as Mainland professionals having the same professional qualifications. To recognise Hong Kong professionals who have obtained the Mainland’s class 1 registered architect qualification or class 1 registered structural engineer qualification through mutual recognition as registered practitioners for the purpose of declaration of engineering design enterprise qualifications within Guangdong Province, in accordance with the relevant Mainland regulations.

On hospital, in addition to Shanghai Municipality, Chongqing Municipality, Guangdong Province, Fujian Province and Hainan Province, to allow Hong Kong service suppliers to set up wholly-owned hospitals in all municipalities directly under the Central Government and provincial capitals in the Mainland.

On banking, to allow any Mainland-incorporated banking institution established by a Hong Kong bank to engage in the sale and distribution of mutual funds.

On securities, to continue to support qualified Mainland financial institutions engaged in securities activities to set up subsidiaries in Hong Kong and to operate businesses in accordance with law; and to deepen co-operation between the Mainland and Hong Kong in financial services and products development, and to allow investments in the Mainland securities market by means of the Renminbi Qualified Foreign Institutional Investor scheme.

On insurance, to allow Hong Kong insurance brokerage companies to set up wholly-owned insurance agency companies in Guangdong Province (including Shenzhen) on a pilot basis. The place of operation should be in Guangdong Province (including Shenzhen), and the applicant must fulfill the following criteria: (1) the applicant should have been operating insurance brokerage businesses in Hong Kong for over 10 years; (2) the applicant’s average annual business revenue for the past three years before application should not be less than HK$500,000 and the total assets as at the end of the year before application should not be less than HK$500,000; (3) within three years before application, there has been no serious misconduct and record of disciplinary action; and (4) the applicant should have set up a representative office in the Mainland for over one year.

On tourism, to optimise the current “144-hour facilitation visa” policy in Guangdong Province through relaxing the requirement to pre-register the outbound control point, and reviewing the requirement regarding tour size at an appropriate juncture.

On technical testing, analysis, and product testing, to expand the scope of product testing that can be undertaken by testing organisations in Hong Kong for the China Compulsory Certification (CCC) System to all existing products processed in Hong Kong that require CCC. These testing organisations have to be accredited by the accreditation body of HKSARG (i.e. the Hong Kong Accreditation Service) to be capable of performing testing for the relevant products under the CCC System.

On distribution, to allow the same Hong Kong service supplier that opens more than 30 stores accumulatively in the Mainland and sells different types and brands of commodities (including staple food) coming from multiple suppliers to operate in Guangdong on a wholly-owned basis as a pilot measure.

On individually owned stores, to expand the scope of services and relax the restrictions of individually owned stores set up by Hong Kong permanent residents with Chinese citizenship in the Mainland, i.e. the number of persons engaged in the operation is relaxed from no more than eight persons to 10 persons, and the business area for certain types of services is relaxed from not exceeding 300 square meters to 500 square meters.

To relax the criteria of “substantive business operations” under the definition of Hong Kong service supplier. Unless individual CEPA measures, or the laws, regulations as well as administrative regulations of the Mainland impose specific requirements on the nature and scope of business, the scope of CEPA preferential measures that Hong Kong service suppliers may apply is not restricted to the scope of their business in Hong Kong.

Supplement VIII to CEPA clearly supports Mainland banks to make use of Hong Kong’s international financial platform to develop their international businesses on the premises of prudent operation; and supports Hong Kong insurance companies to enter the market through setting up business institutions or capital participation, so as to participate and share in the development of the Mainland insurance market. It also enhances bilateral co-operation in areas such as development of insurance products, business operation and operational management, etc.

The two sides agreed to strengthen co-operation in tourism, including measures to jointly improve the quality of tourism services in the Mainland and Hong Kong, and to strive together for the healthy and orderly development of the Mainland’s Hong Kong-bound tourism market; to take forward the Mainland and Hong Kong’s co-operation in overseas joint tourism promotion, joint development of “multi-destination” itineraries featuring the Mainland and Hong Kong, and closer co-operation between the overseas tourism offices of the two places; to encourage mutual entry of tourism enterprises and investments in the two places to enter each other’s markets; to support strategically Hong Kong service suppliers to set up travel agents in the Mainland; and to enhance support for developing Hong Kong as a homeport for cruise tourism.

The two sides agreed to further strengthen co-operation in commodity inspection and quarantine, food safety, quality and standardisation; and to strengthen co-operation between the two places in the area of innovation and technology, so as to support Hong Kong’s development in innovation and technology.

Under Supplement VIII to CEPA, measures pertaining to enhancement of origin criteria, relaxation of the definition and related requirements of Hong Kong service supplier, and measures relating to trade in services will be effective from April 1, 2012.

The signing of Supplement VIII to CEPA fully reflects the support of the Central Government for the Hong Kong Special Administrative Region. The Supplement provides for preferential measures in trade in goods, trade in services, as well as trade and investment facilitation.

On trade in goods, the measure for origin criteria allows Hong Kong manufacturing enterprises to include materials and component parts originated from the Mainland in the calculation of “value-added content”, which will help to further improve the CEPA origin criteria and enable more Hong Kong products to enter the Mainland market under the zero tariff preferential arrangement, thus increasing their competitiveness, as well as attracting and encouraging the manufacturing industry to move towards diverse and sustainable development.

The liberalisation and trade and investment facilitation measures for the pillar industries and those industries in which Hong Kong has a competitive edge will help Hong Kong service industries accelerate their opening up of the Mainland market. This will be greatly conducive to the sustainable development of these industries, and will foster the economic and trade integration and professional exchanges between the two places.

The measures for individually owned stores will expand the scope of business and improve operating conditions. This will help small and medium enterprises tap the Mainland market and increase the beneficiaries of CEPA.

The relaxation on the criteria of “substantive business operations” in the definition of Hong Kong service supplier also enables Hong Kong businesses to expand their scope of business in the Mainland with greater flexibility and diversity, thereby maximising CEPA’s benefits.

The Financial Secretary, Mr John C Tsang said, “We welcome the WEF’s recognition of Hong Kong’s rising competitiveness as an international financial centre. Hong Kong is ranked first in financial development. This is the first time ever for an Asian financial centre to be given the top spot.

“We are pleased with the WEF’s encouraging acknowledgement of our strengths in financial access, business environment and banking financial services, and in particular, our strong performance in some financial services such as IPO activity and insurance.

“We will study the report carefully for any further useful comments on Hong Kong. We will continue to strengthen Hong Kong on various aspects as a leading financial centre and as Mainland’s offshore Renminbi centre,” he said.

Among the seven component pillars assessed, Hong Kong ranks first in “Financial access”, and third in both “Business environment” and “Banking financial services”. The WEF noted that the need to make different forms of capital available will be essential for future growth and recovery. The WEF also remarked that the challenge facing various economies in the world will be how to encourage economic activity while not fuelling the next credit bubble, which could cause severe consequences down the line. According to the WEF, when looking for possible solutions, decision-makers should not lose sight of the long-term consequences while they fix the short-term situation.

The study ranks 60 of the world’s leading financial systems and capital markets, analysing the drivers of financial system development that support economic growth. The seven pillars assessed are: institutional environment, business environment, financial stability, banking financial services, non-banking financial services, financial markets and financial access.

Hong Kong ranks first, overtaking the US (2nd), the UK (3rd) and Singapore (4th). Mainland China ranks 19th, up from 22nd.

Speaking today (Wednesday) at a luncheon to welcome young Hong Kong film director Derek Tsang to the 15th edition of the festival, the Director of the Hong Kong Economic and Trade Office in Toronto, Miss Gloria Lo, thanked the festival organizers for again picking a Hong Kong film for their opening gala. A capacity crowd attended the Canadian premiere of “Lover’s Discourse” by Tsang and Jimmy Wan at the festival’s grand opening at the Isabel Bader Theatre last night.

Hong Kong films presented at the festival’s annual galas in recent years have included “Gallants” by Clement Cheng and Derek Kwok, “Overhead” by Felix Chong and Alan Mak, Kenneth Bi’s “The Drummer” and more. “The showing of yet another Hong Kong film for the opening would no doubt give much encouragement to our new generation of aspiring and talented filmmakers,” said Miss Lo.

The Hong Kong Special Administrative Region Government nurtures creativity by supporting small- to medium-budget films through the Film Development Fund, and “Lover’s Discourse” was partly funded by that program.

Miss Lo said the festival has helped facilitate cultural exchanges between the East and the West. “There is always a close bond between Hong Kong and Canada,” she said. Tsang studied sociology at the University of Toronto, and both Cheng and Bi have lived in Canada before.

“I should say that the Hong Kong film industry has undergone impressive development in recent years, with over 300 international awards received over the past decade, including the latest achievement made by the film ‘A Simple Life’, directed by Ann Hui,” Miss Lo said. “A Simple Life” was recently screened at the Toronto International Film Festival.

“Hong Kong has an excellent environment for creative industries,” she said, “thanks to our freedom of expression, free flow of information and exchange of new ideas.” Hong Kong is promoting cultural and creative industries, including the film industry, as one of the six industries for its economy.

Apart from “Lover’s Discourse”, another Hong Kong film, “Overheard 2″, an acclaimed Hong Kong action thriller, will be screened by the festival at 7pm on Friday, November 18, at the Richmond Hill Centre for the Performing Arts.

The Centenary of China’s 1911 Revolution was hosted by the Chinese Cultural Centre of Greater Toronto, sponsored by the Hong Kong Economic & Trade Office (HKETO) in Toronto. Apart from Dr Sun Yat-sen Museum, Hong Kong, the other supporters include Faculty of Liberal Arts and Professional Studies, York University and Richard Charles Lee Canada-Hong Kong Library, University of Toronto. Today, officiating at the ribbon-cutting ceremony were Miss Gloria Lo, Director of HKETO, Miss Xiao Hu, Cultural Consul of the Chinese Consulate General in Toronto and officials from the three levels of Government in Canada, including Hon. Chungsen Leung, Parliamentary Secretary for Multiculturalism and Hon. Michael Chan, Ontario Minister of Tourism and Culture.

Speaking at the opening ceremony, the HKETO Director Miss Lo noted that the staging of a commemorative activity overseas during the centenary of the Revolution imparted special meaning. The Chinese and mainstream communities in Toronto would gain a deeper understanding of the Chinese history as well as Dr Sun’s life and revolutionary ideas which Dr Sun had said originated from Hong Kong. Hong Kong has played a pivotal role from the setting up of Xing Zhong Hui and Tong Meng Hui, fundraising for the revolutionary activities, to the staging of the successive uprisings.

Miss Lo said, “This exhibition includes two sets of displays — the 1911 Revolution in China – Francis Stafford’s Photo Exhibition and Dr. Sun Yat-sen and Family. They have been showcased in Hong Kong where had countless ties with the 1911 Revolution. Besides, Hong Kong still conserves the historic home and heritages related to the revolutionary campaigns, from Central to Tun Mun in the New Territories. I encourage you to visit Hong Kong and trace Dr Sun’s footprint over there.”

Also in the exhibition are the precious books relating to Dr Sun Yat-sen and the 1911 Revolution, a piece of Dr Sun’s calligraphy and a cane he used before, as well as a good collection of stamps on Dr Sun. To tie in with the exhibition, Professor Joshua Fogel, Canada Research Chair in the history of modern China, Department of History of York University delivered a public lecture to on “Dr Sun Yat-sen and the International Arena on the Eve of the 1911 Revolution”.

The Centenary of China’s 1911 Revolution will be held at the Chinese Cultural Centre for two weeks, starting from today until November 6. Then the displays will move to York University and University of Toronto afterwards.

The Centenary of China’s 1911 Revolution Exhibition is sponsored by the Hong Kong Economic & Trade Office (HKETO) in Toronto. Picture shows the officiating guests at the exhibition’s opening performing a cake-cutting ceremony. From left: Member of Parliament Rathika Sitsabaiesan; Ms Xiao Hu, Cultural Consul of the Chinese Consulate General in Toronto; the Hon. Chungsen Leung, Parliamentary Secretary for Multiculturalism; Dr Ming-tat Cheung, Chair of Chinese Cultural Centre of Greater Toronto; Miss Gloria Lo, Director of HKETO; the Hon. Michael Chan, Ontario Minister of Tourism and Culture and Raymond Cho, Toronto Councillor.

The Centenary of China’s 1911 Revolution Exhibition was supported by the York University and the University of Toronto. Officiating at the opening ceremony are (from left): Ms Xiao Hu, Cultural Consul of the Chinese Consulate General in Toronto; the Hon. Chungsen Leung, Parliamentary Secretary for Multiculturalism; Dr Ming-tat Cheung, Chair of Chinese Cultural Centre of Greater Toronto; Miss Gloria Lo, Director of HKETO; the Hon. Michael Chan, Ontario Minister of Tourism and Culture; Raymond Cho, Toronto Councillor; and Professor Joshua Fogel, Department of History of York University.

Hong Kong offers the highest level of economic freedom worldwide, with a score of 9.01 out of 10. The other top scorers are Singapore (8.68), New Zealand (8.20), Switzerland (8.03), Australia (7.98), Canada (7.81), Chile (7.77), the United Kingdom (7.71), Mauritius (7.67) and the US (7.60).

Please see a speech (in English only) by the Chief Executive, Mr Donald Tsang, at the Gala Dinner co-hosted by the Fraser Institute and the Lion Rock Institute in celebration of Hong Kong being ranked as the world’s freest economy in the Economic Freedom of the World 2011 Annual Report at Harbour Grand Hotel in Hong Kong today (Sept 20).

Speech by CE at Gala Dinner for release of Economic Freedom of the World 2011 Annual Report

It is always a pleasure of mine to welcome the Fraser Institute to Hong Kong. Here I must thank the Lion Rock Institute for arranging tonight’s dinner and for its continued work to foster economic freedom in Hong Kong.

I am of course delighted that Hong Kong has again been ranked by the Fraser Institute as Number One in the world for Economic Freedom. This Gala Dinner is a great way to mark that achievement and to celebrate the benefits of economic freedom.

Hong Kong has been ranked Number One for more than three decades. We’ll do our best to make it Number One for the next three decades too. We are never complacent in this. This recognition from the Fraser Institute highlights our long-standing commitment to free and open markets. This philosophy has served our city well – in good times and in bad, in times of stability and great upheaval.

The Fraser Institute last held its Gala Dinner here in 2008, at the height of the global financial crisis. In fact, it was in the same week that Lehman Brothers filed for bankruptcy in the US – a decision that only deepened the sense of gloom that was being felt in world markets at that time.

Three years on, we are still feeling the aftershocks of the worst global financial crisis since the Great Depression. Some economists are predicting a double-dip recession, which I am sure we all hope does not eventuate, but for which we must be well prepared.

In such testing times, it is important for an externally-oriented economy such as Hong Kong to remain true to our philosophy. That means strong fiscal discipline, low taxes, open markets, free flow of information, goods and capital, clean government and a level playing field for business.

The fact that we have held true to these beliefs for decades is no doubt one reason why Hong Kong has consistently ranked so highly in the league tables of economic freedom. As the old saying goes: “If it ain’t broke, don’t fix it.”

At the same time, the Fraser Institute’s report, along with others covering competitiveness, business environment and livability, also identify areas where there is room to improve. Because of our extensive international networks and connections, Hong Kong understands more than most economies the need for constant vigilance to remain competitive and relevant in the global marketplace. And while it is always nice to receive an accolade for a job well done, it is perhaps more useful to look at the areas on which we need to work and to stay ahead of the competition. We will be looking closely at the areas in your report that might need more attention on our part – thanks for the useful reference.

Despite the global turmoil, Hong Kong today is doing quite well. We are looking at 5% to 6% growth this year in GDP. Trade remains strong, the retail sector is doing very well and our unemployment level is low by global standards – it’s now at 3.2%, almost equivalent to full employment. We do have concerns about higher inflation and asset price bubbles and we are keeping a very close watch on both of these areas.

Last year, Hong Kong was the world’s third-largest recipient of Foreign Direct Investment flows, and the second-largest FDI recipient in Asia. Second only to the whole of China. We attracted a record US$69 billion. In terms of FDI stock, Hong Kong ranked the highest in Asia last year, with a 30 per cent share, or a little over US$1 trillion.

Hong Kong and the Mainland of China also continue to invest heavily in each other’s economies – with the realised stock of two-way, inward investment hitting US$800 billion by end-2010. That’s a pretty solid vote of confidence in each other’s future. We are in the future of Mainland China. And Mainland China has confidence in us, Hong Kong.

This is also a reflection of the important role that Hong Kong has played in the Mainland’s opening up and reform process. This process started in 1978 but has accelerated in recent years as China and the rest of Asia have become the focus of greater investment interest.

Since 1997, Hong Kong has been able to play a much greater role in this process under “One Country, Two Systems”. This is because the Central Government of China is leveraging all the strengths and advantages that Hong Kong enjoys as a free and open economy to provide a testing ground for the nation’s liberalisation of trade and services.

For example, under “One Country, Two Systems” Hong Kong remains a separate member of the World Trade Organisation. This has allowed us to sign a free-trade pact with the Mainland of China to provide greater access to this huge market for Hong Kong’s goods and services.

The Mainland-Hong Kong Closer Economic Partnership Arrangement, or CEPA, was launched in 2004. It has gradually been expanded since then to include more opportunities for Hong Kong manufacturers and service providers to access the Mainland markets, often through pilot programmes in adjoining Guangdong Province.

We are now working on the eighth round of enhancements to CEPA and our ultimate goal is to fully liberalise trade in services between Hong Kong and the Mainland by 2015.

Last year we also signed the Framework Agreement on Hong Kong/Guangdong Co-operation. This Agreement further opens the gates to cross-boundary trade, finance and investment with Guangdong Province, which now has a population of 100 million. Not a bad market for starters.

So, you can see that we are constantly looking for ways to open up trade and investment pathways and to improve our business-friendly environment.

Market freedom lies at the heart of Hong Kong’s role as China’s global financial centre and the development of the offshore Renminbi market. This exciting development will have a huge impact on Hong Kong’s financial sector. It is paving the way for the gradual and greater use of Renminbi for international trade and investment.

But the reason this is possible in Hong Kong is because it is underpinned by the same fundamentals required for a global financial centre to flourish – sound and transparent regulations, a freely convertible currency, superb real-time, multi-currency settlement infrastructure, low and simple taxes, a tried and trusted legal system, the free flow of information and a critical mass of world-class talent in finance, equities, banking, insurance and corporate law.

Around 180 banks are currently using Hong Kong’s Renminbi clearing platform. This includes branches of overseas banks as well as overseas branches of Mainland banks which together form a Renminbi payment and settlement network covering over 30 countries. This year the total value of trade settling in Hong Kong is likely to go over 1.5 trillion Renminbi. The savings of Renminbi in Hong Kong has already exceeded half of a trillion. The market is going at an accelerated pace. The strength of Hong Kong in this system is apparently getting momentum. It is going to be the most important powerful tool as Renminbi becomes liberalised and international convertible currency.

The development of a Renminbi bond market in Hong Kong has also gathered pace since the first launch in 2007. In just the first half of this year, there were 38 Renminbi bond issuances in Hong Kong totaling 43 billion Renminbi – more than all the bonds issued last year. In other words, this year we are going to at least double what we did last year.

Ladies and gentlemen, these are just some of the ways that Hong Kong’s commitment to economic freedom benefits not just our city but also our nation and our business partners around the world.

Our clean and efficient government continues to look for ways to cut red tape, eliminate outdated regulations and safeguard property rights. In recent months, business registration, customs clearance and arbitration services have all been streamlined to enhance our business-friendly environment. Just now we got a reference to the introduction of minimum wage in Hong Kong being a handicap. Let’s see how carefully it has been fashioned in a way that while we introduced minimum wage policy this year, unemployment rate continues to decline, indicating the wisdom and appropriateness of our policy.

So, economic freedom is part of Hong Kong’s DNA. We value the Fraser Institute’s recognition of Hong Kong’s endeavours and we look forward to seeing you back in Hong Kong again and again.