Back to "Speeches" Empowering Hong Kong in the New Er@ By Mrs Rosanna Ure Director, Hong Kong Economic and Trade Office On January 11th, 2001 at Hong Kong Canada Business Association Luncheon Introduction The development of Hong Kong as a world class financial and business centre is an interesting subject to study. Indeed, this development is often initiated by external forces beyond our control. Yet every time, we emerge stronger and re-invent ourselves to meet the challenges of the time. Shortly after the Second World War, there was a massive influx of refugees from the Mainland. Most of them were desperately poor but some had capital and experience in running textile factories in China. The combination of capital, know-how and a cheap and ready workforce made Hong Kong the natural choice for a booming textile industry-manufacturing base in the region for many years. Other low-skilled manufacturing industries also developed such as the manufacturing of plastic flowers, semi-conductor radios and toys. All these required minimum skill and a moderate amount of capital investment. The demand of this kind of products means that there was a steady source of income for budding capitalists to accumulate their wealth and, more importantly, their trading experience and network in the western world. The birth of this capitalist model is not without pain. The demand for public services and facilities far outstripped the supply. Many lived in squatter huts and amid appalling living conditions. Semi-skilled labourers had to work long hours and had difficulty in making ends meet. Social discontent was rife and boiled over in the late 1960s. As a result, the government at that time took steps to redress some of the problems that plagued the ordinary citizens in their everyday life. This included the building of affordable public housing units for the grass roots and the establishment of the Independent Commission Against Corruption. The stage was ready for Hong Kong to re-engineer itself for the next stage of its development. Throughout the seventies and eighties, Hong Kong experienced tremendous economic growth. Gradually, Hong Kong perfected its edge as a regional financial centre and logistics hub. It handled the huge volume of economic traffic between China and the rest of the world as China began to trade actively with the rest of the world following its adoption of the open-door policy. The momentum continued despite the transfer of sovereignty. Hong Kong has evolved into a world class financial centre and its service industry has overtaken, in terms of economic activities and gains, manufacturing. Hong Kong as an Information Centre The e-revolution that has swept through the world brings unprecedented changes to our way of doing business. Not only does it require the infrastructure to support the communication of huge quantity of data within split second; it also requires a legal framework to regulate transactions and trained personnel to keep the system going. In his Policy Address of 1998, the Chief Executive of the Hong Kong Special Administrative Region said, "With our excellent telecommunications infrastructure, our unique position vis-�-vis the Mainland and our bi-lingual language capability, Hong Kong has a strong competitive advantage in seeking to serve as an information gateway to the Mainland. Working with our Mainland counterparts, we will improve our mutual Internet links, making it easier for Hong Kong companies to integrate their manufacturing and supply operations on the Mainland. In linking the Mainland through Hong Kong to the rest of the world we will also be able to act as a digital intermediary, which will allow us to stimulate economic growth". This has crystallised the vision of the Hong Kong Special Administrative Region Government: Hong Kong should position itself as the IT hub of Asia and we should take the advantage of our excellent telecommunications network to propel Hong Kong into the 21st Century. Under the government's Digital 21 IT Strategy, we have successfully built our capabilities and infrastructure to support a thriving information economy and to create a strong foundation for growth in IT use. The three most important milestones Hong Kong has achieved are putting in place a legislative framework for e-business, the establishment of a local public key infrastructure to enable secure e-business transactions and the launch of the first phase of Electronic Service Delivery. Now Hong Kong citizens can register change of their addresses, renew driving licences and most importantly file tax returns and pay various government bills via the Internet. Future directions under our Digital 21 Strategy include: Creating a world class environment for e-business. Here we should continue to develop our infrastructure, to nurture the cultural environment so that the community not only accepts but actively participates so as to harness the power of the new technologies. The government will continue to make Hong Kong the best place for investors to conduct e-business. Nurturing an e-generation. Hong Kong workforce has been known to be hardworking, versatile and adaptable. We will further enhance the competitiveness of our workforce by furthering their IT-competency. Here the government will collaborate with the industry and academic institutions not only in Hong Kong but also overseas to ensure that we have a sufficient supply of highly qualified people to serve the community. Ensuring the Government lead by example in adopting IT. Here the Government will take a more proactive role in modernising Government operation. This aspiration will be realised by providing more Government services online, pursuing e-procurement, facilitating inter- and intra-departmental e-communications and e-transactions, enhancing our internal information infrastructure and improving the IT skills of the civil service. Exploiting enabling technologies. In the next few years, a number of new technologies will appear in the market, such as 3G mobile communications, Next Generation Internet and Digital Terrestrial TV. These are exciting examples which illustrate that we embrace and exploit new technologies to better the quality of life of our citizens. The Canadian Link You may ask: what is the relevance of Canada in the development of Hong Kong as an IT hub? Let me first of all preface my answer by referring to the Memorandum of Understanding signed in 1998 between the Hong Kong and Canadian governments. The spirit of this Memorandum is to encourage exchanges on the IT front including investment, technology and business partnerships, educational and learning exchanges and exchanges in policy and regulatory information. As you can see, both governments are committed to promoting IT developments through exchanges and collaboration. Indeed when our Secretary for Information Technology and Broadcasting Mrs. Carrie Yau visited Canada in October last year, she reiterated the Hong Kong Government's intention of fostering closer tie with the Canadian government and promoting private sector investment. We are particularly impressed by the Canadian government's policy of high connectivity and the private sector's innovative and entrepreneurial endeavours and feel that Hong Kong could certainly learn a lot from the Canadian experience. To e-business investors, what has Hong Kong to offer? Hong Kong boasts the following major advantages:- Hong Kong has an excellent telecommunications infrastructure and high connectivity. About half of the households and companies in Hong Kong have personal computers. About 36% of all households and companies in Hong Kong are connected to the internet. According to a survey in October last year by Nielsen/Net Rating, Hong Kong's internet users topped the list by spending 10 hours 12 minutes per month on internet surfing, followed by US users who spend 10 hours 4 minutes. The US Heritage Foundation has ranked Hong Kong the world's freest economy for the seventh successive year. The free flow of information is a pre-requisite to information technology and Hong Kong has been renowned for safeguarding this principle scrupulously Our low and simple tax regime is business friendly Our service sector is second to none. The transmission of funds, for example, is made easy by our excellent banking sector. The establishment of the Growth Enterprise Market, the NASDAQ equivalent in Hong Kong, makes the raising of capital for IT industry much easier. Above all, the government is committed to providing the facilitating environment for ideas to fully develop. This also includes the building up of an e-competent workforce. The Role of the Hong Kong Economic and Trade Office in Canada As the sole representative of the Hong Kong Special Administrative Region Government in Canada, the role of the HKETO is to enable and enhance mutual understanding of the two places and help foster close ties between Hong Kong and Canada. We also promote business link and investment so that both places can benefit from economic growth. As a result, over the past twelve months, we have already assisted 10 Canadian companies in their business ventures in Hong Kong, 7 of which are IT or telecommunication-related. We actively seek out the niche companies and invite them to take a good look at Hong Kong's potentials and the favourable investment environment. I am happy to note that many Canadian firms, which have decided to invest in Hong Kong earlier, have experienced growth and good returns for their investment. But our efforts do not stop there. In order to promote exchanges between the students of both places, we have recently launched a joint project with the Sheridan College. This multi-media awards project aims to encourage tertiary students from both Hong Kong and Canada to find out more about each other's home base. Through this competition, we hope to cultivate young people's creative talents in the use of multi-media skills and programmes. Hong Kong into the New Er@ With the imminent accession to the WTO, China is becoming the magnet of investment for many businesses. Hong Kong is the gateway to China and its superb telecommunication network plays a pivotal part in enabling Hong Kong to be the best place for Western investors to set up their regional base and logistics centre. Our drive to sharpen our competitive edge as a regional IT centre complements Hong Kong's historical advantage as a prime location for multinationals' regional headquarters for the Asia-Pacific region. In fact, as reported in the newsletter issued by the Economist Intelligence Unit last December, Hong Kong's dominant position as a regional headquarters centre for service-sector firms and for Western multinationals was clearly reflected in a survey of 8,000 North American, European and Japanese firms. The survey is particularly illuminating in that it identifies the actual role and function of individual business centres in the region: Singapore is predominantly a centre for sub-regional headquarters dealing with ASEAN; most Tokyo-based regional headquarters either have a long history there or represent firms whose Japan business is their only or dominant regional business; Shanghai is no doubt a rising star. It is increasingly a hub for regional headquarters of multinationals which focus primarily on mainland China; Sydney and Melbourne are attractive locations for regional headquarters but the downsides are their distance from key regional markets and the lack of an "Asian" identity. Amongst these cities studied, only Hong Kong serves as the true hub for regional headquarters with a management span over the whole Asia-Pacific region. Ladies and gentlemen, I am not suggesting that Hong Kong is king. What I firmly believe is that the successful transformation of Hong Kong from a barren fishing village into a regional financial and business centre is not so much a matter of luck, but rather due to the concerted efforts of the government, the private sector and an entrepreneurial community. And these efforts will continue to empower Hong Kong to forge ahead in the new millennium. Thank you. Back to "Speeches"