It is a pleasure to join you today for this Alliance Partner Presentation at Softworld 2000. I am especially pleased that Hong Kong has been invited to again participate in this prestigious event. It gives us a chance for which we are most grateful to share with you just how quickly Hong Kong is embracing the Information Age, and to show you the excellent IT infrastructure that has allowed the telecommunications and Internet sectors to flourish in Hong Kong.

First, let me quickly give you an update on Hong Kong's economy. Following a difficult two years from mid-1997 to mid-1999, Hong Kong's economy started to rebound strongly in the third quarter of last year. We ended the year with GDP Growth of 2.9% compared to our original estimate of 0.5%. But that was in comparison to a decline of more than 5% in 1998, our first full-year recession in history. So it was quite a good turnaround in 1999.

The figures for this year are even more encouraging. GDP grew by a remarkable 14.3% in the first quarter and 10.8% in the second quarter. We are now expecting growth of 8.5% for the whole of 2000, which is considerably better than our original forecast of 5%. This will be our highest growth rate in more than a decade.

The economic recovery has been fairly broad-based, led by strong export growth. Private consumption and investment have been rising steadily. Tourists are arriving in record numbers. Our container port is seeing double-digit growth. Air cargo traffic is growing equally strong.

The economic downturn did cause a considerable amount of pain in the community. But it has also provided us with a unique opportunity to look more critically at the strengths and weaknesses of our economy. It helped us refocus our efforts in developing knowledge-based industries, in particular the IT sector. We pushed through much-needed reforms in the financial sector to enhance our regulatory framework and to make us more competitive in the world-without-walls trading environment.

We have continued to liberalize our telecommunications and broadcasting sectors. We continue to invest heavily in transport infrastructure. We are pushing ahead with reforms of the education system to equip our young people with the skills needed to sustain the knowledge-based economy.

So that is where we are now. The economy is recovering well and we are moving ahead with reforms in many areas to make sure we remain competitive and a location of choice for international business in Asia.

With the Asian financial crisis behind us, few would question the long-term potential of the Asian market. The IT industry, in particular, is experiencing exponential growth. The International Data Corporation estimates that the number of Internet users in the Asia-Pacific region, excluding Japan, will almost triple from the current level of 33 million to 95 million by 2004. In the same period, the value of e-commerce is estimated to rise from US$22 billion to an astonishing US$770 billion - a 34-fold increase. To put it plainly, it would be remiss of any company not to include the Asia-Pacific on its development agenda, particularly in the IT sector.

If you agree with those sentiments then you will need a reliable partner to help seize and maximize the opportunities on the horizon. This brings me to the crux of speech: Why choose Hong Kong as your IT partner in Asia? What do we offer?

Let me answer those questions from a macro and micro perspective.

Hong Kong, Your Strategic Partner

On a macro level, Hong Kong is a pluralistic, open and tolerant society. We have a hard-working, entrepreneurial workforce, many of whom are bilingual. We have a deep pool of professionals in key sectors such as law and accounting, logistics and transport, management and corporate services. We have close language, cultural and business links with China, the largest and fastest growing market in the region. We have well-regulated financial markets and Asia's best-regulated banking sector. We have provided a useful gateway to China and will continue to do so as a world class service centre.

We have a respected and easily understood legal system. In case you are not aware, the common law system prevails after the Handover and it will continue to prevail as gauranteed under the Basic Law and under "One Country Two Systems". We have a level playing field for business and a clean administration. All these advantages make Hong Kong a great place - we believe the best place - to do business in Asia.

As I have just mentioned, one of our key strengths is our financial markets, where there have been two developments of interest to the IT sector.

One is the listing of seven NASDAQ stocks on the Hong Kong Stock Exchange. This is the first time that NASDAQ stocks have been traded 'live' in the Asian time zone. Five of the seven stocks listed at present are technology counters. In the near future, selected Hong Kong stocks will also be traded on the NASDAQ.

The other development has been the establishment of our own NASDAQ-style second board - the Growth Enterprise Market - or GEM as we call it. The GEM provides an opportunity for emerging and growing companies - many in the technology field - to raise capital from local and overseas investors. Since its inception in November last year, more than 45 companies have been listed, raising capital worth nearly US$2 billion.

Perhaps the most significant factor in our future success is the enormous potential of the market on our doorstep - the Mainland of China. Hong Kong's enterprises were the earliest explorers of business opportunities that flowed from the opening up of the Mainland in late 1970s. This 20-year cultivation has yielded unique partnerships with provincial and municipal enterprises in the Mainland. And it underscores the role we can play in further opening up China's market once it becomes a member of the World Trade Organization. We believe there will be substantial room for Hong Kong companies to further develop a presence in the Mainland, especially in the IT and telecommunications sectors.

At the micro level Hong Kong has all the necessary infrastructure to benefit from the IT boom. We have one of the world's most advanced telecommunications networks which supports all types of communications technologies. We have one of the highest mobile phone penetration rates in the world, currently at 70%, which will no doubt stimulate the growth of mobile-commerce. Just about ten days ago, I announced our plan to issue 3rd generation mobile service licenses by auction. You are all welcome to bid since we have no foreign ownership restriction in the telecommunications sector. Alternatively, you may wish to become an MVNO (Mobile Virtual Network Operator) if you happen to have a leading edge on content or service applications.

We are building a Cyberport and a Science Park to foster IT development in Hong Kong. Already 15 major international IT leaders have signed up as anchor tenants. They are Cisco, CMGI, Hewlett-Packard, IBM, Microsoft, Oracle, Pacific Convergence Corporation, Portal, Silicon Graphics, Yahoo, etc. In addition, over 150 companies have registered an interest in becoming tenants.

The One-Stop Portal

It might be true that there are several places in the Asia Pacific region that are suitable as a base for research and development operations. There are a few economies with the advanced telecommunications infrastructure needed to test-run your latest technology and products. There are two or three places where you have access to a deep and liquid financial market, or where you can seek the venture capital to develop your product. But Hong Kong offers you all of these advantages, and more, under the one roof.

Our Cyberport and Science Park projects will provide a world-class environment in which to research and develop your products. You can then test them on a technology-receptive market that is hooked up to the world's first fully digitized telecommunications networks, where there is 100 per cent broadband coverage to business and with high external connectivity to all major global telecommunications hubs.

If you are looking to finance your operations then Hong Kong has all that you need. More than US$17 billion in local and overseas venture capital is managed in Hong Kong. We have Asia's second-largest stock market behind Japan and we are the world's fourth-largest banking centre.

Ladies and Gentlemen, I would like to sum up by once again highlighting why Hong Kong is your best business partner in the Asia-Pacific region.

We are a one-stop portal for enterprises wanting to capture the opportunities in the region. We are a user-friendly economy with a bilingual workforce. We have a sound and easily understood legal system. We have a vibrant and entrepreneurial business environment. We have a simple and easy tax system where corporations pay 16% profits tax and individuals pay no more than 15% salaries tax. We have a business-friendly government that believes in maximum support and minimum intervention. We have a well-connected, global trading network that is extremely strong in the Mainland of China. And, most importantly, we think and operate on Internet time!

I encourage you to take a look at Hong Kong when drawing up your plans for the Asia-Pacific region. The Hong Kong Economic and Trade Office in Toronto, or our sub-office in Vancouver, will be more than happy to give you any help you may need.

You might also like to make a few clicks to visit the Information Technology and Broadcasting Bureau website (www.info.gov.hk/itbb) on the Hong Kong government's homepage. You will be able to see just how much Hong Kong is doing to lead IT development in the Asia-Pacific region. You will also be able to find out more about low tax structure and other investment information at Invest Hong Kong's website (www.investhk.gov.hk).

I am certain that Hong Kong and Canadian companies are already exploring partnership opportunities. The Hong Kong and Canadian governments have signed a Memorandum of Understanding to further boost collaboration. With greater participation by the private sectors, academia and so on, Hong Kong and Canada will be able to demonstrate just how strategic alliances are a win-win for all concerned in the fast-growing Asian IT and telecommunications sectors.

On that note, I wish you all great success in your future endeavours. Thank you.