The Director of the Hong Kong Economic and Trade Office of the Hong Kong Special Administrative Region (SAR) Government in Canada, Mr Donald Tong, today (March 8) urged Canadian high-tech companies to take immedite steps to participate in Hong Kong's development of the Cyberport project

Speaking at a Lions Club business seminar attended by bankers, industrialists and academics in Toronto, Mr Tong said the project - announced by the Financial Secretary, Mr Donald Tsang, in his Budget Speech on Wednesday - would be a joint venture between the SAR Government and the private sector which is expected to invest C$2.6 billion.

He pointed out that a number of international companies including Hewlett Packard, IBM, Oracle and Yahoo have already agreed to set up regional headquarters or research and development centres in the Cyberport, and negotiations are continuing with other leaders in the technology field.

"This project is on the fast track because it is our intention to become the premier information and technology hub in the region," he said.

The project will be on a 260,000 square metre site on reclaimed land on the south coast of Hong Kong Island. It will have an ultra-modern intelligent building complex with state of the art telecommunications and information infrastructure and services to meet the needs of multi-national high-tech companies

Other ancillary facilities include residential buildings, hotels, and a cyber- mall containing retail, entertainment and educational facilities.

"I hope this broad brush picture of our planned high-tech city will convince Canadian entrepreneurs of the vast opportunity available for them in Hong Kong and take immediate advantage of getting a foothold in our ambitious project."

Turning to other aspects of the 1999-2000 budget, Mr Tong said in spite of the projected deficits for 1998/99 and the next financial years, the SAR Government would be committing billions to create a friendly business environment for investors and to generate employment opportunities.

"Because of the economic turmoil, we introduced a full range of tax concessions to provide relief and to stimulate the economy. This year, there is still a need to provide-short term assistance which would mean offering a series of one-off tax concessions, including a freezing of government fees and reduction of property taxes, to help individuals and businesses to cope with the downturn. These will cost the Government a total of C$2 billion."

Other measures announced to stimulate the economy and to enhance competitiveness, include:

• Ongoing negotiations with the Walt Disney Company on opening a major theme park on North Lantau Island. An outcome hopefully could be available in mid-1999.

• Reform of securities and futures markets including proposed demutualisation and merging of stock and futures exchanges and clearing houses into a single, publicly listed, market operator.

• Strengthening banking supervision and developing debt market.

• Privatising part of the government owned mass transit railway system, one of the few in the world to operate at a profit.

• � Reform plans for civil service aimed at 5 per cent productivity gains over the next five years. Freeze on salaries and recruitment.

On expenditure, Mr Tong said the government will continue to invest heavily in education, health care and social welfare, which are expected to shave off 50 per cent of the total public expenditure amounting to C$58 billion in the next financial year.

He also pointed out that the economy is expected to grow by 0.5 per cent in 1999 and inflation is expected to fall by an average of 2 per cent. The trend growth of GDP over the next five years is forecast at 3.5 per cent a year.

"We will have again a deficit budget in 1999/2000 but would come close to having a balanced budget in 2000/2001. We will be in the black again in the following fiscal year," he said.

In conclusion, Mr Tong said he is confident that with the provisions of the budget, Hong Kong will emerge much stronger and more competitive.

For further information please contact Chief Information Officer, Frank Chuan at telephone no. (416) 924-5544.