The Hong Kong Special Administrative Region's (SAR) status as the freest economy in the world has remained intact, the Director of the Hong Kong Economic and Trade Office of the SAR Government in Canada, Mr Donald Tong, said today (Nov 13).

Speaking to businessmen and members of the Hong Kong Canada Business Association (Calgary Section) at a breakfast seminar in Calgary, Mr Tong said a report jointly published by the renowned Fraser Institute in Vancouver and other independent institutes reaffirmed the territory's position as the bastion of free market economy.

"This shows that criticisms and claims that the Special Administrative Region (SAR) Government has changed its free market policy is absolutely unfounded," he said.

"Hong Kong's economic freedom has long been our competitive edge vis-�-vis other economies in the region. No doubt we will conscientiously preserve those strong aspects of our economic freedom, and strive to improve in any other aspects which have possible scope for improvement."

Last week, the Fraser Institute together with independent institutes in 53 other countries, including the Cato Institute of the U.S. published a report entitled "1998-1999 Interim Report on Economic Freedom of the World" reasserting Hong Kong as the freest economy in the world in both 1990 and 1997. Hong Kong has been consistently ranked as the freest economy in the world for the past two decades, from the earlier series of studies. Mr Tong pointed out that despite the market incursion and the Asian financial turmoil, foreign businessmen, including British, Americans, Canadians, Japanese and Germans had not abandoned the territory in droves, because they remained optimistic and confident on our commitment to free trade.

To facilitate the economic recovery, he added, the SAR government had introduced, among other things, very generous tax breaks for individuals and businesses, such as putting more money back into the hands of 99 per cent of taxpayers and reducing profits tax to 16 per cent.

He said the climate for establishing business in the territory was very favourable as wages were now softening and property price and rentals had fallen substantially by about 50 per cent , and the stock market was around 40 per cent below its peak in 1997.

"These measures, helped by a drop of 2.5 per cent in the inflation rate recently, have certainly made Hong Kong much more attractive to those Canadian companies which previously had avoided the territory because of the high cost involved," Mr Tong said.

"In addition to improving the investment climate, we are also going ahead with our C$47 billion infrastructure projects for the next five years, which will create tens of thousands of jobs for the locals. These projects include a new railway, subway extensions to new towns, housing and major high-speed road networks.

"Furthermore, we have also started drawing up plans for other major projects to cope with the population growth and economic expansion beyond the year 2002.

"One good example is our plan to transform the old Kai Tak airport site into a self-contained "Garden City" which would house 320,000 people by the year 2016."

Mr Tong said the Chief Executive, Mr Tung Chee Hwa, has in his recent policy speech announced new initiatives to implement without delay ambitious plans for innovation and technology development to remain competitive.

These include establishing an Innovation and Technology Fund, setting up an Applied Science and Technology Research Institute and promoting university-business collaboration and Hong Kong-Mainland collaboration to build up a cluster of expertise.

"With all these initiatives, we expect the economic adjustment will continue well into 1999. It is interesting to note that the International Monetary Fund has just predicted that our economy would start picking up towards the last two quarters of next year. We are confident that the adjustment will ultimately produce a much leaner and more competitive Hong Kong."

Following his Calgary visit, Mr Tong will fly to Edmonton in the evening to attend and address the national board meeting of the Hong Kong and Canada Business Association.

He will, together with Premier Ralph Klein of Alberta, inaugurate at the opening of a photographic exhibition on the SAR, organised by the Hong Kong and Canada Business Association (Edmonton Section). Photographs showing all facets of Hong Kong life and landscape, including major infrastructure developments such as the new airport at Chek Lap Kok, will be on display during the one-week exhibition.

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