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Following is the speech delivered by the Chief Secretary for Administration, Mr Henry Tang, at the Hong Kong Exporters' Association Christmas Luncheon held at the Island Shangri-La Hotel this afternoon (December 14):
Tom (Tang), distinguished guests, friends, ladies and gentlemen,
Good afternoon. I am delighted to join you again for your Christmas Luncheon.
I do know that after a delicious lunch, there is a propensity to take a slight snooze. I will try my best to keep you awake.
The last time I had the pleasure of attending this event was in 2008. At the time, Hong Kong was in the full grip of the global financial crisis. Exporters were feeling the economic chill hardest.
I am pleased to be back here in slightly happier times for our economy and for our business community.
I would like to, first of all, thank all our exporters for your determination and hard work over the past few years in leading our recovery.
Christmas is traditionally a good time for exporters. Indeed, Santa Claus himself knew a thing or two about the export business.
For as long as I can remember, Santa has had a knack of getting his products delivered around the world on time. I don't know whether it's within budget, but it is on time. The Santa Claus brand is as strong today as it always has been and his helpers, including many of you, never let him down.
Here in Hong Kong, a lack of snow, reindeer and chimney pots has not held our exporters back.
Hong Kong's total export value rebounded strongly by 26 per cent to HK$2.2 trillion during the first nine months of 2010. Our economy expanded by 6.8 per cent in the third quarter of this year compared to last year. And the jobless rate has returned to pre-financial crisis levels.
The importance of our import-export sector cannot be underestimated.
The Government will ensure that appropriate support is rendered to the industry to promote the sustainable growth of our important industry.
First, we will continue to open up new opportunities for cross-boundary business in the Mainland.
Naturally, the Mainland market holds the greatest potential for our exporters. Over 50 per cent of our total exports are destined for the Mainland market. And of course, I am aware that many of these exports for the Mainland market are actually raw materials so they can't be sold as they are. But there are many who are actually making the products in the Mainland, so with the Central Government's increasing emphasis on boosting domestic consumption as the next engine of economic growth, I am sure our exports to the Mainland will continue to reach new heights in the years to come.
We are working very hard to break down the invisible barriers to cross-boundary trade. Again this year, CEPA (Mainland and Hong Kong Closer Economic Partnership Arrangement), our free trade pact with the Mainland, has been expanded. We have also signed the Framework Agreement on Hong Kong-Guangdong Co-operation.
These initiatives, together with new soft and hard infrastructure, will maintain Hong Kong as a key port for Mainland-related trade. Indeed after those works, I really need to sound a word of caution here. While we see the Mainland market as a vast potential market - and indeed many of our trading partners overseas see the Mainland as a huge trading partner and with huge potential as well - our exporters and manufacturers are now facing unprecedented challenges to upgrade with shortage of labour and rising costs. These are very strong and unprecedented challenges that you are facing. You are working very hard to overcome some of those challenges. So taking on the Mainland market as a domestic market must pose many challenges because it is a market with a culture that is different from most of the markets that you are familiar with. Indeed, the vast potential and the very complex distribution nature of the Mainland market will pose quite substantial challenges for most people. Therefore I would encourage you to explore it and do it with caution that you must first review your own strengths, and look at your own challenges before you actually make a big leap forward.
Second, the Government is playing a leading role in strengthening links with major emerging markets overseas.
These markets have become even more prominent and competitive in the wake of the global financial crisis.
Our Chief Executive has recently led high-level business delegations to India and Russia. The Financial Secretary also led a similar mission to South America earlier this month.
These visits help to connect our business community with economies that have great potential for growth and strong buying power. We will continue with these efforts relentlessly, both from senior government executives, and more importantly, from the day to day promotion that's done by the Trade Development Council (TDC). The TDC is doing, has done and will continue to do great work in looking for new markets and to connect exporters such as yourselves to these markets.
My third point today relates to business financing. Although our economy has emerged relatively strongly from the financial crisis, the global recovery remains uneven.
The Government will continue to monitor the situation closely and ensure that funds are available to effectively support the development of our small and medium enterprises (SMEs).
I encourage eligible applicants to make use of the SME Development Fund to initiate projects. This Fund could empower SMEs in brand building and exploring emerging markets in the Mainland and overseas.
We intend to seek approval from the Legislative Council's Finance Committee for allocating an additional $1 billion to the SME Development Fund and the Export Marketing Fund in mid 2011.
The Hong Kong Mortgage Corporation is planning to introduce the market-based SME Financing Guarantee Scheme next month. This will provide our SMEs with an additional financing option.
My fourth and final point today relates to the Export Credit Insurance Corporation, or ECIC. Currently companies that have relocated production processes outside Hong Kong and set up subsidiaries in the Mainland or overseas may not benefit from the ECIC.
The Corporation considers that it could extend insurance coverage to these companies. The insurance extension could cover contracts between Hong Kong enterprises' wholly owned subsidiaries and their buyers. This would support our enterprises in tapping overseas and the Mainland markets, particularly in those emerging markets, that I referred to earlier, where credit risks are higher than the traditional ones
These new arrangements could commence early next year.
Ladies and gentlemen, I am sure that our exporters - more than most people - believe in Santa Claus бн or at least in the business he brings.
Similar to Santa, Hong Kong's export brand is strong globally; we have great logistics expertise and a very committed workforce.
So it only remains for me to wish you all a Merry Christmas, happy Hanukkah and a prosperous and successful New Year.
Thank you very much.
Ends/Tuesday, December 14, 2010
Issued at HKT 17:21
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