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Following is the speech delivered by the Chief Executive, Mr C Y Leung, at the Asian Financial Forum at the Hong Kong Convention and Exhibition Centre this morning (January 14):
Jack (Chairman of the Hong Kong Trade Development Council, Mr Jack So), distinguished guests, ladies and gentlemen,
On behalf of the Hong Kong Special Administrative Region Government, I warmly welcome you to this year's Asian Financial Forum (AFF).
I am delighted to see so many people here for the sixth AFF. Among us are leaders in the world of finance from different countries and across the spectrums of politics, business and academia. A warm welcome to you all.
In three days' time, the day after my annual government Policy Address, I shall launch the Financial Services Development Council. The purpose of the Council will be to enhance, elevate and champion the competitive position of Hong Kong as an international financial centre and promote the development of our financial services industry, making the best use of the many opportunities provided by the Mainland of China.
The Council will focus on realising the many local and overseas development opportunities. It will provide a common platform for informed discussion on policy and for public-private collaboration. It will be an ambassador for the industry locally and overseas, and at the same time a capacity builder.
My Government will adopt a proactive approach to fostering a new working relationship among enterprises, the market and the Government. This will help ensure that Hong Kong can enjoy the full benefits from closer regional integration in a free and open business environment. My Government will also do everything it can to unlock the vast opportunities in the Mainland of China, not just for local businesses but also for businesses from outside of Hong Kong.
The Central Government has set out their support, as shown among other things in the National 12th Five-Year Plan, for Hong Kong to "consolidate and elevate its position as an international financial centre".
The Central Government has also openly expressed their support for Hong Kong's development as an offshore Renminbi centre and an international asset management centre.
Last month in Beijing, Premier Wen Jiabao clearly indicated to me that the Central Government would adopt policies to promote the development of Hong Kong's Renminbi clearing platform. I am pleased that the AFF will discuss Renminbi liberalisation in some detail, including at a workshop tomorrow.
Hong Kong's financial services industry is an important component of our economy. In 2010 it contributed about one-sixth of our GDP. For the past two years, we have been ranked first in the World Economic Forum's Financial Development Report. The Hong Kong Stock Exchange is among the most active in raising equity funds; we are a leading fund and wealth management centre ranked second in Asia, just behind Japan, in terms of asset management business. We also have the largest pool of offshore Renminbi liquidity anywhere in the world.
From a broader perspective, I see Hong Kong also as the two-way "Chief Information Officer" and "Chief Knowledge Officer" for anyone interested in China. From financial services to real estate to social development, Hong Kong is the "come to" place for information, knowledge and networking in the Mainland.
In parallel, Hong Kong is a valuable partner of the Mainland of China in its drive to "Go Global". Throughout recent history, Hong Kong has nurtured strong connections with partners around the world. Today, these links serve as an effective channel for Mainland investors to branch out and explore overseas markets.
In the context of "Asia: Shaping the Next Global Landscape", Hong Kong will continue to be an important player in the region, especially as a financial interface with the Mainland of China.
As you may know, the AFF was launched here in 2007. Since then, we, the world, have been affected by an unprecedented global financial crisis.
Some of the largest, strongest and most affluent economies in the world have been hard hit by the crisis. Ongoing difficulties in the Eurozone and the US continue to weigh down global economic growth and add uncertainties to the markets.
At the same time, the international financial landscape has transformed significantly over the past five years. Asia is no longer a sideshow in international finance. This region is very much part of the main event.
We have seen a notable swing to the East of financial opportunities and talent, with investors eager to be part of Asia's economic growth story. I am not just referring to the rapid development of the Mainland of China right here on our doorstep, but also to emerging economies, especially in Southeast Asia.
Importantly the economies in this region have become far more deeply connected also in terms of finance and investment.
This Forum is an important platform, not only for nations in this region, but also for countries around the world to get more involved in the growth of Asia.
Despite the global financial crisis, Asia has achieved stable employment conditions, maintained prudent fiscal policies, and continued to focus on fostering economic development. Asia's growing middle class, including in the Mainland of China, is helping to support domestic demand which is essential for sustainable growth.
Asia is no longer simply a "factory of the world"; it is a facilitator of inclusive growth and prosperity on the back of rising consumption and wealth creation.
I am confident that Hong Kong will continue to play an important role in the Asian Century.
My Government is fully committed to maintaining a vibrant and conducive environment for doing business here in the heart of East Asia.
Business people constantly tell us how important our low-tax regime, effective rule of law and level playing field for business are to their operations. These longstanding attributes create room for companies in Hong Kong to grow and innovate.
There is no restriction on foreign businesses entering Hong Kong and no control over the flow of capital. Over the past two decades, the number of overseas and Mainland companies using Hong Kong as a base for their regional operations has grown four-fold. We now host almost 4,000 regional headquarters and regional offices.
Also, for almost two decades Hong Kong has retained its position as the world's freest economy. That is according to both the Fraser Institute in Canada and the US-based Heritage Foundation.
Last week, the Heritage Foundation named Hong Kong as the world's freest economy for the 19th year in a row.
Hong Kong will continue to invest heavily in fostering human capital and infrastructure development to raise our competitiveness and promote high value-added and knowledge-based activities.
We will also continue to uphold our strong market institutions and sound regulatory frameworks which have become a cornerstone of Hong Kong's prosperity.
I see important areas where the Hong Kong Government can further assist enterprises from all over the world in tapping the opportunities offered by our nation's economic strength and growth potential.
In particular, we will step up "G2G" (government-to-government) efforts in negotiating and implementing economic and trade agreements with the Mainland. This includes the unique Mainland and Hong Kong Closer Economic Partnership Arrangement, or CEPA, which is a primary vehicle for lowering trade and investment barriers between the Mainland and Hong Kong.
At the same time, Hong Kong is expanding its economic links with new and emerging markets in Asia and across the Asia-Pacific region.
For example, our exports of goods to India more than tripled in the five years between 2007 and 2011. India is now our fourth largest export market.
Ladies and gentlemen, the global financial services industry is at a crossroads following the financial tsunami in 2008. On one hand, the old business model and regulatory regime for financial institutions has been seriously challenged.
On the other hand, wealth management needs arising from ageing populations in advanced economies and growing affluence in the developing world have given rise to enormous opportunities for the industry.
The world is in search of a win-win-win paradigm that strikes a delicate balance among the welfare of shareholders, practitioners and the real economy.
We must reflect seriously on how to tackle impediments to the development of the industry, to explore new high-potential areas, build a more diversified business portfolio and stay competitive through innovation and upgrading.
In the meantime, I am sure we shall benefit from the insights of distinguished speakers and other guests at this Forum.
So allow me to wrap up by wishing you all a very enjoyable and successful Asian Financial Forum and a happy and prosperous 2013.
Thank you very much.
Ends/Monday, January 14, 2013
Issued at HKT 11:44
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