19 Nov 2001
REMARKS BY MR. PETER WOO, CHAIRMAN, HKTDC, AT THE HKTDC DINNER IN LONDON, 19 NOVEMBER, 2001
Chief Secretary the Hon. Mr Tsang, Lord Woolf, My Lords, Ladies and Gentlemen,
It is always wonderful to be back among Hong Kong's closest friends. Four years beyond the handover, the Trade Development Council's London Dinner appears to be thriving. TDC is delighted with tonight's turnout. I welcome you all and thank you for being here this evening.
In the face of globalisation, borderless manufacturing and shorter product cycles, we face increased challenges.
However, there is a Chinese saying that to succeed, you need to be in the right place at the right time and in harmony with your neighbour. At this historic hour of China's entry into the World Trade Organisation, Hong Kong is all three.
Allow me to give you an update from TDC's angle. Since we last met, Hong Kong has risen to number nine in the league table of world trade. We also top global rankings in nine types of consumer exports and are second or third in a further seven.
Many analysts project a doubling of China's trade over the next five years. To many, there is no longer any dispute about whether to do business in China. The only question that remains is how - how best to access that marketplace. We are all excited at the possibilities; but on the other, everyone is daunted by the risks, because many have already tried and have failed.
The solution for many companies, particularly for companies with limited appetite for risk, is to use Hong Kong as a platform, a partner - and a risk-manager. Hong Kong has what people call a "first-mover advantage". Hong Kong firms have learnt how to be successful in the Chinese mainland ' and, even more important, how not to lose money there. Knowing what NOT to do is often the key.
So looking to the future, the TDC sees three major areas of activities :
First, the huge growth in China's trade will place enormous demands on the service sector. Hong Kong's economy is 85% services, while that of China is 40%. There is a clear opportunity for Hong Kong's service sector, given the gap.
Hong Kong's immediate neighbour, the Pearl River Delta, is the world's largest
manufacturing basin. It is also the strongest, the fastest-growing and the most
prosperous engine of growth in China.
with this immediate neighbour, Hong Kong's exporters deal only in areas where
they have a competitive edge, outsourcing or contracting out all else. This successful
business model has enabled them to move up the value chain. 36% now have their
own brands and over 60% benefit from original design manufacturing. So design,
marketing, logistics and other trade-related services are their focus for the
Allow me to give you some numbers you may perhaps not be aware of. Hong Kong went from ranked 23rd to ranked number nine in world trade in little over 20 years. China's share of our trade rose from 6% to 35% in that time. Now, every single minute we send 35 containers to sea, and every single minute we send four tonnes of air cargo around the world. The Hong Kong Convention and Exhibition Centre (HKCEC) attracts 100,000 buyers from around the world a year. Our cyber-marketplace, tdctrade.com, recently topped two million hits a day, up from 600,000 when it started 18 months ago. This was all without China as our domestic market. Imagine the possibilities.
Thirdly, an Italian friend of mine put it very simply when he described Hong Kong as a China that speaks English; where you can understand the institutions; and where the laws work.
My overseas audiences always find our very business-friendly tax regime overwhelming as a haven for entrepreneurs of all sizes, especially small and medium-sized enterprises. Well, overseas companies are moving into Hong Kong at an official rate of one per week - to say nothing of the unofficial rate! Even more interesting, we are expecting 4.2 million mainland companies, big or small, to discover Hong Kong's attractions as a global platform and a haven for SMEs.
Hong Kong's SMEs are striking up strategic alliances with their overseas counterparts - e-to-e (enterprise-to-enterprise, entrepreneur to entrepreneur) - in the areas of innovation, marketing, distribution, process and cost-efficiency, to seize the vast opportunity now available in the mainland. The TDC is primed to facilitate and to promote partnership in China's WTO era between Hong Kong companies, overseas firms and mainland enterprises.
Since last year's TDC Dinner, I have visited 50 cities around the world. My purpose is to connect - to connect with creative business people who have new ideas, new products and new services, looking for new markets and also new customers. The response has been extremely positive, because the time is ripe. First, the change of sovereignty is widely acknowledged to have been a success: Hong Kong's freedoms and way of life have remain unchanged. Second, China's timely membership of the WTO. And finally , the Hong Kong story speaks for itself.
But enough with the TDC update : our guest of honour tonight needs little introduction. Before becoming Chief Secretary in May this year he made his mark both in London and on the world stage as Hong Kong's first home-grown Financial Secretary. Likewise, he is the first Chief Secretary to be "made in Hong Kong". I am reliably informed, however, that his distinctive trademark, his bow ties, are from Jermyn Street.
It is my great pleasure and privilege to invite our Chief Secretary, the Honourable Mr. Donald Tsang, to address us.
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