Speech delivered by
Joshua C.K. Law, Director-General of Trade and Industry
Hong Kong Special Administrative Region Government at
Thai Hong Kong Trade Association dinner on 17 November 2000
Ladies and gentlemen:
It is a pleasure to be here today in this bustling city of Bangkok among such a distinguished gathering. I have come here directly from Brunei, where we have just seen the conclusion of another successful round of annual meetings for APEC leaders, ministers and senior officials.
As one of APEC's 12 founding members, Thailand has helped transform this grouping into an important forum for trade liberalisation and greater economic co-operation throughout the Asia-Pacific Rim. Hong Kong joined APEC in 1991. And following our reunification with China in 1997, we have continued to participate as a separate economy using the name 'Hong Kong, China'. Throughout the past decade, Hong Kong and Thailand have often spoken with one voice within APEC to promote even greater liberalisation in trade, services and investment amongst member economies. So Hong Kong and Thailand already have long-standing, strong and friendly bilateral links.
This evening, I would like to go beyond the strength of our bilateral relationship to talk about Hong Kong's economic and trading ties with the Asia-Pacific region and how Hong Kong sees its role as markets within the region become more and more open.
There is no doubt that there is tremendous economic, social and cultural diversity among Asia-Pacific economies. They stretch from the snow-capped peaks of the Andes to the lush jungles of Southeast Asia; and from the frozen plains of Russia to the arid deserts of Australia. Yet despite this diversity, there is unity among Asia-Pacific economies to gradually open up their markets to each other. This commitment has produced the most dynamic economic region in the world.
Over the past decade, the average annual growth in trade within the APEC economies was 8%, compared to 6.5% for the world as a whole. Foreign direct investment inflows into the region grew by 210%, while FDI outflows from the region doubled during the same period. These figures mirror the enormous benefits that have flowed from the progressive dismantling of trade and investment barriers in the region.
Hong Kong's development and prosperity is strongly linked to the region. Thirteen of our top 20 trading partners are from the Asia-Pacific region. Trade with these economies was worth US$287.4 billion [last year], more than 80% of our total trade. The bilateral economic relationship between Hong Kong and Thailand provides another snapshot of strength and importance of regional trade and co-operation:
Hong Kong was Thailand's 7th largest trading partner in 1998. Reciprocally, Thailand was Hong Kong's 12th largest trading partner in 1999.
Hong Kong is one of Thailand's major export markets. Thailand accounts for over three-quarters of Hong Kong's rice imports. In 1999, we imported more than US$120 million worth of rice from Thailand. Thailand is also our second-largest supplier of natural rubber latex.
Hong Kong has a strong business presence here in Thailand. Hong Kong is the 4th largest investor in Thailand, and is particularly active in consumer products and export-oriented industries such as electronics, textiles and clothing, toys and plastics.
Thailand has a large ethnic Chinese community. There is no doubt that people-to-people contacts are put to good use to leverage the significant trade and investment co-operation between our two economies.
Both Thailand and Hong Kong suffered during the Asian financial crisis, but we are rebounding strongly. Thailand is expecting GDP growth of 4.5% to 5% this year, while we in Hong Kong are expecting GDP growth of 8.5% for 2000. Exports of goods and services will continue to benefit from the global economic upswing, as well as improved competitiveness for our products and services helped by on-going cost adjustments in Hong Kong and a rebound in East Asian currencies.
Hong Kong has largely overcome the pain brought about by the Asian financial crisis. And we are well prepared to take advantage of the general economic recovery in the region. So how are we preparing for the challenges and opportunities ahead?
Our long-term goal is to develop Hong Kong into a world-class city in Asia, in the same mould as New York in the Americas and London in Europe. We have set our sights on becoming a major regional and global hub for finance, trade, tourism, information and transport; a city with the solid economic foundations needed to provide our residents with a relatively high average income.
We already possess many of the attributes needed. We are an international financial centre, the world's 10th-largest trading entity in goods and Asia's most popular international tourist destination. We have Asia's second-largest stock market, the world's busiest container port and the world's busiest airport for international air cargo. We will continue to strengthen these key pillars of our economic success. By doing so, we can play a pivotal role in the regional as well as global economy, and be home to even more multi-national companies providing services to the entire region. To help achieve this goal, we will continue to push for further global trade liberalisation by our active participation in the WTO and APEC, while at the same time enhance bilateral relations with major economies in the region. In this connection, I am pleased to note the strong message in the Declaration made by APEC Economic Leaders in Brunei yesterday reiterating the need to expeditiously launch a new WTO round of multilateral trade negotiations. Leaders agreed that a balanced and sufficiently broad-based agenda should be formulated and finalised as soon as possible in 2001 and that a round be launched in 2001.
One of Hong Kong's greatest strengths is our extensive links with the Mainland of China. Over the past 20 years, Hong Kong has benefited greatly from China's open door policy. Now, the world's 9th largest trading entity, China is poised to enter the WTO. With a population of 1.2 billion, China is potentially the largest and fastest growing consumer market in the world. And it is about to become more comprehensively and systematically liberalised, adding not only certainty, but also momentum, to globalisation.
China's WTO accession is not simply about business opportunities. It is about strengthening economic and social stability in the region. It is about ensuring that differences on trade issues are resolved sensibly. It is about developing the regional economy on responsible, rules-based principles.
As China's market continues to open up and liberalise, enormous business opportunities will emerge. It has been estimated that by 2010, the Mainland's exports will be 22% higher, while imports will be 17% higher. Hong Kong is well-placed in fact, best-placed to capitalise on these opportunities. We have first-hand knowledge of the Mainland market, gained through decades of interaction; we have an established business presence; we have the language and cultural ties; and we have world-class business and financial services and excellent infrastructure to support all of those endeavours in China. We will have a greater, not lesser, role to play as a gateway to the Mainland market. And we will be able to participate even more in the economic development of our country as more sectors open up to foreign investment.
Although we will strive to make the best use of these opportunities, Hong Kong is not the only economy that stands to benefit. The Mainland itself, as well as other regional economies, will benefit from the expanded economic activities. In order to seize the vast opportunities on the horizon, Hong Kong has to further develop and secure its role as a strategic partner, not just with the Mainland but also between Mainland and the rest of the world. I would welcome more Thai companies to join those already in Hong Kong to capitalise on the head-start we can offer as China's market continues to open up and expand.
Ladies and gentlemen, thank you once again for asking me to speak with you today. I am grateful to have been given this opportunity on my first visit to Thailand in the new millennium. You are most welcome to come and visit us in Hong Kong, whether for business or pleasure.