Strengthening Regional Co-operation in the New Millennium By Joshua C.K. Law, Director-General of Trade and Industry 18 November 2000
Ladies and gentlemen:
I am honoured to be here today to address such a distinguished audience. Early this week, I was in Brunei Darusalam attending the APEC meetings. Our two economies have close co-operation in APEC in strengthening the multilateral trading system and to promote further liberalisation in trade and investment amongst member economies in the Asia Pacific. Being one of the 12 founding members of APEC, Thailand's active participation has helped transform APEC into an important regional forum for promoting open trade and economic cooperation. Together we faithfully support the various APEC work in pursuing these goals.
Tonight, I would like to talk about regional co-operation in the new Millenium, and to share with you how Hong Kong is embracing changes and preparing for the challenges and opportunities ahead.
Notwithstanding their diversity, the Asia-Pacific economies have developed a complementary relationship during the past decade. With continuous growth in trade, the Asia-Pacific was the most dynamic region in the last decade. The average annual growth in trade in the past decade within the APEC economies was 8%, compared to 6.5% for the world as a whole. In addition, foreign direct investment inflows into the region grew by 210% in the past decade, while foreign direct investment outflow from the Region doubled during the same period. These figures mirror the enormous benefits brought about by the progressive dismantling of trade and investment barriers in the region.
Of Hong Kong's top 20 trading partners in 1999, 13 were from the Asia-Pacific region. The volume of trade amounted to US$287.4 billion, representing 81.3% of Hong Kong's total trade. Hong Kong and Thailand have close trade and economic relationship. Just a few examples,
Hong Kong was Thailand's 7th largest trading partner in 1998. Reciprocally, Thailand was Hong Kong's 12th largest trading partner in 1999.
Hong Kong is one of Thailand's major export market. Thailand is Hong Kong's largest supplier of rice and accounts for some three-quarters of Hong Kong's rice imports. In 1999, we imported over US$ 120 million of rice from Thailand. Furthermore, Thailand is also Hong Kong's second largest supplier of natural rubber latex.
Hong Kong has a strong business presence 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 etc.
Thailand has a large ethnic Chinese Community. No doubt these businesses and 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 seriously from the Asian Financial Crisis in 1997 and its aftermath, but we are rebounding fast. Thailand is expecting GDP growth of 4.5% to 5% this year. Hong Kong's economy has also been moving ahead quite strongly since the latter part of last year. We attained a double-digit GDP growth, at 10.8% in real terms in the second quarter of 2000 over a year earlier, after a 14.3% growth in the first quarter. We are now forecasting GDP growth of 8.5% in real terms for 2000. We expect that exports of goods and services will continue to benefit from the global economic upswing and improved competitiveness for Hong Kong's products and services helped by on-going cost adjustments in our economy and a rebound in East Asian currencies.
Hong Kong has largely overcome the pain brought about by the Asian Financial Crisis. We are well prepared to take advantage of the general economic recovery in the region. So how can we strengthen regional co-operation in the New Millenium? 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, much as New York in the Americas and London in Europe, a strong 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 are already an international financial centre, Asia's most popular international tourist destination, Asia's second largest stock market, the world's 10th largest trading entity in goods, the world's busiest international air cargo hub and container port. We will continue to strive for improving pillars of our economic success. In this process we can play a pivotal role in the regional as well as global economy, be home to a host of multi-national companies and provide services to the entire region. To achieve our goal, we will continue to participate actively in the WTO and APEC, and at the same time enhance our bilateral relations with our neighbouring economies.
One of Hong Kong's greatest strengths is an 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 with a population of 1.2 billion people, China is poised to enter the WTO. Potentially the largest and fastest growing consumer market in the world is about to be 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 further, enormous business opportunities will emerge. It has been estimated that by 2010, the Mainland's exports will be higher by 22%; imports by 17%. 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 the opportunities, Hong Kong will by no means be the only winning party. The Mainland itself as well as other economies in the region will also benefit from the expanded economic activities. In order to seize the vast opportunities ahead, Hong Kong has to further develop and secure our role as a strategic partner not just to the Mainland but also between Mainland and the rest of the world. I would like to see more Thai companies joining those already in Hong Kong to capitalise on the head-start that we can offer as China's market continues to open up and expand.
I am pleased to have
this opportunity to speak to you in my first visit to Thailand in the
new Millennium. I look forward to seeing all of you in Hong Kong when
you visit us, whether for business or pleasure.