Speech by DGTI at opening ceremony of Third All China Economics International Conference (English only)
Monday, December 14, 2009
Following is the speech by the Director-General of Trade and Industry, Ms Maria Kwan, at the opening ceremony of the Third All China Economics International Conference organised by the APEC Study Centre of the City University of Hong Kong today (December 14):
Professor Wei (Dean, College of Business, City University of Hong Kong), distinguished guests, ladies and gentlemen,
Good morning. First of all, I would like to congratulate the City University of Hong Kong for successfully organising a series of All China Economics Conferences. I understand that this is the third conference, and I expect that there will be more to come. It is indeed my honour and pleasure to be here to participate in the opening ceremony of this year's conference, focusing on "Asia Pacific Economic Cooperation (APEC) Turns 20 and the Anniversary of the Financial Tsunami". As the Senior Official of Hong Kong, China, to APEC, I would like to take this opportunity to share with you APEC's achievements in the past 20 years, and Hong Kong, China's contribution to APEC.
Background on APEC
Let me start with a brief background on APEC. APEC is an inter-governmental forum established in 1989 as a driving force for free and open trade and investment in the Asia-Pacific region. Hong Kong joined APEC in 1991, and has continued to be a separate and full member under the name of "Hong Kong, China" since July 1, 1997. Today APEC has 21 member economies, including the major economic and political powers in the region such as the United States, China, Japan and Russia. APEC's primary goal is to support sustainable economic growth and prosperity in the Asia-Pacific region. In a unique manner, APEC operates on the basis of voluntary commitments, open dialogue and equal respect for the views of all participants. Decisions are made by consensus. These give member economies much flexibility to spearhead initiatives on different fronts taking into account the different needs and circumstances of individual members.
Achievements of APEC
This year is APEC's 20th anniversary. It is timely to review what APEC has achieved in the past two decades, and to look ahead at what APEC should focus on to make it continue to be relevant in shaping the future development of the region.
To pursue its goal of free and open trade and investment, APEC set for itself in 1994 what is known as the Bogor Goals: to achieve free and open trade and investment by 2010 for APEC industrialised economies, and by 2020 for developing economies.
Over the past 20 years, APEC has been focusing its work on three key areas in pursuit of the Bogor Goals :
trade and investment liberalisation;
trade and investment facilitation; and
economic and technical co-operation.
APEC member economies have made remarkable achievements in the past two decades. In 1989, when APEC was first established, average regional tariffs stood at around 17%. By 2004, this was reduced by about 70% to an average of 5.5%. Currently, APEC economies account for more than half of global Gross Domestic Product and about 44% of world trade. Intra-APEC merchandise trade has grown fivefold from US$1.7 trillion in 1989 to US$8.44 trillion in 2007 - an average increase of 8.5% per year.
In addition to facts and figures regarding economic growth among APEC member economies, I would like to share with you some success stories of APEC which have brought direct and practical benefits to businesses and entrepreneurs in the region.
To facilitate trade and investment in the region, which is a major objective of APEC, APEC adopted the first Trade Facilitation Action Plan in 2002. With the collective efforts of members in implementing the plan, the cost of business transactions across the region was reduced by 5% between 2002 and 2006. To take this initiative one step further, a second Trade Facilitation Action Plan was formulated in 2007. The aim is to reduce the cost of business transactions across the region by another 5% between 2007 and 2010. We are pleased with the interim assessment done last month, which shows that APEC is overall on track in achieving this aim, having already reduced transaction costs by 3% between 2006 and 2008. In addition, APEC endorsed an Investment Facilitation Action Plan in 2008 with the objective of facilitating and encouraging investment flows in the region.
Many of you may be aware of the APEC Business Travel Card, and indeed very likely some of you are already in possession of one. For those of you who are using the card, you will no doubt agree that the card has helped lessen the chore of going through immigration formalities when you travel abroad. Indeed, the whole concept of the card, which was introduced in 1997, is to provide fast and efficient immigration clearance by participating economies for business travellers in the APEC region. The card allows the holder to enjoy fast track entry and exit at immigration points through special lanes. The scheme has proved very successful and immensely popular among frequent business travellers.
In fact, APEC has embarked on a large number of projects and programmes in different areas pertinent to trade and investment liberalisation and facilitation, including trade in services, customs clearance of goods, adoption of a set of principles on government procurement, promotion of electronic commerce, exploring ways to reduce barriers to trade and investment in environmental goods and services, co-operation in protection and enforcement of intellectual property rights. And the list goes on and on.
APEC's swift actions in addressing the global economic crisis
APEC economies, like other economies in the world, are hard hit by the global economic crisis. Members wasted no time waiting, they sprang into action. While meeting in Peru in November last year when the world was weathering the shocks of the financial tsunami, APEC Economic Leaders swiftly announced their determination and commitment to tide over the crisis. Specifically, leaders reaffirmed their commitment to working closely in a co-ordinated and comprehensive manner to take urgent and extraordinary steps to stabilise the financial sectors, strengthen economic growth, and promote investment and consumption. Leaders also supported efforts to ensure that adequate finance would be available to business, including small and medium enterprises (SMEs), and to maintain trade and investment flows in the region.
To fight against the pressure of protectionism which was increasing amid the economic downturn, leaders vowed their strong support of the Washington Declaration by the Group of 20, and committed to refraining in the following year from raising new barriers to investment or to trade in goods and services, imposing new export restrictions, or implementing measures inconsistent with the rules of the World Trade Organisation, including those for stimulating exports. In July this year, APEC Trade Ministers agreed to extend this commitment to 2010, or beyond if necessary.
SMEs are the backbone of many economies including Hong Kong, and they are particularly hard hit by the economic difficulties arising from the financial tsunami. APEC plays a very important role in helping the SMEs in the region in overcoming such difficulties and positioning themselves for sustainable recovery. Seminars on strategies to manage the impacts of the global financial crisis and access to credit were held in June and October this year. These have facilitated member economies devising policies and strategies to help SMEs survive the crisis and meet the challenges ahead.
Major outcomes of AMM and AELM 2009
A year has passed since the onset of the financial crisis. APEC Economic Leaders and Ministers just held this year's annual meetings in Singapore last month. I participated in some of the meetings. Leaders and ministers have reviewed global and regional economic developments, formulated strategies to position the region for recovery and strengthen regional economic integration, and paved the way to sustainable economic growth.
While the global economic situation recently showed signs of improvement, APEC leaders and ministers are of the view that economic recovery is not yet on a solid footing. Unemployment remains unacceptably high in many economies. The recovery remains fragile. As such, APEC economies will maintain their economic stimulus policies until a solid economic recovery has clearly emerged.
Leaders also recognise the need to develop a new growth paradigm for the changed post-crisis landscape, and an expanded trade and investment agenda to strengthen regional economic integration in the Asia-Pacific region. They are committed to pursuing balanced, inclusive and sustainable growth.
To pursue economic growth that is inclusive, APEC will step up efforts in two areas. First, APEC will facilitate structural adjustments that enhance opportunities for all to benefit from growth, focusing on facilitating SME development and enhancing the functioning of labour markets, including enhanced support to women workers and entrepreneurs. Second, APEC will strengthen social resilience, focusing on enhancing the economic security of individuals and designing social safety nets that provide short-term security while avoiding long-term dependency.
Climate change is one of the biggest challenges facing the world. Leaders acknowledged that economic growth should be consistent with sustainable development. They have reaffirmed the APEC-wide aspirational target of reducing energy intensity by at least 25% by 2030, using 2005 as the base year. To address climate change, APEC's key response will include improved market access for environmental goods and services, further development of these sectors within APEC economies, enhancing energy efficiency and sustainable forest management and rehabilitation.
Support for the multilateral trading system has always been a key agenda of APEC. Leaders have reaffirmed their commitments to rejecting all forms of protectionism, keeping markets open, and refraining from raising new barriers to investment or to trade in goods and services. They have also vowed to ensure an ambitious and balanced conclusion to the Doha Round negotiations in the World Trade Organisation in 2010. They have called for the exercise of pragmatism and all possible flexibility, and the use of all possible avenues in order to accelerate the pace of the negotiations to secure convergence on a final package.
To accelerate regional economic integration, APEC will continue to explore building blocks towards a possible Free Trade Area of the Asia Pacific. In order to improve the business environment, APEC will also strengthen its efforts on trade liberalisation "at the border"; improving the business environment "behind the border"; and enhancing supply chain connectivity "across the border".
Hong Kong, China's contribution to APEC
Hong Kong sees APEC as an important forum for us to strengthen our co-operation with other economies on a wide range of trade and economic issues. Since we joined APEC in 1991, throughout these years, we have been contributing actively to the work of APEC.
To give a few examples: we are currently the Vice-Chair of the Committee on Trade and Investment and the Economic Committee, both reporting to the Senior Officials Meeting. We took the lead in developing the APEC Principles on Trade Facilitation in 2001, and co-ordinating the implementation of the first and second Trade Facilitation Action Plans.
This year, we also took the lead in developing an APEC mission statement, tagline and branding strategy, to enhance APEC's visibility and promote understanding of APEC's achievements among its key target audiences.
Looking ahead, in support of regional economic integration for improving business environment "behind the border", we will work with Singapore as co-champion economies, to devise and implement a capacity building programme in relation to "Trading Across Borders", with a view to assisting other participating economies in implementing regulatory reforms to make it cheaper, faster and easier to do business within APEC economies. We will also host the APEC SME Working Group meeting in June next year to continue APEC's efforts in helping SMEs in the region to embrace challenges and gain better access to the international market.
Our efforts are widely recognised within APEC. These also help enhance our profile in the region. Our open and liberal trade and investment regimes are indeed widely acknowledged in APEC. At an Individual Action Plan Peer Review exercise conducted in January 2007 to measure members' progress towards attaining the Bogor Goals, Hong Kong, China, was considered to be one of the most liberal and open economies in the world, strongly committed to the multilateral trading system, and a "model member economy" in trade and investment liberalisation and facilitation. While we do not regard ourselves as an industrialised economy in APEC, we have set 2010 as our goal for achieving the Bogor Goals.
Looking into the future
Looking into the future, Hong Kong and other member economies of APEC will continue work on accelerating regional economic integration, liberalisation of trade and investment, business facilitation, and improving the skills and capacity of its members through economic and technical co-operation.
APEC will also strengthen its collaboration with other international organisations, such as the World Trade Organisation, World Bank and Asian Development Bank, with a view to steering the region along a path of inclusive and sustainable growth. Through such collaboration, international organisations may contribute their expertise, resources and information in taking forward the APEC agenda and processes, while APEC may help mobilising region-wide support to initiatives advocated by these organisations that are relevant to APEC.
The new APEC tagline which Hong Kong has contributed to develop, "Advancing Free Trade for Asia-Pacific Prosperity", summarises the aspiration of APEC. We firmly believe further and deepened economic integration, together with the opening of markets, reduction in costs and risks in trade and investment, will substantially benefit member economies of APEC and their stakeholders, and foster long-term, inclusive and sustainable prosperity in the region.
Lastly, I would like to express my appreciation to the APEC Study Centre of the City University of Hong Kong for organising this conference to provide a platform for exchange of ideas among a distinguished group of intellectuals and professionals. I am sure there will be insightful views and inspiring discussions on various contemporary economic issues and world affairs on the agenda. I wish the conference every success. I also wish all participants an enjoyable and fruitful stay in Hong Kong.