Speech by DGTI at the "APEC at 20 and the Rise of China" Conference (English only)
Friday, February 26, 2010
Following is the opening speech by the Director-General of Trade and Industry, Ms Maria Kwan, at the "APEC at 20 and the Rise of China" Conference organised by the Asia-Pacific Economic Cooperation (APEC) Study Centre at Lingnan University today (February 26):
Professor Chan (Yuk-shee, President of Lingnan University), Professor Seade (Vice President of Lingnan University), distinguished guests, ladies and gentlemen,
Good Morning. It is my pleasure to be here today to participate in this Conference on "APEC at 20 and the Rise of China" organised by the APEC Study Centre at Lingnan University, the current host institution of the Hong Kong APEC Study Centre.
This conference is very timely as APEC has just completed its first two decades of work in promoting economic co-operation among its member economies. While taking stock of its achievements, it is also important for APEC to address new challenges, particularly after the global economic crisis. As the Senior Official of Hong Kong, China to APEC and just returned this morning from attending the First Senior Officials Meeting at Hiroshima, Japan, I would like to take this opportunity to share with you APEC's achievements in the past 20 years and, looking ahead, its major priorities in 2010.
Since its establishment in 1989, APEC has been a driving force for free and open trade and investment in the Asia-Pacific region. 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. The substantial economic potential of APEC members, together with APEC's unique operation characteristic based on voluntary commitments, open dialogue and equal respect for the views of all participants, have made it possible for individual member economies to have the flexibility of spearheading initiatives on different fronts based on their different needs and circumstances.
In 1994, APEC set for itself what is known as the Bogor Goals, that is, APEC industrialised economies to achieve free and open trade and investment by 2010, and developing economies to achieve it by 2020. This year five industrialised APEC members are due to be assessed on their progress towards the Bogor Goal. Another six developing economies have volunteered to join the assessment as well. Collectively, they are now generally referred to as the 2010 economies. As one of the most liberal and open economies in the world and a "model member economy" in trade and investment liberalisation and facilitation, Hong Kong, China has set for itself the target of achieving Bogor Goals in 2010.
APEC's efforts on trade and investment liberalisation and facilitation in pursuit of the Bogor Goals in the past 15 years have helped boost region-wide growth and prosperity. Currently, APEC member economies are among the world's most economically dynamic and together account for 40% of world population, 44% of the world trade and 56% of world GDP.
The GDP for the Asian Pacific region has more than tripled since 1989, equating to a compound annual growth rate of 7.1%. Fifteen of APEC's 21 members rank among the top 40 exporting economies. APEC's total trade has grown fivefold from US$3 trillion in 1989 to US$15 trillion in 2007. Formal barriers to trade in the region had been cut by 67% from average regional tariffs of about 17% in 1989 to an average of 5.5% in 2004. This translates into substantial savings for consumers and reduced cost for manufacturers who use imports for production.
Between 1994 and 2004, foreign direct investment in APEC increased by 210%. APEC's Business Advisory Council has estimated that between 1994 and 2004, 195 million new jobs were created in the region, and APEC's work on trade and investment liberalisation helped reduce poverty by one third - lifting an estimated 165 million people out of poverty. A mid-term stocktake of progress towards the Bogor Goals also estimated that employment in APEC economies had grown by 18% between 1990 and 2002.
APEC has also embarked on a large number of projects and programmes in different areas pertinent to trade and investment liberalisation and facilitation. These include implementation of the APEC Business Travel Card scheme, introduction of Trade Facilitation Action Plans to reduce trade transaction costs, putting in place Investment Facilitation Action Plan to improve the investment environment, improving supply chains in the region under the Supply Chain Connectivity Initiative, 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. The list goes on and on.
In this process, Hong Kong, China has made due contribution. Among other things, we took the lead in developing the APEC Principles on Trade Facilitation in 2001, and since then have been co-ordinating the implementation of the first and second Trade Facilitation Action Plans.
Global Financial Crisis and the New Economic Order
The global financial crisis in 2008 has brought about unprecedented challenges to the global economy. Like other economies in the world, APEC economies were hard hit by the global economic crisis. In the first instance, APEC economic leaders demonstrated at their meeting in Peru in 2008 their commitment to working closely in a co-ordinated and comprehensive manner, taking urgent and extraordinary steps to stabilise the financial sectors, strengthen economic growth, and promote investment and consumption. To help economies tide over the crisis, efforts were made to ensure that adequate finance would be made available to business, particularly for small and medium enterprises (SMEs), and to maintain trade and investment flows in the region.
While economic situation in some economies and regions has improved recently, the road to recovery is still a winding and bumpy path. The early policy responses by major economies, such as massive stimulus and financial bailout packages, have been successful thus far in stabilising the situation. But these packages alone are not adequate for addressing imbalances within economies as well as across economies. In the APEC Economic Leaders Meeting in Singapore last November, leaders recognised 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.
APEC 2010 Key Priorities
As the host of APEC 2010, Japan has made "Change and Action" the theme this year - APEC will consider the necessary "changes" and put them into concrete "actions". Japan is working with other member economies in formulating a "new vision" to further growth and prosperity in the Asia-Pacific region.
A most important task for APEC this year is the assessment of the progress made by the 2010 economies in achieving the Bogor Goals. Assessment is now in train with Japan taking the lead and working in consultation with other economies.
Key priorities for APEC 2010 have been identified. They include regional economic integration (REI), growth strategy and human security, to be supported by economic and technical co-operation activities. The latter is considered important to help members build capacity to support and implement the necessary "actions" and thereby generating "changes" in the region.
On REI, liberalisation and facilitation of trade and investment has been the key engine of development in the region and its importance to APEC remains unchanged. APEC will continue to explore possible pathways towards the establishment of a Free Trade Area of the Asia Pacific as mandated by Leaders. Key areas of REI include its acceleration in the areas of services, digital economy, investment, rules of origin, standards/technical barriers to trade; environmental goods and services and strengthening of intellectual property rights; improving the business environment through implementation of ease-of-doing business initiatives and strategisation of post LAISR (Leaders Agenda to Implement Structural Reform) work; and enhancing regional connectivity and promoting trade facilitation.
Although much work is still needed to formulate a growth strategy, APEC has identified the key element for supporting growth, namely, implementing structural reforms strategically which would support more balanced growth within and across economies, achieve greater inclusiveness in societies, sustain the environment, and increase growth potential through innovation and a knowledge-based economy.
APEC's human security agenda will also be augmented to help sustain growth and prosperity in the Asia-Pacific. Food security has been identified as a vital issue for the development of the region. More concrete actions for strengthening food security in the region will be drawn up. Other important items will include response to infectious diseases, counter terrorism, anti-corruption and disaster preparedness.
By spearheading domestic reforms and regional co-operation in shaping a new economic order, APEC strives to remain a premier and relevant forum in the Asia-Pacific in the future.
Finally, I would like to congratulate the APEC Study Centre of Lingnan University for successfully organising this conference which enables our distinguished academia and professionals to exchange ideas on a number of important subjects. I have no doubt there will be lots of insightful views and inspiring discussions and I wish the conference every success. I also wish all visitors from abroad a most enjoyable and fruitful stay in Hong Kong.