Press Releases

HK Businesses Can Play a Leading Role in Business Development in Western Region
Saturday October 21, 2000

The opening of the western region will set in motion a series of related enterprise reforms and market opening measures. This, coupled with the Country's impending accession to the WTO, is bound to create numerous business opportunities, said the Director-General of Trade and Industry, Mr Joshua Law.

Speaking at the "2000︱estern Forum of China" in Chengdu this morning (October 21), Mr Law said: "With years of investing and operating experience in the Mainland as well as geographical advantage and human networks, Hong Kong businesses are poised to seize these opportunities to participate in the development of the resource-rich western region, thus contributing to both the western region's economic development and Hong Kong's prosperity."

"Despite the vast difference in historical and economic background between the western region and HKSAR, both have much experience regarding economic and trade development to share with each other. Since the country went ahead with reform and open door policy in 1978, Hong Kong businesses have been actively involved in investment and trade in the coastal provinces, developing external trade in tandem with local enterprises. Plenty of valuable experience has thus been gained which can be used for reference in the development of western region." he added.

"Being the largest direct investor in the Mainland, Hong Kong accounts for 51% of the country's foreign direct investment. Currently Hong Kong is also the largest foreign investor in the western region. Take, for example, Chengdu where the total value of the 43 Hong Kong investment items reached HK$800 million in 1998.

"The western region has plenty of natural resources and enormous development potential. Hong Kong businesses' flexible operation and good grasp of market information can certainly provide the western region with assistance in the development of export sector.

Mr Law said huge investment is needed in the development of western region. "Hong Kong is experienced in international capital financing and able to provide a wide variety of financial services. Our efficient market and monitoring mechanism as well as prudent banking sector can provide effective capital financing services to the western region.

"Furthermore, the western development will need foreign investment. In that respect, Hong Kong businesses can help spearhead inward investment. This will also reinforce Hong Kong's position as the gateway to the Mainland market as well as our status as an international financial centre.

"Hong Kong is also able to provide the western region with quality service sector support. The country will gradually open its service market upon accession to the WTO. The western development will expedite the development of tertiary sectors such as banking, finance and insurance. Nowadays, service sector already accounts for nearly 70% of GDP of developed countries in the West while the percentage for the Mainland is less than 35%.

"It means that service trade still has a huge scope of development in the Mainland. Hong Kong's market mechanism is well aligned with the world system. The regulation of financial businesses such as banking, insurance and securities is efficient. Professional services such as legal services, accounting and consultancy are well established. The external networking such as trade, communication and transportation is also properly set up. Apart from remaining as a link between the Mainland's and overseas enterprises, we can provide the Mainland with various support and professional services directly after the Mainland service market is opened, thus assuming the role as a 'high value-added service hub'.

"In the process of helping the western region to develop an external oriented economy, we will have many opportunities to cooperate with enterprises in the western region. Take, for example, the logistics business. Hong Kong is an important international entrepot and well developed in logistics services. We are not only familiar with international rules but also knowledgeable about the Mainland market. With such advantages, we can offer help to the western region in developing regional distribution centres and furthering regional economic development.

"The western region possesses good technological infrastructures and research talents. The country also fully supports academic and technological research schemes initiated in the western region. On the other hand, Hong Kong has the strength of financial skills, rich in international marketing experience and good access to obtain new high technology. We can form an ideal strategic partnership.

"The SAR government strongly supports the country's long term strategy of western development which is instructmental in advancing the national development and prosperity. As the single front-line department supporting Hong Kong's trade and industry, Trade and Industry Department is duty-bound to serve as a middleman to inform Hong Kong businesses of the policies, measures and opportunities concerning the western development in a bid to facilitate cooperation in different areas between the two places.

In concluding his speech, Mr Law said: "We at Hong Kong welcome the western development strategy and hope that we shall collaborate in the sharing of capital, technology, human resources and information, facilitating each other's economic development. Hong Kong is prepared to utilize its own strengths to support the western development and contribute positively to the advancement of the country."

Mr Law is leading a Trade and Industry Department (TID) Delegation for an eight-day visit to Chongqing, Chengdu, Xian and Beijing. The purpose of the visit is to gain first hand information of the progress of the western region development.

Other members of the delegation include Deputy Director-General of Trade and Industry, Mr Edward Yau; Assistant Director-General of Trade and Industry, Mrs Jennie Chok; and the Deputy Head of the Economic Affairs Department, Liaison Office of the Central People's Government in HKSAR, Mr Wang Liao-ping.