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Speeches

Speech by the Director-General of Trade and Industry, Ms Salina Yan, at the APEC SME Business Forum 2019 (English only)
Wednesday, December 18, 2019

Following is the speech by the Director-General of Trade and Industry, Ms Salina Yan, at the APEC SME Business Forum 2019 in Shenzhen today (December 18):

Distinguished guests, ladies and gentlemen, 

Good morning. It is my great pleasure to join you all today here in Shenzhen at the APEC SME Business Forum 2019.  This is an important platform for APEC Economies and representatives from the private sector to gather and exchange thoughts and insights on this year's theme of promoting innovative, entrepreneurial and creative development, and enjoying cooperative, beneficial and shared future.  I am going to speak on the topic of Regional Cooperation and Integration - Coordinated Development of SMEs in Guangdong-Hong Kong-Macao Greater Bay Area.

SMEs in Hong Kong

Small and Medium Enterprises (SMEs) have always been a central topic at APEC meetings as they form the backbone of APEC economies.  Insofar as Hong Kong is concerned, we have about 340 000 SMEs as at June 2019, accounting for over 98% of the total business units and contributing 45% of our total private employment. The Hong Kong Special Administrative Region (SAR) Government attaches great importance to regional economic integration as 32% of the SMEs in Hong Kong are engaged in import/export trade and wholesale activities.  Coming next are professional and business services, which account for 15% of our SMEs. We are also pleased to see an emerging trend in recent years of the new generation starting their own businesses in Hong Kong. The figures on innovation and entrepreneurship are indeed very encouraging.  In 2018, we have more than 2600 Innovation and Technology (I&T) start-ups, representing an 18% increase compared with that in 2017. Under the "One Country, Two Systems" principle, Hong Kong has and will continue to make use of our unique advantages to promote the development of a diverse and flourishing economy. 

APEC Connectivity Blueprint - Physical, Institutional, and People

APEC celebrates its thirtieth anniversary this year.  Over the past 30 years, regional economic integration and connectivity have been the core mission of APEC. From the APEC Connectivity Blueprint to the theme of "Connecting People, Building the Future" for APEC 2019 and the theme of "Optimizing Human Potential towards a Future of Shared Prosperity" for APEC 2020 in the Malaysian host year, we are glad to see that APEC member economies are committed to achieving the overarching goal of strengthening physical, institutional and people-to-people connectivity within the diverse Asia-Pacific community.

For Hong Kong, the completion and commencement of a number of major public infrastructure projects, such as the Hong Kong-Zhuhai-Macao Bridge and the Three-Runway System project of the Hong Kong International Airport, continue to enhance our already very close connections with the rest of the world.  Physical connectivity apart, enhanced institutional connectivity is promoted through our work in developing an Online Dispute Resolution and Deal-making Platform with SMEs in mind as well as pushing for an array of cargo clearance facilitative measures.  The widening of the Free Trade Agreement (FTA) network with our trading partners is another dimension of strengthening institutional connectivity. As for people-to-people links, we have endeavored to strengthen collaboration with APEC economies in education, research as well as tourism.   All these connections, fostered by advancement in technology and innovation in the digital age, are important building blocks of a connected business network for Micro, Small and Medium Enterprises (MSMEs) in harnessing the benefits of the rapidly evolving global value chain.

The Greater Bay Area

Thanks to the national strategy of the Guangdong-Hong Kong-Macao Greater Bay Area development, we are witnessing the elevation of regional cooperation to a new level based on synergies and leveraging on comparative advantages with the "One Country, Two Systems" in full practice. The Greater Bay Area, or the GBA, comprises the two Special Administrative Regions of Hong Kong and Macao and nine municipalities in Guangdong with distinct characteristics, complementary positioning and strong competitiveness.  With a combined area of 56 000 square kilometres, and a population size of 71 million, the Gross Domestic Product of the GBA stood at US$1.6 trillion last year, comparable to the entire size of some economies or countries in the world. The business opportunities and potential in the GBA are certainly huge.

The Outline Development Plan for the Greater Bay Area promulgated in February this year sets out the basic principles and development objectives of the GBA. It also sets a vision for developing an international innovation and technology hub, expediting infrastructural connectivity, building a globally competitive modern industrial system, taking forward ecological conservation, developing a quality living circle, and strengthening cooperation and participation in the Belt and Road initiative.

Since March this year, the Central Government has announced two rounds of measures to take forward the implementation of the GBA, including measures that would facilitate people flow, supporting the use of mobile electronic payment by Hong Kong residents in the Mainland, and wider participation of Hong Kong professionals in the legal, construction and insurance sectors in the Mainland market.  As a predominantly services economy, Hong Kong is known for its status as an international financial, transportation, and trade centre and an aviation hub supported by competent professional services.  Enjoying the dual advantages of "One Country, Two Systems", and helped by the speedy development of technology and innovation in the digital age as well as the availability of production capacity in the GBA, Hong Kong sees vast potential in the GBA Development in bringing mutual benefits to all.

Fostering Innovation and Creativity

Specifically, fostering innovation has been a policy priority under the GBA Development, with the ultimate aim of developing the Area into an international I&T hub. Notably, our host Shenzhen has devoted great efforts in transforming itself into a centre of innovation and creativity with global influence and achieved great success in this area.  The HKSAR Government has also put innovation and technology at the forefront of Hong Kong's development for the 21st century.

Along that line, the Hong Kong-Shenzhen Innovation and Technology Park will be set up to facilitate the cross-boundary and regional flow of innovation elements such as talents, capital, information and technologies.  Occupying a strategic location in Hong Kong bordering Shenzhen, the Park is four times as large as the Hong Kong Science Park, providing technology start-ups not only the space to grow, but also the geographical proximity to leverage the robust supply chain, manufacturing capabilities and talent pool in Shenzhen and the GBA as a whole.

Attracting and nurturing talents is of utmost importance in maintaining a vibrant I&T ecosystem.  The Technology Talent Admission Scheme administered by the HKSARG offers a fast track for eligible technology companies to admit overseas and Mainland technology talents for conducting research and development (R&D).  Another scheme in the form of an Internship Programme supports technology start-ups and organisations to recruit graduates from universities as interns to assist in the R&D projects.   In addition, young people are encouraged to start their businesses in the various incubation centres in the GBA with financial and mentorship support.  By encouraging young talents to pursue their career in I&T, innovation and creativity could be brought to the industry.

Strengthening Regional Economic Development

The GBA advocates development through openness and a rules-based system.  In this spirit, the Mainland and Hong Kong Closer Economic Partnership Arrangement, or CEPA, helps strengthen the economic development in the region.  First signed in 2003, CEPA is a living document with regular reviews and enhancements of goods and services trade liberalisation.  It pioneers the idea of "early and pilot implementation in Guangdong" ( 廣 東 省 先 行 先 試 ).  It is now a comprehensive and modern free trade agreement, underpinned by four subsidiary agreements covering four major areas, namely trade in goods, trade in services, investment, and economic and technical cooperation. The Agreement on Trade in Goods under the CEPA framework signed last December contains a dedicated Chapter on "Trade Facilitation Measures in the Guangdong-Hong Kong-Macao Greater Bay Area" which seeks to explore facilitation measures such as expedited cross-boundary customs clearance, greater use of the trade single windows and enhanced control point information exchange. Last month, we signed an updated version of the CEPA Agreement on Trade in Services to lower the market access thresholds and provide more opportunities for Hong Kong enterprises and professionals to gain entry into the fast opening up Mainland market.

Apart from CEPA, the HKSAR has signed another seven Free Trade Agreements (FTAs) with 19 economies. Some of these FTAs are signed with APEC member economies, including the FTA with ASEAN signed in 2018. In the ASEAN-HK FTA, there are rules and disciplines on simplifying and harmonising customs procedures, with the objective of facilitating trade and promoting customs co-operation. Substantial market access commitments covering trade in goods as well as trade in services have also been made.  Capacity building activities and technical assistance programmes will be organised to enhance co-operation between ASEAN and Hong Kong. As of  today, the FTA has entered into force for Laos, Malaysia, Myanmar, Singapore, Thailand, Viet Nam and Hong Kong.  For the remaining four ASEAN Member States, the FTA will enter into force subject to the completion of their internal ratification procedures.

Promoting Entrepreneurship

Young Hong Kong entrepreneurs are already taking advantage of the benefits offered by the GBA to realise their dreams. In this slide, you can see that thanks to the vast market demand, a young Hong Kong entrepreneur has launched his innovative product which displays best-before dates on food wrappers to avoid consumption of expired food. Combining the funding from Hong Kong and the R&D capability in Shenzhen, another young entrepreneur applies Internet of Things on personal belongings to prevent property loss and has launched his product in the internet+ environment in the Mainland. The ample land supply in the GBA also allows a group of young entrepreneurs to establish their aquaponics farm for raising both fish and vegetables together in a sustainable way. These are just a few examples showing how the GBA development has enabled Hong Kong young entrepreneurs in putting their new and innovative ideas into practice.

Innovation and creativity is the driving force for economic growth. By building a facilitative ecosystem, the GBA can bring tremendous opportunities for start-ups to implement their creative ideas and reach out to the greater market.  This is an unprecedented project involving one-country, two systems, three custom territories and three currencies. But the development of the GBA is not only for the benefit of cities within the Area. It also opens up a perfect platform for collaboration amongst all economies achieving win-win results through complementary cooperation. There are many success stories of start-up businesses in the GBA, and we will definitely have more encouraging stories to share in the near future.

With this, I wish the APEC SME Business Forum 2019 every success. My best wishes also go to Malaysia for hosting a successful APEC year for 2020.

Ends