7. The long-awaited economic recovery
has not come easily. We need to take careful stock of
experience gained to consolidate our achievements and
further promote economic restructuring and development.
Capitalising on Our Unique Advantages
8. The principal reason for Hong Kong's emergence from
the economic doldrums is that our unique advantages have
produced results. Under "One Country, Two Systems",
Hong Kong continues to be a highly liberal and diverse
society under the rule of law. We have a mature market
economy and world-class infrastructure, a clean government
and a highly professional and dedicated civil service,
a simple tax system and low taxes, good social and public
order, and proximity to a vast and rapidly expanding Mainland
market. Hong Kong is the only city in Asia endowed with
all these advantages, which over time have transformed
into a competitive edge for our local industries. We have
done a great deal to consolidate our core industries by
actively promoting the development and expansion of the
financial services, producer services, logistics and tourism
sectors:
- On financial services, with the institutional reforms
of recent years, we have maintained our lead in innovation
and supervision and consolidated Hong Kong's position
as an international financial centre. We have successfully
issued government bonds. Local banks have been allowed
to operate personal renminbi business. More Mainland
enterprises have come to list in Hong Kong. As a result,
Hong Kong has become the world's third largest capital-raising
market. Our position as the financing centre for the
Mainland has strengthened. Compared with pre-1997
levels, our stock market capitalisation has increased
by over 50%, while trading volume has hit a record
high.
- Producer services have become the mainstay of our
economy. As a proportion of GDP, trade services have
surged from about 20% in 1980 to nearly 40% last year
and account for over 70% of total external earnings.
In the past five years, Hong Kong's trade volume with
the Mainland grew at an average annual rate of 7.9%,
of which growth in non-processing trade was a striking
13%. Offshore trade has also continued to expand.
It is clear that Hong Kong still plays a vital role
as a two-way platform for international trade.
- Hong Kong's position as a regional logistics hub
has been strengthened. We have further opened our
aviation network to allow more flights between Hong
Kong and major Mainland and overseas cities. The catchment
area of Hong Kong International Airport has been extended
to cover the Pearl River Delta. We are now preparing
for the construction of Container Terminal 10 and
pushing ahead with pre-feasibility study work. As
for soft infrastructure, the Digital Trade and Transportation
Network will be launched this year to facilitate the
exchange of information and data with related industries.
To lower land transport costs, we are striving to
reduce clearance times at boundary crossings. We are
planning to introduce a bill this year to provide
the statutory basis to "co-locate immigration
and customs facilities".
- On tourism, we will further strengthen our tourism
infrastructure. We will also ask the Mainland to further
extend the Individual Visit Scheme to broaden the
source of visitors. Last year, there was a total of
12 million visits by Mainlanders to Hong Kong, four
million of which were under the Scheme. Compared to
1998, last year's visitor arrivals had doubled. Hong
Kong Disneyland is on schedule for completion in September
this year, ushering in a new era for our tourism development.
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