II. Promoting Economic Restructuring
A Market-led Approach
14. Hong Kong is a free market economy, and the prime
mover of economic restructuring rests mainly with the
private sector. While the Government has an active role
in promoting the development of hard and soft infrastructure,
the wider community must itself move to meet the new
challenges posed by the knowledge-based economy. We
need to apply new knowledge, technologies and innovative
thinking, and to improve our services and management,
so as to continually enhance our competitiveness.
The Role of the Government
15. The economic restructuring that
is sweeping through the world has highlighted the unique
role of the government. Whether it is persuading trading
partners to open their markets as part of the globalisation
process, or promoting technological education to facilitate
the development of the knowledge-based economy, governments
in various countries have assumed a key role of driving
the transformation process. As a highly open economy,
the use of monetary and fiscal policies in Hong Kong
to revitalise economic growth is unlikely to be effective.
We have to focus instead on enhancing the competitiveness
of our economy. Over the past five years, I have repeatedly
stressed that the Government has to embark on important
initiatives on a macro-level. These include investing
heavily in education, upgrading economic infrastructure,
promoting innovation and technology, improving the business
environment, helping the business sector to develop
new markets, actively protecting our ecology and environment
and improving our quality of life. Concurrently, we
will reinforce our strengths in our four main economic
pillars - finance, logistics, tourism and producer services
sectors. We should also capitalise on the rapid development
of our Motherland to hasten our economic restructuring.
These are important tasks, necessary not only for economic
needs, but also for discharging our responsibilities
and making good our pledges to the community. We will
focus on the following areas:
Improving the Business Environment
16. One of our urgent tasks is to
further improve our business environment. To overcome
our economic difficulties, we must strive to attract
foreign investment, retain domestic investment and boost
local economic activities, with a view to broadening
our production capacity, creating employment, and expanding
our tax base. Following the principle of "big market,
small government", we have to reduce business costs
by cutting red tape, embarking on de-regulation, streamlining
procedures and enhancing administrative efficiency.
We believe we can do better. I therefore plan to set
up a high-level task force to examine these issues and
put forward policy recommendations.
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