Speech by SCED at Prime Source Forum 2016 (English only)
Following is the speech by the Secretary for Commerce and Economic Development, Mr Gregory So, at the Prime Source Forum 2016 today (March 14):
Distinguished guests, ladies and gentlemen,
It gives me great pleasure to join you all today at the Prime Source Forum 2016. I would like to extend my warmest welcome to everyone here, especially guests from Mainland China and overseas.
The Prime Source Forum is now one of the signature events in the industry. We are glad that it has chosen to meet in Hong Kong every year since 2006. This is a testament to the attractiveness of our city as a preferred destination for prestigious international conferences.
With the presence of some 400 senior executives from over 20 countries representing different levels of the supply chain in the textiles and apparel field, the Forum provides an excellent platform for industry experts to get together and reflect on the opportunities and challenges ahead.
The textiles and clothing industry has long been a cornerstone of our economy, with total exports exceeding $210 billion in 2015. The industry also provides employment to around 10 per cent of our manufacturing workforce. Over decades, Hong Kong has maintained its prominent position in the industry by moving up the value chain. It has transformed from its initial role as a leading production base into a renowned global sourcing hub and a major fashion design centre. Today, many companies in Hong Kong are serving as regional headquarters performing the essential decision-making and co-ordination roles.
And over the years, Hong Kong has developed a worldwide reputation as a trend-setter for showcasing the newest fashion collections. Our fashion designers have been gaining a worldwide reputation for their professional expertise, sensitivity to current trends and ability to blend commercialism and innovation. Thanks to their dedication and great talent, collections bearing Hong Kong designer labels have successfully tapped into the international market.
All along, our government has been providing support for projects that are conducive to the development of fashion design in Hong Kong. In particular, Create Hong Kong has been helping the industry by nurturing talent and supporting small and start-up design companies through the CreateSmart Initiative, while Invest Hong Kong has been offering free advice and services for multi-national companies interested in setting up sourcing and sales and marketing operation in our city.
Last February, the Government announced a series of pilot measures to be rolled out in the coming three years, with the aim of promoting the development of the fashion industry. Our Financial Secretary also announced recently that the Government will implement the three proposals made by the Advisory Group on Implementation of Fashion Initiatives. These three proposals are (1) strengthening the promotion of local fashion designers and emerging fashion brands in Hong Kong and overseas; (2) establishing an incubation programme for fashion designers; and (3) setting up a resource centre to provide technical training and support for young designers. I am sure these initiatives will go a long way towards strengthening the fashion industry.
Apart from being an international fashion design centre, Hong Kong is also an important global sourcing hub for garments and accessories. Our successful trade fairs, such as Hong Kong Fashion Week and World Boutique, are highly regarded as Asia's premier one-stop sourcing platforms for buyers and suppliers. A number of international trading houses and major retailers have established their buying offices here for sourcing high-quality fashion and accessories. Let me share with you some of our advantages as a global sourcing hub.
The first advantage is our strategic location at the heart of Asia and at the doorstep of Mainland China. This makes us an ideal springboard to reach out to the prosperous markets in our neighbourhood. Half of the world's population can be reached within five hours' flight time from Hong Kong. We also have world-class transport and information technology infrastructure, and one of the world's busiest container ports. Our strong connectivity is particularly relevant to the fashion industry, where the ability to respond timely way to market demand is paramount in coping with the rise of "fast fashion".
Apart from excellent hardware, our software, particularly our reliable and professional services as well as our business-friendly environment, also contribute to our supremacy in the sourcing business. Our trade professionals in product sourcing are able to cater for the preferences of a diverse customer base and are acclaimed for speedy delivery within a short lead time. They are also well versed with international rules and documentation requirements for textiles trade.
Furthermore, our business-friendly environment is also very conducive to sourcing activities. We practice free trade and we do not impose any tariffs or maintain any trade barriers. Regulatory measures are kept to a minimum to ease trade flow. We follow the common law legal system and adopt internationally recognised codes of practise in business and commerce. We have a low and simple tax system with no GST (goods and services tax) or VAT (value-added tax). We have a clean and efficient government and a level playing field for all companies.
Indeed, you would expect nothing less from an economy that is consistently ranked as the freest in the world. We have retained top spot in the Heritage Foundation's Index of Economic Freedom for 22 years in a row. This status reflects real advantages for businesses in Hong Kong. It is no wonder that over 7 900 Mainland and international companies have chosen Hong Kong as their base in Asia.
Well, the list can go on, and these are all positive endorsements of Hong Kong as an international business city. Yet we should not lose sight of new challenges and opportunities ahead.
The slow recovery of the global economy and the export climate in the United States and European markets pose challenges to us. We need to be vigilant and look out for new markets. Fortunately, there are many new opportunities flowing from the rapid economic growth in the Asia-Pacific region, particularly ASEAN (Association of Southeast Asian Nations).
Our Free Trade Agreement (FTA) negotiation with ASEAN is progressing smoothly, and we expect a successful conclusion this year. Our FTA with ASEAN will further enhance businesses by providing a stable and transparent framework in which regional trade and investment can flourish.
We have also benefited from the preferential treatment accorded to us through our unique free trade pact with Mainland China, the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA).
Another golden opportunity is the Belt and Road Initiative. This grand strategy promotes closer economic and cultural ties among some 60 countries in Asia, Europe and Africa. The Belt and Road will generate demand and increase the volume and intensity of international trade and investment flow among countries along the routes, as well as two-way traffic in and out of China. As a highly open economy with extensive and strong external connectivity, Hong Kong is best placed to serve as the "super-connector" linking up various parties to take part in the Belt and Road.
As far as the textiles and apparel industry is concerned, countries along the Belt and Road, such as the ASEAN, offer the dual advantages of being a relatively low-cost production base as well as a lucrative and promising market. The huge consumer base coupled with the rise of an affluent middle class over there has propelled an unprecedented demand for trendy fashions and accessories. Hong Kong has always been a trend-setter for showcasing the newest fashion collections in the region. Riding on the Belt and Road Initiative, our designer brand fashions will be well sought-after in the emerging markets along the routes.
Aristotle once said, "Excellence is never an accident. It is always the result of high intention, sincere effort, and intelligent execution; it represents the wise choice of many alternatives - choice, not chance, determines your destiny."
Hong Kong is your right choice, your most ideal partner as you venture into the vast markets of the Far East and the Belt and Road. Hong Kong is ready to facilitate and help grow your businesses. I invite and encourage you all to make greater use of Hong Kong's unique advantages in terms of our physical proximity with the Mainland, as well as our first class infrastructure and our highly competitive business and professional services.
I wish you all a very rewarding Forum and an enjoyable stay in Hong Kong. Thank you.
Ends/Monday, March 14, 2016