SCED's speech at APEC Business Advisory Council luncheon (English only)
Following is the speech by the Secretary for Commerce and Economic Development, Mr Gregory So, at the Asia-Pacific Economic Cooperation (APEC) Business Advisory Council (ABAC) luncheon today (January 29):
Ms Ho (Chair of the 2015 ABAC, Ms Doris Magsaysay Ho), Ambassador del Rosario (Chair of the 2015 APEC Senior Officials' Meeting, Ms Laura del Rosario), Raymond (Acting Executive Director of the Hong Kong Trade Development Council, Mr Raymond Yip), Allan (Representative of Hong Kong, China in ABAC, Dr Allan Zeman), Anthony (Representative of Hong Kong, China in ABAC, Mr Anthony Nightingale), distinguished guests,
Good afternoon. Welcome to Hong Kong and this first ABAC meeting of 2015.
I hope you enjoyed your chicken steaks and exotic desserts. I believe I'm your post-meal liqueur, or cordial, as it's sometimes called in North America. For the next 10 minutes or so, I'll speak to you straight up, undiluted.
This is, by the way, my second time welcoming you to the ABAC meeting in Hong Kong; the last one took place three years ago next month. We are honoured to welcome you back.
This is also a noteworthy year for ABAC. Yes, 2015 marks the 20th anniversary of ABAC. It was at the Seventh APEC Ministerial Meeting, in Osaka, Japan, back in November of 1995, that the ministers agreed to establish the APEC Business Advisory Council.
If you're wondering, the traditional 20th anniversary gift is, yes, China. Of course, Hong Kong can help you get all the China you need. And I'm not talking tableware.
China aside, we owe our global trade success to a host of singular advantages and deeply rooted beliefs. Leading the way is our unwavering commitment to free and open trade and investment. That central tenet is the engine driving our economic growth and prosperity.
This, I'm pleased to say, coincides with APEC's primary goal - supporting sustainable economic growth and prosperity in the Asia-Pacific region by championing free and open trade and investment.
Hong Kong is a textbook study in transformation. Rising from a small trading harbour little more than a century ago, Hong Kong is today a global centre for trade, finance, business, logistics, telecommunications and restaurant trends, too, as Mr Zeman will, no doubt, confirm.
Other central planks include the rule of law, upheld by an independent judiciary, a level playing field for business, free flow of capital and information, and a much appreciated low and simple tax regime.
And Hong Kong is a free port. That means we don't levy tariffs on imports or exports. Our customs procedures are simple. We also maintain an open and liberal service and investment regime. We welcome business and investors from all over the world.
So what has all this free and open trade and investment actually brought us? The numbers tell the story. In 2013, we were the world's fifth-largest trading entity in goods and the eighth-largest commercial services trading economy. That same year, we finished as the world's fifth-largest foreign direct investment (FDI) provider and fourth-largest FDI recipient.
Beyond the numbers, there's global recognition. We've been rated the world's freest economy by the Heritage Foundation for 21 consecutive years. We've also topped the Fraser Institute's "Economic Freedom of the World" report since 1996. In this year's World Bank "Doing Business" report, Hong Kong finished third. Rest assured, we're working on that.
In the WTO (World Trade Organization)'s 2014 Trade Policy Review on Hong Kong, we were applauded for our continuing contributions to the multilateral trading system, as well as our leadership in the Doha Development Agenda negotiations.
Still with the WTO, last month Hong Kong became the first WTO member to join the Trade Facilitation Agreement. That, of course, is the first multilateral agreement concluded since the establishment of the WTO. The Agreement is expected to reduce worldwide barriers to global supply chains and red tape by half. It's also expected to boost the world economy by about US$1 trillion. I'd say that's plenty good reason to join. And I look forward to seeing other APEC members follow our lead in the coming months.
We've also been helping member economies implement their commitments under that agreement, and enhance supply-chain connectivity, by promoting wider use of Global Data Standards (GDS). Standardised codes enable information about traded goods to be easily understood and shared by all parties. This can only improve supply-chain performance.
Given a mandate last year by APEC leaders and ministers, we will be conducting GDS pilot projects on Global Data Standards together with New Zealand. These will track the movement of goods, to further demonstrate the benefits. We hope that the projects, together with the assessment to be conducted by APEC's Policy Support Unit, will help establish a set of policy-based principles and recommendations. We are confident that Global Data Standards will contribute to regional economic integration, which is, of course, one of ABAC's four priorities this year.
In that regard, we are pleased that APEC leaders last year endorsed the Beijing Roadmap for APEC's Contribution to the Realisation of the Free Trade Area of the Asia-Pacific (FTAAP). We fully support translating this long-term vision into concrete action.
The Beijing Roadmap will guide our way in realising the FTAAP. Hong Kong, China, will participate actively in related activities, including the collective strategic study to be launched later this year and scheduled for completion by the end of 2016.
Hong Kong also welcomes ABAC's priority of "Strengthening and Facilitating SMMEs' Entry into Global Markets". Small, medium and micro-enterprises (SMMEs) play a valuable role in job creation. They make significant contributions to economic growth in APEC economies. Hong Kong knows that as well as anyone. After all, more than 98 per cent of our businesses are SMEs (small and medium-sized enterprises).
Liquidity is important for the sustainable development of SMMEs and their entry into global markets. To increase financing alternatives for SMMEs beyond traditional bank finance, we lend direct support for SMMEs in a variety of ways.
For example, the Hong Kong Government operates an SME Loan Guarantee Scheme. This provides a guarantee of up to 50 per cent of an approved loan for individual SMEs, which then helps them secure bank loans.
The Government's Hong Kong Mortgage Corporation runs a market-based SME Financing Guarantee Scheme for the same purpose. It guarantees up to 80 per cent of a loan, charging the guarantee a small fee. The Corporation has also launched a Microfinance Scheme in collaboration with banks and NGOs. This offers micro-businesses start-up loans, along with such support services as mentorship and entrepreneurial training.
Strengthening dialogue with the business sector, particularly ABAC, will certainly help expand SME participation in the regional and global economy. We look forward to sharing our experience on SME financing with ABAC.
Start-ups are another Hong Kong Government priority. First, let me share with you some of the success stories here in Hong Kong. We know start-ups need many things beyond good ideas. I'm talking about seed funding, office space, work visas, community networks, business development support, market access and serial investment, not to mention customers, so design and promotion support are also critical.
We've built up an excellent network to support these needs, to nurture start-ups and attract talent. This includes incubation programmes, government funding schemes, networking communities and shared working spaces.
In the technology field, we operate the Small Entrepreneur Research Assistance Programme. This gives funding support to technology entrepreneurs and small enterprises, allowing them to move ahead with essential applied R&D (research and development).
In addition, we recently set up a Technology Start-up Support Scheme for Universities. This provides funding support for university students and professors looking to kick-start and commercialise their R&D.
Another Hong Kong Government programme, StartmeupHK, helps SMEs find access to financial, intellectual and social capital.
Then there's our Venture Programme, in which participants actually get to pitch their concepts to judges, angel investors, venture capitalists and overseas and local business communities. Allow me to share with you some of the feedback from the participants.
Our goal is to encourage the development of start-ups, to help them grow into regional and global brands.
When it comes to creativity and innovation, there's the concept - that happy eureka moment. And then, no less important, there's the protection, trading and management of the intellectual property (IP).
IP is innovation's currency. Knowledge protected by law is traded across borders to drive growth. Over the last two decades, we have seen a growing demand for IP rights in Asia, especially in Mainland China. With the Mainland taking off as an important IP supplier and user, Hong Kong is poised to become the IP trading hub of Asia.
With that in mind, we've set up a Working Group on IP Trading, led by yours truly. We are, let me add, pressing ahead in four areas. First, we are enhancing our IP protection regime. This includes updating our patent management by introducing an "original grant patent" system. We encourage quality filings from all over the world. And we continue to review our IP regime to ensure that it follows international norms and best practices.
Second, we encourage IP creation, supporting the industrial and R&D sectors, as well as creative industries and IP users, to promote the development, use and commercialisation of IP.
Third, we help foster IP intermediary services and enhance manpower capacity. This involves promoting high-quality services in IP valuation, financing, insurance, arbitration and mediation, as well as due diligence and IP matching services. We also work to attract talent in IP-related professions to create the desired clusters.
Fourth, we enhance the promotion, education and external collaboration of IP. We highlight Hong Kong's strengths as an IP trading hub to overseas stakeholders. We also raise awareness among companies of the value of IP to their business portfolios.
ABAC has also chosen "Sustainable and Resilient Communities" as a priority in 2015. Implementing the APEC Connectivity Blueprint endorsed by our leaders last year will be an important element in support of this priority. What's more, the Connectivity Blueprint underpins the other three priorities.
Given Hong Kong's unique location on the southern coast of China, coupled with our world-class infrastructure, international networking, financial expertise and related professional services support, we have become a great connector throughout the region - and on the logistics, commercial and trade fronts.
As I noted earlier, our approach is based on the free flow of capital, goods and services. We're open to new ideas and the unfettered exchange of information. In terms of financial connectivity, Hong Kong ranks alongside London and New York as a world-leading financial hub.
Our success underlines the benefits that comprehensive connectivity can bring. In this regard, we are eager to share our experience, to explore collaborative opportunities with APEC economies.
I look forward to working with you to realise ABAC's priorities in the coming year. Yes, the Chinese Lunar New Year is just three weeks away. In the spirit of collaboration, no doubt, we are free to call it the Year of the Sheep, the Year of the Ram or the Year of the Goat. Whatever you decide, you can't go wrong. I'm confident that ABAC will enjoy another year of progress, of co-operation that rewards us all.
And to each of you here today, I wish you health, wealth and happiness, and in whatever order you wish to choose.
Ends/Thursday, January 29, 2015
Issued at HKT 15:50