Speech by Hong Kong Commissioner, USA
University of Arkansas Clinton School of Public Services
Wednesday, 16 January 2008

Thank you for your kind introduction, Steve.
Dean Rutherford, ladies and gentlemen,

I am honoured to be addressing a gathering at the University of Arkansas Clinton School of Public Service on a subject that is very dear to my heart, Hong Kong - the tiny dot of 400 square miles at the southern most tip of China where seven million Hong Kongers called home; the place where President Clinton visited in 1998 and became part of our local history as Air Force One became the first plane to land in our then brand new airport. That historic visit reinforced the very close partnership between Hong Kong and the US. And today, I would like to share with you all my thoughts on what brings two very different communities together as collaborators in meeting global challenges.

2. The first thing that comes to mind is trade. We live in a world where globalisation is an inescapable fact. And Hong Kong being a small economy with little natural resources understands the importance of trade. Indeed, we live by trade. For a tiny place like Hong Kong with just seven million people, we are the 11th largest trading economy in the world. The value of our merchandise trade with US alone amounted to $64 billion in 2006, making us your 15th largest export market. What is even more remarkable is that on a per capita basis we import from US twice as much as Mexico, three times that of Australia, four times that of South Korea, five times that of Japan and six times that of the European Union.

3. We are staunch supporters of free trade and work with the US and other allies to liberalise markets round the world and to fight for equal treatment for all through active participation in the World Trade Organization and APEC. And as President Clinton said at the Fortune Global Forum held in Hong Kong in May 2001, Hong Kong is “Exhibit A in global interdependence and its benefits”.

4. We understand that globalisation entails challenges to sectors of our workforce. It is the government’s responsibility to respond to those needs to ensure that our workforce will be equipped with the necessary skills to adapt to the changing economic environment. In addition to providing nine years of compulsory free education, we have just announced last October a plan to extend that to 12 years of free education for all eligible young people in Hong Kong. We will also work with NGOs to provide retraining programmes and social support schemes as our workforce transitioned to a different skill set so that no one will be left behind as the economy evolves.

5. Over the last quarter of a century, Hong Kong has reinvented itself over and over again, from a manufacturer of low-value basic products, to high-end sophisticated products, to an entrêpot, to a logistics hub, to an international financial centre and the business hub of Asia.

6. Today, Hong Kong is home to 68 of the top 100 banks in the world. We are the world’s seventh largest stock market by market capitalisation and have raised over $60B in equity in 2007, putting us fifth in the world in terms of total equity raised. We are also the region’s logistics hub with 85 carriers operating 5600 flights per week to over 150 destinations, and 80 international shipping lines serving some 500 destinations worldwide. We are the world’s top airport in handling international air cargo and the second busiest container port in the world.

7. Hong Kong attracted $42.9B in FDI last year, placing us second in Asia after the Mainland and seventh in the world. And we are home to over 6440 overseas firms, 3890 of which have their regional headquarters and operations in Hong Kong. US topped the list with over 1280 firms including many household names such as Apple, AT&T, American Express, Citigroup, Exxon Mobil, FedEx, Time Warner brothers, Disney, Microsoft, Goldman Sachs, New York Life, Coca-Cola, and the list goes on.

8. Granted we are well-positioned geographically to act as the gateway to China and to Asia, a role Hong Kong has excelled in for the last 25 years. And the fact that our workforce is versatile and fluent in both English and Chinese certainly gives us an edge when businesses from the west look for opportunities in the east. But location and language alone would not explain why Hong Kong has flourished as a business and financial centre. The answer lies in something much more fundamental - it is the values we share that bring us together, that makes our friends from US and from round the world feel right at home in Hong Kong.

9. And the values I am speaking of are values that define a modern metropolis - the respect for human rights and freedoms; the importance of the rule of law underpinned by an independent judiciary; a clean and efficient government; the free flow of capital, information and people; and a level playing field for all.

10. These are the values that make us partners. Americans are the largest corporate expatriate community in Hong Kong with over 60,000 citizens residing in Hong Kong at the end of 2007. Last year, over a million Americans visited Hong Kong. 11 US carriers and two Hong Kong carriers operate 88 weekly passenger and 139 cargo services between Hong Kong and the US.

11. But it is not just trade that brings us together. Many in Hong Kong grew up with Sesame Street and characters from the Walt Disney and Peanuts cartoons. You hear songs of Elvis Presley, Prince, Ray Charles and Hannah Montana playing in our homes across the ocean, and of course Hollywood films and your TV series enjoy great success in Hong Kong. And I am happy to see that our local directors such as John Woo and Wong Kar-wai, and actors like Chow Yun-fat, Maggie Cheung and Tony Leung, on top of our Kung-fu icon, Jackie Chan, have made a mark in the US.

12. We find US one of the top destinations for our young people pursuing college or post-graduate degrees. Our eight publicly-funded universities also have long-standing student exchange arrangements with over 140 institutions in the US, offering opportunities for our students to experience first-hand the diverse and rich culture of both places. In the last academic year, for instance, we welcomed over 2,800 students from the US to Hong Kong while some 2,300 Hong Kong students had the opportunity to experience US college life.

13. US is also one of the favourite places for our young people seeking a short sojourn overseas. Hong Kong and US may be thousands of miles apart, but we understand each other and we are comfortable with each other. To many Americans, Hong Kong is their home away from home. The same is true for Hong Kongers in the US.

14. Our long-standing relationship extends well beyond trade to areas that affect everyone in the global village. Our law enforcement agencies have a long record of working with our US and other overseas partners in fighting trans-border crime such as drug trafficking. As a major financial centre, we are at the forefront in combating money laundering and it was under the chairmanship of Hong Kong in 2001-02 that the Financial Action Task Force On Money Laundering extended its scope to cover terrorist financing.

15. When global terrorism threatened the safety of our ports, Hong Kong was among the first economies to sign on to the US’ Container Security Initiative. We have also last year agreed to be one of four ports to take on the pilot scheme for Secure Freight Initiative on a limited basis. We are happy to be recognised by the US Administration and US Congress as a model for our cooperation on this front. As a responsible member of the global community, we consider it our duty to ensure that our ports operate in an effective and secure manner.

16. Besides global terrorism, we are also confronted by challenges on the public health front. Our experience with avian flu and SARS showed us that diseases know no boundary. We need to be on the alert at all times and transparency and communication with our neighbours and the rest of the world are critical in fighting any epidemic. That is why we have collaborated with the World Health Organization and with the Center for Disease Control in Atlanta in sharing our experience in preparing for an avian flu outbreak and in acting as a test laboratory for avian flu for the region. We will continue to do our small part in making the world a healthier place for all.

17. Climate change is another subject that demands the attention and cooperation of every economy in the world. Hong Kong is doing its part and has recently signed on to APEC Leaders’ Sydney declaration on Climate Change to reduce our energy intensity at least by 25% by 2030. At present, our per capita greenhouse gas emission is around 6.4 tonnes, which compares favourably with developed economies in the region. Singapore, for instance, has an emission level of about 9 tones per capita; Japan, 11 tonnes per capita; the United Kingdom also has around that 11 tonnes, and Australia 27 tonnes per capita. We have just concluded a 10-year franchise with our two power companies linking the rate of return to the level of emissions, with renewable energy attracting the highest rate of return. We will continue to encourage the use of cleaner fuel for transport and promote energy efficiency. We will also promote afforestation. In the past five years we have planted 11 m trees and will double our efforts in the coming years.

18. I am hence extremely delighted to learn that President Clinton will be bringing for the first time the Clinton Global Initiative to Asia in May this year. And the first city selected to host the meeting is Hong Kong. The themes of the meeting will be education, public health and climate change. We look forward to the opportunity of exchanging views with leaders form Asia and round the world on these important subjects.

19. Ladies and gentlemen, I have described the common values we share and the common challenges we face. Hong Kong and the US started off as partners in trade and have moved beyond that to be collaborators in meeting global challenges. I will, during my tenure as Hong Kong Commissioner to the USA, work to strengthen the strong and deep ties that defines the important bilateral relationship between Hong Kong and your great country, the USA.

20. Thank you.