Remarks of Commissioner Margaret Fong, JP
Washington International Trade Association (WITA) Reception
Hong Kong Economic & Trade Office, Washington, D.C.
5 February 2008

Thank you Leslie for the kind introduction. Not only have I known Leslie for 10 years, I am also a loyal customer of New York Life. That’s why I’m particularly delighted to be co-hosting this event with New York Life.

First, a warm welcome to you all.

I see a number of good friends but also many new faces. For those of you who may be less familiar with Hong Kong, I would venture to say that this tiny dot of 400 square miles at the southern most tip of China is one of the most vibrant and welcoming place on earth. That was the case when we were a British colony and certainly remains so when we became a Special Administrative Region of the People’s Republic of China on 1 July 1997.

The moment you land at the airport, you feel the buzz. In 23 minutes, the Airport Express will take you from the airport to the Central Business District. That is the Hong Kong way, fast, reliable, world-class service supported by state-of-the-art infrastructure.

From day one, Hong Kong recognised that we have to look outward. We are far too small with few natural resources – our deep sea port and our people. We hence live by trade. And for us, the best policy is to be a free and open market. We are a free port and staunch supporters of free market principles. We have no tariffs, no quotas, no barriers of any sort. And we have an extremely low and simple tax regime where companies only pay tax when they are making profits and on average listed companies pay about 9%-10% tax. We have no capital gains tax, no withholding tax, no sales tax. We also believe in a level playing field where all companies which choose Hong Kong as their home will enjoy exactly the same treatment.

And in Hong Kong, rule of law reigns supreme. We continue to practise common law and is fast developing into an international arbitration centre, a testament of the confidence firms operating in the region and round the world have for our legal system.

In January this year, we are proud and honoured to be named the freest economy in the world by the Heritage Foundation, 14 years in a row, since the Index for Economic Freedom was compiled.

On top of the core values that define Hong Kong, we are also blessed by our fortunate geographical location. Being right at the doorstep of China, the largest single market in the world, Hong Kong has been acting as a gateway to China, and to Asia , for over a quarter of a century. Hong Kong businessmen were the first of enter the Mainland when the doors opened in 1978 and have remained since. Today, we account for some 40% of the Mainland’s total FDI on a cumulative basis. We are also a premier capital formation centre for Mainland enterprises. From 1993 when the first H-shares were floated in our stock exchange, 430 mainland companies have raised over $232 billion in our stock market.

And we have CEPA, our own FTA with the Mainland. Under CEPA, all products manufactured in Hong Kong meeting generous rules of origin will enter the Mainland tariff free. 38 services sectors ranging from banking to distribution and freight forwarding to professional services enjoy WTO-plus treatment. And the best thing is the agreement is nationality-neutral. It applies to all companies that are incorporated in Hong Kong, wherever their funding may be coming from. So firms from round the world are taking advantage of CEPA and reaping its benefits.

When firms come to Hong Kong, they are looking at not just a market of 7 million but one with a hinterland of 1.3 billion. Last year, Hong Kong attracted $42.9b FDI, compared to $69.5b for the Mainland in total. It is therefore not surprising that Hong Kong is the business hub of the region with 6,440 overseas firms operating in Hong Kong, 3,890 of which serve as the companies’ regional base.

And what is even better is that Hong Kong also serves as the natural launching pad for Mainland companies which want to go international, a place which shares a common heritage but at the same time offers a wealth of experience in international trade. Hong Kong has the financiers, the lawyers, the accountants and the administrators. What’s more they are not just local talents but talents from round the world.

If you are in the financing sector, you should certainly be in Hong Kong. 68 of the top 100 banks are in Hong Kong; we are Asia’s top asset management centre; our stock market is the seventh largest in the world and raised over $37 billion in equity last year placing us fourth in the world; and we have the highest concentration of insurers in Asia.

If you are in the logistics sector, you should also be in Hong Kong. We are the world’s number one international air cargo handling centre. Within a four-hour flight radius, we cover all major cities in Asia. We make this possible with 87 international carriers providing 5,600 flights every week to 150 destinations, including 40 on the Mainland. And we are the world’s third busiest container port known for our efficiency, reliability and excellent track record in the important area of port security.

If you are in the trading and legal sectors, you certainly should be in Hong Kong. As the place where business deals are put together, where demand for legal support for maritime, merger and acquisitions and IP services is growing by the day, Hong Kong is the place to be.

Beside these well-known sectors, clean and renewable energy; personalised health care services and biomedical technology, especially in the area of Chinese medicine, are new and exciting areas that present opportunities for US firms. In Hong Kong, we are always on the lookout for new business opportunities. If you have a bright idea, Hong Kong is the place to make it happen.

I invite you to look around the room at our skyline on the carpet; the works of our local artists on the wall; the splash of colour that greets you as you enter our building. I hope they give you a taste of the vitality of Hong Kong. And what is more, Hong Kong is fun. From the most delicious dim sum and every type of cuisine you can possibly imagine; to the best shopping on earth; to quaint and peaceful outlying islands; to a declared Ramsar Wetland site; to Disneyland, we have it all. I welcome you to come and visit us. I promise you that not only will you be struck by the ease of doing business in Hong Kong, you will also enjoy the wonder of being in a place where the east truly meets the west.

Thank you.