HONG KONG: ASIA'S WORLD CITY
China's Accession to the World Trade Organisation
China's accession to the WTO will mark yet another major change. Not only will this provide greater market access for China's trading partners and greater opportunities for multinational corporations and small and medium-sized enterprises (SMEs), the Mainland will become more rules-based. Because of that, the trade and investment systems in China will be more transparent, more business friendly and more aligned with international practices. Such vital improvements will attract more international and Hong Kong businesses and will support expanded trade and investment links. While some multinational businesses may choose to deal directly with China, others will continue to use Hong Kong as their base of operations. Few overseas SMEs have the capacity to move into China directly. Because of this, they will need a partner who knows the Mainland well and Hong Kong is the obvious choice. Hence, China's accession to the WTO will mean further enhancement of Hong Kong's position as an international financial and business centre, a transportation and communication hub, a centre for professional services and our traditional role as a gateway to the Mainland.
But perhaps an even greater opportunity for Hong Kong is the growth of the Mainland's domestic market. In the 23 years since China first opened up its market, the economy has grown tremendously, with GDP reaching US$1 trillion last year. A great deal of wealth has been created in the process and a strong domestic economy is emerging. China's membership in the WTO and the development of the country's virtually untapped Western Region will accelerate this process. We have seen in history, and in Hong Kong's development over the past few decades, that once per capita GDP rises beyond a certain level, there is an explosion of demand for high- value and high-quality consumer products and services.
When I was in Guangzhou in December, I was told by managers at an automobile plant that their annual production of 30 000 cars was insufficient to meet domestic demand. In fact, due to such high demand, customers had to wait several months to purchase these vehicles. I also visited a piano factory where the general manager told me that every year they produced over 70 000 pianos. Aside from healthy sales to western markets such as the United States and Europe, demand in the Mainland for grand pianos continued to grow steadily with the expansion of the middle class.
From all indications, the coastal regions and the Pearl River Delta are on the verge of an economic take-off.
Pearl River Delta
The Pearl River Delta, covering 50 000 square kilometres with a population of some 30 million people, is a microcosm of the future development of the Mainland. With Hong Kong at the entrance, this dynamic hinterland offers great economic opportunities. In recent years, the Pearl River Delta has recorded double-digit growth and is one of the most open regions in the Mainland. In that time, the people of the Pearl River Delta have accumulated significant wealth. Shenzhen's per capita GDP in 2000 rose to US$4,300 and is estimated to grow to US$7,000 in five years. Guangzhou, Dongguan, Zhuhai, and other cities and townships in this important. region are following close behind.
3