ENG-2000 — Page 30

HONG KONG: ASIA'S WORLD CITY

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specialised skills and knowledge. These characteristics, combined with a vibrant economy, a free society based on the rule of law, a position as an international centre of finance, trade and tourism, excellent transportation and telecommunication infrastructure, and a large international community, are all trademarks of these 'world cities.' Hong Kong not only possesses these attributes, but it is committed to maintaining and strengthening them. We do, however, recognise that we have to advance further in improving the quality of life in Hong Kong, for example in environmental protection and arts and culture, if we are to compete as a world city.

International Financial and Trading Centre

Our world-class financial services sector is set to become even more dynamic. In the past decade, Hong Kong has broadened its base as an international financial centre. Apart from loan syndication, an increasing proportion of our financial activities is based on equity raising for local, Mainland and foreign companies. This role, which embraces private equity finance and venture capital activities, is much more skill- intensive than loan syndication. The growth of this sector draws heavily on the depth and breadth of Hong Kong's legal, regulatory, equities research, and financial services skills. This role of equity intermediation will grow at a faster pace in the coming years.

Hong Kong is the world's 10th largest trading entity, largely as a result of our position as the gateway to the Mainland. This advantage is critical when international corporations look for a strategic location for their Asian headquarters. With China's accession to the World Trade Organisation (WTO) and the subsequent lowering or removal of many import tariffs, Hong Kong's efficient port, market knowledge and easy access to the Mainland will become even more crucial to global trade and investment flows.

Synergy with the Mainland Economy

For nearly half a century, Hong Kong has witnessed the tremendous changes that have taken place in the Mainland and has derived great benefits from those changes. In the 1950s, we saw a huge influx of entrepreneurs and business elite from the Mainland, which turned Hong Kong into a highly competitive and efficient export economy. The change brought about by Deng Xiaoping's 'open-door' policy in 1978 gave Hong Kong manufacturers an opportunity to expand and migrate across the boundary and their success has helped make Hong Kong one of the world's most remarkable trade and financial centres. Throughout this process, Hong Kong has also made significant contributions to the Mainland economy. Because of this, our relationship has always been a ‘win-win' situation and this will continue.

Today, 40 per cent of our trade is with the Mainland. Three quarters of the 18 million containers handled by our port during the year were related to the Mainland, mostly to and from the Pearl River Delta region. On average, 31 000 vehicles and 280 000 people travel across the boundary every day. Mainland companies account for some 30 per cent of the Hong Kong stock market capitalisation. In 2000, over three million tourists from the Mainland visited Hong Kong, ranking these tourists ahead of visitors from all other locations. Clearly, Hong Kong's economy is intrinsically linked with the Mainland.

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