ENG-2000 — Page 32

HONG KONG: ASIA'S WORLD CITY

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In Hong Kong, there has been some concern over the huge changes taking place within the Pearl River Delta region. Some are anxious that closer integration within this region could have a negative impact on Hong Kong's property market and businesses such as restaurants and retail outlets. While concern about rapid growth in the region understandable, and there may, unfortunately, be some negative impact in the short term, I believe increasing integration within the Pearl River Delta region is a natural process that we should welcome and embrace. In doing so, we must be confident of Hong Kong's strategic location and our continued role as a conduit to the outside world for southern China.

The faster cities throughout southern China grow, the more business they will generate for Hong Kong. As people in the region begin to accumulate wealth, there will be increased demand for Hong Kong's goods and services. As this region. becomes more affluent, more of its people will travel to Hong Kong as tourists. All these factors will contribute significantly to our economy. In this context, the future of Hong Kong and the Pearl River Delta should be seen as one regional economy. We need to manage the change leading to this outcome, seize the opportunity, and ensure that Hong Kong remains the economic driving force for the region. In the process, we will strengthen our position as a 'world city'.

Added to this is the expanding nature of the Pearl River Delta's manufacturing industry, assisted by more Hong Kong companies establishing plants or joint ventures across the boundary, and the Pearl River Delta's own burgeoning hi-tech sector. With Hong Kong's strength as a business centre, and the Pearl River Delta's strength as a manufacturing base, the two regions complement each other. Increasingly, international companies are attracted by this synergy, which directly reinforces Hong Kong's position as Asia's business centre.

Hong Kong's close economic relationship with the Mainland, and in particular with the rest of the Pearl River Delta, puts Hong Kong in a unique position. This relationship will help to strengthen Hong Kong's business relations with the rest of the world. Where else is there an international financial and trading centre located immediately adjacent to an economy that offers very competitive land and labour costs, a huge expanding market for goods and services, and a hinterland economy that is ready to take-off and become a leading global market? The HKSAR Government is committed to enhancing this vital relationship. Let me cite five important tasks which we will pursue:

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Firstly, we are considering setting up an Economic and Trade Office in Guangdong to strengthen our liaison with the local trade and commerce authorities, so that we would be in a better position to help Hong Kong businesses capitalise on the rapid development of the region.

Secondly, we intend to enhance our co-operation with our Guangdong counterparts by taking steps to promote the use of our international airport and Hong Kong's container port for trade linked to the Pearl River Delta region. Not only will this strengthen Hong Kong's ties to the region, it will also enhance Hong Kong's existing position as Asia's leading international cargo hub.

• Thirdly, we will encourage Hong Kong companies to co-operate with their Pearl River Delta partners to establish logistics centres and to promote Hong Kong's logistics capabilities.