Speeches

IDHKBA Welcoming Dinner for DGJ

Following is the speech by the Director-General of the Hong Kong Economic and Trade Office in Jakarta, Mrs DO PANG Wai Yee, at her welcoming dinner hosted by the Indonesia-Hong Kong Business Association (IDHKBA) in Jakarta, Indonesia today (November 2):

James (Chairman of IDHKBA), Kwan Ho (Director of HKTDC in Indonesia), Distinguished Guests, Ladies and Gentlemen,

Selamat malam! First of all, thank you for attending tonight’s dinner and for giving me such a warm welcome to Jakarta. This is my first public speaking event in Jakarta and I am delighted to meet you all.

I assumed the position of Director-General, Hong Kong Economic and Trade Affairs, Jakarta in mid-September this year. So I have only been here for a month and a half. Prior to this, I have only been to Jakarta once as a tourist some ten years ago, and while I am still getting to know this city, I must say the landscape has changed a lot from what it was over ten years ago. Apart from the many new skyscrapers, there are definitely a lot more cars! Despite my short time here, Jakarta has impressed me as a vast, vibrant and exciting metropolis and I am very pleased that the Hong Kong Government has chosen this wonderful city to set up the newest Economic and Trade Office.

The new Economic and Trade Office

Let me first explain a bit about the purpose of setting up a new Economic and Trade Office in Jakarta and our duties.

There are currently 12 Economic and Trade Offices around the globe. Apart from the Jakarta office, we have Economic and Trade Office in Berlin, Brussels, Geneva, London, New York, San Francisco, Singapore, Sydney, Tokyo, Toronto and Washington. Economic and Trade office is the representative office of the Hong Kong Special Administrative Region (SAR) Government in that country as well as the region it covers. It seeks to promote Hong Kong’s economic and trade interest by liaising closely with a wide range of interlocutors and contacts. The Economic and Trade Office also handles all bilateral matters relating to economic, technology and cultural issues, etc. between Hong Kong and the respective countries under the office’s purview.

In the past, there were only two Economic and Trade Offices in Asia; one in Tokyo covering Japan and Korea and one in Singapore covering the ten ASEAN countries. With the shift of the global economic development to the Asian region and the rise of ASEAN economies, we see a strong and practical need to strengthen our representation and profile in this region so that we can forge closer ties with our ASEAN partners.

With the setting up our new office, we are representing the Hong Kong SAR Government in matters between Hong Kong and ASEAN as a whole, and handle in particular matters between Hong Kong and four countries, namely Indonesia, Malaysia, the Philippines and Brunei. The Economic and Trade Office in Singapore will continue to cover the other six countries in ASEAN. Together with the Singapore Economic and Trade Office, we wish to build closer relations with all the ASEAN countries.

Hong Kong and ASEAN

Our presence in Jakarta is very timely. The ties between Hong Kong and ASEAN have been growing stronger in the past few years. In 2015, ASEAN was our second largest partner in merchandise trade. From 2011 to 2015, the bilateral goods trade between Hong Kong and ASEAN grew at about 3.2% on average every year. Five of the ASEAN economies were among our top 20 trading partners in 2015: they are Singapore, Thailand, Vietnam, Malaysia and the Philippines. ASEAN was also our 4th largest partner in service trade in 2013. The average annual growth rate was about 11% from 2009 to 2013. To strengthen economic relation with ASEAN and contribute to regional economic integration, we have commenced negotiations of the ASEAN - Hong Kong Free Trade Agreement in July 2014. It is hoped that the Free Trade Agreement will enhance economic ties between ASEAN and Hong Kong by facilitating the flow of goods, services and investment. It will bring more business opportunities and stimulate further growth in the region. With the commitment of ASEAN and Hong Kong to conclude the negotiations this year, businessmen and investors of both sides will soon be able to capitalise on the benefits to be brought about by this important trade agreement.

Jakarta, being the home of the ASEAN secretariat, is naturally the place where we should set up shop. Of course, apart from the ASEAN connection, Indonesia is also a very important strategic partner for Hong Kong as we embark on our journey of deeper integration with Asia.

Hong Kong and Indonesia

Indonesia is currently Hong Kong’s 23th largest export market in the world and the 6th largest market in ASEAN. In the first three months of 2016, Hong Kong’s exports to Indonesia amounted to US$588 million whereas for the same period, Hong Kong’s imports from Indonesia amounted to US$570 million. Apart from trade, Hong Kong has also increase its share in foreign direct investment in Indonesia. According to the latest data from the Investment Coordination Board here, Hong Kong has leapt from ninth to fourth place in terms of foreign direct investment in the January to September period. Total foreign direct investment from Hong Kong stood at US$1.6 billion.

We believe there is huge potential for Indonesia and Hong Kong to build closer relations. And this is not only limited on trade, investment and business, but also cultural exchanges and people to people link.

Tonight, I would like to use this opportunity to introduce Hong Kong to our new friends here. For friends who are familiar with Hong Kong, I would also like to give an update on the recent development.

Hong Kong – One Country Two System

Every city has its own unique characteristics. There are many things which make Hong Kong unique but one of the key characteristics that makes Hong Kong stands out is that we are a Special Administrative Region established pursuant to the “One Country, Two Systems” principle. Put it simply, the concept is that while Hong Kong is part of Mainland China, the “One country”, Hong Kong would enjoy a high degree of autonomy, the “Two systems”.

The “One Country Two Systems” in Hong Kong is implemented through the Basic Law. The Basic law is a piece of national legislation of the People’s Republic of China and it is the most important constitutional documents of the Laws in Hong Kong which provides the legal basis for establishing the Hong Kong Special Administrative Region. Thus far, Hong Kong is thriving under “One Country Two Systems” where our strong tradition in the rule of law, our free and open economy, our capitalist system prevail.

Rule of Law

In terms of rule of law, Hong Kong continues to adopt the common law system. We also enjoy independent judicial power where the power of the final adjudication of court cases in Hong Kong rest with the Court of Final Appeal there. The arrangement for a city of a country to enjoy such a power of final adjudication is unprecedented. The Basic Law also allows us to invite judges from other common law jurisdictions to sit in the Court of Final Appeal. This has been an ongoing practice in the Court of Final Appeal and at the moment, we are privileged to have eminent overseas judges from the United Kingdom, Australia, and New Zealand sitting in our Court of Final Appeal from time to time. Our judicial independence has received international recognition.

Fundamental human rights are fully respected in Hong Kong. The right to liberty and security of person are firmly guaranteed under the Basic Law and the Bills of Rights and citizens are guaranteed the freedom of expression. Citizens also have the right to confidential legal advice and access to the courts, and further, people in Hong Kong can challenge the decisions made by the Government through legal process known as the judicial review. In judicial review proceedings, the court has the power to review whether administrative decisions were made within the boundary permitted by the law, or whether a legislative provision is consistent with the Basic Law.

Capitalist City

From the economic perspective, the Basic Law also provides that Hong Kong continues the capitalist system. This means that there is –

Free flow of capital and that Hong Kong’s markets for foreign exchange, gold, securities and futures will continue;

The policy of free trade which safeguards the free movement of goods, intangible assets and capital, and that Hong Kong SAR can participate in relevant international organizations and international trade agreements; and

Protection of private ownership of enterprises, legitimate right of inheritance and foreign investment,

The rule of law is an indispensable element for the development of Hong Kong and it has greatly facilitated our economic development. This is because naturally, investors would seek to invest in places where, among others, their money would be well protected by a robust and transparent legal framework which is enforceable by an independent judiciary; and where they could compete on a level-playing field as all players are bounded to obey the same set of rules.

With the free flow of capital safeguarded, Hong Kong has been able to attract a large volume of foreign investment in the past 20 years. According to the United Nations World Investment Report, Hong Kong ranked second in global foreign direct investment in 2015, with record amounts of inflows and outflows at US$103 billion and US$143 billion respectively. This is a testimony that investors are confident in the business environment of Hong Kong. There are also nearly 8,000 overseas and Mainland companies keeping their offices in Hong Kong, another vote of confidence in our system.

Further, for the past 22 years in a row, Hong Kong has ranked first in the Index of Economic Freedom, published annually by the Heritage Foundation. We also regained our position as World’s No.1 in terms of economic competitiveness as rated by the Swiss-based International Institute for Management Development in its World Competitiveness Yearbook 2016. We are happy to say that these help to prove that Hong Kong has been maintaining our economic competitiveness and ease of doing business.

Other edges of Hong Kong

In fact, Hong Kong is one of the best places in the world to do business. Apart from the characteristics above, Hong Kong is one of the most internationalised cities in the world, with English as one of our official and commonly use languages. Our society is free and open, and our lifestyle is a blend of East and West. Of course, one of the best things about East meets West is that we have pubic holidays celebrating both traditional Chinese festivals, such as Chinese New Year, mid-autumn festival as well as Western holidays such as Christmas and Easters.

Our currency, the Hong Kong dollars, is fully convertible and capital from the Mainland, as well as from all over the world, flows freely in and out of Hong Kong. We have a simple and low tax regime. In fact, the tax rate in Hong Kong is one of the lowest in the world with the highest level of personal flat tax rate standing just at 15%.

We have the experience, the expertise and the connection to serve as the fundraising and financial hub for different economies, especially for the Belt and Road economies which I will talk about later. Our financing options range from public offering and loan syndication to private equity. To illustrate my point, our stock market is the eighth largest in the world in terms of market capitalization and Hong Kong ranks first, globally, in equity funds raised through initial public offering.

We also take pride in being China’s de facto international financial capital and that we are the first mover in Mainland’s continuing economic reforms. Hong Kong is the world’s largest offshore Renminbi business centre. We also have international investors with a wide variety of Renminbi products, including those for cross-border trade settlement and Renminbi financing.

Hong Kong has also been keen to explore Islamic Financial Services. Over the past two years, we have successfully issued two global sukuk, or Islamic bonds and we are now working on the third.

All in all, Hong Kong has a good story to tell. Being an international financial center, we consider that we are also well-positioned to contribute towards the Belt and Road initiative which brings me to this interesting topic. So please allow me to spare a few minutes to briefly introduce this initiative.

Belt and Road

The Belt and Road strategy encourages closer economic as well as cultural co-operation among some 60-plus economies, particularly those emerging economies spanning Asia, Middle East, Europe and Africa. Belt and Road is, in essence, an invitation to the international community to join hands to take global and regional co-operation to new heights, in particular in terms of enhancing policy co-ordination, strengthening infrastructural facilities connectivity, facilitating unimpeded trade and investment, deepening financial integration and building people-to-people bonds.

We believe the Belt and Road initiative will be a driving force of the global economy in the 21st century. It will generate demand and expand international trade and investment flow. The Belt and Road Initiative covers various aspects and proposes co-operation in many sectors, but fundamentally the Initiative is about making connections.

We think that Hong Kong is well-placed to play this facilitator role as a super-connector, largely because of the unique advantages presented by our "One country, Two systems" arrangement that I mentioned earlier. Hong Kong is an international gateway to Mainland China, offering unique physical and intangible connectivity to the Mainland with privileged trade and social access. In addition, our well-established system that connects us to the international community in terms of our legal system, language, trade practices as well as lifestyle which international traders are familiar with.

Besides, the Belt and Road initiative will also catalyse the movement of people and goods, boosting demand for reliable logistics services. In this, Hong Kong is also well placed to serve. Our airport has been the busiest cargo airport in the world for more than 15 years. From Hong Kong, you can reach half the world's population in five hours, including Jakarta which is just a shave off five hours away. We boast the world's fifth busiest container port, providing some 350 services a week to more than 500 destinations worldwide. Our 700 shipping-related companies offer a wide range of services, from ship management, broking and chartering to finance, marine insurance, legal, arbitration and many other support services. The Maritime Silk Road will create fresh demand for shipping services. Logistics companies will find it advantageous to establish a presence in Hong Kong given our network.

Indonesia, being in the critical gateway in the Maritime Silk Road will be a key player in the Belt and Road initiative. With the big-ticket infrastructural development, from highways and railways to maritime and aviation transport being rolled out by the Government here, there is real synergy with the Belt and Road initiative. Hong Kong will have a lot to offer and expertise to share when it comes to international co-operation on infrastructural projects envisaged under the Belt and Road.

This is because we have a deep pool of talented professionals, from engineers and surveyors to architects, designers and planners, not to mention other professionals specialised in financing, insurance, arbitration, risk management and project consulting. All of them are experienced and eager to partner with overseas businesses, to take part in the development, management and operation of infrastructural projects. We believe there would be many areas we can work together and there is much our economies could accomplish.

Looking Ahead

In conclusion, I will invite all of you to consider Hong Kong as your first choice in seeking partnership to expand regionally or internationally, whether it is for capitalization or setting up offices. I would also recommend to you our professional services which cover a wide-range of talents from engineer to accountants to legal experts, all with ample international exposure as well as knowledge of working locally in Asia. For our part, the Jakarta office will do our upmost to promote Hong Kong to our friends in Indonesia and ASEAN and vice-versa to establish closer ties between us. Tonight’s dinner is just the beginning of our journey in “wonderful Indonesia”.

As I have mentioned, one of the main goals is to build people to people contact. Only through interaction and communication can we get to know and understand each other better. Only through getting to know each other, can we continue successful economic cooperation in the long haul.

So to start with, I look forward to meeting each one of you and exchanges views on matters concerning Indonesia and Hong Kong. As I have mentioned earlier, our office will also oversees matters concerning Malaysia, the Philippines and Brunei. So if you have any thing you could share with us on those countries, I would love to learn from you too.

Finally, I would like to thank the Indonesia-Hong Kong Business Association for organizing this evening’s dinner. I hope you are not too hungry and I will leave you to the main attraction of the night - dinner. I wish you all a nice evening. Thank you. Terima Kasih!

Ends/Wednesday, November 2, 2016