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CHIEF EXECUTIVE’SFINAL POLICYADDRESS

ECONOMIC DIALOGUES

HONG KONG ECONOMIC & TRADE OFFICE (ASEAN) NO. 3/2011 ISSUE MICA (P) 094/03/2011

HIGHLIGHTS

HK ATTENDEDAPEC 2011

SINGAPORE-HONG KONGPERMANENT SECRETARIES

EXCHANGE

Permanent Secretary for the Civil Service, Mr Raymond Wong (centre); and Permanent Secretary for Transport and Housing (Housing), Mr Duncan Pescod (left), greeted by Singapore’s Deputy Prime Minister, Mr Teo Chee Hean (right).

Permanent Secretary for Labour and Welfare, Mr Paul Tang (centre); and Permanent Secretary for Development (Planning and Lands), Mr Thomas Chow (right), welcomed by Singapore’s Deputy Prime Minister, Mr Teo Chee Hean (left).

CULTURALCO-OPERATION

Warmly received by Singapore’s Head of Civil Service, Mr Peter Ong, the Hong Kong

delegation participated in the three-day programme to exchange with their counterparts

at the Singapore Government. Permanent secretaries of Hong Kong and Singapore had

fruitful discussions on subjects of mutual interest, such as the relationship between civil

servants and political appointees, public

consultation and engagement in policy-

making and challenges faced in housing,

aging population and rising cost of

living.

In addition, the Hong Kong delegation

made a courtesy call on Singapore’s

Deputy Prime Minister and Minister in

charge of Civil Service, Mr Teo Chee Hean.

To understand the latest development

of Singapore, they also visited the Urban

Redevelopment Authority and were

briefed on the development at Marina

Bay.

A delegation of four permanent

secretaries of the Hong Kong Special

Administrative Region (HKSAR) Government

visited Singapore from November 22 to 24

under the Singapore - Hong Kong Permanent

Secretaries Exchange Programme 2011.

They were Permanent Secretary for the Civil

Service, Mr Raymond Wong; Permanent

Secretary for Labour and Welfare, Mr Paul

Tang; Permanent Secretary for Transport and

Housing (Housing)/Director of Housing, Mr

Duncan Pescod; and Permanent Secretary

for Development (Planning and Lands), Mr

Thomas Chow.

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POLICY ADDRESS POLICY ADDRESS POLICY ADDRESS POLICY ADDRESS POLICY ADDRESS POLICY ADDRESS

CHIEF EXECUTIVE’SFINAL POLICY ADDRESS

The Chief Executive, Mr Donald Tsang, delivered his final Policy Address on October 12 and announced the

resumption of the Home Ownership Scheme (HOS) and other initiatives to promote affordable housing and boost land supply.

The Chief Executive said a relatively small flat supply, abundant liquidity and ultra-low interest rates had fuelled property price rises in recent months. The Government will allocate sites to resume its HOS policy to assist low and middle-income families to buy their own homes, with a plan to provide more than 17 000 flats over four years from 2016-17 onwards.

In addition, the Government wants to ensure an annual supply of land for about 40 000 flats. Even when demand for land declines, development will continue so the newly developed sites can be kept in the Government’s land reserve and be made available when needed.

Measures were also introduced to expand land resources for housing, including the release of industrial land for non-industrial uses, the option of reclamation outside Victoria Harbour, the use of rock caverns to reprovision public facilities and release such sites for housing, and the conversion of deserted green belt areas and agricultural land. The Chief Executive hoped the new measures would contribute to the healthy and steady development of the property market.

To meet growing demand for premier office space, Mr Tsang said the development of East Kowloon – including the new Kai Tak Development Area, Kwun Tong and Kowloon Bay – would provide another core business district for the city.

“With the development of the office belt and tourism and leisure facilities at Kai Tak, combined with revitalised industrial buildings, East Kowloon is poised to be developed into a premier business district that provides an additional office floor area of 4 million square metres,” Mr Tsang said.

On economic development, Mr Tsang said it was important to maintain Hong Kong’s competitiveness by seizing opportunities both in the Mainland and globally, adding that Hong Kong would strengthen investment co-operation with emerging markets overseas, boost co-operation with Taiwan, Fujian and Chongqing and further support the development of the six industries where Hong Kong enjoys a competitive advantage. The six industries are medical services, environmental industries, testing and certification services, education services, innovation and technology, and cultural and creative industries.

The Chief Executive proposed setting aside HK$1 billion (approx US$128 million) to help businesses tap the Mainland market. He also sought to sign Supplement VIII to the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA), which was eventually signed on December 13.

Noting China’s support for Hong Kong as an international centre for financial services and in particular, the offshore RMB business centre, Mr Tsang said the Government would promote the use and circulation of RMB funds, and establish strong and extensive links with the Mainland’s onshore RMB market by three ‘bridges’, namely trade, direct investment and equity investment.

The Policy Address also rolled out new initiatives to enhance caring for the elderly, support for people in need, nurture talents and improve the environment for quality life. For details, please visit http://www.policyaddress.gov.hk/11-12/.

Chief Executive at the Policy Address press conference

Economy grows 4.3% in Q3Hong Kong’s economy grew 4.3% year on year in real terms in the third quarter, according to the 3rd Quarter Economic Report 2011 and the preliminary figures on Q3 Gross Domestic Product released on November 11. The economy is now forecast to grow 5% for 2011 as a whole.

Government Economist Mrs Helen Chan said on a seasonally adjusted quarter-to-quarter basis, GDP expanded 0.1% in real terms. Broadly on par with the growth trend of the past decade, she said it represented a further moderation from the 5.3% growth seen in the second quarter. The moderation was mainly caused by a sharp fall-off in exports towards the end of the quarter, amid an increasingly austere global economic environment.

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GOVERNMENT SCHOLARSHIP GOVERNMENT SCHOLARSHIP GOVERNMENT SCHOLARSHIP GOVERNMENT SCHOLARSHIP

Starting from the 2012/13 academic year, up to 10 targeted scholarships will be offered under the HKSAR Government Scholarship Fund to first-year non-local full-time students from ASEAN countries, India and Korea, who are enrolled in publicly-funded degree

programmes in Hong Kong.

The targeted scholarships, currently HK$80,000 (approx. US$10,250) per year per student, will cover full tuition fee of the non-local students. Once awarded, the scholarship will be tenable for the normal duration of the programme concerned and renewable annually subject to satisfactory academic performance of the awardees.

Relevant degree programmes are provided by nine institutions, namely City University of Hong Kong, Hong Kong Baptist University, Lingnan University, The Chinese University of Hong Kong, The Hong Kong Institute of Education, The Hong Kong Polytechnic University, The Hong Kong University of Science and Technology, The University of Hong Kong, and The Hong Kong Academy for Performing Arts.

Interested students should first enroll in a relevant programme provided by the nine institutions, which will submit nominations to the Fund’s Secretariat for the targeted scholarships by April 30, 2012. Selection will be based on the student’s academic performance, contribution to the institution/society, leadership, communication skills and/or commitment to the Hong Kong community. The results of the first batch of targeted scholarship awardees will be announced in June 2012.

The HKSAR Government Scholarship Fund was established in 2008 as part of the efforts to further develop Hong Kong into a regional education hub. Currently with HK$1.25 billion (approx. US$160 million), the Fund awards scholarships to and recognise the achievements of outstanding local and non-local students studying in Hong Kong. In 2010/11, 514 scholarships were awarded, including 220 to non-local students from 16 different economies.

Hong Kong aspires to be a regional education hub to nurture talents for the region. The Government endeavours to attract local and non-local students to study, conduct academic research and take part in educational exchange activities by offering various government scholarships to support their higher education studies in Hong Kong. More information on studying in Hong Kong can be found in the Government’s dedicated website: http://studyinhongkong.edu.hk.

• HK emergency relief fund to assist disaster victims •

The HKSAR Government is concerned about the natural disasters recently occurred in the Philippines, Cambodia and Thailand that have left millions of victims in need of assistance. Between October and December, it approved five grants from the

Disaster Relief Fund totalling HK$8 million (approx. US$1.03 million) to three relief agencies to undertake relief projects for the victims in these countries.It was hoped that the grants – HK$500,000 (approx. US$64,000) to the Adventist Development and Relief Agency, China for flood victims in Cambodia; HK$3.5 million (approx. US$450,000) to World Vision Hong Kong for typhoon victims in the Philippines; as well as HK$3 million (approx. US$385,000) to World Vision Hong Kong and HK$1 million (approx. US$128,500) to Save the Children Hong Kong for flood victims in Thailand – would help the victims in the three countries relieved from the disasters as soon as possible.The Disaster Relief Fund was established by the Government in December 1993 for emergency disaster relief in places outside Hong Kong.

HKSAR Government Scholarships for ASEAN students

Hong Kong’s position as a burgeoning hub for international as well as mainland Chinese

companies and the rapid growth of Chinese yuan businesses there presented tremendous business opportunities for Malaysian and Singaporean companies, said the Director-General of Invest Hong Kong, Mr Simon Galpin, during the 3rd World Chinese Economic Forum organised by Asian Strategy & Leadership Institute in Malaysia on November 3 and 4.

Mr Galpin highlighted that Chinese companies were using Hong Kong as a platform to access capital, expertise and business partners, whereas many small and medium enterprises from North America and Europe were also coming to Hong Kong. “Malaysian and Singaporean companies are benefiting from the confidence these investors are placing in Hong Kong,” he said. With US$69 billion inflow and US$74 billion outward investments, Hong Kong ranked third in terms of foreign direct investment after the US and China last year.

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HKETO ASEAN HKETO ASEAN HKETO ASEAN HKETO ASEAN HKETO ASEAN HKETO ASEAN HKETO ASEAN

HKETO (ASEAN) Director’sfirst round of official visits

DG of Invest Hong Kong speaks at the 3rd World Chinese Economic Forum in Malaysia.

Since his assumption of office in July, the Director of Hong Kong Economic and Trade Office (HKETO) (ASEAN), Mr Fong Ngai, has

embarked on a series of official visits to various ASEAN economies to establish and renew contacts with government counterparts, business leaders and the media friends of these countries. He has made some 20 visits covering all the 10 member countries of ASEAN.

During the visits, Mr Fong briefed the interlocutors on the latest development of Hong Kong, and at the same time sought to understand more about the countries, as well as to explore co-operation opportunities with them. In addition, he paid courtesy calls on the Chinese Ambassadors. He also met with Hong Kong and Chinese communities to show appreciation to their support in HKETO (ASEAN)’s work in promoting Hong Kong in their respective countries.

DG of Invest HK attendseconomic forum in Malaysia

Mr Fong Ngai (right) and Mr Suryo Bambang Sulisto, Chairman, Indonesian Chamber of Commerce and Industry (KADIN).

Mr Fong Ngai (left) and H.E. Mr Bounkeut Sangsomsak, Vice Minister of Foreign Affairs, Laos.

Mr Fong Ngai (left) and Dr Hajah Norlila bte DP Hj Abd Jalil, Deputy Permanent Secretary (Professional and Technical), Ministry of Health, Brunei Darussalem.

Mr Fong Ngai (left) and Mr Cesar V. Purisima, Secretary, the Department of Finance, the Philippines.

The well-established and growing economic ties between Hong Kong and Thailand will be further developed and

strengthened, given their strategic locations and privileged positions in China and Indochina respectively, said the HKETO (ASEAN) Director, Mr Fong Ngai, during his presentation at a dinner co-organised by the Thai-Hong Kong Trade Association (THTA) and the Thailand-Hong Kong Business Council (THBC) on October 11 in Bangkok.

Talking about Hong Kong’s advantages as a gateway to Mainland China and an offshore centre of RMB businesses, Mr Fong highlighted the nationality-neutral Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA), saying that the free trade agreement was a win-win arrangement, bringing new business opportunities to the Mainland, Hong Kong and all foreign investors.

The ASEAN region as a bloc has become Hong Kong’s second largest trading partner, just after Mainland China, with a trade volume of US$85 billion in 2010. Indochina is an emerging market which Hong Kong has recently been investing in and trading with extensively. Mr Fong appealed that Hong Kong and Thailand should join hands to develop the trade and investment links between China and Indochina, capitalising on the business infrastructure and expertise of the two places.

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ECONOMIC DIALOGUES ECONOMIC DIALOGUES ECONOMIC DIALOGUES ECONOMIC DIALOGUES ECONOMIC

Economic dialogueswith ASEAN countries

Hong Kong spares no effort in strengthening its economic and trade ties with ASEAN, which has an

abundance of natural and manpower resources and hence gigantic productivity potential, the Director-General of Trade and Industry, Ms Maria Kwan, said at the welcome dinner hosted by the Hong Kong Federation of Overseas Chinese Associations for the delegation of Indonesian Chamber of Commerce & Industry (KADIN) in Hong Kong on October 14.

Hong Kong has open markets, free flows of information and capital, an independent judiciary, the rule of law, a low and simple tax regime, quality professional support services and good infrastructure. Ms Kwan said, “The complementary advantages of both sides make for a perfect match in exploring business opportunities in the global and regional markets.”

The Director-General said Hong Kong and the Southeast Asian economies are long-time trading partners. Noting the promising pace of recovery in Asia after the financial tsunami in 2008, Ms Kwan remarked that Hong Kong and ASEAN members should grasp the opportunity by developing a strategy for fostering closer economic and trade co-operation within the region.

Director-General of Trade and Industry (third right) attends a welcome dinner hosted by the Hong Kong Federation of Overseas Chinese Associations for the delegation of KADIN Indonesia led by its Chairman, Mr Suryo Bambang Sulisto (fourth right).

HKETO (ASEAN) Director (centre), THTA President Mr Andrew Wong (sixth left), THBC Co-Chairman Ms Vongthip Chumpani (sixth right) and members of the two business associations after the dinner talk.

DG of Trade and Industry meets KADIN Indonesia

HKETO (ASEAN) Directorbriefs Thai businessmen

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To promote cultural exchanges between Hong Kong and ASEAN countries, the HKETO (ASEAN) supports cultural events to introduce brilliant cultural groups and artists from

Hong Kong to the audience in ASEAN.

In August, the Asian Youth Orchestra (AYO), led by its Artistic Director Mr Richard Pontzious, conducted a concert tour to Southeast Asia. As a sponsor of the concert tour, the HKETO (ASEAN) invited local interlocutors to enjoy the Orchestra’s performances in Kuala Lumpur, Singapore, Hanoi and Bangkok during the period between August 9 and 17. Established in 1989 with its base in Hong Kong, the AYO aims to provide rich and diversified art experience to the group of most outstanding young musicians in Asia.

In addition, the HKETO (ASEAN) sponsored The Theatre Practice of Singapore to bring two renowned theatre practitioners from Hong Kong to its inaugural Chinese Theatre Festival held from August 25 to September 18. The Artistic Director of Hong Kong’s PIP Theatre, Ms Olivia Yan, came to Singapore to produce and direct a drama “The Story After Ah Q” in collaboration with her local partners, The Theatre Practice and O Theatre. The other theatre artist from Hong Kong was Mr Lau Ming-hang, who presented a unique giant pop-up book performance entitled “Am I Crying”. Both productions were well received by the Singaporean audience.

CULTURE CULTURE CULTURE CULTURE CULTURE CULTURE CULTURE CULTURE CULTURE CULTURE

HKETO (ASEAN) hosted a pre-performance reception of “The Story After Ah Q” on September 16. HKETO (ASEAN) Director, Mr Fong Ngai (second left) and the then Deputy Director, Mr Law Kin-wai (left), meet Hong Kong theatre director, Ms Olivia Yan (second right), and Artistic Director of The Theatre Practice, Ms Kuo Jian Hong (right), at the reception.

HK ACTIVE IN ASIA CULTURAL CO-OPERATION

CULTURAL EXCHANGES IN ACTION

Cultural ministers and senior officials of 11 Asian countries came together at the Asia Cultural Co-operation Forum (ACCF) 2011 in Hong Kong on October 8

to share their insights and experiences of translating the vision of supporting the continuation and enhancement of Intangible Cultural Heritage (ICH) into actions.

The ACCF was launched in 2003 by the HKSAR Government as an initiative to foster regional cultural co-operation, share good practices and promote culture and the arts.

The seventh forum this year carried the theme of “Safeguarding Intangible Cultural Heritage: From Vision to Action”. At a luncheon hosted for the cultural ministers and senior officials of the Mainland China, Cambodia, Indonesia, Japan, Korea, Laos, Myanmar, The Philippines, Singapore, Thailand and Vietnam attending the Forum, the Chief Secretary for Administration, Mr Stephen Lam, spoke on the theme and highlighted three important tasks the Government was undertaking in preserving and enhancing cultural heritage, namely investment, intangible heritage and international collaboration.

Mr Lam urged for stronger collaboration between governments, institutions and other stakeholders across the region to promote greater understanding and foster friendship among Asia’s many different cultures.

The highlight of the Forum was the “Panel Discussion by Asia Cultural Ministers” session, in which the Secretary for Home Affairs, Mr Tsang Tak-sing, addressed the participants that Hong Kong adopted a multi-pronged approach to protect, nurture and promote ICH. This includes in-depth research, education, promotion, application for inscription and transmission.

In Hong Kong, four local ICH items, namely the Cheung Chau Jiao Festival, the Tai O dragon boat water parade, the Tai Hang fire dragon dance and the Yu Lan Ghost Festival of the Hong Kong Chiu Chow Community, have been successfully inscribed onto the national list of intangible cultural heritage. Another heritage item, Cantonese opera, was inscribed onto UNESCO’s Representative List of the Intangible Cultural Heritage of Humanity in 2009.

Separately, Secretary for Home Affairs (first right) attends the China and ASEAN (10+1) Cultural Ministerial Meeting in Chongqing on October 10 as an observer.

Participating cultural ministers and senior officials exchange views at the panel discussion session.

A 30-member delegation of the Chinese General Chamber of Commerce (CGCC) of

Hong Kong, led by its Chairman Dr Jonathan Choi, attended the 11th World Chinese Entrepreneurs Convention (WCEC) held in Singapore from October 5 to 7. Hosted by the Singapore Chinese Chamber of Commerce and Industry, the global forum under the theme of “New Global Environment, New Chinese Enterprise, New Impetus” aimed to strengthen economic co-operation and mutual understanding among Chinese entrepreneurs from all over the world.

On behalf of the Founder Members of WCEC, Dr Choi addressed at the opening and closing ceremonies of the Convention, appealing to the Chinese entrepreneurs to work closely together for the steady growth of the global economy. He said in view of the shift of economic power from

the West to the East in recent years, WCEC would play a more important role to connect and unite Chinese entrepreneurs for the economic development of the world.

On the sideline of the Convention, the HKETO (ASEAN) hosted a breakfast reception for the CGCC delegates and members of the Hong Kong Singapore Business Association. At the reception, HKETO (ASEAN) Director, Mr Fong Ngai, briefed the delegation on the latest development in ASEAN, as well as Hong Kong-ASEAN trade and investment relations. The businessmen from Hong Kong and their counterparts based in Singapore got acquainted with each other and enjoyed fruitful exchanges on business opportunities.

EXCHANGES EXCHANGES EXCHANGES EXCHANGES EXCHANGES EXCHANGES EXCHANGES EXCHANGES

DG of Trade and Industry visitsASEAN MEMBER STATES

11TH WORLD CHINESEENTREPRENEURS CONVENTION

Director-General of Trade and Industry, Ms Maria Kwan (right), and Deputy Minister (Trade) of Malaysian Ministry of International Trade and Industry, Y.B. Dato’ Mukhriz Tun Dr Mahathir, after a fruitful meeting.

HKETO (ASEAN) Director, Mr Fong Ngai (centre), CGCC Chairman Dr Jonathan Choi (third right) and his delegates at the 11th World Chinese Entrepreneurs Convention.

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The Director-General of Trade and Industry, Ms Maria Kwan, visited Kuala Lumpur, Malaysia and Singapore from December 7 to 9 to promote the bilateral trade relations between Hong Kong

and the countries.

During her visit in Kuala Lumpur, Ms Kwan had fruitful exchanges with the Deputy Minister (Trade) of Malaysian Ministry of International Trade and Industry, Y.B. Dato’ Mukhriz Tun Dr Mahathir; and the Director-General of the ASEAN-Malaysia National Secretariat of Ministry of Foreign Affairs, H.E. Ambassador Zainal Abidin Ahmad. She also met with the Deputy Director General of Malaysian Investment Development Authority, Dato’ Azman Mahmud; and enjoyed good exchanges with business leaders of Malaysia.

Ms Kwan continued her trip in Singapore, where she met with the Deputy Secretary (Trade) of Singaporean Ministry of Trade and Industry, Ms Koh Lin-Net, to discuss on issues of mutual interest. She also made a courtesy call on the Chinese Ambassador, Mr Wei Wei; and had valuable interactions with business leaders in Singapore.

This was the first leg of the Director-General’s series of visits to the region to build up economic and trade relations with the ASEAN member states. Ms Kwan also visited Brunei Darussalam from December 20 to 22 and met with the Permanent Secretary of Bruneian Ministry of Foreign Affairs and Trade, Dato Lim Jock Hoi. She will continue to visit other ASEAN member states in the coming months.

MINISTERIAL DIALOGUE

WITH MALAYSIA

Secretary for Food and Health, Dr York Chow, held a bilateral meeting with Minister of Health of Malaysia, Y.B. Dato’ Sri Liow Tiong Lai, on September 16 in San Francisco before attending the APEC high level dialogue panel meeting. They exchanged views on health-related issues and subjects of mutual concern. Photo shows Dr Chow (left) presenting a souvenir to the Minister.

Separately, the Secretary for Commerce and Economic Development, Mr Gregory So, attended the APEC Ministerial Meeting in Honolulu on November 11. Mr So also hosted a reception for some 200 Hong Kong business heavyweights and local leaders in Honolulu. He told the guests at the reception that to strengthen regional economic integration and expand trade, the APEC community had looked at ways to address the next-generation trade and investment issues, such as enhancing the participation of small and medium enterprises in global production chains. Giving an update on Hong Kong’s development, he said Hong Kong, being a unique global business hub, financial centre, and premier tourist destination, is the best base to access the huge and dynamic market of China.

As a small externally-orientated economy and international financial centre, Hong Kong’s best protection against the current instability was to keep its

own house in order, said the Chief Executive, Mr Donald Tsang, at the plenary session of the Asia-Pacific Economic Co-operation (APEC) 2011 CEO Summit in Honolulu on November 11.

In a speech entitled ‘Seeking stability in an unstable world’, Mr Tsang said, “We must also remain vigilant to the highly volatile market conditions worldwide. The best way to achieve this is to build on our strengths and shore up our more vulnerable areas.”

He outlined the measures Hong Kong had taken to maintain financial and economic stability, such as the enhancement of the regulatory regime for credit rating agencies and short selling, and also emphasised the importance of seeking out new development opportunities.

The Chief Executive said one of Hong Kong’s most important roles as China’s global financial centre was to promote offshore business using RMB for the gradual liberalisation of the Mainland currency, noting that it would firm up Hong Kong’s financial services sector in times of global uncertainty, as well as provide stability and opportunity to the global financial system.

Speaking at the APEC Finance Ministers’ Meeting in Honolulu on November 10, the Financial Secretary, Mr John Tsang, stressed that Hong Kong was stepping up efforts to ensure financial stability in view of the importance of tackling counterparty risks across global financial markets highlighted by the European sovereign debt crisis.

The Financial Secretary also told the meeting how Hong Kong had strived to stay competitive and achieve sustainable growth in order to maintain its economic vibrancy and cope with changes in the global economy. Strategies include strengthening economic integration with China, diversifying the city’s export markets and economic structure, and investing in infrastructure development and the workforce.

Apart from participating in international bodies, Hong Kong will continue to commit itself to implementing the international financial regulatory reforms, taking into account local circumstances, he added.

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SUBSCRIPTION/RESPONSE

Chief Executive, Financial Secretary tell APEC:HK VOWS TO ENSURE FINANCIAL STABILITY

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Chief Executive (first row, first right), poses for a group photo with other APEC Economic Leaders in Honolulu.

Secretary for Commerce and Economic Development (second right) at the APEC Ministerial Meeting.

APEC APEC APEC APEC APEC APEC APEC APEC APEC APEC APEC APEC APEC APEC APEC