Hong Kong's Mainland Action Plan Unveiled

by Mary Swire, for LawAndTax-News.com, Hong Kong

18 January 2007

On Monday this week, Hong Kong's Chief Executive, Donald Tsang, presented an action plan compiled by expert groups he appointed after the publication of China's 11th Five-Year Plan last September.

The action plan has four sections resulting from studies by 33 panellists from four focus groups: a financial services group led by David Li Kwok-po, an executive councillor and chairman of the Bank of East Asia; a trade and business group led by Victor Fung Kwok-king, chairman of the Airport Authority; a maritime, logistics and infrastructure group led by Tung Chee-chen, chairman of Orient Overseas (International); and a professional services, information and technology and tourism group led by Leung Chun-ying.

Mr Tsang's speech was made in general terms, but the financial services group's proposals are said to include increasing use of the yuan, increasing the SAR's involvement in financial services on the mainland, opening more channels to improve the outward mobility of mainland investors and fund-raisers, and allowing financial instruments issued in Hong Kong to be marketed on the mainland.

The professional services group recommended, among other things, the establishment of 'greater China law firms' whose members would be able to practise simultaneously on the mainland and in Hong Kong.

Mr Tsang's speech was as follows:

'When economic strategies were formulated in the past, it was a usual practice for the Government to deliberate and draw up specific recommendations behind closed doors before presenting to individual industries for discussion. This is the first time that collective wisdom has been drawn from various industrial, commercial and professional sectors to map out a detailed action agenda and an implementation timetable as the blueprint for Hong Kong's economic development. Let me take this opportunity to express my warmest gratitude to all four convenors and the dozens of expert members for their valuable contributions in the past couple of months.

'After the Asian financial turmoil, we were thinking hard about our way forward. Proposals kept coming up and views were divergent, but then we gradually formed a consensus on the direction of Hong Kong's future development. Hong Kong, as a cosmopolitan city, should use this strength to push forward with our economic development. We should not be distracted by whimsical thoughts and should not divert our resources to try on every type of industry. This would be like a good forward football player trying playing a full back, ending up wasting his own strength. Hong Kong's strengths lie in services sectors like finance, logistics, IT, trade, shipping and tourism. Our direction is to consolidate these strengths and strive for the very best. We did well in the past and we must do even better in the future. Competition comes not only from other cities within the region but also from ourselves. As I said in the Economic Summit on September 11 last year, the question now is not "what" we have to do, but "how" to put the consensus into practice.

'It was against this background that the Economic Summit was called to start the studies. Under the "One Country, Two Systems" principle, the country has highlighted Hong Kong's role and the direction of our economic development in the 11th Five-Year Plan, that is to develop financial, logistics, tourism and IT industries and to preserve our status as an international financial, trade and shipping centre. The four focus groups today submit their report and the action agenda, systematically recommending a series of measures to strengthen Hong Kong's status as an economic centre. The action agenda sets out 50 strategic recommendations and 207 specific measures to cover all major economic sectors. Some of the proposals match with my discussion with national leaders and financial officials during my Beijing visit last month. The action agenda not only outlines a blueprint and sets a direction but also lists a detailed schedule of division of labour and a timetable to enable the Government, public corporations, industrial and commercial sectors, professionals, labour sector, academia and the community to know how to do their part in implementing the recommendations to achieve the effect of "know it, do it".

'These recommendations are not solely about how Hong Kong can continue to strive for the best and keep our momentum in economic development amidst fierce global competition. More importantly, the targets and initiatives contained in the action agenda state clearly how our professional services in finance, logistics and trade can respond to and support the country's rapid development.

'I believe the recommendations are conducive to the country at large and our neighbouring provinces and cities, creating a win-win situation. Their implementation will give full play to our strengths and help contribute our part to the country's emergence as a global economic powerhouse.

'The Government will adopt a three-pronged approach to follow up on the action agenda actively. First of all, I will instruct all bureau secretaries to immediately study the recommendations in depth and draw up polices and implementation plans as soon as possible. Priorities are those that must commence in the first half of this year and those that will require discussions with the Central Government or Mainland provinces and cities. Second, I will hand over the action agenda to the next term of government as an important reference on economic strategy for the next five years. Third, I will submit the report and the action agenda to the Central Government.

'For all focus group convenors and expert members, the work of the Economic Summit has drawn to a close today. But it marks the beginning of a new phase of work. From 'thinking', we now proceed to 'action'. It is a race against time. So we must not only move forward, but also move forward at a fast pace. The Government is determined to strengthen Hong Kong's competitiveness. I am hopeful that with the collective efforts of the community, the firm action of the Government and the staunch support of the Central Government, Hong Kong will scale new heights in its economic development.'

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