Tung Confident About Hong Kong's Economy

Chief Executive Tung Chee Hwa Friday said that despite a marked economic downturn, Hong Kong will grow stronger in the months and years ahead as an international business center for multi-national companies.

Tung made the remarks at a reception hosted for senior representatives from over 80 overseas companies at the Government House this afternoon.

"As we emerge successfully from the cyclical downturn and from the economic re-structuring, Hong Kong will grow stronger in the months and years ahead as a financial center, as a center for tourism, as a center for transport and logistics, and as a center for multi-national companies like you, as well as a city in the middle of the fastest growing region in China, the Pearl River Delta," he noted.

"Together, you and us, we work very hard to make Hong Kong a better place for business as well as a better place to live in because I know Hong Kong is not just our home," Tung said. "From now on, Hong Kong is also your home."

There are over 12,000 overseas companies in Hong Kong. Of the 12,000, 3,000 of them are regional headquarters. Over the last few months, more than a hundred regional headquarters additionally have been established here in Hong Kong.

The chief executive said the fact that they should choose to come to Hong Kong at this time, a time of major economic downturn in their own countries, is a testimony to the strength of Hong Kong as an attractive center of international business.

Hong Kong's economy over the past 12 months has been affected adversely by two important factors, namely cyclical downturn and economic restructuring, Tung said.

As an open economy, Hong Kong is obviously adversely affected by what happens in the United States, in Europe and in Japan as well as the rest of Asia, he said, adding that the fact there is a major downturn going on now in the United States and in Europe as well as the continued sluggish economy in Japan has affected Hong Kong very badly this year.

On the other hand, the structural adjustment has been taking place in Hong Kong for some time now, Tung explained. This is the result of globalization or advances in IT as well as a result of the tremendous progress that has been made in China's mainland.

"The achievements of China have given us tremendous opportunities but at the same time we have to recognize many many new challenges," he stressed. "It is against this sort of background that we in Hong Kong over the last few years have been undergoing structural changes."

He said he did not think that there is a reason to be pessimistic, or to be worried. "The fact is that if you look at the Hong Kong economy, compared ourselves with the rest of Asia, we actually fare much better," he added.

"Don't underestimate the clustering effect of many of our businesses," he said. "We have one of the largest concentration of financial institutions here."

Tung also stressed the importance of multi-national companies in Hong Kong not only because they bring employment opportunities, but more importantly, they bring social and cultural diversities.






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