Speech – Maintaining a business-friendly environment in Hong Kong (Andrew Leung)

President, Hong Kong is the most popular city in the world and ever since the inception of Hong Kong as a port, it has relied on its open economic policy to attract overseas capital and talents. In the past two or three decades, Hong Kong has become the door for European and American businesses to enter the Mainland, but with the further opening up of the Mainland and the rapid development of our neighbouring cities, the original strengths of Hong Kong are being weakened.

Last month, when the Business and Professionals Alliance for Hong Kong paid a visit to the Chairman of the National People’s Congress Standing Committee, ZHANG Dejiang, who is in charge of Hong Kong affairs, the latter called on us to seize the next three years, which is a critical period, to make greater efforts and do a good job on the economy, so as to improve the living of the people. Hong Kong must further examine all business-related frameworks and legislation and seize the opportunity of extending the “pilot and early implementation” scheme from Guangdong to the nine provinces in the Pan-Pearl River Delta Region to do its utmost to attract more enterprises and capital outside Hong Kong to make use of Hong Kong as a platform. The Government cannot just talk about vision but refuses to implement policies that can hit the ground and run.

In the past few years, we have told officials a number of times in the Chamber that Hong Kong has to make good use of its unique advantage of being able to leverage on the Mainland and practising the “one country, two systems” principle, together with its well-developed legal system and long-established position as an international commercial and financial centre, to build a platform that would facilitate Mainland enterprises in going global and foreign capital in entering China. In recent years, Hong Kong has become an important platform for financing for Mainland capital. In the future, we have to make greater efforts to seize the opportunities arising from the take-off of the Mainland economy, promote Hong Kong as a base for carrying out work relating to R&D, patents and production using high technology, so as to enable the scope of production of Hong Kong’s manufacturing industry to radiate to more places. Similarly, since the Mainland has been actively conducting research on new technology in recent years, the testing and certification industry in Hong Kong can also assist it in carrying out testing and certification, so as to help the relevant products leave the Mainland and enter the international market.

President, I have many friends in the industrial sector who began to actively develop the economic and trade relationships between Hong Kong and ASEAN countries many years ago. In recent years, ASEAN countries have seen strong economic growth and the large number of young people in their populations also provides a large source of manpower and great spending power. The further consolidation of the China-ASEAN Free Trade Area has catapulted the ASEAN to become the third biggest trading partner of China, but some difficulties and challenges in the relationship between China and the ASEAN remain.

Historically, there are close relationships between Hong Kong and the Southeast Asian region and many overseas Chinese have settled in Hong Kong, making use of Hong Kong as a trading intermediary, thus making Hong Kong one of the major choices in fund raising and trading for residents and companies in Southeast Asia. Hong Kong’s economic framework, in particular, its strengths in such production services as finance, law and accountancy have made the Hong Kong economy highly complementary to that of ASEAN countries. I believe that ASEAN countries are also happy to use Hong Kong as a platform for corporate financing, trading and making external investments.

In addition, through the service industry of Hong Kong, the Mainland can also expand its scope of business and speed up investments by Mainland companies in ASEAN countries. To this end, the authorities should initiate the participation of Hong Kong in the negotiations relating to the China-ASEAN Free Trade Area and government officials should take the lead in organizing visits to enhance their understanding of the business sector in these countries, and to promote Hong Kong as a platform for Mainland enterprises, for example, by establishing companies registered in Hong Kong, so as to increase their investments in ASEAN countries. We should also enable more Hong Kong students to understand the systems, customs, languages, and so on, of Southeast Asia, so as to train manpower well-versed in the Southeast Asian region. Lastly, we can also consider putting in place facilitation arrangements in respect of the issuance of visas to further streamline the process of issuing visas to the citizens of ASEAN members, with a view to eventually extending visa-free treatment to them.

President, good labour relationships is one of the factors determining the success or otherwise of a business. In recent years, amendments to labour legislation and new labour legislation have been continually introduced in Hong Kong. We do not oppose providing protection to employees, but some of the laws have failed to take into account actual business operation and employers’ difficulties, so much so that they pose potential problems to our business environment.

President, Australia is one of the countries in the world with the best protection for workers but its Government also began to make new adjustments from 2005 onwards. In December of that year, the Parliament of Australia passed the Work Choices Act 2005 to amend the original Work Relations Act 1996, so as to change the Government-led mode which had all along been adopted by beginning to emphasize negotiations and the resolution of differences by employees and employers within companies by all means, instead of frequently referring them to the official Australian Industrial Relations Commission. Employees are also allowed to enter into Australian Workplace Agreements with their employers on their own, so as to change the traditional centralized labour relationship adjustment system of the past into a decentralized mode, that is, to allow employees and employers autonomy in holding discussions, so that the entire labour relationship can be made simpler and more flexible.

In the past, we often stressed that the labour relation in Hong Kong enjoyed great flexibility, so the business sector could tide over difficult times safely but ever since the introduction of minimum wage, the extent and frequency of adjustments to the wage level give one the impression that politics has overridden everything else. In the future, we still have to adjust the level of the minimum wage, but I hope that we can return to the situation in which the future wage level can be determined by objective factors.

Standard working hours is an even more complicated issue than minimum wage and it affects each and every wage earner in Hong Kong, so we should not act with undue haste. Instances of working for long hours over prolonged periods of time may be found in some industries because of the nature of their work. Some people in the industries concerned hold that legislation should not be enacted across the board because of a small number of instances, as statutory standard working hours will make companies lose their flexibility further. Whether or not there is a need to enact such legislation must be discussed and dealt with very cautiously.

Just now, Mr TANG Ka-piu also mentioned the situation in Singapore. He praised Singapore for its numerous desirable policies but he does not know, or he deliberately avoided mentioning the fact that Singapore is the place importing the largest number of workers.

President, I support Mr Jeffrey LAM’s motion.


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