HK chief executive focuses on economic development, social harmony in 2005 policy address

Hong Kong Special Administrative Region (HKSAR) Chief Executive Tung Chee Hwa delivered Policy Address for 2005 at the Legislative Council Wednesday afternoon, toping economic development and social harmony in his next year's agenda.

He said Hong Kong's economy in 2004 has proven to be the best since the Asian financial crisis and surpassed those of the past seven years, with a growth rate of 7.5 percent and many of its economic indicators registered double-digit growth. He noted that Hong Kong has finally shaken off the economic doldrums and is now on the road to healthy development.

Tung vowed to continue improving the SAR's business environment and encourage fair competition.

In the coming year, Tung said that the SAR government will insist on the principle of fairness in governance, and seek to properly balance the interests of different social strata and sectors.

He promised that relevant government departments will support these reviews by studying improvement measures for implementation in 2005.

The chief executive noted that Hong Kong, which has long been recognized as the freest and most open economic entity, will endeavor to promote fair competition and adopt different measures according to different circumstances.

"These range from the use of licensing conditions, contractual provisions, codes of practice and administrative measures to legislation for individual sectors," he said, citing the successful introduction of competition for the telecommunications industry in 1998 and the recent monitoring of the local fuel supply market.

Tung ruled out the possibility of implementing a goods and services tax in the next two-and-a-half years as a way to broaden the tax base, as "the economy is still at the early stage of post-recovery consolidation."

He said the SAR government has been reducing the deficit according to set targets, expressing its determination of and confidence in restoring fiscal balance by 2008-09.

The implementation of Closer Economic Partnership Arrangement (CEPA) has brought immediate benefit to Hong Kong's economy, and more benefits of CEPA are expected to come, said Hong Kong chief executive Tung Chee Hwa in the policy address.

Tung said that introduced only by a year ago, CEPA has helped foster economic growth in Hong Kong.

"We have started to consult the industries concerned on the contents of CEPA III, to be implemented next year, and will begin discussions with the Central Authorities," said Tung.

He said that in addition to implementing and furthering CEPA, the government will continue to promote cooperation between Hong Kong and Guangdong.

At the same time, Hong Kong will actively participate in the development of the Pan-Pearl River Delta and foster bilateral cooperation with other mainland provinces and cities, Tung said.

Through concerted efforts, Hong Kong and Guangdong have entered a new stage of cooperation. The scope of cooperation has expanded beyond trade and boundary-crossing facilities to many areas, including logistics, tourism, regional planning, technology, intellectual property rights, education, transportation, environmental protection, health, culture and sports, he said.

Of particular significance is the Hong Kong-Zhuhai-Macao Bridge which is the biggest cross-boundary infrastructural project since the return of Hong Kong to the motherland. It has undergone a feasibility study, and will soon be registered for the next stage of work to start, Tung said.

He also mentioned that Hong Kong should seize the opportunities arising from the "going global" strategy for mainland enterprises."To attract more mainland enterprises to Hong Kong, we will help them raise capital, establish international trading networks and gain quick access to the international market."

He noted that the prime consideration of the Hong Kong government is to promote employment, which is to be handled firstly by way of pushing economic growth.

At present, more than 20,000 people in Hong Kong are still unemployed, which Tung said is a problem "we must face up to."

Tung said that the government attaches importance to protect its citizens' right to employment and will step up publicity and law enforcement to resolutely clamp down on illegal workers.

He added that in anticipation of changes in the job market, the government will continue to vigorously encourage both job seekers and employees to upgrade themselves by learning.

The chief executive noted that the government and the community should provide care and assistance to some low-income families whose circumstances have worsened over the past few years.

Tung announced that Hong Kong government has decided to establish a commission to alleviate poverty. The commission will study, from a macro perspective, how to help the poor in the terms of financial, employment, education and training needs.

Tung also pledged to insist on "substantial investment" in education to transit the SAR into a knowledge-based economy.

Tung said that as long as Hong Kong maintains prosperity, stability and social harmony, Hong Kong's democratic constitutional system can develop at a faster pace.

He noted that the ultimate aim of universal suffrage as set out in the Basic Law can be achieved, and the Basic Law paves the way for the development of democracy in Hong Kong and the Hong Kong government will take forward democratic development in a gradual and orderly manner, in accordance with the provisions of the Basic Law.

On improving governance, Tung noted that the SAR government will continue to move forward in this respect in fully implementing "One Country, Two Systems" and adhering strictly to the Basic Law.

Moreover, "we will continue with our efforts to uphold the vision of 'people-based' governance."

The SAR government will also further enhance the operation of the Accountability System and demonstrate team spirit, said Tung.