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Transcript of remarks by the Financial Secretary, Mr Donald Tsang, during an interview on the Australian Broadcasting Corporation's national programme 'Asia Pacific' on Tuesday (August 1) night:

Compere: China's imminent entry into the World Trade Organisation will have perhaps as big an impact on its satellite Hong Kong as on the Mainland itself. Hong Kong is positioning itself for the new environment with China more open to the world's marketplace and, three years after the handover to Beijing, it's keen to reassure business that its capitalist-based democracy is as secure as ever.

Finance correspondent Karen Snowdon has this report.

Snowdon: Visiting Sydney, Hong Kong's Financial Secretary Sir Donald Tsang was keen to get the message across to business leaders that the Special Administrative Region is their best bet in Asia; as a doorway to China itself, for its well-established service, its rule of law and its growing information technology infrastructure.

He says Hong Kong hasn't changed in the three years since the handover. It remains Asia's most open and fair economy, a condition he says Beijing is just as interested in defending.

But recent controversy surrounding apparent Beijing directives to the media and to business not to deal with Taiwan, have raised concerns that Beijing's hands off policy might be weakening.

Is the honeymoon over? Donald Tsang.

Mr Tsang: No, but as far as the statement you refer to by this particular gentleman, concerning businessmen doing business in Taiwan, there was immediately a different statement made by his boss to the effect that there is absolutely no restriction on the way in which Hong Kong businessmen could do business legally. There was also a simultaneous statement made by the Hong Kong government and, indeed, if I look at it in the way which I do, if you do look at it my way, it is an excellent opportunity for people to understand that that is the official Mainland China position, that there is no restriction on how Hong Kong people should do business. There are no cracks in the system.

From the point of view of China intervening in Hong Kong affairs, if there is anything over the last three years, the record has been impeccable.

Snowdon: What do you see driving the Hong Kong economy from this year out, say for the next year, the main drivers of the economy?

Mr Tsang: It's trade orientated. There is a larger volume of commodity trade, trade in goods, and also a very strong revival in trade in services. Tourism has also come back in a big way. We now have tourist arrivals in Hong Kong in excess of a million every month. Together with that there was a much stronger underpinning in terms of technology.

There's a lot of technology firms being established in Hong Kong right now. Many of them are not traded on the stockmarket. They are employing people, they are introducing new economic activities, they are bringing in new investments.

Snowdon: Some of those new investments are moving out, some prominent companies are cutting back on staff. One of the most prominent, Tom.com is concentrating on the Mainland and putting off 16% to 20% of its staff. Does this concern you?

Mr Tsang: Tom.com is a small company, by the way. There are companies which open up every day, there are companies who are closing down, going belly up every day. This is the name of the game in Hong Kong. I'm certainly not fussed at all.

Snowdon: Are you concerned about the IT technology stocks shakeout that seems to be happening, concentrating in the US but having repercussions around the world?

Mr Tsang: Indeed, I think this is the case. I think it's a good thing to have an occasional health check on the way in which the stockmarkets are going, particularly with new commodities on the market, called technology stocks, dotcom stocks. What is happening in the United States certainly will affect similar bourses all over the world. Hong Kong is no exception.

Snowdon: This high profile development in Hong Kong, it's called the Cyberport. What will it do for Hong Kong?

Mr Tsang: This is part of the infrastructure we have for the information technology industry. This will concentrate on the high end of broadband Internet development and on multimedia content creation work. It will accommodate roughly 130 to 140 firms, large and small, doing research, doing development work.

Snowdon: Are you still expecting double digit growth for the Hong Kong economy in the coming years?

Mr Tsang: Oh, no, no, no. Double digit growth is a freak signal. We are a mature economy. The 14.3% growth we registered in the first quarter of this year, I do not think it is repeatable in the quarters ahead. I would say the year as a whole, we would be doing slightly better than 6%

End/Wednesday, August 2, 2000

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