Ends/Thursday, March 2, 2017
Issued at HKT 17:43
Following is the speech by the Secretary for Development, Mr Eric Ma, at a networking luncheon with local industries co-organised by the Hong Kong Trade Development Council, the Indonesian Chamber of Commerce and Industry, the Indonesian Chinese Entrepreneur Association and Real Estate Indonesia in Jakarta, Indonesia, today (March 2):
Mr Irwan Hutasoit (Vice Chairman of Finance, Banking and Investment, Chamber of Commerce Jakarta), Mr Richard Tan (Executive Board Chairman of the Indonesian Chinese Entrepreneur Association), Mr Soelaeman Soemawinata (Chairman of Real Estate Indonesia), distinguished guests, ladies and gentlemen,
Good afternoon. It is a great honour to join all of you here and share the vision of this trade mission in fostering a closer relationship between Indonesia and Hong Kong. At the business matching session before this luncheon, I have already met some of you. I hope the rapport built between Hong Kong and Indonesia participants could carry on for the next couple of hours and beyond.
I would like to take this opportunity to express my gratitude to our three Indonesian co-organisers and the Hong Kong Trade Development Council for their excellent arrangement in making the business matching session and the luncheon a great success.
Indonesia and Hong Kong
Hong Kong and Indonesia are long-time business partners. In the first three months of 2016, Hong Kong's exports to Indonesia were US$588 million. Major export items included telecom equipment and parts, knitted or crocheted fabrics and computers. During the same period, Hong Kong's imports from Indonesia were US$570 million. Major imports included jewellery; coal, not agglomerated; and edible products and preparations.
According to the Census and Statistics Department of Hong Kong, there were 19 Indonesian companies setting up local offices in Hong Kong as of June 2015, taking care of local business for their Indonesian parent companies. In addition, a number of small and medium enterprises are established by Indonesians in Hong Kong, with businesses in restaurants, supermarkets, and courier services.
In June 2016, Hong Kong set up the Economic and Trade Office (ETO) in Jakarta. It signifies the importance of Indonesia as our major business partner because we only have ETOs in two other foreign countries in Asia. With the new ETO here in Jakarta, Hong Kong's bilateral relationship with Indonesia is entering into a new era.
Indonesia is the largest economy in the Association of Southeast Asian Nations (ASEAN). The ASEAN Secretariat is located here in Jakarta and permanent representatives of the 10 ASEAN countries are also based here. In anticipation of the conclusion of the ASEAN-Hong Kong Free Trade Agreement, we look forward to having more and closer co-operation with Indonesia.
Hong Kong's unique business strengths - professionalism, system and connectivity
All these explain why we decided to conduct a trade mission to Indonesia at this point in time. Our delegation members are outstanding leaders in their professional fields, namely accounting, architecture, construction, corporate services, engineering, landscape architecture, legal, property investment and real estate. They possess internationally recognised professional qualifications, extensive experience in serving overseas clients and capability in managing large-scale projects.
They are in particular good at communications and overcoming adversities. Through this trade mission, we would like to have more in-depth exchanges with friends in Indonesia in urban planning, infrastructure development and related professional services.
The unique "one country, two systems" arrangement gives Hong Kong advantages no other economy can hope to match. In terms of "one country", Hong Kong has the preferential access to the market in Mainland China and enjoys the support from the Central Government. For "two systems", Hong Kong maintains the common law system underpinned by an independent judiciary, a capitalist system featuring low tax rates, and an open market allowing free flow of goods, services, capital and business travellers. We, therefore, are familiar with the systems, languages, and cultures and business practices of both Mainland China and the Western countries. There is nothing like doing business in Hong Kong and with Hong Kong.
Hong Kong's role as a pathfinder and "super-connector" for international business partners interested in the Mainland Chinese market can help Indonesian companies seize the opportunity. There are indeed mutual benefits for Indonesia and Hong Kong to further enhance our business ties on various fronts.
Construction for the future
Service and industry are Indonesia's main economic drivers, each accounting for more than 40 per cent of GDP. Major sectors include manufacturing, mining, construction, transport and communication, finance and real estate. Hong Kong construction companies have participated in some construction and real estate projects in Indonesia. With the rapid urbanisation, a booming business sector and a surge of the middle class in Indonesia, there will be stronger demand for upgrading infrastructure as well as a better working and living environment. Hong Kong has the capability and capacity to contribute more to Indonesia's development.
Hong Kong construction companies have earned a reputation for speedy construction of quality high-rise apartment blocks and office towers. The adoption of specialised construction techniques, such as reclamation and design-and-build methods, has made Hong Kong a regional leader.
We have successfully designed and implemented the "Rail-plus-Property" model in our urban development and financing. Adopting this model, Hong Kong's MTR Corporation Limited has been able to build a world-class mass transit system without the need for substantial direct injection of government funding. Instead, the Government has received significant land premiums from sites along the railway. Over the past three decades, out of the 91 MTR stations constructed, 48 MTR stations adopted the "Rail-plus-Property" model, providing more than 100,000 residential units and over 2 million square metres of commercial space. We are pleased to see that this development model has been successfully introduced in some cities in Mainland China and we hope to introduce it to other countries including Indonesia.
We are also experienced in construction and management of cross-border infrastructure. Allow me to just name four mega projects here. First, the Hong Kong-Zhuhai-Macao Bridge project. It is a large sea crossing linking Hong Kong, Zhuhai and Macau. The project will boost the trade, commerce and tourism between Hong Kong, the west coast of the Pearl River Delta, Guangxi Province and possibly Vietnam. The second cross-border project going full steam ahead is the Guangzhou-Shenzhen-Hong Kong Express Rail Link project - a 26-kilometre high-speed rail link with Guangzhou. Thirdly, a new cross-boundary highway called the Liantang/Heung Yuen Wai link. In addition, construction of the third runway at the Hong Kong International Airport has just begun. The total value of these projects is about US$43 billion.
Hong Kong's construction industry performed well last year. The total value of our various construction works was about US$30 billion. Most of the export markets for Hong Kong's building and construction services are in Asia, with the Chinese mainland being a prominent one. Major services exports include project management, contracting and engineering consulting. I believe our construction and professional services sectors share more with our Indonesian counterparts.
Hong Kong's role as "super-connector" under China's Belt and Road Initiative
Right here in Jakarta, President Xi Jinping of China made an announcement on the launch of China's 21st Century Maritime Silk Road in 2013. Since then, significant development has been made. Let me give you some updates.
In March 2015, China's National Development and Reform Commission issued "The Vision and Actions on Jointly Building the Silk Road Economic Belt and the 21st Century Maritime Silk Road", outlining the framework of the Belt and Road Initiative, co-operation priorities and mechanisms. The five major goals of the Belt and Road Initiative are policy co-ordination, facilities connectivity, unimpeded trade, financial integration and people-to-people bonds.
For facilities connectivity, it refers to prioritising areas of construction as part of the Belt and Road strategy. Efforts will be made to give priority to removing barriers in the missing sections and bottleneck areas of core international transportation passages, advancing the construction of port infrastructure facilities, and clearing land-water intermodal transport passages. The connectivity of infrastructure facilities, including railways, highways, air routes, telecommunications, oil and natural gas pipelines and ports, will also be promoted. This will form part of a move to establish an infrastructure network connecting various Asian sub-regions with other parts of Asia, Europe and Africa.
Under the Belt and Road Initiative, Hong Kong performs as the "super-connector" between Mainland China and other countries. With our experience in infrastructure development and professional services, Hong Kong can certainly play an active role to further promote the relationship between Indonesia and China to reach new heights.
Looking ahead
Ladies and gentlemen, there is no universally applicable model in urbanisation, and there is no rigid development path. Over the years, Hong Kong has faced challenges, innovated and made remarkable development achievement. Over the years, Indonesians have worked on a united front for social stability, infrastructure development and economic advancement. I am confident that if Indonesia and Hong Kong can seize the opportunity to deepen and widen our co-operation, the development of both places will continue to go from strength to strength.
Thank you very much.
Ends/Thursday, March 2, 2017
Issued at HKT 17:43
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