Remarks by Ir Dr the Honourable Raymond Ho Chung-tai, MBE, JP on the motion on
“Motion of Thanks – Vibrant Economy”
at the Legislative Council meeting
on 26 January 2005

Madam Deputy to the President,

As pointed out in the 2005 Policy Address, the economic outlook of Hong Kong is promising. The unemployment rate is dropping and the growth rate of 7.5% in GDP has been reported. Reviving the economy is one of the policy areas addressed by the Policy Address. I believe that if the government can provide a good business environment so that citizens as well as enterprises can work in concert with one another, full economic recovery is not impossible.

As mentioned in the Policy Address, regulatory regimes and licensing procedures are to be streamlined and simplified respectively in order to provide a good business environment to investors. This measure is highly appreciated. As I have discussed with the government in the past, complicated administrative procedures will only pose hindrances to businessmen. I believe that the new measure will offer them facilitation.

According to the Policy Address, construction/real estate and retail sectors are given priority in this area. I hope that the government will keep its progress of work on schedule in order to avoid any delay and hopefully it can deal with other sectors earlier.

In recent years, Hong Kong has moved closer to the Mainland in terms of commerce, particularly the Pan-Pearl River Delta Region. Undeniably, the Mainland is a large market. We should capitalize on our geographical and cultural proximity to enter this market. To facilitate it, the government should liaise with the Mainland provincial authorities to simplify their relevant procedures. In my opinion, to accelerate Hong Kong 's economic recovery, it is necessary for us to expand our market. Only relying on the local market is definitely not sufficient.

Although Hong Kong 's economy is recovering, there are some problems that the government must address to for a full economic revival and among which is the labour problem.

As we all know, Hong Kong is undergoing an economic restructuring – from a manufacturing-based economy to a service-based economy and we are in a transition to a knowledge-based economy. It is expected that the job market for low-skilled workers will be smaller and smaller. Unfortunately, in recent years, while the government has put a lot of resources in higher education, it has neglected the need to upgrade our low-skilled labour. As a result, there is a serious mismatch of human resources. According to the manpower projection study conducted in 2003, it is estimated that by 2007, there will be a possible excess of 230,000 workers with relatively low educational attainment. By this, it is obvious that to solve the unemployment problem in a long-term manner, it is necessary for the government to provide low-skilled workers with relevant self-improvement programmes particularly for the upgrading of their skill and English language.

Hong Kong is an international city. There are a large number of foreigners coming to Hong Kong for travel and business every year. Unfortunately, many people in Hong Kong including those in the service industry are unable to communicate with foreigners even in simple English. I think that providing English language programmes to low-skilled workers not only can help them make a living but also will help Hong Kong keep its image as a cosmopolitan city.

Besides labour problem, the government must also make sure that it adopts a consistent approach in its policy in order to help Hong Kong recover from the economic downturn. Frequent changes of policy will waste time and resources, and more importantly, ruin investors' confidence in Hong Kong .

The Asian financial turmoil took place in 1997. During these years, many Hong Kong people suffer from unemployment, negative equity and salary reduction etc. These years are really a setback and have posed a very hard time to many people. However, we are glad to find that an economic upturn is just round the corner – the unemployment rate has dropped steadily from a peak of 8.6% in 2003 to 6.5%, property values have rebounded significantly, and cases of negative equity have dropped drastically from a peak of over 100,000 to about 25,000 last September. With the new Policy Address, I hope that the government will create a better business environment in which stable government policy, sufficient skilled labour and other supporting measures can be found. With this, it is expected that we will be able to thoroughly shake off the economic doldrums very soon.

Madam Deputy to the President, I so submit. Thank you.