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Chief Executive CY Leung
November 11 was Singles' Day in the Mainland of China. If you're wondering, Singles' Day actually embraces more shopping than romance. Indeed, it's the world's biggest online shopping day of the year. Bigger than any day leading up to Christmas, or Chinese New Year. According to Alibaba, customers spent well over US$9 billion online in Mainland China on that day. In short, it was a great commercial success, a triumph for e-commerce and a telling statement of the scale of consumer demand in the Mainland of China.
There is, however, more to a sale than concluding a transaction. As everyone here knows, there is also the matter of delivering the product to the customer, to the customer's satisfaction, and that is on time and in satisfactory condition.
Untarnished, intact, on time: these are just a few of the logistics challenges this conference, now in its fourth year, was created to discuss and deal with. In the process, creating fresh business opportunities.
Geographical advantage
This conference was also created to underline the value that Hong Kong can bring and offer you - to your logistics business and to this vital, surging sector. One of the world's great trading economies, logistics is the lifeblood of Hong Kong. For good reason. Strategically located in Asia, and at the doorstep to southern China, Hong Kong is within four hours flight time of all major Asian cities. Within five hours, as Margaret just said, we can reach half the world's population. Our location, at the heart of Asia, is a natural asset, giving Hong Kong an unparalleled advantage as this region's hub for international trade and logistics.
Hong Kong has also been blessed with a magnificent harbour, one with a long CV as a maritime haven, a meeting place between East and West. Since the 1980s, when Mainland China adopted its reform and opening up policies, Hong Kong has played a critical logistics role between the Mainland and the world, evidenced by the development of the container port here in Hong Kong, which was driven by the rapid growth in trade not just between Hong Kong and the Mainland, but also between China and the rest of the world.
Mainland connection
Since 1997, our connectivity with Mainland China has grown exponentially, and at all levels, immeasurably strengthening our trade-hub status.
That includes our free-trade agreement with the Mainland. The Mainland & Hong Kong Closer Economic Partnership Arrangement, better known as CEPA, offers favourable trading and investment conditions for Hong Kong-based companies. I emphasised the word "based", not just Hong Kong companies but Hong Kong-based companies, whether local or foreign-owned, in the export of goods, the trading of services and the realisation of investment. To date, CEPA has enabled more than 400 liberalisation measures in a variety of sectors and industries, including freight forwarding, storage and warehousing, air transport, maritime transport and road transport. More will follow.
Thanks to the "One country, two systems" principle, Hong Kong works like no other city on the Mainland. We enjoy a high degree of autonomy. Our special status, including rights and freedoms, are enshrined in our constitutional document, known as the Basic Law. We maintain a free-market economy, with separate legal and judicial systems firmly entrenched in the rule of law. We have our own currency, issue our own travel documents, have our own immigration policy and retain our status as a free port and separate customs territory. These are all important institutional advantages, helping Hong Kong sustain a strong market economy.
Free economy
Indeed, the US-based Heritage Foundation has named Hong Kong as the world's freest economy every year for the past 20 years. And Hong Kong finished fourth in this year's World Competitiveness Rankings, produced by the International Institute for Management Development. The Institute attributed our success to exports, business efficiency and innovation. Each is essential to the smooth functioning of our logistics sector.
Similarly, Hong Kong was placed second out of 131 countries in a new global Connectedness Index. Compiled by the McKinsey Global Institute, the Index focuses on the total flow of goods, services, finance, people, data and communication. This, too, is critical to the continuing success of Hong Kong logistics.
Hong Kong is an important regional hub for international companies. More than 7,500 externally owned businesses are based here. Of these, nearly 1,400 operate as regional headquarters and some 2,400 as regional offices.
The 21st century is often described as the Asia-Pacific century - and again for good reason. According to the latest International Monetary Fund forecast, the GDP of developing Asian economies is expected to grow by 6.5% this year. That's well above the International Monetary Fund's global growth forecast of 3.3%. New opportunities are fast emerging as living standards rise, purchasing power increases and the region becomes more integrated.
Given our strategic location and time zone linking Asia and Europe, Hong Kong is a global centre for trade, finance, business and communications. A super-connector between the rest of China and the rest of the world.
Livable city
For investors, Hong Kong's open economy and international outlook are some of our key attractions. Indeed, Hong Kong is the second-most popular locale, after the United Arab Emirates, for global professionals staying on longer than intended, according to "Global Professionals on the Move 2013", a study by the Hydrogen Group. That's thanks to our business-friendly environment, rule of law, international connections, free flow of capital and information, quality of life and multilingual and multicultural environment. And a recent Economist Intelligence Unit report ranked Hong Kong as Asia's third-most livable city, after Osaka and Tokyo.
Living well also means enjoying the outdoors. In this regard, my Government is keen to make Hong Kong a greener city. And we are determined to improve Hong Kong's air quality. Last year, we implemented a comprehensive "Clean Air Plan for Hong Kong". It strengthens policy co-ordination in environmental protection, energy, transport and planning. It also emphasises co-operation with neighbouring Guangdong Province.
Maritime development
I also attach great importance to reinforcing Hong Kong's position as an international maritime hub, as well as a regional centre for international legal and dispute resolution services. Arbitration awards made in Hong Kong are enforceable in jurisdictions of about 150 Contracting States of the New York Convention, as well as in Mainland China and Macau. Our maritime arbitration work is well-established. Indeed, the Hong Kong International Arbitration Centre has been in operation since the 1980s. In addition, renowned arbitration institutions such as the International Court of Arbitration, which was established as the International Chamber of Commerce's arbitration body, and the China International Economic & Trade Arbitration Commission operate here. And I'm pleased to note that, tomorrow, the China Maritime Arbitration Commission will inaugurate its Hong Kong office - its first branch office outside the Mainland.
Hong Kong's maritime development also enjoys the staunch support of the Central Government. China's 12th Five-Year Plan expressly supports Hong Kong's position as an international maritime centre. Hong Kong port remains one of the world's busiest, and the Hong Kong Shipping Register is the world's fourth-largest, its gross tonnage at 91 million. Hong Kong companies own or manage 9% of the world's merchant fleet in deadweight tonnage. And this city's 700 shipping-related companies offer a flotilla of maritime services, including ship agency and management, broking and chartering, finance, marine insurance, and maritime legal and arbitration services.
Asia today accounts for one-third of global GDP. Our continent's growth potential is immense, with enormous business opportunities yet to be realised. Hong Kong's Asian economic links will be strengthened further with the conclusion of an ASEAN-Hong Kong Free Trade Agreement, now under negotiation.
The movement of goods among Asian countries has traditionally relied on shipping. Now we are seeing other possibilities. Even Hong Kong as a seaport is seeing the advantage of land transportation. The completion of the Hong Kong-Macao-Zhuhai Bridge, which is about 29km long, in another three years will provide a short cut to the west bank of the Pearl River Delta in Guangdong Province, then onto the Guangxi Autonomous Region and then the border with Vietnam.
In the meantime, the country is fostering the development of the Silk Road Economic Belt which will link the northwestern part of China to parts of Europe. The emergence of this new region will require new logistics support.
Chief Executive CY Leung gave this speech at the Asian Logistics & Maritime Conference 2014.
