Chief Executive, Mrs Tung, Chairman of the Hong Kong Trade Development Council, Mr Peter Woo, my lords, ladies and gentlemen, I am delighted to be with you this evening and to have the opportunity to say a few words.
The Hong Kong Trade Development Council's annual dinner has turned into something of a grand institution and one of the key events I believe in the London business calendar. We are all honoured to be here. Congratulations, Chairman Woo, on the 20th anniversary tonight of the first of these dinners. The range of distinguished guests that are here tonight bears testimony to the importance of this event.
The Trade Development Council plays a crucial role in promoting trade to and from Hong Kong. Together with the Hong Kong Economic and Trade Office and Invest Hong Kong Office, it helps maintain Hong Kong's very prominent profile in the UK.
Could I on behalf of the British Government, extend the warmest possible welcome to CH Tung, Hong Kong's Chief Executive. I understand that you have had a very busy schedule here in the last two days: perhaps next time you will be able to find time also to watch your favourite team, Liverpool FC, play football (some might say they have not played for a very long time).
2003 has been a difficult year for Hong Kong in many ways, not least from the impact of the terrible SARS outbreak there, but the way that the economy is getting back is testament to the resilience of Hong Kong and of Hong Kong's people. It is heartening to see that growth forecasts are being revised upwards and that important sectors such as tourism have rebounded very well to that. Hong Kong has much to offer in this area.
I believe that Britain's bilateral relationship with Hong Kong also continues to strengthen. We have the widest range of common interests: in expanding trade and investment in both directions; preserving the environment; countering the threat posed by international terrorism; maintaining good governance and the rule of law and promoting educational and social justice. In all these areas, and many others, Britain and Hong Kong are actively engaged in doing business together and sharing expertise. Together we greatly welcome the closeness of our relationship with the Hong Kong Special Administrative Region Government, which helps us to expand these links.
The closeness of the bilateral relationship is reflected by the continuing high frequency of very senior visits between the UK and Hong Kong. This very morning the Prime Minister and CH Tung met, which the Prime Minister greatly valued. The Deputy Prime Minister is currently in China and will be visiting Hong Kong on Friday. My predecessor as Lord Chancellor had a strong affinity for Hong Kong and was a regular visitor. I hope it is not too long before I am able to visit there myself.
On the trade front, two way trade flows are now running at nearly £9 billion per year. Hong Kong is the UK's 14th largest export market for goods, second only to Japan in Asia. It is also a huge market for us for services - as many of the companies present here tonight will testify. British companies are also major investors in Hong Kong, engaged in all sectors of the economy. I commend the help given to British companies by the Hong Kong Trade Development Council and Invest Hong Kong.
Hong Kong as you know is also vitally important for UK exports to China. Hong Kong agents play a crucial role in China trade, drawing on their knowledge of Chinese business culture and contacts with the mainland on the one hand, and their familiarity with Western business practice on the other.
The UK also continues to enjoy a very high level of inward investment from Hong Kong, in areas stretching from the latest generation mobile phones to the development of UK branded products. We look forward to these mutually beneficial business links continuing to grow.
I am well aware of the continuing close links with Hong Kong in the legal sector, due to our shared heritage of the rule of law, independent judiciary and the tradition of the Common Law. Judges, court officials and lawyers from the UK and Hong Kong are involved in a constant stream of exchanges. They meet to discuss subjects of common interest, to give and receive training and to practise the law. These exchanges benefit both legal professions and enrich our experience. Both legal professions are involved in my own department's Practical Training Scheme for Young Chinese Lawyers and as the Chief Executive says, the UK sends judges to sit as non-permanent judges on the Court of Final Appeal in Hong Kong: in May of this year the appointments of the Lord Chief Justice, Lord Woolf and Lord Scott of Foscote were announced - an indication of the importance to the relationship.
I was also delighted to see the co-operation between the Hong Kong and English legal communities in the seminar hosted in Hong Kong on 20 October by UK Trade and Investment, focussing on the importance of international dispute resolution, and the strengths of both Hong Kong and London in this area. As more and more UK companies aim to develop business opportunities in the growing Pearl River Delta market, the need for experienced arbitration and mediation experience can only increase. Again, the support of the Hong Kong Trade Development Council, in the form of Executive Director Michael Sze, was an important factor in the success of this event. I thank him personally for all he did.
I should like to pay tribute to the work of the British Council in Hong Kong in the field of legal education and legal reform. Over the past four years the British Council and the British Consulate-General have worked together to develop a comprehensive programme including an intensive summer school for undergraduates, professional development seminars for practising lawyers and policy symposia for decision makers within the legal community. The aim is to build up long-standing relationships. These relationships matter so much for London and Hong Kong.
As the Chief Executive said, education links between Hong Kong and the UK remain strong. I am delighted that about 19,000 young people from Hong Kong are currently studying in the UK. They have a lot of choice in the modern world and we value the vote of confidence they give us in our education system. Of the 19,000, some 7,000 are studying in UK boarding schools. Could I also thank publicly Dr Li Ka-Shing for his outstanding contribution to the Chevening Scholarships schemes in Hong Kong and China. This is one of the largest single contributions in the world and one that is very much appreciated. Thank you. With this contribution, we have been able to award a total of 54 Chevening scholarships in Hong Kong this year. The students will return to their own environment as potential leaders in their chosen field.
The British Council is also actively engaged in teaching English in Hong Kong. The Council's English Language Centre there teaches about 40,000 students each year; it remains the British Council's largest such operation in the world.
Six years on from the handover, the bilateral relationship I believe with Hong Kong is in good shape. We continue to have substantial interests in Hong Kong. But as the world moves on, so our relationship must be forward-looking. We want to build on what we have achieved together so far. I have outlined some of those achievements. But I believe, there is scope for future collaboration with Hong Kong in other areas - for example over creative industries and Public Private Partnerships, as well as joint scientific research and technology transfer.
Two of the ways in which the world is moving on are the increasing economic co-operation between Hong Kong and mainland China, and the growing importance of the Pearl River Delta in the global economy. British companies, with their intimate knowledge of Hong Kong, are well placed to benefit from both of these developments. The opportunities created by the Closer Economic Partnership Arrangement can only benefit I believe the Hong Kong economy, and offer the prospect of greater business success for British companies using Hong Kong as the natural gateway to this expanding and increasingly sophisticated market.
Hong Kong is now a part of a rapidly-changing China, which is developing quickly into one of the key international players. I am glad to say that our relationship with China is stronger than it has ever been. The Prime Minister as I have said paid a very successful visit to China, before going on to Hong Kong, in July and we are now working on maintaining the momentum of senior level contacts and looking hard at ways of strengthening these relations even further. I am personally keen to see legal contacts expanding with Hong Kong. But also with mainland China.
Hong Kong of course has a dynamic part to play in our relationship with China. But as we look forward, we do not forget our historic responsibilities towards Hong Kong. We are pleased that the handover went smoothly. Some people in Hong Kong still accuse us of forgetting Hong Kong: others believe that we speak about events there too often. We aim to strike the right balance in a way that helps Hong Kong. The Foreign Secretary continues to report regularly to Parliament on how the 1984 Sino-British Joint Declaration is operating in Hong Kong. I commend these reports to you: they are significant.
Six years on, we continue to assess that, generally, "One Country, Two Systems" is working well in practice. We welcome the fact that the Chinese Government and the Special Administrative Region Government have shown a commitment to making a success of "One Country, Two Systems". There have been occasions when we have had concerns about developments in Hong Kong. On such occasions, we raise these concerns with the SAR Government or with Beijing, as appropriate. Sometimes we speak out publicly, though we do not believe in megaphone diplomacy for its own sake. The most recent concern has, of course, been the national security legislation mandated by Article 23 of the Basic Law. We shared the concerns of many in Hong Kong that the proposed legislation might undermine the rights and freedoms of the people of Hong Kong and lessen Hong Kong's autonomy from mainland China, as allowed under the Joint Declaration and Basic Law. Foreign Office Minister, Bill Rammell, has made no less than five public statements in the last year about this issue. We acknowledged and welcomed the various amendments the SAR Government made to improve the wording, in response to the concerns of the people of Hong Kong. But we are pleased that, following the demonstrations in Hong Kong on 1 July, the SAR Government now intends to consult the people more widely before taking this matter forward again. It is important that the eventual legislation does not undermine the rights and freedoms so clearly cherished by the people of Hong Kong. It is also important that the people perceive this to be the case.
China and the UK have common interests, in a prosperous and stable Hong Kong. But stability does not necessarily mean "no change". The big political question in Hong Kong these days is about constitutional reform. Given my role as Head of the relatively new Department for Constitutional Affairs, I am interested in what may be proposed. I understand that the Basic Law lays down some guidelines about moving towards elections by universal suffrage, but decisions need to be made about the pace of this. Our views on this subject, repeated by our Prime Minister during a speech in Hong Kong in July, are well-known: we hope that there will be early progress towards the Basic Law's ultimate aims of the election of the Chief Executive and all members of the Legislative Council by universal suffrage. But this progress should be at a pace in line with the wishes of the people of Hong Kong. They have demonstrated their interest in this subject and their views will be crucial. We understand that the Hong Kong Government has promised to start the process of public consultation on this issue early next year and we greatly look forward to that.
So, there are important issues facing Hong Kong. It is important to resolve these carefully and to secure the right outcomes. The international community watches what happens in Hong Kong, 'Asia's World City', very closely. That is a dimension that I know the Special Administrative Region Government will always bear in mind.
These are incredibly interesting times in Hong Kong. But we are confident that Hong Kong can overcome the challenges it faces and adjust to the rapid developments going on in the mainland. Hong Kong possesses an excellent soft infrastructure: the rule of law; an independent judiciary; a free press and a meritocratic civil service. Hong Kong will continue to prosper if it nurtures assets such as these. I wish the Chief Executive and the people of Hong Kong the very best of luck in their endeavours.
I am greatly honoured to be here tonight. Thank you very much.