Address by The Hon Tim Fischer MP, Deputy Prime Minister, Leader of the National Party, Minister for Trade, to the Hong Kong Economic and Trade Office Dinner, Melbourne, 1 July 1997

  Introduction

Your Excellency Mr Hua Junduo, Ambassador for the People's Republic of China; Your Excellency Sir Roger Carrick, High Commissioner for the United Kingdom; Mr Philip Chok, Director of the Hong Kong Economic and Trade Office and our host tonight, ladies and gentlemen.

Early this morning, one of the defining events of this century, took place. Of course, I refer to the fact that for those who don't like the sound of bagpipes, at last Hong Kong and Kowloon will be free of that wailing!

After 156 years of British rule, the United Kingdom returned Hong Kong to China as one of the most prosperous, vibrant and internationally-oriented societies in the world. A proud legacy has now passed to China.

I want to extend sincere congratulations to the leaders of China, and the new Hong Kong Special Administrative Region, who have awaited and prepared for the change.

For Australia, the handover was also a moment of special significance.

Literally millions of Australians have visited Hong Kong. Hong Kong is also home for Australia's largest expatriate community in Asia, with more than 30,000 resident Australians.

Ninety thousand people from Hong Kong have also begun new lives in Australia. They have contributed greatly through their knowledge, skills, energy and commitment, not least in building a bridge between Australia and Hong Kong that has helped strengthen our relationship. I acknowledge and salute your contribution to this country and to this remarkable relationship.

Tonight I would like to set out for you the Government's thinking on why Hong Kong-Australia ties remain so important to us.

Hong Kong and Australian Interests

A few facts and figures tell the story about why Australia has an enduring interest in what happens in Hong Kong.

Hong Kong's dynamism is a major contributing factor to much of this region's, including Australia's, growth.

Hong Kong is the world's eighth-largest trading economy and the single largest source of foreign direct investment in ASEAN and, more broadly, in the APEC region. It is the fourth-largest source of global foreign investment.

Australia has a big stake in the future prosperity of Hong Kong. We have a strong and visible business presence with around 350 Australian companies based there and a further 1,000 with representative offices. The Australian Chamber of Commerce is the second-largest foreign chamber in Hong Kong and the largest Australian chamber overseas.

Hong Kong is the fifth-largest destination for Australian overseas investment. Major Australian investors in Hong Kong employ more than 10,000 people, and include BHP, Pioneer, Leightons, Datacraft, Telstra, National Mutual and the major Australian banks.

Many small and medium enterprises have also shown true entrepreneurial spirit in Hong Kong. They have taken advantage of the opportunities there, as well as tapping into Hong Kong's strengths as the pre-eminent regional financial and trading centre.

The Hong Kong Government, in turn, has shown its commitment to our business links by opening the Economic and Trade Office in Sydney in October 1995. The Office has been facilitating and promoting trade interests between Hong Kong and Australia under the very able guidance of its Director, Phillip Chok. And I thank Philip for inviting me here tonight.

Hong Kong's open economy makes it an invaluable trading partner for Australia. In 1996, Australia and Hong Kong had two-way trade of AUD 3.9 billion, making Hong Kong our eleventh largest trading partner. It is a growing market for Australia's services exports and our exports of elaborately transformed manufactures (ETMs). It is an important source of tourists and overseas students.

The story of Australian trade with Hong Kong is therefore an extremely successful one. The Government is keen, as is business, to see that success continue.

Opportunities from the Transition

In the lead up to the handover, Hong Kong sent one message louder and more clearly to the world than any other. And that message was that it will be "business as usual" in Hong Kong right through and beyond the transition.

It is a message that has enjoyed the bipartisan support of the outgoing Government and the Chief Executive, Mr Tung Chee-hwa.

It is a message that has been sent by the Chinese Government in many official statements.

We are hearing this message from the buoyant Stock Market's Hang Seng Index as well as from still rising property prices. Its also what we are hearing from Australian businesses in Hong Kong.

The Government's assessment is that the indicators are very positive. Much of the source of optimism comes from Hong Kong's remarkable economic flexibility, and its celebrated ability to find the new opportunities presented by changing circumstances.

We've seen plenty of evidence of that flexibility over the last couple of decades.

Services are now the dominant and fastest-growing sector of the Hong Kong economy, contributing 84% of GDP in 1995. This trend will be reinforced by the Hong Kong Trade Development Council's plan to promote Hong Kong internationally as the services hub of Asia.

Moreover, Hong Kong's role as a trade and investment gateway between China, the Asia-Pacific, and the rest of the world has driven its structural transformation, and turned it into the regional financial and services centre that it is now.

Economically, its closer links with China will offer even greater opportunities to this business-hungry community, including Australian business. Today, Hong Kong provides design, management, technology, finance, marketing, transport and communication services which have assisted the rapid economic development of the Chinese hinterland.

Hong Kong's role has been particularly important in southern China, where Hong Kong companies now account for 80% of foreign direct investment approved in Guangdong Province, and employ around five million people.

Hong Kong is China's second-largest source of imports and its largest export destination, playing a crucial role as a transhipment port for much of China's trade with the rest of the world. Hong Kong and China are each other's largest investors, underlining the extent of economic interdependence.

This mutually beneficial economic relationship will be given a boost by the increased level of cooperation between Hong Kong and China which is heralded by the return to Chinese sovereignty.

Hong Kong's Spirit Must be Kept Alive

Continuing to nurture the dynamism of Hong Kong is the key to the success of the handover.

Our policy approach, therefore, is centred on the undertakings, made in the 1984 Sino-British Joint Declaration and in China's Basic Law for Hong Kong, that Hong Kong will enjoy "a high degree of autonomy" in all matters except foreign affairs and defence, and that Hong Kong's way of life and its economic and social systems will remain unchanged.

The Australian Government has maintained close and regular contact with all parties directly involved in the transfer of sovereignty - China, Britain and Hong Kong.

This has been to ensure that the nature and extent of Australia's strong consular and commercial interests in Hong Kong are well understood and appreciated. We have underlined the importance to our interests, and to Hong Kong's continued stability and prosperity, of a smooth and successful transfer of sovereignty.

This will require the maintenance of Hong Kong's free and open economic and social systems, assets that underpin Hong Kong's economic success. It will involve the continuation of the rule of law and the free flow of information; an independent judiciary; and democratic political institutions. We look forward to early elections for a new Legislative Council and welcome China's assurances that this will happen before July 1998.

Australia's interests will be best served by the full implementation of the undertakings about Hong Kong's future made in the Sino-British Joint Declaration.

Our own preparations for the change have included an assessment of all aspects of our relationship with Hong Kong. A review of all multilateral and bilateral treaties with Hong Kong, China and Britain, has ensured that the legal framework of our relationship with Hong Kong is sound.

Since the signing of the Joint Declaration we have concluded four bilateral agreements with Hong Kong - in the areas of Investment Protection and Promotion, Air Services, Mutual Legal Assistance in Criminal Matters, and the Surrender of Accused and Convicted Persons.

China has endorsed these agreements through the Sino-British Joint Liaison Group, which will ensure their application after the transfer of sovereignty. The Overseas Missions (Privileges and Immunities) Act 1995, will enable the continuation of Hong Kong Government economic and trade representation in Australia beyond the transfer of sovereignty. The Government has also successfully negotiated with China an agreement to ensure Australia's continued consular representation in Hong Kong from today.

Australia has announced that it will provide recognition of the new Hong Kong SAR passport. And the Chinese and Hong Kong Governments have confirmed publicly that Australians will continue to enjoy 90 days visa-free entry to Hong Kong.

Conclusion

Ladies and gentlemen, Australia's counts itself as one of Hong Kong's long-term partners and one of Hong Kong's long-term friends. We have done much together in the past and, for Australia's part, are committed to doing more together in the future. We also want to continue our work together in APEC and the WTO to open markets and develop trade.

Most importantly, we want to encourage the further development of the strong ties that bind the people of Australia and Hong Kong - links that add depth to our relationship.

So tonight Hong Kong and its people have not just our best wishes, they have a commitment of support from a friend through all of the excitement, challenge and opportunity that lies ahead.