Chief executive sees economic development primary goal of HK government

Hong Kong Chief Executive CY Leung said on Wednesday in his first policy address that promoting economic development is the primary goal of the city's government as sustained economic growth is a prerequisite for Hong Kong to tackle housing, poverty, aging population and environmental problems.

"During my term, I am fully committed to the principle of keeping expenditure within the limits of revenues, and to maintaining a business-friendly environment with a simple and low tax regime," Leung, who took office in July, 2012, told the city's lawmakers.

The policy address, broadcast live to the city's 7.1 million population, presents the annual work plan of the Hong Kong Special Administrative Region (HKSAR) government. It also sets out long- term blueprint and objectives for Hong Kong.

Leung said there are currently two major trends in economic development. First, the global economic gravity is shifting to the East. Second, the implementation of the National 12th Five-Year Program (2011-2015) will usher in a new wave of economic development for Chinese mainland.

Regarding the role of the government, he said the city government must be "appropriately proactive" to promote economic development. In cases of market failure, the city government must take appropriate action to address the problem. In the past six months, the city government has taken such actions in a proactive manner, he said.

The National 12th Five-Year Program explicitly supports Hong Kong in reinforcing and enhancing its status as an international financial, trading and shipping centers.

Hong Kong's competitive edge, together with city government's " appropriately proactive" approach, makes Hong Kong well placed to diversify its industries to meet the needs of Hong Kong's people for start-up initiatives, investment, business operation and employment, he said.

Leung said Hong Kong must deepen and expand its industries. For deeper development, Hong Kong must play to its strengths to increase business volume. To expand development, it must diversify the products and services of its existing industries and identify new areas for development.

Leung said he would soon announce the establishment of the Economic Development Council. From a high-level, cross- departmental and cross-sectoral perspective, the council will explore ways to make use of Hong Kong's long-standing advantages and the opportunities offered by the nation.

The council will focus on efforts to broaden Hong Kong's economic base, work on the overall strategy and policy to enhance the city's long-term development and identify industries which present opportunities for Hong Kong's further economic growth.

Under the council, Working Groups on Transportation, Convention and Exhibition Industries and Tourism, Manufacturing Industries, Innovative Technology and Cultural and Creative Industries, and Professional Services will be set up to make concrete recommendations to the city government, he added.

Leung added he had taken into account four factors in drawing up and implementing this policy address.

First, the deep-seated problems of Hong Kong cannot be solved overnight, but Hong Kong needs to grasp the nettle and take the first step to deal with them. Second, the city must act proactively to address the concerns of people promptly.

Third, the city government is determined to deliver results, but Hong Kong people must act with one heart and one vision to tackle these problems. Fourth, some decisions which are fiscal- related will be announced by the Financial Secretary of the HKSAR government in the upcoming budget.