There are already encouraging signs of a pick-up in visitors to Hong Kong following the launch last month of a tourism promotion programme. While the long-haul markets will take some time to return to normal, we have seen the quick return of Mainland visitors, the Secretary for Economic Development & Labour says.

Speaking at the 43rd annual general meeting and members' luncheon of the Federation of HK Industries, Stephen Ip - who is also Acting Financial Secretary - said the Government moved quickly to offer assistance when the tourism sector was hit by the SARS outbreak.

This took the form of low interest loans, waivers of Government fees and charges and funds set aside to help relaunch the economy, he said.

The tourism comeback plan was announced last month, immediately after the World Health Organisation removed Hong Kong from its list of SARS affected areas.

The Hong Kong Tourism Board has since rolled out a nine-month campaign featuring a series of world-class events and worldwide publicity.

"The objective is to bring visitors back to Hong Kong and, in so doing, reassert our image as one of the region's premier tourist destinations," Mr Ip said.

The campaign includes activities such as a two-month shopping and dining festival with special offers and a lucky draws. Other events include an international fireworks competition in October, and a spectacular harbour lighting show in December.

A series of world-class sport, entertainment and cultural events will also be brought to Hong Kong - including the visits of Liverpool, Real Madrid and Victoria Beckham.

'Individual visitor' arrangements will buoy tourism

Mainland arrivals last month increased by 51% compared to May 2003, and by 11% over June last year. This clearly indicates the pent-up demand that has built up over the past few months, Mr Ip said.

To capitalise on this demand, new arrangements have been put in place for 'individual visitors' from four cities in Guangdong.

Current estimates are that up to 1 million people may come to Hong Kong from these four cities under this new scheme in the first year. The scheme is expected to be extended to cover the whole of Guangdong -  which has 86 million people - by July 2004.

"In the short term, we hope that a quick tourism recovery will help to re-energise other sectors and thus propel overall economic recovery.

For example, our hotel occupancy rate has risen quickly, from a low of 10% during the worst of the SARS crisis, to 30% or more in June and now to about 60% in the past two weeks," he said.

New attractions under development

There is good progress on the Hong Kong Disneyland, Tung Chung Cable Car and the Wetland Park in Tin Shui Wai, all of which are scheduled to be completed in 2005.

The Avenue of Stars, another new tourism product to come on stream early next year, will enhance Tsim Sha Tsui's attraction as a tourism hub.

These two projects, together with the former Marine Police Headquarters development, are good examples of partnership between Government and the private sector, Mr Ip said.

Logistics remain a key Hong Kong advantage

The logistics sector accounts for 4.8% of Hong Kong's Gross Domestic Product and provides more than 200,000 jobs, or 6.3% of the workforce, he noted.

"Modern logistics is as much about communications as it is about physically moving merchandise. So the Government has invited proposals for the development of a Digital Trade and Transportation Network System to enhance the overall competitiveness of our logistics industry. This project is accorded the highest priority and our aim is to bring the DTTN initiative online as soon as practicable," he said.

Next week, the first berth of Container Terminal 9 will come on stream. Upon completion of the remaining five berths by 2005, Hong Kong's container-handling capacity will be further enhanced.

A study to develop a master plan for Hong Kong's port development in the coming 20 years and beyond has been commissioned and is scheduled for completion in late 2003.

Co-operation with the Mainland

Enhancing physical connectivity with the Mainland remains high on the Government's agenda, Mr Ip said. In 2002, improvements were made to extend the operating hours of the Lok Ma Chau Boundary Control Point and enhance its throughput, reducing costs for the logistics industry.

Looking ahead, the completion of the Shenzhen Western Corridor will provide a significant boost to our capacity to handle cross-boundary vehicles.

The Government is also committed to pursuing a bridge linking Hong Kong, Macau and Zhuhai as a priority project. We are also building an additional bridge between Lok Ma Chau and Huanggang.

Closer Economic Partnership Arrangement to boost economy

The recently-signed Closer Economic Partnership Arrangement with the Mainland will allow Hong Kong companies to set up wholly-owned enterprises to provide logistics services in the Mainland, international ship-management services, storage for international maritime freight, container station and depot services, and non-vessel operating common carrying services.

"They can set up wholly-owned shipping companies and will enjoy greater flexibility in the handling of empty containers. Since China has not made any WTO commitments in respect of logistics services and maritime transport services, Hong Kong companies operating businesses under CEPA will enjoy unique advantages," Mr Ip said.

He added that Hong Kong hotels and restaurants will be permitted to operate in the form of sole ownership in the Mainland, and travel agents will be able to set up joint venture arrangements with Mainland operators without geographical restrictions to offer both inbound and domestic tours throughout the Mainland.

"I trust you will agree that CEPA will bring many new business opportunities to Hong Kong, facilitate our economic recovery, and boost investment between the Mainland and Hong Kong," he said.

"I would also emphasise that all our efforts will be in vain if the private sector does not make the most of the opportunities available."