Closing the gap: Acting Chief Executive Rafael Hui says Hong Kong should enhance its role as a bridge between the Mainland and the world.

Acting Chief Executive Rafael Hui says Hong Kong should take advantage of its geographical position and enhance its role as a bridge between the Mainland and the world to maximise its strengths.

Speaking at an economic seminar today, Mr Hui said there are three ways Hong Kong can strengthen its connections with the Mainland and engage itself globally.

They include:

* encouraging Mainland enterprises to use Hong Kong as their base to explore international markets;

* providing services to support regional commercial co-operation; and

* helping Mainland enterprises to find venture capital.

Mr Hui said one of the key priorities of the Government's work is to attract overseas and Mainland enterprises to invest in Hong Kong.

"With our world-class international business environment and other supporting facilities, Hong Kong has become a popular investment destination for various Mainland enterprises," he said.

Springboard for Mainland companies

"In recent years, Hong Kong has been a springboard for Mainland enterprises to expand their business into the global market. To further promote economic integration between Hong Kong and the Mainland, we must introduce Hong Kong's diversified services into the Mainland."

The Government has been promoting Hong Kong's service industry on the Mainland through the Closer Economic Partnership Arrangement which makes it easier for Hong Kong enterprises to enter the Mainland market.

Mr Hui said the Government will continue to nurture scientific and design talent. "The production cost is relatively high in Hong Kong, which lowers our competitiveness on prices. To stand out, we must increase our competitiveness on quality. We must develop value-added products and services with innovative technology, high-value added content and substantial intellectual property input."

With a flexible and stable financial system, as well as a regulation system of international standard, Hong Kong should use its international financial status to help Mainland corporations find financing, Mr Hui said.

Up to the end of 2005, 335 Mainland corporations had been listed in Hong Kong and had raised more than $1 trillion since 1993.

More Mainland capital expected

Mr Hui expected that more and more capital from the Mainland will be transferred overseas for investment as the Mainland allowed its money - including insurance companies and China National Social Security Fund - to invest overseas. More opportunities are anticipated for Hong Kong to co-operate with the Mainland in financial services.

He said it is essential to consolidate Hong Kong's role as an international commerce, information, finance and services centre when advancing trade co-operation with the Mainland.

The Government will continue to strengthen Hong Kong's position as the freest economy for business and the best market for the Mainland and overseas investors, he added.