Hong Kong is enviably located at the rim of the fastest growing economy of the world - Mainland China, and more importantly, we are strategically right at the doorstep of the Pearl River Delta, which some people call the "factory of the world".

There are, indeed, few places where a developed city economy like Hong Kong could have such a vast hinterland feeding its growth. Just think of the millions of tonnes of goods that need to be transported from southern China to the rest of the world. And Hong Kong handles 70% of those goods through our port.

The Closer Economic Partnership Arrangement - or CEPA - which we have just signed with the Mainland, is expected to fuel further growth for Hong Kong. And we don't just sit on our laurels although we are rightly proud of our one-and-a-half-century old maritime heritage.

Strong collaboration between Gov't, private sector

We have flourished as a premier hub port in the region over the years, not only because we have a deep and sheltered harbour, but also because the Government believes in providing the necessary infrastructure and favourable environment for businesses to flourish with minimum regulations. The spirit of collaboration between the Government and the private sector is firmly rooted here.

Last year, Hong Kong handled a world-record throughput of 19.1 million 20-foot-equivalent units, or TEUs,  and has been the world's busiest container port for nine out of the past 10 years. Thanks to your support, we have 370 liners services per week to over 500 destinations in the world.

Our shipping and maritime sectors have been progressing with matching success. The growth of our Shipping Register is an example of our achievements. We established in 1990 an autonomous Hong Kong Shipping Register. And as you all know, after Hong Kong returned to Chinese sovereignty in 1997, private shipping and related business such as shipping management and shipping registration, continued to operate freely in Hong Kong.

Cost savings boost register's competitiveness

We are committed to enhancing the competitiveness of the Hong Kong Shipping Register, that is, we have reduced the registration fee of the register and introduced a simplified but still rigorous survey for the joining vessels. These measures have provided significant savings for shipowners and ensured that our fleet attains the highest international safety standards.

We monitor the quality our fleet through the Tokyo Memorandum of Understanding on Port State Control in the Asia Pacific Region's Computerised Information System and give advice to shipowners in meeting port state control requirements.

As a result, the registered tonnage has made double-digit growth in the last five years. The register has grown from 484 vessels with 5.7 million gross tonnes in 1997 to 832 vessels with 18.5 million gross tonnes this year. This makes our register one of the top 10 shipping registers in the world. We hope that the register will cross the 20 million gross tonnes' mark by next year.

We are also extremely proud of our shipowners. Currently, we are the 7th largest shipowning and ship management centre in the world, controlling about 8% of the world's tonnage, at 36 million gross tons. Furthermore, we have about 800 shipping-related companies operating in Hong Kong, providing high quality maritime finance, insurance, legal, arbitration, brokerage, ship management, ship registration and ship surveying services.

Comprehensive ship finance services available here

As a leading financial centre in Asia, Hong Kong provides comprehensive ship finance services to the shipping industry. On marine insurance, all of the major P & I Clubs have offices in Hong Kong and most companies have obtained licences from the Insurance Commission to conduct underwriting business in Hong Kong. Your forum has also supported us through the establishment of the Asia Marine Consortium in Hong Kong in 1999, offering an Asian hull insurance facility to Asian shipowners.

Hong Kong is also the regional base for many of the world's largest shipbroking companies. Hong Kong shipbrokers are accredited to international bodies, such as the Institute of Chartered Shipbrokers and the Baltic Exchange.

Our Arbitration Ordinance is recognised as one of the most advanced arbitration statutes and our maritime legal service provides comprehensive support to the arbitration process. Moreover, Hong Kong's empathy with the Asian value of mediation and its skill at blending the best of East and West have made Hong Kong the prime arbitration centre in Asia for the resolution of disputes. With our long common law tradition, Hong Kong is also home to many of the world's top international shipping law firms.

New bodies help shape future of HK's industry

Recognising the importance of the shipping and maritime sectors to Hong Kong's economy, and to further affirm the Government's determination to work with the private sector to enhance the attractiveness and competitiveness of Hong Kong's maritime industry, we reorganised the Hong Kong Port & Maritime Board into two separate bodies this year.

The Hong Kong Maritime Industry Council and Port Development Council have been set up in June this year. The MIC is a high-level industry-specific body with a mandate to advise the Government to formulate and implement measures to further develop Hong Kong as an international maritime centre. Members of the MIC are appointed by the Chief Executive.

The other advisory body, the Hong Kong Port Development Council, advises the Government on the port development strategy and port planning.

The Maritime Industry Council held its first meeting in July and agreed to take forward a number of initiatives to enhance Hong Kong's attractiveness as a base for international maritime enterprises and services. These include:

* promoting Hong Kong as a gateway to China, drawing on our strengths and advantages;

* speeding up the negotiation of double-taxation agreements relating to shipping or related aspects with other countries;

* raising the public perception of the professional standing for the industry and divising sector-by-sector improvement measures.

Our objective is to elevate the status of Hong Kong as an international maritime centre.

Council to focus on meeting manpower demand

The industry council will also focus on the education, training and manpower supply in the maritime sector to ensure that we have a continuous supply of well-trained men and women to rise up to the managerial positions.

We will work hand in hand with the industry to create incentives to attract more young people to obtain sufficient sea-going experience and qualifications so that they may take up shore-based managerial positions later.

Currently, our maritime training programmes are provided by different institutes, such as the degree course in International Shipping & Transport Logistics conducted by the Hong Kong Polytechnic University and the diploma course in Maritime Studies run by the Seamen's Training Centre.

The industry council will examine ways to improve coordination and utilisation of resources across the maritime educational bodies to meet the manpower demands of the industry.

Measures aim to raise HK's maritime profile overseas

The industry council's first promotional effort overseas is to take part in an international shipping event - the Seatrade in London in September 2003. As an indication of the importance we attach to participating in the event, I will personally lead the Hong Kong delegation. We will also take part in Posidonia 2004 in Greece.

We are fully aware of the importance of a favourable business environment to the development of the shipping and maritime sectors. We are committed to maintaining a level playing field for businesses and protecting our fundamental strengths such as a clean government, a sound legal system, a robust financial market, a low tax regime.

We will make every effort to enhance cooperation with the international shipping community in making Hong Kong a pre-eminent international maritime centre in Asia.

In concluding, I would like to congratulate the Hong Kong Shipowners Association for hosting this great event in Hong Kong. I wish you continued success in building the Forum into a representative body for Asian shipping. To our distinguished delegates, I hope you will enjoy your stay here and be able to find time out of your busy schedule to enjoy this vibrant city which is Hong Kong.

The Secretary for Economic Development & Labour gave this address at the luncheon of the 12th Asian Shipowners' Forum.