August heralds the start of the annual consultation exercise for the Policy Address to be announced in October. Over the next few weeks, the Chief Secretary for Administration, the Financial Secretary and I will attend over 30 consultation sessions with various community sectors and opinion leaders. My first session will be held this afternoon.
The backdrop this year is markedly different from that of last year, when the Wall Street crisis had just unleashed the global financial tsunami that engulfed financial markets and severely curtailed business activity.
In view of the massive shockwaves buffeting our economy, I set up the Task Force on Economic Challenges to devise immediate relief measures, as well as longer-term plans to help us turn the crisis into an opportunity.
At that time, I predicted that the impact of the crisis would be huge, and that there was not much room to be optimistic for a quick recovery. So, we initiated a wide range of measures to stabilise the financial system, support enterprises and preserve employment.
In the Budget last February, we adopted counter-cyclical measures by expanding government expenditure to stimulate the economy. In May, we announced further relief measures.
The latest data indicates that both the external and Hong Kong economies have stabilised, and that our stock and property markets have picked up. Yet, it is not entirely clear whether the global economy has really turned the corner.
We must remain cautious and do all that we can to boost economic growth to create a better economic environment for Hong Kong people. This will be the primary focus of my administration in the year to come.
Strong advantages
The four pillar industries that have underpinned Hong Kong�s success over the years - financial services, tourism, logistics, and business support and professional services - still remain strong advantages. But we need to innovate more to retain a sharp competitive edge over other cities in the region.
We also need to broaden our economic base by promoting diversity to add new impetus for sustainable growth. In this context, the Task Force on Economic Challenges had made a number of recommendations for promoting and developing six priority areas - educational services, medical services, testing and certification, innovation and technology, cultural and creative industries, and environmental industries.
The Government has made an initial response and I intend to elaborate on this topic in my next Policy Address.
Hong Kong must further evolve as a knowledge-based economy to grasp the opportunities open to us. While the six priority industries all contribute to the further development of our knowledge-based economy, the Government has to adopt a new mindset and attitude to promote them.
Incentives focus on priority industries
We are studying the Task Force on Economic Challenges recommendations, focusing particularly on promoting these six priority industries through land supply and other incentives.
I hope the community will give their views on how to develop a knowledge-based economy and the six priority industries during the Policy Address consultation. This includes the Government's role in the process and our development strategies.
Past experience has shown that when the economy was thriving, people felt secure in their jobs, while challenging economic times gave rise to social conflict. And, when the economy revives, we can expect to see the unemployment rate drop and wages start to edge up.
On the jobs front, we should remember that major projects such as those under planning in 2007 - including the Guangzhou-Shenzhen-Hong Kong Express Rail Link and the Hong Kong-Zhuhai-Macau Bridge - will get underway this year. They will provide tremendous employment opportunities during the construction phase, and great economic benefits long after completion of the projects.
HK among first to rebound
Given our strong foundations, coupled with the diligence, resilience and innovative abilities of our people, I am confident that Hong Kong will be among the first economies to rebound in the region when the external economic revival takes hold.
Riding out the current economic storm, and charting new directions for our economy, is a collective effort. It is not something that can be achieved by the Government on its own. It requires the input and dedication of every Hong Kong citizen. A tripartite collaboration among the Government, the business sector and the community is vital for our economic development.
I need your help to prepare Hong Kong for a new and diversified phase of economic development. We can create our own opportunities - but only if we prepare for them in advance.
This opinion piece was published in the local English-language press today.
