Symposium on the Financial Exchange and Cooperation of Fujian, Hong Kong and Taiwan
Speeches
08 Aug 1998
Symposium on the Financial Exchange and Cooperation of Fujian, Hong Kong and Taiwan
David Carse, Deputy Chief Executive, Hong Kong Monetary Authority
Ladies and Gentlemen,
- I am pleased to be here this morning to welcome you to this
Symposium. The Chinese Banks' Association is to be congratulated
for organizing this important initiative with the co-sponsorship of
the Fujian Provincial Government and Chinatrust Commercial Bank.
The idea of the Symposium, as I understand it, is to facilitate the
exchange of ideas concerning the financial industries in the three
regions and the exploration of cooperative opportunities between
them.
- Such an initiative could not have come at a better time. The
current financial crisis is creating havoc among the Asia
economies. Initially, the damage was felt in the financial sector.
But the full impact is now being seen in the real economy as output
and trade are crippled by higher interest rates, the burden of
foreign currency borrowing and the credit crunch. The Mainland of
China, Hong Kong and Taiwan have survived the crisis in better
shape than most other economies in the region. But they have not
been unaffected as events of this week have demonstrated in Hong
Kong where we have witnessed further speculative pressure on the
Hong Kong dollar.
- In this kind of uncertain economic environment, it is all the
more important that we should be trying to maximize the
opportunities to develop trade and investment links between
neighbouring economies. That is why this Symposium is timely and
important. The existing economic links between Fujian, Hong Kong
and Taiwan provide a solid platform on which to build for the
future. Taiwan and Hong Kong are already major trading partners
with Taiwan*s exports to Hong Kong accounting for 23.5% of its
total exports in 1997. Visitors from Taiwan also account for a
significant proportion of the total number of visitors to the
territory and thus make a major contribution to the tourist
industry in Hong Kong which, as you will know, currently needs all
the help it can get.
- Trade between Hong Kong and Fujian is also growing rapidly in
both directions and both Hong Kong and Taiwan are a major source of
overseas investment into the Province. There are over 10,000 Hong
Kong enterprises in Fujian.
- The Hong Kong presence in Fujian includes a number of banks
from Hong Kong, including Bank of East Asia. The same bank also
maintains a branch in Taiwan which puts it in a good position to
take advantage of the triangular trading links between Fujian, Hong
Kong and Taiwan. In its role as an international financial centre,
Hong Kong is also the host to a number of banks from Taiwan. The
Taiwanese presence here consists of 4 licensed banks, 2 restricted
licensed banks and 3 representative offices. There are also a
significant number of other Taiwanese banks which have expressed
the intention to establish representative offices here. We are
processing these applications in an orderly fashion on a
"first-come first-served" basis. It has long been our policy not to
allow in too many banks from the same region or country too
quickly. As in the case of the Japanese regional banks and the
Korean banks we therefore operate a queuing system. I know that
this can sometimes be frustrating to those who are at the back of
the queue. But I would like to made it clear that these is no
reluctance on our part to admit banks from Taiwan, as the existing
presence here clearly demonstrates. I am sure that Dr Jeffrey Koo
will also testify to this.
- Hong Kong is currently going through tougher times as a
financial centre. Some foreign banks have cut back their lending
here and a few banks have actually left. This has reflected
problems back home rather than discontent with Hong Kong. However,
it is true that Hong Kong must reduce the cost of doing business in
order to remain competitive, and that is why the current fall in
property prices and rents, while painful, is also necessary. I am
confident that Hong Kong will emerge from the current crisis with a
better-balanced economy and with even stronger fundamentals. Above
all, it can continue to rely on its main strategic advantage as a
financial centre - namely, its proximity to the Mainland of China.
This places it in an ideal position to intermediate the trade and
investment flows between places like Fujian and Taiwan.
- In conclusion, I would like to repeat my welcome to you and to
express my hope that your discussions today will lay the foundation
for even greater cooperation between Fujian, Hong Kong and Taiwan
in the future.