8. In view of the global economic landscape, we need to keep abreast of three major trends and ride on them.
9. First, the unstoppable wave of innovation and technology (I&T) has swept through the world, fundamentally changing the global economic structure and the way we live and consume. The application and omnipresence of communication technology, artificial intelligence and big data have not only spurred the birth of many new industries that operate across industries, sectors and geographical areas, as well as the emergence of the sharing economy, but also revolutionised the traditional and capital intensive business model based on tangible assets. They have generated keen competition along with opportunities for transformation. New technologies facilitate business start-up and foster new ideas, innovative products and services that generate economic benefits. This explains why major economies over the world all strive to develop I&T and regard it as the new driver of economic growth. To stay ahead of the game, we must enhance our I&T environment, attract companies from new economy sectors and research institutions to set up their presence in Hong Kong and nurture talent for a knowledge-based economy.
10. Second, the shift in global economic gravity from West to East is now established. Over the past five years, China has contributed over 30 per cent to the global economic growth and, together with other developing regions in Asia, has made up a share of almost 60 per cent. In the foreseeable future, the developing regions in Asia will continue to drive the global economy. Since the reform and opening up of our country four decades ago, China's economy grew by about 9.5 per cent per annum in real terms on average, and has risen to a US$12 trillion economy last year. Its per capita GDP also increased from just about US$200 in 1978 to over US$8,000 today. The future directions and strategies of our country's economic development have a major global bearing. They are also the linchpin of Hong Kong's sustained prosperity.
11. Third, since the outbreak of the global financial crisis in 2008, there have been incessant protests against free trade and calls for de-globalisation in some advanced economies. Protectionism is also on the rise. The multilateral trade system advocated by the World Trade Organization over the past few decades has encountered enormous challenges. More economies have turned to regional or bilateral trade negotiations for promoting and maintaining their trading activities. While safeguarding multilateral trade, Hong Kong must also strive to conclude more regional and bilateral trade agreements.