Fostering Economic Flows between Hong Kong and its Hinterland

38.     As a regional financial and commercial centre, Hong Kong must maintain a smooth flow in both directions of economic activity with its neighbouring areas, in particular the Mainland.  Our interaction with other economies generally does proceed smoothly.  With the Mainland, however, the flows, in particular those of people, goods, capital, information and services, still need improvement.  This is the third challenge we face.

39.     As regards the flow of people, the quota system for the Hong Kong Group Tour Scheme was abolished on 1 January this year, following discussions between the Government of the Hong Kong Special Administrative Region and the Central People's Government.  There are now 67 Mainland travel agencies organising tours to Hong Kong, as against four in the past.  The Central People's Government has also simplified the procedures for Mainland visitors to come to Hong Kong on business.

40.     I have already touched upon the subject of goods and capital flows earlier in my speech.  In the field of information, Hong Kong is the telecommunications and broadcasting centre for the region.  We have readily-available information on economic developments in the Mainland. We are the natural base for analysts and investors interested in China.  This creates a clustering effect.  We need to reinforce our advantage in the field of information through upgrading both hardware and software.

41.     As for services, the Government will continue to promote closer connections between these industries in both places.  Our professional services, such as accounting and banking, have gained a foothold in the Mainland.  I am now holding discussions with officials of the Central People's Government on a Closer Economic Partnership Arrangement with the Mainland.  Such an arrangement will greatly enhance the flow of goods and services between the two places.