Hon Helen Clark
Speech Notes

Speech for Reception and Luncheon hosted by the Hong Kong Trade Development Council

NEW ZEALAND AND HONG KONG
ASIA-PACIFIC PARTNERS

My thanks go to the Hong Kong Trade Development Council for hosting this luncheon for us today. This is my first visit to Hong Kong as Prime Minister. It is also the first visit by a New Zealand prime minister since Hong Kong became a special administrative region in 1997, and the first New Zealand prime ministerial visit since 1994.

Clearly a visit at this level is overdue. I myself did visit Hong Kong twice as Leader of the Opposition in 1994 and 1997 and had the opportunity to meet decision makers and opinion leaders then, and since as they have visited New Zealand.

New Zealand’s Economic Direction

Our government took office in New Zealand in December 1999. Our economic policy is firmly focussed on the economic transformation necessary to sustain for us first world living standards in the 21ST century.

In the year to December New Zealand achieved 3.4 per cent economic growth. Business and consumer confidence has been high, but has more recently been affected by the reports of slowdowns in our key trading partners.

Unemployment stands at 5.6 per cent, its lowest level since mid-1988. Our exchange rate is highly competitive and has helped fuel an export-led boom. The fiscal position of the government is sound, and the current account deficit is diminishing.

These positive indicators, however, have not induced complacency at government level. Our economy retains too many “old economy” characteristics which leave it too dependent on good weather for farm production, good commodity prices, and a competitive currency. All these factors are beyond our control. Our task now is to work in partnership with our business community, our educational and research institutions, and our regional economies to build an economy driven more by education, skills, science, research, technology, innovation and entrepreneurial activity.

Like Hong Kong therefore, New Zealand is gearing up to ride the knowledge wave. We are one of the world’s best connected nations, with advanced communications systems and high information technology literacy. The government has taken the lead in promoting a national e-commerce strategy, and is shortly to launch its e-government strategy. Priority is being given to digital opportunity initiatives in our schools.

Like most developed nations we are seeking to improve the interface between our tertiary education and research institutions and the business world. It is important that we commercialise more of our discoveries and inventions in New Zealand. New policies for incubator support and seed capital will be announced shortly. We are borrowing ideas from the innovators in Singapore, Israel, Silicon Valley- indeed from wherever we can -, adapting them to NZ conditions, and applying our own creative thinking on how to move ahead. We have also recently improved the tax treatment of research and development expenditure.

Our government is keen to attract more high quality foreign direct investment to New Zealand to develop key industries. We have welcomed recent major investments such as Shell and Norske Skog in our energy and forestry industries, and Ericsson in wireless technology. We are actively seeking increased investment in our wood processing industries.

Our government is keen to work alongside both overseas owned and local businesses to foster growth and innovation in the New Zealand economy. A new agency, Industry New Zealand, is working to foster business and industry growth and investment, and works in parallel with Trade New Zealand’s export boosting activities.

Our desire to boost government-business partnerships and to take a New Zealand Incorporated approach to our economic relations with other nations has led to a delegation of senior business leaders accompanying me on this visit to Hong Kong and on to China. Others were also with us in Japan from where we have just come. Our delegation represents a wide range of sectors, reflecting the growing diversity of New Zealand’s trade profile. It includes areas New Zealand is already well known for in Hong Kong, such as the primary sector and tourism, as well as education, including education software and publishing, and insurance and financial services.

New Zealand and Asia

New Zealand’s links with Asia go back a long way. Chinese people first came to New Zealand in the 1860s goldrush, to what was known as “new gold mountain” after the “old gold mountain” rush in California. The 1990s brought many new Chinese migrants, especially from the People’s Republic of China, Hong Kong, and Taiwan. The Chinese community is now one of the largest minority ethnic groups in New Zealand. It is making a valuable economic contribution and is enriching our cultural and social development.

New Zealand also had ties with other Asian countries, based on security. The New Zealand military were engaged in the conflicts in Korea, Malaya and Vietnam. In the latter part of the 20th century New Zealand’s economic orientation shifted to the Asia Pacific. Opportunities have been actively sought with the dynamic Asian economies, like Hong Kong’s. Now six of New Zealand’s top ten trading partners are in the region.

In recent years our relationships with Asia have been reinforced by both migration and by more New Zealanders travelling, living and working in Asia. One in eight Aucklanders now is of Asian origin. One-third of Auckland University students identify as Asian.

We live in a global labour market in which skills and entrepreneurial flair are at a premium. Just as talented New Zealanders are recruited by other nations, so we must seek to recruit the talented citizens of other nations. For the coming year, we have lifted our target number for skilled and business migrants to 27,000 and certainly hope to increase interest in Hong Kong, which is currently our eleventh largest source of migrants.

We are also actively seeking new, open, trade relationships.

Last year we concluded a comprehensive closer economic partnership with Singapore. It is our hope that a similar arrangement with mutual advantage can be concluded with Hong Kong and that is a subject for my discussions here. At the regional level, New Zealand supports linkages between our CER agreement with Australia and the ASEAN free trade area.

The new arrangement we have with Singapore offers good opportunities for New Zealand business in the services sector. There is also scope to harmonise our business environments. Momentum has been created for more trade and investment between us. Our agreement should be seen as a building block in the APEC region’s efforts to meet the Bogor goals for trade and investment

New Zealand and Hong Kong

New Zealand enjoys a close relationship with Hong Kong. At the political level we welcome frequent high level contacts between us. There have been several ministerial visits from our new government over the past sixteen months. Chief executive Tung Chee-Hwa visited New Zealand several times. Chief Secretary, Mrs Anson Chan, came last year. In a couple of months we are expecting Mrs Fanny Law, Hong Kong Education Secretary, and we hope that Sir Donald Tsang will be able to visit in the not too distant future.

Hong Kong and New Zealand have worked together well on APEC and WTO issues. We wish Hong Kong well in its task as chair of the preparatory process for the Qatar WTO ministerial meeting. Like Hong Kong we hope that a new WTO round will be launched at Qatar.

In trade and economic terms Hong Kong is a very important market to New Zealand. It is currently our seventh largest export market. Our two-way trade last year was over $NZ940 million. New Zealand’s exports to Hong Kong increased by 29 per cent in NZ dollar terms in 2000.

Hong Kong is also New Zealand’s sixth largest source of foreign investment at well over $NZ1 billion last year. Companies based in Hong Kong with investments in New Zealand range from very large corporates to family companies, including many companies with interests held by Hong Kong residents who have migrated to New Zealand in recent years.

Clearly Hong Kong’s economic prospects are closely linked to those of China. Hong Kong is a very important source of support for China’s economic modernisation programme. Hong Kong will continue to play a pivotal role providing services for New Zealand businesses in the China market after China’s entry into the WTO. We look forward to strengthening ties with Hong Kong as a facilitating centre for our trade with the mainland.

Our New Zealand-Hong Kong economic relationship is diversifying into new areas. Traditionally food, fish and forestry products, have been prominent among New Zealand’s exports, but our expertise in environmental technology, clean-fuel transport, and software is also attracting investors. I believe that the Hong Kong delegation that came with Mrs Anson Chan last November was impressed by New Zealand’s IT companies and expressed the belief that there were new opportunities for New Zealand companies to work with Hong Kong IT developers.

In tourism, Hong Kong is an important source of overseas visitors to New Zealand. Since 1998 holders of Hong Kong Special Administrative Region and British National (Overseas) passports have been able to visit New Zealand visa-free.

Significant numbers of Hong Kong students are studying in New Zealand. The visit by the Secretary for Education, Fanny Law, later this year will be another opportunity for us to discuss ways of further enhancing co-operation in education. Today I am opening a New Zealand education fair in Hong Kong as part of our bid to attract a greater share of the Hong Kong overseas student market. New Zealand offers top quality education in the medium of the English language, which is greatly prized in Hong Kong. By world standards we are a safe and friendly society for student visitors, and we are very price competitive.

Recently New Zealand and Hong Kong launched a working holiday scheme for young people. Hong Kong’s young people can holiday in New Zealand and gain work and English language experience during their stay. Young New Zealanders can holiday and work in Hong Kong. More exchanges of young people will lay the solid foundation for future links between us. Already Hong Kong is the base for the largest community of New Zealanders living in Asia. New Zealanders hold prominent positions in the legal profession, the media, industry and medicine here.

In this visit I seek to reaffirm New Zealand’s commitment to close ties with Hong Kong. We have a strong and positive interest in Hong Kong’s success, as we hope Hong Kong has in ours. We look forward to working with Hong Kong on bilateral, regional, and global trading issues and hope that in the not too distant future a closer economic partnership will strengthen the ties which bind us.

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