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Meeting with Thai Customs in Bangkok, Thailand

11 August 2000

Ladies and Gentlemen,

Good afternoon.

I am delighted to be here again in Thailand. I have made numerous visits to Thailand in the past, and I never seemed to have enough time to soak up all the sights and sounds of your beautiful country. I must work out some sort of secondment arrangement with your administration here to fulfil my long sought-after dream of actually living in Thailand for a sustained period of time.

The purpose of my visit this week is to meet with your customs authority, to share with them the latest developments in Hong Kong and to see how we can deepen even further our already strong working relationship. As you may be aware, we have a long history of solid cooperation going back a number of decades. And you would be pleased to know that we have had fruitful discussions on this occasion. We have covered a range of subjects, concentrating particularly on the narcotics front. We have identified new opportunities of cooperation and we will seek to ensure that we will take full advantage of our working together.
This lunch is a real bonus for me, and I am grateful to the colleagues of the Hong Kong Economic and Trade Office in Singapore in organizing this distinguished gathering. What I would like to do today is to share with you some of my views on anti-narcotics trafficking, recent developments in the Hong Kong economy and what we are doing to attract investments through trade facilitation.

Anti-Narcotics Trafficking

During my short stay, I have seen your customs authority at work. I am greatly impressed by the vigorous actions taken by your government in preventing and suppressing unlawful cultivation, manufacture and trafficking of drugs. I have seen for myself how the former opium poppy fields have now turned into corn, tea, coffee and cabbage plantations over the Golden Triangle area. The opium poppy replacement scheme and the various related campaigns have changed the global drug scene. This remarkable success serves as a model for other countries to emulate. I must congratulate you and your customs administration for the excellent work that you have undertaken in the effective suppression of narcotics trafficking in Thailand.

A healthy and stable society is an essential element for sustained economic prosperity. Drug usage brings to a society a complex web of problems. Hong Kong is no exception. We have suffered through a difficult period in the past, but I am glad to tell you that the drug abuse trend in Hong Kong has been diminishing since 1994. The overall number of reported drug abusers has dropped by 20% from some 20,000 in 1994 to 16,000 in 1999. It is also heartening to see a substantial drop in the number of young drug abusers under 21 years old in the same period. These are encouraging results which have been accomplished by the employment of stringent measures at both the supply side and the demand side.
Besides the implementation of a comprehensive domestic program, we take great pride in our work with overseas administrations, like the Royal Thai Customs. The drug problem is not unique to any people or any specific part of the world, nor is any administration in a position to deal successfully with this problem in isolation. It is, therefore, our policy to accord emphasis to inter-agency cooperation between administrations, and the results have been fruitful. The record interception in Japan of 616 kg of "ice" with the arrest of twelve culprits and the neutralization of a drug syndicate in the USA with a total seizure of some 200 kg of cocaine both taking place last year are two of the many successful examples of our active participation in combating transnational drug trafficking.

We have also assisted overseas authorities in confiscating multi-million dollar drug proceeds. In recognition of our effort in a specific case, the US government shared with us in June this year some US$ 900,000. Furthermore, our comprehensive anti-narcotics regime has drawn kudos from the White House drug czar, General Barry McCaffrey, who made an open commitment to recommend the removal of Hong Kong from the list of "Major Drug Transit Centres" in the US President's International Narcotics Control Strategy Report.

We have made good achievements so far in the war against drug trafficking, but there is no room for complacency. There are new challenges ahead, and in particular, the growing popularity of synthetic drug abuse in our region has caused us tremendous concern. There is a need to call for even greater inter-agency cooperation when this problem is still manageable. We are totally committed to playing an active role in this direction, and we know we can count on your administration to work with us in fighting for a better future for our children.

Hong Kong Economy

Moving on to the Hong Kong economy. Indeed there are encouraging signs of recovery three years after the outbreak of the Asian financial crisis, and the regional rebound is gathering momentum. I am pleased to note that, after a painful period of economic adjustment, the stage is set for Hong Kong to achieve stunning economic gains in the year 2000. In the first quarter this year, Hong Kong registered a spectacular GDP growth of 14.3% and the second quarter would also probably bring double digit growth. An overall growth rate of 6% has been projected for the full year. Many forecasters have indicated that our projection rests heavily on the conservative side, but for an externally oriented economy like Hong Kong, I think it is a virtue to operate in a conservative manner, but we would make the necessary modifications when more data become available later this month.

As a result of this economic optimism, bilateral trade between Thailand and Hong Kong in the first five months of this year also saw a rise of 21.3% over the same period last year. This is substantial compared to the 3.6% growth for the period between 1998 and 1999.

The quick recovery of Hong Kong has much to do with the solid fundamentals of our economy. We have totally free trade in a textbook market setting, level playing field for all, a low and simple tax regime, and unfettered flow of information. We also have an accountable, clean and business-friendly civil service, buttressed by the rule of law and an independent judiciary.

The pains of the economic malady are now history. The Hong Kong business sector is busily diversifying into the "new economy" with a massive rush recently of dot-coms setting up in Hong Kong. There are many theories on the strengths and weaknesses of the new companies and there is still no consensus on their state of health. However, it is certain that one of the most significant developments in reshaping our economy in this new century will be the power of innovation and technology, and high profile projects, such as the Cyberport, would certainly add fuel to our future economic growth.

In building this new platform, we are seeking to encourage innovation and creativity in our community. An essential ingredient in fostering the construction of the technological architecture is assurance for investors that their intellectual property rights will be properly protected. In this connection, we have made a tremendous effort in our enforcement, and we have achieved highly encouraging results. The piracy situation in Hong Kong is now fully under control. Having broken the back of the illicit business in the piracy of intellectual property in Hong Kong, we now have even greater confidence in promoting technological innovation in our economy and in developing new technological infrastructure to face the challenges in the new millennium.

We are also expecting a boom of business opportunities with China's imminent accession to the World Trade Organization. The likely expansion of China's trade links and investment relations with the rest of the world would bring substantial economic gains to Hong Kong. All these recent developments suggest clearly that our economy is getting ready to take the next quantum jump.

Trade Facilitation

Under the heading of Trade Facilitation, I would like to share with you three examples of how we are getting ready in taking that quantum jump to make Hong Kong an attractive place for overseas investments and to take Hong Kong into a new era of prosperity.

Container Terminal No.9

First of all, we have begun the construction of Container Terminal No. 9. When completed in 2004, the new container terminal, which costs about HK$10 billion to build, will provide six additional berths with a design capacity of 2.6 million TEUs, bringing our total capacity to well over 20 million TEUs. This would help to meet forecast demand and maintain Hong Kong as the world's busiest container port for some time to come.

The first berth will come into operation in May 2002 and we in Customs will be ready to assist in the facilitation of the movement of the additional containers. We are streamlining our procedures with the use of technology while seeking to speed up cross boundary movement of container trucks as well as enhancing our water links with the Mainland to enable more cost effective transport of cargoes.

Pre-clearance at the Land Boundary

At the land boundary checkpoints, we have about 30,000 goods vehicles going to and from Hong Kong and the Mainland everyday. Traffic jams are usually seen as a sign of prosperity, but to the truck drivers it is a nuisance and to the businessmen it is a loss of opportunity. I think you are familiar with this issue. We have attempted different measures to remedy the problem. We have sought to build more clearance kiosks, but due to the limitation of land, we have reached the limit for this option. We have implemented a special "empty container" scheme and this has helped to some extent to alleviate some of the congestion but the limit will also be reached in a couple of years. We are now attempting to establish a scheme of clearance under which transport companies would let us have information of their cargoes ahead of time, and we would provide them in return with the necessary clearance prior to their arrival. This should help facilitate movement of cargoes at the very busy boundary between Hong Kong and the Mainland. We are still at a preliminary stage and we see this as a medium term solution to a big problem.

As a forerunner of our effort to facilitate transshipment cargo as a whole, we have worked out recently with a cargo operator a streamlined clearance procedure for air cargo to be transshipped to the Mainland airport in Guangzhou by land transportation through our boundary checkpoints. Under the new procedure, the air-to-land transshipment cargo needs only subject to customs clearance once at our airport under normal circumstances, saving the trouble for a second clearance at the land border. We are able to do that because of the cooperative arrangements we have obtained from the operators in ensuring that full cargo data are provided to customs in advance for pre-clearance and the cargo is transported on ground under proper security safeguards. The arrangement has opened up new business potentials for the industry and may serve as a pilot for further extension of customs facilitation to all forms of transshipment cargo.

Air Cargo Hub

Separately, we are working to establish the Hong Kong International Airport as the air cargo transshipment hub in the region. To make that possible, we have amended our laws to simplify formalities and procedures in order to minimize bureaucracy. We are now able to facilitate the movement of goods without sacrificing our enforcement role. In fact, our role has been enhanced as a result. We have been able to achieve this with the help of advanced technology. Supported by the powerful customs air cargo clearance computer system which cost about US$22.5 million, we have been able to clear cargoes prior to their arrival in Hong Kong and move cargoes according to the new standards required in the "new economy" setting.

This is only a start. Our ultimate aim is to develop a one-stop customs cargo clearance for all transport modes - air, land and sea. We are working hard on this, and we are aiming to meet the needs of our business partners before long. And I do hope you will come join us on this platform of opportunity in creating a new prosperity.

Thank you.

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