Good morning, ladies and gentlemen.

I am honoured to have this opportunity to address you on a subject very close to my heart, both as a businessman and as Chairman of the Hong Kong Trade Development Council.

The ethical management of business is not only immensely important to Hong Kong in its role as global trade intermediary and integrator. It is important to every one of us in the room today ----- in our business dealings with each other, with each other 's countries and regimes, with the increasing number of our trade partners and business clients over the e-commerce networks.

My argument today is that we in Hong Kong have a special role to play in the promotion of ethical business management. I believe that we have broad experience to offer in the realm of education and policy and institutions to promote best practice. And I also believe that our role at the heart of the communications revolution in Asia, as the principal trade gateway and business intermediary for China, and as a regional trade entrepot, give us a vested interest in ensuring the highest standards of business ethics.

Hong Kong as an international centre

There is no doubt that Hong Kong continues to be one of the leading international trading and financial centres of the world. In many ways, despite the Asian financial crisis, we are continuing to run on the competitive track that was laid out for us in the mid-1990s.

We remain a major transportation and logistics hub, with an economy based on the depth and breadth of our services. We are at the centre of globally dispersed manufacturing networks, and we continue to build closer business integration with the Chinese mainland. We remain one of the world 's freest economies, with strong free trade credentials in such global forums as the WTO and APEC.

Hong Kong 's infrastructure, knowledge and critical mass of talent and expertise continue to make it a uniquely effective and efficient location from which to orchestrate business, particularly for China.

But although we remain a major physical trade hub, handling almost half of all the trade to and from the Chinese mainland, we have also expanded our role beyond purely physical trade. Nowhere is this more true than in the realm of information technology, e-commerce and telecommunications.

As the Information Age spreads throughout Asia, information and the technology to create new trade and business opportunities have become the new currency. The dot in every com. And Hong Kong is one of the leaders in the race to add value in this process: through the creation, dissemination and application of information.

We are a centre for the free flow of ideas and know-how, a platform for the exchange of global and regional information, and a conduit for information in China. In other words, we are becoming an increasingly transparent, knowledge-based economy.

The rapid dissemination of goods and ideas over the Internet, the need for real-time 24-hour information, the question of privacy and security in cyberspace, all have brought into focus the increased need for dependable and transparent business processes.

Corporate governance, too, has become a major issue for shareholders, investors and customers who demand updated and real-time information on companies. We are no longer living in an age of annual reports. It is more like an age of hourly reports, of comparative information that is readily available at the touch of a button.

We need to find dependable checks on business partners we may not even have met or have any intention of meeting. We need to create reputation and content that is valid wherever our clients may be. We need confidence in our brand. We need legal safeguards for intellectual property and expectations that the rule of law, particularly internationally accepted law and business norms, apply to our business dealings.

In this sense, a reputation for high standards of business ethics and management is an integral part of the business transaction. This is what brought us through the Asian crisis as a dependable trade partner and leader in international best practice. These are what will ensure our future as a global information and e-commerce hub.

China and the WTO

These matters are particularly urgent for an economy that acts as a major business intermediary for China. As most of you know, Hong Kong continues to use its competitive advantages to provide services to China in areas beyond merchandise trade.

These services are oriented both inwards to Chinese-end customers, as well as overseas customers. Services account for less than 40% of China 's GDP, a figure lower than that of most developing countries. Hong Kong 's sophisticated service sector, which contributes 84% of our GDP, is well positioned to help full in this gap, and also to help China develop its own service industries.

This is particularly so as China opens up, even in advance of progress on WTO accession, and as Hong Kong businesses reach in towards the Chinese mainland. With WTO accession, the opportunity for Hong Kong service industries will be all the greater.

And so too will the responsibility for ethical business practices. I said earlier that Hong Kong is a leader in best practice. That is because we have to be. Hong Kong has a business culture that is internationally recognised for prudence, high standards of transparency and disclosure, good governance, and the rule of common law.

We have a critical mass of international legal, insurance and accountancy firms. We are the regional base for many multinational corporations with high standards of corporate governance and business ethics covering diverse legal and ethical regimes throughout the world.

We have a free market, clean government, a well-managed and -regulated financial sector, openness and accountability, and a pluralistic society than thrives on the free flow of information.

In other words, we have confidence in our business, legal and official transactions, and the world has confidence in us. I believe that many countries in Asia are aiming, in one way or another, for the same standards of governance and best practice that Hong Kong maintains. The Political and Economic Risk Consultancy recently highlighted the success of Hong Kong as a capital-raising centre for dot.com and China-related companies precisely because of its strong rule of law.

But it wasn't always like this. Corruption was once endemic in Hong Kong. We began the journey to fight corruption some 25 years ago when we first established the foundations of what became the ICAC.

The dramatic steps we took then to foster an ethical business culture have paid enormous dividends in terms of prosperity and competitive advantage. As a best practice leader in the region, we are heartened to see and to cooperate in the Central Government 's mission to combat corruption on the mainland. We believe that we have a lot to offer based on our anti-corruption measures and institutions.

We also believe that with the approach of WTO accession, the need for such best practice will increase even further on the mainland: especially for Hong Kong companies in direct competition with medium and large multinationals, each of which have their own high standards of corporate governance and business ethics.

China 's accession to the WTO will undoubtedly bring a whole new set of business relationships for Hong Kong and Asian companies in China. We have a tremendous example to offer, and a deep responsibility. This is the very moment in which we must underline our strong commitment to ethical management in the business sector.

Hong Kong companies have a duty to their own prosperity. That duty is to apply best practices in all their dealings, ensure that their employees understand and contribute to total quality management, and to reinforce their message with internal training in the company's core values and commitment to integrity.

We must never allow ourselves to dumb down or ' keep silence ' when dealing with less developed ethical regimes or countries with debatable business practices. Although it may facilitate some short-term savings, complacency is not the path to success or competitiveness in building long-term business relations. As a prime mover in free trade forums, we must ensure that Hong Kong 's reputation for the rule of law and best practice is constantly maintained. For that is one of our major competitive advantages, if not our major one.

Conclusion

At the end of the day, ethical management is not only an expression of what type of people we are, what we believe in and how we behave as business partners. It is also a tool of competitiveness. Something that others can learn in their dealings with us, either in person or over the Internet.

Our values as a community ----- honesty, openness, fair play under the rule of law?are among the crucial ways we add value to global business. And adding value to business is the key to Hong Kong remaining successful as an intermediary in world trade.

The fact that most of Hong Kong 's international business is done by small and medium enterprises means that Hong Kong 's success is unusually dependent not just on systems and institutions ----- such as the ICAC ----- but on the strength of individual values and integrity.

That is why conferences such as this are so important. We must constantly reinforce awareness within the community the importance of ethics in business, and the reason why Hong Kong is so successful, and will continue to be successful as a world city, a global information hub, and a unique integrator for business with China.

Thank you for your attention.