U.S.-Hong Kong Relations: Building on Success

Consul General Kurt W. Tong

Remarks by U.S. Consul General Kurt W. Tong
to the American Chamber of Commerce
September 22, 2016

(As prepared for delivery)

Good afternoon, and thank you to the American Chamber of Commerce in Hong Kong for hosting me here today.

I am very honored to have been chosen to represent the United States to both Hong Kong and Macau — each of which are wonderful and unique places.

Among other things, I have realized that I now live in the world’s most three-dimensional city. Between all the mountains and stairs, I’m getting good exercise.

Today I would like to share my reflections on my first month in this job, with a particular focus on the place where this American Chamber has invested so much time and effort — the very “special” administrative region that is Hong Kong.

You all may know the American saying, “don’t mess with success.” I feel fortunate to be able to walk in and take up leadership of a high-quality mission, and arrive here at a time when, by all accounts, the unique arrangement of Hong Kong — and the United States-Hong Kong relationship that supports that framework — are proving to be so very successful.

What I would like to talk about today is why I believe our relationship — and Hong Kong itself — have been so successful, and how we all can work together to build on that success.

Success Created by Hong Kong, Supported by America

Let me start by mentioning some of the ways in which the U.S.-Hong Kong partnership is beneficial — for both our societies, as well as for the other parts of China.

You don’t have to look far to find many examples of the strength of our relationship. Hong Kong has a well-deserved and longstanding reputation as a leading center of global finance and commerce. Hong Kong remains the most sophisticated financial center in Asia, where important economic players from the United States, China, and other nations congregate to organize, and manage, and finance investments all around the world.

One of the foundations of this strength is the close and friendly cooperation between the monetary authorities and financial regulatory authorities in Hong Kong and the United States.

Hong Kong is also famous for having the world’s top cargo airport, and the No. 5 cargo shipping port. Those capabilities are big reasons why the United States, located all the way across the Pacific Ocean, remains Hong Kong’s second largest trading partner after Mainland China.

In fact, looking at it in the other direction, Hong Kong is America’s 10th largest export market, and a key destination for high-quality U.S. products. It’s a top market for our beef, and a growing market for other products like wine.

Hong Kong is also China’s primary link for investment flows to the rest of the world. It is a conduit for over 60 percent of all outbound investment from the Mainland. For that reason, Hong Kong is also very attractive for U.S. service providers aiming to facilitate investment into the United States — and we are delighted to help facilitate that investment through our SelectUSA program.

Our economic ties are also supported by extraordinarily strong law enforcement cooperation, in a wide range of areas, including drug interdiction and customs security. This benefits both our economies and societies. But it also makes the rest of the world a safer place as well.

But beyond economics, let’s also consider the profound people-to-people ties that characterize the successful U.S.-Hong Kong relationship.

These can be family ties. A couple weeks ago I went to a lovely wedding in St. John’s Cathedral that was the kind of event that makes for complicated immigration questions, with some elements of Hong Kong, the USA and Canada all thrown in.

U.S.-Hong Kong educational ties are also very strong. I look forward to connecting with Princeton University’s active alumni network here, and I know other university connections are vibrant as well.

In fact, Hong Kong is #20 overall for the number of undergraduates going to study in the United States — which is remarkable given its small population. We aim to welcome even more Hong Kong students and tourists to America. That is why we continue to streamline the visa appointment process to support the increased demand our Consular Section is experiencing.

Another important aspect of all this is exchange programs like Fulbright, and other professional exchange programs, that strengthen friendship between U.S. and Hong Kong academics and professionals. Every year we send about a dozen Fulbright scholars in both directions. I met a number of these impressive people, and leaders from the organizations in Hong Kong that support them, earlier this week.

Last year’s Fulbright cohort was typical. One Hong Kong scholar, who did a year’s research in the U.S. on prevention of domestic violence, told us her research was transformed from a “local concern to a global undertaking.” That is the kind of impact we are looking for. Likewise, one of the American scholars, who came to Hong Kong in 2015, said it was the “best year of his and his family’s life,” and was full of praise for Hong Kong’s educational institutions and international community.

During my tenure as Consul General, you will probably also hear a lot from me about our efforts to expand tourism to the United States. I think this is really important from both an economic angle and a cultural angle.

I believe that the United States is actually an under-tapped tourism opportunity for people from Asia. We can do more to help people discover everything that our broad continent has to offer.

Hong Kong’s “Specialness” is the Foundation of Success

I want to say more about one particular element that underpins the many successes of the U.S.-Hong Kong relationship, that I have just described.

It is the “S” in the SAR. The Hong Kong Special Administrative Region. For Hong Kong is indeed special, and our relationship with Hong Kong is special.

What makes Hong Kong so special?

I could start with all the things that make it a great place to live: Hong Kong is known worldwide for combining all the excitement and conveniences of a modern cosmopolitan city with a rich Chinese cultural heritage. (Along with that comes the Cantonese language — I’m just starting to take lessons.)

I think Hong Kong’s unique geography also makes it special. It boasts a stunning urban skyline, but also beautiful countryside and beaches. I was interested to learn that Hong Kong’s land area is still six times the size of Washington, D.C. and it has more than 200 islands rich in biodiversity (including 236 species of butterfly).

And of course Hong Kong’s status as a food destination is well known, as well — from its iconic dim sum to Michelin-starred, innovative international cuisine — and I’m looking forward to trying it all.

But there are other, more important things that make Hong Kong special that may not be so obvious as its glittering skyline. But these are just as critical to Hong Kong’s identity and success.

Hong Kong is famously located at the crossroads of East and West — geographically, economically, and culturally. That has historically shaped Hong Kong’s destiny and growth, and I expect it will continue to do so going forward.

Hong Kong’s impressive human resources rival any market in the world. Its smart, motivated young people comprise a deep pool of talented professionals, and are a magnet for international business and investment.

Perhaps the most important thing that makes Hong Kong “special,” however, is its strong rule of law, transparency, and openness, which create the basis for business and trade to succeed here.

Everyone says it, because it is true: The independence of the Hong Kong judiciary, and the objectivity and fair-mindedness of Hong Kong’s economic and financial regulators, are the foundations of the city’s success.

But let me give you another less-mentioned example. Hong Kong is on the right side when it comes to Internet regulation. The U.S. Chamber of Commerce recently warned that excluding foreign Information and Communications Technology product and service providers from China could decrease the potential size of the Chinese economy by as much as $3 trillion over the next decade. Hong Kong helps point the rest of China in the right direction on this important issue.

Indeed, more generally, the construct of “one country, two systems” has been highly successful in protecting Hong Kong’s open society and institutions. It is the key framework that makes all this “specialness” possible and sustainable over time.

“One country, two systems” is not only a very unique and special reality. It is also a construct that both China’s central government and the people of Hong Kong — and for that matter, the United States as well — all aim to maintain.

This does not mean anyone can be complacent. Hong Kong’s high degree of autonomy under the “one country, two systems” construct is something that requires care and attention to maintain.

As you know, for our part, the United States’ support for Hong Kong’s high degree of autonomy is clearly spelled out in the 1992 Hong Kong Policy Act.

I think there is a lot at stake here. Hong Kong is definitely part of China. But Hong Kong also exists as one of the world’s leading cities, and many people outside China also have a stake in its success. It would be a great loss to the global commons — economically as well as culturally — if Hong Kong were to somehow lose its “specialness.”

Here is another obvious, but important, point: The United States and the people of Hong Kong share an abiding respect for certain fundamental freedoms, and certain core values. I believe that these values are as much a part of Hong Kong’s success as its well-deserved reputation for efficiency as a global hub for international finance and trade.

We share values like freedom of expression, of the press, and of assembly. Academic freedom, and open space for critical debate.

A couple of weeks ago we saw Hong Kongers turn out in record numbers to exercise their freedom to participate in choosing the city’s legislature. I think that high turnout, with voters lining up late into election night, showed how much people here are committed to the idea of democratic participation in politics.

I now look forward to working with all of Hong Kong’s elected leaders in the Legislative Council to build even stronger relations between the United States and Hong Kong, which will benefit both our societies. I hope to arrange meetings with all 70 Legislative Council members as soon as possible after they are sworn in. Seventy is a lot, so it may take a while. But our Consulate team is ready to talk about U.S.-Hong Kong relations with anyone, regardless of their political views.

Facing Challenges Ahead

I have described the success story that is today’s Hong Kong. And I hope I have reaffirmed for you that the U.S.-Hong Kong relationship is on a strong footing, and has contributed to our mutual benefit.

Before I close, I think I should mention a few challenges that we can face together, going forward, as we seek to build on the success we have already achieved.

First, economic competitiveness: Hong Kong, like many leading international financial centers, is seeking to ensure its future prosperity amid a technological revolution that is reshaping labor and capital the world over.

The United States faces similar and related challenges. As a highly advanced economy, we need to re-match the U.S. workforce to the demands of recent technologies, and make sure that our education system and national infrastructure meet critical needs. In that context, it is clearly in our shared interest to work together to keep Hong Kong competitive as a regional hub for business, trade and finance.

One way we can do this is by working together to create an environment conducive to innovation. An example of this is the Consulate’s Smart Technologies Initiative, through which we aim to help forge trans-Pacific business partnerships offering advanced U.S. technologies to Hong Kong, as Hong Kong implements its Smart Cities program. AmCham Hong Kong — our partner in this initiative — will play a key role in making this happen.

I also think that our more general efforts to advocate on behalf of U.S. businesses also help build Hong Kong’s competitiveness. It’s a win-win situation, really — Hong Kong gets access to cutting edge U.S. technology and services bidding on their tenders; and U.S. companies have an advocate here in the Consulate as they bid. Such advocacy support can range from a simple phone call to letters of support and face-to-face meetings between senior U.S. and Hong Kong Government officials. We hope members of the American Chamber will let us know how we can best serve you.

Another key 21st Century challenge is the whole question of inclusive growth. In particular, I think that there is real value to be added in the United States and Hong Kong sharing ideas and strategies for addressing income disparity, and creating economic opportunities for young people.These are certainly important challenges that we both share.

I have had already had the pleasure in my short time here of speaking with people from various walks of life — from meeting with business leaders to visiting elderly residents living alone in Central and Sheung Wan.

It was a glimpse into the good work in Hong Kong of both governmental and non-governmental organizations assisting society’s most vulnerable. It was also a reminder that Hong Kong, like the United States, is a place of diversity and contrasts, and that we have a responsibility to work together to ensure all members of our society’s rights are respected and their voices heard — regardless of economic status, gender, ethnicity or sexual orientation.

In a time of global economic uncertainty and increasing income disparity in many countries, including my own, a top challenge for all societies is to provide economic opportunities for young people so that they can feel confident in their futures.
And there is work to be done on both sides, as well, to combat trafficking in persons and improve the protection of intellectual property rights.

I look forward to working with the SAR government and the Legislative Council in addressing those issues.

Let me mention one last challenge, which is largely a question for the United States, but also impacts the entire region. And that is to continuing to maintain the tempo and content of U.S. engagement in the Asia-Pacific more broadly.

The United States, Hong Kong and our neighbors in the region all benefit mightily from American economic and diplomatic engagement.

I also appeal to the American Chamber in Hong Kong to help explain to people back home how important Asia is to the United States.

One pending piece of business on the top of my mind, of course, is the Trans-Pacific Partnership. Although Hong Kong is not a member of the TPP, it — like the United States and the other TPP member economies — stands to benefit greatly from improvements to the “rules of the road” in the Western Pacific for trade and investment, and behind-the-border economic regulation, which are written into the TPP agreement. These measures include improved labor practices, environmental regulations, and intellectual property rights protection, as well as a wide range of other rules that require and encourage transparency and accountability.

Concluding Remarks

I look forward to working on these issues with you all together over the coming months and years. And I look forward to engaging in dialogue with people from all sectors of Hong Kong’s government and society.

I think we can all sense that we now live in consequential times. In times like these, and indeed, when faced with any issue on which there is a difference of opinion, I believe solutions are best found when we give the other party the benefit of the doubt regarding their intentions.

Cooperation, communication, and listening to one another are also keys to success. When we do that, we often find that we are working together towards the same goal.

Ladies and gentlemen, I believe we are all working towards a shared goal of building upon the current success of the U.S.-Hong Kong relationship, and the great city of Hong Kong. I look forward to working with you to help construct an even brighter future, together.

Thank you very much for your attention.