Thank you for joining us today for this Official Kick-off to AmCham's 2007 year.

I would like to thank our AmCham Honorary Chairman, US Consul General Jim Cunningham, for being here today and for your on-going support.

I also want to thank our outgoing 2006 chairman, Steve Marcopoto, for the great work he put into the Chamber this past year and throughout his years on AmCham's board of governors. Steve's efforts as Chairman in 2006 have set the stage for what I believe will be a year of great achievements for AmCham in 2007. Steve has already covered our major accomplishments for 2006. I only want to add that his leadership and energy were keys to those accomplishments and will provide the momentum we need this year.…. Thank you again Steve!

I would also like to thank some of our departing Board members who have also made significant contributions. First, Jon Zinke, our 2005 Chairman and 2006 ex-officio governor leaves after 7 active years on the board. Also, Maura Fallon and Don Meyer leave the board after serving full 6-year terms.

The commitment and efforts by these people embody the true spirit of AmCham in Hong Kong and I want to thank them on behalf of all of our membership.

It is a great honor to be chairman of the leading foreign Chamber of Commerce in Hong Kong. AmCham is fortunate to have a strong board of governors, a great group of committee chairs, plus their vice chairs, all supported by our talented and hardworking AmCham staff led by Jack Maisano.

I look forward to an exciting year working closely with all of our members to consolidate gains made under Steve. However, to be effective and responsive to our membership, the Board of Governors and I need to hear from you. Active participation in AmCham events and in the intellectual life of the Chamber is key to maintaining our organization's leadership position in the Hong Kong community.

2007 will be an eventful year for Hong Kong. We mark the 10th Anniversary of the return of sovereignty to China – the 'Handover' that seems like such a short time ago. A lot has been said about the changes of 1997, but I feel we can confidently say that the 'One County, Two Systems' governance plan is working.

The success of this governance model has also had big impact on American business interests in Hong Kong. In line with these changes, AmCham has continued to look at its priorities in adapting to the new thrust of Hong Kong’s growing integration into China's business world.

The economic environment of Asia and of Hong Kong has changed considerably in the past 10 years. Between 1997 and 2004, Hong Kong slipped into, and then slowly worked its way out of, the painful impact of deflation, induced by the Asian Financial Crisis. China, meanwhile, has become a global economic powerhouse. Hong Kong has been much affected by China's rise, and has generally benefited from the changes that have taken place over the past decade. For example, the Individual Travel Scheme has resulted in an outpouring of millions of Mainland tourists into the territory. The CEPA free trade agreement has freed several industries of tariffs and non-tariff barriers to trade in both goods and services across the border. And China's relaxed domestic financial controls have allowed Hong Kong to become the world's fastest-growing center of IPOs for mainland companies, as well as its only external 'banker' of RMB transactions.

We've also had our challenges: SARS and the cross-border communications breakdowns that helped its spread; the 2000-2001 recession; turmoil over Article 23; continuing discussions and tensions around the subject of universal political suffrage; and deteriorating air quality.

All these have had an impact on Hong Kong’s development in the first 10 years of Chinese sovereignty.

From an economic and business perspective, Hong Kong enters its second decade in good shape, with excellent prospects for a strong future. Economic growth will continue. Cross-border opportunities look set to expand.

And, Hong Kong continues to develop as a major international financial hub, a significant port destination, and an important tourist destination.

As the second decade of Chinese sovereignty develops, I am confident that Hong Kong will continue to be a great place for foreign companies to do business.

AmCham has also matured and changed over the past 10 years. We have spent the decade developing ourselves as a key source of information and guidance for American businesses trying to understand how to use Hong Kong as a gateway to doing business in Mainland China. Our many informed speakers, seminar panels, publications, and business briefings have been very popular sources of this type of information.

AmCham has been and will continue to be a strong voice representing American businesses. In dealing with concerns related to cross-border business and Hong Kong's role as a center for international trade, transportation and financial services, AmCham speaks business truths to governments in Hong Kong, Mainland China, Macau and back in the United States.

Our membership ranks have changed too. Some regional headquarters have followed their markets to Shanghai, for instance. High costs here have contributed to the movement of 'back-office' work for service industries offshore – many across the border, into the Pearl River Delta. Localization of management among many of our member companies has required that we shift our focus to attract a different type of member, with different needs.

The tragedy of "9/11" led to an outpouring of sympathy from the local community for our members. It also led to AmCham’s close cooperation with Hong Kong Customs and with our own government to help facilitate Hong Kong's now leading role as a model in the Container Security Initiative program. This program is intended to protect world trade flows from terrorist disruptions. As an active member of OSAC and as lobbyists in Washington Doorknocks, we participate in supporting efforts to provide local and regional security – without unnecessary sacrifice to business success, here or in the United States.

The SARS outbreak, in 2003, meant dealing with a new range of urgent member concerns and assisting the territory-wide effort to reassure overseas visitors when it was safe to return. We continue to help our businesses prepare contingency plans for any of the various 'pandemics' that threaten our community's health. We have conducted surveys and hosted panel discussions on these subjects throughout 2006 and will continue to do so in 2007.

Changes to US tax laws have put additional strains on the competitiveness of American businesses, raising the costs of hiring Americans overseas. We responded within 24 hours of the law's change with robust information programs concerning the impact on Americans working in Hong Kong. We also developed global links with other Americans responding to the changes, and even developed our own US tax blog, which I invite you to visit on our AmCham website.

This effort is ongoing. We will continue our efforts, led by our Tax Committee, to have the laws changed in ways that will encourage Americans to live and work overseas. To compete in a world economy, we need more Americans with international experience and sensitivity, not fewer.

Like Hong Kong, AmCham has matured and evolved since 1997. We continue to work closely with the US Consulate General in identifying issues important to members. Together we are actively pursuing new opportunities to complement Hong Kong's efforts to retain its distinctive advantages as a regional and world business hub.

With AmCham's major office renovation completed this past summer, and advances in our communications capabilities, we now are much better positioned to engage with our members. Our hope is that this will help build a closer dialogue with a larger group of members and keep AmCham focused on those factors most important to them.

2007 will be an exciting and busy year. For Hong Kong, there will be an election for the next Chief Executive. The government will continue to look for ways to broaden the tax base. There will be ongoing discussions on universal suffrage. And, of course, there is certain to be a big 10th Anniversary celebration.

2007 will also be an active year for AmCham, and the Board and I are eager to get off to a quick start.

We will continue to address issues related to improving Hong Kong as a great place for foreign companies to do business. Internally, we will build on the efforts of 2006 to enhance interaction among the Board of Governors, committee chairs and the broader membership.

So, what are our top priorities for 2007?

First, The environment remains a concern and is a key priority for AmCham in 2007. AmCham will continue to advocate for action to promote improvements here. We will focus on highlighting those member companies and local companies that have taken action on their own to improve the environment. In that regard, I urge you to sign on to the 'Clean Air Charter' in cooperation with our partner organizations in the Business Coalition on the Environment. We intend to broaden the dialog by sponsoring events designed to promote steps that our members can take to make positive improvements to our natural environment.

Another key priority for 2007 is the financial services industry. The Chief Executive has highlighted financial services as an area that Hong Kong needs to promote even further. Toward that end, we will seek to work more closely with the government to promote Hong Kong to the American business community and to broaden the base of international financial services provided here. We are pleased with the recent developments allowing Chinese financial institutions to issue Yuan based debt in Hong Kong. We also support a larger role for Hong Kong in the trading of RMB. We will also work to help further attract other types of international financial service providers to Hong Kong – such as hedge funds, private equity firms, asset management companies and others.

Another focus of AmCham in 2007 is on education of expatriate children – especially the availability, or rather current unavailability, of classroom space. This is now listed as a significant concern among our member companies. The serious lack of classroom space in convenient locations – most especially on Hong Kong Island – has made it difficult for many incoming expats to find school places for their children. This affects the ability of companies to bring their best talent to Hong Kong. AmCham will continue to engage the government in finding ways to allow existing international schools to expand.

Macau will also be a focus for us in 2007. Given the growing number of American businesses with a presence there, AmCham has also been working with our Macau Committee to help them establish a more formal presence in that SAR. We will work closely with this new Macau Chapter, to help them grow their membership base to a level that will eventually allow creation of a financially and functionally independent AmCham Macau.

Another focus is AmCham’s Charitable Foundation, which has been assisting young scholars from Hong Kong to achieve their potential for over 20 years. Last year, we augmented funding for our Foundation by means of a raffle associated with our annual AmCham Ball. This effort was complemented with other new charitable events in 2006: the Macau Committee organized that territory’s first-ever AmCham Macau Ball, and our Sports and Entertainment Committee organized two golf events, one at Fanling and another in Macau. As a result, the Charitable Foundation has been able to double the amount of money available for grants, year over year. In 2007, we will continue to reach out in new directions and promote the visibility of this outstanding AmCham trust.

Finally, expanding our membership will be an important focus in 2007. AmCham continues to be the largest international Chamber of Commerce in Hong Kong and among the largest AmChams in the world. Our core values and advocacy on behalf of issues important to our members and our country have significant influence and carry a strong voice. A large, active membership is the key to the success of AmCham, and we have invested in significant changes designed to build our membership, better engage current members and attract new ones. The success of AmCham is in all of our best interests. I ask that each member make it a personal challenge in 2007 to introduce at least one new member, and to clear time on her or his calendar to more actively participate in the busy life of AmCham. With some 300 events a year, regular annual business surveys, nine publications in electronic or print formats, including a newly developed annual ‘White Paper’ on Hong Kong, and a very active advocacy agenda, there is no shortage of opportunity for member involvement.

We also plan to have fun this year. Americans like to socialize and our annual AmCham Ball is one of the best parties in town. This year promises a Latin flair with its theme, "Miami Beat". Join us and mark your calendars for Saturday, March 17th. Book early! as this is among the most popular events on Hong Kong's social calendar, and, even with accommodations for over 1,000 people, tickets will go fast. Also, in October we will host our 2nd Annual AmCham Hong Kong Open Golf Tournament, at Fanling. This will be quickly followed with another in November, our 2nd Annual AmCham Macau Open Golf Tournament.

I have lived in Hong Kong for seven years and consider this my home. It’s a great place to live and work, especially when a lot of travel is required. This is an efficient, clean city with a great infrastructure, and a wide range of cultural and entertainment activities. The city has energy, and its people have a keen business sense.

While there will always be issues and concerns, with the progress made over the past 10 years, the continued integration with the Chinese economy, and the growing recognition that Hong Kong is a major financial hub and gateway into the Mainland, I am confident that this will continue to be a major center for American business.

To summarize: We have a busy year ahead, promoting Hong Kong as an international financial center, promoting dialog on education and the physical environment, working to build a successful AmCham in Macau.

I look forward to working closely with all of our members. You hold the keys to our organization. You are its source of strength and influence in what has become a globalized business environment.

The 10th Anniversary of the return of Hong Kong to China’s sovereignty will certainly be a memorable year for all of us. Hong Kong’s continuing success has quietly made as much history as the historic "handover" did itself. I am sure that it will be a great year for AmCham and for Hong Kong. We have a lot to do, and I look forward to your continued support.

Thank you.