PECC Coordinating Group & Standing Committee Meetings

Mr Chairman

Ladies & Gentlemen

At the outset, I would like to express my thanks to PECC for kindly inviting me to attend this important meeting and share my views with you on issues of our mutual interest. At the same time, I would like to thank our host for the excellent arrangements and warm hospitality accorded to us.

Before touching upon relationship between PECC and APEC, I want to say few words about APEC's priorities. For this reason I may exceed 10 minutes time limit.

This APEC year happens to be the first year of new century. China, as host and in consultation with other member economies, has chosen "Meeting New Challenges in the New Century, Achieving Common Prosperity Through Participation and Cooperation" the main theme of the year. It is forward-looking and tries to reflect the sense of new century, new challenges and new opportunities. Based on the theme, APEC this year is likely to focus on three main areas.

First, human capacity building and human resource development. APEC intends to build on the existing Ecotech agenda, mobilize new resources, and encourage greater contributions from member economies and the business community to intensify cooperation in capacity building with a view to enabling all economies, especially the developing economies, to share the benefits of globalization and the new economy. To this end, China and Brunei will jointly host a high level meeting in Beijing in May to discuss and formulate a viable strategy on human capacity building. The outcome of which will be an important deliverable to Leaders Meeting in Shanghai. In addition, HRD Ministers will gather in Japan in September for the 4 th Ministerial meeting to discuss issues related to human resource development.

Second, APEC will seek to revive the momentum of progress in its core mission of trade and investment liberalization and facilitation. Initiatives have been put forward on facilitating trade, improving investment environment and strengthening the multilateral trading system. APEC's contribution to the launch of new round WTO talks will be further discussed during the June trade ministers meeting with a view to playing a similar role as in 1993 when APEC gave the decisive push to the Uruguay Round Talks. At the same time APEC will undertake initiatives to build up the capacity of its member economies in implementing WTO agreements.

Third, APEC will work to create a healthy macro-economic environment and build a secure and stable financial future for the region and prevent the recurrence of a new financial crisis. "Growth with restructuring, stability and equity" is the theme of Finance Ministers process this year. Finance Ministers will focus on macro-economic policy dialogue, advance structural adjustment and reform so as to build a solid foundation for sustainable growth in the region.

Apart from these three areas, APEC will also place emphasis on measures to ensure that the benefits of new economy are shared equally among all segments of society. In this regard, issues such as e-commerce, cyber education, the digital divide will be high on the agenda.

While aiming high, APEC member economies are advancing their work with a sense of practicality and realism in view of the uncertainty in regional and global economic situation. Nevertheless, with combined effort of all, APEC members will be able to produce tangible deliverables to be announced by our leaders in October.

PECC has chosen Managing Globalization in the 21st Century as its main theme and identified four areas: Charting the Millennium Trade Agenda; Strengthening Financial Market and Corporate Governance; Seizing E-opportunities and Community Building as its focuses this year. PECC and APEC have a lot to cooperate in those areas.

Now I turn to the question on relationship between PECC and APEC. What I intend to do today is just to share some personal views with you.

PECC and APEC are two important groupings located in the same geographical region with more or less similar membership. PECC is viewed as a "partner" of APEC and accordingly has been afforded the unique position of being the only non-governmental official observer at APEC meetings. Over the years, there has been fruitful cooperation between the two entities. Nevertheless, the relationship between PECC and APEC has never been defined, but has evolved over time.

Formed 9 years earlier, PECC is regarded by many as a forerunner of APEC. It serves as a regional economic forum for cooperation and policy coordination in areas ranging from trade, investment and finance to human resources development. The tripartite composition of business, academia and government is viewed as a source of strength of PECC.

While APEC, as a governmental forum, involves mainly government officials. It is a forum for deliberating issues related to creating freer, open trade in the region in a more substantive manner and through relevant cooperative activities. The main characteristic of APEC is the annual Informal Leaders' Meeting, which provides a unique forum for leaders to exchange views on issues of mutual interests. This high profile enables APEC to enjoy higher visibility and more publicity.

As experience showed, PECC can play a constructive role in the APEC process and in promoting APEC goals through its activities. This in fact has been highly appreciated by APEC member economies.

PECC has sectoral fora that closely mirror those of APEC. Whereas APEC fora respond directly to tasking by APEC Ministers and Leaders, PECC has more flexibility in identifying and tackling contemporary issues. As a result, PECC has been able to carry out complementary rather than duplicative work and provide constructive advice to relevant APEC fora. This is borne out by the number of papers and reports produced by PECC ranging from deregulation and privatization to energy issues.

PECC has strong analytical and research capabilities. And over the years it has played a useful role in conducting research and assessment for APEC. Since two are working for the same objective, when it comes to awarding external consultancies for studies or assessments of APEC activities, it is quite natural that APEC members are more comfortable for PECC to conduct them, because of the sensitivities involved. PECC played a useful role in the study on "Assessing APEC Individual Action Plans and their Contribution to APEC's Goals", which led to the development of e-IAP. Currently PECC is undertaking research on Corporate Governance. PECC's other research on regional economic cooperation has also proven to be useful intellectual source for APEC.

In the wake of intense policy dialogue among APEC members on the financial crisis, PECC contributed in its own way to the discussion on strengthening markets and enhancing regional and international financial system.

PECC has also successfully carried out projects in collaboration with APEC fora, such as the Regional Integration for Sustainable Economies (RISE). PECC's contribution in such cases has been not only in the form of intellectual, but also the supplementation of project funds.

Given the different structure and agenda of the two institutions, there is no reason for APEC to compete with PECC. However, the fast changing environment has posed challenges to all regional and international organisations, APEC is no exceptional. In order to adapt to the new situation and stay relevant, APEC has expanded its contacts and activities over the decade, especially its interaction with business community and research institutions. The most important step in this direction was taken in 1995 when Leaders decided to form the APEC Business Advisory Council, or ABAC. In 1993 as part of the Leaders' education initiative, APEC Study Centres, or ASC, were established to promote cooperation in higher education and advanced research. These developments on the one hand have broadened the constituencies of APEC, on the other hand reduced its dependency on PECC in certain areas.

Of course, cooperation with APEC is not the sole focus of PECC. PECC has its own objectives and agenda. I share the view that PECC should continue its role as an independent economic think-tank, strengthening its capabilities and expanding its activities in this area, making its research more focused and more relevant to the needs of regional economic development. PECC should also make full use of its connection with the business community, tap their resources and engage them more actively. In this respect, some National Committees of PECC have rich experience which can be shared by others to enhance activities in this field. Furthermore, PECC may want to consider undertaking more projects like RISE and expand its cooperation with other regional and global organizations such as PBEC, ADB, OECD, World Bank and WTO for mutual benefit.

In conclusion, it is in the interests of both PECC and APEC to maintain a cooperative partnership. To manage such a relationship in a changing world is sometimes challenging. But if we succeed in doing so, we will achieve a win-win situation for both fora. Seeing many APEC old hands among you, especially two former SOM Chairs, we should have every reason to be optimistic about the future relationship of PECC and APEC.

Thanks