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Speech by Mrs Carrie Yau, Secretary for Information Technology and Broadcasting (Designate) on "Informatisation of the Hong Kong Special Administrative Region" at the High-level Forum on"City Informatisation in the Asia-Pacific Region" in Shanghai

June 5, 2000

Mr Jiang, Distinguished guests, Ladies and gentlemen,

I am honoured to have the opportunity to attend the High-level Forum on "City Informatisation in the Asia-Pacific Region", representing the Chief Executive of the Hong Kong Special Administrative Region (HKSAR), and would like to share with you today the progress and plans of informatisation of the HKSAR.

Global Trend of Digitisation and Informatisation

It is a global phenomenon that governments around the world are striving to promote the development of information technology (IT) in order to seize the opportunities and meet the challenges of the Information Age. Digitisation has enhanced the efficiency of communications and data transmission, thus rendering geographical distance obsolete. The globally connected world has facilitated more cross-border activities, leading to a single economy in the world market in which we have to cooperate and compete with anyone, and in anywhere.

Digitisation also leads to the convergence of media, which has blurred the distinction amongst the traditionally unrelated activities like sending and receiving electronic mail, browsing the Internet and downloading information, video conferencing, watching television and movies, etc. and enabled them to be carried out on the same platform. New lines of business and enterprises, such as Internet application services, multi-media content providers, etc. are booming and becoming the engine to drive our economic growth. The falling in price of IT products is another catalyst to drive the wave of digitisation, as it helps channel information around the globe through the cyberspace at a substantially lower cost.

Facing the global trends of IT development, digitisation and informatisation, the HKSAR is well prepared and positioned to meet the challenges, and take the opportunities. Let me briefly set out our progress and plans.

The Progress of Informatisation in the HKSAR

The HKSAR has strong competitive advantages in the development of digitisation and informatisation. Firstly, a fully digitised, efficient and high capacity telecommunications infrastructure is a pre-requisite for informatisation, as it enables information, including multi-media content, to travel expeditiously, without interruption. We are proud to say that our telecommunications system was already fully digitised as early as 1995, which laid a concrete foundation for our informatisation development. Today, our telecommunications infrastructure is amongst the best and most advanced in the world. All commercial premises and over 80% of our households are covered by broadband connections. Our external Internet capacity, 44 Gbps at present, is amongst the top in Asia, and will further increase by ten-fold in the next three years. This first class infrastructure is complimented by our policy to further liberalise the telecommunications market, focusing on free competition and providing a level playing field to encourage investment. As a result, our telecommunications market is now characterised by efficient and innovative services with competitive prices.

Moreover, we encourage and welcome the introduction of new IT and telecommunications services into the HKSAR. We are advanced user of technology. We are now conducting public consultation on the introduction of third generation mobile communication technology, with a view to making the services available within next year.

We need to formulate comprehensive and long-term strategies to sustain our informatisation plan. The HKSAR Government, therefore, set up the Information Technology and Broadcasting Bureau (ITBB) in April 1998 to formulate and co-ordinate policies on IT, broadcasting and telecommunications. The Chief Executive of the HKSAR, Mr. Tung Chee Hwa, outlined in his policy address the vision to make Hong Kong a leader in the information world, and emphasised the importance of using IT to help retain our competitive edge and drive our overall economic expansion. If we are to maintain our status as a leading international financial and business centre, and retain our competitiveness in the global market, we have to stay in the forefront of IT development. Against this background, we launched the "Digital 21" IT strategy in November 1998 to set out our IT policies and initiatives.

Informatisation Policy of the HKSAR

The "Digital 21" IT strategy has identified four enabling factors for developing IT in the HKSAR, and has, based on these enabling factors, set out our initiatives and work schedule for the years ahead. The four enabling factors are -

  1. developing high capacity telecommunications system;
  2. establishing an information infrastructure with an open, common interface for secure electronic transactions;
  3. promoting IT education to ensure that our people know how to use IT ; and
  4. cultivating an environment that stimulates creativity and welcomes advances in the use of IT.

As I have just explained, the HKSAR has an excellent telecommunications infrastructure. It is our established policy to maintain an open and fair market environment to allow operators, based on their individual business strengths, to compete so as to provide quality and innovative services at competitive prices. Under this policy, we are expecting new private investment of some HK$13 billion in our telecommunications infrastructure in the next few years, which will further strengthen our position as the communication hub in the Asia-Pacific Region.

To foster the development of electronic commerce, the HKSAR Government is committed to providing a favourable environment for promoting the wider adoption of electronic commerce in the community. A pre-requisite is to instill public confidence in the security of electronic transactions. The HongKong Post has already set up a certification authority in the HKSAR to offer certification services via a local public key infrastructure. Supported by the operation of certification authorities and with the use of digital certificates, we can address the issues of authentication, integrity, confidentiality and non-repudiation in electronic transactions.

In order to provide a secure and clear legal framework for electronic commerce, we have enacted the Electronic Transactions Ordinance early this year. The Ordinance is largely based on the United Nation's Commission on International Trade Law-Model Law on Electronic Commerce. It gives electronic records and digital signatures the same legal status as that of their paper-based counterparts. The HKSAR Government has also taken the lead in accepting submissions in the electronic form under the bulk of the statutory provisions in the laws of the HKSAR after the enactment of the Ordinance.

To encourage the use of IT, the HKSAR Government will also take the lead and implement the Electronic Service Delivery (ESD) scheme in October this year. The ESD will provide an open and common information infrastructure for the public to obtain Government services on-line. A wide range of services will be covered which include submitting tax return, paying Government bills, renewing driving or vehicle licences and registering as a voter, etc. Through the Internet and other access means like public information kiosks installed at convenient public locations, the community can obtain Government services 24 hours a day and 7 days a week. The ESD scheme will also serve as a catalyst to pump-prime the electronic commerce development in the private sector, through allowing commercial services to be provided via the same information infrastructure electronically.

We have also been actively investing in major infrastructural projects, and the Cyberport is a notable example. We will provide in the Cyberport a world class working and living environment so as to attract to, and retain in, Hong Kong a strategic cluster of IT companies and a critical mass of IT professionals. The Cyberport is a comprehensive development which comprises a mix of offices, residential, commercial and recreational facilities, supported by state of the art telecommunications and information infrastructure and a wide range of high-tech facilities such as multimedia laboratory and cyber library, etc. The Cyberport is not just an ideal place for multinational corporations to locate their regional business centres, but also a "niche" for promising local companies to set up their operations. Situated within a pleasantly landscaped campus-like environment, the Cyberport will act as a focal point for the like-minded companies and professionals to exchange ideas, expertise and unleash creative synergy. The Cyberport will develop itself into an international IT centre famous for creative and innovative IT applications.

The Cyberport project will occupy a total of 24 hectares of land at a convenient and pleasant location at Telegraph Bay near the University of Hong Kong. This is our IT flagship project and is proceeding quickly. The building works are in progress and the Cyberport will be completed in three phases by end 2001, end 2002 and end 2003, respectively. We require the developer to build, next to the Cyberport, a residential development and the units in it will be put on sale in the open market to generate revenue for the project (which is now estimated to cost HK$15.8 billion). To date, 15 leading IT companies have signed letters of intent to become anchor tenants, such as Cisco, IBM, Microsoft, Oracle, Yahoo!, Legend from Beijing and Hua Wai from Shenzhen. Another 111 companies have also registered interest to become tenants.

On IT education and manpower training, the HKSAR Government has formulated a comprehensive policy to ensure a stable supply of quality manpower to sustain the development of our IT industry. On basic education, we have launched a five-year strategy on "Information Technology for Learning in a New Era". In simple terms, we will use IT to turn our schools into dynamic and innovative learning institutions to develop the capabilities of our students to process information effectively and efficiently. We will also foster their attitude and abilities in life-long learning, so that they will eventually be able and willing to use IT to meet the challenges in their studies and in their work in future. The implementation of the strategy involves capital expenditure of HK$3.2 billion and recurrent expenditure of over HK$550 million each year. Our target is to have 25% of the school curriculum taught through the use of IT by the 2002-03 school year.

Manpower training is a critical factor for the development of an IT society. We have at present about 19,000 (or 23%) full-time degree-level students studying in IT-related field. On top of that, our Vocational Training Council also offers around 17,000 sub-degree level IT places annually to provide the necessary IT manpower. There are also retraining programmes to provide basic IT courses to school leavers and the unemployed.

In addition to local supply, some of our IT professionals come from overseas. The HKSAR's long-standing policy of encouraging overseas professionals, complimented by its excellent business environment, has prompted many IT companies to set up offices in the HKSAR and bring in relevant professionals. To further attract experts from overseas and the Mainland of China to work in the HKSAR, we have recently launched the "Admission of Talents Scheme" which enables local companies greater flexibility to admit professionals from the Mainland and overseas to work in the HKSAR. Our major infrastructural projects such as the Cyberport and the Science Park to be completed in the next few years will also attract Mainland and overseas professionals and should help nurture talents in the HKSAR.

Indeed, IT has become an indispensable element in our daily lives. There are now over 2.5 million Internet users in the HKSAR and Internet traffic almost doubled in the past 12 months, reaching 1.3 billion minutes per month in March 2000. To promote the wider use of IT, the HKSAR Government has implemented a wide range of measures, which include the provision of computers, Internet and electronic mail services at community halls, post offices and libraries for use by the public free of charge. This substantially increases the opportunities for the public to learn and experience how IT could benefit them in their everyday life.

How IT development in the HKSAR can tie in with that in the Mainland and in the Asia-Pacific Region

The development in the HKSAR is closely related to that of the Mainland and the Asia-Pacific Region. I would now like to share with you how our future IT development could tie in with that in the Mainland and the Region.

First and foremost, China's accession to the WTO will bring about enormous business opportunities to the HKSAR. With our established partnership with the provincial and municipal enterprises in the Mainland, we stand ready to play an important role in the opening of the Mainland's market upon its accession to the WTO. There will be substantial rooms for HKSAR companies to further develop, especially for those in the IT and telecommunications sectors, thereby encouraging them to increase their investment in both the HKSAR and in the Mainland, thus further promoting the development of IT and telecommunications industries in both places.

Second, the HKSAR is well-positioned to provide services like resource and market matching for Mainland IT research and development. For example, our Industry Department provides information through its website on the science and technology institutions in the Mainland; the Hong Kong Trade Development Council provides information on the Mainland enterprises; and the Hong Kong Productivity Council has established the Hong Kong Industry Online database and has linked it up with the China Productivity Promotion Net database in over 20 productivity centres in the various cities and provinces of the Mainland. Such database covers information about companies, markets, products, policies, investment and partnership, etc. and the linkage helps to introduce Mainland's technological development to places outside China.

Third, the sophisticated and sound financial and banking system of the HKSAR can continue to provide capital financing services for the development of IT enterprises in the Mainland and the Asia-Pacific Region. The HKSAR has always been the preferred place for raising capital by Mainland enterprises. The majority of the Mainland enterprises approved for overseas listing have chosen to list in the HKSAR. The Growth Enterprise Market (GEM), recently established by the Stock Exchange of Hong Kong, can act as an intermediary to provide development capital for emerging local, Mainland and regional enterprises, especially the IT-related enterprises. Since last November, the GEM has already helped 25 emerging growth companies to raise over a total of HK$10 billion. At the same time, the HKSAR has also developed into one of the Region's largest venture capital centre which provides start-ups with a readily available source of capital. As at mid-1999, the amount of venture capital managed through the HKSAR amounted to over HK$130 billion. All these will enable the HKSAR to play a useful role in the high-tech development of the Mainland and the Region.

As an international city in China, the HKSAR is also well-placed to become the Internet content hub in the Region, especially for the Chinese-speaking communities. We will formulate suitable policies and implement appropriate strategies to encourage local development and establishment of innovative and attractive web sites, particularly those which can help the HKSAR to develop into an electronic commerce gateway to the Mainland.

Apart from the IT field, we will also continue to foster closer co-operation with the Mainland in other areas. One notable example is the amendment of our legislation on arbitration recently to ensure that the spirit of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, or what we call the "New York Convention", applies to the enforcement of arbitral awards between the Mainland and the HKSAR.

Conclusion

To conclude, ladies and gentlemen, the entrepreneurs of the HKSAR are well renowned for their flexibility, responsiveness and adaptation to changes. With the rapid development of IT, our enterprises have taken active initiatives to maintain their competitiveness and to exploit new opportunities in the electronic commerce market. The HKSAR Government is also fully committed in providing a favourable environment and the necessary infrastructure for our enterprises to thrive. All these drive the informatisation of the HKSAR. One of our priority tasks now is to tie in with and make our contribution to the informatisation development in the Mainland and the Region.

Upon China's accession to the WTO, the HKSAR's position in providing financial and other professional services to Mainland's enterprises will only become more crucial. In this regard, we will continue to strengthen our competitiveness through the use of IT. The HKSAR Government will continue to encourage investments in IT, and formulate conducive policies to make us a leading digital city which can provide a strong support to informatisation in both the Mainland and the Region. We will also continue to upkeep our basic fundamentals and our success formula by maintaining the rule of law, a level playing field, a clean and efficient government and the free flow of information. Under one country two systems, we will continue to play the role of an information metropolis in supporting the economic development in the Mainland and the Region, so that we all thrive in the global economy in the 21st century.

Thank you.