Speeches and Presentations




LCQ9: Development of industries in Hong Kong

Following is a question by the Hon Chung Kwok-pan and a written reply by the Acting Secretary for Financial Services and the Treasury, Ms Julia Leung (in the absence of the Secretary for Commerce and Economic Development) in the Legislative Council today (October 31):

Question:

When the Chief Executive (CE) talked about the relationship between the Government and the market in his address to the Legislative Council on the 17th of this month, he pointed out that Hong Kong needed to develop new strengths to keep its leading position; otherwise, it would fall behind. With regard to the promotion of the development of industries in Hong Kong, will the Government inform this Council:

(a) whether the Government of the current term will continue to promote the six industries where Hong Kong enjoys clear advantages; if it will, of the specific plans in place, and the details of the policies concerned; if not, the reasons for that; of the measures put in place by the authorities to support the development of such industries in order to improve the Hong Kong economy;

(b) whether the authorities have any specific ideas regarding the new strengths that Hong Kong needs to develop as mentioned by CE; if they have, of the details; whether the authorities will review afresh the policies regarding the exploration of emerging industries and the nurturing of related talents so as to promote diversified development of the industrial structure and enhance Hong Kong's competitiveness; and

(c) whether the Government will strengthen support for the traditional pillar industries which are relevant to the emerging industries, in particular those faced with continuous soaring operational costs and, as a result, are in dire need of reforming for development; if it will, of the details?

Reply:

President,

My collective reply to the three parts of the question is as follows:

The Government attaches great importance to the development of industries in Hong Kong, since quality employment opportunities could only be created by promoting a firm economic development and encouraging businesses to thrive. We will actively support the diversification of our economy that can engender a stronger middle class and better job opportunities for the grass roots. The Chief Executive (CE) has stated clearly in his Manifesto that we would draw up an overall industry policy with a view to creating jobs and improving people's livelihood.

To implement the above guiding thoughts, we need to support emerging industries with growth potentials. The Government should take a more active and positive role and act as the market facilitator. When selecting potential emerging industries, we should consider the inherent merits of these industries and capitalise on the opportunities made available by the rapid developments in the Mainland. It is also stated in a dedicated Chapter of the National 12th Five-Year Plan that support is given to the development of emerging industries in Hong Kong -

"Section 2 Supporting Hong Kong and Macao to nurture emerging industries
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Supporting Hong Kong and Macao to strengthen their capabilities in industrial innovation, expedite the nurturing of new economic growth points and take forward co-ordinated economic and social development."

— (Section 2, Chapter 57, National 12th Five-Year Plan)

In the past few years, the Government has actively allocated resources to promote the development of these industries. Take innovation and technology as an example. Hong Kong enjoys various strengths, including a fine tradition of rule of law, a sound intellectual property rights protection regime as well as universities at international standards. Developing technology-based industries will not only provide quality research and employment opportunities in Hong Kong, but also enhance the competitiveness of Hong Kong's other industries. We are committed to creating a favourable environment to facilitate the realisation of research and development (R&D) results, by providing software and hardware support and fostering co-operation among the Government, industry, academia and the research sectors. For instance, we have commenced development of Phase 3 of the Science Park, launched the R&D Cash Rebate Scheme and raised the level of rebate from 10% to 30% upon review, and rolled out the Public Sector Trial Scheme.

Apart from promoting the existing industries, the Government will also need to create new advantages and develop new strengths for Hong Kong. The CE has therefore announced that an Economic Development Commission (EDC) would be established to provide visionary direction and advice to the Government on the overall strategy and policy to broaden Hong Kong's economic base and to enhance Hong Kong's economic growth and development, and in particular, to explore and identify growth sectors or clusters of sectors which present opportunities for Hong Kong's further economic growth, and recommend possible policy and other support for these industries. EDC will be led by the CE. The preparatory work for the setting up of the EDC has commenced and it is envisaged that the EDC would be set up shortly.

We have to maintain Hong Kong's existing advantages while building up new ones. In fact, there are certain synergies between traditional and emerging industries. One may think that the textiles and apparel industry is a rather traditional sector, but if the needs of the industry can be met by applying innovative technology to enhance product quality, expand into new application areas and lower production costs, this will be a good example of cross-sector synergistic development.

We also understand that recently, the traditional pillar industries are in urgent need to upgrade and restructure their operations in the face of increasing operating costs. As such, the Government has introduced a number of policy measures this year to ease the burden of enterprises, improve the business environment, and assist the enterprises in upgrading and restructuring their operations and enhancing their service quality. These measures include the launching of the special concessionary measures under the SME Financing Guarantee Scheme, supporting the Hong Kong Export Credit Insurance Corporation to offer concessionary policy terms for SMEs including premium discounts for SMEs, signing the Supplement IX to CEPA to provide more services liberalisation and trade and investment facilitation measures, as well as rolling out the $1 billion Dedicated Fund on Branding, Upgrading and Domestic Sales (BUD Fund) to assist enterprises in developing brands, upgrading and restructuring their business operations and promoting domestic sales in the Mainland market.

Looking forward, the Government is eager to work together with various stakeholders in pooling wisdom to jointly formulate an overall economic development strategy and a corresponding industry policy with a view to boosting the economy, improving people's livelihood and maintaining Hong Kong's long-term competitiveness.

Wednesday, October 31, 2012

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