Speeches and Presentations



LCQ6: Building "Brand Hong Kong" and promoting the development of Hong Kong industries

Following is a reply by the Secretary for Commerce and Economic Development, Mr Gregory So, to a question by the Hon Chung Kwok-pan in the Legislative Council today (January 9):

Question:

In reply to my question raised in this Council earlier, the Chief Executive (CE) promised to examine how to build a good Hong Kong brand. In addition, he has promised in his election manifesto that "[w]e will support Hong Kong manufacturers in restructuring their business model to tap the domestic market on the Mainland, especially in areas such as garments, toys, jewellery, electronics, watches and clocks, where our manufacturers have traditionally excelled in terms of branding, design, product research and development, market research, sales, marketing and exhibitions. We will strive to set up permanent exhibition venues in major mainland cities to display Hong Kong made products". In this connection, will the Government inform this Council:

(a) whether the Government has any initial ideas for helping local small and medium enterprises (especially those from the manufacturing industry) in building "Brand Hong Kong"; if it has, of the details and when it will put forward specific plans; if not, the reasons for that;

(b) whether the Government will complementarily promote the development of Hong Kong industries while building "Brand Hong Kong", including the implementation of measures to encourage exchange and collaboration between Hong Kong manufacturers and overseas enterprises in tapping business opportunities; if it will, of the specific measures and the industries in which such measures will first be implemented; if not, the reasons for that; whether the authorities will allocate additional resources to assist Hong Kong manufacturers in developing the domestic market on the Mainland, taking the opportunities of the preferential policies under the Mainland and Hong Kong Closer Economic Partnership Arrangement, and through the quality products under "Brand Hong Kong", as well as to assist Hong Kong manufacturers in developing overseas markets; if they will, of the details; if not, the reasons for that; and

(c) given that, in recent years, quite a number of manufacturers in the clothing industry intend to relocate their factories on the Mainland or in Southeast Asia back to Hong Kong, of the policies that the authorities have put in place to help such manufacturers moving back to Hong Kong and to strengthen the brand prestige of good quality of "Made in Hong Kong" products; of the policies for encouraging Hong Kong manufacturers to develop new materials for clothing and new technology for production (e.g. encouraging manufacturers to collaborate with universities and scientific research institutions, etc.) so as to build and develop "Brand Hong Kong" ?

Reply:

President,

My consolidated reply to the Hon Chung Kwok-pan's question is as follows:

To help enterprises enhance their competitiveness and expand their business, the Government has implemented various measures to assist different industries, including those industries which have traditionally excelled like garments, toys, jewellery, electronics, watches and clocks etc, in developing brands, upgrading and restructuring their operations, exploring sales channels, and enhancing product research and development, and has also been providing the latest market information to them.

Developing brands and exploring Mainland and overseas markets
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On funding support, to assist Hong Kong enterprises in capturing the opportunities arising from the policies of expanding domestic demand and encouraging upgrading and restructuring in the National 12th Five-Year Plan, we launched a dedicated fund of $1 billion in end June 2012 to provide funding support for individual enterprises and non-profit-distributing organisations to assist the enterprises in developing brands, upgrading and restructuring operations, and promoting domestic sales in the Mainland, so as to enhance their competitiveness and further their business development in the Mainland. The response of the trade has been overwhelming. Under the Enterprise Support Programme, 297 applications received under the first two batches had been processed, of which 31 applications were approved with an average funding amount of $368,000. Another 71 applications were approved with conditions. Under the Organisation Support Programme, 37 applications received under the first two batches had been processed, of which 17 applications were approved with an average funding amount of around $3.57 million. We are now processing the third batch of applications, including 222 applications submitted by enterprises and 17 applications submitted by organisations.

The SME Development Fund (SDF) administered by the Trade and Industry Department (TID) also provides funding support to trade and industrial organisations etc to implement projects which help SMEs develop and promote their brands so as to tap into the Mainland and overseas markets. In the past three years, over $14 million of funding has been granted under the SDF to support a number of projects relating to the development and promotion of brands. In addition, the SME Export Marketing Fund (EMF) operated by TID supports individual SMEs to participate in export promotion activities, with a cumulative funding support for each SME at $150,000. About $2.27 billion of funding has been granted under the EMF, benefiting over 36 000 enterprises. The Hong Kong Export Credit Insurance Corporation (ECIC) also implements various measures to support Hong Kong exporters, in particular SMEs, to engage in export trade and explore export markets. These include providing special premium discounts for export to emerging markets under specified conditions.

On the other hand, the Government and other relevant organisations also organise a wide range of activities to promote Hong Kong brands. For example, the Hong Kong Trade Development Council (HKTDC) organises exhibitions and short-term promotional activities in the Mainland and overseas markets to promote Hong Kong brands, and provides business matching services etc, in order to support and encourage Hong Kong enterprises to exchange and co-operate with Mainland and overseas enterprises, to test the markets and expand their business network. These activities include the Lifestyle Expos organised in emerging markets and the Style Hong Kong Shows held in major cities in the Mainland, etc. HKTDC has also set up a Design Gallery in Beijing and Guangzhou to provide a long-term sales platform for Hong Kong brands so as to test the market and build up brand awareness. As e-commerce has been increasingly popular, HKTDC has also set up a Design Gallery website on Taobao's Tmall, helping Hong Kong brands explore the vast opportunities in Mainland's online shopping market. In addition, our offices in the Mainland collaborate with trade associations and other organisations to organise "Hong Kong Week" promotional events in the Mainland in 2012 and 2013, in order to promote Hong Kong products and services, with a view to assisting Hong Kong enterprises in building up their brand image and exploring the domestic market.

Apart from funding support and promotional activities, we also provide enterprises with various information and services to enhance their ability in developing brands and exploring sales channels. For example, TID has been co-organising a high-level conference on brand development with HKTDC, and providing useful information on branding through its website. Moreover, the "HKTDC Research" electronic information platform also provides different types of market information, including analysis of consumers' needs and preferences, in order to assist Hong Kong enterprises in understanding the latest situation of the Mainland and overseas markets.

Technology and research development of the textiles and clothing industry in Hong Kong
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Regarding technology and research development of the textiles and clothing industry, there are various programmes under the Innovation and Technology Fund (ITF) to support and encourage Hong Kong enterprises to conduct research and development (R&D) work, in order to enhance the comcompetitiveness their products. These include the Small Entrepreneur Research Assistance Programme and the University-Industry Collaboration Programme, etc. To further encourage private companies to conduct R&D work, the Government launched the $200 million R&D Cash Rebate Scheme in April 2010. To enhance the effectiveness of the Scheme, we have increased the level of cash rebate threefold, from 10 per cent to 30 per cent, with effect from February 1, 2012. In addition, the Government has set up five R&D Centres since 2006 to promote and co-ordinate partnership between universities and the industry to conduct applied R&D in selected technology areas, which includes the Hong Kong Research Institute of Textiles and Apparel (HKRITA). Up to end November 2012, HKRITA has conducted 80 R&D projects funded by the ITF, with total funding of about $215 million. With an increasing number of projects completed, HKRITA has been engaging more actively in the transfer of its R&D results to the industry and commercialisation of the R&D outcomes in recent years.

Long-term industries development
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The Honourable Chung also mentioned about the relocation of factories of the clothing industry back to Hong Kong. In fact, this issue does not only involve a single industry, but concerns the long-term development of industries of Hong Kong. In this regard, the Chief Executive (CE) has already stated clearly in his policy platform that we would draw up an overall industrial policy. On this, the Economic Development Commission (EDC) to be established under the CE's direction will look into the support policies and measures required by industries that could foster Hong Kong's further economic development. The EDC will be led by the CE. The preparatory work for the establishment of the EDC has commenced and it is envisaged that the EDC would be set up shortly.

Thank you, President.

Wednesday, January 9, 2013