Speeches and Presentations

LCQ18: Industrial development of Hong Kong

     Following is a written reply by the Secretary for Commerce and Economic Development, Mr Gregory So, to a question by the Dr Hon Chiang Lai-wan in the Legislative Council today (July 9):


     Some industrialists have relayed to me that with the northern migration of quite a number of factories one after another during the eighties of the last century, industries in Hong Kong have been unable to revive in the past 20-odd years.  However, it has been reported that as the production costs on the Mainland have increased continuously in recent years, some manufacturers have planned to relocate their production bases back to Hong Kong.  On the other hand, a group of local industrialists from the new generation are actively revitalising Hong Kong industries at present.  Regarding the industrial development of Hong Kong, will the Government inform this Council:

(1) whether it has compiled statistics in the past 10 years about the number of manufacturers who relocated their production bases back to Hong Kong and the number of factories newly set up by them in the territory; if it has, of a tabulated breakdown of such numbers by type of products; if not, the reasons for that;

(2) whether the Government put in place specific policies in the past 10 years to assist manufacturers in their business development in Hong Kong; if it did, of the details; if not, the reasons for that;

(3) whether it has put in place policies and measures to assist the local industrialists from the new generation in their business development in Hong Kong; if it has, of the details; if not, the reasons for that;

(4) whether it has conducted any study on upgrading the existing industrial buildings so as to provide more factory premises that are suitable for modernised industries; if it has, of the details; if not, the reasons for that;

(5) given that subsequent to the decline of local industries, most industrial talents have changed their occupations, migrated northward or retired, giving rise to a succession problem of such talents, whether the Government has new policies and measures for training up more industrial talents; if it does, of the details; if not, the reasons for that;

(6) whether it has examined the implementation of new measures to further promote industrial development in Hong Kong, such as offering preferential measures to attract manufacturers to relocate their factories back to Hong Kong; if it has examined, of the details; if not, the reasons for that; and

(7) as the Government advocates the diversification of industries (including the innovation and technology industries), whether the Government has plans to draw up new policies and measures to assist in training up local workers gearing to the development of high-end technology industries; if it does, of the details; if not, the reasons for that?



     It has been the Government's policy to provide an environment conducive to conducting businesses and render suitable support to various trade sectors, so as to facilitate them to play to their strengths and attract enterprises (including local and foreign enterprises or Hong Kong enterprises returning from overseas or the Mainland to Hong Kong for development) to explore business opportunities in Hong Kong.  The Government attaches great importance to promoting the economic development of Hong Kong.  One of the main foci is to diversify the industries, that is, to diversify the products and services of our existing industries and to identify new areas for development, so as to meet the needs of the Hong Kong people for start-up initiatives, investment, business operation and employment.  The introductory part of the question states that some Hong Kong manufacturers have planned to relocate their production bases back to Hong Kong, and some industrialists also intend to revitalise the development of Hong Kong industries.  The Government is open to all proposals which can effectively facilitate the economic development of Hong Kong, and will actively listen to the views of the trade and the public on different specific proposals.

     The Government has not compiled statistics on the number of manufacturers who have relocated their production bases back to Hong Kong and the number of factories newly set up by them in the territory.  Parts (2), (3) and (6) of the question are mainly related to the policies and measures of the Government to support the development of the traditional industries.  The various existing support measures implemented by the Government and public bodies, such as the Dedicated Fund on Branding, Upgrading and Domestic Sales, the Small and Medium Enterprise (SME) Loan Guarantee Scheme, the SME Export Marketing Fund, the SME Development Fund, the special concessionary measures under the SME Financing Guarantee Scheme, and the Small Business Policy scheme implemented through the Hong Kong Export Credit Insurance Corporation, provide support to various trade sectors (including the traditional industries) in respect of financing and enhancing their overall competitiveness, so as to assist enterprises in developing their business.  In addition, the Support and Consultation Centre for SMEs of the Trade and Industry Department (TID) provides free information and consultation services specifically for SMEs (including new business start-ups of the traditional industries) such as information on applications for Government licences and permits, guidelines on drafting business plans and budget analyses, which help SMEs broaden their business knowledge and enhance their entrepreneurial skills.

     With regard to suggestions of encouraging the return of the traditional industries, we consider that given the limited land and manpower resources in Hong Kong, land-intensive or low value-added while labour-intensive industries may not be conducive to the creation of high quality employment opportunities and the long-term economic development of Hong Kong.  In fact, it is not possible to diversify industries solely by encouraging the return of the traditional industries.  We believe Hong Kong should progress towards a knowledge-based economy, and the traditional industries should deploy resources to areas or processes with high value-added or high technology as well as competitive edges or development potential, including product development and design, brand promotion and management, and research and development.

     For promoting product development, design and research and development, the Government is committed to, through the provision of software and hardware support, enhancing the co-operation among the Government, industry, academia and research sectors, and promoting local innovation and technological development.  For example, the Hong Kong Science and Technology Parks Corporation provides technology infrastructure for technology-based enterprises; and the Innovation and Technology Fund finances projects which are conducive to industrial innovation and technology enhancement.  Moreover, to promote and encourage the development of "Hong Kong brands", the TID and the Hong Kong Trade Development Council (HKTDC) have been jointly organising annual large-scale conferences on brand development since 2009 to help enterprises understand the strategies of exploring the domestic market and to deepen SMEs' awareness and knowledge about brand development.  In addition, the HKTDC has been actively promoting "Hong Kong brands" in both the Mainland and emerging markets, and is committed to establishing the network of Hong Kong Design Galleries in the Mainland to provide a platform for Hong Kong enterprises to showcase their products and enhance the popularity of "Hong Kong brands" in the Mainland.

     As regards the study on policies and measures to provide further support to industries, the Economic Development Commission (EDC) led personally by the Chief Executive is providing 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.  The EDC is also exploring and identifying growth sectors or clusters of sectors which present opportunities for Hong Kong's further economic growth, with a view to recommending possible policy and other support measures for these industries.  The EDC and its Working Group on Manufacturing Industries, Innovative Technology, and Cultural and Creative Industries (MICWG) are focusing on exploring ways to enhance the infrastructural support to the industries; assist the industries to tap into the Mainland market; enhance talent nurturing and attract talents; and encourage collaboration between various sectors and the innovative technology and the cultural and creative industries.  The MICWG has made initial specific recommendations to the EDC on a number of areas, including (i) providing opportunities for design talents to attend overseas internship; (ii) improving the Innovation and Technology Fund; (iii) encouraging enterprises to employ research and development talents; and (iv) strengthening the incubation programmes administered by quasi-Government or Government-funded bodies (including the Hong Kong Science and Technology Parks Corporation, the Cyberport and the Hong Kong Design Centre).  The recommendations have been endorsed by the EDC.  We look forward to the EDC's submission of more specific recommendations for the Government's consideration and implementation as appropriate.

     Part (4) of the question mentions the upgrading of the facilities of the existing industrial buildings to meet the needs of modernised industries.  At present, there are six industrial buildings under the Hong Kong Housing Authority, most tenants of which engage in the operations of light industries, and the leasing rate is over 99 per cent.  For privately-owned industrial buildings, proposed modifications of the facilities concerned should be proceeded with by the owners and should comply with the relevant regulations and procedures.

     Parts (5) and (7) of the question are mainly related to talents for promoting the development of industries.  Regarding the manpower required for the development of industries, the Vocational Training Council (VTC), through its 13 member institutes, supplies manpower for different industries by providing some 250 000 places each year in a full range of pre-employment and in-service programmes with academic qualifications recognised under the Qualifications Framework.  Separately, the Employees Retraining Board provides a diversified range of training programmes covering different industries to qualified employees aged 15 or above at sub-degree level or below to improve their employment opportunities, equip them with the necessary skills for switching jobs or enhance their skills in the respective industry.  Regarding talents required by high-technology industries, in addition to the relevant regular courses offered by various tertiary institutions, the New Technology Training Scheme of the VTC provides financial assistance to local employers to encourage them to release their employees to learn new technologies which are conducive to their business development, including some technologies not being widely applied in Hong Kong but the absorption and application of which by the local industrial and commercial sectors will significantly benefit Hong Kong.  The forms of support include subsidising employees to participate in overseas training courses, work attachments or pre-approved local training courses, and providing tailor-made training courses to individual companies.

Ends/Wednesday, July 9, 2014
Issued at HKT 11:53