Banner Picture
Publications and Press Releases
Press Releases
spacer file

LCQ1: Development of Internet economy

Following is a question by the Hon Mrs Regina Ip and a reply by the Secretary for Commerce and Economic Development, Mr Gregory So, in the Legislative Council today (January 21):


According to a consultancy study in 2011 on the contribution of the Internet to Hong Kong's economy, one-third of Hong Kong's Internet economy was driven by consumption, another third was contributed by net exports of e-commerce and Internet-related hardware, and the remaining third comprised government and private investments in Internet-related goods and services. The contribution of the Internet to the economy will rise from 5.9 per cent of Hong Kong's gross domestic product in 2009 (i.e. about HK$96 billion) to 7.2 per cent in 2015, reflecting the increasing importance of the Internet to the economy. However, there are comments that the Government is not proactive in promoting the development of the Internet economy and cross-border e-commerce activities. In this connection, will the Government inform this Council:

(1) whether it has regularly collected data and conducted statistical analyses on Internet economic activities in Hong Kong; if it has, of the details;

(2) whether it will set up a standing working group comprising representatives from the Internet industry to study ways to support and boost the Internet economy, including formulating strategies to encourage private investments in this respect; and

(3) as it is learnt that the Guangdong provincial authorities has all along been committed to promoting and developing cross-border e-commerce activities, and that Guangzhou, one of the pilot cities designated by the State Council for cross-border e-commerce services, has introduced tax relief measures such as bonded warehouses, bonded logistic parks as well as import duties on luggage and postal parcels, while Hong Kong lacks the measures and a department dedicated to promoting cross-border e-commerce activities proactively, whether the Government will take steps to catch up on this front?



My reply to the three-part question is as follows -

(1) Since 2000, the Government has been conducting regular surveys on the usage of computers, Internet, e-commerce and other information technologies (IT) in various business sectors in Hong Kong, with a view to formulating measures to drive IT adoption among different economic sectors to enhance competitiveness. According to findings of the 2013 Survey on Information Technology Usage and Penetration in the Business Sector undertaken by the Census and Statistics Department, the value of e-commerce sales in Hong Kong increased by 104 per cent from $139.6 billion in 2008 to $284.7 billion in 2012. E-commerce sales accounted for 3.7 per cent of business receipts of local business establishments in 2012, of which 47.6 per cent was business-to-consumer transactions, 51.5 per cent was business-to-business transactions and the remaining 0.9 per cent was related to government and non-business organisations. The new round of survey, which is under preparation, would commence in March.

(2) The Government is committed to facilitating the development of digital economy. The Task Force on Industry Facilitation under the Digital 21 Strategy Advisory Committee, comprising members from Government and the industry, advises on strategies and initiatives to facilitate the development of information and communications technology (ICT) in Hong Kong. The Task Force deliberated on issues related to the development of Internet economy on various occasions, including the Sector-specific Programme, ways to promote cloud computing adoption among small and medium enterprises, usage of IT by local enterprises, and the International IT Fest which helps foster the development of digital economy in Hong Kong. Furthermore, the Working Group on Manufacturing Industries, Innovative Technology, and Cultural and Creative Industries under the Economic Development Commission had also considered the subject of e-commerce.

As regards encouraging private investment in the Internet economy, Hong Kong is a free market and private investments are mainly market-driven, with the Government implementing measures to support and facilitate the development of the industry and the market. For instance, in early 2014, the Office of the Government Chief Information Officer launched a one-stop interactive portal, iStartup@HK, for technology startups and prospective investors, providing them with a networking platform that can facilitate investment matching. Moreover, Cyberport and the Hong Kong Science and Technology Parks also arrange opportunities for their startups to meet with investors and pitch their innovative ideas and products in order to acquire funding.

On the other hand, Invest Hong Kong also promotes Hong Kong as a regional and global e-commerce service centre, introducing Hong Kong's well-developed ICT infrastructure to overseas, Mainland and Taiwanese investors and encouraging them to collaborate with local research and development centres in respect of e-commerce technology and facilities, so as to foster the development of Hong Kong's e-commerce business.

(3) E-commerce is burgeoning in Hong Kong. We ranked 3rd worldwide in the Digital Evolution Index compiled by the Tufts University in 2013, indicating that Hong Kong has a mature digital eco-system and a competitive e-commerce market. Our Internet take-up rate is very high, with mobile penetration rate standing at 237 per cent. Our average peak Internet connection speed at 84.6 Mbps is the fastest globally. The robust digital and mobile connectivity of Hong Kong has provided a favourable environment for the development of e-commerce.

Hong Kong thrives on free trade. Being a free port, Hong Kong does not levy customs tariff on imports or exports. Given the different economic structures of Hong Kong and Guangzhou, it is inappropriate to compare the fiscal measures of the two places.

Hong Kong and Guangdong have been working closely to facilitate cross-boundary e-commerce. Under the Mainland and Hong Kong Closer Economic Partnership Arrangement, Hong Kong and Guangdong have jointly implemented Mutual Recognition of Electronic Signature Certificates. This measure strengthens the security and reliability of cross-boundary electronic transactions, thus promoting the development of secure e-commerce between the two places.

Wednesday, January 21, 2015