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Speech by the Secretary for Commerce, Industry and Technology, Mr Henry Tang, at the Softworld 2002 Conference held at Charlottetown, Prince Edward Island, Canada

Following is the full text of the speech entitled "Hong Kong - Connecting the World" given by the Secretary for Commerce, Industry and Technology, Mr Henry Tang, at the Softworld 2002 Conference held at Charlottetown, Prince Edward Island, Canada today (September 8, Canada time):

Ladies and gentlemen,

It gives me great pleasure to speak before this distinguished gathering of delegates, from Canada and around the world, who have come here for Softworld 2002. Indeed this is the fifth year Hong Kong participates in this major international information and communications technology event. This time I have brought along a strong delegation comprising some of the most active members of our ICT industry, representatives from the Hong Kong Trade Development Council, and my colleagues in the HKSAR Government.

Our participation in this annual conference is a key activity under the auspices of the Memorandum of Understanding on ICT co-operation, which we signed with Canada in 1998. Hong Kong and Canada have always enjoyed a close and friendly relationship. We look forward to building on that relationship to further enhance our cooperation as we embrace the digital era.

The theme of Softworld this year is "Where Great Ideas Are Born". I would like to take this opportunity to share with you the developments of Hong Kong in the ICT field as well as business and partnership opportunities that Hong Kong can offer to overseas ICT companies. I hope this will help stimulate discussions and sharing of best practices in the next couple of days where "greater ideas might be born".

Hong Kong is an early and mature user of ICT. We have achieved a good record of technology diffusion in the community. We have a PC penetration rate of over 60% and an Internet penetration rate of over 50% among our households, with one-third of them using broadband services. Indeed, broadband coverage reaches all commercial buildings and over 95% of domestic buildings in Hong Kong.

We have in total over 2.6 million Internet accounts serviced by over 250 ISPs. Internet services in Hong Kong are amongst the cheapest in the world. Hong Kong is well linked to Mainland China and all major cities in the world, with an external connectivity of 900 Giga bits per second, which is the second highest in Asia, only next to Japan.

Hong Kong also has one of the world's most open and vibrant telecommunications market. There is no restriction on foreign ownership or participation. Except where there are physical constraints such as spectrum scarcity, we allow market force to decide on the number of licences to be issued for different types of telecommunications services. We adopt a fair, transparent and pro-competition regulatory regime in order to provide a level playing field for all operators.

As a result, we have one of the most competitive telecommunications markets in the world. We have altogether six mobile operators, nine local fixed telecommunications network service operators and 25 external telecommunications facilities operators for a population of around seven million people. We have licensed 200 IDD operators. 86% of our population are mobile phone users - one of the highest mobile penetrations in the world. We are one of the first in Asia to introduce General Packet Radio Services (GPRS), or 2.5G, and we are also the first in Asia to launch multimedia messaging service (MMS). We plan to roll out 3G services next year. We have already issued licences to four operators.

With the establishment of an advanced information infrastructure, various online services have been successfully introduced in both the public and private sectors, making Hong Kong an advanced digital city in the use of online services. To name a few, the public can now file tax returns, book sport and recreational facilities, conduct banking and stock trading transactions, pay Government bills or submit trade-related documents online. 86% of our population aged 15 or above have used e-business services.

Another fine example of Hong Kong being an online city is the Government's commitment to the Electronic Service Delivery Scheme, under which we now offer over 130 kinds of public services online. I am very proud to report that our ESD scheme won the renowned Stockholm Challenge Award last year.

Even the average Hong Kong citizens are very receptive to new technologies. Over 8.5 million e-payment smart cards are already in circulation for use in various types of public transport services as well as in small value retail transactions, averaging more than one card per person. We will start rolling out multi-application smart identity cards in mid 2003 for the entire population. Value-added applications, offered on a voluntary basis, will allow the smart ID card to be used as a driving licence, library card or even as an electronic purse. We will also provide a digital certificate to be installed in the smart identity card so that the public can make use of it for authentication in electronic transactions. Covering seven million people, Hong Kong will have one of the largest client bases in the world for taking part in E-government and e-commerce applications.

The HKSAR Government has a clear vision of the role we should play in driving Hong Kong's ICT development. We promulgated in May 2001 the Digital 21 IT Strategy, which aims to position Hong Kong as a leading digital city and e-business community in the region. Under the strategy, we have embarked on various initiatives which focus on five strategic areas: enhancing our e-commerce environment; building E-government; developing our IT workforce; building a digitally inclusive society; and exploiting enabling technologies.

We have established a solid foundation for the development of e-business. We have enacted legislation to give legal recognition to electronic records and digital signatures. We have built a local public key infrastructure supported by four recognised certification authorities in the public and private sectors, in order to provide the community with digital certificates for the conduct of secure electronic transactions. We have also successfully established e-commerce infrastructure in various sectors to support our economic growth. We have one of the world's most advanced financial information infrastructures in the region.

The HKSAR Government also leads by example in promoting e-business. I have just referred to the Electronic Service Delivery Scheme, where we have set an ambitious target of putting 90% of our public services online by end 2003. We have earmarked C$340 million this financial year for meeting capital expenditure in Government IT projects. Most of these projects will be outsourced to the private sector. One recent example is Teranet of Toronto working with a Hong Kong IT company. Together, they won a C$30 million contract to develop and maintain an Integrated Registration Information System for the Land Registry of the Government.

We have also introduced one of the world's first web-based electronic tendering systems. Our aim is to carry out 80% of Government procurement tenders through electronic means also by end 2003.

We have made good progress in promoting e-logistics. Online trading activities and the submission of many of the trade-related documents are not only feasible but actively promoted. We are also gradually migrating to paperless customs clearance.

With all these efforts, Hong Kong has gained international recognition and has been ranked amongst the top in Asia in terms of e-business potential and readiness, as well as E-government development. Make sure you are on the look-out: we have a lot of business opportunities to offer to Canadian and other overseas ICT companies.

With our close geographical, cultural and economic links with Mainland China, we stand to gain from its accession to the WTO, and the gradual opening up of its market, especially in the ICT field. We see a crucial role for us to link up our international business partners with Mainland enterprises. Our strength as an international financial centre and premier services hub will contribute to the acceleration of the economic growth in the Mainland. We are best equipped to provide the value-added services our Mainland partners need to expand their business operations, both domestically and overseas.

Conversely, with over twenty years' experience in cultivating and doing business in the Mainland market, Hong Kong companies are uniquely placed to offer our expertise to support Canadian and other overseas firms to venture into this vast, and in many respects, untapped market. As a matter of fact, our IT sector has already established a close partnership with Mainland ICT industry. Over 40% of software vendors (ISVs) in Hong Kong actually have set up branch offices in the Mainland and have actively participated in IT service and application developments.

And besides, what makes Hong Kong tick as a knowledged-based economy is our steadfast commitment to protecting intellectual property rights. This commitment is underpinned by our comprehensive IP legislation, which complies fully with the WTO TRIPS Agreement (Trade-Related Aspects of Intellectual Property Rights), vigorous enforcement actions, sustained public education efforts, as well as serious co-operation with intellectual property owners in combating piracy.

Indeed, our strategic value as a two-way platform for doing business with the Mainland has been recognized by many foreign companies wanting to have a share of the pie. Over 3,200 overseas businesses have set up their regional headquarters and offices in Hong Kong. The recent ones include Philips of the Netherlands - the world electronics giant, and Checkpoint of Israel, which is the world leader in firewall technology. These actions speak for themselves. Hong Kong is your springboard.

Ladies and gentlemen, if what I have just said appealed to you, I strongly urge you to come to Hong Kong in December this year to attend the prestigious international telecommunications event, ITU TELECOM ASIA 2002. I understand that Mr Allan Rock, Minister of Industry Canada, will lead a Canadian delegation to participate in the event. You will be able to see for yourselves what Hong Kong can offer to you as a leading digital city in the region and Asia's World City.

Finally, let me thank you once again for having us here in this beautiful city of Charlottetown, Prince Edward Island. I hope you will be able to establish new relationships and find new partners with many members of our Hong Kong delegation present today. Thank you very much.

Monday, September 9, 2002