Enhancing Employment Support and Creating Employment Opportunities

MR CHAN KIN-POR (in Cantonese): President, today, many Members have expressed their views on employment support, I would like to focus on analysing the issue of creating employment opportunities. In fact, poverty alleviating measures have been implemented in Hong Kong for many years, but the population living in poverty is on the rise despite these relief measures. The problem involves many complicated issues, including the population policy, which cannot be easily solved. However, I think one of the fundamental and principal causes is the serious unbalanced development of industries. Before the reunification, the service industry in Hong Kong developed rapidly, among which the four pillar industries made even greater success. As a result, labour-intensive industries declined gradually. According to the information of the Census and Statistics Department, at present, the service sector has accounted for 92.3% of the GDP in Hong Kong, but it can only accommodate 86.7% of the employed population. As for the manufacturing industry, the GDP percentage it accounts for has dropped continuously from 14.5% in 1991 to 2.5% at present. For this reason, no matter how prosper Hong Kong is, many grassroots people still cannot find a job, or can only take up jobs with very low pay. One of the reasons for the unbalanced industrial development was that production costs in Hong Kong kept increasing, which drove industries to move north. Another reason was that the Hong Kong Government followed strictly the positive non-intervention policy, allowing industries to develop freely. As a result, industries with an edge in Hong Kong made rapid development, such as the four pillar industries. Since investors usually focused on reaping short-term profits, no one was interested in investing in industries that needed longer time for development, particularly without the promotion of the Government. As a result, there was a serious imbalance in industrial development. After the reunification, the Government seemed to be aware that the diversified development of industries was required to provide the means of livelihood for all walks of life. The former Chief Executive, TUNG Chee-wah, had put forth a number of industrial proposals, but they all ended in failure for various reasons. Now, Chief Executive Donald TSANG has proposed the promotion of the six industries, namely, testing and certification services, medical services, innovation and technology, cultural and creative industries, environmental industries and education services. It is the golden opportunity to redress the unbalanced industrial development in Hong Kong, and the authorities have estimated that tens of thousands of new posts will be created. Some people are of the view that the six industries cannot offer a lot of jobs to the grassroots. However, new posts will naturally bring forth new demand. When new offices come into operation, new demand for matching services will arise, such as cleansing services, catering service for staff, goods transport, and so on. Actually, since it is not possible for industries to move back to Hong Kong, we can only rely on the promotion of the development of new industries to create new posts. Moreover, if Hong Kong can achieve diversified development, the next generation of the population in poverty will have a greater chance to rise out of poverty. However, the success of the six industries depends greatly on the determination of the Government. Before the delivery of the policy address, the
Government kept spreading the advantages of developing the six industries, leading the public to have high hopes for these industries. Nonetheless, it has turned out that the promotion effort made by the Government has only confined to the removal of hurdles hindering the development of these industries. It is really worrying that the Government is not making adequate effort to promote these industries. We can see from the examples of many countries in Asia that governments must undertake the role of an advocator in promoting the industrial development. Take the film industry in Korea as an example. The industry has seen rapid development in recent years. In addition to the efforts made by members of the industry, the Korean Government has actually taken up the role of an advocator. It has rendered full support to the industry from research and development, talent training, fund raising and marketing promotion. But when we look at the case of the industry in Hong Kong, we can easily understand why the industry has been in decline. Hence, in order to right the unbalanced industrial development, the Government must give up its passive attitude, and actively take up the role of an advocator for industries.
To take up the role of an advocator, the Government has to overcome certain psychological burden. It should not remain indifferent to the industrial development in fear of attracting criticisms of collusion between the Government and the business. On the contrary, it should act boldly to introduce new mechanisms and provide ambitious tax or financial concessions to investors to attract them to invest or set up regional offices in Hong Kong. The Government may enter into investment agreements with investors. To pre-empt abuses and transfers of benefits, the Government may put in place a stringent monitoring system, so that the agreements will be vetted and approved in a fair and open manner with high transparency. The openness and transparency of the arrangement can ensure that the Government is blameless. Investment agreements should also be handled strictly. Investors should be requested to give undertakings on the scale of investment in Hong Kong and even on the number of posts to be created. The Government will provide them with concessions step by step only when their capital arrives in Hong Kong and produces actual benefits. To create job opportunities, I believe the Government should start with improving the industrial structure and attracting investors. The approach adopted in the past will not find a way out for Hong Kong. The Government should adopt a new mindset and dare to commit in order to solve the employment
problem. President, I so submit.

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