Written Question on Promoting the development of industries where Hong Kong enjoys clear advantages


The Government of the last term proposed the development of six industries that Hong Kong enjoyed clear advantages (six priority industries), i.e. testing and certification, medical services, innovation and technology, cultural and creative industries, environmental industries and education services, to pave the way for Hong Kong to move towards a knowledge-based economy. In this connection, will the Government inform this Council:

(a) whether it has completed the survey on the statistics on the six priority industries for 2012; if it has, of the statistics, including the number of persons employed in each industry, and the value added in the Gross Domestic Product contributed by each industry, etc.; if it has not, when it will complete the survey and release the statistics;

(b) given that the Chief Executive indicated in the 2013 Policy Address that in promoting the six priority industries in the past four years, certain issues which needed to be addressed had been identified, e.g. the medical sector was facing manpower shortage and whether education services should be regarded as an industry, etc. and that the Economic Development Commission would review the industrial development strategies and policies in order to draw up relevant proposals, whether the relevant review has been completed; if so, of the review outcome and details of the relevant proposals; if not, the preliminary review outcome;

(c) of the Government’s long-term positioning of the medical and education services industries, and whether it will give up promoting the development of these two industries; given that the Government of the last term adhered to the economic principle of “big market, small government”, whether the current Government will adopt a strategy of “making proactive efforts” in promoting industrial development, so as to expedite the pace of Hong Kong moving towards a knowledge-based economy; and

(d) given the views that since the local market is small, whether the industries can exploit the mainland market is of utmost importance, whether the Government has conducted any study on the development opportunities of the six priority industries in the mainland market; whether it will take specific measures to enhance co-operation between the six priority industries and their counterpart industries on the Mainland (especially in the Pearl River Delta Region) and help Hong Kong enterprises tap into the mainland market?

Reply by the Secretary for Commerce and Economic Development, Mr Gregory So:


This question straddles various policy areas. After consulting bureaux and departments concerned, my reply is as follows:

(a) In accordance with established practice, statistics on economic contribution (in terms of value added) and employment situation in respect of the six selected industries for the reference year of 2012 will be released on the Budget Day, i.e. February 26, 2014.

(b) The Economic Development Commission (EDC), personally led by the Chief Executive, is studying, from a high-level, cross-departmental and cross-sectoral perspective, how to make use of Hong Kong’s existing advantages and opportunities available. The EDC is also exploring the overall strategy and policy to broaden our economic base and enhance our long-term development, and identifying industries which present opportunities for Hong Kong’s further economic growth. The four working groups underpinning the EDC are:

(i) Working Group on Transportation;
(ii) Working Group on Convention and Exhibition Industries and Tourism;
(iii) Working Group on Manufacturing Industries, Innovative Technology, and Cultural and Creative Industries; and
(iv) Working Group on Professional Services.

They have drawn up their respective work plans and initial possible directions/recommendations and are examining in detail the feasibility of such initial directions/recommendations. We look forward to the early formal submission of specific recommendations by the EDC.

(c) In the 2013 Policy Address, the Chief Executive mentioned that to promote economic development, the Government must be “appropriately proactive”. The Government should refrain from intervention when the market is functioning efficiently, except to ensure a level playing field. The Government attaches great importance to the development of industries in Hong Kong, since high quality employment opportunities could only be created by promoting a firm economic development and encouraging businesses to thrive.

On the education front, the Government will continue to make substantial investment in education development. By promoting internationalisation and diversification, we will strive to consolidate Hong Kong’s status as a regional education hub with a view to promoting our competitiveness and long-term development through fostering talent.

On the medical front, the healthcare system of Hong Kong runs on a dual-track basis encompassing both public and private elements. The Government will, on the one hand, continue its investment and commitment for the public healthcare sector so that it will remain strong and robust and retain its role as the cornerstone of Hong Kong’s healthcare system and the safety net for all. On the other hand, we will promote and facilitate private healthcare development to help redress the imbalance between the public and private sectors in hospital services, increase the overall capacity of the healthcare system in Hong Kong to cope with the rising service demand and provide more choices of quality healthcare service to the public. The Government will continue to maintain this dual-track healthcare system, which has served Hong Kong well, and ensure that it can develop in a balanced and sustainable manner. The long term development of the medical industry should be primarily for satisfying local demand.

(d) The Government is committed to assisting Hong Kong companies in accessing the rapidly growing Mainland market. We have made various efforts in this regard with a view to further enhancing the co-operation between the Mainland and Hong Kong, in particular through the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA). Through CEPA, we are seeking various preferential and facilitative measures for the trade, lowering the entry threshold, relaxing the scope of services, etc. so as to promote the development of industries where Hong Kong enjoys clear advantages and provide an impetus for Hong Kong to move towards a diversified and knowledge-based economy.

Some examples of the various efforts are given below:

(i) On cultural and creative industries, the Government helps develop the Mainland market by lobbying the relevant Mainland authorities for market liberalisation measures. In this respect, the Hong Kong film sector is allowed under CEPA to partner with the Mainland counterpart to co-produce films for developing the film market of the Mainland. We also provide funding support to the local creative industries for undertaking initiatives and activities to tap the Mainland market;

(ii) On testing and certification, the Government has been discussing with Mainland authorities in seeking wider recognition of the assessment results by Hong Kong testing organisations through CEPA. Hong Kong testing organisations can co-operate with Mainland certification bodies to undertake testing of products processed in Hong Kong for the China Compulsory Certification System and, on a pilot basis in Guangdong Province, provide testing for voluntary food certification. With effect from 2014, relevant staff employed by Hong Kong testing and certification organisations without commercial presence on the Mainland will be allowed to provide services there. The scope of testing services for the purpose of certification will also be expanded from food to other areas of voluntary product certification on a pilot basis in Guangdong Province;

(iii) On innovation and technology, we have formulated and implemented initiatives to dovetail with the National 12th Five-Year Plan on Science and Technology Development to enhance Hong Kong’s participation in the national roadmap of technology development. Initiatives include the successful nomination of Hong Kong experts to enter into the National Science and Technology Programmes Expert Database; encouraging Hong Kong’s participation in national science and technology programmes; establishing more collaborative platforms, e.g. Partner State Key Laboratories (PSKLs), Hong Kong National High-tech (Partner) Industrialisation Base, Hong Kong Branch of Chinese National Engineering Research Centre (CNERC), etc. The Government also provides funding support to the PSKLs and CNERC for strengthening their R&D capabilities and promoting their co-operation with their Mainland counterparts; and

(iv) On environmental industries, the Government has implemented different measures to support the development of Hong Kong’s environmental industry in the Mainland. These measures include the setting up of “Hong Kong Pavilion” in the environmental exhibitions in Hong Kong and the Mainland for participation of the industry to showcase Hong Kong’s environmental technologies and services, organising study missions to facilitate the industry to understand the latest environmental policies and green market of the Mainland, implementing the CEPA liberalisation measures jointly with the relevant Mainland authorities, etc.

In addition, the Government introduced in June 2012 the $1 billion Dedicated Fund on Branding, Upgrading and Domestic Sales assisting Hong Kong enterprises from all sectors to enhance their competitiveness and further their development in the Mainland through developing brands, upgrading and restructuring their operations and promoting domestic sales in the Mainland. The response of the trade has been overwhelming. As at end of November 2013, we have approved 137 applications from enterprises and 28 applications from organisations, with a total funding amount of about $151 million.

Furthermore, the Office of the HKSARG in Beijing (the Beijing Office) has been conducting research on national polices related to taxation, labour, etc. which are of interest to Hong Kong enterprises, and analysing the impact and opportunities brought about by these policies to Hong Kong enterprises. The Beijing Office has also arranged experts to speak at seminars organised in the Mainland and compiled topical newsletters to disseminate relevant research findings to Hong Kong business associations and enterprises.

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