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The Chief Executive, Mr Tung Chee Hwa, said today (Saturday) that small and medium enterprises (SMEs) were the backbone of Hong Kong's economy and it was Government's objective to provide a favourable environment conducive to the development of these enterprises.

Mr Tung said, "Hong Kong's economy is experiencing painful adjustment. But after this adjustment, the SMEs will play the role of an engine in our economic revival."

The Chief Executive today met with a group of SME practitioners and entrepreneurs to exchange views on the current and future development of SMEs. They included exporters and operators from catering, toy, garment and technology industries.

There are over 290,000 SMEs in Hong Kong, which constitute about 98 per cent of all enterprises in the services and manufacturing sectors. They employ about 1.4 million workers, representing 60 per cent of the workforce.

Mr Tung said that the Special Finance Scheme to provide funding and guarantees for loans for SMEs was part of the relief measures announced by the Government on June 22 to ease Hong Kong's economic adjustment. The Scheme was aimed at helping SMEs to cope with the liquidity crunch problem.

The Finance Committee of the Legislative Council approved a commitment of $2.5 billion for establishing the Scheme last month. The Government is now inviting the authorised institutions under the Banking Ordinance to participate in the Scheme.

"My colleagues in the Trade and Industry Bureau and Industry Department are making sure that loan facilities will be made available by the market sector before the end of the month," Mr Tung said.

"The entrepreneurs in Hong Kong are renowned for their adaptability and responsiveness to changes. I have confidence that with the relief in liquidity, the SMEs will come up with new business strategies to cope with the changing market environment and continue making significant contribution to Hong Kong's economy," Mr Tung added

During the meeting, representatives expressed their views on a number of issues ranging from human resources training, education to technology development.

The Director-General of Industry, Mr Francis Ho, also attended today's meeting.

End/Saturday, August 8, 1998