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The Government is firmly committed to promoting the development of electronic commerce in Hong Kong, especially amongst the small and medium sized enterprises.

This was stated by the Secretary for Information Technology and Broadcasting, Mr K C Kwong, when addressing members of the business associations of Germany, Australia, Austria, France, Singapore and Hong Kong today (Friday).

He told the gathering that the Government, fully recognising the importance of electronic commerce in driving Hong Kong's future economic growth, had taken a number of initiatives aimed at providing a favourable environment for electronic commerce to take hold and flourish in the territory.

First, he said, the Government would launch the Electronic Service Delivery (ESD) scheme which would provide Government services over the Internet.

"Our aim is not only to provide more efficient and better quality public services to the community, but also to encourage the community to accept electronic commerce as an integral part of daily living," he said.

"By raising general awareness in, and acceptance of, electronic business, the ESD scheme will also act as a catalyst to pump-prime the development of electronic commerce in the private sector."

The Government is currently inviting tenders for the supply of the ESD system. The first phase of the scheme will cover the services of 10 departments and public agencies, and is expected to be operational in the latter half of next year.

Mr Kwong noted that, in parallel with the introduction of ESD, the Government was working on several fundamental issues which were essential to the development of electronic business in Hong Kong.

They include the establishment of a public key infrastructure and a public Certification Authority to provide a safe and secure environment for the conduct of electronic commerce.

He explained, "With the use of digital signatures using a public/private key mechanism, we will be able to establish the identity of the parties to an electronic transaction, authenticate electronic messages, guarantee the integrity and confidentiality of the messages and ensure that they cannot be repudiated."

The Hongkong Post will establish the public Certification Authority by the end of this year. In addition, the Government will introduce legislation to ensure that electronic records and digital signatures are accorded the same degree of recognition and protection in law as their paper-based counterparts.

"We are now working on a bill to establish the legal framework, and we aim to introduce the bill into the Legislative Council within the next quarter," said Mr Kwong.

Noting that a strong IT industry is essential to the development of applications for electronic commerce, Mr Kwong said the Government was set to outsource its IT projects as much as practicable.

He said Government spending on IT was expected to reach $2.1 billion in 1998/99, an increase of 11 per cent over the last financial year. And despite the current economic downturn, the Government will continue to push vigorously the use of IT within Government, both to improve services and to enhance productivity.

"Starting from next financial year, all new IT development and maintenance projects will, as a preference, be outsourced unless there are over-riding reasons for retaining the work in-house.

"Our target is to outsource two-thirds of all new IT projects in Government by 2001 so as to create a market of sufficient size to stimulate the development of the IT industry," Mr Kwong said.

He was confident that the Government initiatives he outlined would create a favourable environment for the development of electronic commerce in Hong Kong.

END/Friday, February 26, 1999

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