Press Release



Speech by Secretary for Trade and Industry


Following is the full text of the speech (English only) by the Secretary for Trade and Industry, Mr CHAU Tak Hay, at the luncheon organised by the Israeli Chamber of Commerce today (Thursday):

Mr Aharoni, Ladies and Gentlemen,


It gives me great pleasure to speak at today's luncheon. Being here with you today reminds me of the inspiring and enjoyable experience that I had in Israel earlier this year. I was most impressed by what I saw. Evidence of the leaps in technological development and the resultant economic achievements abounded. For example, I was told that some 65 per cent of Israel's GDP came from technology-related products and that Israel's per capita GDP had surged from US$11,000 to more than US$17,000 in just a few years' time.

But equally, if not more, important, was the strong commitment to the pursuit of excellence through innovation and technology that I witnessed throughout the trip. This has immense relevance to Hong Kong as we position ourselves to become an innovation centre in the next millennium. For commitment and resolve are the prerequisites in our drive forward in the knowledge-based economy.

The Foundation

Before charging into the future, it is useful to take stock of where we are now. Over the years, Hong Kong has invested significant resources in establishing a range of support services for our manufacturing and service industries. A number of trade and industrial support organisations such as the Trade Development Council and the Productivity Council help our businesses access new markets and improve their productivity. Infrastructural facilities such as the industrial estates, the Industrial Technology Centre and the Science Park being developed seek to cater for the different needs of our industry for technology support and accommodation. Funding schemes are also in place to encourage projects of benefit to the development of our industries as well as technology ventures.

Like Israel, Hong Kong attaches great importance to education and training. Education is the single biggest item of the Government's annual budget - about one-fifth in terms of recurrent expenditure. We have eight universities producing 15 000 first-degree graduates and 6 000 higher-degree graduates each year. In addition, the Vocational Training Council provides a wide range of technical education and industrial training programmes. It also administers the New Technology Training Scheme, which provides grants to companies to enable their employees to acquire skills in new technologies.

Capability Building

It has been said that a contributing factor in Israel's success formula is the constant sense of alertness or even crisis that the Israelis possess. Indeed, the last thing that we should do is to be complacent. As economies across the globe realise the importance of innovation and technology to their long-term economic growth, we have to redouble our efforts if we are to maintain our competitiveness. The Chief Executive therefore laid down his vision of developing Hong Kong into an innovation centre for Southern China and beyond in his first Policy Address. In the past two years, we have been taking active steps to realise this vision.

For example, following the recommendation of the Commission on Innovation and Technology, we have recently established a $5 billion Innovation and Technology Fund to finance projects that contribute to the upgrading of innovation and technology of our manufacturing and service industries. The Fund will provide a secure source of financing for such activities as commercially relevant research and development projects, human resources development and technology entrepreneurship. As far as technological infrastructure is concerned, the Commission has identified a gap in terms of midstream research and development. Given the importance of such research in developing innovative ideas into generic technologies for eventual commercialisation by the private sector, we have accepted the Commission's recommendation to establish an Applied Science and Technology Research Institute. We are now mapping out the planning parameters of the Institute. Separately, we are also following up on other recommendations of the First Report of the Commission, such as strengthening technological cooperation with the Mainland. We are confident that these new initiatives will add further impetus to the long-term development of our industries.

Many of you are aware that the Commission has recently submitted its Second and Final Report to the Government. The major recommendations of the Report include -

(a) first, the establishment of a standing advisory body reporting to the Chief Executive and a policy group headed by the Financial Secretary so as to strengthen the formulation, coordination and implementation of policy on innovation and technology;

(b) second, the merging of the Hong Kong Science Park, the Hong Kong Industrial Technology Centre Corporation and the Hong Kong Industrial Estates Corporation so as to achieve better synergy among the various components of our technological infrastructure;

(c) third, the relaxation of present immigration restrictions to enable talents from the Mainland to work in Hong Kong; and

(d) fourth, the fostering of an innovation and technology culture through an expansion of the existing incubation programme and the provision of matching grants for technological ventures undertaken by entrepreneurs.

The Government is now considering these recommendations carefully. As a member of the Commission, I can attest to the rigorous debate and thorough deliberations on the important issues involved at Commission meetings. The Government is fully aware of the weight of the recommendations but at this stage I do not wish to pre-empt the Government's formal decision on these recommendations. I can however say that the work of the Commission in itself has provided much food for thought among our businessmen. Within the community, we have seen a significant change of atmosphere from a large measure of scepticism when the Commission was appointed in March 1998 to general acceptance of the importance of innovation and technology when the Commission released its Second and Final Report in July this year. This change is welcome because, in the final analysis, the success in our pursuit of innovation and technology upgrading will hinge on the initiatives and entrepreneurship of the business community as well as the level of interest of our young people in the pursuit of studies and a career in science and engineering.

Cooperation with Israel

This brings me to the ample opportunities for cooperation between Israel and Hong Kong. I am pleased to say that we have been making good progress in strengthening links between Hong Kong and Israel at various levels - Government, academia and business.

At the Government level, we are working on a Memorandum of Understanding with the Israeli Government to further the development of our information and communications technology industries. We believe that the Memorandum will be of mutual benefit to Hong Kong and Israel in facilitating the expansion of our respective domestic, regional and international markets for information and communications products, services and technologies.

On the academic front, some of our universities have already established useful links with their Israeli counterparts through visiting professorship, joint research projects and co-sponsorship of symposia. My colleagues in the Education and Manpower Bureau and the University Grants Committee have also recently visited Israel with a view to identifying further opportunities for collaboration. We are working hand-in-hand with our Israeli counterparts to explore the possibility of launching joint research schemes, exchanges of staff and students and exchanges of delegations of specialists and advisors.

Perhaps of more immediate interest to the present andience, at the business level, there is much scope for Hong Kong and Israel to deepen our bilateral trade and investment activities. Hong Kong has much to learn from Israel's outstanding technological capability in areas such as telecommunications, information technology and Internet business, computer software, medical technology and semi-conductors. On our part, our businessmen and business women possess excellent marketing, financing, and other professional skills. They also have a keen sense of what will sell and what will not. In addition, being the gateway to the Mainland of China, Hong Kong can serve as a useful foothold for Israeli businessmen who wish to do business with the Mainland.


At this time when we are embarking on our mission to develop ourselves as an innovation centre in the next millennium, opportunities for strengthening ties between Hong Kong and Israel abound. I would therefore urge the Israeli Chamber of Commerce to take an active part in building up and furthering such ties. I look forward to closer and more fruitful collaboration between Hong Kong and Israeli businesses in the years to come.

Thank you.

End/Thursday, August 19, 1999