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Following is the speech by Secretary for Information Technology and Broadcasting, Mr K C Kwong, at E-services World '99 Conference and Exhibition today (Monday):

Mr Lee, distinguished guests, ladies and gentlemen,

I am pleased to be invited to speak at the opening of the E-services World '99 Conference and Exhibition organised by Hewlett-Packard Hong Kong Limited today.

The emergence of electronic commerce over the Internet has been the most significant development affecting businesses as we enter the new millennium. Electronic commerce is the engine which will drive future economic growth. By leveraging on the latest advances in information technology, telecommunications and multi-media content creation, electronic commerce has become the key tool in enhancing corporate competitiveness. It enables businesses to become more adaptive and responsive to changes in market conditions, allows them to develop new markets globally and more effectively, facilitates their targeting of customers on a localised or even individual basis, and helps them to improve their management of the entire value chain.

Fuelled by the exponential growth in the use of the Internet worldwide, the potential market that electronic commerce can tap in the Internet world is enormous. According to industry estimates, the number of Internet users worldwide will rise from over 100 million in 1998 to over 300 million by 2002 and the total value of business conducted over the Internet will increase from US$ 200 billion in 1998 to US$1 trillion per year by 2002.

Of more direct relevance to us here are the trends in Hong Kong and in the Mainland of China. In Hong Kong, the number of Internet users have surpassed the 1 million mark and is continuing to grow. In the past 12 months, the volume of Internet traffic in and through Hong Kong has almost doubled and the number of Internet users making purchases online has increased by 50%. Industry estimates suggest that the total value of products and services transacted over the Internet in Hong Kong will increase from US$60 million in 1998 to US$2.4 billion by 2003. These statistics and forecast indicate that Hong Kong is poised to ride on the electronic commerce wave.

The projected growth in the Mainland is even more impressive. The number of Internet users there has almost doubled from about 2 million last year to some 4 million now. Industry experts estimate that electronic commerce turnover will leap from a minuscule US$ 8.1 million in 1998 to US$3.8 billion per year by 2003. With the increasingly close ties between the Mainland and Hong Kong, and the affinity on the basis of a common language and culture between the two places, businesses in Hong Kong should be well positioned to capitalise on the opportunities in the Mainland by taking advantage of the development of electronic commerce there.

The Government of the HKSAR fully recognises the importance of electronic commerce to our future economic growth. To encourage the wider adoption of electronic commerce by local businesses, the Government will become a leading participant in it through the launching of the Electronic Service Delivery (ESD) Scheme. ESD will make it possible for the public to obtain Government services on-line, in a seamless manner, 24 hours a day and 7 days a week. We are about to award the contract for phase one of ESD and we expect to have the Scheme up and running in the latter half of 2000. Services to be covered include submission of tax returns, renewal of driving and vehicle licences, registration as a voter, search for job vacancy and payment of Government fees, etc. Apart from providing better services to the public, ESD will act as a catalyst to pump-prime the development of electronic commerce in the private sector.

We will also strengthen public confidence in electronic commerce by establishing a local public key infrastructure through the Hongkong Post. Through the use of private/public key cryptographic technology and digital signatures, participants in electronic transactions will be able to confirm the identity of the parties to the transactions, ensure the integrity and confidentiality of electronic messages exchanged and safeguard against the repudiation of the transactions. The Government will take the lead in the establishment of the public key infrastructure. Hongkong Post's key and certification services will be available by the end of the year. But it will not be given exclusivity in the provision of such services. And we would welcome the establishment of competing certification services by the private sector.

Also, to strengthen the legal certainty of electronic transactions, we have introduced recently an Electronic Transactions Bill into the Legislative Council. The Bill is intended to give electronic records and digital signatures the same legal status as that of their paper-based counterparts. The Bill also seeks to establish a clear framework to support the operation of certification authorities in Hong Kong.

Through these initiatives, we seek to create a favourable environment for electronic commerce to take hold and flourish in Hong Kong.

However, for Hong Kong to become a leader in the use of electronic commerce, Government's efforts alone are not sufficient. Private sector efforts are equally important. We need to work together to raise general awareness and understanding of electronic commerce. I am therefore particularly pleased to see the initiative taken by Hewlett Packard in the organisation of the conference cum exhibition today. This provides a valuable opportunity for business executives, industry experts, Government officials and other interested people to gather together, exchange ideas and keep themselves abreast of the latest advances in information technology and electronic commerce. E-services World '99 Conference and Exhibition will no doubt give us helpful insights on electronic commerce, and useful pointers to the way forward. I wish you all a fruitful outcome from this Conference and Exhibition.

Thank you.

End/Monday, September 20, 1999

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