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The Financial Secretary, Mr Donald Tsang, said today (Wednesday) that positive sentiment was starting to filter through the retail sector, with retail sale in July recording positive year-on-year growth for the first time since September 1997.

Speaking at the luncheon meeting of the Retail Management Association, Mr Tsang said that the retail industry had been waging its toughest battle in the past two years in the aftermath of the Asian financial turmoil. Retailers had done all they could to weather the downturn.

"Hong Kong's legendary competitive environment continues to hone the best and fittest in the retail industry. And that is why our retail industry will eventually emerge from this recession a lot more street-wise, a lot leaner," he said.

Mr Tsang noted that improved sentiment would hopefully translate into positive territory for both sales volume and value in the last quarter of this year, especially during the busy Christmas and Chinese New Year periods. There has already been a noticeable growth in sales of consumer durables and a more modest increase in sales of watches and jewellery.

He said he was very pleased that the association acknowledged the measures announced in the 1999-2000 Budget which aim to help stimulate local spending and provide a catalyst for economic recovery.

"Our latest GDP figures - which took many by surprise - are a sign that some of the proposals announced in the Budget and the supplementary one in Summer 1998 are starting to work their way through," he said.

Indeed, the retailing industry should have benefited from many of the economic relief and revenue concessions during the past two years, Mr Tsang said. These included the freeze - in some cases reduction - in most government fees and charges; and 10% tax rebate and rates rebate.

He said these economic stimulus measures would have freed up well over HK$40 billion in the current and previous fiscal years by the time they fully trickled through and go back to the accounts of small businesses, their staff and all other taxpayers.

To help more Small and Medium Enterprises (SMEs), many of whom are retailers, Mr Tsang said the amount of guarantee for loans provided under the $2.5 billion special finance scheme would be doubled as announced by the Chief Executive in his Policy Address last week.

The scheme was set up in August 1998 to offer guarantees of up to 70 per cent to small businesses which needed to raise bank financing.

Moreover, Mr Tsang said that the newly established SME Information Centre within the Industry Department provided a one-stop shop for information on services and support offered by the government to SMEs. "It is particularly useful in helping companies find out all the business licence requirements for their particular activities," he said.

The Business and Services Promotion Unit under his office is also studying how the process of retrieving building plans by retail business can be revamped. The target is to make building plans available more easily and quickly using advanced information technology.

Furthermore, a new initiative coming on-line, which will help develop e-commerce in Hong Kong, is the Electronic Services Delivery Scheme. "This will give members of the public and businesses on-line access to certain types of services, and allow the payment of various government fees and bills," he said.

One of the services that will be available in the first phase of the project is the payment of tax bills. "This will make life easier for tax-paying retailers," he said.

The Electronic Transactions Bill has been introduced into the legislature to establish a legal framework for electronic commerce in Hong Kong and give electronic transactions the same legal status as paper-based transactions.

"The Bill will be of particular relevance to the retail sector as more and more people take to the Net to do business. All of these steps will help pump-prime the development of e-commerce in Hong Kong," he said.

Photo:Positive sentiment is starting to filter through the retail sector, according to the Financial Secretary, Mr Donald Tsang, at the Hong Kong Retail Management Association's luncheon.

End/Wednesday, October 13, 1999

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