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The following is a speech by the Secretary for Information Technology and Broadcasting, Mr K C Kwong, in addressing the Hong Kong IT Forum organised by the Hong Kong Trade Development Council and the Hong Kong Economic Trade Office (Toronto) in Vancouver today (Sunday, Hong Kong Time):

The Honourable Gilbert Normand, Mr Alan Wong, distinguished guests, ladies and gentlemen,

It gives me great pleasure to officiate at the Hong Kong Information Technology Forum organised by the Hong Kong Trade Development Council. I hope that, through this Forum, you will gain a better understanding of the development of IT in both Canada and Hong Kong, and a better appreciation of the business opportunities in the two places. This will no doubt lead to better business ties between Canadian and Hong Kong companies.

Hong Kong and Canada have much in common in the IT and communications fields. For example, we both strive to become a leader in niche IT areas in our respective regions, and we are both in the forefront in innovative use of information and communications technologies. Against this background, our two Governments have entered into a Memorandum of Understanding on IT co-operation with a view to fostering closer cooperation in the IT and related sectors in the two places.

As part of the initiatives under the MOU, we organise visits by businesses in the IT and related sectors to our respective places with a view to improving mutual understanding of IT development in our respective regions and to building business alliances. This is the second time I have led a business delegation to Canada to attend Softworld. I am confident that I will not be disappointed for doing so a second time. And I look forward in particular to seeing the exhibition and demonstration of advanced applications of IT in Softworld 99.

Since my visit to Softworld last year, we have worked hard in Hong Kong to build ourselves up as a leading digital city in the Asia Pacific region. This is the goal we set for ourselves in our "Digital 21" IT Strategy. I would like to share with you today some of the initiatives which we have launched under our Digital 21 IT Strategy.

First, we recognise that to become a leading digital city in a globally connected world, we must have a high quality and high capacity telecommunication infrastructure operated to provide bandwidth and services at affordable prices. This is a prerequisite for us to fully exploit the business opportunities in the Information Age. Judging by world standards, Hong Kong is not lagging behind. For example, our broadband network covers practically all business buildings as well as 75% of all households. And the network is continuing to be rolled out and we expect the residential coverage to increase to 85% within a year. Despite our relatively small size, we have 4 local fixed telecommunications network operators and we expect to license a fifth one shortly, based on the local cable TV network. This will bring broadband coverage to even more homes. But we think that demand for bandwidth will rise at such a rate that we must encourage even more broadband capacity locally. This is because we have over 1 million Internet users (out of a population of 6.8 million people) and the number is continuing to grow while Internet traffic measured by dial-up minutes have doubled in the past year. To encourage further local broadband coverage, we have decided to license wireless fixed telecommunications networks. In response to a recent open invitation to industry, we received 14 applications to provide such wireless networks.

On the external front, we are also well connected with the global telecommunications network which enabled us to have access to literally everywhere in the world through electronic linkages. Today, our total capacity of submarine cables stands at 44.1 Gbps, second only to Japan in the Asia Pacific region. With more additional capacity being put in place in the coming years, our external capacity will increase to 764.1 Gbps by 2002 and 2,064 Gbps by 2009. But we are not complacent. We have decided to further liberalise the telecommunications market to encourage even more investment in external capacity. I am glad to say that this policy has met with very positive response from the market and we received 34 applications for external facilities licences to provide and operate new external cables and satellites. If all these applications came to fruition, we will see yet another several fold increase in our external telecommunications capacity!

Second, we note that one of the primary reason people have not taken up electronic commerce over the Internet as enthusiastically as they have taken up browsing is the concern over security of such electronic transactions. To resolve this problem, we will provide a safe and secure environment for the conduct of electronic commerce in Hong Kong through a local public key infrastructure supported by the establishment of certification authorities. With the use of digital signatures and public/private key mechanism, we will be able to establish the identity of the parties to an electronic transaction, authenticate the electronic messages transmitted, guarantee the integrity and confidentiality of the messages exchanged and ensure that the transactions made with these messages cannot be repudiated. We will take the lead in the establishment of a public certification authority through the Hongkong Post. The department has already awarded the contract for the supply of the public key infrastructure system and is aiming to offer public certifications services to both businesses and individuals by the end of this year. We will actively explore and develop cross recognition for certification authorities between Hong Kong and other economies, including Canada, either on a bilateral or multilateral basis in order to facilitate cross-border electronic commerce.

Third, the HKSAR Government is taking the lead in electronic business by providing public services on-line under our Electronic Service Delivery Scheme. Under the scheme, we will provide Government services to the public over the Internet and through other electronic means via an open and common information infrastructure. The services will be provided in a citizen-centric and seamless manner and the services will be available 24 hours a day, 7 days a week. The public services that we have chosen for inclusion in the first phase of the scheme are the ones which members of the public are most likely to use. So they include payment of Government bills and fines, submission of tax returns and payment of taxes, applications for driving and vehicle licences, notification of changes of addresses and job matching through the Labour Department. Through ESD, we will not only improve the quality of our services, but also help to create an environment and a climate conducive to the development and take-up of electronic commerce.

Fourth, we are establishing a proper legal framework to provide certainty for electronic transactions. We have recently introduced the Electronic Transaction Bill into our legislature. The Bill seeks to give electronic records and digital signatures used in electronic transactions the same legal status as that of their paper-based counterparts. The Bill will also seek to establish a framework which will promote and facilitate the establishment and operation of certification authorities in Hong Kong. We expect the Bill to be passed by our legislature by the end of this year.

I am confident that with all these initiatives, we shall see the wider adoption of e-Commerce in Hong Kong. And we shall all see a substantial growth in demand for high quality IT and software solutions to support all these developments. We look to the world IT market both as a source of supply as well as a source of partnership in this exciting endeavour of ours.

With the proven capabilities of Canada in a good number of areas of IT and communications, I am confident that you will find excellent and rewarding opportunities for doing business, either by yourselves or in partnership, in Hong Kong. And of course, you should also consider using Hong Kong as a bridge to the enormous market in the Mainland of China.

I wish you all every success with the Forum.

Thank you.

End/Sunday, November 7, 1999

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