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The Secretary for Trade and Industry, Mr CHAU Tak Hay, at a press conference today (March 10) set out proposals announced by the Financial Secretary in his Budget Speech to restructure the Trade and Industry Bureau (TIB) and the departments under the purview of TIB.

After restructuring, a new Innovation and Technology Commission will be set up under TIB, and the Business and Services Promotion Unit, currently under the Financial Secretary's Office, will be integrated into TIB. A dedicated agency named Invest Hong Kong will be set up within TIB to attract investment into Hong Kong. The Trade Department will be renamed the Trade and Industry Department to reflect its expanded responsibilities, while the Industry Department will be disestablished. At the same time, policy responsibilities for consumer protection, competition policy as well as the regulation of outbound travel agents will be transferred from TIB to Economic Services Bureau (ESB). Policy responsibility for electronic data interchange will be transferred from TIB to the Information Technology and Broadcasting Bureau (ITBB).

Mr CHAU said the objective of the restructuring arrangements is to establish the right organisations to advance Government initiatives for promoting innovation and technology, attracting external direct investment, and improving Government services to industry and commerce.

Mr CHAU said, "The Government is firmly committed to encouraging innovation and upgrading technology in the industrial and commercial sectors. The Government will improve its institutional framework in accordance with the recommendations of the Commission on Innovation and Technology chaired by Professor Chang-Lin Tien to ensure stronger policy support for innovation and technology programmes."

The detailed measures include:

1. Setting up a standing Council of Advisors on Innovation and Technology to advise the Chief Executive on all aspects of our innovation and technology policy;

2. Setting up an inter-bureau committee chaired by the Financial Secretary to co-ordinate the Government's policies and plans; and

3. Setting up a new Innovation and Technology Commission under TIB to manage, co-ordinate and implement Government's programmes in this field.

The Secretary for Trade and Industry believed that the proposed new institutional framework will enable the Government to make better-informed decisions when formulating policies, to improve co-ordination and to optimise allocation and use of resources. The establishment of the Innovation and Technology Commission will ensure that we have adequate manpower dedicated to the co-ordination and promotion of programmes, including implementing the recommendations of the first and second reports proposed by the Commission on Innovation and Technology.

The main functions of the Innovation and Technology Commission are as follows:

1. Innovation and technology policy development, co-ordination and implementation, including servicing the Council of Advisors on Innovation and Technology and the inter-bureau co-ordination committee chaired by the Financial Secretary;

2. Oversight of non-government subvented technological support bodies, including Productivity Council, Science Park, Industrial Estates Corporation, Industrial Technology Centre, Applied Science and Technology Research Institute;

3. Administration of Government funding schemes related to innovation and technology, e.g. Innovation and Technology Fund, Applied Research Fund; and

4. Provision of accreditation, standards and calibration services.

Mr CHAU pointed out that transferring those responsibilities under the Industry Department to the Innovation and Technology Commission, which is elevated to the policy bureau level, highlights the importance that the Government attaches to innovation and technology.

The Government proposes that the Innovation and Technology Commission will be headed by an officer equivalent in rank to that of a principal department (i.e. equivalent in rank to Director-General of Industry). Full-time science advisors will be recruited to assist its work and to upgrade the professional knowledge of the staff.

In respect to attracting foreign investment, the Government commissioned a consultancy study last year to examine how promotion efforts could be improved. The study's findings point to a need for the Government to develop a more proactive strategy. The main points of the strategy are as follows:

1. To target promotional efforts at a number of areas where Hong Kong has a competitive edge;

2. To adopt proactive promotion measures, including targeting individual company;

3. To strengthen "after-care" service to retain and expand investments already made in Hong Kong; and

4. To improve the investment environment, especially in target sectors, to attract prospective investors.

The Government also accepted the consultant's recommendations to improve on the existing institutional arrangements. These include:

1. A steering committee to be chaired by the Financial Secretary will be established to oversee overall policy development and implementation;

2. An advisory forum will be put in place to seek views from the private sector on strategies and measures for promoting foreign investment; and

3. A dedicated agency named Invest Hong Kong will be set up under TIB to execute the investment promotion programme.

The Government recommends that the new agency be headed by an officer equivalent in rank to that of a principal department to ensure that the post-holder will have the right personal qualities and experience to take the lead to execute the Government's investment promotion programme. In addition, the department will recruit to the agency relevant experts from the private sector to enhance the professionalism of its work.

Mr CHAU said, "The Government will establish a sound mechanism to ensure the new agency will work closely with the Trade Development Council, the Government's overseas Economic and Trade Offices and other related organisations.

The Government also proposes restructuring arrangements to improve services to the industrial and commercial sectors. They include the following:

1. Apart from its responsibility for industry and trade, the Trade and Industry Bureau (TIB) will be responsible for the overall policy on commerce development in Hong Kong. TIB will be renamed in English as Commerce and Trade Bureau;

2. The Business and Services Promotion Unit currently under Finance Secretary's Office will be integrated into TIB;

3. The functions of the Trade Department (TD) will be expanded to take over from the Industry Department (ID) the responsibility for general support for industry and small and medium-sized enterprises. TD will be renamed Trade and Industry Department;

4. A Trade and Industry Advisory Board will be set up to give advice to the Government on industrial and trade matters. The existing Trade Advisory Board will be disbanded; and

5. The policy responsibilities for consumer protection, competition policy and regulation of outbound travel agents will be transferred from TIB to ESB. Policy responsibility for electronic data interchange will be transferred from TIB to ITBB.

Subject to the approval of the Legislative Council, the proposed organisational changes will take effect on July 1, 2000.

End/Friday, March 10, 2000

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