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Following is a speech by Secretary for Information Technology and Broadcasting, Mrs Carrie Yau,at the International Conference on Hi-Tech Investment and Commercialisation today (March 20):

Hong Kong IT and telecom infrastructure in the 21st century and how technology companies can benefit from it

Distinguished Guests, Ladies and Gentlemen,

I am delighted to speak to you this morning at the opening of the International Conference on Hi-Tech Investment and Commercialisation organised by the Hong Kong Industrial Technology Centre. And I would particularly like to welcome to Hong Kong those delegates who have come from overseas. I am sure you will enjoy our friendly hospitality and, more importantly, make the right networking during your stay in Hong Kong.

We in Hong Kong are committed to developing the territory into a leading digital city in the Asia-Pacific Region. And we have made significant progress through the implementation of our "Digital 21" IT Strategy.

The Digital 21 IT Strategy

Hong Kong launched its first IT Strategy, 'Digital 21', in November 1998. Through the intensive implementation work in the past two and a half years, we have put in place the essential IT and telecommunications infrastructure which are essential for Hong Kong to achieve its goal of developing into a digital city.

We have liberalised our telecommunications market and developed an advanced and highly competitive telecommunications infrastructure, based on the free economy and level playing field policies that have guided us through our successes in the past years. We have enacted the Electronic Transactions Ordinance and introduced a legislative framework for e-commerce to flourish, and have established the local certification authority which is needed for the conduct of secure electronic transactions. More recently we launched our Electronic Service Delivery scheme to provide Government services online through the Internet and public information kiosks. This scheme focuses on genuine electronic transactions and services like submission of tax return, renewal of driving and vehicle licence, payment of Government bills, registration as a voter, etc can all be carried out online 24 hours a day and seven days a week. This will transform the way in which the public interact with the Government. We have taken the lead in the adoption of e-commerce in Government services and have set a good example for the private sector to follow.

These achievements have led to rapid development in the IT and telecommunications infrastructure. Now one in every two households in Hong Kong has a computer; and more than one-third of our population are Internet users. Our broadband network covers all commercial buildings and over 95% of households. The current external connectivity at 44.1 Gbps is amongst the highest in Asia and will increase by 9-fold in the next two to three years. Our mobile phone penetration rate of 76% is amongst the top in the world. We also have the world's highest utilisation of smart payment cards with more than 6.8 million cards circulating in the market - and that's roughly one smart card for every person.

In the near future, leading edge technologies such as 3rd generation mobile communications, digital terrestrial television and Next Generation Internet applications will come on stream, making Hong Kong a leading digital city in exploiting technologies to drive economic growth.

Indeed, the speed with which we have embraced the new Information Age and the efforts we have made have been recognized by many international research agencies. For example, the London-based Economist Intelligence Unit has ranked Hong Kong amongst the top 10 places in the world with the best e-commerce readiness. Forrester has estimated that the value of e-commerce transactions in Hong Kong will grow from US$2 billion in 2000 to US$70 billion by 2004.

Review of Digital 21

Nevertheless, we cannot be complacent. All economies aiming to benefit from the technological revolution must keep pace with the global development. Governments, in particular, should adopt visionary strategies to create a favourable environment for e-commerce to flourish, and this includes the development of hi-tech investment and commercialization. And this formed the basis for the review of our "Digital 21" IT Strategy. Our aim is to capitalise on our early success in establishing a world-class environment for the information economy and to promote the further development of IT, e-commerce and hi-tech in order to improve our economic and social prosperity and to strengthen Hong Kong's position as a leading digital city.

The key areas we need to focus on are -

* enhance and maintain a favourable environment for e-commerce to flourish and hi-tech to develop;

* develop a skilled workforce for the information economy;

* ensure the Government continues to lead by example;

* leverage Hong Kong's strengths to exploit enabling and advanced technologies; and

* strengthen the community for digital exploitation.

We will promulgate our revised "Digital 21" IT Strategy shortly. I am sure that it will help to stimulate hi-tech development and investment, as well as the commercialization of the technology developed for rolling out new applications in the market for community exploitation.

Our Competitive Advantages

It may be true that there are places in the Asia Pacific Region which are suitable to serve as a base for research and development operations. Similarly, there are other economies which have advanced telecommunications infrastructure needed to test-run your technology and products. There may also be one or two places where you have access to a deep and liquid financial market, or where you can seek venture capital to develop your products. But Hong Kong offers you all of these advantages under one roof.

Our Cyberport and Science Park projects, which are now undergoing implementation in full steam, will provide a world-class environment for developing and conducting research on your products. You can always test your products in a market which is technology-receptive and which is hooked up to a fully digitised telecommunications network, where broadband coverage is widespread, and with high external connectivity to all major global telecommunications hubs. There is no question of any capacity constraint. You can then market your products and services in both Hong Kong and elsewhere using the extensive marketing network and expertise we have in Hong Kong.

If you are looking for capital to finance your operations, Hong Kong again has all that you need. We are an international financial centre with a robust financial information infrastructure. We have Asia's largest stock market after Tokyo and we are the world's fourth-largest banking centre. More than US$17 billion in local and overseas venture capital is managed here. We have also established a Growth Enterprise Market, or GEM Board, to raise capital for technological start-up companies.

We will also continue to uphold the pillars of our success, including the rule of law, independent Judiciary, low and business-friendly taxes, and freedom enshrined in the Basic Law, our constitution.

Moreover, with our special relationship with the Mainland of China and our expertise in its market operation and our bilingual capability, investing in hi-tech development in Hong Kong will help you expand into the Mainland market and explore the numerous business opportunities which will arise when the Mainland is admitted to the World Trade Organisation and opens up its market. That is indeed one of the key factors why multinational companies incline to choose Hong Kong as their regional headquarters and the Economist Intelligence Unit has recently ranked Hong Kong as the most important Asia-Pacific centre for regional headquarters.

Ladies and gentlemen, in summary, while competition in the region is keen, you won't find a better place than Hong Kong to partner with in hi-tech investment and commercialization. We are a one-stop portal for hi-tech investment and commercialization and we can help you build your success in the Asia-Pacific Region.

The Hong Kong Government is committed to spearheading our drive to become a world-class, knowledge-based economy. With our advanced IT and telecommunications infrastructure, coupled with our sound economic policies and Government support, I can expect to see more companies in Hong Kong, whether local or those with overseas investment, breaking into the world technology markets. And I hope you will be among these future success stories.

Thank you.

End/Tuesday, March 20, 2001

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