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Following is the translation of the speech by the Secretary for Commerce and Industry, Mr Chau Tak Hay, at a press conference today (October 12) on the programme area of Commerce and Industry Bureau contained in the Policy Address:

Ladies and Gentlemen,

Welcome you all to this press conference. In his Policy Address delivered two days ago, the Chief Executive put forward a package of new initiatives to support the development of our commercial and industrial sectors. I would like to brief you on these initiatives. As pointed out by the Chief Executive, the economic restructuring and cyclical adjustments that we are undergoing, coupled with the uncertainties caused by the terrorist attacks on September 11, had posed great challenges to the business sector of Hong Kong. In response to this, the Commerce and Industry Bureau and relevant Government departments will in the coming year focus on improving our business environment, upgrading our infrastructure, assisting Hong Kong businessmen to capitalise on the strengths of the Mainland and supporting the development of professional services. Now let me elaborate.

Enhanced Support for Small and Medium Enterprises

Small and medium enterprises (SMEs), which account for more than 98 per cent of all local enterprises, have always been a pillar of Hong Kong's economy. Therefore, the HKSAR Government has been actively supporting the development of SMEs.

You would recall that in the Policy Address delivered by the Chief Executive last year, he commissioned the Small and Medium Enterprises Committee (SMEC) to explore and put forward new measures under the themes of "helping to start a new business", "helping to build a new business" and "helping to expand a business" in order to provide further support for SMEs.

In June this year, the SMEC submitted to the Chief Executive a report which proposed a series of new support measures. The most significant proposal in the report was the establishment of four funds, totalling $1.3 billion all together, namely the SME Business Installations and Equipment Loan Guarantee Scheme, the SME Development Fund, the SME Training Fund and the SME Export Marketing Fund.

The report received favourable response from the community as well as the business sector. It was regarded as heading towards the right direction and bringing about practical assistance to the SMEs. We have also noted that, in the face of the sharp economic slowdown, SME operators generally hope that the Government will offer stronger financial support over and above the level of funding proposed by the SMEC.

In view of the above, the Chief Executive announced in the Policy Address that $600 million would be provided in addition to the amount recommended by the SMEC, of which $500 million would be injected into the Business Installations and Equipment Loan Guarantee Scheme, and $100 million allocated to the SME Export Marketing Fund. We will present details of the schemes to the Legislative Council Panel on Commerce and Industry and seek funding approval from the Finance Committee shortly, so that the four funds can start their operation by the end of this year or early next year.

The Government has also accepted other recommendations of the SMEC, which include improving the service provided at the SME Information Centre; enhancing communication between the financial sector and the SMEs so as to facilitate financing; encouraging SMEs to upgrade the quality of management and improving corporate culture and promoting the application of Information Technology in SMEs. The above measures will be implemented shortly.

The above decisions demonstrate the strong commitment of the SAR Government to supporting SMEs, and our confidence in the future of SMEs in Hong Kong. If you have any specific questions about the funding schemes, I am sure the Director-General of Trade and Industry would be happy to answer them later.

Construction of a New Exhibition Centre

Hong Kong is a first-class location for exhibitions and conferences in Asia. Against the background of a thriving exhibition industry in the region, we need to construct a new exhibition centre of superb quality, as well as ancillary facilities, so as to grasp the business opportunities and maintain the competitive edge of Hong Kong. For this reason, the Government has decided to construct a new world-class exhibition centre at Chek Lap Kok, in conjunction with the Hong Kong Airport Authority. We plan to invite tenders for the project in 2002 and commence the construction works in 2003. The new exhibition centre, which is expected to open in 2005, will provide an exhibition area of 50 000 square metres. The total construction costs will be about $4 billion. The Government will invest up to $2 billion into the project while the remaining costs will be borne by a private consortium of developers/operators. The land required will be provided by the Airport Authority.

We estimate that the new exhibition centre will over a 25-year period bring substantial economic benefits amounting to $10.4 billion in present value. A total of about 3 500 jobs will be created during the construction period and after the opening of the new exhibition centre. Employment opportunities will also arise indirectly from related supporting activities and more tourist visits. I believe that the new exhibition centre will further strengthen Hong Kong's leading position as an exhibition hub in the Asia-Pacific region.

Economic and Trade Office in Guangdong

Hong Kong's future development, as said by the Chief Executive, must hinge on the economic growth momentum in the Mainland. In order to enhance economic co-operation between Hong Kong and the Pearl River Delta, the SAR Government will establish an Economic and Trade Office (ETO) in Guangzhou. We believe that the business sector will welcome the decision. After the proposal for an ETO in Guangdong was announced by the Financial Secretary in the 2001-02 Budget, we have conducted a feasibility study and obtained support from the Central Government. The ETO will be set up under the Commerce and Industry Bureau and its ambit mainly falls within business and trade areas, including the following:

(a) Strengthening economic and trade liaison between Hong Kong and Guangdong - In order to develop and enhance the economic and trade relations between Hong Kong and Guangdong, the ETO will promote closer co-operation with the Government and related organisations in Guangdong, and launch more exchange programmes and visits between Hong Kong and the Guangdong Provincial Government;

(b) Building up a better understanding between Hong Kong and Guangdong - the ETO will provide the SAR Government with information about Guangdong Province, and will in turn offer information about the SAR to the Guangdong Provincial Government and non-government organisations;

(c) Supporting Hong Kong's enterprises - the ETO will take the initiative to enhance the connection and communication among Hong Kong businessmen in Guangdong; reflect and follow up issues of concern common to them through appropriate channels; and assist them to obtain information about trade and commercial policies, relevant legislation and the latest economic development in the Mainland, etc.;

(d) Attracting investment - the ETO will take the initiative to provide information and assistance in order to attract investments to and from Guangdong and enhance commercial ties between the two places;

(e) Promoting Hong Kong - the ETO will promote Hong Kong's image as a friendly neighbour and business partner through publicity activities in Guangdong Province so as to strengthen the Guangdong-Hong Kong relationship.

I would also like to point out that the ETO will not deal with any commercial or legal disputes concerning individual enterprises, nor will it intervene in any administrative, law enforcement and judicial matters of the Mainland. We shall discuss detailed arrangements with the Mainland authorities concerned, including the Guangdong Provincial Government and the Guangzhou Municipal Government, and we aim to be able to establish the ETO as early as possible next year. The staffing establishment for the ETO is now being formulated and will be submitted to the Establishment Subcommittee of the Legislative Council when ready.

Supporting the Development of Professional Services

Endowed with professional talents, Hong Kong is an important centre of professional services in the region. Upon China's accession to the World Trade Organisation, its market will become more open and its economy will prosper further. This will no doubt bring new opportunities to the professional services sector in Hong Kong. Nevertheless, our professional sector is also faced with the challenges brought by Hong Kong's economic restructuring.

In order to help the professional sector grasp opportunities and meet new challenges, the Chief Executive has asked the Business and Services Promotion Unit under the Commerce and Industry Bureau to co-ordinate the efforts of relevant departments so that they can offer active support in this regard. The SAR Government will also set aside $100 million to establish the Professional Services Development Funding Scheme to support, on an equal matching basis, useful projects that can enhance the standard of professional services in Hong Kong. We are now considering the details of the project. We will consult the professionals sector and will introduce the proposal to the Legislative Council as soon as possible.

Apart from the measures mentioned particularly by the Chief Executive above, I would like to make use of this opportunity to highlight two initiatives mentioned in our Policy Objectives booklets:

(a) To review the import and export licensing requirements: in order to strengthen Hong Kong's status as an international trade centre and to support the Government's policy of promoting the development of the logistics industry, we will explore the possibility of relaxing the import and export licensing requirements as regards transshipment in the coming years while upholding the principle of safeguarding Hong Kong's effective trade control system. We will also study the streamlining of the related application procedures.

(b) Review of certain provisions in the Copyright Ordinance - The amended Copyright Ordinance, which came into effect in April this year, aroused considerable concern and debates in the community. Having sought the approval of the Legislative Council, the Government has suspended some of the new provisions and pledged to solicit the views of the general public in order to work out a long-term solution. We will release a consultation paper to the public in November for a two-month consultation and will take the views of the public into careful consideration in formulating specific legislative proposals.

I have just outlined to you the measures in this year's Policy Address in supporting the development of commerce and industry in Hong Kong. Would the Director-General of Investment Promotion like to add anything about the major tasks within his terms of reference?

End/Friday, October 12, 2001

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Press conference web-casting( Floor / Chinese / English )