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Speech by SES at press conference


Following is the translation of the speech by the Secretary for Economic Services, Ms Sandra Lee, at a press conference today (October 13) on the programme area of Economic Services Bureau contained in the Policy Address:

Ladies and Gentlemen,

Thank you for coming to this morning's briefing.

"Connectivity and flow : passengers and cargo" is our theme today. There is a lot of similarity between tourism and logistics in Hong Kong, namely -

(1) Both are built on solid foundations. What we need to do is to enhance the value of these two mature industries, increase their competitiveness and improve the business environment so that they are ready for new challenges;

(2) Both industries have to have the force of "attraction". For Tourism, Hong Kong must offer a variety of attractive features to bring tourists to Hong Kong. For logistics, be it physical or virtual, it is the value we can add to the supply chain that we can attract more business to Hong Kong. The more value we add the more we will be able to develop opportunities for our logistics sector; and

(3) Both tourism and logistics cut across various policy portfolios within the Government and straddle different business sectors. The successful development of both industries hinges on cooperation between the public and the private sectors. Thus, connectivity amongst Government departments, between the Government and the public and private sectors is essential to future success.

As pointed out by the Chief Executive in his Policy Address, we in Hong Kong are in a unique position. We have the Mainland as the hinterland, we have the world before us, we are a major city in China and an international city in Asia. We have a first class transportation network that connects us to the world. We will capitalise on this distinct advantage and make Hong Kong a world class tourist destination and a logistics hub.


Tourism is an important pillar of our economy. We face serious challenges because of the cyclical worldwide economic slowdown and our own economic restructuring. Our challenge is to devise effective means to stimulate visitor arrivals which in turn will bring economic benefits.

The Chief Executive announced in his Policy Address measures to increase the number of visitor arrivals and to facilitate and streamline their entry into Hong Kong for leisure and business purposes -

(i) We have reached an agreement with the Mainland authorities to abolish the quota system of the Hong Kong Group Tour Scheme from January 2002 onwards and to increase the number of designated travel agents to about 67. The Mainland authorities have also agreed to extend the effective period for multi-business visit endorsements from the present six months to a maximum of three years, with each duration of stay in Hong Kong extended to 14 days. The expected growth under both the Hong Kong Group Tour Scheme and the Business Visit Endorsement Scheme is promising - in the first year following implementation, we expect an increase of some 300 000 mainland visitors, bringing in additional tourism receipts of $1.5 billion.

(ii) Taiwan is our second largest source market for tourism. Naturally, we also want to facilitate entry of these visitors by reducing the time required to process their permit applications and providing additional application channels. Towards this end, the Immigration Department has pledged to speed up the processing time of one year and three year multiple Taiwan Visit Permits so that it can be completed within two working days with no quota. Immigration Department will also introduce the iPermit Scheme in April 2002 to further facilitate the entry of Taiwan residents.

Measures to facilitate entry are only one of the ways to increase the number of visitors to Hong Kong. We will expedite work on enhancing our existing tourist attractions. The Chief Executive announced in his Policy Address measures to create employment and improve the environment such as making Hong Kong clean and green and improving air quality. We will continue to develop new tourist attractions including the five medium to long term tourism initiatives on Lantau Island, in Sai Kung, Central, West Kowloon and Aberdeen announced by the Chief Executive at the end of August. More importantly, of course, is the reception tourists receive during their stay in Hong Kong and their experience of our culture. We must strengthen our efforts to promote a hospitality culture and enhance the quality of service in the tourism and related trades. These initiatives, taken together, will ensure Hong Kong retains its position as the most popular tourist destination in Asia.

The Terrorist attacks on the United States on 11 September 2001 have had an adverse impact on the global economy, and on Hong Kong. The Hong Kong Tourism Board has adjusted its initial forecast of total visitor arrivals in 2001, and now expects the same number of arrivals as last year. We hope the increase in visitor arrivals from the Mainland and Taiwan which will result from the measures described above will offset in part the impact of the tragic event. The Hong Kong Tourism Board and the industry will cooperate to target these new markets and to seek new opportunities to promote Hong Kong. At the same time, the industry must seize the opportunity to develop their business.

We understand the difficulties faced by the industry in the face of global volatility. We will work hand in hand with the sectors concerned to overcome these challenges and map out proactive strategies to promote tourism. As part of this process, we will invite representatives from hotels, airlines, travel agents, retail and other sectors in the industry, to a Tourism Symposium to be held on 3 November 2001 at the Hong Kong Convention and Exhibition Centre. We will use this opportunity to exchange views, to work with the industry to develop new ideas and solutions to promote the development of tourism in Hong Kong.


Besides facilitating the movement of people, logistics is a development priority for us. The Chief Executive pointed out in his Policy Address that " with Hong Kong's excellent transportation facilities and the Pearl River Delta's high productivity, together we can develop into a logistics hub to link the Mainland with the world".

We are a major logistics hub. For some years, Hong Kong has taken the lead in terms of container throughput and international air cargo handling. Taken together with our well-established services in the financial, insurance and related sectors, we have a very good foundation to further develop the logistics industry. The crucial thing here is to ensure that we are able to move more goods of a greater variety than ever before and to move them faster and to more places speedily.

The logistics industry encompasses sea, land and air services. Taken together, trade, transport and logistics industries make up 21.6% of our GDP, employ 20% of the total workforce. To develop this industry, we need to enhance connectivity between the various sectors in the supply chain, such as those between different modes of transport and those between Hong Kong and our cargo sources. We also need to facilitate collaboration amongst the players in the chain so as to strengthen the four pillars of "Logistics Hong Kong". ie "physical, electronic, human resources and marketing logistics" ( the 4-Ls). The 2 "C"s ie "Connectivity" and "Collaboration" and the "4-Ls" form the base on which the development of our logistics industry can be built.

The Port and Maritime Board commissioned the McClier Corporation in December last year to carry out a "Study to Strengthen Hong Kong's Role as the Preferred International and Regional Transportation and Logistics Hub". The key findings of the Study are outlined in the document in the folder. We have considered the recommendations in the Study Report and are ready to embark on the next stage in the development of our logistics industry.

To develop Hong Kong into a logistics hub and a supply-chain base, our policy objective, as I said earlier, is to increase the flow of cargo, to facilitate the development of the necessary infrastructure, to capitalise on information technology to improve the speed and the accuracy of logistics operations, thereby reinforcing our position in this industry in the region. Work in this area must be undertaken promptly.

To enhance the connectivity and cooperation at different stages of the supply chain, we will need a new organisation structure which will include -

(1) for Policy Steer : the creation of a new "Steering Committee on Logistics Development" to be chaired by the Financial Secretary, with the Secretary for Economic Services, the Secretary for Commerce and Industry and the Secretary for Information Technology & Broadcasting as members. This will provide the necessary policy steer to accelerate measures to take forward "Logistics Hong Kong";

(2) for Facilitation : the creation of a new "Hong Kong Logistics Development Board" to provide a forum for the public and private sector stakeholders to discuss and co-ordinate matters concerning the industry and to carry out joint projects. This Board will have members drawn from the Government and the industry and appointed by the Financial Secretary. The Board is not just a forum for discussion. It has the important task of promoting and implementing specific programmes; and

(3) for Administrative Support : the Port and Maritime Board Division in the Economic Services Bureau will be reorganised into the "Port, Maritime and Logistics Development Unit". It will be tasked to support the actions and programmes emanating from the Steering Committee on Logistics Development and the Hong Kong Logistics Development Board.

The new organisations will be set up shortly to commence operation.

I now invite my Deputy, Mr Alex Fong, to give a presentation to outline our "Logistics Hong Kong" initiative.

End/Saturday, October 13, 2001


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