2005-06 Policy Address by Chief Executive (7)
********************************************* Our Position as an International Financial Centre
78. Hong Kong is a leading international financial centre in the Asia-Pacific region. We will continue to consolidate this position, which is of vital importance to our prosperity. The banking sector is laying the groundwork for implementing the New Basel Capital Accord to meet the highest international standards. The Government upgrades the quality of financial markets by enhancing the regulatory regime and the promotion of good corporate governance. A Securities and Futures (Amendment) Bill aimed at strengthening the regulation of listed companies will be introduced into the Legislative Council in this legislative session. We will continue to promote the development of the bond market and fund management business, and further promote the asset management industry in Hong Kong. To attract more investors and offshore funds to Hong Kong, measures have been taken to abolish estate duty and exempt offshore funds from profits tax.
Expanding Renminbi Business
79. The Central Authorities attach great importance to the role of Hong Kong as an international financial centre. Four areas of renminbi (RMB) business have been opened up to Hong Kong banks under the first-phase arrangements. The operation of these services has proved very successful, as seen by a steady increase in RMB deposits, smooth transactions and a stable exchange rate. On the basis of the SAR Government's proposal, the Central Authorities have given in-principle approval to extend the scope of RMB business in Hong Kong. This includes raising the exchange limit between RMB and Hong Kong dollar per person per transaction; lifting the credit limit of RMB cards issued by banks in Hong Kong; relaxing the RMB remittance limit imposed on Hong Kong residents; extending RMB settlement to designated merchants in more sectors; and permitting designated merchants in Hong Kong to open RMB cash deposits accounts and exchange the RMB deposits one-way into Hong Kong dollars. In addition, the Central Authorities have also endorsed in principle the operation of a new RMB business in Hong Kong, which will allow Hong Kong residents to issue RMB cheques for a limited amount exclusively for consumer spending within Guangdong Province. The Central Authorities will soon finalise the arrangements and make an official announcement. I believe these new measures will definitely be an important impetus to the comprehensive development of the financial sector in Hong Kong.
Furthering CEPA
80. The Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) is a manifestation of our unique advantages under "One Country, Two Systems". Following the introduction of CEPA I and II, which involves tariff-free access to the Mainland for many of our products and trade liberalisation in 26 services sectors, we have held further talks with the Central Authorities and hope to announce CEPA III arrangements as soon as possible. Under CEPA III, more Hong Kong products will enjoy tariff-free access to the Mainland, while the scope of liberalisation in the existing CEPA services sectors will be further extended. There will also be more measures to facilitate investment and trade.
81. The signing of CEPA was certainly very important, but its implementation carries even greater significance. To ensure the effective implementation of CEPA, the SAR Government continues to work closely with the Mainland authorities to adopt the necessary supporting measures to help our services suppliers gain early access to Mainland markets. We will strengthen co-operation with the Mainland authorities to publicise extensively the specific contents of CEPA and the strengths of our professional services. We will also strive to help local professions participate in Mainland construction works and other projects.
Extending the Individual Visit Scheme
82. The Individual Visit Scheme for Mainland residents to visit Hong Kong has gone a long way towards boosting the local retail and job markets. Last year Hong Kong received a total of 4.2 million Mainland visitors under the Scheme, bringing additional tourism receipts of around $6.5 billion. We will extend the Scheme on a step-by-step basis. After discussion with the Mainland authorities, I am pleased to announce that from November 1 this year, the Scheme will be extended to four more Mainland cities, namely Chengdu, Jinan, Shenyang and Dalian. As the next stage, we aim to extend the Scheme to those Pan-PRD provincial capitals not yet covered by the Scheme.
Regional Economic Co-operation
83. Hong Kong has developed into a services-oriented economy that relies on the vast Mainland market. The Pan-PRD regional co-operation initiative, launched last year, enables us to use the well-tested experience gained in the PRD and apply it to the huge market in southern and central China covering an area of 2 million square kilometers and with a population of 450 million. In July this year, I attended the Second Pan-PRD Regional Co-operation and Development Forum in Sichuan. A series of agreements was concluded by participating provinces and regions. We will leverage our strengths to expand the scope of services that can facilitate development in the Pan-PRD region and help the Pan-PRD provinces and regions to enter the global market.
84. Guangdong figures prominently in our regional economic co-operation. Through concerted efforts of the Hong Kong and Guangdong Governments, the scope of co-operation keeps expanding and moving up the value chain. Significant results have been achieved in areas such as investment and trade, cross-border infrastructure, environmental protection, facilitating people and cargo flows, promoting implementation of CEPA in Guangdong, attracting Guangdong enterprises to Hong Kong, as well as technological and educational exchanges and joint overseas promotion. In the eighth plenary session of the Hong Kong/Guangdong Co-operation Joint Conference held last month, the two sides agreed in a practical manner to step up co-operation in information sharing and food safety. From now on, we will strengthen our interface in planning to perfect the infrastructural system in the Greater PRD region, to achieve full connectivity of air, sea and land transport among the cities in the region. We have also enhanced our communication with the Shenzhen Municipal Government on issues such as border control point development and public order. We will work particularly closely with Shenzhen in infrastructural planning, food safety and ecological improvements.
85. The land along the border between Hong Kong and Shenzhen has long been a designated closed area. Now that Hong Kong has returned to the Motherland, "One Country, Two Systems" has been effectively implemented. Illegal cross-border activities are in check because of
co-operation between Hong Kong and Shenzhen. On the advice of the security departments and on the basis that an effective border will be maintained, we have decided to reduce the size of the closed area significantly. We will redraw the limits of the new closed area and will study how the land released should be put to use. The sizeable private land holdings and wetlands with conservation value in the area, and the substantial cost of development, make careful overall planning a must. The relevant planning work and the fencing of the new closed area will proceed in parallel. In this connection, the Government will, in the first half of 2006, commence the planning study, consult the public, and then draw up statutory plans.
Optimising Human Resources
86. To help the economy power ahead, we must upgrade the quality of the local workforce to effectively cope with competition brought by globalisation. A quality workforce is more than a deciding factor in economic development. It also helps create social harmony. We place special emphasis on education, training and retraining. The resources put into education exceed one-fifth of the Government's annual expenditure, which is higher than in many advanced societies. Here, I would like to reiterate that the Government will not cut back on total spending on education. We will insist on allocating substantial public financial resources to develop human capital and optimise our human resources. To facilitate the transition to a knowledge-based society, education reforms are being carried out steadily and have started to deliver results. We still have a long way to go, but we will stay the course and press ahead with these reforms.
87. On the new senior secondary education and higher education reform, we will take into account views collected from various sectors and devise feasible proposals covering the design, implementation details and financial arrangement of the academic structure reform. We plan to introduce the "3-3-4" academic structure in September 2009.
88. Chinese culture has a fine tradition of respect for teachers. Teachers deserve our respect and recognition for their many toils nurturing talent for the community. We rely on our fine professional teachers to implement quality education in Hong Kong. Through the Chief Executive's Award for Teaching Excellence and Teachers' Day, the Government will continue to express its regards and respect to the teaching profession.
89. The Government will allocate additional resources to public sector primary schools with at least 12 classes to improve the teacher-to-class ratio from this autumn. This will help relieve teachers' workload, implement specialised teaching, and enhance the effectiveness of teaching. The Education and Manpower Bureau has embarked on a pilot study on small class teaching (SCT), which will provide a useful reference for the Government to decide on the necessary conditions and approaches for the territory-wide implementation of SCT.
90. Hong Kong's development is geared towards the provision of quality services to the Mainland and the rest of the world. To achieve this, we must upgrade our biliterate and trilingual proficiency. We will regularly review the basic competence in Chinese and English of students from Primary One to Secondary Five, and target resources to reinforce language education. The Hong Kong Examinations and Assessment Authority has developed the standards-referenced examinations for the Chinese Language and English Language subjects in the Hong Kong Certificate of Education Examination for implementation in 2007. A standards-referenced assessment on Putonghua listening and oral skills has also been designed for students of Secondary Three or above for implementation in 2007. Enrolment is on a voluntary basis. To ensure their professional competence, all teachers of English and Putonghua are required to reach the language benchmarks by September 2006. A Professional Development Incentive Grant Scheme for Language Teachers has been launched to encourage and assist serving teachers to acquire higher professional qualifications in language teaching.
91. While engaged in nurturing local talent, we will actively seek to enhance the value of our education. We have traditionally deployed our first-class education resources to nurture talent for the entire Asia-Pacific region and to attract high quality students to study in Hong Kong. In future, we will be more proactive in attracting talent from the Mainland and overseas to come and settle here. In this connection, we have sought the views of various sectors and taken reference from overseas experience. We are considering introducing a new admission scheme in 2006. Under this scheme, a certain number of talented people from the Mainland and overseas who meet specific eligibility criteria will be allowed to stay in Hong Kong for a certain period of time, without the requirement of securing an offer of local employment beforehand. During their stay, they can decide whether they want to develop their career in Hong Kong on a long-term basis. We strongly believe that a larger pool of talent will increase our competitiveness, make Hong Kong more prosperous, attract more capital and create more jobs. This new blood will turn Hong Kong into an even more vibrant society.
92. To ensure that the overall quality of our population can meet the future demands of a knowledge-based economy, we need a comprehensive population policy. We will regularly review the progress of implementing the policy recommendations made in the Report of the Task Force on Population Policy in 2003, and make adjustments where necessary. The Task Force on Population Policy, headed by the Chief Secretary for Administration, is studying the changes in our demographic structure and the policies needed to respond to these changes. A report will be released next year for public consultation.
(To be continued)
********************************************* Our Position as an International Financial Centre
78. Hong Kong is a leading international financial centre in the Asia-Pacific region. We will continue to consolidate this position, which is of vital importance to our prosperity. The banking sector is laying the groundwork for implementing the New Basel Capital Accord to meet the highest international standards. The Government upgrades the quality of financial markets by enhancing the regulatory regime and the promotion of good corporate governance. A Securities and Futures (Amendment) Bill aimed at strengthening the regulation of listed companies will be introduced into the Legislative Council in this legislative session. We will continue to promote the development of the bond market and fund management business, and further promote the asset management industry in Hong Kong. To attract more investors and offshore funds to Hong Kong, measures have been taken to abolish estate duty and exempt offshore funds from profits tax.
Expanding Renminbi Business
79. The Central Authorities attach great importance to the role of Hong Kong as an international financial centre. Four areas of renminbi (RMB) business have been opened up to Hong Kong banks under the first-phase arrangements. The operation of these services has proved very successful, as seen by a steady increase in RMB deposits, smooth transactions and a stable exchange rate. On the basis of the SAR Government's proposal, the Central Authorities have given in-principle approval to extend the scope of RMB business in Hong Kong. This includes raising the exchange limit between RMB and Hong Kong dollar per person per transaction; lifting the credit limit of RMB cards issued by banks in Hong Kong; relaxing the RMB remittance limit imposed on Hong Kong residents; extending RMB settlement to designated merchants in more sectors; and permitting designated merchants in Hong Kong to open RMB cash deposits accounts and exchange the RMB deposits one-way into Hong Kong dollars. In addition, the Central Authorities have also endorsed in principle the operation of a new RMB business in Hong Kong, which will allow Hong Kong residents to issue RMB cheques for a limited amount exclusively for consumer spending within Guangdong Province. The Central Authorities will soon finalise the arrangements and make an official announcement. I believe these new measures will definitely be an important impetus to the comprehensive development of the financial sector in Hong Kong.
Furthering CEPA
80. The Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) is a manifestation of our unique advantages under "One Country, Two Systems". Following the introduction of CEPA I and II, which involves tariff-free access to the Mainland for many of our products and trade liberalisation in 26 services sectors, we have held further talks with the Central Authorities and hope to announce CEPA III arrangements as soon as possible. Under CEPA III, more Hong Kong products will enjoy tariff-free access to the Mainland, while the scope of liberalisation in the existing CEPA services sectors will be further extended. There will also be more measures to facilitate investment and trade.
81. The signing of CEPA was certainly very important, but its implementation carries even greater significance. To ensure the effective implementation of CEPA, the SAR Government continues to work closely with the Mainland authorities to adopt the necessary supporting measures to help our services suppliers gain early access to Mainland markets. We will strengthen co-operation with the Mainland authorities to publicise extensively the specific contents of CEPA and the strengths of our professional services. We will also strive to help local professions participate in Mainland construction works and other projects.
Extending the Individual Visit Scheme
82. The Individual Visit Scheme for Mainland residents to visit Hong Kong has gone a long way towards boosting the local retail and job markets. Last year Hong Kong received a total of 4.2 million Mainland visitors under the Scheme, bringing additional tourism receipts of around $6.5 billion. We will extend the Scheme on a step-by-step basis. After discussion with the Mainland authorities, I am pleased to announce that from November 1 this year, the Scheme will be extended to four more Mainland cities, namely Chengdu, Jinan, Shenyang and Dalian. As the next stage, we aim to extend the Scheme to those Pan-PRD provincial capitals not yet covered by the Scheme.
Regional Economic Co-operation
83. Hong Kong has developed into a services-oriented economy that relies on the vast Mainland market. The Pan-PRD regional co-operation initiative, launched last year, enables us to use the well-tested experience gained in the PRD and apply it to the huge market in southern and central China covering an area of 2 million square kilometers and with a population of 450 million. In July this year, I attended the Second Pan-PRD Regional Co-operation and Development Forum in Sichuan. A series of agreements was concluded by participating provinces and regions. We will leverage our strengths to expand the scope of services that can facilitate development in the Pan-PRD region and help the Pan-PRD provinces and regions to enter the global market.
84. Guangdong figures prominently in our regional economic co-operation. Through concerted efforts of the Hong Kong and Guangdong Governments, the scope of co-operation keeps expanding and moving up the value chain. Significant results have been achieved in areas such as investment and trade, cross-border infrastructure, environmental protection, facilitating people and cargo flows, promoting implementation of CEPA in Guangdong, attracting Guangdong enterprises to Hong Kong, as well as technological and educational exchanges and joint overseas promotion. In the eighth plenary session of the Hong Kong/Guangdong Co-operation Joint Conference held last month, the two sides agreed in a practical manner to step up co-operation in information sharing and food safety. From now on, we will strengthen our interface in planning to perfect the infrastructural system in the Greater PRD region, to achieve full connectivity of air, sea and land transport among the cities in the region. We have also enhanced our communication with the Shenzhen Municipal Government on issues such as border control point development and public order. We will work particularly closely with Shenzhen in infrastructural planning, food safety and ecological improvements.
85. The land along the border between Hong Kong and Shenzhen has long been a designated closed area. Now that Hong Kong has returned to the Motherland, "One Country, Two Systems" has been effectively implemented. Illegal cross-border activities are in check because of
co-operation between Hong Kong and Shenzhen. On the advice of the security departments and on the basis that an effective border will be maintained, we have decided to reduce the size of the closed area significantly. We will redraw the limits of the new closed area and will study how the land released should be put to use. The sizeable private land holdings and wetlands with conservation value in the area, and the substantial cost of development, make careful overall planning a must. The relevant planning work and the fencing of the new closed area will proceed in parallel. In this connection, the Government will, in the first half of 2006, commence the planning study, consult the public, and then draw up statutory plans.
Optimising Human Resources
86. To help the economy power ahead, we must upgrade the quality of the local workforce to effectively cope with competition brought by globalisation. A quality workforce is more than a deciding factor in economic development. It also helps create social harmony. We place special emphasis on education, training and retraining. The resources put into education exceed one-fifth of the Government's annual expenditure, which is higher than in many advanced societies. Here, I would like to reiterate that the Government will not cut back on total spending on education. We will insist on allocating substantial public financial resources to develop human capital and optimise our human resources. To facilitate the transition to a knowledge-based society, education reforms are being carried out steadily and have started to deliver results. We still have a long way to go, but we will stay the course and press ahead with these reforms.
87. On the new senior secondary education and higher education reform, we will take into account views collected from various sectors and devise feasible proposals covering the design, implementation details and financial arrangement of the academic structure reform. We plan to introduce the "3-3-4" academic structure in September 2009.
88. Chinese culture has a fine tradition of respect for teachers. Teachers deserve our respect and recognition for their many toils nurturing talent for the community. We rely on our fine professional teachers to implement quality education in Hong Kong. Through the Chief Executive's Award for Teaching Excellence and Teachers' Day, the Government will continue to express its regards and respect to the teaching profession.
89. The Government will allocate additional resources to public sector primary schools with at least 12 classes to improve the teacher-to-class ratio from this autumn. This will help relieve teachers' workload, implement specialised teaching, and enhance the effectiveness of teaching. The Education and Manpower Bureau has embarked on a pilot study on small class teaching (SCT), which will provide a useful reference for the Government to decide on the necessary conditions and approaches for the territory-wide implementation of SCT.
90. Hong Kong's development is geared towards the provision of quality services to the Mainland and the rest of the world. To achieve this, we must upgrade our biliterate and trilingual proficiency. We will regularly review the basic competence in Chinese and English of students from Primary One to Secondary Five, and target resources to reinforce language education. The Hong Kong Examinations and Assessment Authority has developed the standards-referenced examinations for the Chinese Language and English Language subjects in the Hong Kong Certificate of Education Examination for implementation in 2007. A standards-referenced assessment on Putonghua listening and oral skills has also been designed for students of Secondary Three or above for implementation in 2007. Enrolment is on a voluntary basis. To ensure their professional competence, all teachers of English and Putonghua are required to reach the language benchmarks by September 2006. A Professional Development Incentive Grant Scheme for Language Teachers has been launched to encourage and assist serving teachers to acquire higher professional qualifications in language teaching.
91. While engaged in nurturing local talent, we will actively seek to enhance the value of our education. We have traditionally deployed our first-class education resources to nurture talent for the entire Asia-Pacific region and to attract high quality students to study in Hong Kong. In future, we will be more proactive in attracting talent from the Mainland and overseas to come and settle here. In this connection, we have sought the views of various sectors and taken reference from overseas experience. We are considering introducing a new admission scheme in 2006. Under this scheme, a certain number of talented people from the Mainland and overseas who meet specific eligibility criteria will be allowed to stay in Hong Kong for a certain period of time, without the requirement of securing an offer of local employment beforehand. During their stay, they can decide whether they want to develop their career in Hong Kong on a long-term basis. We strongly believe that a larger pool of talent will increase our competitiveness, make Hong Kong more prosperous, attract more capital and create more jobs. This new blood will turn Hong Kong into an even more vibrant society.
92. To ensure that the overall quality of our population can meet the future demands of a knowledge-based economy, we need a comprehensive population policy. We will regularly review the progress of implementing the policy recommendations made in the Report of the Task Force on Population Policy in 2003, and make adjustments where necessary. The Task Force on Population Policy, headed by the Chief Secretary for Administration, is studying the changes in our demographic structure and the policies needed to respond to these changes. A report will be released next year for public consultation.
(To be continued)
Ends/Wednesday, October 12, 2005
Issued at HKT 12:17
NNNN