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Following is a question by the Hon Wong Kwok-hing and a written reply by the Secretary for Financial Services and the Treasury, Mr Frederick Ma, in the Legislative Council today (December 14):
Question:
Many members of the printing industry have reflected to me that the numbers of factories and workers in the industry have dropped continuously. They have said that under the existing procurement policy of the Government, many government printing jobs have been outsourced to non-local factories, resulting in a large number of unemployed printing workers. In this connection, will the Government inform this Council:
(a) of the number of factories in the printing industry, the number of workers employed as well as the unemployment rate in the industry in each of the past three years;
(b) of the number of local printing factories which relocated to the Mainland and the number of local printing workers who, as a result, had to work in the Mainland in each of the past three years, as well as the number of local printers which arranged for the relevant work to be carried out in the Mainland after they had successfully tendered for government printing jobs last year;
(c) of the respective numbers of printing-related government procurement contracts with a contract value of not more than $1.3 million and $1.3 million or above awarded to local and non-local printing factories, as well as the percentage of contracts awarded to local printing factories in all the relevant contracts in each of the past three years;
(d) of the measures to support the development of the printing industry in Hong Kong and to facilitate the employment of printing workers, as well as the effectiveness of such measures;
(e) whether it will stipulate that a specified percentage of outsourced government printing jobs must be awarded to local printing factories, in order to support the development of the local printing industry; and
(f) whether it will consider revising the existing marking scheme for assessing tenders pertaining to printing-related government procurement contracts, so that it will, apart from tender price, include new criteria for assessment, e.g. requiring the relevant work to be carried out in Hong Kong and according priority to employing local workers etc, in order that more government printing contracts can be awarded to local factories and hence safeguard the employment of local printing workers?
Reply:
Madam President,
First of all, I would like to point out that it is groundless to attribute the unemployment problem in the printing industry to the government procurement policy. Owing to the increasing use of electronic means, the value of government printing orders has decreased from about $300 million in 2002-03 to $230 million in 2004-05. Most of these printing orders are handled in-house by the Government Logistics Department (GLD). Outsourcing will be arranged only when GLD does not have the necessary skills or machines. In 2004-05, about 22% of the total value of all printing services required by the Government was outsourced. This comprised about 3 300 printing jobs with a total value of $50.8 million. According to the Annual Survey of Industrial Production conducted by the Census and Statistics Department, the business receipt (Note 1) of the printing, publishing and allied industries in 2004 was $29,222 million. The value of government outsourced printing jobs therefore only accounts for about 0.17% of the business receipt of the printing sector. Given that outsourcing only constitutes a small proportion of government's printing jobs and an insignificant proportion in the printing industry, any change in procurement policy is unlikely to have any significant impact on the employment situation of printing workers.
Our reply to the question raised by Hon Wong Kwok-hing is as follows :
(a) According to the information provided by the Census and Statistics Department, the number of establishments (Note 2) in printing, publishing and allied industries, the number of persons engaged (Note 3) and the unemployment rate (Note 4) in the printing industry in the past three years are as follows :
Period No. of No. of persons Unemployment
establishment* engaged* rate#
(%)
------ --------------- ---------------- ------------
2002 4 698 39 981 6.7
2003 4 236 37 945 7.1
2004 4 228 36 831 5.9
2005 Q2 4 099 36 749 5.1
* Figures for 2002, 2003 and 2004 refer to the position as at end December of the respective years and figures for 2005 Q2 refer to the position as at end June 2005.
# The unemployment rates for 2002, 2003 and 2004 are the annual average figures and the unemployment rate for 2005 Q2 is the moving quarterly average for the period Apr-Jun 2005.
(b) We do not have any information on the number of local printing factories which had relocated to the Mainland, nor information on the number of printing workers who had to work in the Mainland as a result of the relocation in each of the past three years. We also do not have information on the number of local printers which arranged for the relevant work to be carried out in the Mainland after they had successfully tendered for government printing jobs last year. We do not require the successful tenderer to specify where the outsourced work is performed. Nevertheless, we are aware that most of our local contract suppliers of printing services have printing facilities located in Hong Kong.
(c) The total number of printing-related contracts awarded by the Government in the past three years is as follows :
Year below at or above Value
$1.3 million $1.3 million ($)
(in million)
---- -------------- -------------- ------------
2002-03 4 000 11 61.5
2003-04 3 400 Nil 54.7
2004-05 3 300 Nil 50.8
All the above outsourced printing jobs were awarded to local printing service suppliers. We are aware that most of our local contract suppliers have printing facilities in Hong Kong. Given the small value of each printing order and the very tight delivery schedules, we have good reasons to believe that most orders were carried out in Hong Kong.
(d) Based on information provided by the Trade and Industry Department, the Government has introduced some measures through the Innovation and Technology Fund and the SME Development Fund to support the development of the printing industry in Hong Kong. The Innovation and Technology Fund provided a grant of $8.58 million to the Hong Kong Printers' Association and the Vocational Training Council to set up the Advanced Printing Technology Centre to provide demonstration of digital printing technology and production processes. The Centre helps to disseminate the latest technology trend in electronic publishing and digital printing to the local publishing and printing industry. The SME Development Fund provided a grant of $1.4 million to the Graphic Arts Association of Hong Kong for production of a printing specification manual and a set of best practices for offset printing in Hong Kong. These have helped to establish benchmarks for the industry to make reference to. The measures have helped the industry to upgrade its capabilities and competitiveness which should in turn have facilitated the employment of printing workers.
(e) Under the current policy, procuring departments are required to ensure that the tender specifications for goods and services to be procured are drawn up on the basis of functional and performance requirements. There should be no requirement for or reference to a particular brand, specific origin or service provider. In view of the motion passed at the meeting of the LegCo Panel on Manpower held on 17 November 2005 requesting Government to review the government procurement policy under the World Trade Organisation Agreement on Government Procurement and impose a requirement that priority be given to safeguarding the employment opportunities for local workers in government procurement of goods and services, we will consider in the context of the review whether it is appropriate to stipulate a specified percentage of outsourced government printing jobs to be awarded to local printing factories in order to support the development of the local printing industry.
(f) As mentioned in part (c) above, given the small value of each printing order and the very tight delivery schedule, we believe that most of the government printing contracts are carried out in Hong Kong. Moreover, the small size of government's outsourced printing services has little impact on the unemployment situation in the printing industry. Nevertheless, we will consider in the review mentioned in part (e) above whether we should include the criteria of "local production" and according priority to employing local workers in the tender assessment requirements.
Note 1: Business receipt refers to sales of goods, industrial work and industrial services, and other receipts.
Note 2: An establishment is defined as an economic unit which engages, under a single ownership or control, in one or predominantly one kind of economic activity at a single physical location, e.g. an individual factory, workshop, retail shop and office. (Source from Quarterly Survey of Employment and Vacancies, Census and Statistics Department.)
Note 3: Persons engaged include :
(i) all individual proprietors, partners and persons having family ties with any of the proprietors or partners and working in the establishment without regular pay, who are actively engaged in the work of the establishment for at least one hour on the survey reference date; and
(ii) all full-time salaried personnel or employees and working directors of limited companies directly paid by the establishment, both permanent and temporary, who are either at work (whether in Hong Kong or outside Hong Kong) or temporarily absent from work (viz. those on sick leave, maternity leave, annual vacation or casual leave, and on strike) on the survey reference date. Part-time employees and employees on night/irregular shifts working for at least one hour on the survey reference date are also included. (Source from Quarterly Survey of Employment and Vacancies, Census and Statistics Department.)
Note 4: Unemployment rate in the printing industry refers to the proportion of unemployed persons with a previous job engaged in the printing industry in the corresponding labour force (which is the sum of the number of employed persons engaged and the number of unemployed persons with a previous job engaged in the printing industry). (Source from General Household Survey, Census and Statistics Department.)
Ends/Wednesday, December 14, 2005
Issued at HKT 14:58
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