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Speech by SCED at Hong Kong Toys Council Annual Dinner (English only)

    Following is a speech by the Secretary for Commerce and Economic Development, Mr Frederick Ma, at the Hong Kong Toys Council Annual Dinner this evening (January 7):

Lawrence (Chairman of Hong Kong Toys Council), Bernie (Vice-chairman of Hong Kong Toys Council), distinguished guests, ladies and gentlemen,

     Good evening. It is a great pleasure to be here. Let me start by wishing you all a very happy new year.  Also, a warm welcome to our guests from overseas.  Like many people around the world, I am eager to see the new and ingenious products our toy manufacturers have come up with this year.  The creativity of this industry never ceases to amaze me.

Toy industry in Hong Kong

     Hong Kong toys are well known to children and their parents in all corners of the globe.  Many are on wish lists all over the world during the Christmas period.  Over the years our toys have built up a solid reputation for quality, safety and affordability.  Today, we are the worldˇ¦s second largest exporter of toys, including re-exports, behind the Mainland of China (note).  

     This did not happen by chance.  More than half a century of accumulated experience in designing, making and marketing the worldˇ¦s playthings is paying off.  Today, most of our toy-makers have moved their manufacturing base across the boundary to the Pearl River Delta (PRD).  Roughly four out of every five Hong Kong-owned toy manufacturers are now based in the PRD, where lower production costs help to increase competitiveness.  

     Our other competitive advantage is that, under the Closer Economic Partnership Arrangement, or CEPA for short, all goods of Hong Kong origin imported into the Mainland enjoy tariff free treatment, and our firms enjoy enhanced access to Mainland markets.  Under CEPA, foreign firms incorporated in Hong Kong enjoy the same benefits.  I encourage more overseas companies to leverage this free trade pact with the Mainland.  

Challenges of toy industry

     At times like this, when things are going well, it is important not to be blind-sided by potential problems ahead, and to prepare for the bumps along the road.  One example is costs, which have been rising faster than we could have expected a couple of years ago.  This is partly because of a skilled labour shortage in the PRD region.  Surging oil prices have also pushed up the cost of plastic and chemical fibre materials.

      On the demand side, there is increasing concern over environmental and safety issues among consumers. Today, ˇ§green manufacturingˇ¨ is a prominent factor for major toy importing countries. Product safety is another topic that is never far from the headlines these days. We are all aware of the recalls of China-made products by overseas toy retailers in recent months.  This is a complicated issue in our increasingly globalised environment.  There is a possibility of problems arising at various stages, from design, sourcing of materials or the manufacturing process itself.  Occasionally the issue becomes politicised. But, first and foremost, we need to protect the consumer.  Thankfully, a growing number of firms have their own quality control teams, in-house testing facilities and independent performance monitors. These all add to costs, but it is a relatively small price to pay to safeguard reputation and boost confidence in the long run.

Challenges can be opportunities

     Fortunately ˇV or more often through sheer hard work ˇV Hong Kong entrepreneurs have become experts at turning challenges into opportunities.  To maintain our competitiveness, we should strive to become ever more creative and innovative, while keeping abreast of the global trends and consumer demand.

     It is often said that todayˇ¦s children are growing up faster than a generation before.  I am impressed at how quickly even young kids can take to computers and ˇ§smartˇ¨ toys that incorporate the latest electronic technologies.  Interactive and educational features are increasingly popular with parents who want the best for their childrenˇ¦s development. New, innovative toys which can capture the interest of children ˇV or perhaps more importantly, that of their parents ˇV have become the market trend.  

     You donˇ¦t have to be a child to enjoy playing games, as all of you ˇV more than most ˇV are well aware. Another potential growth area of the industry focuses more on adults and the family.  With the innovation in technology and popularity of broadband Internet access, gadgets and gaming consoles with new interactive control features and linkages to the Internet have emerged as the new ˇ§in thingˇ¨.  

To capture the new opportunities in toy markets

     In recognising these new trends of toy development, the importance of R&D and design cannot be overemphasised.  I am encouraged to hear that the local toy industry has been investing in a wide range of technologies in the design, prototyping and manufacturing of their products.  Manufacturing and engineering technologies are now widely used to strengthen the design and production process as well as the safety of toys.  

     The government is fully behind the industryˇ¦s march towards high technology, high value-added and high intellectual property content products.  Our Innovation and Technology Fund, or ITF, has so far supported 10 toy industry projects with a total funding of HK$22.2 million to help develop the technologies for ˇ§smartˇ¨ toys. These include a tracking robot with self-learning capabilities, rapid prototyping technology for conceptual design, and a study on worldwide trends in using PVC and its substitutes.

     We are also supporting the Productivity Councilˇ¦s initiatives to help the industry enhance the environmental design of their products, to use environmentally friendly materials, to adopt cleaner production technologies and practices, as well as to recycle used products.  In his Policy Address last October, the Chief Executive announced a five-year programme with a further HK$93 million funding to assist Hong Kong-owned enterprises in the PRD in adopting cleaner production technologies and techniques.  This is a hands-on programme providing on-site advice on practical solutions, and sponsorship of cleaner production pilot projects.  

     The government and the toy industry should continue to work together for an even brighter ˇV and of course cleaner ˇV future.


     For more than two decades the Hong Kong Toys Council has played a crucial role in steering the local toy industry through both calm and stormy waters.  Your hard work has helped ensure our position of strength today, and instill confidence for the future.  I thank you for your endeavours in the past and wish you all a happy and prosperous 2008. Thank you.

Note: Source: TDC website

Ends/Monday, January 7, 2008
Issued at HKT 19:53


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