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Traditional Pillar Industries
Financial Services
98. The financial services industry, accounting for about 16% of our GDP, is one of Hong Kong's four traditional pillar industries. We are committed to developing Hong Kong as a global capital formation centre, asset management centre and offshore Renminbi (RMB) business centre to attract capital and talent, with a view to providing world-class, comprehensive and quality financial services in the Asian time zones.
99. The financial tsunami not only highlighted the need for the international regulatory system to progress with time, but also changed the global financial landscape. At a time when the international financial order is being reshuffled, and the centre of global economic gravity is shifting to the East, we must grasp the opportunity to continuously enhance Hong Kong's regulatory system and strengthen our advantage of being "part of China but outside the Mainland" under "One Country, Two Systems".
Financial Co-operation with the Mainland
100. Strengthening our financial co-operation with the Mainland is vital for our financial services. These services should be positioned and developed in a way that will increase our contribution to promoting the modernisation of the Mainland's financial system, particularly the internationalisation of the RMB and the increased convertibility of the Mainland's capital account in a gradual and orderly manner. We have the following four short-term goals:
(1) To seek "early and pilot implementation" in Hong Kong of those Mainland financial services which have not been liberalised because the capital account is not yet opened or it is necessary to test the market through piloting. For example, we may seek the expansion of channels for enterprises to invest in the Mainland the RMB capital raised in Hong Kong;
(2) To promote capital flows between banks in Hong Kong and the Mainland, and to attract more foreign enterprises to use Hong Kong's RMB settlement services by taking advantage of the development of cross-border trade settlement in RMB;
(3) To encourage more Mainland, Hong Kong and foreign enterprises to issue RMB bonds in Hong Kong; and
(4) To strengthen the linkage between products traded on the stock exchanges of Hong Kong and the Mainland, seek mutual access for market participants and intermediaries, and expand the channel for capital flows between the two places.
Emerging Markets
101. We will enhance financial co-operation with emerging markets. Apart from Islamic finance, we will also tap into business opportunities in Russia, Central Asia, India, South America and other emerging markets to attract more large enterprises to list in Hong Kong and make use of Hong Kongˇ¦s well-established financial and trading platform to expand their international business.
Investor Protection
102. On investor protection, we will take forward proposals such as establishing a cross-sector investor education council and a financial dispute resolution scheme, and introducing statutory requirements for listed corporations to disclose price sensitive information in a timely manner. On the insurance industry, the Government will take into account public views and draft legislation on the establishment of an independent Insurance Authority. In addition, to further boost market confidence and promote financial stability, we are preparing, in collaboration with the industry, a proposal to establish an insurance policyholders' protection fund. We hope to consult the public by the end of this year.
Tourism
103. Our tourism industry has performed impressively this year. In the first eight months, visitor arrivals topped 23 million. However, several incidents concerning unscrupulous practices relating to Mainland tour groups came to light this year. The malpractice of a few has tarnished the reputation of our tourism industry. The Government is determined to step up regulation. I have asked the Secretary for Commerce and Economic Development to review the operation and regulatory framework of the entire tourism sector, including the role, powers, responsibilities and operation of the Travel Industry Council of Hong Kong, as well as its working relationship with the Travel Agents Registry. Our aim is to promote the healthy and sustainable development of the tourism industry.
Logistics
104. To support the logistics sector's switch to high-value goods and services, we are gradually making available long-term sites for the sector to develop a logistics cluster. As a start, a site in Tsing Yi was put up for open tender last month. In parallel, we will continue to provide suitable sites for port back-up uses to facilitate efficient port operations. We will continue to consolidate Hong Kong's position as an international maritime centre, reinforce the maritime service cluster, strengthen the training of human resources and promote our quality and comprehensive maritime services both locally and abroad.
105. On air transport, the Airport Authority is implementing a midfield expansion project to provide additional aircraft stands and apron facilities and a new passenger concourse. Phase 1 works are expected to begin in the third quarter of next year for completion in mid-2015. In addition, the new air cargo terminal project is expected to be completed in early 2013. This project will increase the airport's cargo handling capacity by 50%. We expect more competition in the industry upon completion of this new terminal, which will help enhance the airport's competitiveness.
Professional Services
106. We have been promoting access of local professional services to the Mainland market through CEPA. For example, we encourage mutual recognition of professional qualifications, seeking the opening up of Mainland's professional qualification examinations to eligible Hong Kong residents, and facilitate Hong Kong professionals with relevant qualifications to register and practise in the Mainland. Supplement VII to CEPA signed this year further liberalises the Mainland market for our medical services and construction-related professional services. We will maintain close contact with the Mainland to enhance the effective implementation of CEPA.
Support for Small and Medium Enterprises
Credit Facilities
107. In response to the global financial crisis, the Government rolled out a series of measures to "stabilise the financial system, support enterprises and preserve employment" to help small and medium enterprises (SMEs) tide over the difficult times. Over the past year, some 39 000 applications have been approved under loan guarantee schemes, involving total loans of over $97 billion. The measures have benefited some 20 000 enterprises and helped preserve more than 330 000 jobs.
108. The Hong Kong Mortgage Corporation Limited is exploring the establishment of a market-oriented loan guarantee scheme to provide a sustainable platform for obtaining credit.
109. The SME Export Marketing Fund under the Trade and Industry Department subsidises SME participation in export promotion activities. The SME Development Fund provides financial support for trade and industrial organisations, professional bodies, support organisations and research institutes to carry out projects to enhance the competitiveness of SMEs. As these two funds have been well received, we plan to inject an additional $1 billion into these funds next year.
Competition Bill
110. The Competition Bill was introduced into this Council last July. It aims to prohibit and deter anti-competitive conduct in various sectors and to maintain a level playing field. The Government fully understands the concern of SMEs that a competition law may undermine their flexibility in doing business and increase their operating costs. We have included in the bill exemptions and a mechanism to help enterprises comply with the law. We will continue to explain to the business community the content of the bill, and listen carefully to their views.
(To be continued)
Ends/Wednesday, October 13, 2010
Issued at HKT 12:12
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