********************************************************
The greatest challenge facing Hong Kong's labour market is to tackle structural unemployment brought about by economic restructuring, globalisation, wider application of information technology and corporate downsizing.
But with challenges come opportunities. Hong Kong's economic integration with the Mainland, in particular the Pan-Pearl River Delta, and globalisation have also brought new opportunities to the labour market, the Permanent Secretary for Economic Development and Labour, Mr Matthew Cheung Kin-chung, said at a dinner hosted by the Chinese General Chamber of Commerce today (November 7).
"In recent years, globalisation and the information technology revolution have exacerbated the ongoing relocation of production processes and outsourcing of certain white-collar jobs outside the territory. The process has continued to chip away job opportunities in the lower strata.
"Some enterprises strive to substitute labour by capital equipment and corporate downsizing for greater cost saving to enhance competitiveness. This make lives all the more difficult for workers with low educational attainment and low skills," Mr Cheung said.
"For the local workforce, moving from one sector to another horizontally is obviously much easier than moving up the skills ladder vertically. This is particularly so when a third of our labour force has educational attainment of only lower secondary or below.
"The 'one-middle-two-lows' group in the labour market is facing the highest risk of unemployment. This refers to those people aged 40 or above and with relatively low educational attainment and low skill level," he said.
Mr Cheung said that although the number of unemployed middle-aged people had dropped from an all-time high of 140,000 to almost 100,000, it still constituted about half of the total number of unemployed people.
Meanwhile, the unemployment rate of people with lower academic qualifications is relatively higher. The jobless rate of people with educational attainment of lower secondary or below is 8.1%, which is higher than those with tertiary education and degree level by four percentage points.
"The Government has adopted a multi-pronged and robust approach to meet the challenges on the employment front by improving the business environment to create more jobs," Mr Cheung said.
"We will continue to promote the development of four core industries - tourism, logistics, business services and financial services – with the aim of creating more jobs through market forces.
"At the same time, we will enhance the skills of our workforce to meet the labour demand of the knowledge-based economy," he said.
The number of long-term unemployed dropped from a record high of about 100,000 during the period from June to August in 2003 to 60,000 recently. The average duration of long-term unemployment was also reduced from an all-time high of 113 days in November 2003 to 76 days in January 2004.
Mr Cheung pointed out that although the figures indicated that some people who had difficulty in finding jobs before were placed into employment gradually, tackling unemployment would still be a long-term challenge.
On wages and working hours, Mr Cheung said that wages in some industries had increased gradually with the sustained economic recovery in Hong Kong. According to statistics released by the Census and Statistics Department, the average wage rate in March and June this year rose by 0.7% and 0.4% respectively over the same period last year, reversing the downward trend from 2002 to 2004.
On future positioning and opportunities, Mr Cheung said, "With further economic integration with the Mainland, particularly the Pan-Pearl River Delta, and globalisation, our labour force especially young people, have to rise to the challenge and embrace opportunities brought about by the opening up of the labour market. Many professionals and managerial staff are now working on the Mainland and overseas."
According to official statistics, 240,000 Hong Kong residents worked on the Mainland last year, a four-fold increase compared with the 1990s. Most of them are managers, executives or professionals. Nearly 90% of them work in Guangdong.
"Meanwhile, we are opening our door to talent from the Mainland and overseas through more flexible measures. This would help enhance our economic vitality and create more job opportunities. In the first three quarters of this year, we approved applications submitted by nearly 20,000 talented workers from the Mainland and overseas to work in Hong Kong through the 'Admission Scheme for Mainland Talents and Professionals' and the 'General Employment Policy'.
"The Government is considering launching a new admission scheme next year to allow a number of talented workers from the Mainland and overseas to reside in Hong Kong without the requirement of securing an offer of local employment first. Attracting such people will help increase Hong Kong's competitiveness, capital flow and job opportunities," Mr Cheung said.
From a macro-perspective, the implementation of the first phase of CEPA created about 29,000 jobs for Hong Kong in the first two years (2004-05). The launch of the third phase of CEPA should bring more business opportunities for Hong Kong enterprises and professional sectors on the Mainland. It will increase Hong Kong's attraction to overseas investors as well. All these help sustain the economic recovery and encourage private enterprises to create job opportunities.
On the employment outlook in the near term, Mr Cheung said: "With the sustained pick-up in overall economic activities, labour demand is likely to continue to grow. This will have a positive impact on the employment market in the next few months. The newly opened Hong Kong Disneyland has already created 18,000 new jobs.
"The extension of the Individual Visit Scheme to Chengdu, Jinan, Shenyang and Dalian and the Sixth Ministerial Conference of the World Trade Organisation to be held next month will pave the way for continued growth of the tourism sector and stimulate demand in hotel, retail and catering industries."
He pointed out that between now and the end of 2006, the Government will invest about $190 million to carry out over 120 Rural Public Works and Urban Minor Works projects, accelerate the building of a number of municipal works projects, advance maintenance works to 30 community halls and centres, and carry out projects associated with preparations for the 2008 Olympic Equestrian Events.
These works, together with projects initiated by the Hong Kong Housing Society and the Urban Renewal Authority to help property owners undertake proper building maintenance, are expected to create over 6,300 jobs for the construction industry and alleviate its unemployment problem.
"Another 2,700 jobs will be created if the plan to construct the new Central Government Offices and the Legislative Council Building is realised in 2007. A series of infrastructure works that are under way, such as the construction of the KCRC Lok Ma Chau Spur Line, Route 8, the KCRC South Kowloon line, the Hong Kong-Shenzhen Western Corridor, a second passenger terminal building at the airport and the AsiaWorld-Expo complex, will bring a considerable number of job opportunities during the construction process or after completion.
"In the next four years, 34 new hotels are expected to come on stream, bringing job opportunities for the construction industry and creating 8,000 jobs in the hotel and related industries. When the first phase of the redevelopment plan of Ocean Park is completed in 2008-09, there will be 2,600 to 4,000 new jobs available; and the number of new jobs will increase to 11,300 to 12,800 in 2021-22.
"Speaking overall, as our economic fundamentals remain sound, we are cautiously optimistic about the employment outlook," Mr Cheung said.
Ends/Monday, November 7, 2005
Issued at HKT 18:31
NNNN