2009-10 Policy Address by Chief Executive (3)

Trading and Logistics

17. The Government attaches great importance to the sustainable development of the trading and logistics industry. The Outline of the Plan for the Reform and Development of the Pearl River Delta (the Outline) promulgated in January 2009 stresses the importance of a clear division of work, a reasonable layout and complementarities in respect of the facilities in Hong Kong and in the Mainland. We will work closely with the Mainland authorities to maintain Hong Kong's leading position in the global supply chain.

18. It is increasingly accepted that the trading and logistics sector in Hong Kong should gradually shift to high-value goods and services. To facilitate development in this direction, we have identified a number of permanent sites around the Kwai Tsing area, which is close to our container terminals and airport. These sites will be made available to the market in phases from 2010 onwards to facilitate the development of a logistics cluster.

19. An important measure to support our logistics industry is to enhance the handling capacity of the Hong Kong International Airport. The Hong Kong Airport Authority will carry out a midfield expansion project to provide additional aircraft stands and apron facilities and a new passenger concourse. The project can maximise the use of the two existing runways so that the airport can cope with air traffic demand up to 2020. The preliminary study on the project will be completed in 2010.

Professional Services

20. The professional services we provide are on a par with international standards and renowned for their high quality and efficiency.  Hong Kong and the Mainland encourage the mutual recognition of professional qualifications by our respective professional bodies, and facilitate access to the Mainland market by Hong Kong's professional services through the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA).   CEPA has introduced various market liberalisation measures for Hong Kong's professional services sector, including allowing Hong Kong residents to sit the Mainland's professional qualification examinations, simplifying internship requirements, facilitating registration and practising, and lowering market entry thresholds.

Six Industries

21. Apart from the four pillar industries, the six industries are crucial to the development of our economy.  At present, the private sector part of these six industries directly contributes about 7% to 8% of GDP, and employs around 350 000 workers, or about 10% of the total workforce. With appropriate policies to remove obstacles to their development, the six industries will enter a new phase of development, propelling Hong Kong towards a knowledge-based economy.

Optimising Land Use

22. Over the years, the Government's role in economic development has mainly been setting market rules, creating a fair and open environment, and providing suitable human resources, with the aim of optimising the use of limited resources in society.  Now that the economy is restructuring, the Government has the responsibility to examine whether the existing use of resources can support the new economic structure, and to prevent the factors of production from being tied up by outdated policies and economic structure.

23. The community widely supports the development of the six industries, and has clearly reflected to the Government that land resources are crucial to their development. Meanwhile, there have been calls for realising the potential of old industrial buildings. Due to the constraints of the existing systems and policies, these valuable resources have not been fully utilised.

24. Therefore, the Government proposes the following package of measures to release the potential of over 1 000 old industrial buildings.  To encourage the redevelopment or conversion of industrial buildings by owners, we will:

(1) Lower the threshold for compulsory sale for redevelopment for industrial buildings in non-industrial areas to facilitate the consolidation of ownership by owners;

(2) Enable owners to pay additional premiums according to the actual development density after redevelopment based on a "pay for what you build" approach;

(3) Allow owners who modify the lease for redevelopment to opt to pay additional premiums by instalments over a period of five years at a fixed interest rate if the premiums payable exceed $20 million; and

(4) Exempt owners who opt for the wholesale conversion of a building instead of redevelopment from paying the waiver fee for change of land use, provided that the requirement on age of property is met and planning permission is obtained.

The second, third and fourth measures proposed will be effective only for three years starting from 1 April 2010. The approved projects for redevelopment have to be completed within five years, and those for wholesale conversion within three years.

25. These measures have been proposed after careful consideration by the Government. They can address the needs of economic development by enabling owners to revitalise and add value to their industrial buildings, thus providing new momentum for economic growth and creating jobs. They are also in line with the principle of "Big Market, Small Government", and allow the market to respond to such needs. To be more business friendly, the Lands Department will set up a dedicated team to process applications for redevelopment or wholesale conversion of industrial buildings.

(To be continued)

Ends/Wednesday, October 14, 2009
Issued at HKT 11:28