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LCQ4: Development of convention and exhibition industry

     Following is an oral reply by the Secretary for Commerce and Economic Development, Mrs Rita Lau, to a question by the Hon Ronny Tong in the Legislative Council today (May 5):


     At the meeting of the Panel on Commerce and Industry of this Council held on April 20 this year, some members of the convention and exhibition (C&E) industry pointed out that monopoly might exist in the industry at present.  In this connection, will the Government inform this Council:

(a)  whether the authorities will consider inviting an independent academic institution to conduct a study, so as to examine if monopoly exists in the C&E market at present; if they will, of the details; if not, the reasons for that; whether the authorities will review the policy on the C&E industry according to the existing fair competition policy, including the policy of promoting market competition by the Hong Kong Trade Development Council (TDC); if they will, of the details; if not, the reasons for that;
(b)  whether the authorities will consider formulating new policies and measures to enable more market players to participate in the C&E industry; if they will, of the details; if not, the reasons for that; and

(c)  given that it has been reported that a "non-competition" clause, which is in contravention of the fair competition policy, is included in the existing operation agreement signed between TDC and the company responsible for the management of the Hong Kong Convention and Exhibition Centre, whether the Government will request TDC and the company to revise or remove the "non-competition" clause contained in the agreement; if they will, of the details; if not, the reasons for that; how the Government will explain to the public the situation of the C&E industry being monopolised?



     More than 40 individuals and organisations attended the meeting of the Panel on Commerce and Industry held on April 20, 2010.  They expressed a diversity of views, many of which affirmed and supported the Trade Development Council's (TDC) organising exhibitions to promote, assist and develop Hong Kong's export trade.  At the meeting, I also explained the policy for developing the convention and exhibition industry in Hong Kong and the TDC's functions and role in it. The Government has been striving to enhance Hong Kong's advantages and appeal as an international MICE (meetings, incentive travels, conventions and exhibitions) capital. We will continue to attract major international MICE events to Hong Kong. Our reply to the question raised is as follows:

(a)  We should not use only market shares to determine whether there are monopolies in the market.  We need to consider other factors and assess the overall market conditions.  The other factors include whether there are market entry barriers; whether there is fair competition in the market; and whether there are abuses of market positions and obstructions to free trade, which have impaired economic efficiency to the detriment of the overall interest of Hong Kong.  As far as market share is concerned, the numbers of trade shows solely organised by TDC in 2008 and 2009 are 22 and 26 respectively, representing 25% and 29% of the total numbers of trade shows in the respective years, implying no monopoly by TDC in the market. Considering such market situation, we currently have no plan to conduct any study on the exhibition industry.  The Government will continue to monitor the development of the exhibition industry and maintain liaison with the trade.

(b)  The market for the convention and exhibition sector in Hong Kong is a free and open market with no barriers.  In addition, as a result of the Government's efforts in promoting a business-friendly environment and providing various facilitation and support measures, Hong Kong has a vibrant MICE industry.  In the 2008-09 Budget, the Financial Secretary earmarked an additional $150 million for the development of Hong Kong as an international MICE capital.  In November 2008, the Hong Kong Tourism Board (HKTB) also established the Meetings and Exhibitions Hong Kong (MEHK) Office which has specific responsibility for promoting Hong Kong's MICE tourism.  Since its establishment, the MEHK has been stepping up its promotion efforts in various target markets in collaboration with the convention and exhibition industry, TDC, the Government's Economic and Trade Offices and the Invest Hong Kong.  It has also been providing one-stop professional support services for MICE event organisers. We expect that these measures will help attract more enterprises from outside Hong Kong, professional institutes, association management companies and MICE event organisers etc. to stage MICE events in Hong Kong, and will be conducive to bringing more players to the market.

     As a new initiative in 2010-11, the MEHK will develop an online "E-marketplace", which will serve as a one-stop business-building platform to facilitate MICE event organisers and planners to search for suitable venues and products, plan itineraries, request proposals from local suppliers, and learn about the latest offers in Hong Kong.

     In addition, the Invest Hong Kong will continue to identify suitable exhibition organisers all over the world and invite them to invest in Hong Kong.  It will also provide them with information and support services as appropriate.

(c)  The "non-competition" clause in the operation agreement signed between TDC and the operator of the Hong Kong Convention and Exhibition Centre (HKCEC) (i.e. Polytown Company Limited) seeks to protect the interests of both parties by restricting either party's participation in the development of new exhibition facilities in Hong Kong during the term of the contract.  The clause does not prohibit TDC from organising exhibitions at venues other than HKCEC.  

     In fact, TDC has organised more than 20 exhibitions at the AsiaWorld-Expo (AWE) since the establishment of the latter.  In 2010, TDC will continue to stage four exhibitions at AWE, namely the Hong Kong International Printing and Packaging Fair, the Sports Source Asia, the ECO Expo Asia and the Hong Kong International Building and Decoration Materials and Hardware Fair.  

     The "non-competition" clause is part of the operation agreement signed between TDC and Polytown, a binding commercial contract. The Government does not intend to and will not ask them to delete or alter the relevant clause.

Ends/Wednesday, May 5, 2010
Issued at HKT 15:58


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