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LCQ10: Development of the six priority industries
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     Following is a question by the Hon Mr Ip Wai-ming and a written reply by the Financial Secretary, Mr John C Tsang, in the Legislative Council today (November 24):

     In his policy address delivered in October 2009, the Chief Executive announced the development of six industries where Hong Kong enjoys clear advantages, including testing and certification, medical services, innovation and technology, cultural and creative industries, environmental industries and education services, in order to create more quality jobs.  In this connection, will the Government inform this Council:

(a) of the respective percentages of the value of production of the private enterprises in the six priority industries in the overall Gross Domestic Product as at the end of 2009;

(b) whether it knows the overall number of persons currently employed in each of the priority industries, and the distribution of education levels, age groups as well as the number of posts involved of such persons;

(c) whether it knows if the current number of employees in each of the priority industries has increased, compared with relevant figures as at the end of 2008; if so, of the number of newly created jobs in each of the priority industries; of the changes in the age groups, education levels and salaries of the employees taking up such jobs; whether the number of such newly created jobs and the job types meet the Government's expectations of the quality jobs to be brought by the priority industries; if the number of employees has not increased, of the reasons for that; and

(d) whether the Government has assessed the effectiveness of promoting the development of the six priority industries last year and public reaction to the implementation of the policy; if an assessment has been conducted, of the outcome; whether the Government has any specific new measure to step up promotion of the various priority industries in the coming year; if so, of the content and implementation timetable of such new measures; if not, the reasons for that?
 
Reply:

President,

(a) to (c) When the Economic Analysis and Business Facilitation Unit, in collaboration with the Census and Statistics Department, released the crude estimates of the six industries for 2008 early this year, it was announced at the same time that the statistics for 2009 would be released in early 2011.  The six industries are not traditional industries, and some of them (e.g. innovation and technology) comprise economic activities that straddle different industries.  We do not have statistics in respect of the six industries.  We are seeking to enhance relevant economic surveys and increase the sample sizes of the targeted industries in order to collect more comprehensive data.  Table 1 presents the contributions of the private sector component of the six industries to the GDP and total employment in 2008.

     The data for compiling statistics on employment in the six industries mainly come from surveys of establishments.  Taking into account the data reporting burden of the establishments, we have not asked for a breakdown of employees by education level, age group and post.

(d) The Government is gradually implementing various measures in pressing ahead with the development of the six industries where Hong Kong enjoys clear advantages.  This is a long-term industrial development plan which can put Hong Kong on a path towards a more diversified and higher value-added economy.  The measures implemented and to be implemented in promoting these six industries and the effectiveness of the measures are briefly listed below:

Testing and Certification Services

     The Hong Kong Council for Testing and Certification (HKCTC) was established in September 2009.  The HKCTC announced in March 2010 its three-year market-oriented development plan for the industry.

     The HKCTC recommends a dual approach - making general improvements to the accreditation service and strengthening the competitiveness of the industry as a whole, and exploring new business opportunities in four selected trades, namely, Chinese medicine, construction materials, food and jewellery.

     The Government is working closely with the HKCTC in implementing its three-year market-oriented development plan for the industry.  Major measures to be implemented in the coming year include the following:

(1) Organising career talks for students and liaising with the industry on the provision of more internship opportunities for students in the field of testing and certification to help attract talent to the industry;

(2) Arranging a series of talks, technical seminars and workshops to provide the industry with the latest information, publicising the Government・s support services, and enhancing the practitioners・ professional skills;

(3) Setting up working groups on four selected trades, namely Chinese medicine, construction materials, food and jewellery, for focused promotion of testing and certification services;

(4) Working with the Hong Kong Trade Development Council (HKTDC) and trade associations in the industry to enhance the awareness of the "Tested in Hong Kong, Certified in Hong Kong" branding, and connecting the industry to potential customers through the HKTDC's platforms (such as publications and major trade fairs); and

(5) Implementing relevant measures in connection with Supplement VII to CEPA signed in May 2010, under which eligible testing laboratories in Hong Kong are allowed to undertake testing of products for the China Compulsory Certification System on a pilot basis for selected products processed in Hong Kong.

     We will closely monitor the implementation and effectiveness of these measures and continue to support the development of the industry.

Medical Services

     We have reserved four sites at Wong Chuk Hang, Tseung Kwan O, Tai Po and Lantau for the development of private hospitals.  From December 2009 to March 2010, we invited expressions of interest from local and overseas parties in developing private hospitals at the four sites.  We are now formulating the land disposal arrangements for the sites, including the means and timing of land disposal, the detailed requirements for development and the land premium.  We plan to dispose of the sites in phases starting from late 2011/early 2012.

Innovation and Technology

     The Government is committed to promoting the development of our innovation and technology sector.  After identifying innovation and technology as one of the six industries in 2009, the Government has introduced a number of new initiatives to enhance the hardware and software support for the industry.

     On hardware, the Government obtained funding approval from the Legislative Council in April 2010 for the construction of Science Park Phase 3, which will cost $4.9 billion.  The project will commence in the second half of 2011, and will be completed in phases between 2013 and 2016, eventually providing an additional floor area of 105 000 square metres and creating 4 000 R&D-related jobs.

     To improve software for local scientific research, the following measures have been implemented:

(1) In April 2010, the Government launched the $200 million "R&D Cash Rebate Scheme" to encourage business enterprises to establish stronger partnership with research institutions.  Under the Scheme, enterprises enjoy a cash rebate equivalent to 10% of their R&D investments.  So far, 116 applications have been approved, with cash rebates totaling some $2.5 million; and

(2) To foster close collaboration among Government, industry, academic and research sectors, the Innovation and Technology Commission is actively promoting the application of local R&D outputs in the public sector.  For example, in collaboration with the industry, the Hong Kong Applied Science and Technology Research Institute has successfully enhanced the quality of LED lamps and widened the scope of their application, and has reached an agreement with the Highways Department to use LED lighting on a pilot basis in public carparks and minor roads.

     In the year ahead, we will continue to improve the operation of the Innovation and Technology Fund and the R&D Centres.  We will also explore ways to enhance Hong Kong・s role in supporting our nation・s development in science and technology, and endeavour to create a more favourable environment for the development of innovation and technology in Hong Kong.

Cultural and Creative Industries

     To complement the development of the West Kowloon Cultural District and develop local and overseas cultural markets, we have earmarked an additional recurrent expenditure of $486 million for the period from 2010/11 to 2014/15 to strengthen the cultural software of Hong Kong through arts programme development, manpower training, promotion of arts education, audience building and cultural exchanges.  In July 2010, we also injected $1.5 billion into the arts portion of the Arts and Sport Development Fund, the investment returns of which will be used to support more projects that are conducive to building a vibrant local arts scene, and to step up our support for small and medium arts groups with good potential.

     We will continue to promote cultural exchanges with the Mainland and the rest of the world, and support our arts groups in staging performances, organising exhibitions and participating in exchange activities in different economies, thus showcasing Hong Kong・s creativity and building our cultural brand.  Specific tasks include setting up cultural co-operation frameworks with various economies to provide a conducive environment for exchanges; deepening and broadening the collaboration between Hong Kong and Taiwan, using the Hong Kong-Taiwan Cultural Co-operation Committee as a platform; and developing brand-building arts programmes and major cultural exhibitions jointly with partners in the Pearl River Delta region through the mechanism of the Greater Pearl River Delta Cultural Co-operation Meeting.

     In June 2009, the Commerce and Economic Development Bureau set up Create Hong Kong (CreateHK), a dedicated office responsible for liaising with different creative sectors, providing one-stop service for local creative industries, and working with them to boost their development.

     To provide financial support for creative industries, we have also launched the $300 million CreateSmart Initiative, which has been well received by the industries.  A total of $68 million has been granted to 38 projects.  The aims of these projects include supporting the participation of local creative talent in international competitions; providing paid internship opportunities for young people aspiring to a career in creative industries; and assisting the sector in organising promotion activities in the Mainland and overseas to demonstrate the abilities of our creative talent and establishing a platform for their business and marketing activities.  In addition, CreateHK is committed to assisting trade groups in organising major local creative events that attract enterprises, talented people and academics related to creative industries from around the world, thereby consolidating Hong Kong・s status as Asia・s creative capital.

     Riding on the opportunity presented by the Expo 2010 Shanghai, we worked with our creative industries in organising a series of activities in Shanghai during the event to promote Hong Kong's creativity. These included exhibitions such as the "Hong Kong: Creative Ecologies V Business, Living, Creativity", "Hong Kong Ani-Com Carnival" and "Fashion Visionaries V Hong Kong", which were all very successful, leaving the residents and tourists in Shanghai deeply impressed by our creative industries.  Meanwhile, the HKTDC also staged the "Style Hong Kong" Show in Shanghai to promote both our culture and creativity.  The activity not only showcased our creative products, but also promoted the Hong Kong brand in general.

     An abundant supply of quality people is essential to the continuous development of creative industries.  The Academy of Film of the Hong Kong Baptist University and the Hong Kong branch of the US-based Savannah College of Art and Design were established in June 2009 and October 2010 respectively with the support of CreateHK.  The two establishments together provide more than 1 900 students places at various levels, further enhancing Hong Kong's ability to nurture creative talent for the local creative industries.

     Since its establishment, CreateHK has rendered assistance and support to some 60 promotion events, which have attracted more than 380 000 participants from more than 30 countries and regions and from the local community.  Overall, the work of CreateHK over the past year or so has yielded initial results in promoting our creative industries overseas, nurturing local talent, fostering a creative environment in the community and consolidating Hong Kong・s status as Asia・s creative capital.              

     In the coming year, the Government will continue to maintain close contact with the creative sectors, adopting an accommodating and innovative mind-set in understanding their respective needs. Further initiatives will be implemented to collaborate with our creative industries to boost their development.  Some of the finalised initiatives and their implementation schedules are as follows:

(1) Sponsoring a one-year full-time technical training programme to provide skilled workforce at frontline level for the local film industry.  The programme commenced in September 2010;

(2) Supporting local creative talent in a wider range of creative industries, such as design and digital entertainment, in participating in overseas competitions, thus showcasing Hong Kong's creativity and elevating the standing of local creative industries in the international arena;

(3) Working closely with our creative industries to develop signature events (including the Hong Kong Asian-pop Musical Festival to be held in March 2011 during the Hong Kong Entertainment Expo and the Special Interest Group on Graphics and Interactive Technologies Asia 2011 to be held in Hong Kong in December next year), with a view to enriching Hong Kong's creative events calendar, and establishing the city as the prime location for holding creativity events in the region;

(4) Supporting our creative industries in using the new media to explore new markets and promote themselves worldwide.  This includes supporting the local comics sector in introducing a mobile distribution platform in late November 2010, and assisting in the establishment of a 3D online platform by the architectural sector in the first half of 2011 to showcase local architectural works; and

(5) Revitalising the former Police Married Quarters on Hollywood Road.  To realise the full potential of the site in promoting the development of creative industries, we will work closely with the Musketeers Education and Culture Charitable Foundation Limited, i.e. the selected operator, and the local creative industries to implement the transformation project and establish the site as a regional centre for creative industries.

Environmental Industries

     We have been promoting the development of various new businesses relating to environmental protection, including electric vehicles, new energy technology, and products to enhance building energy efficiency.  We are taking the lead in enhancing environmental protection initiatives in government departments with a view to creating new business opportunities for environmental industries.  We have also been encouraging the private sector, through various policies and financial incentives, to support the development of environmental industries.  For example, we have been actively expanding the list of products with green specifications for government procurement (the number of items has increased from some 60 in 2009 to more than 100 at present), and we are extending green procurement to cover government service contracts.  We are also gradually increasing the use of recycled materials in public works contracts.  The Buildings Energy Efficiency Bill which will be passed soon, together with the Mandatory Energy Efficiency Labelling Scheme that is already in place, will create more business opportunities for energy services companies and the electrical and mechanical industry.  In the coming year, we will continue to promote green practise within Government, and further enhance the implementation of relevant policy initiatives to support the development of environmental industries.

Education Services

     On the development of education services, our objective is to reinforce the position of Hong Kong as a regional education hub, nurture talent for other industries, attract quality students and enhance our competitive edge, in order to facilitate the long-term development of Hong Kong, the Pearl River Delta and the whole nation.  To achieve this objective, we strive to promote the internationalisation and diversification of the local higher education sector.

     The Education Commission set up the Working Group on the Development of Education Services in Hong Kong in early 2010.  In the past few months, the Working Group has been soliciting views from various stakeholders in the education and other sectors.  After analysing their views, the Working Group will make recommendations to the Education Bureau (EDB).

     In 2008, the Government implemented a series of measures to develop Hong Kong into a regional education hub. These include doubling the non-local student quota for publicly-funded programmes to 20%, establishing the $1 billion HKSAR Government Scholarship Fund, relaxing the restrictions imposed on non-local students regarding employment during their study and stay in Hong Kong after graduation.  These initiatives have been effective.

     In the past year, the EDB worked closely with the local higher education institutions to step up exchanges and promotion activities in the region.  We will keep up our efforts in this respect.  

     We will continue to implement a series of measures to support the self-financing post-secondary education sector.  These include the Land Grant Scheme, Start-up Loan Scheme and Quality Enhancement Grant Scheme.  As announced in the 2010-2011 Policy Address, we will establish a $2.5 billion Self-financing Post-secondary Education Fund. With its investment income, the Fund will provide stable and sustainable resources to support the sector's long-term development.

     We plan to launch an Expression of Interest exercise in late 2010 to invite development proposals from institutions for the site of the former Queen's Hill Camp.  Depending on the needs of the sector, we will consider making available two more sites at Tai Wai and Tseung Kwan O in due course.

Ends/Wednesday, November 24, 2010
Issued at HKT 13:43

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