Daily Information Bulletin
Issued by Hong Kong Special Administrative Region Government Information Services
Garden Road, 5th-8th Floors, Murray Building, Hong Kong. Tel: 2842 8777



Wednesday, March 18, 1998



CONTENTS
========
1.  Transcript of Chief Executive's media session
2.  Transcript of Chief Secretary's media session
3.  Transcript of Financial Secretary's media session at signing ceremony
4.  Transcript of Financial Secretary's media session after Provisional LegCo meeting
5.  Statement by Department of Justice
6.  Update on cholera
7.  Nomination for subsector elections to close on Friday
8.  611 nominations received for subsector elections
9.  Class suspension arrangements for revised rainstorm warnings
10. Signing ceremony of the Fixed Rate Mortgage Pilot Scheme



1.  Transcript of Chief Executive's media session
    *********************************************

     Following is the transcript (English part) of the
media session given by the Chief Executive, Mr Tung Chee
Hwa, at the airport before departing for Beijing this
(Wednesday) afternoon:

Reporter: What's the future of the Chief Secretary? Is she
going to step down when her contract expires?

Mr Tung: No, this is not the subject at all of discussion.
We are working very well together as a team.  In fact, the
entire civil service, we are all working very very hard
for better future for Hong Kong.

Reporter: Mr Tung, there have been reports that the ICAC
did not press charges against Sally Aw because of her
relationship with your family.  What's your response to
these reports?

Mr Tung: Well, I have just explained that a few moments
ago that, first of all, the decision to prosecute or not
rests entirely with the Secretary for Justice.  This is a
very fine tradition in Hong Kong.  It is also very much
provided for by the Basic Law.  It is entirely the
Secretary for Justice's decision and responsibility in
these matters.

Reporter: ... Zhu Rongji being elected as the new Premier.
Do you have any particular expectations from him?

Mr Tung: Well, again as I said earlier on that this is a
very momentous and historic occasion for all Chinese
people that a new leadership has been elected by the Ninth
National People's Congress.  Over a period of time, I have
a chance to meet many of the leaders and I have to tell
you that they have very clear direction as to where the
country is going.  Quite visionary.  And it is a historic
moment because I think we can now all feel that in the
21st century that the country will be, and the people will
be wealthier, the country will be stronger and will be at
last united.  So as a Chinese person, obviously, I am
absolutely delighted that this has happened.  And I am
very honoured to be invited to participate in the closing
ceremony of the Ninth National People's Congress.

End


2.  Transcript of Chief Secretary's media session
    *********************************************

     Following is the transcript of a media session given
by the Chief Secretary for Administration, Mrs Anson Chan,
after attending the Provisional Legislative Council
meeting this (Wednesday) afternoon:

Reporter: Is there a statement you would like to make ...?

Mrs Chan: I was saying that I don't know where this rumour
about my resigning or retiring has originated from.  But
I'm afraid I'm going to disappoint those who started this
rumour.  I have no intention, I repeat, no intention of
resigning or retiring.  As you can all see, I am in
perfect health; I continue to be very enthusiastic about
my work; there's plenty of challenges and lots of work to
do and I intend to continue to do my work as I have always
done it.

Reporter: It's likely in the public's mind that this
rumour ...?

Mrs Chan: What? ...no connection!

Reporter: ... the question of selective enforcement of law ...

Mrs Chan: I have to, you know, refute this allegation that
there is selective enforcement of law.  As you all know,
the decision to prosecute or not to prosecute is entirely
a matter for the Secretary for Justice.  I know that the
Secretary for Justice has issued, or will shortly issue a
statement.  I just want to make it clear that on this
occasion, as on previous occasions in respect of
prosecutions, neither the Chief Executive nor myself have
interfered in any way, nor do we intend to interfere in
this case or in subsequent cases.  I hope I made that
quite clear.

End


3.  Transcript of Financial Secretary's media session at signing ceremony
    *************************************************************************

     Following is the transcript of the media session by
the Financial Secretary, Mr Donald Tsang, after
officiating at the signing ceremony of the Hong Kong
Mortgage Corporation Limited Fixed Rate Mortgage Pilot
Scheme today (Wednesday):

Mr Tsang: Today is a very big day for us in mortgage
financing in Hong Kong. We are now offering the consumers
a new way of financing mortgages on a fixed rate basis.
We have been working on it for some while.  We have now
been able to produce a product remarkably quickly and I
think it will be popular in Hong Kong.  But I must
emphasize it is something not in replacement of any
existing facility or existing arrangement.  It is an
additional product.  In other words, a consumer can choose
between a floating rate mortgage arrangement or a fixed
interest rate mortgage arrangement.  That will be
certainly very popular from consumers' point of view.
Secondly, it will be very good for the banks themselves
who offer these fixed rate mortgages to their customers
because it is a new line of business, a new stream of
avenue for them.  For the Mortgage Corporation as well, it
is excellent because we are now able to produce two lines
of product, one on fixed rate and one on floating rate.  I
am sure Hong Kong, as in most other mature economies, will
gradually find fixed rate mortgages equally popular as
floating rate one, so I think it is a big day for Hong
Kong.  Today is a pilot scheme.  I am sure it will catch
on.  Well, thank you very much.

End


4.  Transcript of Financial Secretary's media session after Provisional LegCo meeting
    *************************************************************************************

     Following is the transcript of the media session by
the Financial Secretary, Mr Donald Tsang, at the
Legislative Council after the passing of the 1998
Appropriation Bill today (Wednesday):

Mr Tsang: I am very grateful to the support of the
Provisional Legislative Council for my Budget.  It passed
my Budget without any voice of opposition.  This is a
rather rare experience for the Administration.  It has
encouraged enormously myself and my colleagues who have
been involved in budgeting work in the last few years.
This is indeed a rare occasion, reflecting that the
proposals that I have made in the Budget represented the
consensus, not only within the Administration and the
community, but it has also received the support of the
Legislature.  We are going to work together to tackle this
difficult year of 1998.  I have explained in some length
why I have to persevere with the minor revision in fuel
duty.  I think those reasons are quite compelling.  I hope
that Members would consider my points very carefully when
they come to consider this amendment bill this coming
Wednesday.

Reporter: Mr Tsang, you have said two things.  On one hand
you said the impact on revenue is not that great, and you
said you refused to withdraw.  So what exactly are you
saying?

Mr Tsang: What I said is the revenue implication as far as
this year is concerned is tolerable in that it would not
create deficit, it would not make a major dent in our
surplus position.  But I would certainly warn that
whatever you do to upset the overall the balance of the
package, and what's more, it is going to reduce the room I
would be able to manoeuvre in getting more revenue
concessions in the coming year.  And that we would have to
consider very carefully and we shouldn't be doing this
unless we have compelling reasons.  From my point of view
the compelling reasons are on my side, in that there is
absolutely no reason why my fuel proposal should be
altered.  And as I have said, even in the case of diesel
fuel, while I have every sympathy for those taxi drivers
and lorry drivers, we have recognised one very important
fact: even including the revenue revision we have proposed
the cost of diesel at this moment is lower than what was
prevailing in April last year.

Reporter: ... is that a threat that you withdraw ...?

Mr Tsang: I have explained very carefully we are not
making any threat at all.  It is not my intention or my
colleague's intention.  We are merely stating the fact.
We hope that Members would consider them very carefully.

End


5.  Statement by Department of Justice
    **********************************

     In response to media enquiries about the case
concerning Hong Kong Standard, a Department of Justice
spokesman said today (Wednesday):

     "The decision to prosecute the three individuals in
this case was taken by the Department of Justice in
accordance with our prosecution policy and having full
regard to the evidence available.  No special treatment
was given to any suspects.  The status of any suspect or
political factors did not feature in our decision.

     "As the matter is sub judice, we will not comment
further on the details of the case."

End


6.  Update on cholera
    *****************

     The Department of Health announced that a new local
case was confirmed today (Wednesday).

     The new confirmed case involves a 26-year-old female
reported as a suspected local case on March 15, 1998.

     There is a new suspected imported case involving a 24-
year-old male from the fourth tour group of the same
travel agency after a tour in Thailand between March 9 and
March 15.

     As of today, the total number of confirmed cholera
cases so far this year is 45, including 30 imported cases
and 15 local cases.  There is only one suspected case.

End


7.  Nomination for subsector elections to close on Friday
    *****************************************************

     Preparations for the Election Committee subsector
elections on April 2 have reached the final stage as the
nomination period is about to conclude in two days' time.

     A total of 683 members of the Election Committee will
be returned from 35 subsectors representing various
trades, professions, labour, social services, Chinese
People's Political Consultative Conference Hong Kong
delegates and district-based organisations.

     These members, together with the 77 ex-officio
members and 40 representatives nominated by the Religious
Subsector, will form a 800-strong Election Committee.

     Speaking at a press conference to review the progress
of the preparations, the Chairman of the Electoral Affairs
Commission, Mr Justice Woo Kwok-hing, called on
prospective candidates intending to join the race to hand
in nomination forms without delay to allow time for any
errors to be corrected before the close of nominations.

     "We have done our best to make the nomination
procedure as simple as possible.  A nominee is required to
give only the minimum amount of information necessary to
meet legal and administrative requirements," he said.

     "A candidate only needs to have his nomination paper
subscribed by at least five voters registered for the
subsector concerned and pays an election deposit of
$1,000," he added.

     But he advised candidates to include more than the
minimum required number of subscribers in their nomination
forms to avoid the risk of invalidation of their
nominations should any subscribers be subsequently found
not to be voters for the subsector concerned.

     "The Election Committee has the right to choose 10
Legislative Councillors on May 24.  Don't miss your chance
to become a member of this committee.

     "I hope to see as many candidates as possible from
various subsectors come forward to give the 140,000 voters
a choice on April 2," he said.

     To qualify for nomination, a candidate must be aged
18 or above and is a registered elector for a geographical
constituency.  He must also either be a registered voter
for the subsector concerned or satisfy the Returning
Officer that he has a substantial connection with the
subsector, and he must not be disqualified on other
statutory grounds.

     A candidate cannot be nominated for more than one
subsector, Mr Justice Woo said.

     Nomination forms are available from the Returning
Officer of the subsector concerned, District Offices, the
Registration and Electoral Office on the 10th floor of
Harbour Centre, 25 Harbour Road, Wan Chai, and the
website, http://www.info.gov.hk.

     Completed forms should be returned to the relevant
Returning Officer in person during office hours (9 am to
5 pm) by this Friday (March 20).

     After the nomination period closes, a briefing will
be arranged for all the candidates at 10 am the following
morning (Saturday) at Hall 5A of the Hong Kong Convention
and Exhibition Centre.

     Returning officers will draw lots to determine the
order of names of candidates on ballot papers and to
allocate designated spots to candidates for putting up
election advertisements.

     Talking about arrangements on the polling day,
Mr Justice Woo said that 96 polling stations had been
identified and that polling would last 15 hours, running
from 7.30 am to 10.30 pm.

     Every subsector will be assigned one or more polling
stations in accordance with the size of its electorate.
The Education Subsector, with the biggest electorate of
56,000, will be assigned 18 polling stations.

     To facilitate voting by the disabled, 36 of the
polling stations have been designated as special polling
stations.  A disabled voter may apply to the Chief
Electoral Officer at least three days before the polling
day for voting at a special polling station designated for
his subsector.

     Counting of votes will be done by computers at a
central counting station to be set up at Hall 3 of the
Hong Kong Convention and Exhibition Centre.

     To help voters and members of the public better
understand the counting process, two demonstration
sessions on the use of computer counting devices, known as
optical mark readers, will be held at 3 pm and 4 pm on
Saturday (March 21) at Hall 5A of the Hong Kong Convention
and Exhibition Centre.

     Interested persons are requested to reserve a seat by
calling 2588 1212 before Friday.

     Mr Justice Woo said that poll cards and candidates'
introductory leaflets would be sent to voters at the end
of this month.

     "By that time, voters will have a clearer picture of
where and when to vote as well as the personal particulars
of candidates who seek to represent their subsectors," he
said.

End


8.  611 nominations received for subsector elections
    ************************************************

     A total of 235 nominations for the Election Committee
subsector elections have been received today (Wednesday).

     This brings to 611 the total number of nominations
received since the eight-day nomination period started on
Friday (March 13).

     The breakdown of nominations by subsector is:

Subsector         Number of nominations    Cumulated total
---------             received today       ---------------
                  ---------------------

Catering                     8                          18

Commercial(first)            3                           3

Commercial(second)           1                          10

Finance                      3                           3

Financial services          11                          12

Hong Kong Chinese                                       10
Enterprises Association

Hotel                        1                           1

Import and export            3                          10

Industrial(first)           10                          11

Industrial(second)           5                           8

Insurance                    5                           9

Real estate and              2                           4
construction

Textiles and garment        12                          12

Tourism                      6                           7

Transport                    4                          14

Wholesale and retail         4                           5

Accountancy                 11                          26

Architectural, surveying    12                          12
and planning

Chinese medicine             9                          17

Education                    3                          27

Engineering                  4                          39

Higher education             3                          18

Information technology       1                          40

Legal                        7                          13

Medical                     10                          36

Agriculture and fisheries   23                          57

Labour                       9                          41

Religious                                               20

Social welfare              13                          17

Sports                                                  10

Culture                      1                          11

Publication                 10                          11

Chinese People's Political  17                          40
Consultative Conference

Heung Yee Kuk                3                           3

Provisional District        14                          23
Boards for the Districts
in the Urban Council Area
("Hong Kong and Kowloon
Provisional District Boards")

Provisional District         7                          13
Boards for the Districts
in the Regional Council Area
("New Territories Provisional
District Boards")

End


9.  Class suspension arrangements for revised rainstorm warnings
    ************************************************************

     New arrangements for the suspension of classes in
times of inclement weather will be implemented from March
23, 1998 when the Hong Kong Observatory's revised
Rainstorm Warning System (RWS) comes into effect, the
Education Department announced today (Wednesday).

     A department spokesman said the new arrangements take
into account the fact that the revised RWS, operating on
colour-coded warnings of AMBER, RED and BLACK, has
incorporated a forecast element.

     "Under the new arrangements, schools will operate as
usual under the AMBER signal.  School personnel, school-
bus drivers, parents, students and candidates for public
examinations should listen to radio and television
announcements on weather, road and traffic conditions,"
the spokesman said.

     The spokesman said that the school arrangements for
RED warning will be the same as those for BLACK warning.

     "The Director of Education will announce the
suspension of classes if the RED or BLACK warning is
issued before schools start," he said.

     "Internal tests or examinations and outdoor
activities will be postponed or cancelled, and students
should stay home.

     "However, schools should still ensure that their
premises will be appropriately open and staffed to look
after any students arriving or leaving, to ensure their
safety."

     The spokesman noted that some students may already be
on their way to school when the RED or BLACK warning is
issued before school hours.

     "Such students should normally proceed to the school
unless road or traffic conditions ahead are unsafe," he
said.

     "School-bus drivers should listen to radio broadcasts
on the development of the rainstorm and ensure that
students will be taken to a safe place, normally the
school, unless road or traffic conditions ahead warrant
otherwise.

     "Although there will be no normal classes, students
arriving at school should remain there until it is safe
for them to go home."

     The spokesman said that if the RED or BLACK warning
is issued when schools are in session, students should
stay in school where it is safe.

     "They should remain in school until the end of school
hours and conditions are safe for them to return home."

     The spokesman urged schools, parents and students to
listen to radio and TV announcements on schools and public
examinations during inclement weather.

     "Whenever possible, the department will make the
first announcement for suspension of classes before
6.15 am for AM and whole-day schools and before 11 am for
PM schools," the spokesman said.

     Circulars carrying detailed instructions on what to
do in times of heavy persistent rain and typhoons are
being sent to schools.

     The spokesman advised schools to draw up a
contingency plan in advance to deal with the suspension of
classes due to rapidly deteriorating weather.

     "Schools should inform teachers, pupils and parents
of all arrangements to be made in bad weather at the
beginning of each school year."

End


10. Signing ceremony of the Fixed Rate Mortgage Pilot Scheme
    ********************************************************

     The Hong Kong Mortgage Corporation Limited (HKMC)
signed an agreement with Chase Manhattan Bank and Dao Heng
Bank today (Wednesday) to launch a pilot scheme for
promoting fixed rate mortgages.

     Under the pilot scheme, the HKMC agrees to purchase
from each of the two participating banks up to $250
million of the eligible fixed rate mortgages during the
6-month pilot scheme period.  Mortgage loans offered by
the two participating banks will be fixed for the first
three years and the interest rate is presently fixed at
10.5%.  The borrower will be given a choice at the end of
the 3-year period either to re-fix the mortgage rate for
another term at the then prevailing fixed rate specified
by the HKMC or to convert the mortgage loan to a floating
rate basis.  The fixed mortgage rate may be changed from
time to time by HKMC having regard to changes of the
market interest rates.

     At today's signing ceremony, Mr Donald Tsang,
Chairman of the HKMC, said: "Fixed rate mortgage products
will bring significant benefits to Hong Kong.  To the home
buyers, it provides an additional choice of mortgage
finance that can protect them from adverse movements in
interest rates.  To the investors, the HKMC debt
securities provide an additional source of high quality
and liquid Hong Kong dollar assets with an attractive
enhancement of yield above those of Exchange Fund Notes.
To the originating banks, their partnership with the
Mortgage Corporation provides an extra source of steady
fee income and a new avenue for marketing their banking
products to the mortgage borrowers."

     Both the Mortgage Corporation and the participating
banks will not be exposed to the risk of adverse movements
in interest rates.  "HKMC will make use of the fixed rate
funds from debt issuance to purchase fixed rate mortgages
originated by the banks and hence will not be exposed to
the risk of interest rate mismatch.  The participating
banks also will not be exposed as the Mortgage Corporation
will buy the fixed rate mortgages from them soon after
origination on a loan by loan basis," said Mr Joseph Yam,
Deputy Chairman of the HKMC.

     The HKMC has made some modifications to its mortgage
purchase criteria to cater for the purchase of fixed rate
mortgages.  In recognition of the lower credit risk of
fixed rate mortgages and in line with the practice in the
US, the existing 6-month seasoning requirement for
floating rate mortgages will not be applied to the fixed
rate mortgages originated under the pilot scheme.  On the
other hand, the HKMC will adopt a lower maximum original
loan size of $4 million.

     The pilot scheme will last for six months.  If it is
successful, and subject to favourable funding conditions,
the HKMC may extend the arrangement by increasing the
amount available for fixed rate loans and appointing
additional participating banks.

                         - - - - -

Pilot Scheme to Promote Fixed Rate Mortgages

Participating Banks
Chase Manhattan Bank
Dao Heng Bank

Duration
Six months starting from 18 March 1998.

Framework of the Pilot Scheme

Pre-commitment to Purchase

The HKMC has given a pre-commitment to the two
participating banks to purchase from each of them up to
$250 million of the eligible fixed rate mortgages.  The
banks will originate fixed rate mortgages at an interest
rate to be specified by the HKMC from time to time.  The
mortgages will be purchased by the HKMC on a loan by loan
basis soon after origination.  This will protect the banks
from the market risk arising from interest rate changes
between the origination of the mortgages and offloading of
these mortgages to the HKMC.

Loan servicing

The participating banks will service the mortgages in
return for a servicing fee.

Product features

Mortgage rate

The interest rate of the mortgages will be fixed for the
first three years at 10.5%.  At the end of the 3-year
period, the borrower can choose either:

(i)  to re-fix the mortgage rate for another term at the
then prevailing fixed rate specified by HKMC; or

(ii) to convert the mortgages to floating rate at Prime
plus 1.5%.

Tenor

Maximum * 25 years
Minimum * 10 years

Prepayment Fee

Borrowers will be offered two options:

Option 1: Fixed scale fee

Time of Prepayment                      Prepayment Fee

Within one year of origination date     3% of the original
                                        principal balance

Between first and second year           2% of the
since origination date                  outstanding
                                        balance

Between second and third year           1% of the
since origination date                  outstanding
                                        loan balance

Option 2: Reinvestment loss fee

No fee if the prepayment would not result in a
reinvestment loss to the HKMC (i.e. HKMC's prevailing
fixed mortgage rate is at the same rate or higher than the
original fixed rate of the mortgage).  Borrower will pay a
prepayment fee when the HKMC's prevailing fixed rate is
lower than the original fixed rate of the mortgage (i.e.
HKMC will suffer a reinvestment loss due to the
prepayment).  The Prepayment Fee will be calculated using
the following formula:

Original             Outstanding        Remaining fixed
fixed rate           principal          term of
minus           X    balance of    X    the mortgage
Prevailing           the mortgage
fixed rate

A comparison of the prepayment charges under the two
options is at Annex A.  The borrowers must decide on which
option they will take at the origination of the fixed rate
mortgages and the option, once chosen, is irrevocable.

Eligibility Criteria

HKMC's mortgage purchasing criterion for the fixed rate
mortgages originated under the pilot scheme are as
follows:

Maximum original loan                    HK$4,000,000
size at origination

Maximum Loan-to-Value ratio              70%
(LTV) at origination

Maximum Debt-to-Income ratio             50%
(DTI) at origination

Minimum Seasoning                        Nil
Maximum original term to maturity        25 years
Minimum original term to maturity        10 years
Maximum sum of "original term"           40 years
and "age of property at origination"

Annex A

Comparison of Prepayment Fees

For comparison, using the following assumptions, the
prepayment fees for the two options would be as follows:

Original Principal Balance:              $1,000,000
Origination Date:                        April 1, 1998
Fixed Rate at Origination:               10.50%
Date of Prepayment:                      October 1, 1998

Scenario 1

                                         Rate falls by
                                         1%        2%

Option 1:                                $30,000   $30,000
(Fixed scale fee)

Option 2:                                $24,810   $49,620
(Reinvestment loss fee)

Scenario 2

                                         Rate increases by
                                         1%        2%

Option 1:                                $30,000   $30,000
(Fixed scale fee)

Option 2:                                0         0
(Reinvestment loss fee)

End



PROVISIONAL LEGISLATIVE COUNCIL MEETING SUPPLEMENT


CONTENTS
========
1.  New initiatives to tackle unemployment
2.  Speech by the Financial Secretary
3.  SPEL explains spending on environmental improvements
4.  SES's address on Telecom
5.  MTR (Transport Interchange) Bylaw
6.  Gov't to look after students' mental and physical health
7.  Mechanism for determining bus fare rise
8.  Transparency of government advisory bodies
9.  Contracting out works by USD
10. Land Fund
11. Bus safety
12. Fixed rate mortgages
13. Courses to assist newly arrived children to adapt learning
14. Measures to prevent falling objects
15. Measures to strengthen welfare services for new arrivals
16. Companies in economic downturn
17. Measures to ensure water quality safe for keeping seafood



1.  New initiatives to tackle unemployment
    **************************************

     It is a matter of priority for the Government to help
the unemployed to find a job and to acquire the necessary
work skills in order that they may compete favourably with
others in the labour market and hold down a job under the
current state of unemployment.

     The Secretary for Education and Manpower, Mr Joseph
W P Wong, said today (Wednesday) in the Provisional
Legislative Council during the resumed debate on the 1998
Appropriation Bill that the Government had introduced a
number of new initiatives on the basis of the existing
mechanism to help the unemployed and had already made some
progress.

     To better co-ordinate and process vacancies
information provided by employers groups, Mr Wong said all
the Local Employment Services centres of the Labour
Department would be fully computerised from April to
facilitate the setting up of a computerised and
centralised vacancies register to provide speedier and
more efficient job-matching service for both employers and
job-seekers.

     He added that the Labour Department would extend the
daily opening hours of its 10 Local Employment Services
centres for one hour from March 30 for the benefit of the
unemployed who wished to make use of the employment
services available there.

     The overall rate of successful job placement by the
Labour Department is 22 per cent, while the placement rate
through job-matching specially arranged for the unemployed
is as high as 70 per cent.

     "We are confident that the Labour Department can help
the unemployed to re-enter the job market so long as they
are positive and realistic in finding jobs," Mr Wong
noted.

     He said that the Government would enhance vocational
training for the unemployed by increasing substantially
the number of training places to be offered by the
Construction Industry Training Authority and the
Vocational Training Council.

     In order to help unemployed young people, Mr Wong
said that the Government would allow the Employees
Retraining Board (ERB) to consider flexibly applications
from unemployed young applicants for enrolment in its
training courses, while still giving priority to those
aged above 30 and are less educated.

     "The Government has been actively liaising with
various employers' associations, urging them to identify
long-term job vacancies for which specially tailor-made
retraining programmes could be organised, in addition to
the existing courses provided through the ERB.  The
Education and Manpower Bureau (EMB) will hold a meeting
tomorrow with the Small and Medium Enterprises Committee
under the Industry Department to discuss how they could
cooperate with the employers of these enterprises to
organise these tailor-made courses," Mr Wong noted.

     "These courses should be employment-oriented," he
said.  "We will arrange on-the-job training for the
trainees at the employers' work-places, and the employers
must employ them after they have completed training.  They
will receive a monthly subsidy of $4,000 while under
training and we will, in addition, propose an on-the-job
training subsidy for them," he said.

     "Another aim of organising these special courses
during the present slackening of the labour market is to
provide training for the unemployed as far as possible.
This could help them grasp new and widely applicable
knowledge and skills which would enable them to meet the
market requirements and help them find jobs when the
economy recovers," he added.

     "Unemployment is basically an economic problem.  We
should not expect that these measures, which will be
implemented in the coming year, could reduce the
unemployment rate immediately.  But the inter-departmental
working group coordinated by the EMB will continue to
monitor the labour market closely and assess the
effectiveness of these measures, particularly the
implementation of the entire retraining programme,"
Mr Wong stressed.

End


2.  Speech by the Financial Secretary
    *********************************

     Following is a speech by the Financial Secretary,
Mr Donald Tsang, in concluding the debate on the second
reading of the Appropriation Bill 1998 in the Provisional
Legislative Council today (Wednesday):

Madam President,

Introduction

     I am grateful to the Honourable Members of this
Council for welcoming the Budget proposals and responding
generously to them in this debate.  Fifty-six members have
spoken.  While there are one or two points where you give
me the impression that you are, perhaps, not wholly
enthusiastic, by and large you have been supportive, for
which I thank you.  I am also grateful for the most
generous support that has come from the community.
Working together, we can overcome the difficulties we
face.

     I have tried to make clear in the Budget that through
the expenditure programmes and through the unprecedented
range of substantive revenue measures, the Government will
do all that it can to help the economy and to help the
citizens of Hong Kong.  But at the heart of the speech was
an appeal to the unity, the courage and the enterprise of
the community.  Government alone cannot transform the
economy.  We can work to provide the right framework, but
you, the citizens of Hong Kong, must provide the motive
power.  We all know that a single Budget will not
regenerate our economy.  That regeneration will depend on
the exertion of our fellow citizens.  We will, I trust,
encourage them by our example.

     My colleagues in the Administration have already
responded to many points that Honourable Members have
raised on particular policy areas.  I would like to
comment on the presentation of the Budget; the reserves;
and the suggestion that I have been over-optimistic in my
forecasts.  I would also like to say something myself
about unemployment.  I will conclude with perhaps a brief
word on duties.

Budget Presentation

     Some members have suggested that I misled them before
the Budget.  That was never my intention, but I won't duck
the charge.  I make no apology for dampening down the
excessive expectations that were building up day by day in
the strained atmosphere of the early part of this year.
As I have said, the Budget by itself could not abolish the
difficult conditions we face, could not itself turn Hong
Kong around.  The demands that were emerging went far
beyond anything I could possibly have met in the Budget.
If I had let those demands go unquestioned, that would
have misled the community and fuelled even greater
expectations.  The Budget would then have come as a
disappointment.

     Given the fragile mood of the community, a Budget
that failed to satisfy inflated expectations would have
been very bad for Hong Kong.  I would not have been doing
my duty to the community if I had allowed belief to grow
that I could offer quick fixes, quack remedies or
fantastic give-aways.  In the face of set-backs, leaders
of the community need to keep calm - iceberg cool even -
and work to prevent the pressure from short term worries
doing damage to the interests of this city.

The Reserves

     Some Members have suggested that Hong Kong's reserves
are so large that we should not worry about losing our
fiscal balance for a bit.  Others have said that I am
being much too cautious in the guidelines that I have set
for maintaining the reserves.  I would like to make two
points in reply.

     First, those reserves themselves contribute
enormously to our present balance.  Without the interest
on those reserves we would not have been able to reduce
taxes substantially and still maintain a small surplus in
the accounts.

     Second, the guidelines are novel.  I am aware that
one could choose other formulas.  We will have to see how
the arrangements I have set out work in practice.  But I
am certain that if we maintain our reserves within these
guidelines, they will continue to provide a great resource
for the community, they will give assurance of fiscal
stability, and they will impose good discipline on public
finance.  They give everyone - every citizen, every
investor, every analyst - clear, measurable indicators
against which to judge the reserve levels.  They give
flexibility to the Administration, so that maintaining the
reserves does not place undue constraints on revenue or
expenditure plans during times of economic difficulty,
while prompting us to keep up our guard against adversity
in times of prosperity.

     The community has given widespread support to the
guidelines.  I have undertaken to keep both the guidelines
and the effect of observing them under careful scrutiny.
I welcome your assistance in doing so in the years ahead.

GDP Forecast

     Several Members say that the forecast for Hong Kong's
economic performance this year has been over-optimistic.
The gloomy atmosphere prevalent earlier this year may have
unduly affected them. Trouble anticipated is often worse
than the trouble itself.  I accept that this is going to
be a hard year - even though some Members have said I
should not mention such things - but I see no grounds for
despondency.  We should always take counsel of our
courage, not of our fears.  That has always been the
approach of Hong Kong's citizens.  They work hard, even in
the midst of uncertainty, to lay the foundations for a
place of greater security.  That is my approach too.  I am
not being an optimist.  I well understand the old saying
that "any time things appear to be going better, you have
overlooked something".  But I don't believe in moping.  I
believe in hard work.

     Through the Budget measures, the Administration is
continuing to work hard to make this a city in which
everyone can make the most of their talents and
opportunities.  I have faith in the ability of Hong Kong's
citizens to make good use of the freedom of choice, of the
protection of their rights and of the infrastructure of
services and facilities that they enjoy here.  Those
things do not hold out illusory promises.  They don't
insulate us from risk.  But they are precious and have
proved, time and time again, to hold out the best prospect
for people to lift themselves up.  I am not a prophet,
able to tell you with all authority that the forecast that
we have made will be absolutely accurate, nor would I want
to be.  I have not closed my eyes to the problems that our
businesses face.  But the forecast of 3.5% growth in GDP
for the year as a whole does reflect the best reasonable
judgement that the Administration can make of what our
economy can achieve, barring the effect of unpredictable
events here or abroad.

Unemployment

     That leads me on to the matter of unemployment.  The
Secretary for Education and Manpower has already spoken on
this issue, but I would like to add my own thoughts.
Nobody can read of those who have lost their jobs, see
them on television, meet them in the streets, and not be
moved.  They are our fellow citizens.

     I tried to make clear in the Budget speech that my
Budget package was designed to help everyone.
Particularly for this time of economic hardship it was
designed to keep our economy moving, help it adjust
quickly and provide new opportunity.  Public spending and
reduced taxes have effects that spread far beyond the area
or the persons on which they impact directly.  I spoke of
the way in which we tried to frame the Budget so that all
the measures worked together for the general benefit of
the economy and community.  Those were not just words.
Cutting taxes to increase the spending power of
individuals or increase incentives for business to invest
really does help the wider economy, not just the person or
company whose taxes are cut.  Spending on services for the
elderly, the disabled, new arrivals, or child and family
support doesn't just help the recipients of those
services.  It puts money into the economy, as does our
substantial programme of capital spending on
infrastructure and housing.  Sustaining economic activity
in these ways is the most realistic and effective means of
maintaining and creating new employment and helping the
community to cope with the difficulties of economic
adjustment.

     In addition, the public purse has an important role
to play in direct services to the unemployed.  It will
provide the safety net when all else fails.  It is being
used to fund effective training, retraining and job
placement services.

     I want to put a question to this Council and to the
community.  I know that the cold calculations of the
economist give little comfort to the man or woman who has
lost their job in the present downturn, but what comfort
would it bring if I were to ignore sound economic and
financial practices?  The difficulties we face today do
not arise because we have spent more than we earn, or
because we have not managed our financial system properly.
Our economic fortune has not changed because Hong Kong has
given public subsidies to private business; or has
directed private enterprise to fulfil public dreams rather
than letting it follow the natural and healthy guidance of
the market.  How much greater would our problems be if we
had gone down those roads ourselves?

     Yes, we do face lean times, but we have done that
before.  We will have to look harder and further for
opportunity.  We will have to work harder to achieve our
goals.  But as we do that, the public service will be
working with the community, giving all who need it every
support.

Duties

     I turn finally to the issue of duties, upon which
more than a few Members have commented.  Indeed, that is a
rather polite way of describing a reaction from Honourable
Members that can best be summed up in the title of Bob
Dylan's song "You ain't goin' nowhere".  Well, I'm always
prepared to face the music.  I have listened carefully and
fully to what Members have said in the course of eleven
hours of speeches.  Please allow me one more chance to set
out why I consider it right to make these increases, and
to make clear the consequences if we do not make them.  I
would also like to clarify the intention behind the
perhaps too brief remark I made about diesel fuel in my
Budget speech.

     I proposed the 6% increase in duties on tobacco,
fuels, and methyl alcohol after careful consideration.  I
understand the difficulties the community is facing.  The
Budget package makes that clear.  On this matter of
duties, there are important public interests to be served.
First, maintaining the real value of these revenues
contributes to the stability of public finances.  Second,
maintaining the real impact of these duties sustains their
effect for transport and public health reasons.  The
effect on inflation and on the costs of consumers or
industry will be negligible.

     For methyl alcohol, we are adding around 50* a litre
for a substance little used in Hong Kong.  There is an
important public health reason to ensure that there is no
financial incentive to use it to make alcoholic beverages.
It is poisonous.  The effects can range from blindness to
death.

     As for fuel duties, given declining world oil prices,
the effects on the real costs of motorists, transport
operators and internal aviation services ought to be non-
existent.  Just last Friday, the third reduction in fuel
prices in the past year has been announced.  The current
retail price of diesel oil, even after taking into account
the duty increase this year, is 7% below what it was in
April last year.  Given the extreme constraints on road
space in Hong Kong and the environmental impact of
motoring, this community has long accepted that we should
maintain a high duty on fuels as part of a package of
measures to encourage efficient road use and to constrain
fuel consumption.  I have not sought to increase the
weight of these measures.  The rise in duty to offset
inflation simply maintains their impact in real terms.

     As for the duty on aviation spirit, it only affects a
handful of people who choose to fly within Hong Kong.
Whether they do so for recreation or in one or two cases
for commercial purposes, they do so in the full knowledge
that there is a high duty on aviation spirit.  I do not
see a livelihood argument against a duty adjustment here.

     While these increases will have little or no real
effect upon individuals, the contribution of increased
duties to the balance of public finances does have real
significance.  Hong Kong's tax base is not wide, as a
number of members have pointed out during this debate.  If
we do not maintain the real contribution from revenues
like duties, we increase our dependence on fewer and more
volatile revenue sources.  It will restrict our ability to
make desirable revenue concessions that may benefit the
community and the economy in future Budgets.  It will
create pressure to make increases at above the rate of
inflation in later years, or to increase other taxes to
meet potential shortfalls.  I do not and have not said
that as a threat.  It is simply a description of reality.

     The responsible management of public finance involves
unpopular choices from time to time.  One of Hong Kong's
great competitive advantages is the overall stability of
our low tax regime.  Keeping that advantage is one of my
main considerations.  Looking ahead, thinking about the
consequences of the decisions that we make today, is
crucial for maintaining that stability, sustaining that
advantage.

     Last year the former Legislative Council said that I
could not increase diesel duty when the economy was doing
well.  This year Members are saying I cannot increase
diesel duty because this will add to the burdens of people
when the economy is not doing well.  I do ask Honourable
Members to reflect on the point that it is in the public
interest that we should seek to promote stability in
public revenues, and that we should maintain the real
effect of policy measures.  That may provoke some short
term unpopularity, but consistency in policy and prudence
in fiscal management have much to commend them.  Our past
record in this area is a major reason why the regional
financial turmoil has affected us less than many of our
neighbours.

     I have had to look carefully at the effect if Members
of this Council vote down the increase in diesel duty.  My
colleagues and I carefully examined this late last week.
We had to do this not out of spite, but because the
revenue and expenditure items hang closely together in a
Budget package.  Removal of any element inevitably affects
the balance.  On this occasion, the immediate impact is
not unbearable.  Since all the new revenue and expenditure
measures that I have set out for this year have been
carefully targeted with consideration of specific
community needs, I have concluded that I should not
withdraw any of them.

     But before Honourable Members come to vote on the
proposed duty adjustments next week, I would again ask you
to consider the points that I have made.  I ask you to
reflect that if you do vote against any of them, the loss
of revenue will narrow our margin of safety and will
increase the constraints on providing tax concessions in
future.  Transport, environmental and public health
policies may also be weakened.

     Before I conclude, I wish to make clear that, during
the Budget Speech, when I made special mention of the need
to tackle the harmful effects of diesel fuel use for our
environment, I meant no criticism of the transport trade.
It is not the taxi, minibus and lorry drivers who produce
the pollution, it is the technology they use.  The drivers
and their families are as much at risk from the health
effects of the pollution as any other member of the
public.  They provide an important service to the
community.  They need to maintain their livelihood.  We
are working with the trade to resolve the problem caused
by diesel fuel without damaging their business.  I raised
the point about diesel duty simply because I was concerned
about what happened last year.  I did not want to see any
greater imbalance created while we are sorting out this
important issue for the health of our community.

Conclusion

     In closing, may I again thank this Council for its
support.  We all have much work to do in the coming year.
I trust that the Budget that I have presented leaves no-
one in any doubt that this Administration is determined to
play its part to the utmost.  Honourable Members have the
same commitment.  I look forward to continuing to work
with you, and with the Members of the Legislative Council
to be elected in May, to serve our community faithfully in
the year ahead.

End


3.  SPEL explains spending on environmental improvements
    ****************************************************

     Following is the speech by the Secretary for
Planning, Environment and Lands, Mr Bowen Leung, in
response to the debate on Appropriation Bill 1998 in the
Provisional Legislative Council today (Wednesday):

Madam President,

     I would first like to thank those members who
indicated their support for continued environmental
improvement measures.

     Many members spoke on the diesel duty issue.  I shall
leave that for the Financial Secretary to answer.  I shall
merely comment that the decision made today will impact on
our efforts to encourage the use of cleaner fuels and
reduce the general use of vehicles in future.

     A number of members criticised the apparent reduction
in spending on the environment; some doubted whether this
was due solely to a spending gap caused by the completion
of some capital works projects, prior to others starting.
I have carefully examined the past and future spending
forecasts for not just the Environmental Protection
Department, but for all the departments involved in
delivering environmental improvements.  I would like to
assure this Council that there has been no reduction in
recurrent expenditure or staffing levels.  Likewise, there
has been no reduction in our determination to improve our
environment.

     We have an energetic programme ahead of us.

     -  Recently, in mid March, we started the feasibility
study for the part of the Strategic Sewage Disposal Scheme
(SSDS) which will collect sewage from the north and south-
west of Hong Kong Island.  Another study, dealing with any
further treatment and disposal, will commence later this
year.  These studies will enable us to develop further the
SSDS to facilitate its implementation and bring earlier
improvements to harbour water quality.

     -  In just a few days the Environmental Impact
Assessment Ordinance will come into effect.  This is a key
tool to implant the concept of sustainable development in
the minds of planners, engineers, and developers.

     -  In mid-1998, we intend to start publication of a
roadside air pollution index to supplement the existing
general air pollution index.  No doubt this will highlight
the need to accelerate the introduction of clean vehicle
fuel.

     -  We will publish the Waste Reduction Plan later
this year.  This will provide us with a framework for the
whole community to follow to reduce our waste.  Government
will, as a matter of priority, examine how we can deal
with illegal waste dumping blackspots.  But let there be
no illusions.  We will need the community's support, both
within and outside this Council.

     In the coming years we will be embarking upon a wide
range of environmental related capital works projects,
subject to financial and other approvals.  These include
upgrading of our sewage and drainage systems, restoration
of additional old landfills, as well as the construction
of the latest model of incinerators to help us deal with
our waste disposal problems.  Whilst we can only finalise
the estimated costs of these projects after further
detailed study, it is likely that we shall be spending
billions of dollars over the next five years.

     Let me now turn to the LPG taxi trial, with which you
are all familiar.  We have recently conducted an interim
review of the trial which started last November.  The
outcome is encouraging indeed.  Both the drivers and
passengers are satisfied with the LPG taxis' performance.
So far, LPG taxis have proven to be as reliable as their
diesel counterparts.  At current fuel prices, the
operating costs of LPG taxis are similar to their diesel
equivalents.  The service requirements for the two types
of taxis are also similar.  If this continues, it would
appear that LPG taxis will be both technically practicable
and commercially viable for widespread use in Hong Kong.

     We are now formulating an implementation programme,
in parallel with the trial, to ensure that the necessary
supporting infrastructures such as gas refuelling stations
and vehicle servicing mechanics can be put in place if and
when we decide to implement the scheme on a permanent
basis.  We will also need to carefully consider whether
any incentives are required to encourage a smooth switch
from diesel to gas.  If we continue to receive encouraging
reports on both the trial itself and the provision of
infrastructure, we would examine whether the trial can be
cut short and make a firm, early decision on the way
forward.

     At the same time that we are considering cleaner
alternatives to diesel vehicles, we have imposed more
stringent diesel vehicle emission and fuel standards, and
have also strengthened our emission inspection of
commercial diesel vehicles to curtail emissions from such
vehicles.  To closely monitor the vehicle emission
problem, we have set up 2 roadside air quality monitoring
stations at busy locations and will add a third one by
mid-1998.

     Let me conclude by saying that there are no quick
fixes to improving our air quality, or indeed any aspects
of creating a better environment.  The Government is
committed to doing the best and most we can.  As we start
to address how to make a sustainable future for Hong Kong,
tackling issues of waste, inefficiency and pollution will
need much effort from all of us.  On this I look forward
to the support, encouragement and foresight of all
sections of our community, including our legislature, in
future.

End


4.  SES's address on Telecom
    ************************

     Following is an address on Telecommunication
(Amendment) Regulation and Telephone (Repeal) Regulation
by the Secretary for Economic Services, Mr Stephen Ip, in
the Provisional Legislative Council meeting today
(Wednesday):

Madam President,

     Thank you Madam President for allowing me to speak.
I wish to use this opportunity to thank Members for
supporting the appropriation of $6.7 billion and for
approving our proposed two regulations to amend the
Telecommunication Regulation and the Telephone Regulation,
so that we could implement the agreement reached with Hong
Kong Telecom (HKT) for the early termination of the
monopoly in external telecommunications services.  The
liberalisation of the entire telecommunications market and
the introduction of competition more than seven years
ahead of schedule will benefit consumers and strengthen
the competitiveness of Hong Kong.

     Our previous record in liberalising
telecommunications market speaks for itself.  From
telecommunications equipment, radio pagers, mobile phones
to the introduction of call-back international telephone
services, we can see the benefits competition can bring to
consumers, and the increases in efficiency and improvement
in competitiveness in all sectors of the economy.

     We believe that the early termination of HKT's
monopoly in external telecoms services will bring over $17
billion in direct consumer benefits.  Liberalising
international telecommunications market will also bring in
investment, stimulate the economy, create employment
opportunities and remove the hindrance from the monopoly
on the introduction of new technology, so as to ensure
Hong Kong's position as the telecommunications hub in the
Asia-Pacific region.

     Members may feel a bit anxious on whether the price
paid now will commensurate with the returns in future,
just like parents facing the same anxiety at their
daughter's marriage not knowing whether she will have
happiness, after paying the "dowry".  But I can assure
Members that competition will be an honest husband that
will not let you down.  From experience in Hong Kong and
worldwide, a fair and effective competitive environment
will definitely be beneficial to consumers.

     It is of course of utmost importance that Government
regulation can ensure a truly level playing field,
particularly at the commencement of competition, since the
new operators need appropriate regulations to ensure that
they will not be unfairly attacked by existing operators
with advantages in the market.  In this regard, both DG,
OFTA and I have explained that existing legislation
already possess sufficient provisions for measures against
anti-competitive behaviour and operators with dominance.
With regard to the liberalisation of the
telecommunications market, we will adopt an open and fair
system in choosing successful applicants.  But suitable
supervision of licensees' behaviours is still needed, for
example in the area of protection of clients' information
and data and the prohibition of all anti-competitive
behaviour.

     Considering that external telecoms services will be
liberalised in less than 10 months' time, we have decided
to advance the review on telecommunications policy
previously scheduled for mid-year.  We will issue a
consultation document in April to invite the industry and
interested parties to submit their views on the way the
market should be liberalised.  This way, we can complete
the review and issue licences to applicants meeting the
criteria earlier - from around September, so that new
operators will have sufficient time to prepare for the
commencement of services from January 1 next year.

     I know Members have considered carefully the issue of
local residential exchange line tariffs.  We have
explained that the Agreement we have reached with HKT will
result in an opening of the local fixed telecommunications
market to much greater competition.  HKT is required to
open up at least 50% of its local network by January next
year before any increases in local residential tariffs
will be allowed.  We expect to see real competition in the
local market as these exchange lines are opened up.  With
competition disciplining the market, local tariffs will
remain at reasonable level.

     Members who have just spoken can rest assured that
the Government is determined and has substantial reserve
powers to monitor and regulate a liberalised
telecommunications market.  These powers are contained in
the Ordinance, Regulations and licence conditions.
Amongst other things they allow us to ensure a fair,
competitive market and the Telecommunications Authority
has the ability to intervene and set both technical and
commercial conditions if the industry cannot reach
satisfactory arrangements by commercial negotiation.
Therefore, these powers allow us to establish
interconnection arrangements between the established
players and new external services licensees and the
Telecommunications Authority has already commenced a
consultation exercise on the development of delivery fee
arrangements which encompasses this matter.

     Lastly, let me thank Members, especially the Hon
James Tien and those who attended the committee meeting,
for supporting the full liberalisation of the
telecommunications market in order to allow Hong Kong
consumers, and Hong Kong in general, to gain much benefits
through this liberalisation.  Thank you.

End


5.  MTR (Transport Interchange) Bylaw
    *********************************

     Following is a speech by the Secretary for Transport,
Mr Nicholas Ng, in moving a motion on Section 25 of the
Mass Transit Railway Corporation Ordinance in the
Provisional Legislative Council today (Wednesday):

Madam President,

     I move that the "Mass Transit Railway (Transport
Interchange) Bylaw" be approved.

     The Bylaw aims to allow MTRC to control and regulate
the vehicular and pedestrian traffic as well as the
operation of public transport services in the transport
interchanges.

     According to the "Agreement for the Design,
Construction, Financing and Operation of the Airport
Railway" signed between the Government and MTRC, MTRC is
responsible for the design, construction, completion,
management and maintenance of the three transport
interchanges serving the Airport Express Line at the Hong
Kong, Kowloon and Tsing Yi stations.  To fulfil this
responsibility, MTRC has to make bylaws to govern the
management and operation of these transport interchanges.

     The Bylaw mainly deals with rules that drivers and
pedestrians are required to comply with and the penalties
for non-compliance, etc.  Provisions in the Bylaw have
been scrutinized and agreed by a Sub-committee of this
Council.  We are grateful to the Sub-committee for its
valuable suggestions. The MTRC has already made relevant
amendments to the Bylaw.

     Apart from the above Bylaw, in exercise of the power
vested in me under the "Mass Transit Railway Corporation
(Amendment) Ordinance 1998" enacted by the Provisional
Legislative Council on January 14, 1998, I have made the
"Mass Transit Railway (Transport Interchange) Regulation"
in relation to the powers and obligations of MTRC in
managing and operating the transport interchanges.  The
Regulation was introduced to the Provisional Legislative
Council on February 18, 1998.  Since we have not received
any proposals from Members for amending the Regulation
within the required 28 days, the Regulation will come into
effect as from today.

     The Airport Express Line is scheduled to be open in
July 1998.  Making of the above Bylaw is necessary for
MTRC's effective management and operation of the transport
interchanges.

     Madam President, I beg to move.

End


6.  Gov't to look after students' mental and physical health
    ********************************************************

     Following is a question by the Hon Eric Li Ka-cheung
and a written reply by the Secretary for Education and
Manpower, Mr Joseph W P Wong, in the Provisional
Legislative Council today (Wednesday):

Question:

     With regard to promoting young persons' awareness of
maintaining their mental and physical health, will the
Government inform this Council:

     (a)  whether it has reviewed if the school curriculum
on health education meets the objective of instilling in
students the awareness of mental and physical health; if
so, what the results are;

     (b)  whether the Education Department has made
reference to the relevant surveys and studies conducted by
the Department of Health or other institutions when
developing the curriculum on health education for primary
and secondary schools; if so, what the details are;

     (c)  of the measures it will adopt to help young
persons acquire proper awareness of and attitude towards
mental and physical health; and

     (d)  whether it will consider issuing guidelines to
require schools to strengthen the curriculum on physical
education so as to improve the physical fitness of
students?

Reply:

Madam President,

     (a)  The Curriculum Development Council (CDC)
regularly reviews the curricula of various subjects to
ensure they keep up with social development and
requirements.  In reviewing the school curricula of health
education-related subjects, one of the key objectives has
been to nurture among students awareness of mental and
physical health.  Relevant targets and contents have been
included in the newly-revised curricula of subjects like
General Studies, Home Economics and Human Biology.

     (b)  CDC makes reference to relevant surveys and
studies as well as consults the education sector
extensively when developing the curricula of various
subjects.  In reviewing the curricula of health education-
related subjects, CDC has examined in detail relevant
study reports and papers prepared by local institutions,
including the Department of Health (DH), and overseas
institutions.  These reports and papers cover areas such
as drug education, sex education, youth problems, family
life education, health awareness, oral health, health
education etc.  CDC has also made reference to the
relevant curricula of other countries and regions.

     (c)  Both the Education Department (ED) and DH are
committed to instilling into our younger generation proper
awareness of and attitude towards mental and physical
health.  In this respect, services provided by ED include:

     *  educating primary and secondary school students on
the importance of health through the teaching of subjects
like General Studies, Physical Education, Social Studies,
Home Economic and Human Biology etc;

     *  providing educational materials, such as "Go for a
Healthy Diet" and "Fun with Vegetables" teaching kits, to
encourage students to develop healthy diets; and

     *  providing schools with subsidies for sports
activities to encourage them to organise more recreational
activities.

     Services provided by DH include:

     *  participating in the work of the General Studies
Subject Committee under the CDC to provide professional
advice on the part of the syllabus on healthy living;

     *  conducting various training courses, including
leadership training for Student Health Ambassadors to
enable them to organise activities to promote health
education in their schools; and

     *  organising health education activities on various
themes like smoking and health, donation of organs, self
care, healthy family and healthy diet, in the form of
exhibitions, workshops, video shows, slide shows, seminars
and competitions.

     *  Student Health Service Centres under DH provide
regular health screenings to all secondary school students
in Hong Kong, as well as activities like health talks,
information leaflets, brochures, video tapes and computer
games to strengthen young persons' awareness of health.
Through questionnaire surveys and individual counselling,
the medical and nursing staff of these Centres also instil
in students proper health knowledge and rectify students'
wrong concepts of health.

     (d)  The ED has been implementing by stages a
"School-based Physical Fitness Extended Curriculum
Experimental Project" in six primary schools and four
secondary schools since the 1997/98 school year.  The
objective of the Project is to promote co-operation among
physical education teachers, schools and families in
helping students improve and maintain their physical
fitness.  Under the project, physical education teachers
will measure, assess and report on students' performance
and progress in physical fitness on a regular basis.
Schools will also liaise and co-operate with parents,
helping them design physical fitness development plans for
their children and encourage their children to do physical
fitness "homework" in their spare time, e.g. jogging on
the spot at home.  Starting from the next school year, the
project will be extended to all public sector primary and
secondary schools.  ED also plans to draw up physical
fitness standards for all students in Hong Kong in the
next two to three years.

End


7.  Mechanism for determining bus fare rise
    ***************************************

     Following is a question by the Hon Chan Choi-hi and a
written reply by the Secretary for Transport, Mr Nicholas
Ng, in the Provisional Legislative Council today
(Wednesday):

Question:

     It is reported that, in order to improve the quality
of bus services, the Transport Department is considering
introducing a point-deduction system for franchised bus
companies and, in assessing the rates of fare increase
proposed by bus companies, will take into account the rate
of traffic accidents and the number of substantiated
complaints.  In this connection, will the Government
inform this Council:

     (a)  of the details of the point-deducation system;

     (b)  whether, before formulating a scheme for
assessing proposed fare increases, the Transport
Department will study if the quality of service of
franchised bus companies will be affected by a reduction
in the proposed rates of increase and, if the service
quality will be affected, of the remedial measures to be
adopted in this regard; and

     (c)  whether the Transport Department has conducted
any study on the quality of the existing service of
franchised bus companies; if so, of the progress of the
study; if not, whether such a study will be conducted?

Reply:

Madam President,

     The Transport Department is conducting a study on the
criteria and mechanism for determining increases in bus
fares.  It will examine, amongst other things, the
feasibility and desirability of a bonus and penalty system
for determining a bus fare increase to be awarded to a
franchisee.  This system would take into account such
factors as standards of service, safety records, future
improvement plans and cost efficiency.  The study is
expected to be completed in July 1998.

     In processing a fare increase application, we
obviously have to strike a balance between the interests
of a bus company and those of the travelling public.  We
will take into account inflation, past performance,
service improvement plans, changes in revenue and
expenditure, the commercial viability of the operator as
well as public affordability.

     The Transport Department conducts regular reviews on
the performance of franchised bus companies.  The reviews
cover various aspects of performance, including regularity
and reliability, public complaints received and
improvements made, vehicle maintenance, accident rates,
and the provision of passenger facilities.  The results of
these reviews have been used in assessing the fare
increase applications of the bus companies and in
evaluating their applications for renewal of franchises.

End


8.  Transparency of government advisory bodies
    ******************************************

     Following is a question by the Hon Law Cheung-kwok
and a written reply by the Secretary for Home Affairs,
Mr David Lan, in the Provisional Legislative Council today
(Wednesday):

Question:

     Will the Government inform this Council of:

     (a)  the government advisory boards and committees
which have not fully opened up their meetings to the
public; and

     (b)  the specific measures in place to fully open up
the meetings of these boards and committees to the public
in the next three years, so as to enhance the transparency
of their operation and their accountability to the public?

Reply:

Madam President,

     (a)  At present, there are about 280 advisory bodies,
of which more than half have conducted open meetings to
allow public attendance.

     Whether the meetings of the advisory bodies should be
opened up depend largely on the particular needs, nature
of business and functions of the concerned bodies.  It
would not be appropriate to require those advisory bodies
which may deal with classified and commercially sensitive
information as well as personal data to open up meetings.
Moreover, some of these bodies are prohibited by
legislation to conduct open meetings.  Nonetheless, almost
all of the advisory bodies will issue press releases
and/or hold press briefings after meetings to inform the
public of their work and to answer enquiries on those
issues which are of public concern.

     (b)  The Administration has all along been
maintaining a consistent policy to encourage advisory
bodies to adopt more transparency measures, including
opening up their meetings where appropriate.  Also, the
Administration has required all advisory bodies to adopt
various transparency measures according to their
individual needs.  These measures include issuing press
releases, holding press briefings, making agendas,
minutes, papers and reports available for public
inspection and publishing annual reports.

     In addition, the Administration has been actively
pursuing the following measures to further enhance the
transparency and accountability of advisory bodies -

     (i)   all papers of meetings, except those containing
classified and market or commercially sensitive
information, are made available to the public upon request
in accordance with the Code on Access to Information;

     (ii)  the Civil and Miscellaneous Lists, which
contain information on the membership and terms of
reference of the bodies, will be uploaded onto the
Internet subject to technical and financial feasibility;

     (iii) upon agreement of the individual bodies, the
notice and agenda of the meetings of the bodies will be
uploaded onto the homepages of each Policy Bureau;

     (iv)  relevant information such as the composition,
functions and transparency measures of the advisory bodies
will be updated at regular intervals; and

     (v)  the curriculum vitae form which collects the
relevant personal data of individual members of these
bodies has been redesigned in accordance with the data
protection principles set out in the Personal Data
(Privacy) Ordinance to enable the disclosure of certain
background information of the members of these bodies,
such as their profession and public service records, to
the public.

     The Administration will continue to closely monitor
the system of advisory bodies and will consider adopting
further measures to increase the transparency of the
bodies.  In order to enhance understanding of the work of
the advisory bodies by the public, we will continue to
encourage more bodies to open up their meetings.

End


9.  Contracting out works by USD
    ****************************

     Following is a question by the Hon Chan Choi-hi and a
written reply by the Secretary for the Treasury, Mr K C
Kwong, in the Provisional Legislative Council today
(Wednesday):

Question:

     It has been the practice of some government
departments (such as the Urban Services Department (USD)
to contract out part of their work.  However, the wages of
the workers employed by the contractors are far lower than
those of civil servants undertaking the same kind of work.
In this connection, will the Government inform this
Council:

     (a)  whether it knows the disparities in the number
and the wages of workers involved between the cases where
the USD provides the cleansing services by itself and
where such services are contracted out to private
companies;

     (b)  whether the government departments concerned are
required to prescribe in the contracts the number of
workers to be employed and the minimum wage to be paid by
the contractors; and

     (c)  of the policy on contracting out works by
government departments; and whether it has assessed the
impact of this policy on the number of posts in the civil
service at present and in the next three years?

Reply:

     Contracting-out of services provided by government
departments is undertaken in situations where the service
can be provided in a more cost-effective manner whilst
maintaining the desirable quality and standards.  In
procuring such services from the private sector, we will
need to satisfy ourselves, through established tender
procedures, that the company meets our specifications and
provides good value for money.  It is not appropriate to
compare directly the wages offered by private contractors
to their employees in providing their services to
Government and the salaries of staff in the civil service
doing apparently similar jobs as the detailed job
requirements may differ.  My reply to the three-part
question is as follows -

     (a)  The Director of Urban Services (DUS) has advised
that the wages of workers employed by private companies
providing cleansing services  for the Urban Services
Department (USD) are determined by the companies
themselves, taking into account the nature and volume of
work, working hours and the policy of individual
companies.  The wages are also affected by the demand and
supply situation of the labour market at the time the
tenders were invited.  According to the tenders received
by USD in the past six months, the monthly wages of
cleansing staff employed by private companies varied from
about $4,000 to $9,000.  Civil service staff carrying out
similar duties in USD are Workman II; their salary ranges
from $9,245 to $9,615 per month.  However, as I have
pointed out in the early part of my reply, the two cannot
be directly compared.

     DUS has further advised that based on tenders
recently received, private companies on average deploy
about 80% of the manpower required by USD in carrying out
similar work.

     (b)  There is no policy or regulation requiring
government departments to prescribe in the service
contracts the minimum wage to be paid by the contractors.
Prescription of the number of workers to be employed is
normally made only where this is essential to ensuring
certain service quality and standards.

     (c)  In determining whether a service should be
contracted out, we take into account the following
factors -

     (i)   whether it will be more cost-effective to
contract out to private companies;

     (ii)  whether contracting-out will improve
flexibility in human resources management;

     (iii) whether there is suitable expertise in the
private sector to provide the service; and

     (iv)  whether there will be any impact on existing
staff in the departments concerned.

     As contracting-out proposals will arise from time to
time in individual departments concerned and are
considered on a case by case basis, it is not very
meaningful to undertake an assessment of their impact on
the civil service establishment as a whole.

End


10. Land Fund
    *********

     Following is a question by the Hon Ng Leung-sing and
a written reply by the Secretary for the Treasury, Mr K C
Kwong, in the Provisional Legislative Council today
(Wednesday):

Question:

     It is reported that, since the outbreak of the
financial turmoils, the net assets of the Land Fund have
decreased by almost HK$4 billion in the three months up to
the end of last year.  In this connection, will the
Government inform this Council whether it has any plan to
adjust the investment strategy and portfolio of the Land
Fund in order to turn its deficit around?

Reply:

     As at end December 1997, the net assets of the Land
Fund totalled HK$195.6 billion, a decrease of HK$3.85
billion, or about 1.9%, since September 30, 1997.

     The loss was largely attributable to the sharp
decline in Hong Kong equity prices as the Hang Seng Index
fell by 28.7% during this period.  The Hong Kong equity
portfolio accounted for 7.1% of the total portfolio of the
Land Fund.  Prompt defensive action and income generated
from investment in bonds and deposits during the three
months to end December 1997 offset some of the losses in
the Hong Kong equity market.

     The investment strategy and asset allocation of the
Land Fund are reviewed regularly by the Land Fund Advisory
Committee taking into account the latest market
development and future prospect.  Adjustments to the
strategic asset allocation are made as and when necessary.
The equity markets worldwide are expected to be volatile
in 1998.  In light of the current uncertain investment
environment, it is appropriate to adopt a defensive
investment strategy and we have reduced our equity
exposure accordingly.  Over the long term, the investment
strategy of the Land Fund (like that of the Exchange Fund,
with which it will be aligned by April 1, 1999) will be
formulated according to the objectives of capital
preservation and achieving reasonable returns with minimum
increase in risk.

End


11. Bus safety
    **********

     Following is a question by the Hon Lee Kai-ming and a
written reply by the Secretary for Transport, Mr Nicholas
Ng, in the Provisional Legislative Council today
(Wednesday):

Question:

     In the wake of the recent spate of bus accidents, the
police will step up the prosecution of bus drivers in
breach of traffic regulations.  It is claimed that such a
move has placed further strain on bus drivers.  In this
connection, will the Government inform this Council
whether it is aware of the measures to help bus drivers
alleviate their stress?

Reply:

Madam President,

     Police enforcement action is not targeted solely at
buses but seeks to enhance awareness of all motorists to
road safety and to improve their driving behaviour.

     To ensure bus safety, the bus companies provide their
drivers with comprehensive training programmes which
include skills training, route familiarisation, refresher
training, and remedial training.  Road safety seminars are
also provided in co-ordination with the Police and the
Transport Department.  Consideration is being given to
introducing training courses on defensive driving and the
handling of emergencies on the road.  Management of bus
companies have regular meetings with representatives of
the bus drivers' unions to discuss matters of mutual
concern.  For drivers with special problems such as
excessive pressure, counselling services are also provided
by some bus companies.

     To promote road safety and make driving less
strenuous, Transport Department conducts continual reviews
on speed limits, and improves traffic blackspots, road
bends and steep roads.  Improvements are implemented
wherever necessary.  In the 1998/99 Road Safety Campaign,
we will remind motorists of the importance of safe
driving.  This would be of benefit to all drivers,
including bus drivers.

End


12. Fixed rate mortgages
    ********************

     Following is a question by the Hon Ng Leung-sing and
a written reply by the Secretary for Financial Services,
Mr Rafael Hui, in the Provisional Legislative Council
today (Wednesday):

Question:

     Will the Government inform this Council whether,
before deciding to promote fixed-rate mortgages in Hong
Kong, the authorities had studied the extent to which the
banks can secure a stable source of long-term fixed-rate
funds and assessed the potential risks posed to banks by
fixed-rate mortgages; if so, what the findings are?

Reply:

     We have considered issues relating to banks' funding
source and potential risks associated with fixed rate
mortgages.  A bank which originates fixed rate mortgages
should secure a reliable source of fixed rate funding in
order to avoid the risk arising from interest rate
mismatch in income and expenses.  The mortgage originating
bank can manage this risk through -

     (a)  obtaining fixed rate funding by issuing fixed
rate securities or swapping their floating rate
receivables into fixed rate receivables through interest
rate swaps; or

     (b)  entering into a prior agreement to sell fixed
rate mortgages on a loan by loan basis as they are
originated to a mortgage purchaser which will eliminate
the market risk arising from interest rate changes between
the origination and the offloading of the mortgages.

     One of the objectives of setting up the Hong Kong
Mortgage Corporation (HKMC) is to promote the development
and liquidity of the residential mortgage market in Hong
Kong.  In pursuit of this objective, the HKMC has been
studying means to promote the fixed rate mortgage market,
which will offer additional choices of mortgage products
for home buyers and insulate them from fluctuations in
interest rates.  The HKMC is well placed to promote the
origination of fixed rate mortgages.  It can use the fixed
rate funds tapped from institutional investors (such as
pensions and insurance funds) through the issue of long-
and medium-term bonds and bills to acquire fixed rate
mortgages from the banks.  Under the proposals which are
being developed by the HKMC to promote fixed rate
mortgages in Hong Kong, the Corporation would give a pre-
commitment to banks to purchase the fixed rate mortgages
as they are originated.  In these circumstances, banks
mainly serve as an agent in originating and servicing the
mortgages, they will not be subject to the interest rate
or the funding risks of the fixed rate mortgages.

End


13. Courses to assist newly arrived children to adapt learning
    **********************************************************

     Following is a question by the Hon Hui Yin-fat and a
written reply by the Secretary for Education and Manpower,
Mr Joseph W P Wong, in the Provisional Legislative Council
today (Wednesday):

Question:

     It is learnt that the Education Department has been
implementing a pilot scheme since last September to
provide full-time course lasting for not more than three
months in five primary schools for newly arrived school
children, so as to facilitate their integration into
mainstream schools.  Regarding this scheme and other
induction programmes and English Extension Programmes for
newly arrived school children, will the Government inform
this Council:

     (a)  of the names and addresses of the five primary
schools participating in the scheme;

     (b)  of the objectives and contents of the course
under the scheme, and the similarities and differences
between such course and other induction programmes and
English Extension Programmes for newly arrived school
children;

     (c)  of the number of school children who have
participated in the scheme since last September, and the
average length of time each school child has participated
in the scheme;

     (d)  whether it has reviewed the effectiveness of the
scheme and the way forward in this regard; if so, what the
details and findings of the review are; if not, when the
review will be conducted; and

     (e)  of the respective numbers of newly arrived
school children who have applied for enrolment in
induction programmes or English Extension Programmes and
who have been allocated places in such programmes in each
of the past three years?

Reply:

Madam President,

     (a)  The names and addresses of the five primary
schools participating in the pilot scheme on short-term
preparatory course since September 1997 are as follows:

Name of school                      Address
--------------                      -------
FDBWA Yan Kow School                Ping Shek Estate,
                                    Kwun Tong, Kln.
Tsuen Wan Lutheran School           Cheung Shan Estate,
                                    Tsuen Wan, N.T.
Pak Tin Catholic Primary School     Blk 3, Pak Tin Estate,
                                    Shamshuipo, Kln.
Confucian Tai Shing Primary School  10, Tai Shing Street,
                                    Wong Tai Sin, Kln.
Taikoo Primary School               Greig Road,
                                    Quarry Bay, HK

     (b)  The Induction and English Extension Programmes
are provided by the Education Department (ED) through non-
governmental organisations to assist newly arrived
children and young people to adapt to the local living and
learning environment, as well as to enhance their ability
to learn the English language.  The course content of the
Induction Programme covers social adaptation, language
learning and homework tutoring; while the English
Extension Programme focuses on learning of English.

     On the other hand, the short-term preparatory course
offers school-based short-term courses lasting not more
than three months to newly arrived children and young
people.  The course content is based on the school
curriculum and the class arrangement is similar to that of
normal schools.  The aim of the course is to assist newly
arrived children and young people to adapt to the local
learning environment and school curriculum as soon as
possible.

     (c)  During the period from September 1997 to
February 1998, a total of 157 newly arrived children have
enrolled in two to three months short-term preparatory
courses in the five primary schools named above.  On
average each child has attended school for 62 days and the
school hours have been similar to those for normal classes
of the schools concerned.

     (d)  The ED has sent questionnaires to participating
schools to solicit the views of the school masters,
teachers and parents on the pilot scheme.  The
questionnaires will be collected in three batches within
the current school year.  The ED will study the views so
collected by the end of the current term, and review the
effectiveness of the pilot scheme before deciding whether
to extend the course to more schools in the coming school
year.

     (e)  The numbers of newly arrived children and young
people who have taken the Induction and the English
Extension Programmes arranged by the  ED in the past three
years are:

          Induction Programme  English Extension Programme
Year     (No. of participants)    (No. of participants)
----     --------------------- ---------------------------
1995/96         3,403                     1,425
1996/97         9,081                     5,561
1997/98      About 10,700              About 7,000

     As to the number of applicants for enrolment in these
programmes, the ED does not have such record.

End


14. Measures to prevent falling objects
    ***********************************

     Following is a question by the Hon Ngan Kam-chuen and
a written reply by the Secretary for Security, Mr Peter
Lai, in the Provisional Legislative Council today
(Wednesday):

Question:

     In view of the recent series of incidents involving
objects throwing from a height, will the Government inform
this Council of:

     (a)  the total number of reported cases involving
falling objects in the past three years, together with the
number among them which occurred in public housing
estates;

     (b)  the number of casualties involved in these
reported cases, together with the number of cases
resulting in conviction; and

     (c)  the specific measures in place to prevent the
occurrence of such incidents?

Reply:

Madam President,

     (a)  The total number of cases reported to Police
involving falling objects from a height in the past three
years is 1,413 with 57 of them occurring in public housing
estates. Detailed breakdown is as follows:

                                  Number of reported cases
Year   Number of reported cases   in public housing states
----   ------------------------   ------------------------

1995             500                         14
1996             499                         20
1997             414                         23

     (b)  the number of casualties involved in these
reported cases is 774 with breakdown as follows:

           Serious Injury*
Year   involving hospitalisation   Slight Injury   Total
----   -------------------------   -------------   -----

1995             20                     244         264
1996             41                     217         258
1997             20                     232         252
(up to June)

*No victim died in these cases.

     From 1995 to June 1997, the total number of convicted
cases is 97 with 101 offenders convicted.

     (c)  The Government has taken the following measures
to prevent the occurrence of such incidents:

     (i)   the Police Force liaise closely with the
Housing Department and has stepped up enforcement actions
in estates where there are frequent incidents of falling
objects.  Section 4B of the Summary Offences Ordinance
(Cap. 228) stipulates that if anything is dropped or
allowed to fall from any building to the danger or injury
of any person in or near a public place, the person who
drops that thing or allows it to fall commits an offence
and is liable to a fine of $10,000 and imprisonment for
six months.  If the offence is committed in the course of
the construction, repair or decoration of the building or
part thereof, the principal contractor on the site and the
contractor carrying out the construction, repair or
decoration is liable to a fine of $50,000 and imprisonment
for one year;

     (ii)  the Housing Department has recently installed
closed circuit television systems in three public housing
estates on an experimental basis to detect offenders
committing such irresponsible act;

     (iii) the Housing Department has also constructed
covered walkways in new public housing estates to link
domestic blocks to bus terminals, schools and commercial
centres.  In older estates, covered walkways are built as
improvement items where feasible;

     (iv)  residents of public housing estates are
reminded through various means, such as notices, estate
newsletters that such malpractice will endanger the safety
of the public, and that they are held liable for the
consequence of such irresponsible behaviour; and

     (v)   the Information Services Department has
produced both television and radio announcements in public
interest on falling objects to educate members of the
public against committing the offence.

End


15. Measures to strengthen welfare services for new arrivals
    ********************************************************

     Following is a question by the Hon Hui Yin-fat and a
written reply by the Secretary for Health and Welfare,
Mrs Katherine Fok, in the Provisional Legislative Council
today (Wednesday):

Question:

     Regarding the impacts brought about by new arrivals
on the population structure and the development and
planning of social welfare services in Hong Kong, will the
Government inform this Council:

     (a)  of the respective percentages of new arrivals in
the territory's overall population in the respective
areas, in terms of number, sex and age groups (using every
ten years as the basis for each age group), in each of the
past three years;

     (b)  of the respective percentages of new arrivals in
the overall newly arrived population, in terms of sex and
age groups, in each of the past three years;

     (c)  whether it has studied how new arrivals have
brought about changes in the population structure of the
territory, and the correlation between population
structure and development and planning of social welfare
services; if so, what the respective findings are; and

     (d)  of the concrete measures in place to ensure that
the future development and planning of social welfare
services can cater for the needs of new arrivals and the
changing population structure of the territory?

Reply:

Madam President,

     In the context of this reply, the term "new arrivals"
means those Mainland residents who have entered Hong Kong
for settlement on the strength of One-way Permits (OWP).

     (a) & (b)  A detailed breakdown of new arrivals
expressed as a percentage of the overall population as
well as the age-sex distribution of the new arrivals is
set out at Annexes I and II respectively.

     (c)  The Commissioner for Census and Statistics has
studied how new arrivals have affected the population
structure of Hong Kong over the past three years.  The
study compares the age-sex profile of the actual
population of Hong Kong with that of the population under
a hypothetical scenario which assumes no new arrivals in
the period.  The study shows that had there been no new
arrivals since 1995, the median age of the population at
the end of 1997 would have been 35.4 instead of the actual
figure of 35.2.  The sex ratio at the end of 1997, would
have been 1,029 males per 1,000 females instead of 1,011
males per 1,000 females.

     The Social Welfare Department (SWD) has examined, on
the basis of information and population projections
available from the Commissioner for Census and Statistics,
the welfare service needs of new arrivals and their impact
on the overall demand and provision of welfare services in
Hong Kong.  The anticipated increase in the population
including that resulting from new arrivals from the
Mainland has been taken into account, in particular for
those welfare services which are population based.

     In addition to population projections, SWD also takes
into consideration the demographic characteristics of the
community and their service needs, in planning its service
programmes.  The planning standards will be flexibly
applied, having regard to the demographic characteristics
of districts, such as congregation of new arrivals in some
districts.

     (d)  The Government is committed to strengthening
welfare services to meet the increase in service demands,
arising from the needs of all Hong Kong residents
including new arrivals.

     At the district level, the District Services
Coordinating Committees, chaired by SWD representatives
meet regularly to identify the needs of new arrivals and
re-direct resources through the planning of programmes to
cater for their specific needs.

     A Steering Committee on New Arrival Services, chaired
by the Secretary for Home Affairs, has been set up since
January 1998 to ensure close liaison between relevant
government bureaux and to oversee the delivery of services
provided by various government departments and non-
government organisations.  In addition, a Coordinating
Committee on New Arrival Services, chaired by the Director
of Home Affairs and comprising representatives from policy
bureaux and departments concerned, has been meeting
regularly since December 1995 to identify problems
encountered by new arrivals and to formulate measures to
assist their smooth and quick integration into the
community.  The work of the Coordinating Committee is
complemented by the 18 District Coordinating Committees on
New Arrival Services, chaired by the Home Affairs
Department, at the district level.

                                                   Annex I

 New Arrivals in a Specified Year Expressed as Percentage
            of the End-year Population in the
           Respective Age-sex Group, 1995-1997
           -----------------------------------

Year: 1995

Age group            Male      Female      Both sexes
---------            ----      ------      ----------
below 10             1.7%       1.6%          1.6%
10-19                0.9%       0.8%          0.8%
20-29                0.5%       1.4%          1.0%
30-39                0.3%       1.0%          0.7%
40-49                0.2%       0.9%          0.6%
50-59                0.1%       0.5%          0.3%
60 and over          0.1%       0.2%          0.1%
All ages             0.5%       1.0%          0.7%

Year: 1996

Age group            Male      Female      Both sexes
---------            ----      ------      ----------
below 10             2.5%       2.5%          2.5%
10-19                1.2%       1.2%          1.2%
20-29                0.4%       1.5%          1.0%
30-39                0.2%       1.1%          0.7%
40-49                0.2%       1.8%          1.0%
50-59                0.1%       0.7%          0.4%
60 and over          0.1%       0.2%          0.1%
All ages             0.6%       1.3%          1.0%

Year: 1997

Age group            Male      Female      Both sexes
---------            ----      ------      ----------
below 10             0.9%       1.0%          0.9%
10-19                1.3%       1.3%          1.3%
20-29                0.4%       1.3%          0.9%
30-39                0.1%       1.2%          0.7%
40-49                0.1%       1.6%          0.9%
50-59                0.1%       0.9%          0.5%
60 and over          0.1%       0.3%          0.2%
All ages             0.4%       1.1%          0.8%


                                                  Annex II

     Age-sex Distribution of New Arrivals, 1995-1997
     -----------------------------------------------

Year: 1995

Age              Male            Female          Total
group        Number    %     Number    %     Number    %
-----        ------    -     ------    -     ------    -
below 10      6,534  14.2%    5,880  12.8%   12,414  27.0%
10-19         3,879   8.4%    3,285   7.1%    7,164  15.6%
20-29         2,404   5.2%    7,459  16.2%    9,863  21.4%
30-39         1,702   3.7%    6,869  14.9%    8,571  18.6%
40-49           941   2.0%    4,275   9.3%    5,216  11.3%
50-59           329   0.7%    1,197   2.6%    1,526   3.3%
60 and over     356   0.8%      876   1.9%    1,232   2.7%
Total        16,145  35.1%   29,841  64.9%   45,986 100.0%

Year: 1996

Age              Male            Female          Total
group        Number    %     Number    %     Number    %
-----        ------    -     ------    -     ------    -
below 10      9,980  16.3%    9,057  14.8%   19,037  31.1%
10-19         5,134   8.4%    5,214   8.5%   10,348  16.9%
20-29         1,980   3.2%    7,650  12.5%    9,630  15.7%
30-39         1,512   2.5%    7,600  12.4%    9,112  14.9%
40-49           904   1.5%    8,846  14.5%    9,750  15.9%
50-59           291   0.5%    1,771   2.9%    2,062   3.4%
60 and over     394   0.6%      846   1.4%    1,240   2.0%
Total        20,195  33.0%   40,984  67.0%   61,179 100.0%

Year: 1997

Age              Male            Female          Total
group        Number    %     Number    %     Number    %
-----        ------    -     ------    -     ------    -
below 10      3,703   7.4%    3,423   6.8%    7,126  14.2%
10-19         5,666  11.3%    5,543  11.0%   11,209  22.3%
20-29         1,926   3.8%    6,923  13.8%    8,849  17.6%
30-39           929   1.8%    8,489  16.9%    9,418  18.7%
40-49           585   1.2%    8,729  17.4%    9,314  18.5%
50-59           302   0.6%    2,331   4.6%    2,633   5.2%
60 and over     402   0.8%    1,336   2.7%    1,738   3.5%
Total        13,513  26.9%   36,774  73.1%   50,287 100.0%

End


16. Companies in economic downturn
    ******************************

     Following is a question by the Hon Kennedy Wong Ying-
ho and a written reply by the Secretary for Trade and
Industry, Miss Denise Yue, in the Provisional Legislative
Council today (Wednesday):

Question:

     Owing to the economic downturn in Hong Kong, a number
of large and small scale companies have successively laid
off employees and some of them have even closed down.  In
this connection, will the Government inform this Council:

     (a)  of the number of companies applying for
bankruptcy since the beginning of this year as compared
with that in the same period in each of the past three
years;

     (b)  of the number of companies applying for holding-
over of provisional tax since the fourth quarter of last
year as compared with that in the same period in each of
the past three years;

     (c)  of the percentage of medium and small scale
enterprises among the companies in (a) and (b) above; and

     (d)  whether it will consider taking measures to help
these medium and small scale enterprises tide over this
difficult time; if so, what the details are?

Reply:

Madam President,

     (a)  The number of winding-up petitions to court in
January and February 1998 and the corresponding figures in
the same period in the past three years are as follows:

                                 Number of winding-up
                                  petitions to court

January and February 1998                143
January and February 1997                111
January and February 1996                 99
January and February 1995                 81

     (b)  The number of companies applying to the Inland
Revenue Department for holding-over of provisional tax
during the period from October, 1997 to February, 1998 and
the corresponding figures in the same period in the past
three years are as follows:

                                The number of companies
                              applying for holding-over of
                                    provisional tax

October, 1997 to February, 1998          4,242
October, 1996 to February, 1997          3,853
October, 1995 to February, 1996          4,516
October, 1994 to February, 1995          4,049

     (c)  The Government has no record of the percentages
of small and medium enterprises (SMEs) among the companies
in (a) and (b) above.

     (d)  The Government's policy of supporting the trade
and industry has all along been based on the principle of
"maximum support, minimum intervention".  We believe that
free market is the most efficient means to allocate
resources and promote economic development.  The
responsibility of the Government is to create a business
friendly environment for the best development of various
business sectors.  Therefore, we will not provide any
grants or subsidies for the operation of individual
enterprises.

     However, we fully appreciate the fact that SMEs,
which constitute over 98% of companies in Hong Kong, have
encountered many difficulties in business operation.
Externally, they have to face an intensely competitive
business environment while internally, their development
are hindered by constraints both in resources and in their
scale of operation.  The Small and Medium Enterprises
Committee was therefore set up by the Government in July
1996 to identify issues affecting the development of SMEs
and suggest appropriate measures to support and facilitate
their development.  In accordance with one of the
recommendations of the Committee, we are setting up a
pilot Credit Guarantee Scheme to provide guarantees for
loans on pre-export expenses, thereby helping SMEs solve
financing problems.  In addition, the Business Licence
Information Centre set up by the Government, and other
organisations such as the Hong Kong Productivity Council
and Hong Kong Trade Development Council also provide a
wide range of services to SMEs to facilitate their
business operation.

End


17. Measures to ensure water quality safe for keeping seafood
    *********************************************************

     Following is a question by Dr the Hon Tang Siu-tong
and a written reply by the Secretary for Health and
Welfare, Mrs Katherine Fok, in the Provisional Legislative
Council today (Wednesday):

Question:

     Will the Government inform this Council whether there
are rules prohibiting people from taking the sea water
from certain water zones in the territory for keeping
seafood; if so:

     (a)  of such water zones;

     (b)  of the number of cases in breach of the relevant
rules in the past 3 years;

     (c)  whether the recent cholera cases in Hong Kong
are related to the consumption of seafood kept in the sea
water from such water zones; and

     (d)  of the measures in place to further prevent
people from taking sea water from such water zones?

Reply:

Madam President,

     (a)  According to the Food Business (Urban Council)
Bylaws and the Food Business (Regional Council) Bylaws,
the two Municipal Services Departments can regulate and
prohibit the food business operators and restaurants from
keeping live fish or shell fish intended for human
consumption in water of a quality below a specified
hygiene standard.  The two Municipal Services Departments
regularly collect from restaurants and markets, for
testing, samples of water which are used for keeping
seafood.  Operators who do not comply with the specified
standard are prosecuted.

     (b)  At present, there is no legislation prohibiting
the drawing of sea water from the territory's waters for
keeping seafood.  Hence, no person has been prosecuted for
this reason.

     (c)  During the investigation of the recent cholera
cases, the Department of Health had collected from the
seafood restaurants and the seafood suppliers concerned
samples of water which had been used for keeping seafood.
To date, all water samples taken have been tested negative
for cholera.

     (d)  The Administration has set up a special inter-
departmental working group to take follow-up actions,
examining how to ensure that the quality of water used for
keeping seafood complies with the specified hygiene
standard.

     The Department of Health and other relevant
Government departments will continue to investigate the
recent cholera cases, trace their sources, step up
enforcement of the relevant laws and take all other
effective measures to contain the spread of cholera in
Hong Kong.

End





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