hkskyline
January 12th, 2005, 07:16 PM
Policy Address 2005
http://www.policyaddress.gov.hk/pa04/eng/images/brandhk_s.gif
Website : http://www.policyaddress.gov.hk/2005/eng/index.htm
Here are some key points :
Introduction
The year 2004 proved to be good for Hong Kong's economy, with performance surpassing each of the past seven years. We have undergone an unprecedented economic restructuring. Although the process has been painful, it has lowered costs and increased our competitiveness. Most importantly, we have established a clear direction and positioning for future development. Policies and measures adopted by the Government to cope with the rapidly changing situation have started to deliver results. The hard work of our people has paid off, heralding the first stage of economic recovery. My Policy Address today sets out the priorities for this year and the rest of my term, on the basis of experience gained and lessons learnt.
Helping the Poor and Needy
Several Members as well as the community at large have expressed deep concern about the problem of poverty. As a result of globalisation, some types of jobs have relocated elsewhere. Unemployment has persistently remained at a high level. For some low-income families, their circumstances have worsened over the past few years. They require the community's care and assistance.
Our policy vision is to first promote economic growth and create employment opportunities. Then, through education and training, we seek to provide individuals with the opportunity to give full play to their potential, enhance themselves and free themselves from poverty. The Government also allocates resources for public housing, health care, education and welfare (including the Comprehensive Social Security Assistance (CSSA) Scheme) to weave a reliable social safety net to provide basic protection for those in need. However, due to ongoing rapid economic restructuring and new circumstances, we will take steps to provide more direct assistance and support for those in need.
Goods and Services Tax
Members are concerned about our fiscal deficit and have suggested various measures to cut expenditure and raise revenue. In fact, the Government has been reducing the deficit according to set targets and is determined to, and confident of, restoring fiscal balance by 2008-2009. Some Members have suggested the introduction of a goods and services tax as a feasible option to broaden the tax base. We are examining this proposal. In any event, our economy is still at the early stage of post-recovery consolidation. Overseas experience suggests that this is not the appropriate time to introduce a goods and services tax. Therefore, the Government will definitely not implement such a tax in the next two and a half years.
Health Care Financing
Members and the health care sector are concerned about whether our public health care system is financially sustainable in the long term. We are now reforming the advisory framework for health care services to facilitate the tendering of advice on our long-term health care policies and financial viability. We also need to further explore ways to enhance our health care system and improve the interface between the public and private health care sectors. Maintaining quality public health care services involving the allocation of community resources and public well-being is a major issue. We will undertake studies within the next two and a half years to help lay the foundation for the formulation of long-term strategies.
At present, our health care policies aim to protect the public with equal emphasis on disease prevention and treatment. However, there is a genuine need to enhance community-based health services and health education, including the promotion of family medicine on a wider scale and the provision of appropriate support and assistance.
West Kowloon Cultural District
In the 1999 Policy Address, I referred to a plan to develop West Kowloon Reclamation into a district of culture, entertainment and art. This is a major and forward looking plan. We are now consulting the public on the proposal and many people have participated actively in this exercise. I wish to emphasise that the Government keeps an open mind when listening to views. We will definitely pay heed to public opinion and the overall and long-term interests of Hong Kong when taking a decision after the completion of the consultation exercise.
Consolidating the Four Core Industries
First of all, we will continue to strengthen the four core industries. For the financial services sector, we will seize the opportunities brought by accelerated liberalisation and development of the Mainland economy to enhance Hong Kong's role as an international financial centre. In particular, we will tap into the huge potential of renminbi business, bond markets and asset management services. At the same time, we will continue to improve the quality and stability of our financial markets, enhance the regulation of listing and reinforce corporate governance. In terms of producer services, the Mainland's external trade exceeded US$1,000 billion last year, the fourth highest total in the world. Leveraging on the Mainland market, our producer services sector will have greater opportunities for expansion. To promote the upgrading of our producer services, the Government encourages wider application of technology and innovation, and strengthening design, research and development and brand-building activities. On the logistics front, the Government will liaise closely with the trade to formulate measures to enhance the competitiveness of the aviation and container freight industries. With the continuous growth of tourism in the Mainland and worldwide, we expect the number of visitors to Hong Kong to reach 35 million by 2010. As Asia's prime tourist destination, we will take active measures to consolidate existing advantages and further develop our potential. This will in turn create more job opportunities for the middle and lower strata.
According to the latest visitor survey conducted by the Hong Kong Tourism Board, shopping is the main purpose of nearly 90% of our visitors. Hong Kong has always been a shopping paradise for visitors because we carry a wide range of genuine and trendy goods at fair prices and we provide quality service. The Luxury Conference held in Hong Kong at the end of last year further reinforced Hong Kong's status in the international fashion and luxury goods markets. A superior business reputation and rigorous quality management are competitive advantages we have worked long and hard to achieve. This year, we will adopt a multi-pronged approach to consolidate our advantages. We will do our best to protect intellectual property rights and to eliminate counterfeit goods. We will continue to promote "No Fakes" stickers to increase the confidence of those shopping in Hong Kong. At the same time, we will strive to expand consumer protection for visitors by rendering full support to the Travel Industry Council of Hong Kong to implement a penalty mechanism against non-compliance with the "100 per cent refund guarantee scheme". We will facilitate the extension of the Quality Tourism Services Scheme by the Hong Kong Tourism Board to cover more tourism-related trades. To improve the shopping environment, we plan to provide additional pedestrianised streets with upgraded support facilities in two major shopping and entertainment districts, Causeway Bay and Tsim Sha Tsui, with a view to making Hong Kong even more attractive as a shopping paradise.
Closer Economic Partnership Arrangement
Introduced only a year ago, CEPA has helped foster economic growth in Hong Kong. Over 660 Hong Kong-registered enterprises have been issued with Certificates of Hong Kong Service Supplier. Under CEPA, these enterprises are able to enter the Mainland market much earlier and enjoy preferential treatment. Some enterprises in sectors such as banking, distribution, transport and logistics have already set up business in the Mainland. And professional services are beginning to develop market opportunities. Implementation of the Individual Visit Scheme quickly boosted the retail sector and the overall consumer market. Since last August, the application procedures for state-owned and private enterprises in the Mainland to set up business in Hong Kong have been greatly streamlined. This has speeded up the pace of Mainland enterprises investing in Hong Kong and fostered growth for both places. By the end of 2004, products with a total value of $1.145 billion had been manufactured in Hong Kong and imported into the Mainland tariff free.
We understand that, with the implementation of CEPA in Mainland provinces and cities, some areas require specific supporting measures. Some of our services sectors still face relatively high thresholds. We will continue to follow up these issues with the Central Authorities.
We have started to consult the industries concerned on the contents of CEPA III, to be implemented next year, and will begin discussions with the Central Authorities.
The implementation of CEPA has brought immediate benefits to our economy. This is plain for all to see. The experience of other regions in formulating free trade arrangements shows that it takes time for the newly generated economic activities to produce visible results. Therefore, we expect the economic benefits of CEPA to become even more evident over time.
Promoting Regional Co-operation
In addition to implementing and furthering CEPA, the Government will continue to promote co-operation between Hong Kong and Guangdong. We will actively participate in the development of the Pan-Pearl River Delta (Pan-PRD) and foster bilateral co-operation with other Mainland provinces and cities.
Through concerted efforts, Hong Kong and Guangdong have entered a new stage of co-operation. The scope of co-operation has expanded beyond trade and boundary-crossing facilities to many areas, including logistics, tourism, regional planning, technology, intellectual property rights, education, transportation, environmental protection, health, culture and sports. Of particular significance is the Hong Kong-Zhuhai-Macao Bridge, the biggest cross-boundary infrastructural project since the return of Hong Kong to China. It has undergone a feasibility study and we will soon proceed to the next stage of work after the official establishment of the project by the State Council. Construction of the Hong Kong section of the Hong Kong-Shenzhen Western Corridor will be completed by the end of 2005 as scheduled. We will continue to plan and build cross-boundary infrastructure. We will expand the scope of co-operation within the PRD for mutual prosperity. Both sides will actively work for the expansion of the co-operative hinterland from the PRD area to the north, east and west of Guangdong. On the solid foundation of co-operation between Guangdong and Hong Kong, we will work together to promote regional co-operation in the Pan-PRD.
The formal launching of Pan-PRD co-operation last June opened up long-term prospects for Hong Kong. This vast area with a population of 450 million will gradually develop into a market characterised by the free flow of economic fundamentals, similar to the booming Greater PRD, only much larger. As an integral part of the Pan-PRD, Hong Kong will be able to deploy its advantages as an international trading, financial, logistics and information centre. By expanding the scope and coverage of our services sector, we can lead this vast hinterland to the global market. It will in turn provide Hong Kong with an enormous internal market for our goods and services. Hong Kong, in co-operation with other provinces in the region, will work towards perfecting the transport links within the Pan-PRD and strive to create a fair and orderly market environment that offers abundant opportunities for our investors and services sector.
Developing Cultural and Creative Industries
Overseas experience shows that during economic restructuring, cultural and creative industries can propel the economy to a new level. In the United Kingdom, for example, this economic sector achieved average annual growth of 8% from 1997 to 2001, far exceeding the overall economic growth rate, after its government adopted a policy to promote creative industries. In the same period, the number of people employed by creative industries grew by an average annual rate of 3%, compared with the overall figure of 1% . While developing creative industries will require creative talent, it will also create employment opportunities for people with various technical skills, particularly as avenues for creative young people to prove their worth.
In the Asia-Pacific region, with over 2 billion people, Hong Kong is well positioned to develop cultural and creative industries: we have a highly open and free society, where information, capital, talent and goods can move freely. We have the rule of law, providing effective protection for intellectual property. We are a pluralistic and inclusive society, a confluence of Eastern and Western cultures, and a cultural cradle for overseas Chinese. We have a rich variety of cultural activities and life-styles conducive to inspiring creativity. We stand to benefit from the many opportunities now arising in the Mainland following its own promotion of cultural industries in recent years. We have people who have always been good at learning, skilful at adaptation and strong on creating things. Yet, there are apparent limiting factors in some key areas, such as cultivating creative talent, fostering creativity, commercialising creative ideas and financing the establishment of creative industries, which have held back the full development of cultural and creative industries in Hong Kong. At present, cultural and creative industries account for only about 4% of our GDP, compared with 8% in the United Kingdom. Obviously, there is still scope for growth.
To promote new development in this area, we have adopted some policy measures and gained some experience over the past two years. For example, we have set up a Digital Media Centre and the Cyberport iResource Centre and we will establish an incubator to facilitate creation of television games. We have not only set up a Design Centre, but also launched a $250 million DesignSmart Initiative to develop a service centre that will provide a focal point for high value-added design activities. We have secured access to the Mainland market for our film industry under CEPA and will strengthen the function and application of existing funds supporting the film industry. We have also helped organise a number of activities to promote local films. In March this year, we will premiere a world-class event, Entertainment Expo Hong Kong. This new mega-event will combine the Hong Kong International Film Festival, the Hong Kong International Film and TV Market, the Hong Kong Film Awards Presentation Ceremony and the Digital Entertainment Leadership Forum.
Our aim is to consolidate our core industries, foster a favourable social environment to nurture and attract versatile people with multi-skills, promote the development of cultural and creative industries, facilitate the transition to a knowledge-based economy, sustain prosperity and enhance our quality of life.
http://www.policyaddress.gov.hk/pa04/eng/images/brandhk_s.gif
Website : http://www.policyaddress.gov.hk/2005/eng/index.htm
Here are some key points :
Introduction
The year 2004 proved to be good for Hong Kong's economy, with performance surpassing each of the past seven years. We have undergone an unprecedented economic restructuring. Although the process has been painful, it has lowered costs and increased our competitiveness. Most importantly, we have established a clear direction and positioning for future development. Policies and measures adopted by the Government to cope with the rapidly changing situation have started to deliver results. The hard work of our people has paid off, heralding the first stage of economic recovery. My Policy Address today sets out the priorities for this year and the rest of my term, on the basis of experience gained and lessons learnt.
Helping the Poor and Needy
Several Members as well as the community at large have expressed deep concern about the problem of poverty. As a result of globalisation, some types of jobs have relocated elsewhere. Unemployment has persistently remained at a high level. For some low-income families, their circumstances have worsened over the past few years. They require the community's care and assistance.
Our policy vision is to first promote economic growth and create employment opportunities. Then, through education and training, we seek to provide individuals with the opportunity to give full play to their potential, enhance themselves and free themselves from poverty. The Government also allocates resources for public housing, health care, education and welfare (including the Comprehensive Social Security Assistance (CSSA) Scheme) to weave a reliable social safety net to provide basic protection for those in need. However, due to ongoing rapid economic restructuring and new circumstances, we will take steps to provide more direct assistance and support for those in need.
Goods and Services Tax
Members are concerned about our fiscal deficit and have suggested various measures to cut expenditure and raise revenue. In fact, the Government has been reducing the deficit according to set targets and is determined to, and confident of, restoring fiscal balance by 2008-2009. Some Members have suggested the introduction of a goods and services tax as a feasible option to broaden the tax base. We are examining this proposal. In any event, our economy is still at the early stage of post-recovery consolidation. Overseas experience suggests that this is not the appropriate time to introduce a goods and services tax. Therefore, the Government will definitely not implement such a tax in the next two and a half years.
Health Care Financing
Members and the health care sector are concerned about whether our public health care system is financially sustainable in the long term. We are now reforming the advisory framework for health care services to facilitate the tendering of advice on our long-term health care policies and financial viability. We also need to further explore ways to enhance our health care system and improve the interface between the public and private health care sectors. Maintaining quality public health care services involving the allocation of community resources and public well-being is a major issue. We will undertake studies within the next two and a half years to help lay the foundation for the formulation of long-term strategies.
At present, our health care policies aim to protect the public with equal emphasis on disease prevention and treatment. However, there is a genuine need to enhance community-based health services and health education, including the promotion of family medicine on a wider scale and the provision of appropriate support and assistance.
West Kowloon Cultural District
In the 1999 Policy Address, I referred to a plan to develop West Kowloon Reclamation into a district of culture, entertainment and art. This is a major and forward looking plan. We are now consulting the public on the proposal and many people have participated actively in this exercise. I wish to emphasise that the Government keeps an open mind when listening to views. We will definitely pay heed to public opinion and the overall and long-term interests of Hong Kong when taking a decision after the completion of the consultation exercise.
Consolidating the Four Core Industries
First of all, we will continue to strengthen the four core industries. For the financial services sector, we will seize the opportunities brought by accelerated liberalisation and development of the Mainland economy to enhance Hong Kong's role as an international financial centre. In particular, we will tap into the huge potential of renminbi business, bond markets and asset management services. At the same time, we will continue to improve the quality and stability of our financial markets, enhance the regulation of listing and reinforce corporate governance. In terms of producer services, the Mainland's external trade exceeded US$1,000 billion last year, the fourth highest total in the world. Leveraging on the Mainland market, our producer services sector will have greater opportunities for expansion. To promote the upgrading of our producer services, the Government encourages wider application of technology and innovation, and strengthening design, research and development and brand-building activities. On the logistics front, the Government will liaise closely with the trade to formulate measures to enhance the competitiveness of the aviation and container freight industries. With the continuous growth of tourism in the Mainland and worldwide, we expect the number of visitors to Hong Kong to reach 35 million by 2010. As Asia's prime tourist destination, we will take active measures to consolidate existing advantages and further develop our potential. This will in turn create more job opportunities for the middle and lower strata.
According to the latest visitor survey conducted by the Hong Kong Tourism Board, shopping is the main purpose of nearly 90% of our visitors. Hong Kong has always been a shopping paradise for visitors because we carry a wide range of genuine and trendy goods at fair prices and we provide quality service. The Luxury Conference held in Hong Kong at the end of last year further reinforced Hong Kong's status in the international fashion and luxury goods markets. A superior business reputation and rigorous quality management are competitive advantages we have worked long and hard to achieve. This year, we will adopt a multi-pronged approach to consolidate our advantages. We will do our best to protect intellectual property rights and to eliminate counterfeit goods. We will continue to promote "No Fakes" stickers to increase the confidence of those shopping in Hong Kong. At the same time, we will strive to expand consumer protection for visitors by rendering full support to the Travel Industry Council of Hong Kong to implement a penalty mechanism against non-compliance with the "100 per cent refund guarantee scheme". We will facilitate the extension of the Quality Tourism Services Scheme by the Hong Kong Tourism Board to cover more tourism-related trades. To improve the shopping environment, we plan to provide additional pedestrianised streets with upgraded support facilities in two major shopping and entertainment districts, Causeway Bay and Tsim Sha Tsui, with a view to making Hong Kong even more attractive as a shopping paradise.
Closer Economic Partnership Arrangement
Introduced only a year ago, CEPA has helped foster economic growth in Hong Kong. Over 660 Hong Kong-registered enterprises have been issued with Certificates of Hong Kong Service Supplier. Under CEPA, these enterprises are able to enter the Mainland market much earlier and enjoy preferential treatment. Some enterprises in sectors such as banking, distribution, transport and logistics have already set up business in the Mainland. And professional services are beginning to develop market opportunities. Implementation of the Individual Visit Scheme quickly boosted the retail sector and the overall consumer market. Since last August, the application procedures for state-owned and private enterprises in the Mainland to set up business in Hong Kong have been greatly streamlined. This has speeded up the pace of Mainland enterprises investing in Hong Kong and fostered growth for both places. By the end of 2004, products with a total value of $1.145 billion had been manufactured in Hong Kong and imported into the Mainland tariff free.
We understand that, with the implementation of CEPA in Mainland provinces and cities, some areas require specific supporting measures. Some of our services sectors still face relatively high thresholds. We will continue to follow up these issues with the Central Authorities.
We have started to consult the industries concerned on the contents of CEPA III, to be implemented next year, and will begin discussions with the Central Authorities.
The implementation of CEPA has brought immediate benefits to our economy. This is plain for all to see. The experience of other regions in formulating free trade arrangements shows that it takes time for the newly generated economic activities to produce visible results. Therefore, we expect the economic benefits of CEPA to become even more evident over time.
Promoting Regional Co-operation
In addition to implementing and furthering CEPA, the Government will continue to promote co-operation between Hong Kong and Guangdong. We will actively participate in the development of the Pan-Pearl River Delta (Pan-PRD) and foster bilateral co-operation with other Mainland provinces and cities.
Through concerted efforts, Hong Kong and Guangdong have entered a new stage of co-operation. The scope of co-operation has expanded beyond trade and boundary-crossing facilities to many areas, including logistics, tourism, regional planning, technology, intellectual property rights, education, transportation, environmental protection, health, culture and sports. Of particular significance is the Hong Kong-Zhuhai-Macao Bridge, the biggest cross-boundary infrastructural project since the return of Hong Kong to China. It has undergone a feasibility study and we will soon proceed to the next stage of work after the official establishment of the project by the State Council. Construction of the Hong Kong section of the Hong Kong-Shenzhen Western Corridor will be completed by the end of 2005 as scheduled. We will continue to plan and build cross-boundary infrastructure. We will expand the scope of co-operation within the PRD for mutual prosperity. Both sides will actively work for the expansion of the co-operative hinterland from the PRD area to the north, east and west of Guangdong. On the solid foundation of co-operation between Guangdong and Hong Kong, we will work together to promote regional co-operation in the Pan-PRD.
The formal launching of Pan-PRD co-operation last June opened up long-term prospects for Hong Kong. This vast area with a population of 450 million will gradually develop into a market characterised by the free flow of economic fundamentals, similar to the booming Greater PRD, only much larger. As an integral part of the Pan-PRD, Hong Kong will be able to deploy its advantages as an international trading, financial, logistics and information centre. By expanding the scope and coverage of our services sector, we can lead this vast hinterland to the global market. It will in turn provide Hong Kong with an enormous internal market for our goods and services. Hong Kong, in co-operation with other provinces in the region, will work towards perfecting the transport links within the Pan-PRD and strive to create a fair and orderly market environment that offers abundant opportunities for our investors and services sector.
Developing Cultural and Creative Industries
Overseas experience shows that during economic restructuring, cultural and creative industries can propel the economy to a new level. In the United Kingdom, for example, this economic sector achieved average annual growth of 8% from 1997 to 2001, far exceeding the overall economic growth rate, after its government adopted a policy to promote creative industries. In the same period, the number of people employed by creative industries grew by an average annual rate of 3%, compared with the overall figure of 1% . While developing creative industries will require creative talent, it will also create employment opportunities for people with various technical skills, particularly as avenues for creative young people to prove their worth.
In the Asia-Pacific region, with over 2 billion people, Hong Kong is well positioned to develop cultural and creative industries: we have a highly open and free society, where information, capital, talent and goods can move freely. We have the rule of law, providing effective protection for intellectual property. We are a pluralistic and inclusive society, a confluence of Eastern and Western cultures, and a cultural cradle for overseas Chinese. We have a rich variety of cultural activities and life-styles conducive to inspiring creativity. We stand to benefit from the many opportunities now arising in the Mainland following its own promotion of cultural industries in recent years. We have people who have always been good at learning, skilful at adaptation and strong on creating things. Yet, there are apparent limiting factors in some key areas, such as cultivating creative talent, fostering creativity, commercialising creative ideas and financing the establishment of creative industries, which have held back the full development of cultural and creative industries in Hong Kong. At present, cultural and creative industries account for only about 4% of our GDP, compared with 8% in the United Kingdom. Obviously, there is still scope for growth.
To promote new development in this area, we have adopted some policy measures and gained some experience over the past two years. For example, we have set up a Digital Media Centre and the Cyberport iResource Centre and we will establish an incubator to facilitate creation of television games. We have not only set up a Design Centre, but also launched a $250 million DesignSmart Initiative to develop a service centre that will provide a focal point for high value-added design activities. We have secured access to the Mainland market for our film industry under CEPA and will strengthen the function and application of existing funds supporting the film industry. We have also helped organise a number of activities to promote local films. In March this year, we will premiere a world-class event, Entertainment Expo Hong Kong. This new mega-event will combine the Hong Kong International Film Festival, the Hong Kong International Film and TV Market, the Hong Kong Film Awards Presentation Ceremony and the Digital Entertainment Leadership Forum.
Our aim is to consolidate our core industries, foster a favourable social environment to nurture and attract versatile people with multi-skills, promote the development of cultural and creative industries, facilitate the transition to a knowledge-based economy, sustain prosperity and enhance our quality of life.