4.Members agreed that a special meeting would be convened on Tuesday, 29 October 1996 to receive an urgent briefing by the Administration on the business plan of Tradelink before submitting it to the Executive Council.

5.It was agreed that the following items would be discussed at the regular meeting on Tuesday, 12 November 1996 -

Review on regulatory mechanism of outbound travel industry; and
Compensation payments from the Travel Industry Compensation Fund.

6.Members agreed to include the following items for discussion in the 1996-97 session -

Topics	Proposed by
(a) Task Force on Services Promotion	Miss CHAN Yuen-han
(b) Protection against parallel imports	Mr SIN Chung-kai
(c) Trade protectionism	Mrs Selina CHOW
(d) Promotion of the film industry	Mrs Selina CHOW
(e) Promotion of the design industry	Mrs Selina CHOW
(f) Establishment of the Economic Development Board	Dr LAW Cheung-kwok

V. Policy briefing by Secretary for Trade and Industry on the Governors 1996 Policy Address

7.Miss Denise YUE briefed members on Governments policy commitments in the principal programme areas of the Trade and Industry Branch.

Support for industry

8.Members were concerned about the measures to enhance competitiveness of the service industries. In response, Miss YUE advised that the Industry Department, in cooperation with the Coalition of Hong Kong Service Industry, had been actively planning for the introduction of an Awards Scheme for Services in recognition of excellence in service quality, productivity and exports. This Award, the nature of which would be similar to that of the Industry Award, would help enhance service quality. Persons in the tourist trade and in the service industries would be invited to participate in the Scheme.

9.As to the plan for support of the service industries, Miss YUE advised that a 16-member committee chaired by the Director-General of Industry and comprising representatives from various sectors of the service industries had been formed to consider proposals on financial and infrastructural support to the service industries.

10. Mr Francis HO added that the Legislative Council Finance Committee had approved an allocation of $50 million to set up a Services Support Fund (the Fund). The Fund would provide financial support to projects aimed at enhancing the competitiveness of the service industries and the overall development of Hong Kong as a services centre. Applications for the Fund were open to all service industries and would be considered by a vetting committee chaired by the Director-General of Industry. The first grant was expected to be made in early 1997.

11. Regarding the Task Force on Services Promotion, Miss YUE informed that it was making good progress. The final report summarising the proposals of the Task Force would be released in late 1996 for the information of members of the Legislative Council as well as the public. The report would provide a guide to the way forward in promoting and developing the service industries, including the role played by the private sector.

12. On a members suggestion to designate a separate policy branch to deal with industry promotion, Miss YUE responded that policy secretaries had all along been responsible for the promotion of industries which fell within their respective purview, e.g. the Secretary for Economic Services was responsible for the promotion of the tourist industry. Consideration would be given to establishing a permanent unit in the Government Secretariat to co-ordinate and monitor various services-related initiatives.

13. On a members concern about the high vacancy rate in industrial buildings, Miss YUE said that the current situation was attributed to a change in industrial trend. Owners of industrial land could apply to the Town Planning Board for approval for change of land use. She explained that the Planning, Environment and Lands Branch was responsible for the overall planning in land use in Hong Kong. Industry Department played an advisory role in assessing the need for industrial land.

Science Park

14. Regarding the progress of the establishment of the Science Park, Mr HO advised that the preferred site for the Science Park was currently part of the sea which was being reclaimed. Subject to provision of funds, the site so formed would be available for construction in February 1998. In the meantime, the Administration would work out the institutional, financial and technological support arrangements for the Science Park. Detailed planning of this project would start shortly.

The Second Technology Centre

15. According to Mr HO, the Industrial Technology Centre Corporation had started planning the Second Technology Centre (the Centre). The former site of St George School in Kowloon Tong was earmarked for the development of the Centre, in addition to the development of other community facilities including the provision of two international schools. As the site was originally designated for military use, the Administration had to secure the approval of the Town Planning Board for change of land use. Given the time needed for the process, and subject to the provision of funds, it was anticipated that construction works for the Centre would not commence before mid-1997 at the earliest.

The Co-operative Applied Research and Development Scheme

16. Mr HO stated that the Co-operative Applied Research and Development Scheme was launched in mid-1995 with the objective of supporting projects undertaken by researchers on both sides of the border and of strengthening links with major Chinese research institutes. Four research projects in the area of biotechnology and other high technology had been approved. On the other hand, Industry Department and the Chinese State Science and Technology Commission had agreed to conduct two joint studies to identify business and technological opportunities in information technology and biotechnology, respectively.

Protection of intellectual property rights

17. On the protection of intellectual property rights, Miss YUE assured members that the Government was committed to developing a comprehensive, independent and internationally accepted framework to protect intellectual property rights. New legislative provisions had been enacted to strengthen enforcement against organised syndicates masterminding cross-border copyright piracy. New cross-border customs measures had been introduced to enhance co-operation with the Chinese Customs to combat infringement of intellectual property rights. Additional resources had been allocated to the Customs and Excise Department as well as the Intellectual Property Department to carry out these tasks. With these measures in place, it was hoped that Hong Kong would not be named in any of the categories provided for under the US Special 301 Law.

18. As regards anti-piracy activities, Mr S F LI advised that over a hundred operations had been mounted this year. There had been an increase of 47% in the value of seized pirated and counterfeit products as compared with the same period over last year. Joint anti-piracy operations were being carried out with the Chinese authorities. With additional resources to be made available in November 1996, the Administration would step up anti-piracy activities.

Trade protectionism

19.Regarding the recent unilateral action taken by the US Government to impose additional requirements on certain textile products from Hong Kong, members enquired about the latest development and the action taken by the Hong Kong Government to resolve the issue. In reply, Miss YUE stated that the recent unilateral measures taken by the US Government were meant to combat illegal textile transshipment. Ongoing negotiations with the US Government were being held and the US customs officers had completed inspection of a number of textile manufacturing factories in Hong Kong. Should the US Government refuse to rescind its unilateral measures, consideration would be given to bringing the matter to the attention of the Textile Monitoring Body of the WTO for arbitration. Miss YUE pointed out that the crux of the issue rested with the imposition of the textile quota system. To solve the problem at root, the Hong Kong Economic and Trade Offices in Geneva and Washington had been strenuously lobbying for the removal of the textile quota system. At the upcoming World Trade Organisation (WTO) Ministerial Conference in December 1996, further efforts would be made in pressing for quicker liberalisation of the textile and clothing trade. The Government was committed to securing unrestricted access to overseas market for local exporters by promoting a free, open and stable multilateral trading system.

20. Addressing some members worry that the US Government might impose stricter control over Hong Kong exports after the change of sovereignty, Miss YUE said that Hong Kong would enjoy a high degree of autonomy and would continue to be regarded as an independent and separate customs entity. The bilateral agreements on textile exports between Hong Kong and the US Government would continue in force after 1997.

Long-term development

21. On the progress of the study on long-term industrial development prospects commissioned jointly by the Hong Kong Government and the private sector and conducted by the Massachusetts Institute of Technology (MIT), Mr HO informed that the study was half-way completed. An interim report would be ready by January 1997 and the final report would be available in March 1997. The Administration was making arrangements for the experts from MIT to give a presentation during the Hong Kong Technology Week in early 1997. Meanwhile, the President of MIT would be arriving Hong Kong in March 1997 to present the findings of the final report. The Administration would take this opportunity to review the policy on industrial and technological development and to re-examine the role of manufacturing in the future economic development of Hong Kong. Mr HO assured members that there would be a high degree of transparency in the review process.

22. On the need for retraining workers to tie in with the trend of economic development, Miss YUE advised that this issue came under the responsibility of the Secretary for Education and Manpower. The Vocational Training Council had been conducting a series of training programmes in the light of the demands of the job market.

23.The meeting closed at 10:30 a.m.

Legislative Council Secretariat
8 November 1996

Last Updated on 21 August 1998

LegCo Panel on Trade and Industry

Minutes of meeting held on Friday, 11 October 1996 at 9:00 a.m. in the Chamber of the Legislative Council Building

I. Election of Chairman and Deputy Chairman

II. Terms of reference

III. Schedule of meetings for the 1996-97 session

IV. Items for discussion at the next meeting

V. Policy briefing by Secretary for Trade and Industry on the Governors 1996 Policy Address