Extract of the minutes of
Provisional Legislative Council Members' Meeting with
Kwai Tsing Provisional District Board Members
on 18 December 1997

Assistance to Entrepreneurs

2.K&TPDB members expressed concern about the lack of a reliable channel through which Hong Kong entrepreneurs with manufacturing operations in the Mainland could seek advice and assistance when they encountered problems. They said that small and medium-sized enterprises in particular needed such assistance. They suggested that the Hong Kong Special Administrative Region Government (HKSARG) should co-operate with the Mainland authorities in setting up an organization to provide assistance to businessmen in distress in the Mainland.

3.A PLC Member said that the Government had decided to set up an office in Beijing for the HKSARG. The purpose would be to enhance communication and co-ordination between HKSARG and the Mainland authorities. A K&TPDB member responded that the Administration should consider setting up more offices in the Mainland, in particular, in the southern cities such as Guangzhou.

4.A PLC Member informed the meeting that the Hong Kong and Macau Affairs Office had set up a special department in Guangzhou two years ago to deal with complaints from and provide assistance to Hong Kong residents who encountered difficulties in Guangzhou. However, as far as he knew neither the department nor the future Beijing HKSARG office would be responsible for dealing with complaints arising from business activities. He opined that with increasing economic activities between Hong Kong and the Mainland, the Administration should consider establishing such a channel which would serve to enhance economic ties and trade co-operation with the Mainland.

5.A PLC Member commented that the problem could not be resolved simply by setting up a centralized organization because the nature of complaints and disputes arising from business activities could be very diverse and complex. They could be "cross-provinces" involving different local authorities and levels of Government. She suggested that as a first step, the Government should consider setting up a channel through which businessmen could lodge certain types of complaints. In response to a K&TPDB member, she said that while PLC Members were concerned about the problem, they were not in a position to directly follow up complaints with the Mainland authorities. She said that Members would urge the Administration to pursue the matter.

6.The Convenor informed the meeting that the question of rendering assistance to Hong Kong-based businessmen who encountered difficulties in the Mainland was raised at the Council meeting on 12 November 1997. The Administration had advised that the Trade Department and the Trade Development Council were providing assistance to Hong Kong businessmen in their pursuit of economic activities in the Mainland as in other places. It was looking further into the matter and was liaising with the Central People's Government to explore whether there was any scope of assisting or otherwise specific complainants about the avenues available in the Mainland for businessmen to pursue their cases. He said that the Panel on Trade and Industry would follow up the matter.

7.K&TPDB members expressed concern about the recent financial turmoil which had adversely affected small and medium-sized business enterprises. They pointed out that it had become increasingly difficult for businessmen to secure credits from banks and asked about the progress of the study on Venture Board which aimed to help small enterprises in raising capital.

8.A PLC Member replied that the Hong Kong Stock Exchange had considered that a Venture Board was necessary and that it was studying under which organization should the Venture Board operate. She added that the Government intended to set up a pilot Credit Guarantee Scheme to facilitate small and medium enterprises in obtaining the necessary financing from commercial banks for their pre-export expenses. The extent of the Scheme coverage would be limited to 50% of the loan payment approved or $2 million for each individual loan whichever was less. The total Scheme coverage for an applicant at any one time would be limited to not more than $6 million.

9.The Convenor undertook to forward a copy of the information paper on the Scheme prepared by the Administration for the Panel on Trade and Industry to K&TPDB for reference.

(Post meeting note: The paper was sent to K&TPDB on 22 December 1997.)