Legislative Council

LC Paper No. CB(1) 227/98-99

Ref: CB1/PL/G/1

Paper for the House Committee meeting on 25 September 1998

Panel to undertake issues relating to
the overall economic development of Hong Kong

Purpose

This paper invites members to consider broadening the responsibilities of an existing economy-related Panel to undertake the monitoring of issues relating to the overall economic development of Hong Kong.

Background

2. At the House Committee meeting on 18 September 1998, members considered alternative ways of monitoring government policies and issues of public concern relating to the overall economic development of Hong Kong and keeping abreast of government policies on macro economic matters. Among the various options examined, members agreed in principle that the responsibilities of one of the existing economy-related Panels should be broadened to undertake this task. The Secretariat was asked to develop the implementation details of this option for members' consideration. In particular, members have agreed that in redefining the terms of reference of the Panel undertaking this additional task, the Panel's new responsibilities should not, as far as possible, duplicate those of other Panels.

Review of the work of existing economy-related Panels

3. The policy areas covered by the three existing economy-related Panels are as follows:

Panel on Financial Affairs:	banking and monetary matters, securities and futures trading, occupational retirement schemes, insurance, bullion trading, companies, insolvency, bankruptcy, trust companies, trustee investment, trade in financial services, government investment and loan portfolios, trading funds, revenue and taxation, policy on fees and charges, economic analysis and impact of regional financial development on Hong Kong;
Panel on Economic Services:	energy, agriculture and fisheries, air services, port development, postal services, monitoring of electricity and towngas companies, tourism, meteorological services, cargo handling facilities, merchant shipping support services and marine matters.
Panel on Trade and Industry:	multilateral trade issues, trade control systems, industrial development, intellectual property protection, business environment and development, consumer protection and competition, trade-related electronic data interchange service.

The subjects that have been studied by the above Panels during the past three years are listed in Appendices I to III.

Proposal

4. Overall economic development covers matters relating to the overall economic infrastructure, strategies and measures to revive and revitalize the economy, the strengthening of Hong Kong's economic fundamentals and competitiveness, financial crisis management, Hong Kong's economic development in relation to the development of the region, etc.

5. Having regard to the work of the three economy-related Panels, it is proposed that matters relating to the overall economic development of Hong Kong be included in the terms of reference of the Panel on Financial Affairs. All Members should be notified and invited to briefings and discussions on general economic issues. On issues which straddle the work of other Panels, joint meetings with the Panels concerned may be held.

6. It is proposed that the name of the Panel on Financial Affairs be changed to Panel on Financial Affairs and Economic Development, with its terms of reference revised as in Appendix IV. Subject to members' agreement, a motion to change the name and terms of reference of the current Panel on Financial Affairs would be moved in accordance with Rule 77 of the Rules of Procedure by the Chairman of the House Committee at the Council meeting on 14 October 1998. Members who are not members of the current Panel on Financial Affairs will then be invited to signify membership for the reformed Panel on or before 23 October 1998.

Advice sought

7. Members are invited to endorse the proposal in paragraph 6.

Legislative Council Secretariat
24 September 1998

Appendix I

Banking and Monetary Matters

- Work plans of the Hong Kong Monetary Authority
- Mortgage Corporation
- The implications of the sale of shares of Hong Kong Note Printing Ltd. to the China Bank Note Printing and Minting Corporation
- Central Bank Bilateral Repurchase Agreements
- Code of Banking Practice
- Personal data privacy of bank customers

- Consumer protection under the terms and conditions governing the use of locally-issued credit cards
- The regulation of the banking services made available on the Internet
- Financial positions and future monitoring of banks in Hong Kong after the recent currency crisis in Asia
- Shortage of coins

Securities & Futures

- The budget and business plan of Securities and Futures Commission
- The Market Development Plan of the Stock Exchange of Hong Kong
- Membership of the Stock Exchange of Hong Kong
- The operation of Hong Kong Securities Clearing Co. Ltd.
- Conflict of interest of council members of Stock Exchange of Hong Kong

- Registration of leveraged forex companies and their supervision
- Rolling forex and future development of Hong Kong's foreign exchange market
- Review of the Leveraged Foreign Exchange Trading Regulatory System
- Supervision of H-shares
- Share prices of listed media companies
- Consultation paper on Management, Supervision and Internal Control Guidelines for Persons Registered with or Licensed by the Securities and Futures Commission
- Review of the risk management during the recent stock market slump
- Rationalisation of securities and futures related ordinances
- Supervision of stock brokers
- Price volatility in second and third liner stocks and stock market movements
- Investor participation in Hong Kong Securities Clearing Co. Ltd's Central Clearing and Settlement System
- Computer data failure in the trading system of the Stock Exchange of Hong Kong
- Market manipulation
- Regulation of red chip stocks trading
- Regulation of intermediaries
- Supension of stock trading and its consequences
- Red Chip Index Futures trading prospect and safeguards for investors
- Report on the current status of the "Life Boat Loan" set up after the 1987 stock market crash
- Downfall of CA Pacific and the state of the securities brokerage industry
- Review of constituent stocks of the Hang Seng Index
- Proposed Automatic Trading System for the Futures Exchange

- Protection of minority shareholders' interest on privatisation of listed companies
- Disclosure of previous criminal convictions of directors of listed companies
- Offering mechanism of initial public offerings and the Kwong On Bank incident
- Fairness in subscription for initial public offerings

- Monitoring of the fund management industry
- Code of conduct for fund managers

Bullion Trading

- Bullion trading
- Monitoring of the local London gold market

Retirement Schemes/Insurance

- Mandatory Provident Fund System
- The regulation of the health insurance industry
- Review of the insurance industry

Taxation

- Field audit and tax investigation
- Anti-tax avoidance measures
- Services provided to the public by Inland Revenue Department
- Work Plan of Inland Revenue Department
- Interest on tax reserve certificates

Companies

- Statutory protection for auditors
- Verification of director's list with regard to property fraud
- Review of the Hong Kong Companies Ordinance
-Prosecution of directors for failing to file annual returns

Government Finance Matters

- Principles for setting fee levels for government services
- Budget Expert Talks (Consultation with the Chinese side on the transitional Budget and related matters)
- The Electrical and Mechanical Services Department's Trading Fund
- Management of government reserves
- Review of the operation of trading funds
- Equity injection into Kowloon-Canton Railway Corporation for implementation of West Rail

Asian Financial Crisis

- The current financial crisis surrounding the Hong Kong dollar and the Hong Kong stock market
- Review of Financial Secretary's authority in using the Exchange Fund
- Developments in the financial markets of Asia
- Actions taken by Government in the foreign exchange, securities and futures markets

Appendix II

Agriculture & Fisheries

- Registration of Veterinary Surgeons
- Microchip implantation for dogs
- Control of dangerous dogs

- Ex-gratia allowance for fishermen affected by development projects
- Development of fishing industry
- Policy on development of the agriculture and fisheries industry
- Mainland Fishermen Deckhands Scheme

- Problems arising from the operation of the Yau Ma Tei Fruit Market
- Upgrading of the Yuen Long Permanent Wholesale Market to a category A project under the Public Works Programme

- Compensation for slaughter of chickens
- Resumption of the importation of live poultry

Port Services

- Progress of Development of Container Terminals No. 9, No. 10 and No. 11
- Location and development of Container Terminals 10 and 11
- Safety of Hong Kong's waterways as a result of th on-going reclamation works and the Green Island dumping project
- Management of Public Cargo Working Areas (PCWAs)
- Port Cargo Forecast
- An update on port services
- Northshore Lantau Development Study

Air Services

- Measures to address the heavy air traffic and flow of passengers at Kai Tak International Airport during Lunar New Year
- Setting up of Airport Authority
- The need for a second runway at the new airport at Chek Lap Kok
- Management and leasing of retail outlets at the new airport
- The effect of the change of ownership of Hong Kong's airlines on the industry and the economy
- Airport charges at Chek Lap Kok Airport
- Briefing on Airport Authority Bylaw
- Delay of the opening of the new airport at Chek Lap Kok
- Operation of the new Hong Kong International Airport

Postal Services

- Arrangements for philatelic sale at the Post Office

Energy and Utilities

- Scheme of Control for Hong Kong and China Gas Co. Ltd.
- Domestic Water Heating and Cooking Fuel Market
- Feasibility of Introducing a Common Carrier System for Gas Supply in Hong Kong
- Tariff Revision for Hong Kong and China Gas Co. Ltd.

- Transport of Liquefied Petroleum Gas

- China Light and Power Co. Ltd.: Tariff Increase
- Hong Kong Electric Co. Ltd. tariff increase
- Hongkong Electric Company Limited's generation development proposals
- Future Demand for Electricity in Hong Kong and Demand Side Management
- Implication of China Light and Power Company Limited's corporate restructuring

- Safety of household electrical products

Tourism

- Hong Kong Tourist Association: Visitor and Tourism Study Strategy Report
- Government's policy to promote tourist industry

Note: Issues relating to telecommunications discussed by the Panel are not included.

Appendix III

International Trade

- The Asia Pacific Economic Co-operation meeting in Osaka
- Ministerial Conference of the World Trade Organisation in Singapore

- Deposit Requirement for Products-for-export in China
- Increased convertibility of Renmenbi
- Sale of textile quotas
- Inclusion of Hong Kong on the Section 301 Watch List
- Sino-US Trade Relations and their Implications on Hong Kong
- US import measures on textile and clothing products
- Trade protectionism

- Renewal of China's Most Favoured Nation Status
- Progress report on Minister Washington's Most Favoured Nation (MFN) status lobbying
- Update on Renewal of China's Most-Favoured Nation Status and Intellectual Property Right Dispute
- Update on renewal of China's Most Favoured Nation Status by the United States

Business Environment and Development

- Tradelink
- Business plan of Tradelink
- The Community Electronic Trading Service
- Community Electronic Trading Service and Trade Declaration
- Departmental business study in Trade Department

- Helping Business Programme
- Rent policy for market stalls
- Business and service promotion
- Assistance to entrepreneurs
- Special Finance Scheme for small and medium enterprises

- Credit Guarantee Scheme

Consumer Protection and Competition

- Proposed Contingency Fund Scheme for the Protection of Outbound Travellers
- Closure of Observers Travel Enterprises
- Regulation of Travel Industry
- Review on regulatory mechanism of outbound travel industry
- Compensation payments under the Travel Industry Compensation Fund

- Rice Control Scheme

- Policy on Fair Competition
- Competition Policy : The Key to Hong Kong's Future Economic Success
- Competition Policy

- Prepayment of goods and services

Intellectual Property Protection

- Intellectual property rights protection in Hong Kong and the possible naming of Hong Kong under the US Special 301 Law
- A new patent registration system for Hong Kong
- Briefing on Copyright Bill and protection against parallel imports
- Briefing on Registered Designs Bill
- Enforcement against copyright piracy activities

Industrial development

- Helping development of industries
- Admission of services industries into the Industrial Estates
- Proposed establishment of science park
- Science Park
- Consultancy study report on Hong Kong's software industry
- Review of the Applied Research and Development Scheme and Cooperative Applied Research and Development Scheme

Appendix IV

1. To monitor and examine Government policies and issues of public concern relating to the overall economic development of Hong Kong, finance and financial matters.
   
   
2. To provide a forum for the exchange and dissemination of views on related policy matters.
   
   
3. To receive briefings and to formulate views on any major legislative or financial proposals in the relevant policy areas prior to their formal introduction to the Council or Finance Committee.
   
   
4. To examine and to report on any major issues of wide public concern in the relevant policy areas as referred by the Council or House Committee or as raised by the Panel itself.