The Government believes that its framework for supporting the services sector of the economy should be built around eight key components. These are described below.
Sales and Marketing
The Trade Development Council's (TDC) success in the past three decades in
promoting international trade in goods makes it the ideal vehicle for helping
Hong Kong develop external markets for its services. The TDC will expand
its work in promoting trade in services, particularly exports of services.
Market Access
Hong Kong will use its position as a member of the World Trade Organisation
to press for further liberalisation of trade in services. In conjunction
with the business community, the Trade Department, together with the Hong
Kong Economic and Trade Offices overseas, will identify and challenge
restrictive practices which infringe the letter and spirit of the General
Agreement on Trade in Services.
Export Credit Insurance
Export credit insurance facilities help Hong Kong's exporters reduce the risks
involved in selling to markets overseas. Because such facilities are not
usually provided by private insurers, the Export Credit Insurance Corporation
(ECIC) has been providing this support to exporters for the past three decades.
ECIC will tailor its facilities to meet the particular needs of exporters
of services and market its facilities more vigorously.
Supporting Productivity Growth
The services sector recognises that the key to improved competitiveness and profitability
is higher productivity through innovation. To be successful, Hong Kong's service
providers must be able to offer their customers the right products at the right prices.
The Government will continue to assist the services sector, particularly small
and medium firms, to improve their productivity through organisations such
as the Hong Kong Productivity Council, the Hong Kong Article Numbering
Association, the Hong Kong Management Association and the Hong Kong Information
Technology Federation. The principal objectives will be to promote more extensive
use of information technology, human resources development and quality management.
A Services Support Fund
Innovation in new technologies must be led by the private sector. However,
government incentives may be justified where the gains from technology transfer
to the whole economy exceed the benefits which an individual firm by itself
can expect from adopting the new technology. The launch of the Industrial
Support Fund in 1994 signified the Government's commitment to providing additional
resources to support the development and application of new technologies in
manufacturing industry. The Government will seek to establish a Services
Support Fund of $50 million to provide funding support for projects which
will benefit the further development, and increase the competitiveness, of
Hong Kong's service industries.
A Small and Medium Enterprises Committee
Throughout most of Hong Kong's services sector, small and medium enterprises
(SMEs) employing fewer than 50 people make up 90% of the firms involved.
Hong Kong owes much of its success to the flexibility and agility of these
SMEs. Yet their size may make it difficult for them to take advantage of
the latest productivity enhancement techniques and management systems.
They may also experience difficulties in obtaining finance and access to
market information. An SMEs Committee, serviced by the Industry Department
and drawing its membership from chambers of commerce and various trade and
industry support organisations, will be established by August 1996 to address
these and other issues of concern to SMEs. The Committee will cover SME issues
relating to both services and manufacturing.
Upgrading Our Infrastructure
Improvements to the infrastructure are important to the development of Hong
Kong as a regional services centre. Telecommunications, the port and
airport, and domestic transportation facilities are some of the most obvious
examples of the way in which infrastructure development supports the services
sector of the economy. As the principal provider of Hong Kong's infrastructure,
the Government will continue to review the requirements of the community and the
economy to ensure that the necessary investments are made to provide Hong Kong
with the high-quality infrastructure it needs to compete successfully. We are
determined to invest in new railway projects, provide a financial services
complex and launch the Electronic Data Interchange system.
Fair Competition
Keen domestic and international competition provides the best incentive for
our service industries to innovate and improve their productivity. The
Government will maintain a level playing field and an open market in services
by removing rules and regulations in any of our service industries which may
restrict market entry or reduce competition. A review of market transparency
will be undertaken in 1996, in accordance with Hong Kong's commitment under
the Bogor Declaration.
The Environment
No effort to promote Hong Kong as a services centre would succeed if the territory
is perceived locally and internationally as a polluted and environmentally
unfriendly place. The Government will continue with its investments in
environmental infrastructure and legislative measures aimed at improving
Hong Kong's environment. We shall also lay the foundations to achieve
sustainable development to take us into the next century.
A Culture of Service and Quality
A service culture and a commitment to quality are essential if our services
sector firms are to compete successfully. Most services depend for delivery
on their front-line staff. It is essential that Hong Kong continues to
develop its service culture and its commitment to quality through improved
personnel policies and training. In conjunction with the private sector,
the Government will ensure that ample training will be provided for the front-line
staff. The Government also intends to work with private sector organisations,
such as the Retail Management Association, to provide more extensive awards
to recognise courtesy and excellence in the delivery of service, and to
promote a service culture.
Business Facilitation
The Government should not usurp business's role in making and implementing
business decisions. But the Government can play an important supporting
role by fostering an attitude change within its Policy Branches and
Departments. Civil servants should not see their role merely as regulators
but more as supporters and partners for business. The key areas in which
initiatives could be taken to achieve this goal include ensuring transparency
in the content and enforcement of existing rules and regulations, more user-friendly
immigration procedures and the inclusion of specific commitments to
facilitate business in the Government's Performance Pledges.
Better and More Service Statistics
Statistics provide both the Government and the business community with vital
information needed to make day-to-day decisions. A considerable range of
statistical information on services is currently available covering areas
such as trade and inward investment in services. However, new and more
detailed statistics on service products, sector operating characteristics,
outward investment and service productivity would also be valuable. The
Census and Statistics Department has been asked to assess the options for
improving the available statistics without imposing heavy additional reporting
burdens on business.
Meeting Today's Needs
We are committed to giving greater emphasis in the school curriculum to those
areas that are important to the practical needs of the service industries.
The Curriculum Development Council includes members from the academic and business
sectors and keeps the school curriculum under constant review to ensure it
meets the changing needs of the service-led economy. As a result of the
Council's continuing efforts, Travel and Tourism has recently been included
in the school curriculum. The Council intends to include Electronics next
year. We have commenced a review of the curriculum for pre-vocational
schools, and are about to commence a review of how we provide vocational
education and training. We expect to complete the reviews by mid-1996.
The recommendations arising from the reviews should point the way forward
for a longer term strategy which will take full account of the needs of our
service industries.
Language Proficiency
Language proficiency is probably the area of our education provision which
requires the most urgent attention. If Hong Kong is to continue to succeed
as an international financial and services centre, good standards must be
attained both in English, the international language of trade, and in
Chinese, the mother tongue of the bulk of the population. The Education
Commission has set out detailed proposals on how to enhance language
proficiency in its sixth report. Following the current public consultation,
the agreed recommendations should be implemented expeditiously. Funds have
already been earmarked for the implementation in 1996-97 of the more
important recommendations including the early establishment of the Standing
Committee on Language Education and Research (SCOLAR), the employment of an
additional 100 native English-speaking school teachers, the extension of the
Intensive English Language Programme to some 11?00 Secondary Six and
Secondary Seven students as well as the enhancement of Putonghua teaching
and learning in our schools. This will include the development of a new
Putonghua curriculum for Primary One to Secondary Five for use in 1998.
Funds are also being sought from the Language Fund to enable the extension
of the reading and writing schemes to cover Primary One to Secondary Five in
our schools, the launching of research projects by SCOLAR as well as the
establishment of a new Language Resource Centre for our teachers.
A New Technology Training Scheme for Services
The New Technology Training Scheme (NTTS), currently administered by the
Vocational Training Council, provides assistance for employers to train their
staff, either locally or overseas, in new technologies which are important
to the industrial and economic development of Hong Kong. At present, the
Scheme does not systematically cover training for employees in service
industries. The scope of NTTS will be reviewed to see how best it could be
adapted to enable employees in the services sector to be trained in the
latest technologies and management techniques.
The initiatives described above will be supported internationally by a comprehensive programme to promote Hong Kong's strengths as a global and regional services centre. The Government Information Services, supported by the network of overseas Economic and Trade Offices and business community, will lead efforts to promote Hong Kong as a business centre committed to providing first-class services. In the next 12 months, there will be five promotion campaigns in six countries.
The Government is considering whether a permanent institution should be established within the Government Secretariat to co-ordinate and monitor the progress of these services-related initiatives. The views of the private sector will play an important part in this decision.
[Addendum]
[1996-97 Budget Speech]