CURRENT PERFORMANCE INDICATORS

Hong Kong's international trade has expanded dramatically during the past three decades. It is now the eighth largest trading economy in the world. This has led to a major expansion of the import and export trade sector and also those services which are provided and incurred by firms in this sector. In 1994,

• More than 500?00 people were employed in this sector, accounting for 18.0% of the workforce. The corresponding figures for 1984 were 162?35 and 6.4% respectively.

• Hong Kong's import and export trade sector handled $2,421 billion in goods. This was an increase of 14.3% over the previous year and 444% higher than the figure for 1984. This sector also comprises offshore trading services and other trade-related services. These services amounted to about $61 billion, an increase of 21.3% over the previous year.

• The import and export trade sector contributed 17.9% of Hong Kong's Gross Domestic Product or $171 billion.

THE GOVERNMENT'S COMMITMENT

The Government is committed to promoting the further development of the import and export trade sector by?

• safeguarding Hong Kong's rights and fulfilling its obligations under trade or trade-related agreements;

• promoting a free, open and stable trading system and environment; and

• securing, maintaining and improving access to our export markets.

We will continue to?

• press ahead with the further liberalisation of trade in goods and services under the multilateral, rules-based system of the World Trade Organisation;

• take an active part in the Asia-Pacific Economic Cooperation to accelerate the liberalisation of trade and investment in the Asia-Pacific region;

• promote Hong Kong's external trade and economic interests through our overseas Economic and Trade Offices;

• help Hong Kong exporters to develop and diversify external markets for their goods and services through the efforts of the Trade Development Council;

• remove, where appropriate, any domestic barriers to the free movement of goods, services, capital and people;

• improve the trade-related services provided by the Trade Department, including import and export licensing and origin certification; and

• assist Hong Kong exporters to minimise their risks by providing insurance protection through the Hong Kong Export Credit Insurance Corporation.

POLICY DIRECTIONS

We propose to :

• establish a Small and Medium Enterprises (SMEs) Committee in 1996-97 to identify issues affecting the development of SMEs in Hong Kong, including those in the import and export trade sector, and suggest measures to support and facilitate their development. This Committee will work with major industry and trade organisations to identify ways to provide more support to SMEs in the import and export trade sector and improve their economic performance;

• support an initiative of the Hong Kong Productivity Council to establish a Service Sector Branch in 1996-97 to help enhance the productivity of the services sector;

• promote the use of electronic commerce and data interchange in conjunction with interested bodies such as the Tradelink, the Hong Kong Productivity Council, the Hong Kong Article Numbering Association and the Hong Kong Information Technology Federation; and

• review the ambit of the New Technology Training Scheme to ascertain whether it could be enlarged to cover technologies, skills or other techniques applicable to service industries, including the import and export trade sector.

THE PRIVATE SECTOR'S CONTRIBUTION

The import and export trade sector, in conjunction with relevant trade organisations, is in the best position to assess its needs and support its requirements. The private sector makes its vital contribution by?

• facilitating the development of SMEs in the import and export trade sector;

• enhancing the productivity of the sector;

• upgrading its levels of technology; and

• promoting the use of electronic commerce to increase efficiency and competitiveness.

LONG TERM ISSUES

The growth of the import and export trade sector over the years has been impressive. Hong Kong's open economy, its strategic location and the entrepreneurial skills of its private sector have contributed to its remarkable success. Its growth has continued even in times of significant currency fluctuations, rapid changes to the economic and political landscapes of major trading partners, the evolving global economy and the substantial increase in operating costs. We will continue to uphold free trade, which underpins the success of our economy. We will support the World Trade Organisation, which seeks to create a free, open and stable multilateral trading system. The Government, with the support of the private sector, must be prepared to combat protectionist tendencies with vigour.

We have entered an era of technology. Importers and exporters will need to respond to innovations which widen product variety, upgrade the quality of products and improve their competitiveness on world markets.

The continuing success of the import and export trade sector hinges to a great extent on an efficient transport network to and from Hong Kong. We will continue to invest heavily in the development of the physical infrastructure, including port and new airport facilities. We will also seek to improve the traffic and transport links between Hong Kong and China, in particular the roads leading to the border. We are committed to developing and promoting the use of electronic data interchange (EDI) to maintain Hong Kong's competitiveness on international markets. The Tradelink and the Government are now installing the computer systems. The current plan is to launch a commercial EDI service in 1996, which covers the lodging of trade declarations and applications for export licences for textiles and clothing shipped under quota.

Secretary for Trade and Industry

March 1996