Members present the president the honourable andrew wong wang-fat, O. B. E., J. P
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- MR CHIM PUI-CHUNG
- MR SIN CHUNG-KAI
- FINANCIAL SECRETARY
- PRESIDENT
- MR EDWARD HO
MRS SELINA CHOW (in Cantonese): Mr President, after years of phenomenal growth, the Hong Kong economy has started to slow down recently. There is no cause for alarm in fact. Yet when we find that the Government has the least determination to revive the economy, we cannot just sit and wait for a miracle. During the last financial year, registration of private companies, compared with the year before last saw a drastic reduction of almost 40%. Meanwhile the number of companies wound up through voluntary liquidation rose from 2 600 in 1992 to 3 100 in the last financial year. The increase is almost 20% indicating that the business climate is unfavourable and the investors or operators of small business have no confidence in the economic prospect. They date not set up new business rashly. A worrying trend is that the current operating costs, compared with the past, have increased tremendously. Among other factors, high rental is a serious problem. As a representative of the wholesale and retail sector, I keep receiving messages from the sector. They are saying that they have to bear severe rental pressure and shops which have to close down because of drastic rent increase in recent years are too numerous. Last year, the rent of shops in some shopping arcades were increased by 50% upon renewal of their leases. I do support free market mechanism, yet I severely censure the landlords for their shortsightedness. Killing the goose that lays the golden eggs is a no win situation. The shops close down and the landlords have no rent to collect. Some boutique operators complained to me that they had been the pioneers of the shopping arcade concerned. Over the last two years, they worked very hard to keep their business going and bore high rent. Recently, the landlord lowered the rent in order to cut down vacancies in the shopping arcade. New tenants, nevertheless, have been given a 30% discount off the original rent. Yet the sitting tenants still have to pay the old rent and their competitiveness is severely reduced. What is even more ironical is that those shop operators, being unable to bear the high rent, turn to become illegal hawkers. They not only directly affect the business of the shopping arcade but also give the triads an opportunity to demand protection fee. If one frequents Mongkok at night, one will see that some illegal hawkers are all having a fixed stall. The rent that should be earned by the landlords of the shopping arcades eventually goes to the pocket of the triad members. The landlords in fact "go for wool and come home shorn". The operators of some shops which are apparently faring quite well will find themselves actually toiling for the landlords after the rental has been increased. The Housing Authority, which is also a big landlord, is no exception. It is only concerned with increasing the rent of commercial premises and totally ignores the fact that there is an aging population in the housing estates and a changing commercial climate. I have heard that the Housing Authority has recently raised the base rent of some shops by more than 50% and introduced a two-fold increase in the percentage levy relative to business turnover. As a result, shops in housing estates have to keep going through the operators' painstaking efforts. I have heard that a number of shop operators in housing estates are uninterested in staying in business. If the Housing Authority does not rationalize its commercial rent policy, it will eat its own bitter fruit. I suggest that the Housing Authority should, if possible, commission outside professional surveyors to undertake the assessment of market rent of commercial premises. In doing so, the internal operating cost incurred in respect of assessment work can be saved. More importantly, it will ensure fairness and the calculation of rent will not be considered as something done behind closed doors in disregard of the changing commercial environment. The rent charged, as a result, is much higher than the real market value. In fact, quite a number of tenants have complained that the Housing Authority is too slow in responding to the declining market rent. It raises the rent when the market rent is actually falling. This has caused much difficulty to the commercial tenants. I suggest that officers in the Housing Authority should enhance the transparency of the appeal procedure in such a way as to inspire greater public trust in it. Another operational difficulty faced by the wholesale and retail trade is product safety regulation. I am not advocating that there should be no regulation. However, I cannot agree that goods which have passed the quality standard and goods which have not should be confiscated indiscriminately. For instance, the Customs and Excise Department had once detained quality-passed goods for more than two months. These goods were eventually released only after much negotiation. This move constituted serious and unnecessary intervention of the activities of law-abiding businessmen. I urge for reasonable law enforcement in such a way that legislation will not become an unfavourable factor to proper business operation. As regards sewage charge which has been vehemently criticized by the catering industry, I have spoken a lot on it. The Secretary for Planning, Environment and Lands said in a briefing session that sewage charge only accounts for 0.46% to 1.19% of the operating costs. I am not going to argue how much the percentage should be. I only want to cite a case. A chain of fast-food shops hired a laboratory to conduct a survey for its nine branches and found that the pollution level was 60% less than the official estimation. In other words, the payable sewage charge for these nine branches alone in a year is $620,000 more than their due. Of course, this fast-food chain has the right to appeal. But they have to pay the sewage charge first. Even though they win, they still have to pay in advance a large sum of money. If their appeal is dismissed, however, they will be required to pay $8 million more than the original estimated annual sum. Does the Secretary still consider that this is a trivial amount? Sewage charge has really dealt a severe blow to the catering industry. To be a benevolent government, the Administration should study the concerned charge objectively again and rectify its mistake. In order to stimulate the economy, I suggest that the Hong Kong Government should set up a business development fund to enable those who wish to create their own business to obtain low interest loans from the fund if they can meet the necessary criteria. Their future repayment should include interest and investment return to the fund which should be ploughed back for providing further loans to other business founders as a means to foster small-scale and creative operations. This will stimulate the economy and create more jobs. In England, Australia, Singapore, and South Korea, similar schemes have been implemented successfully. It will not only encourage prospective businessmen to create their business but also create more employment opportunities. It is therefore worthwhile to learn from their experience and adopt the scheme. In regard to rates, I hope the Government can take account of the declining market rent when it reassesses the rateable value of premises. The Rating and Valuation Department should not, as some have criticized, be quick to react to a rising market but slow to react when rental comes down. Mr President, with these remarks, I support the motion. MR CHIM PUI-CHUNG (in Cantonese): Mr President, it is absolutely normal for the Hong Kong economy to have ups and downs. According to history, from the 1950s up to the present, there were six years in which the economy suffered declined, namely 1956, 1962, 1967, 1974, 1982 and 1989. The most serious case is probably the one which happened after the riots in 1967 when there were a lot of changes which put the economy as a whole to a difficult test. Nevertheless, I would reiterate that Hong Kong is actually still a piece of blessed land. Although some newspapers may not agree, Hong Kong in fact has some special conditions. Today I will review the economy and express my opinions mainly with regard to two aspects, namely, the economic aspect and the financial aspect. First, as far as the tourism industry is concerned, it has been estimated that there will be 9.3 to 10 million tourists coming to Hong Kong who will spend about $65 billion here. Under the circumstances, we have to understand that many tourists from Taiwan now go to China directly from Macao. We have to evaluate how this situation will affect the future of Hong Kong and I hope the Government will conduct a review on the matter. The tourism industry ranks second among all the trades in terms of the value of consumer spending and it is also the second largest industry. We have to understanding that the predominant industry, the container industry, is still the best in the world and certainly it will face challenges from places like Kaohsiung and Singapore. The Government should examine how it can protect the industry and to reflect on the reasons why our aviation industry and our hotel industry which once ranked first in the world (although I have much reservations about the saying that our hotel industry ranked first in the world, it was a fact) have now lagged behind. The Government should examine the matter. Besides helping the tourism industry, we have to appreciate that the Ocean Park and the Buddha statue in Lantau are pioneering undertakings which are good items in terms of the attraction they offer to tourists. We have to bear in mind that we can create the world's biggest discount store and an eating and drinking paradise in Hong Kong. Besides, the Chinese people in other parts of the world extremely enjoy the television and the film industry of Hong Kong. Therefore, a department should be set up to study these questions. I am very pleased to hear that the Financial Secretary will hold a discussion on the question of transforming Hong Kong into a consumption centre which, I think, is necessary. As I said before, we have to understand clearly what our special attractions are. Therefore, I still think that it is right for the Government to adopt the non-intervention policy, but at the same time, it has to give positive assistance and to study what the needs are. Why is that so? That is because the resources involved are not within the affordability of the ordinary businessmen or organizations. In 601 days, the Hong Kong Government will become the Government of the Special Administrative Region. In fact, since his arrival, Governor PATTEN has raised the political status of Hong Kong. However, very unfortunately, many European countries, especially, France and Germany, have little knowledge of Hong Kong. In particular, they have grave misgivings about the prospects of investment here. Although the Securities and Futures Commission has sent a delegation to promote Hong Kong, unfortunately, as the press has observed, the result is like that of the promotion work done by the Independent Commission Against Corruption in regard to its policy of not arresting people. In fact, such promotion work can be more effectively done by traders and businessmen. The Government should take positive steps to promote our economic activities and financial services to European countries, especially to countries like France and Germany. Mr President, we understand that the most important undertaking which will affect the future of Hong Kong is the Beijing-Kowloon Railway. The Beijing-Kowloon Railway is a big investment undertaken by the Chinese authorities. Its commissioning was initially planned as a celebration of Hong Kong's sovereignty reversion to China. It will be a big celebration. Other than the Three Gorges hydro-power project, it is a very important investment item. I firmly believe that there were plans to bring forward to this year the railway's commissioning date but, probably because of technical problems, this railway will have to wait until 1997 before it can be commissioned. This railway covers almost six provinces and 17 cities which have a population of hundreds of millions of people. It is indeed a very, very huge potential market. The Government should immediately set up a commission to assess the needs and resources of these 17 cities and the provinces concerned because a market with hundreds of millions of people is a very big one and it will be very important to Hong Kong in the future in terms of entrepot trade, fuel supply and so on. Mr President, I would also like to speak on the financial aspect. I have to reiterate that, after 1997, there will be absolutely no future in politics, whether there will be 19 or 18 representatives from geographical constituencies. What will be left will be the economic and financial aspects. The Government will know better as far as the economic aspect is concerned. As regards the financial aspect, Hong Kong can certainly increase its representativeness or input in the future, because the Chinese Government and the country as a whole lacks this kind of resources and talents and it really needs input from Hong Kong in terms of support and the supply of talent. Therefore, I very much hope that a training unit can be set up under the command of the Secretary for Financial Services to conduct a useful assessment of the prospects of the financial services sector of Hong Kong and China. That would be a feasible measure which would not be too costly. If that can be done properly, even if improvements cannot be made before 1997, the financial services sector of Hong Kong will certainly be able to better develop after 1997. I said the other day that about 5% to 6% of the labour force is now working in this sector and, if improvements can be made, it will become an important sector in Hong Kong in the future. Therefore, Mr President, as a representative, I will certainly express my views on the financial services. With these remarks, I support the motion. MR SIN CHUNG-KAI (in Cantonese): Mr President, the unemployment rate and underemployment rate of Hong Kong have been on the rise, and have hit an all-time high. Those unemployed and underemployed number about 200 000. This is partly attributable to the adjustment of the market. But what worries people more is that it has reflected the seriousness of the problems arising from economic transformation, that is to say, as the manufacturing industries keep on shrinking, the service industries are having difficulty absorbing the workers who have lost their jobs. The percentage of the manufacturing industries as a component of the GDP of Hong Kong has been falling year after year. In 1993, they accounted for a mere 11.4%. If the Government lets this state of affairs continue, the consequence will probably be this: Not only will the manufacturing industries be unable to create more job opportunities, but they will also be laying off more and more workers, and the unemployment rate of Hong Kong will be staying at a high level. This Council has been repeatedly urging the Government to formulate industrial policies for a balance to be struck between the development of the service industries and manufacturing industries within the Hong Kong economy, in order that our industries would not become deficient. However, the Government remains unmoved. In the policy address debate of last year, the Secretary for Trade and Industry stated, "We must continue to develop policies and programmes which maintain Hong Kong's leading position as a regional manufacturing centre." This is the long-term major goal we are hoping to achieve. However, the Government must do so by injecting the necessary resources and working out the specific direction of development for the various industries. It should not just shout slogans and delay matters under the pretext of conducting a study or a consultation exercise. In this connection, the Science Park is the best example. In Taiwan, the Hsinchu Science Park has already become the most vital motive force for the economic growth of Taiwan, and Taiwan has already decided to build a second science park. In contrast to this, Hong Kong in the early 1990s started looking into the feasibility of setting up a science park. The ridiculous thing about it is that the studies are stilling going on today. Consultation on the Hong Kong Science Park Study 2 with the various sectors has at last got under way and the study has concluded that building the Science Park will certainly bring enormous benefits to Hong Kong. Having a Science Park now is like having spring that has come late. But "being late is better than never." Therefore, we urge the Government to implement the project as soon as possible and drawn up a timetable for the construction of the Science Park. At present, there are many questionable areas with regard to the deployment of resources and employment of ways and means to support the industries of Hong Kong. The funds allotted to scientific research investments are of course scanty; besides, they are not regular funds. At present, such kind of finds for scientific research investments constitute only 0.085% of the GDP of Hong Kong, which is much less than the 1.12% of Singapore, the 1.82% of Taiwan, and it is even less than those of developing countries such as Indonesia and Malaysia. How Hong Kong can maintain her leading position as a regional manufacturing centre defies belief. On the other hand, an academic conducted a survey with regard to Hong Kong manufacturers' degree of satisfaction with the local supporting bodies, and the result showed that only the Trade Development Council's support was regarded as sufficient. As to other bodies such as the Hong Kong Productivity Council, the Industry Department, the Vocational Training Council and the Labour Department, the support provided by them was considered by the manufacturers polled as insufficient. The survey also slowed that small to medium-sized manufacturers found it difficult to raise capital. Can the Government make a commitment to effect improvement? It is not an easy thing for manufacturers of new technology products to obtain loans from the banks. Apart from providing some subsidies that are repayable, can the Government provide market and feasibility assessments so that it will be easier for manufacturers to obtain suitable ...... FINANCIAL SECRETARY (in Cantonese): Mr President, I think we are short of a quorum now. PRESIDENT: There was another mistake that we made when we amended the Standing Orders. Under the new Standing Order 4C(3), we do not provide for interruptions to be raised by the three former ex officio Members in the Council, that is something we have to rectify some other time. But as for now, I shall count the Council. The President asked the Clerk to ring the division bell to summon Members. PRESIDENT: Mr SIN Chung-kai, please continue. We now have a quorum. MR SIN CHUNG-KAI (in Cantonese): The above-mentioned situations have clearly shown that the Government has not tried its best to help the industrial development of Hong Kong. Moreover, as most industrial undertakings in Hong Kong are small to medium-sized, it would be difficult for them to upgrade the technology on their own. Therefore, the Government has to play an active role in allocating more resources to help enterprises move towards high value added activities and maintain quality manpower so as to enhance Hong Kong's competitiveness. In this connection, the Democratic Party has proposed to set up a "subsidizing fund for small and medium-sized enterprises". The fund will provide help to small to medium-sized enterprises in the form of loans or subsidies to enable them buy machinery, open up overseas markets, pay the fees for hiring consultants and apply for registration of intellectual property. The fund will also ensure increased funding for science and technology research. The Democratic Party has also proposed to set up a "skills training fund" to encourage the provision of on-the-job training to employees by enterprises. Finally, I would like to respond to the Financial Secretary's grounds for refusing to set up the Economic Development Board in his reply last week. Firstly, the functions of the Economic Advisory Committee (EAC) are to study the economic development of Hong Kong and to make recommendation on maintaining the economic growth of Hong Kong to the Financial Secretary. However, one can say that this Committee is carrying out "clandestine operations", and we have no knowledge, whatsoever, of the subjects being studied or discussed by this Committee. And there is no way we can tell whether its performance has met our requirements. Therefore, I hope the Government can make public the subjects that the EAC has studied or discussed and make a genuine effort to review this Committee's functions before deciding whether or not there is the need to set up the Economic Development Board. With these remarks, I support the Honourable Allen LEE's motion. MR EDWARD HO (in Cantonese): Mr President, there are basically two different views held by the people of Hong Kong concerning the state of our economy. The first, which is held by the Financial Secretary and the Government, is that the present economic outlook is optimistic and the factors affecting the economy are running their course in a natural cycle and so the Government has no need to intervene in our economic development in any way. The second view is held by members of the industrial and commercial sector and the labour sector. Everyone is aware of the rise in unemployment and the fall in the growth of the GDP and we do not want to dwell on these any longer. Is the real cause for the present state of our economy just as what the Financial Secretary says ─ a natural phenomenon of the economic cycle ─ and that we have no need to take any action to help? I hope what he says is right. Then we do not need to worry. But, in fact, has our economy hit rock bottom yet? When will it bottom out? Should we wait until the economy hits bottom before we seek a solution to it? Anyway, I feel that the present economic situation of Hong Kong is a matter of concern, especially when the people are cherishing a negative feeling about it. In my opinion, the following are the main reasons for the current economic slowdown. First, persistently high inflation in the absence of a solution has kept the operational costs of all industries in Hong Kong on a constantly rising trend. Consequently, Hong Kong is gradually losing its superior competitiveness in the international community. In the past 20 years, many industries have been relocated from Hong Kong to mainland China and other Southeast Asian countries and this has led to Hong Kong's economic transformation. Consequently, the demand for labour by the manufacturing industry is gradually tapering off and hitting bottom. It is the distant cause for the dwindling number of employed workers in Hong Kong in recent years. And the immediate cause is the slowdown of the world's economy and the macro-economic regulation of China which has in turn led to the decline of our economy. Secondly, because of the economic slowdown, ordinary people's consumption power has generally weakened. In addition, the uncertainties about our economic prospects have eroded the people's desire to spend money which directly affects all trades in Hong Kong. Thirdly, Hong Kong people are worried about the political issues arising from the transition to 1997 and therefore they have all kinds of reservations about long-term investment or whether to remain in Hong Kong to help build Hong Kong. All these sentiments indirectly have a negative impact on Hong Kong's economy. Under such circumstances, I feel that the Government has the need and the ability to take certain actions to improve the economy of Hong Kong. The Honourable Allen LEE has mentioned a series of measures which can stimulate the economy and improve the people's livelihood which are not "interventions" of the market at all. Other than short-term measures, the Government must make longer-term plans to create a better investment environment for Hong Kong. I might as well mention briefly the following: 1. As regards the setting of long-term goals for education and human resources, we know that the Government has worked hard to increase the tertiary institute places in recent years but I feel that it has not done enough in training workers with general skills. 2. Concerning industry, we should enhance the measures designed to assist industry. Take the industrial estates in Hong Kong for an example. The three industrial estates have provided local factory owners with land at reasonable prices to build factories and also equipped them with the necessary technologies which in turn have greatly enhanced their competitiveness. However, for the time being, small factories are not eligible to get a place in these industrial estates yet. Hence, the Government must consider the flexibility of as well as contributions these small factories have made in the industrial history of Hong Kong and give them more assistance such as setting up an industrial park. 3. Although the mainstay of Hong Kong's economy is the service industry, the Government has never provided it with any assistance. I hope that the Administration, especially the Trade Development Council, can promote our service industry abroad. 4. As regards the professional services, they are, of course, part of the service industry. I hope that the Government will positively respect the professional services and raise their professionalism. When hiring consultants for its projects, the Government always awards the tender to whoever bids the lowest price. I feel that this amounts to neglect of factors such as quality and goodwill. This in turn leads to vicious competition and lowering of the quality of the projects. 5. Although the rents of commercial units have fallen, according to a financial magazine, in terms of annual rental charged for grade A offices, Hong Kong still ranks third among the cities of the world, outranking even New York and London. I hope that the Government will set aside more land for commercial use, especially along railway lines or in the Northwest New Territories, so that cheaper land will be made available. Mr President, the slowdown of Hong Kong's economy which has led to a rise in unemployment is a matter of concern of everyone. However, if the Government, members of the industrial and commercial sector and the labour sector will work together to strive for a consensus about the economic prospects of Hong Kong and formulate suitable long-term strategies, I will be optimistic about our economic prospects. Download 0.94 Mb. Share with your friends:
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