Replies to initial written questions raised by Finance Committee Members in examining the Estimates of Expenditure 2012-13 Director of Bureau : Secretary for Commerce and Economic Development Session No. 12 File name : cedb(cit)- doc
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- Examination of Estimates of Expenditure 2012-13
Question : The Administration indicated in its last year’s written reply to question on the Estimates of Expenditure 2011-12 that it did not have the information on the percentage contribution of small and medium enterprises (SMEs) to the Gross Domestic Product (GDP) of Hong Kong. Would the Administration advise this Committee of the current percentage share of SMEs in the GDP? What is the employment size of SMEs and its proportion in the total labour force? How are these figures compared to those 5 years, 10 years and 15 years ago? On the assumption that the percentage contribution of SMEs to the GDP and the percentage of the employment size of SMEs in the total labour force are both declining, is the Administration aware of the reasons? Is there any plan to support the sustainable development of SMEs? Asked by : Hon. CHAN Mo-po, Paul Reply : The Administration does not have information on the contribution to the Gross Domestic Product of Hong Kong by small and medium enterprises (SMEs) in all sectors, suffice for it to say that SMEs have always been the backbone of Hong Kong’s economy. According to the latest statistics provided by the Census and Statistics Department, there were about 300 000 SMEs in Hong Kong in September 2011, accounting for over 98% of all local enterprises, and employing more than 1.24 million persons, constituting about 48% of total employment in the private sector. In 2000 and 2005, the number of persons employed by SMEs was around 1.2 million, constituting respectively 52% and 51% of total employment in the private sector. As regards the data on SMEs in 1995, they were not compiled in accordance with the current definition of business units and industry classification. They are therefore not directly comparable with those after 2000. The Government attaches great importance to the development of SMEs. The estimated expenditure in 2012-13 for Programme (2) Commerce and Industry is about $150 million. It is mainly for the manpower and operating expenditure for handling this programme area. It does not include the funding allocated to the Trade and Industry Department (TID) for its specific measures to assist SMEs. In 2012-13, TID will continue to implement the SME Funding Schemes, including the SME Loan Guarantee Scheme, SME Export Marketing Fund and SME Development Fund, and the estimated expenditure is around $320 million. To enhance support for the sustainable development of SMEs, we have obtained the approval of the Finance Committee of the Legislative Council in July 2011 to increase the total guarantee commitment under the SME Loan Guarantee Scheme substantially from $20 billion to $30 billion and inject an additional $1 billion into the SME Development Fund and SME Export Marketing Fund. In addition, the Support and Consultation Centre for SMEs of TID will continue to provide free, reliable and practical information and consultation services for SMEs. Given the fluctuations in the external economic environment, SMEs may have to face financing difficulties as a result of a credit crunch. To help SMEs, the Financial Secretary proposed in the 2012-13 Budget to introduce special time-limited concessionary measures under the existing SME Financing Guarantee Scheme of the Hong Kong Mortgage Corporation Limited. Under the measures, the loan guarantee ratio will be increased from the existing ceiling of 70% to 80%, and the guarantee fee will be reduced substantially. The application period will last for nine months. The Government will provide a total guarantee commitment of $100 billion for the special concessionary measures. To support Hong Kong enterprises, in particular SMEs, to capture the opportunities arising from the National 12th Five-Year Plan, the Chief Executive announced in the 2011-12 Policy Address a proposal to set up a dedicated fund of $1 billion to encourage them to move up the value chain and explore and develop the Mainland market through developing brands, restructuring and upgrading their operations and promoting domestic sales in the Mainland. We have consulted the trade earlier and are finalising the operation details of the fund. We plan to seek funding approval from the Finance Committee of the Legislative Council in April with a view to launching the fund by mid 2012. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||