Session No. 5 File name : cedb(cit)- doc

For the year 2010-11, Commerce and Economic Development Bureau (Commerce, Industry and Tourism Branch) will continue to assist the trade to adjust to changes in Mainland’s policy on processing trade through industrial restructuring and upgrading, relocating their operations and opening up new markets. Please compare the specific tasks involved and the breakdown of the expenditures for the past three years (i.e. 2007-08 to 2009-10) with those for the coming year.

Through the following work, the Commerce and Economic Development Bureau gives encouragement to and assists Hong Kong enterprises in upgrading, restructuring and opening up new markets so as to adjust to changes in the Mainland’s policy on processing trade:

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  maintaining close dialogue with the trade through the Task Force to Support the Processing Trade and other channels, so as to understand their concerns and views;
  
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  maintaining close liaison with the Mainland authorities at various levels (including through the Hong Kong/Guangdong Expert Group on the Restructuring and Upgrading of the Processing Trade) to reflect the trade’s views on problems encountered in the process of developing the domestic sales market and in the course of upgrading and restructuring, and discuss proposed supportive measures for the trade. We have also been appealing to the Mainland to consult the trade and fully consider their views before promulgation of new policies and legislation, and to give the trade sufficient time for transition and adjustment;
  
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  organising symposiums and seminars through the Trade and Industry Department (TID) and Mainland Offices to enhance the trade’s understanding of new policies, legislation and the business environment;
  
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  disseminating information on trade-related policies, legislation and measures to Hong Kong enterprises through TID and Mainland Offices by means of circulars and newsletters. TID’s website includes a dedicated page on business information on Mainland China, with hyperlinks to the economic and trade websites of 170 Mainland authorities. This platform facilitates Hong Kong enterprises in getting access to trade-related information on the Mainland;
  
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  organising trade delegations to visit the Mainland with a view to enhancing the trade’s understanding of Mainland policies and market development;
  
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  providing Hong Kong enterprises with support services on technological upgrading, improving management, branding and market development, etc., and also Mainland market information through the Hong Kong Productivity Council (HKPC) and the Hong Kong Trade Development Council; and
  
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  with regard to financial support, assisting small and medium enterprises (SMEs) through the “SME Funding Schemes” in areas such as market promotion, acquisition of equipment, upgrading of operational and technical skills, restructuring and business relocation.
  

The above is our ongoing work. Our work priorities for each year may be different in light of the prevailing economic and business environment and concerns expressed by the trade.

For example, in the year of 2007-08, in response to the adjustment in the policy on processing trade and implementation of the Labour Contract Law, we conveyed to the Mainland authorities through various channels (including written communication and meetings with senior officials) the trade’s concerns. We also put forward and followed up on proposed supportive measures.

In the years of 2008-09 and 2009-10, our work priorities were to assist the trade in coping with the financial tsunami. On one hand, we maintained close dialogue with the trade to understand their situations and requests, in response to which we have launched supportive measures including enhancing flexibility in the use of “SME Loan Guarantee Scheme”, introducing a “Special Loan Guarantee Scheme” which has a total loan guarantee commitment of $100 billion and extending twice its application period, and increasing the grant ceiling and scope of the “SME Export Marketing Fund”. At the same time, we liaised closely with the Mainland authorities, which responded positively to the views of the HKSAR Government and the trade. Various concrete facilitation measures were launched by the Mainland authorities in 2008-09 and 2009-10, including raising the export tax rebate rates for a number of times, suspending the actual payment of standing book deposit for processing trade enterprises, reducing or waiving administrative fees and charges, implementing "restructuring without stopping production" and "consolidated tax return for multiple domestic sales", etc. We also discussed with the Mainland authorities arrangements to facilitate Hong Kong enterprises in tapping on the Mainland domestic market.