LCQ6: Support for Hong Kong manufacturing enterprises on the Mainland

Boosting success: how hong kong manufacturers thrive on the mainland

Following is a question by Dr the Hon Chow Man-kong and a written reply by the Secretary for Commerce and Economic Development, Mr Algernon Yau, in the Legislative Council today (May 8):

Question:

The Key Statistics on Business Performance and Operating Characteristics of the Industrial Sector (the Key Statistics) released regularly by the Census and Statistics Department (C&SD) include, in addition to statistics of local economic activities in manufacturing, statistics of local import and export firms engaged in sub-contract processing arrangement on the Mainland and providing manufacturing-related technical support services. It is learnt that the latter are regarded as an indirect reflection of the operating situations of Hong Kong manufacturing enterprises having set up their headquarters in Hong Kong and their factories on the Mainland. Furthermore, according to the information of the C&SD, there has been a continuous drop in the number of import and export firms with manufacturing-related activities, the number of persons engaged and the sales revenue in recent years, and the decrease in those numbers has accelerated since 2020 (i.e. since the outbreak of the epidemic). In this connection, will the Government inform this Council:

(1) given that the C&SD did not release the full statistical report of the Key Statistics at the end of last year as it had done in previous years, and has classified the said report as a "discontinued product", of the reasons for that;

(2) as it is learnt that Hong Kong businesses having their headquarters in Hong Kong and producing on the Mainland have created an enormous demand for support services in finance, transport and logistics and other production service industries in Hong Kong, whether it has assessed the impact of the continuous decline in the number of relevant enterprises on the development of local production service industries (e.g. re-export trade via Hong Kong, financing and other support services for industries and commerce); if so, of the details; if not, the reasons for that;

(3) given that the Financial Secretary has proposed in this year's Budget the development of Hong Kong into a multinational supply chain management centre to attract Mainland manufacturing enterprises seeking to "go global" to set up offices in Hong Kong to serve as headquarters for managing their offshore trading, and there are views that most Hong Kong manufacturing enterprises, which are a key stakeholder in bolstering Hong Kong's status as a multinational supply chain management centre, have all along chosen Hong Kong as their supply chain management centre, whether the government departments concerned have, in view of the aforesaid statistical changes, gained an understanding from the relevant sectors (including the major chambers of commerce) their latest development and how they upgrade and transform themselves; if so, of the details; if not, the reasons for that;

(4) whether the New Industrialisation Development Office established in February this year will join hands with government departments such as the Trade and Industry Department, the C&SD and the Special Administrative Region Government's economic and trade offices on the Mainland to conduct a more thorough survey on the development of Hong Kong manufacturing enterprises on the Mainland (or trading firms defined by the C&SD as being engaged in manufacturing-related activities) and provide targeted support; if so, of the details; if not, the reasons for that; and

(5) given that the Financial Secretary announced in the 2022-2023 Budget that a total funding of $135 million would be allocated to the Hong Kong Trade Development Council in the three years that followed for the introduction of the Support Scheme for Pursuing Development in the Mainland, but there are views that the effectiveness of such measure has room for improvement, whether the Government will consider, by drawing reference from the initiative proposed in last year's Policy Address of earmarking $30 ‍million for clansmen associations, providing regular or project-‍based subsidies for chambers of commerce and groups of Hong Kong people on the Mainland, so as to assist Hong Kong manufacturing businesses, in particular, in developing the Mainland domestic sales market; if so, of the details; if not, the reasons for that?

Reply:

President,

In consultation with the Financial Services and the Treasury Bureau, the Innovation, Technology and Industry Bureau (ITIB) and the Constitutional and Mainland Affairs Bureau, the consolidated reply to the different parts of the question is as follows:

(1) Statistical reports regularly published by the Census and Statistics Department (C&SD) in the past were in traditional desktop publishing format (PDF format). In order to enhance users' reading experience, starting from April 2023, these statistical reports are published by the C&SD in the new "web report" format, which provides more interactive features and is more convenient for users to read directly using computers or mobile devices. The detailed results of the 2022 Annual Survey of Economic Activities in respect of the industrial sector were already published in "web report" format on December 29, 2023, in the report "Key Statistics on Business Performance and Operating Characteristics of the Industrial Sector in 2022" (www.censtatd.gov.hk/en/wbr.html?ecode=B10800122022AN22&scode=310). Key statistics relating to manufacturing firms as well as import and export firms engaged in sub-contract processing arrangement and providing manufacturing-related technical support services are presented in Table 610-72013 of the report under Section 7.

(2) and (4) Government bureaux and departments maintain liaison with various trade and industrial organisations and, through different consultation channels, understand the development situations and needs of the relevant sectors, with a view to formulating appropriate policies and support measures. Apart from liaising and exchanging views with various major chambers of commerce in Hong Kong from time to time, the Commerce and Economic Development Bureau (CEDB) has also established the Trade and Industry Advisory Board and the Small and Medium Enterprises Committee comprising, among other members, representatives from a number of business and professional services sectors and small and medium enterprises (SMEs), for tapping the trades' views. Other Government bureaux and departments also keep abreast of the operation and actual needs of the relevant sectors through different channels, including the advisory bodies under their purviews. The C&SD also regularly conducts surveys of economic activities to collect statistical data on the business performance and operation of Hong Kong enterprises (including those with business operations on the Mainland) of various sectors (including the manufacturing industry). The ITIB will continue to maintain close liaison with the C&SD and duly consider if there is any need to conduct a more comprehensive study.

(3) and (5) In line with the trend of Mainland manufacturing enterprises extending their production supply chains abroad, the Financial Secretary has proposed in the 2024-25 Budget to develop Hong Kong into a multinational supply chain management centre. In that regard, as a premier financial and commercial centre in the region, Hong Kong has the capacity to offer full-fledged and comprehensive professional support services (e.g. consulting services, trade financing and corporate training) to meet the overseas business needs of those Mainland enterprises wishing to "go abroad".

The CEDB is co-ordinating and working together with "Team Hong Kong" organisations to study the relevant details, including the provision of one-stop services for enterprises. Invest Hong Kong will also support the work and step up efforts in attracting Mainland manufacturing enterprises to set up offices in Hong Kong to serve as headquarters for managing their offshore trading, and continue to organise and sponsor a series of investment promotion activities to provide them with the latest information on Hong Kong's business environment and proactively promote Hong Kong's distinctive advantages of enjoying strong support of the Motherland and our close connections to the world under "one country, two systems".

As regards understanding the latest development situation of the relevant sectors for promoting upgrading and transformation and providing targeted support, the measures being implemented include:

To understand the needs of Hong Kong enterprises on the Mainland, at the early implementation stage of the Support Scheme for Pursuing Development in the Mainland, the HKTDC conducted studies through surveys and seminars, and received more than 1 700 replies from these enterprises. The HKTDC, having regard to the findings and in partnership with relevant Mainland organisations, launched a series of activities and services that could cater for enterprises' needs. From the commencement of the Support Scheme for Pursuing Development in the Mainland in April 2022 to end March 2024, the HKTDC had organised more than 290 events in around 50 Mainland cities with the participation of more than 22 000 representatives of Hong Kong enterprises and professionals. The events include introduction and briefing of policies, online and offline seminars, business forums, visits to work sites and enterprises and thematic salons, covering different sectors such as finance, innovation and technology, professional services, biomedicine, catering, environmental protection and cultural and creative industries. In organising these activities, the HKTDC had collaborated with more than 270 relevant organisations including Mainland-based chambers of Hong Kong businesses, economic and trade associations, professionals' groups, young entrepreneur associations, industry associations as well as relevant Mainland governmental and economic and trade bodies.

The Support Scheme for Pursuing Development in the Mainland is well-received by Hong Kong enterprises and relevant organisations on the Mainland, and has helped deepen our trades' understanding of the Mainland's policies and market developments, as well as broaden their Mainland network so as to extend their business from major cities to neighbouring provinces or cities. The Government does not plan to change the current operation and mode of funding of the Support Scheme for Pursuing Development in the Mainland.

Government bureaux and departments will continue to closely monitor the latest developments of different sectors, and review the effectiveness of their work in due course for enhancing their policies and support measures.

Source: AI-generated images

Epd addresses concerns raised on eia report for san tin/lok ma chau development node

​The Environmental Protection Department (EPD) approved the Environmental Impact Assessment (EIA) report for San Tin/Lok Ma Chau Development Node (ST/LMC DN) with conditions. Regarding the questions raised by individual groups, the EPD responded today (May 19).

A spokesperson for the EPD said that the EIA process is scientific and professional. The Environmental Impact Assessment Ordinance (EIAO) and its Technical Memorandum (TM) have laid down scientific and objective standards and requirements, with designated professional authorities to help comprehensively review all EIA reports. The EIA process is also open and transparent. Starting from the submission of the project profile by the project proponent, all steps are made public on the EIAO website, and there is a two-stage consultation during the public inspection period to allow the public and the Advisory Council on the Environment (ACE) to fully express their comments. The Director of Environmental Protection (DEP) will approve the EIA report after fully considering all the above information and comments and confirming that the EIA report has met all statutory standards and requirements.

　

Regarding the EIA report of the ST/LMC DN, the DEP explained in detail the basis for the approval at a press conference on May 17. For the comments raised by individual groups, the EPD provided consolidated responses on seven aspects:

(1) Validity of EIA Study Brief

The TM lays down clear guidelines on the requirements of the EIA Study Brief (SB): "The EIA SB aims to set out the purposes and objectives of the EIA study, the scope of environmental issues which shall be addressed, the requirements that the EIA study shall need to fulfil, and the necessary procedural and reporting requirements." Annex 3 of the TM also lists out all factors need to be considered. The EPD confirmed that, with regards to the provisions in the TM, the SB has covered all environmental issues that need to be assessed and met all relevant requirements.

(2) Ecological baseline survey and ecological impact

The key objectives of ecological surveys are to fill in information gaps in the existing available ecological information, and to confirm and evaluate the ecological value of habitats and species. There is a large amount and continuous ecological information within the study area, which includes the nature conservation management agreements undertaken by the Hong Kong Bird Watching Society funded by the Environment and Conservation Fund since 2012 as well as a number of EIA studies and environmental monitoring and audit reports. Relevant information has been appropriately taken into consideration in the EIA study.

(3) Avoid major environmental impacts as a priority

The EIA report has followed the principle in the order of "avoidance", "minimisation" and "compensation" in accordance with the requirements of the TM, such as avoiding the Ramsar Site, preservation of the core area of the Mai Po Lung Village Egretry and the Mai Po Village Egretry, as well as the mature woodland habitat at Pang Loon Tei, etc.

(4) Impacts on flight of breeding egrets and other wetland avifauna

A 12-month ecological baseline survey has been conducted under the EIA study in accordance with the requirements of the TM and the relevant guidance notes, which included surveys on flight paths above egretries and night roosts. The ecological impact assessment has also considered the indirect impacts imposed on the egrets and herons due to loss of foraging grounds or disturbance.

The EIA report also recommended designation of non-building area and stringent building height restriction for preservation of a 300-metre-wide (comparable with the width of the Tsing Yi North Bridge) east-west birds' flight corridor; preservation of a 70m-wide bird flight path of the Mai Po Lung Village Egretry. The Tuen Mun River currently passing through the Tuen Mun Park (one of the top ten roosting sites in Hong Kong), which serves as a flight path frequently used by egrets, has a width of only 75m, and therefore it is sufficient to serve as a flight path for egrets.

(5) Impacts on Euraisan otters and design details of wildlife corridors

Based on literature records (otter scats instead of otters were found in the area), the EIA report has assumed that otters are present and conducted corresponding assessment. After listening to the views of green groups and the ACE and making reference to Taiwan's experience in protecting Eurasian otters, enhancement measures that are conducive to otters' activities were proposed, including establishing 10m-wide above ground wildlife corridors with water environment; underground wildlife corridors with cross-sectional area no less than six square meters with natural lighting; widening of the gaps in the grille of the water channel connecting the Shenzhen River; and adding otter-specific ladders or passages at the dam of the main drainage channel and the flap valve.

(6) Effectiveness of wetland compensation

The EIA report has made reference to the actual experience of the Sheung Shui to Lok Ma Chau Spur Line construction works, and proposed enhancement of ecological function and capacity of the fish pond wetlands through active management, and proved the effectiveness of wetland compensation with facts. The EIA report recommended adopting a variety of measures, including consolidating smaller and scattered fish ponds into larger water bodies, setting up artificial habitat islands, reprofiling of pond banks, pond drain-down, and when necessary, trash fish-stocking, to create and enhance environmental quality and capacity. The Hong Kong Bird Watching Society's website also pointed out that by adopting pond drain-down only can already increase the bird abundance by as much as 19 times. The current EIA report has only conservatively assumed a 45 per cent increase, which is sufficient to compensate for the ecological impact caused by the development of the San Tin Technopole.

(7) Mitigation and compensation and Habitation Creation and Management Plan

The EIA report has devised mitigation measures for potential ecological impacts during the construction period, including installing noise barriers at the boundaries of the construction area and carrying out construction in phases outside the period of arrival of migratory birds, supplemented by corresponding environmental monitoring requirements to reduce ecological impacts during construction.

The Civil Engineering and Development Department (CEDD) will also implement a series of wetland enhancement measures at Mai Po, including desilting of tidal channels connecting the gei wai of the Mai Po Nature Reserve and the Inner Deep Bay, so as to improve water exchange in the gei wai thereby increasing the number of fish and shrimps for migratory birds to forage. Part of the exotic mangrove invading the mudflat of the Inner Deep Bay will also be cleared to increase the feeding and habitat space for migratory birds. In addition, the CEDD will implement interim wetland enhancement measures, including restoration of abandoned ponds in the Inner Deep Bay area and active management of the restored ponds including trash fish stocking. Furthermore, no pond filling works of the project will be commenced prior to commencement of construction of the ecologically enhanced fish ponds.

The CEDD has submitted the Draft Habitat Creation and Management Plan upon request of the ACE, and will set up an Environmental Committee comprising representatives from relevant government departments, green groups and academics to advise on the preparation of various implementation plans.

Conclusion

The EIA process is scientific, professional and comprehensive. The EPD has fully considered comments received during the public inspection of the EIA report and consulted relevant authorities in accordance with the TM. The ACE also unanimously approved the EIA report and its recommendations. The EPD hopes to optimise the project through the EIA process so that the ST/LMC DN can improve its ecological environment and become a sustainable, livable place where urban and rural areas and nature integrate.

Source: AI-generated images