Legislative Council Business - 20091111

Following is a question by Hon Emily Lau and a written reply by the Secretary for Constitutional and Mainland Affairs, Mr Stephen Lam, in the Legislative Council today (November 11):

Question:

The Government signed the Letter of Intent in Taking Forward Co-operation on Modern Service Industries between Hong Kong and Shenzhen in Qianhai (Letter of Intent) with the Shenzhen Municipal Government on August 19 this year, hoping to promote and enhance Hong Kong's service industries and foster long-term economic growth of Hong Kong by participating in the development of Qianhai in Shenzhen. In this connection, will the Executive Authorities inform this Council:

(a) of the reasons for the Government not consulting the Legislative Council and the public before signing the Letter of Intent, and when it will conduct the consultation concerned;

(b) of the content of the Letter of Intent and the role played by the Hong Kong Special Administrative Region Government;

(c) whether public funds will need to be deployed and relevant legislation to be enacted for participation in the development of Qianhai in Shenzhen; and

(d) what benefits Hong Kong may gain from participation in the development of Qianhai, and what sort of competition Hong Kong's service industries will face as a result?

Reply:

Mr President,

(a) and (c) Regarding parts (a) and (c) of the question, the principle of "One Country, Two Systems" has always been the basis of co-operation between Hong Kong and other regions in the Mainland. The Administration has always acted in the overall interests of Hong Kong in promoting co-operation projects. If a project requires additional funding from the Legislative Council (Legco) or involves any legislative issues, in accordance with established procedures, the Administration will submit the proposal to the Legco for consideration. The Letter of Intent does not require any additional funding from the Legco nor involves legislative issue. It is therefore not necessary for the Administration to put the Letter of Intent to the Legco.

In convening meetings on regional co-operation with the Mainland, we have been making arrangement for the officials concerned to meet the media. Press releases would also be issued. These arrangements maintain transparency on co-operation with the Mainland. The Letter of Intent followed the same arrangement.

In promoting further co-operation between Hong Kong and Guangdong, in particular the Pearl River Delta (PRD) region, we have fully consulted and taken into account the views of the relevant stakeholders including the Legco and the industries. For instance, in recent co-operation with Guangdong and Shenzhen, we have taken full consideration of the views expressed by Legco members at the motion debates on March 4 and June 17 this year on "Actively implementing complementary policies for the 'Outline of the Plan for the Reform and Development of the Pearl River Delta'" and "Promoting co-operation between Hong Kong and Shenzhen" respectively. The Chief Secretary has also visited the nine municipalities of the PRD with representatives from the industries from April to June this year. A large scale forum on the implementation of "The Outline of the Plan for the Reform and Development of the PRD Region" (the Outline) was organised in July in Hong Kong. These activities have allowed us to collect and consider the views of different sectors before formulating further policy proposals.

(b) On part (b) of the question, Hong Kong and Shenzhen signed the Letter of Intent in August this year. The Letter of Intent aims to reflect the overall intention of both sides in promoting development of modern service industries in Qianhai, as well as the mutual wish of jointly exploring opportunities for co-operation.

According to the Letter of Intent, Hong Kong and Shenzhen agreed to jointly promote issues relating to the co-operation on modern service industries in Qianhai by designating the planning and construction of the Qianhai area as a major vehicle of Hong Kong-Shenzhen co-operation. This will be done under the framework of the Outline, "One Country, Two Systems" and Hong Kong/Guangdong co-operation. The two sides will explore opportunities for co-operation in the following areas:

(i) to study relevant policies and measures to facilitate the development of modern service industries in the region;

(ii) to improve the industrial structure and expedite the building of modern industrial system of Shenzhen, the PRD region and Guangdong Province by leveraging on Hong Kong's advantages as an international financial, trading and shipping centre, as well as through the co-operation between Hong Kong and Shenzhen in developing modern service industries in Qianhai;

(iii) to support the development of Hong Kong's service industries in the region and jointly explore markets for modern service industries under the principle of enhancing complementarities and mutual benefits, and on the existing basis of CEPA.

According to the Letter of Intent, Hong Kong and Shenzhen agreed to set up an expert group under the frameworks of Hong Kong/Guangdong co-operation and Hong Kong/Shenzhen co-operation to discuss the overall direction and details of co-operation. Both sides will conduct further negotiations to work out details of individual items in the Letter of Intent.

The most important substantive points of the Letter of Intent are set out above. They have also been included in the press release of the "Hong Kong/Guangdong Co-operation Joint Conference" held in August this year.

As regards the development of modern service industries in Qianhai, it is still at a preliminary exploratory stage. When we formulate the detailed development plan, we will submit funding applications and legislative proposals, if any, to the Legco for consideration.

(d) On part (d) of the question, Hong Kong enterprises have much room for development in the Mainland in the light of the opening up policy of the Mainland over the past 30 years, in particular the manufacturing industries. At the same time, the focus of Hong Kong's domestic economy has also shifted to service industries. In the years ahead, we need to continue to explore markets for Hong Kong service industries in the Mainland.

On March 4 this year, the Legco passed a motion urging the Administration to actively implement policies complementary to the Outline. The Outline contains a number of different proposals, including the one supporting the development of Qianhai in Shenzhen, so as to strengthen co-operation with Hong Kong relating to service industries and high-tech industries.

Our overall objective is to leverage on Hong Kong's advantages as an international financial, trading and shipping centre to develop the Mainland market for Hong Kong's service industries, so as to tap into the Greater PRD market which has a population of 50 million as an initial step, and then to gain access to the individual markets in the Pan-PRD region provinces, which has a population of more than 400 million.

Ends/Wednesday, November 11, 2009