LEGISLATIVE COUNCIL ― 29 March 2018 8117

OFFICIAL RECORD OF PROCEEDINGS

Thursday, 29 March 2018

The Council continued to meet at Nine o'clock

MEMBERS PRESENT:

THE PRESIDENT THE HONOURABLE ANDREW LEUNG KWAN-YUEN, G.B.S., J.P.

THE HONOURABLE LEUNG YIU-CHUNG

THE HONOURABLE TOMMY CHEUNG YU-YAN, G.B.S., J.P.

PROF THE HONOURABLE JOSEPH LEE KOK-LONG, S.B.S., J.P.

THE HONOURABLE WONG TING-KWONG, G.B.S., J.P.

THE HONOURABLE STARRY LEE WAI-KING, S.B.S., J.P.

THE HONOURABLE CHAN HAK-KAN, B.B.S., J.P.

THE HONOURABLE CHAN KIN-POR, G.B.S., J.P.

DR THE HONOURABLE PRISCILLA LEUNG MEI-FUN, S.B.S., J.P.

THE HONOURABLE WONG KWOK-KIN, S.B.S., J.P.

THE HONOURABLE PAUL TSE WAI-CHUN, J.P.

THE HONOURABLE CLAUDIA MO

THE HONOURABLE MICHAEL TIEN PUK-SUN, B.B.S., J.P.

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THE HONOURABLE WU CHI-WAI, M.H.

THE HONOURABLE YIU SI-WING, B.B.S.

THE HONOURABLE MA FUNG-KWOK, S.B.S., J.P.

THE HONOURABLE CHARLES PETER MOK, J.P.

THE HONOURABLE CHAN CHI-CHUEN

THE HONOURABLE CHAN HAN-PAN, J.P.

THE HONOURABLE LEUNG CHE-CHEUNG, S.B.S., M.H., J.P.

THE HONOURABLE KENNETH LEUNG

THE HONOURABLE ALICE MAK MEI-KUEN, B.B.S., J.P.

DR THE HONOURABLE KWOK KA-KI

THE HONOURABLE KWOK WAI-KEUNG, J.P.

THE HONOURABLE DENNIS KWOK WING-HANG

DR THE HONOURABLE HELENA WONG PIK-WAN

THE HONOURABLE IP KIN-YUEN

DR THE HONOURABLE ELIZABETH QUAT, B.B.S., J.P.

THE HONOURABLE MARTIN LIAO CHEUNG-KONG, S.B.S., J.P.

THE HONOURABLE POON SIU-PING, B.B.S., M.H.

IR DR THE HONOURABLE LO WAI-KWOK, S.B.S., M.H., J.P.

THE HONOURABLE CHUNG KWOK-PAN

LEGISLATIVE COUNCIL ― 29 March 2018 8119

THE HONOURABLE ALVIN YEUNG

THE HONOURABLE ANDREW WAN SIU-KIN

THE HONOURABLE JIMMY NG WING-KA, J.P.

DR THE HONOURABLE JUNIUS HO KWAN-YIU, J.P.

THE HONOURABLE HO KAI-MING

THE HONOURABLE LAM CHEUK-TING

THE HONOURABLE HOLDEN CHOW HO-DING

THE HONOURABLE SHIU KA-FAI

THE HONOURABLE SHIU KA-CHUN

THE HONOURABLE WILSON OR CHONG-SHING, M.H.

THE HONOURABLE YUNG HOI-YAN

DR THE HONOURABLE PIERRE CHAN

THE HONOURABLE CHAN CHUN-YING

THE HONOURABLE TANYA CHAN

THE HONOURABLE CHEUNG KWOK-KWAN, J.P.

THE HONOURABLE HUI CHI-FUNG

THE HONOURABLE LUK CHUNG-HUNG

THE HONOURABLE LAU KWOK-FAN, M.H.

THE HONOURABLE KENNETH LAU IP-KEUNG, B.B.S., M.H., J.P.

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DR THE HONOURABLE CHENG CHUNG-TAI

THE HONOURABLE KWONG CHUN-YU

THE HONOURABLE JEREMY TAM MAN-HO

THE HONOURABLE GARY FAN KWOK-WAI

THE HONOURABLE AU NOK-HIN

THE HONOURABLE VINCENT CHENG WING-SHUN, M.H.

THE HONOURABLE TONY TSE WAI-CHUEN, B.B.S.

MEMBERS ABSENT:

THE HONOURABLE JAMES TO KUN-SUN

THE HONOURABLE ABRAHAM SHEK LAI-HIM, G.B.S., J.P.

THE HONOURABLE JEFFREY LAM KIN-FUNG, G.B.S., J.P.

THE HONOURABLE MRS REGINA IP LAU SUK-YEE, G.B.S., J.P.

THE HONOURABLE STEVEN HO CHUN-YIN, B.B.S.

THE HONOURABLE FRANKIE YICK CHI-MING, S.B.S., J.P.

THE HONOURABLE CHRISTOPHER CHEUNG WAH-FUNG, S.B.S., J.P.

DR THE HONOURABLE FERNANDO CHEUNG CHIU-HUNG

DR THE HONOURABLE CHIANG LAI-WAN, J.P.

THE HONOURABLE CHU HOI-DICK

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PUBLIC OFFICERS ATTENDING:

PROF THE HONOURABLE SOPHIA CHAN SIU-CHEE, J.P. SECRETARY FOR FOOD AND HEALTH

DR BERNARD CHAN PAK-LI, J.P. UNDER SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT, AND SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT

CLERKS IN ATTENDANCE:

MS ANITA SIT, ASSISTANT SECRETARY GENERAL

MISS FLORA TAI YIN-PING, ASSISTANT SECRETARY GENERAL

MR MATTHEW LOO, ASSISTANT SECRETARY GENERAL

8122 LEGISLATIVE COUNCIL ― 29 March 2018

GOVERNMENT BILLS

Second Reading of Government Bills

Resumption of Second Reading Debate on Government Bill

PRESIDENT (in Cantonese): We now resume the Second Reading debate on the Chinese Medicine (Amendment) Bill 2017.

CHINESE MEDICINE (AMENDMENT) BILL 2017

Resumption of debate on Second Reading which was moved on 14 June 2017

PRESIDENT (in Cantonese): Ms Alice MAK, Chairman of the Bills Committee on the above Bill, will address the Council on the Committee's Report.

MS ALICE MAK (in Cantonese): President, in my capacity as Chairman of the Bills Committee on Chinese Medicine (Amendment) Bill 2017 ("the Bills Committee"), I now report on the major deliberations of the Bills Committee.

The Bills Committee has held five meetings with the Administration, and received views from deputations and individuals. Members are supportive of the Chinese Medicine (Amendment) Bill 2017 ("the Bill") to confer power on the Director of Health ("the Director") to make a Chinese medicine safety order ("CMSO") when he or she has reasonable grounds to believe that a Chinese herbal medicine, proprietary Chinese medicines and other substances or compounds generated in the course of manufacture of proprietary Chinese medicine are dangerous or injurious to health, or unfit for use by human beings, or a danger to public health, so as to prohibit the sale or supply of such product or recall such product in order to further protect public health.

Some Members are concerned about the public health risk that might arise from the various orally consumed products composing mainly of Chinese herbal medicines but added other materials or substances as active ingredients being sold in the market and bottled drinks containing Chinese herbal medicines, which are currently not regulated under the Chinese Medicine Ordinance ("CMO") and, if the Bill is passed, would not be subject to CMSO as they do not fall within the definition of proprietary Chinese medicine under CMO. Members expressed LEGISLATIVE COUNCIL ― 29 March 2018 8123 concern about the risks that these products may pose to public health. In addition, the great majority of Members believe that the Administration should respond to the request made by the Chinese medicines industry over the years for a comprehensive review of CMO.

The Administration said that it is exploring amendments to the definition of proprietary Chinese medicine in CMO so as to strengthen the regulation. The Chinese Medicines Board ("CMB") under the Chinese Medicine Council of Hong Kong ("CMCHK") has established a working group to examine the issue. Subject to the recommendations to be made by the working group and the view of CMB, extensive consultations would be conducted on any proposed amendments to the definition of proprietary Chinese medicine in CMO. The Administration would, as and when appropriate, propose the relevant legislative amendments in a separate legislative exercise. As regards drawing a concrete timetable for a comprehensive review of CMO, the Administration has undertaken that it will have further discussions with the Chinese medicines industry and brief the Panel on Health Services of the Legislative Council on the way forward in this regard.

Members note that the Bill empowers the Director to direct any person to stop selling and to recall from the market any Chinese medicines or related products with public health risk. Some Members are concerned about whether the sample collection method and testing criteria of the existing routine market surveillance system to monitor the quality and safety of Chinese herbal medicines and proprietary Chinese medicines can ensure the effective enforcement of CMSO. On Chinese herbal medicines, they are of the view that the Department of Health ("DH") should strengthen its market surveillance system at the import, wholesale and retail levels, such that substandard Chinese herbal medicines in the market could be identified and recalled in a timely manner. Moreover, the Administration should also regularly review and update the standards of limits of pesticide residues and heavy metals for Chinese herbal medicines to ensure that these standards are on par with the relevant international standards and appropriate testing methods should be adopted to assess whether a Chinese herbal medicine may have public health risk and warrant the issuance of a CMSO.

As regards proprietary Chinese medicines, some Members consider that to deal with the supply of unregistered proprietary Chinese medicines in the market, apart from conducting routine inspections and unannounced checking of the premises of licensed local Chinese medicines traders, in the future, DH should also expand the scope of inspections to cover other retail outlets and increase the number of routine inspections. In addition, some Members consider that the 8124 LEGISLATIVE COUNCIL ― 29 March 2018

Administration should strengthen the monitoring of the safety and quality of the intermediate products that may be generated in the course of manufacture of proprietary Chinese medicines. In the long run, the Good Manufacture Practice ("GMP") requirements for proprietary Chinese medicines should be made mandatory to further ensure the safety and quality of proprietary Chinese medicines.

Members also expressed concern about the procedure of recalling deficient products after the passage of the Bill and the liability that traders have to assume for failing to carry out a complete recall. The Administration assured Members that for the enforcement of a CMSO in the future, DH would follow the current approach by discussing the details of the enforcement method and the time frame with the person subject to the CMSO in each case. After the passage of the Bill, CMB would amend the relevant practising guidelines and the Recall Guidelines for Chinese Medicine Products to reflect the changes sought to be made by the Bill, so as to assist the licensed Chinese medicines traders concerned to set up and maintain a system of control to enable the rapid and, so far as practicable, complete recall of the Chinese medicine products sold or distributed by the licence holder concerned in the event of such products being found to be dangerous, injurious to health or unfit for human consumption. Members note that the Bill provides for defences and the establishment of an appeal mechanism to enable a person bound by a CMSO to appeal against the decision of the Director.

President, after considering the views of the Bills Committee, the Administration will propose some textual, technical and consequential amendments to the Bill. The Bills Committee has no objection to the amendments to be introduced by the Administration later.

The foregoing is my report on the work of the Bills Committee. I will now express my personal opinions on the Bill.

President, the amendments in the Bill mainly seek to empower the Director to make a CMSO in specific circumstances to prohibit the sale of proprietary Chinese medicines and Chinese medicine products that may pose risks to users and make recalls.

Simply put, the amendments this time around actually amount just to a patching exercise. According to the industry, when DH finds that a specific proprietary Chinese medicine or Chinese medicine product poses potential risks LEGISLATIVE COUNCIL ― 29 March 2018 8125 to users, usually it will request the parties concerned to stop its sale and carry out a recall. Although recalls are carried out on a voluntary basis, the overwhelming majority of industry practitioners will comply with the relevant requests of DH. Such a mode of operation has all along existed and is proven.

The Bills Committee held five meetings in total and at two of them, we listened to the views of the industry on the Bill. As I said just now, with regard to these amendments, which appear to be a patching exercise, do not depart from the usual practice and have little substantive impact on the normal operation of the industry, why do they arouse the concerns of so many Members and the industry?

In fact, on each occasion when we listened to the views of members of the public, many industry representatives were present and I think that apart from reflecting the diligence of both Members and the industry in scrutinizing the Bill, more importantly, this also reflects the fact that the Government has neglected the planning for the development of the Chinese medicine industry in Hong Kong for a long time and still less has it set any definite development goal. As a result, nowadays, we find that the regulatory regime is lagging far behind the actual situation. I believe there are reasons for the diverse views on CMO expressed by Members in the Bills Committee and the industry this time around.

In fact, we understand clearly that Members and the industry do not oppose the amendments on this occasion, only that they wish to see more complete and pertinent amendments. The fact is, as pointed out by the great majority of industry members in the public hearings, CMO (Cap. 549) was enacted in 1999 and has been in effect for almost two decades. However, throughout the years, no major review has been conducted and no amendment has been made. We can thus imagine what sea change has occurred in the market conditions nowadays compared with those two decades ago. In particular, the problems related to medicines alluding to particular trade marks, health food, and so on, are rampant and have impacted heavily on the industry.

I must point out that it is essential to review and amend CMO, which is the major regulatory framework affecting the development of Chinese medicine in Hong Kong. Article 138 of the Basic Law stipulates that "The Government of the Hong Kong Special Administrative Region shall, on its own, formulate policies to develop Western and traditional Chinese medicine and to improve medical and health services.". This provision points out clearly that under the framework of the Basic Law, traditional Chinese medicine and Western medicine 8126 LEGISLATIVE COUNCIL ― 29 March 2018 should coexist and be attached equal importance. In view of this, some Members and industry members expressed the hope that the Administration could expeditiously review and revise CMO comprehensively, so as to dovetail with the actual development. The Hong Kong Federation of Trade Unions agrees with and supports doing so, and hopes that the Government will take follow-up actions as soon as possible.

In fact, I believe that just like me, the great majority of Members and industry members support the amendments of this exercise. In particular, after making the amendments, the relevant regulatory regime will cover not just licensed manufacturers but also unlicensed or other illegal manufacturers of proprietary Chinese medicines. In the future, if the proprietary Chinese medicine manufacturer concerned refuses to comply with a CMSO, it has to assume criminal liability, so the deterrent effect is significantly enhanced and it is hoped that the protection for the public can be enhanced.

President, we also know that the Food and Health Bureau will be reorganized and the Chinese Medicine Unit will be established with a view to coordinating policy issues in the development of Chinese medicine in Hong Kong. We hope that the relevant review and amendment exercise related to CMO can be completed as soon as possible. Apart from dealing with issues related to the definition of proprietary Chinese medicines and inspection and safety criteria as soon as possible, the handling of other issues related to the development of Chinese medicine, for example, the registration and regulation of health foods, the development of a Chinese medicine hospital, the training of Chinese medicine pharmacists and Chinese medicine dispensers as well as long-term professional development, should also be expedited.

As we all know, it is the stated intention of this Government to promote the development of primary health care and Chinese medicine can dovetail with the functions of health promotion, tackling problems at source and primary protection served by primary health care. Utilizing the resources and manpower for Chinese medicine optimally and putting in place a complete and healthy mode of development for Chinese medicine in Hong Kong can tie in completely with the major direction of developing primary health care. I hope the authorities can hear the demands of Members, the industry and the public and review CMO as soon as possible, so as to promote the development of Chinese medicine in Hong Kong in earnest.

With these remarks, I support the Bill. Thank you, President.

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DR HELENA WONG (in Cantonese): President, I rise to speak in support of the Chinese Medicine (Amendment) Bill 2017 ("the Bill"). I have also taken part in the deliberations of the Bill Committee on the Bill. The Government proposed these amendments actually because of a court judgment made on a case, namely, Man Hing Medical Supplies (International) Ltd v Director of Health, in 2015 in which the Court ruled that the Director of Health had no lawful power to instruct the licensed wholesaler of proprietary Chinese medicine to recall the suspected unregistered proprietary Chinese medicine in question. Only then did the Government suddenly realize that there are loopholes in the relevant ordinance.

As we know, if there are problems with food, we can recall the food in question through food safety orders. The Government can empower the Food and Environmental Hygiene Department to do so in law. However, if Chinese medicine is found to be problematic and if the Government wants to order the recall of the medicine or herbal medicine in question, the law does not provide for such power of the Government. This is the background of the Government having to introduce amendments to the Ordinance in haste. It is necessary for the Government to plug the loopholes in law and therefore, we support the Government in doing so. The amended Ordinance will empower the Director of Health to make a Chinese medicine safety order to prohibit the sale of or recall deficient Chinese medicines or relevant products in specified circumstances.

Several other Members of the Bills Committee and I support these amendments. During the amendment exercise, I have had a lot of discussions with the Government at meetings and also on other occasions outside the meetings. On the question concerning the recall of deficient medicines, we consider that there is a more fundamental issue and that is, in the first place, we certainly hope that the medicines are free of problems, but why will there be problems with medicines or herbal medicines? In this connection, we have raised a lot of issues on how we can enhance the entire policy on the regulation of the quality and safety of Chinese medicines or Chinese herbal medicines and at the same time, we have examined whether there are other loopholes that warrant government attention to ensure that we have in place a safe testing system for Chinese herbal medicines, thus obviating the need to recall them when they are found to have problems after import. We consider that this area of work is relevant, too.

To establish a set of standards and a regulatory framework for Chinese herbal medicines, the Government actually has a very long way to go. The Government has to pay attention to many aspects ranging from the growing, manufacture, import, wholesale, retail and testing of Chinese medicines or 8128 LEGISLATIVE COUNCIL ― 29 March 2018

Chinese herbal medicines to their registration, and as the current system is far from comprehensive, it is necessary for the Government to make improvement continuously. Plugging the loopholes simply through this Bill under discussion today cannot fully respond to the aspiration for regulation of the safety of Chinese medicines in the entire system that I mentioned just now. Therefore, the Democratic Party and I very much hope that the Government will not stop working after taking this step now. Likewise, in our discussion on the Medical Registration (Amendment) Bill 2017 yesterday, we supported the Government and the passage of the Bill but actually the Government still has to carry out a lot of ensuing work.

The Democratic Party calls on the Food and Health Bureau to continuously take forward follow-up work, in order to establish an effective regulatory system on the quality and safety of Chinese herbal medicines. We consider that there is still room for improvement in several areas as follows: First, the Government must clearly stipulate and update the tolerable contents or standards of pesticide and heavy metals in Chinese medicines and Chinese herbal medicines; second, the Government must review the current approach for conducting laboratory tests on Chinese medicines; third, the Government must regulate the sulphur dioxide content in Chinese herbal medicines and stipulate its tolerable upper limit; fourth, the Government must strengthen the control on the import of Chinese medicines and Chinese herbal medicines; and fifth, the Government must step up sampling testing in various aspects.

Let me start with the first point on the safety of Chinese herbal medicines and the limits of pesticide residues and heavy metals content. Having taken part in the work of food safety for several years, I understand that in respect of the limit of heavy metals content in food, the Government is actually in the process of making amendments. It has completed consultation and will introduce proposals to the Legislative Council in the next legislative year. In this process, we found that the standard for heavy metals in food is very outdated in some cases, including the standard for such toxic heavy metals as lead. In this review of heavy metals content in food, the Government hopes to align our standard with the international standard. However, Chinese medicines and Chinese herbal medicines are excluded, and the Government will conduct tests on only four heavy metals in Chinese medicines and Chinese herbal medicines. Why does it not set standards for various types of heavy metals, just as the way food is handled, but confine the tests to only four heavy metals? The Department of Health did not answer these questions asked by me in the Bills Committee.

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Other than participating in the work of food safety, over the past few years I have also sent for laboratory tests different kinds of Chinese herbal medicines bought from different shops in the market, in order to find out the types of pesticide residues, if any, in them and whether the limits are exceeded. We have, from time to time, found the presence of pesticide residues, sulphur dioxide and heavy metal residues in these samples. Besides, some of the findings were most shocking. It is because there are some items which, I think, have never been tested by the Government since the inception of Hong Kong, and as they are not considered as food, nor are they medicines, such as honeysuckle flower and chrysanthemum flower, they are not included in the lists of herbal medicines subjected to regulation by the Government, namely, Schedules 1 and 2. Yet, the Centre for Food Safety does not consider them as food and so, no sampling tests are conducted on them either. We have sent them to the laboratory for tests and found residues of dozens of types of pesticides in them, which is most shocking indeed, and we do not know if we should still soak honeysuckle flowers and chrysanthemum flowers in water as a drink because when we buy Chinese herbal medicines at Chinese medicine dispensaries, some honeysuckle flowers and chrysanthemum flowers are often added if we have excessive "internal heat". But these items are omitted from the Ordinance; nor are they being addressed in the Bill.

Six months ago the Democratic Party specifically conducted another test on Chinese herbal medicines with the purpose of finding out the sulphur dioxide content in Chinese herbal medicines. Findings showed that in 8 of the 20 samples tested, the sulphur dioxide content exceeded the limit in the Chinese Pharmacopoeia. I pointed out that the samples exceeded the limit in the Chinese Pharmacopoeia in the hope that Members will understand that even the Mainland has drawn up standards for Chinese herbal medicines, such as the limit of sulphur dioxide content, but there is none in Hong Kong. Is this an omission? So, in Hong Kong, there are plenty of loopholes in respect of Chinese herbal medicines and we are here patching up only a small hole today. I hope that the Food and Health Bureau will instruct the Department of Health ("DH") to carry out work on the safety of Chinese medicines effectively.

At present, DH conducts regular tests on 37 pesticide residues and four heavy metals in Chinese herbal medicines, but over 300 types of pesticides in the market are used for growing herbal medicines. With regard to the testing of pesticide residues in food, a great variety of pesticides is involved and they are 8130 LEGISLATIVE COUNCIL ― 29 March 2018 also used in many different combinations, such as what types of pesticides should be used for growing what types of food, the types to be prohibited, the tolerable upper limits, and so on. There are in the market over 300 types of pesticides used for growing herbal medicines. So, why are tests conducted on only 37 types of them? From this we can see the existence of quite many loopholes.

Apart from omissions in respect of safety standards and the testing of pesticides and heavy metals, I also wish to talk about the approach and standard of testing. Over the past few years, I found that the Government tended to purposely water down the problem of excessive pesticides in Chinese medicines. When problems are detected in the test results, DH adopts an approach similar to the sampling method for testing the presence of lead in drinking water. I wonder why the Government always likes to take this approach of carrying out tests in two stages, which is used in few places in the world. The method used for testing Chinese herbal medicines in Hong Kong can be regarded as unique.

How does the Government test Chinese herbal medicines? The Government conducts tests on pesticide residues and heavy metals in Chinese herbal medicines in two stages. At the first stage―the Mainland also adopts this method―the Government conduct tests on the Chinese herbal medicines in their raw state before cooking to ascertain the presence of those 37 pesticides and four heavy metals in the samples as well as the amount of residues or contents found in them. If it is found that the pesticide residues and heavy metals content are in excess of the prescribed standards, it means that the limits are already exceeded. But even though the pesticides and heavy metals are tested to be in excess of the limits at this stage, the medicines still are not considered as having exceeded the limits but will be further tested at the second stage.

How does the Government conduct tests at the second stage? The Government will prepare decoctions with the Chinese herbal medicines and then conduct tests on pesticide residues and heavy metals content in the decoctions. If the contents in decoctions so prepared are found to be in excess of the limits, then the Chinese herbal medicines will be confirmed to have exceeded the limits. No other places in the world use such an approach. Only Hong Kong uses this method, which is indeed a great invention, and of course, that is only an ironic remark, because not even the Mainland will do it this way.

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Does the Government wish to water down the problem, so that the regulation of Chinese herbal medicines may be more lenient? The Government argued that the public will only drink the herbal decoctions prepared with Chinese herbal medicines without consuming the residues of the herbal medicines and therefore, two-stage tests for Chinese herbal medicines are necessary. But the problem is that if we draw reference from the standards in the Mainland, tests are conducted on medicines in their raw state in the Mainland, that is, pesticide residues and heavy metals content are tested in Chinese herbal medicines before they are cooked. However, the Government said that it does not matter even if the limits are exceeded in raw Chinese herbal medicines and that it is fine as long as the herbal decoctions do not exceed the limits. In fact, even if the decoctions are found to have exceeded the limits, we are still unable to tell which kind of herbal medicines is deficient and hence causes the decoction to have exceeded the limits because herbal decoction is a mixture of multiple kinds of Chinese medicines, and rarely is the decoction prepared with only one kind of herbal medicine. What is most amazing with Chinese medicines is that many kinds of Chinese medicines are mixed in preparing herbal decoctions for treatment or health fortification. So, if the Government said that the test results of herbal decoctions are more accurate, the Government should draw up a set of standards recognized worldwide and by the Mainland and provide cross references for the testing of herbal medicines before and after cooking. But we have yet seen the making of legislation by DH to set out standards in these two aspects so far.

The European Union, the United Kingdom and the United States have set maximum residue limits for some pesticides in medicinal plants and their preparations. The European Pharmacopoeia 8.6 and the British Pharmacopoeia 2016 have set residue limits for 105 pesticides whereas the United States Pharmacopoeia 39 has set residue limits for 106 pesticides. While the Chinese communities attach great importance to herbal medicines, not many standards have been set for compulsory testing. To establish a comprehensive system for Chinese medicine similar to that of Western medicine, it is necessary to step up efforts in setting standards for Chinese herbal medicines and proprietary Chinese medicines. Only in this way will the international community have confidence in the long-term development and efficacy of Chinese medicine.

President, as I wished to make five points but managed to put forward only two of them, I will further talk about Chinese herbal medicines, especially the sulphur dioxide content, when I speak again later on. I shall stop for now.

8132 LEGISLATIVE COUNCIL ― 29 March 2018

MR SHIU KA-FAI (in Cantonese): President, the Chinese medicine industry stands among the 85 business associations covered by the wholesale and retail sector represented by me. For this reason, all along I have actively followed up the Chinese Medicine (Amendment) Bill 2017 ("the Bill") and maintained in-depth communication with the industry.

In short, the objective of the Bill is to confer power on the Director of Health to make a Chinese medicine safety order to prohibit the sale and supply of and recall proprietary Chinese medicines or related products which he considers injurious to health, dangerous to public hygiene and health and unfit for human consumption.

In principle, the industry supports the amendments proposed by the Government in this exercise because it can plug the loophole in the existing law under which the Director of Health does not have the power to issue any recall instruction. Chinese herbal medicines or proprietary Chinese medicines which have safety problems can thus be recalled effectively to protect public health.

However, in respect of the specific operation, the industry hopes that the Government can take their concerns into account, including: first, will they have sufficient time to make the recall arrangements after receiving the Chinese medicine safety order issued by the Director of Health? Second, how is the "reasonable excuse" for failure to comply with the Chinese medicine safety order defined? Third, who will be held liable if customers fail to return the products after the supplier has sent them a recall notice? Fourth, regarding the penalty, is the penalty proposed now, i.e. a fine of $100,000 and imprisonment of two years, too harsh?

During the earlier discussion in the Panel on Health Services as well as the scrutiny by the Bills Committee, I have all along relayed the industry concerns. I am particularly concerned about the criteria and standards to be adopted by the Director for assessing whether a Chinese medicines trader has complied with a Chinese medicine safety order. It is possible that Chinese medicines traders may be unable to recall all the products. For example, the products may have been sold to a "shell" company or an unlicensed trader without their knowledge. After a problem has occurred, the Chinese medicines traders wish to contact the "shell" company concerned, but the latter may have slipped away already. Who will be held liable in the end? Or the retailer ultimately refuses to return the products to the supplier, manufacturer or wholesaler. Who will be held liable? LEGISLATIVE COUNCIL ― 29 March 2018 8133

The relevant products may even have been sold to other countries. How will the recall be handled then? All these problems are in fact the concerns of the industry. For this reason, I hope the Administration―as I have said in the Bills Committee before―will conduct a comprehensive review and thoroughly consult the industry again after the Bill has been implemented for a certain period.

Besides, during the scrutiny of the Bill, the industry has repeatedly expressed its discontent with the Chinese Medicines Ordinance ("CMO"), especially the definition of "proprietary Chinese medicine" and registration of products of such medicines. In this connection, the industry hopes that the authorities can amend CMO expeditiously.

As a matter of fact, now some orally consumed products or health foods in the market are mainly composed of Chinese herbal medicines, but given the addition of other substances (such as a small amount of vitamin C), they are not deemed to be Chinese medicines or such products and do not fall under the definition of "proprietary Chinese medicine" in the existing CMO. So they are currently not subject to regulation under CMO. Even if this Bill is passed, the industry will still be unable to recall such products should any problem arise.

I wish to express my views on this situation. The industry has pointed out that members of the public find some Chinese medicine products in the market confusing. As I said just now, as long as some other substances, possibly a small amount of vitamin C, are added, products mainly composed of Chinese herbal medicines are not subject to regulation even if they are sold in a way similar to that of common Chinese medicines or related products in the market. Of course, I will not comment on the merits or demerits of such products. Perhaps they are even better, I am not sure. But such products are not proprietary Chinese medicines. They may only be health products. In my view, the Government needs to provide the people of Hong Kong with clear information on such products and do more publicity. For example, a special label can be affixed onto the products to distinguish Chinese medicines or related products which are regulated by law from health products which are not so that members of the public will know the difference. Certainly, whether to make the purchase or not is the consumers' choice eventually.

Let me reiterate that I will not specify which type of products is good and which one is not because it is possible that both are good. But I think the Government needs to help members of the public understand the difference 8134 LEGISLATIVE COUNCIL ― 29 March 2018 between the two because proprietary Chinese medicines carry medicinal effects. Does the other type of products which is not subject to regulation actually carry any medicinal effect? If it does, it needs to be regulated. If not, how should this type of products be defined? Now many such confusing situations mentioned by me just now have appeared in the market.

Furthermore, Secretary, I wish to point out that more importantly, should there be any problem with such products which are currently not subject to regulation, they cannot be recalled either. This time the authorities have plugged the loophole regarding the power of the Director of Health to issue a recall instruction. When can the other loophole be plugged? I believe the Policy Bureau needs to keep an eye on this issue.

I have certainly noted the response given by the Government to this issue earlier. That is, it is now conducting an in-depth study on how to revise the definition of "proprietary Chinese medicine" in CMO. The Chinese Medicines Board under the Chinese Medicine Council of Hong Kong has set up a working group comprising experts in Chinese medicines, representatives of the Chinese medicine industry and those of the Government Laboratory. It is responsible for following up the matter and exploring the way forward. However, I hope the Secretary can expedite the work in this aspect. It will be even better if a timetable can be released so that members of the public can have a clear understanding of the Chinese medicine products purchased by them as early as possible.

Apart from the definition of "proprietary Chinese medicine", let me take this opportunity to talk about CMO, which was enacted in 1990. After 20 years of implementation, many of its provisions may have become outdated and need updating. For example, now we often read from the news that the beauty industry offers such services as moxibustion, manipulative therapy and massage to customers. Under CMO, it is very easy to breach the law inadvertently for practice of medicine without a licence. Suppose a service provider in the beauty industry claims that it will be good to health in various ways if customers receive his manipulative therapy. In that case, he may have committed an offence in law. For this reason, now many beauticians do not know how to do promotion when they offer these services. Actually what is good about moxibustion and manipulative therapy? As we all know, manipulative therapy can improve blood circulation, but if beauticians solicit customers by selling this merit, they may breach the law inadvertently. However, how can the beauty industry promote LEGISLATIVE COUNCIL ― 29 March 2018 8135 these services without mentioning their merits? Can beauticians charge customers service fees of $200 or $300 simply by saying that there will be skin-to-skin contact? I do not believe that will do. As a matter of fact, these services are good to health. However, restricted by CMO, the beauty industry cannot promote such services as moxibustion, manipulative therapy and massage. In fact, some members of the beauty industry are involved in court cases. They are very worried about this and wonder if they should promote and offer this kind of services. In this regard, I hope the Secretary can expeditiously follow up with the relevant parties and clearly set the criteria and requirements for lawful provision of this kind of services by the beauty industry.

Let me mention in passing that I have participated in the scrutiny work of the Bills Committee for a long period. At the meetings of the Bills Committee, I have expressed views and opinions different from those of Dr Helena WONG. I know that Dr Helena WONG is greatly concerned about the health of the people of Hong Kong, so she holds extremely high requirements on any law relating to food safety. Of course I am also concerned about public health myself. But apart from public health, I also consider it most important to strike a balance for the rights and interests of the industry. Just now Dr Helena WONG mentioned that now the testing of Chinese herbal medicines only targeted Chinese herbal medicines in their raw state and their decoction, but it was not sufficient to test only the decoction. The dregs of the decocted Chinese herbal medicines should be tested together to see if there are pesticide residues and heavy metals. She hoped the authorities would tighten the criteria for testing Chinese herbal medicines.

I believe the people of Hong Kong who have consulted Chinese medicine practitioners and consumed Chinese medicines before know that after seeking consultation, they will collect the prescribed Chinese herbal medicines which are usually very dry and of which they have no knowledge. On reaching home, they will decoct the Chinese herbal medicines according to the prescription, boiling them with certain bowls of water until a certain amount is left, which they will finally consume. I believe most Hongkongers will only consume the decoction and discard the dregs of the Chinese herbal medicines. I have never heard anyone would eat the dregs of the Chinese herbal medicines in the decoction as though it is a dish. Such dregs will just be treated as litter and thrown away.

How should the Government protect members of the public? Actually we should test what we would eat and digest. Any substance in the decoction which is injurious to health, such as pesticide residues and heavy metals mentioned just 8136 LEGISLATIVE COUNCIL ― 29 March 2018 now, is subject to regulation by established indicators. Chinese herbal medicines found to exceed the limits after testing must be banned because the decoction is consumed direct. However, what is the purpose of testing the dregs in the decoction? I have never heard anyone would eat such dregs. It was probably only when people were fleeing for refuge during wartime that they would eat the bark of trees, right? Now it is unlikely for anyone to do such things nowadays. What do the dregs of Chinese herbal medicines have to do with people's health? Secretary, I have in fact drawn an analogy at the meeting of the Bills Committee: there will certainly be a problem if we have eaten the rust on a stainless steel pot. But using the stainless steel pot to make a soup, we will not eat the pot. So what does the pot have to do with our health?

What problems will arise if the Government imposes overly strict regulation? Of course, it is most desirable to test everything. However, firstly, testing incurs a cost. Leaving aside the cost for handling the correspondence with the Government, the laboratory will charge a fee for every product tested. Even if the test is done by the Government, it will have to pay a fee all the same. All of these are resources. If we test something which should be tested, such as the decoction which, as I said just now, will be digested in our bodies, there will not be any controversy. I agree that testing must be conducted in complete compliance with the procedures. If there is any problem, testing should be conducted because the decoction will be digested in our bodies and affect our health. But I do not see the need to test the dregs of Chinese herbal medicines, particularly since such medicines came from places around the world. The soil or methods of planting are different, and the standards in various places also vary. Since the Government has already put such strict regulation in place, the Chinese medicine industry is worried that if any more excessively harsh standard is imposed for the testing of Chinese herbal medicines, it will impede the introduction of Chinese herbal medicines into Hong Kong in the future. Consequently, some Chinese herbal medicines may not be allowed to be imported into Hong Kong. As we all know, every prescription includes many different types of herbal medicines. If one type is missing owing to the reason mentioned just now, it may render the relevant medical treatment ineffective. This is what members of the industry have told me. They are gravely concerned about it.

Let me reiterate that all of us are concerned about the protection of public health in Hong Kong, but the relevant policy and legislation must prescribe the right remedy for the problem. After consulting a Chinese medicine practitioner, we will collect the herbal medicines, boil them into a decoction and then drink it. LEGISLATIVE COUNCIL ― 29 March 2018 8137

We will not eat the dregs of the Chinese herbal medicines. For this reason, I do not see the need to test the dregs of Chinese herbal medicines in the decoction. Such dregs are irrelevant to health. This is the view I wish to express in this session. Thank you, President.

MR CHAN HAN-PAN (in Cantonese): After the Chinese Medicine Ordinance ("CMO ") came into effect, all proprietary Chinese medicines sold in Hong Kong must be registered and subject to regulation for the protection of the public. We certainly consider this a good arrangement, for after these products are included in the scope of regulation, the interests of the public are protected. Yet, over the 20 years since CMO came into effect, we have found numerous deficiencies. The implementation of CMO has given rise to all kinds of problems and distortions. Today, the amendments proposed by the Secretary are meant to plug the loophole, which is only one of the many loopholes, such that the Department of Health ("DH") is empowered to order the recall of specific pharmaceutical products.

Members may feel puzzled why the Government is not given the power under CMO to order the recall of problematic or suspected unregistered products. CMO is fraught with problems, is it not? Members should have spotted the problem now, that is, the Government has no lawful power to order the recall of a specific product which the authorities are satisfied that it is problematic. The Government has proposed the present amendments to plug this loophole merely because it has lost its case in a lawsuit.

Since plugging this loophole is in the interest of the public, DAB will surely support it. In the past few years, I have visited and interviewed members of the industry to conduct a number of surveys. We published the "Proposal for the development of the Chinese Medicine industry in Hong Kong (I)" ("香港中藥 產業發展建議書(一)") and the "Proposal for the development of the Chinese Medicine industry in Hong Kong (II)" ("香港中藥產業發展建議書(二)") ("Proposal (II)") in 2014 and 2016 respectively. In the past two years, I have been drafting the third proposal. I would say that the Government has heeded the views in my two proposals. The policies introduced in recent years have answered some of our aspirations, which include the provision of assistance to small and medium enterprises ("SMEs") in the accreditation of Good Manufacturing Practice ("GMP") as suggested by me in Proposal (II). Recently, I notice the Government has allocated funds for the construction plan of a GMP 8138 LEGISLATIVE COUNCIL ― 29 March 2018 pharmaceutical production plant in the Hong Kong Science Park, so that the industry can be provided with a relatively simple, direct and easy approach to meeting the production standards under GMP.

Another aspect is about assistance in registration. In the past, there was no regulation on Chinese medicine, but now they are subject to regulation. Nonetheless, yet the testing required in the registration process may not be scientifically practicable. What are the difficulties? Some would say： we need only do tests on Chinese medicines. Is it not the case? I would like to take this opportunity to explain to all of you the difficulties involved. First, Chinese medicines are pharmaceutical products of compound formula. For example, Danggui ("當歸", Radix Angelicae Sinensis) and Beiqi ("北芪", Astragalus membranaceus) are two substances. Yet, when the two substances are cooked together, it may become N substances. To test these substances, we need to have the reference substances for each of these products, that is, reference substances containing the two substances: Danggui and Beiqi, as well as the reference substances of each of the substances produced from the decoction of the two substances together. We can only do laboratary tests with the relevant references.

Yet, given the long history of Chinese medicine of thousands of years and that of science of only a few hundred years, reference substances for many kinds of Chinese medicine are not yet available. Hence, in the course of registration, it will be extremely difficult to obtain a laboratory report. Many prescriptions are devised from experience or passed down from history. Some prescriptions are even handed down from the Guangxu ("光緒") era and are still on sale in Hong Kong. These prescriptions are proved to be effective. Yet, it will be extremely difficult to do reference tests in laboratories and arrive at a test report. Hence, the progress of registration of Chinese medicines is extremely slow at present. We note that the Government has heeded my views and will grant funding for the commission of professional bodies to assist the industry in doing registration. The pilot work of the first phase has been completed, where the registration of a number of pharmaceutical products has been successfully completed with the relevant assistance. This is a good achievement, evident that the Government is prepared to heed suggestions.

Another issue is that government departments responsible for Chinese medicine are only performing their duties in regulation without promoting the development of Chinese medicine. In the past, we proposed the development of LEGISLATIVE COUNCIL ― 29 March 2018 8139 a Chinese medicine port. Yet, over the past decade or so, it has only been empty talk. It was only in the past two years that the Government expressed the willingness to set up a department to promote the development of Chinese medicine. This is the right direction. If the authorities only impose regulation on an industry but offer no assistance to it, it can in no way promote the development of the industry. The global market for Chinese medicine is enormous, yet without assistance from the Government, the Chinese medicine industry in Hong Kong can hardly achieve development. In my proposal, I have urged the Government to set up a fund. In the Policy Address and the Budget this year, the Government says that a $500 million fund will be set up to promote the development of Chinese medicine. Though the amount of the fund is far smaller than our proposal, the Government has at least heeded our views and I consider this a good beginning.

The Government is now heading in the right direction. I should be satisfied with this, should I not? Not indeed. For the major problem at root regarding CMO is the definition for proprietary Chinese medicines. Mr SHIU Ka-fai mentioned this just now. Under the existing definition, proprietary Chinese medicine means any proprietary product composed solely of Chinese medicine. In other words, if all the ingredients in the prescription of the proprietary Chinese medicine are Chinese medicines, that product will be subject to regulation. Yet, it gives rise to certain problems. What are they? Some time ago, I often put a few bottles of drugs here in the Chamber and I would like to quote an example here.

As in the past, I like to use Tianxi pills ("天喜丸"), a drug for women, as an example. Chicken is an essential ingredient of Tianxi pills. According to the pharmacopoeia, basically all chickens are regarded as Chinese medicine. The only exception is Tushouji ("吐綬雞", Meleagrididae), which is turkey. Since turkey is not regarded as a kind of Chinese medicine, these smart businessmen add turkey to make Tianxi pills. Though 90% of the ingredients in the prescription are Chinese medicines, the pill is not made solely of Chinese medicines because one of the ingredients, turkey, is not Chinese medicine. According to the existing CMO, registration of the pill is not required and it is merely regard as a food product.

Tianxi pills is a pharmaceutical product, yet with the addition of turkey as one of the ingredients, the pill is not regarded as a pharmaceutical product and does not required registration. Come to imagine that. Tianxi pills are available 8140 LEGISLATIVE COUNCIL ― 29 March 2018 in different brands. Certain brands have spent millions of dollars to do registration, yet some brands made their pills readily available on the market by adding turkey as an ingredient.

Among the products available in the market, Tianxi pills merely represent the tip of the iceberg. The case of An Gong Niu Huang Pill ("安宮牛黃丸"), a life-saving pill, is similar. The An Gong Niu Huang Pills manufactured by famous brands are very expensive, charging around $500 to $600 per pill. Yet, some An Gong Niu Huang Pills available in the market are only registered as food products but not proprietary Chinese medicines. Only the "1+7" nutrition information of these products are provided, yet their prices are even higher than An Gong Niu Huang Pills manufactured by famous brands. These products come in attractive packages. If not by careful examination, even government officials cannot differentiate whether or not the products are registered products and the difference in quality of these products. These food products abound in the propriety Chinese medicine market, and the number of these products is on the rise.

Three years ago, I made enquiries with the industry about the situation. Back then, they said a few brands of An Gong Niu Huang Pills on the market were registered as food products. Recently, when I asked the trade about the latest situation, they said a dozen of brands were now available on the market. Members can thus imagine the situation. Now, in the market, there are registered An Gong Niu Huang Pills of regular prescription with no added ingredients, as well as An Gong Niu Huang Pills with added foreign substances or other ingredients. This is the loophole of the registration system of propriety Chinese medicines. If no measure is taken to plug this loophole, fewer and fewer proprietary Chinese medicines will register with the Government. They will instead register their products as food products with the "1+7" nutrition labels for sale. This is very dangerous, for there are dosage limits for pharmaceutical products, with specified daily doses and quantity for each dosage, but for food products, they may be taken many times without limit. Can Chinese medicines be taken many times without any limit? This is a point of concern. Hence, we consider that CMO is fraught with loopholes. Today, we have only taken the first step in plugging the loopholes.

The second example is very obvious. When businessmen identify any proprietary Chinese medicines which fetch good sales, they will add vitamin C to the product, so that they do not have to do registration for the product. Why? LEGISLATIVE COUNCIL ― 29 March 2018 8141

With the addition of vitamin C, the product is not made solely of Chinese medicines and registration is not required. How ridiculous it is? How easy it is to take advantage of the loopholes? Hence, I hope the Government will know that we hope the amendments to CMO will do more than merely conferring power on the Government to recall problematic proprietary Chinese medicines. For even if the Government has the power to instruct the recall of specific propriety Chinese medicines, it has no power to order the recall of counterfeit products flooding the market or suspected propriety Chinese medicines sold as food products with "1+7" nutrition labels, for these products are out of the scope of regulation of CMO. I even notice that certain registered pharmaceutical manufacturers are producing suspected pharmaceutical products as registered food products. I am a bit confused, too. We can hardly define whether or not products produced by licenced pharmaceutical manufacturers are pharmaceutical products. Yet I wonder if licenced pharmaceutical manufacturers can produce food products. No one can give me an answer to this question to date.

Manufacturers of food products should possess the Food Factory Licence, but now these food products are produced by pharmaceutical manufacturers. Does it mean that no registration is required? I hope DH or the Bureau will have the opportunity to answer my question. Prohibiting pharmaceutical manufacturers from manufacturing food products is not the best solution to plug the loophole. After all, pharmaceutical manufacturers may make such products through other food factories, or they may convert their drug factories into food factories or obtain another licence, so that the products do not have to be registered as proprietary Chinese medicines. They can save significant costs by doing so and the products sold will not be subject to regulation. The market is completely distorted. It is extremely unfair to those members of the Chinese medicine industry who produce medicines and work hard with all their heart. Their perseverance in following traditional prescriptions may, in consequence, cause them to be eliminated from the market and their products to disappear gradually. Back then, it was expected that over 10 000 kinds of Chinese medicines will need to be registered. Now, only 6 000 kinds are waiting for registration. I wonder how many kinds will be registered according to CMO eventually. On the registration of propriety Chinese medicines, manufacturers may have chosen not to register them because the procedures involved are very difficult or because there is hardly any room for survival in a market flooded with food products with "1+7" nutrition labels.

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Hence, I would like to tell the Government in this session that it should outlaw suspected propriety Chinese medicines registered as food products. If not, the market will be completely distorted. When visitors buy these food products which are suspected Chinese medicines in Hong Kong, they may think the products are counterfeits. By then, the established reputation of Hong Kong will be ruined. Why do visitors like to do shopping in Hong Kong? Because we have attained the internationally recognized high standard. Regrettably, we have made no progress in proprietary Chinese medicines.

Therefore, the Secretary has to shoulder this important responsibility and accomplish this historical mission of assisting the industry in addressing the problems, so as to bring the development of proprietary Chinese medicines in Hong Kong back on track and to take it forward.

President, I so submit.

PRESIDENT (in Cantonese): Does any other Member wish to speak?

(No Member indicated a wish to speak)

PRESIDENT (in Cantonese): If not, I now call upon the Secretary for Food and Health to reply. Then, the debate will come to a close.

SECRETARY FOR FOOD AND HEALTH (in Cantonese): President, first of all, I have to thank Ms Alice MAK, Chairman of the Bills Committee, members of the Bills Committee and colleagues in the Legislative Council Secretariat for their effort in enabling the smooth completion of the scrutiny of the Chinese Medicine (Amendment) Bill 2017 ("the Bill").

The main purpose of the Bill is to empower the Director of Health to make a Chinese medicine safety order ("CMSO") to prohibit the sale, and direct the recall, of a Chinese medicine or related product under specified circumstances and ensure effective and smooth enforcement of a CMSO in order to safeguard public health. The Director will be empowered to order any person (regardless of whether he/she is a licensed trader under the Chinese Medicine Ordinance (Cap. 549) ("CMO") or not) who has sold Chinese herbal medicines, proprietary LEGISLATIVE COUNCIL ― 29 March 2018 8143

Chinese medicines and intermediate products to recall Chinese herbal medicines, proprietary Chinese medicines and intermediate products from the market, and to prohibit by order the sale of the same. In addition to empowering the Director to make CMSOs, the Government has also proposed introducing an appeal mechanism into the Bill to allow a person bound by a CMSO to appeal against the decision of the Director.

Despite the fact that relevant licensed traders of Chinese medicines, that is, wholesalers of Chinese herbal medicines and wholesalers and manufacturers of proprietary Chinese medicines, have already been required by law to set up a system of recall under the Chinese Medicines Regulation (Cap. 549F) ("CMR") for proprietary Chinese medicines, Chinese herbal medicines and intermediate products generated in the course of manufacturing a proprietary Chinese medicine, the Court held in a previous judicial review case that the Director did not have the statutory power to order recall. Moreover, the Government has reviewed CMO and found that there is currently no provision under CMO or its subsidiary legislation providing that an unlicensed trader must, as directed by the Director, carry out recall actions regarding proprietary Chinese medicines or Chinese herbal medicines which may pose threats to public health, such as Chinese herbal medicines being distributed without licence as well as unregistered proprietary Chinese medicines being distributed. In view of the aforementioned situation, the Government considers it necessary to amend CMO and its subsidiary legislation to plug the existing loopholes in the law, with a view to conferring on the Director the statutory power to order the recall of Chinese herbal medicines or proprietary Chinese medicines from the market, in order to strengthen the control.

The Bill was introduced into the Legislative Council in June last year and subsequently the Bills Committee has held five meetings in total. I am very pleased that, after the five meetings, members of the Bills Committee expressed support for the amendments proposed by the Bill as well as the predominately technical or textual Committee stage amendments ("CSAs") proposed by the Government. I will briefly introduce the key provisions of the Bill as follows.

Firstly, the Bill proposes to add new sections 138B to 138I to CMO to clearly set out the forms and effects of the making of a CMSO, variation order and revocation order with a view to facilitating traders' understanding of their responsibilities and the operational details of the orders.

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To ensure the fair and just handling of all cases, the Bill proposes to amend section 141 of CMO to introduce an appeal mechanism to allow a person bound by a CMSO to appeal against the decision of the Director.

As regards the penalty, the Bill proposes to add new sections 138K to 138L to CMO to provide that a person bound by a CMSO who fails or refuses to comply with any requirements set out in the CMSO commits an offence, and is liable to a fine at level 6 (i.e. $100,000) and to imprisonment for two years. The proposed penalty is the same as the existing penalty for not complying with most other provisions under CMO.

The Bill also proposes to amend the relevant provisions to enable effective and smooth enforcement of CMSOs, including amending section 159 of CMO regarding provisions on service of notices and orders, the way of service of notices or orders, such as delivery in person or by post to the relevant address, as well as amending provisions of CMR regarding the setting up and maintenance of a system of control to enable the rapid and, as far as practicable, complete recall of Chinese herbal medicines, proprietary Chinese medicines and/or intermediate products.

The Bills Committee has discussed the operational details of CMSOs, including the scope, the principles of the making of CMSOs, the recall procedures, the appeal mechanism, and so on. Although some other questions were raised by members about the regulation of Chinese medicines under CMO, members were supportive of the Bill. Neither was there any objection to the CSAs proposed by the Government. The Bills Committee has held two public hearings to meet with deputations. Quite many attending deputations and individuals clearly expressed their hope that the Bill could be passed expeditiously to ensure better protection for public health early.

On consultation, the Department of Health ("DH") conducted a seven-week public and trade consultation from January to February 2017 on the proposed legislative amendments, during which a meeting with 16 Chinese medicines traders associations and 6 briefing sessions for individual licensed Chinese medicines traders were convened. The public and trade generally recognize the need for the legislative amendments and support the Bill.

I thank Honourable Members for their support for CMO and the views expressed. Next I will give a brief response.

LEGISLATIVE COUNCIL ― 29 March 2018 8145

I thank Ms Alice MAK, Chairman of the Bills Committee, for expressing the aspiration of the Bills Committee for the development of Chinese medicine. The Government is concerned about the long-term planning and positioning of Chinese medicine services. Given the increasing recognition of Chinese medicine, the Government considers it necessary to set up a dedicated unit called the Chinese Medicine Unit, to be responsible for overall policy planning and coordination of the development of Chinese medicine, maintaining a close tie with traders, as well as coordinating and taking forward various strategies and measures for promoting the development of Chinese medicine in Hong Kong, including the development planning of and tender exercises for dedicated Chinese medicine hospitals.

The Chinese Medicine Unit will also be responsible for the coordination of a $500 million fund mentioned by Mr CHAN Han-pan to provide support for the development of the Chinese medicine industry, including applied research, Chinese medicine specialization, knowledge exchange and cross-market cooperation, and helping local Chinese medicines traders with the production and registration of proprietary Chinese medicines.

Ms Alice MAK and Mr CHAN Han-pan also pointed out the need for a comprehensive review of CMO to expand the safety net for public health. Regarding the amendments to CMO, there is a need for us to hold further discussions with the Chinese medicine industry to find out more about the views of various stakeholders on the existing provisions of CMO before formulating the details and timetable for conducting the review. Through the Chinese Medicine Development Committee, we will hold discussions focusing on different areas with its members from various sectors, including Chinese medicine practitioners, Chinese medicine, academic, scientific research, health care, and so on, and solicit their views on the long-term policy and measures for promoting the development of Chinese medicine, including the existing provisions of CMO.

DH will also continue to maintain communication with traders on related matters in the hope of striking a balance between protecting public health and supporting the development of Chinese medicine and making constant improvements to the regulatory system under CMO. We understand that this Bill is just the first step. We will continue to improve the regulation of Chinese medicine and report the future way forward in this regard in a timely manner.

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I also thank Mr SHIU Ka-fai and Mr CHAN Han-pan for pointing out some of the existing loopholes, such as imposing regulation on proprietary Chinese medicines similar to that on health food products. We also mentioned earlier how regulation could be stepped up. The Bills Committee has noted and pointed out this is not the objective of this Bill. Notwithstanding this, we are very much concerned about the health risk possibly posed to the public by health food products sold on the market as proprietary Chinese medicines. Having regard to the need to strike a balance between the industry concerns and protecting public health, the Government approves of the need to review the definition of proprietary Chinese medicines and the relevant provisions in order to enhance existing legislative control of the aforementioned products. Since various stakeholders are involved, the Chinese Medicines Board ("CMB") set up under the Chinese Medicine Council of Hong Kong has already formed a working group to specifically conduct a comprehensive review of this issue and offer advice. We will report the progress on this front to Members in due course.

Currently, there is no uniform definition and regulation of health food products, as different regulation will be exercised in different places having regard to their respective circumstances and needs. The Government now adopts a multi-pronged regulatory strategy to exercise regulation through a series of existing law and, depending on the nature, ingredients, the claimed contents, functions, uses, dosage, package, and so on, of individual products to exercise specific regulation from different perspectives, with a view to performing the function of regulation in a multi-pronged manner for protection of public health. In spite of this, as I mentioned earlier, a working group will be set up to specifically review this issue.

I also thank Mr SHIU Ka-fai for relaying the views expressed by the industry on the operational details of recall. Under CMR, the wholesalers of Chinese herbal medicines, manufacturers of proprietary Chinese medicines and wholesalers of proprietary Chinese medicines have the duty to set up and maintain a system of control to enable the rapid and, so far as practicable, complete recall of the Chinese medicine products sold by them in the event of such products being found to be dangerous, injurious to health or unfit for human consumption. CMB published the Recall Guidelines for Chinese Medicine Products ("the Recall Guidelines") in 2005 to assist the industry to set up the recall system. The industry may discuss with DH anytime should they have any queries or problems.

LEGISLATIVE COUNCIL ― 29 March 2018 8147

According to the Recall Guidelines, traders must recall the products from their customers within reasonable limits and, during the recall, the relevant traders should regulate the efficiency and progress of the recall. Each recall operation should be treated as an isolated case and factors such as the nature of problems, customer safety, sale networks, and so on, should be taken into consideration in formulating the recall strategy.

In order to reduce the risks possibly posed by problematic products, the recall should usually be completed within the shortest time, and each recall operation should be treated as an isolated case. In issuing a recall order, DH will ensure adequate communication with the trader concerned and take into consideration such factors as the nature of the problem, the sale network, and so on, and consider if short-term, curable, minor health problems or seriously adverse consequences or even deaths will be caused to people using or coming into contact with the product, for the formulation of appropriate recall methods.

The aforementioned Guidelines and mode of operation are proven. The amendments proposed this time around seek mainly to confer on the Director of Health the statutory power to make an order to recall proprietary Chinese medicines or Chinese herbal medicines from the market without altering the original recall procedures.

Separately, Dr Helena WONG has raised questions and expressed concern about the surveillance of the market and the quality and safety of Chinese herbal medicines. She has also specifically pointed out some of the methods currently employed by DH to test the decoction of Chinese herbal medicines. I would like to give a brief response to this issue now. Currently, DH adopts a two-pronged strategy to test Chinese herbal medicines including, first, conducting tests on samples through a regular market surveillance system and second, conducting targeted tests on Chinese herbal medicine samples obtained from other channels which include the adverse drug reaction reporting system, public complaints and referrals from other government departments.

DH will also conduct tests on Chinese herbal medicine samples through a regular market surveillance system. The scope of the system covers Chinese herbal medicines listed in Schedules to CMO, including 31 types and 574 types of Chinese herbal medicines listed in Schedule 01 and Schedule 2 respectively. DH will collect around 45 samples of Chinese herbal medicines every month, and 8148 LEGISLATIVE COUNCIL ― 29 March 2018 items subject to regular testing include pesticide residues, heavy metals content and morphological identification will be tested for the purpose of monitoring the quality and safety of the Chinese herbal medicines regulated under CMO. After conducting risk assessments on Chinese herbal medicines, DH will collect samples of Chinese herbal medicines in a random manner as monthly testing samples and send its staff to purchase Chinese herbal medicines from licensed retailers and wholesalers of Chinese herbal medicines. The scope of market surveillance by DH covers the whole territory and spot checks will be conducted on relevant retailers and wholesalers in a random manner every month.

The testing of pesticide residues in the decoction of Chinese herbal medicines is considered to be a closer simulation of condition during human consumption, which is considered by DH to be more appropriate for human risk assessment. The procedures and scope of the tests are recognized by both CMB and the international expert group of the Scientific Committee set up under the Hong Kong Chinese Materia Medica Standards research project. The Administration has stressed that the results of the first-stage test are for screening purpose only. It does not mean that the samples concerned will certainly have adverse effects on health. If the results of the second-stage tests show that the limits of pesticide residues are exceeded, DH will conduct investigations and carry out the associated risk management procedures.

President, Honourable Members, it can be seen from the foregoing introduction that the amendments proposed by us to the Bill seek to enhance the regulatory standard of Chinese medicines in Hong Kong. During the drafting process, the relevant stakeholders were already fully consulted. We also thank the Bills Committee for supporting the amendments proposed to the Bill. I implore Honourable Members to support the passage of the Bill to enable the regulatory mechanism for Chinese medicines to be improved expeditiously so as to afford better protection to the public. Thank you, President.

PRESIDENT (in Cantonese): I now put the question to you and that is: That the Chinese Medicine (Amendment) Bill 2017 be read the Second time. Will those in favour please raise their hands?

(Members raised their hands)

LEGISLATIVE COUNCIL ― 29 March 2018 8149

PRESIDENT (in Cantonese): Those against please raise their hands.

(No hands raised)

PRESIDENT (in Cantonese): I think the question is agreed by a majority of the Members present. I declare the motion passed.

CLERK (in Cantonese): Chinese Medicine (Amendment) Bill 2017.

Council became committee of the whole Council.

Consideration by Committee of the Whole Council

CHAIRMAN (in Cantonese): Council now becomes committee of the whole Council to consider the Chinese Medicine (Amendment) Bill 2017.

Members may refer to the Appendix to the Script for the debate and voting arrangements for the Bill.

CHINESE MEDICINE (AMENDMENT) BILL 2017

CHAIRMAN (in Cantonese): I will first deal with the clauses with no amendment. I now propose the question to you and that is: That the following clauses stand part of the Bill.

CLERK (in Cantonese): Clauses 1, 2, 3 and 6 to 12.

CHAIRMAN (in Cantonese): Does any Member wish to speak?

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DR HELENA WONG (in Cantonese): Chairman, just now the Secretary responded to some queries raised by me, but she did not explain the reason for testing only four types of heavy metal. The authorities conduct the testing of herbal medicines in two stages. After preliminary screening, any herbal medicines found to have exceeded the limit will be decocted to check the excess. Actually, even if any excess is found at this stage, which type of herbal medicines has caused the final decoction to exceed the limit is unknown. For this reason, there is no way to carry out a recall under a CMSO. Since the authorities do not know actually which type of herbal medicines in the whole pack has exceeded the limit, they cannot recall all the herbal medicines. Hence, even if the Chinese herbal medicines available for sale in the market have exceeded the limit of heavy metals content, pesticide residues or sulphur content, the authorities are unable to recall them.

For this reason, despite our support for the Chinese Medicine (Amendment) Bill 2017 ("the Bill") to confer power on the authorities to recall problematic Chinese medicine products which have problems, if the authorities adopt the existing two-stage testing approach, it actually cannot help detect herbal medicines with excessive heavy metals or pesticide residues at the import, wholesale and retail levels. How will the authorities deal with this issue?

Just now I also mentioned the problem with sulphur dioxide because in some tests commissioned by us, it was found that a lot of herbal medicines sold in the market carried sulphur dioxide residues exceeding the standard limit in the Pharmacopoeia of the People's Republic of China. But so far the Government has not imposed any regulation. I hope that the Government can provide a clear timetable, stating when the problem of sulphur dioxide content in Chinese herbal medicines or proprietary Chinese medicines will be addressed after the passage of the Bill today.

The industry has long used sulphur to fumigate Chinese herbal medicines for over a century, but the Government has never exercised any control. The main purpose of fumigating Chinese medicines with sulphur is to keep the Chinese herbal medicines moist so that they will weigh heavier, to bleach them so that they will look better to customers, or to prevent them from being infested by insects or getting mouldy during storage, etc. Some members of the industry often use sulphur to fumigate Chinese herbal medicines. However, sulphur dioxide will remain in Chinese herbal medicines fumigated with sulphur. Excessive sulphur dioxide will cause adverse reactions such as sore throat, harm LEGISLATIVE COUNCIL ― 29 March 2018 8151 to the stomach, etc. to users, and it is also toxic to the liver and kidney. Sulphur also contains impurities like arsenic and mercury. After excessive fumigation, these heavy metal elements will infiltrate into the herbal medicines. If someone keeps consuming them over a long period, they will accumulate in his body and endanger his health. I hope the Government will state clearly when it will impose regulation.

Various places such as Mainland China, Taiwan, South Korea, Europe and the United States have set out standards for sulphur dioxide content in Chinese herbal medicines. The WHO (i.e. World Health Organization) Expert Committee on Food Additives has assessed the risk of using sulphur dioxide as a food additive and set the tolerable daily intake of sulphur dioxide at 0.7 mg/kg. That means the daily intake of sulphur dioxide for an adult who weighs 60 kg should not exceed 42 mg.

Regarding the sulphur dioxide content in Chinese herbal medicines, there is no explicit guideline in law which states that the authorities can recall herbal medicines or proprietary Chinese medicines exceeding the limit. Although the Preservatives in Food Regulations has set out standards regulating sulphur dioxide, it is only applicable to food but not Chinese herbal medicines. So far Hong Kong has not set any standard limit for sulphur dioxide content in Chinese herbal medicines.

Here I urge the Food and Health Bureau to draw reference from the Mainland and international practices, and expeditiously set a timetable for amending the Chinese Medicines Ordinance ("CMO") to include a statutory ceiling for sulphur dioxide content in various types of Chinese herbal medicines to prevent abuse of sulphur for fumigation of herbal medicines in the Chinese medicine industry.

Besides, just now Mr CHAN Han-pan also mentioned imported or locally manufactured Chinese medicines …

CHAIRMAN (in Cantonese): Dr Helena WONG, I wish to remind you that now it is not an extension of the Second Reading debate. The committee is now considering the motion that clauses 1, 2, 3 and 6 to 12 stand part of the Bill. Please focus on why you support or oppose this motion.

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DR HELENA WONG (in Cantonese): Chairman, okay. My speech certainly supports these clauses standing part of the Bill because the objective of the first few clauses is related to the manufacture, possession and sale of proprietary Chinese medicines and Chinese medicines. The speech made by me just now has also pointed out the problems of Chinese herbal medicines in respect of manufacture, possession and registration.

In my view, the Government needs to make a greater effort at the import of Chinese herbal medicines. During the scrutiny of the Bill, I have especially voiced the need to pay attention to and examine afresh the quality control system for imported Chinese herbal medicines. In this connection, the Government said that according to the Practising Guidelines for Wholesalers of Chinese Herbal Medicines issued by the Chinese Medicines Board under the Chinese Medicine Council of Hong Kong―that means this book in my hand―licensed wholesalers of Chinese herbal medicines may purchase herbal medicines or processed herbal medicines only from reputable suppliers. However, most of the Chinese herbal medicines currently available in the market in Hong Kong were planted and manufactured in Mainland China and then imported into Hong Kong. According to the Drug Administration Law of the People's Republic of China, processed herbal medicines manufactured on the Mainland must meet the requirements of GMP, i.e. Good Manufacturing Practice, for the purpose of regulating the manufacture of Chinese herbal medicines and proprietary Chinese medicines. They must also be granted the Drug GMP Certificate after passing the inspection by the local food and drug regulatory department of the respective province, autonomous region or municipality under the China Food and Drug Administration.

However, as we have repeatedly pointed out at the meetings of the Bills Committee, although the Government has issued the Practising Guidelines requiring wholesalers to procure herbal medicines from reputable suppliers, we know that the quality of traders in the industry varies. The Hospital Authority works in a more prudent manner. Providing Chinese medicine outpatient services, it will import herbal medicines from places with GMP certification. However, not every wholesaler or retailer in the market will import herbal medicines from reputable suppliers or places with GMP certification.

In this connection, does the Department of Health strictly inspect the current licences issued to wholesalers and check the origins of their Chinese medicines? Although we know that the Government now requires wholesalers LEGISLATIVE COUNCIL ― 29 March 2018 8153 to keep the documents to show the origins of herbal medicine imports, we doubt whether the Government has conducted proper inspections to ensure that the herbal medicines came from reputable places. If we have the opportunity to visit Guangzhou, we would see some local large-scale wholesale markets where there are all kinds of herbal medicines. But do we know clearly where such herbal medicines come from? Actually no one knows …

CHAIRMAN (in Cantonese): Dr Helena WONG, let me remind you again that the committee is now considering the motion that clauses 1, 2, 3 and 6 to 12 stand part of the Bill. You should wait until the next debate session to express the view you are presenting now.

DR HELENA WONG (in Cantonese): Thank you, Chairman. I will end this part of my speech. I hope the Government will enhance its work in regulating herbal medicine imports to ensure that there is no problem with the places of origin of herbal medicines. It should also establish a sound tracking mechanism so that when we discover any problem with the quality of herbal medicines, we will clearly know from which farm or place of manufacture they actually come from, thus being able to recall all the problematic herbal medicines imported into Hong Kong.

CHAIRMAN (in Cantonese): Does any other Member wish to speak?

(No Member indicated a wish to speak)

SECRETARY FOR FOOD AND HEALTH (in Cantonese): Chairman, I will make a brief response. I thank Dr Helena WONG for raising her views just now on our testing approach and the regulation and import of various types of Chinese herbal medicines. We will review the existing work in due course. We will also pay attention to the international practice and consult the Scientific Committee, with a view to making continuous enhancement to the existing effort.

Thank you, Chairman.

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CHAIRMAN (in Cantonese): I now put the question to you and that is: That the clauses read out by the Clerk stand part of the Bill. Will those in favour please raise their hands?

(Members raised their hands)

CHAIRMAN (in Cantonese): Those against please raise their hands.

(No hands raised)

CHAIRMAN (in Cantonese): I think the question is agreed by a majority of the Members present. I declare the motion passed.

CLERK (in Cantonese): Clauses 4 and 5.

CHAIRMAN (in Cantonese): The Secretary for Food and Health will move her amendments, as set out in the Appendix to the Script.

Members may now proceed to a joint debate on the original clauses and the amendments.

Secretary for Food and Health, you may move your amendments.

SECRETARY FOR FOOD AND HEALTH (in Cantonese): Chairman, I move the amendments to the clauses read out just now as set out in the paper circularized to Members. Some of the amendments are technical or textual. For example, we propose a textual amendment to clause 4, replacing "證明" with "確立" in the Chinese text for alignment with the English text.

We also propose amending clause 4 to adopt the definition of "intermediate product" in the existing Chinese Medicine Ordinance (Cap. 549), substituting "intended for use" with "to be used". Since the policy intent remains unchanged, we decided to move this amendment to avoid misunderstanding and ambiguities.

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Moreover, we propose amending clause 5 to repeal the relevant finality provision so as to reflect that the policy does not intend to restrict or limit the power of final adjudication vested in the Court of Final Appeal.

The Bills Committee does not object to our proposed amendments. I hope Members will support the relevant amendments.

Thank you, Chairman.

Proposed amendments

Clause 4 (See Annex II)

Clause 5 (See Annex II)

CHAIRMAN (in Cantonese): I now propose the question to you and that is: That the amendments moved by the Secretary for Food and Health be passed.

CHAIRMAN (in Cantonese): Does any Member wish to speak?

(No Member indicated a wish to speak)

CHAIRMAN (in Cantonese): I now put the question to you and that is: That the amendments moved by the Secretary for Food and Health be passed. Will those in favour please raise their hands?

(Members raised their hands)

CHAIRMAN (in Cantonese): Those against please raise their hands.

(No hands raised)

CHAIRMAN (in Cantonese): I think the question is agreed by a majority of the Members present. I declare the amendments passed.

8156 LEGISLATIVE COUNCIL ― 29 March 2018

CLERK (in Cantonese): Clauses 4 and 5 as amended.

CHAIRMAN (in Cantonese): I now put the question to you and that is: That clauses 4 and 5 as amended stand part of the Bill. Will those in favour please raise their hands?

(Members raised their hands)

CHAIRMAN (in Cantonese): Those against please raise their hands.

(No hands raised)

CHAIRMAN (in Cantonese): I think the question is agreed by a majority of the Members present. I declare the motion passed.

CHAIRMAN (in Cantonese): All the proceedings on the Chinese Medicine (Amendment) Bill 2017 have been concluded in committee of the whole Council. Council now resumes.

Council then resumed.

SECRETARY FOR FOOD AND HEALTH (in Cantonese): President, I now report to the Council: That the

Chinese Medicine (Amendment) Bill 2017 has been passed by committee of the whole Council with amendments. I move the motion that "This Council adopts the report".

PRESIDENT (in Cantonese): I now propose the question to you and that is: That the motion moved by the Secretary for Food and Health be passed.

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In accordance with Rule 59(2) of the Rules of Procedure, the motion shall be voted on forthwith without amendment or debate.

PRESIDENT (in Cantonese): I now put the question to you as stated. Will those in favour please raise their hands?

(Member raised their hands)

PRESIDENT (in Cantonese): Those against please raise their hands.

(No hands raised)

PRESIDENT (in Cantonese): I think the question is agreed by a majority of the Members present. I declare the motion passed.

Third Reading of Government Bill

PRESIDENT (in Cantonese): Government Bill: Third Reading.

CHINESE MEDICINE (AMENDMENT) BILL 2017

SECRETARY FOR FOOD AND HEALTH (in Cantonese): President, I move that the

Chinese Medicine (Amendment) Bill 2017 be read the Third time and do pass.

PRESIDENT (in Cantonese): I now propose the question to you and that is: That the Chinese Medicine (Amendment) Bill 2017 be read the Third time and do pass.

8158 LEGISLATIVE COUNCIL ― 29 March 2018

PRESIDENT (in Cantonese): Does any Member wish to speak?

DR HELENA WONG (in Cantonese): President, the Democratic Party is very glad to see that the Chinese Medicine (Amendment) Bill 2017 ("the Bill") will soon be passed today, and we also strongly support the development of Chinese medicine in Hong Kong, including the construction of a Chinese medicine hospital. Apart from that, we hope the Government can support the operation of the new Chinese medicine hospital with public funds for the provision of outpatient and inpatient services, and that it can step up training for Chinese medicine practitioners and pharmacists, offering them an intership venue.

The success of Chinese medicine hinges on a number of complementary policies and resources provided by the Government, which also needs assurance of the quality control of Chinese herbal medicines and proprietary Chinese medicines. Moreover, a proper regulatory framework for quality and safety assurance should also be put in place. Earlier on, I mentioned the need to step up regulation at the import level and take note of the number and types of Chinese herbal medicines tested. And as stated by me earlier on, the Government also has to address the difficulty in distinguishing products as herbal medicines, food or neither the former nor the latter.

Moreover, at the import, wholesale and retail levels, we know that the Department of Health ("DH") will collect some samples of herbal medicines for laboratory tests. Earlier on, the Secretary also mentioned that the number of samples of Chinese herbal medicines taken by DH for testing had increased from the original 30 to 45 per month starting from February 2017. Nevertheless, is the population of 45 samples of Chinese herbal medicines collected per month way too small? I consider it pitifully small, and the testing only covers 37 pesticide residues and four heavy metals content. The Secretary has yet to give us an answer as to why only four heavy metals are covered, so …

PRESIDENT (in Cantonese): Dr Helena WONG, I wish to remind you that during the Third Reading debate, Members should only expound on whether they support the Third Reading of the Bill, instead of extending the Second Reading debate or the debate in the committee of the whole Council. Will you please focus on whether you support the Third Reading of the Bill?

LEGISLATIVE COUNCIL ― 29 March 2018 8159

DR HELENA WONG (in Cantonese): President, thank you for your friendly reminder, but you have interrupted me. Had you not taken up the time, I actually would have finished just now.

(THE PRESIDENT'S DEPUTY, MS STARRY LEE, took the Chair)

Let me say it once again. The Democratic Party supports the Bill. But the existing surveillance regime for the quality and safety of Chinese herbal medicines is still in need of improvement if we wish to ensure the safety of Chinese medicines and the development of Chinese medicine. I hope the authorities may provide DH with additional resources to carry out proper testing. I believe as far as food safety is concerned, we will collect more than 45 samples per month, so why are only 45 samples of herbal medicines collected per month? Given that there are currently a wide range of herbal medicines and many different wholesalers, is it way too slipshod?

Hence, I very much hope that the Secretary will undertake to provide DH with additional resources to carry out proper testing. If we attach such importance to Chinese medicine, we hope the herbal medicines purchased and consumed by members of the public are able to cure people without raising other concerns. I do hope the Secretary will admit that the population of 45 samples of herbal medicines collected per month is way too small indeed, and there are many more which have never been tested. Will they review afresh the current quality and safety of Chinese herbal medicines, and formulate up-to-date standards for heavy metals content in herbal medicines? If we place great importance on food safety, why do we treat herbal medicines in such a negligent manner? If food testing covers more than four heavy metals content, why does the testing of herbal medicines covers four heavy metals content only? Why do we tighten the standards for heavy metals content in food without paying the least attention to herbal medicines, and keep using the outdated and obsolete standards?

In Hong Kong, a modern city, public health is our utmost concern. While reviewing food safety, we should also review afresh the safety of Chinese herbal medicines and proprietary Chinese medicines. If we can expeditiously pass the amendments to the Bill and update the standards for heavy metals content in food in terms of food safety, and then proceed forthwith to the amendments relating to 8160 LEGISLATIVE COUNCIL ― 29 March 2018

Chinese herbal medicines after the passage of the Bill by reading it the Third time today, we will feel more at ease, otherwise we will remain concerned about whether there are any loose ends left.

I shall stop here. We support the Third Reading of the Bill.

MR SHIU KA-FAI (in Cantonese): Deputy President, I will just be brief. I certainly support the passage of the Chinese Medicine (Amendment) Bill 2017 by reading it the Third time. Earlier on, Dr Helena WONG expressed her hope that the Bureau will conduct laboratory tests on the many different substances contained in herbal medicines. In fact, in my last speech, I already mentioned that we would take herbal medicines in the form of decoctions without taking the dregs. I think if testing is to be conducted, procedures will matter much. Earlier on, Dr Helena WONG stated that if something wrong was found only after the herbal medicines had been served in the form of decoctions, there would be no way to trace the problematic herbal medicines. But I believe otherwise. If possible, the Secretary may also express her views. I believe for decoctions found problematic, the authorities should, under the relevant procedures, find out where such herbal medicines are purchased and make inquiries with the traders concerned who will then furnish details of the wholesalers, so as to trace the sources. I believe my understanding is correct. Later on, the Secretary may give a further explanation, otherwise if what Dr Helena WONG said is true, there will actually be a total lack of regulation.

Deputy President, the last point I wish to make is that it is common sense that we must not eat pork raw due to its high bacterial load, and it must be consumed cooked. If even raw pork is subject to testing, we may as well stop eating it once and for all because it should be our standard to eat cooked pork, which also holds true for decoctions. For this reason, I hope the Bureau can get a clear picture of how things are currently going in the area of Chinese medicine. Thank you.

MR CHAN HAN-PAN (in Cantonese): Deputy President, I would like to correct a remark made by Mr SHIU Ka-fai just now. When we eat pork, we eat the meat, yet when we take Chinese medicine, we will not swallow the dregs. Regarding Dr Helena WONG's concern about quality testing, DAB is also LEGISLATIVE COUNCIL ― 29 March 2018 8161 concerned about this. Yet, Members should note that if the testing standard for Chinese medicine is to be raised to a level on a par with that for food, I am afraid no Chinese medicine will be available for sale in the market.

Why? For vegetables, they may be harvested in three months. Yet, for certain types of Chinese herbal medicine, it may take more than six years of growing before they can be used. Hence, it is impracticable to compare the heavy metals content of the two. Some Chinese herbal medicines require refining, where certain substances need to be added in the refining process. For instance, if the use of Chinese herbal medicines with heavy metals content is prohibited, Zhusha ("朱砂", Cinnabaris) which contains mercury cannot be used in future. Hence, sometimes it may not be suitable to apply the yardstick for food regulation to the regulation of Chinese medicine.

Certainly, we believe that it is, in general, good to raise the standard. Yet, we hope that in expressing concerns about the safety of Chinese medicine, Dr Helena WONG will discuss more with the industry to enrich her knowledge, and she should not classify all things to be swallowed as food. Chinese medicine needs to be decocted and the public will take the decoction as medicine. Hence, the target subjects of the testing procedures as a whole are the decoctions or the pills made from refining Chinese herbal medicines instead of the dregs, as well as raw ingredients for preparing the decoction. I think this approach is more reasonable, for only the decoctions and the pills are to be taken, and the public are most concerned about this.

We do not expect all Chinese herbal medicines imported into Hong Kong to meet the required standards for food, as I consider this unscientific and unrealistic. Does it mean that Hong Kong does not have its own standards? Not really. Indeed, Hong Kong has the Hong Kong Chinese Materia Medica Standards ("HKCMMS"). Yet, HKCMMS is extremely stringent and no one has even used that even though it has been established for years.

Deputy President, let me come back to the Chinese Medicine (Amendment) Bill 2017 ("the Bill"). The amendments this time around will confer on the Government the power to instruct a recall of Chinese medicine or the relevant products. I recall a case that occurred before the introduction of the Bill, where the pharmaceutical manufacturer changed one of the ingredients in one of its Chinese medicine products. Why was the change made? The original ingredients used for the product were selected according to the results of the repeated studies conducted by The Chinese University of Hong Kong and the 8162 LEGISLATIVE COUNCIL ― 29 March 2018 effect was good. However, the product turned out to have one shortcoming, that is, a lot of froth and bubbles would form when water was poured into it. The manufacturer then replaced one of the Chinese herbal medicines with another one with the same effect which would reduce the froth and bubbles. Since the products had not undergone clinical tests, it was made into concentrated Chinese medicine granules for sale. Unfortunately, the concentrated granules were not made of Oolong (烏龍) tea but Tieguanyin (鐵觀音) tea. Oolong tea is not regarded as a Chinese herbal medicine but Tieguanyin tea is. The pharmaceutical manufacturer had overlooked this point in making the change. As a result, the Chinese Medicine Council of Hong Kong considered the product problematic, and the Department of Health ("DH") immediately instructed a recall of the product. In the course, I called DH to point out directly to the authorities that they did not have the authority to instruct a recall of the product and I asked them to study the Chinese Medicine Ordinance ("CMO") carefully. Back then, DH told me in an authoritative manner to the effect that, "We have the power to instruct a recall. It is ridiculous if the Ordinance does not provide the authorities with such power, is it not?" This opinion of mine was proved to be correct only when certain people started a lawsuit against the Government to challenge the Government's authority in instructing the recall. At that time, I had studied CMO and learnt that the Government did not have the power to take such action.

There are other loopholes in CMO still and I have reminded the Government of them earlier. I hope with the Third Reading of the Bill, the Government will immediately start the work of amending CMO as a whole. Otherwise, many of the problems in regulating Chinese medicine will persist, where the market will be flooded by an avalanche of suspected Chinese medicine products and there will be a lack of protection for the public.

Certainly, the Government has to wait for the allocation of a time slot for the submission of the motion, and it takes time for the legislature to scrutinize the motion. Yet, if we are to promote the development of the Chinese medicine industry and win an international reputation for our products, we have to make matching adjustments to our regulatory laws. Recently, a throat-soother drink of Hong Kong is most sought after in the United States, selling at over US$80 per bottle. Why would the product become so popular? For it can cure flu and relieve flu symptoms. The product can make a name for itself in the international community not because of the support of the Hong Kong Government. It boils down to mere luck and coincidence.

LEGISLATIVE COUNCIL ― 29 March 2018 8163

Yet, I trust that if we can effect sound regulation and provide appropriate assistance to the industry, Hong Kong has good potential to develop the Chinese medicine industry in addition to the finance and real estate industries. As seen from history, when wars and chaos broke out in the Mainland, such as times in the Ming Dynasty and Qing Dynasty, many operators would bring the secret prescriptions of their families to Hong Kong and settle down here. However, I would like to tell Members that under the existing registration system, certain operators using the secret prescriptions handed down by their ancestors have indicated a wish to cease production, for they cannot continue their operation when they cannot obtain the registration. Members should know that there are only three types of registration applicable to proprietary Chinese medicines at present. The first type is HKP (Notice of Confirmation of Transitional Registration of Proprietary Chinese Medicine), which is kind of transitional registration. The second type is HKC (Certificate of Registration of Proprietary Chinese Medicine), which is an official registration. The third one is HKNT, which is the Notice of Confirmation of (Non-Transitional) Registration Application of Proprietary Chinese Medicines.

For certain traditional Chinese medicines, such as Yuen Kut Lam ("源吉 林") …

DEPUTY PRESIDENT (in Cantonese): Mr CHAN Han-pan, Council is now conducting the Third Reading debate of the Bill, and we are not discussing the question on the development of Chinese medicine. I believe many Members of this Council aspire for better development of Chinese medicine, yet Members should focus on the discussion about whether or not they support the Third Reading of the Bill now.

MR CHAN HAN-PAN (in Cantonese): I support the Third Reading and the passage of the Bill. Yet, I must point out unequivocally to the Government that even though the Government is conferred with the power to instruct the recall of certain propriety Chinese medicines under the Bill this time around, it should pay attention to the preliminary work. If the preliminary work is unsatisfactory, such as inadequacy in the registration system, many prescriptions which have escaped the damage of war, being passed down from the Ming Dynasty and Qing 8164 LEGISLATIVE COUNCIL ― 29 March 2018

Dynasty until now, may be lost. I do not wish to see the Government giving instructions to recall proprietary Chinese medicines with a history of several hundreds of years according to the amendments to CMO passed here today.

Hence, I hope the Government will continue to work hard on the regulation under CMO as a whole after it has been conferred with the power. For certain propriety Chinese medicines which have been used for hundreds of years and have been proved to be effective with no safety concerns, the authorities should grant them the HKS registration―safe Chinese medicine in Hong Kong―which is a type of registration designated for traditional Chinese medicines. Therefore, I would like to take this opportunity of the Third Reading debate of the Bill to call the Government's attention to our aspirations and proposals.

Deputy President, I so submit.

DEPUTY PRESIDENT (in Cantonese): Does any other Member wish to speak?

(No Member indicated a wish to speak)

DEPUTY PRESIDENT (in Cantonese): If not, I now put the question to you and that is: That the Chinese Medicine (Amendment) Bill 2017 be read the Third time and do pass. Will those in favour please raise their hands?

(Members raised their hands)

DEPUTY PRESIDENT (in Cantonese): Those against please raise their hands.

(No hands raised)

DEPUTY PRESIDENT (in Cantonese): I think the question is agreed by a majority of the Members present. I declare the motion passed.

CLERK (in Cantonese): Chinese Medicine (Amendment) Bill 2017.

LEGISLATIVE COUNCIL ― 29 March 2018 8165

MEMBER'S MOTION

DEPUTY PRESIDENT (in Cantonese): Debate on motion with no legislative effect. The motion debate on "Stimulating internal demand and opening up new visitor sources".

Members who wish to speak on the motion will please press the "Request to speak" button.

I call upon Mr SHIU Ka-fai to speak and move the motion.

STIMULATING INTERNAL DEMAND AND OPENING UP NEW VISITOR SOURCES

MR SHIU KA-FAI (in Cantonese): Deputy President, I move that the motion, as printed on the Agenda, be passed. Deputy President, this motion on "Stimulating internal demand and opening up new visitor sources" was actually submitted to the Secretariat early last year. In November last year, I thought we could finally conduct a debate on it but, as we all know, the Legislative Council has since encountered a lot of problems, and it is only until today that the debate and voting can finally be conducted.

Although one year has passed since then, this motion has not become outdated. On the contrary, it is even more opportune. The Budget announced late last month is in agreement with the premise of this motion, that is, the Government is enjoying ample fiscal reserves and fiscal stability. After Hong Kong's reunification, no budget has recorded any deficit since 2003. The latest Budget has even forecast a record-breaking surplus as much as $138 billion. The fiscal reserves, reaching $1,100 billion, have also hit a new high. The Government has also forecast surpluses for the next five years, with its fiscal reserves reaching $1222.6 billion in five years. According to past experience, the Government usually underestimates its surplus. Hence, the future surplus figures are expected to be higher than the estimates.

Deputy President, since the government coffers are inundated with revenue and the Government is enjoying fiscal stability, I have all along advocated that it should make good use of this favourable state of public finance for launching more measures to improve people's livelihood, so as to return wealth to people 8166 LEGISLATIVE COUNCIL ― 29 March 2018 and stimulate internal demand while saving up for a rainy day and pursuing economic development.

Next I will express my views on "stimulating internal demand" and "opening up new visitor sources".

Insofar as "stimulating internal demand" is concerned, when announcing the Budget, the Government originally planned to share with the public 40% of its surplus of approximately $53 billion by launching such measures as rates concession, reducing salaries tax and profits tax, "triple payment" of Comprehensive Social Security Assistance, and so on. Although the recommendations made by the Labour Party, such as deduction of the "levy on foreign domestic helpers", refund of Government rent and a 10-year tax allowance for rentals, are not included in these measures, we can see that the Government is sincere. Therefore, the Labour Party will still support the Government. Recently, the Government has even decided to launch an additional initiative under the Caring and Sharing Scheme, so that 2.8 million eligible persons will receive $4,000 each, and the expenditure thus incurred is estimated to be $11 billion. Both the Labour Party and I welcome this initiative. It will cost the Government $64 billion in total to implement the two initiatives.

It is right that the Government is prepared to listen to different aspirations of people in society and strive to benefit the citizens when the economy is robust and huge surpluses are recorded. It is also a good thing for the Government to do so. These resources to be shared with the public can not only improve their livelihood but also return wealth to them. What is more, people will have more cash on hand, thereby stimulating spending or, as I mentioned just now, internal demand. I hope and urge Hong Kong people to, after receiving the benefits, strive to remain in Hong Kong for spending and offer assistance to various trades and industries, including the retail, catering, logistics and transport industries.

Some question the wisdom of continued expansionary efforts by the Government to stimulate the economy, at a time when the value of total retail sales, after two years of decline, have finally rebounded in March and continued to pick up in recent months. Deputy President, good times do not last forever, as the saying goes. The trend of the retail industry is seemingly robust, but not without its worries. It is thus imperative for us to save for a rainy day and get prepared for challenges and lurking perils before us in future.

LEGISLATIVE COUNCIL ― 29 March 2018 8167

As a matter of fact, in view of the recent recovery in retail businesses, landlords will have no compunction about raising rents. Meanwhile, the unemployment rate of Hong Kong has dropped to 2.9%, the lowest in 20 years, while the rate of underemployment hovers at 1.1%, which points to the extreme tightness of the local labour market. Since the Government has no immediate plans to relax its labour importation policy, the competition for hands among all businesses may well intensify with wages climbing higher.

Apart from the aforementioned worries, some members of the industry have pointed out to me that the Mainland has lowered the import tariffs on numerous consumer products since 1 December last year, with the average tax rate of over 187 consumer products, including food, health supplements, pharmaceuticals, cosmetics, clothing and footwear, household products, cultural and entertainment, and general merchandise, slashed from 17.3% to 7.7%. While it is undoubtedly good news for the import/export trade, it is quite the opposite for the retail sector of Hong Kong. A reduction of import tariffs means the gap between prices in the Mainland and those in Hong Kong will gradually narrow, which, together with the prevalence of online shopping in the Mainland, may disincentivize Mainlanders from doing shopping in Hong Kong.

To tackle these challenges, Hong Kong must vigorously promote tourism. The tourism industry has always been a key pillar of the economy of Hong Kong, contributing 5% of Gross Domestic Product and employing, along with such closely linked industries as retail, catering, transport, logistics and import/export, hundreds and thousands of people, with significant impact on the economy and people's livelihood in Hong Kong.

The retail and tourism industries are inextricably linked. The pick-up in the value of total retail sales in recent months was linked to the growth of visitor numbers to Hong Kong. In 2017, 58.5 million visitors came to Hong Kong, of whom 76% came from the Mainland. The spending of these Mainland tourists shopping in Hong Kong accounts for around 35% to 40% of the total retail sales in the territory by value. Therefore, as the tourism industry flourishes, the local retail sector along with all manners of businesses will flourish as well.

This year's Budget proposes an additional provision of $396 million to the tourism industry, representing an increase of over $240 million, or over 60%, from the additional provision of last year. I certainly welcome this. Unlike last 8168 LEGISLATIVE COUNCIL ― 29 March 2018 year, no waivers of licence fee were made available for travel agents, hotels, guesthouses and restaurants in this year's Budget despite the Government's fiscal prowess, disappointing many industry practitioners.

Moreover, the $220 million or so allocated to the Hong Kong Tourism Board is largely, I suppose, for the implementation of the development blueprint for Hong Kong's tourism industry. I certainly find such a provision crucial, but with a fiscal surplus in abundance, the Government should allocate more funding still. Further, in respect of supporting facilities for tourism, the development of hardware is no less important than that of software. By providing more of such supporting facilities, conflicts between the locals and tourists could be avoided.

Deputy President, the commissioning of the Guangzhou-Shenzhen-Hong Kong Express Rail Link ("XRL"), possibly this year, and the likely completion of the Hong Kong-Zhuhai-Macao Bridge ("HZMB") will bring greater convenience to Mainland tourists travelling to Hong Kong, providing what I believe as the biggest opportunity for Hong Kong's tourism industry to scale new heights since the implementation of the Individual Visit Scheme in 2003. Long-haul tourists aside, I believe the Guangdong-Hong Kong-Macao Bay Area ("the Bay Area"), which alone boasts a population of 60 million, will eventually drive the economy of Hong Kong forward. However, you need a strong hammer to forge steel, as I said just now. We cannot receive tourists properly without first upgrading our capability and capacity of receiving visitors.

In an assessment report on Hong Kong's capacity to receive tourists in 2013, the Government set no limit on the overall visitor arrivals, but nonetheless highlighted several aspects in need of improvement, including measures to divert pedestrian flow in tourist districts, so that visitors to Hong Kong can enjoy themselves to the full without affecting the locals. In respect of measures to divert tourist flow in recent years, I find them still not satisfactory. The influx of visitors to Hong Kong has induced much anxieties and aversion among many members of the public. And the activities of tourists in certain districts have indeed caused some impacts on the locals. That being the case, the Government should, in view of its abundant fiscal surplus, provide additional supporting facilities for tourism , such as establishing different shopping spots, thereby diverting tourists away from residential districts.

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An Honourable colleague mentioned some districts in Hong Kong in his amendment. Deputy President, I know the district where you live is also popular with tourists. If tourists come in droves and proper matching transport facilities are unavailable, residents in the district will grow aversive. I therefore hope that the Government will work harder and do a proper job in respect of matching transport facilities. It is crucial to strike a balance between doing business and having regard to the feelings of the public. I wish to also point out that driving tourists away is easy, inducing them back is much harder. I do not think it is wise for Hong Kong to drive tourists away just to make the Hong Kong public feel good. Therefore, the Government should provide more supporting facilities, which is what the public wish to see the Government do.

In the long term, I think the authorities should review the merits of maintaining the "one trip per week" measure while considering whether the measure should be moderately extended to other Mainland cities. In view of the added convenience to tourists in terms of transport options to be brought about XRL and HZMB, if the "one trip per week" policy can be relaxed at the same time, I believe more tourists will be enticed to visit Hong Kong, bringing not only overall economic gains to Hong Kong, but also more jobs opportunities and a greater chance of a pay rise to wage earners. Deputy President, I have said time and again that the key to bettering people's livelihood lies first and foremost in boosting the economy. If the economy is flagging, how can we help those in need?

I am aware that some Members have expressed concerns over visitors to Hong Kong and proposed amendments accordingly. I respect their views, as the feelings of the Hong Kong public are very important. However, it is no less important to come up with ways to promote economic growth, i.e. to boost the income, of Hong Kong. I believe no Member in this Chamber, be him pro-establishment or non-establishment, wish to see businesses in Hong Kong sagging and the economy handing for a downturn. I have no doubt that their considerations are based on the worries of the Hong Kong public. I therefore hope that the Government will iron out the problems by doing a better job of supporting hardware, thereby dispelling the misgivings of some Members.

Deputy President, I shall stop here for the time being. Thank you.

8170 LEGISLATIVE COUNCIL ― 29 March 2018

Mr SHIU Ka-fai moved the following motion: (Translation)

"That, given the Government's ample fiscal reserves and fiscal stability, this Council urges the Government to make good use of this favourable state of public finance for launching more measures to improve people's livelihood, so as to return wealth to people and stimulate internal demand; the Government should at the same time expedite the provision of additional tourism supporting facilities to upgrade Hong Kong's visitor receiving capability and capacity, and alleviate the inconvenience caused by visitors to members of the public through better diversion, so as to open up new visitor sources for the benefit of the tourism, retail, catering and transport sectors, etc. and the overall economy of Hong Kong."

DEPUTY PRESIDENT (in Cantonese): I now propose the question to you and that is: That the motion moved by Mr SHIU Ka-fai be passed.

Five Members will move amendments to this motion. Council will conduct a joint debate on the motion and the amendments.

I will call upon Members who will move the amendments to speak in the following order: Dr KWOK Ka-ki, Mr YIU Si-wing, Mr Michael TIEN, Mr WU Chi-wai and Mr LAM Cheuk-ting; but they may not move amendments at this stage.

DR KWOK KA-KI (in Cantonese): Deputy President, I thank Mr SHIU Ka-fai for proposing this motion on "Stimulating internal demand and opening up new visitor sources". Tourism has all along been a pillar of Hong Kong, making considerable contribution to the economy. Apart from the manufacturing industry, tourism has also made Hong Kong famous in the world during the early post-war period. Thanks to its beautiful sceneries, Hong Kong has become the Pearl of the Orient with different types of attractions. But in recent years, the visitor arrivals generated by tourism, other than contributing to the Hong Kong economy, have actually dealt a blow and even brought challenges to Hong Kong in various aspects.

We have seen that in districts which see the concentration of certain types of tourists, such as Yuen Long and Tuen Mun in New Territories West, Sheung Shui in New Territories East, and also Tsuen Wan, To Kwa Wan, Hung Hom, LEGISLATIVE COUNCIL ― 29 March 2018 8171 etc., many local residents are suffering badly. What they have to put up with is actually visitors mainly from the Mainland, because according to the distribution of tourists in Hong Kong, Deputy President, visitors from the Mainland account for an extremely large share. According to the latest statistics of the Hong Kong Tourism Board ("HKTB"), Mainland visitors, be they overnight or same-day visitors, account for a very high percentage in the total visitor arrivals, numbering over 4.3 million. That said, we have seen that apart from the Mainland visitors, actually there are still over 1.12 million visitors from places outside the Mainland. But why is it that these non-Mainland visitors were less often the cause of complaints or contentions from people in different districts in Hong Kong? I think this has to do with their mode of travelling. While Mainland visitors still take up a vast majority of visitors in Hong Kong, there are over 2.7 million same-day arrivals from the Mainland. It is difficult for us to figure out or gather statistics on what these same-day visitors do in Hong Kong. Do they come for sightseeing or, as we suppose, for shopping, or even engaging in parallel trading activities?

We understand that shortly after the implementation of the "one trip per week" measure by the Government, there was slight improvement―just slight improvement―in the situation of parallel traders. But after a short time … I believe any citizen or official who have found time to go to such districts as Sheung Shui, Yuen Long and Tuen Mun in New Territories North will find that these districts are like battlefields where the streets are jam-packed and swarmed with Mainland visitors, particularly on days of long holiday in the Mainland. More often than not, they mostly concentrate on buying not high-value consumer goods but daily consumables. This explains why these districts are full of pharmacies or gift shops that appeal to Mainland visitors as their target customers. These Mainland visitors will often lay open their suitcases on the ground or cram the streets in the vicinity of the "parallel goods warehouses", as we call them, which are converted from industrial buildings, or selling points, thus causing obstruction on the streets. Are these situations particularly favourable to the tourism industry in Hong Kong? I do not have the answer, because I have read an interesting piece of news about an interesting comment made by the Mayor of Taipei, KO Wen-je, in his blog. He said that some Taiwanese netizens had their fantasy dashed the first time they visited Hong Kong and felt downright disappointed with Hong Kong.

(THE PRESIDENT resumed the Chair)

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Is it really the case that we have only Mainland visitors? No, it is not. In fact, visitors from Taiwan, Japan, Southeast Asia (including the Philippines and Malaysia) and Australia also constitute a large share of our visitor sources, and we really should not and will not have only one single source of visitors. Regarding these tourists from the same source, especially as their spending pattern is probably limited to shopping only, what effects will they have on Hong Kong? The effects are multi-faceted. Perhaps let me cite from a female netizen who made criticisms of Hong Kong in three aspects.

First, the streets are over-crowded and service attitude is bad; second, prices are too high; and third, an excessive number of Mainland visitors has compromised the original characteristics. She said that after opening up to Mainland visitors under the Individual Visit Scheme, Hong Kong is no longer the Hong Kong she used to know. Delicacies of Hong Kong are hard to come by; shop rental is expensive, and the chefs have retired. Most of the goods for sale now are ready-made; small shops have all disappeared; and all the shops operate with the sole objective of appealing to the taste of the Mainlanders, such as goldsmiths and Chinese herbal medicine shops.

This is most pathetic. Hong Kong has made the utmost effort to develop diversified tourism but at the same time, people from among our major visitor sources―the Mainland aside, Taiwan is also a major source for us―have made such criticisms of us. While the Government has ploughed in enormous amounts of funds, allocating billions of dollars to HKTB and the Tourism Commission, and will intensify its efforts this year by, among others, making provisions for the Ocean Park, not to mention a further injection for the Disneyland amidst huge controversies and the signing of some unequal treaties last year, what it gets in return is these criticisms alleging that Hong Kong is no longer worth visiting by tourists. My view is that we have worked so hard to take forward the relevant work over the years, but is it worth it?

There are demerits in having a homogenous source of visitors. As we all know, South Korea, Taiwan and even Japan have, because of disputes with the Mainland … For instance, the deployment of the THAAD system by South Korea has triggered discontent of the Mainland and the latter reacted by reducing the number of Chinese tours. It is for this reason that South Korea, Taiwan and even Japan have been dealt a blow to a certain extent at different times. But interestingly, a figure of the Korean tourism organization shows that South Korea has achieved recovery because when adding up the numbers of visitors from other LEGISLATIVE COUNCIL ― 29 March 2018 8173 places in Asia, the Middle East and other regions, the total number has exceeded the number of Chinese visitors by 31%, and an increase is recorded in visitors from Vietnam, Mongolia, Kazakhstan and Russia. Taiwan has a similar example. When the Taiwanese authorities were involved in political disputes with the Mainland, the latter again cut the number of tours. However, Taiwan has done very well by exerting their utmost to draw up a new policy on tourism. Despite a drop in the number of Mainland visitors, the total number of international visitors in Taiwan reached 10.7 million, which is an all-time high. When the number of Mainland visitors dropped by 600 000, the total visitor arrivals conversely hit a new high.

In fact, I wish to state that in order to maintain competitiveness and as a sustainable tourism city, Hong Kong cannot rely on one single visitor source. For example, you may think that it seems easy to make money when the Mainlanders come to Hong Kong for shopping. But if Members have paid attention to the situation, they will find that the Mainland has already lowered the tariffs for various types of consumer goods (including cosmetics). Will there still be so many people coming to Hong Kong for shopping? This is open to question. This is the first point.

Second, when Mainland visitors are tired of a certain place, such as Hong Kong, they will look for other destinations. But when our focus has been zeroed in specifically on Mainland visitors over the past decade, actually we are turning away visitors from some overseas places or places outside the Mainland every day, and they already have an aversion to Hong Kong or no longer consider Hong Kong their prime destination. Once this has become a trend, HKTB or the Government would have to double or triple the effort in order to attract tourists to visit Hong Kong again.

Apart from creating a huge impact on various districts in Hong Kong, especially New Territories West, Hung Hom and To Kwa Wan as we mentioned earlier, an over-reliance on Mainland tourists under the Individual Visit Scheme will not enable the tourism industry in Hong Kong to achieve any progress in the long run. I think Hongkongers should brace up; the tourism industry should also brace up, and the Government all the more should brace up. Clinging to the past advantages will get us nowhere.

With these remarks, I hope Members will support my amendment.

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MR YIU SI-WING (in Cantonese): President, first of all, I thank Mr SHIU Ka-fai for proposing this motion on "Stimulating internal demand and opening up new visitor sources" for debate. A key point of the original motion is to provide additional tourism facilities, so as to open up new visitor sources for the benefit of the overall economy of Hong Kong. As we all know, Hong Kong is principally a service-based economy. In 2014, the service sector accounted for as much as 93% of the Gross Domestic Product ("GDP") of Hong Kong, which was far higher than other developed economies in Asia. Despite the need for Hong Kong to be restructured into a diversified economy, I believe the service sector in Hong Kong will, for a certain period of time, continue to take up a significant percentage share and steer the direction of economic development in Hong Kong.

Tourism is the pillar of the service sector. Although the tourism industry makes a direct contribution of only 5% to GDP and employs 7% of the working population, the ripple effect is considerable. For example, such industries as retail, catering and transport mentioned in the original motion can be affected by the tourism industry. According to the World Travel and Tourism Council, tourism indirectly contributes as much as 16.8% to GDP in Hong Kong and employs a workforce of 560 000, accounting for 14.7% of the total working population. In recent years, given the global economic stability, transport convenience and comprehensive tourism facilities, outbound travel has become a habit of the general public. The rapid economic growth in the Mainland in recent years has increased the desire of the nationals to travel abroad, and tourism can be regarded as a sunrise industry. Therefore, I agree to the view of the original motion that the development of tourism should be made the key for stimulating internal demand.

In 2017, Hong Kong recorded a total of 58.5 million visitor arrivals, an increase of 3.2% over the previous year, and the number of overnight visitors was even up by more than 5%. The main reasons are the fewer incidents of Mainland visitors being treated impolitely in Hong Kong in the past two years and also additional resources provided by the Government for promoting tourism with local characteristics, thus enabling the local tourism industry to reverse the declining trend in the past two years and ride on the upswing again.

This year, with the commissioning of the Hong Kong-Zhuhai-Macao Bridge ("HZMB") and the Guangzhou-Shenzhen-Hong Kong Express Rail Link ("XRL"), opportunities will abound for the tourism industry. In future, a population of over 300 million covered by the five-hour traffic circle between LEGISLATIVE COUNCIL ― 29 March 2018 8175

Hong Kong and the Mainland will be a visitor source market with spending power and potentials. Besides, transport convenience will enable overseas visitors to travel via Hong Kong to the nearby areas through multi-destination travel and this will facilitate the growth of overnight visitors.

Having said that, we cannot neglect the pitfalls and challenges in future. With regard to the pitfalls, last year there were over 30 million same-day visitor arrivals, accounting for more than 50% of the total number of visitors, while overseas visitors accounted for only 24% of the overall visitor arrivals. This structure of visitor sources is unfavourable to the healthy development of the tourism industry in Hong Kong. In respect of challenges, our competitiveness targeting visitors with high spending power remains inadequate; the Ocean Park and the Hong Kong Disneyland ("Disneyland") face direct competition from the ocean park in Hengqin and the Shanghai Disneyland respectively; and in respect of cruise travel, we face competition from Nansha in Guangzhou and the Prince Bay in Shekou.

In respect of tourism support facilities, the high occupancy rate and room rates of hotels will affect the desire of overseas visitors to make bookings with hotels. The persistent shortage of parking spaces for coaches and the difficulties encountered in employing drivers will affect the service quality of travel agencies. The lack of large-scale convention and exhibition venues in Hong Kong will limit the development of Meetings, Incentive, Conventions and Exhibitions ("MICE") travel. While the local natural scenic spots and country parks have characteristics, the varying conditions for visitor reception are not conducive to the development of green tourism and in-depth travel.

To address these problems, the Commerce and Economic Development Bureau has formulated the Development Blueprint for Hong Kong's Tourism Industry, summing up the many measures proposed as short, medium and long-term initiatives and providing a timetable for implementation. This is worthy of support. However, the Blueprint mostly contains short-term initiatives, with few medium-term and long-term initiatives, not to mention the lack of innovative ideas and fragmentary division of work among the departments responsible for coordination. For instance, the Kai Tak Development Area and the plan on Lantau are under the purview of the Development Bureau; the West Kowloon Cultural District is the responsibility of the Home Affairs Bureau; the Third-runway System falls under the ambit of the Transport and Housing Bureau; and the Commerce and Economic Development Bureau is only responsible for such areas as the development of Disneyland, convention and exhibition, etc. 8176 LEGISLATIVE COUNCIL ― 29 March 2018

While the Blueprint is a paper on the planning of tourism, it is actually a hotchpotch of tourism-related projects currently under the charge of respective Policy Bureaux, without presenting comprehensive views on the development of tourism and overall planning in the long term.

To draw up a paper on planning of the development of tourism, I think the Financial Secretary should make upgrading the tourism industry in the long term the objective and direction of development and formulate specific targets for infrastructure and service standards. The support of various Policy Bureaux should be entailed, and the Commerce and Economic Development Bureau should be made responsible for coordinating and overseeing the implementation of the initiatives. This way, better results will be achieved. Since the Blueprint has already been formulated now, I hope the Secretary for Commerce and Economic Development will, under controlled circumstances, complete the short-term initiatives in accordance with the plan made by the Bureau as soon as possible, so that the development of tourism industry in Hong Kong can scale new heights.

Regarding the contents of the Blueprint, I have the following suggestions: First, it is necessary to upgrade the transit function of the Hong Kong International Airport ("HKIA") by all means, in order to consolidate its position as a regional aviation hub. Over the years, HKIA has been known for wide-ranging choices of international routes, comprehensive matching facilities and competitive airfares, and has become an important transit stop for both overseas and domestic visitors. In tandem with economic development in the Mainland, airports on the Mainland have actively developed their international routes, and Hong Kong is facing competition from them. Take the Baiyun Airport in Guangzhou as an example. In 2011, 59% of HKIA's direct routes were also served by the Baiyun Airport, and in 2015, the figure rose to 68%, showing increasingly fierce competition in the region. Even though HKIA faces competition from the nearby areas, the commissioning of HZMB and XRL will open up more visitor sources for HKIA. The Airport Authority Hong Kong is going to invest $3 billion in the development of a transit terminal to provide seamless air transit services for passengers transiting via Hong Kong who arrived by bus through HZMB.

Given the imminent commissioning of HZMB and the fact that the completion of the transit terminal will take some time, I think we can no longer wait. In the interim, the authorities can consider taking short-term measures to prevent the loss of transit passengers to other airports. For example, is it possible to make use of the existing facilities at the SkyPier to allow some transit LEGISLATIVE COUNCIL ― 29 March 2018 8177 passengers arriving by bus through HZMB to go through customs clearance and the check-in process at SkyPier direct? This can provide convenience to these transit passengers while achieving diversion of visitors. This can ease the pressure of people flow and transport on the main passenger terminals, thereby laying a foundation for the services of the transit terminal in future.

Second, developing quality green tourism by upgrading infrastructure development. In recent years, the traditional tourism attractions in Hong Kong have faced huge challenges. To enhance our competitiveness, it is necessary for the Government to continuously inject a large amount of funds for the purpose. Take Disneyland as an example. The Government will have to inject $10.9 billion in the next five years. Hong Kong has rich natural resources, and green tourism, which has been the talk of the town in recent years, should be made a key area for development. However, in country parks and outlying islands with conditions for developing green tourism, the facilities are inadequate as there is obviously a shortage of facilities such as water and electricity supply, accommodation, toilets and transport, and as a result, visitors' experience is far from good.

In this connection, I suggest that the Government can select some trial points and in collaboration with the districts and investors, appropriately develop tourism resources in country parks and outlying islands on the premise of not compromising ecological conservation. In recent years, the development of small towns with characteristics to attract tourists has become popular in the Mainland. These towns are developed with government investment in infrastructure development and at the same time, experienced corporations are also attracted there. This has enhanced the receiving capacity and standard of management of these small towns and facilitated the development of green tourism with characteristics in rural areas. The new generation of small towns with characteristics provide stylish accommodation and catering services to meet the needs of different classes. I think Hong Kong can consider developing green tourism with reference drawn from the way that small towns with characteristics are developed in the Mainland, with a view to promoting tourism in the countryside and outlying islands using a top-down approach.

I believe it is only when tourism in Hong Kong is unique that it can rise above the fierce competition in the region, and only in this way can it continue to play a vitally important role in the service sector in Hong Kong.

President, I so submit.

8178 LEGISLATIVE COUNCIL ― 29 March 2018

MR MICHAEL TIEN (in Cantonese): President, the motion proposed by Mr SHIU Ka-fai states that given the Government's ample fiscal reserves and fiscal stability, it should make good use of this favourable state of public finance for launching more measures to improve people's livelihood, and expedite the provision of additional tourism supporting facilities so that various sectors and industries can be benefited as a whole. I especially agree with this point.

I wonder if I am one of the few or even the only Member in the Chamber who truly speaks his mind and opposes the making of cash handouts by the Government. Quite a number of Hongkongers share my view, considering that today is the time when the Government is in the best financial condition. It should make a more vigorous effort at investing for the future and improving people's livelihood rather than seeking a momentary applause, not to mention that the applause has gradually turned into boos and hisses this time around. Every day, hundreds of kaifongs ask me whether they are eligible. I really do not know how to reply. I made enquiries with the Government, but not every question was answered. Moreover, a large number of administrative issues are involved. Certainly, I disagree with its principle most. I have advanced this point almost every month, and today I have to say it again. In times of an abundant surplus, the Government should set up various targeted funds. It should teach the public "fishing" on a continued basis and give them "fishing" tools rather than handing out "catches". Hence, today I am going to discuss the "fishing" tools.

I have all along supported the Government's development of underground space. In areas which are already highly developed, it is actually difficult to create more room on the ground to resolve the lack of space for pedestrians. The total retail sales volume has risen two-fold within 10 years, whereas the retail floor area has increased by only 7%. Every sector is striving for land. To increase the retail floor area, underground development may be an approach most worthy of consideration.

Some time ago, the Government conducted a consultation exercise in which 80% of the people supported the development of underground space. The underground space in the three preliminary proposals is situated at the Victoria Park, the Southorn Playground in Wan Chai and the Kowloon Park in Tsim Sha Shui. Now it seems that the Government considers the proposal of Kowloon Park the most feasible and wishes to launch it first. If the planning for this proposal is carried out satisfactorily, there is the possibility of linking it with the MTR Tsim Sha Tsui Station and Austin Station, as well as the West Kowloon LEGISLATIVE COUNCIL ― 29 March 2018 8179

Station of the Guangzhou-Shenzhen-Hong Kong Express Rail Link ("XRL"). Places are readily available for visitors to travel around and have fun after arrival at this XRL station.

Certainly, I have heard many people say that they do not wish to see another Harbour City appear underground. I must declare that I am engaged in the retail industry. This next remark to be made by me should be quite convincing. I absolutely agree that the shops opened underground should be diversified. Most importantly, they should provide products in dazzling varieties. The Government can designate a few large areas for bidding, which can promote the local economy and help young people start their own businesses, thus obviating their need to pay exorbitant rents. Besides, there is no need to zone all the space for setting up fixed shops across the board. Some space can be designated for organizing bazaars of different themes at regular intervals. For example, at one time the theme can be environmental protection and the next, nostalgia. Operators can be allowed to set up pop-up stores which are popular among the young. It can give them room to give play to creativity and think about the business they can do and profits they can make. The satisfaction so derived will definitely be higher than that from receiving dole from the Government direst. We need not worry that they will have no customers. Young people are most adept at online publicity. Now many government policies are often criticized for being biased or tilted to certain people. Actually it depends on how they are packaged.

Speaking of young people's strengths, I believe they are the strongest force in supporting the cultural and creative industries in Hong Kong. We often say that the six major industries where Hong Kong enjoys an edge are empty talk. To be fair, among these six major industries, the cultural and creative industries turned out to have taken the lead unexpectedly. In 2015, the economic contribution of the cultural and creative industries accounted for 4.7% of the Gross Domestic Product, whereas that of the other five industries was still below 2%.

Now primary school students already know how to write applications which are not confined to games. Recently, I have attended the anniversary ceremony of a primary school. Its students have invented an alarm device for missing elderly and won the first prize in a competition. When Most Kwai Chung Limited, the parent company of 100 Most, was listed, it was oversubscribed by 6 000 times and hit the record of oversubscription. A day after it became listed, its market value was $1.1 billion. Hongkongers never 8180 LEGISLATIVE COUNCIL ― 29 March 2018 lack creativity. Yet we need to give them room to give play to their potential. For this reason, Roundtable has all along proposed that the Government develop a "cultural and creative industries park". It sounds like the Innovative and Technology Park, but they are in fact vastly different. One is high-tech whereas the other one is low-tech, providing young people with a down-to-earth platform to develop a career to their liking.

Apart from doing business and engaging in the cultural and creative industries, many people love sports. Roundtable has repeatedly proposed the development of a multi-purpose venue for holding road events. It can be used for motor racing, cycling and long-distance running. The recent discussion about the review of private recreational leases has unreasonably put sports and development in confrontation as though the two cannot coexist. My proposal of constructing a multi-purpose motor racing circuit at Sunny Bay does not have such a problem. Since that land lot is near the airport, no housing units can be constructed. The purpose is recreational development. I have heard quite a number of voices which hold that Hong Kong needs development, but we cannot only construct housing units. Many members of the public also wish to see more attractions in Hong Kong.

I know many officials have not genuinely conducted any in-depth study on this proposal, or they are not well-versed in this matter. They have never thought of building a motor racing circuit. We often say that the focus of innovation and technology is not technology but innovation. It is about thinking out of the box, giving more thoughts to what has never been considered before.

President, I wish to talk about the scale of economy of motor racing. There are three major sports events in the world. The Olympic Games and World Cup Finals are held once every four years, whereas F1 (i.e. Formula 1) racing is held every year without breaks. I am not saying that we must host F1 races. There are many other motor racing events. But in 2017 alone, the total attendance of F1 races over three days was 200 000. That means the average daily attendance was 70 000. Let me provide some information for comparison. In the same year, the average attendance of each football match of the UEFA Champions League was 40 000; and in 2014, the average attendance of World Cup Finals was 50 000. As we all know, apart from attendance, live broadcast is most important. In 2017, 350 million people around the world watched F1 races. For the other tourist spots, we have to come up with something new every year. Even after Disneyland has completed the expansion project, will visitors come again after travelling there once? For this reason, it turns out that LEGISLATIVE COUNCIL ― 29 March 2018 8181 we have to keep making investments to construct new facilities. It is a bottomless pit. However, sports events are brand new every year. Many friends of mine will go abroad to watch matches of the English Premier League and Wimbledon every year. There is no question of boredom. That is in fact the same case with motor racing.

I have heard a very senior Member say that the residents of Tung Chung are worried about the noise problem. Of course we need to listen to the residents' view. But President, we should first conduct a study and then explain the facts to the residents. Let us look at this picture. The part circled in blue is Tung Chung. Given this horizontal distance, the residents of Tung Chung are not affected even though noises are generated from the airport. The part circled in red is Sunny Bay, which is affected by the planes because they fly over the residents' heads. The distance between the red and blue circles is approximately equal to the straight-line distance between Sheung Wan and Chai Wan. Let us think with common sense. Will it cause any impact? I have also heard the worry that the F1 racing drivers will cause noises when they drive at top speed from Central to the motor racing circuit. But the car races will be held only at the motor racing circuit. We are not going to close bridges and roads across the territory to hold such races.

Let me speak on another piece of common knowledge. These race cars worth several million or over ten million dollars will be carried to the circuit by trucks quietly. I do not know if these trucks are electric vehicles, but I am sure that they will not generate any noise when they carry the race cars to the circuit.

President, when there is no money, any proposal of development is extravagant. However, when there is a surplus, we cannot lavish money recklessly simply because there is no place to spend it. This is the time when it is most worthy for us to make vigorous investments. If the Government can manage such a complicated proposal of handing out money, I believe my proposal can be implemented as well sooner or later. My concept is very simple. It is a facility which can benefit various sectors and industries. I am confident that the Government can definitely achieve it. So long as it has the will, it will certainly succeed. Apart from many fans of car racing on the Internet, there are also many people who love watching sports events. They hope that besides the World Cup Finals, there will be more events related to car racing.

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Furthermore, as I have said before, the total distance of travelling around the car park at Sunny Bay once is 5 km. That is to say, the distance of travelling around it 10 times is already the total distance of a full marathon. Hong Kong can organize more marathons in the future. It may not be necessary to close bridges and roads, and practices can also be conducted there on the usual days. As regards cycling races, now there is a velodrome in Hong Kong which can hold track cycling races. Our work has been very successful. But regarding road cycling races, the facilities in Hong Kong are not up to the mark at all. The motor racing circuit proposed by me can be used for training road cycling racers. We can similarly train up another Sarah LEE in the future. Hence, this circuit is multi-purpose, meeting multiple ends at one go. It is a great bargain worthy of taking forward, much better than handing out money.

President, I so submit.

MR WU CHI-WAI (in Cantonese): President, the title of this motion is "Stimulating internal demand and opening up new visitor sources". In brief, the motion is divided into two parts. The first part is on stimulating internal demand. Given the colossal surplus of the Government, how should it allocate resources? Mr Michael TIEN said just now that he strongly opposed making cash handouts. I believe the general public will have the impression that when the Government has a surplus and has to share the fruits of economic development with the public, candies should be distributed in a fair manner. If the Government decides not to distribute any candies, as Mr TIEN said, it should invest the surplus on the future and on initiatives addressing various social problems.

Regrettably, the Government has chosen to give away candies. Worse still, the amount allocated is insufficient and the approach is unfair. The arrangements are fraught with problems. I think the Government should consider this thoroughly. The Government is now facing the following problem. According to the Medium Rage Forecast of the Budget, the Government's expenditure will increase continuously in the next five years. But still, the Government's annual surplus will be on the rise. By 2022, the fiscal reserves will reach $1,200-odd billion, which is equivalent to 21 months of government expenditure. From this perspective, we all expect the Government to be cautious in using the surplus and handling the fiscal reserves.

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The Government states in the Budget that in view of the 10-year hospital development plan introduced in 2016, it is working on the second 10-year hospital development plan and will set aside $300 billion for this purpose. How about the plan on the construction of elderly homes? It is a proposal initiated by Secretary Dr LAW Chi-kwong who is also a government official. Does it mean that the Government has not yet reached a consensus internally on this plan? Is it because the Government has not yet decided how resources should be allocated for the construction of 458 elderly homes to meet future demand that provision for this purpose has not been mentioned in the Budget?

By the same token, primary health care is also a concern which the Government has long since considered that requires follow-up …

PRESIDENT (in Cantonese): Mr WU Chi-wai, I have to remind you that the Budget which you mentioned in your speech is not the subject of the present debate.

MR WU CHI-WAI (in Cantonese): President, I understand that. Yet, my earlier remarks are related to the subject of the motion on stimulating internal demand.

In fact, to make investments in society is also a tactic to stimulate internal demand. President, please allow me to finish my point. I would like to point out that many Honourable colleagues have placed the focus of stimulating internal demand on investment on the tourism industry. This is only one of the approaches. Yet, investments in society and the health of the people will relieve the public from their worries about their future, and this will create another kind of economic opportunities.

As the population is ageing, silver hair economy may be an investment direction for the Government. When the Government invests in the overall health care services for the community to relieve the public from worries about their future, people will be willing to spend their income in the community, instead of making savings for unexpected needs in future, preparing for their future life and even their choice of work in future. This is also a kind of investment.

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I earnestly hope the Government will understand that in the concept of investment, investment in the economy and investment in the needs of each member in society should not be made conflicting, and the Government should not hold the concept that the former is investment whereas the latter is expenditure. Actually, this kind of thinking is incorrect. In fact, this concept is not introduced by me. The former Governor of the People's Bank of China, ZHOU Xiaochuan (周小川), has pointed out that one of the objectives of the social security reform implemented in the Mainland is to set the people's mind at ease about their retirement, with a view to lowering the saving rate which is on the high side, thereby stimulating internal demand and investment. Why? The saving rate in Hong Kong is definitely not on the low side. According to relevant figures, it stands at 22%, which is the third highest in Southeast Asia. What does a high saving rate imply? It implies that we have no proper channels to spend our money other than keeping it as savings, yet it will limit the flow of economic resources in society as a whole. Certainly, I am not saying that the Government should encourage the public to spend more than they can afford. This is not the case. However, lowering the desire for saving appropriately may enhance investments in society as a whole or encourage overall consumption in the community.

Once again, I stress that the Government must use the fiscal reserves properly in promoting policies on health care and elderly care, and this involves the important rationale that reserves should be spent on these services. Health care and elderly care services are not purely expenditure to the Government, as it will generate reward to the community as a whole. The reward comes in several levels. On the first level, it is certainly the achievement of the policy objectives of the Government. Undoubtedly, this is the obligation of the Government. If not, what is the function of a government? In fact, for policies over which a consensus has been reached, it is a problem if the Government has not allocated resources for follow-up or made various excuses for not taking actions. It must be borne in mind that in cases where the Government is willing to commit, supporting facilities and measures will follow. For instance, when the Government decided to implement the first 10-year Hospital Development Plan, it allocated $200 billion to the construction of hospitals for the provision of 5 000 beds. It then set aside another $300 billion for the implementation of the second 10-year Hospital Development Plan. What about the supporting facilities and measures required? Resources like land and manpower will be arranged accordingly. Hence, this kind of investment will drive social expenditure correspondingly, where changes will take place in response to the policies of the LEGISLATIVE COUNCIL ― 29 March 2018 8185

Government. This is not kind of single unchangeable calculation as the Government presumes. By the same token, services of elderly homes may link up the silver hair economy as a whole.

In this connection, if the Government makes significant investments, it will change the present situation. For instance, when the Government decides to commit resources to the construction of 458 elderly homes, given the shortage of manpower in elderly homes, it will stimulate the introduction of various automatic facilities. When adequate investment is made in the economy, these automatic facilities will give impetus to the relevant industry chains. The Government should consider the issue in this direction rather than holding onto the conventional and bureaucratic mindset that it is kind of an expenditure and the Government should count every dollar.

In fact, on the problem of ageing population, a consensus has been reached in society nowadays. Secretary Dr LAW Chi-kwong has conducted many studies and warned that the "silver tsunami" will strike Hong Kong by 2027. Yet, the Government presently is only talking about building two to three elderly homes in a year, and it shifts the blame of not building more elderly homes to land shortage. On the issue of land shortage, should the Government, as the bureaucratic regime, address the issue and accord great importance to the issue? In fact, the Planning Department can be completely flexible in setting the requirements, and it may cope with the demands in this respect by means of requirements on GFA (gross floor area).

Hence, I hope the Government will consider these issues carefully. These social problems are in front of our eyes. Yet, the Government only sticks to the old mindset and invests on economic development, giving no regard to addressing the needs of the people of Hong Kong and alleviating their worries about their future. The Government simply regards investment not relating to economic development as expenditure. In my view, this is a wrong argument. I hope the authorities will change their mindset and use the resources in hand properly.

In fact, to borrow the remarks of Mr TIEN, if the Government agrees with this perspective, the community will not urge the Government to offer candies. When the community does not urge the Government to offer candies and the resources are really used for these objectives, the general public will be happy. When people do not have to worry about their future, society as a whole will become more harmonious. If the Government does not consider the issue from 8186 LEGISLATIVE COUNCIL ― 29 March 2018 this perspective and only makes investments on the economy, the positive effect in the economy can be obvious. This is certain and Members will support and agree with this. Mr SHIU Ka-fai, do not worry, I agree with your motion. However, I have to make one point. If the concept of "stimulating internal demand" is merely applied to economic development, the issue as a whole will not be addressed from a macroscopic perspective. Besides, this is not an approach to using the surplus properly.

The other part of Mr SHIU Ka-fai's motion is on opening new visitor sources, and I will leave it to Mr LAM Cheuk-ting to talk about it. Lastly, I would like to reiterate the points I made earlier, for I hope the Government will listen to them attentively. In the course of "stimulating internal demand", the Government should not only listen to one-sided views and regard economic development as the only way to "stimulate internal demand". In fact, the many needs of the general public (The buzzer sounded) … will be met if the Government invests resources in these areas. When they no longer have to worry about the future, many social problems will be ameliorated. Thank you, President.

PRESIDENT (in Cantonese): Mr WU Chi-wai, please stop speaking immediately.

MR LAM CHEUK-TING (in Cantonese): President, I have to thank Mr SHIU Ka-fai for proposing this motion debate on "Stimulating internal demand and opening up new visitor sources". The Democratic Party supports the original motion of Mr SHIU Ka-fai. President, I would focus on the discussion about "opening up new visitor sources", which relates to the tourism industry.

The Democratic Party proposes that the Government should thoroughly consider the existing policies on receiving tourists. I understand that the tourism industry is a pillar of the economy of Hong Kong, and there were 50-odd million visitor arrivals in Hong Kong in the past two years. According to the figures, 26-odd million Mainland visitors in total had claimed to visit Hong Kong for leisure, entertainment and shopping. Among which, 16-odd million are same-day visitors coming to Hong Kong for shopping. What does this tell us? It means that many Mainland visitors come to Hong Kong merely to do shopping and do not stay overnight. And I have reasons to believe that a majority of such visitors will do their shopping in New Territories North and Yuen Long.

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Visitors' shopping activities can be divided into two categories. The first category is self-consumption. Another one is "conveyancing goods" or making purchases for other people. It is understandable for visitors to shop at Hong Kong for self-consumption, yet it depends on the receiving capability of the city as a whole. We definitely cannot allow the number of visitors to increase continuously till it exceeds the receiving capability of Hong Kong. Hence, the Democratic Party agrees with Mr SHIU Ka-fai's proposal of upgrading Hong Kong's visitor receiving capability and capacity, so that the overall visitor receiving capability will be enhanced. We do not wish to see visitors experiencing unhappy events, such as undesirable transport arrangements and long waiting time for entry upon arrival, or forming the impression that Hong Kong is being neglectful during their visits, due to the inadequacy in our supporting facilities. This is not good hospitality. We hope the Government will enhance Hong Kong's visitor receiving capability.

Yet, before our visitor receiving capability is enhanced, we should not thoughtlessly express an expectation for a significant increase in visitors, for this will exert heavy pressure on individual districts, where the North District is already overloaded. I am a District Council Member of Shek Wu Hui. Shek Wu Hui is a district located near the Sheung Shui train station with tens of thousands of Mainland visitors doing shopping there every day. Among these visitors are people engaging in parallel trading activities and procurement services, which have exerted an extremely heavy pressure on and instilled strong public grievances in the district. First, with the increase in rent and prices, many small shops are forced to close. As shops like stationery stores, Hong Kong-style cafes and shops selling daily necessities which have been operating for three to four decades have been forced out of operation, residents can hardly buy their daily necessities in the district. Residents thus have to travel a long distance or pay high prices when they have to buy daily necessities. Yet, sometimes, they may not get what they want due to shortage of supply. A couple of years ago, there was a shortage of formula milk. Certain daily necessities like shampoo may also be sold out sometimes. This situation is extremely unsatisfactory.

Moreover, the problem of obstruction of public places has become very serious. As many Mainland visitors want to carry as many goods as possible to the Mainland on one trip, they will remove the packing of goods and open their luggage on the street at will. Members should know that pavements along Shek Wu Hu are only around 2 m in width. Yet, these visitors open their luggage and remove the packing of their goods in the middle of the pavement, and litter the 8188 LEGISLATIVE COUNCIL ― 29 March 2018 place with rubbish and cardboards. They have made the community environment very dirty. These messes have instilled a deep sense of grievance and anger among the public.

A few years ago, a parallel goods shop in Sheung Shui was set on fire. Of course, we denounce such conduct and demand strict actions against this. Yet, President, I am most shocked by the events that occurred in the following days. I heard many members of the public tell me that the fire was a "Good job" and more of those shops should be burnt down. I then told them that the situation was rather dangerous for there were residential flats above the shops and tenement buildings in the vicinity. I told them they should not think that way. Yet, I can appreciate the grievances and angers of the public.

I have to tell Members that public grievances cannot be overlooked. Some Members said earlier that the protesting activities, which include kicking visitor's luggage, targeted at visitors or parallel traders a few years ago were uncivilized and had tarnished the reputation of the tourism industry of Hong Kong. Such actions are definitely incorrect. Yet, we have to ask what caused such actions, as these are not individual cases. Particularly for the many residents living in districts affected like Tuen Mun, Yuen Long and North District, Members will feel the deep sense of grievance if Members care to chat with them. This should be attributed to the vigorous promotion of the tourism industry by the Government over the years, where the receiving capability of the districts has been overlooked.

When the Democratic Party proposed to LEUNG Chun-ying, the former Chief Executive, that the authorities should cap the number of visitor arrivals, he criticized us for "acting proudly before getting rich". Yet, when Mainland government officials noticed the problem and imposed the "one trip per week" restriction, he changed his comments. We cannot count on the endless flow of customers to gold and jewelry shops and drug stores every day to boost the economy of Hong Kong. We should not think this way, for it has distorted the economy. Will the economic benefits generated by these activities benefit the residents of the districts? In fact, many residents in the districts can in no way share these fruits, and on the contrary, they are bearing increasingly higher rents. The rentals for shops and residential flats, as well as prices, have all increased. As most of the residents in Sheung Shui area are grass roots, they simply cannot afford the high prices, so they have no alternative but to live in smaller flats and move to remoter locations.

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In fact, the success of the tourism industry of Hong Kong in the past did not rely merely on the Mainland market. Hence, I encourage the Government to conduct more promotion on Hong Kong in overseas markets with a view to attracting more overseas tourists, so that Hong Kong does not have to rely on one single tourist source. If Hong Kong relies fully on the Mainland market, the tourism market in Hong Kong will be readily subject to heavy blows in the event of an economic downturn or changes in policies in the Mainland.

President, since we see that the existing "one trip per week" measure is not producing obvious effect, we propose to change it to "eight trips per year". We have referred to the average number of Mainland visitors visiting Hong Kong every year before proposing the "eight trips per year" arrangement. Actually, it is more than enough for a person to visit the same city eight times a year, and there is no need for them to visit Hong Kong every week. They come to Hong Kong every week merely for shopping, yet the frequency of shopping does not necessarily be so high, for Hong Kong can hardly cope with the visitor flow and goods flow.

We also propose the construction of shopping malls at various boundary control points, but not the kind of shopping city led by "Mr Elephant". "Mr Elephant" is not in the Chamber now. Pardon my frankness. The shopping city at the boundary as proposed by Mr WONG Ting-kwong is quite a failure. Neither tourists nor locals consider the shopping city attractive and visit it. I guess his "elephant tail" can only be used to swat flies, for the shopping city is a complete failure. I propose that a boundary shopping city be located at convenient sites near Lo Wu Station or Lok Ma Chau Station, so that visitors coming here solely for shopping can leave right after shopping and will not affect the life of local residents.

We also request the Government to increase the manpower for maintaining order in the North District. The special task force for combating parallel trading activities in the North District, formed by seven police officers and one sergeant, is responsible for two major districts, Sheung Shui District and North District. I have made repeated requests to the Security Bureau and the Hong Kong Police Force for an increase in manpower, but my requests have all been rejected. The Commissioner of Police even includes the police manpower at the border in the calculation of manpower. The border area is under the Border District whereas Sheung Shui is under Sheung Shui District. The division should not be breached. How can the dozens of police officers serving the border area be 8190 LEGISLATIVE COUNCIL ― 29 March 2018 counted as manpower responsible for handling parallel trading activities in the North District? His comment will mislead the public (The buzzer sounded) … Thank you, President.

PRESIDENT (in Cantonese): Mr LAM Cheuk-ting, please stop speaking.

SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT (in Cantonese): President, the general public is always concerned about social and livelihood issues, as well as the economy. The Government appreciates the public aspiration for a better life. Hence, the Government has always endeavoured to improve people's livelihood and promote economic development.

In recent years, society as a whole has risen to various challenges, whereas public expectations of the Government keep changing. Many citizens consider the Government should be "appropriately proactive" in governance, making more proactive efforts to promote diversified economic development and provide a better business environment, so as to provide more employment opportunities for people from various social strata and facilitate the general public and the industries in benefiting from it.

The Government has been increasing resource allocation in recent years to enhance services related to people's livelihood, such as education, medical and health care and welfare. In 2018-2019, the estimated recurrent expenditure on these three livelihood areas exceeds $230 billion, which accounts for around 60% of the recurrent expenditure of the Government. In the past five years, the cumulative increase in recurrent expenditure on these three areas amounted to 42.8%.

In the Policy Address presented in October 2017, the Chief Executive has proposed new measures on other livelihood-related areas, including poverty alleviation, elderly care, support for the disadvantaged and housing. These measures include the introduction of a non-means-tested Public Transport Fare Subsidy Scheme and enhancement of the Low-income Working Family Allowance Scheme, and so on. In the Budget announced last month, the Financial Secretary ensured that adequate resources would be provided for the implementation of various measures proposed in the Policy Address, and that the surplus would be used properly to introduce additional financial measures benefiting the public and enhancing the business environment. LEGISLATIVE COUNCIL ― 29 March 2018 8191

Actually, in stimulating internal demand, the fundamental approach is to stimulate economic growth. In the face of economic restructuring and the new landscape in global competition, the Government of this term will endeavour to promote the development of emerging industries in addition to conventional industries, which include the creative industries, to give impetus to economic growth and create quality employment opportunities for young people. The Government will commit resources to reinforcing development in innovation and technology, which includes setting aside funding for university research, offering tax concession for R&D expenditure for enterprises, nurturing talents in innovation and technology and striving to attract overseas top scientific research institutions to Hong Kong, and so on.

Moreover, there are over 330 000 small and medium enterprises ("SMEs") in Hong Kong at present, which constitute over 98% of the total number of local business establishments. They may be regarded as our major economic pillar. Hence, we have been making a vigorous effort to establish a more business-friendly environment for SMEs with a view to stimulating economic growth. Last October, the Government announced in the Policy Address that it would strategically utilize tax measures to assist SMEs. These include reducing the profits tax rate for the first $2 million of profits of enterprises to 8.25%, which is half of the existing profits tax rate. It is expected that these measures will promote industrial development and diversification of the economy, thereby enhancing the competitiveness of Hong Kong. The relevant Amendment Bill was passed by the Legislative Council on 21 March this year.

Furthermore, in the Budget, it is proposed that $1 billion will be injected into the SME Export Marketing and Development Funds and enhancement measures will be introduced to step up the support for SMEs. As for the SME Export Marketing and Development Funds, we propose to increase the cumulative funding ceiling for SMEs under the SME Export Marketing Fund from $200,000 to $400,000, increase the funding ceiling per application from $50,000 to $100,000 and remove the existing condition on the use of the last $50,000 to give full support to SMEs in exploring new markets and new business opportunities. It is also proposed in the Budget that $1.5 billion will be injected into the Dedicated Fund on Branding, Upgrading and Domestic Sales ("BUD Fund") to increase the cumulative funding ceiling per enterprise from $500,000 to $1,000,000 for enterprises undertaking projects in the Mainland under the Enterprise Support Programme of the BUD Fund. Moreover, the geographical 8192 LEGISLATIVE COUNCIL ― 29 March 2018 scope of the Enterprise Support Programme is proposed to be expanded to cover ASEAN markets, with a cumulative funding of $1,000,000 for enterprises undertaking projects in ASEAN markets.

To promote economic growth, we naturally have to capitalize on the opportunities arising from the Belt and Road Initiative and Guangdong-Hong Kong-Macao Bay Area ("the Bay Area") to open up new markets and create business opportunities for enterprises and professional sectors of Hong Kong. The Belt and Road Initiative is the long-term development strategy of the country, which will be the major impetus for social and economic development of Hong Kong in future. The Government will adopt a multi-pronged approach in facilitating Hong Kong's participation in the Belt and Road Initiative, which includes reinforcing our cooperation with regions along the Belt and Road to consolidate and expand Hong Kong's competitive edge, to bring in more opportunities for enterprises and professional sectors of Hong Kong, thereby benefiting the economy of Hong Kong. Recently, the Secretary for Commerce and Economic Development led a delegation of 48 members from the business and professional sectors to visit Cambodia and Vietnam, exploring projects and opportunities along the Belt and Road for Hong Kong enterprises.

In the meantime, the Government will continue to consolidate and enhance the traditional pillar industries of Hong Kong, including the finance services industry, maritime and logistics industries, professional services industry and the tourism industry which is the concern of the present motion, to maintain steady economic growth. Tourism is one of the four pillar industries in Hong Kong, which constitutes approximately 5% of the Gross Domestic Product ("GDP"). Over the years, the tourism industry has been the engine of economic growth in Hong Kong and has provided nearly 260 000 job opportunities for workers from various strata of society, including the retail industry and hotel and catering services, and so on. Hence, the performance of inbound tourism industry is closely related to people's livelihood and economic development. Maintaining the healthy and sustained growth of the tourism industry will be conducive to the stabilization of the employment market and the promotion of economic growth of Hong Kong.

Given the change in the mix and spending pattern of visitors to Hong Kong in recent years, coupled with the competition posed by neighbouring regions, the Government has made timely adjustment to the development strategies of the tourism industry of Hong Kong, guiding it in the direction of developing LEGISLATIVE COUNCIL ― 29 March 2018 8193 diversified services and attracting more high-spending overnight visitors to Hong Kong. With the joint efforts of the Government, the Hong Kong Tourism Board ("HKTB") and the tourism industry, adding to these external changes taken place, the tourism industry has regained growth momentum, attaining a growth of 3.2% in total visitor arrivals in 2017, a year-on-year increase of 6% in the fourth quarter.

To further enhance Hong Kong's competitiveness as the major tourist destination in the region and to unleash the full potential of Hong Kong's tourism resources, the current-term Government draws up the Development Blueprint for Tourism Industry ("Development Blueprint") in the first Policy Address delivered last October. Visionary planning is adopted in formulating tourism initiatives and measures of short, medium and long terms in the next five years.

The vision and mission of the Development Blueprint is to develop Hong Kong into a world-class premier tourism destination with a view to ensuring the balanced, healthy and sustainable development of the industry. This includes four major development strategies, 13 implementation goals and 72 measures. In the Budget this year, the Government announced that it will allocate an additional $396 million to the tourism industry, of which $226 million will be provided for HKTB and $170 million will be provided to the Tourism Commission ("TC") for the implementation of the relevant measures of the Development Blueprint.

In response to the concerns about Hong Kong's receiving capability as raised by a number of Members earlier, first, the SAR Government is extremely concerned about the nuisance caused by parallel trading activities to the daily lives of residents. Starting from the end of September 2012, the law enforcement departments concerned have adopted a number of measures to enhance order at railway stations and control points to protect the daily lives of residents. For instance, the MTR Corporation Limited has provided full support to the Government in carrying out enforcement actions within the railway premises, and has implemented a series of measures to restrict parallel trading activities, which include setting the size and weight limits for luggage carried by passengers, displaying signage in some stations along the East Rail Line to remind passengers of the restrictions on luggage size and weight, and prohibiting passengers with bulky luggage from using escalators, and so on. As for immigration control, the Immigration Department ("ImmD") has established a "watch list of suspected parallel traders". The ImmD will examine visitors suspected to be parallel traders, and if their purposes of visits are in doubt, it will 8194 LEGISLATIVE COUNCIL ― 29 March 2018 consider refusing their entry and repatriating them to the Mainland immediately. The authorities will continue to adopt targeted measures, including strengthening cooperation with the relevant Mainland departments and stepping up immigration control.

Moreover, the Government is also extremely concerned about issues at the district level caused by illegal coach parking and congestions resulted from assembling of tour groups. The Government has through the Travel Industry Council of Hong Kong ("TIC") urged restaurants and shops of the districts concerned to pay attention to maintaining order in receiving inbound tour groups from the Mainland, step up control on visitors flow and monitor closely the real-time situation at the destinations, and to ensure that visitors, tourist guides and coach drivers will observe order in order not to affect the livelihood of the community. TIC will issued circulars to travel agencies from time to time, urging them to ensure that tour coaches will comply with traffic rules when visiting tourist attractions, as well as minimize the inconvenience caused to other road users. TIC will also organize seminars from time to time to urge tour guides to manage inbound tour groups properly.

The orderly management of visits by inbound tour groups to restaurants and shops in the community calls for close cooperation and coordination among trade practitioners, including travel agents, tourist guides, restaurants, shops, coach drivers, etc. In this connection, TC, TIC and other relevant government departments have been meeting with representatives of the relevant trade from time to time to follow up arrangements for receiving inbound tour groups. We have also encouraged the trade to make use of information technology to enhance visitor flow and vehicular flow control. Measures being implemented include: using instant messaging software with a chat room set up to strengthen communication among trade members; and installing video cameras outside a restaurant that serves inbound tour groups, on a pilot basis, to enable the trade to know the real-time on-the-spot situation so as to pre-empt an influx of a large number of tour groups at the same time.

In addition, the Financial Secretary convened a high-level tourism coordination meeting in October 2017, where the relevant government departments have strengthened the law enforcement actions against illegal coach parking, as well as exploring and introducing different measures to promote the use of legal parking spaces by more coaches, and this includes providing additional pick-up/drop-off spaces and parking spaces for coaches at appropriate LEGISLATIVE COUNCIL ― 29 March 2018 8195 locations, letting car parks for coach parking on the basis of short-term tenancy ("STT"), as well as piloting the provision of a half-hourly concessionary parking rate in an STT car park.

The Government will continue to closely monitor whether the tourism trade has continuously adopted measures to minimize the inconvenience caused by inbound tour groups to the community. If there remains no improvement to the situation of the relevant districts over time, the Government will recommend to the Travel Industry Authority soon to be set up to deploy more manpower to conduct on-site inspections, as well as formulating suitable administrative measures against travel agencies that are not amenable to repeated advice and willfully undertake poor management in arranging for inbound tour groups to visit shops and restaurants in a non-cooperative manner. Disciplinary orders can be made after investigation and disciplinary proceedings.

President, and Honourable Members, I would like to take the opportunity of the debate today to listen to Members' views on enhancing people's livelihood and promoting economic growth. I will give my conclusion and responses after Members have expressed their views on the motion. Thank you.

PRESIDENT (in Cantonese): Does any other Member wish to speak?

MR TONY TSE (in Cantonese): President, I agree with Mr SHIU Ka-fai's motion that we should stimulate internal demand and open up new visitor sources. And I also subscribe to his view that it is imperative for the Government to expedite the provision of additional tourism supporting facilities with a view to upgrading Hong Kong's visitor receiving capability and capacity. I believe many members of the public will agree that the infrastructural facilities of Hong Kong are grossly inadequate. One can hardly fail to experience the extreme overcrowdedness when taking a ride on MTR trains or setting foot in such places as Mong Kok or Causeway Bay frequented by tourists: taking the MTR during rush hours probably obliges a wait for several trains before you can squeeze yourself on board, while going down a sidewalk often poses the danger of being crowded out to the driveways.

During infrastructural planning, it is necessary for the Government to allocate more resources and take tourism supporting facilities into the consideration, such as whether sufficient parking spaces are available for large 8196 LEGISLATIVE COUNCIL ― 29 March 2018 tourist coaches. As the Secretary has pointed out, the problem lies not in a lack of willingness to observe the rule, but a lack of parking spaces whatsoever. Are the current design and size of roads adequate to cope with the people and vehicular flows at the present or increased level? As a matter of fact, in pondering the development of new tourist attractions, all supporting facilities must be taken into consideration in the preliminary planning as well.

President, you may recall that in the last term of the Legislative Council, I raised the issue of lowering the design density of standing room in train compartments. My effort has successfully led to the lowering of density, from six to four standing passengers per square metre, by the MTR Corporation Limited ("MTRCL") to enhance comfort for members of the community and travellers on trains. That said, considering the profit level of MTRCL at the moment, the slogan of improving quality of service that it often boasts and the fact that many passengers or travellers carry backpacks or carry on luggage on board these days, should MTRCL not study again the possibility of further lowering the standard for the density of standing passengers per square metre in train compartments?

Infrastructural facilities aside, "sustainable tourism fulfils the needs of the tourists and that of their host countries, it protects and enhances future opportunities for development", as the World Tourism Organization of the United Nation stated. It is thus equally crucial to find ways of integrating the development of tourism into the culture and heritage of Hong Kong. In respect of developing new tourist attractions and restoring cultural relics and monuments for example, Hong Kong has no shortage of young architects, planners, surveyors and landscape architects with high ideals and an innovative mind. If more design competitions focusing on Hong Kong's distinctive culture and heritage can be held, of which the winners will be given charge of the relevant construction, not only will it enhance the local flavour in design and construction, it can also nurture more local talent, strengthen their sense of belonging to Hong Kong and build up the professional brand of Hong Kong.

If Hong Kong, a small place as it is, can develop into a metropolis ideal for walkers, not only will the locals be benefited, it will also be an appeal to more tourists. There are in my sector many experts in this area who can bring their skills into full play, developing those narrow lanes and alleys in Hong Kong and converting them into distinctive scenic spots that draw tourists.

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Jeff SPECK, an American planner, once said that a walkable city saw streets as more than spaces for traffic of people and vehicles, they were venues where a relationship between pedestrians and roads developed. The NYC Plaza Programme is a government initiative that invites proposals from local non-profit-making organizations to transform underused streets into public plazas, which will be operated and managed by them. While the design and construction funding for a particular project comes from the government, the non-profit-making organization and the local community concerned will be responsible for the detailed conceptual design. There are certain restrictions regarding the management of the venue upon commission, such as no advertising for profit is permitted and all revenue from venue leasing must be ploughed back into the repairs and maintenance of the plazas. The programme, which has transformed some originally underused streets into vibrant social public spaces, is a good example that, I believe, Hong Kong should follow. There are 18 districts in Hong Kong, each having its own District Council. I think District Councils can play a role in working with professionals of the sector and non-profit-making organizations in the design, construction and operation of street plazas of Hong Kong.

President, the stimulation of internal demand hinges on the continuous prosperity of the Hong Kong economy and contentment of its people in work and living environment, while the opening up of new visitor sources depends on the existence of distinctive tourist attractions with proper supporting facilities, in which both locals and tourist can take pleasure. I wish to call on all District Councils to step up control on the hygiene and cleanliness of their respective districts, make full use of professionals, nurturing more young talent and build a more distinctive Hong Kong.

I so submit, President.

MR KENNETH LAU (in Cantonese): President, first of all, I wish to thank Mr SHIU Ka-fai for proposing the motion. Having carefully comprehended the motion on "Stimulating internal demand and opening up new visitor sources", one would realize that the motion has fleshed out the Budget themes of "diversified economy", "investing for the future" and "caring and sharing". I understand that today's debate is not a debate on the Budget, but please allow me to mention some numbers.

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According to the estimates in the Budget, the Government will have a surplus and fiscal reserves of respectively $138 billion and $1,092 billion in 2017-2018, hitting a record high, mainly thanks to unexpected revenues from land sale and stamp duties. Such circumstances are elusive. We do not know when they will change for the worse. The robust development of the Hong Kong economy may slow down. Therefore, the Government indeed needs to contemplate how to make good use of such reserves to strengthen the competitive edges of Hong Kong and develop new areas of growth to prepare for the future development of Hong Kong. And the motion today precisely offers one of the many directions.

The motion proposes returning wealth to the people through policies so that they can live in peace and work with contentment, thereby boosting their spending power and stimulating internal demand and at the same time strengthening tourism supporting facilities and measures to attract more visitors for the benefit of various industries. It can be regarded as a thorough and all-embracing approach to consolidating the foundation for the economic development of Hong Kong. As regards the policy to return wealth to the people, I believe it is more appropriate to discuss it later in the Budget debate. Today I wish to express views on opening up new visitor sources.

President, the tourism industry is one of the four pillar industries of Hong Kong, with 270 000 people directly employed. Therefore, the rise and fall of the tourism industry is regarded as the lifeline to the development of Hong Kong. In 2015 and 2016, the number of visitors to Hong Kong has dropped for two consecutive years. Luckily the number of visitors to Hong Kong ceased dropping in 2017 and started to rise, but was still lower than that in 2015. As a result, Hong Kong needs to strengthen tourism supporting facilities and measures to enhance its appeal.

Externally, Hong Kong has always been presenting an impression of a highly modernized international metropolis. Many visitors come to Hong Kong to visit theme parks, shop in urban areas and taste local food. The tourist experience of Hong Kong should not be limited to the urban areas or conventional tourist attractions. Monotonous tourist experience can no longer satisfy and attract visitors. Should we only cling to the existing models, we may not even be able to retain the original sources of visitors, let alone opening up new sources, and will continuously be outdone by neighbouring cities or countries.

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President, over 40% of the land in Hong Kong is designated as country parks, the area of which tops Asia. In developing new towns back then, the Government considered it necessary to preserve country parks for people's vacation and recreational use. According to the statistics of the Agriculture, Fisheries and Conversation Department, the number of visitor trips to country parks is 12 million every year. During holidays, many visitors form tours to hike on the Lion Rock, Lantau Island or in Sai Kung. The Government should capitalize on the beautiful sceneries of the New Territories and the humanistic features of villages to develop eco-tourism.

Last year, Mr YIU Si-wing proposed the motion on "Giving full play to the edges of local tourism resources". I mentioned that in many foreign places, there are homestay lodgings along the hiking trails or in countryside for hikers and visitors to enjoy a short stay so as to appreciate and assimilate into mother nature. Many hiking trails in Hong Kong are situated in remote villages. If the Government assists in restoration, provides water supply and power generation facilities, undertakes basic road and drainage works, and allows villagers to operate their village houses as homestay lodgings to provide limited accommodation and catering services, I believe Hong Kong has the potentials to open up new visitor sources in terms of eco-tourism given the beautiful environment of country parks.

Moreover, the Sha Tau Kok Frontier Closed Area is similarly a location with great potential for the development of eco-tourism. In Sha Tau Kok, there are numerous historical buildings, such as trenches made during the Anti-Japanese War, pillboxes and San Lau Street, as well as a fully equipped pier which enables visitors to travel to places with traditional cultural features, such as Lai Chi Wo and Kat O. After the reunification of Hong Kong with the Motherland more than 20 years ago, since one July 1997, there is indeed no longer any need to retain the closed areas for security or political reasons. However, much to my regret, Sha Tau Kok remains a closed area. It is a formidable task if the people of Hong Kong and visitors want to enter Sha Tau Kok or Chung Ying Street. On the contrary, we can join a tour on the Mainland to look into the mysteries of Chung Ying Street. Such tourism resources with special value have never been put to good use because of the maintenance of the closed area.

In fact, the direction of opening up new visitor sources is always there, but the Government has been turning a blind eye to it and employing delaying tactics, rendering the problem unsolved. The authorities need only remove restrictions 8200 LEGISLATIVE COUNCIL ― 29 March 2018 and regulations in policies to make investment anew in hardware and provide manpower support so that the implementation of such a policy is not beyond reach. The aforementioned various suggestions can not only increase the attractiveness of Hong Kong and open up new visitor sources, but also facilitate the revival of villages and conservation of the traditional countryside culture. They serve multiple purposes.

Though the Secretary for Commerce and Economic Development will give a reply to the motion today, but views presented by Members often require cross-departmental or even cross-bureau collaboration to materialize. I expect that, after listening to our views, the Government will conduct a serious study to put its new style of governance into practice, and that departments and bureaux will no longer just mind their own business but take concrete actions for the sake of Hong Kong.

President, I so submit.

MR MA FUNG-KWOK (in Cantonese): President, the motion proposed by Mr SHIU Ka-FaiI today is a topic of great concern to the community currently, and particularly as the Hong Kong Government has a fiscal surplus exceeding a hundred billion dollars and a reserve of over a thousand billion dollars, members of the public certainly hope that the authorities can introduce more policies to improve the people's livelihood and return wealth to the people. In the meantime, they also hope that the Government will make planning for tourism properly to open up new visitor sources, thereby facilitating economic development.

I believe most Honourable colleagues do not have any strong objection to the principles of the original motion but when it comes to the specific policies, there can be plenty of room for discussion. First of all, in respect of policies beneficial to the people's livelihood, we think that housing is definitely the most pressing problem. Property prices in Hong Kong remain on the high side on a sustained basis, with an increase of about 5% in the first quarter of 2018 alone. While many "snails without shells" are burdened by expensive rent, it is even more undesirable that many grass-roots people on the Waiting List of Public Rental Housing are forced to live in subdivided units where the environment is deplorable and the headboard is just next to the toilet bowl and yet, the rent per square feet is exorbitantly high. A large part of the people's wages has to be LEGISLATIVE COUNCIL ― 29 March 2018 8201 spent on mortgage repayment and rent. How much spare money do they have to afford more spending and what is the point of talking about "stimulating internal demand"?

We all know that a solution to the problem is for the Government to expeditiously increase supply by developing more public housing, so that property prices and rent can return to reasonable, affordable levels. Only when the people live in peace and work with contentment can they have the means to increase spending. However, according to the forecast of the Government, there will be a shortage of at least 1 200 hectares of land in the next three decades. In fact, apart from meeting the needs of housing, land is also required for the development of industries, cultural and recreational facilities, health care and elderly services, education, and so on. Given this shortage of land, various trades and industries have to pay expensive costs for use of land. Their development is thus impeded.

Although the question of how to increase land supply is not a topic for discussion today, it is the most important factor in improving the living standard of the people and stimulating internal demand. The Task Force on Land Supply is going to put forward proposals, and I hope that Members will discuss them rationally in order to look for a feasible solution to the land problem long term.

Second, speaking of improvement of the people's livelihood and stimulating internal demand, actually these are also duties required of us as Members of the Legislative Council. The Administration has all along proposed many measures to make investment for the future, promote employment and stimulate the economy and internal demand. But when these measures are tabled to the Legislative Council for deliberation, they are often delayed by filibusters. In fact, the Finance Committee of the Legislative Council approved only $58.3 billion, or less than 45%, of the $130.3 billion funding sought for works projects in the last legislative year. Some colleagues have linked politics with the people's livelihood at the expense of public interest. In the current legislative year, the deliberations of the Finance Committee have continued to be conducted at "the speed of a tortoise". I, therefore, appeal to colleagues in the Legislative Council to scrutinize the projects in a rational manner, so that the Finance Committee can perform its duties and functions and the projects would not be accumulated for no reason any longer.

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President, another part of the original motion mentioned the provision of additional tourism supporting facilities to upgrade Hong Kong's visitor receiving capability and capacity. I have to reiterate that an independent Policy Bureau should be made responsible for reconsolidating the policy on tourism and the relevant planning, and the cultural, sports and tourism policies have potentials to be considered together. In this connection, I have repeatedly proposed the establishment of a Culture, Sports and Tourism Bureau by the Administration to coordinate the relevant work and make deployments, in order to bring the synergy of all three aspects into full play.

In respect of visitor sources, as we can see from the statistics on visitor arrivals in 2017, visitors from the Mainland and short-haul markets recorded an increase of 3.9% and 2.9% respectively, but visitor arrivals from long-haul markets were slightly down by 0.1% while those from new markets even dropped significantly by 11.9% over 2016. In view of this, the Administration should introduce different measures targeting different clientele groups, especially high-value added visitors with high expectations, so that during their stay in Hong Kong, they can enjoy a wider variety of experiences and better appreciate Hong Kong's culture and urban characteristics. The authorities should, in parallel, review the policies on the Individual Visit Scheme, cruise tourism, and so on, with a view to actively opening up new visitor sources.

Moreover, the resources of tourist attractions in the tourism industry should be reviewed. For instance, the construction works of the Hong Kong Palace Museum should commence expeditiously, the development of a tourism hub in Kai Tak and the planning study on Lantau should be expedited, and so on. Consideration can also be given to developing local cultural and creative parks, in order to facilitate the upgrading of local cultural tourism.

Certainly, while efforts are made to attract new visitor sources and further the development of tourism, we cannot neglect the impact caused by visitors on the living of the local people. The authorities must address squarely the burden brought by visitors on various modes of transport, especially the railway, and expeditiously make plans on new railway lines, in order to improve the transport arrangements. The authorities should review the tourism supporting facilities, especially parking spaces for coaches, in local communities frequented by some Mainland tours, and also instruct the relevant government departments to work with travel agencies and shops receiving visitors in devising regular coordinating LEGISLATIVE COUNCIL ― 29 March 2018 8203 measures, in order to reduce the impact of these tours on the local communities. Besides, regarding The Boxes, which is a boundary shopping mall in San Tin intended to divert Mainland shoppers and parallel traders, it is reported that the customer flow has been low since its opening last month. In fact, the development of a boundary shopping mall is a good idea, for it can provide convenience to visitors and alleviate the impact on the local people. In this connection, I hope that the authorities can find out the reason expeditiously and step up publicity among Mainland visitors and also encourage receiving travel agencies to use this facility more often. If necessary, improvement can also be made to the matching transport facilities between boundary control points and the shopping mall in the hope that while customer flow can be increased, the shopping mall can serve its intended purpose, and similar projects can also be reproduced at other boundary control points in the long run.

All in all, I hope that the authorities can show more concern for the people's livelihood and improve the living of the people while taking forward the development of tourism and opening up new visitor sources on the premise of providing additional tourism supporting facilities and reducing the impact on the local people.

President, I so submit.

DR PRISCILLA LEUNG (in Cantonese): President, I rise to speak in support of the original motion today. As regards the issues presented in the original motion, I wish to focus my discussion on issues relating to tourism. My party comrade, Mr Jeffrey LAM, has proposed an amendment to the motion and it, content-wise, also supports the direction proposed in the motion.

I will concentrate on discussing tourism. Just now I heard many Honourable colleagues talk about how the supporting facilities and measures can be better implemented in long-term planning. However, now I wish to say that a lot of our good resources have been wasted. If the Government is willing to do better in terms of policy, many problems can instantly be ameliorated. I consider that, in terms of tourism, the crucial factors are accessibility, appeal, comfort and shopping spots that are suitable for all ages. All of this can help make Hong Kong a hospitable city and give pleasure and enjoyment to visitors who come to Hong Kong for spending.

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One of the most precious resources of Hong Kong is the Victoria Harbour. Are both sides of the Harbour put to good use now? From the perspective of tourism, is the Victoria Harbour being optimally utilized? I wish to first talk about accessibility. For example, East Kowloon is indeed not too different from West Kowloon, which I am most familiar with. Under the Energizing Kowloon East initiative, we expect that the waterfront promenade will link up the east of Kowloon with the west of Kowloon. On the subject of accessibility, we have recently come to an almost unanimous opinion in the District Council that, as stated in various views, the greatest waste of the Kai Tak Cruise Terminal is land. Why did many of the shops which used to operate there fail to continue business? The very reason is poor accessibility. Even if you drive there you will have to keep making all sorts of twists and turns before reaching the main building. Therefore, in this respect, the Government must contemplate how to better utilize the location, both in terms of tourism and transport. In this connection, we have made a suggestion about capitalizing on waterborne transport. It is reported that an investment of $3 million only is needed to operate a sampan service at the pier near Kai Tak Cruise Terminal, but it has not been put into action. We hold that the concept of "water taxis" should be implemented as soon as possible so that hopefully it will be possible to travel from Kai Tak Cruise Terminal to the waterfront of Hung Hom―which has been arduously transformed from a piece of wasteland into a gorgeous waterfront. How can one get to Tsim Sha Tsui from Kai Tak Cruise Terminal and how can it be linked up with the West Kowloon Cultural District?

The Hung Hom Ferry Pier is yet another typical example. Since the cessation of ferry services in 2011, the pier has been abandoned. In fact, if it is possible to revitalize the pier by first allowing some small businesses in the district to be conducted there or local artists or even the catering industry to operate there, in a fashion similar to the former Blake Pier, such that the location can be put to better use. But it is not the case now. The pier has just been discarded. Passers-by there cannot but ask why Hong Kong is so wasteful. The waterfront was built with a great deal of effort but the pier has been discarded.

Of course, the proposal of "water taxis" made by us may be regarded as a small-scale venture. Actually it is my greater hope to make better use of ferry services. Other than a waterborne means of transport to alleviate the pressure on road transport, as we can imagine, most Hongkongers of our generation used to go to school or work by ferry. Ferry is a collective memory per se and the ferry pier is also an ideal shopping and tourist spot to visitors. It is inexpensive and LEGISLATIVE COUNCIL ― 29 March 2018 8205 comfortable for visitors to ride the ferry to enjoy the scenic view of the Victoria Harbour. However, one after another ferry routes have been cancelled. In my view, the reason for it is the Government's "dead brain". It always refers to ferry as merely a means of transport and wants to discontinue its operation once the operator has suffered small losses. After all, the Government only regards ferry as a means of transport.

In fact, ferry is so much more than just a means of transport; it can even be linked to the development of tourism. Therefore, can the Government revitalize its brain? We need to revitalize not only the piers, namely Kai Tak Cruise Terminal and Hung Hom Ferry Pier, but also the overall policy. What needs to be done is not the provision of subsidies of $1 million or $2 million. That is not the most important, for the most important point is to accommodate some better practices, such as advertising, policy-wise. With the presence of the catering industry, people will naturally go there and ferry rides will become popular too. Another example is Wan Chai North and the consultation on the urban design study for the harbourfront area has commenced. Why has there always been just a promenade from the waterfront of West Kowloon and Hung Hom to Tsim Sha Tsui? Has the Government considered adding any cultural feature to it? With regard to a diversified theme zone, how can arrangements be made to cater for suitable water sports? In such a way, the entire area will become very lively.

Moreover, we always have a dream. If the waterfronts of the east and west of Kowloon are truly linked up, can multi-coloured flowers and plants be grown on both sides? It will be a gorgeous scene looking from a distance. The Government can draw reference from waterfronts in foreign places and study what they have set up along the waterfronts. For example, the catering industry has proliferated along the waterfront in Australia or other places. I do not mean that the catering industry must be allowed to operate there. But we should introduce some appropriate elements to increase the number of shopping spots. The shopping patterns or tourism patterns I have just mentioned are suitable for all ages.

In addition, many visitors like taking the ferry so the two kinds of usage can coexist. During peak hours, when people go to work, residents of the district can take the ferry to North Point, Central or Wan Chai; while during non-peak hours, meaning non-prime time, the pier can be used for horizontally carrying visitors from other countries who have come to Hong Kong on cruises. They can then get to Tsim Sha Tsim comfortably without the hassle of going in 8206 LEGISLATIVE COUNCIL ― 29 March 2018 circles inside the cruise terminal or arriving at shopping spots after enduring much traffic congestion sitting in coaches. Therefore, Secretary, accessibility is crucial. I hope the Secretary can consider the tourist measures that can effect instant improvement. (The buzzer sounded) … Thank you, President.

PRESIDENT (in Cantonese): Dr Priscilla LEUNG, please stop speaking.

MR ALVIN YEUNG (in Cantonese): President, first of all, I would like to thank Mr SHIU Ka-fai for proposing this motion debate.

As a matter of fact, this issue can be viewed from two perspectives. Firstly, public coffers must be effectively used to improve people's livelihood and stimulate internal demand; secondly, how ancillary tourist facilities can be increased to attract more tourists to Hong Kong.

Let us talk about internal demand first. Basic knowledge in economies tells us that internal demand consists of several major elements, including private consumption expenditure, government consumption expenditure, visitor spending and capital input. According to the Hong Kong Economic Reports 2017 published last month, internal demand displayed a sustained and steady growth last year. Total consumer spending in the domestic market increased from 2.3% in the fourth quarter of 2016 to 6.3% in the fourth quarter of 2017. Among different consumer spending items in the domestic market, private consumption expenditure was the most robust with an increase from 1.9% in 2016 to 5.4% in 2017. The growth rate in the fourth quarter of 2017 reached 6.3%, which was the highest in the past five years. The figures showed that private consumption expenditure was a key driver of Gross Domestic Product growth after exports of goods. I believe the positive local consumer sentiment is somewhat related to the good employment situation in the past five years.

President, let us also look at the government consumption expenditure last year. There is obviously a lot of room for improvement in driving internal demand by the Government. In 2017, government consumer expenditure growth was 3.4%, which was more or less the same as in the past few years. The growth of government consumer expenditure was 3.6% in 2012. It then dropped to 2.7% in 2013 before climbing back to 3.4% last year. It seems that the Government can still make a lot of effort in this regard. LEGISLATIVE COUNCIL ― 29 March 2018 8207

President, from these two groups of figures, we can come up with an interesting discussion on the question of whether a cash handout should be included in the Budget. This is a question worth pondering because handing out cash to the people direct may increase their sentiment of private consumption, but at the same time we run a risk and this brings us to these questions: where will people put this money? Will they save it up? Can it stimulate the economy direct? On the contrary, the consumption of the Government can generate a foreseeable outcome. If the Government properly invests this sum of money where it is needed, for example, in infrastructure and improving people's livelihood, such as universal retirement protection and extra resources into dental and specialized medical services for an ageing society in the long term, people will have more disposable money for private consumption as they do not need to spend too much money on themselves. I hope the Government can give this consideration.

President, the Economic Reports also mentioned figures on visitor spending which showed that we may need some new ideas as the existing tourism model may not be able to stimulate internal demand. Why am I saying this? It is undeniable that the figure displayed robust growth before 2014 thanks to the Individual Visit Scheme. In fact, the cumulative growth over two consecutive years before 2014 was as high as 27.4%. It then dropped to 15.8% before a slight rebound last year. The number of inbound visitors amounted to 48 million in 2012 and 60 million in 2014, then dropped to 56 million in 2016 before bouncing back slightly to 58 million last year. If we look at the breakdown, however, we will find that the number of non-Mainland inbound visitors has remained at about 14 million in the past few years, which means that most of the remainder were visitors from the Mainland.

President, the figures highlighted three problems. Firstly, we are overly relying on Mainland visitors and the number of non-Mainland visitors seems to remain stagnant. This has also brings forth the question of whether local tourism are putting all eggs in one basket by overly catering to a single source market. President, what is the result of this? The economy in the Mainland directly affects the local ecology. When the Mainland experiences an economic downturn or policy changes, our local retail sector will face direct and substantial impact. Goldsmith shops in tourist areas closing down one after another recently is an example. The situation seems worrying.

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President, secondly, blindly going after the number of visitors, sacrificing quality for quantity, will hurt local people's livelihood. I think it is unnecessary to go into the details of the impact of Mainland visitors under the Individual Visit Scheme on Hong Kong in the past 10 years. I would like to specifically ask the Government to not politicize the issue by elevating all criticisms of Mainland visitors from Hong Kong people to the political plane. If we take a step back and look at it objectively, it is actually a problem not unique to Hong Kong. Too many visitors in tourist cities often bring nuisances to local residents. Such is the case in Venice of Italy, Japan, Thailand, etc. Local governments must strike a balance between tourism economy and local livelihood by, for example, developing ecology or conservation tourism, or restricting the number of visitors just like the national parks in some countries to protect the local ecology.

President, thirdly, tourism featuring local characteristics should be developed. The Civic Party has always advocated developing local eco-tourism and heritage tourism to attract high-quality foreign visitors instead of those who visit the territory merely for purchasing brand name items or daily necessities. This of course requires planning and a conservation policy on the part of the Government. For instance, if the State Theatre which my party comrade Ms Tanya CHAN is very much concerned about can be conserved, I believe there will be a positive effect on enhancing foreign visitors' interest in Hong Kong's local culture. We certainly do not want conservation to be sheer empty talk voiced by the Government as an excuse for real estate-driven development.

Lastly, the Civic Party supports Mr SHIU Ka-fai's original motion. I so submit.

MS CLAUDIA MO (in Cantonese): President, the intent of the original motion is good but it basically solely links increasing internal demand to the tourism industry, which I find problematic in terms of logic. Having examined a number of amendments, the only one I consider meaningful is the one proposed by Mr LAM Cheuk-ting, who still does not delete "expedite the provision of additional tourism supporting facilities to upgrade Hong Kong's visitor receiving capability and capacity".

First of all, I will discuss some numbers with all of you. The tourism industry is certainly a major pillar of the Hong Kong economy, accounting for about 5% of our Gross Domestic Product. Is the number small? No, neither is it too big. Some say the tourism industry is the one and only industry of Hong LEGISLATIVE COUNCIL ― 29 March 2018 8209

Kong, which we must make it perform well such that Hong Kong will then be very prosperous and stable. I absolutely disagree with such a view, particularly so when the problem of the Individual Visit Scheme ("IVS") has initially caused the streets to be flooded with jewel stores and dispensaries. The Legislative Council has been discussing this issue for five years. Eventually LEUNG Chun-ying agreed―or perhaps he did not agree but the Mainland gave the order―as we said "too many IVS visitors will sink Hong Kong". Then he knew the situation was not good and IVS was thus changed to "one trip per week". The number looks better and the situation appears smoother.

However, I wonder if Honourable colleagues have noticed the number of visitor arrivals in Hong Kong was close to 60 million in 2017. Overall, Hong Kong received nearly 60 million visitors in one year. It is an abnormal number. Let us take a look at the situations of other international metropolis: Paris, the city of flowers, which is definitely visited by a lot of tourists; New York, the "Big Apple" and London, which pervades a royal ambiance; what are the numbers of visitors to these places? About 20 million or 30 million. There are only some 10 million international visitors to New York, but 60 million to Hong Kong. Is it crazy? And still we have to increase our visitor receiving capability and capacity? I really can bear it no more.

Honourable colleagues can look at the more specific numbers. For instance, the number of visitors to Paris is no more than 30 million, among which are French natives visiting Paris, not only overseas tourists. New York is the only place possibly having a higher overall number than Hong Kong. In 2016, the number of visitor arrivals in New York was 60 million while that in Hong Kong was less than 60 million. But the number of New York indicated that locals accounted for a large part of it, with only 10 million or so international tourists. Hong Kong is really jam-packed. Allegedly, even mops were sold out in Causeway Bay for a period of time. When the number of visitors has slightly dropped in the last two years, people then say there is a need to upgrade Hong Kong's visitor receiving capability and capacity. I have doubts and reservations about such capability and capacity. Anyway, the number indeed needs not be raised? Maintaining the number at the current level can already allow everyone to breathe a sigh of relief and Causeway Bay to no longer be jam-packed.

Of course, it is common knowledge that among the nearly 60 million visitor arrivals in Hong Kong, 75% came from the Mainland and among such visitors over 10 million were non-overnight visitors. The statistics of international visitors do not include non-overnight visitors. A peculiar 8210 LEGISLATIVE COUNCIL ― 29 March 2018 phenomenon prevails in Hong Kong, that is the problem of parallel traders, which is still pending proper solution. Now the Member has proposed the motion. My feelings are mixed because I do not know if I should support or oppose it. Japan has difficulty calculating the number of visitors because its territory stretches from Hokkaido to Okinawa. But it is expected that the total number of visitors nationwide will only grow to about 40 million. The number of visitor arrivals in Hong Kong, including the large number of parallel traders who travel back and forth nonstop, is close to 60 million. And someone say we need to upgrade our visitor receiving capability and capacity? People also say, without the tourism industry, Hong Kong is doomed. But there are other trades and industries in Hong Kong. To stimulate internal demand, the Government could have recovered the 170-hectare golf course for the construction of public rental housing so that people can live in peace and work with contentment. Accordingly, internal demand will naturally be generated because people's housing conditions have been improved and they are leading a better life. Logical deduction should be made in this way.

In conclusion, I find it rather strange that Mr Michael TIEN talked about his opposition to cash handouts for no reason and said that he was genuine in doing so, meaning he criticized others for untruthfully opposing cash handouts,. I know I should not discuss in particular the issue of cash handouts in this debate, but as he has brought it up, I also wish to point out that the Treasury of Hong Kong is overflowing with coffers mainly due to the high land premium policy, where bidders scramble to bid for land lots with higher prices. Under such a circumstance, more and more red capital has emerged. The local "white elephant" works are forced to rely on it, because how can our money be comparable to the national treasury? Despite an overflowing Treasury, we have not seen the Government making any particularly long-term plan or measure. We also distrust the Government, and so we think it is better to hand out cash.

Full stop.

MR JEREMY TAM (in Cantonese): President, according to the Travel & Tourism Competitiveness Report 2017 released by the World Economic Forum, the overall competitiveness of Hong Kong's tourism industry ranked 11th. In the Asian region, its ranking was only second to Japan. In terms of prioritization of travel and tourism, Hong Kong ranked ninth among all the economies. In the Asian region, its ranking was only second to Singapore. LEGISLATIVE COUNCIL ― 29 March 2018 8211

If we look at the overall figures only, we will easily be mistaken that Hong Kong's tourism industry has continued to flourish. However, behind the high ranking of its competitiveness, the tourism industry is actually outwardly strong but inwardly weak. Over the years, Hong Kong's tourism industry has been unable to shake off the excessive reliance on Mainland visitors, lacking in local characteristics. The whole ecology of the operation is extremely unhealthy.

If we read the report carefully, we would find some clues. Hong Kong's rankings were rather extreme. Despite its high rankings in such areas as business environment, safety and security, and health and hygiene, Hong Kong has a lag in other aspects. Among the East Asian countries and regions, Hong Kong received the second lowest score in terms of price competitiveness, only higher than that of Australia. In terms of international openness and cultural resources and business travel, Hong Kong ranked the third lowest, being only higher than China and Mongolia. From these situations, we can draw the following conclusion: Hong Kong's tourism industry has three main problems, namely, high prices, a lack of international perspective and an absence of local cultural characteristics.

The problem of high prices in Hong Kong is well known to all, and it cannot be resolved overnight. So I am not going to dwell on it here. Today I wish to focus the discussion on the latter two.

Compared with the other East Asian countries, why is Hong Kong's international openness lower? This is closely related to Hong Kong's tourism policy. Over the years, Hong Kong's tourism industry has excessively relied on Mainland visitors. For example, in 2017, among the 58.47 million visitors to Hong Kong, 44.45 million came from Mainland China, accounting for nearly 80% of the total number.

No doubt Mainland visitors can bring considerable economic benefits to Hong Kong, but an over reliance on a single market as the source of visitors has rendered the overall development of the tourism industry homogeneous. Jewellery shops and drug stores opened to satisfy Mainland visitors abound in the street, thus greatly reducing Hong Kong's attractiveness to visitors from other places. More importantly, we have put all the eggs in one basket. Should there be any fluctuation in the Mainland economy or change in the spending pattern of Mainland visitors, it will be detrimental to the healthy development of Hong Kong's tourism industry and associated industries.

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In my view, it is inevitable that greater diversification is the direction of development of Hong Kong's tourism industry, in order to enhance its appeal to different sources of visitors around the world. According to international experience, when the per capita GDP (i.e. Gross Domestic Product) of an emerging economy reaches US$3,000, its people will become better off in living and the middle class will emerge, giving rise to an explosive growth in the demand for outbound travel. In the Asian region, a number of emerging economies have actually appeared. In 2017, the per capita GDP of Indonesia was US$3,858, whereas that of the Philippines was US$3,022. Owing to the large population of India, its per capita GDP was lower, being only US$1,852, but given its rapid economic development, the potential demand for outbound travel is huge.

According to the "Global Muslim Travel Index 2017" released by Mastercard, excluding the member states of the Organisation of Islamic Cooperation, Hong Kong was the third most popular place for Muslim visitors in Asia. It is thus evident that Hong Kong is their favourite destination for travel. There are still plenty of business opportunities available for us outside China.

The Government should make consideration in a far-sighted manner and make attraction of visitors from international sources its policy backup. Take India as an example. Earlier on, to prevent abuse of non-refoulement claims, the Hong Kong Government has required holders of Indian passports to submit a lot of additional information online in the pre-arrival registration system before travelling to Hong Kong. Such a policy has made the procedures more complicated. It may also discourage tourists from coming to Hong Kong. The following figure is a practical pointer. After the implementation of this measure, the number of Indian visitors to Hong Kong in the first seven months of 2017 has dropped by 20.4% over the same period in 2016. The Government should conduct a review or consider other approaches in a timely manner.

We certainly need to stop bogus refugees from coming to Hong Kong. This is absolutely necessary, but the measure should not be an overkill. Facing such emerging areas as India which I mentioned just now, the Tourism Board has in fact injected a lot of resources in the past in the hope of attracting more visitors. However, to pre-empt the abuse of non-refoulement claims, the Government has gone too far, closing the door to many visitors who originally wished to travel to Hong Kong for spending.

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Quite a number of Members have mentioned the need to embrace the Belt and Road. What countries are included? There are Bangladesh, Nepal, Pakistan, as well as Kenya and Ethiopia in Africa. However, these countries may also present the problem of potential bogus refugees mentioned just now. In that case, are we going to break up the Belt and Road and disallow the entry of people of some of the countries into Hong Kong? While the Government deeply embraces the Belt and Road, how will it handle this matter?

Besides, a more important issue is the positioning of Hong Kong's tourism industry. As I mentioned just now, to satisfy Mainland visitors, now jewellery shops, drug stores and shops of famous brands abound in the territory. But where is the local culture? In fact, foreign tourists like in-depth travel. Special lifestyle and features are appealing to them. On the contrary, hypocritical shows put up deliberately will easily arouse their aversion.

As a matter of fact, there is keen competition in the region. For example, Japan, Korea and Taiwan have published many movie and television works with local characteristics. I hope we will not blindly indulge in such slogans as the Belt and Road and Bay Area. Here I call on the Government to remain vigilant in times of peace and take precautions for rainy days. It should step up its efforts to attract visitors from other regions to improve the excessive homogeneity of Hong Kong's tourism industry. The Government should also accept and promote local cultural features with a proactive and open attitude. I so submit.

MR VINCENT CHENG (in Cantonese): President, the tourism industry is closely related to the stimulation of internal demand and economic development. Here, I will express my views on visitor diversion, expansion of visitor sources and measures to upgrade the tourism industry of Hong Kong.

First, visitors should be suitably diverted to alleviate the pressure borne by certain districts in receiving visitors. The development of the tourism industry of Hong Kong should be attributed to the enormous visitor source of Mainland visitors, which had been the engine of economic growth in the past decade, yet it has led to the problem of receiving capability in Hong Kong. Hence, in my view, the diversion of visitors to alleviate Hong Kong's pressure in receiving visitors remains the most important task of the Government in promoting the 8214 LEGISLATIVE COUNCIL ― 29 March 2018 development of tourism industry. In fact, certain districts, old districts in particular, such as To Kwa Wan, Hung Hom and Kowloon City, and so on, have been confronted with numerous problems arising from visitors for a prolonged period. These problems include traffic congestion, illegal parking, hygiene problems and noise, and so on. At present, not only roads are jammed by tour coaches, pavements are also crowded with visitors.

Last week, the Secretary for Commerce and Economic Development met with us to discuss the relevant issues. We learnt that the authorities would introduce some short-term measures, such as the provision of parking lots for tour coaches at a half-hourly concessionary parking rate. Moreover, the Government will introduce data sharing projects to allow shops, restaurants, tour guides and coach drivers to conduct real-time communication and to grasp the visitor flow, vehicular flow on roads and in shops, which will be conducive to the diversion of visitors. Will these measures be effective? We have to wait and see, and we will monitor the situation closely. Yet, we are deeply concerned about the traffic congestion in Kowloon West at present.

No matter how, diversion of visitors is the most important task. This is the key. Representatives of the Government have expressed the idea of diverting some of the visitors in the several residential areas mentioned to the cruise terminal, so that visitors will do shopping and patronize the restaurants there. The intention of this proposal is good, yet I hope the Government will carefully examine the spending patterns of visitors now visiting To Kwa Wan. Since these visitors may be paying a relatively low fee for their tour, if they are to do their spending at the cruise terminal, will the positioning of the facilities and price ranges at the cruise terminal suit their needs? Proper coordination is required for the proposal, lest this good intention backfires.

Second, I would like to talk about the need for the Government to strengthen its execution capability in promoting tourism. We hope the Government will enhance the functions of the Tourism Commission ("TC") or the Commissioner concerned. Moreover, in the promotion of the development of the tourism industry, the authorities may play a more proactive role. Working groups may be set up according to needs to promote various policies and measures. For instance, focus groups on promoting district tourism and task forces on the cultural and creative industries may be set up to conduct discussions with district members and stakeholders, to listen to more views and put forth LEGISLATIVE COUNCIL ― 29 March 2018 8215 more feasible proposals proactively. Furthermore, TC should establish big data for relevant issues to understand the behaviour and preference of visitors and to analyse the development trend, policies and measures within the region and in the global tourism market, so as to keep abreast of the times.

Third, it is about measures for expanding visitor sources. We have to make proactive efforts to enhance and increase tourist attractions. At present, in many places overseas, as well as the Mainland, products of thematic tourism have become popular. These tours include tech tours, sports tours, arts tours, green and eco tours, in-depth tours and experiential tours, and so on. I have heard that some master dressmakers of Qipao in Kowloon West are thinking about organizing Qipao experiential tours, yet they lack support. Regarding the experience of these local cultural characteristics, if the Government can offer assistance in some measure by means of policies and support arrangements, it will greatly facilitate the promotion of local culture. I like marathons very much, and I am used to running abroad. For instance, I have been to Gold Coast of Australia. Activities are organized according to the seasons there. Since the number of visitors visiting Gold Coast is fewer during winter, the marathon will be held in winter. Moreover, they have made many matching arrangements, which include guides on various tourist attractions and dining places for runners after the marathon. At present, Hong Kong is also making these arrangements, yet the promotion of tourism warrants greater efforts.

As for district tourism, I often mentioned the cases of Kowloon City, Yau Tsim Mong and Shum Shui Po, as many places in these districts should be cherished and many century-old stores should be treasured. In the case of Shum Shui Po, for example, there is a shop specialized in tofu snacks, where many overseas visitors will pay a special visit for the tofu pudding. These old stores can attract more visitors with some packaging, and this will definitely be conducive to the development of local community economy. Hence, in a short while, a design and fashion hub will be set up in Shum Shui Po. At the last meeting of the District Council, I told the Secretary my wish that the design and fashion hub would not be confined to the specified site but should bring about a radiation effect, so that other locations in Shum Shui Po would also benefit. In this way, visitors would not merely visit the design and fashion hub but also the cloth street and the button street, thereby facilitating the development of more tourist options.

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Finally, I agree with Mr SHIU Ka-fai that the expansion of visitor sources, including Mainland and overseas visitors, will definitely benefit the tourism industry, the retail industry, the catering industry and the transport industry, as well as the economy as a whole. I am most anxious about the arrangements made by the authorities for facilities at the West Kowloon Cultural District ("WKCD") after the completion of the Guangzhou-Shenzhen-Hong Kong Express Rail Link in future. Such arrangements should incentivize inbound overseas visitors to visit other places in addition to WKCD. For instance, after watching Cantonese opera at WKCD, visitors may go to Shum Shui Po to have a bowl of "pig liver noodle", or go to Kowloon City to get a custom-made suit. Only with these arrangements will the tourism industry bloom in all aspects with glorious splendour. President, I so submit.

MR CHARLES PETER MOK (in Cantonese): President, I would like to thank Mr SHIU Ka-fai for proposing this meaningful motion: "Stimulating internal demand and opening up new visitor sources".

As regards "stimulating internal demand", Mr SHIU stated in his original motion that, given the Government's ample fiscal reserves, it should return wealth to the people, and thus a lot of Members have discussed in the debate the arrangements proposed in the latest Budget or whether or not cash handouts should be made. I will not cover such topics. But the major principle of "returning wealth to people" and "stimulating internal demand" suggested by him is definitely correct. In the second half of his motion he mentioned how to open up new visitor sources; today many Members, therefore, have particularly spoken on the tourism industry. Likewise, "opening up new visitor sources" is about how Hong Kong can attract more tourists and various kinds of business. And such a major principle must be correct as well.

Of course, having paid attention to a series of amendments and speeches made by Members just now, Honourable colleagues would identify the many contradictions contained therein. Earlier in the debate, many Members have mentioned that, as a tiny place, the capacity of Hong Kong is limited after all. We have already seen the development of the Individual Visit Scheme ("IVS") causing problems to numerous districts. In today's debate, on the one hand, many Members wish to open up new visitor sources, but on the other, they indicate that the districts they represent have already been overloaded, resulting in LEGISLATIVE COUNCIL ― 29 March 2018 8217 significant problems. How can a balance be struck and coexistence achieved between the two aspects? In fact, the Government may then have to make changes to many specific practices and policies, but sometimes it may be unable to do so. Certainly, we often hear people ask: are there too many Mainland visitors? As suggested in Dr KWOK Ka-ki's amendment, should we focus on attracting visitors of different nationalities and spending patterns to Hong Kong? The two matters may not be contradictory, but, as Honourable colleagues would have noticed, the focuses of amendments proposed by Members from the pro-establishment camp and the pro-democracy camp are indeed vastly different. However, I have to ask: do we agree that a balance should be struck between the two matters? It means: do we definitely speak against Mainland visitors coming to Hong Kong? Conversely, the pro-establishment camp can actually say more about how to attract visitors of different nationalities and spending patterns.

President, I wish to further expound on one or two amendments but, of course, Mr Jeffrey LAM has already withdrawn his amendment. He mentioned IVS, so did many Honourable colleagues. Certainly, during the few years when the economy of Hong Kong was at its worst, IVS might have offered certain help to some people or the business sector, but in many respects it is a double-edged sword. While Honourable colleagues have brought up the issue of capacity, some amendments have discussed how to relax measures to attract more Mainland visitors to Hong Kong.

Nevertheless, I also wish to point out that in the last 10 years or so, particularly in the initial period when IVS was flourishing, on the one hand it had offered some help to the economy of Hong Kong, but on the other, I consider that in those few years, the development of the tourism industry and retail industry had been lagging in many respects, especially e-commerce, due to the over reliance on IVS and the market of Mainland visitors. During those few years, retail businessmen did not want to court troubles and did nothing after rented a shop premise because they would make profits anyway. There was no need for long-term planning, just like the Government needs not think about other things. The result is that, exactly over those few years, the Mainland has completely overtaken Hong Kong in the development of e-commerce. The types of electronic payment under discussion in Hong Kong have already been implemented in the Mainland because we only care about earning money from IVS visitors.

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From the perspective of the industries, it is a relevant point and has an impact as they could earn too much "easy money", i.e. hot money. For matters that can only be achieved with more investment or brain power, they do not attach importance to them.

Another amendment was proposed by Dr CHIANG Lai-wan, who has also withdrawn her amendment. She mentioned "the Government should comprehensively promote the development of a smart tourism city with an out-of-the-box mindset". She referred to the development of a smart tourism city and also an out-of-the-box mindset.

I wish to offer some views on this point in conclusion. On the subject of an out-of-the-box mindset, is the Government or are the industries really capable of doing so? For instance, Mr SHIU Ka-fai has pointed out a few aspects in his original motion. He stated "so as to open up new visitor sources for the benefit of the tourism, retail, catering and transport sectors, etc. and the overall economy of Hong Kong". Considering these few aspects alone and as regards tourism, Mr SHIU Ka-fai held a press conference in the Legislative Council a few days ago to voice opposition against the practices of the likes of Airbnb. Hong Kongers actually like to obtain service via Airbnb when travelling abroad, but of course, it may not be suitable for the environment and certain conditions of Hong Kong. Nevertheless, as Mr Kenneth LAU has mentioned home-stay lodgings, can we not give up some innovative practices only for the sake of protecting the existing vested interests?

I have spoken on tourism. As regards the retail industry, can the commercial sector accept electronic payment with genuine sincerity so as to save Mainland visitors to Hong Kong the inconvenience? Third, can transport arrangements be revamped? Overseas visitors to Hong Kong feel dissatisfied with not being able to use Uber services, and Mainland visitors have also made criticisms of the ride-sharing Apps, DiDi, being outlawed in Hong Kong. Accordingly, how can we talk about having an out-of-the-box mindset and how can innovation be made? The industries have to learn that they cannot only protect the interests of those with vested interests. Now we hope that the overall economy will be benefited, not that only some parties with vested interests will be protected. Otherwise, even if we can open up new visitor sources, can the retail and transport industries, etc. be benefited? Indeed no.

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IR DR LO WAI-KWOK (in Cantonese): President, the main theme of the original motion moved by Mr SHIU Ka-fai is to urge the Government to make good use of this favourable state of public finance to stimulate internal demand and open up new visitor sources. And it also emphasizes that the Government should launch more measures to improve people's livelihood given the ample fiscal reserves, so as to return wealth to people.

With such an enormous surplus, the Business and Professionals Alliance for Hong Kong ("BPA") believes that the Government should invest in the future while caring for people's livelihood, and share the fruit of economic prosperity with the public as appropriate. A few days ago, the Government announced a plan on the Budget to "fill the gap" and grant a sum of $4,000 in cash to eligible citizens. The BPA welcomes and supports the Government's willingness to listen to the opinions of the community and share the economic prosperity with the public, hoping that the Administration will determine the eligibility and the way to "hand out cash" as soon as possible so that qualified citizens may benefit early. This may also help stimulate internal demand in the near term.

In the long run, we cannot rely on local people to stimulate internal demand. The original motion moved by Mr SHIU Ka-fai and the amendments of Mr YIU Si-wing, Mr Michael TIEN and Mr WU Chi-wai request the Government to expedite the provision of additional tourism supporting facilities to upgrade Hong Kong's visitor receiving capability and capacity.

BPA has all along kept a keen interest in this topic and believes that the SAR Government should make good use of the fiscal surplus, expedite the allocation of resources for the provision of additional tourism supporting facilities, appropriately open up new visitor sources and consolidate Hong Kong's image as a hospitable city.

Specific measures to open up new visitor sources include: (1) enhancing the Individual Visit Scheme policy for Mainlanders intending to visit Hong Kong by allowing Mainland e-passport holders to apply online for endorsement to visit Hong Kong, so as to facilitate the entry of visitors; (2) proactively exploring new tourism projects, such as introducing more measures to encourage visitors to use Hong Kong as the embarking and disembarking port in their cruise tours and make spending in Hong Kong, and allocating more resources to the Hong Kong Tourism Board for joint development of more "multi-destination" tourism products with neighbouring countries and regions. Meanwhile, the Government 8220 LEGISLATIVE COUNCIL ― 29 March 2018 should proactively hold discussions with Guangdong and Macao on implementing an arrangement for Guangdong-Hong Kong-Macao sailing by pleasure vessels, so as to promote the development of pleasure vessel tourism industry; (3) the Government should continuously improve local facilities of the tourism industry and the convention and exhibition industries, so as to attract more overseas visitors with potential from emerging markets to Hong Kong.

(THE PRESIDENT'S DEPUTY, MS STARRY LEE, took the Chair)

In addition, the Government should endeavour to increase Hong Kong's unique attractions, further beef up resources for preservation and promotion of Hong Kong's traditional culture, revitalizing remote villages by removing the restrictions imposed by policies and regulations, and proactively explore eco-tourism resources in rural areas, with a view to achieving diversification in tourism products. Through implementing the co-location arrangement at the Hong Kong section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link ("XRL") and seizing the opportunities brought forth by the completion of the Hong Kong-Zhuhai-Macao Bridge ("HZMB") in the future, the Government should adopt focused strategies to attract more visitors to Hong Kong for tours and consumption. I think there is a need to explore all of these in depth.

As we all know, the Hong Kong section of XRL is scheduled to be commissioned in the third quarter this year. The Bills Committee on Guangzhou-Shenzhen-Hong Kong Express Rail Link (Co-location) Bill of this Council is holding deliberations in earnest. Colleagues from BPA and I very much agree and support the objective of implementing the co-location arrangement in the West Kowloon Station at the Hong Kong section of XRL and look forward to the passage of the Bill by this Council before the Council rises in summer this year, so as to bring the greatest convenience and benefits to the general public. Since Hong Kong enjoys the unique advantage under "one country, two systems", it may leverage this strategic infrastructure of XRL to further expedite its participation in the Belt and Road Initiative and the construction of the Guangdong-Hong Kong-Macao Bay Area and seamlessly connect with the Pan-Asian Economic Circle to help Hong Kong's commercial and industrial sectors explore broader markets and horizons, promote the long-term development of Hong Kong and upgrade its competitiveness.

LEGISLATIVE COUNCIL ― 29 March 2018 8221

The objective and purpose of the West Kowloon Station are to help promote Hong Kong as a major regional hub. With the three-runway system international airport, HZMB, a world-class cruise terminal and other high-quality infrastructure for external connections, coupled with the Hong Kong section of XRL, the land, sea and air transportation system can be easily connected to West Kowloon and integrated with the vast XRL network. The tremendous effect of this regional hub formed by the land, sea and air infrastructure of Hong Kong should not be underestimated and dwarfed.

Pragmatically, the co-location arrangement is a requisite for the commissioning of XRL and the reason for 15 platforms designed for the West Kowloon Station. We can imagine that further development could see Platform No. 1 being designated for Beijing Line, Platform No. 2 for Shanghai Line and Platform No. 3 for Guilin Line. This is the concept. In this way, XRL passengers travelling to and from different cities can reach West Kowloon direct, while passengers boarding in the West Kowloon Station can also use the XRL network freely, thus maximizing the economic and social benefits of Hong Kong section of XRL.

Just now, several Members mentioned Mr Jeffrey LAM's amendment in their speeches. I would like to point out that, since Mr LAM cannot fit his schedule with the changed Agenda of this Council today, he was forced to withdraw his amendment.

As regards the amendment of Dr KWOK Ka-ki on the abnormal expansion of retail luxury goods businesses in various districts and the amendment of Mr LAM Cheuk-ting on the proposal to freeze the number of Individual Visit Scheme cities and levy a land arrival tax on visitors, they are contrary to the main theme of the original motion and both the colleagues from BPA and I oppose them.

Deputy President, I so submit.

MR HOLDEN CHOW (in Cantonese): Deputy President, I thank Mr SHIU Ka-fai for moving this motion on "Stimulating internal demand and opening up new visitor sources". In relation to opening up new visitor sources and promoting the tourism industry of Hong Kong, the Democratic Alliance for the 8222 LEGISLATIVE COUNCIL ― 29 March 2018

Betterment of Hong Kong ("DAB") issued the "Proposal on the Sustainable Development of Tourism in Hong Kong", which listed a number of opinions, in October 2017. Please allow me to reflect some opinions to the Administration here.

First of all, regarding the arrangement of the Kai Tak Cruise Terminal ("KTCT"), we know that the Government has injected a lot of resources into KTCT, hoping to develop it into a world-class cruise hub. Undeniably, the Government made some efforts in the past and both the number of cruises berthing at KTCT and the number of passengers have actually increased, but I think that there are still inadequacies on the part of the Government in its work of handling KTCT. For instance, the passengers of cruises currently berthing at KTCT basically leave shortly after landing. Since the Government has injected so many resources into KTCT, I think we should make good use of it and put in places more retail or supporting facilities there to retain visitors, so that they can use KTCT and make spending there. We are discussing ways to keep developing new attractions for visitor diversion, and this method can kill two birds with one stone.

Some people hold that KTCT seems to "have nobody around" for quite a long time. I hope the Government can take onboard our views to proactively expand the existing retail floor area of only around 5 000 sq ft, the ratio of which is relatively small compared to the 140 000 sq ft, and provide additional retail facilities. I believe this can help boost the visitor flow. Cruise passengers will not leave shortly after landing but to make spending there, thus effectively creating another tourist spot.

About the issue of water taxis, DAB has repeatedly proposed to the Government the development of water taxis and we are glad that the Government has made a response, stating implementation of the proposal for introducing water taxis. We also hope that the Government will examine the possibility of introducing water taxis at KTCT and use KTCT as a departure point, a destination or a berthing point for water taxis to further open up new visitor sources and add tourism supporting facilities.

Deputy President, I have some opinions about Lantau Island too. We know that there are still various attractions on Lantau Island open to visitors. HZMB will be commissioned soon. We hope that more visitors can be attracted to Lantau Island for tours and spending by then. I hope that the Transport and LEGISLATIVE COUNCIL ― 29 March 2018 8223

Housing Bureau will further examine the possibility of providing additional supporting facilities to effectively attract visitors using HZMB to Lantau Island for tours and spending.

Deputy President, The Boxes―a shopping centre near the border at San Tin―vigorously promoted by Mr WONG Ting-kwong from DAB has been opened for business recently and has drawn some media coverage. Indeed, I worked with Mr WONG Ting-kwong and saw him put in enormous efforts to promote this shopping centre. However, just now I heard some colleagues of this Council make inaccurate criticisms and inappropriate accusations of this shopping centre, saying that Mr WONG Ting-kwong (nicknamed "Mr Elephant") should use his "elephant tail" to "swat the flies" if there is no visitor. I am very disappointed with these remarks. Colleagues who do not agree with other's political views or a particular measure may express their views and criticisms in an objective manner. Such remarks, however, will only make me feel that they wish to "perform a personal show" in this Council to curry popular favour. For I do not think that such words can win credits for a person. Rather, I think he should consider checking his own moral standard.

Deputy President, the original intent of promoting this shopping centre is to channel Mainland visitors in the North District and provide them one more place for spending, thus reducing the impact on residents. If one would like to solve the problem, he should put forward a reliable and feasible proposal, not to mention the fact that this shopping centre has just begun operation. We think that this shopping centre should continue to operate to channel visitors and reduce the impact on residents, consistent with the original intent. In my opinion, the opposition colleagues who make such accusations and criticisms with those remarks should consider checking their own moral standard.

Deputy President, I so submit.

DR CHENG CHUNG-TAI (in Cantonese): Deputy President, many Members have delivered their speeches on the motion on "Stimulating internal demand and opening up new visitor sources" moved by Mr SHIU Ka-fai already, and mentioned the issues related to the Individual Visit Scheme ("IVS") and the one-year multiple-entry Individual Visit Endorsements (multiple-entry endorsements) in their speeches. I understand why the issue of IVS was covered in their discussion on "stimulating internal demand", but I would like to reiterate and take the trouble to reiterate the reason why both society as a whole as well as 8224 LEGISLATIVE COUNCIL ― 29 March 2018 the residents of individual districts supported the "liberation" protests in 2015 and the anti-parallel traders campaigns on their own initiative. It was due to the simple reason that the damages caused by IVS and the multiple-entry endorsements had disrupted the daily lives of local residents.

Even though the authorities subsequently introduced the improvement measure of "one trip per week" Individual Visit Endorsements, the residents of the North District are still suffering every day. I think we should step into their shoes. I wish to add one point here. Some Members mentioned that there were some physical conflicts or so-called "radical" actions during the protests. I think the reasons behind are also very simple. The people of Hong Kong are mostly rational, and they would have resorted to simple demonstrations or petitions to work things out if they could. The ultimate reason leading to those "radical" actions was that the residents had tried many other ways in a peaceful, rational, and non-violent manner but in vain, and so they were left with no alternative but to resort to other means, which eventually resulted in the implementation of "one trip per week". Indeed, a significant amount of discussion was devoted to the issue of multiple-entry endorsements previously. One's position on this issue may have been influenced by certain vested interests or some fundamental stance. Therefore, I think it is meaningless to argue about it further here.

However, when we deliberate on the motion moved by Mr SHIU Ka-fai, I believe all of us here should take a broader perspective instead of adopting the rather narrow view that the discussion on stimulating internal demand covers the issue of IVS only. Let me cite a few examples to explain my point. The first example is Joe HISAISHI, the master musician who composed music for the films directed by Hayao MIYAZAKI. It happens that Joe HISAISHI will soon give performances in Hong Kong with The Hong Kong Philharmonic Orchestra. Unfortunately, it is nearly impossible to get a ticket for the concerts. Even if tickets are sold through a ballot and real-name ticketing system now, it is still unlikely for the general public to get a ticket. In addition to Joe HISAISHI, another example is Dayo WONG, who has become the talk of the town recently. Similarly, it is also impossible to buy a ticket for the upcoming stand-up show of Dayo WONG, and it has generated a lot of discussions in society about the legitimacy of black-market tickets and ticket touting. Members of certain organization went so far as to say that the shows were for those who could afford a ticket. However, if our city is to be attractive to tourists and become a cultural attraction, is it reasonable that only the wealthy are entitled to enjoying Dayo WONG's shows? Even Dayo WONG himself does not agree with it.

LEGISLATIVE COUNCIL ― 29 March 2018 8225

Today many MayDay's fans have queued up to buy tickets for the band's upcoming concerts. However, a system malfunction occurred, thus adding to their worries over the availability of tickets. They might not be able to buy any ticket after having queued up for the whole morning. What I am talking about is not the Oldies Concert to be held in Tsuen Wan, but the concert of the Taiwanese band MayDay. Tickets for the MayDay concerts are sold in May every year, but their fans were unable to buy a ticket after having queued up for the whole morning this year.

Well, let us talk about yesterday. The Hong Kong Jockey Club encountered a half-day system malfunction on a horse race meet yesterday. Two days earlier, the Mark Six betting service was also interrupted. Ticket sales in the 102 betting centres across the territory were suspended due to a system breakdown. Deputy President, the various basic infrastructure facilities can no longer cope with the needs of our daily lives, including the needs of entertainment, recreation, culture, etc. These should have been the elements that make a place, our city, more appealing. But the fans of MayDay were unable to buy a ticket after having queued up for the whole morning today. The so-called "ticket touting" involves those unscrupulous merchants or people who have the time for touting activities only, but after all, what we are facing today is not only the issue of ticket touting, but that our electronic systems are simply unable to cope with the recreational needs of local people. Then how would it be possible for us to go on to discuss our visitor receiving capability and capacity? What is more, when it comes to the issue of our visitor receiving capability and capacity, we may get confused about certain concepts. Are those visitors parallel traders, smugglers, or day-trippers? We have not yet taken into account their number, their categories and differences, but we are so narrow-minded that we are discussing only the sales of commodities.

The motion we are discussing today is about stimulating internal demand and opening up new visitor sources, but the discussion in the whole morning focused solely on retail and sales of goods. Certainly, some Members may disagree and say that cruise tours and water taxis were also covered in our discussion. Thanks to Mr Holden CHOW who mentioned water taxis in his speech and reminded me of it. In fact, I am a bit frustrated about it. Speaking of taxis, I would like to ask which one of you has never been refused hire by a taxi driver. It is during this week that reporters of a mainstream media took footage of some taxi drivers in Lan Kwai Fong, showing how those drivers 8226 LEGISLATIVE COUNCIL ― 29 March 2018 overcharged or raised taxi fare at will, etc. How come our tourism industry has received so many criticisms? Recently, Hong Kong has been rated as one of the most unpopular tourist destinations by the people of Taiwan. So the issue is not about reliance on one single visitor source, but that Hong Kong is no longer appealing culture-wise.

Deputy President, I would like to cite another example to conclude my speech. Just now I mentioned Joe HISAISHI, Dayo WONG, and MayDay, but I have not yet mentioned an emerging artist from Taiwan … excuse me, I mean Japan. Miwa KOMATSU, the Sen of Spirited Away comes to life, had her first art exhibition held in Hong Kong recently. One of the strengths of Hong Kong lies in its great diversities of pooling talents from all over the world. Unfortunately, our discussion today focused on shopping only. Talking about shopping, Mr SHIU Ka-fai, I would like to make one final point. The problem of Hong Kong is that the tourism industry does not benefit local tourism. The fact is that some Mainland merchants in Hong Kong are selling counterfeit Japanese products that appear to be made in Japan, and disguise themselves as a part of the local tourism industry. I do not wish to name any companies (The buzzer sounded) but I believe all of you understand what I mean. I so submit.

DEPUTY PRESIDENT (in Cantonese): Dr CHENG Chung-tai, your speaking time is up.

MR WONG TING-KWONG (in Cantonese): Deputy President, as I had gone to the Po Leung Kuk to attend a handover ceremony, I missed the speeches and comments of some Members. Nevertheless, I noted some problems with Mr Holden CHOW's remarks after returning to the Chamber, and I will make some comments on his remarks later.

Deputy President, it has been five months since the motion was proposed by Mr SHIU Ka-fai. Today we can finally discuss this motion in a formal manner, especially when the SAR Government has announced a fiscal surplus of over $130 billion. We may explore in a more practical way how best to make good use of the public financial resources, and at the same time, stimulate domestic and external economies for sustainable economic development.

LEGISLATIVE COUNCIL ― 29 March 2018 8227

The details of this motion are mainly divided into two aspects, namely people's livelihood and tourism, and I will focus my speech on tourism development. I very much agree with the original motion to "expedite the provision of additional tourism supporting facilities to upgrade Hong Kong's visitor receiving capability and capacity, and alleviate the inconvenience caused by visitors to members of the public through better diversion, so as to open up new visitor sources". While the SAR Government has stated that it attaches great importance to tourism and allocated an additional $226 million in the Budget to implement the recommendations made in the "Development Blueprint for Hong Kong's Tourism Industry" issued by the Commerce and Economic Development Bureau in October last year, there are inadequacies in its recommendations on upgrading visitor receiving capability and capacity.

In view of the fact that Hong Kong is small but densely populated with a bottleneck in visitor receiving capability, the Government should study early effective measures to divert and channel visitors, so as to enhance the capability of receiving an increasing number of visitors in future. DAB advises the Government to study the possibility of setting up shopping centres in the border area, proactively develop Lantau Island and roll out more diversified tourism infrastructure projects to enhance the capability of Hong Kong, so as to accommodate Mainlanders on visit and consumption in Hong Kong and alleviate the negative impact arising from over-concentration of visitors. Meanwhile, this can provide job opportunities for residents within the existing and planned new towns in the New Territories to promote local community economy.

I reiterate that the tourism resources in Hong Kong are in shortage, especially in terms of natural scenery. We do not have great scenery of vast grasslands or famous mountains and rivers. Resources are not enough even if we manage to expedite the construction of additional tourism facilities. Therefore, apart from constantly improving tourism measures and adding new elements internally, the authorities should take advantage of the close tie with the Mainland to develop more diversified tourism projects.

Deputy President, East Asia has indeed become the world's largest economic region and economic engine in terms of aggregate output. For this reason, places around the world will focus on Asian countries and regions including China in promoting tourism development. With the commencement of the third runway project at the Hong Kong International Airport, Hong Kong can leverage the development opportunities of the Belt and Road Initiative ahead to vigorously promote Hong Kong's tourism industry and attract people from the 8228 LEGISLATIVE COUNCIL ― 29 March 2018

Belt and Road countries to Hong Kong for business and leisure travel. We should also attach importance to ways of seizing new development opportunities in the Guangdong-Hong Kong-Macao Bay Area. With the respective advantages enjoyed by the "nine cities and two regions", regional integration in the Pearl River Delta can be accelerated as long as complementarity is achieved.

Regarding the expansion of local tourism development, Hong Kong and Guangdong are located in close proximity. It is proposed that cooperation with tourist cities such as Guangzhou, Zhuhai, Zhongshan, Macau and Zhaoqing to form an alliance, so that visitors from all parts of the world can start their journey from Hong Kong and enjoy new tourist experiences with multi-destination itineraries. We also propose that the SAR Government should strive to further relax the existing 144-hour Convenient Visa requirement with the Mainland to attract more international visitors to Hong Kong for multi-destination itinerary experiences.

In addition, the authorities should develop tourism products for the Belt and Road countries jointly with the region and Guangdong Province including Shenzhen and Nansha Cruise Terminal, open up a cruise tour market in countries along the Belt and Road and create multi-destination itineraries for cruise tours in Guangdong, Hong Kong and Macao. Besides cooperation in the promotion of and publicity on cruise tours should be enhanced. Adding to this must be an effort made at striving for relaxed visa arrangement with the Central Government, so that Mainland cruise passengers boarding from Hong Kong can directly return to China after travelling to a third place of the port cities along the Maritime Silk Road. This can boost the development of cruise tours along the Maritime Silk Road and promote Hong Kong as a major home port for cruises and a hot spot for international cruise tours.

Given the increasingly fierce competition in tourism worldwide, the tourism industry of Hong Kong faces many challenges. I hope that the Government can proactively consider the recommendations of DAB. Deputy President, I support the original motion and the amendments of Mr YIU Si-wing, Mr Michael TIEN and Mr WU Chi-wai.

Lastly, I heard some Members criticize The Boxes. I hope that they will refrain from making sarcastic remarks but to make some positive suggestions (The buzzer sounded) …

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DEPUTY PRESIDENT (in Cantonese): Mr WONG Ting-kwong, your speaking time is up.

MR TOMMY CHEUNG (in Cantonese): Deputy President, my party comrade, Mr SHIU Ka-fai, has elaborated on the motion moved by him already. He explained clearly that given the Government's ample fiscal reserves and fiscal surpluses, it is indeed necessary for the Government to launch more measures to improve people's livelihood and at the same time expedite the provision of additional tourism supporting facilities, and open up new visitor sources for the benefit of the tourism, retail, catering and transport sectors, etc. and the overall economy of Hong Kong. Therefore, the Liberal Party welcomes the Government's proposal to allocate an additional sum of nearly $400 million to support the tourism industry. We also hope that these measures will empower various sectors to facilitate the development of the tourism industry and reshape the image of Hong Kong as a world-class tourist destination of choice and ensure the sustainable and healthy development of the tourism industry.

In the face of intense competition from other regions, Hong Kong has found the competitiveness of its local tourism industry dwindling. According to the Travel & Tourism Competitiveness Report 2017 published by Switzerland's World Economic Forum, Hong Kong and Singapore ranked 12th and 13th, respectively among 136 countries and places, while China ranked 15th. Among the countries and places in the Asia-Pacific region, Japan was ranked the highest and took the 4th place.

Hong Kong was not even ranked among the top ten and was far behind Japan. In just a few years, Japan had become the most improved country in terms of tourism quality. It was ranked the highest globally in the areas of "degree of customer orientation" and "ground transport efficiency", and also received a very high rating in respect of hospitality service. Added to the fact that China was also ranked the highest in terms of cultural resources, we can see that Hong Kong must strive to upgrade its competitiveness of tourism and open up new business opportunities for tourism. For instance, in recent years, the general public have shown an interest in bazaars and markets with local flavours, and there is also the view that the Government should set up more bazaars or markets with special features so as to preserve the traditional characteristics of society. The Liberal Party has always maintained that the Government should 8230 LEGISLATIVE COUNCIL ― 29 March 2018 not only retain the existing bazaars or markets, but also help develop and establish new holiday bazaars with special features according to the different conditions of individual districts.

In fact, generally speaking, bazaars and markets are characterized by their diversity, providing services and commodities that cover different aspects of our daily living in a small community or in a single street. Therefore, a bazaar with special features usually reflects the characteristics of the local community. Bazaars or markets are not only valuable cultural assets of Hong Kong but also serve as a collective memory of the people of Hong Kong. In recent years, there has been an upsurge of in-depth or cultural tourism globally. Local bazaars and markets in Hong Kong should be able to find a place in this trend and become tourist attractions.

However, while striving to explore new business opportunities, the authorities should also pay attention to the capacity of individual districts of Hong Kong. According to the statistics of the Hong Kong Tourism Board, the number of visitor arrivals in Hong Kong reached 58.5 million in 2017, which was 7.9 times the local population. Visitors from Mainland China still account for the majority, exceeding 44 million and accounting for 76% of the total. The huge number of Mainland tourists visiting Hong Kong every year has reached an alarming level and raised the popular concern about the visitor receiving capacity of Hong Kong.

In December 2013, the Commerce and Economic Development Bureau completed the Assessment Report on Hong Kong's Capacity to Receive Tourists. The areas assessed include the handling capacity of control points, the receiving capacity of tourism facilities, the accommodation capacity of hotels, and the carrying capacity of public transport networks. The report predicted that there would be more than 70 million visitor arrivals in 2017 and the assessment on Hong Kong's capacity to receive tourists were carried out based on that estimation. For example, the report stated that among various public transport modes used by inbound tourists, railway accounted for 55% of the share. It was estimated that even if the number of visitor arrivals reached 70 million in 2017, the demand could be met in general. Although 2017 was over and the number of visitor arrivals did not reach the estimated 70 million, the visitor receiving capacity of Hong Kong is still a cause for worry.

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Taking into account the capacity of individual districts of Hong Kong, the Mainland authorities implemented the measure of "one trip per week" Individual Visit Endorsements back in 2015 to alleviate the overloaded population capacity. We believe that with the opening of the Hong Kong-Zhuhai-Macao Bridge and the Express Rail Link, the number of visitor arrivals will continue to rise. Therefore, the Government must consider how best to develop more tourist attractions and transport facilities to cope with the increasing number of visitors. The SAR Government must work hard to attract more tourists to Hong Kong and stimulate internal demand on the one hand, and prevent tourists from concentrating in certain districts and thus disrupting the lives of the local residents on the other.

Deputy President, just now I heard some Members criticize parallel traders in their speeches, claiming that they posed a problem and they were not tourists at all. In fact, some Members may not be aware of the fact. They should have visited Shenzhen more often. I believe most of the parallel traders are Hongkongers. I have also mentioned openly that, according to my information, parallel traders were able to earn $600 a day about two years ago. In this case, instead of working as dishwashers for long hours, they would rather cross the border a few more times carrying more parallel goods, and then go shopping, or enjoy a haircut, a manicure, or a massage in Shenzhen before returning to Hong Kong. In this way, there will only be profits but no loss. Therefore, I urge Honourable colleagues not to be misled into thinking that all parallel traders are Mainlanders. If there are Members who harbour hatred against our compatriots, there is nothing I can do.

In fact, the motion moved by Mr SHIU Ka-fai today suggests measures that should be taken by the Government. Even if the number of inbound tourists does not increase drastically, we should also consider how best to improve the tourism supporting facilities because it is also possible for local residents to visit local tourist attractions. As mentioned by some Honourable colleagues earlier on, New York is also a tourist attraction for the locals. If so, how come local bazaars cannot become tourist attractions for our local residents? I think colleagues do not have to show overly negative reaction towards our opinions on this motion. Thank you, Deputy President.

MR CHAN CHI-CHUEN (in Cantonese): Deputy President, the discussion on today's motion can be conducted in two parts: one, stimulating internal demand and, two, opening up new visitor sources. 8232 LEGISLATIVE COUNCIL ― 29 March 2018

First, let me talk about simulating internal demand. The Chinese expression in the text of the motion means literally "pulling into motion" ("拉 動"). This Chinese expression is not Hong Kong usage. It is not used by Hong Kong people in their everyday speech and writing. We must be wary about the Legislative Council of Hong Kong using Mainland-style expressions. The Secretariat translates the Chinese expression in question into "stimulate" and "stimulating". Following Hong Kong-style usage, a more appropriate Chinese expression meaning literally "stimulating local demand" ("刺激本地需要") should be used instead. A more straightforward Chinese expression meaning "stimulating local citizens' consumption" ("刺激本地市民消費") can also be used.

I talk about stimulating internal demand first. In order to stimulate and encourage local citizens' consumption, the citizens must have money in the first place. If they do not have money, they will not be able to make spending. Suppose the citizens have money to spend. Is there anything worth spending their money on? Are they are willing to spend it? We still need to consider these questions.

Let us assume that if a person earns more, he will be more willing to spend. Therefore, if the Government is willing to return wealth to the people, local consumption will indeed be stimulated. There are many ways to return wealth to the people. Tax refunds, rates waivers and even tax concessions as proposed in the amendments will all result in placing more money in the hands of the citizens. In theory, the citizens will become more willing to make spending.

However, in order to immediately stimulate local consumption, I will propose, as advocated by the People Power in the past many years―a direct cash refund for all. This will be the most practical thing to do. Hong Kong has now a fiscal surplus of $138.0 billion. If $10,000 is returned to each of us, we will immediately consider how to spend this money. Buying clothes, watching movies, going to concerts―if we can buy the tickets, eating out, buying iPhones and iPads can all stimulate local consumption and help Hong Kong's retail industry. I do not understand why some former senior officials oppose cash handouts. They say the citizens will only use the money to buy iPhones and iPads. What is wrong with this? This will also stimulate Hong Kong's economy and help the retail industry. Mr SHIU Ka-fai should enlighten the Government on this knowledge and correct its wrong understanding. Handing LEGISLATIVE COUNCIL ― 29 March 2018 8233 out money to Hong Kong people is to let them spend it. The overall economic benefits thus produced and the subsequent multiplier effect are always a sure win―always gains, no losses.

Of course, drawing reference from the theories in textbooks, apart from increasing the money citizens can spend, many other factors are also relevant to local consumption, such as stability of the financial market, income distribution issues and good governance. When Hong Kong people have more money, will they keep it for the bad times in the future or will they spend it with no regard to the future? These two scenarios are very different. If there is good governance, we will all be more willing to make spending. Now, let us turn from the citizens to the SAR Government. The SAR Government has so much fiscal reserves. Yet, it tries to use public money prudently. I advocate, on the contrary, stimulating consumption by the Government, so that the Government will allocate more funds to different sectors and improve the Hong Kong economy overall.

The second part of the motion―"opening up new visitor sources"―is the "main course". When we read these words, we cannot but support them. In any circumstance, reliance on a single visitor source is certainly not good. Suppose we have one big customer. We are subject to his manipulation. If he reduces his spending, changes his mind, or no longer spends money because of whatever reasons, we will be left with no customers. If we have different visitor sources, we will not need to rely on one single big customer. I certainly support this. And, we must also support the suggestion to "alleviate the inconvenience caused by visitors to members of the public through better diversion". Diversion is also good for the visitors. If all visitors rush to the same tourist spot, the waiting time will be long and service quality will be poor. The chances of conflicts happening between visitors―let alone Hong Kong citizens―will be higher. So, this must be supported.

What else remains to be discussed now? We must also support "the provision of additional tourism supporting facilities to upgrade Hong Kong's visitor receiving capability and capacity". Providing more tourist spots and facilities to upgrade our visitor receiving capability will certainly not have any bad effects. The only thing in this suggestion that I need to consider carefully is the issue of capacity. Actually, should we continuously upgrade Hong Kong's visitor receiving capability? Is it really true that more visitors are always better for us? Or, shall we set a limit? These are questions we need to consider carefully.

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The Assessment Report on Hong Kong's Capacity to Receive Tourists published in 2014 projected that Hong Kong's visitor arrivals would rise to 70 million in 2017. We were also very worried on the day of the publication of the Assessment Report. However, the real situation has turned out to be different. Last year, the number of visitor arrivals was about 58 million. The Report also projected that visitor arrivals would increase to over 100 million in 2023. After the Individual Visit Scheme had been introduced to relax restrictions on visitors coming to Hong Kong from different provinces and cities and after the introduction of the Multiple-entry Individual Visit Endorsements Scheme in 2003, the number of Mainland visitor arrivals increased by multiples and grew from 8.46 million in 2003 to the peak 47.25 million in 2014. Recently, the number of Mainland visitor arrivals has slightly dropped. Is this a bad thing? Not necessarily so. Honestly, to people doing business and people in the tourist industry, what matters is the money, not the people. They do not care where the visitors are from. It is only when the number of visitors from a single source displays a downward trend that the Hong Kong Tourism Board ("HKTB") begins to propose methods to open up new visitor sources. They go to Russia and other places to promote Hong Kong. The authorities concerned will do this only when they sense danger.

Dr LAM Kin-ngok, Peter, Chairman of HKTB, has once used the metaphor of a factory to explain that visitor receiving capability should certainly be upgraded when there are many visitors and that we should not close the door to shut them out. As the metaphor goes, when the owner of a factory gets more orders for his products, he will employ more workers and build more plants. The manufacturing industry can do this in the production process. However, we will not be able to create one more Hong Kong by magic when the number of visitor arrivals is more than doubled. The MTR will also not be able to cope when the number of passengers doubles. Even if double-deck train cars could be introduced, the station and platform facilities would still not be able to be upgraded accordingly.

Therefore, I support the measures proposed by many Members to restrict the number of visitors. This is because, even if we restrict the number of Mainland visitors, the number of overseas visitors has begun to rise in recent years. We need to understand that being able to earn money too easily may not be a good thing. The industry will be caught and left helpless when policies, or the circumstances that have made the single visitor source viable, suddenly change overnight. Therefore, I support the amendments proposed by Mr LAM Cheuk-ting and Dr KWOK Ka-ki.

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MR KWOK WAI-KEUNG (in Cantonese): Deputy President, I thank Mr SHIU Ka-fai for moving this motion. Actually, "[s]timulating internal demand and opening up new visitor sources" boils down to "take-all". As regards stimulating internal demand, we also wish to boost local consumption. Opening up new visitor sources means attracting more tourists to Hong Kong and spend their money. I believe this is a formula for the business sector to generate wealth. Business is business. There is certainly nothing wrong with this.

However, regarding stimulating internal demand, we can take a look at our country. Several years ago, the State also strongly advocated expanding internal demand. Why was it important to increase and stimulate internal demand? The first reason was that, then, the total deposits of the people of our country had reached RMB20,000 billion. Another reason was to stabilize the overall economic structure, as domestic demand was relatively stable. If our country relied too heavily on foreign economic demand, we would be affected immediately when other countries ran into an economic downturn. These two were the main reasons. Of course, there was yet another consideration. Our country had a market of 1.3 billion people. Our domestic demand represented a market of 1.3 billion people.

I remember that, when I heard of this for the first time, I thought of the scenario of everybody squeezing his tube of toothpaste twice a day. If everyone squeezes his tube of toothpaste once in the morning and once at night, it will be 1.3 billion times multiplied by 2. The tubes of toothpaste will be squeezed 2.6 billion times every day. In other words, a huge amount of toothpaste will have to be produced to satisfy this level of demand. The whole market will be livened up, and big, medium-sized and small businesses will all prosper. Compared to this market, the 7-million-people market of Hong Kong is a dwarf. We can all see that many sectors of the Hong Kong market, including daily necessities and grocery, catering and retailing, are actually monopolized by chain operations of big consortiums. These two kinds of markets stand on completely different bases.

However, in any circumstance, stimulating internal demand will never be a wrong thing to do. In particular, let us take a look at the Hong Kong economy in recent years. The situation is not bad indeed. Indicator figures have been rising continuously and the unemployment rate has remained at a low level for a long time. According to the latest figures, our fiscal surplus is as much as 8236 LEGISLATIVE COUNCIL ― 29 March 2018

$140 billion and our fiscal reserve is more than $1,000 billion. We ask: What can we do to stimulate internal demand? Of course, besides measures like tax refund, rates waiver and "double payments", in fact, a gap-filling measure of handing out $4,000 has just been announced too. I believe this measure will also be able to produce some stimulus effect. However, we must ask: Are we short of money these days? Hong Kong is not short of money, but we are nevertheless plagued by many problems. Similarly, if we wish to stimulate consumption, we must consider the factor of time apart from money.

Deputy President, I said to you in the lift just now that time is very precious. As a matter of fact, working hours in Hong Kong, being the longest in the world, are indeed too long. The wage earners go to work early and come home late. When they are home, they can only eat, wash and sleep. How can they have any time to spend money? And, we wait patiently from the beginning to the end of the year for several days of leave, but, as the pressure of life and the cost of living are too high in Hong Kong, we all join tours and "flee" Hong Kong. Joining tours to "flee" Hong Kong does not mean that we are refugees fleeing with all our belongings, only that we have a "fleeing" mentality, trying to run away from the high cost of living and the source of high pressure. Therefore, we all choose to join tours. We are afraid that, as I said yesterday, staying in Hong Kong will mean having to receive phone calls and SMS messages from our bosses, making our days of leave no different from days of work. At the same time, regarding the 17 days of public holidays, we know that increasing the number of holidays can stimulate consumption in theory. Although I said just now that most of us will join tours and leave Hong Kong during our days of leave, more people will choose to stay in Hong Kong and spend money here during these holidays if our working hours are reduced.

Another issue is money. We must note that the Hong Kong Federation of Trade Unions ("FTU") announced two months ago that, from 2004 to 2017, in real terms after discounting inflation, wages had grown by only a little more that 0.2% per year. Such a low growth rate was miserable. This reflects that the economic structure of Hong Kong is extremely unhealthy: profits generated by capital is very much higher than the growth of income earned by the productive force. This is a very important key point. At the same time, to a certain degree, this also reflects that property prices and rents have been rising faster than wages.

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Actually, we all know that people who have purchased flats and are servicing mortgages are basically just working for the banks. Rent-payers are just working for their landlords. Actually, the per-square-foot rents of subdivided units are already catching up with the rents of luxury apartments. A group of people who originally had the money and the need to spend it are now no longer able to go out and make spending. We often say that Consumer Price Index (A) reflects expenditures on "fuel, rice, cooking oil, salt, vinegar and tea" or, in other words, basic needs like food, clothing, housing and transportation, but the problem is whether these expenditures are distributed evenly. They are not. For many occupants of subdivided units, as well as many other rent-payers, expenditure on housing alone takes up more than 40% of their wages. How much money is left for them to spend? Just now, we also talked about the "Green Form Subsidized Home Ownership Scheme" or the Home Ownership Scheme. As both of these two schemes have their prices pegged to market prices, their prices are becoming more and more unaffordable to the citizens. With the housing problem unsolved, how can the citizens have any money to spend?

Deputy President, just now, many Members have considered opening up new visitor sources and stimulating internal demand from the point of view of people's livelihood. They were thus led to consider also the issue of visitor receiving capability. I wish to stress that some Honourable colleagues have only talked about the phenomena, without highlighting the structural problems. In fact, as the Chinese proverb "a water melon leans towards the bigger side" goes, when visitors' spending power is greater than local spending power, the business sector can only make a painful decision. We must change the fundamental structure and return to the right direction. Where does our spending power come from? Our spending power comes from the wage earners, but they can make spending only if they have the time and money. Thank you, Deputy President.

MR KWONG CHUN-YU (in Cantonese): Deputy President, on 5th April 1990, about this time of the year, the film The Proud Youth made its debut in the cinemas of Hong Kong. It easily made more than $10 million in the box office and its greatest achievement was that it made its way into the Taiwan market. Afterwards, Mr James WONG said at an interview that, when composing the music for the theme song A Laugh on the Open Sea, he looked up some ancient empirical records to see how it should be written. He found that there was a view in the ancient writings that "great music is easy". The result was that he 8238 LEGISLATIVE COUNCIL ― 29 March 2018 wrote a most simple melody to A Laugh on the Open Sea. This song easily made a great success in Taiwan. It also gave other Chinese communities worldwide a better understanding of Hong Kong in the 1990s.

In the 1990s, Hong Kong was still a place with great creativity and creative power. I will not go back too far. We all know that, for films in the 1980s, we had Sam HUI's Aces Go Places series. In the 1990s we had many good productions, and then came Stephen CHOW's films. Why do I mention these films? Because I always regard them as a very important soft power.

Nowadays, many Korean films are probably following the examples of the Hong Kong films of the eighties and nineties. They also feature beautiful images―I do not know whether local cinema or television films in Korea are very different from these films. They are indeed most appealing. The Koreans use their cultural and creative power to induce tourists' interest in their country. We cannot deny that the whole of Hong Kong was very lively when our film and music industries were blooming. The song A Laugh on the Open Sea even won a prize at the Golden Horse Awards of that year.

Now, in 2018, what is the state of the cultural and creative industry in Hong Kong presently? Let us look at the figures. According to the Hong Kong Monthly Digest of Statistics, the average per-year growth of the cultural and creative industry from 2005 to 2015 was as high as 7.6%. It was higher than the 5.4% growth rate of the Gross Domestic Product ("GDP") in the same period. The value of the cultural and creative industry had increased. It also made up a larger share of GDP, rising from 3.8% to 4.7%. Employment in the cultural and creative industry also showed an obvious rising trend. In these 10 years, employment in the whole of Hong Kong had an average annual growth rate of 1.2%, whereas employment in the cultural and creative industry had an average annual growth rate of 2.2%. These figures look very good. Is it not true that the performance of the cultural and creative industry of Hong Kong has been very outstanding? Within this industry, the performance of the design industry was particularly spectacular. From 2005 to 2015, its value grew from $1 billion to $4.1 billion, recording an increase of 314%.

The question is whether the Hong Kong Government has allocated more funds to promote the development of the cultural and creative industry and helped our friends in different sectors of this industry. If we agree that every city should have its own soft power and that soft power needs to have real substance, I LEGISLATIVE COUNCIL ― 29 March 2018 8239 can but say: sorry. In recent years, what we have seen in Hong Kong is the very big challenges facing different sectors of the cultural and creative industry. They are in the middle of the merciless winter. We also know that many of our friends are struggling for survival in industrial buildings. They have to watch out day and night for the prospect of being accused of breaching the conditions of land lease. Some of our friends who staged music performances in industrial buildings have even been arrested. They have been forced to close down. Land prices are high. Rents are also high. Culture and art are denied room of survival.

Some people may doubt whether I have gone too far astray. What does all this have to do with internal demand? They are definitely related. If we do not have the soil and space for the people of this city to develop their creativity and produce creative works, what do tourists come to Hong Kong for? Not to mention creations for the foreign markets, there are even no creations for the local market. We do not have the milieu for this. We may say that tourists visiting Hong Kong still have many things to see. We may say that Hong Kong is a shopping paradise. In the 1990s, when I was still young, I indeed often heard that Hong Kong was the "Pearl of the Orient". However, we must realize that, without our being aware of it, this scenario has left us, very far away from us now. In the eighties and nineties, we have the movie stars whom we knew so well. Then, Hong Kong still had the ability to "make stars". We really did have some very bright stars. Do stars in the entertainment industry definitely have a relationship to the charm of a city? Yes, definitely. In fact, in those prosperous years of our cultural and creative industry, we did not need to worry about our tourist industry.

What is the situation now? Some Honourable colleagues pointed out just now that we are relying too much on certain industries. This is dangerous. We will gradually lose ourselves. What is the appeal of Hong Kong? The answer is Hong Kong itself. The story of Hong Kong is most intriguing. Our friends in the faraway West are curious about the Eastern culture of Hong Kong, which they do not understand. The Chinese-language communities around us also have many creative works about us. They are attracted by the myriads of neon lights of our city. They are attracted by the mysterious charm of a city that they wish so very much to explore. However, now, we cannot but ask what problems Hong Kong has run into. We have always been advocating to give living space to arts workers. We have finally taken a small half-step forward and included a $1 billion "Unused School Premises Renovation Fund" in the Budget. We have waited a very long time for this fund. 8240 LEGISLATIVE COUNCIL ― 29 March 2018

Is there any place in Hong Kong that is worth renovating? Yes, there is one. We may not know that there is a Wesley Village in Hong Kong. I do not know whether Honourable colleagues have heard of this place before. The Wesley Village was originally a deserted camp site in Wan Chai. When the Hong Kong novelist NI Kuang wrote his works of the "Wesley series", he borrowed the name of this place. Many other Chinese communities are also very familiar with the "Wesley series". I read the whole series when I was a small boy. It is great to know that there is a place with this name in Hong Kong.

How does Taiwan deal with matters like this? There is the Huashan 1914 Creative Park in Taipei. In Tainan, they have The Pier-2 Art Center. Making good use of land resources, the Taiwan authorities have attracted some creative artists to produce creative works there. Regardless of whether rents are to be paid or not, it is a fact that the authorities provide support for the production of creative works. This is a long-term investment providing space and ancillary facilities policy-wise. If we can do well in this respect, this will be exactly where Hong Kong's soft power lies. If Hong Kong has always lacked this soft power, we will not make this suggestion. I am sad to say that, if the Government continues to indulge in inaction, this soft power of ours will vanish.

Please refer to what I said at the beginning of my speech. How did the film The Proud Youth and its theme song A Laugh on the Open Sea that made their debut on 5th April 1990 come into being? Where are the talents of Hong Kong?

I so submit.

MR SHIU KA-CHUN (in Cantonese): Deputy President, Mr SHIU Ka-fai has moved the Member's motion "Stimulating internal demand and opening up new visitor sources". This motion is made up of two parts. The first part is: "That, given the Government's ample fiscal reserves and fiscal stability, this Council urges the Government to make good use of this favourable state of public finance and launch more measures to improve people's livelihood, so as to return wealth to people and stimulate internal demand". I support this part of the motion. The second part of the motion is: "the Government should at the same time expedite the provision of additional tourism supporting facilities to upgrade Hong Kong's visitor receiving capability and capacity, and alleviate the inconvenience caused by visitors to members of the public through better diversion, so as to LEGISLATIVE COUNCIL ― 29 March 2018 8241 open up new visitor sources for the benefit of tourism, retail, catering and transport sectors, etc. and the overall economy of Hong Kong". I have reservations about this part of the motion.

Will the provision of additional tourism supporting facilities really be able to improve people's livelihood and return wealth to them? In fact, apart from benefiting the property owners, shop owners, big consortiums and chain stores and shops, how will these measures really return wealth to the people? How will they return wealth to the 3.43 million wage earners of Hong Kong?

According to the Census and Statistics Department's latest working hours statistics, as many as 380 000 people work for more than 60 hours a week. With a five-day week, the average number of working hours daily is about 12 hours. Besides, 1% of Hong Kong's wage earners even work for more than 75 hours a week. This is really outrageous. When compiling the above statistics, foreign domestic helpers working in Hong Kong were excluded and meal hours were discounted. The trades and industries involved in the statistics were tourism, retailing, catering and transportation, etc. which are mentioned by Mr SHIU Ka-fai in his motion. Besides stuffing money into the fat purses of the bosses, how many health, emotional and family problems have these so-called economic benefits brought to the workers in these trades and industries?

It is exactly this mindset of development, development and, again, development that has done so much harm to so many labourers. It is well said that "exploitation of labour knows no end". Faced with the unchecked growth of desire, if labour rights are not improved, labourers will only continue to be squeezed dry while their bosses reap enormous profits.

At the beginning of this year, the cultural magazine Breakazine, in cooperation with the artist CHING Chin-wai, Luke, turned four persons, including a student of a tertiary institution, a trade union official, a research assistant and an artist, into undercover workers to experience in person the everyday work of a salesman, a security guard, a fast food shop worker and a cleansing worker. What will the lives of these grass-root workers be like after "[s]timulating internal demand and opening up new visitor sources"? I believe we all know the answer. Through this social experiment, we have come to understand the great difficulties of the grass-root workers in Hong Kong. They do not only offer their labour for hire. They even also lose their identity as 8242 LEGISLATIVE COUNCIL ― 29 March 2018 human beings in the process. They do not have promotion prospects. They do not have wage increases. In spite of all this―frankly―they still have to toil like dogs.

I can anticipate that, with the growth of the tourism industry, we will hear people make certain remarks. For example, the bosses will say that payment for overtime work, work-related injuries, customers' complaints and insults have all been included in the wages. Workers will hear their colleagues say that, as the Cantonese proverb goes, one should be prepared to be thirsty if he has chosen to eat salty dried fish. The movie star Andy LAU will also come out and say: "Such a service attitude is no longer good enough nowadays." It is exactly because of such mentalities in society that grass-roots workers have not been given reasonable basic remunerations and terms. Does one work to survive, or to live? Why does he have to work in such conditions that he loses his identity, and even to the point of losing his dignity as a human being. Furthermore, this kind of work pattern does not only affect the individuals, but also creates various kinds of family and social problems.

Actually, only when the basic labour rights framework, including, for example, right to collective bargaining of workers, eight-hour standard working hours and overtime pay, anti-age-discrimination, yearly reviews of the statutory minimum wage, abolition of the arrangement of offsetting severance payments with MPF contributions, abolition of the outsourcing system and the short-term contract system that push labour cost downwards, is properly set up, will I be able to really support "[s]timulating internal demand and opening up new visitor sources". It is because only so will it be possible for Hong Kong to really develop its economy and for every grass-roots worker, who is squeezed dry and living in the most miserable conditions, to return to the life of a human being.

When we discuss the development of the tourism industry, we often stress the need for development, increase of GDP, promotion of creativity and technology, re-industrialization, Belt and Road Initiative, and so on. However, will the Hong Kong citizens really be able to generally benefit from these developments? If reasonable labour rights are not guaranteed, how can the 3.43 million grass-roots workers stand to benefit?

The motion "Stimulating internal demand and opening up new visitor sources", frankly, realizes the business sector's view that the labourers' wages have already paid for the rebukes and insults to which they are exposed, their LEGISLATIVE COUNCIL ― 29 March 2018 8243 exploitation, over-time work, night shifts, and so on, all being part of the package. In the eyes of Mr SHIU Ka-fai, the labourers of the service sector are probably outright non-existent. Why can we not see that the people who are serving us are human beings? What government policies and cultural systems have blinded us from the needs of others? This is precisely because everybody has only money in his eyes.

And, besides the issue of labour rights, the capability of the local community to cope is also an important factor to be considered. One should not take it too lightly while talking about increasing the number of visitors by great margins. Regarding problems created by the inundation of Hong Kong by Mainland visitors, the understanding of the government officials and Members who care only about the economy is often different from the personal experiences of the citizens. Government officials and the business sector think that no matter how many more visitors come to Hong Kong, we will be able to cope only if we can have more facilities. However, citizens have been complaining all the time in the past decade that they have found the situation depressing. They are worried that if the number of visitors continues to increase, their living will be affected―if it has not been affected already.

In 2014, a study on the Individual Visit Scheme conducted by the Research Office of the Legislative Council provided an answer to this question. Mr Gregory SO, Secretary for Commerce and Economic Development then, had his eyes fixed on the capability of Hong Kong's tourism infrastructure to receive visitors, but the research brief of the Research Office held that society's capacity to cope was just as important because it impacted on the lives of the citizens direct. We find that the Government's understanding of issues concerning Mainland visitors is on the wrong track. This is one of the reasons why it has not been possible to dispel the citizens' dissatisfaction, which has indeed intensified instead, for some time in the past.

Deputy President, talking about stimulating internal demand without caring about the citizens (The buzzer sounded) … is not acceptable to me. Thank you, Deputy President.

DEPUTY PRESIDENT (in Cantonese): Mr SHIU Ka-chun, your speaking time is up.

8244 LEGISLATIVE COUNCIL ― 29 March 2018

DEPUTY PRESIDENT (in Cantonese): I would like to remind Members that the title of this Member's motion is "Stimulating internal demand and opening up new visitor sources". The main contents of this motion and the amendments are about the tourism industry and its supporting facilities. I note that at least 70% of the speech given by Mr SHIU Ka-chun just now was related to the advocation of labour rights. I do not wish to interrupt Members' speeches, but I hope Members will concentrate on the content of the motion, so that the debate can be more focused.

DEPUTY PRESIDENT (in Cantonese): Does any other Member wish to speak?

(No Member indicated a wish to speak)

DEPUTY PRESIDENT (in Cantonese): If not, Mr SHIU Ka-fai, you may now speak on the amendments. The time limit is five minutes.

MR SHIU KA-FAI (in Cantonese): Deputy President, first, I would like to thank the 22 Honourable colleagues who have spoken at today's meeting. I must also thank the several colleagues who have proposed amendments to my motion, including Mr YIU Si-wing, Mr Michael TIEN, Mr WU Chi-wai, Dr KWOK Ka-ki and Mr LAM Cheuk-ting.

I am very much encouraged by Mr YIU Si-wing's amendment and the speech he made earlier. I also strongly agree with Mr YIU's views on and vision for the tourism sector of Hong Kong.

Mr Michael TIEN's suggestions to open up more underground space, find bigger places for the retail industry, and so on, are also very worth supporting. As for the race track suggested by him, I think this is a very creative idea. I also support it.

Mr WU Chi-wai's main direction is close to my original motion. So, I will also agree to his amendment.

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As for Dr KWOK Ka-ki and Mr LAM Cheuk-ting's amendments, I have some reservations about them. Dr KWOK Ka-ki said that certain abnormal luxury goods retailing activities in various areas should be regulated by the Government to improve the situation. However, Hong Kong practises capitalism and market economy. Shops with appropriate business registrations should be able to choose to operate in different areas. If I support Dr KWOK Ka-ki's amendment, I will be departing from the direction of my original motion. I believe this will be difficult.

Mr LAM Cheuk-ting said that he hoped the authorities would freeze the number of cities participating in the Individual Visit Scheme, consider changing "one trip per week" endorsements into "eight trips per year" endorsements, introduce an arrival tax for visitors, and so on. As the theme of my motion is to open up new visitor sources, Mr LAM's amendment is not in the same direction of any original motion. I feel gravely concerned about introducing a land arrival tax. If our State does so in reciprocity, Hong Kong citizens travelling to the Mainland will suffer. I do not think that the suggestions of Dr KWOK Ka-ki and Mr LAM Cheuk-ting will serve to expand the tourism industry. Therefore, I am opposed to the amendments of Dr KWOK Ka-ki and Mr LAM Cheuk-ting.

However, I wish to mention here that, although I take exception to Mr LAM Cheuk-ting and Dr KWOK Ka-ki's amendments, I am sure that these two Members do not wish to harm Hong Kong's business. On the contrary, I believe they are particularly concerned about the nuisances caused by visitors to Hong Kong citizens. Therefore, I hope the SAR Government will pay attention to this. Although we can do more business and have more visitors, more "kick-luggage" incidents may occur again if there are not enough supporting facilities. Today, some other Members have also mentioned this problem. I hope the Government will pay more attention to this particularly. For example, at some busy tourist spots, the authorities should increase police presence to maintain law and order. As for cleanliness, the Food and Environmental Hygiene Department should also deploy more staff to do the cleansing work. If pedestrian flow increases threefold or fourfold, the number of cleansing workers should also be increased threefold or fourfold. Once, I saw a rubbish bin at the back entrance of SOGO stuffed with a huge heap of cigarette butts. I did not understand why there was no one to cleanse the bin. Actually, such situations do not only make Mainland citizens visiting Hong Kong feel strange. They are also the last thing Hong Kong citizens wish to see.

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Therefore, in order to have good business, we must have good supporting hardware. If the authorities can do a good job in the provision of supporting hardware, I do not see any reason for Members to oppose the motion. After all, we must boost Hong Kong economy. Otherwise, we will not be able to deal with all our livelihood problems. In particular, I wish to respond to my co-ethnic colleague Mr SHIU Ka-chun. Just now, he said that with the increase of business, employees will have to work very hard and very miserably like slaves. However, according to past data of the retail industry, frontline employees were able to earn $30,000 to $40,000 when the economy was thriving. When the economy went down a couple of years ago, their wages were reduced to $10,000 plus. From this, we can see that the number of visitors has an immediate impact on the incomes of frontline employees. Have overall wages increased or decreased in Hong Kong in recent years? When business increases, have wages increased or decreased? I would like to invite the student "Ka-chun" to do some research at home. In fact, wages have been rising continuously. The more visitors, the higher the wages. Thank you, Deputy President.

SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT (in Cantonese): Deputy President, I am very grateful to Mr SHIU Ka-fai for proposing the motion today and a number of Honourable Members for proposing the amendments to the motion or speaking in the debate. I will now give a consolidated response to the views expressed by Members during the debate.

A number of initiatives to promote economic development and improve the business environment were proposed in the Policy Address presented by the Chief Executive in October last year as well as the Budget announced by the Financial Secretary last month. Some of these initiatives seek to improve education, health care and social welfare services which are closely related to people's livelihood, so that an administration can address the community's pressing needs. However, I will not repeat the contents of the relevant initiatives here.

I believe many Honourable Members in this Chamber will agree that the fundamentals of Hong Kong economy are stable and healthy. In 2017, Hong Kong economy saw continued expansion with an annual growth of up to 3.8%, also the largest increase in six years.

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In addition to the favourable global economic trends, the performance of inbound tourism industry has also continued to improve. The overall number of visitor arrivals in Hong Kong grew by 3.2% in 2017 and even saw an increase of 6% year on year in the fourth quarter. The value of total retail sales also saw an annual growth of 2.2% in 2017. Generally speaking, the external economic outlook is on the whole positive. The favourable employment and income conditions and good consumer sentiments are also expected to continue to drive internal demand in the short term.

Despite the favourable outlook of Hong Kong's economic indicators, the Government will still proactively play the role of a "facilitator" and a "promoter" and promote innovation. Strong financial resources are provided in the Budget last month and more than $50 billion has been earmarked for promoting innovation and technology development, including giving vigourous support to the incubation programmes operated by Cyberport and the Hong Kong Science and Technology Parks Corporation. As an international financial centre with a highly-developed information and communication technology sector, Hong Kong is an ideal place for the development of financial technology ("Fintech"). The Government will continue with its endeavours in promoting local Fintech development and encourage the industry to launch innovative businesses as trials. The initiatives in the Budget include allocating $200 million to Cyberport to enhance support for start-ups, including Fintech start-ups, as well as setting aside a dedicated provision of $500 million for the development of the financial services industry in the coming five years. On the payment system, Hong Kong has all along had a sophisticated electronic payment ecology, with a wide range of electronic payment tools. We are also pleased to see quite a number of local merchants responding quickly, with more and more shops accepting Mainland and overseas payment facilities to enable tourists to use payment methods considered by them to be the most suitable and convenient and, hopefully, drive retail growth.

We will also take forward initiatives to support various sectors in seizing the many opportunities brought by the national Belt and Road Initiative and the Guangdong-Hong Kong-Macao Bay Area ("the Bay Area") development, thereby creating new impetus for our economy. As a major node of the Belt and Road Initiative, Hong Kong will provide infrastructure investment and financing, as well as essential professional and legal services in order to link up Belt and Road countries and regions.

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As I pointed out in the opening remarks, the Government attaches great importance to the development of the tourism industry. During the formulation of the Development Blueprint for Hong Kong's Tourism Industry, we had maintained communication with the industry and endeavoured to address their concerns. Many views put forward by Honourable Members during the debate are already reflected in the Development Blueprint.

I believe all Members in this Chamber will agree that our joint vision and goal is to press ahead with the development of Hong Kong into a world-class premier tourism destination to ensure the balanced, healthy and sustainable development of the industry. To this end, the Government has set aside an additional $396 million in 2018-2019 for the implementation of initiatives in the Development Blueprint in relation to the development of tourism products, support for the development of attractions and the industry, promotion of smart tourism, and enhancement of initiatives related to the provision of professional services by the industry.

The Government will promote tourism through four development strategies. First, we will continue to develop a diversified portfolio of visitor source markets, focused on attracting high value-added overnight visitors. During the debate, the majority of Members who spoke and Members who proposed the amendments shared the view that our most important goal was not only to maintain a steady increase in the number of tourists, but it was also very important to develop broader visitor source markets.

After the commissioning of transport infrastructure including the Hong Kong-Zhuhai-Macao Bridge ("HZMB") and the Hong Kong Section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link ("XRL"), the journey time of commuting between Hong Kong and the Pearl River Delta will be reduced, which can help the cooperation and development of tourism in the three places. Nevertheless, for the sake of promoting tourism and economic development, the co-location clearance arrangement must be implemented for XRL. The linking up of Hong Kong with various Mainland cities by the XRL network will greatly help Hong Kong's tourism industry to develop new source markets.

Furthermore, we also have to seize the opportunities arising from the Bay Area development and the national Belt and Road Initiative. We will collaborate with the Hong Kong Tourism Board ("HKTB") to organize a tourism LEGISLATIVE COUNCIL ― 29 March 2018 8249 forum late this year under the themes of the Belt and Road and the Bay Area with a business matching conference and invite the tourism departments and industries of countries and regions along the Belt and Road to participate. The forum will help governments in various places exchange information and the tourism industry in various places initiate business ties and cooperation, enhance Hong Kong's position as a regional tourism hub, and assist Hong Kong's tourism industry in developing visitor source markets.

In addition, we will support the Travel Industry Council of Hong Kong ("TIC") in leading the local tourism industry to visit Bay Area to enable the industry to enhance collaboration with its Mainland counterparts in order to develop more business opportunities. We will also support the establishment of an online resources platform by TIC to assist the industry in grasping information of the tourism resources of Belt and Road and Bay Area, with a view to developing more tourism products and visitor source markets.

The second development strategy is to nurture and develop tourism products and initiatives with local and international characteristics, as well as reinforcing and upgrading Hong Kong as a travel destination for conventions and exhibitions, a regional cruise hub and an events capital. During the debate, many Members mentioned culture and creativity, historical monuments, green and in-depth tourism, and so on. All this is our development direction.

We will collaborate with creative media schools to enable tourists to experience, through the use of augmented reality technology and creative media art that re-creates the historical landscape of tourist attractions through mobile applications, the historical landscape and community culture of locations with a rich historical culture amidst the modern urban setting of these places today. This would enrich the experience of tourists in Hong Kong. We will also enhance the tourism characteristics of the Victoria Harbour and the waterfront promenade through the provision of light installations with artistic characteristics at the promenade.

Moreover, we will develop Sham Shui Po and Wan Chai into attractive tourism communities for tourists in order to achieve diversion through unique creative art installations and activities on the streets, locally created animation figures, multimedia, creative technology, and so on, leveraging cross-sector collaboration. We will also launch an activity combining art tourism, cultural 8250 LEGISLATIVE COUNCIL ― 29 March 2018 tourism, heritage tourism and green tourism through organizing art and cultural activities and showcasing art pieces to enable tourists to experience the unique Hakka culture and character.

To promote the sustainable development of green tourism is also one of our highlights. The Agriculture, Fisheries and Conservation Department ("AFCD") will partner with the Tourism Commission to improve in phases in the next few years some of the supporting facilities at some popular hiking trails with tourism potential in Hong Kong, including information panels, hiking trail links, real-time weather display, and so on, to provide more tourist-friendly facilities. We have tentatively selected 10 hiking trails for enhancement of their tourism support facilities. These hiking trails include popular trails recommended by international media, such as the Dragon's Back Trail on Hong Kong Island, the MacLehose Trail in Sai Kung, as well as scenic trails which are not familiar to overseas tourists, such as the section stretching from Wu Kau Tang to Lai Chi Wo in the North District, section 2 of the Phoenix Trail on Lantau, and so on. AFCD will also update and enrich web pages providing information of hiking trails and mobile applications with additional social sharing, photo-taking and geographical marking functions to facilitate the sharing of green tourism information among tourists.

During the debate, Members expressed concern about the convention and exhibition industry. The industry is indeed playing a crucial role in Hong Kong as an international centre for commerce and trade in, on the one hand, promoting the development of commodities and services industries and, on the other, attracting high-spending overnight visitors to visit Hong Kong to bring us lots of economic activities and employment opportunities.

In order to expand the convention and exhibition venues, the Chief Executive announced in the Policy Address the Government's decision to demolish the three government buildings in Wan Chai North and redevelop the site into convention and exhibition facilities. The new facilities will be connected to and integrated with the existing Hong Kong Convention and Exhibition Centre to strengthen Hong Kong's competitiveness in hosting large-scale international conventions and exhibitions. At the same time, we will continue to take forward the planned development of a convention centre above the Exhibition Station of the Shatin to Central Link. We will also continue to explore the possibility of expanding other existing convention and exhibition facilities.

LEGISLATIVE COUNCIL ― 29 March 2018 8251

On the promotion of meeting, incentive travels, conventions and exhibitions ("MICE"), we will continue to earmark funding to HKTB to attract more large-scale international convention and exhibition activities and small and medium MICE activities, with a view to attracting more high-spending convention and exhibition visitors to Hong Kong.

We will also strive to attract different kinds of new and mega events to Hong Kong. Just now, a Member proposed that the Government should explore the development of underground space, cultural and creative parks and multi-purpose venues for holding road events, and so on. All these are consistent with our goal of striving for more venues to host mega events. Granting suitable proposals, we will give them consideration.

Cruise tourists are also among our actively pursued prime targets. We will incentivize cruise lines to deploy more cruise ships to berth at Hong Kong, supporting diversification of cruise passenger source markets, and enhancing Hong Kong's competitiveness through focusing on the "fly-cruise" programme and enhancement to market penetration in Southern China.

Regarding tourism hardware, the Government has spared no effort in developing and enhancing Hong Kong's tourism facilities as well as upgrading its competitiveness by various means. We will support the development of educational tourism projects at the Ocean Park by launching a brand new 3D projection-cum-water light show with local characteristics. An all-weather water park and two new hotels are scheduled for completion one after another between 2018 and 2021. The Hong Kong Disneyland Resort is also actively carrying out an expansion and development plan, and a number of new facilities will be commissioned progressively from this year to 2023. The "Moana: A Homecoming Celebration" stage show will be the first to be launched at the entirely new outdoor venue at Adventureland in May 2018. We will continue to explore with and provide assistance to interested international brands in introducing different types of tourist facilities into Hong Kong for enriching visitors' experience.

The third development strategy is smart tourism. A new smart tourism landing web page will be set up to provide tourism and transport information for arrivals at the Hong Kong International Airport, the West Kowloon Station of XRL and the Hong Kong Boundary Crossing Facilities of HZMB, with a view to enriching the tourism experience for our visitors and facilitating their access to 8252 LEGISLATIVE COUNCIL ― 29 March 2018 various tourist attractions. Visitors using the Wi-Fi services at the aforementioned venues will be connected to the web page for information on the facilities of the premises where they are visiting, transport information on commuting between tourism hot spots, hotels and retail facilities, with a view to assisting visitors in planning their itinerary and activities in Hong Kong.

Furthermore, making use of information technology to enhance operational efficiency and competitive edge is a general trend. As early as the 2016-2017 fiscal year, $10 million was earmarked to establish the "Pilot Information Technology Development Matching Fund Scheme for Travel Agents" ("the Scheme") through TIC. Since the introduction of the Scheme, TIC has approved 110 applications in total, and the response from the industry has been enthusiastic. In view of this, we will earmark an additional $30 million in the 2018-2019 fiscal year to further take forward and enhance the Scheme to incentivize more small and medium travel agents to make use of information technology to equip themselves, including enhancing the quality of services, beefing up information system security, improving visitor flow control for inbound tour groups, and so on.

The last key development strategy is to upgrade the quality of tourism services. We are taking forward at full steam the legislative work on setting up a Travel Industry Authority ("TIA") and will seek the Legislative Council's expeditious scrutiny and early approval of the Travel Industry Bill ("the Bill"). The early establishment of TIA will lead to full regulation of travel agents, tourist guides and tour escorts, which will help clamp down on the unscrupulous conduct of the industry as mentioned by Members earlier, so that better protection can be provided for visitors. The Bill has been under scrutiny by the relevant Bills Committee for nearly one year. We hope the scrutiny can be completed expeditiously for the early passage of the Bill, so that problems caused by zero-/negative-fare tours can be addressed effectively.

We will continue to support HKTB in stepping up the publicity of quality and honest tourism and the Quality Tourism Services Scheme in the Mainland to bolster visitors' confidence in Hong Kong's tourism trade. Since the participation of the trade is equally important, we will continue to support TIC in enhancing training for tourism practitioners in order to boost the quality of trade services.

LEGISLATIVE COUNCIL ― 29 March 2018 8253

I also noted the proposal put forward by a Member of reviewing the Individual Visit Scheme and the "one trip per week" policy, as well as levying a land arrival tax on arrivals. Given its far-reaching impacts, the relevant proposal warrants prudent consideration. We have all along adopted a pragmatic attitude in dealing with issues related to the tourism industry and striven to strike a balance between the impacts of the industry on Hong Kong economy and the livelihood of Hong Kong people. In fact, the implementation of the "one trip per week" initiative has effectively reduced the number of trips made to Hong Kong by people who used to come to Hong Kong multiple times within one week or even one day and, at the same time, specifically clamped down on professional parallel traders using travel documents issued by the Mainland to come to Hong Kong. In future, we will continue to keep the conditions in view and maintain close contact with the Central Government on the overall arrangements for Mainland residents to visit Hong Kong.

As regards the proposals of constructing boundary shopping malls, imposing luggage restrictions on public transport and reviewing the restrictions on the export of infant and follow-up formulae, quite many of them are related to problems caused by parallel trading. Targeting parallel trade activities, various law enforcement departments have adopted a number of countermeasures, and they include issuing summonses for obstruction caused by parallel traders placing goods in public places, enhancing the street cleansing services in parallel trading hotspots, issuing Fixed Penalty Notices to people contravening the Fixed Penalty (Public Cleanliness and Obstruction) Ordinance, arresting Mainland visitors suspected of contravening conditions of stay for engaging in parallel trading activities, and so on.

As regards the inconvenience caused by inbound tour groups to certain districts, the Government and TIC will meet with representatives from the trade from time to time to urge them to maintain order when receiving inbound tour groups, and encourage them to use information technology to strengthen visitor and vehicular flow control. The Government is also stepping up enforcement actions against illegal coach parking, as well as exploring and introducing different measures which include promoting the use of legal parking spaces by more coaches through the provision of additional roadside pick-up/drop-off bays and parking spaces for coaches at appropriate locations, letting car parks for coach parking on the basis of short-term tenancy ("STT"), piloting the provision of a half-hourly concessionary parking rate in an STT car park, and so on.

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Insofar as the future development direction is concerned, we will continue to explore various proposals for attracting high value-added visitors to Hong Kong and suitably providing additional supporting tourism facilities and upgrading Hong Kong's visitor receiving capability on the premise of not causing inconvenience to the daily life of local residents.

Lastly, I thank Honourable Members for expressing many valuable and constructive views during the debate. We will continue to be "appropriately proactive" in deploying resources and properly undertake various tasks to improve people's livelihood. We will also join hands with the tourism trades to consolidate Hong Kong's position as a prime tourist destination and strive to take forward the development of innovation and technology and support new economic projects to promote the long-term development of Hong Kong's overall economy in a healthy manner.

Thank you, Deputy President.

DEPUTY PRESIDENT (in Cantonese): I now call upon Dr KWOK Ka-ki to move his amendment.

DR KWOK KA-KI (in Cantonese): Deputy President, I move that Mr SHIU Ka-fai's motion be amended.

The amendment moved by Dr KWOK Ka-ki (See the marked-up version at Annex 1)

DEPUTY PRESIDENT (in Cantonese): I now propose the question to you and that is: That the amendment, moved by Dr KWOK Ka-ki to Mr SHIU Ka-fai's motion, be passed.

DEPUTY PRESIDENT (in Cantonese): I now put the question to you as stated. Will those in favour please raise their hands?

(Members raised their hands)

LEGISLATIVE COUNCIL ― 29 March 2018 8255

DEPUTY PRESIDENT (in Cantonese): Those against please raise their hands.

(Members raised their hands)

Ir Dr LO Wai-kwok rose to claim a division.

DEPUTY PRESIDENT (in Cantonese): Ir Dr LO Wai-kwok has claimed a division. The division bell will ring for five minutes.

(While the division bell was ringing, THE PRESIDENT resumed the Chair)

PRESIDENT (in Cantonese): Will Members please proceed to vote.

PRESIDENT (in Cantonese): Will Members please check their votes. If there are no queries, voting shall now stop and the result will be displayed.

Functional Constituencies:

Mr LEUNG Yiu-chung, Mr Charles Peter MOK, Mr SHIU Ka-chun, Dr Pierre CHAN and Mr KWONG Chun-yu voted for the amendment.

Mr Tommy CHEUNG, Mr CHAN Kin-por, Mr YIU Si-wing, Mr MA Fung-kwok, Ir Dr LO Wai-kwok, Mr SHIU Ka-fai, Mr CHAN Chun-ying and Mr Kenneth LAU voted against the amendment.

Mr WONG Ting-kwong, Ms Starry LEE, Mr POON Siu-ping, Mr Jimmy NG, Mr HO Kai-ming, Mr Holden CHOW and Mr LUK Chung-hung abstained.

THE PRESIDENT, Mr Andrew LEUNG, did not cast any vote.

8256 LEGISLATIVE COUNCIL ― 29 March 2018

Geographical Constituencies:

Ms Claudia MO, Mr Michael TIEN, Mr WU Chi-wai, Mr CHAN Chi-chuen, Dr KWOK Ka-ki, Dr Helena WONG, Mr Alvin YEUNG, Mr Andrew WAN, Mr LAM Cheuk-ting, Ms YUNG Hoi-yan, Mr HUI Chi-fung, Mr Jeremy TAM, Mr Gary FAN and Mr AU Nok-hin voted for the amendment.

Mr CHAN Hak-kan, Mr WONG Kwok-kin, Mr Paul TSE, Mr CHAN Han-pan, Ms Alice MAK, Mr KWOK Wai-keung, Dr Elizabeth QUAT, Mr Wilson OR, Mr CHEUNG Kwok-kwan, Dr CHENG Chung-tai and Mr Vincent CHENG abstained.

THE PRESIDENT announced that among the Members returned by functional constituencies, 21 were present, 5 were in favour of the amendment, 8 against it and 7 abstained; while among the Members returned by geographical constituencies through direct elections, 25 were present, 14 were in favour of the amendment and 11 abstained. Since the question was not agreed by a majority of each of the two groups of Members present, he therefore declared that the amendment was negatived.

MS STARRY LEE (in Cantonese): President, I move that in the event of further divisions being claimed in respect of the motion of "Stimulating internal demand and opening up new visitor sources" or any amendments thereto, this Council do proceed to each of such divisions immediately after the division bell has been rung for one minute.

PRESIDENT (in Cantonese): I now propose the question to you and that is: That the motion moved by Ms Starry LEE be passed.

PRESIDENT (in Cantonese): I now put the question to you as stated. Will those in favour please raise their hands?

(Members raised their hands)

LEGISLATIVE COUNCIL ― 29 March 2018 8257

PRESIDENT (in Cantonese): Those against please raise their hands.

(No hands raised)

PRESIDENT (in Cantonese): I think the question is agreed by a majority respectively of each of the two groups of Members, that is, those returned by functional constituencies and those returned by geographical constituencies through direct elections, who are present. I declare the motion passed.

I order that in the event of further divisions being claimed in respect of the motion of "Stimulating internal demand and opening up new visitor sources" or any amendments thereto, this Council do proceed to each of such divisions immediately after the division bell has been rung for one minute.

PRESIDENT (in Cantonese): Will Members please turn to Page 5 of the Script.

PRESIDENT (in Cantonese): Mr YIU Si-wing, you may move your amendment.

MR YIU SI-WING (in Cantonese): President, I move that Mr SHIU Ka-fai's motion be amended.

The amendment moved by Mr YIU Si-wing (See the marked-up version at Annex 2)

PRESIDENT (in Cantonese): I now propose the question to you and that is: That the amendment, moved by Mr YIU Si-wing to Mr SHIU Ka-fai's motion, be passed.

PRESIDENT (in Cantonese): I now put the question to you as stated. Will those in favour please raise their hands?

(Members raised their hands)

8258 LEGISLATIVE COUNCIL ― 29 March 2018

PRESIDENT (in Cantonese): Those against please raise their hands.

(No hands raised)

PRESIDENT (in Cantonese): I think the question is agreed by a majority respectively of each of the two groups of Members, that is, those returned by functional constituencies and those returned by geographical constituencies through direct elections, who are present. I declare the amendment passed.

PRESIDENT (in Cantonese): Mr Michael TIEN, as the amendment of Mr YIU Si-wing has been passed, you may move your revised amendment.

MR MICHAEL TIEN (in Cantonese): President, I move that Mr SHIU Ka-fai's motion as amended by Mr YIU Si-wing be further amended by my revised amendment.

The further amendment moved by Mr Michael TIEN to the motion as amended by Mr YIU Si-wing (See the marked-up version at Annex 3)

PRESIDENT (in Cantonese): I now propose the question to you and that is: That Mr Michael TIEN's amendment to Mr SHIU Ka-fai's motion as amended by Mr YIU Si-wing be passed.

PRESIDENT (in Cantonese): I now put the question to you as stated. Will those in favour please raise their hands?

(Members raised their hands)

PRESIDENT (in Cantonese): Those against please raise their hands.

(No hands raised)

LEGISLATIVE COUNCIL ― 29 March 2018 8259

PRESIDENT (in Cantonese): I think the question is agreed by a majority respectively of each of the two groups of Members, that is, those returned by functional constituencies and those returned by geographical constituencies through direct elections, who are present. I declare the amendment passed.

PRESIDENT (in Cantonese): Will Members please turn to Page 12 of the Script.

PRESIDENT (in Cantonese): Mr WU Chi-wai, as the amendments of Mr YIU Si-wing and Mr Michael TIEN have been passed, you may move your revised amendment.

MR WU CHI-WAI (in Cantonese): President, I moved that Mr SHIU Ka-fai's motion as amended by Mr YIU Si-wing and Mr Michael TIEN be further amended by my revised amendment.

The further amendment moved by Mr WU Chi-wai to the motion as amended by Mr YIU Si-wing and Mr Michael TIEN (See the marked-up version at Annex 4)

PRESIDENT (in Cantonese): I now propose the question to you and that is: That Mr WU Chi-wai's amendment to Mr SHIU Ka-fai's motion as amended by Mr YIU Si-wing and Mr Michael TIEN be passed.

PRESIDENT (in Cantonese): I now put the question to you as stated. Will those in favour please raise their hands?

(Members raised their hands)

PRESIDENT (in Cantonese): Those against please raise their hands.

(Members raised their hands)

Mr LAM Cheuk-ting rose to claim a division.

8260 LEGISLATIVE COUNCIL ― 29 March 2018

PRESIDENT (in Cantonese): Mr LAM Cheuk-ting has claimed a division. The division bell will ring for one minute.

PRESIDENT (in Cantonese): Will Members please proceed to vote.

PRESIDENT (in Cantonese): Will Members please check their votes. If there are no queries, voting shall now stop and the result will be displayed.

Functional Constituencies:

Mr Tommy CHEUNG, Mr WONG Ting-kwong, Ms Starry LEE, Mr CHAN Kin-por, Mr YIU Si-wing, Mr MA Fung-kwok, Mr Charles Peter MOK, Mr IP Kin-yuen, Mr POON Siu-ping, Ir Dr LO Wai-kwok, Mr Jimmy NG, Mr HO Kai-ming, Mr Holden CHOW, Mr SHIU Ka-fai, Mr SHIU Ka-chun, Dr Pierre CHAN, Mr CHAN Chun-ying, Mr LUK Chung-hung, Mr Kenneth LAU and Mr KWONG Chun-yu voted for the amendment.

Mr LEUNG Yiu-chung voted against the amendment.

THE PRESIDENT, Mr Andrew LEUNG, did not cast any vote.

Geographical Constituencies:

Mr CHAN Hak-kan, Mr WONG Kwok-kin, Mr Paul TSE, Ms Claudia MO, Mr Michael TIEN, Mr WU Chi-wai, Mr CHAN Chi-chuen, Mr CHAN Han-pan, Ms Alice MAK, Dr KWOK Ka-ki, Mr KWOK Wai-keung, Dr Helena WONG, Dr Elizabeth QUAT, Mr Alvin YEUNG, Mr Andrew WAN, Mr LAM Cheuk-ting, Mr Wilson OR, Ms YUNG Hoi-yan, Ms Tanya CHAN, Mr CHEUNG Kwok-kwan, Mr HUI Chi-fung, Mr Jeremy TAM, Mr Gary FAN, Mr AU Nok-hin and Mr Vincent CHENG voted for the amendment.

Dr CHENG Chung-tai abstained.

LEGISLATIVE COUNCIL ― 29 March 2018 8261

THE PRESIDENT announced that among the Members returned by functional constituencies, 22 were present, 20 were in favour of the amendment and 1 against it; while among the Members returned by geographical constituencies through direct elections, 26 were present, 25 were in favour of the amendment and 1 abstained. Since the question was agreed by a majority of each of the two groups of Members present, he therefore declared that the amendment was passed.

PRESIDENT (in Cantonese): Mr LAM Cheuk-ting, as the amendments of Mr YIU Si-wing, Mr Michael TIEN and Mr WU Chi-wai have been passed, you may move your revised amendment.

MR LAM CHEUK-TING (in Cantonese): President, I move that Mr SHIU Ka-fai's motion as amended by Mr YIU Si-wing, Mr Michael TIEN and Mr WU Chi-wai be further amended by my revised amendment.

The further amendment moved by Mr LAM Cheuk-ting to the motion as amended by Mr YIU Si-wing, Mr Michael TIEN and Mr WU Chi-wai (See the marked-up version at Annex 5)

PRESIDENT (in Cantonese): I now propose the question to you and that is: That Mr LAM Cheuk-ting's amendment to Mr SHIU Ka-fai's motion as amended by Mr YIU Si-wing, Mr Michael TIEN and Mr WU Chi-wai be passed.

PRESIDENT (in Cantonese): I now put the question to you as stated. Will those in favour please raise their hands?

(Members raised their hands)

PRESIDENT (in Cantonese): Those against please raise their hands.

(Members raised their hands)

8262 LEGISLATIVE COUNCIL ― 29 March 2018

Ir Dr LO Wai-kwok rose to claim a division.

PRESIDENT (in Cantonese): Ir Dr LO Wai-kwok has claimed a division. The division bell will ring for one minute.

PRESIDENT (in Cantonese): Will Members please proceed to vote.

PRESIDENT (in Cantonese): Will Members please check their votes. If there are no queries, voting shall now stop and the result will be displayed.

Functional Constituencies:

Mr LEUNG Yiu-chung, Mr Charles Peter MOK, Mr IP Kin-yuen, Mr SHIU Ka-chun, Dr Pierre CHAN and Mr KWONG Chun-yu voted for the amendment.

Mr Tommy CHEUNG, Mr WONG Ting-kwong, Ms Starry LEE, Mr CHAN Kin-por, Mr YIU Si-wing, Mr MA Fung-kwok, Ir Dr LO Wai-kwok, Mr Jimmy NG, Mr Holden CHOW, Mr SHIU Ka-fai, Mr CHAN Chun-ying and Mr Kenneth LAU voted against the amendment.

Mr POON Siu-ping, Mr HO Kai-ming and Mr LUK Chung-hung abstained.

THE PRESIDENT, Mr Andrew LEUNG, did not cast any vote.

Geographical Constituencies:

Ms Claudia MO, Mr WU Chi-wai, Mr CHAN Chi-chuen, Dr Helena WONG, Mr Andrew WAN, Mr LAM Cheuk-ting, Mr HUI Chi-fung, Mr Gary FAN and Mr AU Nok-hin voted for the amendment.

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Mr CHAN Hak-kan, Mr Paul TSE, Mr Michael TIEN, Mr CHAN Han-pan, Dr Elizabeth QUAT, Mr Wilson OR, Ms YUNG Hoi-yan, Mr CHEUNG Kwok-kwan and Mr Vincent CHENG voted against the amendment.

Mr WONG Kwok-kin, Ms Alice MAK, Dr KWOK Ka-ki, Mr KWOK Wai-keung, Mr Alvin YEUNG, Ms Tanya CHAN, Dr CHENG Chung-tai and Mr Jeremy TAM abstained.

THE PRESIDENT announced that among the Members returned by functional constituencies, 22 were present, 6 were in favour of the amendment, 12 against it and 3 abstained; while among the Members returned by geographical constituencies through direct elections, 26 were present, 9 were in favour of the amendment, 9 against it and 8 abstained. Since the question was not agreed by a majority of each of the two groups of Members present, he therefore declared that the amendment was negatived.

PRESIDENT (in Cantonese): Mr SHIU Ka-fai, you still have 2 minutes and 20 seconds to reply. Then, the debate will come to a close.

MR SHIU KA-FAI (in Cantonese): President, once again, I thank the 22 Honourable colleagues who have spoken today, especially Mr Jeremy TAM and Dr KWOK Ka-ki who proposed expanding the sources of international visitors. I agree with their proposals.

I also agree with the proposals of Mr Kenneth LAU, Mr Tony TSE, Mr MA Fung-kwok and Mr KWONG Chun-yu to promote tourism through innovation, culture and sports, etc.

Dr Priscilla LEUNG, Mr Vincent CHENG and Mr Holden CHOW hoped the Government will make more efforts on water taxis and ferries. These are good suggestions that will help increase the number of tourist attractions.

Mr Kenneth LAU suggested that more tourist attractions should be added in rural areas so as to divert tourist flow. This is a good suggestion that I very much support.

8264 LEGISLATIVE COUNCIL ― 29 March 2018

I thank Mr WU Chi-wai, Chairman of the Democratic Party, and Mr Alvin YEUNG, Leader of the Civic Party, for supporting my motion.

Mr WONG Ting-kwong mentioned the border shopping centre. I hope Honourable colleagues can give their full support to this initiative. I am not soliciting business for the border shopping centre, but I believe it can attract parallel traders to shop there and divert the traffic in the North District. I believe it will be beneficial to Hong Kong, and thus hope everyone will work together to better develop the border shopping centre.

President, just now Mr Tommy CHEUNG mentioned the issue of parallel traders. I must point out that currently the majority of parallel traders are Hong Kong residents. Hong Kong residents account for 70% to 80% of the total because Mainlanders are prone to being arrested when carrying goods in Hong Kong. Hence, we must find a way to tackle this issue.

Mr Charles Peter MOK mentioned the accommodation rental website Airbnb. I certainly support innovative technology and resource sharing, but it must be done lawfully and properly. Some owners rent out their properties without a licence to strangers, allowing trespassers to go in and out of public housing and Home Ownership Scheme courts in such areas as Mei Foo, which caused worries among residents. We must find a way to address this issue.

I would also like to thank Ir Dr LO Wai-kwok for putting forward good recommendations. I am sorry that Mr Jeffrey LAM cannot move his amendment due to an adjustment to the Agenda. His proposed amendment was most insightful and I completely support it.

I hope Members will cast their votes as soon as possible today so that the Easter holidays can begin. Thank you.

PRESIDENT (in Cantonese): I now put the question to you and that is: That the motion moved by Mr SHIU Ka-fai, as amended by Mr YIU Si-wing, Mr Michael TIEN and Mr WU Chi-wai, be passed. Will those in favour please raise their hands?

(Members raised their hands)

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PRESIDENT (in Cantonese): Those against please raise their hands.

(Members raised their hands)

Mr Gary FAN rose to claim a division.

PRESIDENT (in Cantonese): Mr Gary FAN has claimed a division. The division bell will ring for one minute.

PRESIDENT (in Cantonese): Will Members please proceed to vote.

PRESIDENT (in Cantonese): Will Members please check their votes. If there are no queries, voting shall now stop and the result will be displayed.

Functional Constituencies:

Mr Tommy CHEUNG, Mr WONG Ting-kwong, Ms Starry LEE, Mr CHAN Kin-por, Mr YIU Si-wing, Mr MA Fung-kwok, Mr Charles Peter MOK, Mr IP Kin-yuen, Mr POON Siu-ping, Ir Dr LO Wai-kwok, Mr Jimmy NG, Mr HO Kai-ming, Mr Holden CHOW, Mr SHIU Ka-fai, Dr Pierre CHAN, Mr CHAN Chun-ying, Mr LUK Chung-hung, Mr Kenneth LAU and Mr KWONG Chun-yu voted for the motion as amended.

Mr LEUNG Yiu-chung voted against the motion as amended.

Mr SHIU Ka-chun abstained.

THE PRESIDENT, Mr Andrew LEUNG, did not cast any vote.

8266 LEGISLATIVE COUNCIL ― 29 March 2018

Geographical Constituencies:

Mr CHAN Hak-kan, Dr Priscilla LEUNG, Mr WONG Kwok-kin, Mr Paul TSE, Mr WU Chi-wai, Mr CHAN Han-pan, Ms Alice MAK, Dr KWOK Ka-ki, Mr KWOK Wai-keung, Dr Helena WONG, Dr Elizabeth QUAT, Mr Alvin YEUNG, Mr Andrew WAN, Mr LAM Cheuk-ting, Mr Wilson OR, Ms YUNG Hoi-yan, Ms Tanya CHAN, Mr CHEUNG Kwok-kwan, Mr HUI Chi-fung, Mr Jeremy TAM, Mr AU Nok-hin and Mr Vincent CHENG voted for the motion as amended.

Ms Claudia MO, Mr CHAN Chi-chuen and Mr Gary FAN voted against the motion as amended.

Dr CHENG Chung-tai abstained.

THE PRESIDENT announced that among the Members returned by functional constituencies, 22 were present, 19 were in favour of the motion as amended, 1 against it and 1 abstained; while among the Members returned by geographical constituencies through direct elections, 26 were present, 22 were in favour of the motion as amended, 3 against it and 1 abstained. Since the question was agreed by a majority of each of the two groups of Members present, he therefore declared that the motion as amended was passed.

NEXT MEETING

PRESIDENT (in Cantonese): I now adjourn the Council until 11:00 am on Wednesday, 11 April 2018. By then, the Chief Executive's Question Time will be held first, immediately followed by the regular meeting of the Legislative Council.

Adjourned accordingly at 2:47 pm.

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Annex II

8268 LEGISLATIVE COUNCIL ― 29 March 2018

Annex 1

The marked-up version of the amendment moved by Dr KWOK Ka-ki (Translation)

That, the Government has recorded high surplus year after year, with the 2016-2017 financial year, for example, recording over $100 billion in government surplus and more than $900 billion in fiscal reserves; given the Government's ample fiscal reserves and fiscal stability, this Council urges the Government to make good use of this favourable state of public finance for launching more measures to improve people's livelihood, so as to return including striving to alleviate the impact on people's livelihood arising from the abnormal expansion of retail luxury goods businesses such as jewellery and goldsmith shops, cosmetics shops and pharmacies in various districts (especially in Yuen Long, Tuen Mun, Sheung Shui, Tsuen Wan, To Kwa Wan, Hung Hom and so on) geared to some tourists' needs in the past, so as to bring forth the return of the people-based spirit to local communities in Hong Kong, with a view to returning wealth to people and stimulate stimulating internal demand; the Government should at the same time expedite the provision of additional tourism supporting facilities to upgrade Hong Kong's visitor receiving capability and capacity, and; alleviate the inconvenience caused by visitors to members of the public through better diversion, so as to open up attract visitors having different nationalities and spending patterns to Hong Kong, thereby opening up new visitor sources for the benefit of and preventing visitor sources from becoming homogeneous; and formulate measures to promote Hong Kong's diversified tourism resources, with a view to benefiting the tourism, retail, catering and transport sectors, etc. and the overall economy of Hong Kong.

Note: Dr KWOK Ka-ki's amendment is marked in bold and italic type or with deletion line.

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Annex 2

The marked-up version of the amendment moved by Mr YIU Si-wing (Translation)

That, given with the Government's ample fiscal reserves and fiscal stability, this Council therefore urges the Government to make good use of this favourable state of public finance for launching more measures to improve people's livelihood, so as to return wealth to people and stimulate internal demand; the Government should at the same time expedite the provision of additional tourism supporting facilities as per the Development Blueprint for Hong Kong's Tourism Industry released by the Commerce and Economic Development Bureau in October 2017 to upgrade Hong Kong's visitor receiving capability and capacity, and alleviate the inconvenience caused by visitors to members of the public through better diversion, so as to open up new visitor sources for the benefit of the tourism, retail, catering and transport sectors, etc. and the overall economy of Hong Kong.

Note: Mr YIU Si-wing's amendment is marked in bold and italic type or with deletion line.

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Annex 3

The marked-up version of the further amendment moved by Mr Michael TIEN to the motion as amended by Mr YIU Si-wing (Translation)

That, with the Government's ample fiscal reserves and fiscal stability, this Council therefore urges the Government to make good use of this favourable state of public finance for launching more measures to improve people's livelihood, so as to return wealth to people and stimulate internal demand; the Government should at the same time expedite the provision of additional tourism supporting facilities as per the Development Blueprint for Hong Kong's Tourism Industry released by the Commerce and Economic Development Bureau in October 2017, including but not limited to studying the development of underground space, or local cultural and creative parks, or multi-purpose venues for holding road events, in order to upgrade Hong Kong's visitor receiving capability and capacity, and alleviate the inconvenience caused by visitors to members of the public through better diversion, so as to open up new visitor sources for the benefit of the tourism, retail, catering and transport sectors, etc. and the overall economy of Hong Kong.

Note: Mr Michael TIEN's amendment is marked in bold and italic type.

LEGISLATIVE COUNCIL ― 29 March 2018 8271

Annex 4

The marked-up version of the further amendment moved by Mr WU Chi-wai to the motion as amended by Mr YIU Si-wing and Mr Michael TIEN (Translation)

That, with the Government's ample fiscal reserves and fiscal stability, this Council therefore urges the Government to make good use of this favourable state of public finance for launching more measures to improve people's livelihood, so as to return wealth to people and stimulate internal demand; the Government should at the same time expedite the provision of additional tourism supporting facilities as per the Development Blueprint for Hong Kong's Tourism Industry released by the Commerce and Economic Development Bureau in October 2017, including but not limited to studying the development of underground space, or local cultural and creative parks, or multi-purpose venues for holding road events, in order to upgrade Hong Kong's visitor receiving capability and capacity, and alleviate the inconvenience caused by visitors to members of the public through better diversion, so as to open up new visitor sources for the benefit of the tourism, retail, catering and transport sectors, etc. and the overall economy of Hong Kong; the Government should also make good use of the fiscal surplus in excess of its original estimate every year and allocate in various ways the extra surpluses to projects which have not been implemented or enhanced for years due to a lack of financial resources.

Note: Mr WU Chi-wai's amendment is marked in bold and italic type.

8272 LEGISLATIVE COUNCIL ― 29 March 2018

Annex 5

The marked-up version of the further amendment moved by Mr LAM Cheuk-ting to the motion as amended by Mr YIU Si-wing, Mr Michael TIEN and Mr WU Chi-wai (Translation)

That, with the Government's ample fiscal reserves and fiscal stability, this Council therefore urges the Government to make good use of this favourable state of public finance for launching more measures to improve people's livelihood, so as to return wealth to people and stimulate internal demand; the Government should at the same time expedite the provision of additional tourism supporting facilities as per the Development Blueprint for Hong Kong's Tourism Industry released by the Commerce and Economic Development Bureau in October 2017, including but not limited to studying the development of underground space, or local cultural and creative parks, or multi-purpose venues for holding road events, in order to upgrade Hong Kong's visitor receiving capability and capacity, and alleviate the inconvenience caused by visitors to members of the public through better diversion, so as to open up new visitor sources for the benefit of the tourism, retail, catering and transport sectors, etc. and the overall economy of Hong Kong; the Government should also make good use of the fiscal surplus in excess of its original estimate every year and allocate in various ways the extra surpluses to projects which have not been implemented or enhanced for years due to a lack of financial resources; in order to open up new visitor sources, the Government should also strive to clamp down on parallel traders, so as to reduce their impact on visitors; specific measures include:

(1) freezing the number of the Individual Visit Scheme cities to control the entry of parallel traders into Hong Kong in the name of the Individual Visit Scheme, thereby enhancing Hong Kong's capability of receiving genuine visitors, and opening up visitor sources from different places and of different types;

(2) reviewing the 'one trip per week' policy for the purpose of considering the replacement of 'one trip per week' by 'eight trips per year', and imposing an entry limit of 'one trip per day' for persons entering Hong Kong (excluding persons with special needs such as those with endorsement for business visit, cross-boundary LEGISLATIVE COUNCIL ― 29 March 2018 8273

students and their parents), so as to clamp down on parallel traders and thus spare capability and capacity for receiving genuine visitors;

(3) levying a land arrival tax of $20 to $50 on each person entering Hong Kong (excluding local residents, cross-boundary students and their parents, and so on), so as to minimize the impact of parallel traders on genuine visitors;

(4) regarding the carrying of bulky luggage by some parallel traders travelling on public transport, the organizations concerned should strictly enforce the regulations on passenger luggage on public transport, including conducting a study on levying a cross boundary luggage surcharge on parallel traders travelling on the East Rail Line of the Mass Transit Railway, implementing the 'separation of passenger transport and cargo transport' on the East Rail Line, and requiring parallel traders carrying bulky luggage on the East Rail Line to use designated train compartments only, so as to reduce the nuisance caused to visitors;

(5) exploring the identification of sites at various boundary control points for constructing shopping malls to divert visitors, so as to reduce the nuisance caused by parallel traders to local communities and tourist hotspots, thereby attracting more visitors to Hong Kong; and

(6) retaining the restriction on powdered formula to prevent parallel trading activities from causing nuisance in various districts and deterring visitors.

Note: Mr LAM Cheuk-ting's amendment is marked in bold and italic type.