OFFICIAL RECORD of PROCEEDINGS Wednesday, 12
LEGISLATIVE COUNCIL ― 12 December 2018 4025
OFFICIAL RECORD OF PROCEEDINGS
Wednesday, 12 December 2018
The Council met at Eleven o'clock
MEMBERS PRESENT:
THE PRESIDENT THE HONOURABLE ANDREW LEUNG KWAN-YUEN, G.B.S., J.P.
THE HONOURABLE JAMES TO KUN-SUN
THE HONOURABLE LEUNG YIU-CHUNG
THE HONOURABLE ABRAHAM SHEK LAI-HIM, G.B.S., J.P.
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 JEFFREY LAM KIN-FUNG, G.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.
4026 LEGISLATIVE COUNCIL ― 12 December 2018
THE HONOURABLE MRS REGINA IP LAU SUK-YEE, G.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.
THE HONOURABLE STEVEN HO CHUN-YIN, B.B.S.
THE HONOURABLE FRANKIE YICK CHI-MING, S.B.S., J.P.
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, B.B.S., 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 CHRISTOPHER CHEUNG WAH-FUNG, S.B.S., J.P.
DR THE HONOURABLE FERNANDO CHEUNG CHIU-HUNG
DR THE HONOURABLE HELENA WONG PIK-WAN
LEGISLATIVE COUNCIL ― 12 December 2018 4027
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.
DR THE HONOURABLE CHIANG LAI-WAN, S.B.S., J.P.
IR DR THE HONOURABLE LO WAI-KWOK, S.B.S., M.H., J.P.
THE HONOURABLE CHUNG KWOK-PAN
THE HONOURABLE ALVIN YEUNG
THE HONOURABLE ANDREW WAN SIU-KIN
THE HONOURABLE CHU HOI-DICK
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
4028 LEGISLATIVE COUNCIL ― 12 December 2018
DR THE HONOURABLE PIERRE CHAN
THE HONOURABLE CHAN CHUN-YING, J.P.
THE HONOURABLE TANYA CHAN
THE HONOURABLE CHEUNG KWOK-KWAN, J.P.
THE HONOURABLE HUI CHI-FUNG
THE HONOURABLE LUK CHUNG-HUNG, J.P.
THE HONOURABLE LAU KWOK-FAN, M.H.
THE HONOURABLE KENNETH LAU IP-KEUNG, B.B.S., M.H., J.P.
DR THE HONOURABLE CHENG CHUNG-TAI
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.
THE HONOURABLE CHAN HOI-YAN
MEMBERS ABSENT:
THE HONOURABLE KWOK WAI-KEUNG, J.P.
THE HONOURABLE DENNIS KWOK WING-HANG
THE HONOURABLE KWONG CHUN-YU
LEGISLATIVE COUNCIL ― 12 December 2018 4029
PUBLIC OFFICERS ATTENDING:
THE HONOURABLE MATTHEW CHEUNG KIN-CHUNG, G.B.M., G.B.S., J.P. CHIEF SECRETARY FOR ADMINISTRATION
THE HONOURABLE WONG KAM-SING, G.B.S., J.P. SECRETARY FOR THE ENVIRONMENT
THE HONOURABLE NICHOLAS W. YANG, G.B.S., J.P. SECRETARY FOR INNOVATION AND TECHNOLOGY
THE HONOURABLE JAMES HENRY LAU JR., J.P. SECRETARY FOR FINANCIAL SERVICES AND THE TREASURY
DR THE HONOURABLE LAW CHI-KWONG, G.B.S., J.P. SECRETARY FOR LABOUR AND WELFARE
THE HONOURABLE JOHN LEE KA-CHIU, S.B.S., P.D.S.M., J.P. SECRETARY FOR SECURITY
THE HONOURABLE EDWARD YAU TANG-WAH, G.B.S., J.P. SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT
THE HONOURABLE MICHAEL WONG WAI-LUN, J.P. SECRETARY FOR DEVELOPMENT
THE HONOURABLE PATRICK NIP TAK-KUEN, J.P. SECRETARY FOR CONSTITUTIONAL AND MAINLAND AFFAIRS
DR BERNARD CHAN PAK-LI, J.P. UNDER SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT
DR CHUI TAK-YI, J.P. UNDER SECRETARY FOR FOOD AND HEALTH
4030 LEGISLATIVE COUNCIL ― 12 December 2018
CLERKS IN ATTENDANCE:
MR KENNETH CHEN WEI-ON, S.B.S., SECRETARY GENERAL
MISS ODELIA LEUNG HING-YEE, DEPUTY SECRETARY GENERAL
MISS FLORA TAI YIN-PING, ASSISTANT SECRETARY GENERAL
MS DORA WAI, ASSISTANT SECRETARY GENERAL
LEGISLATIVE COUNCIL ― 12 December 2018 4031
PRESIDENT (in Cantonese): Will the Clerk please ring the bell to summon Members to the Chamber.
(After the summoning bell had been rung, a number of Members entered the Chamber)
TABLING OF PAPERS
The following papers were laid on the table under Rule 21(2) of the Rules of Procedure:
Subsidiary Legislation/Instruments L.N. No.
Dutiable Commodities (Amendment) Regulation 2018 ..... 241/2018
Firearms and Ammunition (Amendment) Regulation 2018 ...... 242/2018
Firearms and Ammunition (Storage Fees) (Amendment) Order 2018 ...... 243/2018
Pawnbrokers (Amendment) Regulation 2018 ...... 244/2018
Massage Establishments (Amendment) Regulation 2018 ...... 245/2018
Merchant Shipping (Safety) (Dangerous Goods and Marine Pollutants) (Amendment) Regulation 2018 ...... 246/2018
Merchant Shipping (Local Vessels) (General) (Amendment) Regulation 2018 ...... 247/2018
Merchant Shipping (Safety) (Construction and Survey) Regulation ...... 248/2018
Merchant Shipping (Safety) (Fire-fighting Appliances and Fire Protection) Regulation ...... 249/2018
4032 LEGISLATIVE COUNCIL ― 12 December 2018
Merchant Shipping (Safety) (Cargo Ship Construction and Survey) (Ships Built Before 1 September 1984) (Amendment) Regulation 2018...... 250/2018
Merchant Shipping (Safety) (Cargo Ship Construction and Survey) (Ships Built On or After 1 September 1984) (Amendment) (No. 2) Regulation 2018 ...... 251/2018
Merchant Shipping (Safety) (Fire Protection) (Ships Built Before 25 May 1980) (Amendment) Regulation 2018 ...... 252/2018
Merchant Shipping (Safety) (Fire Appliances) (Ships Built On or After 25 May 1980 but Before 1 September 1984) (Amendment) Regulation 2018 ...... 253/2018
Merchant Shipping (Safety) (Fire Protection) (Ships Built On or After 1 September 1984) (Amendment) Regulation 2018 ...... 254/2018
Merchant Shipping (Safety) (Passenger Ship Construction) (Ships Built Before 1 September 1984) (Amendment) (No. 2) Regulation 2018 ...... 255/2018
Merchant Shipping (Safety) (Passenger Ship Construction and Survey) (Ships Built On or After 1 September 1984) (Amendment) (No. 2) Regulation 2018 ...... 256/2018
Merchant Shipping (Safety) (Cargo Ship Safety Equipment Survey) (Amendment) Regulation 2018 ...... 257/2018
Merchant Shipping (Safety) (Subdivision and Damage Stability of Cargo Ships) (Amendment) (No. 2) Regulation 2018 ...... 258/2018
Securities and Futures (OTC Derivative Transactions―Clearing and Record Keeping Obligations and Designation of Central Counterparties) (Amendment) Rules 2018 ...... 259/2018
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Arbitration and Mediation Legislation (Third Party Funding) (Amendment) Ordinance 2017 (Commencement) Notice 2018 ...... 260/2018
Private Healthcare Facilities Ordinance (Specification of Date for Section 135(1)(a)) Notice ...... 261/2018
Private Healthcare Facilities Ordinance (Specification of Date for Section 136(1)(a)) Notice ...... 262/2018
Other Papers
No. 47 ― Queen Elizabeth Foundation for the Mentally Handicapped Report and Accounts 2017-2018 (including the Report of the Director of Audit)
No. 48 ― The Hospital Authority Public-Private Partnership Fund Financial Statements and Independent Auditor's Report for the year ended 31 March 2018
No. 49 ― Social Work Training Fund Fifty-seventh Annual Report by the Trustee for the year ending on 31 March 2018 (including Financial statements and the Report of the Director of Audit)
No. 50 ― Lotteries Fund The Accounts of the Fund 2017-18 (including the Report of the Director of Audit)
No. 51 ― Samaritan Fund Report on the Fund, Financial Statements and Report of the Director of Audit for the year ended 31 March 2018
No. 52 ― Hospital Authority Annual Report 2017-2018 (including Independent Auditor's Report and Audited Financial Statements)
4034 LEGISLATIVE COUNCIL ― 12 December 2018
No. 53 ― Communications Authority Annual Report 2017/18
No. 54 ― Hong Kong Tourism Board Annual Report 2017/18 (including Independent Auditor's Report and Financial Statements)
No. 55 ― Equal Opportunities Commission Annual Report 2017/18 (including Financial Statements and Independent Auditor's Report)
No. 56 ― The Prince Philip Dental Hospital 2017-18 Annual Report by the Board of Governors (including Audited Financial Statements and Auditor's Report)
No. 57 ― Sir Murray MacLehose Trust Fund Trustee's Report on the administration of the Fund, Financial statements and Report of the Director of Audit for the year ended 31 March 2018
No. 58 ― Police Welfare Fund Annual Report 2017/2018 (including Financial statements and the Report of the Director of Audit for the year ended 31 March 2018)
No. 59 ― The Police Children's Education Trust and the Police Education and Welfare Trust Annual Report 2017/2018 (including Financial statements and the Report of the Director of Audit for the year ended 31 March 2018)
No. 60 ― Brewin Trust Fund Report of the Brewin Trust Fund Committee on the administration of the Fund, Financial statements and Report of the Director of Audit for the year ended 30 June 2018
LEGISLATIVE COUNCIL ― 12 December 2018 4035
No. 61 ― Grantham Scholarships Fund Report of the Grantham Scholarships Fund Committee on the administration of the Fund, Financial statements and Report of the Director of Audit for the year ended 31 August 2018
No. 62 ― Chinese Temples Fund Report of the Chinese Temples Committee on the administration of the Fund, Financial statements and Report of the Director of Audit for the year ended 31 March 2018
No. 63 ― General Chinese Charities Fund Report of the Chinese Temples Committee on the administration of the Fund, Financial statements and Report of the Director of Audit for the year ended 31 March 2018
No. 64 ― The Government Minute in response to the Annual Report of The Ombudsman 2018
No. 65 ― Ocean Park Corporation Annual Report 2017/18 (including Auditor's Report and Financial Statements)
No. 66 ― Electoral Affairs Commission Report on the Recommended Constituency Boundaries for the 2019 District Council Ordinary Election
Report No. 7/18-19 of the House Committee on Consideration of Subsidiary Legislation and Other Instruments
ADDRESS
PRESIDENT (in Cantonese): Address. The Chief Secretary for Administration will address the Council on "The Government Minute in response to the Annual Report of The Ombudsman 2018".
4036 LEGISLATIVE COUNCIL ― 12 December 2018
The Government Minute in response to the Annual Report of The Ombudsman 2018
CHIEF SECRETARY FOR ADMINISTRATION (in Cantonese): President, today I submit the Government Minute ("GM") responding to the recommendations set out in the Annual Report of The Ombudsman 2018 ("the Annual Report").
The Ombudsman summed up 12 direct investigation and 195 full investigation cases and made a total of 209 recommendations in the Annual Report. The GM responds to the 10 direct investigation and 83 full investigation cases where recommendations were made by The Ombudsman. Government departments and relevant public bodies accepted most of The Ombudsman's recommendations, and follow-up actions have been or are being taken accordingly. As for individual recommendations that were not accepted, relevant departments or public bodies have given an account to The Ombudsman, explaining their difficulties or other follow-up actions taken in response to relevant issues.
In 2017-2018, the Office of The Ombudsman ("the Office") handled nearly 4 800 complaints by way of inquiry, full investigation or mediation. Of these, 237 cases were concluded by mediation, representing a rise of over five folds as compared to 2013-2014; while the number of participating government departments and public bodies went up from 11 half a decade ago to 28 last year. I am most thankful to The Ombudsman for promoting mediation and bringing in a breath of fresh air. Many complaints involving no or only minor maladministration can be settled quickly with satisfactory outcomes for all parties by this speedy, convenient and amicable approach. I encourage more government departments and public bodies to resolve disputes with the public by mediation as far as possible. With the Apology Ordinance coming into effect in December last year, departments and public bodies should also offer apologies, where appropriate, for the inconvenience and nuisance experienced by the public.
Over the past four years, the Office has furthered its emphasis on direct investigation. Apart from a significant increase in the number of direct investigations completed each year, the Office was committed to examining LEGISLATIVE COUNCIL ― 12 December 2018 4037 public administration issues with extensive and profound impact on Hong Kong people, as well as exploring long-term solutions in collaboration with government departments. The Office made a total of 63 recommendations in 10 of the 12 direct investigations completed last year. As mentioned by The Ombudsman in the Annual Report, direct investigation reports catalysed changes in Government policies and measures in recent years. As a catalyst for enhancing the quality of public administration, the Office is a powerful change agent. Government departments and public bodies were also receptive to the Office's recommendations, and actively improved the quality and effectiveness of their services, thereby enhancing operation efficiency and responsiveness to public needs.
For instance, after conducting a direct investigation into the criteria and procedures for procurement and withdrawal of library materials by the Leisure and Cultural Services Department ("LCSD"), the Office made a number of recommendations on effective utilization of public resources for procurement of library materials, and proper disposal of worn-out/damaged and outdated library collections. LCSD immediately reviewed and revised the procedure of setting procurement targets and compiling procurement plans. It has also been keen to explore possible collaboration with non-profit-making organizations in disposing withdrawn books through donation and a trial scheme on community book sharing, subject to compliance with Government regulations, cost-effectiveness and availability of resources, so as to better serve the community.
In addition, thanks to the Office's direct investigation into subjects such as the Government's mechanism for handling smoking offences, its control over fly-tipping of construction waste and landfilling activities on private land, as well as its regulation of factory canteens, there has been better communication and collaboration among government departments, and greater efficiency and proactiveness in taking law enforcement actions. Such improvements have brought tangible benefits to the living environment, safety and health of our citizens.
While stepping up its effort on direct investigation, the Office has not overlooked the complaints lodged by individual complainants. In 2017-2018, the Office conducted full investigation into 195 complaints, and close to 70% of 4038 LEGISLATIVE COUNCIL ― 12 December 2018 the complaints were found to be unsubstantiated after investigation. In its striving for justice for members of the public through professional investigation/inquiry and impartial judgment, the Office was also conscious of the constraints faced by government departments and public bodies in deploying resources and exercising statutory powers. For instance, the Office respected the practice of the Buildings Department and the Lands Department in handling issues of building safety, illegal structures and illegal occupation of Government land, taking into account such factors as threat to public safety when setting the priorities for enforcement actions. Some of the investigation findings also indicated that government departments and public bodies had already made every effort within their purview to handle the issues and requests raised by members of the public. The Ombudsman praised some government departments and public bodies in particular for taking follow-up actions and making improvements on relevant issues even before the Office concluded its investigations. This is an apt demonstration of the positive interactions between the Office and government departments. On the other hand, the Office also made rather strong criticisms against government departments and public bodies, and reminded them to utilize their resources and powers in more flexible and targeted manner to enable effective law enforcement and solve problems for members of the public. Such criticisms and recommendations are worth the reflection of departments and public bodies.
As mentioned in the GM last year, the number of requests for information made to government departments has been on the rise. In 2017-2018, departments received a record high of over 6 100 requests for information made by members of the public under the Code on Access to Information ("the Code"), which was an increase of over 10% as compared to the figure in 2016-2017. Even so, more than 94% of the cases were provided with all the information requested and 3% of them were provided with part of the information requested. In 2017-2018, the Office also received as many as 91 Code-related complaints, which shows mounting public expectation for an open and accountable government. 1 In the investigation of 71 Code-related cases concluded in
1 Translator's note: It is "an open and accountable Government" in the official press release. I took the liberty to change it to "government" here as it is not referring to any particular government. LEGISLATIVE COUNCIL ― 12 December 2018 4039
2017-2018, the Office found non-compliance with the Code in 30, mostly relating to nonconformity with specific provisions of the Code and refusal of requests for information without sufficient justification. To enhance understanding about the spirit and principle of the Code among departments, the Government has sought to strengthen staff training. A training video was produced in the third quarter of this year for the reference of staff involved in regular handling of Code requests. The purpose is to improve staff awareness and understanding of the various provisions of the Code including justifiable reasons to refuse disclosure of information. In addition, the Constitutional and Mainland Affairs Bureau will continue to send officers to relevant departments to provide briefing on cases and content of the Code.
At the same time, the Government attaches importance to the Office's recommendations regarding the enactment of access to information and archives laws. The Law Reform Commission ("LRC") launched on 6 December this year a public consultation on its studies about reforming the system of access to information and archives law. The Government will pay close attention to the public's views on these two issues, study and follow up the recommendations as appropriate after the LRC has completed its consultation and published its final reports.
President, I would like to express my gratitude to The Ombudsman, Ms Connie LAU, and her professional team for their independent and impartial handling of public complaints as well as their dedication to raising the standard of public administration of Hong Kong over the last four years. The comprehensive and in-depth investigations as well as constructive criticisms and recommendations of the Office, coupled with the positive response of the departments and bodies concerned, have greatly benefited the community of Hong Kong. The Government will continue to support The Ombudsman's work and looks forward to meeting public expectation more effectively in its administration and better addressing the needs of our society in the delivery of public services.
Thank you, President.
4040 LEGISLATIVE COUNCIL ― 12 December 2018
ORAL ANSWERS TO QUESTIONS
PRESIDENT (in Cantonese): Questions. First question.
The role of Radio Television Hong Kong as a public service broadcaster
1. MR HUI CHI-FUNG (in Cantonese): Mr LEUNG, the Report on Review of Public Service Broadcasting in Hong Kong published in 2007 has pointed out that the status and structure of Radio Television Hong Kong ("RTHK") as a government department does not fit the bill of a public service broadcaster in full. It has been reported that in August this year, the Director of Broadcasting prohibited the News and Current Affairs of RTHK from televising live a speech delivered by the Convenor of the Hong Kong National Party. Some members of the public have queried that the incident has reflected that the Director of Broadcasting, in his capacity as a department head, can hardly safeguard the editorial independence of RTHK as a public service broadcaster, simply by virtue of the Charter of Radio Television Hong Kong ("the Charter") signed by RTHK with the Chief Secretary for Administration and the Chairman of the Broadcasting Authority. On the other hand, the Government submitted a funding proposal to the Public Works Subcommittee of this Council at the end of 2013 for the construction of a New Broadcasting House to replace the existing three buildings which were aging, had obsolete facilities and had run out of space, and for RTHK to implement new services and projects to fulfill its mission as a public service broadcaster, but the funding proposal was subsequently negatived. In this connection, will the Government inform this Council:
(1) as it is stated in the Charter that RTHK will adhere to the editorial principles of being impartial in reflecting views and immune from commercial, political and/or other influences, whether the Government has assessed if the aforesaid act of the Director of Broadcasting has violated the spirit of the Charter; whether it will demand the Director of Broadcasting to undertake to continue to safeguard RTHK's editorial independence and keep RTHK immune from external interferences;
(2) of the measures in place to ensure that RTHK is provided with sufficient resources to fulfill its mission as a public service broadcaster; the follow-up work undertaken by the Government on the construction of the New Broadcasting House and the latest progress made; and
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(3) whether it has studied the disestablishment of RTHK from the government structure and giving RTHK financial and operational autonomy, with a view to ensuring that RTHK will adhere to the editorial principle of being immune from political and commercial influences; if so, of the outcome; if not, the reasons for that?
SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT (in Cantonese): President, the Report on Review of Public Service Broadcasting in Hong Kong published in 2007 mentioned in Mr HUI Chi-fung's question was prepared by the Committee on Review of Public Service Broadcasting, which had been appointed by the Government in 2006 to review the future development of public service broadcasting in Hong Kong. After extensive discussion and consultation, the Government made its decisions on the matter. In September 2009, the Government announced the way forward for Hong Kong's public service broadcasting and decided that Radio Television Hong Kong ("RTHK") would undertake the work of Hong Kong's public service broadcaster and maintain its status as a government department. Subsequently, in August 2010, the Government promulgated the Charter of RTHK ("the Charter"), which specifies the public purposes and mission of RTHK, the key programme areas of activities undertaken by RTHK and the modes of service delivery, thereby strengthening RTHK's governance.
My reply to the various parts of the question raised by Mr HUI Chi-fung is as follows:
(1) Aside from stipulating that RTHK is editorially independent and that it must adhere to the editorial principles of being impartial in the views it reflects and being immune from commercial, political and/or other influences, the Charter also clearly states that the Director of Broadcasting is RTHK's Editor-in-chief. RTHK has all along been committed to providing professional radio, television and new media services to the Hong Kong people in accordance with the Charter. As RTHK's Editor-in-chief, the Director of Broadcasting has been responsible for making the final editorial decisions in RTHK and accountable for editorial decisions taken by RTHK programme producers.
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(2) The Government attaches great importance to public service broadcasting, and has allocated quite a lot of resources to RTHK to provide radio, television and new media services and to implement new development projects, including the launch and enhancement of digital terrestrial television broadcasting and the implementation of the Community Involvement Broadcasting Service. RTHK's expenditure rose from $469,900,000 in 2010-2011 to an estimated $1,012,500,000 in 2018-2019, representing an increase by 115%. This is higher than the overall increase by 85% in the Government's expenditure for the same period. As for manpower, RTHK's civil service posts of 738 in 2018-2019 represent an increase by 41% (or 215 posts) as compared with 2010-2011. This is in comparison to an increase by 14% in the Government's entire civil service establishment for the same period.
As for the New Broadcasting House ("New BH") project, the Government had submitted to the Public Works Subcommittee of the Legislative Council in December 2013 a funding application of $6 billion for the construction of the New BH in Tseung Kwan O. However, the application was negatived by the Legislative Council. Subsequently in January 2014, the Government reduced the cost to $5.3 billion in response to the request of the Subcommittee Members. Unfortunately, it was ultimately not supported by the majority of Subcommittee members. As such, the New BH project was unable to proceed on schedule as planned.
RTHK and the Architectural Services Department have been examining the proposal, having regard to the views and concerns of the Legislative Council over the cost estimate and scope of the New BH project, with a view to working out a proposal that meets RTHK's operational requirements and can address Members' views.
As the option of constructing a joint-user building is more cost-effective than an independent New BH, we have been exploring along this direction.
(3) With respect to part (3) of Mr HUI's question, the Government has no plan to conduct such a study.
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MR HUI CHI-FUNG (in Cantonese): Mr LEUNG, Secretary, I really feel aggrieved on behalf of RTHK that, on the one hand, it has to take on the mission of public service broadcasting, offering programmes that cater for the needs of minorities and the disadvantaged while staying immune from commercial influences, but on the other hand the resources are tight. The Government has not increased the manpower and expenditure in proportion to the production of RTHK, nor is it willing to build a new broadcasting house for the broadcaster. Instead, it made use of the Director of Audit's Report ("Audit Report") to criticize RTHK for reruns of programmes and insufficient viewership. I think this is unfair. Besides, I have not yet talked about the senior management of RTHK …
PRESIDENT (in Cantonese): Mr HUI, please state your supplementary question directly.
MR HUI CHI-FUNG (in Cantonese): President, I will raise my supplementary question. From time to time, the senior management of RTHK interferes with editorial independence. For example, it banned the slogan "Long live Emperor Xi" and prohibited the live broadcast of the Hong Kong National Party's speech and all sensitive topics alike. Therefore, the supplementary question I wish to raise is: Will the Administration provide resources to support RTHK only if the broadcaster meekly becomes its mouthpiece, or else bleed RTHK dry if the broadcaster has independence and critical thoughts?
SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT (in Cantonese): President, it seems that Mr HUI Chi-fung has not heard the reply I made earlier to the three parts of his main question. If he listens to my main reply again, he will notice that I have, in fact, made my point very clear. The duties of RTHK in its role as a public service broadcaster and government department in Hong Kong are already clearly defined in the Charter. As a government department, RTHK is responsible to the general public. Of course, Members or members of the public who have different opinions on RTHK's service quality, stances and so on can directly raise them to RTHK or the Communications Authority.
However, I do not agree with the false accusations made by Mr HUI just now against RTHK, or the criticisms he levelled at the Government either.
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MR TONY TSE (in Cantonese): President, the recent Audit Report made a number of criticisms on the operation of RTHK, including frequent reruns of old programmes, stalling for time, unsatisfactory viewing rates, and only one supplier for some outsourced programmes. Of course, I hope that the Legislative Council's Public Accounts Committee ("PAC") will hold a public hearing on the Audit Report for more in-depth understanding of the relevant allegations, hopefully without obstruction from the committee members concerned.
I believe that RTHK, as a government department, should follow the established procedures and policies of the Government, including those in the area of procurement. I would like to ask: Is the Secretary aware that it has deviated from the procedures and policies or failed to follow the policies? If so, what follow-up action will the Government take?
SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT (in Cantonese): President, I thank Mr Tony TSE for his supplementary question. First of all, I know that since the Director of Audit submitted the Audit Report to the Legislative Council, PAC has been considering whether to conduct hearings on this part of the Audit Report concerning RTHK. Therefore, subject to President's permission and in accordance with the practice of the Government, I will not make comments on other occasions before PAC has made a decision. However, I am aware that, after the Director of Audit made the Audit Report, the Director of Broadcasting indicated that he respected and adopted the views of the report, and would follow up.
Therefore, with regard to the supplementary question raised by Mr Tony TSE just now, as I said earlier, being a government department as well as a public service broadcaster, RTHK certainly has to be regulated under all the regulations relating to government departments. For example, the Audit Commission can also conduct value-for-money audits of RTHK, advise on its services, and so on. In this respect, our approach is non-discriminatory and no special treatment is otherwise made. In the event that the audit work has found deficiencies within RTHK, the Commerce and Economic Development Bureau, as a Policy Bureau, will definitely handle the case of this government department in an impartial manner.
LEGISLATIVE COUNCIL ― 12 December 2018 4045
MR STEVEN HO (in Cantonese): President, the speech that Andy CHAN Ho-tin delivered at the Foreign Correspondents' Club ("FCC") obviously aimed at promoting the independence of Hong Kong; therefore, the Government's decision to prohibit RTHK from broadcasting it was correct. However, I wish to advise the Government of another issue: Hong Kong people generally believe that some RTHK programmes are still impartial, but some are quite biased, or even suspected of engaging in mud-slinging, no matter who the target is. I would like to ask the Government what tactics, ordinances or provisions are in place to deal with some acts that have somehow overstepped the mark or crossed the bottom line? What actions will the Government take to change such malpractice? How many times has the Government invoked such provisions in the past few years? Have it ever, for example, deducted salaries and issued warning letters. If the Government has not done so, certain people in RTHK will continue to take advantage of the privileged editorial independence to do things contrary to the wishes of Hong Kong people.
I hope the Government understands that failure to do so would make it a toothless tiger.
SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT (in Cantonese): President, paragraph 7 of the Charter clearly states that RTHK will adhere to the following editorial principles: be accurate and authoritative in the information that it disseminates; be impartial in the views its reflects, and even-handed with all those who seek to express their views via the public service broadcasting platform; be immune from commercial, political and/or other influences; and uphold the highest professional standards of journalism. This is an important circumscription that sets the stage for RTHK's work under the Charter.
Of course, as I just said in reply to Members' questions, RTHK is still subject to scrutiny by the public and monitoring by the Communications Authority in the same way other broadcasters are. Therefore, any person who disagrees with a programme in certain respects, as Members said earlier, can lodge a complaint. Then, RTHK needs to provide a response.
It is precisely because RTHK is a public service broadcaster that the Director of Broadcasting takes on the sole responsibility to handle its daily operation that falls within its scope of editorial independence under the Charter. 4046 LEGISLATIVE COUNCIL ― 12 December 2018
Therefore, in this regard, we are convinced that RTHK should continue its work along the same lines, and the Director of Broadcasting should continue to shoulder this responsibility.
MR STEVEN HO (in Cantonese): President, the Secretary has not answered my question.
PRESIDENT (in Cantonese): Mr Steven HO, which part of your supplementary question has not been answered?
MR STEVEN HO (in Cantonese): My supplementary question asked him if the Government has taken any measures to rectify their mistakes in the past few years. If the Secretary thinks that nothing wrong has been done, he can tell the public truthfully.
PRESIDENT (in Cantonese): Mr HO, please sit down. Secretary, do you have anything to add?
SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT (in Cantonese): President, regarding some of the examples mentioned earlier by Members, the Director of Broadcasting has made decisions based on the programme areas and purview under the Charter, and I respect his decisions.
MR LEUNG CHE-CHEUNG (in Cantonese): President, Secretary, as regards Mr HUI Chi-fung's question on RTHK today, the Audit Commission has, in fact, already made severe criticisms that their unsatisfactory viewing and listening rates do not conform to the principle of value for money. Therefore, I believe that the Secretary will not deny the need to review the work of RTHK.
On the other hand, I have recently heard some people criticize RTHK, mainly referring to the problems with its establishment, which is wholly made up of civil servants. In part (2) of his main reply, the Secretary mentioned that the relevant expenditure rose from $400-odd million to $1 billion. LEGISLATIVE COUNCIL ― 12 December 2018 4047
Correspondingly, the number of staff at RTHK has now reached 738, representing an increase of 215 compared with before. All of them are civil servants, and remuneration is paid according to the civil service system. However, is the same true of other media around it?
Therefore, this is exactly the question of whether the way forward for RTHK will be reviewed, which Mr HUI Chi-fung raised earlier. Secretary, could you tell us whether RTHK needs an institutional reform in order to meet the public's demand for value for money and fulfil the public's wish by refraining from spending huge public money while doing nothing?
SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT (in Cantonese): President, I thank Mr LEUNG Che-cheung for his supplementary question and comments. First, regarding the mode of operation in which RTHK plays the role of a public service broadcaster, I have already said in the main reply that the Administration had thorough discussions in 2007, 2008 and 2009, and the final decision rightly answered Mr LEUNG's question. The decision at that time was that RTHK would continue to be a government department. Therefore, judging from this perspective, we also believe that RTHK should be subject to supervision in relation to its identity as a government department. Of course, many key staff members of RTHK are employed under the civil service system, but there is also flexibility to employ staff on non-civil service contracts when necessary.
What I presented earlier in part (2) of the main reply sought to give the response that if some Members held that RTHK had failed to achieve its mission in recent years because of a lack of resources, I would quote some figures for comparison to corroborate that the resources allocated to RTHK for overall expenditure and staffing were not fewer than those to other government departments, and that was without factoring in non-contract staff. Of course, as evident from the facts, the workload of RTHK has increased in the past few years because it was assigned a TV channel, but I agree with Mr LEUNG that, as a government department and public service broadcaster, RTHK certainly has to properly consider the issue of value for money, because this is what the public expect of it. We will also deal with it along the same lines. I believe the Director of Broadcasting has also accepted the Audit Report, and we will continue to follow up as well.
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DR JUNIUS HO (in Cantonese): President, I would also like to follow up on the issue of value for money. The Secretary mentioned just now that, having conducted reviews in 2007 and 2008, the Bureau considered it necessary to allocate more resources to RTHK, but that was a matter of 10 years ago. I have also heard many members of the community comment that there were indeed shortcomings in the work of RTHK. As to whether it was because RTHK has insufficient funding, I beg to differ. Instead, I think RTHK has currently a bloated structure and, with more than 700 civil servants making such programmes, it comes up short in terms of value for money. Will the Secretary consider undertaking a serious review at this juncture? Is it possible to merge the existing RTHK, Information Services Department and other information technology-related departments and then introduce programmes that are pre-eminently functional and more cost-saving? Do not forget that $1 billion is not a small amount, considering that the legal aid service and the Duty Lawyer Scheme in Hong Kong have been working well despite having only $800 million to $900 million of funding. I hope that the Secretary will undertake a review at this time and merge certain government departments. This may be beyond the Secretary's purview, but overall speaking, the Government should exercise macro-control.
SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT (in Cantonese): President, I would like to correct Dr Junius HO, who has just mentioned that the allocation of resources was a matter of 10 years ago. The figures I quoted earlier refer to the fiscal years from 2010-2011 to the latest, so allocation of additional resources has been ongoing for the past decade. In addition, I have explained the reasons, so this is not an issue of resources. As regards Dr Junius HO's proposition about whether RTHK needs to merge with other government departments, first of all, I believe Members also understand and, of course, some people would expect that, as a government department, RTHK should assist the Government in promoting positive messages, among other things. However, RTHK is also a public service broadcaster, which is different from private broadcasters. It has to fulfil some public missions that commercial broadcasters may not consider worth undertaking, such as the production of programmes that are intended to help the disadvantaged and minorities, or worthwhile without commercial support. This is what RTHK, as a public organization, should do. Let me cite an example. RTHK has a dedicated television channel for broadcasting the meetings and deliberations in the Legislative Council every day. It is difficult to say whether there is LEGISLATIVE COUNCIL ― 12 December 2018 4049 economic value, but such work is, in fact, best suited for public service broadcasters. Thus, the work in this area is significantly different in direction from that of other departments mentioned by Dr HO, for example the Information Services Department where I have worked. Therefore, from my personal standpoint, I fail to see a tendency towards merging in this regard.
PRESIDENT (in Cantonese): Second question.
Provision of facilities at Hong Kong Port of Hong Kong-Zhuhai-Macao Bridge for visitors to Hong Kong
2. MR MICHAEL TIEN (in Cantonese): In 2015, the Government commissioned a consultant to conduct a Planning, Engineering and Architectural Study for Topside Development at Hong Kong Boundary Crossing Facilities Island of Hong Kong-Zhuhai-Macao Bridge ("HZMB"), and expected that the study would be completed by February 2017. However, the said study is expected to complete in 2019, as currently shown on the Planning Department's website. In this connection, will the Government inform this Council:
(1) of the reasons why the completion of the aforesaid study needs to be deferred to 2019, and the latest progress and outcome of that study;
(2) whether the facilities recommended for construction in the consultant's latest proposal include a large entertainment centre providing shopping, catering, cinema and other diversified indoor entertainment facilities with characteristics, so as to attract visitors coming to Hong Kong through HZMB on one-day tours to stay in the Hong Kong Port area for spending, thereby alleviating the current situation of an excessive number of visitors flocking to Tung Chung; if so, whether those facilities will be provided outside or within the closed area of the Hong Kong Port; if not, whether the Government will request the consultant to conduct a study in this regard; and
(3) whether it has, by drawing reference from the HZMB Macao Port Park-and-Ride Scheme, examined the provision of car parks at the closed area of the Hong Kong Port for inbound private cars, so that visitors to Hong Kong may, after parking their cars, change to 4050 LEGISLATIVE COUNCIL ― 12 December 2018
public transport for entering the urban areas of Hong Kong together with other passengers in their cars, thereby alleviating the traffic burden on the road networks?
SECRETARY FOR DEVELOPMENT (in Cantonese): President, after consulting the Transport and Housing Bureau, my reply to various parts of the question is as follows:
The Hong Kong Boundary Crossing Facilities Island of Hong Kong-Zhuhai-Macao Bridge ("BCF Island") is located at the landing point of the Hong Kong-Zhuhai-Macao Bridge ("HZMB"). It is close to the Hong Kong International Airport and is a key gateway for Hong Kong to connect the Pearl River Delta and the rest of the world. To explore the optimum utilization of the 150-hectare BCF Island, the Civil Engineering and Development Department ("CEDD") and the Planning Department ("PlanD") commissioned the "Planning, Engineering and Architectural Study for Topside Development at the Hong Kong Boundary Crossing Facilities Island of Hong Kong-Zhuhai-Macao Bridge" in January 2015. The initial concept of the study was to develop economic industries such as tourism, retail, creative industries, exhibition tourism, commercial and professional services as well as logistics on the BCF Island.
To consult public views on the initial development concept, CEDD and PlanD conducted a community engagement exercise in mid-2015. The public generally welcomed conducting studies for the topside development, supported the strategic goal of "capitalizing on the bridgehead economy" and agreed to the topside development of diversified economic industries. At the same time, the public also proposed that traffic connection between the topside development and the other districts and provision of adequate parking spaces for local and incoming vehicles should be considered in detail in the study. Some views also suggested the study team comprising the relevant departments and consultants to consult the Airport Authority Hong Kong ("AAHK") for coordination of proposed developments on the Airport Island and the BCF Island with a view to enhancing Hong Kong's role as a regional transhipment centre. Based on the recommendations and opinions collected in the community engagement exercise, the study team reviewed the planning proposals and implementation plans for different land uses (including the inbound private car park) and conducted relevant technical feasibility assessments (e.g. traffic impact assessment, environmental impact assessment, etc.) and financial viability assessment. The LEGISLATIVE COUNCIL ― 12 December 2018 4051 study process needs to take into account various factors, including the development constraints of the BCF Island and the development opportunities of the adjacent Airport Island.
In terms of constraints, since most of the land in the BCF Island falls within the closed area, except the development projects for the closed area, the topside development and its access must be segregated from the closed area due to security requirements. We also need to ensure that the development proposal will not affect the daily operation as well as the security requirement and arrangement for the customs/quarantine clearance of the crossing boundary point. Since the BCF Island is in proximity to the Airport, the building height on the island is subject to airport height restrictions. The planning of the BCF Island also needs to consider factors such as noise impacts. The above constraints will affect the topside development of the BCF Island, such as the inappropriateness for residential development due to aircraft noise. On the other hand, the above constraints will affect the development costs of the topside development of the BCF Island. If individual land use proposal involves conversion of most or even the whole part of the closed area into non-closed area for development, we need to construct large-scale platforms and elevated transport infrastructure to segregate the topside development from the closed area. In addition, to ensure the 24-hour normal and safe operation of the boundary control point, construction works need to be carried out in phases, and sufficient temporary traffic, security and safety protection measures should be provided during the construction period. Therefore, as compared with conventional land development projects, the topside development would involve higher development costs. All these will affect the technical and financial viability of different land use proposals.
As for the adjacent Airport Island, AAHK is actively promoting a number of large-scale development projects in recent years. Among them, construction works for the SkyCity's hotel project with more than 1 000 rooms commenced in 2017 for completion in 2020 and 2021. In addition, the development and management rights of the SkyCity's integrated retail, dining and entertainment facilities with an area of 350 000 sq m were granted in April 2018 for completion in phases from 2023 to 2027. Compared with the existing Cityplaza shopping mall with an area of about 100 000 sq m and the Harbour City shopping mall of about 200 000 sq m, the SkyCity will become the largest retail, dining and entertainment complex in Hong Kong upon completion. It will provide facilities such as transport interchange and at least 2 800 parking spaces to meet the needs of visitors. In June 2018, AAHK also granted the development and management 4052 LEGISLATIVE COUNCIL ― 12 December 2018 rights of a high-end logistics centre covering an area of approximately 5.3 hectares at the southern cargo area of the Airport. The logistics centre is expected to be in operation in 2023 and would further strengthen the leading position of the Hong Kong International Airport as an international aviation and cargo hub. Besides, the Government will discuss with AAHK on the second phase expansion plan of the AsiaWorld-Expo.
The above mentioned latest developments on the Airport Island cover a wide range of airport-related industries such as hotels, retail, dining, entertainment, logistics and exhibitions. To ensure synergy be created between the BCF Island and the development on the adjacent Airport Island, the Chief Executive announced in this year's Policy Address that the Government would invite AAHK to submit a development proposal for the topside development of the BCF Island. The government's vision is that the topside development of the BCF Island, together with the Airport's Three-runway System, the high-end logistics centre, the SkyCity development project and the future development of the AsiaWorld-Expo on the Airport Island, will turn Lantau into an "Aerotropolis" connected to the Guangdong-Hong Kong-Macao Greater Bay Area and the world. After announcement of the Policy Address, the Government formally issued an invitation letter and received a reply from AAHK last month agreeing to submit a proposal which includes exploring the feasibility of providing an inbound private car park at the topside development. The development proposal will cover the entire BCF Island including the closed area on the Island.
After completion of the study and submission of development proposal by AAHK, the Government will carefully consider relevant recommendations before finalizing the development plan for the topside development of the BCF Island and will consult the public in due course. Although the study on the topside development of the BCF Island will be extended as a result, this arrangement will facilitate the long-term development of the BCF Island. It will also help create an "Aerotropolis" with high economic efficiency and diversified employment opportunities to consolidate and enhance Hong Kong's position as an international business centre.
On the other hand, although the topside development of the BCF Island is still under study, the Government has been monitoring closely the influx of visitors into Tung Chung and other areas since commissioning of the HZMB and has held a number of inter-departmental meetings. Working with bus companies LEGISLATIVE COUNCIL ― 12 December 2018 4053 and local tourism trade, a number of measures have been implemented to divert the flow of visitors within a short period of time. These measures include actively arranging for setting up temporary small-scale shops in the passenger clearance building of the HZMB BCF, launching an online pre-booking system for coaches to improve the queuing and boarding arrangement for feeder bus at the boundary control point. In the medium term, we believe that the large-scale retail, dining and entertainment complex of the SkyCity, which are expected to be opened in phases from 2023, would help divert visitors.
MR MICHAEL TIEN (in Cantonese): First of all, I have to praise the Secretary for his mentioning of quite a number of new measures, with some being specifically described, in his reply to an oral question. I really read it with great interest and hope that the Government will do the same in many of its future answers.
The Chief Executive announced in the Policy Address that AAHK would be invited to deal with this project, to which I give my agreement. As explained by the Secretary earlier in the main reply, if the topside development involves conversion of most of the closed area into non-closed area, large-scale platforms and elevated transport infrastructure facilities will need to be constructed with a lot of money and the construction works will also need to be carried out in phases. This will be quite disturbing to the public. I thus think that the best way is that the greater part of that area of 3 million sq ft should be used for closed area development.
I have discussed with AAHK in this respect. Upon completion of the SkyCity, 2 800 parking spaces will be provided for vehicles with dual Hong Kong/Mainland and Hong Kong/Macao licence plates or local vehicles, but not for vehicles with only Macao or Mainland licence plates. Besides, this SkyCity with an area of 3 million sq ft is well equipped with full array of facilities. It will not have any …
PRESIDENT (in Cantonese): Mr TIEN, please raise your supplementary question directly.
4054 LEGISLATIVE COUNCIL ― 12 December 2018
MR MICHAEL TIEN (in Cantonese): All right. Basically, it is very simple, as the public want to have a synergy effect. They suggest constructing a car park with 3 000 to 4 000 parking spaces within the closed area so that more people can go shopping after parking their vehicles there. In this regard, I have asked the opinions of the public about building a shopping mall and, within the closed area …
PRESIDENT (in Cantonese): Mr TIEN, please raise your supplementary question directly.
MR MICHAEL TIEN (in Cantonese): All right. It will be in the form of a budget shopping mall selling some daily necessities, i.e. the products purchased by parallel traders. It will have no conflict with the SkyCity and will be welcome by the public.
May I ask the Secretary whether it is basically feasible if most of these facilities, such as the car park and the budget shopping mall, are outside the immigration area?
SECRETARY FOR DEVELOPMENT (in Cantonese): President, I thank Mr TIEN for his question. Indeed, when the Government invited AAHK to consider about the topside development of the BCF Island, we also asked it to conduct a study on the construction of a large-scale car park. From the angle of the Government, we think that this is feasible. But sure enough, a related study has to be undertaken.
In regard to conducting certain retail activities on the BCF Island, the Government's proposal in 2015 has actually included some retail activities. Therefore, I share Mr TIEN's opinion. Our initial view is that it is feasible to conduct retail activities. But as regards the actual feasibility and the pragmatic scale, they will be explored in the study by AAHK and will be further studied by the Government afterwards.
MR YIU SI-WING (in Cantonese): President, there are no coach parking spaces under the existing planning of the BCF Island, and at the boundary control point, there are now eight parking spaces for passenger pick-up purpose LEGISLATIVE COUNCIL ― 12 December 2018 4055 and also eight spaces for drop-off purpose. The Government adopts a quota system because it is worried that too many coaches will go to the boundary control point to pick up passengers. Earlier on, the Secretary also mentioned the quota system and the pre-booking arrangement. In the long term, this approach does not facilitate the significant increase of visitors on the BCF Island. In my view, since the Secretary also mentioned that there would be a future planning of the BCF Island and the facilities concerned would be reconsidered, will the Secretary consider providing more coach parking spaces in the topside development of the existing BCF Island with a view to addressing the current shortage of coach parking spaces?
SECRETARY FOR DEVELOPMENT (in Cantonese): President, I thank Mr YIU for his question. At the present stage, we will not rule out any possibility. The views given by Mr YIU just now are very precious. First of all, AAHK is now watching the live broadcast of this meeting and can listen to our questions and answers. We will also relay the views of Mr YIU to AAHK, and I do not see any reason why it will ignore this aspect. However, concerning the result after the views are relayed to AAHK, I do not want to make a guess at this moment, anyway, let us conduct a study first.
MS ALICE MAK (in Cantonese): President, I notice that the content and facilities in the Secretary's main reply which interested Mr Michael TIEN very much will only be realized by 2023 and it is now 2018. These facilities will only be put in place and operated in 2023, even later than the commissioning of the link road with Tuen Mun. May I ask the Secretary how he will, during the interim period, address the current problem of a large number of visitors coming to Hong Kong through HZMB on one-day tours and flocking to other areas, thus affecting local people's livelihood? After the commissioning of the link road with Tuen Mun, will the Government have any measure to prevent another influx of visitors not only into Tung Chung, but also into Tuen Mun?
PRESIDENT (in Cantonese): Ms MAK, your question is not within the scope of the main question. Secretary, will you answer this question?
4056 LEGISLATIVE COUNCIL ― 12 December 2018
SECRETARY FOR DEVELOPMENT (in Cantonese): President, I will answer briefly. In fact, during last week or the week before last, Secretary for Transport and Housing Frank CHAN mentioned in this Chamber some short-term measures. For instance, boarding of passengers is allowed for bus route B6 at the same time at the Tung Chung Station; and Mainland tours can pre-book the service of the shuttle bus, also known as "golden bus", one day instead of a few days before using the service. At present, the various short-term measures are under the monitoring of an inter-departmental working group of the Government, and I only mention one or two of these measures so that Ms MAK can learn about the facts. As we all know, for tourists or tours to come to Hong Kong from Zhuhai by "golden buses", the service actually needs to be booked online and no instant tickets can be sold at the moment. Anyway, the number of passengers concerned was recorded to have dropped from the daily average of about 16 000 to about 11 000 in early December. I have recently paid a site visit to the boundary control point. The number of visitors handled daily at the boundary control point has dropped from nearly 100 000 during the peak period to about 60 000 or 70 000 at present. Hence, I think these short-term measures are conducive to alleviating the substantial pressure on Tung Chung.
MR TONY TSE (in Cantonese): President, I think the Government has done very poorly in the planning of the topside development of the BCF Island. Because in 2002 and 2003, the planning of HZMB started; in 2005, the design was basically completed; and in 2009, the construction commenced. However, it was only until 2015 that there was a consultancy study on the use of the BCF Island. I actually do not understand why the study could not be commenced earlier but had to wait until 2015. Were there any changes in the factors? At the same time, I believe there will still be a period of time before the long-term planning can be completed and the construction work be commenced. In the short term, how will the Government make use of the BCF Island with an area of up to 150 hectares?
SECRETARY FOR DEVELOPMENT (in Cantonese): President, I thank Mr TSE for his question and views. Of course, we can now ask why the planning concerned was not considered a decade ago. But it is very difficult for me to give a detailed explanation in respect of the Government's wisdom back then. I believe one of the reasons may be the less urgent demand for land in Hong Kong a decade ago. Mr TSE may recall that in early 2000s, the LEGISLATIVE COUNCIL ― 12 December 2018 4057 development density in individual districts was even reduced, and it was only raised in recent years under appropriate circumstances. Until the previous term of the Government thought that the usage of this 150-hectare BCF Island could be considered, we then pressed ahead full steam with the planning.
As I also mentioned in the main reply, the incumbent Government thinks that since the BCF Island is in operation around the clock, the cost will be relatively high. The various kinds of development on the Airport Island, including the future projects and those under construction as I just mentioned, will surely be commissioned in phases, while the commercial development projects of SkyCity with an area of 3.5 million sq ft will be commissioned gradually from 2023. In our view, inviting AAHK to conduct a study should be conducive to achieving a synergy effect, which I think Mr TIEN has also mentioned in his question. On the Airport Island and the BCF Island, there are many so-called airside activities and the areas can also be well coordinated for effective allocation and utilization. This is the present situation. I hope that this answer can help explain some history.
MR LEUNG CHE-CHEUNG (in Cantonese): President, I cannot agree more with Mr Tony TSE's view concerning the planning issue, and of course, the Secretary thinks that we should not pursue the previous Government over this matter.
However, this reflects the lack of careful consideration of the whole Government in the planning and construction of large-scale infrastructural facilities, resulting in the present situation, and that is, many visitors have nowhere to go after coming to Hong Kong but flock to Tung Chung. Therefore, the crux of the issue is how to make a new planning without delay and this is what we want.
Nonetheless, the parking issue mentioned by Mr Michael TIEN is also highly important. I would like to ask the Secretary whether more thought will be given to the shortage of parking spaces or the construction of a large-scale car park, for example, in the new phase of the 150-hectare BCF Island. In fact, the shopping centre also needs a large number of parking spaces. In this regard, will the authorities provide additional parking spaces on the original basis?
4058 LEGISLATIVE COUNCIL ― 12 December 2018
SECRETARY FOR DEVELOPMENT (in Cantonese): President, I thank Mr LEUNG for his supplementary question.
Perhaps I will provide more details. At present, there are 650 parking spaces on the BCF Island, but they are only for use by northbound motorists. If Hong Kong people want to go to the Mainland through HZMB, they can drive to the BCF Island and park their vehicles there, and these parking spaces are already available. A few days ago, I particularly made a visit there and found that the utilization rate was not high. Basically if you drive there, you should be able to find vacant parking spaces.
As regards southbound traffic, meaning the vehicles from the Mainland to Hong Kong without dual Hong Kong/Mainland licence plates but with only Mainland licence plates, there is currently no provision of any parking spaces for them on the BCF Island. When we invited AAHK to conduct a study on the future topside development of the BCF Island, we have precisely pointed out the need to study the feasibility of providing a large-scale car park in the topside development. Hence, Mr LEUNG, our answer is positive, and this will happen if the direction of study can remain positive.
IR DR LO WAI-KWOK (in Cantonese): President, contrary to what Mr Tony TSE said, an early planning was actually unnecessary. I recall that a couple of years ago when the Government needed to ask for additional funding for the BCF Island project, some members of the Public Works Subcommittee already queried the authorities for not taking the opportunity to improve the car-parking, retail and catering facilities of the BCF Island.
It was not until the commissioning of HZMB that we realized that the BCF Island was so popular with visitors. The "overcrowding of visitors" in Tung Chung has already proved the lack of forward vision on the part of the Government in this regard. Hence, I think we really should not discuss something so far away from now or how to make use of the large-scale facilities of the SkyCity.
My question is: How are the authorities going to increase the facilities on the BCF Island in the short term so that the needs of the large number of visitors can be met there?
LEGISLATIVE COUNCIL ― 12 December 2018 4059
SECRETARY FOR DEVELOPMENT (in Cantonese): President, I thank Ir Dr LO for his supplementary question.
In the short run, as I have briefly mentioned when answering Ms MAK's supplementary question earlier on, we will try to divert visitors through the arrangement of buses and alignment of the routes.
Ir Dr LO asked about the facilities on the BCF Island. It so happened that a few weeks ago, a temporary pop-up shop was opened in the passenger clearance building, selling formula milk or products which Mainland visitors are interested to purchase in Hong Kong, as the Honourable Member mentioned earlier. Some people criticized previously that it might not be most desirable to have retail shops operating at the arrival hall, because visitors will not do shopping when they arrive in Hong Kong but they will have to go back to the arrival hall when they want to do shopping before leaving the territory. As I understand, a retail shop of scale should be able to open at the departure hall in the first quarter of next year. We hope that these measures can further alleviate the problem.
PRESIDENT (in Cantonese): Third question.
Regulation of cannabis
3. MR CHAN HAK-KAN (in Cantonese): President, the Canadian authorities have relaxed the control on recreational cannabis since October this year. Nationals of that country may purchase cannabis as well as food products and drinks containing cannabis from licensed suppliers. Given the frequent economic and trade exchanges and flows of residents between Canada and Hong Kong, some members of the public are concerned that the trend of consuming cannabis may spread to Hong Kong. Moreover, quite a number of parents of students are worried that their children who are studying or participating in study tours in Canada may bring cannabis or food products containing cannabis into Hong Kong when they return to the territory, thereby contravening the law inadvertently. In this connection, will the Government inform this Council:
(1) whether the Hong Kong Economic and Trade Office in Toronto ("Toronto ETO") of Canada has publicized the perils of cannabis among the Hong Kong people who are studying, touring or operating business there, and reminded them and people intending 4060 LEGISLATIVE COUNCIL ― 12 December 2018
to visit Hong Kong that the laws of Hong Kong prohibit the bringing of food products containing cannabis into Hong Kong; if Toronto ETO has, of the details;
(2) whether it will step up the interception of the various types of food products or gifts containing cannabis to prevent them from being brought into Hong Kong; and
(3) of the respective numbers of cases of law enforcement agencies smashing cannabis plantations and seizing food products containing cannabis, as well as the number of prosecutions for cannabis-related crimes and the penalties generally imposed on the convicted persons, in the past three years; whether it will step up law enforcement and publicity efforts to combat cannabis-related crimes?
SECRETARY FOR SECURITY (in Cantonese): President, in Hong Kong, cannabis and tetrahydro-cannabinol ("THC"), a major compound of cannabis, are dangerous drugs controlled under the Dangerous Drugs Ordinance ("the Ordinance") (Cap. 134, Laws of Hong Kong). Any products, including food products and beverages, that contain cannabis or THC are also controlled under the Ordinance. Under the Ordinance, trafficking in dangerous drugs, or illicitly importing to and exporting from Hong Kong, procuring, supplying, manufacturing, or dealing in or with dangerous drugs, constitutes a criminal offence. The maximum penalty is life imprisonment and a fine of $5 million. Illicitly possessing, or smoking, inhaling, ingesting or injecting dangerous drugs is subject to a maximum penalty of imprisonment for seven years and a fine of $1 million. The Police and the Customs and Excise Department ("C&ED") as the law enforcement agencies have been strictly enforcing the law to combat offences related to drugs, including cannabis.
Cannabis is addictive and can cause serious harms to physical and mental health. According to research studies in different places around the world (including those conducted by the World Health Organization), cannabis abuse has severe long-term harmful effects, such as causing irreversible impairment to cognitive functions, mental illness, anxiety and hallucinations, respiratory diseases, cardiovascular diseases and cancer. The United Nations has placed cannabis under drug control, requiring countries to exercise stringent regulation LEGISLATIVE COUNCIL ― 12 December 2018 4061 in respect of the production, manufacture, export, use, possession, and so on, of cannabis. The Government and non-governmental anti-drug service organizations have been implementing various forms of preventive education and publicity on the harms of cannabis abuse and relevant offences. With the legalization of recreational cannabis in individual overseas countries and regions, the Government will strengthen publicity and educational measures with a view to facilitating members of the public, especially young people, to have a correct understanding of the harms of cannabis abuse, and refrain from trying the drug under the influence of others or the misconception that cannabis is not harmful. The public will be reminded not to bring cannabis or any products that contain controlled cannabis compounds into Hong Kong, as this is against the law. Law enforcement agencies will also strengthen enforcement against cannabis as appropriate.
For the three parts of the question raised by Mr CHAN Hak-kan, my consolidated reply is as follows.
While Canada has legalized recreational cannabis with effect from 17 October this year, the relevant legislation prohibits the sale or distribution of cannabis to any person aged under 18, or bringing cannabis into or out of the country. Sale of cannabis food products and drinks is still unlawful in Canada. With the legalization of recreational cannabis in Canada and individual overseas regions, C&ED issued a press statement in November this year to remind members of the public of the harms of cannabis abuse and the requirements under the Ordinance. The statement has particularly mentioned that as food products and drinks containing cannabis or THC may be available for sale in some overseas countries, members of the public should pay attention to the packaging labels of the products concerned while making purchases in those regions as well as the relevant domestic legislation in relation to cannabis, so as to avoid breaching the law inadvertently. The statement has also reminded members of the public that cannabis and THC are dangerous drugs in Hong Kong, and it is a criminal offence to possess or bring such products into Hong Kong.
The Hong Kong Economic and Trade Office (Toronto) ("Toronto ETO") has already uploaded the above mentioned press statement onto its web page. Through the regular distribution of its e-news bulletins, Toronto ETO has also reminded local business associations, community groups and individuals, especially local Hong Kong student groups, of the legislative control of cannabis in Hong Kong and the harms of cannabis abuse.
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As for law enforcement, C&ED has, based on the principle of risk management, strengthened the inspection of travellers and cargoes at control points to interdict the import of cannabis or products containing cannabis or THC. C&ED has also liaised with major air, marine and express cargo operators, reminding them to maintain alertness to goods suspected to contain cannabis and related products, and to report to C&ED promptly in such cases.
From 2015 to the first half of 2018, the Police and C&ED detected a total of 18 cases involving cannabis plantations, and C&ED seized a small quantity of food products containing THC in five other cases. One thousand one hundred and eighty-three persons arrested for cannabis-related offences were prosecuted. Generally, the majority of persons convicted of serious drug offences (such as manufacturing, trafficking in or possession of a large quantity of drugs) would be sentenced to imprisonment, while those convicted of minor drug offences (such as possession of a small quantity of drugs for self-consumption) may be sentenced with other forms of penalty (such as admission to drug addiction treatment centres, probation orders or a fine). The court will decide the actual penalty in each individual case having regard to its practical circumstances.
As mentioned above, with the legalization of recreational cannabis in individual overseas countries and regions, the Government will strengthen relevant publicity and education. Law enforcement agencies will, based on intelligence and risk management, stringently and proactively combat cannabis-related offences. In addition, the Centre for Food Safety has reminded food importers not to import any food products and drinks that may contain cannabis or cannabis compounds. Government departments concerned will continue to closely monitor the situation, and follow up and investigate any suspicious case in a timely manner.
MR CHAN HAK-KAN (in Cantonese): President, Members may not have a clear idea about cannabis food products. I have in hand two photographs of candies containing cannabis. They look very colourful and attractive. It is definitely possible that people may consume them by mistake or under inducement. Actually, such candies can be bought online very easily, and the relevant websites also state that they can be shipped directly to Hong Kong.
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May I ask whether the Secretary has stepped up law enforcement to prevent cannabis food products from finding its way into Hong Kong during the peak period of drug abuse nearer the time of Christmas? And, has he communicated with online platforms to remind them not to deliver such products to Hong Kong?
SECRETARY FOR SECURITY (in Cantonese): President, many thanks to Mr CHAN for his supplementary question.
All along, law enforcement agencies have kept a close watch on the presence or otherwise of food products suspected of containing cannabis or THC on the market. Over the past three years, C&ED has found a small quantity of food products containing THC from the import or re-export cargoes in five cases. But the work and experience of law enforcement agencies have not shown any massive influx of food products or beverages containing cannabis or THC into the market. C&ED will strength inspection of travellers and cargoes at various control points based on the risk management principle, so as to interdict the import of products containing cannabis or THC into Hong Kong. C&ED has also approached air, marine and express cargo operators and reminded them to remain vigilant and report the relevant cases.
As far as I understand, in general, the packaging of cannabis food products that may be lawfully offered for sale under the law in overseas regions will indicate that the products contain cannabis. One example is the affixation of labels "This product contains cannabis" or "This product contains THC". When people see such food products in overseas places, they should read the labels carefully and avoid bringing them into Hong Kong because this is against the law. I also hope that people can report such cases.
Certainly, C&ED will also strictly enforce the law. Regarding the specific situation mentioned by Mr CHAN, I wish to say that apart from performing routine searches on suspicious travellers or conducting searches based on its risk assessment, C&ED will also undertake inspection with the help of drug sniffer dogs. With the help of 62 drug sniffer dogs, C&ED will proactively intercept people at various boundary crossings to find out if anyone attempts to bring the relevant products into the territory. Besides, C&ED will use X-ray scanners and trace detectors when enforcing the law, and it has also procured new and advanced equipment, such as ion scanners for the specific analysis of particle samples and also the laser-based Raman spectroscopy for analysis purpose. 4064 LEGISLATIVE COUNCIL ― 12 December 2018
C&ED is capable of detecting various drugs (including cannabis) carried by travellers entering the territory and in turn preventing the entry of cannabis into Hong Kong.
Regarding the situation mentioned by Mr CHAN, I think education is of equal importance. So, apart from conducting publicity through Toronto ETO as I mentioned just now, the Narcotics Division ("ND") has also uploaded onto its website a great deal of basic information on the nature and hazards of cannabis, and so on. Besides, ND has also drawn on new media, such as launching video clips on YouTube jointly with "Internet celebrities"―as Members all know, "Internet celebrities" have greater appeal on the Internet. Furthermore, the Police will also launch video clips on cannabis during the summer vacation, so as to enable young people to realize the hazards of cannabis, and remind people to be more careful when they see any food products or beverages which may contain cannabis in overseas places and avoid bringing them into Hong Kong.
MS CHAN HOI-YAN (in Cantonese): President, Members all know that apart from Canada, various countries which are popular tourist destinations among Hong Kong people have already legalized recreational cannabis. Just now, the Secretary specifically talked about ND's website. I have also visited that website and found that it does mention the physical harms of cannabis. But we are now discussing some new food products. Some manufacturers have packaged cannabis food products as candies or biscuits, and "THC" is often used on their labels.
May I ask how the authorities can do better in this respect? Because as far as I can see, the authorities have failed to step up publicity on such new candies or biscuits on their websites or publicity leaflets. As a result, children and students are unable to know that this kind of new drugs may have already found their way into Hong Kong.
SECRETARY FOR SECURITY (in Cantonese): Many thanks to Ms CHAN for her supplementary question. Any products containing THC are unlawful because THC itself is already a dangerous drug. So, any candies, food products or beverages containing THC are unlawful. We have heard the Honourable Member's views on enhancing publicity. We will continue to follow it up.
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To our understanding, Canada's law on legalizing recreational cannabis still prohibits the sale of cannabis food products or beverages. It only permits the possession of 30 g recreational cannabis or below, and this is restricted to adults aged above 18. And, it also forbids anyone to carry cannabis products into or out of the country. Therefore, we will tell people clearly about Canada's statutory requirements in this respect.
I agree that we should conduct continuous publicity and also consider the adoption of various channels in order to get the messages through to as many people as possible. Speaking particularly of young people, the authorities' various anti-drug programmes invariably include the element of enhancing publicity on the hazards of drugs and cannabis. For example, the drug eradication or elimination messages frequently disseminated by us together with non-governmental organizations precisely include the relevant contents. We also seek to raise students' awareness of cannabis through the Healthy School Programme and explain to people that any products (such as food products and beverages) which contain THC are unlawful.
PROF JOSEPH LEE (in Cantonese): President, the replies given by the Secretary over the past 10 minutes or so are very comprehensive. In the future, I do not wish to hear any reports that beverages or food products with cannabis or cannabis-like ingredients have found their way into Hong Kong through the Internet or other channels and done harm to young people. I do not wish to hear such reports any more especially after Christmas.
President, this is not the supplementary question I intend to ask. According to the Secretary's comprehensive replies, it looks like Hong Kong should probably have a "zero" risk in this respect. The focus of Mr CHAN Hak-kan's main question is that Canada's legislative amendments have aroused the concern that youngsters or other people may bring cannabis into Hong Kong. The second last paragraph of the Secretary's main reply states that during the period from 2015 to 2018, 1 183 people have been convicted upon prosecution. May I ask whether the Secretary can provide Members with one figure for this period? How many young people have been convicted of bringing cannabis food products or beverages into Hong Kong?
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SECRETARY FOR SECURITY (in Cantonese): President, people arrested for cannabis-related drug offences accounted for around 10% of all people arrested for drug offences. The rate of successful prosecution in serious drug cases stands at around 80% every year. The Honourable Member asked about the number of people involving various types of drugs. In the first half of 2018, 776 methamphetamine abusers were reported, and 48 of them aged below 21. The figure for triazolam, midazolam and zopiclone abusers was 509, while the figure for cocaine abusers was 516, and 146 of them were people aged below 21. Cannabis abusers amounted to 220 in the first half of 2018, and 75 of them were young people (aged below 21).
The court has not compiled any particular statistics on the numbers of convictions based on drug types. The reason why we can tell the number of people arrested for cannabis-related drug offences is that the Police has kept the relevant figure. Nevertheless, we have not kept any overall statistics on the numbers of convictions based on drug types. Having said that, I wish to point out that the number of people arrested for cannabis-related drug offences mainly falls within the range of 300 and 400 every year. The figure for this year is around 200-odd so far, and it is comparable to the figures for previous years.
DR HELENA WONG (in Cantonese): President, on 7 November, I asked a question about the importation of food products and beverages containing cannabis, and it was likewise the Secretary for Security who answered that particular question. His replies last time and also this time have enabled us to know that the importation of food products and beverages containing cannabis or THC is prohibited. But it looks like the Government has failed to explain clearly whether products containing cannabidiol, which is a cannabis compound, contravene the Ordinance. And, it also seems that this substance is not designated as a dangerous drug under the Ordinance. Is it unlawful to bring to Hong Kong pharmaceutical products, food products or beverages containing cannabidiol? Are products containing solely cannabidiol without THC against the law? Can the Government give a categorical reply? Because cannabidiol also functions as analgesics.
PRESIDENT (in Cantonese): Dr WONG, you have already stated your supplementary question. Please sit down. Secretary, please answer.
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SECRETARY FOR SECURITY (in Cantonese): Regarding this supplementary question from the Honourable Member, I can tell people very clearly that under the Ordinance, THC is designated as a dangerous drug, whereas cannabidiol is not. But we must be very careful because traces of THC may still be found regardless of how sophisticated the technologies used to extract cannabidiol have become. What I mean is that in the case of extracting cannabidiol from cannabis, even though cannabidiol is not designated as a dangerous drug under the Ordinance, traces of THC may still be found irrespective of how sophisticated the technologies used in the extraction process have become. But whether the relevant products are completely without THC must be determined by laboratory tests. We know from scientific literature or the enforcement process that what I have just said is widely recognized―traces of THC may still be found regardless of what sophisticated technologies are used to extract cannabidiol. Any products containing THC are dangerous drugs. People must be very careful about this.
PRESIDENT (in Cantonese): Fourth question.
Promoting the popularization of electric private cars
4. MR KENNETH LEUNG (in Cantonese): Since 1 April last year, the Government has reduced the concessions on first registration tax ("FRT") for electric private cars ("e-PCs") from full exemption in the past to putting in place a cap at $97,500. The measure led to a significant drop in the number of first registered e-PCs, which plunged from 4 294 in the six-month period prior to its implementation to 300 in the 17-month period after its implementation. However, the number of first registered fuel-powered private cars rose from 19 382 in the six-month period before the implementation of the measure to 21 345 in the six-month period after. On the other hand, among the public chargers for electric vehicles across the territory, about 40% are standard chargers that have relatively lower charging speed. As at August this year, less than 2% of private cars are e-PCs. In respect of promoting the popularization of e-PCs, will the Government inform this Council:
(1) whether it will reinstate the full exemption of FRT for e-PCs; if so, of the details; if not, the reasons for that;
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(2) given that the Government introduced, at the end of February this year, a "One-for-One Replacement" Scheme under which a vehicle owner who scraps an old private car and buys a new e-PC may enjoy a greater amount of FRT concession, of the respective numbers of applications received, approved and rejected by the Government so far, and the reasons for some applications being rejected; as there have been criticisms that the eligibility criteria of the Scheme are stringent, whether the Government will review the effectiveness of the Scheme and relax the eligibility criteria; if so, of the details; if not, the reasons for that; and
(3) whether it has plans to upgrade, in the coming two years, the public chargers to medium or quick chargers across the board; if so, of the estimated expenditure, work timetable and detailed plans; if not, the reasons for that?
SECRETARY FOR THE ENVIRONMENT (in Cantonese): President, my responses to the questions raised by Mr Kenneth LEUNG are as follows:
(1) The Government's standing policy is to encourage the public to use public transport as far as possible. For members of the public who need to acquire private cars ("PCs"), we encourage them to choose electric private cars ("e-PCs").
When drawing up the first registration tax ("FRT") concessions for e-PCs, the Government considered that while refraining from promoting the overall growth of PCs causing traffic congestion and aggravating roadside air pollution, vehicle buyers could be aptly encouraged to go for electric vehicles ("EVs") when purchasing PCs. Taking account of these two factors, the technological development and market situation of EVs, as well as road traffic conditions and views of stakeholders, we decided to continue with the FRT concessions of up to $97,500 for e-PCs from 28 February 2018 to 31 March 2021. For the same period, a new "One-for-One Replacement" Scheme ("the Scheme") has also been introduced to allow eligible existing vehicle owners who buy a new e-PC and scrap their own eligible old PC to enjoy a higher FRT concession of up to $250,000.
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With ongoing technology development in e-PCs, a number of vehicle manufacturers have already marketed relatively more affordable e-PC models which are priced between $240,000 and $400,000 (FRT excluded), with their laboratory-tested driving range reaching 280 km to 400 km and fairly meeting most Hong Kong drivers' general needs of daily mileage of only a few tens of kilometres. Out of the 15 e-PC models type-approved by the Transport Department ("TD") in the local market, most of them (eight models) are eligible for full FRT exemption under the Scheme. The Scheme would be able to motivate more vehicle manufacturers to introduce different types of e-PCs, particularly the relatively more affordable models, in the local market to popularize the use of e-PCs.
The Government will, as scheduled, review the existing FRT arrangements for EVs before their expiry on 31 March 2021, and has no plan to revise the established arrangements at this stage.
(2) To be eligible for the Scheme, the old PC must have been first registered in Hong Kong for at least six years, the vehicle owner must have been the registered owner of the old PC for three years or more without interruption, and the old PC must have been licensed for at least 20 months within the 24 months immediately before its de-registration. The objective of such measures is to prevent people from gathering a large number of old PCs from overseas or second-hand markets to participate in the Scheme for profit making. Data shows that, by the time the Scheme ends on 31 March 2021, the total number of PCs meeting the two criteria of old PC having been first registered for six years or more and its owner having owned the PC for three years or more without interruption will be around 470 000, accounting for about three-fourth of the total number of PCs, which is not a small number. At this stage, the Government has no plan to revise the application criteria for the Scheme.
Till the end of this November, TD received a total of 274 applications under the Scheme, of which 268 were approved and three were rejected. The remaining three are still under process. For the three rejected applications, one is rejected because the old PC has been first registered in Hong Kong for less than six years, and the other two fail to meet the criterion that the old PC must have been licensed for at least 20 months.
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(3) Regarding the charging arrangements for e-PCs, it is the Government's policy direction that e-PC owners shall perform daily charging of their e-PCs by using charging facilities at their home, workplaces or other suitable places. The public charging network in Hong Kong mainly serve as supplementary charging facilities, enabling e-PC owners to top up their e-PC batteries to complete their journeys when necessary. They do not serve as daily charging facilities or their alternatives.
In a relatively small place like Hong Kong, the daily mileage of PCs in general is only a few tens of kilometres. By charging with medium chargers for less than an hour, EVs may run for at least another 30 km, implying that the supplementary charging facility is sufficient to top up their batteries at times of occasional needs. The installation cost of quick chargers is expensive and their electricity demand is very high. The power supply systems in some buildings may not be able to cope with such electricity demand. Hence, medium chargers would serve as the backbone of public charging facilities.
The Government has been progressively upgrading the standard chargers installed at those government car parks that are open to the public and managed by TD or Government Property Agency ("GPA") to medium chargers over the past few years. Except for the 61 chargers located at TD car parks that are planned for demolition and some chargers which are capable of charging at both standard and medium speeds, all other public standard chargers installed at TD or GPA car parks have been upgraded to medium chargers. The two power companies will continue to upgrade their existing public standard chargers to medium chargers and install multistandard quick chargers. EV suppliers have also been proactive in setting up more EV charging facilities for their EV models at public venues.
With the increase in the number of e-PCs, the Government is reviewing relevant policies and measures relating to the ancillary facilities for charging e-PCs, including proactively considering the provision of more chargers in government car parks.
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MR KENNETH LEUNG (in Cantonese): The Government has already explained clearly in the main reply that in order to refrain from promoting the overall growth of PCs, it has reduced the concessions on FRT for e-PCs from full exemption in the past to putting in place a cap at $97,500. However, the measure has conversely encouraged the purchase of PCs other than e-PCs. I would therefore like to ask the Government whether it would switch to introducing an increase in FRT for fuel-engined vehicles, so as to suppress the growth in the number of vehicles?
SECRETARY FOR THE ENVIRONMENT (in Cantonese): President, I thank Mr LEUNG for his supplementary question. The Government will review different policies from time to time, and the policy area mentioned by Mr LEUNG falls within the purview of a Policy Bureaux other than the Environment Bureau. Yet, I believe that generally speaking, the Government will conduct a review on different policies when appropriate, and as long as the measures proposed are beneficial to the overall environment or the alleviation of the traffic load of Hong Kong, we will take them into consideration at an appropriate time.
MR FRANKIE YICK (in Cantonese): President, car dealers usually hope that the Government will increase the concessions on FRT, so that they can sell more cars. However, according to the views conveyed by members of the trade to the Liberal Party, there is no need to implement this tax concession measure because as mentioned by the Secretary in part (1) of the main reply, vehicle prices have become very affordable and will only become more and more affordable in the future. Therefore, they did not consider it necessary to implement this concession measure.
Conversely, the biggest problem with encouraging the public to use e-PCs lies in the planning of charging facilities. In this connection, Mr WONG Ting-kwong, who is present now, is facing great difficulty because he is in full support of environmental protection, but his application for installation of charging facilities for e-PCs was not accepted by the owners' committee or owners' corporation of the building at which he is living. The Secretary has just now said that public charging facilities were mainly used to meet urgent charging needs, and e-PC owners should make the daily charging arrangements on their 4072 LEGISLATIVE COUNCIL ― 12 December 2018 own. I would like to ask the Secretary what measures will be put in place to encourage owners' corporations or owners' committees to accept residents' applications made in this respect? If the incentive measures implemented by the Government are not successful, will the Secretary eventually introduce legislation to mandatorily require owners' corporations or owners' committees to accept such applications as far as reasonably practicable?
SECRETARY FOR THE ENVIRONMENT (in Cantonese): President, I thank Mr YICK for sharing with us the latest views of the relevant sector on government policies in this respect. We agree with Mr YICK's views that the existing policies are able to support the healthier development of different models of e-PCs in a more balanced manner, especially models priced at relatively affordable levels. We can see from the distribution of PCs currently benefiting from the tax concession measure that they are more evenly distributed than before, and we have also received positive responses from some car retailers. It is anticipated that more different models of e-PCs priced at relatively affordable levels will be introduced into Hong Kong in the future, thereby providing car owners with more choices when they wish to purchase e-PCs, particularly more affordable models.
I also agree with Mr YICK's comments that challenges do exist now in installing chargers at private residential buildings or estates to facilitate the use of EVs by members of the public. Although the description I made in the main reply is relatively simple, what I said in the final paragraph can reflect that we do understand what the problems are. At Members' requests, we will have a detailed discussion on the issues of concern raised by Mr YICK as soon as possible at meetings of the Legislative Council Panel on Environmental Affairs, and I therefore may not be able to give Mr YICK a concrete answer today. However, in order to provide the public with greater convenience, we are very much willing to thoroughly discuss our work in this respect with the Panel as soon as possible next year, thereby exploring ways to provide daily charging facilities for e-PCs in housing estates and related places.
PRESIDENT (in Cantonese): Mr Frankie YICK, which part of your supplementary question has not been answered?
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MR FRANKIE YICK (in Cantonese): The Secretary has not answered the final part of my question, and that is, will mandatory requirements be imposed by the Bureau if the measures to be introduced have proved to be unsuccessful?
PRESIDENT (in Cantonese): Secretary, do you have anything to add?
SECRETARY FOR THE ENVIRONMENT (in Cantonese): President, with regard to the request of Mr YICK, it will be discussed together with other related issues at meetings of the Panel on Environmental Affairs.
MR JEREMY TAM (in Cantonese): President, according to what the Secretary has explained in part (2) of the main reply, one of the reasons why there is no need to review the existing application criteria is that as at 2021, the total number of PCs meeting the criteria under the Scheme will be 470 000, accounting for three-fourth of the total number of PCs. The Secretary is therefore of the view that there is no need to revise the related policies, and he even does not accept our long-standing proposal of shortening the car ownership period from three years to one year. However, in my opinion, the Legislative Council is reasonable and takes figures seriously, and if we take a closer look, we will realize that the above figures are actually cited from the reply given by the Bureau on 24 October to a written question asked by Ms Tanya CHAN.
It turns out that when making the calculation, the Bureau has worked on the basis that there are now over 186 000 PCs meeting the criteria under the Scheme, and projected that the number of such vehicles will increase to over 470 000 three years later. However, the Government has made a seriously wrong estimate by assuming that no one will buy and sell vehicles within these three years. We should try to figure out the reasons and logics behind it, because there will actually be no significant change in the relevant figures three years later as the frequencies of selling and buying vehicles will not change a lot. We are not talking about electric toy cars here, and it is highly unlikely that hundreds of thousands of people will deliberately change their habit of selling and purchasing vehicles and acquire a large number of new cars suddenly, this is simply impossible.
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I would therefore like to point out that the Bureau has made its decision on the basis of the above projection, but its logics or figures were wrong. It is also a dangerous move to use incorrect figures to support the Bureau's argument that there is no need to revise its policies …
PRESIDENT (in Cantonese): Mr TAM, please raise your supplementary question directly.
MR JEREMY TAM (in Cantonese): … President, my supplementary question is therefore very simple, and I hope the Secretary will go back and examine the issue again. If the arguments I presented just now are valid, and the number of PCs meeting the criteria under the Scheme will remain at the level of only about 180 000 three years later, will the Secretary review the criterion of a three-year period of car ownership, and whether the period should be shortened to one year or two years?
SECRETARY FOR THE ENVIRONMENT (in Cantonese): I thank Mr TAM for his supplementary question. We have different views and perspective in this respect. First of all, as far as environmental protection is concerned, we all understand that nothing can be done if we refuse to make any change and stick to our same old attitude. The period under discussion is not very long, it is about two years, and if we all know the policy requirements clearly, should we as Members and members of the public give an additional level of consideration for the sake of the air quality of Hong Kong and the need for carbon reduction? Should car owners wait for some more time if they would meet the requirements by putting off the purchase of a new car by one year? Are frequent purchase of new cars in line with the principle of environmental protection? What we are talking about now is the green transformation of Hong Kong as a whole and even the whole world, and is it the best attitude if we refuse to make any change? I think these are the issues that we should all ponder over.
PRESIDENT (in Cantonese): Mr Jeremy TAM, which part of your supplementary question has not been answered?
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MR JEREMY TAM (in Cantonese): President, I have already made myself very clear just now, and as there is something wrong with the figures used by the Bureau, is the Secretary first of all willing to examine the figures he has cited …
PRESIDENT (in Cantonese): Mr TAM, you have pointed out the part of your supplementary question that has not been answered.
MR JEREMY TAM (in Cantonese): Is he willing to first examine if the figures used are really incorrect? If yes, what he said just now is totally wrong.
PRESIDENT (in Cantonese): Secretary, do you have anything to add?
SECRETARY FOR THE ENVIRONMENT (in Cantonese): President, I can only add that policies in this respect have already been announced, and all owners of the relevant types of PCs are now given an equal and fair chance to enjoy the concession offered under the Scheme. This is the fair basis for the figures derived.
MR SHIU KA-FAI (in Cantonese): The Government's introduction of environmental protection and emission reduction measures has the support of many Hong Kong people, including me. With the provision of tax concessions of up to $97,500 for purchasing environmentally friendly vehicles this year, it is expected that the purchase of e-PC models priced at about $300,000 will enable the buyer to enjoy almost full exemption of FRT. In addition, a "One-for-One Replacement" Scheme has also been introduced to provide a tax concession of $250,000, which is considered adequate for encouraging the use of environmentally friendly vehicles.
The focus of my supplementary question is on the inadequate ancillary charging facilities for e-PCs in Hong Kong, which is also the point raised by Mr Frankie YICK just now. Many friends told me that they simply did not know where to charge their EVs. Hence, there is really a need for the Government to put in more efforts as far as charging infrastructure is concerned. As a matter of fact, when it comes to emission reduction, there are now quite a number of 4076 LEGISLATIVE COUNCIL ― 12 December 2018 hybrid vehicle models available in the market, whose performance in both emission reduction and environmental protection is very good. Therefore, before improvement can be made to the provision of charging facilities for EVs, will the Government introduce concession measures to encourage the public to use hybrid vehicles?
SECRETARY FOR THE ENVIRONMENT (in Cantonese): President, I thank the Member for his supplementary question. First of all, I agree with him and as I have said in my reply to Mr YICK's question just now, when promoting the popularization of e-PCs in Hong Kong, we have to pay special attention to the popularization of various vehicle models and the introduction of more different types of vehicles into the local market on the one hand, while examining how we can render the necessary support in a household or related environment on the other, so that more convenient daily charging arrangements can be made by members of the public for their vehicles. In this connection, I believe we do share the same objective.
With regard to the overall policy, we are now focusing our efforts on e-PCs because this type of vehicles is the best choice as far as roadside air quality is concerned. As for the views expressed by the Member on the possibility of providing more policy support for hybrid vehicles, we will thoroughly examine based on scientific researches the impact of hybrid vehicles on roadside air quality, or their effectiveness in saving energy or reducing air pollutants in the environment of Hong Kong. As the situation varies from place to place, we will examine at the appropriate time what benefits different types of new energy vehicles will bring to the environment of Hong Kong, and determine if policy consideration in this respect is warranted.
MR CHARLES PETER MOK (in Cantonese): President, there are many things we have to study, but the Government has sometimes pointed out without doing any research that there is an increasing number of EVs using the road, resulting in more serious road congestion, and a deterioration in roadside air quality. The Government dared to say so, but I wonder if it can provide the relevant data in this respect to support its arguments.
There are now over 10 000 EVs in Hong Kong, but only 2 000 odd chargers have been installed, the ratio is 5:1. Among the chargers installed, many are standard or medium chargers. I am concerned about the measures to LEGISLATIVE COUNCIL ― 12 December 2018 4077 be taken by the Government to upgrade these charging facilities, but it is in fact an issue of greater concern to me that in many countries such as Norway, measures were put in place as early as 1990 to grant purchase tax and customs duty exemptions for EVs. In addition, other ancillary measures have also been drawn up to encourage the use of EVs, including the provision of free parking, charging facilities, road toll exemption, etc.
My supplementary question is: Has the Government considered introducing other ancillary measures to encourage the public to use e-PCs? Apart from offering FRT concessions, whether consideration will be given to implementing the policies I mentioned just now, or providing financial assistance in policy to EV owners for installing chargers at home?
SECRETARY FOR THE ENVIRONMENT (in Cantonese): I thank Mr MOK for his supplementary question. I think we all agree that one of the policy measures implemented to support the popularization of EVs is to provide supplementary charging facilities at the most convenient locations, and as I have said just now, this will be one of the focuses in our future work in this area. As for the availability of other ancillary measures, I am sure Mr MOK is also aware of the fact that a steering committee has already been set up to promote the use of EVs. We are willing to listen to the views of various sectors and stakeholders, and consider appropriate proposals, if any.
PRESIDENT (in Cantonese): Fifth question.
Leakage of personal data by commercial organizations
5. MR PAUL TSE (in Cantonese): President, following the leakage of the personal data of more than 9 million passengers by Cathay Pacific Airways Limited, the Marriott International hotel group has also leaked the personal data of nearly 500 million customers worldwide. Besides, it was revealed that the website of TransUnion Limited ("TransUnion"), which holds the credit records and personal data of over 5 million members of the public, had serious information security loopholes. After obtaining the personal data of the Chief Executive and the Financial Secretary, reporters of a media organization successfully impersonated them and obtained their detailed credit reports from 4078 LEGISLATIVE COUNCIL ― 12 December 2018 the website. Some members of the information and technology sector have criticized that the identity verification procedure of the website is too lax, making the database therein a "doorless coop" which allows indiscriminate access by anyone, thereby giving lawbreakers opportunities to take advantage of the loopholes. Several members of the public have relayed that the successive occurrence of data leakage incidents has caused them to doubt whether commercial organizations are capable of protecting the security of their customers' data, and whether it is the case that the authorities can do nothing about the situation. In this connection, will the Government inform this Council:
(1) whether it knows the progress of the compliance check on TransUnion conducted by the Office of the Privacy Commissioner for Personal Data ("PCPD"); whether the scope of the compliance check, apart from TransUnion itself, also covers the personal data security protection for TransUnion's customers implemented by those organizations or companies which have business connections with TransUnion;
(2) given that at least five organizations are providing the public, in collaboration with TransUnion, free service of online enquiry of personal credit information, and some of the websites concerned have requested users to authorize TransUnion to transfer their data to its collaborating organizations or the overseas servers of such organizations, whether the authorities have regulated this type of data transfer; if not, of the follow-up actions; whether the authorities have assessed the impacts on the public when there is a leakage of personal data by the collaborating organizations of TransUnions or by their overseas servers; and
(3) as TransUnion's business is currently not subject to any regulation and PCPD can only deal with the situation after occurrence of incidents of personal data leakage, whether the authorities have assessed if the existing regulatory regime is tantamount to a "toothless tiger", not being able to protect the personal data privacy of the public; whether the authorities will consider implementing new measures or enacting legislation to actively regulate such situation; if so, of the details; if not, the reasons for that?
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SECRETARY FOR CONSTITUTIONAL AND MAINLAND AFFAIRS (in Cantonese): President, on the question raised by Mr Paul TSE, we have consulted the Office of the Privacy Commissioner for Personal Data ("PCPD"), the Hong Kong Monetary Authority ("HKMA") and the Financial Services and the Treasury Bureau. Before responding to each parts of the question, I would first like to briefly describe the relevant background information on the arrangements relating to credit reference services.
TransUnion Limited ("TransUnion") is an organization providing credit reference services. In the mid-1990s, HKMA conducted a study on the customer credit quality of authorized institutions and concluded that a comprehensive credit database with extensive participation of the authorized institutions should be established. HKMA was of the view that the establishment of a full-fledged credit reference services in Hong Kong with the active participation of all authorized institutions (including licensed banks, restricted licence banks and deposit-taking companies) would allow all authorized institutions and the whole banking industry to better understand, and assess more accurately, the creditworthiness of their customers and better manage the overall credit risk in Hong Kong.
Following the implementation of the Personal Data (Privacy) Ordinance ("PDPO") in 1996, in order to provide practical guidance for Credit Reference Agencies ("CRAs") in Hong Kong, PCPD issued the Code of Practice on Consumer Credit Data ("Code of Practice") in February 1998 to regulate the handling of personal credit data by CRAs and credit providers. The Code of Practice covers areas on the collection, accuracy, use, security, access and correction of data. Four revisions have been made to it since then, with the latest revision made in January 2013.
As the regulatory authority of banks, HKMA issued a circular to all authorized institutions in March 1998, suggesting the authorized institutions to participate comprehensively in the sharing and use of credit data through CRAs within the ambit of the Code of Practice. At the same time, HKMA also stipulated that banks must comply with the relevant supervisory requirements set out in HKMA's Supervisory Policy Manual when providing CRAs with and using credit data. In accordance with the requirements, authorized institutions that use the service of a CRA should enter into a formal contractual agreement with CRA that requires CRA to formulate effective control systems to ensure that relevant provisions of PDPO and the Code of Practice are complied with.
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(PRESIDENT'S DEPUTY, MS STARRY LEE, took the Chair)
Our reply to the various parts of the question raised by Mr Paul TSE is as follows:
(1) Upon receiving the data breach notification of TransUnion on 28 November 2018, PCPD initiated a compliance check on the incident on the same day. In the light of information gathered from the check, PCPD has reasonable grounds to believe that TransUnion has contravened the requirements under PDPO. On 30 November, PCPD decided to launch an in-depth compliance investigation into TransUnion in accordance with section 38(b) of PDPO. On the same day, PCPD also conducted compliance check on five companies offering web platforms or mobile applications for access to the simplified version of credit reports.
HKMA and the banking industry are highly concerned over the incident as the security of the personal credit information provided to TransUnion by banks may be involved. HKMA jointly with the Hong Kong Association of Banks ("HKAB") have immediately contacted TransUnion to ascertain the situation, and HKAB and the banking industry have maintained close liaison with TransUnion over the past two weeks. A series of requirements have been raised to TransUnion, amongst which TransUnion has been requested to conduct a full investigation into the incident immediately and to suspend its online enquiry service on personal credit reports immediately until the completion of full investigation and comprehensive upgrade of information security to protect the personal credit information of authorized institutions. TransUnion has now suspended its online enquiry service on personal credit reports. HKMA will continue to follow up on the matter with HKAB, including requesting TransUnion to thoroughly review all relevant procedures and measures to ensure adequate protection in the collection, handling, storage, security and destruction of personal credit information to meet the security requirements of authorized institutions. HKMA has also made notifications to PCPD and expressed concern. HKMA will continue to maintain close liaison with PCPD.
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(2) According to paragraph 3.21 of the Code of Practice issued by PCPD, a CRA shall not transfer consumer credit data held by it to a place outside Hong Kong unless the purpose of use of the data transferred is the same as or directly related to the original purpose of the collection of such data. Irrespective of whether the personal data is stored in Hong Kong or overseas, or transferred to a data processor overseas to act on behalf of a data user, the data user must ensure that the personal data are dealt with properly in accordance with the requirements of PDPO.
(3) Under the current legal framework, CRAs are not regulated by HKMA. CRAs (including TransUnion) provide credit reference services to banks in Hong Kong and other credit institutions, and they shall comply with the relevant provisions of PDPO and the Code of Practice. As the regulatory authority for banks, HKMA requires banks to comply with the provisions of PDPO when carrying out relevant businesses, to ensure that personal data of customers are properly safeguarded when providing data to and using the service of CRAs. An authorized institution using the service of any CRA must enter into a formal contractual agreement with CRA that requires CRA to formulate effective control systems for personal credit data. An authorized institution may consider whether to terminate its relationship with a CRA if it is aware of unacceptable practices of CRA, or serious breaches of the requirements of PDPO or the Code of Practice.
According to paragraph 3.12 of the Code of Practice issued by PCPD, a CRA shall take appropriate measures in protecting personal credit data in its daily operations to safeguard against any improper access to personal credit data held by it, including monitoring and reviewing on a regular and frequent basis the usage of the database, with a view to detecting and investigating unusual or irregular patterns of access or use, etc. In response to this incident, we will urge PCPD to conduct a comprehensive review of the Code of Practice with reference to the findings of the compliance investigation upon its completion, and consider the need for further revisions to improve the operation of the Code of Practice.
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MR PAUL TSE (in Cantonese): Deputy President, given the fact that even the Chief Executive and the Financial Secretary are also among the victims, it is inevitable that members of the public worry about not being protected, particularly amid the recent emergence of frequent cases of loan or mortgage sales activities which might have something to do with the current leakage of personal data.
The Secretary pointed out in part (3) of his main reply that CRAs are not at all subject to regulation by HKMA which can only impose restrictions on them through regulating the banks, namely requiring the bank using the service of any CRA to enter into a formal contractual agreement with CRA concerned, requiring it to formulate effective control systems for personal credit data. But this practice is not effective at all.
Of course, I must applaud the authorities for its immediate action to request TransUnion to suspend its online enquiry service on personal credit reports after learning the leakage. Yet, given that TransUnion had already provided the personal data of customers to five web platforms, did the company transfer data directly or indirectly to other companies, or did the five web platforms ever provide the data concerned to certain overseas companies? We still do not have the answer at the moment.
Regarding TransUnion's release of the credit information of customers in contravention of the relevant legislation, I want to ask if the authorities know the severity of the problems, the number of companies affected and the transaction value involved?
SECRETARY FOR CONSTITUTIONAL AND MAINLAND AFFAIRS (in Cantonese): Deputy President, I thank Mr TSE for his question. As Mr TSE has said just now and according to what I have pointed out in my main reply, the issue in question involves two aspects. First, CRAs are subject to the regulation of PDPO and personal credit data must be handled properly in accordance with the principles laid down in PDPO. That is to say, both PDPO and the Code of Practice have provided relevant guidance in this regard, and PCPD is currently conducting a compliance check in accordance with PDPO and the Code of Practice. The specific details and the outcomes will be known after the completion of the compliance check.
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Besides, upon completion of the compliance check, we will also examine the existing Code of Practice to see if there is any room for improvement or enhancement. For example, whether it is necessary to enhance the guidance in the relevant procedures of access to personal credit data. This is the first aspect.
Second, CRAs are commercial organizations in nature but are not subject to regulation by HKMA for the time being. HKMA can only ensure proper handling of personal data through exercising regulation over banks which should enter into formal contractual agreements with their CRAs to impose on them the relevant requirements. Thus, HKAB and HKMA have been following up on the matter with TransUnion by raising a series of questions and requirements. As relevant discussion and conversation are still going on, I am not in a position to reveal the specific details, but one thing is obvious that both HKAB and HKMA are very much concerned about the current incident and will definitely ask TransUnion to account for the incident. I believe that HKMA, as the financial regulator, will follow up and examine the entire incident and it will study from the perspectives of financial regulation and risk management if there is room for improvement or the lessons to be learnt.
MR CHAN CHUN-YING (in Cantonese): Deputy President, as regards the leakage of customer data by TransUnion, some people are of the view that it was caused by the business model adopted by the company.
May I ask the Secretary: Apart from the institution concerned, in what way can the regulator step in and make certain adjustments under existing laws if, upon completion of the investigation, it is ascertained that the problem lies in the business model of the institution concerned?
SECRETARY FOR CONSTITUTIONAL AND MAINLAND AFFAIRS (in Cantonese): Deputy President, I thank Mr CHAN for his supplementary question. As I have pointed out in my analysis just now, the entire incident involves two aspects. First, it concerns the protection of privacy in the handling of personal data; second, it concerns industry regulation since we need to consider which approach to take in respect of personal credit risk management.
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Regarding the current situation, as pointed out in my main reply, the current approach was established in the early 1990s, under which credit providers manage the overall credit risk through placing the information in the web platform operated by TransUnion.
From a regulatory point of view, HKMA is the regulatory authority of banks while TransUnion operates as a commercial organization. As far as the incident is concerned, it is necessary for the banks to examine their contractual agreements with TransUnion or the collaborating CRAs and see if they can ensure proper handling and protection of personal credit data; moreover, in what ways do CRAs establish business relationships with the third parties that offer web platforms? Is transfer of information involved? Are their business relationships recognized by law? All of these matters require detailed study.
Lastly, Mr CHAN enquired if the business model or the approach of overall regulation is appropriate, and whether any improvements need to be made. I believe the Financial Services and the Treasury Bureau as well as HKMA will also examine the outcomes of the investigation into the incident and follow up on various issues involved. As a matter of fact, even though similar regulatory systems of other places in the world may have differences, they all take the protection of personal privacy and financial regulation into account. Therefore, institutions involved in the two aspects will have their own roles to play.
MR CHEUNG KWOK-KWAN (in Cantonese): Deputy President, under the current legal framework, TransUnion is not subject to the supervision of HKMA which can only require banks to enter into formal contractual agreements with TransUnion in using its service, requiring it to formulate effective personal credit data control systems.
The Secretary also pointed out in his reply that a bank may consider whether to terminate its business relationship with a CRA if it is aware of unacceptable practices of CRA or serious breaches of the requirements of PDPO.
I want to ask the Secretary: Assuming that the bank terminates its relationship with TransUnion for breach of the contractual agreement, will there be any other alternatives available for local banks? If not, is the practice of LEGISLATIVE COUNCIL ― 12 December 2018 4085 allowing customers to access their personal credit history through a CRA acceptable then?
SECRETARY FOR CONSTITUTIONAL AND MAINLAND AFFAIRS (in Cantonese): Deputy President, I thank Mr CHEUNG for his supplementary question. TransUnion as a CRA, has established relationships with banks (i.e. the credit providers) after signing contractual agreements and then uploads the personal credit data to a web platform for risk management by the industry as a whole. In fact, the banks concerned also have shareholdings in this CRA. In other words, this mode of business operation has been the established practice and has been effective in the past for the purpose of meeting the requirements on personal data security or risk management.
Nevertheless, there have been a number of incidents involving personal or credit data security loopholes recently, which HKAB and HKMA are following up closely. I believe that the industry itself will examine the existing mechanism to see if there is room for improvement and assess if the approach taken is the most effective and suits today's circumstances and needs.
Actually, how can the approach in question be further developed or improved? Well, I believe the findings of relevant investigation and the information and circumstances to be learnt by HKMA and HKAB after following up on the TransUnion incident will provide a basis for us to conduct a review in this regard.
DEPUTY PRESIDENT (in Cantonese): Mr CHEUNG Kwok-kwan, which part of your supplementary question has not been answered?
MR CHEUNG KWOK-KWAN (in Cantonese): I wonder if the Secretary meant that there are really no other options available in the Hong Kong market.
DEPUTY PRESIDENT (in Cantonese): You only have to state the part of your supplementary question which has not been answered. Secretary, do you have anything to add?
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SECRETARY FOR CONSTITUTIONAL AND MAINLAND AFFAIRS (in Cantonese): Deputy President, I now give my reply to Mr CHEUNG's follow-up question. Actually, the entire mode of business operation allows many possibilities. Therefore, I believe that the banking industry, HKAB and the regulator will look for the most appropriate and optimal way to deal with the situation in case the banks concerned find that problems persist despite the signing of formal contractual agreements.
MR CHARLES PETER MOK (in Cantonese): Deputy President, regarding the TransUnion incident, apart from my concern for information security, I wish to point out that a person's own personal information belongs to the very person in question and this is the most essential principle. And so, I do not understand why we have to pay a monthly charge of $280 for access to our own credit data and have to cooperate with the five third-party organizations. We should know that we are supposed to have access to our own personal data free of charge or at cost charges under PDPO. In many other countries (e.g. the United States), people can have access to such data on a yearly basis. However, provision of credit reference service has become a lucrative business here in Hong Kong. Will the Secretary make clear to us if this mode of business operation has contravened the laws? Will the Government put such practice under regulation? And is it possible to require the institutions concerned to refund the amount overcharged to the users in the future in case of overcharging of fees?
SECRETARY FOR CONSTITUTIONAL AND MAINLAND AFFAIRS (in Cantonese): Deputy President, as regards the supplementary questions raised by Mr MOK, the mode of business operation and the protection of personal data privacy are very clear, which have been regulated through the Code of Practice issued by PCPD under PDPO. In fact, the Code of Practice was issued in 1998 with four revisions since then. Given this fact, I believe that problems would have arisen had the arrangements in question failed to comply with legal requirements. And so, I believe that the institutions concerned must have complied with the requirements set out in PDPO and the Code of Practice.
In addition, Mr MOK queried why fees were charged for the provision of credit reference services. I reckon that it may be because of the necessary commercial arrangements made by the credit providers in relation to the personal data submitted by the applicants at the time of application for credit. LEGISLATIVE COUNCIL ― 12 December 2018 4087
Nevertheless, of most importance is whether those arrangements have contravened PDPO and the Code of Practice. Since it seems that no one has ever raised this issue, I will look further into the issue to ascertain if it involves any other problems that need to be addressed.
DEPUTY PRESIDENT (in Cantonese): Last oral question.
Support for the nurturing of local technology talents and the upgrading and transformation of industries
6. MR CHARLES PETER MOK (in Cantonese): Deputy President, in the World Talent Report 2018 published by the International Institute for Management Development in Lausanne of Switzerland, Hong Kong's ranking has fallen from the 12th place of last year to the 18th of this year, and Singapore, which ranks the 13th, has replaced Hong Kong as becoming the highest ranking economy in Asia. There are comments that in order to enhance Hong Kong's international competitiveness and to ensure the diversification of its economy, the Government needs to strengthen its work in the areas of "talents investment and development", "appeal to and retention of talents" and "readiness for talents", step up its efforts to promote the upgrading and transformation of various industries through application of innovation and technology, and enhance the training of local technology talents. In this connection, will the Government inform this Council:
(1) whether it will formulate a comprehensive strategy for training of talents, and conduct studies on the impacts of artificial intelligence, including studying the impacts of the technological development in areas such as artificial intelligence, machine learning and robotics on various industries in the next decade, as well as draw up specific targets in respect of training of talents;
(2) whether it will provide tuition fee subsidies and other incentives (e.g. providing employers with a double tax deduction for training expenditure) to encourage local technology talents to enroll in local and overseas technology training courses and massive open online courses and obtain recognized professional qualifications; and
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(3) whether it will analyze the competitive strengths and weaknesses of various major industries, as well as their needs for and challenges in undergoing upgrading and transformation; whether it will formulate corresponding support strategies to assist enterprises (especially small and medium enterprises) in increasing investment in the application of digital technologies for upgrading and transformation, and to assist practitioners in the industries in acquiring the required skills?
SECRETARY FOR INNOVATION AND TECHNOLOGY (in Cantonese): Deputy President, having consulted relevant government bureaux and departments, our reply to the three parts of Mr MOK's question is as follows:
(1) With the wave of innovation and technology ("I&T") sweeping through the world, robotics, artificial intelligence ("AI") and machine learning, etc., are undergoing rapid development and revolutionizing the traditional business models. Automation is also expected to bring about certain degrees of transformation in industry structures and job requirements. To compete in such a rapidly evolving environment, the local labour force should continuously update and enhance their knowledge and skills through education, retraining and up-skilling, etc., in order to keep abreast of the latest technology development and enhance their digital literacy, such that they can work complementarily with technology and grasp the opportunities brought by technology development.
In recent years, various international institutions and enterprises have published research reports on the impact of AI. A research report pointed out that more routine tasks, such as data processing and machinery operation, have a higher chance of being automated. On the contrary, less routine tasks, such as those involving communication, management, decision-making, planning and creation, have a lower chance of being automated. The Human Resources Planning Commission ("HRPC") chaired by the Chief Secretary for Administration has initially examined and discussed the impact of automation on human resources and the labour market.
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Government bureaux and departments will, through various measures, facilitate industries to capitalize the opportunities brought by technology development, as well as encourage and assist workers of different industries in receiving training and improving skills to embrace the challenges of automation.
(2) The Government has been nurturing local technology talent through different measures. The Innovation and Technology Bureau has earlier briefed the University Grants Committee ("UGC")-funded universities on the trends and development of manpower requirements in the Innovation and Technology sector. In view of the demand of the industry, the UGC-funded universities have responded positively in their Planning Exercise Proposals for the 2019-2020 to 2021-2022 triennium by, inter alia, proposing more cross-disciplinary programmes, such as those relating to AI and financial technology, with a view to providing industries with more technology talent.
In respect to self-financing post-secondary education, the Government launched the Study Subsidy Scheme for Designated Professions/Sectors ("SSSDP") in the 2015-2016 academic year on a pilot basis to subsidize about 1 000 students per cohort to pursue designated full-time locally-accredited self-financing undergraduate programmes in selected disciplines, with a view to nurturing talent for specific industries with keen manpower demand. SSSDP has been regularized from the 2018-2019 academic year and the number of subsidized self-financing undergraduate places has been increased to about 3 000 per cohort. Current students of the designated programmes may also receive the subsidy from that academic year. In the 2018-2019 academic year, there are a total of 37 programmes offered under SSSDP, including five computer science programmes and four financial technology programmes which provide 306 and 265 subsidized first-year intake places respectively.
The Government has recently announced a series of enhancement measures of the Continuing Education Fund ("CEF"), including increasing the subsidy ceiling from $10,000 to $20,000 per person, reactivating closed CEF accounts to also benefit relevant holders and 4090 LEGISLATIVE COUNCIL ― 12 December 2018
expanding the scope of CEF courses to all eligible courses (including technology courses) registered in the Qualifications Register. The related measures will be implemented from 1 April 2019.
On the other hand, the Innovation and Technology Bureau launched the Re-industrialization and Technology Training Programme in August this year to subsidize local companies on a 2:1 matching basis to train their staff in advanced technologies, especially those related to "Industry 4.0", thereby encouraging companies to arrange technology training for their staff. As at the end of last month, there have been 67 open courses registration under the scheme in just three months. The technology areas involved included "Industry 4.0"-related technologies, information technology, textiles and clothing, biomedicine and medical care, automotive technology and environmental protection, etc. The scheme has approved 90 training grants applications, involving 148 trainees and a funding amount of around $1.2 million.
(3) Government bureaux will actively review the competitive advantages and challenges of various industries under their policy purview, and take appropriate measures as necessary to assist enterprises in enhancing their competitiveness through upgrading and transformation. The Innovation and Technology Bureau will provide assistance from the technological perspective, such as encouraging enterprises to conduct more R&D activities, subsidizing companies in using technologies to upgrade and transform, etc.
In regard to the manufacturing industry, the Government actively promotes re-industrialization to develop high-end manufacturing based on new technologies and smart production without occupying much land. The latest Policy Address proposed to create the $2 billion Re-industrialization Funding Scheme to subsidize manufacturers to set up smart production lines in Hong Kong; and allocate an additional $2 billion to the Hong Kong Science and Technology Parks Corporation for building dedicated manufacturing facilities in Industrial Estates required by advanced manufacturing sector, thereby promoting re-industrialization.
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In addition, the Innovation and Technology Bureau rolled out the $500 million Technology Voucher Programme ("TVP") in November 2016 to subsidize local small and medium enterprises in using technological services and solutions to improve productivity, upgrade and transform. We have relaxed the eligibility of TVP since February this year, including allowing applications from non-listed enterprises of all sizes, in order that more enterprises could benefit from the scheme. After implementation of the enhanced measures, the numbers of applications and approved projects have increased substantially. As at the end of last month, the scheme has approved 939 applications with a total funding amount of $130 million.
MR CHARLES PETER MOK (in Cantonese): Deputy President, last week, a Member put an oral question on the ranking of Hong Kong in the World Talent Report 2018. The Chief Secretary for Administration attended the meeting to reply the question. But the Chief Secretary is not here this week. In fact, it would be better for him to answer this question because some questions really have to be answered by him.
In part (1) of my main question, I ask whether it is necessary to conduct comprehensive policy studies on AI. As we can see, the British Government conducted a study on AI in 2014 to look into the opportunities and implications of AI on the future of decision making; and then in 2017, it produced a policy proposal for community discussion. The scope of the proposal is extensive. Apart from industries, R&D, employment, education, etc., the policy proposal also touches on the labour force, government procurement, medicine and health, criminal abuse of information, the statute, tax revenue, regulatory institutions, etc. But now only HRPC in our Government has briefly discussed and explored this subject. Under the chairmanship of the Chief Secretary for Administration, HRPC has only discussed employment-related issues and is yet to produce any reports. Aside from the Chief Secretary's HRPC, has the Policy Innovation and Co-ordination Office ("PICO") conducted, or does it plan to conduct, any related studies? Here is my supplementary question. Have they conducted, or do they have any plans to conduct these studies? And can the results of the studies be made public for community discussion?
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SECRETARY FOR INNOVATION AND TECHNOLOGY (in Cantonese): I thank Mr MOK for his supplementary question. Although the Chief Secretary for Administration is not present, I wish to tell Mr MOK that HRPC recently noted the results of an analysis of the impact of automation on employment in Hong Kong. The results reveal that the potential to implement automation in Hong Kong in general is relatively small since Hong Kong has already transformed into a service-oriented economy. However, different professions and industries in Hong Kong are still capable of achieving a certain degree of automation, though their potentials to implement automation may vary.
HRPC has been exploring how to meet the challenges of AI and automation on the fronts of education, professional training and upskilling, and encourage the industries to use automation or AI and grasp the opportunities generated from these areas. I believe under the leadership of the Chief Secretary for Administration, HRPC will continue to conduct related work. We are not only exploring this issue. We will arrive at a conclusion.
MR CHARLES PETER MOK (in Cantonese): My question is …
DEPUTY PRESIDENT (in Cantonese): Mr MOK, you only need to say the part of your supplementary question that has not been answered.
MR CHARLES PETER MOK (in Cantonese): Will PICO conduct a study and issue a report? Can he tell us whether it plans to do so?
DEPUTY PRESIDENT (in Cantonese): Secretary, do you have anything to add? You did not say just now whether related reports would be made public.
SECRETARY FOR INNOVATION AND TECHNOLOGY (in Cantonese): I will relay this question to HRPC.
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MR MARTIN LIAO (in Cantonese): Deputy President, my supplementary question shares the same purpose as that of Mr Charles Peter MOK. In his main reply, the Secretary says that UGC-funded universities have proposed to offer more cross-disciplinary programmes, such as those relating to AI and financial technology. The Secretary also says in part (3) that government bureaux will, among others, actively review the competitive advantages and challenges of various industries under their policy purview, subsidize companies in using technologies to upgrade and transform, and actively promote re-industrialization. All these are good measures.
But on the other hand, a report produced by PricewaterhouseCoopers finds that in the coming 20 years, it is expected that some 20% of the job opportunities will be replaced by robots, but at the same time, new job opportunities will be created. In the United Kingdom for instance, about 7 million job opportunities will disappear in 2037, but 7.2 million new job opportunities will be created in the areas of health care, science and education. A local research in Hong Kong finds that in the coming 20 years, 28% of the jobs in Hong Kong are at high risk of being replaced by AI, and 1 million working population may become unemployed because of AI.
I have a question for the Bureau. Has the Bureau looked into any new major types of jobs that will be created in Hong Kong in the long run because of AI? In this connection, has the Bureau looked into or started to look into any corresponding industry reports and the manpower transformation and formulate any training policies?
SECRETARY FOR INNOVATION AND TECHNOLOGY (in Cantonese): I thank Mr LIAO for his supplementary question. Mr LIAO says that AI may have an impact on jobs. I would also like to share with Members some reports. According to the Future of Jobs Report 2018 produced by the World Economic Forum, the development of automation technologies and smart technologies will displace 75 million occupations. So, he is correct on this point. However, with the restructuring of companies and redistribution of jobs between robots and humans, another 133 million jobs will be created. In other words, there will be a net increase of 58 million new jobs in 2020. I believe employers will not embrace automation alone and abandon human manpower.
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ManpowerGroup interviewed 18 000 employers worldwide and found that 90% of the employers plan to introduce I&T into their companies in the coming two years, but among them, 83% still wish to maintain or increase their number of employees. So, evidently, Mr LIAO is correct in saying that there will be new job opportunities in the future, and the SAR Government is working on how to take forward this task.
We will actively bring together technology talents. This is one of the eight major directions of the Government in promoting I&T development. We will actively work on the talent pool by means of admitting, nurturing and retaining talents. We launched in the end of August the Technology Talent Scheme to provide more employment and training opportunities for technology talents. The Postdoctoral Hub programme under the Scheme provides funding support to eligible enterprises and companies to recruit postdoctoral talents for R&D work. And the Re-industrialization and Technology Training Programme mentioned in part (2) of the main reply subsidizes local company staff to receive advanced technology training, so as to upgrade the level of technology talents.
Hence, our first task is that we will subsidize local enterprises to pool advanced technology talents; and second, we will train existing talents. We have been subsidizing enterprises through the Internship Programme to recruit graduates with a first university degree or higher degree to conduct R&D work, in order to provide job opportunities for local technology talents. Hence, we hope to provide higher value-added jobs for these talents.
Regarding admitting talents, we launched in June the Technology Talent Admission Scheme to address the shortage of local technology talents and the long time required for admitting these talents. We provide a fast-track arrangement for admitting Mainland and overseas technology talents to undertake R&D work in Hong Kong, with a view to enhancing the efficiency in talent admission. We are now working on the several areas of work above.
Regarding other departments, as I also mentioned in the main reply just now, the Innovation and Technology Bureau will provide technology support for their smooth operation of technologies, so as to enhance the function of each policy purview and the value-added capabilities of different professions.
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MR POON SIU-PING (in Cantonese): Mr Charles Peter MOK mentions in his question that the ranking of Hong Kong in the World Talent Report 2018 has fallen from the 12th place to the 18th place. He asks the Government whether it will formulate a comprehensive strategy for training of talents and draw up specific targets in respect of talent training. I hope that the Government will not rely on the Technology Talent Admission Scheme or the Quality Migrant Admission Scheme alone to address the drop in local talents.
I know that the Secretary mentioned in his main reply HRPC chaired by the Chief Secretary for Administration. HRPC comprises eight Policy Bureau directors, and Secretary for Innovation and Technology is an ex-officio member. The terms of reference of HRPC include formulating various strategies and measures to enhance the quality and capacity of the local working population I wish to ask the Secretary this question. Since its inception, has HRPC formulated any indicators and measures to increase the number of local talents and prevent a drain of local talents?
SECRETARY FOR INNOVATION AND TECHNOLOGY (in Cantonese): I thank Mr POON for his supplementary question. We have discussed many talent-related issues in HRPC. I wish to share with Members some targets we have set. In fact, the Chief Secretary for Administration has also mentioned this before. We are now working on three areas. I will cite some examples to illustrate one of the work areas and see the response in society. After all, relying on the Government alone is not enough. We hope that there will be active response from society as well.
The three areas of work include, first of all, releasing manpower through the use of I&T. Why? It is because this will enable talents to take up higher value-added jobs, thus giving them greater job satisfaction. This also helps promote upward mobility.
Second, we wish to provide support for young people and all people at work to continue learning and attain skill transformation through education and retraining. This is very important. It is because future jobs will require cross-disciplinary or cross-sectoral skills and also because I&T is ever evolving, and the industries are also evolving as well. Apart from skill transformation, we 4096 LEGISLATIVE COUNCIL ― 12 December 2018 also need to pursue self-enhancement, upgrading and transformation. These are also very important. If an employee cannot enhance his values, he cannot survive in this I&T era.
Third, waves of transformation may hit I&T society. A wave may come today, and another wave in another five years. Hence, I&T society is not constant. Training a particular type of talents or capability cannot solve the problem. It takes the participation of entire society to create a pool of talents with business experience, capital and network cores, so as to propel society forward in promoting the development of I&T talent.
We are happy that since the establishment of the Innovation and Technology Bureau, apart from the Government, many private enterprises, the education sector and the community have participated in this development. For instance, various universities have launched new education programmes. The University of Hong Kong has launched programmes in Applied AI, financial technology and Social Data Science; and The Hong Kong University of Science and Technology, The Chinese University of Hong Kong and The Hong Kong Polytechnic University have also launched programmes in these subjects. This is a recent development. The Hong Kong Monetary Authority has a Fintech Career Accelerator Scheme. As for private enterprises, there are the Go Code programme launched by Sino Group, the CS First programme recently announced by Google, the CoolThink scheme launched by the Hong Kong Jockey Club and the Hour of Code activity launched by the City University of Hong Kong. These programmes are launched at different levels of society and are comprehensive in nature, covering primary and secondary schools and universities. We wish to nurture a culture that encourages everyone to pitch in, rather than just making a plan. I hope that everyone will help promote talent development, so as to make this development sustainable.
DEPUTY PRESIDENT (in Cantonese): This Council has spent 22 minutes 46 seconds on this question. Oral questions end here. Since only three to four Members were able to put supplementary questions in the last two oral questions just now, I hope public officers can be brief in making replies in future.
LEGISLATIVE COUNCIL ― 12 December 2018 4097
WRITTEN ANSWERS TO QUESTIONS
Stealing the personal data of others for the purpose of taking out loans
7. DR CHENG CHUNG-TAI (in Chinese): President, recently, quite a number of members of the public sought my assistance, saying that they had been harassed by debt collection agencies by various means (including threatening letters, frequent telephone calls, short messages, and threatening notes posted outside their residences) in an attempt to coerce them to repay loans on behalf of other people. They suspected that their personal data had been stolen and used at an earlier time, resulting in their being deemed to be loan guarantors without their knowledge. In this connection, will the Government inform this Council:
(1) of the number of reports, received by the Police since January this year, about harassment by debt collection agencies; and
(2) whether it will review the provisions in and the enforcement of the Money Lenders Ordinance (Cap. 163), with a view to eradicating the acts of stealing the personal data of others for the purpose of taking out loans?
SECRETARY FOR FINANCIAL SERVICES AND THE TREASURY (in Chinese): President, under the Money Lenders Ordinance (Cap. 163), all licensed money lenders must carry on money lending business in accordance with the conditions imposed by the licensing court on their licences. One of the licensing conditions prohibits a licensed money lender and its debt collectors from recovering debts directly or indirectly from anyone other than the debtor, or harassing anyone while trying to locate the whereabouts of the debtor, or adopting unlawful or improper debt collection practices.
To enhance personal data protection, the licensing court has, since December 2016, imposed an additional licensing condition on all money lender licences. The additional licensing condition stipulates that all licensed money lenders are required to take steps to ensure that when collecting or receiving personal data from another person, the licensed money lenders will not take part in any unlawful disclosure or use of personal data.
4098 LEGISLATIVE COUNCIL ― 12 December 2018
It is an offence for a licensed money lender to breach any of the licencing conditions. The licensing court may revoke its license or reject its licence renewal application. Members of the public may make a report to the Police if they suspect that their personal data have been used fraudulently to make them loan referees, or if any money lender is suspected to have breached the licensing conditions. The Police will conduct investigation and take follow-up actions having regards to the circumstances of the case.
Our reply to the question raised by Dr CHENG Chung-tai is set out below:
(1) In the first 10 months in 2018, the Police received 1 293 crime reports relating to debt collection, which represented a drop of 244 cases from the same period last year. The majority of these cases concerned criminal damage. Regarding non-crime harassment (such as harassment by telephone calls, harassment by visits, etc.), the Police received a total of 6 650 related reports in the first 10 months in 2018, which represented a drop of 1 298 cases as compared with the same period last year.
(2) The Government attaches great importance to the protection of personal data. We note that it has been reported recently that the personal data of a member of the public had been used fraudulently to make him a loan referee without his knowledge, and that he was harassed by debt collectors by various means. To address the issue, the licensing court has, since October 2018, imposed an additional licensing condition on money lender licences. Under the new additional licensing condition, when a referee is provided in respect of a loan application by a borrower, the money lender shall, before entering into any loan agreement, ask the intending borrower to provide the written consent signed by the referee confirming his/her agreement to act as referee for the intending borrower in respect of the loan application.
The Capital Investment Entrant Scheme
8. MR CHRISTOPHER CHEUNG (in Chinese): President, the Capital Investment Entrant Scheme ("the Scheme"), introduced by the Government in 2003, was suspended on 15 January 2015. However, applications which (i) had been submitted before that date and (ii) were submitted within six months from LEGISLATIVE COUNCIL ― 12 December 2018 4099 investments that had been made within six months before that date would not be affected. As stipulated in the rules of the Scheme, an applicant/investor is not required to top up his/her investment in any class of the permissible investment assets should the market value of the investment fall below the Scheme's investment threshold (i.e. $10 million). Nevertheless, some investors of the Scheme recently complained that the Immigration Department ("ImmD") had demanded them to top up their investments after the market values of their investments had fallen below the threshold as a result of investment failure in bonds. In this connection, will the Government inform this Council:
(1) of the following information in each year since 2015: the respective numbers of applications under the Scheme that were (i) outstanding at the end of the year, (ii) rejected within the year and (iii) approved within the year; (iv) the number of investors and their dependents who became eligible for and were granted the Hong Kong permanent resident status within the year; (v) the number of investors whose eligibility to stay in Hong Kong was cancelled within the year as the market values of their investments were lower than the threshold; (vi) the number of investors who were requested within the year to top up the values of their investments as the market values of their investments were lower than the threshold; and (vii) the number of investors whose eligibility to stay in Hong Kong was cancelled due to other reasons (set out in the table below);
Year (i) (ii) (iii) (iv) (v) (vi) (vii) 2015 2016 2017 2018 (as at 30 November) Total:
(2) whether ImmD has, according to different classes of investment assets, treated differently investors whose investments had market values lower than the threshold; if so, of the details and justifications; and
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(3) of the reasons why ImmD demanded some of the investors whose investments had market values lower than the threshold to top up their investments; whether the authorities will examine afresh those cases and review the relevant practice?
SECRETARY FOR SECURITY (in Chinese): President, the reply to Mr CHEUNG's question is as follows:
(1) The statistics on the applications processed by the Immigration Department ("ImmD") under the "Capital Investment Entrant Scheme" ("the Scheme") from 2015 to 2018 (as at the end of November) are as follows:
(vi) (v) Number of Number of persons who persons were whose requested (iv) eligibility to within the Number of stay in Hong year to (vii) (i) persons (ii) (iii) Kong was top-up the Number of Number of acquiring Number of Number of cancelled values of refused outstanding the right of Year refused approved within the their applications applications abode in applications applications year as the investments for extension as at the end Hong Kong in the year in the year market as the of stay in the of the year through the values of market year Scheme in their values of the year^ investments their were lower investments than the were lower threshold than the threshold 2015 11 429 2 2 739 404 0 2016 7 428 6 2 667 728 4 2017 3 375 4 2 640 1 101 4 2018 839# 0 1 507 1 463 Not Applicable* 24 (as at end of November)
Notes:
# Pending the entrants' further submission of relevant supporting documents and information
^ ImmD does not maintain statistics on the number of dependants who have acquired right of abode in Hong Kong through the Scheme
* The entrant is not required to top-up the value of his investment so as to be eligible for extension of stay if the value of his total investment falls below the requisite minimum level, not even in the event of a total loss. Thus, there are no breakdown statistics on (v) and (vi).
(Dependants' applications are not included in the above figures)
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(2) and (3)
Entrants who apply for entry into Hong Kong and extension of stay in Hong Kong pursuant to the Scheme are subject to the "Rules for the Capital Investment Entrant Scheme" ("the Scheme Rules"), including the requirement of investing in Permissible investment asset classes and the portfolio maintenance requirements, etc., as specified in the Scheme Rules. When the entrant furnishes proof to ImmD that his investment in Permissible investment assets has been completed, permission to stay for two years will be granted on the condition that he must continue to satisfy the requirements of the Scheme throughout the period. Further extension for two years will be granted on the same conditions and basis. The entrant is not required to top-up the value of his investment so as to be eligible for extension of stay if the value of his total investment falls below the requisite minimum level, even in the event of a total loss. Therefore, whether the entrant is eligible for the Scheme depends mainly on whether the entrant invests according to the Scheme Rules, instead of the market value of the assets invested under the Scheme.
To ensure that the entrant invests according to the Scheme Rules and does not reduce his investment commitment during his stay in Hong Kong, ImmD scrutinizes whether the entrant has violated the investment commitment in accordance with the requirements of portfolio maintenance and switches between Permissible investment assets as stipulated in the Scheme Rules. If the entrant invests in items other than those listed in the Permissible investment asset classes, ImmD will require the entrant to provide proof of making requisite level of investment in the Permissible investment asset classes. ImmD will assess each application in accordance with the "Changes in the Value of Investment" stipulated in the Scheme Rules and on its own merits. Under exceptional circumstances, ImmD will seek relevant professional advice prior to making a decision.
Carbon emissions
9. MR MARTIN LIAO (in Chinese): President, the Hong Kong Climate Change Report 2015 published by the Government has pointed out that Hong Kong's annual greenhouse gases ("GHG") emissions over the period from 1990 4102 LEGISLATIVE COUNCIL ― 12 December 2018 to 2012 ranged from 33.3 million to 43.1 million tonnes of CO2-equivalent ("CO2-e"), and has explained that the slight rise in carbon emissions in 2012 was likely due to an increase in local cement production to meet the demand of infrastructure projects. In this connection, will the Government inform this Council:
(1) of Hong Kong's GHG emissions each year since 2013, with a breakdown by emission source, and the causes for the relevant figures to rise, drop or remain unchanged;
(2) of the current per capita carbon emissions in Hong Kong, together with a roadmap on how the per capita carbon emissions reduction targets set by the authorities can be attained, i.e. being reduced to "less than 4.5 tonnes" in 2020, and further reduced to "about 3.3 to 3.8 tonnes" in 2030; the expected time when the per capita carbon emissions can be reduced to 2 tonnes CO2-e, and when the target of keeping the global average temperature increase to below 2ºC relative to pre-industrial levels can be attained;
(3) whether it will echo the appeal made by the Intergovernmental Panel on Climate Change in the IPCC Special Report on Global Warming of 1.5ºC published this year by stepping up its efforts in leading Hong Kong people in making contributions towards keeping the global average temperature increase to not more than 1.5ºC, including formulating more ambitious targets for carbon intensity and emissions reduction; if so, of the details; if not, the reasons for that; and
(4) regarding the report on Study on Emissions Trading in the Mainland: Options for Hong Kong published last year by the former Central Policy Unit, in particular the recommendation in the report that the issue of carbon pricing be raised and formulation of corresponding actions be considered at the meetings of the Steering Committee for Climate Change, whether the authorities have taken follow-up actions; if so, of the details; if not, the reasons for that?
SECRETARY FOR THE ENVIRONMENT (in Chinese): President, the Government attaches great importance to addressing the likely impact that might be brought by climate change, and actions have been taken on various fronts to LEGISLATIVE COUNCIL ― 12 December 2018 4103 reduce greenhouse gas ("GHG") emissions. To combat climate change, the Government established the Steering Committee on Climate Change ("SCCC") in 2016 under the chairmanship of the Chief Secretary for Administration to steer and coordinate actions amongst different bureaux and departments, and released "Hong Kong's Climate Action Plan 2030+" in January 2017, setting out in detail the targets and key measures on mitigation, adaptation and resilience to combat climate change. On the basis of the level of our carbon intensity in 2005, our target is to reduce our carbon intensity by 50% by 2020, and by between 65% and 70% by 2030 (which is equivalent to an absolute reduction of 26 to 36%), and our per capita emissions will be reduced from 5.7 tonnes in 2016 to 3.3 to 3.8 tonnes by 2030, so as to align with the target of the Paris Agreement to limit the increase in the global average temperature to well below 2°C above preindustrial levels.
My responses to the question raised by Mr Martin LIAO are as follows:
(1) The Environmental Protection Department compiles GHG inventory in accordance with the guidelines published by the United Nations' Intergovernmental Panel on Climate Change ("IPCC"). GHG emissions by source from 2013 to 2016 are set out as follows:
Greenhouse gas emissions (in kilotonnes CO2-e) Energy Industrial Agriculture, Other Processes Year Forestry Electricity End Waste and TOTAL+ Transport and Other Generation# Use of Product Land Use Fuel@ Use 2013 30 300 7 370 2 320 2 540 1 720 32 44 300 2014 31 200 7 340 2 210 2 530 1 640 31 45 000 2015 27 700 7 530 2 290 2 450 1 720 30 41 700 2016* 27 900 7 500^ 2 300 2 490 1 710 31 41 900
Notes:
* Provisional figures subject to revision.
# Including GHG emissions arising from Towngas production which accounted for about 0.73% of the total GHG emissions in Hong Kong in 2016.
@ Including use of fuel for combustion in commercial, industrial and domestic premises.
+ The sum of individual items may not equal to Total owing to rounding.
^ In 2016, carbon emissions arising from railway electricity consumption accounted for 2% or so of the overall carbon emissions in Hong Kong and were counted into the electricity generation sector. If these emissions were counted into the transport sector, the total carbon emissions from transport will make up about 20% of our overall carbon emissions. 4104 LEGISLATIVE COUNCIL ― 12 December 2018
From 2013 to 2016, Hong Kong's total GHG emissions reduced by about 5% to 41 900 kilotonnes CO2-e from 44 300 kilotonnes CO2-e, mainly attributable to the reduction in electricity generation by power plants and the fact that more natural gas and less coal was burnt for electricity generation, leading to the reduction of GHG emissions from electricity generation from 30 300 kilotonnes CO2-e to 27 900 kilotonnes CO2-e.
(2) and (3)
To meet the 2020 and 2030 carbon emission targets, the Government will continue to optimize the fuel mix, promote wider use of renewable energy, improve energy efficiency and conservation, promote low carbon transport, adopt waste to energy, and other suitable measures to reduce GHG emissions. It is anticipated that Hong Kong's carbon emissions will peak before 2020.
Pursuant to the Paris Agreement, all Parties should strive to formulate and communicate long-term low GHG emission development strategies by 2020. As part of China as well as a responsible member of the global community, Hong Kong should develop a long-term decarburization strategy up to 2050 by 2020. To this end, the Government has invited the Council for Sustainable Development ("SDC") to conduct a Public Engagement ("PE") exercise in early 2019, which will include collecting public views on whether and, if so, at what level a specific carbon reduction target for 2050 should be set (e.g. in line with the 2°C or 1.5°C targets of the Paris Agreement).
The "Special Report on Global Warming of 1.5°C" published by the IPCC in October 2018 assessed the impacts of global warming of 1.5°C above the pre-industrial level and related global greenhouse gas emissions pathways, providing policymakers with the required scientific evidence to formulate climate action plans for achieving the goal of the Paris Agreement (i.e. holding the increase in the global average temperature to well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to within 1.5°C".)
LEGISLATIVE COUNCIL ― 12 December 2018 4105
The Government would strive to conclude by 2020 the latest the development of Hong Kong's long-term decarburization strategy up to 2050. Apart from the recommendations put forward by SDC after PE exercise, we will also consider the latest scientific developments such as the Special Report on Global Warming of 1.5°C in formulating the strategy.
(4) The Former Central Policy Unit published the report entitled "Study on Emissions Trading in the Mainland: Options for Hong Kong" ("the Study") on 12 June 2017. The scope of the Study includes whether Hong Kong is well positioned to develop its own carbon emissions trading ("carbon trading") market and, if so, what role Hong Kong can play in the national carbon market.
The views of the stakeholders interviewed in the Study were diverse and there was no majority view or clear direction.
SCCC discussed the proposals put forward in the Study and agreed that Hong Kong is not yet in a position to establish its own carbon trading market at this stage. The relevant bureaux and departments will continue to keep in view the development of the national carbon market and the international carbon emissions trading schemes, consider the feasibility of setting up carbon emissions trading schemes in Hong Kong in due course, and explore the role Hong Kong can play in the national carbon market.
Provision of sites needed for meeting the public housing production targets
10. MR KWOK WAI-KEUNG (in Chinese): President, the Long Term Housing Strategy has set a public housing supply target of 280 000 units for the coming 10-year period, i.e. 28 000 units each year on average. However, the estimated public housing production for each of the coming four financial years is less than 20 000 units. On the other hand, in June this year, the Chief Executive ("CE") announced the reallocation of nine private housing sites for public housing development. In this connection, will the Government inform this Council:
4106 LEGISLATIVE COUNCIL ― 12 December 2018
(1) of the respective numbers of (i) private housing sites converted to public housing sites and (ii) public housing sites converted to private housing sites by the Government in the past five years, and set out, by the new use, the location, area and number of residential units that can be provided in respect of each site;
(2) of the number of Government, Institution or Community sites rezoned to public housing sites by the Government in the past five years, and set out, by the new use, the location, area and number of residential units that can be provided in respect of each site;
(3) of the Government's considerations in converting private housing sites to public housing sites;
(4) whether it will establish a mechanism whereby, when it is envisaged that the public housing production targets for certain years in the future cannot be met due to insufficient sites being available, a certain number of private housing sites must be timely converted to public housing sites to provide the sites that are required to make up for the shortfall in housing production; and
(5) as CE has stated in this year's Policy Address that the Government will increase the ratio of public housing in the public/private split of new housing supply and allocate more sites for public housing development, of the specific measures to be put in place to implement such decisions?
SECRETARY FOR DEVELOPMENT (in Chinese): President, the Government has been continually identifying suitable sites for the Hong Kong Housing Authority ("HKHA") and Hong Kong Housing Society ("HKHS") to develop public housing in accordance with the ten-year public housing supply target under the Long Term Housing Strategy ("LTHS"). During the site-searching and planning process, the Government would consider the holistic planning of the community as well as specific factors for individual sites in the allocation of suitable sites for public and private housing development purposes.
Having consulted the Transport and Housing Bureau, my reply to various parts of the question is as follows:
LEGISLATIVE COUNCIL ― 12 December 2018 4107
(1) (i) Taking into account those sites announced in June this year and re-allocated in the previous five financial years (2013-2014 to 2017-2018), the Government has reallocated a total of 21 private housing sites for public housing use. Information of these sites is listed below:
Estimated Public Site Area Site Housing Flat (in hectare) ProductionNote Sites allocated for Public Housing Development in 2013-2014 (3 sites) 1. Shek Mun (Shek Mun About 2.3 About 3 000 Estate Phase 2) Site 1, Shatin 2. Shek Mun (Shek Mun Estate Phase 2) Site 2, Shatin 3. Shek Mun (Shek Mun Estate Phase 2) Site 3, Shatin Sites allocated for Public Housing Development in 2014-2015 (1 site) 4. Fung Shing Street, Ngau About 0.69 About 570 Chi Wan Sites allocated for Public Housing Development in 2016-2017 (4 sites) 5. Kai Tak Area 2B Site 3 About 1.12 About 11 500 6. Kai Tak Area 2B Site 4 About 1.14 7. Kai Tak Area 2B Site 5 About 1.14 8. Kai Tak Area 2B Site 6 About 1.43 Sites allocated for Public Housing Development in 2017-2018 (4 sites) 9. Anderson Road Quarry About 1.69 (R2-8) 10. Ex-Cha Kwo Ling About 1.08 Kaolin Mine Site 11. Queen's Hill About 3.97 12. Tung Chung West Area About 1.82 23 4108 LEGISLATIVE COUNCIL ― 12 December 2018
Estimated Public Site Area Site Housing Flat (in hectare) ProductionNote Sites allocated for Public Housing Development in 2018-2019 (9 sites) 13. Anderson Road Quarry About 1.75 About 10 600 (R2-2) 14. Kai Tak Area 2B Site 1 About 1.38 15. Kai Tak Area 2B Site 2 About 1.20 16. Kai Tak Area 1E Site 1 About 1.71 17. Anderson Road Quarry About 0.60 (R2-3) 18. Anderson Road Quarry About 1.42 (R2-5) 19. Anderson Road Quarry About 1.06 (R2-4) 20. Anderson Road Quarry About 0.90 (R2-6) 21. Anderson Road Quarry About 0.60 (R2-7)
Note:
As most public housing sites are still in design stage, the above figures are only the current estimates.
(ii) No public housing sites have been converted for private housing development in the past five financial years (i.e. from 2013-2014 to 2017-2018).
(2) During the five-year period from 2013-2014 to 2017-2018, the Government has rezoned 23 sites predominantly zoned "Government, Institution or Community" for public housing development. The zonings, locations, area and estimated flat numbers of these sites are at Annex.
(3) and (4)
The Government currently has established procedures in the allocation of sites for public and private housing purposes when undergoing the site searching and planning process. In considering LEGISLATIVE COUNCIL ― 12 December 2018 4109
the housing types of individual sites, the Government has to take into account the holistic planning of the community, including the ratio of public and private housing in the concerned areas, and the different needs of public and private housing for community facilities, transport facilities, and infrastructural facilities in the area (such as water supplies, drainage, roads, etc.), and whether the location, area, and development scale of individual sites would be suitable for public housing development. At the same time, the Government also need to take into account the demand for private housing in the society, and continue to keep a certain number of sites for the Land Sale Programme in order to maintain a sustained and steady private housing land supply.
In view of the society's keen demand for public housing in recent years, the Government has converted 21 sites originally intended for private housing for public housing use since 2013-2014 having balanced the needs of different sectors in the society. The Government will continue to keep the situation under review and assess the most suitable land uses for different sites. This notwithstanding, in view of the considerations above, not all sites originally intended for private housing use could be arbitrarily reallocated for public housing.
To solve the shortage of public housing in the long run, we cannot only rely upon site reallocation. The key is to continually increase the overall land supply. The Government will continue to strive to identify sites for public and private housing development, and adopt a multi-pronged approach in increasing land supply in a sustained and steady manner in order to achieve the public housing supply target.
(5) The Government announced LTHS in December 2014, adopting the supply-led and flexible principles to gradually avert the housing supply-demand imbalance. According to LTHS, the Government updates the long term housing demand projection annually and presents a rolling ten-year housing supply target to capture social, economic and market changes over time, and make timely adjustments where necessary.
4110 LEGISLATIVE COUNCIL ― 12 December 2018
Based on the projections in December 2017, the total housing supply target for the ten-year period from 2018-2019 to 2027-2028 is 460 000 units. According to a public/private split of 60:40, the public housing supply target is 280 000 units, comprising 200 000 PRH units and 80 000 subsidized sale flats; while the private housing supply target is 180 000 units.
The Government is now working on the housing demand projections for the next ten-year period (i.e. from 2019-2020 to 2028-2029), and will later announce the results.
As pointed out in the Chief Executive's 2018 Policy Address, the Government would increase the ratio of public housing, and committed that 70% of housing units on the Government's newly developed land would be for public housing, which is a overall target having holistically considered the newly developed land whereas the housing types of individual sites would depend on such factors as the location and availability of ancillary facilities in the vicinity. The Policy Address also indicated that the public/private split of the future ten-year housing supply target under LTHS might need to be adjusted. The Government will have full regard to the latest developments and views from various sectors when updating the next ten-year housing supply target later this year.
To meet the public housing supply target, the Development Bureau and Planning Department have been working with the Transport and Housing Bureau and Housing Department, with the view of identifying suitable lands and increasing overall land supply to provide HKHA and HKHS with sites for public housing development.
In the short-to-medium term, through the rezoning of some 210 housing sites for housing purpose, over 310 000 residential units can be built. Among these units, over 70% will be used for public housing development.
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The medium-to-long term housing supply mainly relies on the four New Development Areas ("NDAs") and New Town Extension projects, which are Tung Chung New Town Extension ("TCNTE"), Kwu Tung North ("KTN") and Fanling North ("FLN") New Development Areas, Hung Shui Kiu Development Area and Yuen Long South development, which together will provide some 210 000 residential units. Under suitable circumstances, we will increase the public housing ratio of these development projects. For instance, as shown in the table above, we have reallocated a private housing site in the TCNTE area for public housing development in year 2017-2018 (item 12). Separately, we were earlier approved by the Town Planning Board to increase the development intensity of residential sites in KTN/FLN NDAs. Together with enhanced site design, the flat gain of 12 000 units will be fully allocated for public housing, increasing the public housing split of the KTN/FLN NDAs to approximately 70%.
Also, the Policy Address suggested that 70% of housing production under the vision of "Lantau Tomorrow" would be for public housing. Taking the 1 000-ha Kau Yi Chau artificial islands under the focus of the first-stage study as suggested by the Government as an example, around 150 000 to 260 000 units could be built, 70% of which (i.e. 105 000 to 182 000 units) would be public housing.
As pointed out in the Policy Address, the Development Bureau will formulate feasible arrangements for the Land Sharing Pilot Scheme after making reference to the Task Force on Land Supply's final report to be submitted, so as to unleash the development potential of private land for increasing supply of public and private housing, among which includes the consideration of using not less than 60% to 70% of the increased floor area for public housing.
The various measures above which are being implemented or proposed have shown the Government's determination in increasing housing land supply. We will continue to make strenuous efforts for the relevant works.
4112 LEGISLATIVE COUNCIL ― 12 December 2018
Annex
Location of Sites predominantly zoned "Government, Institution or Community" that have been rezoned for Public Housing Developments between 2013-2014 to 2017-2018
Rezoned Site Area Estimated Original Land District Location (in Flat Zoning Use hectare)(1) Number Zoning 1 Eastern Java Road, North G/IC R(A) 0.12 240 Point 2 Southern Wah Lok Path, Pok G/IC R(A) 0.36 360 Fu Lam 3 Junction of Shek Pai G/IC R(A)5 0.78 600 Wan Road and Tin Wan Hill Road(2) 4 Kowloon Ko Shan Road, To G/IC, R(A)3 0.3 500 City Kwa Wan Road 5 Kwun Tong Junction of Ko Chiu G/IC R(A) 0.72 660 Road and Pik Wan Road, Yau Tong 6 Choi Hing Road and G/IC, R(A)1 1.23 1 358 Choi Hing Lane, GB, Ngau Tau Kok Road 7 Choi Wing Road, G/IC R(A)2 0.67 1 075 Ngau Tau Kok 8 Ting On Street, Ngau G/IC R(A)3 0.22 378 Tau Kok(2) 9 Sham Shui Junction of Fat G/IC, O R(A)11 0.62 800 Po Tseung Street West and Sham Mong Road, Sham Shui Po 10 Kwai Tsing Tai Wo Hau Road G/IC, O R(A)2 0.31 400 Phase 2, Kwai Chung 11 San Kwai Street, G/IC, V R(A)2 0.55 650 Kwai Chung 12 Tai Po Chung Nga Road G/IC R(A)9 7.7 6 850 East, Tai Po LEGISLATIVE COUNCIL ― 12 December 2018 4113
Rezoned Site Area Estimated Original Land District Location (in Flat Zoning Use hectare)(1) Number Zoning 13 Tai Po Area 9 G/IC, R(A)9 GB 14 Islands Ngan Kwong Wan G/IC R(A) 0.77 500 Road West, Mui Wo 15 Near Shan Ha, Tung G/IC, R(A)1 0.92 1 200 Chung Road, Area 27, Road Tung Chung 16 North Queen's Hill (Site 1), G/IC(2) R(A) 13.77 12 000 Lung Yeuk Tau 17 Queen's Hill (Site 2), G/IC(2) R(B) 3.97 2 200 Lung Yeuk Tau
(Note: The site was subsequently reallocated from private housing development to public housing development) 18 Tuen Mun Hin Fat Lane, Castle G/IC, R(A)26 0.67 1 020 Peak Road, Castle GB, Peak Bay, Tuen Mun R(A)22 (Phase 1 and 2)
(Note: Part of the site was previously rezoned from an area mainly zoned "G/IC" with minor portion zoned "GB" to "R(A)22".) 19 Area 29 West near G/IC, R(A)21 1.32 830 Leung King Estate, R(A) Tuen Mun 4114 LEGISLATIVE COUNCIL ― 12 December 2018
Rezoned Site Area Estimated Original Land District Location (in Flat Zoning Use hectare)(1) Number Zoning 20 Area 2 near Shan G/IC R(A)23 0.31 290 King Estate, Tuen Mun(2) 21 Area 54 Site 5, Hing G/IC, R(A)25 0.77 700 Fu Street Tuen Mun Road, GB 22 Kei Lun Wei, G/IC R(A)24 1 1 000 Area 54, Tuen Mun 23 Hang Fu Street, G/IC R(A)26 0.67 520 Area 16, Tuen Mun Total 23 sites Involving 37.75 hectares Total Number of Flats: Approximately 34 131
Abbreviation:
GB Green Belt G/IC Government, Institution or Community O Open Space R(A) Residential (Group A) Development V Village Type Development Road Road area shown as "Road" on the OZP
Notes:
(1) The estimated site area and flat numbers are for reference only and may be subject to changes at the design stage.
(2) Public/subsidized housing developments developed by the Hong Kong Housing Society.
Statistics on public works projects
11. MR AU NOK-HIN (in Chinese): President, in recent years, quite a number of public works projects experienced cost overruns, arousing public concern. Regarding the statistics on public works projects, will the Government inform this Council:
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(1) of the details of the projects to which approval for increasing the approved project estimates ("APE") was given by the Finance Committee of this Council in each of the past five years, including (i) the names of the projects, (ii) the amounts of APE increased, (iii) the amounts of the revised APE, and (iv) the rates of increase in APE (set out in a table);
(2) of a breakdown of the number of the projects mentioned in (1) by the following reasons for the needs to increase APE (set out in a table): (i) increase in the provision for price adjustment due to escalation in labour and material costs, (ii) increase in the project contingency to account for unforeseen circumstances when the works were in progress, and (iii) other reasons (please specify);
(3) among the projects mentioned in (1), of the number of those for which the awarded prices of the main contracts were lower than the relevant estimates under the original APE; and
(4) of the names of the respective top three companies which were awarded (a) the highest number of public works contracts and (b) the highest total value of consultancy study contracts for public works, in each of the past four years, as well as (i) the total value of the contracts awarded and (ii) the number of contracts awarded to each company (set out in a table)?
SECRETARY FOR DEVELOPMENT (in Chinese): President, the Government has been implementing public works projects in an appropriate and orderly manner with a view to improving people's quality of living, enhancing the long-term competitiveness and promoting the economic development of Hong Kong. Notwithstanding that there have been instances of cost overruns in the delivering of certain mega projects in recent years due to unforeseeable circumstances that arose in the course of project implementation, we have maintained good performance(1) for projects under the Capital Works Programme as a whole.
(1) In retrospect, FC approved a total of about 580 Category A works projects in the past 10 years. Among them, about 70 projects required application to FC for additional funding. In other words, additional funding was required in approximately 10% of the projects. In addition, although there were projects that required additional funding owing to individual circumstances, we generally managed to complete the projects under the Capital Works Programme within the original APEs and even with surplus. 4116 LEGISLATIVE COUNCIL ― 12 December 2018
My reply to the four parts of Mr AU's question is as follows:
(1) The details of the total provision and increases in Approved Project Estimate ("APE") approved by the Finance Committee ("FC") of the Legislative Council in the past five years (i.e. from 2013-2014 to 2017-2018) are provided in Annex 1.
(2) Generally speaking, the major reasons for increasing APE can be categorized as follows:
(a) increased provision for price adjustments to cover higher-than-expected escalation in labour and material costs;
(b) higher-than-expected returned tender prices;
(c) increased project contingencies to account for circumstances during construction stage of the project. For example, they include worse-than-expected ground conditions and extra works carried out to meet local concerns.
Among the projects listed in Part (1) above, the breakdown of the above reasons (a), (b) and (c) accounting for the increases in APE is shown below:
Reasons for Increase in APE (there may be more than one reason for each project) Number (a) (b) (c) of increased higher-than- increased projects provision for expected Other* project price returned contingencies adjustments tender prices 11 9 5 6 2
Note:
* Other: to meet the project expenditures of the new phases of Kai Tak Development
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(3) Out of the 11 projects listed in Part (1) above, the returned tender prices of six projects were lower than the respective sums allowed in the original APE.
(4) The tendering process of public works contracts and the selection of consultants are carried out in accordance with the Stores and Procurement Regulations. The top three contractors and consultants with the highest total values of public works contracts and consultancies awarded in the past four years (i.e. from 2015 to 2018) are listed in Annex 2 and Annex 3 respectively.
Annex 1
The Increases in APE and Total Provision Approved from 2013-2014 to 2017-2018
Original Approved Revised Percentage Project Title APE Provision APE of Increase ($ million) ($ million) ($ million) in APE (i) Project of Increase in APE(1) 6579TH―Central-Wan Chai 28,104.6 7,934.3 36,038.9 28.2% Bypass and Island Eastern Corridor Link 8094EB―Redevelopment of 432.7 220.7 653.4 51.0% Ying Wa Girls' School at Robinson Road, Hong Kong 5019GB―Liantang/Heung Yuen 16,253.2 8,719.9 24,973.1 53.7% Wai Boundary Control Point and associated works―site formation and infrastructure works 5233DS―Sludge treatment 5,154.4 209.9 5,364.3 4.1% facilities 6845TH―Hong Kong-Zhuhai- 30,433.9 5,461.1 35,895.0 17.9% Macao Bridge―Hong Kong boundary crossing facilities―reclamation and superstructures 4118 LEGISLATIVE COUNCIL ― 12 December 2018
Original Approved Revised Percentage Project Title APE Provision APE of Increase ($ million) ($ million) ($ million) in APE 6053TR―Hong Kong Section of 55,017.5 15,387.5 70,405.0 28.0% Guangzhou-Shenzhen-Hong Kong Express Rail Link―construction of railway works 6057TR―Hong Kong Section of 11,800.0 4,215.0 16,015.0 35.7% Guangzhou-Shenzhen-Hong Kong Express Rail Link―construction of non-railway works 5045CG―District Cooling 3,145.9 606.1 3,752.0 19.3% System at the Kai Tak development 5045CG―District Cooling 3,752 153.7 3,905.7 4.1% System at the Kai Tak development 6056TR―South Island Line 927.0 286.2 1,213.2 30.9% (East)―essential public infrastructure works 6063TR―Shatin to Central 6,254.9 847.7 7,102.6 13.6% Link―construction of railway works―advance works Subtotal 161,276.1 44,042.1 205,318.2 - (ii) Total Provision Approved by - 386,784.7 - - FC(2) (iii) Percentage of APE increased - 11.4% - - in Total Provision Approved
Notes:
(1) Eleven projects were approved to increase APE
(2) Two hundred and fifty-eight funding applications were approved
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Annex 2
Top Three Contractors Awarded with the Highest Total Values of Public Works Contracts from 2015 to 2018
Public Works Contracts(3) Year Values Name of Contractor Number (HK$ Billion) 2015 Leighton Contractors (Asia) Limited 2 7.8 China Road and Bridge Corporation 5 6.5 Continental Engineering Corporation 2 3.6 2016 Leighton Contractors (Asia) Limited 2 6.3 China State Construction Engineering (Hong 2 5.4 Kong) Limited Chun Wo Construction and Engineering 4 2.4 Company Limited 2017 Keppel Seghers Hong Kong Limited 1 21.7 Zhen Hua Engineering Company Limited 4 11.2 Gammon Construction Limited 2 6.3 2018(4) Paul Y. Construction Company, Limited 1 6.6 Build King Construction Limited 3 5.5 Penta-Ocean Construction Co., Ltd. 3 5.3
Notes:
(3) Public works contracts with values over HK$7 million are included only
(4) Up to 30 November 2018
Annex 3
Top Three Consultants Awarded with the Highest Total Values of Consultancies from 2015 to 2018
Consultancies(5) Year Values Name of Contractor Number (HK$ Billion) 2015 AECOM Asia Company Limited 20 0.30 Ove Arup & Partners Hong Kong Limited 23 0.26 Black & Veatch Hong Kong Limited 6 0.21 4120 LEGISLATIVE COUNCIL ― 12 December 2018
Consultancies(5) Year Values Name of Contractor Number (HK$ Billion) 2016 AECOM Asia Company Limited 19 0.35 Leigh & Orange Limited 1 0.32 Ho & Partners Architects Engineers & 1 0.19 Development Consultants 2017 WSP (Asia) Limited 11 0.24 Ove Arup & Partners Hong Kong Limited 11 0.11 AECOM Asia Company Limited 10 0.10 2018(6) AECOM Asia Company Limited 19 0.30 Black & Veatch Hong Kong Limited 11 0.17 WCWP International Limited 3 0.17
Notes:
(5) Works-related consultancies with values over HK$3 million are included only
(6) Up to 30 November 2018
Issuance of One-way Permits to mainland children of Hong Kong residents
12. MR LEUNG YIU-CHUNG (in Chinese): President, at present, the daily quota for mainland residents coming to Hong Kong for settlement on Permits for Proceeding to Hong Kong and Macao ("One-way Permits" ("OWPs")) is 150. Since 1 April 2011, the Mainland authorities have allowed eligible mainland "overage children" of Hong Kong residents (i.e. mainland residents who were under the age of 14 when their natural fathers or mothers obtained their first Hong Kong identity cards on or before 1 November 2001) to apply for OWPs for settlement in Hong Kong for reunion with their natural parents. Regarding the issuance of OWPs to mainland children of Hong Kong residents, will the Government inform this Council:
(1) as the Government told this Council in 2005 and 2009 respectively that the Security Bureau had on occasions relayed the views of the public to the Mainland authorities for their consideration of setting up a channel under the OWP system for mainland adult children of Hong Kong residents to settle in Hong Kong, of the progress of the matter;
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(2) whether it will urge the Mainland authorities to relax the eligibility criteria for OWP to allow mainland "elder overage children" of Hong Kong residents (i.e. mainland children of Hong Kong residents who were over the age of 14 when their natural fathers or mothers obtained their first Hong Kong identity cards on or before 1 November 2001, who are thus ineligible to apply for OWPs in the capacity of overage children) to settle in Hong Kong for reunion with their natural parents; if so, of the details; if not, the reasons for that;
(3) whether it knows (i) the number of OWP applications approved by the Mainland authorities and (ii) unused OWP quota, in each year since April 2011; and
(4) given the former Secretary for Security's remark that the Government has reached a consensus with the Mainland authorities to make use of the unused OWP quota to handle the OWP applications made by overage children, whether the Government knows the respective numbers of OWP applications made by overage children (i) received and (ii) approved by making use of the unused OWP quota by the Mainland authorities, in each year since April 2011; whether it will study with the Mainland authorities the use of unused OWP quota to handle the OWP applications made by elder overage children; if so, of the details; if not, the reasons for that?
SECRETARY FOR SECURITY (in Chinese): President, it is stipulated in Article 22 of the Basic Law that for entry into the Hong Kong Special Administrative Region ("HKSAR"), people from other parts of China must apply for approval. The provisions of this Article, in accordance with the interpretation by the Standing Committee of the National People's Congress in 1999, mean that Mainland residents who wish to enter Hong Kong for whatever reason, must apply to the relevant authorities of their residential districts for approval in accordance with the relevant national laws and administrative regulations, and must hold valid documents issued by the relevant authorities. Mainland residents who wish to settle in Hong Kong for family reunion must apply for Permits for Proceeding to Hong Kong and Macao, commonly known as One-way Permits ("OWPs"), from the exit and entry administration offices of the public security authority at the places of their household registration in the Mainland. The application, approval and issuance of OWPs fall within the remit of the Mainland authorities. The HKSAR Government will take account of the 4122 LEGISLATIVE COUNCIL ― 12 December 2018 overall interest of the community and will exchange views on matters relating to the overall OWP scheme with the Mainland authorities from time to time, and reflect to them the aspirations of the society.
The reply to the question raised by Mr LEUNG is as follows:
(1) In response to the request of Hong Kong residents and their Mainland "overage children" for reunion in Hong Kong, starting from 1 April 2011, the Mainland authorities allow eligible Mainland "overage children" of Hong Kong residents (i.e. Mainland residents who were below the age of 14 when their natural fathers or mothers, on or before 1 November 2001, obtained their first Hong Kong identity card and whose natural fathers or mothers still resided in Hong Kong on 1 April 2011), to apply for OWP to join their natural fathers or mothers in Hong Kong. The phased submission of applications by "overage children" to the Mainland authorities will be scheduled chronologically according to the order in which their natural fathers or mothers obtained their Hong Kong identity cards. At present, all eligible Mainland "overage children" of Hong Kong residents may submit applications to come to Hong Kong for reunion with their natural parents, including those whose natural fathers or mothers obtained their first Hong Kong identity cards on or before 1 November 2001.
(3) Since the implementation of the arrangements for "overage children" to apply for entry and settlement in Hong Kong, as at the end of October 2018, the Mainland authorities have received nearly 58 000 OWP applications from overage children, of which initial assessment of over 56 000 has completed. According to the information provided by the Mainland authorities, over 51 000 OWP applications were approved. It is learnt that among those people with OWP approved, over 90% of them have arrived in Hong Kong. The numbers of holders of OWPs entering Hong Kong from April 2011 to the end of October 2018 are set out in the table below. The Immigration Department does not maintain other statistics with breakdown mentioned in the question.
Number of people Year (including "overage children") 2011 (since April) 34 700 2012 54 646 LEGISLATIVE COUNCIL ― 12 December 2018 4123
Number of people Year (including "overage children") 2013 45 031 2014 40 496 2015 38 338 2016 57 387 2017 46 971 2018 (as at the end of October) 35 203 Total 352 772
The overall usage of OWP quota depends on various factors, mainly including the number of Mainland-Hong Kong marriages and the number of other eligible applicants, i.e. the Mainland spouse and minor children of holders of OWPs who have entered Hong Kong still awaiting the approval for settlement in Hong Kong; elderly persons with no one to depend on in the Mainland applying to come to join their children in Hong Kong; and Mainland children applying to come to take care of their elderly parents with no one to depend on in Hong Kong, etc.
(2) and (4)
The HKSAR Government has noted the views in the community concerning Mainland children of Hong Kong residents who are not eligible to apply for OWP as "overage children", including the request from the Mainland residents who has attained the age of 14 when their natural fathers or mothers obtained their Hong Kong identity cards (commonly known as "elder overage children"). The application, approval and issuance of OWPs, Two-way Permits and exit endorsements fall within the remit of the relevant authorities in the Mainland. It is learned that at present the Mainland authorities do not have any plans to change the existing regulations on the application criteria for "overage children". The HKSAR Government attaches great importance to the views of various sectors of the society concerning Mainland residents settling in Hong Kong through the OWP Scheme. The Government will take account into the interests of the community and will continue to exchange views with the Mainland authorities to convey the aspirations of the society.
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Ensuring polling staff to properly discharge duties
13. MR ANDREW WAN (in Chinese): President, the Legislative Council Kowloon West Geographical Constituency By-election was held on the 25th of last month. It has been reported that on the morning of that day when a candidate and some members of his electioneering team were conducting canvassing activities in a Chinese restaurant in Shek Kip Mei, a Presiding Officer told the candidate that the premises were within a No Canvassing Zone ("NCZ") and demanded that he immediately stop his canvassing activities and leave. However, the Presiding Officer did not make the same demand to another candidate who was present at the premises at the time. The Chairman of the Electoral Affairs Commission subsequently met the media and advised that there was no problem for candidates to canvass for votes on non-street level storeys within NCZs. On the other hand, section 40(17) of the Electoral Affairs Commission (Electoral Procedure) (Legislative Council) Regulation (Cap. 541D) provides that a person may, on polling day, canvass for votes, without obstructing any person, on the storeys above or below street level in a building within NCZ provided that the person's entry to the building for canvassing votes is allowed and the building has no polling station inside it. In this connection, will the Government inform this Council:
(1) whether it has gained an understanding of the reasons for the aforesaid Presiding Officer to adopt different approaches for handling the conduct of canvassing activities by the two candidates; whether personal political orientations were involved; if so, of the authorities' further measures to ensure that polling staff will act in an impartial manner; and
(2) whether it has reviewed if the training on electoral legislation and relevant guidelines currently provided to polling staff is sufficient; if it has, of the outcome; if not, the reasons for that?
SECRETARY FOR CONSTITUTIONAL AND MAINLAND AFFAIRS (in Chinese): President, my reply Mr WAN's question is as follows:
(1) In accordance with the Electoral Affairs Commission (Electoral Procedure) (Legislative Council) Regulation (Cap. 541D), door-to-door canvassing and, for the purpose of such canvassing, the LEGISLATIVE COUNCIL ― 12 December 2018 4125
display or wearing of propaganda materials, will be allowed on the storeys above or below street level in a building within a No Canvassing Zone ("NCZ") other than a building in which there is a polling station, provided that permission has been obtained for entry to the building for canvassing votes, and that obstruction is not posed to others and no sound amplifying device is used.
Apart from this, no other canvassing activities will be allowed within a NCZ except for static display of election advertisements mounted at designated spots approved by the Returning Officer. On the polling day, Presiding Officers ("PROs") will make their best endeavor to ensure that no person carries out the aforesaid canvassing activities in NCZ in respect of their polling stations. Any person found to have conducted canvassing activities prohibited in NCZ will be asked to leave the area.
The Electoral Affairs Commission has already received the complaint mentioned in the question, and will follow up on the case in accordance with the established practice.
According to the existing mechanism, the Registration and Electoral Office ("REO") will, as far as possible, avoid deploying polling staff to work in the polling station where they would cast their votes. REO will also require each staff to disclose if he/she had any close relationship with any candidates, and if so, he/she would not be assigned to work at any of the polling stations concerned, such that the election can be conducted in a neutral and fair manner.
(2) There were around 2 700 electoral staff responsible for polling and counting duties on the polling day in the by-election. As in previous elections, REO arranged briefing sessions for all polling staff (including the PROs, Deputy PROs and all polling and counting staff) of the by-election, so as to ensure that the polling stations would be operated in a smooth and effective manner. Besides, polling management training which covered important provisions of the Electoral Affairs Commission (Electoral Procedure) (Legislative Council) Regulation, crisis management, quality polling service, complaint handling and training on emotional quotient, as well as experience sharing workshops was organized by REO for staff at the 4126 LEGISLATIVE COUNCIL ― 12 December 2018
supervisory level. Staff deployed to compile statistical returns on the polling day was provided with specialized training on statistical work.
PROs must follow a set of working guidelines, so as to ensure that the entire election is conducted in an open, honest and fair manner.
Nuisance caused by wild pigs
14. MR STEVEN HO (in Chinese): President, cases of wild pigs appearing in country parks, farms and urban areas have been heard from time to time in recent years. Some members of the public have pointed out that wild pigs eat and damage crops as well as tip over rubbish bins, thereby jeopardizing environmental hygiene and posing threats to the personal safety of the public. Given the outbreak of African swine fever ("ASF") in recent months on the Mainland, they are worried about wild pigs spreading ASF to the pigs in pig farms. On the other hand, the Government launched in October last year a two-year Pilot Study on the Contraception and Relocation of Wild Pigs ("Pilot Study"). As at September this year, the Government conducted 30 operations under the Pilot Study and captured 101 wild pigs, among which 33 female wild pigs were administered with contraceptive vaccine and six wild pigs received permanent surgical sterilization. The Government also relocated another 72 captured wild pigs to the countryside far away from residential areas. In this connection, will the Government inform this Council:
(1) whether it will consider conducting an assessment of the number of wild pigs and the number of wild pig herds across the territory as well as their fertility trend; if so, of the details; if not, the reasons for that;
(2) of the estimated expenditure of and the manpower needed for the Pilot Study; the locations to which the aforesaid 72 wild pigs were relocated and the location selection criteria (whether they include distance from farms); whether it has reviewed if the number of operations was on the low side; whether it will increase the number of operations and review the effectiveness of the Pilot Study; if it will review, when the outcome will be published; if not, of the reasons for that;
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(3) given that the Government has commissioned a local university to examine and improve the design of refuse collection facilities to prevent wildlife animals from foraging food from refuse, of the progress of such work, and whether the relevant design will be adopted for the refuse collection facilities situated in the vicinity of residential areas, country parks and farms;
(4) as the Government has advised that it will conduct public education to remind members of the public not to feed wild pigs, of the details of such work;
(5) as the Government has advised that infrared cameras will be used to take photos of feeding activities once environmental hygiene problem has been found to have been caused by the feeding of wild pigs, and the photos so taken will be referred to the relevant departments for follow-up actions, how the relevant departments follow up those referrals; in respect of the aforesaid work undertaken by the Government in the past three years, of the manpower deployed, the number of prosecutions instituted, the penalties generally imposed and the maximum penalty imposed on the convicted persons, as well as the number of cases involving repeated offenders;
(6) of the Government's suggestions for farmers about how to protect their personal safety when wild pigs intrude into farms; and
(7) whether it has assessed the risk of wild pigs spreading ASF to pigs in local pig farms; whether it will (i) implement measures and provide financial assistance to help pig farm operators guard against ASF, and (ii) formulate a contingency mechanism to deal with the situation of massive deaths of wild pigs; if so, of the details; if not, the reasons for that?
SECRETARY FOR THE ENVIRONMENT (in Chinese): President, the Government is very concerned about the nuisance and potential hazards caused by wild pigs to the public. We are reviewing our existing practices in handling wild pigs and will submit in due course a paper to the panel concerned of the Legislative Council for discussion. In consultation with the Food and Health Bureau, our reply to the question raised by Mr HO is as follows:
4128 LEGISLATIVE COUNCIL ― 12 December 2018
(1) Wild pigs mainly appeared in rural areas of the New Territories in the past, yet surveys conducted by the Agriculture, Fisheries and Conservation Department ("AFCD") have revealed that they now scatter across the whole territory, including the northern part of the New Territories, Sai Kung and Hong Kong Island. As wild pigs normally appear individually or in small groups, making covert movements in their widespread and vast habitats, it is technically difficult to compile statistics on the overall number of wild pigs in Hong Kong.
(2) In response to the objections raised by some concern groups on animal interests, AFCD, on grounds of safety, has suspended hunting operations by the wild pig hunting teams since 2017, and launched a Pilot Capture and Contraception/Relocation Programme of Wild Pigs ("CCRP") in October in the same year. Under the Pilot CCRP, contraceptive treatments are given to wild pigs habituated to feeding and found near the community, and those causing nuisance to the public are relocated to the countryside far away from residential areas and facilities (including farms), such as Tai Tam Country Park and Tai Lam Country Park. During such operations, veterinarians first tranquillize wild pigs with dart guns, then inject a contraceptive vaccine ("GonaConTM") specially developed for mammals to suitable female wild pigs and microchip them. GPS transmitters are also put on wild pigs before they are released back to the countryside. In addition, AFCD is examining the feasibility of conducting permanent surgical sterilization on site for wild pigs.
Since the launch of the Pilot CCRP, three wild pigs were captured in each operation on average, which is more effective than that captured by hunting (less than one each time on average). To assess the effectiveness of the contraceptive vaccine, AFCD, in collaboration with the Department of Agriculture of the United States as well as the Department for Environment, Food and Rural Affairs of the United Kingdom, has commenced an on-site study since this February on the effectiveness of GonaConTM in controlling the breeding of wild pigs. As the adoption of GonaConTM in controlling the breeding of wild pigs has never been tried out elsewhere in the world, it is premature to comment on the LEGISLATIVE COUNCIL ― 12 December 2018 4129
effectiveness of the contraceptive vaccine at this stage. AFCD expects that the assessments on the effectiveness of GonaConTM and the feasibility of conducting permanent surgical sterilization on site will be completed at the end of 2019.
Large in size and aggressive in temper, an adult wild pig may weigh up to 150 kg and measure up to 1.6 m in length. Adult males even have tusks to attack. As it takes at least 10 minutes for the anaesthetic to take effect after successful injection, during which wild pigs will try their best to dash off and become aggressive, AFCD, on account of operational need and safety, has to deploy 12 to 15 staff to capture wild pigs in each operation. On-site preparation (such as allowing wild pigs to get used to the tools at the trap so as to reduce their alertness) is also required about two weeks in advance of the operation. The expenditure involved for the Pilot CCRP in 2017-2018 was $1.79 million. AFCD has earmarked $3.5 million to implement the Pilot CCRP in 2018-2019.
(3) To prevent wild animals such as monkeys and wild pigs from foraging food from refuse, AFCD commissioned in 2018 a local university to help improve the design of refuse collection facilities being used in residential areas and on the streets. The first batch of design has been completed by the contractor. It is expected that trials will be carried out on site when prototypes are ready early next year.
(4) AFCD is conducting a series of publicity and education programmes, including promotion on TV, radio and public transportation, as well as organization of fun day, roving exhibitions, public lectures and visits, to publicize the negative impacts of feeding wild animals. AFCD has also set up a YouTube Channel and Facebook page earlier, and launched the TV Announcements in the Public Interest together with a series of micro-movies titled "Don't Feed Wild Animals and Feral Pigeons" to inform the public about the negative consequences of feeding wild pigs, monkeys and feral pigeons, etc. In addition, AFCD is promoting public awareness of the wild pig problem through its newly designed posters, banners and leaflets.
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(5) If wild pigs are frequently spotted searching for food from feeders in the vicinity of certain residential areas, AFCD will put up banners or posters at suitable places within these areas to remind the public not to feed wild animals. Where possible, AFCD will also set up infrared automatic cameras to monitor the feeding and appearance of wild pigs. The information collected will be referred to the Food and Environmental Hygiene Department for follow-ups on the environmental hygiene problems caused by such feeding. Furthermore, under the Wild Animals Protection Ordinance (Cap. 170), feeding of wild animals (including wild pigs) in feeding ban areas such as Kam Shan, Lion Rock and Shing Mun Country Parks, part of Tai Mo Shan Country Park, Tai Po Kau Nature Reserve, area of Caldecott Road and Piper's Hill section of Tai Po Road will be liable to prosecution and a maximum fine of $10,000. AFCD conducts regular patrols at the feeding ban areas. There was no prosecution initiated for wild pig feeding in these areas over the past three years.
(6) When encountering wild pigs, members of the public should keep calm and stay away from them as far as possible. One must not get near them or drive them away with any objects lest there should be danger. If necessary, one may hide behind some robust and large barriers, and wait until the wild pigs leave before proceeding with one's activities. If wild pigs are found searching for food on farmland, farmers could erect sturdy fences to protect crops or use infrared auto-trigger lightings to deter wild pigs. Farmers should not drive wild pigs away from the farmland with any object, and should immediately keep dogs under restraint so that the wild pigs will not feel threatened and react in self-defence. When a wild pig is posing immediate threats to life and property, one should report to the police for emergency assistance.
(7) According to the Food and Health Bureau, since the outbreak of African Swine Fever ("ASF") found in the Mainland in August this year, the Government has been maintaining close liaison with relevant Mainland authorities on the latest development, so as to prevent the spread of the disease to Hong Kong. The Government has stepped up cleansing and disinfection in various areas, including boundary checkpoints, transportation and slaughterhouses, etc. In LEGISLATIVE COUNCIL ― 12 December 2018 4131
addition, AFCD has been actively disseminating messages to relevant sectors and pig farmers on how to prevent ASF infection with a view to enhancing their vigilance of this disease. Among others, the messages cover how to implement good biosecurity measures, such as preventing wild animals from entering pig farms. Based on the current biosecurity measures in place in pig farms, it is believed that there will be minimal direct contact between wild pigs and pigs in farms. As the ASF virus can persist for months in pork and pork products, AFCD has amended the conditions of the livestock keeping licences issued to pig farms to ban the use of kitchen waste and catering waste that may contain or have been in contact with pork or pork products as feeds. To assist pig farmers switching to other suitable feeds and procuring the necessary equipment, AFCD has set up a special loan scheme under the J.E. Joseph Trust Fund to provide low-interest loan up to $800,000. AFCD will continue carrying out farm inspections and educating farmers, with a view to ensuring proper implementation of disease prevention work and good biosecurity measures at various levels. AFCD has also prepared contingency plans in response to outbreak of ASF at local pig farms which cover culling operations and relevant compensation packages, and conducted a pig culling drill earlier, in order to enhance preparedness for preventing the spread of ASF in Hong Kong.
Combating job-hopping acts of foreign domestic helpers
15. DR CHIANG LAI-WAN (in Chinese): President, since June 2013, the Immigration Department ("ImmD") has stepped up its scrutiny of the employment visa applications of foreign domestic helpers ("FDHs") who changed employers for several times, in order to curb suspected abuse by FDHs of the arrangements for premature contract termination in order to change their employers (commonly known as "job-hopping"). It has been reported that during the period from the implementation of the measure to August this year, ImmD found 10 863 cases of suspected job-hopping among 530 000 employment visa applications of FDHs, but eventually rejected 1 776 applications only. Besides, some employment agencies ("EAs") have abetted FDHs to deliberately perform badly to get themselves fired, so that such FDHs can obtain one month's wages in lieu of notice as well as free air tickets and passages to return to their places of 4132 LEGISLATIVE COUNCIL ― 12 December 2018 domicile while the EAs concerned can collect intermediary fees from new employers who have employed them ("collusive job-hopping"). There are views that the existing measures cannot effectively combat the aforesaid acts of FDHs and EAs. In this connection, will the Government inform this Council:
(1) in respect of the aforesaid cases of suspected job-hopping, of the number of those in which the ex-employers had given negative comments on the performance of the FDHs concerned in the premature termination notifications/complaint letters submitted by them, and among such cases, the number of those in which the employment visa applications of the FDHs concerned were subsequently approved;
(2) whether it will examine allowing employers to amend, subject to FDHs' consent, the Standard Employment Contract for employing FDHs, such as by adding a probation period or stipulating a longer or a shorter termination notice period; if so, of the details; if not, the reasons for that;
(3) whether it will consider setting up an inter-departmental working group which comprises representatives from the Labour Department and ImmD to gather intelligence and conduct investigations in respect of acts of job-hopping and collusive job-hopping; if so, of the details; if not, the reasons for that;
(4) whether it will contact FDH employer groups to step up the publicity among employers that they can report to ImmD suspected acts of job-hopping and collusive job-hopping; if so, of the details; if not, the reasons for that;
(5) in each of the past three years and this year (as at the end of November), of (i) the number of complaints about collusive job-hopping received and, among them, (ii) the number of cases found substantiated, by the authorities as well as the penalties imposed on the EAs concerned; whether it will introduce a diversified punishment mechanism, such as requiring the management personnel of the EAs concerned to attend compulsory training courses; if so, of the details; if not, the reasons for that; and
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(6) whether it has reviewed if the existing measures can effectively combat acts of job-hopping and collusive job-hopping, so as to suitably protect the rights and interests of employers of FDHs; if so, of the outcome; if not, whether it will conduct a review expeditiously?
SECRETARY FOR LABOUR AND WELFARE (in Chinese): President, having consulted the Security Bureau, our consolidated response to the Member's question is set out below:
(1) The Immigration Department ("ImmD") has all along been processing employment visa applications of foreign domestic helpers ("FDHs") in a rigorous manner. If the applicant has any adverse records or breaches, ImmD will refuse his/her application.
Clause 12 of the Standard Employment Contract ("SEC") for employment of FDHs provides that in the event of termination of SEC, both the employer and FDH shall give the Director of Immigration notice in writing within seven days of the date of termination. A copy of the other party's written acknowledgement of the termination shall also be forwarded to ImmD. These records will be kept and taken into account by ImmD when it assesses any future applications made by FDH for employment visa or extension of stay.
Since June 2013, ImmD has strengthened the assessment of employment visa applications from FDHs who changed employers repeatedly to combat abuse in changing employers through the arrangement for premature contract termination (commonly known as "job-hopping"). In assessing FDHs' applications for employment visa, ImmD closely scrutinizes the case details such as the number and reasons for premature contract termination in the last 12 months, with a view to detecting any abuse of the arrangements for premature contract termination. From June 2013 to end October 2018, ImmD received around 544 000 employment visa applications from FDHs, of which 11 077 were subject to further scrutiny, accounting for 2% of the total number of applications. Among the 11 077 cases closely scrutinized by ImmD, various exceptional circumstances may be involved, including premature contract termination on 4134 LEGISLATIVE COUNCIL ― 12 December 2018
grounds of the transfer, migration, death or financial reasons of the ex-employer, or where there was evidence suggesting that FDH had been abused or exploited. Of these 11 077 cases, ImmD refused 1 817 applications, 819 applications were withdrawn by the applicants, and 658 applications could not be processed further.
ImmD does not maintain statistics on the number of suspected "job-hopping" cases which involve adverse comments from previous employers on the work performance of their FDHs.
(2) Pursuant to clause 10 of SEC, either the employer or FDH may terminate the contract by giving one month's notice in writing or one month's wages in lieu of notice. According to section 9 of the Employment Ordinance (Cap. 57) ("EO"), an employer may terminate a contract of employment without notice or payment in lieu if an employee, in relation to his/her employment, wilfully disobeys a lawful and reasonable order from his/her employer, misconducts himself/herself, is guilty of fraud or dishonesty, or is habitually neglectful in his/her duties, etc., if the relevant conditions are fully established.
The proposal of setting a probation period for FDHs or amending the notice period for contract termination involves complicated issues. Although the proposal may shorten the time required by employers to terminate the employment contract with their FDHs, it may give rise to other problems. For example, if a probation period is set, FDHs would also have the right to terminate a contract prematurely with their employers at any time within the probation period, and the employers are still required to bear the costs related to contract termination, including the return passage to FDHs' places of origin. Also, employers cannot dispense with the expenses for hiring a new FDH, including travel expenses, visa fees and authentication fees, etc., even if there is a probation period. On the other hand, if FDHs are required to bear the risks of a probation period or a shorter notice period for terminating a contract, many FDHs may not be able to afford the costs of coming to work in Hong Kong, or they may suffer serious losses as a result of not passing the probation. This would affect the desire of FDHs to work in Hong Kong, thereby limiting employers' choices and even rendering them unable to employ FDHs.
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The existing arrangement under SEC that either the employer or FDH may terminate the contract by giving one month's notice in writing or one month's wages in lieu of notice already provides a degree of flexibility to both parties and has taken into account the interests of both employers and FDHs. After considering the above factors, the Government has no plan to set a probation period for the employment of FDHs or amend the notice period required for contract termination.
(3), (4) and (6)
The Government has all along been closely monitoring the suspected abuse of the arrangement for premature termination of contract by FDHs. Since June 2013, in order to combat suspected "job-hopping" by FDHs, ImmD has strengthened the assessment of employment visa applications from FDHs who changed employers repeatedly within a short period of time. ImmD later implemented a series of measures to further combat "job-hopping", including improving the visa application assessment workflow, increasing manpower to handle cases, and issuing clear operational guidelines to staff, which include checking relevant records of employers and FDHs, and contacting the former employers and FDHs suspected of "job-hopping" to understand the reasons for premature contract termination etc. ImmD will continue to strengthen the assessment and review the effectiveness of the measures from time to time.
In relation to the arrangement for FDHs to return to their places of origin after contract termination, the Labour Department ("LD") has all along been encouraging employers to purchase air tickets for FDHs instead of providing them with cash equivalent to the value of an air ticket. This is to reduce the chance of FDHs or employment agencies ("EAs") not returning to their places of origin or not arranging FDHs to return to their places of origin after receiving from employers free return passage to the places of origin.
ImmD and LD will continue to maintain close contact on matters related to FDHs, and will follow up and investigate as appropriate upon receiving complaints or reports of suspected "job-hopping" of FDHs.
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In addition, LD has all along been organizing education and publicity programmes for FDHs and their employers, such as holding briefing sessions for FDHs and employers, publishing promotional materials, and producing promotional videos, etc., in order to enhance their understanding of their respective employment rights and obligations and channels for seeking assistance, including reminding FDHs not to abuse the arrangement for premature termination of contract. This September, LD issued "A Handbook for Employing Foreign Domestic Helpers" to enable employers to understand their employment rights and obligations, including the arrangement for and way to handle contract termination between employers and FDHs.
If employers and FDHs have disputes regarding the rights under EO or the employment contract and cannot resolve them on their own, they may seek assistance from LD. LD will provide free consultation and conciliation services.
(5) EAs are not in breach of the relevant laws for providing job placement services to FDHs and/or employers. However, for each job placement, EAs are not allowed to charge the FDH commission of more than 10% of the first-month wages after FDH has been successfully placed in employment.
The Code of Practice for Employment Agencies ("CoP"), promulgated by LD pursuant to section 62A of EO, provides that EAs should exercise due diligence in checking the accuracy of the information provided by both job-seekers and employers as far as practicable, and ensure that any information that is made available to employers or job-seekers is consistent with the facts made known to EAs. CoP also requires EAs to enter into service agreements with employers and list clearly the service coverage, itemized fees, date of reporting duty of FDH, arrangement for replacing FDH and refund policy, etc. Employers using the services of an EA should agree and clarify with EA the service details before payment, and the agreed terms should be written down in a service agreement signed by both parties. When entering into a service agreement, employers and EAs may agree on matters about an FDH resigning LEGISLATIVE COUNCIL ― 12 December 2018 4137
shortly after arriving in Hong Kong, for example, whether a refund would be made and whether selecting another FDH would require separate service fees, etc.
If EAs cannot provide the services set out in the service agreement, employers can make a civil claim based on the service agreement to protect their rights as consumers. If EAs are in breach of the CoP requirements, including not entering into a service agreement with employers, their licences may be revoked or refused renewal by the Commissioner for Labour.
LD and ImmD do not maintain the statistics requested in the question.
Promoting the wider use of electric buses
16. MR JEREMY TAM (in Chinese): President, in 2010, the then Chief Executive indicated in his Policy Address that "[t]he ultimate policy objective of the Government is to have zero emission buses running across the territory." Nevertheless, as at early this year, among the 36 single-deck electric buses purchased by franchised bus companies ("bus companies") with full subsidies by the Government, only 24 buses had been put into service. It has been reported that bus companies face quite a number of difficulties should they switch to use electric buses for the whole bus fleets, including that thousands of bus parking spaces have not been installed with electric bus charging facilities, the power supply facilities at parking spaces and in bus depots do not have the capacity to meet the power demand for simultaneous charging of a large number of electric buses, and there are a host of technical issues. In this connection, will the Government inform this Council:
(1) whether it knows in respect of each bus company, the respective current numbers of bus parking spaces located at (i) bus termini, (ii) bus depots and (iii) other places, and among them, the numbers of those provided with charging facilities as well as their detailed locations (set out in a table by name of bus company and location of the parking space);
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(2) whether it knows the following details of each of the electric buses already put in service: (i) the bus model, (ii) the manufacturer and place of origin, (iii) the route number and the first and last stops of the bus route plied by the bus, (iv) the number of breakdowns in the past year, (v) the location of and site area occupied by its charging facilities, and (vi) the amperage for charging (set out by name of bus company in a table);
(3) whether it knows the time needed for fully charging the supercapacitor buses already put in service and their power storage capacities, as well as their maximum travel distance; the maximum number of supercapacitor buses that can be simultaneously charged under the existing power supply facility of each bus depot;
(4) of the performance indicators for those electric buses which are plying (i) routes with more uphill roads and (ii) routes with more level roads (set out in the table below);
Performance Indicator (i) (ii) (a) Maximum travel distance (km) (b) Fuel economy (km/kWh) (c) Effectiveness in reducing emission of various air pollutants (d) Fuel cost (dollar/km) (e) Number of breakdowns each year (f) Downtime due to repairs and maintenance (day/year) (g) Maintenance cost (dollar/km) (h) Total operating cost (dollar/km)
(5) whether it has assessed if it is technically feasible to have more bus routes switched to be plied by electric buses; if it has assessed and the outcome is in the affirmative, of the route numbers and details of such routes, and whether there are plans and timetables for switching to plying such routes by electric buses;
(6) whether, in the coming three years, it will provide assistance to bus companies for installing more electric bus charging facilities and upgrading such facilities; and
LEGISLATIVE COUNCIL ― 12 December 2018 4139
(7) whether it has reviewed the progress in achieving the objective of "hav[ing] zero emission buses running across the territory" and the effectiveness of the relevant measures; if so, of the outcome; if not, whether it will conduct a review expeditiously?
SECRETARY FOR THE ENVIRONMENT (in Chinese): President, electric buses do not have exhaust emissions. Successful replacement of conventional diesel franchised buses with electric buses in Hong Kong can significantly improve our roadside air quality. In this connection, the Government provided $180 million to fully subsidize five franchised bus companies, including Kowloon Motor Bus Company (1933) Limited ("KMB"), Long Win Bus Company Limited ("LWB"), Citybus Limited ("CTB"), New World First Bus Services Limited ("NWFB") and New Lantao Bus Company (1973) Limited ("NLB"), to acquire 36 single-deck electric buses (including 28 battery-electric buses and 8 supercapacitor buses) for conducting a two-year trial to test out their operational performance, reliability as well as economic feasibility in local conditions.
At present, 26 battery-electric buses and 4 supercapacitor buses have commenced operation. The remaining 2 battery-electric buses of NLB are under retendering process,(1) and are expected to commence operation by the end of 2019 at the earliest. Besides, the 4 KMB's supercapacitor buses will commence operation in the first and second quarters of 2019 respectively. With regard to the questions raised by Mr Jeremy TAM, our reply is as follows:
(1) and (2)
The current number of bus parking spaces located at bus termini and bus depots in various districts are as follows:
Number of bus parking Number of bus spaces located at bus depots parking spaces (including the parking area located at bus for the use of franchised termini buses only) Hong Kong Island About 510 About 660 Kowloon About 330 About 1 080
(1) NLB completed the tendering for procurement of two battery-electric buses earlier. As the supplier has subsequently withdrawn their offer, NLB has to retender the contract. 4140 LEGISLATIVE COUNCIL ― 12 December 2018
Number of bus parking Number of bus spaces located at bus depots parking spaces (including the parking area located at bus for the use of franchised termini buses only) New Territories About 770 About 2 000 Sub-total About 1 610 About 3 740 Total About 5 350
As regards the electric buses which have commenced or completed the trials, the following information is set out in Annex 1: (i) Number, model, manufacturer and origin of buses; (ii) Service route (the origins and destinations); (iii) Day of commencement of trial; (iv) Location of charging facilities; (v) Number of charging facilities and its site area; (vi) Information of electricity storage device and charging requirement; and (vii) monthly average number of on-road breakdowns and daily bus availability (%).
(3) The four supercapacitor buses in operation are belonged to KMB and the trial has not yet completed.(2) According to the preliminary trial results, supercapacitor buses can be fully charged in about 20 minutes and travel about 20 km to 30 km after a full charge. Therefore, supercapacitor buses are more suitable for short routes and franchised bus companies require to provide charging facilities at bus stops and/or termini so that supercapacitor buses can be timely charged. To facilitate the trial of supercapacitor buses on the circular route of 284, KMB installed two charging facilities at Sha Tin Central Bus Terminus and KMB Sha Tin Depot respectively to ensure that supercapacitor buses could provide smooth and reliable bus services. Each charging facility can provide charging for one supercapacitor bus at a time.
(4) In general, the electricity consumption of electric buses running on uphill roads is higher than that running on level roads. The trial routes mostly compose of uphill roads and level roads, and thus we are not able to evaluate separately their performance for uphill roads and level roads. Having said that, according to the completed trials'
(2) Two buses commenced the trial in March 2017 and November 2018 respectively. LEGISLATIVE COUNCIL ― 12 December 2018 4141
result of five BYD battery electric buses, the energy consumption of trial route with more uphill roads (i.e. Route No. 81) is about 16% more than the trial route with more level roads (i.e. Route No. 78). As regards the maintenance fee, the electric buses and charging facilities of the trial are still within the warranty period and the suppliers are responsible for the maintenance. As such, data about the maintenance fee and the overall operational fee are not available. A summary of the trial findings up to 31 May 2018 is at Annex 2.
(5) to (7)
Currently there are about 6 000 franchised buses in Hong Kong. About 95% of which are double-deckers and the remaining are single-deckers. The feasibility of promoting the implementation of electric bus services throughout or in individual areas of Hong Kong depends very much on the maturity of electric bus technologies, their prices and suitability for use in Hong Kong. We have to test and prove that the relevant technology is suitable for the local environment and the actual modus operandi of the public transport sector before introduction of electric buses on a large scale.
The technology of single-deck electric buses is already used in many places, but the operation in Hong Kong is subject to further test to ascertain the suitability for use in Hong Kong. The technology of double-deck electric buses is still developing and there are very few models available in the international arena. Furthermore, their passenger carrying capacity and operational efficiency still fail to fulfil the local operational needs (including long daily service hours, high peak passenger loadings, the need to tackle hilly terrains as well as intense air-conditioning demand in hot and humid summer, etc.). We will keep in view the technological development of double-deck electric buses and trials in other places so as to introduce suitable models for trial in due course.
As regards the single-deck battery electric buses, the two-year trial of the first batch of five BYD battery-electric buses was completed in May 2018. The overall average daily driving range of the five buses during the trial was about 190 km. However, under high ambient temperature demanding high loading of air-conditioning 4142 LEGISLATIVE COUNCIL ― 12 December 2018
system, the driving range reduced to about 150 km, which could not meet the normal daily requirement of most of the single-deck bus routes of 200 km to 300 km. It is our initial view that the wider use of single-deck battery-electric buses in Hong Kong will hinge on the following two factors:
(i) whether the battery capacity of single-deck battery-electric bus could be substantially increased later enabling it to travel about 300 km a day after a full charge; and/or
(ii) whether there is adequate space and power capacity for installation of charging facilities at the termini or public transport interchanges for top-up charging of the single-deck battery-electric buses in daytime taking into account mode of charging in daytime and high operation frequency of buses in Hong Kong.
As for single-deck supercapacitor buses, they can travel about 20 km to 30 km only after a full charge and thus more suitable for short routes. Bus stops and/or bus termini would be required to provide charging facilities for timely recharging of the supercapacitor buses. Whether the supercapacitor buses can be further promoted depends on the availability of suitable short routes of single-deck buses and public transport interchanges or bus termini, which the routes pass through, that can provide adequate space and power capacity for installation of top-up charging facilities.
The Government will continue to monitor the trial of electric franchised buses and work with the franchised bus companies to investigate the charging solutions to suit local operational needs. If the trial results are satisfactory, the Government will promote wider use of single-deck electric buses by the franchised bus companies, taking into account affordability of the companies and passengers. We will also keep in view the technological development of double-deck electric buses and consider at a suitable juncture to carry out trials with the franchised bus companies in Hong Kong.
LEGISLATIVE COUNCIL ― 12 December 2018 4143
Annex 1
Information of single-deck electric buses which commenced/ completed the trials and the corresponding charging facilities (as at 31 May 2018)
Monthly Number of average charging Information of Number, model, Service number of Day of Location of facilities and electricity manufacturer route on-road commencement charging its site area storage device and origin of [origin and breakdowns(1) of trial facilities (including and charging buses destination] and daily bus parking requirement availability space) (%)(2) KMB 4 Trials 284 (4 Sha Tin 2 750V/200A (DC) 0.11 time(s) supercapacitor commenced in buses) [Sha Central Bus (about 53.4% buses phases in Tin Central Terminus 49 sq m Supercapacitor March 2017 ―Ravana each) capacity of Model: and November Garden (for top up 53 kWh JNP6122UC 2018 (Circular)] charging during About 20 minutes Manufacturer: Total operation) for a full charge China distance of Youngman 5.7 km Sha Tin 2 Automobile Depot (one of them Group is under Company (for preparation) Limited overnight (about ("Youngman") charging) 49 sq m each) Origin: China KMB 10 10 6C (2 buses) Lai Chi Kok 4 380V/126A (AC) 0 time(s) battery-electric battery-electric [Mei Foo― Bus (about 86.4% buses buses Kowloon Maintenance 44 sq m Lithium iron commenced the City Ferry Depot each) phosphate battery trials in phases Pier] Model: K9R between July Yuet Lun 2 Battery capacity
2017 and 10.2 km Street Depot (about of 324 kWh Manufacturer: September both for 44 sq m BYD Auto 2018. The departure (Both depots each) About 4 hours for Industry current routes and return support a full charge Company are different 4144 LEGISLATIVE COUNCIL ― 12 December 2018
Monthly Number of average charging Information of Number, model, Service number of Day of Location of facilities and electricity manufacturer route on-road commencement charging its site area storage device and origin of [origin and breakdowns(1) of trial facilities (including and charging buses destination] and daily bus parking requirement availability space) (%)(2) Limited from the initial 35A (2 Routes 6C, 0 time(s) (3) ("BYD") ones. buses) 35A and 82.7% [Tsim Sha 42A) Origin: China Tsui East―On Yam]
15.1 km both for departure and return
42A (2 0 time(s) buses) 84% [Jordan (To Wah Road)― Cheung Hang]
14.6 km for departure from Cheung Hang 14.4 km for departure from Jordan
5C (2 buses) Kowloon 4 (about 0.1 time(s) [Star Ferry Bay Bus 44 sq m 59% Pier―Tsz Maintenance each) Wan Shan Depot (Central)]
LEGISLATIVE COUNCIL ― 12 December 2018 4145
Monthly Number of average charging Information of Number, model, Service number of Day of Location of facilities and electricity manufacturer route on-road commencement charging its site area storage device and origin of [origin and breakdowns(1) of trial facilities (including and charging buses destination] and daily bus parking requirement availability space) (%)(2) 10.8 km for departure from Tsz Wan Shan 11.2 km for departure from Star Ferry Pier
603 (2 0 time(s) buses) 83.6% [Ping Tin― Central (Central Ferry Piers)]
16.2 km for departure from Ping Tin 18.1 km for departure from Central LWB 4 July 2017 S64 (2 Siu Ho Wan 4 380V/126A (AC) 0 time(s) battery-electric buses) Bus (about 79.3% buses [Tung Maintenance 44 sq m Lithium iron Chung (Yat Depot each) phosphate battery Model: K9R Tung Estate Public Battery capacity Manufacturer: Transport of 324 kWh BYD Terminus)
―Airport About 4 hours for Origin: China (Passenger a full charge Terminal Building) (Circular)]
4146 LEGISLATIVE COUNCIL ― 12 December 2018
Monthly Number of average charging Information of Number, model, Service number of Day of Location of facilities and electricity manufacturer route on-road commencement charging its site area storage device and origin of [origin and breakdowns(1) of trial facilities (including and charging buses destination] and daily bus parking requirement availability space) (%)(2) Total distance of 22.5 km
February 2018 E31 (2 0 time(s) buses) 51.5% [Tung Chung (Yat Tung Estate Public Transport Terminus) ―Tsuen Wan (Discovery Park Bus Terminus)]
33.9 km for departure from Tsuen Wan 33.5 km for departure from Tung Chung CTB 6 The trial of 3 11 (1 BYD Chai Wan BYD: 3 BYD: BYD: 0.56 battery-electric BYD buses and 1 Depot (about 380V/126A (AC) time(s) buses commenced in Great 70 sq m 75.9% December 2015 Dragon) each) Lithium iron Model: K9R (3 and completed [Central phosphate battery Great Dragon: buses) in May 2018. (Central Great 0.75 time(s) Ferry Dragon: 3 Battery capacity 61.4% Piers)― LEGISLATIVE COUNCIL ― 12 December 2018 4147
Monthly Number of average charging Information of Number, model, Service number of Day of Location of facilities and electricity manufacturer route on-road commencement charging its site area storage device and origin of [origin and breakdowns(1) of trial facilities (including and charging buses destination] and daily bus parking requirement availability space) (%)(2) Manufacturer: 3 Great Dragon Jardine’s (about of 324 kWh BYD buses Lookout 70 sq m commenced the (Circular)] each) Full charge for Origin: China trial in June about 4 hours ------2017. The Total ------current routes distance of Model: are different 15.7 km Great Dragon: LS-130-116 from the initial 700V/100A (DC) (4) (3 buses) ones. 12 (1 BYD BYD: 0.04 and 1 Lithium iron time(s) Great 73.4% Manufacturer: phosphate battery Dragon) Great Dragon [Central Great Dragon: International (Central Battery capacity 0.25 time(s) Corporation Ferry of 315 kWh 69.9% Piers)― Limited ("Great Robinson Dragon") About 4 hours for Road (Circular)] a full charge Origin: China Total distance of 7.5 km
25A (1 BYD: 0.6 BYD and 1 time(s) Great 77.5% Dragon) [Wan Chai Great Dragon: (Hong Kong 0.5 time(s) Convention 61.8% and Exhibition Centre Extension) ―Braemar Hill (Circular)]
4148 LEGISLATIVE COUNCIL ― 12 December 2018
Monthly Number of average charging Information of Number, model, Service number of Day of Location of facilities and electricity manufacturer route on-road commencement charging its site area storage device and origin of [origin and breakdowns(1) of trial facilities (including and charging buses destination] and daily bus parking requirement availability space) (%)(2) Total distance of 11.4 km NWFB 4 The trial of 2 78 (1 BYD Wong Chuk BYD: 1 BYD: BYD: 0.16 battery-electric BYD buses and 1 Hang Depot (about 380V/126A (AC) time(s) buses commenced in Great 70 sq m 82.4% December 2015 Dragon) each) Lithium iron Model: K9R (2 and completed [Wong phosphate battery Great Dragon: buses) in May 2018. Chuk Hang Great 0.42 time(s) Station― Dragon: 1 Battery capacity 47.8% Manufacturer: 2 Great Dragon Wah Kwai (about of 324 kWh BYD buses Estate 70 sq m commenced the (Circular)] each) About 4 hours for Origin: China trial in June a full charge ------2017. The Total ------current routes distance of Model: are different 8.9 km Great Dragon: LS-130-116 from the initial 700V/100A (DC) (2 buses) ones.(5) 81 (1 BYD Chong Fu BYD: BYD: 0.4 and 1 Road Depot 1 (about Lithium iron time(s) Manufacturer: Great 70 sq m phosphate battery 77.3% Great Dragon Dragon) each) International [Lai Tak Battery capacity Great Dragon: Corporation Tsuen― Great of 315 kWh 1.17 time(s) Limited ("Great Chai Wan Dragon: 32.2% Dragon") (Hing Wah 1 Full charge for Estate)] (about about 4 hours Origin: China 70 sq m 11.2 km for each) departure from Lai LEGISLATIVE COUNCIL ― 12 December 2018 4149
Monthly Number of average charging Information of Number, model, Service number of Day of Location of facilities and electricity manufacturer route on-road commencement charging its site area storage device and origin of [origin and breakdowns(1) of trial facilities (including and charging buses destination] and daily bus parking requirement availability space) (%)(2) Tak Tsuen 10.5 km for departure from Hing Wah Estate NLB 2 The trial 38 (2 buses) Yat Tung 2 BYD: Not applicable battery-electric commenced in [Tung Estate Public (about 380V/126A (As at the end buses July 2018 Chung (Yat Transport 37 sq m (AC) of the Tung Estate Interchange each) statistical Model: K9R Public Lithium iron period, i.e. Transport phosphate 31 May 2018, Manufacturer: Interchange) battery the two BYD (for 2 ―Tung battery-electric buses) Chung Battery capacity were not yet Station Bus of 324 kWh put into Origin: China Terminus service) (Circular)] About 4 hours for a full charge Total distance of 4.2 km
Notes:
(1) Breakdowns only include failure of passenger-carrying buses which necessitate passenger evacuation except those owing to accidents.
(2) The outages unrelated to malfunctions (including inspections for Certificate of Road Worthiness/Certificate of Fitness, monthly inspections, routine maintenance/checking, cleaning, etc.) are excluded.
(3) Starting from 28 September 2018, the trial routes are adjusted. The current routes are 7M [Lok Fu―Chuk Yuen Estate (Circular)], 203C [Tai Hang Tung―Tsim Sha Tsui East (Mody Road)], 11D [Lok Fu―Kwun Tong Ferry] and 43M [Kwai Fong Station―Cheung Ching (Circular)]
(4) Starting from 1 July 2018, Great Dragon battery-electric bus running on Route 12 is deployed to Route 25A
(5) Starting from 1 July 2018, Great Dragon battery-electric bus running on Route 81 is deployed to Route 78
4150 LEGISLATIVE COUNCIL ― 12 December 2018
Annex 2
Summary of the trial of electric buses (up to 31 May 2018)
(2)
(km)
Road Road
- (1) (3)
(f) (c) (e) (b) (d) (g) (a) (g/km) (kWh/km) Benefit (NOx/PM10) Benefit buses under trial) under buses Breakdowns/Month Total (km) mileage electric bus/Manufacturer electric Daily Bus Availability (%) Availability Bus Daily Average Number of On Projected driving range Projected completed the trial the (Number completed of Average Electricity Cost ($/km) Number ofundergoingNumber buses or Emission Franchised bus company/Type of bus company/Type Franchised Average Energy ConsumptionAverage Rate KMB: 2(8) 42 300 2.19 NOx: 2.67 0.11 53.4% 19 Supercapacitor 2.59 Buses/Youngman KMB/LWB: 14(14) 70 600 1.26 PM10: 1.50 0.01 75.2% 206 Battery-electric 0.11 buses/BYD CTB/NWFB: 5(5) 362 100 1.36 1.77 0.35 77.3% 191 Battery-electric buses/BYD(4) CTB/NWFB: 5(5) 63 900 1.89 2.34 0.62 54.6% 117 Battery-electric buses/Great Dragon NLB: 0(2) Battery-electric buses/BYD(5) Not Applicable NLB: 0(2) Battery-electric buses(6)
Notes:
(1) From trial commencement to the end of May 2018
(2) NOx―Nitrogen oxides; PM10―Respirable suspended particulates. It is assumed that electric buses replaced the Euro V single-deck diesel buses running on the same routes to reduce the emission. Emission from the power companies for the use of electric buses is not counted
(3) The projected driving range is calculated from usable battery capacity (80% of the highest battery capacity for Youngman and BYD, and 70% of the highest battery capacity for Great Dragon as recommended by the manufacturers) divided by average energy consumption rate
(4) The trial completed in May 2018
LEGISLATIVE COUNCIL ― 12 December 2018 4151
(5) The trial commenced in July 2018
(6) Undergoing retender process
Provision of ancillary facilities for bus captains and regulators
17. MR WU CHI-WAI (in Chinese): President, regarding the regulator kiosks, rest rooms and toilets provided for use by bus captains and regulators of franchised bus companies ("bus companies"), will the Government inform this Council:
(1) of the current number of bus termini not provided with toilets (such as public toilets provided by the Government or toilets provided by bus companies) therein and within 50 metres therefrom, with a breakdown by District Council ("DC") district;
(2) of the number of public transport interchanges ("PTIs") currently not provided with toilets and their locations (set out the relevant information by DC district); as the Hong Kong Planning Standards and Guidelines stipulates that essential facilities such as toilets and regulator kiosks should be provided at PTIs, whether the Government will, in its future planning for PTIs, provide such facilities across the board;
(3) given that currently bus companies have to obtain the consent of government departments (such as the Transport Department, the Lands Department and the Highways Department) before installing latrines fitted with a chemical closet fitment for bus captains' use, of (i) the respective numbers of the relevant applications received, approved and rejected by the Government and (ii) the average and longest processing time taken in respect of the approved cases, in each of the past five financial years, as well as the current number of such applications being processed (with a breakdown by name of bus company);
(4) whether it will require that bus termini to be constructed in the future be provided with regulator kiosks, rest rooms and toilets; and
(5) whether the bus companies have to pay the Government nominal rents or market rents for the sites occupied by the aforesaid facilities of the bus termini; if the latter is the case, of the amount of rents 4152 LEGISLATIVE COUNCIL ― 12 December 2018
paid by each bus company in each of the past five financial years; whether the expenditures concerned are included in the operating costs of the bus companies?
SECRETARY FOR TRANSPORT AND HOUSING (in Chinese): President, my consolidated reply to Mr WU Chi-wai's question is as follows:
The Transport Department ("TD") and franchised bus companies have been striving to provide an appropriate working environment for the staff of the franchised bus companies, including providing ancillary facilities such as rest rooms and toilets at bus termini and public transport interchanges ("PTIs"). Depending on the size and locations of the proposed facilities, franchised bus companies will submit applications for the provision of regulator kiosks, staff rest rooms and chemical toilets to TD, other government departments or private organizations. Since 2017, TD has set up a task force, comprising representatives from relevant government departments (e.g. Government Property Agency, Lands Department and Housing Department) and franchised bus companies, to monitor the progress of these applications. TD will continue to follow up and coordinate with relevant government departments for processing these applications to facilitate the early provision of these facilities for the convenience of the staff of the franchised bus companies.
As for the newly planned bus termini and PTIs, regulator kiosks, staff rest rooms and toilets are already classified as basic facilities. The Government will arrange for the provision of these basic facilities in the planning of new bus termini and PTIs with a view to creating a better working environment for the staff of the franchised bus companies.
At present, there are 298 bus termini and PTIs across the territory, of which 287 (about 96%) of them are provided with toilets within a walking distance of three minutes (or within the site of the bus termini or PTIs), while the rest are served by toilets located within a walking distance of around four to seven minutes.(1) The figures concerned with a breakdown by DC district are set out at Annex 1.
(1) The only exception is the bus terminus located at the Aircraft Maintenance Area of the Airport, which is currently used by one bus route (i.e. Citybus route no. S52 plying between Yat Tung Estate, Tung Chung and the Aircraft Maintenance Area of the Airport). No toilet facility is provided in the vicinity of the bus terminus due to security and safety concerns. However, a round trip of the bus route only takes about 22 minutes, and the bus captains can use the toilet facilities at the other terminating point of the route (i.e. Yat Tung Estate, Tung Chung) where necessary. TD will continue to keep in view the situation of this bus terminus. LEGISLATIVE COUNCIL ― 12 December 2018 4153
Notwithstanding the provision of toilets within or near the bus termini and PTIs, the franchised bus companies will still seek to provide chemical toilets where necessary for further convenience of their staff. The number of applications for the provision of chemical toilets processed by TD in the past five years is set out at Annex 2.
Upon receipt of an application from a franchised bus company, TD will consult relevant government departments and the local community. TD has to pursue coordination work if there are objections from the local community. Where necessary, TD will also work with the franchised bus companies to draw up revised proposal for further consultation. Records show that in general the average time taken for TD to process these applications was about six to seven months. The approval process may take longer for more complicated cases. The longest time required to process a case in the past was about 23 months, and that case was approved in July 2016.
In general, any facilities provided by the franchised bus companies on Government land are charged with market rents. The amount of rentals paid by each franchised bus company in the past five years to the Government for the facilities installed at bus termini and PTIs is at Annex 3. Such rentals constitute part of the operating costs. Nonetheless, franchised bus companies have offered concessionary half fares to elderly passengers through the Elderly Concessionary Fare Scheme ("ECFS") since 1993. Under ECFS, franchised bus companies are exempted from the annual vehicle licence fees and receive reimbursement of rentals paid in respect of Government land so as to facilitate their introduction or continuous provision of fare concessions to the elderly.(2) In other words, franchised bus companies are reimbursed for the rentals that they paid to the Government.(3)
(2) Under the Government Public Transport Fare Concession Scheme for the Elderly and Eligible Persons with Disabilities ("$2 Scheme") introduced in 2012, franchised bus companies will only receive reimbursement for the difference between the $2 fare and the concessionary half fare. They still have to absorb any fare revenue forgone arising from the provision of fare concessions for the elderly under the $2 Scheme (i.e. the difference between full fare and the concessionary half fare).
(3) The amount of reimbursement will not exceed the amount shouldered by the franchised bus company in the provision of fare concessions for the elderly. 4154 LEGISLATIVE COUNCIL ― 12 December 2018
Annex 1
Location of toilets of bus termini and PTIs (as at November 2018)
Location of toilets of bus termini and PTIs District within a walking distance of within a walking distance of 3 minutes 4 to 7 minutes Central and Western 16 1 Wan Chai 7 2 Eastern 12 1 Southern 22 0 Yau Tsim Mong 9 1 Sham Shui Po 12 0 Kowloon City 13 0 Wong Tai Sin 12 1 Kwun Tong 29 0 Kwai Tsing 20 0 Tsuen Wan 11 0 Tuen Mun 17 4 Yuen Long 26 0 North 11 0 Tai Po 11 0 Sha Tin 29 0 Sai Kung 16 0 Islands 14 0 Total 287 10
Annex 2
Number of applications for the provision of chemical toilets from franchised bus companies processed by TD (as at November 2018)
KMB NWFB Citybus LW NLB 2014 No. of applications 1 0 0 0 0 No. of approved cases 1 0 0 0 0 No. of rejected cases 0 0 0 0 0 LEGISLATIVE COUNCIL ― 12 December 2018 4155
KMB NWFB Citybus LW NLB 2015 No. of applications 1 0 0 0 0 No. of approved cases 1 0 0 0 0 No. of rejected cases 0 0 0 0 0 2016 No. of applications 9 1 0 2 0 No. of approved cases 8 1 0 2 0 No. of rejected cases 1 0 0 0 0 2017 No. of applications 5 0 0 1 1 No. of approved cases 4 0 0 1 0 No. of rejected cases 1 0 0 0 1 2018 (as at November 2018) No. of applications 7 3 7 5 2 No. of approved cases 3 0 0 2 0 No. of rejected cases 0 0 0 0 0 No. of applications being processed 4 3 7 3 2 (as at November 2018)
Legend:
KMB―The Kowloon Motor Bus Company (1933) Limited
NWFB―New World First Bus Services Limited
Citybus―Citybus Limited
LW―Long Win Bus Company Limited
NLB―New Lantao Bus Company (1973) Limited
Annex 3
Amount of rentals paid by franchised bus companies to the Government for facilities at bus termini and PTIs between 2013 and 2017
Amount of rentals ($ million) Year Citybus Citybus KMB NWFB LW NLB (Franchise 1) (Franchise 2) 2013 4.67 1.22 0.57 0.02 0.02 0.04 2014 5.13 1.42 0.69 0.03 0.02 0.05 2015 5.52 1.47 0.71 0.04 0.03 0.05 4156 LEGISLATIVE COUNCIL ― 12 December 2018
Amount of rentals ($ million) Year Citybus Citybus KMB NWFB LW NLB (Franchise 1) (Franchise 2) 2016 5.94 1.38 0.74 0.04 0.03 0.06 2017 6.38 1.39 0.81 0.05 0.03 0.07
Legend:
KMB―The Kowloon Motor Bus Company (1933) Limited
NWFB―New World First Bus Services Limited
Citybus (Franchise 1)―Citybus Limited (Franchise for Hong Kong Island and cross-harbour bus network)
Citybus (Franchise 2)―Citybus Limited (Franchise for Airport and North Lantau bus network)
LW―Long Win Bus Company Limited
NLB―New Lantao Bus Company (1973) Limited
Personal hand baggage that may be carried free of charge by taxi passengers inside the passenger compartment of a taxi
18. MR LAM CHEUK-TING (in Chinese): President, regulation 47(3) of the Road Traffic (Public Service Vehicles) Regulations (Cap. 374 sub.leg. D) ("the Regulations") provides that taxi passengers may carry free of charge light personal hand baggage, that is to say, light suitcases, hat boxes, attache cases and similar articles, inside the passenger compartment of the taxi ("compartment baggage"). On the other hand, the Guidelines to Taxi Regulations ("the Guidelines") published by the Transport Department ("TD") elucidates that "[a]s a general rule, each piece of light personal baggage that is placed inside the passenger compartment can be carried free of charge if its total dimensions (length + width + height) do not exceed 140 cm". It is also elucidated on TD's website that taxi drivers may levy an additional charge for every piece of compartment baggage with total dimensions (length + width + height) exceeding 140 cm. In this connection, will the Government inform this Council:
(1) of (i) the number of complaints, received by the authorities in each of the past three years, about taxi drivers overcharging passengers of the additional charge for compartment baggage and (ii) among such LEGISLATIVE COUNCIL ― 12 December 2018 4157
cases, the respective numbers of those in which follow-up actions were taken by the Police and prosecutions were instituted against the drivers concerned;
(2) of the legal basis for the dimension limits specified in the Guidelines and on TD's website for compartment baggage to be carried free of the additional charge; and
(3) whether it has examined if the elucidations, in the Guidelines and on TD's website, for the additional charge for compartment baggage are consistent with the provision in regulation 47(3) of the Regulations; if it has examined and the outcome is in the negative, whether it has assessed if this situation has caused confusion among taxi drivers and passengers and made disputes between them prone to occur, and of the solution for that; if it has not examined, of the reasons for that?
SECRETARY FOR TRANSPORT AND HOUSING (in Chinese): President, my reply to the various parts of Mr LAM Cheuk-ting's question is as follows:
(1) In the past three years, the number of complaints concerning taxi baggage charge received by the Government and the Transport Complaints Unit as well as the relevant follow-up actions taken are set out below:
Number of Complaints Number of Complaints Year on Taxi Baggage Referred to the Police Charge for Follow-up Action 2016 247 70 2017 262 44 2018 241 55 (January to October)
As for the number of cases in which the Police has instituted against the drivers concerned, it will be provided later as it takes time for the Police to collate the relevant data. (Appendix I)
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(2) and (3)
Under regulation 41 of the Road Traffic (Public Service Vehicles) Regulations (Cap. 374D) ("the Regulations"), no goods other than personal hand baggage shall be carried on a taxi. Regulation 47(2) of the Regulations also provides that no registered owner or driver of a taxi shall charge for the hiring of the taxi a fare exceeding the appropriate scale of fares specified in Schedule 5 (including an additional fare of HK$6 for every article of baggage). Furthermore, regulations 47(3) and 47(4) also provide that if light personal hand baggage (including light suitcases, hat boxes, attache cases and similar articles) are carried inside the passenger compartment of the taxi, or if wheelchairs and crutches are carried by a disabled person who is a taxi passenger, the passenger shall not be required to pay the baggage surcharge in respect of these articles.
The existing legislation does not define the size of "light personal hand baggage carried inside the passenger compartment" mentioned in regulations 47(3) and 47(4) of the Regulations. In this connection, having regard to the views of the taxi trade and passengers, and the need to facilitate the daily operation of taxis (including preventing passengers from placing large pieces of baggage inside the passenger compartment so as to reduce the possibility of obstructing the driver's sightline, affecting the driving safety and causing damage to the compartment facilities, etc.), the Transport Department ("TD") has introduced some reference guidelines, stipulating that a piece of light hand baggage may be placed inside the passenger compartment and carried free of charge if its total dimensions (the sum of the length, width and height) do not exceed 140 cm. In other words, a taxi driver may charge a baggage surcharge of HK$6 on each piece of baggage which is placed inside the passenger compartment and has the total dimensions (the sum of the length, width and height) exceeding 140 cm, or on each piece of baggage of any dimensions which is placed inside the luggage compartment.
The relevant reference guidelines do not contradict with the existing Regulations, and have been published in the "Guidelines to Taxi Regulations" ("GTR") compiled by TD as well as in the "Taxi fare of Hong Kong" section of TD's website. Nevertheless, TD will continue to monitor the views from the trade and the public, so as to LEGISLATIVE COUNCIL ― 12 December 2018 4159
examine whether the provisions of the Regulations and the reference guidelines, as well as the related content published in GTR and on TD's website can accurately reflect the actual operational circumstances.
Market positioning for various subsidized housing schemes
19. MR TONY TSE (in Chinese): President, there are views that the housing courts of the Home Ownership Scheme ("HOS") and the Green Form Subsidised Home Ownership Scheme ("GSH") put up for sale in recent years look very much the same as public rental housing ("PRH") estates in terms of building designs and ancillary facilities, as well as the layouts and installations of and materials used in the units, etc. In this connection, will the Government inform this Council:
(1) of the housing development stage at which the authorities usually decide whether the units of an individual public housing development project should be used for rental purpose or put up for sale under a subsidized sale flat ("SSF") scheme, and the relevant considerations;
(2) whether the authorities have set standards, in terms of building designs and ancillary facilities, as well as the layouts and installations of and materials used in the units, etc., for (a) PRH estates, (b) HOS courts and (c) GSH courts;
(i) if so, of the details; whether the following situation arose in the past five years: a housing development project had progressed, when the authorities made the decision mentioned in (1), to a rather late stage rendering it necessary to deviate from those standards; if there was such situation, whether the authorities will in future make the relevant decision at an earlier stage as far as possible;
(ii) if not, the reasons for that; and
(3) whether the authorities will (i) more clearly define the market positioning of various SSF schemes, including the target buyers, eligibility criteria and prices, and (ii) ensure that the building designs and ancillary facilities of the housing courts, as well as the 4160 LEGISLATIVE COUNCIL ― 12 December 2018
layouts and installations of and materials used in the units, etc., can reflect their respective market positioning; if so, of the details; if not, the reasons for that?
SECRETARY FOR TRANSPORT AND HOUSING (in Chinese): President, my consolidated reply to the various parts of the question raised by Mr Tony TSE is set out below.
Long Term Housing Strategy
As pointed out in the Long Term Housing Strategy ("LTHS") published by the Government in 2014, subsidized sale flats ("SSFs") is the first step for home ownership for the low to middle-income families; and are also an essential element of the housing ladder. The Government will identify suitable sites for developing SSFs, and study how to further expand the forms of subsidized home ownership and, where appropriate, introduce supplementary schemes of SSFs. As mentioned in LTHS,(1) given the nature of SSFs as a buffer between public rental housing ("PRH") and private housing, the Hong Kong Housing Authority ("HA") needs to maintain the inter-changeability of PRH and SSFs and adjust their supply in a timely manner to better respond to changes in market situations and the housing needs of the community at large.
According to LTHS, the Government updates the long term housing demand projection annually and presents a rolling 10-year housing supply target. According to the projection in December 2017, the total housing supply target for the 10-year period from 2018-2019 to 2027-2028 is 460 000 units. With a public/private split of 60:40, the supply targets for public and private housing are 280 000 units and 180 000 units respectively. Within the public housing supply target of 280 000 units, the split between PRH and SSFs is 200 000 units and 80 000 units. We are now updating the housing demand projection for the next 10-year period (from 2019-2020 to 2028-2029) and will announce the new housing supply target soon.
Currently, public housing includes PRH, Green Form Subsidised Home Ownership Scheme ("GSH") and other SSF schemes (including the Home Ownership Scheme ("HOS")). Based on the concept of "inter-changeability", the Government strives to maintain the flexibility among different types of public housing to cater for the community's demands for PRH, GSH and other SSFs.
(1) See paragraphs 3.3 and 5.4 of LTHS. LEGISLATIVE COUNCIL ― 12 December 2018 4161
According to the forecast as at September 2018, the total SSF production of HA and the Hong Kong Housing Society ("HKHS") in the five-year period from 2018-2019 to 2022-2023 is estimated to be about 26 300 units.
Planning, Construction and Design of Public Housing
Regardless of PRH and HOS, the design principles of HA emphasize on simplicity, environmental-friendliness and meeting the basic needs of the residents. HA has also been adopting Modular Flat Design in construction. In line with the design principle of "Functional and Cost Effective", layout, size and dimension of the modular flats address residents' need of flexibility when using their living space. There is no partitioning in a modular flat, hence allowing the residents to design their internal partitioning and furniture layout in accordance with their families' need. The design also adopts standardized dimensions, spatial configuration and components. The design of kitchens and shower areas has been standardized and is used as volumetric precast components. This will improve the practicality of the precast components as well as the efficiency and productivity of housing production.
Since GSH is converted from PRH, hence it has no difference with PRH in terms of design and construction. PRH and HOS are basically the same apart from some minor details. For example, metal gates are provided in PRH units while gas water heaters are provided in SSFs.
In planning public housing projects, HA makes reference to the "Hong Kong Planning Standards and Guidelines", consults relevant departments and organizations and considers views of District Councils and local communities in determining the ancillary facilities for public housing developments. Other factors such as individual site constraints, feasibility and suitability regarding the provision of the required facilities, etc. will also be considered in formulating appropriate ancillary facilities. Provision of ancillary facilities for PRH/GSH and other SSFs are basically the same apart from the parking ratios and types of parking facilities. If conversion of the housing type is required during the development process, HA will adjust and modify the provisions as far as practical without affecting the completion date of the project. In the process, relevant government departments and other stakeholders will be consulted.
In the past five years, HA has converted two PRH projects under construction into GSH projects, including King Tai Court in San Po Kong and Lai Chi Kok Road―Tonkin Street Phase 1 (Lai Tsui Court). As mentioned above, the design and construction principles of GSH flats follow that of PRH units.
4162 LEGISLATIVE COUNCIL ― 12 December 2018
All along, HA has been improving and optimizing the planning and design of public housing developments in different aspects. We will continue to collect tenants' feedback through Residents Surveys and take on board views from the stakeholders in the construction industry in relation to design and construction of public housing in order to pursue continuous review and improvement of public housing design including architectural design, flat layout, finishing materials and ancillary facilities of public housing.
Positioning of different types of SSFs
As to the positioning of different types of SSFs, in terms of HOS, the Government announced in 2011 the resumption of HOS and SSFs in response to the home ownership aspirations of low to middle-income families. HA and HKHS will take into account the progress of their new HOS or SSF projects in selecting the projects to be launched for sale each year and the number of flats involved. The pricing and sales arrangements of each project are based on the prevailing pricing mechanism and application eligibility.
As regards GSH, HA endorsed the regularization of GSH in January 2018 with a view to helping more relatively better-off Green Formers (mainly PRH households and PRH applicants who have passed the detailed eligibility vetting) move up the housing ladder. HA will implement GSH at a modest pace to reduce risk of unsold flats and minimize impact on the waiting time for PRH applicants. As to the number of PRH projects to be converted for GSH development each year, HA will make reference to the site selection criteria as previously adopted for the pilot project(2) in assessing PRH projects in the pipeline to select sites for GSH projects, as well as to decide the projects to be launched for sale each year and the relevant pricing and sales arrangements.
(2) HA has endorsed making reference to the following principles adopted for the GSH pilot project in selecting sites for GSH:
(i) while a site may include certain public facilities, it should not contain public facilities that will incur very high management and/or maintenances fees;
(ii) the conversion of a PRH site to GSH development should not result in substantive changes to the original planning;
(iii) the site should preferably be a standalone one, or can be easily carved out from a PRH development; and
(iv) any PRH development that will be completed shortly is not suitable. LEGISLATIVE COUNCIL ― 12 December 2018 4163
The Chief Executive announced the revised HOS pricing mechanism in June this year.(3) The pricing of GSH flats will be based on the new HOS pricing mechanism, i.e. the discount for such flats will be fixed at 10% more than that determined for the preceding HOS sale exercise to ensure that the prices of GSH flats are more affordable to eligible Green Formers.
(3) Two major changes have been introduced to the affordability test in the original HOS pricing mechanism:
(i) using the median monthly household income of non-owner occupier households (instead of the income limit for White Form applicants) for assessing affordability; and
(ii) ensuring at least 75% (instead of at least 50%) of flats for sale are affordable.
Monitoring the administration of an estate for charitable purposes
20. MR JAMES TO (in Chinese): President, at its meeting held on 20 July 2015, the Panel on Administration of Justice and Legal Services of this Council discussed the administration of the estate of the late Ms Nina KUNG. In addition, the Government disclosed early this year that it had drawn up in May 2017 the latest draft of the administration scheme on using the estate for charitable purposes ("the Scheme") and was awaiting a response from the Chinachem Charitable Foundation ("the Foundation"). In this connection, will the Government inform this Council:
(1) given that a government representative undertook at the aforesaid meeting to provide the Panel with the information on the arrangements for the interim administration of the estate and a breakdown of its properties insofar as it was allowed under the law, of the reasons why the Government has not yet provided such information, and whether it will do so immediately;
(2) whether it knows the following information on the estate: (i) the current total value, (ii) the respective total amounts of fees collected so far by the interim administrators of the estate, the managers recruited from outside and other persons involved in the administration of the estate (please specify), and (iii) the amounts of money used for charitable purposes in each of the past three years; and
4164 LEGISLATIVE COUNCIL ― 12 December 2018
(3) whether the discussions conducted between the Government and the Foundation on the Scheme have been concluded;
(i) if not, whether the Government has set a deadline; at what time the latest the Government will seek the Court's directions to ensure that the Scheme will be confirmed and implemented expeditiously; whether it will consider taking measures to enhance the administration of the estate (e.g. appointing government officials to sit on the Board of Governors of the Foundation); and
(ii) if so, whether the Government has submitted the Scheme to the Court?
SECRETARY FOR JUSTICE (in Chinese): President, a reply to the questions raised by Mr James TO in relation to the matters concerning the administration of the Estate of the late Mrs Nina WANG is as follows:
(1) and (2)
At the meeting of the Panel on Administration of Justice and Legal Services on 20 July 2015, Members asked the Department of Justice ("DoJ") to provide information on (a) arrangements approved by the Court concerning the interim administration of the Estate; (b) background, qualification and remuneration of each member of the Executive Committee ("Exco") of the Chinachem Group; and (c) a list of the properties of the Estate.
The Secretary for Justice had explained in detail the arrangements approved by the Court concerning the interim administration of the Estate in her reply to the questions raised by Mr Paul TSE at the meeting of the Legislative Council on 31 January early this year. Since 10 December 2007, the Estate has, pursuant to a Court order, been administered on an interim basis by independent interim administrators appointed with the sanction of the Court of First Instance. The current interim administrators are Mr CHAN Wai Tong Christopher, Mr JONG Yat Kit and Mr WONG Tak Wai of PricewaterhouseCoopers.
LEGISLATIVE COUNCIL ― 12 December 2018 4165
Being "officers of the Court", the interim administrators owe a duty to the Court on matters relating to the interim administration of the Estate. The Court may also give directions to the interim administrators if and when necessary. The work of the interim administrators will continue to be monitored by the Court, including the consideration of the periodical reports and other relevant materials provided by them.
DoJ has, at all times, been paying close attention to the administration of the Estate and has been in frequent contact with the interim administrators, including considering the periodical reports provided by the interim administrators, approaching the interim administrators to further understand matters relating to the interim administration of the Estate, requesting the interim administrators to take follow-up actions and provide reports as the circumstances require, assisting the Court in legal proceedings taken out by the interim administrators, and seeking directions from the Court in the course of interim administration as may be required.
DoJ will continue to closely monitor the interim administrators' work in managing and preserving the Estate and the litigation involving the Chinachem Group and the Foundation, and take such follow-up actions as may be appropriate.
DoJ has sought updates on the Estate from the parties concerned. With their consent, information which can be disclosed is set out below.
The core assets of the Estate comprise the assets of the companies in the Chinachem Group with a net asset value of about HK$137 billion as at 31 August 2018 based on the relevant unaudited combined management accounts. According to the judgment of the Court of Final Appeal dated 18 May 2015, the Chinachem Group was valued in 2012 at over HK$82 billion.
Since the Chinachem Group is not a listed company, after having sought the views from the concerned parties, apart from the net asset value disclosed above, it would not be appropriate for us to disclose the breakdown of its properties which contain sensitive and confidential information.
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The Chinachem Group is managed by its Exco and its current members are as follows (set out in the alphabetical order of the surnames in English (save for the interim administrators)):
(i) Mr CHAN Kam Por (Group's Chief Financial Officer);
(ii) Mr CHOI Wun Hing Donald (Group's Chief Executive Officer);
(iii) Dr KUNG Yan Sum (Chairman of Exco meetings);
(iv) Mr LEUNG Wai Choi Derek (Chief Treasury Officer, Head of Lands/Valuation of the Group);
(v) Madam LIU Yuan Chun (Group's Director of Human Resources);
(vi) Mr NG Shung Mo (Group's Head of Sales);
(vii) Mr WONG Hung Han (Deputy Head of Leasing and Chief Operating Officer of the Group);
(viii) Mr OSBORN Donald Edward (Representative of the interim administrators);
(ix) Mr CHAN Wai Tong Christopher (one of the interim administrators); and
(x) Mr JONG Yat Kit (one of the interim administrators).
During the period from 2015 to 2018 (up till 30 November 2018), the Chinachem Group has in each year made donations for charity purpose to different charitable organizations and other entities in the amounts of about HK$9.7 million, HK$5 million, HK$4 million and HK$3 million respectively, the aggregate sum being over HK$22 million.
LEGISLATIVE COUNCIL ― 12 December 2018 4167
As for the fees of the independent interim administrators, they have been prescribed by the Court in the Appointment Order and are subject to the Court's scrutiny. As the relevant order was made at a hearing not open to public, it is inappropriate for DoJ to provide further details of such information in the absence of any order of the Court directing disclosure.
DoJ and the Foundation have also been monitoring the fees charged by the interim administrators. Should DoJ and the Foundation consider the amount to be too high or unreasonable, an application may be made to the Court for taxation of the fees, in order to ensure that the interim administrators' fees remain reasonable.
(3) By its judgment of 18 May 2015 concerning the Will of the late Mrs Nina WANG, the Court of Final Appeal held that the Foundation is to hold the Estate as a trustee rather than receiving it as an unconditional absolute gift. As the work in implementing the Will is still ongoing, the said judgment does not affect the current independent interim administrators' discharge of the above mentioned duties to manage and preserve the Estate pursuant to the Court's appointment until any further Court order. Therefore, at this stage the Estate has not been vested on the Foundation. DoJ will continue to pay close attention to the financial condition of the Foundation.
Since the handing down of the judgment of the Court of Final Appeal on 18 May 2015 ("CFA Judgment"), DoJ and the Foundation have had meetings and have been in communications on the contents of the proposed Scheme. In order to facilitate constructive and frank discussions, the parties have agreed that the details of such communications should be kept in confidence in the meantime. Meetings have been held to discuss specific areas of the proposed Scheme, including the establishment of the "supervisory" managing organization, and that a draft Scheme has been prepared taking into account the clauses of the 2002 Will and the relevant guidance contained in the CFA Judgment.
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DoJ and the Foundation are actively discussing the content of the draft Scheme with a view to reaching consensus as soon as practicable. We anticipate that DoJ may make an application to the Court for directions concerning the Scheme by the first quarter of 2019, if necessary.
In addition, DoJ will continue to liaise with the interim administrators and request relevant information when appropriate on the detailed arrangements for the implementation of the Will.
Food Truck Pilot Scheme
21. MR JIMMY NG (in Chinese): President, in September this year, the Government extended the Food Truck Pilot Scheme ("the Scheme"), which was launched in February 2017, by two more years whereby the 15 food trucks could operate up to 2 February 2021. Under the relevant licensing conditions, food trucks may operate only in tourist locations and during events designated by the authorities. From the commencement of the Scheme up to mid-August this year, the food truck with the best business performance had a gross revenue between $3.5 million and $4 million, while all of the six food trucks with worst performance had a gross revenue of $2 million or below each. The operating venues with the best, the second best and the worst business performance were the Hong Kong Disneyland, Tsim Sha Tsui Salisbury Garden and Energizing Kowloon East respectively, yielding gross revenues of $17,890,000, $2,900,000 and $460,000 respectively for the food trucks. Some operators of the food trucks have reportedly pointed out that as the people flow in various operating venues has been decreasing, and the authorities do not understand the operation of food trucks and ignore the aspirations of the operators, it is difficult for them to sustain their businesses. In this connection, will the Government inform this Council:
(1) whether it has conducted studies to look into the causes for the great variances in (i) the business performance of different food trucks and (ii) their business performance in different operating venues; if so, set out the relevant information in a table; if not, whether it will conduct such studies;
LEGISLATIVE COUNCIL ― 12 December 2018 4169
(2) whether it has compiled statistics on (i) the volume of people flow at the operating venues for the food trucks and (ii) the turnover of the food trucks, at different hours and during various events; if so, set out the relevant information in a table; if not, whether it will compile such statistics; and
(3) whether it will relax the relevant licensing conditions so as to give the food trucks greater room for survival, e.g. allowing, on the premise of not affecting the traffic and the business situation of eateries in the vicinity, the food trucks to provide catering services for private banquets (e.g. wedding banquets), so as to offset the losses incurred by their operation in certain designated operating venues; if so, of the details; if not, the reasons for that?
SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT (in Chinese): President, the Food Truck Pilot Scheme ("the Scheme"), launched on 3 February 2017, aims to enhance the fun and vibrancy of tourist attractions in Hong Kong by providing diverse, creative and high quality gourmet food to tourists and the locals. It is positioned as a tourism promotion project rather than playing the role as mainstream restaurant. Food trucks should also not be engaged in unfair competition with other restaurants and should not cause problems such as obstruction to pedestrians or other vehicles.
In light of the above considerations, eight tourist attractions were first chosen as the operating locations of food trucks under the Scheme. They are also arranged to participate at various mega events organized by the Hong Kong Tourism Board ("HKTB"). Food truck is introduced as a pilot scheme for trial to explore the suitability of different operating locations and operation modes, as well as its commercial viability.
In view of the business performance of the food trucks and in response to the opinions of stakeholders of the Scheme, the Tourism Commission has rolled out a number of refinement measures since end May 2017 to enhance the operation flexibility of the Scheme as far as possible in order to help improve the business environment of the operators. The measures include:
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(1) introducing four new operating venues, namely the AsiaWorld-Expo, Science Park, The Hong Kong University of Science and Technology and Hong Kong Science Museum;
(2) providing a more flexible shift arrangement for food trucks to operate in Energizing Kowloon East Venue 1 ("EKEV 1") and Tsim Sha Tsui Art Square ("AS") on the same day;
(3) allowing food trucks to participate in self-identified events as long as the events are open to the public with publicity plans available and obtained appropriate licences (e.g. temporary places of public entertainment licence);
(4) allowing the operators to opt whether to operate at the designated venues under the rotation schedule and pay service fees for the operation days only; and
(5) allowing operators to identify new operating venues for our consideration and follow-up.
We had committed to evaluate the Scheme before the end of the two-year trial period (i.e. 2 February 2019). We observed that the business performance of the 15 food trucks varied. Some performed quite well and even opened brick-and-mortar shops. Despite the business performance of some were just average, it generally reflected that more time is required to observe the operation of food trucks. Since the first operating food trucks have only operated for more than 1.5 years under the Scheme and during which we have made continuous refinement to the Scheme, we decided to extend the Scheme for two more years up to 2 February 2021 with a view to allowing sufficient time for the Scheme to be tested out in the market.
My reply to the three-part question raised by Mr Jimmy NG is as follows:
(1) According to the financial statements submitted by operators, the total gross revenue of 15 food trucks up to mid-October 2018 was $35.9 million with details tabulated below:
Gross revenue (up to mid-October 2018) Number of food trucks Between $3.5 million and $4 million 2 Between $3 million and $3.5 million 1 LEGISLATIVE COUNCIL ― 12 December 2018 4171
Gross revenue (up to mid-October 2018) Number of food trucks Between $2.5 million and $3 million 3 Between $2 million and $2.5 million 4 Between $1.5 million and $2 million 4 Below $1 million 1(1)
Note:
(1) The food truck commenced business in December 2017.
(2) We mainly rely on the total gross revenues as shown in the financial statements regularly submitted by the operators to venues rather than the people traffic of each venue to observe the business performance of food trucks. The total gross revenue of 15 food trucks in operating venues up to mid-October 2018 was about $32 million, with details tabulated below:
Gross revenue of food trucks ($) Operating venues (up to mid-October 2018) Designated venues Hong Kong Disneyland Around 19.4 million AS Around 3 million Salisbury Garden Around 3 million Ocean Park Around 1.9 million Golden Bauhinia Square Around 1.5 million Wong Tai Sin Square Around 0.97 million Central Harbourfront Event Space Around 0.83 millions EKEV 1 Around 0.47 million New venues The Hong Kong University of Around 0.37 million Science and Technology(2) Hong Kong Science Museum(3) Around 0.23 million Science Park(4) Around 0.22 million AsiaWorld-Expo(5) Around 0.055 million Total Around 32 million
Notes:
(2) The Hong Kong University of Science and Technology provides one pitch for food truck operation on weekdays since 7 November 2017. The pitch will be closed for a total of around four months during the periods of summer break, winter break, etc.
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(3) Hong Kong Science Museum has been introduced to the Scheme since 18 December 2017. It provides one pitch for food truck operation except for the period of the first two days of the Chinese New Year and the HK Science Festival during which the pitch will be closed for a total of around one and a half months.
(4) Science Park provides one pitch for food truck operation at suitable events held in the venue since 6 June 2017. As at October 2018, there were 80 days of food truck operation for 90 events in this venue.
(5) AsiaWorld-Expo provides two pitches for food truck operation at suitable events held in the venue since 20 May 2017. So far there were eight days of food truck operation for four events in this venue.
As for events, the total gross revenue of 15 food trucks up to mid-October 2018 was $3.9 million. The Tourism Commission has arranged food trucks to participate in six tourism mega events organized by HKTB, namely the Hong Kong Dragon Boat Carnival held in June 2017 and June 2018, the e-Sports and Music Festival Hong Kong in early August 2017, the Hong Kong Cyclothon in October 2017 and 2018 and the New Year Countdown Celebrations in December 2017. The gross revenue yielded from these six tourism mega events was about $1 million. Besides, food trucks also operated in 51 self-identified events, with gross revenue amounting to $2.9 million.
In conclusion, the business performance of food trucks at individual venues and events varied greatly and was largely attributable to a number of factors including whether the pitch location in the operating venue is prominent, whether there are sufficient number of visitors in that venue, whether there are food and beverages offerings nearby and their relative pricing, whether the type and price of food offerings of the food trucks match with the preference and consumption power of customers, etc.
(3) One of the refinement measures of the Scheme is to allow food trucks to participate in self-identified events as long as the events are open to the public and obtained appropriate licences e.g. temporary places of public entertainment licence. Having regard to the fact that food trucks can cook at the spot and their huge size, it is crucial to ensure food safety and hygiene as well as not to cause obstruction LEGISLATIVE COUNCIL ― 12 December 2018 4173
to pedestrians or other vehicles when being parked. In accordance with the licensing condition of Food Factory Licence issued to food trucks, they can only operate at designated venues and events approved by the Government. The designated venues and events are assessed by relevant departments and considered suitable for food truck operation. If food trucks operate at private events (not open to the public) without licences, relevant departments cannot assess whether the premises and the events are suitable for food truck operation.
Since the launch of this refinement measure, food truck operators applied for operating in 62 self-identified events and approval was granted to all applications. In fact, the nature of self-identified events participated by food trucks varies, including mega music concerts, carnivals, food festivals, mega competition activities such as tennis competition, car racing, yacht racing, running competition and charity walk, etc. Amongst all events, some were even held at private premises such as events held at the golf club and country club which were public events with licences. The mode of cooperation between operators and event organizers also varies. Some organizations would make bulk purchase of food from food trucks for their events while others would not collect service fee from the operators but just require them to arrange their own electricity for operation. Operators can decide whether to operate at these events having regard to their own business consideration.
We will continue to identify other new venues as far as practicable, including to explore the placement of food trucks at the vicinity of Hong Kong Port of Hong Kong-Zhuhai-Macao Bridge Passenger Clearance Building and to study further refinement measures.
Regulation of sale of rhinoceros horns and products
22. DR ELIZABETH QUAT: President, the sale of rhinoceros horns and products (which may be in the form of libation cups, boxes, vessels, hairpins, etc.) is regulated in Hong Kong under the Protection of Endangered Species of Animals and Plants Ordinance (Cap. 586), through which the Convention on 4174 LEGISLATIVE COUNCIL ― 12 December 2018
International Trade in Endangered Species of Wild Fauna and Flora ("CITES") is implemented in Hong Kong. It is learnt that under Cap. 586, products of those rhinoceros horns which had been acquired before the CITES provisions started to apply to rhinoceros ("pre-Convention rhinoceros horns") are allowed to be commercially traded in Hong Kong only if such products are accompanied by a pre-Convention certificate issued by the export country. In this connection, will the Government inform this Council:
(1) given that antique collectors generally object to the age of their valuable artefacts be ascertained by applying the current dating methods (e.g. radiocarbon-14 dating and DNA-testing) which involve removal of small parts from the artefacts for testing,
(i) how the law enforcement agencies can accurately determine the age of a rhinoceros horn product offered for sale in the market to ascertain that the product in question is indeed from a pre-Convention stock, and
(ii) whether testimony of experts (from the antique industry and/or Chinese arts and crafts) of their visual identification has so far been admissible in court hearings concerning suspected illegal trading of rhinoceros horn products; if so, of the number of such cases in which the persons concerned have been convicted; if not, the reasons for that, and how the authorities can effectively enforce the ban on illegal trading of rhinoceros horn products;
(2) as the authorities regularly dispose of seized ivory and pangolin scale specimens by incineration, whether they dispose of seized rhinoceros horn specimens by the same method; if not, of the reasons for that and whether they will do so in future; if they will not, of the reasons for that;
(3) of the quantity of rhinoceros horn specimens seized in Hong Kong in the past five years and up to October this year, and among them, the respective quantities of rhinoceros (i) whole horns and (ii) horn cut pieces seized;
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(4) of the total number of holders in Hong Kong of pre-Convention certificates for pre-Convention rhinoceros horn products as at the end of 2017; and
(5) of the total quantity of pre-Convention rhinoceros horn products registered in Hong Kong for commercial purpose as at the end of 2017?
SECRETARY FOR THE ENVIRONMENT: President, our reply to the questions raised by Dr Elizabeth QUAT is as follows:
(1) The Convention on International Trade in Endangered Species of Wild Fauna and Flora ("CITES") started to regulate the international trade of rhinoceroses and their products on 1 July 1975. Rhinoceros horns acquired before this date, known as pre-Convention rhinoceros horns, are exempted under CITES and their international trade is allowed under a permit system. Under the Protection of Endangered Species of Animals and Plants Ordinance (Cap. 586) ("the Ordinance"), any pre-Convention rhinoceros horn to be imported to Hong Kong shall be accompanied by a pre-Convention certificate issued by a relevant authority of the previous exporting place certifying that the horn has been acquired pre-Convention, and shall be subject to inspection by authorized officers upon its landing in Hong Kong.
Any person possessing a pre-Convention rhinoceros horn is also required to produce the pre-Convention certificate concerned, certifying that the horn has been acquired pre-Convention. Authorized officers will verify the authenticity and validity of the certificate, as well as whether the particulars therein match the horn. Authorized officers may seize the horn for further investigation if they reasonably suspect that the possession of the horn is in contravention of the Ordinance, and may adopt appropriate scientific methods (e.g. radiocarbon-14 dating and DNA-testing) to determine the legality of the horn if necessary.
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As to whether an expert's testimony of his/her visual identification, as part of his/her assessment of a rhinoceros horn craft, is admissible in a court hearing as evidence to prove the suspected real age of the rhinoceros horn, there has been no precedent among the prosecutions instituted under the Ordinance. The Government will assess each case on its own merits and seek legal advice before making the most appropriate arrangement.
(2) CITES provides that a law enforcement authority may keep specimens of endangered species confiscated during enforcement actions for scientific, education, enforcement or identification purposes. It also allows destruction of the specimens if the above mentioned disposal methods are not practicable. The Agriculture, Fisheries and Conservation Department ("AFCD") has all along handled confiscated rhinoceros horns and specimens of other endangered species strictly according to the principles laid down in CITES. In the last 10 years, AFCD has all along donated the stockpiled rhinoceros horns for scientific, education, enforcement or identification purposes. There is no need to destroy any confiscated rhinoceros horns.
(3) Between 2013 and the first 10 months of 2018, AFCD seized a total of some 202 kg of rhinoceros horns, of which 76 pieces were whole horns.
(4) A pre-Convention certificate is issued by relevant authority of the previous exporting place for each shipment and may cover more than one specimen. Importers holding pre-Convention certificates, or buyers holding pre-Convention certificates provided by previous importers and relevant transaction receipts, may possess pre-Convention rhinoceros horns and need not register with AFCD. As such, AFCD has no relevant statistics.
(5) For the possession of rhinoceros horns accompanied by pre-Convention certificates certifying that the horns have been acquired pre-Convention, no registration with AFCD is required no matter the horns are for commercial purposes or not. As such, AFCD has no relevant statistics.
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GOVERNMENT BILLS
First Reading and Second Reading of Government Bills
First Reading of Government Bills
DEPUTY PRESIDENT (in Cantonese): Government Bills: First Reading.
INLAND REVENUE AND MPF SCHEMES LEGISLATION (TAX DEDUCTIONS FOR ANNUITY PREMIUMS AND MPF VOLUNTARY CONTRIBUTIONS) (AMENDMENT) BILL 2018
INLAND REVENUE (PROFITS TAX EXEMPTION FOR FUNDS) (AMENDMENT) BILL 2018
FIRE SAFETY (INDUSTRIAL BUILDINGS) BILL
DISCRIMINATION LEGISLATION (MISCELLANEOUS AMENDMENTS) BILL 2018
CLERK (in Cantonese): Inland Revenue and MPF Schemes Legislation (Tax Deductions for Annuity Premiums and MPF Voluntary Contributions) (Amendment) Bill 2018 Inland Revenue (Profits Tax Exemption for Funds) (Amendment) Bill 2018 Fire Safety (Industrial Buildings) Bill Discrimination Legislation (Miscellaneous Amendments) Bill 2018.
Bills read the First time and ordered to be set down for Second Reading pursuant to Rule 53(3) of the Rules of Procedure.
Second Reading of Government Bills
DEPUTY PRESIDENT (in Cantonese): Government Bills: Second Reading.
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INLAND REVENUE AND MPF SCHEMES LEGISLATION (TAX DEDUCTIONS FOR ANNUITY PREMIUMS AND MPF VOLUNTARY CONTRIBUTIONS) (AMENDMENT) BILL 2018
SECRETARY FOR FINANCIAL SERVICES AND THE TREASURY (in Cantonese): Deputy President, I move the Second Reading of the Inland Revenue and MPF Schemes Legislation (Tax Deductions for Annuity Premiums and MPF Voluntary Contributions) (Amendment) Bill 2018 ("the Bill").
In the 2018-2019 Budget Speech, the Financial Secretary suggested introducing tax concessions for deferred annuity premiums and Mandatory Provident Fund ("MPF") Voluntary Contributions to encourage the public to save more for retirement as early as possible with a view to managing longevity risks. In order to implement this measure, the Bill will amend the Inland Revenue Ordinance to the effect that taxpayers can enjoy tax deductions under salaries tax and personal assessment for the payment of eligible annuity premiums and the making of MPF Tax Deductible Voluntary Contributions ("TVCs"). Besides, the Bill will also amend the Mandatory Provident Fund Schemes Ordinance and the related subsidiary legislation, so as to provide for the establishment of TVC accounts for keeping TVCs and the related regulations.
(THE PRESIDENT resumed the Chair)
The Bill suggests that for each taxpayer, the maximum tax deductible limit will be $60,000 per year. This proposal was made after sufficient consideration of the industry's and Members' views, with the limit remarkably increased by 67% when compared with the original proposal of $36,000. I notice from the recent media reports that the public, the industry and Members generally support this proposal from the Government.
It is worth noting that the maximum tax deductible limit will be an aggregate limit for MPF TVCs and deferred annuity premiums for greater flexibility. In other words, whether a taxpayer makes MPF TVCs or purchases a qualifying deferred annuity, or makes MPF TVCs and purchases a qualifying deferred annuity as well, the taxpayer can still claim deductions under salaries tax LEGISLATIVE COUNCIL ― 12 December 2018 4179 and personal assessment up to the cap of $60,000. A person can decide his way of saving to enjoy tax deductions in accordance with factors like his own financial conditions, post-retirement financial needs and risk taking capacity.
Besides, allowing joint annuitants, an annuity is a convenient financial tool for a married couple to plan for their retirement. Based on this consideration, we propose that a taxpayer can claim tax deductions for deferred annuity premiums covering his or her spouse as joint annuitant, or either the taxpayer or the taxpayer's spouse as a sole annuitant. A taxpaying couple can also allocate tax deductions for deferred annuity premiums amongst themselves in order to claim the total deductions of $120,000, provided that the deductions claimed by each taxpayer do not exceed the individual limit, which is $60,000.
TVCs will be subject to the preservation requirements, that means under general circumstances, withdrawal is allowed only at or after the age of 65. The product design of an eligible deferred annuity must be characterized for retirement saving purpose. For example, the total premium cannot be too low, the period of annuity cannot be too short and it has to be in line with the disclosure requirements for the protection of annuity holders, such as the internal rate of return of a product. The Insurance Authority ("IA") has been tasked to issue guidelines in respect of eligible deferred annuities.
I have to emphasize that in terms of financial planning for retirement, it is best to have a basket of financial management instruments, and deferred annuities or MPF TVCs may not be suitable for everyone. A member of the public should consider different factors, such as liquidity needs, bequest motive, financial discipline and other investment alternatives, when choosing the financial management instruments suitable for his own retirement purpose. He also has to understand the need to take investment risks when investing in MPF. A deferred annuity is a long-term insurance contract. The holder should aim at a stable stream of income instead of pursuing a high return, and he may suffer loss if he terminates the contract before it is expired.
IA and the Mandatory Provident Fund Schemes Authority ("MPFA") will collaborate with the industry and the Investor Education Centre in promoting public education, so that the general public can understand more about annuity products and MPF TVCs, and how to assess different retirement planning 4180 LEGISLATIVE COUNCIL ― 12 December 2018 instruments to suit their own needs. IA and MPFA will also continue to closely monitor the point-of-sale conduct of intermediaries.
If the Bill is endorsed by the Legislative Council, the tax reductions concerned will come into effect from the year of assessment of 2019-2020.
President, I implore Honourable Members to support the Bill.
I so submit. Thank you, President.
PRESIDENT (in Cantonese): I now propose the question to you and that is: That the Inland Revenue and MPF Schemes Legislation (Tax Deductions for Annuity Premiums and MPF Voluntary Contributions) (Amendment) Bill 2018 be read the Second time.
In accordance with the Rules of Procedure, the Second Reading debate is adjourned and the Bill is referred to the House Committee.
INLAND REVENUE (PROFITS TAX EXEMPTION FOR FUNDS) (AMENDMENT) BILL 2018
SECRETARY FOR FINANCIAL SERVICES AND THE TREASURY (in Cantonese): President, I move the Second Reading of the Inland Revenue (Profits Tax Exemption For Funds) (Amendment) Bill 2018 ("the Bill").
The purpose of the Bill is to amend the Inland Revenue Ordinance ("IRO") so that we may provide profits tax exemption to eligible funds operating in Hong Kong.
Under IRO, for privately offered funds, only offshore funds and onshore open-ended fund companies can enjoy profits tax exemption; other onshore funds cannot enjoy profits tax exemption like their offshore counterparts. At the fund investment level, IRO currently stipulates that offshore funds with investment in private companies can enjoy tax exemption only if those companies are incorporated overseas but not locally. This tax disparity will disincentivize LEGISLATIVE COUNCIL ― 12 December 2018 4181 funds to domicile and be managed in Hong Kong, thus it may not be conducive to the further development of Hong Kong's Asset and Wealth Management ("WAM") industry.
Meanwhile, based on the latest Base Erosion and Profit Shifting standard of the Organisation for Economic Co-operation and Development, the Council of the European Union ("EU") has identified Hong Kong's tax regimes for offshore funds to be problematic on account of their ringfencing features, and our tax regimes are considered harmful. To address the EU's concerns and to further consolidate the competitive edge of Hong Kong's WAM industry by creating a level playing field for all funds operating in Hong Kong, we propose that a Bill should be introduced by adding self-contained provisions in IRO to allow all funds operating in Hong Kong, irrespective of their structure, their location (onshore or offshore), their size or the purpose that they serve, to enjoy profits tax exemption subject to meeting certain conditions. The conditions shall include:
(a) the entity must meet the definition of "fund";
(b) the transactions of the fund must be carried out in Hong Kong by a corporation which has licensed with the Securities and Futures Commission ("SFC") or the fund is a "qualifying fund"―a fund with at least 5 investors which meets the aggregate capital commitments and the distribution of the net proceeds requirements; and
(c) a fund may enjoy tax exemption on profits from investing in some specified class of assets, including investments in securities and other kinds of financial products. Moreover, a fund can enjoy profits tax exemption on its investment in both overseas and local private companies.
We also propose that the tax exempt profits of the fund will not be tainted even if a fund is taxed on its non-qualifying transactions. For a fund which has set up special purpose entities ("SPEs") for the sole purpose of holding and administering investment in private investee companies, we also propose that tax exemption will be provided at the SPE level to the extent which corresponds to the percentage of shares or interests of the SPE held by the fund.
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In order to reduce the risk of tax evasion, we will introduce anti abuse measures to tax a fund on its profits from investments that do not meet the restrictions/requirements under the immovable property, holding period and short-term asset tests. Furthermore, we will keep the current antiround tripping provisions concerning a resident person under IRO.
President, we consider that the Bill will help Hong Kong to consolidate its competitive edge in the manufacturing and management of funds, drive demand for the related professional services locally, and foster the further development of our financial services industry. In addition, as the tax dis-incentive for funds to invest in local private companies is removed, local start-ups would also benefit from their being the potential targets of investment by funds.
On the financial implications of the profit tax exemption for the Government, as onshore funds cannot enjoy profits tax exemption under the current tax regimes, the majority of funds operating in Hong Kong are offshore ones which could receive tax exemption. As such, the proposal should not give rise to significant tax revenue loss as compared to the current regimes.
The Bill has already taken on board views received from the industry consultation on our proposal and strikes a balance between promoting market development and preventing tax abuse. I hope Members will support the Bill.
President, I so submit.
PRESIDENT (in Cantonese): I now propose the question to you and that is: That the Inland Revenue (Profits Tax Exemption For Funds) (Amendment) Bill 2018 be read the Second time.
In accordance with the Rules of Procedure, the Second Reading debate is adjourned and the Bill is referred to the House Committee.
FIRE SAFETY (INDUSTRIAL BUILDINGS) BILL
SECRETARY FOR SECURITY (in Cantonese): President, I move the Second Reading of the Fire Safety (Industrial Buildings) Bill ("the Bill").
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The objective of the Bill is to bring the fire safety of old industrial buildings ("IBs") up to present-day standards for better protection of their occupiers and visitors.
The fire safety measures in existing buildings generally meet the standards prevailing at the time of their construction. However, the fire safety standards of old buildings fall short of present-day standards.
For instance, an automatic sprinkler system is a highly effective fire service installation capable of limiting or extinguishing a fire prior to the arrival of firefighters, but only some of the IBs constructed before 1973 were installed with such a system. As for IBs and godowns built after March 1973, they were required to be equipped with automatic sprinkler systems only if they were more than two-storey high. In 1987, the Fire Services Department ("FSD") further revised the relevant code to extend the requirement of automatic sprinkler systems to all IBs irrespective of height, as well as incorporate modern standards very close to the prevailing ones.
The fire cases at certain old IBs in recent years have heightened public concern over their fire risks, especially those which have not been equipped with automatic sprinkler systems. It is therefore imperative to legislate for their fire safety enhancement.
The target buildings of the Bill are those which were wholly or partly constructed for use as a factory, industrial undertaking, godown, warehouse, place of bulk storage or similar industrial premises on or before 1 March 1987, or those constructed for the aforesaid uses with their building plans first submitted to the Director of Buildings for approval on or before the same date.
The Director of Fire Services and the Director of Buildings will be designated as the Enforcement Authorities under the Bill, and officers of FSD and the Buildings Department ("BD") will be empowered to inspect the target IBs and issue fire safety directions to their owners or occupiers.
Under the fire safety directions issued, owners or occupiers will be required to upgrade the fire service installations and fire safety construction of IBs to the required standards. They must comply with the requirements within the 4184 LEGISLATIVE COUNCIL ― 12 December 2018 specified time limit. Such requirements may include installation of automatic sprinkler systems, provision of sufficient directional and exit signs, provision of secondary source of electrical power supply, provision of fire hydrant and hose reel systems, provision of adequate means of escape, and provision of fire resisting construction, etc.
If an IB owner or occupier fails to comply with a fire safety direction without a reasonable excuse, the Enforcement Authorities may apply to a magistrate for a fire safety compliance order, directing the owner or occupier to comply with the requirements in the fire safety direction issued.
When the fire safety upgrading works required by a fire safety direction or a fire safety compliance order are completed, and the Enforcement Authorities are satisfied that the requirements have been duly complied with, a certificate of compliance will be issued to the IB owner or occupier concerned by the Enforcement Authorities.
If an owner or occupier fails to comply with a fire safety direction or a fire safety compliance order, and there are substantial fire risks if the building or part of the building in question is occupied, the Enforcement Authorities may apply to the District Court for a prohibition order against the occupation of the building or any part of it.
To allow members of the public to obtain relevant information of fire safety directions, fire safety compliance orders and prohibition orders issued under the Bill, such as their compliance status, date of issue, etc., FSD and BD will be empowered under the Bill to publish such information on various platforms such as their departmental websites. This will enhance the awareness of members of the public, especially prospective buyers of IB units, of the outstanding legal liabilities of IBs.
In order to further facilitate prospective buyers of IBs or IB units to be aware of the existence of court orders in relation to the property, the Bill will also empower the Enforcement Authorities to arrange registration of fire safety compliance orders and prohibition orders against the land register of the property concerned.
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Besides, the Bill seeks also to amend the specified exceptions to offences of disclosing information under the Fire Safety (Commercial Premises) Ordinance and the Fire Safety (Buildings) Ordinance, so that the provisions concerned can tally with those stipulated under the Bill. The Bill makes no amendments to the other aspects of the two Ordinances.
We briefed the Legislative Council Panel on Security on the legislative proposal on 17 April 2017 and received its support. We also conducted a public consultation exercise from August to October this year. A total of 19 written submissions were received and all were generally supportive of the legislative proposal.
I hereby appeal for Members' support for the scrutiny of the Bill, so as to pass the Bill as early as possible. Upon enactment of the Bill, FSD will commence inspection of the target IBs together with BD as soon as possible, starting with some 400 IBs constructed or had their building plans submitted in or before March 1973, because the majority of these IBs are not sprinkler-protected.
President, Hong Kong is densely populated and has many high-rise buildings, it is of paramount importance for us to ensure the fire safety of buildings. The enactment of the Bill will be of great help to enhancing fire safety of old IBs for better protection of the life and property of the public, so as to make Hong Kong a safer city.
I so submit. Thank you, President.
PRESIDENT (in Cantonese): I now propose the question to you and that is: That the Fire Safety (Industrial Buildings) Bill be read the Second time.
In accordance with the Rules of Procedure, the Second Reading debate is adjourned and the Bill is referred to the House Committee.
DISCRIMINATION LEGISLATION (MISCELLANEOUS AMENDMENTS) BILL 2018
SECRETARY FOR CONSTITUTIONAL AND MAINLAND AFFAIRS (in Cantonese): President, I move the Second Reading of the Discrimination Legislation (Miscellaneous Amendments) Bill 2018 ("the Bill").
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The Equal Opportunities Commission ("EOC") presented its submissions to the Government in March 2016 on the findings of its review on the four discrimination laws, including the Sex Discrimination Ordinance (Cap. 480) ("SDO"), the Disability Discrimination Ordinance (Cap. 487) ("DDO"), the Family Status Discrimination Ordinance (Cap. 527) ("FSDO") and the Race Discrimination Ordinance (Cap. 602) ("RDO"). The Constitutional and Mainland Affairs Bureau has consulted EOC's recommendations with the Legislative Council Panel on Constitutional, and Panel Members agreed to accord priority to eight recommendations that are relatively less complex and controversial, with a view to ensuring that the proposed legislative amendments are practicable and workable. We have also consulted the Labour Advisory Board ("LAB") on five employment-related recommendations; LAB in principle supported the Government to take forward those recommendations. The eight recommendations include:
(a) to introduce express provisions in the SDO prohibiting direct and indirect discrimination on the grounds of breastfeeding, and to include expression of milk in the definition of breastfeeding;
(b) to replace the references to "near relative" in the RDO with references to "associate";
(c) to provide protection from direct and indirect racial discrimination and racial harassment by imputation in the RDO;
(d) to expand the scope of protection from sexual, disability and racial harassment between persons working in a common workplace under the SDO, DDO and RDO;
(e) to protect service providers from disability and racial harassment by customers under the DDO and RDO;
(f) to provide protection from disability and racial harassment between service providers and customers where the acts of harassment take place outside Hong Kong but on Hong Kong registered aircraft and ships in the DDO and RDO;
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(g) to protect members or applicants for membership of a club from sexual and disability harassment by the management of the club under the SDO and DDO; and
(h) to amend provisions in the SDO, FSDO and RDO such that the requirement that no award of damages could be made if the respondent can prove that he/she has no intention to treat the claimant unfavourably shall be disapplied for claims in respect of an act of unlawful indirect discrimination committed on or after the commencement of the Discrimination Legislation (Miscellaneous Amendments) Ordinance 2018.
After the relevant amendments to the provisions are made, clear safeguard could be provided for breastfeeding mothers against direct and indirect discrimination on the ground of her breastfeeding in specified fields, such as employment, the provision of goods, facilities and services. In order to afford comprehensive protection to all breastfeeding women, the proposed definition of breastfeeding will not only cover the act of breastfeeding, but also the expression of milk and the status of being a breastfeeding mother. It will also be conducive to creating a more enabling environment for breastfeeding women to continue their full and equal social and economic participation, including staying in or re-joining the workforce while breastfeeding.
Moreover, the Bill will improve the enhancement of protection from racial discrimination and harassment. For instance, after the enactment of the relevant provisions, it will be unlawful for a person to discriminate against directly or harass an associate of the another person who is living with the person on a genuine domestic basis, a carer of the person, or another person who is in a business, sporting or recreational relationship with the person on ground of their race. Besides, a person who is discriminated against or harassed due to a mistaken perception of his/her race will also be protected under the newly added provisions. All in all, the proposed enhancement of protection from racial discrimination and harassment also promotes racial diversity and harmony, thereby creating a cohesive social network for families of different racial groups or ethnic origins.
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With regards to employment-related provisions being amended, they could protect service providers (including employees in various service industries) from disability and racial harassment by customers. The scope of application protection from disability and racial harassment between service providers and customers is also extended from Hong Kong to harassment which takes place outside Hong Kong on Hong Kong registered aircraft or ships. This will provide better legal protection to customers and service providers on board such aircraft and ships. Moreover, the amended provisions will also protect an employee, an employer, a contract worker, a principal, a commission agent and a partner from any sexual, disability and racial harassment between the aforesaid workplace participants, with a view to improving the harassment problem in workplace.
Moreover, we propose to align the provisions in relation to application for an award on grounds of indirect discrimination in SDO, FSDO and RDO with DDO, so as to disapply the disallowing of the award of damages if the respondent can prove that he/she has no intention to treat the person being discriminated against unfavourably to an unlawful act of indirect discrimination committed on or after the commencement of the Bill. This will allow the court to have more flexibility when it deals with compensation claims on grounds of indirect discrimination.
With these remarks, I hope Members can pass the Bill as soon as possible for early implementation of various protections against discrimination and harassment, in order to provide better legal safeguards for the relevant parties, especially women, ethnic minorities and employees.
Thank you, President.
PRESIDENT (in Cantonese): I now propose the question to you and that is: That the Discrimination Legislation (Miscellaneous Amendments) Bill 2018 be read the Second time.
In accordance with the Rules of Procedure, the Second Reading debate is adjourned and the Bill is referred to the House Committee.
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MEMBERS' MOTIONS
PRESIDENT (in Cantonese): Members' motions. Two proposed resolutions under the Interpretation and General Clauses Ordinance in relation to the extension of the period for amending subsidiary legislation.
PRESIDENT (in Cantonese): First motion: To extend the period for amending the Antiquities and Monuments (Declaration of Monuments and Historical Buildings) (Consolidation) (Amendment) Notice 2018, which was laid on the Table of this Council on 21 November 2018.
I call upon Dr KWOK Ka-ki to speak and move the motion.
PROPOSED RESOLUTION UNDER SECTION 34(4) OF THE INTERPRETATION AND GENERAL CLAUSES ORDINANCE
DR KWOK KA-KI (in Cantonese): President, I move that the motion under my name, as printed on the Agenda, be passed.
At the House Committee meeting on 23 November 2018, Members decided to form a subcommittee to study the Antiquities and Monuments (Declaration of Monuments and Historical Buildings) (Consolidation) (Amendment) Notice 2018. To allow sufficient time for the Subcommittee to report its deliberations to the House Committee, I move in my capacity as Chairman of the Subcommittee that the scrutiny period of the subsidiary legislation be extended to 9 January 2019.
President, the Subcommittee met on 4 October. The majority of the members who were present supported the Government's Notice to declare that Fung Ping Shan Building, Eliot Hall and May Hall of the University of Hong Kong be historic buildings. Meanwhile, the majority of members were concerned whether these buildings would get enough support after being declared as historic buildings. Members particularly asked if the Antiquities and Monuments Office or the Development Bureau would provide assistance in terms of money and resources to the relevant historic buildings. Other members asked 4190 LEGISLATIVE COUNCIL ― 12 December 2018 if the staff of the Development Bureau and especially the Antiquities and Monuments Office could provide adequate support to keep these three historic buildings fully open after the declaration, and whether …
PRESIDENT (in Cantonese): Dr KWOK Ka-ki, this Council is now dealing with the motion to extend the period for amending this subsidiary legislation. The detailed content of this subsidiary legislation should be studied by the relevant Subcommittee.
DR KWOK KA-KI (in Cantonese): Certainly, President. I just spoke on the content. President, in the course of discussion, many members would like the Government to provide more information, including whether the University of Hong Kong would make any arrangement to facilitate public visits to these three buildings (especially the Eliot Hall and the May Hall) after they were declared historic buildings. Therefore, the Subcommittee at that time suggested moving an extension resolution to allow its members to study the latest information and have sufficient time to raise amendment proposals when necessary.
President, lastly I implore Members to support this motion.
Dr KWOK Ka-ki moved the following motion:
"RESOLVED that in relation to the Antiquities and Monuments (Declaration of Monuments and Historical Buildings) (Consolidation) (Amendment) Notice 2018, published in the Gazette as Legal Notice No. 224 of 2018, and laid on the table of the Legislative Council on 21 November 2018, the period for amending subsidiary legislation referred to in section 34(2) of the Interpretation and General Clauses Ordinance (Cap. 1) be extended under section 34(4) of that Ordinance to the meeting of 9 January 2019."
PRESIDENT (in Cantonese): I now propose the question to you and that is: That the motion moved by Dr KWOK Ka-ki be passed.
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PRESIDENT (in Cantonese): Does any Member wish to speak?
MR CHU HOI-DICK (in Cantonese): President, I support Dr KWOK Ka-ki's motion which seeks to extend the period for amending the Antiquities and Monuments (Declaration of Monuments and Historical Buildings) (Consolidation) (Amendment) Notice 2018 ("the Notice"). The reason why I support the motion is very simple. I hope the public can have more time to express their views on the HKSAR Government's current efforts at conservation of historic buildings. The relevant Subcommittee of the Legislative Council is receiving public views currently. According to the Chairman of the Subcommittee, Dr KWOK Ka-ki, the public may keep on expressing their views, which will be taken on board in this week's House Committee.
What views should we express? Why do I support the motion to extend the period for amending the Notice? It is because the Government tells the public and the Subcommittee that in Hong Kong, 180 buildings are graded by the Antiquities Advisory Board ("AAB") as Grade 1 historic buildings. These buildings are qualified to be chosen by AAB and will become monuments under statutory protection, just like the three buildings listed in the Notice at present. President, the Government's objective, however, is to list three historic buildings as statutory monuments every year. As such, I shall ask: Since Hong Kong has 180 Grade 1 historic buildings, are we going to spend 60 years to propose this kind of notices in order to protect those 180 Grade 1 historic buildings? Among them, 113 or 62% are privately owned buildings. The owners of these 113 buildings may demolish their properties at any time and the Government can do nothing to stop them.
Now we are of course very glad that the three historic buildings at the University of Hong Kong could be protected. However, the problem the Government should look into is whether the pace of declaring three buildings as monuments is too slow. Besides, as there are more than one thousand graded historic buildings, other than these three buildings, when will the Government look squarely into …
PRESIDENT (in Cantonese): Mr CHU Hoi-dick, this motion seeks to extend the period for amending the subsidiary legislation. Please return to the topic of the motion. If you are unhappy with the relevant government policy matter, you should follow up the issue with the relevant panel or subcommittee which deals with the relevant policy matter. Please come back to the question of this motion.
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MR CHU HOI-DICK (in Cantonese): President, I am returning to the discussion on extending the period to amend the Notice. By supporting this motion, as well as through Dr KWOK Ka-ki's speech and mine, we let the public know the fact that declaring these three historic buildings as statutory monuments will only resolve a small part of the issue, which is totally inadequate to deal with the grading exercise of a large number of Grade 1 historic buildings. The Government's pace is totally unacceptable. I hope more members of the public will take this opportunity to write to the House Committee and tell the Government that it should not adopt this stalling tactic to deal with the conservation of Hong Kong's historic buildings. 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 Dr KWOK Ka-ki to reply. Then, the debate will come to a close.
DR KWOK KA-KI (in Cantonese): President, I move that the motion under my name, as printed on the Agenda, be passed.
PRESIDENT (in Cantonese): I now put the question to you and that is: That the motion moved by Dr KWOK Ka-ki be passed. Will those in favour please raise their hands?
(Members raised their hands)
PRESIDENT (in Cantonese): Those against please raise their hands.
(No hands raised)
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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.
PRESIDENT (in Cantonese): Second motion: To extend the period for amending the three items of subsidiary legislation in relation to toll exemption for franchised buses using Government tunnels as well as the Tsing Ma and Tsing Sha Control Areas, which were laid on the Table of this Council on 5 December 2018.
I call upon Ms Starry LEE to speak and move the motion.
PROPOSED RESOLUTION UNDER SECTION 34(4) OF THE INTERPRETATION AND GENERAL CLAUSES ORDINANCE
MS STARRY LEE (in Cantonese): President, I move that the motion, as printed on the Agenda, be passed. At the House Committee meeting on 7 December 2018, Members decided to set up a subcommittee to study the three Amendment Regulations as set out in the motion.
Members also agreed that I would, in the capacity of Chairman of the House Committee, move a motion to extend the scrutiny period for the three Amendment Regulations to the Legislative Council meeting of 23 January 2019, so that the Subcommittee concerned shall have sufficient time to conduct its scrutiny work.
President, the content of the motion is set out on the Agenda. I implore Members to support the motion.
Ms Starry LEE moved the following motion:
"RESOLVED that in relation to the―
(a) Road Tunnels (Government) (Amendment) (No. 2) Regulation 2018, published in the Gazette as Legal Notice No. 237 of 2018;
4194 LEGISLATIVE COUNCIL ― 12 December 2018
(b) Tsing Ma Control Area (Tolls, Fees and Charges) (Amendment) Regulation 2018, published in the Gazette as Legal Notice No. 238 of 2018; and
(c) Tsing Sha Control Area (Tolls, Fees and Charges) (Amendment) Regulation 2018, published in the Gazette as Legal Notice No. 239 of 2018,
and laid on the table of the Legislative Council on 5 December 2018, the period for amending subsidiary legislation referred to in section 34(2) of the Interpretation and General Clauses Ordinance (Cap. 1) be extended under section 34(4) of that Ordinance to the meeting of 23 January 2019."
PRESIDENT (in Cantonese): I now propose the question to you and that is: That the motion moved by Ms Starry LEE be passed.
DR KWOK KA-KI (in Cantonese): President, I speak in support of this motion for extension of the scrutiny period.
In fact, since the Government's decision to announce a special arrangement for the three government road tunnels and the Tsing Ma and Tsing Sha Control Areas, namely waiving the tolls for franchised buses, considerable doubts have been raised across the community as to whether the arrangement would cause more congestions to roads and tunnels afterwards, and whether the bus companies exempted from the tolls would eventually pass on the benefit of savings to every passenger.
The extension of scrutiny period under this motion will afford this Council an opportunity to undertake discussion through the Subcommittee, and enable the government officials in attendance to clarify whether such arrangements will have a positive impact on the traffic or the development of franchised buses in the long run. These various queries are justified and reflective of the concern among many members of the public about the different traffic arrangements involved in these three tunnels and the control areas.
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I support this motion for extension of the scrutiny period, and look forward to an opportunity to question the Government in the Subcommittee, so that government officials can answer some queries and questions raised by Members and the public.
I so submit.
PRESIDENT (in Cantonese): Does any other Member wish to speak?
(No Member indicated a wish to speak)
PRESIDENT (in Cantonese): Ms Starry LEE, do you need to reply?
MS STARRY LEE (in Cantonese): President, I believe that apart from Dr KWOK Ka-ki, many other Members also wish to follow up on the matter through the Subcommittee. Hence, I just hope Members will support the motion moved by me to extend the scrutiny period.
PRESIDENT (in Cantonese): I now put the question to you and that is: That the motion moved by Ms Starry LEE be passed. Will those in favour please raise their hands?
(Members 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 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.
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PRESIDENT (in Cantonese): Proposed resolution under the Fugitive Offenders Ordinance to extend the period for repealing the Fugitive Offenders (France) Order, which was laid on the table of this Council on 5 December 2018.
I call upon Ms Starry LEE to speak and move the motion.
PROPOSED RESOLUTION UNDER SECTION 3(5) OF THE FUGITIVE OFFENDERS ORDINANCE
MS STARRY LEE (in Cantonese): President, I move that the motion, as printed on the Agenda, be passed. At the House Committee meeting on 7 December 2018, members decided to form a subcommittee to consider the Fugitive Offenders (France) Order.
To give the Subcommittee sufficient time to scrutinize the Order, Members also agreed that I, in my capacity as Chairman of the House Committee, be the one to move a motion to extend the scrutiny period of the Order to the Legislative Council meeting on 23 January 2019.
President, the content of the motion is set out in the Agenda. I urge Members to support the motion.
Ms Starry LEE moved the following motion:
"RESOLVED that in relation to the Fugitive Offenders (France) Order, published in the Gazette as Legal Notice No. 240 of 2018, and laid on the table of the Legislative Council on 5 December 2018, the period for repealing an order referred to in section 3(3) of the Fugitive Offenders Ordinance (Cap. 503) be extended under section 3(5) of that Ordinance to the meeting of 23 January 2019."
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): Does any Member wish to speak?
(No Member indicated a wish to speak)
LEGISLATIVE COUNCIL ― 12 December 2018 4197
PRESIDENT (in Cantonese): I now put the question to you and that is: That the motion moved by Ms Starry LEE be passed. Will those in favour please raise their hands?
(Members 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 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.
PRESIDENT (in Cantonese): Ms Starry LEE will move a motion under Rule 49E(2) of the Rules of Procedure to take note of three items of subsidiary legislation, which are included in Report No. 7/18-19 of the House Committee laid on the Table of this Council.
PRESIDENT (in Cantonese): I have earlier informed Members through the Legislative Council Secretariat that I will first call upon Ms Starry LEE to move the motion. The debate will then be divided into two sessions.
The first session is to debate the two items of subsidiary legislation made under the Peak Tramway Ordinance.
The second session is to debate the Financial Institutions (Resolution) (Loss-absorbing Capacity Requirements―Banking Sector) Rules.
Each Member (including the mover of the motion) may only speak once in each session and for up to 15 minutes.
In each session, I will first call upon the chairman of the subcommittee formed to scrutinize the relevant subsidiary legislation to speak, to be followed by other Members. Finally, I will call upon the public officer to speak.
4198 LEGISLATIVE COUNCIL ― 12 December 2018
The second session will start immediately after the public officer has spoken in the first session. The debate on this motion will come to a close after the public officer has spoken in the second session. The motion will not be put to vote.
I now call upon Ms Starry LEE to move the motion.
MOTION UNDER RULE 49E(2) OF THE RULES OF PROCEDURE
MS STARRY LEE (in Cantonese): President, in my capacity as Chairman of the House Committee, I move the motion as printed on the Agenda in accordance with Rule 49E(2) of the Rules of Procedure to enable Members to debate on the following three items of subsidiary legislation included in Report No. 7/18-19 of the House Committee on Consideration of Subsidiary Legislation and Other Instruments:
(a) Peak Tramway (Safety) (Amendment) Regulation 2018;
(b) Peak Tramway Ordinance (Amendment of Section 3(3)) Notice 2018; and
(c) Financial Institutions (Resolution) (Loss-absorbing Capacity Requirements―Banking Sector) Rules.
Ms Starry LEE moved the following motion:
"That this Council takes note of Report No. 7/18-19 of the House Committee laid on the Table of the Council on 12 December 2018 in relation to the subsidiary legislation and instrument(s) as listed below:
Item Number Title of Subsidiary Legislation or Instrument
(1) Peak Tramway (Safety) (Amendment) Regulation 2018 (L.N. 171/2018)
(2) Peak Tramway Ordinance (Amendment of Section 3(3)) Notice 2018 (L.N. 172/2018)
(20) Financial Institutions (Resolution) (Loss-absorbing Capacity Requirements―Banking Sector) Rules (L.N. 195/2018)."
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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): We now proceed to the first session to debate the two items of subsidiary legislation made under the Peak Tramway Ordinance.
Members who wish to speak please press the "Request to speak" button.
MR JEFFREY LAM (in Cantonese): President, in my capacity as Chairman of the Subcommittee on Peak Tramway (Safety) (Amendment) Regulation 2018 and Peak Tramway Ordinance (Amendment of Section 3(3)) Notice 2018 ("the Subcommittee"), I would like to report on the major deliberations of the Subcommittee.
The two items of subsidiary legislation mentioned above seek to amend the relevant regulation and ordinance respectively with a view to implementing the proposed upgrading plan submitted by Peak Tramways Company Limited ("PTC") together with its application for the second 10-year operating right. The Subcommittee has deliberated on, inter alia, the improvements to be brought about by the upgrading plan on passengers' comfort, the arrangements for the granting of land to PTC by the Government, and the monitoring of the implementation of the upgrading plan.
The Administration has advised that under the upgrading plan, PTC will increase the tramcar capacity to 210 passengers and provide more space to standing passengers. PTC will also implement expansion and redevelopment projects at the Lower Terminus at Garden Road and the Upper Terminus at the Peak, with a view to increasing the capacity of the waiting areas and improving the waiting environment. It is expected that the new peak tram's hourly capacity will exceed the demand, and hence queues will not normally build up at the Upper Terminus. Besides, in formulating the annual consideration payable by PTC based on a rate of 12% of its total revenue generated in the respective year, the value for PTC's use of the additional Government land for implementing the upgrading plan has already been reflected. The additional Government land will therefore be granted to PTC at nominal land premium and nil administrative fee. The Government has formed an inter-departmental working group to ensure that the upgrading plan will be completed in a timely manner.
4200 LEGISLATIVE COUNCIL ― 12 December 2018
President, the Subcommittee has no objection to these two items of subsidiary legislation, and will not propose any amendment. Details of the deliberations of the Subcommittee are set out in its report submitted to the House Committee.
President, I would now like to express my personal views on the Peak Tramway (Safety) (Amendment) Regulation 2018 and the Peak Tramway Ordinance (Amendment of Section 3(3)) Notice 2018.
President, the peak tram is a very popular with tourists, and I also go to the Peak occasionally by the peak tram and notice that when the peak tram climbs to a height where a panoramic view of the entire Victoria Harbour is in sight, the tramcar is always filled with the sound of cheers in different languages, and the night view is particularly magnificent. In the past 130 years, both locals and tourists have considered the performance of the peak tramway satisfactory, and I therefore support the proposal of granting additional land to PTC, with a view to improving its operations and services. As a matter of fact, no party except PTC will find the Government land granted useful, and for which the payment of land premium is also required. This is indeed a sound and appropriate approach.
As the peak tramway is very popular with tourists and has to serve an increasing number of passengers in recent years, PTC has taken the initiative to make a number of improvements in the past to cope with passengers' needs as far as possible. During deliberations on these two items of subsidiary legislation, we have seen that PTC will implement a series of improvement plans to enhance its services, including a substantial increase in the tramcar capacity, the provision of bigger waiting areas, the reduction in the waiting time for passengers, etc.
The peak tram is not only an important tourist attraction but also the collective memory of Hong Kong people. I believe that the legislative amendments will further clarify the rights and obligations involved in the operation of the peak tramway with a view to ensuring continuous improvements in the peak tram services, so that the peak tram will continue to be a must-go attraction for visitors to Hong Kong.
President, I so submit.
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MR HUI CHI-FUNG (in Cantonese): Mr LEUNG, the two items of subsidiary legislation under discussion are made under the Peak Tramway Ordinance ("the Ordinance"), and the amendments involved are technical in nature. Yet, the exercise also relates to the monitoring arrangements and rationality for the Government to grant the operating right to the Peak Tramways Company Limited ("PTC") for a period as long as 17 years in order to tie in with the implementation of the proposed upgrading plan for the peak tramway. There is also the question whether transparency is adequate when Government land is granted to facilitate development projects for promoting tourism. Mr Jeffrey LAM, Chairman of the Subcommittee formed to study the two items of subsidiary legislation, mentioned just now that members have no objection to the proposed amendments. In fact, we have had some heated debates during our discussion in the Subcommittee, and greatly divergent views were expressed by members on monitoring the granting of the operating right.
During the deliberation, many members were concerned about the benefits to be brought to such areas by the upgrading plan, including the time and environment for waiting. We have had many discussions on how to improve the accessibility to the existing entrance of the Lower Terminus at Garden Road as well. These are very important issues, and I believe other Members will also speak on them in their speeches later. However, I am more concerned about the problem I mentioned earlier, and that is, how the Government will monitor the situation after it has approved the grant of operating right for 17 years. Judging from the information provided in papers submitted by the Government so far, it seems that little specific monitoring work can be performed. Has any completion deadline been set for the upgrading plan in the agreement made between the Government and PTC? What actions can the Government take if the works cannot be completed on schedule? Alternatively, if the upgrading plan fails to achieve its desired effects and resolve problems such as excessively long waiting time, does the Government have the power to order PTC to take remedial measures?
(THE PRESIDENT'S DEPUTY, MS STARRY LEE, took the Chair)
During discussion of the Subcommittee, I have asked the Government to clarify whether a timetable for implementing the upgrading plan and any performance pledges have been included in the agreement made with PTC 4202 LEGISLATIVE COUNCIL ― 12 December 2018 concerning the grant of operating right, and whether requirements have been drawn up for imposing certain penalties on PTC when it fails to achieve the specific targets. However, very regrettably, the Government failed to offer answers to these questions at meetings of the Subcommittee. It only advised us in its written reply provided subsequently that administrative measures would be taken to monitor the progress of the upgrading plan. However, I wonder how effective these measures will be.
The Government has also pointed out further in the written reply that in case of default by PTC, such as breaching the agreement or the peak tram having serious incidents, the Secretary may issue a notice under the Ordinance to PTC requiring it to take remedy measures, and the Chief Executive may ultimately terminate the operating right granted to PTC. Although the Government has cited a number of ordinances to illustrate its points, it has failed to give a reply to the core question: how it will rectify the problem when its administrative measures to monitor the implementation of the upgrading plan fail and works delay arises.
With regard to the agreement on the granting of operating right, if there is a delay of one year or even two years in completing the upgrading works, just like many works projects which are facing the problems of cost overrun and works delay now, is it tantamount to breaching the agreement? Is issuance of administrative instructions the only measure available to the Government even if there is project delay? What else can the Government do between issuing administrative instructions and terminating the operating right of PTC? I have in fact enquired about the details of the agreement, but according to the brief introduction provided by the Government on the terms and conditions of the agreement, it does not cover the implementation of the upgrading plan. In other words, if there are any irregularities and delay in the works undertaken by PTC, or the upgrading plan fails to achieve its desired effects as presented today, I do not think there is anything that the Government can do.
I have therefore put forward two specific proposals. First, the Government should undertake to conduct an interim review on the granting of operating right to PTC for a period as long as 17 years, submit a report to the Legislative Council and launch a consultation exercise. As PTC will undertake major improvement works, and the Government has granted to it an operating right for such a long time, should the Government undertake to conduct an interim review as well? I consider this a very reasonable arrangement to allow LEGISLATIVE COUNCIL ― 12 December 2018 4203
Members and the public to monitor the performance of PTC and have a review on it in a more transparent manner, so that the community and the Legislative Council may at least put forward their proposals in the meantime. Nevertheless, the Government is of course not willing to accept this proposal.
Another proposal which I have put forward is that the Government should provide the Legislative Council with information on the content of the agreement or a brief summary of it. The government should also consider whether the implementation timetable for the upgrading plan be included in the agreement. As I have mentioned earlier, according to the definition of "default" given in the Ordinance, the term also covers failure on the part of PTC to comply with the terms and conditions of the operating right granted. As the agreement is an important part of the Ordinance, although we have no way to introduce any amendments eventually, the legislature and the public should at least be given a basis for monitoring the performance of PTC so that when problems arise, an evaluation may be conducted to find out whether the company has breached the agreement.
As a matter of fact, with regard to the terms and conditions or agreements for the grant of operating rights to other transport service operators and bus companies, information briefs have always been prepared by the Government for submission to the Legislative Council. Moreover, full texts or summaries of the agreements made by the Government with the two power companies have also been provided to Members for scrutiny and published. Hence, I am definitely not giving the Government a hard time by putting forward such a proposal. The Government should provide us with the necessary information in a more transparent manner.
However, the Government has only provided a very simple summary in its written reply to our enquiry about the details of the agreement. It merely advises that PTC is required to submit financial statements annually, and the pledge on the frequency of the peak tramway service should be no worse than that committed under the first 10-year operating period, etc. However, what exactly is the pledge set on the frequency of the peak tramway service? Suppose the number of passengers keeps increasing for some time in the future, will PTC implement another upgrading plan as soon as possible, or will it wait until the expiry of the operating right in 2036 before taking remedial actions and making improvements when a new agreement is to be made 10-odd years later, just like what it is doing now?
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At the meetings of the Subcommittee, many members expressed concern about the performance pledge made by PTC. They urged that the improvement works undertaken by PTC should achieve substantial effects. As such, it is even more necessary for Members present to join hands and ask the Government to provide the details of the agreement of the operating right for public information before granting an operating right for such a long period of 17 years.
Another issue which I am very concerned about is the point I mentioned just now at the beginning of my speech. It is the granting of land to private companies like PTC when awarding operating right over a long period. Mr Jeffrey LAM said earlier that very sound and appropriate arrangements were made in this respect, but I beg to differ.
I have asked time and again at meetings of the Subcommittee about how exactly the Government calculated the land premium involved when it granted the three pieces of additional land to PTC. The Government pointed out repeatedly at the Subcommittee meetings that these three pieces of additional land were adjacent to the tramway and of very low development potential, and they would therefore be granted at nominal land premium only. When replying to my enquiries, the Government even said that the annual consideration payable by PTC based on a rate of 12% of its total revenue generated in the respective year had actually reflected the land costs only, and non-land related charges were not included.
The Government advised at the Subcommittee meetings that under the charging mechanism based on a rate of 12% of PTC's total revenue generated, the Government received some $15 million as the premium paid in 2017. We should note that the rate of 12% of PTC's total revenue or the sum of $15 million as mentioned by the Government actually involves not only the land costs for the three pieces of additional land but also the charges for the occupation and use of Government land on which the four intermediate stations and the entire track of the peak tramway lie. The total area of the land concerned definitely far exceeds that of the three pieces of additional land granted, and the land is absolutely not of no or only very low development potential. Moreover, PTC is also required to pay land premium to the Government for the occupation and use of land at the two termini. Is it reasonable and adequate to charge an annual consideration based on a rate of only 12% of the total revenue generated in the respective year for the land costs for occupying and using Government land on which the track of the peak tramway and several intermediate stations lie? I am doubtful about it.
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I have checked the information contained in the annual report of the mother company of PTC. The total revenue generated by PTC in 2017 was about $130 million. For the commercial premises in the Peak Tower located at the Upper Terminus, however, the revenue generated in 2017 was as high as $200 million. If we add the two sums together, we will realize that the peak tram service and its related retail businesses have brought an annual total revenue of over $300 million to the mother company of PTC that year. The $15 million received by the Government actually accounts only for 5% of the total revenue thus generated.
Some Members may think that it is acceptable if the Government is just trying to provide support for the launch of tourism projects by granting land at nominal land premium. As I have pointed out, however, different mechanisms are in place to charge land premium for the launch of different tourism projects, such as the Ocean Park, the Hong Kong Disneyland, etc. For example, the land premium received by the Government for the first phase development of the Hong Kong Disneyland was $4 billion back then, and it can share the profits arising from the project. As for the Ocean Park, land was granted at nominal land premium since it was originally launched as an educational project. However, the Ocean Park Corporation was also required to pay billions of dollars of land premium for several new hotel projects implemented subsequently.
With regard to the peak tramway and tourism projects generally involving the grant of Government land, should the Government formulate a more transparent land grant policy? Alternatively, it may explain the reasons for choosing a certain approach to calculate land premium under different circumstances, and may even request to have a share of the profits generated from such projects. All these are questions to which no answer can be found during deliberation of the Subcommittee.
It is true that PTC is willing to invest $650 million this time to implement the upgrading plan. About the revenue of $300 million generated from the peak tram service and the retail businesses in the Peak Tower in 2017, however, is it a lack of transparency or disappointing on the part of the Government to receive an annual consideration based on a rate of 5% or 12% only of the total revenue generated without taking into consideration such factors as the inflation rate, the increase in the holding capacity and the revenue to be brought to the mother company by engaging in other businesses such as hotel projects, and choosing not to grant the operating right of PTC on a profit-sharing basis? This is also one query I have to raise.
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Finally, I would like to reiterate that with regard to the peak tramway, the Government should accede to my request and provide more information about the terms and conditions for granting an operating right for 17 years, so as to facilitate more effective monitoring by the legislature and the public. If anything goes wrong with the upgrading plan to be implemented, or if no improvements are made in the waiting situation upon completion of the plan, members of the public may act in accordance with the terms and conditions of the agreement and ask PTC to rectify the inadequacies. Moreover, the Government should introduce an interim review mechanism so that PTC and the Government may receive public views in the interim and improve the peak tram service. These are very humble requests, but can the Government promise to do so?
The Government should also review its existing land grant policy for tourism projects. With regard to development plans concerning the peak tramway, although there will be more than 10 years before the grant of a new operating right, the Government should review the existing practice and refrain from adopting approaches of such a low transparency to allocate valuable land resources in Hong Kong to one single company for operating tourism activities.
With these remarks, Deputy President, I note the report submitted by the Subcommittee, and express the above views and opinions on the granting of operating right to the peak tramway. Thank you.
(Mr Jeffrey LAM stood up)
DEPUTY PRESIDENT (in Cantonese): Mr Jeffrey LAM, what is your point of order?
MR JEFFREY LAM (in Cantonese): I wish to seek an elucidation.
DEPUTY PRESIDENT (in Cantonese): Do you wish to clarify a certain part of your speech which has been misunderstood?
MR JEFFREY LAM (in Cantonese): I wish to seek an elucidation from Mr HUI Chi-fung on his speech delivered just now.
LEGISLATIVE COUNCIL ― 12 December 2018 4207
DEPUTY PRESIDENT (in Cantonese): Which part of Mr HUI Chi-fung's speech you wish to seek an elucidation from?
MR JEFFREY LAM (in Cantonese): Deputy President, Mr HUI Chi-fung said just now that a majority of members of the Subcommittee did not agree with the proposed amendments. This is not correct because the Subcommittee report was written by the Secretariat in accordance with what was recorded in the relevant minutes of meetings. I hope Mr HUI Chi-fung would elucidate what he meant by saying that "a majority of members of the Subcommittee did not agree".
DEPUTY PRESIDENT (in Cantonese): Mr HUI Chi-fung, are you willing to make an elucidation?
MR HUI CHI-FUNG (in Cantonese): Yes, I am. From what I recall, I did not mention anything about "a majority of members". Instead, I have only responded to what he said about the report of the Subcommittee. He said that members had no objection to the proposed amendments, but I wished to point out that many divergent views were expressed by many members, and they even had some heated debates during discussion of the Subcommittee. Yet, I am not going to argue with him whether these are majority or minority views.
DR KWOK KA-KI (in Cantonese): Deputy President, I can confirm that there have been a lot of arguments in the Subcommittee, as just mentioned by Mr HUI Chi-fung.
Deputy President, if you have time, please go to Peak Tram Station in Central and then you will see a bizarre view of hundreds of tourists standing on the street. The weather is cold today. But I can tell you that no matter it is cold, rainy or under a typhoon, there are still a lot of people standing on the street, waiting to get on the tram. This is not a new phenomenon. Over the past few years when the Government was vigorously promoting tourism, this phenomenon already appeared.
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As we all know, the supporting facilities of tourism in Hong Kong are rather poor. At the meeting of the Panel on Food Safety and Environmental Hygiene yesterday, we discussed the conditions of public toilets for visitors' use, and they are shameful indeed. We basically do not want to go inside the public toilets for visitors' use, as they have severe odour and cleanliness problems to the astonishment of many visitors. It is beyond their imagination that they would find such public toilets in Hong Kong, a modernized city. Anyway, I am not going to elaborate on this problem.
I am now back to the Peak Tramway. When we read the must-see tourist attractions recommended by the Tourism Commission or the Hong Kong Tourism Board ("HKTB"), we will surely find the Peak Tramway. However, when visitors go to the Peak Tram Station, they will have a painful experience as they have to wait for a very long time, not knowing when they can board the tram. Besides, the ticket price is not cheap at all, as a return ticket costs $52. Deputy President, Peak Tram should be the most expensive means of transport in Hong Kong in terms of the distance covered.
In brief, this Legal Notice seems to be about safety, but is essentially about the adjustment of the tramcar capacity from about 110 passengers at present to 200 passengers. In fact, this should have been adjusted long time ago, as the franchises approved by the Government cover very long periods of time. At present, the two franchises have been much extended, with the franchise of tramway service being extended by 10 years from 2026 to 2036, and the franchise of the Peak Tower being extended to 2031.
Deputy President, we really want Hong Kong to perform better and to do better in its tourist facilities. The paper submitted by the Government says that $650 million will be spent on improving the facilities, which sounds very pleasant. But when we look carefully at the figures, we find that the Government is making great offers to the Peak Tramways Company Limited ("PTC") for the latter to maximize its profits. In 2017, the profits from tramway service, the Peak Tower and the Peak Tram Terminus at St. John's Building were $128 million, $201 million and $53 million respectively, adding up to a total of over $370 million or nearly $380 million. If we divide $650 million by 17 years, we learn that only a very tiny amount of money will be spent on upgrading the facilities each year.
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At the Panel meetings, we asked the Commissioner for Tourism and the Assistant Commissioner for Tourism whether they had discharged their responsibilities fully to improve the situation, resolve such outrageous problems and treat our visitors well. They always responded as if they were recording machines, "Yes, we have." They also asked us to believe in the senior staff of PTC sitting behind them. But instead of answering our questions, the senior staff of PTC only said, "We will spend $650 million to upgrade the facilities." We feel resentful towards that kind of arrogant and contemptuous attitude.
However, this phenomenon is surely attributed to the Government. When the Government approved the franchise to PTC, asking it to upgrade the facilities, did it also ask PTC to do its best for the tourism industry of Hong Kong and provide quality service to our customers, including tourists and Hong Kong people? In fact, many Hong Kong people also want to take the Peak Tram, just like going to Hong Kong Disneyland and Ngong Ping 360. But many people, when seeing this phenomenon, did not want to take the Peak Tram anymore even though they have already arrived at the Peak Tram Station. This tourist attraction was originally meant for Hong Kong people. It serves not only tourists, but also Hong Kong people, and many children want to take the Peak Tram. But firstly, the price of taking Peak Tram, with $52 for a return ticket, is too expensive, but to which the Government only turns a blind eye. PTC asks for a fare hike every year, and every time when PTC requests for a fare hike, the Government will also approve so that PTC can maximize its profits. Secondly, PTC is treating its customers like trash and is not friendly to them at all. Just think about it. If PTC is treating its customers well, will it ask for a fare hike every year but without improving its services?
I clearly remember a saddening scene outside the Peak Tram Station on a day when the weather suddenly turned cold just like today and it was also raining. It was raining and very cold, but many visitors were queuing outside the Peak Tower without any umbrellas. They were waiting to take the next tram in the rain, and had to wait for half an hour, 45 minutes or even one hour. If the situation is so outrageous, no matter how much promotion has Hong Kong done, it will still be to no avail. I believe that after returning to their own countries, these tourists will ask other people not to visit Hong Kong. When we travel overseas, we often have to use tourist facilities like tram stations. I remember that in Taiwan, Japan and European countries, they have proper waiting areas for visitors until they get on the tram.
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The situation in Hong Kong is very weird. Under the present amendment, an area of more than 4 000 sq ft at the Peak Tram Terminus location at St. John's Building will be given to PTC at a very low land premium. Since this was mentioned by Mr HUI Chi-fung just now, I will not go into the details. This Government is really very incompetent, as it completely ignores the miserable situation at the Peak.
The tram station at the Peak has two doors, one is for visitors to get inside the Peak Tower, i.e. the shopping mall, under normal circumstances and wait for the tram, while the other one is for driving visitors outside to wait for the tram. I asked the staff why visitors had to wait outside, and their answer was that under the instruction from the senior management of the company, when there were too many visitors waiting for the tram, they would need to wait outside.
The original idea of developing a shopping mall was not for the Peak Tower Limited to maximize its own profits. Why can it not open up certain area for visitors to wait for the tram in adverse environment? No matter the weather is poor or not, if the staff are compassionate, when knowing that the visitors, coming to this foreign place, have to wait for an hour for the tram at most beautiful spot of Hong Kong, they will say to the visitors, "It would be better that you wait inside, instead of being battered by wind and rain." If the weather is as cold as today, it will be deplorable that visitors need to wait outside. However, the company will not do that, because the area inside is more important. It has to reap profits amounting to $200 million per year from the mall inside and will not give you an inch of area to stand. You have to wait for the tram outside. Even though you have spent an exorbitant amount of $52 to get a return tram ticket, you still need to wait outside. The Government is incompetent as it is totally oblivious to this situation. When I raised a question to the official concerned at the meeting, he said, "I do not know. You may ask the staff sitting behind, and the PTC representative will answer your question." Does the Commissioner for Tourism need to do anything? Does he get pay for sitting on his hands?
As the Government, it has to monitor the project on that piece of land which was originally Government land. But after giving approval to that franchise, it turns a blind eye to it and allows the customers to be poorly treated. Has anything gone wrong? This is doing a disservice to Hong Kong. I see that LEGISLATIVE COUNCIL ― 12 December 2018 4211
Mr YIU Si-wing is not sitting here now in this Chamber, as I also want someone from the tourism industry to air his views. We invite some visitors to the most beautiful place in Hong Kong, but they end up being poorly treated. In fact, what the company has to do is very simply. Deputy President, they can just open the door and let visitors go inside. If we ask the staff of PTC about visitors standing outside to wait for the tram, they will definitely lie, "This is not the case." We have also seen some elderly people, pregnant women and children standing in the open air to wait for the tram, and the staff were just oblivious to them. Nevertheless, the senior staff will only say, "This is not the case. If visitors raise a request, we will give them a place to sit." However, after walking around the entire station, you still cannot see any notice concerned, nor is there anyone outside to give instruction about taking care of the elderly, the weak or people with physical disabilities. It is all empty talk from the senior staff concerned.
This is the nature of businessmen who aim to maximize profits as they are not doing charity work. They now have a profit of over $300 million, but surely they do not mind reaping a profit of $400 million to $500 million. The Government has the responsibility to deal with this situation. After giving approval to the franchise, it should also monitor the company's operation, but our incompetent Government just completely ignores it. We ask about the agreement of the franchise, but the Government says that we will not be given a copy to read. We also ask about the penalties concerned, and the Government says that it can actually impose some penalties or terminate the operating right of the company. Nonetheless, over all these years dealing with the business sector, has the Government ever taken the consortia to task? It is always at their mercy, and is even severely exploited by the consortia on its own project agreements.
This Government is extremely useless, and this is why we have to be so concerned and ask the Government at the Panel meeting to do some more work. In fact, the Government is obliged to safeguard public interests and visitors' interests. I do not understand why this has to be voiced out by Members to the Government. Is this not the obligation of the Government? Does the Government need to be taught by us? Are the Commissioner for Tourism, the Secretary and the Under Secretary, who respectively earns an annual remuneration of a few million dollars, all useless?
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DEPUTY PRESIDENT (in Cantonese): Dr KWOK Ka-ki, I notice that you have already spoken for 12 minutes.
DR KWOK KA-KI (in Cantonese): Deputy President, my viewpoint is very important as I have to explain my reasons for supporting this motion.
DEPUTY PRESIDENT (in Cantonese): The Legal Notice that this Council is now discussing has very specific content, and Members should focus on its content when they speak.
DR KWOK KA-KI (in Cantonese): Deputy President, the content of my speech is very specific.
DEPUTY PRESIDENT (in Cantonese): I notice that you are criticizing the Commissioner for Tourism and the operation of the Peak Tram. If you want to air your views on those matters, you can follow up in the Panel or on other occasions. Please focus your speech on the content of the Legal Notice.
DR KWOK KA-KI (in Cantonese): Okay, okay … I am now back to the theme, and we are back together.
Deputy President, as we mentioned, can this problem be resolved simply by the submission of a Legal Notice in relation to safety? We have to know that the change that they made is not for the change itself. The reason of increasing the tramcar capacity from 110 to 200 passengers is for improving the service. It is for this most fundamental cause that I explain why we are doing this, because we are all very concerned about the tourism industry of Hong Kong. Deputy President, I have asked whether any official from the Transport Department or the Transport and Housing Bureau would attend this meeting today, because I thought this amendment was about the safety of a means of transportation. But from the answer that I got, it is not related to means of transportation but is LEGISLATIVE COUNCIL ― 12 December 2018 4213 related to economic activities which are under the ambit of the Commerce and Economic Development Bureau. This is the case, otherwise Secretary Frank CHAN or his Under Secretary, instead of the Secretary, would have been attending this meeting. It is being considered as a tourist item that can create economic benefits.
Of course, we do not need to care about the division of work within the Government. But on this issue, when we raise our queries, the authorities will need to prove to us that the change to be introduced to the Peak Tram is able to improve services to customers. Treating visitors well is what it should do. But in fact, this problem is still unresolved. The Legal Notice concerned is to deal with the lower Peak Tram Terminus at St. John's Building, while the Peak Tower at the top is not covered by the present programme. When we asked what should be done to resolve the problem, and company answered that only when the frequency of the tram was increased, visitors would not need to queue up. What a great answer and how capable they are. According to their plan, once the tramcar capacity is increased from 100 to 200 passengers, passengers will not need to queue up. They can achieve zero waiting time and passengers will not need to wait. Do you believe in them? I do not believe in them, but the Government fatuously believes in them and recognizes what they say. We used to think that the function of the Government is to monitor the company so that the latter can play its role properly. But I really doubt the effectiveness of the monitoring by such an incompetent Government and incompetent officials. Now that the money has already been paid and the franchise been approved, do you still want to see the tourists and even Hong Kong people standing at either Garden Road or Peak Road to wait for the tram under poor, inhumane and merciless conditions? I think this is shameful and is a shame to Hong Kong, which also needs to deal with other issues such as the toilet problem. The Government only pays lip service to doing its best in the tourism industry, but what it has done is practically driving tourists away. We are being harsh in criticizing the Government because we want it to do better. If the Government still shuts its ears and continues to keep its head down, refusing to face the problem squarely, I can do nothing to help either.
I so submit.
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MR TONY TSE (in Cantonese): Deputy President, the peak tramway has been in operation since 1888 and has a history of 130 years. I am sure it has not only been an attraction for Hong Kong people of different generations but is also a world-renowned local hot spot for tourists. Among the Top 10 Attractions listed on the website of the Hong Kong Tourism Board, the Peak ranks first and a tramcar which is burgundy in colour is shown in its promotion clip.
However, as the peak tramway is highly popular among tourists and locals, long queues often appear at the entrance to the Lower Terminus at Garden Road and that to the Upper Terminus at the Peak Tower. Passengers sometimes have to wait for one to two hours before they can finally board a tramcar. The most inconvenient part about the whole thing is that waiting passengers are not sheltered from the sun and rain as the waiting areas are located at the outdoor open space. I have heard many local and overseas friends complaining that they are forced to give up their plan to go to the Peak by the peak tramway because of the long queue of passengers.
At the end of 2015, under the Peak Tramway (Amendment) Ordinance 2015 enacted during the previous term of the Legislative Council, the Chief Executive in Council approved the granting of the first 10-year operating right of the peak tramway to the Peak Tramways Company Limited ("PTC"), and the granting of the second 10-year operating right was also approved recently. PTC has undertaken to invest $650 million to upgrade its facilities and improve its services. These measures include increasing the tramcar capacity significantly from a maximum of 120 passengers per tramcar per journey at present to 210 passengers; constructing a covered, temperature-controlled queuing and waiting area at the Lower Terminus at Garden Road; renovating the Upper Terminus platform areas; widening gangways at the tramcar doors, and providing more space to standing passengers.
The amendments proposed to the two items of subsidiary legislation under discussion today seek exactly to implement the improvement measures I mentioned just now, and they include increasing the statutory maximum number of passengers that a tramcar may carry; excluding a portion of the existing tramway area from the statutory tramway area so that the land concerned may be granted to PTC by way of a land lease for implementation of the necessary improvement works; and strengthening the Government's supervision over the upgrading works. I will of course offer my strong support for the proposed amendments.
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It is expected that the upgrading works will commence in late 2018 (that is, at the end of this month) for completion in 2021. According to PTC's estimation, with the increase in the tramcar capacity and the improvements made to station facilities, the waiting time for the peak tramway service will be markedly reduced by 90%, and hence queues will no longer build up outside the two termini.
However, I have to remind the Government and PTC that with the increase in the tramcar capacity and the improvements made to the facilities at waiting areas, there will likely be higher visitors flow as people will expect that queues will no longer build up. Hence, I hope they will get well prepared for such situation to avoid the building up of long queues again. Nevertheless, I believe things will after all be better than what it is now, because passengers waiting at the Lower Terminus at Garden Road will no longer be exposed to the sun and rain, and they can at least wait in an air-conditioned waiting area during summer.
As for the Upper Terminus at the Peak Tower, due to geographical constraints and the need to provide an emergency vehicle access, it is not feasible to equip the place with covered waiting facilities. PTC has indicated that it is developing a timed ticket online sales programme which aims to make the visitor demand more evenly distributed throughout the day to further reduce the waiting time. I hope the Government and PTC will increase and improve the signage in the vicinity of the Upper Terminus so that visitors can find their way to the peak tram station without the need to make enquiries everywhere.
Apart from making an investment of $650 million, PTC will also pay to the Government an annual consideration based on a rate of 12% of its total revenue generated in the respective year as land costs. The Government will grant additional land at nominal land premium for PTC to implement the expansion and upgrading works. During deliberation of the Subcommittee on the Peak Tramway (Safety) (Amendment) Regulation 2018 and the Peak Tramway Ordinance (Amendment of Section 3(3)) Notice 2018, some members queried how the rate of 12% was determined, and some Members have also raised the same question just now. Why was the rate determined on the basis of the total revenue generated instead of the company's profits or the actual value of the land granted? Is 12% a reasonable rate? As the representative of the Architectural, Surveying, Planning and Landscape functional constituency, I consider that we should have faith in the professional assessment made independently by professionals from the relevant sector.
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Deputy President, when we go to see a doctor, we should have faith in him or her. As a matter of fact, it takes a very long time for a person to become a professional surveyor. He or she should first of all pursue a degree course in this curriculum, and then acquire an internship position and pass the necessary examination before obtaining an official license. I therefore consider it impossible to explain the calculation methods in great details here, and depending on the circumstances of individual cases, different methods are often adopted to assess land premium. In the case under discussion, we know that the land sites involved are mostly located on slopes and close to the tramway. Hence, even if they were not used for the current purpose, I do not think they could be granted for other purposes of higher development potential. We should never mistakenly think that land sites located in the vicinity of the Peak can definitely be used for developing luxury properties. This is in fact not necessarily the case. It is hence a professional decision to derive a rate for charging land premium on the basis of an assessment made according to the total revenue, and I consider this a fair and reasonable approach.
Deputy President, when deliberating on the Travel Industry Bill last week, I have pointed out that visitors stay in Hong Kong only for a limited time. If they are made to queue and wait for a long time before they can have access to various facilities for tourism, catering and shopping, this will not only run contrary to the principle of "treat visitors well" but also reduce the time available for visitors to spend in Hong Kong, thus indirectly causing loss to Hong Kong's economy and discouraging visitors to visit Hong Kong again. On the other hand, inadequate facilities will also affect the daily life of local people.
Such being the case, there is indeed a need for the Government to assess the capacity and facilities for tourism in various districts of Hong Kong and provide more tourist attractions, hotels, guesthouses and ancillary facilities such as pick-up and drop-off areas for coaches. Besides, measures should also be introduced to timely divert visitors to different districts and tourist attractions to save them from spending a great deal of time waiting to have meals, make payments or even go on amusement rides, while coach drivers need not queue for a very long time for parking spaces in pick-up and drop-off areas. Some Members have also mentioned earlier that due to inadequate toilet facilities, visitors need to queue for a long time before they can use the washroom, and this is also a cause for criticism.
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The SAR Government is striving to develop Hong Kong into a "Smart City". One of the areas covered is "Smart Mobility". Real-time traffic information such as information on traffic congestion and road incidents is provided with the help of information technology and mobile applications. This will facilitate commuters to choose the most efficient mode of transport for their journey. Can we make use of the same technology to achieve "Smart Tourism"? At present, locals and tourists who wish to visit the Ocean Park or the Hong Kong Disneyland may look up for information from certain mobile applications or web pages on the waiting time needed for all amusement rides and performance programmes in those attractions. With the information at hand, they may plan their route and itinerary, or even go to have their meals first during the waiting time. The Government may also consider uploading onto a mobile application or web page the most updated information on the waiting time needed at all tourism facilities in Hong Kong, including the peak tramway, Ngong Ping 360 and Hong Kong Observation Wheel, and the numbers of visitors at different attractions or outlets, for locals and tourists visiting such places to choose the attraction spots they would like to go first. If long queues have already built up, they can choose to have their meals at restaurants or go shopping first, and then visit other attraction spots later.
Effective diversion of visitors can ensure that they will visit various attractions at different time periods. This will benefit operators of various tourist attractions and tourism facilities because the visitor flow will be more evenly distributed. This is also conducive to promoting tourism facilities. I hope the Commerce and Economic Development Bureau will discuss with the Hong Kong Tourism Board and members of the tourism industry as soon as possible, and have the measure implemented for the convenience of locals and visitors. The initiative can also better complement the upgrading plan to be undertaken for the peak tramway.
Deputy President, I so submit.
MR FRANKIE YICK (in Cantonese): Deputy President, the Peak Tramway Ordinance was amended twice in 2013 and 2015 respectively to implement the arrangements for the operation and operating right of the peak tramway. In October this year, the Chief Executive in Council further approved the grant of a second 10-year licence to the Peak Tramways Company Limited ("PTC"). In 4218 LEGISLATIVE COUNCIL ― 12 December 2018 other words, the operator concerned may operate the peak tramway until 2035. The Liberal Party supports the Government's amendments as the licence extension can help the operator to draw up accurate financial estimates and in turn formulate long-term development plans. Speaking of PTC's intention to spend $650 million on conducting the peak tramway service upgrading plan, the Liberal Party hopes that it can be completed as soon as possible, so as to dovetail with the development of Hong Kong's tourism industry.
The peak tramway has a history of over 100 years, and it has undergone constant changes in the process. In the early days, the peak tramway was a means of transport whereby people travelled to and from the Peak. But today, it has turned into a means of transport whereby tourists may travel to the Peak to get a panoramic view of Hong Kong's Victoria Harbour. At present, tourists account for over 90% of the peak tramway passengers every day, and it carried over 6 million passenger trips last year.
However, the failure of its service frequency and passenger carrying capacity to cope with passenger growth has often resulted in very long queues at the two peak tramway termini. The long queues of waiting passengers have even extended to the outdoor area. It is utterly not surprising to see that passengers have to wait for as long as two hours during peak hours. With a view to rectifying the waiting problem, the Liberal Party hopes that the upgrading works of the peak tramway can be commenced as soon as possible. When the upgrading plan is completed smoothly in 2021, the maximum carrying capacity of a tramcar can be increased significantly by 75% from the present 120 passengers to 210 passengers. By that time, passengers' waiting time can be significantly shortened. According to a consultancy study commissioned by PTC, the waiting time at the Peak Tower terminus can be reduced by as much as 90%.
To tie in with the upgrading works of the peak tramway, the Government will lease a number of government sites near the Garden Road Lower Terminus to PTC at a nominal rent under a Special Purpose Lease. The purpose is to provide the peak tramway with sufficient lands for constructing a covered, temperature-controlled queuing and waiting area that can accommodate around 1 300 passengers. I believe that compared to the small and hot waiting environment at present, the terminus after expansion can obviously enhance tourists' comfort during their wait.
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Nonetheless, owing to road constraints outside the Peak Tower terminus, it is impossible to extend the existing temporary roof cover. As a result, passengers queuing outside the covered area have to bear the scorching sun and heavy rains. This is not desirable. I hope PTC can consider other feasible proposals, and the authorities should also give their support, so as to rectify the relevant situation.
The peak tramway is a very important tourism element in Hong Kong. Therefore, regarding the two periods of peak tramway service suspension for two months and five months within the next two years for the construction of a temporary platform and system replacement, the Liberal Party considers that the total service suspension period of seven months is a bit too long. Even though tourists may travel to the Peak by other means of public transport during the suspension of the peak tramway service, they may still want to get a first-hand experience of the characteristic peak tramway. This explains why the Liberal Party hopes that PTC can expedite the relevant works, so as to shorten the duration of service suspension.
I believe that during the suspension of the peak tramway service, road traffic flows in the district will increase, and this will add to the already heavy burden of the existing road access of the Peak. Therefore, the Government must draw up measures for mitigating traffic flows in the Peak especially during rush hours, so as to avoid causing any inconvenience to tourists and residents.
PTC will continue to pay the Government a land premium equivalent to 12% of its total annual operating revenue for using the four intermediate stations on the tram track and also other government sites. The Liberal Party supports this. If part of the operating revenue is used to pay for the land premium, the rent will be adjusted on the basis of its operating performance. This can avoid a heavy burden in times of external economic downturn and help to alleviate the pressure of fare increases. In fact, if computation is done on the basis of its $120 million operating revenue in 2017, PTC will be required to pay the Government a land premium of over $14 million. The Liberal Party thinks that in view of the immense social benefits of the peak tramway, using part of the operating revenue to pay for the land premium is a suitable arrangement.
Deputy President, even if our hardware facilities are satisfactory, we also need software facilities to complement them. It looks like the problem of "dishonest cab drivers" I am going to discuss is not directly related to this 4220 LEGISLATIVE COUNCIL ― 12 December 2018 amendment exercise. But if tourists experience something bad at peak tramway termini, their whole trips in Hong Kong will be affected, and they may develop negative perceptions of Hong Kong in general. Therefore, the Liberal Party also hopes that apart from assisting PTC in completing the upgrading works of the peak tramway, the Government can also strive to combat those undesirable elements that have come to affect Hong Kong's reputation.
In unfamiliar places, tourists will naturally rely on taxis as the major means of transport. Regrettably, a handful of black sheep in the taxi trade have exploited tourists' weaknesses and turned them into their target for making some quick money. The Garden Road Lower Terminus has even degenerated into a main area where black sheep (meaning "dishonest cab drivers") try to make some quick money. They will first put down their for-hire flags and select passengers, and then rip tourists off by charging them exorbitant fares. In fact, their operation shows that such incidents are not individual cases, and they operate as a syndicate. Even though the Hong Kong Taxi Council once recruited "courtesy ambassadors" of its own volition to assist passengers at the Garden Road Lower Terminus and advised drivers to charge fares by the meter, they were intimidated by undesirable elements.
The blatant deeds of "dishonest cab drivers" at the Garden Road Lower Terminus are due fundamentally to the Government's ineffective crackdown and the lenient penalty. Previously, the taxis of some suspected "dishonest cab drivers" were towed away by the Police. But since the penalty is very lenient without any deterrent effect, some undesirable elements have employed the same old tricks again.
Deputy President, the peak tramway is an important tourism resource in Hong Kong. PTC now intends to spend nearly $700 million on conducting the upgrading and improvement works with the aim of dovetailing with the future development of Hong Kong's tourism industry. Nevertheless, the Liberal Party does not want to see "a spoonful of tar spoil a barrel of honey". So, I wish to take the opportunity today to urge the Government to combat "dishonest cab drivers" with greater efforts. Apart from stepping up law enforcement, the Government should also enhance the penalty on those undesirable elements engaging in unlawful deeds, so as to safeguard the overall reputation of the taxi trade and also Hong Kong's reputation.
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Deputy President, this amendment exercise can help to improve the service quality of the peak tramway and tourists' overall impression of Hong Kong, and is conducive to the sustainable development of Hong Kong's tourism industry. For these reasons, the Liberal Party supports the Peak Tramway (Safety) (Amendment) Regulation 2018 and also the Peak Tramway Ordinance (Amendment of Section 3(3)) Notice 2018.
Finally, I wish to give a reply on a point raised by the Subcommittee Chairman just now. In the course of scrutinizing the relevant pieces of subsidiary legislation, some individual Members did put forth many views. But it is not correct to say that this was also the case with the majority of Members. I wish to clarify this particular point.
I so submit.
DEPUTY PRESIDENT (in Cantonese): Does any other Member wish to speak?
MR WONG TING-KWONG (in Cantonese): Deputy President, today, this Council is urged to take note of the Peak Tramway (Safety) (Amendment) Regulation 2018 ("the Regulation") (L.N. 171/2018) and also the Peak Tramway Ordinance (Amendment of Section 3(3)) Notice 2018 ("the Notice") (L.N. 172/2018). The issue involved is actually very simple, and it is mainly about amending the Peak Tramway Ordinance to increase the tramcar capacity from 120 passengers to 210 passengers. So, the Government needs to seek this Council's endorsement of the Regulation and also the Notice.
Sadly, some Members have blown this matter out of proportion today and dragged in issues which are totally irrelevant to the topic. Their speeches are simply unrelated to the Regulation and the Notice whose passage is being sought by the Government in this Council today. One particular example is Dr KWOK Ka-ki, who talked about the Commissioner for Tourism and the like. The Peak Tram is certainly an important segment of Hong Kong's tourism industry, so we have requested the Peak Tramways Company Limited ("PTC") to make improvements. Without increasing the passenger capacity of each tramcar, it will be impossible to rectify the crowdedness problem at the Lower Terminus at Garden Road. Only by increasing passenger capacity can this problem be solved. Besides, the facilities at the Peak Tram termini likewise require 4222 LEGISLATIVE COUNCIL ― 12 December 2018 enhancement. One example is washroom facilities. Due to their long history, they have become outdated. For these reasons, it is necessary for PTC to inject money for making improvements. All these are practical improvement works that can enable Hong Kong to progress. But regrettably, some Members have merely kept levelling criticisms without putting forth any constructive recommendations.
I hope the authorities can give a positive and proactive response and take timely enforcement actions to properly handle the undesirable phenomena brought up by Mr Frankie YICK just now. That way, Hong Kong can maintain its reputation as the "Pearl of the Orient" and truly live up to its status as a favourite tourist destination.
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 call upon the Secretary to speak. Then, this debate session will come to a close.
UNDER SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT (in Cantonese): Good afternoon, Deputy President and Honourable Members. The peak tramway is an important tourism and recreational facility of Hong Kong, popular among many locals and tourists. In December 2015, the Chief Executive in Council approved under the Peak Tramway Ordinance ("PTO") the grant of the first 10-year operating right of the peak tramway to Peak Tramways Company Limited ("PTC") commencing on 1 January 2016.
Under PTO, if the operator can satisfy the Chief Executive in Council that it is committed to and is capable of implementing an upgrading plan conducive to maintaining the peak tramway as an important tourism and recreational facility, its operating right can be extended by a maximum of 10 years. This means the total period of an operating right could be up to 20 years, through a LEGISLATIVE COUNCIL ― 12 December 2018 4223
"ten-plus-ten-year" arrangement under PTO. This arrangement was provided for in the Peak Tramway (Amendment) Bill 2015 passed by the Legislative Council in October 2015.
In October 2018, the Chief Executive in Council approved under PTO the grant of the second 10-year operating right of the peak tramway to PTC commencing 1 January 2026. The Government is satisfied with PTC's commitment and capability of implementing an upgrading plan which will be conducive to maintaining the peak tramway as an important tourism and recreational facility. We look forward to the resulting enhanced peak tram facilities and services for the enjoyment of tourists and locals alike.
Under the upgrading plan, PTC will increase the tramcar capacity by over 75% from 120 passengers to 210 passengers; construct a covered, temperature-controlled queuing and waiting area for about 1 300 passengers at the Lower Terminus at Garden Road; and renovate the platform areas of the Upper Terminus. The implementation of the upgrading plan will address the long-standing queuing problem at the Lower Terminus and bring about enhanced service provision to tourists and locals.
PTC will invest over $650 million for implementing the upgrading plan, which does not entail the use of any public funds. The works are expected to commence at the end of 2018 and be completed in 2021.
As the upgrading plan involves expansion of the existing waiting area and platform at the Lower Terminus, as well as extension of the passing loop, PTC has requested additional pieces of Government land, which are all adjacent to the tramway and are unallocated Government land of very low development potential.
The Chief Executive in Council has also approved granting PTC the use of three additional pieces of Government land with an area of about 426 sq m adjacent to the existing tramway area for implementing the part of the upgrading plan aiming to increase the holding capacity of the Lower Terminus and improve the waiting environment for passengers. To ensure that public safety would be adequately safeguarded, the Government will require that all building works to be conducted in these additional areas and part of the existing tramway area be subject to the scrutiny of the Building Authority ("BA") under the Buildings Ordinance ("BO") (Cap. 123), and grant these additional pieces of land by a Special Purpose Lease ("SPL").
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The additional Government land would be granted to PTC at nominal land premium and nil administrative fee. However, this does not mean that the land is provided free of charge to PTC because, for the first and second 10-year operating rights, PTC has to pay to the Government annually a sum of consideration equivalent to 12% of its total annual revenue received in the year. The sum of consideration chargeable has already taken into account the land use under PTC's upgrading plan, which would extend to additional Government land on top of the existing Government land on which the tram track and the four intermediate stations lie. This arrangement was a decision of the Chief Executive in Council in 2015 and was reported to the Legislative Council in the same year.
The Chief Executive in Council and the Secretary for Commerce and Economic Development ("SCED") have respectively made the Peak Tramway (Safety) (Amendment) Regulation 2018 ("the Regulation") and the Peak Tramway Ordinance (Amendment of Section 3(3)) Notice 2018 ("the Notice") to make technical amendments to the Peak Tramway (Safety) Regulations (Cap. 265 sub. leg. A) and PTO (Cap. 265) to implement the upgrading plan. The aforesaid legislative amendments were gazetted on 12 October 2018 and tabled before the Legislative Council on 24 October 2018 for negative vetting.
The Regulation amended the Peak Tram (Safety) Regulation (Cap. 265A) to increase the maximum number of passengers that a tramcar may carry from 120 to 210. At the same time, it introduced flexibility about the number of compartments for a tramcar by amending the definition of "tramcar". The upgrading plan is expected to complete in 2021. After the new peak tramway system passes the tests, the Government will gazette the commencement notice for the Regulation.
On the other hand, the Notice sought to amend the definition of "Plan" in section 3(3) of PTO. At present, the existing tramway area as delineated on the Plan is unleased Government land to which BO (Cap. 123) does not apply. Given that substantial building works of the upgrading plan is envisaged to be done, we believe the best option is to grant the additional land together with the part of the existing tramway area to be used for the expansion of the Lower Terminus to PTC by way of SPL. The use of SPL will make the land so granted "leased land" which will come under the proper regulation of BO throughout the planning, construction and post-construction stages. Therefore, it is necessary to de-designate a portion of the tramway area from the Plan as defined under LEGISLATIVE COUNCIL ― 12 December 2018 4225 section 3 of PTO and grant this de-designated piece of land, together with the three pieces of additional land, to PTC by SPL so that the building works to be carried out on the land would be subject to BA's scrutiny under BO.
As it takes time to prepare SPL, a Short-Term Tenancy ("STT") will be granted to PTC as an interim arrangement to enable PTC to embark upon the construction works of the upgrading plan as soon as possible by the end of December 2018. The main purpose of granting the STT to PTC is to enable PTC's early submission of the relevant building plans for the proper scrutiny of BA and provide PTC with access to the additional Government land for carrying out the necessary alteration and construction works without deriving any financial gain from the STT. Upon completion of the works, the Government will grant the land to PTC by SPL instead, so that it can continue to operate the peak tramway service.
The Government has already conducted public consultation on PTC's upgrading plan and the relevant proposed legislative amendments. On 12 April 2018, the Government and PTC consulted the Transport and Traffic Committee of the Central and Western District Council on PTC's upgrading plan. The Committee was generally supportive of the upgrading plan. On 25 June 2018, the Government consulted the Legislative Council Panel on Economic Development on PTC's upgrading plan and the relevant proposed legislative amendments. The Panel supported the upgrading plan and had no objection to the proposed legislative amendments. At the meetings of the Legislative Council Subcommittee on the Regulation and the Notice on 31 October and 12 November 2108, members also generally supported the upgrading plan. The Subcommittee had no objection to the Regulation and the Notice and would not propose any amendment.
In summary, the aforesaid District Council and Legislative Council committees were concerned about the implementation timetable of the upgrading plan and urged the Government and PTC to implement the upgrading plan as soon as possible, so as to address the long-standing concerns on the queuing and waiting arrangements at the termini of the Peak Tramway, in particular the Lower Terminus, as well as to enhance service quality for the enjoyment of tourists and locals alike.
I have listened to many Members' speeches just now. First of all, I thank them for their comments. Thanks to Mr Tony TSE for his views and suggestions on smart tourism and ancillary facilities around scenic spots. We 4226 LEGISLATIVE COUNCIL ― 12 December 2018 will consider them carefully together with the relevant departments. On the other hand, regarding Mr Frankie YICK's question on how the Government cracks down on the "black taxis", as commonly called, that target tourists outside the Lower Terminus, the Government is engaged in ongoing efforts to combat irregularities committed by members of the taxi industry. Committed to enforcing law, the Police also conducts decoy operations from time to time in a bid to combat the aforesaid irregularities, and will continue to take relevant enforcement actions with a view to achieving a deterrent effect and curbing the problem.
Earlier on, Dr KWOK Ka-ki and Mr Frankie YICK asked about how PTC would improve the queuing arrangement, particularly at the Upper Terminus, before implementing its upgrading plan. As far as I know, PTC has put up additional queuing railings and safety facilities opposite the Lower Terminus (i.e. outside Hong Kong Park Sports Centre) to ensure that passengers can safely cross the road to enter the terminus in an orderly manner. PTC has also erected a 1.4 m wide and 18.2 m long canopy outside the Upper Terminus to provide shelter for about 75 waiting passengers. At the same time, signage indicating the estimated waiting time are put along the queue for visitors' information. In addition, PTC has recently launched a new ticket sales programme aimed at making the visitor demand more even. PTC will test more advanced features, including advanced sale of timed tickets. After the completion of the upgrading plan, the new peak tram's hourly capacity will exceed the current and forecast demands, and hence queues will not normally build up at the Upper Terminus. PTC will continue to maintain close communications with the Police, the Transport Department, the Tourism Commission and the Central and Western District Office. When necessary, it will timely discuss effective queuing and traffic arrangements with the relevant parties.
Earlier on, Mr HUI Chi-fung expressed concern about how the Government monitors PTC's implementation of the upgrading plan. In this regard, the Government has formed an inter-departmental working group, comprising members from various bureaux and departments, to examine PTC's upgrading plan and to monitor the works to ensure that the requisite statutory requirements will be complied with in a timely manner. In addition, the Government will monitor the progress of PTC's implementation of the upgrading plan through administrative measures, including maintaining close communications with PTC and requesting it to provide progress reports at regular intervals.
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Of course, in case of PTC's failure or default in completing the upgrading plan on time falls within any of the situations of default under section 8A of PTO (e.g. PTC fails to comply with a term on which the operating right is granted, or fails to operate and maintain the tramway properly, which results in a substantial breakdown of the tramway system, or serious injury to or death of the persons who travel on the tramway), sections 8B to 8E may come into play.
According to section 8B(2) of PTO, SCED may issue a notice to PTC requiring it to remedy the default and take effective measures to the satisfaction of SCED to prevent the default from recurring. If PTC has failed to comply with a notice issued to it by SCED under the relevant ordinance, the Chief Executive in Council may, under section 8C(3) of PTO, direct SCED to issue a notice to the company informing the company of the intention of the Chief Executive in Council to terminate the operating right granted to the company.
In addition to the statutory requirements for the implementation of the upgrading plan under the second 10-year operating right, the Government has set various terms in relation to the operating right, covering an annual sum of consideration to be paid by PTC to the Government for the occupation and use of the Government land for operation of the peak tram service (The sum is equivalent to 12% of its total annual revenue received in the year and is charged annually), the charging mechanism, payment arrangements, pledges on the frequency and reliability of the peak tramway service, the requirement of reporting actual performance to the Government, the mechanism to examine the premises and equipment for operation of the peak tramway, the requirement of providing information and assistance to the Government, etc.
Regarding the matters raised at the two meetings of the Subcommittee on the relevant subsidiary legislation, including Mr HUI Chi-fung's request to the Government for information on the operating right of the peak tramway, we have already responded at the subcommittee meetings, and provided separate written replies on 9, 16 and 20 November 2018.
We believe that PTC's implementation of the upgrading plan will bring about improvements to the peak tram passenger space, queuing arrangements, waiting time and waiting areas. The aforesaid legislative amendments aim at enabling PTC to commence the necessary alteration and construction works and 4228 LEGISLATIVE COUNCIL ― 12 December 2018 complete the upgrading plan as soon as possible. An early improvement of the peak tramway service is in line with public expectations and conducive to maintaining the peak tramway as an important tourism and recreational facility. The resulting enhancement of Hong Kong's attractiveness to tourists helps promote the overall development of our tourism and economy.
The Government will closely monitor the progress of PTC's implementation of the upgrading plan to ensure that the peak tramway remains an important tourism and recreational facility.
Deputy President, I so submit.
DEPUTY PRESIDENT (in Cantonese): We now proceed to the second session to debate the Financial Institutions (Resolution) (Loss-absorbing Capacity Requirements―Banking Sector) Rules.
Members who wish to speak will please press the "Request to speak" button.
MR CHAN CHUN-YING (in Cantonese): Deputy President, in my capacity as Chairman of the Subcommittee on Financial Institutions (Resolution) (Loss-absorbing Capacity Requirements―Banking Sector) Rules, I now report on the deliberations of the Subcommittee.
The purpose of the Financial Institutions (Resolution) (Loss-absorbing Capacity Requirements―Banking Sector) Rules ("the Rules") is to prescribe loss-absorbing capacity ("LAC") requirements for banks in Hong Kong and their holding companies and affiliated operational entities in Hong Kong that are within the scope of the Financial Institutions (Resolution) Ordinance (Cap. 628) ("FIRO"), so as to ensure the availability of sufficient LAC to absorb losses of such institutions and contribute to the restoration of their capital position in the event that such institutions were in resolution.
The Subcommittee has held three meetings with the Administration and the Hong Kong Monetary Authority ("HKMA"), and has received views from deputations.
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The Subcommittee noted the grave concern expressed by small and medium-sized banks that they might be required to comply with the LAC requirements under the Rules. They were particularly concerned that HKMA had proposed in the draft text of the LAC Code of Practice chapter a total consolidated asset threshold of HK$150 billion, as a result of which most domestic banks might be subject to the LAC requirements and many small and medium-sized banks would face a substantial increase in their operating costs. A number of Subcommittee members pointed out that the legislative intent of FIRO was to establish a resolution regime for global and domestic financial institutions with systemic importance. If small and medium-sized banks were brought within the scope of the Rules, it would be inconsistent with the objectives of FIRO. The Subcommittee urged the Administration to consider prescribing in the Rules that only global systemically important banks ("G-SIBs") or domestic systemically important banks ("D-SIBs") should be subject to LAC requirements.
Moreover, some members were also concerned that HKMA would factor in the number of depositors of a bank and the total volume of deposits while deciding the total consolidated asset threshold, so as to protect the interests of depositors. They were of the view that the objective of protecting depositors should be achieved through other means, for example, the Deposit Protection Scheme, rather than LAC requirements.
As pointed out by HKMA, the threshold of HK$150 billion only serves as a starting point for HKMA's classification of banks into "resolution entities" and "material subsidiaries". Banks meeting the threshold would not be automatically subject to the Rules or the LAC requirements under the LAC Code of Practice chapter. It was only where the failure of a bank was expected to pose a risk to financial stability that the bank concerned would be subject to the LAC requirements. Regarding the concern over whether protection of depositors is one of the objectives of FIRO, HKMA responded that while exercising the powers under FIRO, it must have regard to the objectives as set out in section 8(1) of FIRO, which includes maintaining the stability and effective working of the financial system of Hong Kong. Allowing small and medium-sized banks to go into insolvency on failure would likely undermine the general confidence of participants in the financial market in Hong Kong and give rise to contagion within the financial system of Hong Kong, thereby affecting the stability and effective working of the financial system of Hong Kong. HKMA 4230 LEGISLATIVE COUNCIL ― 12 December 2018 stated that if small and medium-sized banks could demonstrate to it that their failures could be managed via insolvency without posing a risk to financial stability, they would not be subject to LAC requirements.
In response to the concerns raised by members and the industry, the Administration and HKMA made a number of undertakings. These include: first, the total consolidated asset threshold set out in the LAC Code of Practice chapter will be increased to HK$300 billion and the Code of Practice chapter will be reviewed every three years; second, the earliest date on which D-SIB and non-D-SIB will be required to meet the LAC requirements are 1 January 2022 and 1 January 2023 respectively, and where HKMA has determined that an entity will not be able to meet its LAC requirements according to the prescribed timetable, HKMA can consider allowing a longer implementation period on a case-by-case basis; and third, as regards the calculation of minimum LAC debt requirement, eligible Additional Tier 1 capital instruments would be covered, irrespective of whether such instruments were accounted for as debt or equity.
Members of the Subcommittee generally welcomed the above undertakings given by the Administration and HKMA. As they noted, if the threshold is raised to HK$300 billion, around 12 banks may potentially be subject to the Rules, and these banks have around 200 000 depositors or more, whereas around 17 banks may potentially be required to comply with the Rules if the threshold is set at HK$150 billion. In addition, members stated that when HKMA conducted its triennial review on the Code of Practice, it should consider factors such as the prevailing market conditions in Hong Kong, the business conditions of banks and the relevant international development.
Members stressed that when implementing the resolution regime and the corresponding LAC requirements, Hong Kong should draw reference from the implementation and progress in other major international financial markets. Hong Kong should avoid being the forerunner of implementing the relevant requirements, thereby affecting the competitiveness of the Hong Kong banking sector. Also, some members expressed concerns about the higher costs incurred by small and medium-sized banks for issuance of LAC debt instruments as compared with large banks. In particular, if a number of domestic banks concurrently issue LAC debt instruments, the market may not be able to absorb all the instruments, hence a surge in interest rates.
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As advised by HKMA, the annual cost of non-capital LAC debt instruments issued by banks in Hong Kong is 4% at a conservative estimate, and most domestic banks that may be subject to LAC requirements will issue internal LAC instruments to foreign parent companies within international financial groups, instead of issuing LAC debt instruments to the external market directly. Should there be unforeseen market conditions, HKMA has been empowered by the Rules to make flexible arrangements, including deferring the classification of a resolution entity or material subsidiary in respect of a bank.
Given that the Administration and HKMA have responded to the concerns of the Subcommittee and made relevant undertakings, members generally support the Rules and will not propose any amendment to the Rules.
Deputy President, the following are my personal views on the Rules. Our deliberations about LAC requirements were based on FIRO, which was actually passed by the Legislative Council in June 2016 and came into force on 7 July 2017. FIRO establishes a resolution regime for systemically important financial institutions in Hong Kong, in order to forestall or mitigate, as the case may be, the risks otherwise posed by their non-viability to the stability and effective working of the financial system of Hong Kong, including the continued performance of critical financial functions.
FIRO also establishes a cross-sectoral resolution regime for financial institutions falling within its scope, including banking sector entities (i.e. all authorized institutions), insurance sector entities, and securities and futures sector entities. The purpose is to meet the international standards set by the Financial Stability Board ("FSB") in its "Key Attributes of Effective Resolution Regimes for Financial Institutions".
Given the size, systemic importance, level of concentration, and scale of critical financial functions of Hong Kong's banking system, as well as the necessity of keeping pace with the development of the relevant international guidelines, Hong Kong must give priority to introducing the Rules which are applicable to all authorized institutions (i.e. banks). Under the Rules, authorized institutions are required to maintain their minimum levels of LAC, which can be used to absorb losses and provide recapitalization resources to facilitate orderly resolution should the relevant authorized institutions cease, or become likely to cease, to be viable.
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In fact, FSB has drawn up guidelines on LAC for banks, that is TLAC Term Sheet as we call it. Where a resolution entity or a material subsidiary is part of a G-SIB group that is required to meet TLAC requirements set out in FSB's TLAC Term Sheet from 1 January 2019, i.e. next year, it will be required to meet the minimum requirements of FSB within three months of being classified as a resolution entity or a material subsidiary. Being an international financial centre, Hong Kong has a number of authorized institutions which are parts of G-SIB groups. They are required to meet the deadline for implementing the arrangements relating to LAC under the local legislation, so as to fulfil the minimum requirements of FSB.
While the Rules prescribe LAC requirements for all authorized institutions and their group companies, the Rules only ensure that an authorized institution will be required to meet LAC requirements if its failure is expected to pose risks to financial stability or to depositors. The draft Code of Practice of the Rules sets out the resolution authorities' regulatory intention that authorized institutions with total consolidated assets above a certain threshold may potentially be subject to LAC requirements under the Rules. At the Subcommittee meeting on 28 November this year, HKMA confirmed that the threshold would be raised from the original HK$150 billion to HK$300 billion in the finalized version of the LAC Code of Practice chapter. In other words, authorized institutions with total consolidated assets below HK$300 billion will not be required to comply with LAC requirements, whereas those with total consolidated assets above HK$300 billion will be subject to LAC requirements if their failures are expected to pose risks to Hong Kong's financial stability and to depositors.
So far as the resolution regime is concerned, the authorities have confirmed that except non-Chinese G-SIBs, the earliest at which any D-SIB will be required to meet LAC requirements is 1 January 2022, and the earliest at which any non-D-SIB will be required to meet LAC requirements has been extended to 1 January 2023. If an entity is unable to meet the requirements as scheduled, the resolution authorities may allow it to postpone the implementation, depending on the actual circumstances. Following ongoing dialogue with the industry, the resolution authorities proposed permitting eligible Additional Tier 1 capital instruments to count towards the minimum LAC debt requirement, irrespective of whether they are accounted for as debt or equity. The resolution authorities also confirmed that a review would be conducted on the approach they adopted within three years after the introduction of the LAC Code of Practice chapter. The review will take into account factors such as the prevailing market conditions, operations of the banks and international development.
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Deputy President, the series of activities in respect of the deliberations about the Rules has actually facilitated the communication and positive interactions among the banking industry, Legislative Council and the Government, and enabled Members to have a better understanding about the implementation of the resolution regime and LAC. The industry generally welcomes the undertakings made by the Administration in response to the concerns and worries expressed. If these undertakings are actually carried out, I believe there will be a proper balance between complying with the international standards and maintaining the competitiveness of the local financial institutions.
Therefore, Deputy President, I wish to take this opportunity to thank members for the views they have voiced in the Subcommittee. I concur with their views and support the passage of the Rules. I so submit.
MR JAMES TO (in Cantonese): Deputy President, at the outset, I did seriously consider proposing an amendment to repeal the Financial Institutions (Resolution) (Loss-absorbing Capacity Requirements―Banking Sector) Rules ("the Rules"). Having realized that, some people queried why I wanted to repeal the Rules, which the Financial Stability Board ("FSB") requested us to implement. The reason is very simple: when we initially passed the Financial Institutions (Resolution) Ordinance ("FIRO") in 2006, it was targeted at the institutions described in the following phrase: (I quote) "the risks posed by the non-viability of systemically important financial institutions to the stability … of the financial system of Hong Kong." (End of quote). They refer to some of the mega banks that may affect the financial stability of Hong Kong. The background is very clear. In 2007 and 2008, the global financial storm occurred. Subsequently, countries held an international conference in 2011 and concluded that they should work together against such an undesirable situation, because the failure of any bank might trigger a domino effect due to mutual indebtedness, resulting in successive collapses. Therefore, they have to work together to consolidate those banks that are "too big to fail", in the words of FSB at the time, within their own countries. The failure of such banks would affect not just their own countries, but also others, and even put the whole world in peril. That is why all countries have to consolidate the too-big-to-fail banks in their respective financial systems and consider in advance those jargons unknown to the public, such as the so-called "SIB" or "LAC". I know that Mr CHAN Chun-ying is very accurate and totally flawless in saying those jargons, but we have to explain them 4234 LEGISLATIVE COUNCIL ― 12 December 2018 in simpler terms for the public's easy understanding. He is a Member representing the banking sector, so he certainly has to present them in an orthodox and balanced manner, as Deputy President does.
(THE PRESIDENT resumed the Chair)
I have the obligation to tell the public that the too-big-to-fail banks are few and far between, and the Government indeed told us so in 2016, as recorded in the Legislative Council Briefs and minutes of meetings. However, the current situation is different. The Government now says that both big and small ones should be covered. Undoubtedly, I was the one who voiced the loudest criticism after the meetings. Although I do not belong to the banking sector, Members from the business sector would give a thumbs up after listening to my speech (It has been a long time since I last received such compliment from my colleagues). The reason is very simple: I am not trying to stand by those small or medium banks, but the spirit of FIRO enacted in 2016 is to target those mega banks that are "too big to fail", "too big to allow them to fail" and "so big that their failure would put neighbouring countries and even the whole world in peril". This is why we need the whole world to consolidate the banks in their own systems, rather than consolidating both the big ones, which is a must-do, and slightly the small ones, namely strengthening the foundation of the small ones. In the latter case, when problems arise, we slightly consolidate them as well by calling on their shareholders to fork out more money as contingency funds, find ways to absorb loss, and so on.
We are not talking about the issue of fairness. The Government may argue that it is unreasonable to govern only the big ones but not the small ones. However, this is dictated by the current situation. Why should the big ones be consolidated? It is because the entire world might collapse together. As for the small ones, I do not mean to curse them, but no matter how many of them fail, they hardly affect Hong Kong, much less the world. Therefore, we should now implement FSB's request to consolidate those big ones, rather than consolidating forcefully the big ones and slightly the small ones. We should not consider the matter in that way. That is wrong, because the original spirit was not like that. This was not how Government put it back then. To put it in extreme terms, the Government is deliberately deceiving us. How come? Why did the Government say it the way it was at the time? Could it be that the Government LEGISLATIVE COUNCIL ― 12 December 2018 4235 has reneged on what it said? Back in 2016, the too-big-to-fail banks were few and far between, but that is not the case now. There are currently more than 10 even after the concession. If you ask me, I think that number is not justified at all.
All right, let us talk about the Rules. When scrutinizing the primary legislation, I said that as I was not sure whether the devil was in the details, the Government should provide the details before I would pass the primary legislation, lest the Government would mess everything up, causing harm to the innocent, whether big or small. In fact, I was not worried about causing harm to the innocent, or rather, this should not happen, because the spirit was not targeted at those small banks. The Government said: "Since the Rules are very complicated and we need to conduct consultation, we cannot provide the details now. If the primary legislation is not passed, we will be challenged. Mr TO, please cut us some slack and let us pass FIRO in 2016 first." Given that our colleagues, Secretaries and regulatory bodies in charge of finance are arguably experienced, I said: "Well, I trust you for the moment." Actually, if you ask me, and in retrospect, when we said: "I trust you for the moment", it was only half true. However, there is really no reason why we should stipulate in the Rules that both big and small institutions are covered, that is, both should be consolidated. That should not be the case. The original spirit was really not like that. At that time, I asked the Government to provide details of the Rules before we could pass the legislation, but the Government refused, so we had no alternative but to pass the legislation. The Rules put forward by the Government now actually cover both big and small institutions, and require consolidation of both in future. In addition, it is really outrageous that the Government has now added a reason to explain why the small ones should be consolidated as well, that is, the small ones also have many depositors, and the Government's current requirement that they be consolidated to avoid failure is also a way to protect depositors. The Government has gone so far as to play a foul game like this. We should now consolidate those big banks which might put Hong Kong and the world in peril, by asking their shareholders to set aside some funds or establish a certain mechanism to build loss-absorbing capacity. Our priority is not to enhance deposit protection, or to increase the amount of compensation under the Deposit Protection Scheme. I do not mean to oppose any increase of the compensation amount, but the Government should make use of the Deposit Protection Scheme Ordinance to discuss the increase of levy or compensation amount. Talking of which, the Government told us that $500,000 can already protect more than 90% of the deposits, so in that case do we need to increase it to 4236 LEGISLATIVE COUNCIL ― 12 December 2018 several million dollars? The Government should tell the public an approximate amount and draw a line there. Those members of the public who are rich and find $500,000 not enough can simply open accounts with 10 banks to enjoy the full protection of $5 million.
Therefore, the Government should not propose to enhance deposit protection for no reason. While we are obviously discussing the spirit of the relevant legislation, namely to consolidate those too-big-to-fail banks, the Government has suddenly suggested that we might as well enhance deposit protection. Under such circumstances, is it not very confusing because the spirit of ordinance A is taken for that of ordinance B, and while ordinance B is being pushed forward, ordinance C is thrown in for good measure? We cannot work this way. Well, after being rebuked by us, the Government backtracked on this argument and no longer raised it. By analogy with the case of Mr TUNG, no longer raising a point is tantamount to a retraction. Although the Government has made a little concession, it maintains that 10-odd small and medium banks should be consolidated. It is still not willing to cut them any slack. In this regard, I think the point at issue is not whether it serves the interest of small and medium banks and depositors, or whatever, but that the Government should work with a purpose. It should focus on the work at hand, and not surreptitiously get around it to do another. If this was done knowingly, the Secretary should be held responsible. Or else, if the Secretary was misled by his subordinate Administrative Officers, he still has the responsibility to rectify the practice because, as a principal official, the Secretary should not be muddle-headed and do whatever he is told to do. It is essential for anyone holding the position of a Secretary to have a clear head.
President, ultimately, I have not moved the amendment for repeal. Why? In fact, in the Subcommittee, all Members across the political spectrum were of the view that the Government's move had gone too far at the time. If I suddenly propose to repeal the Rules, for one, I knew for sure it will be a failure. Why? It is because the colleagues of the pro-establishment camp support the SAR Government's administration in accordance with the law. Given that the Rules have already been put forward, could it be that they should support the repeal proposed by Mr James TO? They certainly cannot do so. Thus, all their speeches would criticize me for proposing the repeal. However, now I hope that Members remember what they said in the Subcommittee. They had the same thought, and came to the same view in consultation with the associations of small LEGISLATIVE COUNCIL ― 12 December 2018 4237 banks. I expect colleagues of the pro-establishment camp to say a fair word. In fact, my request is also fair. How could the Government shift from doing one thing to doing another for no reason? The spirit is not the same whatsoever.
Please come together to advise the Government that even if it now intends to implement the Rules despite a $30 million cost because it is making up a lame excuse to avoid eating humble pie, we hope it knows that the implementation will be monitored and criticized by all Members of this Council, who even hold that the Rules should not be implemented at all. Although it is stipulated in law that small banks can be required to implement fund-raising schemes, I believe the Government will also be especially mindful of this strong consensus of the Council when it considers whether or not to really impose such requirement. Despite the fact that the Government is vested with this power, if it does what the Legislative Council deems absolutely inappropriate to do, it will be pitching itself against the entire Council, which, not to be forgotten, means all Members across the political spectrum.
President, this is an obvious, simple and easy-to-understand argument. Not that I do not support FSB's decision, I absolutely do, and that is why I voted for the legislation in 2016 and support the requirement under the Rules for big banks that systemically affect the financial stability of Hong Kong or the world to have sufficient loss-absorbing capacity. However, the Government should not legislate to require the 12 banks that currently have an asset of more than $300 billion to do the same as well. Of course, assuming that after more than a year, the Government eventually requires them to do so for real, I can hardly imagine that these small banks will file judicial reviews. They may not do so, but this possibility cannot be ruled out. In addition, there is a "king of judicial reviews" in our society. For example, the "Cheung Chau king of judicial reviews" may apply for legal aid because he may be a small depositor of any of the 12 small banks, making him eligible to file a judicial review. The Government should not require the 12 banks to do the same regardless of their size, because this is not in line with the original intent.
President, I hope the Government will keep its mind fully alert not to arbitrarily exercise the powers conferred on it by law. If a piece of legislation should not be invoked, just let it be passed and stay in disuse. The Government has already saved face as the Rules have not been repealed and are apparently enforceable. However, at the end of the day, I hope the Government will give a 4238 LEGISLATIVE COUNCIL ― 12 December 2018 listen to all the colleagues' speeches and pull back from the brink, not necessarily today though, as it has more than a year to do so. I beg the Government not to mess around with the 10-odd banks. Please keep in mind that, by saying so, I do not mean that failure of those banks is no big deal because a compensation of $500,000 would get the matter over and done with. I do not wish to see them collapse, but according to statutory provisions, even in the unfortunate event that 10 banks fail, they will not affect the financial stability of Hong Kong because they are small banks, right? On the other hand, will the depositors with more than $500,000 in savings be liable to losses due to unavailability of certain protections? Of course, they will, but we should not handle such issue through this piece of legislation. If we really want to deal with it, we should enhance deposit protection, and negotiate and discuss the levy again. This is the only right path, the noble way, isn't it? Do not surreptitiously get around the matter. In fact, this was not what the Government originally meant to do, but it could not explain itself, so it had no alternative but to find an excuse. This is a very inappropriate practice in governance and legislation.
President, I hope the Secretary will pull back from the brink. Even if the Rules are passed so that some so-called loss-absorbing capacity requirements under the resolution regime can be imposed on the 12 banks, I still hope that the Government will not do so. This will not affect the risk of failure or other risks of the 10-odd banks because the Hong Kong Monetary Authority is now closely monitoring the banks. Even if the Government does not require the banks to have some loss-absorbing capacity according to the resolution regime, I am not worried about any impact on the risks faced by the banks or depositors.
MR CHAN KIN-POR (in Cantonese): President, I joined the Bills Committee on Financial Institutions (Resolution) Bill in 2016. The original intent of the legislation was to target the financial institutions that are "too big to fail" (referring to some large international financial institutions at the time) for fear that their failure would have a knock-on effect on other financial institutions and thus put the entire financial system at risk. The current proposal of the Hong Kong Monetary Authority ("HKMA") that even small and medium financial institutions should be subject to the loss-absorbing capacity ("LAC") requirements under the resolution regime of Hong Kong is obviously a departure from the policy intent.
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HKMA indicated, in addition, that the failure of small and medium financial institutions would affect customers with deposits. This implies that the existing Deposit Protection Scheme is imperfect. Then why do we not review and improve the Scheme, but instead use another rule with fundamentally different objectives to accommodate the situation?
In fact, HKMA's significant tightening of the capital requirements and risk management requirements on banks in the wake of the financial storm has resulted in higher operating costs for banks. At present, it is not uncommon for a medium bank to have hundreds of staff to deal with compliance requirements, hence a big cost hike. Consequently, the capital adequacy ratios and liquidity ratios of the banks in Hong Kong have increased considerably. In fact, the banks in Hong Kong are in very sound condition as many have exceeded HKMA's requirements. However, on the contrary, the huge costs incurred to the banks by the LAC requirements weaken their foundation for operation and make them more prone to problems.
HKMA pointed out that the average cost of issuance of Tier 2 capital instruments in October 2017 was slightly less than 4%, but it is now 2018 and the global economy is headed towards crisis. I predict that Hong Kong's property and stock markets will fall and the interest rate will keep rising. This situation is a far cry from that when HKMA conducted the study in 2017 in terms of social environment, interest rate, cost, and so on. I think HKMA should re-examine the actual costs so as to avoid misjudging the situation and thus unjustifiably causing small and medium banks to bear the brunt of a significant increase in their costs.
I understand why HKMA had to do this. It certainly wanted to reduce the risk of failure to zero but, in fact, everything has its price tag when it comes to reducing risks. I am most afraid that the Government is making a well-intentioned mistake. The original intent of the legislation was to bring stability to the financial sector, so that the Government does not need to assume responsibility in the event of bank failures. However, without judicious implementation on the part of the Government, it will only backfire on the banks with increase and unnecessary addition of operating costs, thus weakening their strength and making them more prone to failure.
Moreover, Hong Kong has to follow international standards, but should not adopt the most rigorous set of practices in the world. For example, while the resolution regime in the United States applies only to G-SIBs (global systemically 4240 LEGISLATIVE COUNCIL ― 12 December 2018 important authorized institutions), D-SIBs (domestic systemically important authorized institutions) are also covered in addition to G-SIBs in Hong Kong. Why should we include even small and medium banks? As regards the timing of implementation, our rival Singapore does not have so much as a timetable, but we will proceed to implementation in 2022. Small and medium banks are deeply worried. Therefore, I expect the Government to be careful in implementing or formulating the code of practice.
HKMA said that there would be great flexibility in implementation. I hope it will actually be achieved. It is precisely because the international regulatory body noticed different situations around the world that it has allowed for flexibility. I absolutely do not wish to see the Hong Kong Government select the harshest measures to implement.
After listening to the hearings and the views of the Bills Committee, HKMA proposed to raise the asset threshold from $150 billion to $300 billion, which was welcomed by the industry. Nevertheless, HKMA also undertook to conduct a review of the LAC requirements every three years. The industry hopes that the Government definitely adds a consultation session to gauge the views of the industry during the review exercise in order to ensure that information reflecting the real situation will be collected.
Another concern for small and medium banks is that although they have not reached the threshold, the Government may take other measures to reinforce their soundness. What will these measures be? Will they be harsher than the LAC requirements? I do not wish to see the Government do such a stupid act. Instead, I expect it to firstly, as pledged, seriously address the concerns raised by Members and the industry, and then make adjustments in accordance with the capital financing conditions for the banks and on the markets of various countries. I hope the Government will implement these practices, and refrain from causing major harm to the banks in Hong Kong in order to fulfil a good purpose. Thank you, President.
MR CHRISTOPHER CHEUNG (in Cantonese): President, the Financial Institutions (Resolution) (Loss-absorbing Capacity Requirements―Banking Sector) Rules ("the Rules") under debate today, as you can tell from the name, is a continuation of the Financial Institutions (Resolution) Ordinance that we scrutinized and passed in the previous Legislative Council. It seeks to lay down LEGISLATIVE COUNCIL ― 12 December 2018 4241 precautionary and self-rescue measures for large banks that are too big to fail, and to ensure that their parent companies or they themselves have loss-absorbing capacity (i.e. LAC) and re-capitalization ability in times of financial crises, so as to save the need to bail them out with public money.
Talking about banks that are too big to fail, our understanding at that time is banks of a considerable scale, such as note-issuing banks or international banks. When these banks become non-viable, they may create an extensive impact or pose a systemic financial risk or even trigger a financial crisis. However, in drafting the Rules, the Hong Kong Monetary Authority ("HKMA") has increased the safety factor, so much so that it is like "walking under the balcony wearing a steel safety helmet", putting almost all small and medium banks under regulation. Instead of preventing large banks from failing, the Rules is trying to prevent all banks from failing, thus seriously affecting the business operation of small and medium banks. This is totally unnecessary. When HKMA drafted the Code of Practice for LAC requirements, it proposed to set the total consolidated asset threshold at $150 billion. The proposal will put almost all banks in Hong Kong, except a few small banks, under the regulation of the Rules.
The authorities find that in terms of local banking assets to GDP (or total deposits) ratio, Hong Kong is higher than other international financial markets, thus justifying the need to take action and minimize the relevant risks. That said, the authorities have not taken into account, or failed to understand, the fact that the scope of services of our banking sector is not restricted in Hong Kong but has expanded long ago to cover other Mainland cities and neighbouring countries. HKMA's approach is like putting a bank in New York on the same par as a bank in Buffalo City. Can we say that the bank in New York takes up a large share of the GDP or total deposits and we will rigidly apply the regional standards for the bank in Buffalo City to this large bank with national business regardless of its global banking business? This is not a suitable approach. So, if HKMA uses the ratio to GDP or total deposits as the criterion to assess the risk of a bank, it is making an apple to orange comparison. It is a wrong and somewhat bizarre concept.
Although the authorities have changed their mind subsequent to queries raised by Members and agreed to substantially increase the threshold from $150 billion to $300 billion to narrow down the scope of regulation, many small and medium banks will still be affected. In order to meet the requirement, these 4242 LEGISLATIVE COUNCIL ― 12 December 2018 banks will have to set aside additional capital for bond issuance instead of using it for lending business, leading to a double loss in respect of income reduction and cost increase. Large banks, on the other hand, can issue bonds under its parent company, which is a common practice that will not negatively impact the capital. Small and medium banks are thus placed at an even more unfair position in the competition. Hence, the Government should separate global systemically important banks (i.e. G-SIBs) from domestic systemically important banks (i.e. D-SIBs) and only put the former under the LAC requirements.
President, I have a reason for this. Since 1997, we have never seen any non-viable small and medium banks. With the launch of the Deposit Protection Scheme after the financial turmoil and the maximum protection increased to $500,000, depositors are well adapted to the idea of investment risk diversification. They will not put all their money in one bank account. The risk of a systemic failure is thus very low. In others words, introducing LAC requirements for banks is the same as using a machine gun to kill flies. It is an over-reacted move.
The Government or the Securities and Futures Commission has been regulating local small and medium brokerages in the same way as large brokerages. This has substantially increased their compliance costs and lowered their viability. This is why I deeply share the feelings of small and medium banks and sympathize with their situation. I affirm the crucial role local small and medium banks play in our banking system. They should continue to serve the public and provide a variety of services for the public to choose.
I welcome that the Secretary has undertaken to review the Code of Practice every three years and listen to views of the sector. My only hope is that when the authorities review the $300 billion threshold in future, it will seriously consider the fact that small and medium banks may easily become a within scope financial institution subject to LAC requirements again since they have to increase their assets or deposits to provide a greater variety of services or better integrate with the Greater Bay Area.
In view of the more open-minded approach the authorities have adopted in considering the Rules and their willingness to substantially increase the threshold and slightly postpone the implementation date after listening to our views, and despite the fact that the Rules now still put some small and medium banks into the scope of regulation, which is hardly desirable, the requirements in the LEGISLATIVE COUNCIL ― 12 December 2018 4243 amended Rules are somewhat relaxed. It is a barely acceptable proposal. Besides, I do not want the international community to think that we are unable to comply with international agreements. Hence, I support the passage of the Rules. 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 to speak. Then, the debate on this motion will come to a close.
SECRETARY FOR FINANCIAL SERVICES AND THE TREASURY (in Cantonese): President, first of all, I have to thank Mr CHAN Chun-ying, Chairman of the Subcommittee on Financial Institutions (Resolution) (Loss-absorbing Capacity Requirements-Banking Sector) Rules and members of the Subcommittee for their deliberations.
Coming into operation in July 2017, the major provisions of the Financial Institutions (Resolution) Ordinance (Cap. 628) ("FIRO") has established a cross-sectoral resolution regime for financial institutions which is in line with the international standards. The Monetary Authority as a resolution authority for authorized institutions, made the Rules in accordance with section 19(1) of FIRO and in close alignment with the international standards about total loss-absorbing capacity set out by the Financial Stability Board in its Total Loss-absorbing Capacity ("TLAC") Term Sheet ("TLAC Term Sheet"). The Rules prescribe the minimum loss-absorbing capacity ("LAC") requirements for authorized institutions and their group companies, so as to require certain banks to maintain minimum levels of LAC which can be used to absorb losses and provide recapitalization resources to facilitate orderly resolution should those banks run into financial difficulties.
The purpose of implementing LAC requirements is to impose losses on the shareholders and creditors of the relevant bank in case of financial difficulties, thereby restoring the bank to viability. The implementation of LAC requirements will enhance the stability of banks, and also, without prejudice to other resolution objectives (e.g. maintaining the stability and effective working of 4244 LEGISLATIVE COUNCIL ― 12 December 2018 the Hong Kong financial system), it will afford protection to public funds and depositors, and motivate investors and creditors to monitor the banks in normal times to inhibit excessive risk-taking by banks.
In order to clarify how the resolution authorities expect to exercise the power to classify authorized institutions for their compliance with LAC requirements, the Hong Kong Monetary Authority ("HKMA") issued the draft Code of Practice chapter for LAC requirements ("LAC Code of Practice chapter") on 19 October 2018 and conducted a consultation with the industry. The consultation period just ended on 3 December with a total of seven written submissions received. HKMA will give thorough consideration to the views collected before publishing the finalized version of the LAC Code of Practice chapter.
In the three Subcommittee meetings, apart from advancing suggestions about the Rules, members also put forward many valuable views on the LAC Code of Practice chapter. I will take this opportunity to give a brief response to all of them.
First of all, regarding the coverage of LAC requirements, during the discussion of the Subcommittee, some members commented that LAC requirements should only cover global systemically important banks ("G-SIBs") and domestic systemically important banks ("D-SIBs"). Under section 2(1) of FIRO, all authorized institutions are banking sector entities, thus failing within the scope of FIRO. This being the case, we have never attempted or intended to conceal the facts from the Legislative Council. Nor have we adopted any underhand practices. After all, the scope of section 2(1) of FIRO has been set out clearly in the Legislative Council papers at the passage of FIRO. Moreover, section 19 of FIRO empowers the resolution authorities to make rules prescribing LAC requirements and this power covers, inter alia, all banking sector entities (i.e. all authorized institutions included) and their group companies.
Nevertheless, I must emphasize that no authorized institutions will be automatically subject to LAC requirements under the Rules. It is only where the failure of an authorized institution, given its circumstances, is anticipated to pose a risk to financial stability by the resolution authorities that it will be classified as an institution subject to LAC requirements. The draft LAC Code of Practice chapter proposes using the amount of total consolidated assets as the indicative threshold. The resolution authorities will then prioritize authorized institutions exceeding the threshold for resolution planning and classification, thereby LEGISLATIVE COUNCIL ― 12 December 2018 4245 requiring these institutions to comply with LAC requirements under the Rules. Upon considering the views of the Subcommittee, HKMA confirmed at the Subcommittee meeting on 28 November its intention to raise the threshold of total consolidated assets from the originally proposed amount of HK$150 billion to HK$300 billion in the finalized LAC Code of Practice chapter.
We consider such approach consistent with the objective specified in the Rules. First, all the authorized institutions with total consolidated assets above HK$300 billion have around 200 000 depositors or more. Allowing any of these authorized institutions to go into insolvency on failure may undermine the general confidence of participants in the financial market in Hong Kong and give rise to contagion within the financial system of Hong Kong, thereby affecting the stability and effective working of the financial system of Hong Kong. Second, to avoid the aforesaid circumstances, resolution is likely to be the only realistic alternative to a publicly funded bail-out, and can minimize the risk to public money and protect the interests of Hong Kong taxpayers.
It should be noted that if an authorized institution can demonstrate to the resolution authorities that it is able to manage its failure via insolvency without posing any of the risks concerned, it will not be subject to LAC requirements.
Just as before, if a financial group engages in cross-border operations, HKMA will maintain communication with the resolution authorities of the relevant jurisdiction to coordinate LAC requirements imposed on any of its related subsidiaries in Hong Kong.
As for the timetable for the implementation of LAC requirements, some members have pointed out that the pace at which Hong Kong implements LAC requirements appears to be faster than that of other countries, and questioned whether it would affect the competitiveness of the Hong Kong banking industry. In fact, various countries have laid down LAC requirements under the TLAC Term Sheet. For example, Switzerland published the relevant requirements in October 2015; United Kingdom and the United States will implement the relevant requirements on 1 January 2019; and Japan will phase in the relevant requirements from 31 March 2019. Hence, the pace at which Hong Kong implements the relevant requirements and the scope they cover are by and large in line with other major international financial markets.
The assets and total deposits in the Hong Kong banking system amount to over eight times and nearly five times of Hong Kong's GDP respectively, evidencing its enormous significance to the economy of Hong Kong. In the 4246 LEGISLATIVE COUNCIL ― 12 December 2018 light of this, we consider it necessary to implement LAC requirements in Hong Kong, so as to improve the resolvability of banks, secure the continuity of their critical financial functions, and maintain financial stability, thereby sustaining Hong Kong's competitiveness as an international financial centre.
In principle, the TLAC Term Sheet requires that non-Mainland G-SIBs should meet TLAC requirements on 1 January 2019. In this connection, once the local LAC requirements have come into operation on 14 December, the resolution authorities will conduct classification of non-Mainland G-SIBs and require them to meet LAC requirements within three months after the classification, so as to generally follow the requirements set out in TLAC Term Sheet.
In addition, the earliest date on which any D-SIB will be required to meet the LAC requirements is 1 January 2022, and the earliest date any non-D-SIB will be required to meet the LAC requirements is 1 January 2023. The two types of banks above cover the local operations of Mainland banks, but given the uncertainty about the timetable for imposition of TLAC on G-SIBs in the Mainland, HKMA will maintain communication with the relevant Mainland authorities to coordinate the imposition of LAC requirements on the local operations of Mainland banks. Where the resolution authorities determine that an entity will not be able to meet its LAC requirements according to the said timetable, the resolution authorities will have the flexibility to consider allowing a longer implementation period on a case-by-case basis.
President, we understand that members are concerned about the implementation of LAC requirements in Hong Kong. After the Rules have come into operation, HKMA will work closely with the banking industry to closely examine the impact of LAC requirements on them and will pay attention to the development in other key jurisdictions where LAC requirements are in force, so as to evaluate the implementation of LAC requirements. HKMA has also undertaken to conduct a review every three years after the publication of the LAC Code of Practice chapter.
Finally, I wish to thank members of the Subcommittee for giving support to the Rules for promoting financial stability and strengthening Hong Kong's position as an international financial centre.
President, I so submit. Thank you.
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PRESIDENT (in Cantonese): In accordance with Rule 49E(9) of the Rules of Procedure, I will not put any question on the motion.
PRESIDENT (in Cantonese): Debate on motion with no legislative effect.
The motion debate on the "Report of the joint-Panel delegation of the Panel on Economic Development, Panel on Financial Affairs, Panel on Commerce and Industry, and Panel on Information Technology and Broadcasting on its duty visit to the Guangdong-Hong Kong-Macao Greater Bay Area".
Members who wish to speak will please press the "Request to speak" button.
I call upon Mr Jeffrey LAM to speak and move the motion.
REPORT OF THE JOINT-PANEL DELEGATION OF THE PANEL ON ECONOMIC DEVELOPMENT, PANEL ON FINANCIAL AFFAIRS, PANEL ON COMMERCE AND INDUSTRY, AND PANEL ON INFORMATION TECHNOLOGY AND BROADCASTING ON ITS DUTY VISIT TO THE GUANGDONG-HONG KONG-MACAO GREATER BAY AREA
MR JEFFREY LAM (in Cantonese): President, I move that the motion, as printed on the Agenda, be passed. The motion is moved in my capacity as the Leader of the joint-Panel delegation of the Panel on Economic Development, Panel on Financial Affairs, Panel on Commerce and Industry, and Panel on Information Technology and Broadcasting ("the Delegation").
The Delegation conducted a duty visit to five cities in the Guangdong-Hong Kong-Macao Greater Bay Area ("the Greater Bay Area"), namely Guangzhou, Shenzhen, Foshan, Dongguan and Zhongshan from 20 to 22 April this year. In order to gain an understanding of the direction of development of these cities and deepen our knowledge about the Greater Bay Area, the Delegation has paid visits to different enterprises, studied the planning of new development areas and conducted exchanges with local government officials. I would now like to highlight the key observations and views of the Delegation.
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The Delegation considers that the development of the Greater Bay Area will present major opportunities for the economic development of Hong Kong, and the Hong Kong Government should do its best in promoting the Greater Bay Area development and deepen Hong Kong people's understanding in this regard. In order to create favourable conditions for Hong Kong people to start businesses and invest in the Greater Bay Area, the Hong Kong Government should also proactively seek further facilitation measures for Hong Kong people to operate business, work, live, study and retire in the Greater Bay Area. These measures include market liberalization, mutual recognition of professional qualifications and taxation arrangements.
The Delegation is of the view that Hong Kong's advantages originate from a sound legal system under "one country, two systems", its international experience and vision, and its ability to make contribution to the overall development of the Greater Bay Area in such areas as professional services, financial market, higher education and health care for integration into the global community. On the other hand, Hong Kong can draw reference from the successful experience of other Greater Bay Area cities in recent years in developing new and high technology industries, import their groundbreaking mindset and make use of high-tech research and development facilities in the Area to develop local industries and enhance scientific research and development.
Given that other cities in the Greater Bay Area have introduced various preferential measures to attract talents in recent years, the Delegation takes the view that the Hong Kong Government should step up its efforts in training local talents and actively introduce incentive measures to attract foreign professionals, thereby enhancing Hong Kong's competitiveness and maintaining Hong Kong's status as a business-friendly international city with a pool of talents. Besides, the Hong Kong Government should also enhance tourism cooperation with the Greater Bay Area to develop tourism products that can achieve complementarity and mutual benefits, with a view to promoting the local economy.
The success of the visit hinged greatly on the tremendous support rendered by the Constitutional and Mainland Affairs Bureau, as well as the arrangements made and the hospitality extended by the Hong Kong and Macao Affairs Office of the People's Government of Guangdong Province, the People's Government of Guangzhou Municipality, the People's Government of Shenzhen Municipality, the People's Government of Dongguan Municipality, the People's Government of LEGISLATIVE COUNCIL ― 12 December 2018 4249
Zhongshan Municipality and the People's Government of Foshan Municipality. The Delegation would hereby like to express its sincere gratitude to the relevant government departments and receiving parties.
President, I would also like to take this opportunity to thank our colleagues in the Secretariat for working so hard to make the visit a success.
President, the following are my personal views.
It has been more than half a year since the Delegation visited the five cities in the Greater Bay Area in April, and in the meantime, the commissioning of the Guangzhou-Shenzhen-Hong Kong Express Rail Link ("XRL") and the Hong Kong-Zhuhai-Macao Bridge ("HZMB") has further put Hong Kong and various Greater Bay Area cities into closer contact with each other. It helps foster the rapid flow of people, goods and capital within the Greater Bay Area, create more potential business opportunities and employment opportunities, promote economic growth, and enhance complementarity and cooperation between Hong Kong and other cities.
Over the past seven months or so, I have received many enquiries about the development of the Greater Bay Area from many people of the industrial, business and professional sectors and members of the public on many occasions. I have also attended interviews with different media and shared with them what I saw and heard in the Greater Bay Area. As I have emphasized in such interviews, seeing is believing. Instead of gaining information through a third party, we should go visit the Greater Bay Area in person. Only by so doing can we witness the great changes and rapid development in the Pearl River Delta ("PRD") Region in recent years.
After their commissioning, HZMB and XRL not only facilitate same day return trips but also provide efficient, comfortable and convenient services that every passenger using them can experience and will admire. It is anticipated that with further enhancement of infrastructural facilities and the railway network in the future, the gradual increase in their usage rates and the commissioning of more boundary crossings, there will be a bright prospect for "multi-destination" travel, a model of travel which the tourism industry has been promoting. The Government's ideal of "one-hour quality living sphere" will not be an empty slogan but a vision to be materialized in the near future.
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This year marks the 40th anniversary of the reform and opening up of the country, and as one of the members in the first batch of Hong Kong businessmen who went to set up factories on the Mainland back in those years, I have witnessed the development of the Mainland, especially the PRD Region, over the past 40 years. The scenes of economically backward cities back then no longer exist now. Industries developed on the Mainland have also gone through many stages of upgrading and restructuring. They have transformed from the labour intensive industries engaged in processing and low-end service of the past into a large number of high-tech and high value-added industries at present, nurturing a pool of highly skilful and quality talents in various trades and industries.
Each city has its own characteristics with an entirely new look under orderly planning. Advanced technology has already been applied in every aspect of people's daily life. Online shopping, electronic payment, mobile applications for placing takeaway orders are nothing new as the technology penetration rate is rather high. According to my colleagues on the Mainland, even elderly persons selling food in wet markets are now asking their customers to settle payment by WeChat Pay because they have no small change. It has indeed caught everyone by surprise that the Mainland is developing at such an astonishing pace. Nowadays, people who travel to the Mainland once every few months will discover many new things during every visit, and this is simply an eye-opening experience for them.
President, we keep speaking good of the development in the Greater Bay Area not for the purpose of exaggerating the achievements of other people and belittling our own efforts, but to arouse public concerns and encourage Hong Kong people to learn more about the latest development in the country. When earth-shaking changes have in fact taken place in some so-called "rural areas", we should stop judging the achievements made in these places with our "Big Hong Kong" mentality and looking at the development of the country through tinted glasses.
We should examine the positioning of Hong Kong, ponder how we can seize the development opportunities in the Greater Bay Area to promote synergistic development and plan the future to create more possibilities for the next generation. If we keep imposing restrictions on ourselves, sticking to an unenterprising attitude of resting on our laurels and entangling ourselves in political disputes, we will not be able to realize how big this world is, and how other places have caught up and even overtaken Hong Kong from behind.
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President, members of the industrial and business sectors are very optimistic about the development of the Bay Area. They are looking forward eagerly to its further development. According to the results of a survey conducted by the sectors, senior management personnel of 70% of the responding enterprises anticipate that their enterprise development will benefit from the development in the Greater Bay Area in the next three years. Sixty-eight percent of the respondents considered that the proposal to develop the Greater Bay Area can bring us many potential business opportunities. Technological innovation, trading and logistics, as well as financial services, are the three crucial areas which would be most benefited. Fifty-seven percent of the responding companies indicate that they have already formulated or are working on their development strategies and policies for the Greater Bay Area.
Certainly, for a strategic plan of such a large scale, we cannot rely solely on individual enterprises and organizations from the industrial and business sectors to fight a lone battle. The leadership, coordination and assistance of the Government are needed. Some enterprises are generally concerned that there might be some uncertainties or ambiguities in the policies or regulatory systems implemented in the Greater Bay Area, and the coordination between various cities in the Greater Bay Area as well as the cross-boundary flow of capital and talents are also some issues of concern.
The Central Authorities announced in August this year the setting up of the leading group for the development of the Guangdong-Hong Kong-Macao Greater Bay Area ("the leading group") under the direct leadership of top officials in the Central Authorities, and this can illustrate the great importance attached by the Central Authorities to the Greater Bay Area development. The Chief Executive is a member of the leading group, and we can thus offer our views to the leading group via the Chief Executive. In order to resolve the policy issues mentioned above, the Chief Executive has to respond to the concerns of the industrial and business sectors and the general public by reflecting such issues to top officials in the Central Authorities and urging for necessary improvements.
Over the past six months after the Delegation's visit to the Greater Bay Area, the Central Authorities have introduced a series of policy measures which include, inter alia, the new policy announced in May by the Ministry of Science and Technology and the Ministry of Finance for local scientific research institutions to directly apply for funding under science and technology projects with central fiscal assistance. The funding granted can also be used on related projects in Hong Kong. Besides, under the Regulations for Application of 4252 LEGISLATIVE COUNCIL ― 12 December 2018
Residence Permit for Hong Kong, Macao and Taiwan Residents introduced in August, eligible Hong Kong residents living on the Mainland may apply for a Residence Permit to enjoy various rights and some basic public services in accordance with law. The introduction of such measures has responded actively to the aspirations of various sectors of the Hong Kong community. They have also laid a good foundation for the development of the Greater Bay Area to facilitate the flow of people, goods, capital and information. I hope the SAR Government will continue to strive for the Central Authorities to introduce more policy measures like these.
With regard to young people, we should provide them with more platforms to experience the development and gain an understanding of the country. Attempts can be made to adopt different modes of cooperation measures to encourage young people to start businesses, work and study in the Greater Bay Area. These measures may include the provision of concessions for renting premises in entrepreneur hubs, business mentorship service, employment information and accommodation offer.
As for the working class and professionals who travel between the Mainland and Hong Kong for work, the Government should take active measures to address their concerns. One of such issues is taxation because people are taxed on a worldwide basis when they stay on the Mainland for 183 days or more during a year. Moreover, the promotion of mutual recognition of professional qualifications for different disciplines should also be expedited. Such initiatives will be of great help to the career development of local professionals on the Mainland and will offer them a greater space for development.
President, as an international financial centre, Hong Kong enjoys the support of "one country" and the privilege of "two systems". We should neither be afraid of competition nor worry about the possibility of being replaced. Instead, we should have a clear understanding of our position, capitalize on our strengths, avoid our weaknesses and actively integrate ourselves into the development of the Greater Bay Area.
The duty visit conducted by the joint-Panel delegation this time is one valuable and successful experience. Members from different political parties and groups have put aside their differences and disputes to take part in the visit with expectation and interests. I am sure that all of them have benefited from the visit. I hope Honourable colleagues in this Council will uphold this principle of calling a spade a spade in the future, and seize every opportunity to visit other LEGISLATIVE COUNCIL ― 12 December 2018 4253 provinces and cities on the Mainland, including such places as Shanghai and Xiongan New Area in Hebei, with a view to understanding the latest development of the country, tapping on collective wisdom and working together for the development of Hong Kong, and creating a greater space for development, striving for a brighter development prospect and building up a living environment of a higher quality for the next generation.
President, I so submit.
Mr Jeffrey LAM moved the following motion: (Translation)
"That this Council notes the Report of the joint-Panel delegation of the Panel on Economic Development, Panel on Financial Affairs, Panel on Commerce and Industry, and Panel on Information Technology and Broadcasting on its duty visit to the Guangdong-Hong Kong-Macao Greater Bay Area from 20 to 22 April 2018."
PRESIDENT (in Cantonese): I now propose the question to you and that is: That the motion moved by Mr Jeffrey LAM be passed.
PRESIDENT (in Cantonese): Secretary for Constitutional and Mainland Affairs, please speak.
SECRETARY FOR CONSTITUTIONAL AND MAINLAND AFFAIRS (in Cantonese): President, I wish to thank Mr Jeffrey LAM for moving the motion on the Report of the Legislative Council's joint-Panel delegation on its duty visit to the Guangdong-Hong Kong-Macao Greater Bay Area ("the Greater Bay Area").
President, the building of the Greater Bay Area is an important development strategy in the country's further reform and opening-up process and also a major decision of the Central Government for maintaining long-term prosperity and stability in Hong Kong. The plan is geared to further deepening cooperation among Guangdong, Hong Kong and Macao, fostering synergistic economic development in the region, and developing the Greater Bay Area into a quality living circle that is suitable for living, working and tourism.
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The Greater Bay Area consists of the two Special Administrative Regions of Hong Kong and Macao and nine Guangdong cities, covering a total area of 56 000 sq km with a population size of over 69 million people. The Gross Domestic Product of the Greater Bay Area amounts to over US$1,500 billion, and its economic growth is very strong. Besides, it is also equipped with a seaport cluster and an airport cluster with the highest density in the world and immense development potential. Following the commissioning of massive infrastructure facilities in the Greater Bay Area one after another, including the Hong Kong Section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link, the Hong Kong-Zhuhai-Macao Bridge and the Liantang/Heung Yuen Wai Cross-boundary Control Point, Hong Kong, Macao and Mainland cities in the Greater Bay Area may attain greater synergy and create more development opportunities in the whole region.
As long as Guangdong, Hong Kong and Macao in the Greater Bay Area can achieve full and mutual complementarity, and the various cities can clearly define their positioning in the development process, the global competitiveness of the entire Greater Bay Area can definitely be enhanced. Actually, a comparison with other places of the world shows that when it comes to population size and geographical coverage, the Greater Bay Area is way ahead of the New York metropolitan area, the San Francisco Bay Area and the Tokyo Bay Area, and it ranks the top among other bay areas worldwide in airport and seaport throughput. The New York metropolitan area, the San Francisco Bay Area and the Tokyo Bay Area are respectively a financial hub, a technology hub and an industry hub, whereas the Greater Bay Area is a combination of the three: Hong Kong is an international financial centre, maritime centre and trade centre; Shenzhen is an innovation and technology hub, and other Guangdong cities are focusing on the development of an advanced manufacturing industry.
The Greater Bay Area will expand the living space of Hong Kong residents and become a vast hinterland for Hong Kong and a quality living circle that is suitable for living, working and tourism.
The Secretary for Commerce and Economic Development, the Secretary for Innovation and Technology, the Secretary for Financial Services and the Treasury and I were glad that we could join Honourable Members in the visit and tour to the Greater Bay Area at the end of April this year upon the invitation of the four Legislative Council Panels and get a first-hand understanding of the latest developments in the relevant Greater Bay Area cities.
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Thirty-two Members from various political parties and groupings participated in the duty visit organized by the Legislative Council this time around. Under the lead of Mr Jeffrey LAM as the delegation leader, the delegation visited five Mainland cities in the Greater Bay Area from 20 to 22 April this year, namely Guangzhou, Shenzhen, Foshan, Dongguan and Zhongshan, under a visit programme encompassing various respects, such as financial services, urban management, technological innovation, development planning, transport infrastructure, old town revitalization, arts and culture. Besides, it also met and exchanged views with leading officials of the relevant Provincial and Municipal Governments. Our observations show that participating Members' response to this duty visit was very positive, and in their view, the site visits and practical exchanges could further deepen their understanding of the development of the Greater Bay Area and drive them to give more proactive thoughts to Hong Kong's participation in the development of the Greater Bay Area. In Hong Kong, the extensive media coverage of the activities undertaken by the Legislative Council delegation in the Guangdong Province has likewise achieved very positive effects on fostering a deeper understanding of the Greater Bay Area among various social sectors in Hong Kong.
The smooth and successful conclusion of the duty visit this time around can be attributed to not only the thoughtful preparations of the Legislative Council Secretariat, but also the immense assistance and well-thought-out arrangements on the part of the Central Government, the Guangdong Province and also the relevant Municipal Government. They undertook a great deal of comprehensive preparations ranging from the drawing up of the visit programme and briefing materials on the places to visit, to the selection of information materials for Honourable Members. I wish to take this opportunity to express heartfelt thanks to the Central Government, the Guangdong Province and also the relevant Municipal Government on behalf of the HKSAR Government once again.
The Report on the Legislative Council's duty visit entails various policy areas and issues. I am glad to hear Honourable Members' views on how Hong Kong can participate in taking forward the development of the Greater Bay Area in this motion debate today. I will give a detailed reply after listening to Members' speeches.
Thank you, President.
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MS CLAUDIA MO (in Cantonese): Just now, Mr Jeffrey LAM urged that Hong Kong people should not look at Mainland China today with a "Hong Kong superior" mentality. He also told us how he was amazed by the rapid technological advancement on the Mainland.
Speaking of a "Hong Kong superior" mentality, I for one dare not adopt this mentality, really. I merely hope that Hong Kong's status quo can remain unchanged for 50 years, and it will not degenerate into one of the many ordinary Mainland cities or go down in history as a lost or vanished city.
Amidst the raging and confrontational Sino-American trade conflicts, MENG Wanzhou from Huawei Technologies Co., Ltd. ("Huawei") is under detention in Canada. I notice that the Legislative Council's report on its duty visit to the Guangdong-Hong Kong-Macao Greater Bay Area ("the Greater Bay Area") contains four paragraphs about Huawei under the heading "Huawei Technologies Co., Ltd." in Chapter 2. What do they say? They say, "Huawei … and its products and solutions have been applied to more than 170 countries around the world, serving 45 of the world's top 50 operators and one-third of the world's population." At a glance, readers may really think that this is some sort of online promotion for Huawei. What has it got to do with Hong Kong? Speaking of the wording, a paragraph explicitly talks about the development of Hong Kong into a smart city at its very beginning. Then, it goes on to mention "smart trash bins"―well, we used them some time ago, but I am not sure if they exist now―and smart lamp posts. We have heard all this over the past few months. They are really very "closely related to us".
But the Greater Bay Area has given us a feeling: Will it become a gigantic black hole that keeps devouring Hong Kong? Will Hong Kong cease to exist as a result? Perhaps, people in the future only know that there is a place in Southern China called the "Greater Bay Area", and no one will talk about Hong Kong by that time, unlike 20 years ago.
Some will definitely wonder why we should always advocate "Hong Kong localism". What is meant by "Hong Kong localism" anyway? Will Zhuhai people advocate "Zhuhai localism"? Probably no. But Members must bear in mind that Hong Kong actually has its own sense of identity. Some have asked me, "You people always talk about 'Hong Kong identity'. What is it all about? Why have we not heard anyone talk about 'Zhuhai identity'?" I honestly do not think anyone will talk about the latter. Nonetheless, Hong Kong people have LEGISLATIVE COUNCIL ― 12 December 2018 4257 developed this sense of identity because in the 1980s, the state leaders of China and the United Kingdom thought that Hong Kong was a unique place, so they signed the Sino-British Joint Declaration. But these days, Beijing has sounded as if that document were a piece of trash. Back in that year, Baroness THATCHER and DENG Xiaoping proposed to enact a mini-constitution called the Basic Law to ensure that Hong Kong would remain unchanged for 50 years. But today, even the Legislative Council has blatantly put the Constitution of the People's Republic of China first. This is unacceptable …
PRESIDENT (in Cantonese): Ms Claudia MO, I wish to remind you that this Council is now debating the report on the duty visit to the Guangdong-Hong Kong-Macao Greater Bay Area. Please return to the topic of this motion.
MS CLAUDIA MO (in Cantonese): I am now discussing the possible impacts of the Greater Bay Area on Hong Kong. I have formed these views after going through and reading the duty visit report.
When officials describe to us how people's life in the Greater Bay Area will be like, they invariably say that it is a very good place for living. And, Mr Jeffery LAM has even proposed to build a "one-hour living circle". In that case, why should our senior officials refuse to take the lead to move into the Greater Bay Area and live there? They have said that it only takes an hour to commute between the two places, and a Member has likewise talked about the building of a "one-hour living circle". So, they should lead by example. What they say is very doubtful. Certainly, we cannot say somewhat definitively that Hong Kong must be segregated from China because this is almost impossible. But these days, their intention is not merely the inclusion of Hong Kong into the grand plan of Beijing. The Greater Bay Area is not like a dish of salad, in the sense that it is not intended to pool the strengths of various sides together. Instead, it is a melting pot, one which will not only melt down Hong Kong but also lead to its possible "disappearance" anytime in the future. The Government has advocated the Greater Bay Area and also the "One Belt One Road" very enthusiastically every day. And these days, even some Legislative Council Members have sided with the Government and spoken in defence of it, singing praises of the Greater Bay Area day after night. They should set an example for us.
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It is not my specific intention to cause them any hard time with my speech. Even Carrie LAM says herself that Hong Kong youngsters should seize the huge opportunities presented by the country and lose no time in seeking career development on the Mainland. What she means to say is that young people in Hong Kong should "go northwards" to the Mainland. While her words still ring in our ears, she nonetheless says that our new arrivals are young and their education level is rising, so they may increase Hong Kong's labour force. A very reasonable interpretation of her words is this: Does she want to do a population transfer? She calls on young people in Hong Kong to go northwards to the Mainland, while hoping that Mainland young people can go southwards to Hong Kong. But she thinks that Hong Kong young people needs not go to Xinjiang or Beijing, and it is already good enough for them to go to the Greater Bay Area. What is her intention? It is honestly suspicious.
The state of affairs going on between China and the United States is well known to all. The cover of The Economist, a British magazine, issued two weeks ago is printed with these words: "Chip wars: China, America, and silicon supremacy". Why can we see the word "silicon"? Because there is a place in the United States called "Silicon Valley". So, can we find a place in the Greater Bay Area which is comparable to Silicon Valley? They always mention "Huawei", "IT" and "AI" because they hope that the Greater Bay Area can develop abreast of Silicon Valley. But they merely want to exploit Hong Kong's special position and take advantage of it. At the same time, Hong Kong is being "Mainlandized" on not only the political front but also the economic and information technology fronts. The Mainland has the final say on economic and livelihood matters. Recently, a Member even hastened to tell us very eagerly (The buzzer sounded) … that she had bought herself a Huawei mobile phone right away …
PRESIDENT (in Cantonese): Ms MO, please stop speaking.
MR CHARLES PETER MOK (in Cantonese): I also joined the delegation in April this year in my capacity as Chairman of the Panel on Information Technology and Broadcasting at the time. Even though our duty visit of several days was very brief, it was still a good opportunity because it enabled us to see LEGISLATIVE COUNCIL ― 12 December 2018 4259 some new developments. Let me now share with Members some of my important feelings and observations.
The cooperation between the Guangdong-Hong Kong-Macao Greater Bay Area ("the Greater Bay Area") and Hong Kong actually began quite some time ago. In the past, the cooperation between both places was known as "nine-plus-two cooperation" or "Pan-Pearl River Delta regional cooperation". The names given to such cooperation have undergone constant changes. Mainland enterprises and Hong Kong businessmen have cooperated with one another for a few decades after the reform and opening up of the Mainland. China-Hong Kong cooperation can be likened to a "shophouse". In the past, Hong Kong and the Mainland were responsible for financial services and manufacturing respectively. But today, they engage in the manufacturing of high technology products of various types. In my view, many cooperation opportunities have arisen very naturally in the process. The most important question that must be considered now is this: As the Central Authorities have formulated planning for the Greater Bay Area, how should Hong Kong position itself? Let me list out my four observations.
My first observation is about the positioning of Hong Kong. The Mainland officials who met with the delegation (especially those who had casual conversations with us during meals) impressed me with their pragmatism. They invariably told us that Hong Kong's international status was very important to them because many overseas companies or individuals would rather live or work in Hong Kong than in the Mainland. To put it point-blank, I think they understand―perhaps deep down their hearts―that the rule of law and the free flow of information which they are unable to attain and also "one country, two systems" are very important to maintaining Hong Kong's status. As long as Members go to the Greater Bay Area―I am not talking about those who never or seldom go there―they will be able to see for themselves how precious and important Hong Kong's systems (especially "one country, two systems") are.
My second observation concerns the competition for talents. Many Members could feel their keen competition for talents or even notice it when viewing night-time television programmes in their hotel rooms in Foshan. For instance, Dongguan, Shenzhen and Foshan try to attract talents by such initiatives as offering cash handouts or rental concession. Various places of the world have 4260 LEGISLATIVE COUNCIL ― 12 December 2018 striven to attract talents. So, what should Hong Kong do with its policies in response? Certainly, it cannot replicate their initiatives. The community may not accept Hong Kong's handing out of a few million dollars to every talent as a means of attracting talents to Hong Kong. However, as I said earlier, many Mainland people know that overseas talents prefer Hong Kong because Hong Kong has appeal to them and is more competitive. To say the very least, in Hong Kong, they need not "climb over the wall" for access to the Internet. For these reasons, I think Hong Kong should sort out its strategies for attracting talents. It should not try to attract talents by allocating funding for the Postdoctoral Hub Programme on the one hand, and call upon Hong Kong talents to seek development in the Greater Bay Area on the other.
The World Talent Report 2018 we discussed in the earlier oral question session also states that we should strive to attract and retain talents. Therefore, on the question of whether Hong Kong people should stay in Hong Kong or not, the authorities should not disseminate confusing messages because Hong Kong employers already face difficulties in recruiting sufficient manpower. Hong Kong people already knew long ago how to choose between the Mainland or other places as their destination after leaving Hong Kong. Therefore, the authorities should not disseminate any confusing messages and urge Hong Kong people to work on the Mainland. One can naturally make his own decision as long as one has such an intention. Speaking of talents, we must put Hong Kong first and try to retain them.
My third observation is that after visiting the Greater Bay Area, I have realized that Hong Kong honestly lags behind the Mainland in the progress of legal reform for not only financial and payment systems. Speaking of autopilot systems alone, we observed the operation of autonomous aerial vehicles during the visit. May I ask the Secretary whether the authorities will formulate any rules and regulations permitting the trial use of such technologies in Hong Kong? In the case of autopilot systems, the authorities have merely designated in Hong Kong Science Park an area as large as several basketball courts for such vehicles. In my view, it is more suitable to use that site as go-kart tracks. This initiative is practically useless.
The authorities have either refused to amend the various laws, or made them more stringent after amendment. In the case of online vehicle or hostel reservation, the authorities have also either refused to enact legislation or simply LEGISLATIVE COUNCIL ― 12 December 2018 4261 enacted legislation for their prohibition. In this regard, Hong Kong has honestly done a "good" job. People with vested interests can be fiercer in Hong Kong than in the Greater Bay Area. But the Government is weak. Therefore, if the Government refuses to step up efforts in reforming the rules and regulations, it will be impossible to develop Hong Kong into a smart city or dovetail with the development of the Greater Bay Area.
The fourth observation is that the authorities always cite the San Francisco Bay Area and the New York metropolitan area for comparison. Just now, the Secretary also mentioned the Gross Domestic Product ("GDP"). Secretary, this is meaningless. If the market values of Apple Inc. and Google had been included in the GDP computation for the San Francisco Bay Area, the GDP level of the San Francisco Bay Area probably would not have been that low. What is the reality? The reality is that such companies have booked their revenue in other countries. Therefore, it is pointless to compare GDP levels. We will not hear anyone from San Jose in the San Francisco Bay Area say that they want to seek development in San Francisco; neither will we hear anybody from San Francisco say that they want to seek development in Redwood City. This will not happen because they all want to seek development in various places of the world.
I really cannot understand one thing sometimes. The authorities may need to compare Hong Kong with other regions. But then why does the Government always tell Hong Kong people to seek development in Dongguan when promoting the Greater Bay Area? By the same token, should Dongguan people go to Foshan and Foshan people go to Guangzhou respectively in order to seek development? This is pointless. They should consider Hong Kong's roles in the global market instead of continuing to compare the GDP levels as this is sheer self-deception.
President, here comes the last point. I think that in the midst of the intense Sino-American trade conflicts at present, Hong Kong must safeguard its competitive edge bestowed by "one country, two systems" for its maximum benefits, including the rule of law and also such important rights as press freedom, the free flow of information and intellectual property rights protection. All these can truly help to further the development of the entire Greater Bay Area. Hong Kong must not do anything in breach of international standards on the 4262 LEGISLATIVE COUNCIL ― 12 December 2018 pretext of technological development or research and development. And, everybody must strive to prevent Hong Kong from giving this perception to the international community. From this angle, I think the Hong Kong Government should enhance its law enforcement and regulation in this respect, or even enact legislation to enhance its regulation and monitoring when necessary. This is very important. That way, Hong Kong can play to its strengths as an international city in the development of the Greater Bay Area or its local development, while also giving full play to its international status in the entire region. This is the most important advantage that we must preserve and also the most important foundation for sustainable economic and technological development in Hong Kong.
MR KENNETH LAU (in Cantonese): President, I have gone on three fact-finding visits to the Guangdong-Hong Kong-Macao Greater Bay Area ("the Greater Bay Area") this year. The first time was in April this year when I joined the duty visit of the joint-Panel delegation of the Panel on Economic Development, Panel on Financial Affairs, Panel on Commerce and Industry, and Panel on Information Technology and Broadcasting. The second time and the third time were in May and July respectively when I led the fact-finding delegations organized by Heung Yee Kuk New Territories to visit the Greater Bay Area. Though having been to certain cities for multiple times, members of the delegations and I still have benefited greatly from the visits which cover different enterprises and organizations on each occasion, and have been deeply impressed by the rapid economic and technological development of the Mainland enterprises.
As projected in the "Made in China 2025" strategy released by the State Council in 2015, our country will stride forward from a big manufacturing power to a strong manufacturing power in 2025, and the manufacturing sector of our country will overtake developed countries such as Germany and Japan in 2035. Various provinces and cities in the Mainland are taking active steps to prepare themselves, so that they will fit in with the national development strategy. Despite the escalating trade war between China and the United States, our country remains steadfast in pursuing the objectives of "Made in China 2025".
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If we liken global economic competition to a ball game, what part should Hong Kong play in the country's overall scheme of development? What are Hong Kong's advantages? With a favourable business environment, a sound judicial system, outstanding professional services, a robust intellectual property protection regime, and all that, Hong Kong is an ideal stepping stone for foreign enterprises seeking to develop the Mainland market, and the most preferred base for Mainland enterprises intending to go global. Hence, in the wake of the 13th Five-Year Plan and the thorough implementation of "Made in China 2025", Hong Kong's service industries and technology industries will be presented with new opportunities.
In recent years, the Government has shown determination to develop innovation and technology ("I&T") as the fifth pillar of Hong Kong's economy. The investments undertaken by the authorities in the past couple of years have amounted to HK$90 billion, including the development of the Lok Ma Chau Loop, the injection of funds into the Innovation and Technology Fund, the establishment of research clusters, the launch of the Postdoctoral Hub Programme, the provision of subsidies to local employees for receiving training in technology, and the review on the outdated legislation which hinders I&T development. The Government has been making proactive efforts to update the hardware and software to support Hong Kong's reindustrialization. Such move, coinciding with the upgrading of China's industries, will facilitate local manufacturers to upgrade and transform their business.
The Lok Ma Chau Loop has the absolute potential to develop as a cluster that specializes in nurturing scientific research talents and fosters international exchange in technological innovation and commercialization of academic research, thus turning itself into a cradle to I&T talents. Specifically, a research-oriented university focusing on I&T should be set up in the Loop by gathering the elite resources of the tertiary institutions in Guangdong, Hong Kong and Macao, so as to meet the development needs of various industries in the Greater Bay Area and provide soft-power support to I&T development in the area.
Next, I wish to talk about the role and potential of the New Territories as the link between Hong Kong and the Mainland. Aside from the Loop which I mentioned above, villages in the New Territories, in terms of tourism and culture, 4264 LEGISLATIVE COUNCIL ― 12 December 2018 definitely have the potential to provide the Greater Bay Area with abundant quality tourism resources. As stated in the report of the delegation, the delegation opined that the Hong Kong Government should develop "multi-destination" tourism products that can achieve complementarity and mutual benefits; and should examine ways to identify more development opportunities through revitalizing old districts and historic buildings, thereby boosting local economy. I fully concur with these remarks, and I think that Sha Tau Kok Town, among other places, shows the greatest potential to develop tourism and to become one of the destinations in the Greater Bay Area tourism circle.
In fact, since the beginning of the current legislative session, I have been striving for the opening up of the frontier closed area of Sha Tau Kok Town. Chung Ying Street, a place with a unique historical background, is located in Sha Tau Kok Town where a wide diversity of historical relics are preserved, for example, the boundary stones at Chung Ying Street, the Warning Bell and the Lingnan-style balconies. What is more, there is an indigenous village, Lai Chi Wo, at the back of Sha Tau Kok Town. It is a village with a history of over three centuries, possessing geological and ecological features as well as Hakka culture. Its geographical location is exceptionally favourable. Moreover, as a frontier area of Hong Kong, Sha Tau Kok has a large number of military and border security remains. Many military enthusiasts and history lovers are eager to see and experience for themselves the history about Hong Kong's resistance against the British and the Japanese in the early years. If the Government is determined to remove various restrictions to revitalize the existing stores in Sha Tau Kok Town, there should be no difficulty for Sha Tau Kok to become a distinctive tourist attraction which will, in turn, give impetus to the local economy, and enhance the attractiveness of the Greater Bay Area.
Finally, I would like to thank Mr Jeffrey LAM, leader of the delegation to the Guangdong-Hong Kong-Macao Greater Bay Area, and I also wish to thank the Legislative Council Secretariat for the carefully planned programme. I hope that in the future, Members from various parties and groupings will have another opportunity to go on a joint duty visit and undertake external exchange activities regarding issues conducive to Hong Kong's development, thereby enabling us to offer advice and counsel for Hong Kong. President, I so submit.
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MR ALVIN YEUNG (in Cantonese): First and foremost, President, please allow me to express my gratitude to our colleagues in the Legislative Council Secretariat for composing the Report on the duty visit to the Guangdong-Hong Kong-Macao Greater Bay Area ("the Greater Bay Area"), in particular for their effort made in consolidating Members' diverse views in one single report. I trust that it must be a Herculean task.
President, it has been almost eight months now since the conclusion of the duty visit. The international scene kept changing with a multitude of events emerging during the past eight months. If we visit the Greater Bay Area today, the contents of the visit will be a lot different from that of eight months ago. Undeniably, the trip to the Greater Bay Area covered numerous visiting points, allowing Members to see for themselves the strengths of the various cities within the Greater Bay Area and the technological development as well as achievements resulting from competition among these cities. This is indeed beyond doubt. However, I believe one thing is true, that is, what the Legislative Council delegation was exposed to see during its duty visit to the different cities in the Bay Area must be thoughtfully selected with the aim to show Members the best side of the Greater Bay Area as far as possible. I am not sure whether what we saw is the whole truth. Yet, this cannot be the whole truth according to the reasonable inference that I have drawn.
President, I put forth two views to sum up the duty visit. One of them is about the strive for talents and the other is about the privileges of the "one country, two systems". Actually, some other pro-democracy Members have already elaborated on these two points and I only wish to make the following supplementary remarks to reflect what I have come up with in previous months upon mulling over the various issues associated with the Greater Bay Area.
First, I would like to discuss some figures. Starting from 2016, the Census and Statistics Department added a regular thematic survey on the number of permanent residents of Hong Kong usually staying in the Guangdong Province ("Guangdong"), namely the number of Hong Kong residents who have stayed in Guangdong for six months or more during the one-year period from six months before the reference time-point to six months after it. The survey seems to have traced the figures up to 2013 only. The number of Hong Kong residents usually staying in Guangdong in mid-2013 was 516 700. The figure increased to 525 500 by the end of 2017, representing an increase of 1.7%. Such rate of increase was not so significant.
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I want to focus on the tendencies. In comparing two set of more recent figures, including those before 2015, we find that the number of Hong Kong people staying in Guangdong has been on the decline and the figure did not rebound to the level of 2013 until the end of 2016. In comparing the figure at the end of 2017 and that of 2013, it is found that only two age groups showed growth in the number of Hong Kong residents, one being the age group of 15 to 24 and the other being 65 or above. Neither group is, however, the core of the working population in Hong Kong.
President, I am talking about these figures because I wish to explore the meaning behind the tendencies as shown in the figures. The SAR Government had been advocating Mainland-Hong Kong integration before the emergence of the concept of "Greater Bay Area". Nevertheless, had the idea of such integration won the wholehearted support and appreciation of the Hong Kong people, the overall number of Hong Kong residents usually staying in Guangdong should not have dropped. It should not be a case in which rebound of figures only took place in the groups of youths and elderly people as it has turned out now. President, I just want to raise a query here: Is the concept of Mainland-Hong Kong integration, including the notion of the Greater Bay Area and that of the Pan-Pearl River Delta Regional Cooperation ("9+2"), genuinely welcomed by the people of Hong Kong? Well, the answer has already been revealed in the figures above.
President, Mainland-Hong Kong integration aims at incorporating Hong Kong into the planning of Guangdong and even the State's development. In the process, the Hong Kong Section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link must be built and the Co-location Arrangement must be implemented. Are these all meant, as suggested by some research institutes, to achieve an economically-oriented makeover by breaking political barriers? Not only do we have to shoulder the financial burden of cost overruns amounting to tens of billions dollars incurred by the Hong Kong-Zhuhai-Macao Bridge ("HZMB"), which is deemed "an awesome project of the century", we also have to endure the impacts brought by the sudden influx of tourists during the day time upon the commissioning of HZMB. As I said just now, members of the delegation were shown the best pictures and most advanced side of the Greater Bay Area. Yet, upon our return to Hong Kong after experiencing the advantages of Mainland-Hong Kong integration ahead of others, we did have intense feelings upon realizing what such planned Mainland-Hong Kong integration projects were actually like. In what ways will Hong Kong benefit therefrom? How much do LEGISLATIVE COUNCIL ― 12 December 2018 4267 we have to sacrifice in turn? Have the people of Hong Kong ever questioned why integration has to be taken forward? Who is it meant for? And who is in charge of the integration planning after all?
Obviously, the Greater Bay Area project is planned for top-down implementation. Since its announcement by the Central Government up to the current establishment of the Steering Committee on Taking Forward Bay Area Development and Mainland Co-operation to effectively take forward various tasks related to the development of the Greater Bay Area, the advantages of integrating Hong Kong with the Greater Bay Area have been promoted to Hong Kong people all along. As to whether the planning of integration really suits Hong Kong and what forms of integration suit Hong Kong best in bringing Hong Kong's strengths (in particular its strengths under certain systems) into full play, the Hong Kong people are always the last to be informed in the course of integration. Of course, the situation of the people on the Mainland is quite similar in that all they can do is to act obediently as instructed by the Central Government.
President, we do not reject the Greater Bay Area project blindly. As a matter of fact, the project will definitely be much more desirable if it is based on a model under which due respect is given to both the people of Hong Kong as well as the fact that Hong Kong is governed under the principles of "one country, two systems"; Hong Kong's public opinions are taken account of throughout the planning process; Hong Kong's rule of law will not be sacrificed at will, or our legal principles need not be altered; and people's livelihood and benefits will not be forfeited at the excuse of pursuing State development.
As for the future planning on the Greater Bay Area, I hope the SAR Government will do its part well in defending Hong Kong's privileges of rule of law and freedom enjoyed under the principle of "one country, two systems" because the Greater Bay Area will no longer need Hong Kong when it has eventually lost its unique status upon integration with the Mainland. By then, Hong Kong will be of no value at all. I do hope that the officials in charge, in particular Secretary Patrick NIP who is present today, will always bear in mind my advice given just now and be good gate-keepers for the people of Hong Kong.
I so submit.
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MR KENNETH LEUNG (in Cantonese): The Guangdong-Hong Kong-Macao Greater Bay Area ("the Greater Bay Area") is an innovative but complex concept since it is distinctly different from all other bay areas around the world. Among the 11 cities in the Greater Bay Area, Hong Kong and Macao are the Special Administrative Regions conferred with independent jurisdiction and have their own systems. Generally speaking, the development of a bay area evolves round a large city which is the core of the entire area. For example, New York, San Francisco and Tokyo each serves as the core city of the respective bay areas. These three cities play the role of leading cities in the three bay areas concerned.
However, the bay area now in question is the Greater Bay Area consisting of Hong Kong, Guangzhou and Shenzhen. They are of similar population size and economy scale. Therefore, the first issue we have to deal with is how to avoid overlapping of roles and the emergence of vicious competition among cities within the Greater Bay Area in the course of development. The second issue to be addressed is about the positioning of each city in the Greater Bay Area. The Greater Bay Area is based on the concept of cooperation but it also involves competition among cities. Of course, I hope the competition will be a prosperous one.
The unique features of Hong Kong must be well preserved in the planning for the entire Greater Bay Area in order to consolidate and expand its own strength. A fully liberalized market that offers a level playing field in the Greater Bay Area is a must for Hong Kong to achieve successful development there. The entry thresholds for all economic activities that have complied with regulatory and legal requirements cannot be too high, and it would be better if no threshold is set. The availability of a liberalized market is among the essential prerequisites for the development of market economy. Hence, without a fully liberalized market that offers a level playing field, the concept of the so-called Greater Bay Area is actually no different from that of a free trade area or special economic zone adopted in the past.
Among the entire cluster of cities, Hong Kong is definitely the most open one and most capable of aligning with international standards and I really hope that this is true. Given its legal system, free flow of information, freedom of speech, modes of operation that have met international standards and the like, Hong Kong has set an indispensable example for other cities in the Greater Bay Area. Thus, I hope that the so-called "integration" only means some sort of cooperation. After all, Hong Kong's unique systems and culture are indispensable.
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In gist, I want Hong Kong to note three key points. First, some Members representing the business sector have questioned just now if the policy of "Hong Kong taxation for Hong Kong people" is implemented in Hong Kong, but we should not plagiarized indiscriminately the concept. What is meant by "Hong Kong taxation for Hong Kong people"? Actually, the concept of "183 days" came from international tax agreements. As an independent tax jurisdiction, Hong Kong should make no attempt to alter it. Those Hong Kong people who choose to work and live in the Greater Bay Area should fulfil their responsibility of paying tax to the local governments. This is an essential point because you cannot have a cake and eat it too. And so this is Point No. 1.
Second, neither can the mode of clean business operation, to which Hong Kong has attached great importance, be altered. As we can see, the United Kingdom, Australia and even the United States have all put in place laws and measures in prevention of cross-boundary corruption. An illustration of this is the case in which the former Secretary for Home Affairs Dr Patrick HO is charged with bribery. Yet, the existing Prevention of Bribery Ordinance ("PBO") of Hong Kong is not cross-regional binding. Any Hong Kong citizen having bribed local officials in an African country is not bound by PBO. Nevertheless, under the equivalent legislation of Australia or the United Kingdom, the employee of an Australian or United Kingdom company having committed bribery or corrupt acts elsewhere is subject to criminal liability imposed by Australia or the United Kingdom. Hence, I do hope that PBO of Hong Kong will also be conferred with cross-boundary binding power while business ethics are being promoted in Hong Kong since our standards of business conduct will have implications on the moral development in peripheral cities. This is Point No. 2.
Third, as an international city, Hong Kong is duty-bound to implement the resolutions of the United Nations Security Council in relation to sanctions and never should we, no matter under what kind of pretexts, make it not executable. Even when Hong Kong has become the leading city in the Greater Bay Area in future, it must strictly enforce the terms and conditions of the agreements with the United Nations or other international agreements in respect of combating money laundering, anti-embargo movements, etc. Anyway, we should never let Hong Kong be reduced to nothing more than the so-called "white gloves".
I so submit, President.
4270 LEGISLATIVE COUNCIL ― 12 December 2018
DR KWOK KA-KI (in Cantonese): President, Mr Jonathan CHOI, member of the Standing Committee of the CPPCC National Committee, has made a point which comes as a wake-up call for the people of Hong Kong: We will only have "Greater Bay Area people" but not "Hong Kong people" in the future. Hence, the answer has actually been written on the wall, that is, Hong Kong citizens should call themselves "Greater Bay Area people" instead of "Hong Kong people" in the future.
The remarks made by Mr Jeffrey LAM just now has reminded me of HUA Guofeng―well, their names share the same Chinese character " 鋒 " (Feng)―HUA Guofeng once said: We uphold determinedly every single decision Chairman MAO makes, and for all instructions given by Chairman MAO, we also …
(The broadcasting system in the Chamber being interfered by some noise)
PRESIDENT (in Cantonese): Dr KWOK Ka-ki, please put away your mobile phone.
DR KWOK KA-KI (in Cantonese): I cannot hear you.
PRESIDENT (in Cantonese): Please put your mobile phone away.
(Dr KWOK Ka-ki removed his mobile phone from the desk)
DR KWOK KA-KI (in Cantonese): Alright … okay now. Please pardon me for that. Well, let me say it once again: "We firmly uphold every single decision Chairman MAO makes, and we unswervingly follow all instructions given by Chairman MAO." But now, we only have to change "Chairman MAO" into "Chairman XI" and that is all. Yet, we already know what happened to HUA Guofeng in the end. He went completely out of public eyes because of the instructions given by DENG Xiaoping and passed away miserably in 2008.
Recently, a lot of things happening in Hong Kong have worried us, in particular the business sector. For example, the dispute over Hong Kong as a separate customs territory, which has been clearly stated in the Annual Report of LEGISLATIVE COUNCIL ― 12 December 2018 4271 the US-China Economic and Security Review Commission under the United States Congress, but I am not going to repeat it here. At present, the biggest problem lies in the fact that many countries in the world are beginning to question whether Hong Kong's so-called independent status still exists and whether the city still deserves the status of a separate customs territory. Look, do you see how Mr CHUNG Kwok-pan, a member of the Liberal Party who represents the business sector, has "shouted himself hoarse" to remind the Government of the need to monitor the matter with due care and must not take it lightly? It is because Hong Kong will be done for once it loses its status of a separate customs territory. That is to say, if we tell others in future that we are not "Hong Kong people" but "Greater Bay Area people", the United States may say: "That is right, you are the Greater Bay Area people. And why should Hong Kong still be granted the status of a separate customs territory since the city is actually no different from the other nine Mainland cities? On what basis are you justified to enjoy such treatment?"
If, one day, there is no longer any difference between Hong Kong the other nine Mainland cities, does it not mean that Hong Kong is right on the road to destruction? Therefore, there have been comments that the Greater Bay Area marks the finish point for the "one country, two systems", which means "the end". The core values that we have worked so hard to establish in Hong Kong, the rule of law that has gained respect from Hong Kong people and investors around the world, effective administration, independent systems, freedom of expression and freedom of the press are gradually melting into thin air. The reason is that the SAR Government and its officials under the leadership of the Chief Executive Mrs Carrie LAM had caused Hong Kong's unique cutting edge in economic development to fade away gradually. They, however, have yet to come round again. Instead, they ask for even more "integration", Mainland-Hong Kong integration. From a practical point of view, the present situation is very critical as Hong Kong is precisely moving towards the end of "one country, two systems". Indeed, it is the time for Hong Kong to wake up now.
Recently, the story of Sabrina MENG, a well-known figure running a state-owned enterprise ("SOE"), has warranted our grave concern. It is because we initially thought that she, as the vice president of such a large SOE, must be a Chinese national, but we later learn that she is in fact a Hong Kong citizen and holds three Hong Kong passports. In addition, she owns a total of two luxury homes in Canada valued at about 14 million Canadian dollars. The truth is that she is a Hong Kong citizen. From her story, we come to realize what Mainland people are truly made of. They will take every possible means in a bid to 4272 LEGISLATIVE COUNCIL ― 12 December 2018 transfer cash and assets out of the Mainland to other places. While keeping a registered residence in Mainland China and even holding a post in an SOE, they have all their assets, spouses and children settled in places other than their home country as a matter of fact. They are evidently speaking with a forked tongue. Hence, we must pay attention not only to what China's officials say but also to how they behave. In fact, Ms MENG and many corrupt officials …
PRESIDENT (in Cantonese): Dr KWOK Ka-ki, you have strayed from the question. Please focus on the question under debate.
DR KWOK KA-KI (in Cantonese): I am now returning to the question under debate, and I am talking about the Greater Bay Area. Actually, we are kind of muddle-headed because amid Mainland people withdrawing their money hurriedly from Mainland China to put it elsewhere for fear that it will be too late, we still insensibly choose to join the Greater Bay Area. However, the most important thing at present is to convince investors around the world that the principle of "one country, two systems" is still upheld and valid in Hong Kong. By the time Hong Kong's situation has really become so miserable as what Mr Jonathan CHOI has suggested, that is, we call ourselves "Greater Bay Area people" instead of "Hong Kong people", it will mark the end of the "one country, two systems country" and the end of Hong Kong. Indeed, this matters so much more than those remarks such as "the Great Bay Area is equivalent to the San Francisco Bay Area (i.e. the bay area of the United States)".
So please look closely at the actual situation first before deciding what to do next. What the Greater Bay Area is! We do not want Hong Kong to be lowered because it is predictable that Hong Kong's future development will be in the hands of the officials of the Central Government, relevant ministries, departments and the other nine cities who will jointly make decisions on our future as the Chief Executive is merely a member of the Steering Committee for the Development of the Guangdong-Hong Kong-Macao Greater Bay Area and Hong Kong will have only one representative. In fact, Mrs Carrie LAM can be deemed a "business representative" by then. It is true that she is among the "business representatives" of the Greater Bay Area. How can Hong Kong be so muddle-headed as to continue with its engagement in the development of the Greater Bay Area, whereas those corrupt Mainland officials who keep referring to the Greater Bay Area are thinking of North America and Australia and have been LEGISLATIVE COUNCIL ― 12 December 2018 4273 withdrawing their assets from the Mainland? Wake up now and stop doing any more harm to Hong Kong please! The most important bargaining chips in our hands are the "one country, two systems" and the hard-won rule of law system. These, however, can be destroyed all too easily, such as by keep making known such news as Victor MALLET's being denied entry to Hong Kong or Legislative Members' being disqualified.
Yet, the deadliest measure is to "DQ" (i.e. disqualify) Hong Kong. For example, the disqualification of Hong Kong from holding the title of separate customs territory will be sufficient to victimize all Hong Kong people. Regardless of this, government officials may still be able to keep earning a salary of millions of dollars, while the rest of us will have to suffer the loss of the mainstay of our economy and our prospect altogether as a result.
I so submit.
MR SHIU KA-FAI (in Cantonese): President, this motion is about the report on the duty visit to the Guangdong-Hong Kong-Macao Greater Bay Area ("the Greater Bay Area") that Members of the Legislative Council made earlier. I attended the duty visit on behalf of the Liberal Party. We went to Shenzhen, Dongguan, Zhongshan, Foshan, Guangzhou, etc. and visited many places of high technologies, as well as places providing financial services and conducting production.
I believe Hong Kong people are able to see that Members across different political groups, whether pro-establishment or non-establishment, find the visit programme very satisfactory. We have seen many new ideas that many Hong Kong people have never seen before. My personal view about the duty visit is that the nine cities and two regions in the Greater Bay Area provide staunch support to young people and the innovation and technology ("I&T") industry. In order to attract young people to the Greater Bay Area, local governments provide many subsidies in respect of land, housing and resources. The SAR Government can make reference to these approaches and learn how to attract young talents to come to Hong Kong. Apart from providing an environment with a sound rule of law, the Government can also provide subsidies on the economic and housing fronts.
In designing the layout of the Greater Bay Area, the State has made reference to the successful examples of Tokyo Bay, New York Bay and San Francisco Bay. These examples prove that unity is power. They have made 4274 LEGISLATIVE COUNCIL ― 12 December 2018 good use of the expertise in different places to complement each other and boost productivity. Aside from the three bay areas I just mentioned, the Greater Bay Area is the fourth one. Hong Kong now ranks third in these four major bay areas. We certainly have our own edges, and they obviously are finance, transportation and trade, and our connections with the world. Guangdong Province has many years of experience in I&T, manufacturing and logistics and it has ample land. As for our sister city Macao, its edge certainly lies in its development of a tourist and leisure hub. I believe the three places together can complement each other to attract people from inside and outside the country to come for development.
Talking about production and trade, Hong Kong has an outstanding history in receiving business orders. After an order was received, it was followed by product design and production. I believe many Hong Kong people are aware of the difficulty in developing industry in Hong Kong due to shortage of land. If the Greater Bay Area can play a part here with its talents and labour force, it will be a good direction for development. However, many people in Hong Kong who are interested in investing in the Greater Bay Area have questions about how to integrate into the taxation and legal systems of the cities in the Greater Bay Area. I thus hope that the SAR Government can expeditiously provide more information in this regard, so as to address their worries when they develop their career or business there.
During the duty visit, some non-establishment Members, especially those from professional sectors, enquired about developing their professions (e.g. accounting services, construction and legal services) and finding business opportunities in the Greater Bay Area. I believe this is what Hong Kong people wish to see because we can bring our expertise to the Greater Bay Area, and the provinces in the Mainland can also enhance their understanding of different professional sectors.
In fact, according to the reports I have read, the service industry in Tokyo Bay, New York Bay and San Francisco Bay account for 80% to 90% of their GDPs, but the service industry in the Greater Bay Area only accounts for some 60% of its GDP. So, there is still much room for our service industry to develop in the Greater Bay Area. The service industry covers many different professions. A mature economy largely relies on its service industry to drive its local economy. So, those who are interested can consider this option.
As a matter of fact, the commissioning of the Hong Kong-Zhuhai-Macao Bright and the Express Rail Link is opportune in that they can tie in with various developments. In order to develop a place, we must develop its infrastructure LEGISLATIVE COUNCIL ― 12 December 2018 4275 and transport network first. We already possess this edge. Our "one-hour living circle" can alleviate our future transport demand. The property prices are very high in Hong Kong. With good health care support, elderly people can take advantage of this "one-hour living circle" and look for residence in the Mainland. I believe this will also be helpful.
Last but not least, I wish to talk about integration. I heard just now a non-establishment Member mention integration. We are Hong Kong people, but we are also Chinese people. I believe if we are asked who we are, we will say we are Hong Kong people as we are in Hong Kong; but if we are asked further, we are all people of the Greater Bay Area and also Chinese people. (The buzzer sounded …) So, there is actually no conflict.
PRESIDENT (in Cantonese): Mr SHIU, please stop.
MR YIU SI-WING (in Cantonese): Four Panels of the Legislative Council jointly conducted a duty visit to five cities in the Guangdong-Hong Kong-Macao Greater Bay Area ("the Greater Bay Area"), namely Dongguan, Zhongshan, Nanhai and Guangzhou. Among the 32 Members, some of them seldom go to the Mainland. After the visit, both establishment and non-establishment Members are amazed at the rapid development of the cities in the Greater Bay Area over recent years. And the tourism facilities in particular, which I am interested in, are striking, and some development models are worth using as a reference for Hong Kong. The first one is an old town revitalization project in Foshan City called Lingnan Tiandi.
Lingnan Tiandi in Foshan is of the same series of development as the Xintiandi in Shanghai. Both are a large-scale old town redevelopment jointly taken forward by a Hong Kong developer and the local governments concerned. On the premise of conserving historic buildings and preserving intangible cultural heritage and local cultural characteristics, the project seeks to infuse the old city with a modern touch and modern facilities, giving it a new look. Apart from a place of monuments and sightseeing spots of aesthetic values, Lingnan Tiandi also serves other leisure functions such as entertainment, residence, retail sales, catering, etc.
Lingnan Tiandi is the biggest old town redevelopment project in Guangdong Province, and is more than 10 times bigger in scale than the Xintiandi in Shanghai. The project first needs to preserve over 20 spots of historic 4276 LEGISLATIVE COUNCIL ― 12 December 2018 heritage with Lingnan characteristics. One of them is the Zumiao Temple which is a major national historical site. The project also needs to fully discover and display the cultural aspect of Foshan and its local characteristics of being the home of Cantonese opera, ceramic art, martial art and fine food. Apart from refurbishing all buildings of historic values, the project has also added a theatre, exhibition hall, art gallery, museum, etc. to give local residents and tourists quality and spacious space for cultural and recreational activities. Hotels, Grade A office buildings and retail streets are located at the periphery to facilitate the need of city development and enhancement while preserving the old look of the city.
The difficulty in redeveloping an old city is that most of the historic buildings are in a dilapidated state. It is much more difficult and expensive to preserve them than to pull them down. Many cities would rather opt for demolition and redevelopment to address their housing and economic development needs. But this will ruin the years of history and culture of a place.
It takes the determination and resolution of the local government to turn Lingnan Tiandi into a commercially viable tourism project without the need to demolish the original historic buildings. The local government understands that by its power alone it cannot make the project successful. It needs the experience of the commercial sector in business operation and professional management. They dare to borrow the collaborated development model used in Xintiandi of Shanghai and let the government and the business sector to give its strength full play through collaboration. It proves that the model is effective.
Actually, many old districts in Hong Kong need redevelopment and many projects in the New Territories need to be taken forward as well. It is worthwhile to learn from the collaboration model of Lingnan Tiandi. The Government should rid itself of the devil of Government-business collusion in its heart and welcome investors from around the world with an accommodating mindset, so that Hong Kong can reap better and bigger returns in the Greater Bay area development.
President, another thought that I have after the duty visit is that the cites in the Greater Bay Area have done a better job in innovation and technology ("I&T") and in encouraging entrepreneurship by making good use of the talents and technology resources in Hong Kong. We visited the Weizhong Bank in Shenzhen, which is an Internet-only bank initiated by a Hong Kong people who is LEGISLATIVE COUNCIL ― 12 December 2018 4277 also the CEO of the bank. And the Songshan Lake Xbot Park in Dongguan is developed by professors from The Hong Kong University of Science and Technology and Mainland tertiary institutions. The Xbot Park provides office space and capital supports for entrepreneurs. The gross output of the successful business teams is now worth over $1.9 billion. It is a major project in Dongguan. The services and products of these two corporations occupy a leading position in the industry with extensive application.
Many cities in the Greater Bay Area now provide a dedicated platform and preferential policies for young people from Hong Kong and Macao. For example, in order to enhance their sense of belonging to start their business and settle in Foshan, the Foshan government provides free office space, cheap boarding, start-up funding supports, tax concession and a one-stop licensing service to attract quality projects, technologies and talents to settle in Foshan. This in turn brings economic benefits to the area.
In the Policy Address this year, the Government announces that it will collaborate with a non-government organization to roll out a pilot scheme to encourage Hong Kong young people to utilize entrepreneurial bases in the Greater Bay Area. The Hong Kong United Youth Association has recently launched a pilot scheme jointly with the Home Affairs Bureau to take forward young entrepreneurship in the Greater Bay Area. Under the scheme, three bases in Shenzhen will be located to provide one-stop entrepreneurial support and preferential policies for young entrepreneurs to settle in Shenzhen. We hold that these are feasible approaches. Given that the Government has already taken its first step forward, we hope that it will actively continue with the work.
Hong Kong and various cities in the Greater Bay Area have their edges in the economic environment. Mainland cities are more versatile in resources distribution and more mature with its hardware support. They also have an enormous consumer market. Hong Kong, on the other hand, has a sound legal system and a simple tax structure. We also have a global vision and advanced technologies. In order for Hong Kong to advance forward, we must leverage with the edges of the Greater Bay Area cities to complement each other, and in turn attract high quality talents from various places to Hong Kong to enhance our competitiveness in the future.
President, I so submit.
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MR TONY TSE (in Cantonese): President, I was not able to participate in the duty visit to the Guangdong-Hong Kong-Macao Greater Bay Area ("the Greater Bay Area") jointly organized by four Legislative Council panels in April this year. But over the last year, I have actually gone for several study visits to a lot of cities in the Greater Bay Area with professionals from the Architectural, Surveying, Planning and Landscape sectors. We have held, among other activities, exchanges and discussions with professors and researchers of the Sun Yat-sen University who specialize in the research on the Greater Bay Area.
I agree with the observations and conclusions of the duty visit report produced by the Legislative Council panels, especially paragraph 7.2 of the report: "The Hong Kong Government should do its best in promoting the Bay Area development, and deepen Hong Kong people's understanding in this regard. Hong Kong and its Mainland counterparts must enhance mutual understanding before seeking to complement each other."
A couple of months ago, I spoke in the debate on Mr Jeffrey LAM's motion "Strengthening regional collaboration and jointly building the Guangdong-Hong Kong-Macao Bay Area". I pointed out at that time that many young professionals and small and medium enterprises in Hong Kong longed to participate in the building of the Greater Bay Area and grasping the development opportunities therein. But to some people, the Greater Bay Area is really as remote as the distance between the two protagonists in the classic Korean movie Siworae (Il Mare) who can only be in touch with each other in a distance. The Special Administrative Region Government must continue strengthening the relevant promotion and publicity work and provide practical and effective support and assistance to Hong Kong people and enterprises who intend to seek development in the Greater Bay Area.
It is stated in the Policy Address this year that the Chief Executive would chair the Steering Committee for the Development of the Greater Bay Area, that the Constitutional and Mainland Affairs Bureau would set up a Greater Bay Area Development Office and appoint a Commissioner for the Development of the Greater Bay Area, and so on. These measures are all good, and most importantly, practical and not detached from reality. As I have pointed out in the Motion of thanks for the Policy Address that the Hong Kong Government should consider opening more offices in the nine Guangdong cities within the Greater Bay Area. More manpower should be deployed in these offices in order to provide Hong Kong people intending to start business, study and live there with support and assistance that are even more direct and feet-on-the-ground.
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It is indicated in paragraph 7.10 of the report that "the Hong Kong Government should seek further facilitation measures for Hong Kong people to operate business, live, work, study and retire in the Greater Bay Area. These include market liberalization, enhancement of regulatory regime, taxation arrangements and mutual recognition of professional qualifications."
In fact, over the last half year, Mainland authorities have introduced some measures to facilitate Hong Kong people to seek development and to live in the Greater Bay Area. Such measures include granting eligible Hong Kong residents national treatments in the education, health care, housing, employment and social security domains. The Mainland authorities have also responded positively to a request jointly raised by me and Ir Dr LO Wai-kwok, the representative of the engineering sector in the Legislative Council, as they have waived the restrictions on Hong Kong practitioners in bidding for construction works in the Mainland.
I urge the Government to keep on following up proactively on the implementation of the relevant measures and communicating closely with the trade people and professional bodies concerned. Moreover, the Government should the initiative to collate views and report the progress, help resolve the practical difficulties they face, continue pursuing with the Mainland more measures, including the tax arrangement which I have been advocating, to facilitate "Hong Kong people paying tax at Hong Kong tax rates".
The delegation visited some innovation and technology enterprises in the Greater Bay Area to listen to local governments' briefing on relevant development and policy measures. The conclusion reached by the delegation is that Hong Kong must maintain a sense of crisis to enhance its competitiveness, and it may also draw on experience from the Mainland, think with a different mindset and introduce new technology to the territory.
I hope the Special Administrative Region Government can sincerely listen to the relevant views. Both politically appointed officials and the civil service have to maintain a sense of crisis and adopt a new mindset. Adherence to norms, standard procedures and precedents is important and also a golden tradition of the Hong Kong Government and its civil service. To retain one's flexibility and adaptability, however, one should not be restricted by these rules and procedures, or else Hong Kong will always lag behind the Mainland by an increasing margin in terms of innovation, technology and smart city development.
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Some young people do not have an in depth understanding of the Greater Bay Area. In addition, many civil servants, including some middle to senior level civil servants, know little about the strategic significance, planning and construction as well as the latest development of the entire Greater Bay Area. They should go to visit the Mainland in person and conduct exchanges and liaisons with Guangdong officials who are no more than a river beyond. Otherwise, the relevant policies on the Greater Bay Area formulated or followed up by them will become detached from reality.
I urge the Civil Service Bureau and the Constitutional and Mainland Affairs Bureau to organize for civil servants at various levels more visits to and exchanges with the Greater Bay Area, encourage them to participate in relevant activities organized by external bodies and professional associations. And more importantly, they should be given extra leaves for taking part in the relevant visits so that they can spare their own annual leaves.
President, the China-United States trade war is going to make an impact on Hong Kong's economy. I hope the Government can proactively help Hong Kong's professional enterprises expand market in the Greater Bay Area, thereby creating more business opportunities and facilitating the continued forward development of Hong Kong's economy. President, I so submit.
MR CHAN CHUN-YING (in Cantonese): President, a joint delegation organized by four Legislative Council panels visited the Guangdong-Hong Kong-Macao Greater Bay Area ("the Greater Bay Area") in April this year, to learn about the latest development there and explore opportunities for Hong Kong. During the visit, what is most eye-opening to me is our first destination, the WeBank in Shenzhen.
(THE PRESIDENT'S DEPUTY, MS STARRY LEE, took the Chair)
Headquartered in Shenzhen, the WeBank is founded by renowned private enterprises which include Tencent, Baiyeyuan and the Liye Group, with a registered capital of RMB3 billion. The WeBank obtained an approval to operate from the regulatory body in December 2014, thus becoming the first LEGISLATIVE COUNCIL ― 12 December 2018 4281 privately operated bank and Internet bank on the Mainland. As at the end of last year, it had more than 60 million registered clients and an asset of RMB81.7 billion.
"Weilidai" is one of the loan products offered by the WeBank. Characterized by its inclusiveness and convenience, it is the first loan product on the Mainland whose entire operation, from application, approval to lending, is conducted online via the Internet. Weilidai's target clients are the Mainland general public who have slimmer chances to secure bank loans. As at the end of last year, it provided loans to more than 34 million people. Among Weilidai's primary loan clients, 78% of them have received tertiary education or below, 76% are non-white collar workers; and of the loan size involved, 92% are under RMB50,000.
Weilidai rides on two major social networking platforms provided by Tencent, with QQ and WeChat users forming the foundation of its clients. Combining the use of big data and biotechnologies such as facial recognition and voiceprint recognition, it is able to identify its clients accurately and averts the risk of fraud. Furthermore, security systems such as third party electronic authentication management, robot customer service, robot debt collection and data accessing are introduced to manage the risk associated with its all online operation. A client can obtain a loan in the range of RMB500 to RMB300,000 simply by providing his or her name, identity card number and phone number―similar to those required by a financial company in Hong Kong―without any guarantee, collateral, nor hard copy materials. The service primarily meets the needs of the general public, and particularly, the small sum consumption needs of some underprivileged people and the operational needs of small businesses.
Weilidai itself is a kind of revolving loan facility allowing flexible drawdown and repayment. Thanks to the in-depth use of the Internet and big data, it piggybacks on mobile device terminals for a 24x365 all-weather business operation. Basically, a loan can reach the account designated by a client in one minute. It is learned that the goal of the bank is to approve a loan in five seconds and have it delivered to an account rapidly within one minute. Its actual operation is even shorter and quicker: the loan approval can be done in as quickly as 0.4 second. This literally materializes the oft-quoted fantasy of completing bank loan procedures "in the blink of an eye".
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Contrary to the above, the conventional financial system in Hong Kong is better developed. There are more than 1 100 bank branches throughout the territory, spanning Hong Kong Island, Kowloon and the New Territories. As at the end of last year, five mobile branches were providing roving service to remote areas and certain public housing estates in Hong Kong, alongside 220 video teller machines installed in the territory. Meanwhile, conventional banks also offer online banking services. Therefore, Hong Kong people can use both physical and online banking services easily.
The Hong Kong Monetary Authority ("HKMA") has just finished updating the Guideline on Authorization of Virtual Banks. It has allegedly received applications from 29 local, foreign and Mainland financial institutions, technology and mobile payment corporations. As Hong Kong is a small place with a high concentration of banks, the operational challenges facing virtual banks in the territory are completely different from those in the other countries and areas.
Deputy President, financial inclusion is now actively promoted throughout the world with an aim to allow everyone an access to basic banking services. The WeBank uses technology in an innovative approach to provide convenient all-weather services for the general public, and especially the non-conventional bank clients. We have been deeply impressed by it. Meanwhile, intended operators of virtual banks in Hong Kong, management of conventional banks, and the regulatory body of Hong Kong banks HKMA should all vigorously consider how to use new technology and new thinking to take forward financial inclusion. Otherwise, our gap with the financial services in the Greater Bay Area will widen, which is adverse to the continued development of Hong Kong as a financial hub.
Deputy President, I so submit.
MR WONG TING-KWONG (in Cantonese): Deputy President, the Democratic Alliance for the Betterment and Progress of Hong Kong ("DAB") published last year a development planning proposal for Hong Kong in relation to the Guangdong-Hong Kong-Macao Greater Bay Area ("the Greater Bay Area"), expounding DAB's development conception and major suggestions with regard to the Greater Bay Area.
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We opine that Hong Kong is now facing two major problems, including a bottleneck in economic development and a high cost of living which renders the overall living quality of the people incompatible with Hong Kong's international status. The participation of Hong Kong in the development of the Greater Bay Area can help us break through the existing economic bottleneck and provide us with more diversified job opportunities, as well as allowing the people to enjoy a better living environment with higher quality.
Therefore, we hold that the development of the Greater Bay Area should be a comprehensive one encompassing six major macro positionings. First, it is among the most liberated, competitive and developmentally sustainable city clusters in the world. Second, it is a world-class base for the innovation and technology industry. Third, it is a world-class centre for modern service industry. Fourth, it is a world-class maritime and logistics hub. Fifth, it is one of the most vibrant and influential cultural centres. Sixth, it is one of the most liveable quality living spheres.
Given the time constraint, I can only put forth some major recommendations here. First, we suggest implementing 24-hour customs clearance in major ports in the future. Currently, among the many boundary control points in the three areas, only Lok Ma Chau Boundary Control Point and the Macau Ferry Terminal Control Point implement 24-hour customs clearance. There is no round-the-clock customs clearance at the other boundary control points. Cross-boundary activities are now getting increasingly frequent, and given the development of the Greater Bay Area, this trend is expected to grow further. The governments of Hong Kong and the Mainland should study the possibility of implementing 24-hour customs clearance at more major boundary control points, such as at the Shenzhen Bay Port.
Furthermore, customs clearance procedures should be streamlined. The entire process remains complicated and time-consuming despite the continued improvement of customs clearance efficiency at many boundary control points over the years. To dovetail with the development of the Greater Bay Area and to develop the flow of people and goods, the two places should consider streamlining customs clearance procedures of people and re-export goods at the ports. Such measures include implementing "co-location arrangement" at more boundary control points such as at the Lok Ma Chau Boundary Control Point and the Huanggang Port. They should also consider implementing joint inspection which allows customs clearance by the two places in one go to facilitate the increasingly hectic cross-boundary activities.
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Meanwhile, DAB is highly concerned about Mainland's amendment to the Individual Income Tax Law of the People's Republic of China, under which Hong Kong and Macao residents whose cumulative length of residency in the Mainland exceeds 183 days will be regarded as Mainland tax residents. All they earn, regardless of its source, will be subject to individual income tax. This will bring about a considerable impact on Hong Kong residents who work or reside on the Mainland.
To promote the development of the Greater Bay Area, we suggest the Special Administrative Region ("SAR") Government strive with the Central Government for the abolition of the foreign asset declaration registration system and the extension of the scope of exemption for individual income tax, so that the persons referred to under that stipulation need not pay individual income tax as long as the foreign earnings they make are unrelated to their work or properties on the Mainland, even when these earnings are paid by Mainland enterprises or individuals. Moreover, the arrangement for the avoidance of double taxation between the Mainland and Hong Kong should be improved to specify that foreign income earned by tax payers in Hong Kong are subject to the Hong Kong tax regime, and there is no need for them to pay individual income tax of the Mainland.
Deputy President, I have made some suggestions in financial development. They include jointly developing financial technology, making use of the research and practice in the big data, artificial intelligence, cloud computing and block chain domains to create a broadly accessible electronic payment system. This will build a widely applicable regional platform for lowering the transaction cost within the region and enhancing the operational efficiency of financial institutions and the industrial and commercial sectors to help these sectors develop a new growth model.
At the same time, we suggest attracting financial institutions to settle in Hong Kong and engage in relevant businesses such as financing, asset management and project risk management, so as to jointly build the Greater Bay Area into a world-class financing platform and asset management centre to further promote the mutual access of financial products, including insurance in Hong Kong.
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In addition, in view of the uncertain macro environment resulting from the China-United States trade conflict, the SAR Government must proactively develop new economic, trade and investment markets. Therefore, we must organize more Greater Bay Area study tours and exchanges for small and medium enterprises, start-up enterprises and young business starters to participate.
Culture is a vital interflow vehicle for livelihood, tourism, starting business and economic development. On cultural interflow, we suggest building a Lingnan cultural district to enhance the growth of unique cultural contents in the region, such as Cantonese, martial arts, operatic songs, story-singing, culinary skills and architecture, with a view to promoting them throughout the entire country and to the rest of the world. This will not only reinforce cultural identification within the region but also promote the development of economically valuable industries such as films, culinary skills, fashion design and so on (The buzzer sounded) …
DEPUTY PRESIDENT (in Cantonese): Mr WONG, your speaking time is up.
MR WONG TING-KWONG (in Cantonese): With these remarks, Deputy President, I support the motion.
MR WU CHI-WAI (in Cantonese): Hong Kong cannot shy away from the planning of the Guangdong-Hong Kong-Macao Greater Bay Area ("the Greater Bay Area"), because the Greater Bay Area planning and the preferential policies offered by various cities will affect the future economic direction of Hong Kong. Hence, we should have a very strong awareness or a sense of crisis. We must also map out strategies to avoid being caught up by other cities in the Greater Bay Area.
Nevertheless, it is very unfortunate that the Government of the Special Administrative Region ("SAR") and the pro-establishment camp, as we have noticed, only propose how to meet the need of Mainland cities in competing for talents, strive for concessionary measures provided by Mainland cities and encourage Hong Kong people to work in the Mainland. I reckon that this mindset of hoping to jump on the economic bandwagon of the Mainland and 4286 LEGISLATIVE COUNCIL ― 12 December 2018 meeting the needs of the Mainland, is unnecessary. Because if the development opportunities in the Mainland are better than those in Hong Kong, the Hong Kong people with capabilities will naturally go to work in the Mainland, and the Government needs not worry about that. Likewise, if the Mainland sees the needs and the advantages, it will also implement various preferential policies to attract Hong Kong people going to invest in the Mainland to help build the economy. The Government thus basically needs not worry about that.
Therefore, one of the observations of this delegation is that different cities are offering abundant subsidies to the research personnel in Hong Kong so as to attract talents and start-up enterprises to settle in the Mainland. In fact, it is very apparent that the elements of competition between Mainland cities and Hong Kong are now already on the table and these cities will not give way to us. Hence, if we only face the development of the Greater Bay Area with the mindset of jumping on the bandwagon or, to put it nicely, grasping the opportunities of the Greater Bay Area, once the development of the Greater Bay Area is successful while Hong Kong is still in void of any breakthrough, the economic strength of our neighbouring cities will be enhanced. At that time, while Hong Kong has to suffer from the sequelae of the brain drain, there is also a chance that Hong Kong's position will be replaced by its neighbouring cities. Should we ask ourselves frankly and consider seriously whether we have to be highly vigilant in facing the development of the Greater Bay Area?
Amid the trade war between China and the United States today, there is actually another level of meaning and I would like to share my feeling with Members. Apart from the trade war between China and the United States, the international community has also tightened control over the export of technologies to the Mainland. Therefore, the trade ties and cultural exchanges of the Mainland with the international community will encounter more difficulties. Under the circumstances, if Hong Kong is economically overly lopsided towards the Mainland and politically emphasizing "one country" over "two systems", Hong Kong will finally be dragged into the complicated international political situation and will be sacrificed in the contest among major countries. Under the circumstances, not to mention the role of Hong Kong as a "super-connector", but even our status as the centre of financial services, i.e. our core business, will also be affected. Should we need to feel worried about it?
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In fact, since Hong Kong was a colony, it has been accustomed to struggling for survival and grasping the opportunities in the conflicts among major countries, with a view to realizing the geographical and political values peculiar to Hong Kong. As Members may recall, even during the Cultural Revolution, the riots of 1967 or the ultra-leftist period, some leftists asked for liberalization of Hong Kong, but back then, the Central Government also understood that the role of Hong Kong had to be planned in the long run and be fully utilized. It is precisely due to its values that Hong Kong can survive in the gaps. Hence, under the environment today, the Hong Kong Government or certain people should properly reflect on whether it is really beneficial to Hong Kong or the country if they insist on stating political stance on every issue and emphasizing "one country" over "two systems". Hence, apart from bringing "one country, two systems" back onto the right track, the Government should also adjust its economic strategies. In the development of the Greater Bay Area, it should place more emphasis on autonomy, attract talents from places all over the globe, and enhance the economic strength and competitiveness of Hong Kong.
Hong Kong always compares its society with Singapore. But in fact, the Singapore Government is exactly playing this role of gaining advantages from both sides. This is the great power politics. People often say that a weak nation has little diplomatic leverage. Under this background, it will look for the room for survival very carefully in the gaps. As we can see, the entire strategy of the Singapore Government towards the ASEAN, the Mainland and even the western society is that it will not stake all its economic strength only on a certain aspect or area. Instead, it would want to expand its room of development through striking a balance.
Amid the looming trade war, we also see where the crises are, and it is more appropriate for Hong Kong to learn from the strategy of Singapore. Hong Kong, under "one country, two systems" and with the role and positioning comparable to some small and weak countries, should seriously consider how to identify its room for survival, development conditions and development opportunities in the contest among major countries. Therefore, I think Hong Kong should even follow the strategy of Singapore of being less dependent on the economy of a particular place. Instead, through different social strata, we should step up cooperation with the international community and safeguard "one country, two systems" with practical actions, so that the international community and all trading partners will have more confidence in Hong Kong. In this way, 4288 LEGISLATIVE COUNCIL ― 12 December 2018 we will be able to find our own development opportunities in the gaps and our unique status through winning advantages from both sides, and continue maintaining Hong Kong's role as an open trade window. This will be genuinely beneficial to both Hong Kong and the country.
At the Legislative Council meeting last week, I raised a question about Hong Kong as a separate customs area. My question back then was actually very pragmatic, and I only wanted to ask the Government whether it had made the worst assessment and the best preparations. I highly believe that facing the trade war between China and the United States, the Hong Kong Government should also take this pragmatic attitude in assessing and responding to the political and other economic problems that it has to tackle. Hence, if the SAR Government is still only concerned about stating its political stance of closely following the central authorities, while criticizing opposing views as political hype without reflecting on what it has done, its indication of political stance will only deepen the wounds of Hong Kong, and I believe that Hong Kong will have to meet greater difficulties.
Finally, in the planning of the Greater Bay Area, Hong Kong should be more proactive in mapping out strategies to enhance Hong Kong's economic strength, instead of grasping national policies simply with the mindset of climbing on the bandwagon. Otherwise, Hong Kong will lose its unique international status together with (The buzzer sounded) … its role as an economic powerhouse in the region.
DEPUTY PRESIDENT (in Cantonese): Mr WU, your speaking time is up.
MR MA FUNG-KWOK (in Cantonese): Deputy President, I thank Mr Jeffrey LAM for moving this motion to give this Council a chance to discuss issues relating to our duty visit to the Guangdong-Hong Kong-Macao Greater Bay Area ("the Greater Bay Area"). As a member of the joint-Panel delegation, the motion has my full support.
The joint-Panel delegation visited five cities in the Greater Bay Area this time to gain knowledge of the latest economic and technological development of the country, understand the application of high-end technology and the concept of LEGISLATIVE COUNCIL ― 12 December 2018 4289 smart city in the Greater Bay Area, and meet with young people from Hong Kong who have started their own businesses in the Greater Bay Area. I wish to give my recognition here to the meaning of the duty visit.
I think the most impressive part of the duty visit is our visit to the China Spallation Neutron Source facility in Dongguan, which is a really eye-opening experience to me. Being an important frontier science base of the country, the facility covers an area of 68 hectares. The construction of the project commenced in 2011 after a decision was made on its development in 2005, and it has taken only 13 years for the entire process to complete when the facility was commissioned in 2018. This has proved that Hong Kong can never compare with the Mainland in terms of the efficiency of infrastructural development, because it is simply a comparison between steam locomotive and high-speed rail.
As we all know, Hong Kong has been suffering from an inherent shortage of land, and we can only sigh in disappointment as far as the development of similar projects is concerned. Nevertheless, we should not be too pessimistic because through regional cooperation, Hong Kong can always take the initiative to put forward its proposals to other municipalities in the Greater Bay Area. If we can adopt an open-minded attitude to sincerely cooperate with other Greater Bay Area cities with a view to achieving complementarity, I am sure that these are important development opportunities for the high-end technology sector of Hong Kong.
Deputy President, the duty visit was originally initiated by the Panel on Economic Development and the Panel on Financial Affairs, and it has therefore focused on such areas as economy, technology and finance, without covering other aspects of development in the Greater Bay Area, such as livelihood issues, education, culture and sports and health care. It should indeed give no cause for criticism, but I would like to point out that cultural development actually plays a very important part in the development of the Greater Bay Area.
The nine municipalities and two Special Administrative Regions in the Greater Bay Area share the same root of Lingnan culture development, but each has its own characteristics. Among them, there are international financial centres where Chinese and Western cultures meet, centres of high technology industries, commercial development, service industry and industrialization, as well as historical and cultural cities with tourism and entertainment industries as their core businesses, and even coastal cities with local characteristics. I believe 4290 LEGISLATIVE COUNCIL ― 12 December 2018 that given the cognateness and diversification of their systems and culture, much vigour can be instilled into creative industries to benefit various trades and sectors, while cultural inclusion is the social atmosphere needed to foster people-to-people bond.
In this connection, I would like to point out that the resources committed by the SAR Government are far inadequate for promoting local culture and arts to tie in with the development of the Greater Bay Area. The Government has announced in the Budget this year that $140 million would be provided in the coming five years to support local arts groups and artists for cultural exchanges and performances in the Greater Bay Area, but the amount offered is far from enough. It even pales in comparison with the resources devoted to the cultural aspects in recent years by other cities in the Greater Bay Area such as Zhuhai, Shenzhen, Zhongshan and Foshan.
There is still much room for our improvement as far as specific policies are concerned. For example, we should examine how we can achieve the objective of smooth clearance for arts groups and artists, thereby facilitating the flow of arts personnel. With regard to sports development, I was given a chance to visit Zhuhai lately, and was greatly impressed by a project to develop the sports of tennis in the place. Zhuhai is not only equipped with perfect venues for competition purpose but also large-scale training grounds covering a big area. It is therefore my hope that the SAR Government will continue to work hard on making long-term planning for the cultural, arts and sports development of Hong Kong, and keep working actively on integrated development in the Greater Bay Area.
Deputy President, the development plan for a city cluster in the Greater Bay Area is a major strategic planning in the overall development plan of the country. Members of this Council should participate in visits and exchanges to gain first-hand understanding of the latest development of the country in various aspects, and join hands in looking for opportunities and offering suggestions and advice for the development of Hong Kong. I think the joint-Panel delegation has set a very good example this time for other committees of the Legislative Council to organize more duty visits of a similar nature to get a better understanding of the latest development in the Greater Bay Area in such areas as livelihood issues, culture, arts, education and health care.
Deputy President, I so submit.
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MR LUK CHUNG-HUNG (in Cantonese): Deputy President, I have been thinking about this subject and how to make the public recognize the opportunities in the Greater Bay Area so that they can have a sense of ownership and happiness which is tangible and touchable.
It has been 40 years since the reform and opening up of our country. The circumstances have been changing. In the past, when we talked about the Greater Bay Area, it was about Shenzhen and Zhuhai that many Hong Kong people visited. Businessmen from Hong Kong set up their factories there for the low labour cost. They visited the eateries at Dongmen district because it was good value for money. They went to the Shucheng (Book City) to buy loads of books costing just a few dollars each. They went to the Luo Hu Commercial City to buy cheap products. But time has changed. The Mainland has undergone rapid development. Nowadays, young people go to popular places in our neighbouring city Shenzhen to have high tea and take selfie photos. The innovation and technology ("I&T") and new infrastructures are new to Hong Kong people. Even people who frequently visit Shenzhen feel that they cannot catch up with the tempo of the place. The GDP of Shenzhen has now exceeded that of Hong Kong.
The development of the Greater Bay Area is the first important project under the two major national strategies of "Reform and Opening Up 2.0" and "Made in China 2025". I have been thinking why our country has come up with this idea of the Greater Bay Area. In fact, every city has its own limitation or its industries will have their limitation due to the geography, history and policy of the city. To achieve greatest efficiency, the cities in the Greater Bay Area have to cooperate like brothers for complementarity of strengths and inadequacies to facilitate people, logistics and capital flows.
Hong Kong has been playing the role of "super-connector", whether internally or externally. We hope that Hong Kong can play this role in the Greater Bay Area as well. To many people, the Greater Bay Area is a place that seems so close and yet so distant. How should we dispel this sense of distance? The Hong Kong Federation of Trade Unions ("FTU") made a visit to Vice-Premier HAN Zheng in Beijing at the end of September and expressed our views to him. Due to the limited time, I will only talk about three points.
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First, it is about Hong Kong people taking out social security schemes in the Mainland. This includes allowing Hong Kong people to enjoy the same treatment of Mainland citizens and letting them maintain their social security contributions in the Mainland after an employment relationship with a Mainland enterprise ends and retrieve the returns after completing 15 years of contribution. Next is health care, which is very important if Hong Kong people wish to develop their career or live in the Mainland. We hope that Hong Kong people can be given treatment of national health institutes and be allowed to participate in the basic health care insurance at city and town level. Like our elderly residing in the Mainland, we can make reference to the successful experience of the University of Hong Kong-Shenzhen Hospital and expand the usage of the Health Care Vouchers to cover Grade A hospitals in the Greater Bay Area to help them seek medical consultation.
Second, we hope that the procedures for Hong Kong people making various Mainland applications with our Hong Kong Re-entry Permit ("Re-entry Permit") can be simplified. We hope that our Re-entry Permit can be added into the identity recognition system under the Mainland digital network so that we can use our Re-entry Permit as our identity card in the Mainland to make various applications that require real name registration, such as opening a bank account and buying transport tickets; and that the requirement of providing residence proof for opening Mainland bank accounts can be waived for Hong Kong people. It is now very troublesome for us to open e-purse accounts in the Mainland because we cannot open a bank account there. Also, different banks may have different standards for opening accounts with them.
Third, more and more transport infrastructures connecting to the Mainland have come or will come into operation, such as the Hong Kong-Zhuhai-Macao Bridge, the Liantang/Heung Yuen Wai Boundary Control Point to be open soon and the comprehensive network of superhighways in the Mainland. Many motorists are very interested in taking self-drive tours or commuting between the two places by driving. At present, there are many limitations on applying driving licences of the two places and the fees are expensive as well. A short-term driving licence is inconvenient for motorists and the fee is high. As such, can the Government simplify the application procedures or substantially lower the fees to facilitate Hong Kong residents driving to the Mainland?
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Another even more practical issue is that many Hong Kong people wish to stay in Hong Kong for a living. They are born and brought up here. Hence, we must, more than ever, strengthen the attractiveness and competitiveness of Hong Kong. The edges of Hong Kong lie in our global connections, the sound legal system, protection of intellectual property, the free flow of information, the independent taxation system, etc. We have superb universities. But then why can we not successfully develop I&T here? Even WANG Tao, the founder of DJI Innovations who studied in a university in Hong Kong chose not to develop his business in Hong Kong.
I think we must work extra hard and catch up on three fronts. The first is on financial supports. The Government has set a target to increase its expenditures on research and development ("R&D") to 1.5% of our GDP by 2022. But this percentage is still far behind the 4.1% of Shenzhen. FTU holds that the percentage should at least be increased to 2%, since financial support is indispensable if we want to vigorously develop R&D. The second front is on land. The Government should expedite the works of the Hong Kong-Shenzhen Innovation and Technology Park ("I&T Park") in the Lok Ma Chau Loop, which covers 87 hectares of land. Start-ups need land to develop their businesses and the I&T Park will provide office space for them at concessionary rents. Meanwhile, the Government should also expedite the provision of other types of land. The third is on STEM education. This can foster the interest of young people in technologies, creativity and mathematics and strengthen their capacities, especially in innovation, to meet the needs of different industries in the future.
Actually, what matters is that the new industries can change our reliance on finance and property development in the past and create more quality employment opportunities and development leeway for Hong Kong. Let me cite a line of the theme song on the Greater Bay Area. Its English translation reads: Open your heart to a bigger world; you can embrace the view in front of you. At the 40th anniversary of the reform and opening up of our country, we (including Hong Kong people) need to open up not only our economy (The buzzer sounded) … but also our heart to embrace the development opportunities of the Bay Area. Thank you, Deputy President.
DEPUTY PRESIDENT (in Cantonese): Mr LUK, your speaking time is up.
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IR DR LO WAI-KWOK (in Cantonese): Deputy President, first of all, I thank Mr Jeffrey LAM, the leader of the delegation to the Guangdong-Hong Kong-Macao Greater Bay Area ("the Greater Bay Area") for moving this motion.
Deputy President, Hong Kong is seriously short of land for development and usage. Our industry chain is weak. As an externally-oriented economy, Hong Kong will face many challenges in the future. Apart from the intense competition brought by economic globalization, we also have to deal with different uncertainties of the external economic environment, such as the revival of trade protectionism, the worsening of the China-United States trade war, the debut of an upward interest rates cycle of the United States, etc. Thus, Hong Kong must remain vigilant in peacetime and develop a high value-added and diversified economy to enhance our overall competitiveness and actively take forward regional cooperation. The "one country, two systems" implemented in Hong Kong gives us a privileged position to provide the country with what it needs, which are also what we are good at. We can thus fully capitalize on the Belt and Road Initiative of our country and the development opportunity of the Greater Bay Area to give fresh impetus for our future economic development.
Deputy President, since the 1980s of the last century I have taken part in the establishment and operation of joint ventures in the Pearl River Delta ("PRD") region and witnessed the rapid development of the PRD cities under the reform and opening up of our country, and also witnessed how Hong Kong contributed to and benefited from this enormous regional cooperation. However, the idea of the Greater Bay Area was not yet in existence at that time and now this new development strategy of our country will bring new opportunities to this region and elevate its development to a higher level.
The Greater Bay Area covers nine adjoining cities in PRD and the two Special Administrative Regions of Hong Kong and Macao. It occupies less than 1% of the land area of our country and accounts for about 5% of the population only, but it has made up 12% of the aggregate economic volume, making it one of the four major bay areas in the world. The Greater Bay Area initiative is already on the agenda of national planning. If we compare the development potential of the Greater Bay Area with those of Tokyo Bay, San Francisco Bay and New York Bay, we will find that the Greater Bay Area tops the rest of the bay areas in terms of regional area, total population, port container throughput and airport passenger throughput. Its Gross Domestic Product ("GDP") and per capita GDP are about to catch up with the rest.
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Deputy President, seeing is believing. The best way to understand the development potential of the Greater Bay Area is to make a site visit. A joint-Panel delegation of the Legislative Council made a three-day visit from 20 to 22 April to Guangzhou, Shenzhen, Foshan, Dongguan and Zhongshan. The delegation was made up of 32 Members of different political parties and groups. The itinerary was packed with programmes. Apart from meetings and exchanges with local government officials, the delegation also visited high-tech corporations and start-ups of special characteristics. For example, the delegation visited the Qianhai Weizhong Bank in Shenzhen. It is the first privately-own bank and the first Internet-only bank on the Mainland. The delegation also visited the Bantian Headquarters of Huawei Technologies Co., Ltd. to learn about how innovation and technology ("I&T") is applied to promote the development of a smart city, including transportation, education, everyday waste management, health care, etc.
The China Spallation Neutron Source facility in Dongguan is the most impressive to me. Spallation Neutron Source is a cutting-edge national scientific facility, which were only found in the United States, the United Kingdom and Japan in the past. The facility is likened to a super microscope for studying the microstructures of materials. It can be used to study the structure and functions of different materials, as well as for materials science, life science, etc. This cutting-edge R&D facility involving an investment of RMB2.3 billion provides free services for other tertiary institutions, R&D institutions and technology enterprises. Some universities and research institutes are now working on potential cooperative projects with the facility. The State has chosen to locate the facility in Dongguan to show its strong support to the high technology development in the Greater Bay Area.
Deputy President, Hong Kong can play a vital role in the development of the Greater Bay Area. With the convergence of people, products, capital, information and services here in Hong Kong, we can serve as a platform for the Greater Bay Area to raise fund, seek high-end professional services, develop emerging industries and facilitate business and trade to achieve the synergy of "one plus one greater than two". Our professional services on engineering, construction, environmental protection, finance, law, testing and certification, trade and industry and I&T are of international standards with competitive edges.
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The future holds a mix of challenges and opportunities. Given that Hong Kong's system is different from the Mainland's, the industries that have tried to develop northward have run into a situation in which "large doors are open but small doors are closed". I have resorted to different platforms to repeatedly urge various ministries and institutions under the Central Authorities to strengthen communication with the local governments so that the obstacles can be removed and more support can be provided for related industries in the Greater Bay Area. In the Legislative Council meeting on 31 May, I moved an amendment to a Member's motion on "Strengthening regional collaboration and jointly building the Guangdong-Hong Kong-Macao Bay Area" and secured the support of Members for its passage. The amendment mainly highlights the need for various parties to actively promote the coordination and integration of the capital, talent, I&T and industry chains in the Greater Bay Area to jointly develop the Greater Bay Area into a first-class international bay area and a world-class city cluster, thereby providing opportunities for the new generation to move upward.
Deputy President, I so submit.
MR CHRISTOPHER CHEUNG (in Cantonese): Deputy President, Mr Jeffrey LAM, in his capacity as the leader of a joint delegation of four panels, including the Panel on Financial Affairs currently chaired by me, led a duty visit to five cities of the Guangdong-Hong Kong-Macao Greater Bay Area ("the Greater Bay Area") in April this year. This visit has given Legislative Council Members from various political parties and groupings an opportunity to have first-hand information about the rapid development of the Greater Bay Area, particularly the gradual rise of the high technology industries which have found their footing and established their bases in the area. Indeed, this is meaningful and has given us profound insight into the ways in which Hong Kong can fit into the development blueprint of the Greater Bay Area.
During the visit, we witnessed intelligent passenger-carrying aerial vehicles evolving from drones and visited an Internet-only bank, the China Spallation Neutron Source, the headquarters of smart mobile phones, and a manufacturing centre of robots. It was an eye-opening experience for us to see the application of cutting-edge technologies in each of them developing towards innovation and technology ("I&T") and creative industries. Another example is Dongguan, a place that we are familiar with. As a manufacturing base in the past, it is now transforming into a centre for developing high technologies. What is more, the LEGISLATIVE COUNCIL ― 12 December 2018 4297 entire I&T market in the Greater Bay Area is open. As long as people are creative, full of ideas, knowledgeable in technologies and daring to invest in I&T, they can go to the Greater Bay Area to develop their careers.
Therefore, I fully support developing Hong Kong into an international I&T centre as the Chief Executive proposed in the Policy Address. Besides, the SAR Government has earmarked HK$50 billion in this year's Budget for promoting I&T, with the focus on developing four major I&T areas, namely, biotechnology, artificial intelligence, smart city and financial technologies ("fintech"). Such move precisely ties in with the development of other cities in the Greater Bay Area to achieve synergy effects.
As an international financial centre, Hong Kong must catch up with the prevailing trend by exploiting I&T to facilitate financial development and develop online certification for account opening, online banking, blockchain transactions, mobile payments or cross-boundary payment platforms to keep abreast of the times. Meanwhile, the Greater Bay Area has got some significant results and experience in the development of fintech. The development of online banking, for example, is an area from which we may draw lessons.
In my view, with our advantages in financial development, Hong Kong can achieve complementarity with the Greater Bay Area city cluster to enlarge and strengthen the innovative enterprises in the Greater Bay Area city cluster as we have a mature and top-class financial services centre, which is essential for the success of bay areas around the world. Hong Kong possesses an excellent system and professional talents in various fields and has accumulated considerable experience in communicating with the international community over the years. Given our time-tested, open and robust financial infrastructure, we can make some contribution in helping Greater Bay Area enterprises to get listed and secure financing in Hong Kong or to go global.
As regards the relevant enterprises, they can take advantage of the various financial services available in Hong Kong and establish treasury centres here to help themselves go international, and, at the same time, centralize the management of their various wealth management tools for cost reduction and higher efficiency.
Furthermore, being the freest and most open economy in the world, Hong Kong not only functions as the financial, trading, shipping, and information hub in the Asia-Pacific Region and maintains a strategic position in the region, it is 4298 LEGISLATIVE COUNCIL ― 12 December 2018 also regarded by multinational enterprises as the most preferred location for their regional headquarters. This exactly tallies with our role as a treasury centre to bring about synergy.
I firmly believe that the only way to stay with the future development trend and serve the mutual interests between Hong Kong and the Greater Bay Area is to create a platform for financial cooperation in the Greater Bay Area, with Hong Kong giving full play to its role as an offshore RMB business centre and providing the Greater Bay Area with various cross-boundary RMB services as well as extensive financial services.
Deputy President, in the financial aspect, the integration of Hong Kong and the Greater Bay Area should be able to forge a new path for the future of small and medium securities dealers. Considering the gradual improvement in the living standard of Greater Bay Area residents, there will be considerable demand for investment and asset management. If the small and medium securities dealers in Hong Kong can make timely transformation and endeavour to develop asset management services, they will be able to cater to the needs of this group of investors, and concurrently, bring new development opportunities for their business.
Moreover, if we wish to maintain our status as the leading financial centre in the Greater Bay Area, we need not only to step up financial innovations, but also to attach importance to network safety and protection of customers' privacy. The Government should examine ways to plug the legal loopholes and impose heavier penalties to prevent the recurrence of massive leak of customer data and preserve Hong Kong's reputation, thereby resuming people's confidence in Hong Kong's system. With the growing use of financial technologies, effective protection of customers' privacy has attracted increasing attention. If customers lose their confidence, Hong Kong's advantages will be adversely affected.
Finally, I hope that non-establishment Members will properly … I mean, just like the visit on this occasion, we should argue less about politics and do more actual work, offering suggestions about Hong Kong's participation in developing the Greater Bay Area together, and striving for a better quality of living for Hong Kong's next generation.
With these remarks, Deputy President, I support the motion.
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MS YUNG HOI-YAN (in Cantonese): Deputy President, early this year, I had the opportunity to visit five cities of the Guangdong-Hong Kong-Macao Greater Bay Area ("the Greater Bay Area"), namely Guangzhou, Shenzhen, Foshan, Dongguan and Zhongshan, together with other Legislative Council Members in the joint-Panel delegation for a three-day duty visit. During the whole journey, I had the opportunity to exchange views with the municipal governments and different innovation and technology ("I&T") enterprises, and I also had a ride with Mr Christopher CHEUNG, who just spoke, in a passenger drone. All these made me feel that I had become an ambassador, and the effect was quite desirable.
Besides, I also had the opportunity to exchange views with the young people from Hong Kong who started their businesses in the Mainland. It allowed me to have more direct and deeper understanding of the I&T development in the Mainland in recent years. This duty visit is highly meaningful to me and I would like to take this opportunity to thank the staff of the Legislative Council Secretariat and the President for the detailed arrangement. In my view, it is more than a study tour; it is a chance for us to share with the public and the young people in Hong Kong the experience and knowledge that we had and learned during the visit.
On the SAR Establishment Day (1 July) last year, the National Development and Reform Commission signed with the Governments of Hong Kong, Guangdong and Macao the Framework Agreement on Deepening Guangdong-Hong Kong-Macao Cooperation in the Development of the Bay Area, in which the unique advantages and roles of Hong Kong are mentioned. This Framework Agreement reaffirms Hong Kong's status as an international financial, transportation and trade centre; encourages us to strengthen our status as a global offshore renminbi business hub and our function as an international asset management centre; and promotes the development of Hong Kong's professional services and I&T industries as well as the establishment of a centre for international legal and dispute resolution services in the Asia-Pacific Region.
Following the commissioning of the Guangzhou-Shenzhen-Hong Kong Express Rail Link and the Hong Kong-Zhuhai-Macao Bridge, travelling between Hong Kong and other cities in the Greater Bay Area becomes more speedy and convenient. This helps to bring about closer exchanges of talents, funding and information among regions, thus boosting regional development in the economy, society and the livelihood of people and bringing more development opportunities 4300 LEGISLATIVE COUNCIL ― 12 December 2018 for the young people and professionals of Hong Kong. In fact, according to the young people working in those Mainland cities, the Greater Bay Area cities and Hong Kong are geographically located within the "one-hour living circle", and the solid industrial foundation of those cities can help realize the commercialization and marketization of the results of local scientific researches. Besides, the housing price and office rental levels in the Mainland are lower than those of Hong Kong. Together with the various supportive measures introduced by the Government to facilitate start-up businesses, their financial pressure has been much alleviated, and the shortfall of Hong Kong in this respect can also be rectified.
The Greater Bay Area has a mega-scale economic market with US$1,400 billion in economic aggregates. Its population and economic scale are gradually on a par with other international bay areas and economies. Hong Kong should grasp the development opportunities properly so that the enterprises and the public can understand and benefit from the advantages brought by the development of the Greater Bay Area.
Deputy President, I think the key to Hong Kong's development in the Greater Bay Area lies in the complementarity of talents. As highlighted in some studies, the Guangdong Province is now facing a lack of professionals in various aspects. For instance, in the course of turning into an international commercial centre, Guangzhou lacks over 500 000 professionals in various aspects, such as international laws, logistics and business management, thus forming a bottleneck in its development. Nevertheless, Hong Kong possesses a large number of professionals, including accountants, lawyers and economic analysts, who are professional talents with international vision. If the Government takes the lead in promoting the Hong Kong industries with competitive edge and our professional services to the government departments and enterprises within the Greater Bay Area to facilitate talents matching and cooperation among enterprises, improving the system for mutual recognition of professional qualifications between Hong Kong and the Mainland, and extending the scope of mutual recognition of professional qualifications so that more professionals can develop their businesses in the Greater Bay Area, I believe that a lot of employment and development opportunities can be brought to the young professionals in Hong Kong.
On the other hand, although Hong Kong enjoys unique edges in financial and professional services, it is undeniable that the future global competition will focus on the innovation and application of science and technology. In the past, LEGISLATIVE COUNCIL ― 12 December 2018 4301 however, Hong Kong seemed to have failed in systematic long-term planning on I&T development. As a result, the Hong Kong I&T market is in lack of scale and it is also difficult to turn the results of local scientific researches into merchandize. We can make a comparison with our neighbouring city, Shenzhen. Last year, Shenzhen injected over RMB90 billion in the research and development ("R&D") of science and technology, four times that of Hong Kong in terms of percentage in Gross Domestic Product ("GDP"). It is comparable to other developed countries and is progressing faster and farther than Hong Kong.
Through in-depth collaboration with the Greater Bay Area, Hong Kong can cooperate with Shenzhen, which attaches importance to scientific research, and other cities within the Greater Bay Area. On the one hand, leveraging on our advantage in the protection of intellectual property rights, Hong Kong can encourage Mainland enterprises to set up their R&D departments in Hong Kong and assist them in the exploration of overseas markets. On the other hand, Hong Kong can provide a larger room of development for the young people who aspire to join the I&T industries so that they can have more diversified pathways in future.
Deputy President, in my opinion, in order to maximize the social and economic benefits brought to Hong Kong by the development of the Greater Bay Area, apart from stepping up multilateral cooperation, the Hong Kong Government should also adopt more measures to facilitate the development of Hong Kong people in the Greater Bay Area. Even though Hong Kong residents can now apply for the residence permits in the Mainland, the permits are only applicable to those people who spend most of their time in the Mainland. Some business, scientific research and teaching personnel holding Home Visit Permits still find it inconvenient to travel between Hong Kong and the Mainland. In this regard, I hope that the Government can provide them with assistance.
Besides, the Government can also consider building a big data database and a pool of talents related to the Greater Bay Area to assist Hong Kong professionals in understanding the room and range of investment or development in different districts, to enhance the business environment in different regions, and to facilitate the entry of Hong Kong professionals and enterprises in the Greater Bay Area market for exploring new business opportunities.
Deputy President, I so submit.
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DR PRISCILLA LEUNG (in Cantonese): Deputy President, I wish to thank Mr Jeffrey LAM for moving the motion debate on the report on the duty visit to the Guangdong-Hong Kong-Macao Greater Bay Area ("the Greater Bay Area"). This has given Members an opportunity to share their views. I believe Members have all got some experience and observations concerning the Greater Bay Area.
I wish to take the opportunity today to talk about my views. I, together with some professional services practitioners, raised certain views with the relevant Mainland departments in charge of the development of the Greater Bay Area in June. First, we proposed to materialize cross-border capital flow for high technology, and we also expressed the hope that this arrangement could be expanded to areas such as environmental protection, health care and, especially, human sciences. I must point out one thing. I have taught law subjects mainly in university over all these years, and I have come to know many students who have graduated for many years or fresh graduates. I have found that people seem to have attached much less importance to human sciences than high technology when it comes to the overall development of the Greater Bay Area.
I think that now is an opportunity. Hong Kong may hold discussions with the Mainland Government (especially the Governments of various Greater Bay Area cities) on adopting high technology in teaching those subjects which are considered to be tradition-related and boring in Hong Kong all along, such as historical studies, anthropology, legal studies, Chinese culture and language, social sciences and classical literature. For instance, as Members all know, many young students in Hong Kong lack a firm grasp of history. If four- or five-dimensional museums equipped with high technologies can be set up for people to visit, then people can get a feel for who those Chinese or western historical figures were. I think that Hong Kong can achieve the function of combining ancient culture and new technology with the adoption of high technologies in teaching human sciences subjects. In this regard, I hope the Government can strive for its actualization on our behalf. I think it will be our major contribution if Hong Kong can enable the Chinese culture to reach the Greater Bay Area more deeply by exporting high technologies and absorbing the high and new technologies developed by the Mainland.
Second, I hope the Government can use the Greater Bay Area platform for assisting the environmental industry in fighting for more resources, such as conducting studies on seawater desalination technologies. I am a frequent LEGISLATIVE COUNCIL ― 12 December 2018 4303 visitor to Zhaoqing, Shenzhen, Zhuhai and Guangzhou. Let me talk about Zhaoqing, a city farthest away from us among them. Various cities in the Greater Bay Area have their unique features. In the case of Zhaoqing, for example, its natural resources are rich, and it has received many cultural heritage awards. These days, the Zhaoqing authorities have endeavoured to develop the city into a biopharmaceutical centre, and they welcome young people who want to start up their business there. This is a feature of Zhaoqing. Young people or others in Hong Kong who want to start up their business there should understand their local features.
Shenzhen is a centre for high technology and advanced technology. For example, WANG Tao, a drone system developer who graduated from The Hong Kong University of Science and Technology, has likewise moved to Shenzhen to seek development there. At this point of my speech, I must also ask one question in passing. Why do people say that Hong Kong lags behind others in competitiveness? I know two doctoral graduates. One of them is a graduate of the Department of Computer Science and Engineering in The Chinese University of Hong Kong, and the other is a graduate of the School of Law to which I belong. But the two of them, a combination of the arts and sciences streams, were unable to start their business in Hong Kong. Nevertheless, they were given funding by Shenzhen. These days, various cities will offer funding, including Zhaoqing, as long as a concept is valuable one way or another. In just half a year, $3 million for each of them already reached their hands. They were totally given $6 million for developing their start-up. Within two years, their staff size has expanded from 4 employees to some 50 employees today, and the market value of their company is over $100 million. This is what I mean by the direct provision of funding to compete for talents. Can Hong Kong compete with them?
I also feel a sense of helplessness sometimes. The Government has earmarked $50 billion for supporting innovation and technology development. But I have asked some people who intend to start their own business. I have been told that even if their applications are granted, the money simply cannot reach their hands. An inherent strength of Hong Kong is that it has put in place a comprehensive bureaucratic system. But officials are slow in action because they are afraid of making mistakes. They have already materialized their concepts in other places, but the funding from the Hong Kong authorities has still not reached their hands. In my view, the authorities should actively consider 4304 LEGISLATIVE COUNCIL ― 12 December 2018 ways to expedite the process in this regard, and to catch up with the Greater Bay Area when it comes to encouraging people to start up their business. The development of the Greater Bay Area will entail "nine plus two" cities. I hope that the Mainland will not overlook Hong Kong and Macao, and that Hong Kong should seek to maintain its competitiveness.
A policy proposal I put forth in June also covers the formulation of a policy on unconditional stay for overseas Chinese people in addition to overseas Hong Kong people. Actually, overseas Chinese people are often relatives of Hong Kong residents. Hong Kong residents may apply for a residence permit for Hong Kong, Macao and Taiwan residents. But can the Mainland learn from Hong Kong's practice and provide elderly people or young families with low-rent housing? Hong Kong residents who have started their own business on the Mainland usually have no housing problem because the nine Greater Bay Area cities will provide accommodation for entrepreneurs as long as their proposals are accepted. Nevertheless, can they also offer such ancillary measures to those elderly people who have moved to reside in the Mainland? What does this mean? Many people have asked, "The Greater Bay Area is such a large cake. How can I get a slice of it?" Apart from financial means, another factor is whether they have any intention to live there. "Live there" means living in the local community with their families, and this includes local schooling for their children. So, can local kindergartens admit the children of those high technology talents? A comfortable local life is very attractive to them. I am talking about support for families, rather than starting up business there alone.
In the case of professional services, such as legal services, is it possible for both places to standardize their instruments, so that everybody can follow the same set of rules? That way, both sides can follow the same basis with greater efficiency in using legal services, without having to resort to litigation on every matter. And, in the course of trade, we can provide professional services more efficiently. Besides, I also hope that arbitrators and mediators can be given more opportunities to play to their strengths.
I hope the Government can voice out our thoughts on various areas of cooperation more often for us.
I so submit.
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MR AU NOK-HIN (in Cantonese): Deputy President, let me talk about my opinions on the Guangdong-Hong Kong-Macao Greater Bay Area ("the Greater Bay Area") and take this opportunity to give a reply on Members' views.
I hope Members can read several articles written by Prof LUI Tai-lok, Vice President at The Education University of Hong Kong. Those articles expound on his concerns about the development of the Greater Bay Area. Generally speaking, one of his articles highlights three problems. Let me discuss them one by one.
(THE PRESIDENT resumed the Chair)
First, he thinks that without capital, talent and general population flows, it will be difficult to achieve genuine integration. Many people have argued right from the start that the Greater Bay Area must follow the examples of the San Francisco Bay Area and the New York metropolitan area in the United States, and also the Tokyo Bay Area in Japan. They think that its economy can thrive as long as it can learn from these bay areas. Members should not forget that the above countries are very similar to one another in intercity lifestyle, culture, system, the degree of speech freedom and also statutory protection for the community. But the differences among Hong Kong, Macao and other cities in the Greater Bay Area are honestly very huge, so much so that it is very difficult to convince people overnight that they do not have any major differences. Lifestyle is the most obvious example. Is it really so very easy to achieve the integration of various cities, just as Dr Priscilla LEUNG has asserted?
Statistics can explain everything. For instance, over 80% of the young people who have moved to work on Mainland China belong to the manager or executive category. Besides, those working people who have moved to work on Mainland China are on average over 40 years old or are even approaching 50 years old. Having learnt these statistics, I wonder how attractive Mainland China is to young people. I have never come across any young people who say that clerical positions in Mainland China are attractive or those who even think that moving to live in Mainland China just for the sake of a job opportunity has much appeal.
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Just now, I heard certain Members discuss the prospects of some industries. To sum up, I will say that their thoughts are founded on their "illusions about going northwards". They try to tell us that as long as Hong Kong's emerging industries (such as the innovation and technology industry) and financial industries can integrate into the Greater Bay Area, they will find opportunities everywhere. Prof LUI Tai-lok has severely criticized such arguments, dismissing them as "wishful thinking of Hong Kong talents characterized by egotism". What does this mean? He wonders whether Hong Kong is really so superior. Many people have argued that if people go northwards to the Mainland, they may find opportunities everywhere. But then, are the various cities in Mainland China really so thirsty for Hong Kong talents? A Mainland employer who is to choose between a Shenzhen university graduate and a Hong Kong university graduate may not necessarily think that the latter graduate will do better than the former one. As we still do not know the needs of the other side, how can they possibly convince Hong Kong people that they may find opportunities everywhere? Has it ever occurred to them that we are actually still unable to answer those questions about the competition and environment that young people (especially those from Hong Kong) may face after moving to Greater Bay Area cities and also other various specific questions, such as which industries will have good prospects and which will not? Promoting integration of Hong Kong and the Greater Bay Area on this very basis is actually an empty slogan.
Second, Prof LUI raises concern about specific work division. Should Hong Kong cooperate or compete with other cities in Mainland China? As I have heard, Members have said quite often that both places should jointly develop an industry chain. As far as my understanding goes, an industry chain means that one party is responsible for a certain part of a work process and another party is responsible for another, so as to achieve synergy. I seldom hear that various cities can tell us clearly about their strengths and agree on the work division arrangements in developing industries. I have instead seen that for competition purpose, many cities have embarked on the massive construction … Well, I think that later on, Members can tell whether we have dealt with infrastructural development properly. Members have stressed the necessity of constructing the Hong Kong-Zhuhai-Macao Bridge for better connection to other places. But I can also recall Members' discussion on the relevant matters. They actually know the answer only too well because some pro-establishment LEGISLATIVE COUNCIL ― 12 December 2018 4307
Members have told us that the Mainland is constructing the Shenzhen-Zhongshan Link. Various cities are actually competing with one another in infrastructural development. And they are also very sceptical of one another as they do not know whether their certain act will end up benefiting one side more than themselves. Have Members ever thought about the reason for all this?
The third question is the most important, and it is about how to deal with what we call "exceptions for Hong Kong" under "one country, two systems". What is meant by "exceptions for Hong Kong"? It is similar to some proposals put forth by the Democratic Alliance for the Betterment and Progress of Hong Kong some time ago. One example is taxation. They propose that the Mainland should exempt Hong Kong people from its personal income tax. As I always say, the case where "we offer the soy sauce while the other side offers the chicken" can never happen. Sometimes, one may need to return the favour. Besides, on the one hand, Members have argued that Hong Kong must maintain its position amidst the Sino-American trade conflicts. But on the other, they have also strongly advocated the necessity for integration. Are Members clear about Hong Kong's characteristics and its strengths among various cities? The blind promotion of integration will prevent us from seeing Hong Kong's features. This, in Kevin LAU's words, is a "strategic mistake".
I so submit.
MR CHU HOI-DICK (in Cantonese): President, the Italian novelist Italo CALVINO has written the novel The Cloven Viscount. The story talks about a viscount whose body was split by a bomb into two halves in a war. The right side of his body then became an evil man, a dictator while the left side became an altruistic man. It occurs to me from time to time that the Greater Bay Area is similar to what is described in this CALVINO novel. When we listen to and talk about the Greater Bay Area, the bulk of it is about industry, commerce, the economy and technology, just like what many Members talked about a moment ago. All these belong to the part which concerns commercial activities and money-making. It is really like the protagonist in CALVINO's novel: usually only one half is highlighted, as if the other half does not exist. I would like to use a fraction of the time at hand to give an account of "the other half" of the Greater Bay Area which I have heard of but have no chance to see.
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I have no idea if the delegation visited ShenZhen Jasic Technology when they were in that city. In May this year, a group of workers in this factory wanted to set up a union to safeguard their own rights. But they were assaulted by unidentified persons and then sacked by the employer. Students who later visited the factory in support of the workers were arrested by the Police. These incidents in fact have been reported in the news. SHEN Mengyu, a master's student of the Sun Yat-sen University, and YUE Xin, a graduate of the Peking University, have both gone missing until now.
Neither do I have any idea whether the delegation, when it was in Zhuhai, visited ZHEN Jianghua, a rights activist who has been detained in Zhuhai City No. 2 Detention Centre until now. Mr ZHEN, during the last decade, has been a supporter of various types of rights defending movements, giving support to people such as ZHAO Lianhai, founder of the "Home for Kidney Stone Babies", families of the detainees involved in the "709 Crackdown" and participants of the "Feminist Five" in 2015. He was arrested in September 2017 on suspicion of inciting subversion of state power and picking quarrels and provoking troubles and was put on trial in August this year. I am not sure how long a sentence he will face but according to news reports, the sentence can be as long as 15 years.
I wonder if the delegation went to the seaside at Yashan when it visited Jiangmen. After the departure of the Nobel Prize Laureate LIU Xiaobo, more than 20 Jiangmen residents took the initiative to hold a memorial service at Yashan. More than 10 of them were later arrested one after the other on the charge of picking quarrels and provoking troubles, including a factory owner coming from Sichuan, WEI Xiaobing. WEI opened a factory in Huizhou but the factory was closed down in August this year unfortunately, on the specious reason of having infringed rules relevant to building safety. But WEI knows the underlying reason too well: the authorities do not want him to have any foothold in Guangdong. He told reporters that his prolonged rights defending activities had brought trouble to his family and the Guangdong Provincial Government certainly did not want him to stay.
Lastly, I do not know if the delegation has inspected the Guangzhou Railway Station, the station visited by many. That railway station is definitely all-powerful now as it is equipped with an omni-percipient surveillance network. With that facial recognition system, faces of the passers-by would be LEGISLATIVE COUNCIL ― 12 December 2018 4309 instantaneously checked against a face database of political criminals or people under surveillance. Mr YU Qiyan, one of those 20-odd participants of the seaside memorial of LIU Xiaobo we talked about just now, has been so arrested with the help of the facial recognition technology at the Guangzhou Railway Station.
Indeed, I do welcome the Hong Kong Legislative Council, when acting on behalf of the Hong Kong people, go to learn the latest development of China and the Greater Bay Area. I do not mean to criticize colleagues who participated in the visit or inspection in April, as those places they toured are not taboo or forbidden places. But I do as well want to ask our colleagues why those incidents and people that I talked about earlier, those in Guangzhou, Zhuhai, Jiangmen or Shenzhen, have somehow become a taboo, forbidden to the Hong Kong people or even to the Hong Kong Legislative Council. It is often said that Hong Kong people ought to integrate into the Greater Bay Area. I think Secretary NIP does understand the fundamental obstacle is that Hong Kong people dislike having themselves cut into halves once they return to the Mainland, with only the halves which concern money-making and development survive and "the other halves" must be let go.
I so submit.
PRESIDENT (in Cantonese): Does any other Member wish to speak?
(No Member indicated a wish to speak)
SECRETARY FOR CONSTITUTIONAL AND MAINLAND AFFAIRS (in Cantonese): President, first of all, I would like to thank a total of 21 Members who have spoken in this motion debate and expressed their views in many different areas on the observations of the joint-Panel delegation in its duty visit to the Guangdong-Hong Kong-Macao Greater Bay Area ("the Greater Bay Area") in April this year, and on the development of the Greater Bay Area. I will try to provide an overall response, and my response basically consists of three parts: First, I will clarify or explain certain concepts. Second, I will elaborate on the 4310 LEGISLATIVE COUNCIL ― 12 December 2018 development opportunities arising from the development of the Greater Bay Area, and the key areas of work of the Government of the Special Administrative Region ("SAR"). Third, I want to focus my response on certain specific areas.
In regard to concepts, some Members aired their views in some aspects earlier. Firstly, as some Members mentioned, the Greater Bay Area is made up of nine cities in Guangdong Province as well as two SARs, namely Hong Kong and Macao. During the 21 years since Hong Kong's reunification, Hong Kong has been cooperating with Guangdong Province in various aspects. Then are there any new elements in the Greater Bay Area today? How is it different from the past? Some Members expressed concern over the integration. There may have different interpretations and explanations concerning the concept of integration. I think a more accurate interpretation is that integration is being promoted in the Greater Bay Area, which is actually made up of nine cities in Guangdong Province and two SARs, namely Hong Kong and Macao, under a regional development concept. Under this regional development concept, each city continues to rigorously develop its own competitiveness, enhance its development in the economic, livelihood and social aspects. But at the same time, being one of the most open regions with faster pace of development in the country, its development under the regional development concept will be beneficial not only to Hong Kong, but also to the development of the entire region and the country. Therefore, in order to attain the goal of regional development, in addition to cooperating with the cities in Guangdong Province or with Guangdong Province, Hong Kong also needs to seek policy breakthrough in different areas together with the related ministries and committees of the Central Authorities. Hence, it is important to have a group, being led by the Vice Premier, at the highest level to bring about and promote development. The Chief Executive, being one of the members of that leading group, is more than a member but can raise our views directly on the overall development of the Greater Bay Area. On the whole, we are pushing forward under the regional development concept.
Secondly, some Members are worried that the development of the Greater Bay Area will affect the principle of "one country, two systems" and the role of Hong Kong. Will the uniqueness of Hong Kong disappear? Will Hong Kong be no different from other Mainland cities? I understand their worries and concerns in this aspect, but we clearly know that the potential of the Greater Bay LEGISLATIVE COUNCIL ― 12 December 2018 4311
Area lies in "one country, two systems". Among the three regions of development in the country, the Greater Bay Area is the most open and has the most international connections, attributive to the principle of "one country, two systems" of Hong Kong. As President Xi pointed out in his meeting with the Hong Kong and Macao delegations in celebration of the 40th anniversary of the reform and opening up of our country last month, the development of the Greater Bay Area hinges on innovation. Hence, we must map out how to leverage the combined advantages of Guangdong, Hong Kong and Macao and create new systems and mechanisms within the framework of "one country, two systems" and the Basic Law, thereby facilitating the flow of key factors. The Greater Bay Area is established under the conditions of one country, two systems, three customs areas and three currencies. There is no precedent internationally, and we have to be bolder in our ventures and attempts with a view to opening up a new pathway. Both Hong Kong and Macao need to pay attention to enhancing our "inner capabilities" and strive to generate new impetus for economic growth. In fact, Premier LI Keqiang, in response to a question asked in the press conference for local and overseas media after the conclusion of the Two Sessions this year, also clearly said that notwithstanding the integration of Hong Kong economy into the overall development of the country, the Central Authorities still adhered to the principles of "one country, two systems", "Hong Kong people administering Hong Kong" and "a high degree of autonomy". The Mainland and Hong Kong and Macao, under "one country, two systems", would all capitalize on our own edges to complement each other for the development of new areas of growth. Therefore, the integration of Hong Kong into the development of the Greater Bay Area will actually enrich the implementation of "one country, two systems".
Besides, some Members are worried that the Greater Bay Area development will be a top-down planning exercise, and that we will be totally passive. In my view, the roles or positioning of different cities in the Greater Bay Area cannot be simply imposed with a top-down approach or instantly established under an instruction by the government. Objectively speaking, we see that different cities actually have their own comparative advantages. And the advantages of Hong Kong, being an international financial, trading and logistics centre, are prominent in areas like professional services and legal services. They have been developed by us over a period of time, instead of being planned by the Government. These are the comparative advantages really 4312 LEGISLATIVE COUNCIL ― 12 December 2018 brought out by ourselves. Therefore, under the concept of regional development, different cities, including the Hong Kong and Macao SARs, will complement each other with their own edges in promoting development. This is the development direction of the Greater Bay Area.
Moreover, some Members are worried that the Government or other parties only care about asking the young people to go north for development in the Greater Bay Area. First of all, the Greater Bay Area is made up of nine cities in Guangdong Province as well as Hong Kong and Macao SARs, and so Hong Kong is also inside the Greater Bay Area. Secondly, I believe every young person will find his place of development, which can be Hong Kong, the Mainland or overseas, according to his own interests, knowledge and training. What is most important to them is to understand where and what the opportunities are. It is thus logical and normal for them to explore, understand and learn about the development of the Greater Bay Area. In this way, young people can understand the development direction in the future and develop their strengths better. On the other hand, staying in Hong Kong for development is also highly important as we have to capitalize on the principle of "one country, two systems" as well as the existing advantages of Hong Kong. We strongly need talents who develop in this regard.
Following my explanation of the concepts, I will mention the opportunities and key areas of work of the Greater Bay Area. In brief, the development of the Greater Bay Area represents significant opportunities to explore new direction of development, open up new room of development and provide new impetus to development, and is pivotal to the maintenance of Hong Kong's prosperity and stability in the long run. The Greater Bay Area can bring significant opportunities in two aspects. On one hand, it can foster new impetus for Hong Kong's economic growth and promote diversified development of the economy and industries, thus resolving the bottleneck problem or the problem of homogenous industry as mentioned by Members earlier on. On the other hand, the Greater Bay Area, apart from providing opportunities for economic development or profit making, can also be developed into a quality living circle which will expand the space and choices for studying, working, starting business or living of Hong Kong residents, and hence become a vast hinterland of Hong Kong.
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In promoting the development of the Greater Bay Area, the SAR Government basically has three key areas of work. Firstly, we strive to develop the Greater Bay Area into an international innovation and technology ("I&T") hub. On this front, we see that last year, the Chief Executive especially mentioned in her two Policy Addresses some important development directions, measures and the injection of resources in the I&T area. They are precisely in line with the statement of President Xi that we have to strengthen our "inner capabilities".
On the other hand, we also ask the Central Authorities for the policies concerned so as to promote the development of science and technology. These policies include the realization of cross-boundary remittance of project funding for science and technological projects so that the scientific research institutions and personnel in Hong Kong can make use of funding from the Mainland. Furthermore, we have signed a cooperation arrangement and a memorandum of understanding respectively with the national Ministry of Science and Technology and the Chinese Academy of Sciences, with a view to enhancing the collaboration between the Mainland and Hong Kong in scientific research, and have also set up the Greater Bay Area Academician Alliance. All these are the results of policy innovation and breakthrough which help create desirable environment for us to develop innovative technologies.
As regards the second key area of work, we facilitate the development of industries in which Hong Kong's strengths lie in the Greater Bay Area. The Greater Bay Area can provide space, land and talents so that our industries enjoying competitive edge, including health care industry and higher education, can have room for further development and exploration. In fact, if the Greater Bay Area is to be developed into a quality living circle, it is highly important to nurture quality health care personnel and develop quality health care services. A Member just mentioned that some retirees can live in the Greater Bay Area in future. In this regard, one of the areas of concern is health care services. Therefore, the development of industries in which Hong Kong's strengths lie in the Greater Bay Area will depend on our efforts.
Concerning the third key area of work, through policy innovation and breakthrough, we strengthen interconnectivity amongst cities in the Greater Bay Area, including the work on enhancing the flow of people, goods, capital and information. And of course, this requires policy breakthrough and innovation.
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In certain specific areas, like I&T as I just highlighted, some Members mentioned the importance of our work in attracting, retaining and training talents. The SAR Government attaches great importance to this aspect of work and has injected resources and introduced some measures. We may take I&T development as an example. In order to nurture more local I&T personnel, in August this year, the Innovation and Technology Bureau launched a Technology Talent Scheme, under which the Postdoctoral Hub Programme aims at providing funding support for designated institutions to recruit postdoctoral talents for scientific research and development, while the Reindustrialisation and Technology Training Programme aims at subsidizing local companies to train their staff in advanced technologies, especially those related to "Industry 4.0". Regarding attraction of talents, in order to meet the needs of the I&T sector in getting talents, the SAR Government rolled out a Technology Talent Admission Scheme in June this year to provide a fast-track arrangement for the admission of overseas and Mainland technology talents into Hong Kong for research and development work. Therefore, the SAR Government will continue to put more efforts in attracting, training and retaining talents.
Moreover, trade facilitation is also an important area. Hence, the SAR Government will continue to enrich the content of the Mainland and Hong Kong Closer Economic Partnership Arrangement ("CEPA"), in order to strive for more opportunities for local enterprises to enter the Mainland market, as well as to promote and facilitate trading and investment between the two places.
With professional services being the strength of Hong Kong, we should make better use of the development of the Greater Bay Area to facilitate the entry of professional services into the Mainland market. At present, eligible Hong Kong residents or professionals concerned can take over 40 qualification examinations for professionals and technicians in the Mainland through CEPA, and agreements or arrangements on mutual recognition of certain professional qualifications have also already reached between the professional groups in Hong Kong and the regulatory institutions in the Mainland.
In terms of tourism, the development of the Greater Bay Area surely plays a pivotal role in promoting tourism development among the three places of Guangdong, Hong Kong and Macao, consolidating the Greater Bay Area's position in multi-destination travel and as an "International City cum Tourism Hub". Today, a tourism forum is also organized in Hong Kong to discuss the LEGISLATIVE COUNCIL ― 12 December 2018 4315 tourism development among the three places of Guangdong, Hong Kong and Macao, and the development of the Greater Bay Area is one of the topics of discussion.
As regards financial services, Hong Kong will capitalize on our advantages as the leading international financial centre, global offshore renminbi business hub as well as international asset and financial management centre. It will provide the enterprises in the Greater Bay Area with diversified financial services, including offshore renminbi business, project financing, as well as risk, asset and fund management.
Concerning tax arrangements, we will proactively reflect the concerns and needs of the Hong Kong people. In fact, as regards the impact of the latest amendment to the Individual Income Tax Law on the Hong Kong people, the Ministry of Finance and the State Administration of Taxation have already given a positive response. Besides, some Members are concerned how certain tax policies will be implemented in the Greater Bay Area, and we will discuss this issue with the Mainland. Nevertheless, in mapping out the appropriate approach, we must consider the overall policies of the country and support the conditions and needs of each other in the Greater Bay Area.
In terms of facilitation measures, the Central Authorities are very clear in the policy of gradually rolling out some measures to assist Hong Kong residents in studying, working, starting business and living in the Mainland. Last year, certain measures were gradually rolled out, including the residence permits introduced in September this year. A Hong Kong resident who has been residing in the Mainland for six months can apply for a residence permit to be entitled to enjoy, in accordance with the law, three categories of rights, six basic public services and nine facilitation measures. In the future, we will strive and negotiate for more facilitation measures, and expect to turn the Greater Bay Area into a favourable place for people to live, work and travel.
In promoting the development of the Greater Bay Area, it is of utmost importance that the industries concerned understand the development opportunities of the Greater Bay Area and put forward their development proposals, while the Government plays the role of "facilitator" which, especially in seeking Government-to-Government policy innovation and breakthrough, will maintain communication with the Government of Guangdong Province and the related ministries and committees of the Central Authorities so as to strive for implementation of the measures and policies. Our Bureau will set up a Greater 4316 LEGISLATIVE COUNCIL ― 12 December 2018
Bay Area Development Office and will later seek support from the Finance Committee of the Legislative Council in creating the position of Commissioner for the Development of the Greater Bay Area. We hope to gain support from the Council so that we can take forward the development of the Greater Bay Area effectively.
We will continue to do well in the promotion and publicity work. We have so far introduced a series of promotion and publicity activities, covering the channels mostly patronized by young people like websites, social media and online media, in order to introduce the related information, development direction and situation of each city, so that trade associations, professional bodies, non-governmental organizations and the general public can grasp the information concerned and consider how to make use of the opportunities brought by the development of the Greater Bay Area.
President, we will continue to maintain close liaison with Legislative Council Members, the industries, trade associations, professional bodies and the stakeholders concerned, and listen to their views on how to take forward the development of the Greater Bay Area effectively, so that the related measures can better meet the needs of various sectors of society. The SAR Government will endeavour to play the role of "facilitator" and discuss with the Mainland Government, with a view to assisting the industries in striving for development opportunities and, in the process, seeking policy innovation and breakthrough.
President, some Members also mentioned that this duty visit has given a good opportunity for Members across various political parties to understand the development of the Greater Bay Area and the Mainland. Some Members also suggested organizing similar duty visits in future to different places in the Mainland for better understanding of the country's development. In this regard, the SAR Government, especially the Constitutional and Mainland Affairs Bureau, will certainly do our best to render our support and play the role of "facilitator". As long as the Council or Members want to have duty visits to the Mainland, we will surely render our support in a comprehensive manner.
I so submit. Thank you, President.
PRESIDENT (in Cantonese): Mr Jeffrey LAM, you still have one minute one second to reply. Then, the debate will come to a close.
LEGISLATIVE COUNCIL ― 12 December 2018 4317
MR JEFFREY LAM (in Cantonese): I am grateful to the 20 Members who have spoken on this motion today. I have just noticed that some Members who did not join the delegation have also expressed some views, but in fact those views are biased because they have no knowledge of the Greater Bay Area at all. As I said in my previous speech, seeing is believing. I suggest that they should actively participate in the Mainland visit when the opportunity arises next time, because only more exposures will further broaden their horizons. The State has always supported the development of Hong Kong and kept the principles of "one country, two systems" and "a high degree of autonomy" unchanged. Hong Kong should rightly give full play to its strengths, take an active part, and separate the wheat from the chaff in the development of the Greater Bay Area. As the saying goes, time and tide wait for no man. If we keep frittering away our time, good opportunities will only slip through our fingers.
President, I hope you can lead a Legislative Council delegation to visit Shanghai or Xiong'an New Area next year. When the time comes, the efforts of the Secretaries and Legislative Council colleagues will be very much appreciated again.
President, I so submit.
PRESIDENT (in Cantonese): I now put the question to you and that is: That the motion moved by Mr Jeffrey LAM be passed. 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 CHU Hoi-dick rose to claim a division.
4318 LEGISLATIVE COUNCIL ― 12 December 2018
PRESIDENT (in Cantonese): Mr CHU Hoi-dick has claimed a division. The division bell will ring for five minutes.
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.
PRESIDENT (in Cantonese): Among the Members returned by functional constituencies, 20 were present, 17 were in favour of the motion, 1 against it and 1 abstained; while among the Members returned by geographical constituencies through direct elections, 26 were present, 17 were in favour of the motion, 6 against it and 3 abstained …
(Ms Claudia MO indicated her wish to speak)
PRESIDENT (in Cantonese): Ms Claudia MO, what is your point?
MS CLAUDIA MO (in Cantonese): President, no matter how I pressed the voting button, it did not respond. May I press it once again?
PRESIDENT (in Cantonese): Ms MO, voting has stopped and the result has already been displayed. Please state your voting intention.
MS CLAUDIA MO (in Cantonese): I intended to vote against the motion.
PRESIDENT (in Cantonese): Okay, your voting intention will be put on record.
LEGISLATIVE COUNCIL ― 12 December 2018 4319
MS CLAUDIA MO (in Cantonese): You said "okay". That means it is confirmed, right?
Functional Constituencies:
Prof Joseph LEE, Mr Jeffrey LAM, Mr WONG Ting-kwong, Ms Starry LEE, Mr CHAN Kin-por, Mr Steven HO, Mr YIU Si-wing, Mr MA Fung-kwok, Mr Charles Peter MOK, Mr Christopher CHEUNG, Mr POON Siu-ping, Ir Dr LO Wai-kwok, Mr CHUNG Kwok-pan, Dr Pierre CHAN, Mr CHAN Chun-ying, Mr LUK Chung-hung and Mr LAU Kwok-fan voted for the motion.
Mr LEUNG Yiu-chung voted against the motion.
Mr SHIU Ka-chun abstained.
THE PRESIDENT, Mr Andrew LEUNG, did not cast any vote.
Geographical Constituencies:
Dr Priscilla LEUNG, Mr WONG Kwok-kin, Mrs Regina IP, Mr WU Chi-wai, Mr CHAN Han-pan, Mr LEUNG Che-cheung, Ms Alice MAK, Dr Helena WONG, Dr Elizabeth QUAT, Dr CHIANG Lai-wan, Mr Andrew WAN, Dr Junius HO, Mr Wilson OR, Ms YUNG Hoi-yan, Mr CHEUNG Kwok-kwan, Mr Vincent CHENG and Ms CHAN Hoi-yan voted for the motion.
Ms Claudia MO, Mr CHAN Chi-chuen, Dr Fernando CHEUNG, Mr CHU Hoi-dick, Dr CHENG Chung-tai, Mr Gary FAN and Mr AU Nok-hin voted against the motion.
Dr KWOK Ka-ki, Mr Alvin YEUNG and Mr Jeremy TAM abstained.
4320 LEGISLATIVE COUNCIL ― 12 December 2018
THE PRESIDENT announced that among the Members returned by functional constituencies, 20 were present, 17 were in favour of the motion, 1 against it and 1 abstained; while among the Members returned by geographical constituencies through direct elections, 27 were present, 17 were in favour of the motion, 7 against it and 3 abstained. Since the question was agreed by a majority of each of the two groups of Members present, he therefore declared that the motion was passed.
SUSPENSION OF MEETING
PRESIDENT (in Cantonese): I have sought the views of Dr Pierre CHAN, the mover of the next motion. He wishes to have the debate on his motion begin tomorrow so that it can be conducted in its entirety. I now suspend the meeting until 9:00 am tomorrow.
Suspended accordingly at 7:10 pm.
LEGISLATIVE COUNCIL ― 12 December 2018 A1
Appendix I
POST-MEETING SUPPLEMENTARY INFORMATION
Post-meeting supplementary information provided by the Secretary for Transport and Housing in relation to Question 18
In our written reply to the captioned Legislative Council Question, we stated that it would take time for the Police to collate the number of cases in which the Police has instituted against the taxi drivers concerned based on the complaint cases concerning taxi baggage charge referred by the Government in the period between 2016 and October 2018. In consultation with the Police, we provide the information at Annex for your reference.
Annex
Number of complaints and prosecution cases concerning taxi baggage charge
No. of complaints No. of complaints No. of complaints with prosecution referred to the Year on taxi baggage instituted after Police for charge follow-up by the follow-up action PoliceNote 2016 247 70 0 2017 262 44 1 2018 241 55 0 (January to October)
Note:
More than half of the cases were withdrawn by the complainants, while prosecution was not instituted for the remaining cases due to insufficient evidence or warning was given by the Police to the driver concerned.