LEGISLATIVE COUNCIL ─ 19 March 2015 7597

OFFICIAL RECORD OF PROCEEDINGS

Thursday, 19 March 2015

The Council continued to meet at Nine o'clock

MEMBERS PRESENT:

THE PRESIDENT THE HONOURABLE JASPER TSANG YOK-SING, G.B.S., J.P.

THE HONOURABLE ALBERT HO CHUN-YAN

THE HONOURABLE LEE CHEUK-YAN

THE HONOURABLE JAMES TO KUN-SUN

THE HONOURABLE CHAN KAM-LAM, S.B.S., J.P.

THE HONOURABLE LEUNG YIU-CHUNG

THE HONOURABLE EMILY LAU WAI-HING, J.P.

THE HONOURABLE TAM YIU-CHUNG, G.B.S., J.P.

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

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

THE HONOURABLE FREDERICK FUNG KIN-KEE, S.B.S., J.P.

THE HONOURABLE VINCENT FANG KANG, S.B.S., J.P.

THE HONOURABLE WONG KWOK-HING, B.B.S., M.H.

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PROF THE HONOURABLE JOSEPH LEE KOK-LONG, S.B.S., J.P., Ph.D., R.N.

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

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

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

THE HONOURABLE RONNY TONG KA-WAH, S.C.

THE HONOURABLE CYD HO SAU-LAN, J.P.

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

DR THE HONOURABLE LAM TAI-FAI, S.B.S., J.P.

THE HONOURABLE CHAN HAK-KAN, J.P.

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

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

DR THE HONOURABLE LEUNG KA-LAU

THE HONOURABLE CHEUNG KWOK-CHE

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

THE HONOURABLE IP KWOK-HIM, G.B.S., J.P.

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

THE HONOURABLE ALAN LEONG KAH-KIT, S.C.

THE HONOURABLE LEUNG KWOK-HUNG

THE HONOURABLE ALBERT CHAN WAI-YIP

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THE HONOURABLE WONG YUK-MAN

THE HONOURABLE CLAUDIA MO

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

THE HONOURABLE JAMES TIEN PEI-CHUN, G.B.S., J.P.

THE HONOURABLE NG LEUNG-SING, S.B.S., J.P.

THE HONOURABLE STEVEN HO CHUN-YIN

THE HONOURABLE FRANKIE YICK CHI-MING

THE HONOURABLE WU CHI-WAI, M.H.

THE HONOURABLE YIU SI-WING

THE HONOURABLE GARY FAN KWOK-WAI

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

THE HONOURABLE CHARLES PETER MOK, J.P.

THE HONOURABLE CHAN CHI-CHUEN

THE HONOURABLE CHAN HAN-PAN, J.P.

DR THE HONOURABLE KENNETH CHAN KA-LOK

THE HONOURABLE CHAN YUEN-HAN, S.B.S., J.P.

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

THE HONOURABLE KENNETH LEUNG

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

DR THE HONOURABLE KWOK KA-KI

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THE HONOURABLE KWOK WAI-KEUNG

THE HONOURABLE DENNIS KWOK

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

DR THE HONOURABLE FERNANDO CHEUNG CHIU-HUNG

THE HONOURABLE SIN CHUNG-KAI, S.B.S., J.P.

DR THE HONOURABLE HELENA WONG PIK-WAN

THE HONOURABLE IP KIN-YUEN

DR THE HONOURABLE ELIZABETH QUAT, J.P.

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

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

THE HONOURABLE TANG KA-PIU, J.P.

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

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

THE HONOURABLE CHUNG KWOK-PAN

THE HONOURABLE CHRISTOPHER CHUNG SHU-KUN, B.B.S., M.H., J.P.

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

MEMBERS ABSENT:

DR THE HONOURABLE LAU WONG-FAT, G.B.M., G.B.S., J.P.

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

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PUBLIC OFFICERS ATTENDING:

THE HONOURABLE MATTHEW CHEUNG KIN-CHUNG, G.B.S., J.P. SECRETARY FOR LABOUR AND WELFARE

MR GODFREY LEUNG KING-KWOK, J.P. SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT (am)

THE HONOURABLE GREGORY SO KAM-LEUNG, G.B.S., J.P. SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT (pm)

MR GODFREY LEUNG KING-KWOK, J.P. UNDER SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT (pm)

CLERKS IN ATTENDANCE:

MS ANITA SIT, ASSISTANT SECRETARY GENERAL

MISS FLORA TAI YIN-PING, ASSISTANT SECRETARY GENERAL

MISS ODELIA LEUNG HING-YEE, ASSISTANT SECRETARY GENERAL

MR MATTHEW LOO, ASSISTANT SECRETARY GENERAL

7602 LEGISLATIVE COUNCIL ─ 19 March 2015

MEMBERS' MOTIONS

PRESIDENT (in Cantonese): Good morning, Members. This Council will now continue to deal with the motion under Rule 49E(2) of the Rules of Procedure moved by Mr Andrew LEUNG.

Does any other Member wish to speak?

(No Member indicated a wish to speak)

PRESIDENT (in Cantonese): If not, Members have already spoken. I now call upon the Secretary for Labour and Welfare to speak. The debate will come to a close after the Secretary has spoken. Secretary for Labour and Welfare, please speak.

MOTION UNDER RULE 49E(2) OF THE RULES OF PROCEDURE

Continuation of debate on motion which was moved on 18 March 2015

SECRETARY FOR LABOUR AND WELFARE (in Cantonese): President, the Government tabled two pieces of subsidiary legislation relating to increasing the statutory minimum wage (SMW) rate to the Legislative Council on 21 January this year, including the Minimum Wage Ordinance (Amendment of Schedule 3) Notice 2015 and the Employment Ordinance (Amendment of Ninth Schedule) Notice 2015. The Legislative Council subsequently set up a subcommittee to scrutinize these two Notices.

First of all, I extend my heartfelt thanks to Dr CHIANG Lai-wan, Chairman of the Subcommittee, and the 19 members for the scrutiny work. The Subcommittee has held three meetings to conduct comprehensive and meticulous discussions on the Government's recommendations, and stakeholder groups have also been invited to attend the meetings and express their views. Members and I have listened to the views of 18 groups and individuals. I am pleased to note that members of the Subcommittee have not proposed any amendment in objection to the Notices. Upon completion of the scrutiny of these two Notices LEGISLATIVE COUNCIL ─ 19 March 2015 7603 by the Legislative Council today, the Labour Department (LD) will make preparations and launch extensive publicity for the implementation of the new SMW rate which will come into force on 1 May (the Labour Day) this year.

I also thank the 12 Members for their views expressed last night, and would like to give a concise response here.

To begin with, I understand that there are divergent opinions and views among some Members in respect of the increase in the SMW rate from the current rate of $30 to $32.5 per hour. As the minimum wage may have impacts on a number of aspects, such as the labour market, employment, society and economy (including the affordability of small and medium enterprises (SMEs)) in Hong Kong or even inflation, productivity, competitiveness and wage level, the Government must adopt an evidence-based approach when setting the minimum wage rate to maintain an appropriate balance between the objectives of forestalling excessively low wages and minimizing the loss of low-paid jobs, and at the same time take into account the need to sustain Hong Kong's economic development and competitiveness.

The high-level Minimum Wage Commission (MWC) collectively involving members from the labour and business sectors, academics and government officials has reviewed the minimum wage rate in a comprehensive, objective and impartial manner. It has conducted intensive and extensive consultation to collect views of stakeholders and members of the public on the review of the minimum wage rate and its impact on the socio-economic conditions and various industries and trades (in particular the SMEs and low paying sectors I have just mentioned). Apart from undertaking detailed analyses of the wage distribution data from the Annual Earnings and Hours Survey conducted by the Census and Statistics Department, the MWC also examined the findings of other surveys, such as the studies on the knock-on effect ― which may also be known as the ripple effect ― of the minimum wage on pay hierarchies in the retail and restaurant sectors, and took into account other relevant considerations that could not be fully quantified. The Government agrees that the recommendation made by the MWC has struck an appropriate balance between the interests of employees and employers, and that the arrangement for the new rate to come into effect on 1 May this year is also pragmatic and reasonable.

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According to some Members, the MWC used some outdated data to review the SMW. I have clarified this at a meeting of the Subcommittee of the Legislative Council, stating that it is a serious misunderstanding of the review conducted by the MWC. The MWC made reference to an Array of Indicators and a large number of data released and updated more frequently, including labour demand and supply, inflation, Gross Domestic Product, price forecasts and unemployment rate, so as to grasp the latest conditions and trends of various aspects of the socio-economic and employment conditions in Hong Kong. The MWC also adopted a framework of impact assessment to estimate the potential impact on employees, enterprises, unemployment rate and inflation brought by different minimum wage test levels. The MWC even adopted a forward-looking approach to consider the economic outlook to have due regard to the time gap between recommending the minimum wage rate and the implementation of the new rate, so as to make comprehensive consideration.

Regarding some Members' concern about whether the increase in the minimum wage rate could catch up with inflation, I would like to point out that inflation in Hong Kong generally showed an easing trend over the past year. From May 2013 (subsequent to the previous increase in the minimum wage rate) to January this year, the underlying Composite Consumer Price Index recorded a cumulative increase of 5%. As the global commodity prices have softened, imported inflationary pressures have recently decreased and local cost pressures also stay moderate, the risk of rising inflation should remain contained in the coming period. Therefore, barring a drastic rise in the inflation rate, it is expected that the 8.3% increase in the minimum wage, which will be increased from $30 to $32.5 from 1 May this year, can catch up with the inflation rate of the same period in the past two years.

In fact, inflation is only one of the factors considered by the MWC in conducting impact assessments for the minimum wage rate. We cannot rigidly make inflation rate a determinant of the minimum wage rate or else the review of the minimum wage rate will fail to take full account of social, employment and economic factors as well as other interactions, and may also result in a self-perpetuating inflationary spiral of wages and prices chasing each other.

Some Members requested that the Government may strengthen publicity on the positive effects of the minimum wage so that people will not mistakenly LEGISLATIVE COUNCIL ─ 19 March 2015 7605 believe that the minimum wage will only create negative impacts. In this connection, I have, in fact, stated clearly that ever since the implementation of the minimum wage, it has produced far more positive effects than negative ones.

Actually, the minimum wage is also a major policy instrument of poverty alleviation, the effectiveness of which is evident to all. Meanwhile, the SMW helps encourage the labour force to enter or re-enter the labour market and strongly boosts their incentive to work. I would like to share some statistics with Members. The newly released statistics for the period from December 2014 to February 2015 indicate that total employment in Hong Kong has increased to 3 807 500 persons, representing an increase of over 265 200 persons when compared with the number of 3 542 300 persons before the implementation of the minimum wage. It should be noted that around two thirds of the increase in the number of workers were female, which amounted to 181 200 persons. Among them, the increases in the number of older and lower-skilled females were particularly notable. The numbers of female workers aged 50 or above and those who are lower-skilled have increased by 120 000 persons and 125 000 persons respectively.

The latest statistics also indicate that the female labour force and number of employed persons have respectively recorded a year-on-year increase of 3.6% and 2.8%, representing an increase of 66 900 and 51 800 persons. The increases in male labour force and number of employed persons, which are smaller over the same period, have respectively recorded a year-on-year increase of 1% and 1.4%, representing an increase of 20 100 and 25 700 persons. The statistics I have just cited precisely point out that in fact, the minimum wage has particularly attracted many middle-aged and low-skilled females to re-enter the labour market, thereby increasing the productivity of Hong Kong.

A lot of Members mentioned last night that the minimum wage rate should be reviewed annually. I have also given detailed explanations on various occasions and at the meeting of the Subcommittee. President, I would like to reiterate that the Minimum Wage Ordinance (MWO) requires that the minimum wage rate must be reviewed at least once in every two years. Setting a limit of not exceeding two years for the review cycle is a pragmatic practice and was the consensus reached among Members of the Legislative Council when legislating on the minimum wage. This arrangement is beneficial to both employees and employers. Firstly, it will have less impact on the mode of employment. Should an annual review be implemented, there may be more frequent 7606 LEGISLATIVE COUNCIL ─ 19 March 2015 adjustments of the minimum wage rate. Consequently, some employers who wish to maintain their flexibility in controlling labour costs may tend to offer short-term employment contracts and replace their permanent staff with casual workers, leading to fragmented employment. Secondly, with an annual review of the minimum wage rate, employers will also find it difficult to estimate their emolument costs in preparing service and business contracts. The review of the minimum wage rate involves a host of complicated issues relating to employment, economic and social situations. Given that Hong Kong has limited experience in implementing the minimum wage, the existing flexible arrangement of reviewing the minimum wage rate at least once in every two years should be maintained at the present stage. In particular, it is important that buffers will be available in times of economic downturn. Moreover, the existing legislation allows the Government to conduct a review of the minimum wage rate within a shorter period as and when necessary, which means we have the flexibility to conduct one more review.

Some Members were concerned about the protection for employees with disabilities after the implementation of the minimum wage. I would like to point out that the Minimum Wage Ordinance (MWO) obviously protects both able-bodied employees and employees with disabilities, so that they are entitled to the same SMW. In response to the worries of people in the community that some employees with disabilities may encounter difficulties in getting a job, the MWO also provides an optional productivity assessment mechanism for employees with disabilities ― I have to emphasize that employees with disabilities are given the option to decide whether they will undergo such an assessment ― to strike an appropriate balance between wage protection and employment opportunities for persons with disabilities. After conducting a review, the LD suggested retaining this special arrangement while enhancement measures will be launched, such as enhancing the assistance for employees with disabilities on the procedure of opting assessment, improving the quality of approved assessors in conducting assessment and strengthening communication among employees with disabilities, employers and approved assessors. After consulting the Rehabilitation Advisory Committee and the Labour Advisory Board, the LD reported the outcome of the review to the Panel on Manpower in December last year. The three aforesaid committees generally accepted the outcome of the review and suggestions of the LD. The LD will continue to widely publicize the rights of employees with disabilities to receive the minimum wage and to choose to undergo assessment, and monitor the overall implementation of the assessment mechanism. LEGISLATIVE COUNCIL ─ 19 March 2015 7607

Some Members suggested providing wage subsidies to employees with disabilities. In this regard, President, I have explained at a meeting of the Subcommitte0e that the Government attaches great importance to the employment of persons with disabilities. We aim to assist and support persons with disabilities in finding appropriate jobs having regard to their abilities rather than disabilities in an inclusive society which duly recognizes the rights, capabilities and contribution of persons with disabilities. The Government will continue to provide vocational training and employment support for persons with disabilities while adopting positive encouragement measures to enhance job opportunities for persons with disabilities, such as giving due recognition to good employers, sharing good practices and providing incentive and assistance to employers. We do not have any plans to provide wage subsidies to persons with disabilities at the present stage.

President, the implementation of the SMW has been smooth since its launch on the Labour Day on 1 May 2011 with continuous growth in the salaries of low-income employees. When compared with the quarter prior to the implementation of the minimum wage (from February to April 2011), the average monthly employment earnings of low-paid and full-time employees (excluding government employees and live-in domestic workers who are not covered by the minimum wage) recorded a cumulative increase of 34.5%, or an increase of 12.7% in real terms after discounting inflation, for the period from November 2014 to January this year. The overall labour market has remained stable. The number of employed persons has increased steadily, while the unemployment rate has been standing at a relatively low level. In fact, one may say that we have reached full employment. This is the fruit of the concerted efforts made by various sectors of the community, including the Legislative Council. I sincerely thank the labour sector, the business sector, Legislative Council Members and other stakeholders for approving and supporting the minimum wage policy.

I would also like to take this opportunity to express my sincere gratitude to the Chairperson of the MWC, Mr JAT Sew-tong, and all members for their efforts in completing the important task of reviewing the minimum wage rate and, most importantly, reaching a consensus. On this basis and with the support from various sectors of the community and Members, let us witness the fourth anniversary of the implementation of the SMW on the Labour Day on 1 May this year and, in the meantime, implement the new minimum wage rate to increase the income of grass-roots workers.

President, I so submit. Thank you.

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PRESIDENT (in Cantonese): The debate has come to a close. In accordance with Rule 49E(9) of the Rules of Procedure, I will not put any question on the motion.

PRESIDENT (in Cantonese): Proposed resolution under Article 75 of the Basic Law.

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

I now call upon Mr IP Kwok-him to speak and move the motion.

PROPOSED RESOLUTION UNDER ARTICLE 75 OF THE BASIC LAW OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION OF THE PEOPLE'S REPUBLIC OF CHINA

MR IP KWOK-HIM (in Cantonese): President, in my capacity as Chairman of the Committee on Members' Interests (CMI), I move that the proposed resolution to amend Rule 83A of the Rules of Procedure (RoP) of the Legislative Council of the Hong Kong Special Administrative Region, as printed on the agenda, be passed.

Rule 83A of the RoP provides that: "In the Council or in any committee or subcommittee, a Member shall not move any motion or amendment relating to a matter in which he has a pecuniary interest, whether direct or indirect, or speak on any such matter, except where he discloses the nature of that interest."

The Bills Committee on the Stamp Duty (Amendment) Bill 2012 raised two issues in relation to Members' disclosure of pecuniary interests under Rule 83A during its scrutiny of the Bill. The first one is: whether a Member is required to disclose a pecuniary interest which is in common with the rest or a sector of the population of Hong Kong (common pecuniary interest)? The second one is: whether a Member is required to disclose the same pecuniary interest in a matter each time he speaks on the matter in the same committee (repeated disclosures)?

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The CMI has convened three meetings to discuss the arrangements of Members' disclosure of pecuniary interests under Rule 83A.

As regards the disclosure of common pecuniary interests, the CMI noted that Rule 84(1) and (1A) of the RoP expressly exclude common pecuniary interests. In other words, a Member can still participate in or be present at a vote taken on a question in which he or she has a direct pecuniary interest if such is a common pecuniary interest. Moreover, common pecuniary interests are of general application and not unique to individual Members. The CMI has also made reference to the relevant rules of the legislatures in the United Kingdom and Canada, which exempt their members from disclosing common pecuniary interests. Having considered the aforementioned factors, the CMI proposes to amend Rule 83A of the RoP to exempt Members from disclosing common pecuniary interests.

Concerning repeated disclosures of the same pecuniary interests, the CMI has noted the practice of the United Kingdom House of Commons in relation to disclosure of interests. Members of the House of Commons are only required to declare relevant interests at the first meeting of a public bill committee or on the first occasion on which they address the committee, and repeated declarations at subsequent meetings are not necessary except when a Member speaks on an amendment to which the interest is particularly relevant. The interests declared by Members will be recorded in the minutes of the first meeting which will be uploaded onto the House of Commons' website for public inspection.

The CMI opined that it is an essential principle to ensure other Members and the public are aware of the pecuniary interests a Member has in the matters being discussed at the Legislative Council; and such a principle must be adhered to. However, it is equally important to ensure at the same time that meeting proceedings would not be unnecessarily hindered by Members' repeated disclosures of the same pecuniary interests. The CMI hence proposes to adopt a practice similar to that of the United Kingdom House of Commons to amend Rule 83A of the RoP so that it expressly provides that members of a committee or subcommittee on legislative proposals are only required to disclose pecuniary interests when they first speak on a matter in the committee or subcommittee, and repeated disclosures of the same interests at subsequent meetings are not necessary. As questions discussed at the Legislative Council meetings and 7610 LEGISLATIVE COUNCIL ─ 19 March 2015 meetings of other committees (including panels) are mostly different, the related amendments are only applicable to committees or subcommittees on legislative proposals.

The CMI has consulted all Members on the two amendment proposals and received support from the majority of Members. The CMI has also sought the views of the Committee on Rules of Procedure and the House Committee, which also supported the proposed amendments.

With these remarks, President, I urge Members to support this motion. Thank you, President.

Mr IP Kwok-him moved the following motion:

"RESOLVED that the Rules of Procedure of the Legislative Council of the Hong Kong Special Administrative Region be amended as set out in the Schedule.

Schedule

Amendment to Rules of Procedure of the Legislative Council of the Hong Kong Special Administrative Region

1. Rule 83A substituted Rule 83A ―  Repeal the Rule Substitute "83A.Personal Pecuniary Interest to be Disclosed (1) Subject to subrules (2) and (3), a Member shall not in the Council or in any committee or subcommittee ― (a) move any motion or amendment relating to a matter in which he has a pecuniary interest, whether direct or indirect; or (b) speak on any such matter, except where he discloses the nature of that interest. LEGISLATIVE COUNCIL ─ 19 March 2015 7611

(2) In ― (a) any Bills Committee; or (b) any subcommittee appointed pursuant to Rule 75(12) (House Committee) for the purpose of assisting the House Committee in the performance of its functions under Rule 75(10) (House Committee), a Member, who has disclosed as required under subrule (1) his pecuniary interest in relation to a matter at a meeting of the relevant committee or subcommittee, shall not be required to declare the same interest in subsequent meetings of the same committee or subcommittee before the Member speaks on the same matter. (3) Subrule (1) shall not apply where the Member's interest in a matter is in common with the rest of the population of Hong Kong or a sector thereof."."

PRESIDENT (in Cantonese): I now propose the question to you and that is: That the motion moved by Mr IP Kwok-him be passed.

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

MR ALBERT CHAN (in Cantonese): President, the People Power opposes this amendment which proposes changes to the declaration of interests by Members, for this, to a certain extent, means relaxing the regulation on interest declaration.

Although as Mr IP Kwok-him said earlier, the Committee on Members' Interests (CMI) had widely consulted the views of all parties in the course of the study, and as far as I understand it, an overwhelming majority of Members were supportive of the amendments, President, why does the People Power oppose the amendment? In retrospect, the entire system for declaration of interest by Members and its implementation actually have a great many grey areas and are grossly slipshod. Members are also extremely lax in interpreting and enforcing 7612 LEGISLATIVE COUNCIL ─ 19 March 2015 this system. Some of the declarations made by Members were downright nonsensical. If the President can still recall, during discussions in this Chamber or committees, Members might sometimes make a declaration beforehand even if no interest was actually involved or there was nothing to do with interests. The most obvious case in point is that some Members engaging in the construction sector declared that their company might tender for certain projects planned for implementation. Some Members might make a declaration beforehand even at a most primitive stage, and more often than not, after making a declaration, these Members would continue to take part in the discussion and vote. If they think that they have direct pecuniary interests for which declarations are required, they should first ascertain the relevance of such interests, rather than making a declaration anyway as a safeguard or to play safe, and then going on speaking and casting a vote as if they do not have any interest. Therefore, from this we can see that the rules in the Rules on Procedure (RoP) on the monitoring and declaration of interests and also in respect of implementation are virtually useless.

Certainly, in the past there were cases of Members being condemned for failing to make a declaration. There have been such cases before. But let us look at the background of Members in this Council. With regard to the complex and interwoven relationships behind Members in handling the many issues, only the Members themselves know clearly whether actual interests are involved, especially how much pecuniary interest is actually involved. President, I believe you must know that pecuniary interests can be handled in a way that direct interests become indirect ones and indirect interests become invisible, right? Our Chief Executive and the Secretary for Development are most adept at this. While interests are obviously involved, they can get away with it by claiming that the land was acquired for planting by family members, thus brushing aside the interests. So, from this we can see that the interpretation of interests can sometimes be arbitrary. Even if members of the public consider that interests are involved, such interests can be brushed aside so long as the person in question considers that such interests do not constitute direct pecuniary interests.

The most obvious example is the problem of Mr NG Leung-sing presiding over meetings as Chairman of the Finance Committee. At that time, various sectors of the community, especially the affected residents in the Northeast New Territories, questioned the interests involved in the three or four capacities of Mr NG Leung-sing who is a non-executive director of SmarTone Telecommunications Holdings Limited, Bank of China (Hong Kong) Trustees Limited, Chiyu Banking Corporation Limited, and the MTR Corporation Limited LEGISLATIVE COUNCIL ─ 19 March 2015 7613 and yet, he could continue to preside over meetings. Worse still, he did not just preside over meetings in the normal way but abused his powers to stop Members from speaking and asking questions, and the funding was subsequently bulldozed through amidst chaos. Members of various sectors of the community have questioned whether he resorted to such heavy-handed measures because of the interests involved in his multiple capacities. But there is nothing we can do under the existing RoP.

Of course, the amendment relating to interest declaration tabled for our passage today bears no direct relevance or relation to the case concerning Mr NG Leung-sing that I have just mentioned, for this amendment only involves the handling of bills. However, a small move will change the overall situation, and this amendment is obviously intended to relax the relevant rules. The existing interest declaration system is problem-plagued, and the rules relating to government officials, Members and implementation are riddled with problems. Given that the system is riddled with problems, if the rules are neither tightened nor improved but are relaxed as proposed instead, I personally think that this is absolutely a wrong message and direction.

I believe this motion today will definitely be passed. I call on the Chairman of the CMI, Mr IP Kwok-him, to comprehensively review the various problems that I have just raised. It is because if the handling and declaration of interests are not appropriate and if these issues are not suitably addressed, public confidence in this Council will certainly drop drastically and will even vanish altogether. So, in the vote to be taken later on, we will vote against the motion. On the question of interest declaration, I hope Hong Kong people will understand its importance not only to this Council but also to the higher echelons in the Government ― the declaration of interests is of the higher echelons of the Government is vitally important, and the monitoring of their interests is also of the utmost importance, is it not? The interests of this Council are only indirect in nature. When major policy decisions are made, we can see in many cases that the transfer of benefits has completely deprived the public of their rights and entirely sacrificed the public interests to the benefit of the rich and powerful people at the end of the day, right? Members can take a look at the series of decision that has been made now. Basically, where executive hegemony or executive tyranny prevails, the Legislative Council is but a semi-unregulated body. Such being the case, the public can only be wantonly abused and exploited, and the future they face is, in fact, quite miserable.

7614 LEGISLATIVE COUNCIL ─ 19 March 2015

Therefore, with regard to the amendment proposed to the stipulations on interest declaration in the RoP today, the People Power expresses dissatisfaction at this system, especially the system for monitoring interests. Thank you, President.

PRESIDENT (in Cantonese): I wish to remind Members that the amendment proposed to the Rules of Procedure under this motion only concerns whether a Member is required to disclose a "common pecuniary interest" and whether a Member is required to make "repeated disclosures" in a committee and subcommittee on legislative proposals. Members should speak on these two proposals.

MR LEUNG KWOK-HUNG (in Cantonese): President, yesterday, I received a WhatsApp message and an SMS that read, "Mr LEUNG Kwok-hung, my teacher, those people in the Legislative Council do not speak logically, so please fulfil your duty of speaking up for the people by saying something. Being a Member does not just mean voting, rather, a Member should set an example for the people.". This being so, I have no alternative but to try to give a discourse today.

First, should repeated declarations be made? President, this is not necessary and it would do just to reform the system. At present, our meetings are broadcast live, so we may as well have some placards made, so that it can be written thereon how many companies I own, then place the placards here throughout the meeting just like name cards and that would do, would it not? When you hand out your name cards in overseas countries, it is printed thereon that "I am Jasper TSANG, President of the Legislative Council" and on seeing this, other people would immediately be filled with deep veneration. Do you remember that when I was detained in Shanghai, that is, on that occasion when a body search was conducted on me, you kept me company and I said, "This is the President of the Legislative Council and he is also a delegate of the Chinese People's Political Consultative Committee (CPPCC).". Then, you said humbly that you had resigned from the post of delegate of the CPPCC but it seemed they still had no idea what the President of the Legislative Council was. Therefore, the method can be very simple actually. And regarding the question of whether or not repeated declarations have to be made, in fact, if it is said that monitoring by members of the public should be enabled, of course, the people would say even if declarations have to be made for 20 000 times, that would only be right, LEGISLATIVE COUNCIL ─ 19 March 2015 7615 would they not? What hindrance would this actually cause? When watching the drama series on Jade channel, we do not watch each and every episode. If we did not watch the first or last episode, for example, if someone happens to turn on the television set to watch the drama series only on one occasion, he may not know the story.

Therefore, what problems would this pose? As an alternative, we can place a placard here and it is only necessary for your goodself to grant this approval. On the placard, it can be written that "I am such and such a person", so this is very simple, is this not? We have to keep abreast of the times. Now, even sign language interpretation service is provided in the Legislative Council, so perhaps let us designate part of the screen next to the place where sign language interpretation is provided. You can instruct our staff members to post there, say, that Mr LEUNG Kwok-hung once said Mr Jimmy LAI had given him $500,000, so this can be posted there ― this time, I am not going to talk about others and will only talk about myself ― and that would do. What problems are there? As regards the public perception, this is a matter for the public. This is the first point.

President, the present problem is: I have been driven out of the Chamber by you before and that was because I asked LEUNG Chun-ying if he had made any declarations of interest, buddy. LEUNG Chun-ying does not have to declare his interest but Legislative Council Members have done so. Frankly speaking, that would certainly cause reactions. We are responsible for monitoring him but he attacked us in an underhand manner by handing those so-called "black material" to pro-LEUNG newspapers, even though there are not many such newspapers nowadays, this being the pass that he has come to. What sort of legislature is this actually? At that time, I also proposed that the legislation related to the Independent Commission Against Corruption should cover the Chief Executive but I was inveighed by Members of the pro-establishment camp, who said that the Chief Executive could not possibly be so despicable and that LEUNG Kwok-hung was talking nonsense here but now, you have got what you bargained for. At that time, I was referring to Donald TSANG but the incumbent Chief Executive is LEUNG Chun-ying. The Members in the legislature did not speak truthfully but we can no longer do so now. Yesterday, I wrote an article for the Ming Pao Daily News and Members can read it in the commentaries column …

PRESIDENT (in Cantonese): Mr LEUNG, you have strayed from the question.

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MR LEUNG KWOK-HUNG (in Cantonese): In what way have I strayed from the question, buddy? It was you who talked about this in the first place. We are now talking about repeated disclosures and I am explaining the importance of it. Many people now say that there is no need to make repeated declarations, do they not? President, it is not true that we have the final say, rather, we have to be accountable to voters. I have to explain why I support this practice, do I not? We have to cite extensive reasons. You have also heard overseas Members of Parliament deliver speeches as well as the speech of that Prime Minister, so what possibly would not be ruled by you as having strayed from the question? Of course, it is necessary to call things by their proper names.

Yesterday, I talked about things being investigated, knowledge being complete, thoughts being sincere, hearts being rectified and achieving universal peace, and I lectured LEUNG Chun-ying on this. Of course, today, I have to apply the same standards to myself. On the question of whether or not repeated declarations have to be made, in fact, it is absolutely right to do so. President, if it is now said that there is no need to make declarations, what kind of conclusion will actually be reached? It is: Someone can avoid making declarations before speaking by means of this Rule and that is, the monitoring on this person will be reduced.

Therefore, President ― you have to look at me ― what I mean is that if it is not necessary to make declarations, just place a placard here and that would do. In this way, it will not be necessary to make declarations because the declarations will become permanent. Alternatively, a runner that reads "It is rumoured that 'Long Hair' receives money from the United States" can be placed next to the sign language interpreter and that would do. What need is there to make declarations? Everything is understood without being spoken out.

President, whether a legislature is moving forward or going backwards and whether or not it is wise depends on its ability to grasp what is important or otherwise. Would it kill to say once again that one may have interest at stake? Buddy, if the time here were so precious, I would not have to make use of this "Siren" so frequently to summon Members back here. That means since they can spend their time on other things, it would also do for them to say just a few words more here, for example, saying that "'Long Hair' allegedly received $500,000 from Mr Jasper TSANG", would it not? This is a very simple rationale.

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President, what are the woes of not declaring one's interest? Let me give you another example: Today, I will go to the Eastern Magistracy to support those people who were arrested for setting sail to defend the Diaoyu Islands. I feel irate whenever I see this. I have also forgotten it because I am getting old and also more indifferent. Just imagine: That Director of Marine, in supervising his subordinates, performed some "good deeds" and did not do his level best. He could even allow a boat that would be used by women and children and persons with disabilities to be converted and to carry no life jackets on board. It was allowed to operate without sufficient hands on board, yet the Government could put obstacles in the way of a vessel used for defending the Diaoyu Islands. Frankly speaking, if there is a mechanism for the declaration of interest, that will do. Had there been a system for the declaration of interest and had that Director of Marine declared his interest, the problem would have been solved but since there was not any, that was very bad. People who are civil servants may obtain some advantages from one side and some from another side. President, for this reason, the whole system is problematic.

This is very simple. I wish to discuss another issue, that is, a person for whom I have great respect, someone called Stanley NG. Yesterday, it looked as though he had taken some wrong drugs. If he were to appear here now, I would give him a good dressing down. He suddenly expressed agreement for regulating contracts instead of regulating working hours. If it is necessary to make a declaration of interest, Stanley NG is a deputy of the National People's Congress (NPC), so did the Party Leadership Group of the NPC tell him to settle for the regulation of contracts instead of regulating working hours? We are too … President, frankly speaking, you are unencumbered by official posts now …

PRESIDENT (in Cantonese): Mr LEUNG, you have strayed from the question.

MR LEUNG KWOK-HUNG (in Cantonese): President, why is this not relevant? This is very simple ― even if you drive me out, I have to say this all the same ― the Legislative Council is obvious proof that there are two types of interest. During the two sessions, we go to such length as adjourning Council meetings to enable them to attend the sessions, so this regime … the political organizations which they have joined are binding to them, or they have interests. Buddy, they wine and dine in Beijing for a fortnight, so how do I know what they 7618 LEGISLATIVE COUNCIL ─ 19 March 2015 have discussed? Buddy, is it necessary to make declarations of interest? What I mean is: Is it necessary to declare that I am a deputy of the NPC, that I am a delegate of the Chinese People's Political Consultative Committee (CPPCC) or I am some sort of deputy, so that people would know as soon as they see it? That is to say … do not say that this is unjust … do not say that they are righteous ministers, that is, they also have to behave in a certain way in another regime. Although no war could possibly break out within a country, if you are also in another Government, that already would not do, buddy. It is stipulated by the Legislative Council that apart from the functional constituencies, which are so special that 12.5% of the Members in them can hold foreign passports, the other Members are not allowed to do so, buddy, do you think I am right?

Therefore, on this issue of declaration of interest, is it also necessary to declare such matters? This definitely is not common interest. How many people can serve in such offices? Frankly speaking, we do not know how deputies of the NPC are elected. This is a special class with vested interests and in English, this is called caste, c-a-s-t-e. This is a privileged class, yet they do not have to make declarations of interest here, buddy. Mr Dennis KWOK, do you think this is right? I believe this is not right. Therefore, frankly speaking, I have not strayed from the question at all, only that our legislature is so lifeless that they do not know how to draw inferences from one instance.

They are so powerful that our venerated President has to say, "Let us not hold any meetings, all right? Give me a reply slip concerning whether or not to hold …"

PRESIDENT (in Cantonese): Mr LEUNG, you have strayed from the question. This motion is about whether or not a Member has to disclose his pecuniary interest in relation to a matter under deliberation. Please do not stray from the question.

MR LEUNG KWOK-HUNG (in Cantonese): President, let me tell you immediately … if you are a deputy of the NPC or a delegate of the CPPCC … when deliberating the constitutional reform proposal, do you have any interest at stake? Do you have any? You do not and this is why you are serving as the President.

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PRESIDENT (in Cantonese): Mr LEUNG, if you stray from the question again, I will stop you from speaking.

MR LEUNG KWOK-HUNG (in Cantonese): There can be no helping it. Frankly speaking, I can swear by heaven and earth and my conscience that when I speak in other places, I am admired by a multitude of people but when I speak here, I am scolded by the President. Nothing can be done. Hey, is this not a serious problem, buddy? The whole logic now is to talk about the declaration of interest as little as possible, so I cited some examples. If you obviously have interest at stake but do not declare it, even if you are not cheating, this is still tantamount to saying "your neighbour is not the thief" and you have also given this example before. As the saying goes, "This is not the where the 300 teals of silver are buried and your neighbour is not the thief". Such is the wisdom of the Cantonese.

The question now is: Should our legislature be like a chicken that has eaten a glowing worm, that is, to let the public look at its innards even more clearly, or should it not be? Or is our entire system for the declaration of interest, which makes the monitoring of Members possible, just like "chicken urine", in other words, non-existent? Insofar as chickens are concerned, they do not urinate.

This system of ours has crumbled so very badly. This started with the Chief Executive as it was Members of the Legislative Council who defended the privileges of the Chief Executive that prevented him from being investigated by the ICAC. Now, it is us who are getting moldy on the inside, that is, let us have less monitoring, is that not so? We have many tabloids that expose the matters of the other side or publish sensational news reports, so what need is there to make declarations here? President, I am not going to talk anymore. Even though you said I had strayed from the question, we can ask heaven and earth and our conscience. This little friend of mine, teacher LEUNG can no longer teach here for he has to go. Bye bye. President, since you do not allow me to speak, I am not going to speak anymore and heaven and earth and our conscience will know.

MR FREDERICK FUNG (in Cantonese): President, I oppose the amendment, though my reasons might not be identical to those cited by Mr LEUNG.

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To begin with, the amendment involves two different declarations. First, if a Member participating in a discussion has a pecuniary interest, whether direct or indirect, but the policy itself has territory-wide implications, the Member might not be required to declare his interest. I consider this problematic.

Firstly, since we have been required to make declarations of interests over the years, what has happened to make it necessary to change this requirement? If there are no problems, why is this requirement not retained? The second point is related to the interests of individual Members. Is equal treatment extended to all by the Government in policy formulation?

President, we find that there are different circumstances in certain cases. Let me cite rates as an example. Will rates increases have the same impact on everyone? If I do not have a flat to live, what does a rates increase have to do with me? If I have a flat, a rates increase might have a slight impact on me. If I had 100 flats, the impact of rates increases on me would be more substantial. If I had a company which owned several streets and even an entire district, the impact of rates increases on me would be enormous. Hence, should the declaration requirement be scrapped, Members will not be required to make any declaration of interests in future should they encounter the aforesaid circumstances.

Actually, the greatest significance of interest declaration lies in that people can gain an understanding of the backgrounds of speeches delivered by Members, their "direct or indirect pecuniary interests", and whether or not such interests have any bearing on their speeches. Certainly, listeners may judge Members' speeches from their own perspective and, on the basis of "direct or indirect pecuniary interests", decide how far they should believe in the speeches or even view Members with total distrust. I think that this amendment will make Members and members of the public fail to see the picture clearly. Even if members of the public watch the live broadcast of Council proceedings and listen to the speech delivered by a Member, they will not know whether or not he has any interest. Even if they pay attention to media or newspaper reports, they will not know the relationship with which a Member is involved. Unless the background information of a certain Member is reported by the media, the public might not be aware that his speech has something to do with his possession of several streets or districts, and hence his opposition to the Government's proposed rates increases. Therefore, although a certain policy involves the general public, some people might not be affected, but others might be affected slightly or significantly. So, I think that this unreasonable amendment should not be passed, whereas the original provision should be retained.

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Secondly, should Members be obliged to declare their interests at each and every meeting? President, I still consider it necessary to do so, for Members once held as many as 10 meetings on the same question before. There will certainly be no problem if Members make an interest declaration at each meeting. If 10 Council meetings are scheduled for the same question, the meetings might be held every other day, week or even month. In other words, if the amendment is passed, Members who have declared their interests today will not be required to do so again even if five meetings are to be held in future at an interval of one week or one month. Even if I were one of the attending Members, I do not think I can bear in mind the interest declared by a certain Member a week or a month ago, unless I only attended that particular meeting and only paid attention to the declaration and speech made by a certain Member. As we all know, Members of this Council are required to attend the meetings held by a dozen committees. Sometimes, several committees might hold meetings concurrently. As a result, Members will have to spend half an hour at a certain meeting and then proceed to another conference room and spend another half an hour on another discussion. So, it is impossible for a Member to remember the interests declared by all of the other Members.

It is even more impossible for ordinary people to do so. Even if they watch the live broadcast of each Council meeting, they can still not remember if a certain Member has problems with a certain item and so pay attention to his speech to find out if it is problematic, too. They will definitely not do so, not to mention remembering the details of the first declaration made by that Member. Even we Members attending the same meeting will not remember the details of declarations made by other Members, not to mention members of the public.

Actually, even if a Member declares his interest at each meeting, members of the public still cannot have a full picture of his interest involved behind the scene. As I said just now, if five or 10 discussions have to be held on the same question, and a meeting is to be held weekly, then the meetings will span 10 weeks. As an ordinary person, I really cannot remember all the declaration details. Even if a Member declares his interest on every occasion, I will still forget it. Moreover, I might not be watching the live broadcast while a Member is declaring his interest. Even journalists might not set out the interests of all Members in the newspapers on all occasions. Hence, the only thing we can do is to require Members to declare their interests once at each meeting to give members of the public an opportunity to understand the interests in which they are involved.

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Another channel through which members of the public can gain an understanding of the interests involved is to look up minutes of meetings. However, Members should understand that if a meeting held on the same question lasts two to three days in a row, its minutes will not be made available for public inspection immediately. The same will apply if two meetings are to be held in the same week. Members of the public will have to wait a couple of months before they can read the minutes of meetings and find out a certain Member has a certain interest in a certain issue. Those people who know how to look up the minutes are very "smart" indeed. The general public will not do that. I believe even Members in this Chamber will not do so. Hence, I think that Members should make an interest declaration at each meeting to inform other Members and the public of his interest in a certain issue. It is unreasonable for Members to refuse making simple declarations. If a Member with an interest is given an opportunity to speak without declaring his interest, it means that he does not give others an opportunity to consider the interest hidden behind his speech. I believe this is the most important point insofar as declaration of interests is concerned. We are not prohibiting a certain Member from speaking, but he must let others know more about his speech and interests. Some of his interests might be entirely reasonable, but this has to be judged by the listeners rather than the Member himself.

President, I think that Members must be frank, clear and direct in making decisions and policies. For this reason, this amendment should not be passed. Furthermore, the declaration requirement has been in use for so many years, so what is the problem with it?

Just now, I asked Members these questions: What is the problem with this proposal and the first one? Why should the declaration requirement be scrapped? I have been a Member for more than 20 years, except for two years during which I was not elected. How many times have we seen 70 Members queued up to make declarations? Some people might think that a meeting will be rendered impossible if Members have to spend almost an hour on making declarations. However, I have never seen anything like that before. So far, the highest number of Members who indicated their wish to declare interests on one occasion was only 10 or so. How much time does it take for a Member to raise his hand to indicate to the President his wish to declare an interest and do so? Five minutes or 10? If a meeting lasts a couple of hours, is it worthwhile to spend just a couple of minutes?

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President, this issue has something to do with the right to know, not efficiency or procedural justice. After a Member has declared his interest, we will then be able to tell and judge whether or not his speech is biased because of his interest. So, this value must be upheld firmly. President, I oppose this amendment.

MR DENNIS KWOK (in Cantonese): President, as a number of Members said earlier on, the two major amendments of this motion today are mainly related to certain requirements for declaration of interest by Members.

The first amendment is to remove the requirement under which declaration of interest is to be made every time a Member attends meetings of committees or subcommittees. With this modification, a Member needs only make a declaration of interest at the first meeting, and repeated declarations at subsequent meetings are not required. This modification apparently streamlines the whole declaration procedure and pre-empts repetitions without rocking the principles of declaration of interest by Members and prevention of conflicts of interest. Hence, I support this point.

However, the second amendment seeks to change the requirement under which a Member shall make a declaration on any matter in which he has a pecuniary interest, whether direct or indirect, when he moves a motion and an amendment or speaks. Where the Member's interest is in common with the rest of the population or a sector thereof, no declaration is required. President, as this amendment concerns the principles of declaration of interest by Members and prevention of conflicts of interest, Members must carefully consider whether this change will make Members more prone to the problem or trap of conflicts of interest, and I think it will.

Where the Member's interest is in common with the rest of the population, no declaration is required. I agree to this point and the reason is simple. If the interest is in common with the rest of the population, basically the issue of conflict of interest or even abuse of power for personal gains will not arise. However, some people will retort that the existing Rule 84 of the Rules of Procedure (RoP) has set out that the same practice applies to voting by Members. That is, if a Member's interest is in common with the rest of the population or a sector thereof, he can still vote. In fact, one of the reasons for us to amend Rule 83A now is to align it with Rule 84.

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The second thing is to meet the proportionality test. It means that if Members' interest is in common with the rest of the population or a sector thereof, they can still vote. In that case, speaking or moving motions and amendments are actually less important than voting. The declaration requirement in this regard should therefore be aligned with Rule 84 with proportionality.

Nevertheless, this is just like the "pocket-it-first" proposal mooted by the Government. As we are given the right to vote, why should we reject it? This is a most shallow view devoid of in-depth understanding of the whole issue. This crude analogy has confused the underlying implications and nature of the two procedures.

The reason why Rule 84 allows Members to vote where their interest is in common with the rest of the population or a sector thereof is that voting is in itself the most important and fundamental power of Members. Hence, unless apparent conflicts of interest arise, Members must not be easily deprived of their right to vote. But on the contrary, the right to speak or move motions or amendments are less important than the right to vote. Hence, it should be appropriate to impose declaration requirements on Members in this regard. This is the original intent of Rule 84(A), and the reason why this situation arose when the RoP were made back then.

The existing requirements do not deprive Members of their right to speak, and move motions or amendments after making declarations of interest. As long as they declare their interest before exercising the relevant rights, such rights are actually not affected. Rather, it just follows the established practice without affecting Members' rights and their obligations to make declarations at all.

If no declaration is required where a Member's interest is in common with a sector of the population, a serious problem will arise. And what is the problem in itself? In fact, the term "a sector of the population" is not clear. How do we define interest in common with "a sector of the population"? Let me give an example. If a Member holds one lot of HSBC shares, which is in common with other minority shareholders of HSBC, he will not be required to declare his holdings in The Link REIT and HSBC when he speaks, or moves motions or amendments in respect of The Link REIT incident. This is actually worse than the existing regulation, and will make Members more prone to the problem of abuse of power for personal gains or even conflicts of interest.

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Given the ambiguity of the term "a sector of the population", if we further waive the relevant requirements for declaration of interest, the original intent of Rule 83A per se will be undermined seriously and challenged. We should note why there is a difference between Rule 83A and Rule 84. This is actually where the original intent lies.

Let me further talk about the views of the general public. For example, in the finance programmes that I usually listen to, some stock market analysts will do stock analyses. At the end, the programme host will ask whether the stock market analyst has any holdings in such stocks. If so, he has to make a declaration. If both the general stock market and the Securities and Futures Commission require stock market analysts to do this, why is the same principle not applicable to Members? Why can they be exempt from making a declaration? At present, are the integrity and credibility of the Legislative Council so high that the public feel they can trust the legislators? I nonetheless think that the situation is just the opposite.

President, in the past year, The Economist magazine reported that Hong Kong was assessed to be a place with a rather high level of collusion between business and the Government. The Legislative Council will also be involved because policies and proposals alleged to be tilted to the business sector proposed by the Government are often discussed in the Council. And I believe a number of Members are stakeholders of the relevant policies or legislation, thus giving people the impression of collusion between business and the Government. The Economist has given such a rating to Hong Kong's policy regime. If we reduce Members' responsibility to make interest declarations for no reason, the credibility of the Legislative Council will be further affected. At present, the credibility of the Legislative Council is not high. Why should the requirements of declaration of interest by Members be lowered for no reason? This does not hold water in any sense.

In addition, we now require Members to make interest declarations rather than prohibiting Members having an interest in the question from speaking, or moving motions or amendments. The relevant practice will not affect Members' own power and ability in deliberations, nor will it cause great trouble to Members. Why should the requirement for declaration be abolished? The only reason that comes to my mind is that some Members are not willing to be subject to public monitoring.

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For these reasons, President, on behalf of the Civic Party, I oppose this amendment and support maintaining the existing practice of declaration of interest by Members. Thank you, President.

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

MS CYD HO (in Cantonese): President, changes in the mechanism for declaration of interests will affect the public's impression of the Legislative Council. In the past, when we monitored the Government's work, we used to say that regardless of whether Members really had any conflict of interests, if it would arouse suspicion and change people's impression of the executive, government officials or Legislative Council Members, the subject of our discussion today, thus undermining people's confidence in the parties involved, then it would not be appropriate to relax the procedures for declaration of interests.

Of course, during the scrutiny of the bill relating to stamp duty, many Members found it troublesome because if they had to repeatedly declare the properties held by them every time before they spoke, it would indeed take plenty of time. At that time the practice adopted by parliaments in Canada and overseas countries was mentioned in the committee scrutinizing the bill. That is, after a Member has declared his interest for the first time, every time he speaks again, he will ask the Chairman or the meeting to refer to the document kept by the secretariat on his declaration of interests. However, such a practice cannot give members of the public instant knowledge as to whether the Member concerned is involved in any conflict of interests. This expedient approach will certainly save a lot of time, but should we make such an important change just because Members do not want to take the trouble or a few minutes of the meeting time will be expended?

Actually, to follow the practice of overseas parliaments, we need the backing of a strong civil society. We also need an independent media ecology. The media must be capable and enjoy sufficient coverage, independence and autonomy to pinpoint the matters of Members' declaration of interests to the masses. Only then can we take this step. However, take a look at the media ecology in Hong Kong, where self-censorship is becoming increasingly serious. At present, Council meetings are broadcast live, allowing members of the public LEGISLATIVE COUNCIL ─ 19 March 2015 7627 to watch the proceedings of the meetings in their entirety, but we still rely on the media to deliver the live broadcast, otherwise members of the public will be unable to see the conflict of interests behind. If we simplify the practice to asking members of the public to refer to the documents on Members' declaration of interests kept in the Secretariat, members of the public will be unable to comprehend the whole matter instantly.

Besides, President, apart from scrutiny of legislation, I wonder if Members remember that during the examination of the funding application for the Guangzhou-Shenzhen-Hong Kong Express Rail Link, the civil society was very concerned with Members' conflict of interests. They requested the then Chairman of the Public Works Subcommittee to withdraw from discussion. However, I believe Members must have noticed that our regulation over conflict of interests is inadequate. As mentioned by many Members earlier, after declaring his interests, the Member concerned can still exercise his power and continue to act as Chairman here. Of course, we also believe that in the event of an obvious conflict of interests, some self-disciplined Members who have high expectations of themselves will choose to withdraw from discussion and ask another Member or the Deputy Chairman to temporarily chair the meeting for them. Yet a more common situation is that after our discussion, the Member concerned does not try to avoid suspicion at all and continues to chair the meeting in his capacity as the Chairman, making it hard to convince the public. Hence, President, I hope Members can consider afresh spending a few more minutes to declare their interests in meetings. It may indeed be quite troublesome, but in my view, it is more important to maintain public confidence in the Council. Hence, we will not support the amendment.

As far as I know, usually when the Committee on Members' Interests (CMI) proposed a change, it would consider that it had already carried out a lot of consultation beforehand. The consultation went rather smoothly without much objection, so it did not understand why … in fact, this is not the first time. I remember that when former Member Ms Miriam LAU served as Chairman of the CMI, she had also conducted consultation on the monitoring of Members' conduct for a long period. At that time we expressed our consent, but then at the Legislative Council meeting, after thinking about it more deeply and weighing up the matter carefully, we decided to accord priority to the Council's credibility and thus voted against her proposal. Of course, last time Ms Miriam LAU's proposal on monitoring Members' conduct was opposed for a different reason. Nevertheless, I would like to ask Mr IP Kwok-him not to get angry because such 7628 LEGISLATIVE COUNCIL ─ 19 March 2015 things have happened before. I hope that when Members propose a change, they will conduct more thorough consultation, since I do not think anyone has discussed with me or sought my views on this matter. I guess Members might have depended on the representatives of their political parties or groupings to discuss the matter, but the discussion conducted might not be detailed enough. The speeches made by Members from their respective perspectives and angles at this Legislative Council meeting will certainly shed new light on the matter.

Now, when this Council's credibility has been subject to continuous queries, I find it inappropriate for us to relax the relevant procedures. At least we should act scrupulously in compliance with the original rules and further identify areas where improvement can be made so as to strengthen public confidence in the whole Council. Thank you, President.

MR WU CHI-WAI (in Cantonese): President, first of all, I wish to tender my apology to Mr IP Kwok-him because in the entire discussion on the disclosure of pecuniary interests, I did not pay enough attention to the amendment, for I had focused my attention only on the part on repeated disclosure of the same pecuniary interest. During the past deliberations I had repeatedly considered the need for Members to disclose their interests repeatedly at every meeting. So, when I first got this message, I focused only on the part that I have just mentioned and considered that this change seemed to be able to strike a balance between deliberations and declaration of interests. Therefore, I did not pay sufficient attention to the amendment when I initially took it into consideration.

However, with regard to the other part of the amendment, which is about disclosure of common pecuniary interests, I am rather concerned about it. Insofar as this part is concerned, I must say that I omitted it as my focus was on the latter part when I first consider the amendment. But this part has shocked the public or aroused concern from us because if we propose to adopt less stringent ― The current stipulations are already very stringent in a way that under the present arrangement, Members will make their own judgment on whether they have any direct or indirect pecuniary interest to declare. In other words, Members make their personal judgment which is also subject to public monitoring. However, it is now proposed that an additional stipulation be included to the effect that if an interest that needs to be disclosed by a Member is a so-called common pecuniary interest, such interest can be exempted from declaration.

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I think this will give the public an impression that this proposal seeks to give Members one more amulet or "imperial sword" in the declaration of interest by Members as Members may argue that the question under discussion concerns an interest of Hong Kong as a whole, hence obviating the need for declaration. For example, issues like rates or the third runway mentioned by colleagues earlier may all involve the interests of Hong Kong as a whole and yet, we dare not be certain about whether a Member has any personal interest involved. Therefore, given the current stipulation whereby Members can disclose their direct or indirect pecuniary interests based on their personal judgment and subject to public monitoring, I do not wish to give the public an impression that this proposal is meant to provide Members with an additional channel through which they can have a chance to make a defence in the process of declaration.

I do not know whether Members will use this opportunity to make a defence but I think this is actually not necessary to this Council. Why should we give the public the impression that our intention is to provide a Member with another "imperial sword" for the Member to argue that in his view, his interest is actually in common with the interest of Hong Kong as a whole and hence a declaration is not necessary?

Therefore, on this basis, and after listening to colleagues' speeches, we in the Democratic Party hope that these issues relating to declaration of Members' interests can be discussed afresh and further considered in depth, so that we can think more clearly about how a balance can be struck effectively. Although Members' declarations may cause some inconvenience in the deliberations of this Council for their declarations may take an additional five to 10 minutes, we hope to do our utmost to maintain the credibility of this Council in its deliberations. Therefore, it is on this basis that the Democratic Party will not support the relevant amendment.

Thank you, President.

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

MS CLAUDIA MO: There is this saying that "if something is not broken, do not try to fix it." I am not too sure if I understand the motive and objective behind this proposal in the Council today. Some people would suggest that we are 7630 LEGISLATIVE COUNCIL ─ 19 March 2015 going after simplicity, trying to make things simple and we say we all hate bureaucracy. So, why do we not just cut down bureaucracy? But that is not the point. We do not do things just because it is more convenient for those involved and at the expense of public interest. We say politics is perception. And how this change is going to be perceived by Hong Kong society as a whole? You know and I know that Members here seem to think that they can just avoid declaring any conflict of interest.

President, I am rather curious about your kind of chiding "Long Hair" just now because I perfectly agree with his point that Members here ― some of them, at least ― do have conflict of interest problems. On what front? On the front of their membership at the National People's Congress (NPC) and the Chinese People's Political Consultative Conference (CPPCC). You say there is completely no conflict of interest there ― commercial or political, indeed? No one in Hong Kong would dare to say such a thing. But then, somehow, they do not need to declare that. So, we have this particular nebulous situation in this Council already and now we are trying to make things even simpler when it comes to declaration of conflict of interest. That is very bad for the image of Hong Kong, especially at the time when even the Mainland Government is trying so hard to crack down on graft, corruption, under-the-table deals et cetera, et cetera. We are talking about possible conflict of interest ― possible ― and now you are giving out a new rule to make Members have their heart …

PRESIDENT: Let me remind Members we are now dealing specifically in this motion with disclosure of Members' personal pecuniary interest. This is the subject matter of this motion.

MS CLAUDIA MO: Exactly, it is about personal interest. How personal is this personal interest?

PRESIDENT: Let me repeat once again: it is personal pecuniary interest.

MS CLAUDIA MO: That is exactly what I am saying: how do you define "personal"? I have a company in Hong Kong and then I have businesses in China or the Mainland of China and my membership at the NPC or CPPCC could LEGISLATIVE COUNCIL ─ 19 March 2015 7631 have some influence there. Possible or positive? Actually, positive impact. How about that? But you do not need to declare it as of now, as far as I could see. So, never mind, I am not trying to change anything here. You were saying this is not exactly relevant to what we are discussing. Fine. OK, let us forget about that except my point being, if there is such … or there are rather such doubts already, why should we make things even easier, easier for Members here? Let us not change it. The old rules are not broken. Who is complaining? I am not complaining. As Ms Cyd HO was saying, we were not particularly thoroughly, in any way, consulted on this issue.

And some people would say, when it comes to allegations of collusions between the Government and businesses in Hong Kong, businesses involving Members here, we could rely on the press, on journalistic media in town. Can we really? No, because self-censorship is so rampant amongst our journalistic labels in this city. Everyone knew that. Self-censorship for what reasons? One, commercial reason. How about that? Commercial reason because they do not want to offend advertisers. The second reason, for political clout, for political favours. That is exactly what is happening in Hong Kong within this Council and out there.

So, we are in a bad situation already. Let us not, at least, try not to make it even worse. And for the sake of credibility of the Council, for the sake of public interest in general, I oppose what we are discussing ― all these unnecessary changes. Thank you.

MR KENNETH LEUNG (in Cantonese): President, I now speak on the amendment to Rule 83A of the Rules of Procedure (RoP) of this Council, namely "Personal Pecuniary Interest to be Disclosed".

Overall, there are four main reasons for my opposition to the amendment. First, the original provision of Rule 83A simply reads, "In the Council or in any committee or subcommittee, a Member shall not move any motion or amendment relating to a matter in which he has a pecuniary interest, whether direct or indirect, or speak on any such matter, except where he discloses the nature of that interest." President, Rule 83A is actually made in a very lenient manner. Even though I have a direct or indirect pecuniary interest in a matter, I may still proceed to propose amendments or speak after making such disclosure. In other 7632 LEGISLATIVE COUNCIL ─ 19 March 2015 words, for all the gain I am going to obtain, I may still go ahead after declaring it, and this is a very lenient approach. I disclose that I will stand to gain, but I may still speak and propose amendments, so President, this is very lenient. I am fine with not tightening the practice, but why should there be an additional provision to make it even more blurred or lenient?

As regards Rule 83A, we surely need some guidelines, precedents or internal guidelines provided by the Legal Adviser in order to have a grasp of the three essential elements in Rule 83A, namely "direct", "indirect" and "pecuniary interest". What constitutes "direct"? If I receive money direct, this definitely constitutes "direct". What constitutes "indirect"? President, on the level of "indirect", I see the necessity to have some more guidelines for Honourable colleagues to make a declaration on any possible conflict of pecuniary interest in a more unequivocal or swift manner. This is essential.

I consider Rule 83A in its original form proven and see no need for change. We may also look at the two main proposed provisions for Rule 83A in the amendment, namely subrules (2) and (3). Subrule (2) is actually very simple, and it means that a Member who has disclosed his pecuniary interest in relation to a matter at a meeting of the relevant committee or subcommittee shall not be required to declare the same interest in subsequent meetings of the same committee or subcommittee before the Member speaks on the same matter. President, there are actually a lot of unclear or grey areas in the changes made to the relevant provision. First of all, what constitutes "the same matter"? Let me take the building of a third runway at the airport as an example, if environmental matters surrounding the building of the new airport runway are discussed in the second meeting, are they regarded as "the same matter"?

If Honourable colleagues hold that Rule 83A(2) can help them save much of their time in various aspects, let me put forward a suggestion. Before we swore in as Members of this Council, we needed to make a detailed declaration to the Secretariat in writing; since we have offered to the Secretariat a list on all of the interests, including pecuniary ones, properties, and so on, what is the point of yet another declaration? What if we ask people to check it out on their own before the start of every meeting on the ground that we have already made the declaration and no more is needed, period. Yet, that is not the crux of the matter.

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President, under the current global trend, government agencies, multinational organizations and even private enterprises alike take a stringent approach to conflict of interest. As Honourable colleagues put it earlier, conflict of interest refers not just to the real one but also to perception. In the professional background to which I belong, some multinational professional trades, including law firms, accounting firms or banks, may also take a stringent approach to conflict of interest. Very often, failure to declare a single item may lead to dismissal of staff. Regardless of one's position or years of service, if there is a conflict of interest not declared, albeit inadvertently, the colleague in question will still have to be dismissed. This is no fantasy. When Members look at regulatory bodies, multinational enterprises and professional trades around the world, they will see how the mechanism for declaration of interest will become increasingly tight.

Of course, we do not want the progress of this Council's deliberations to be affected by such procedures, and there is a need to strike a balance. Yet, Rule 83A represents a balance in itself, because what we need to declare are merely direct or indirect pecuniary interests but not others. The President has made it clear earlier.

Therefore, there is actually a very blurred point in the proposed change to Rule 83A(2), namely the definition of "the same matter", and this will actually give rise to a lot of disputes in some incidents future. In addition, there is another very important reason why we need to make a declaration every time before a meeting begins rather than taking it as a ritual. President, I have talked with many multinational regulatory bodies. For example, in our understanding of some professional organizations, including law or accounting firms, prior to the trading of a company's shares, if the shares are held by a client of my company, I still need to make a declaration in advance even though I do not serve that client directly. Is that action unnecessary? I know clearly that I do not contact the client nor offer any service, why do I still need to make a declaration before doing a transaction? First of all, it is about perception; and second, when colleagues are forced to think about if there is a conflict of interest before a meeting starts, it takes just a minute or two, but this action is very important. If they do not do so, as I put it just now, President, before we swore in as Members of this Council, on the first day of our four-year term, we put down all of our interests in clear wording and handed it to the Secretariat for access by the public and the media. The job is done, because all the interests have been declared, and there is no need to do it again before the meetings of all panels or bills 7634 LEGISLATIVE COUNCIL ─ 19 March 2015 committees start. Is that the case? That is not the most essential point here. The most essential point is that Members spend two or three minutes to think about if there is a conflict of interest before a meeting begins. President, this action or approach is essential in the sense that we will be placed in an unbeatable position and that our declaration of personal pecuniary interests can also foster confidence of the public in how we act as a means to maintain the credibility of this Council. This is very important.

President, after Rule 83A(2), I would also like to talk about the amendment to Rule 83A(3), which reads, "Subrule (1) shall not apply where the Member's interest in a matter is in common with the rest of the population of Hong Kong or a sector thereof." This kind of exemption is even more blurred. What constitutes "the rest of the population of Hong Kong"? What about the definitions of "Hong Kong" and "the rest of"? Does it refer to adult members of the public, or both adults and children? Does it include Hong Kong people having emigrated overseas? Does it include Hong Kong people who are identity card holders but have no right of abode? What constitutes "the rest of the population of Hong Kong"? I do not wish to see such blurred provision in the RoP, which is very difficult to operate.

In addition, what constitutes "a sector (of the population of Hong Kong)"? How is "a sector" formed? How many are there? Do 100 members of the public constitute "a sector"? If there are 20 shareholders and 100 employees in my company, and they constitute "a sector of the population" and represent the interests of "a sector of the population", does it mean there is no need for me to make a declaration, President? If my company hires 100 000 employees, and suppose I am a director of HSBC as well as a Member of this Council, do the interests of 100 000 employees not represent the majority of the public? Simply put, there has recently been a heated debate in this Council on whether there is a need to install an ATM machine here for staff and Members to withdraw cash; if I am a director of HSBC as well as a Member of this Council, the proposal will mean a contract to HSBC, which has also hired 100 000 employees. Do they constitute "a sector of the population"? Do I share the same interest as the majority of the public? How should a declaration been made? A declaration is surely needed, President.

In fact, Rule 83A(3) is unnecessary. Such a stipulation will only give rise to more doubts among a greater number of Honourable colleagues, who may need to spend more time to think about if a declaration is necessary as well as whether LEGISLATIVE COUNCIL ─ 19 March 2015 7635 they are among the rest of the population of Hong Kong or a sector thereof. I will be convinced if Honourable colleagues who endorse the current amendment can answer me, President. Otherwise, I maintain that Rule 83A should be kept in its current simple and effective form without the need for any amendment.

With these remarks, President, I oppose the amendment.

MR GARY FAN (in Cantonese): President, I rise to speak against the resolution moved by Mr IP Kwok-him under Article 75 of the Basic Law to amend Rule 83A of the Rules of Procedure of the Legislative Council concerning disclosure of pecuniary interest. This proposed resolution seeks to relax the requirements in the Rules of Procedure (RoP) for Members to disclose pecuniary interests at meetings of the Council or any committee or subcommittee, including the exclusion of "common pecuniary interest" from Rule 83A, and requiring members of committees or subcommittees responsible for scrutinizing legislative proposals to disclose their pecuniary interests only when they speak at the first meeting, and repeated disclosure of the same interests at subsequent meetings is not necessary. The Neo Democrats considers that this amendment concerning repeated disclosure of the same interests, which is too lenient, will affect the degree of convenience for members of the public in monitoring Legislative Council Members.

President, this amendment of the RoP was conducted in response to the view raised by some members of the Bills Committee on Stamp Duty (Amendment) Bill 2012 during the scrutiny on the Bill which commenced in early 2013. They opined that if they needed to disclose the same pecuniary interests at every meeting of the Bills Committee, it might unnecessarily hinder the progress of the meeting. For this reason, in April 2013, the current-term Committee on Members' Interests (CMI) began to hold meetings to deliberate on a review of Rule 83A.

President, being a member of the CMI, I have repeatedly objected to the proposal on amending Rule 83A at the meetings on behalf of the Neo Democrats. The Neo Democrats considers that the RoP, which involves disclosure of Members' personal interests, has always aimed at maintaining the transparency of the Legislative Council and enhancing its accountability. Hence, the main consideration for all amendments must be enhancing the transparency of the 7636 LEGISLATIVE COUNCIL ─ 19 March 2015

Council rather than maintaining the efficiency of the proceedings of meetings. The situation is similar to that of the provisions of the RoP limiting the power of the President of the Legislative Council. Neither can they be amended at will for the sake of maintaining the efficiency of the proceedings of meetings.

The current-term CMI has also considered amending Rule 83 of the RoP relating to registration of interests by Legislative Council Members. The amendment made at that time tightened the criteria for Members' registration of personal interests, including the requirement to register under the existing categories of "directorships" and "remunerated employment, offices, etc." in the Register of Members' Interests the job nature of such offices, as well as the addition of a new category of registrable interests, which is "remunerated membership of boards, committees or other organizations", requiring Legislative Council Members to report remunerations received in statutory bodies and non-government organizations in detail. These amendments simply seek to address current public expectations of Legislative Council Members in Hong Kong society and enhance the transparency of Members' personal interests to facilitate monitoring by the general public.

Similarly, the purpose of Rule 83A of the RoP is to ensure that when Members exercise the powers conferred on them and make important decisions on policies and affairs which have an impact on public interest, such decisions shall be based on public interest. For this reason, the principle of enabling the public to ensure proper exercise of public powers by Legislative Council Members should be overriding. A prerequisite for amending Rule 83A is that it must be evident that the severity of the impact of repeated declaration of Members' personal pecuniary interests on the proceedings of meetings makes it justifiable to do away with this overriding principle.

President, at the CMI's first meeting to scrutinize the amendment to Rule 83A on 30 April 2013, members who belonged to both the CMI and the Bills Committee on Stamp Duty (Amendment) Bill 2012 said that they had noticed that many members engaged in the scrutiny on the said Bill had to disclose their pecuniary interests. They did not concur that Members' disclosure of interests in compliance with Rule 83A would waste a lot of time and affect the Council's efficiency. Neither did they agree that it would hinder the progress of the meetings. Usually it will take only some 10 seconds, 30 seconds or half a minute for a Member to declare his interests before delivering his speech. LEGISLATIVE COUNCIL ─ 19 March 2015 7637

Merely saving each Member a small amount of time has little effect in enhancing the efficiency of a meeting, but it will have a profound impact on the image of the Legislative Council.

President, as public engagement in the Legislative Council business becomes increasingly deeper, the people's standard for Members' declaration of personal interests has become more stringent. That is why Mr NG Leung-sing, former Chairman of the Finance Committee, was repeatedly questioned about his conflict of interests when the Finance Committee was considering the funding for the advance works of the North East New Territories development areas. Hence, I do not agree that the Legislative Council needs to amend the RoP which monitors Members' powers, relaxing the provisions relating to such regulatory power for the sake of maintaining the efficiency of the proceedings of meetings or giving Members convenience in declaration of interests. Otherwise, it is a kind of regression of the RoP, making the Legislative Council unable to tie in with the evolving Hong Kong society and affecting public confidence in the Legislative Council.

President, the CMI has studied the practice adopted by the House of Commons of the Parliament of the United Kingdom for declaration of interests. That is, Members of the Parliament in a public bill committee are required to declare relevant interests only at the first meeting of the committee or on the first occasion on which they address the committee, and repeated declarations at subsequent meetings, regardless of how many meetings there are, is not necessary. However, members of our CMI have also indicated that there is a major difference between the British legislature and the Hong Kong legislature. Compared with the British Parliament which is returned entirely by direct elections, half of the Members of the Hong Kong Legislative Council are returned by functional constituencies representing the interests of their respective sectors. As a result, it is more likely that they will need to declare pecuniary interests.

For instance, Mr NG Leung-sing, who was elected uncontested in the finance sector in the current-term Legislative Council, concurrently holds remunerated directorships in six companies. Mr Andrew LEUNG from the industrial sector, who was also elected uncontested, is even a remunerated director of 19 companies. While such a privileged class of functional constituencies still exists in Hong Kong, we should adopt declaration requirements which are even more stringent than those applied by countries where true universal suffrage is place. Only then can we meet public interest.

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President, the Neo Democrats finds it necessary for Members to declare interests when they speak on a question for the first time at every meeting on the Bill because no matter whether it is from the perspective of the Legislative Council or from that of the public, each meeting can be regarded as a separate meeting rather than a continuation of the previous meeting. Moreover, the public may not have time or a lot of chances to observe every meeting to look into each Member's declaration of interests in sequence. For this reason, to prevent Members from encountering difficulties in the actual operation and inadvertently contravening Rule 83A, the Neo Democrats holds that other approaches such as administrative measures may be adopted to resolve the issue.

The practice of one of the 18 District Councils in Hong Kong, the Sai Kung District Council, may serve as reference for us, which is putting the written declaration of interests of the District Council Members on the desks right before them at each meeting to remind them to disclose their interests before they speak on the relevant matters for the first time. This administrative arrangement can strike an appropriate balance between convenience for Members and transparency of Members' interests, and the administrative cost for implementing this arrangement is actually very low.

President, the Neo Democrats holds that as Rule 83A of the RoP has been operating effectively, it is not necessary to make a comprehensive amendment. I suggest Honourable colleagues in the Legislative Council consider adopting administrative measures which can remind Members to disclose their own interests while reducing the difficulties posed to the actual operation of Rule 83A. Hence, I object to the resolution moved by Mr IP Kwok-him.

President, I so submit.

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

MR WONG YUK-MAN (in Cantonese): President, in my reply to the questionnaire issued by the Committee on Members' Interests (CMI) in June last year, I did not express any strong view on the two proposals on amending Rule 83A of the Rules of Procedure (RoP). However, after noting the details of the case involving former Chief Secretary for Administration Rafael HUI and the revelation of acceptance of huge donations from Jimmy LAI by a number of LEGISLATIVE COUNCIL ─ 19 March 2015 7639 pan-democrat Members, including Members of the three major pro-democracy political parties in this Council, I have pondered over the proposals again and, after a lot of thoughts, considered that they are not entirely sound. As a result, I cannot but change my mind and object to the proposals.

Members as public office holders must be open and transparent, and it is better for the declaration system to be stringent than being lax. According to the findings of many opinion polls, public satisfaction with the overall performance of Members of the Legislative Council remains low. Not only do the public have high expectations for Members' integrity, but Members are also obliged to let the public learn more about whether their judgment and trade-off made in respect of policy are fair and reasonable. Therefore, political factors and public perception must be taken into consideration in introducing any amendment to the requirement concerning the monitoring of Members' personal interests.

It has turned out that some so-called pro-democracy Members, including radical Members, could have accepted the lavish entertainment offered by Cathay Pacific Airways over the years. One of them was Mr Kenneth LEUNG, who delivered his speech here some time ago. Some Members had even brought along their spouses, and the total amount of expenditure on hotel accommodation and others could add up to more than $100,000. Many Members had not made any declaration, and it is most laughable that one of them had held aloft a placard reading "Covetous Donald TSANG reaping benefits at sea, on land and in air". Buddy, you are behaving in the same manner, right? When I took up chairmanship in 2010 in the wake of the five geographical constituencies referendum, one of my former party comrades accepted the lavish entertainment offered by Cathay Pacific Airways along with his wife, and we were being kept in the dark. He had accepted such entertainment not only once, but twice.

Honestly, we had received such invitations before, but we would ask ourselves on what basis we could accept the invitations. What did the handing over of an airplane have to do with these Members? These are all scandals. However, no heads rolled in the end. Was it not double standards? Given their high expectations for government officials and calls for the officials to "face the music", why did these Members not require themselves to do the same? While their declaration was made only until after their acceptance of money from Jimmy LAI had come to light, we have to face mud-slinging every day though we have not accepted any money.

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Although it has been nearly 18 years since the establishment of the Special Administrative Region Government, half of the Legislative Council seats are still not returned by direct elections. The functional constituencies are regarded as coterie elections with a very narrow electorate base. Not only were many of the functional constituency Members returned uncontested, but some of them have intricate relationships with the interests of the business sector or other trades and industries. Nevertheless, political party and political donations laws are absent in Hong Kong. When it comes to monitoring Members' conflict of interests, Hong Kong is a far cry from other countries and regions, such as the United Kingdom and Canada as mentioned in the document. Under the political party laws, and even political donations laws and political lobbying, implemented in some places, parliamentary members are regulated by the law should they wish to lobby representatives of certain interest groups or governments. Although they can engage in lobbying, they cannot breach the law.

Given the absence of political party and political donations laws in Hong Kong, a political party is only required to submit simple documents when running in elections by, for instance, stating that all electoral expenses are to be borne by the Democratic Alliance for the Betterment and Progress of Hong Kong (DAB). However, independent candidates have to follow a very troublesome procedure of making declarations for each and every document. It is most ridiculous that a year-long inquiry could be launched by the Independent Commission Against Corruption (ICAC) even if $50 is unaccounted for. There is nothing we can do about these extremely harsh electoral laws in Hong Kong. We also agree that harsh electoral laws are fine in order to ensure the cleanliness of elections. However, political parties are not subject to regulation, right? The DAB is widely known to have abundant money, but there is nothing we can do about it, because it is not regulated by the law. Neither are they required to reveal the source of their funding. Given the absence of political party laws in Hong Kong, political parties can register as limited companies or societies. If they are registered as limited companies, they are only required to have their tax returns completed by accountants annually. In addition to limited companies, political parties can also establish central committees and hold general meetings or congresses. If we want politics in Hong Kong to develop in a sophisticated and healthy manner to prevent the occurrence of the aforesaid incidents … for instance, a Member should not be treated as breaking the law for accepting money from Jimmy LAI. It is pointless to scold him because he has not broken any law. He can shout aloud that he has accepted the money unconditionally. LEGISLATIVE COUNCIL ─ 19 March 2015 7641

He can say anything. On the contrary, we will be treated as breaking the law should we try to find fault with him and question him for speaking for Jimmy LAI in this Council after accepting his money.

Under the current political system, there is no law on political parties, political donations and lobbying. In overseas countries, the voters know very well which consortia are represented by which political parties. Hence, when it comes to polling, they should know clearly which consortia are represented by which political parties before deciding on whether or not they should cast votes. Therefore, I will not support any proposed amendment that may lower the transparency and undermine the monitoring of Members' personal interests by the public. Under the current environment and system, political party, political donations and lobbying laws are completely absent. The greatest significance of a law on political party lies in ensuring that all political parties, whether big or small, can carry out their political work under a fair, impartial and open system. Insofar as party politics is concerned, this is a key element of democracy. And smaller political parties should even enjoy extra protection.

Let us come back to the case involving Rafael HUI and the earlier corruption incidents involving Donald TSANG. As the former Commissioner of the ICAC, Timothy TONG was found binge drinking Maotai and failing to attend to his proper duties. This illustrates that the Government's declaration system was actually problematic. The Legislative Council, being a legislature and a public opinion representative, is responsible for monitoring the Government. However, Members of the Council frequently call for the invocation of the Legislative Council (Powers and Privileges) Ordinance against government officials, even though they do not set a good example themselves. On the one hand, they play the role of public opinion representatives, but how do they conduct themselves? Members must set an example, strict with themselves, boost public confidence in Members' participation in politics, manifest the spirit of integrity to gain public trust, and maintain a stringent system for declaration of personal interests. I feel sorry that it is not the case today. I will therefore not support this amendment because it is basically meaningless.

According to Rule 83A of the RoP, the main purpose of disclosure of pecuniary interests by a Member is to ensure that other Members and the public are made aware of any pecuniary interest of that Member which might reasonably be thought to be relevant to those proceedings. President, would you please count the number of words in this sentence. It is a terribly long sentence with no 7642 LEGISLATIVE COUNCIL ─ 19 March 2015 breaks at all. I can already be considered as an articulate person who can read out the whole sentence fluently. You may invite another Member to read out "other Members and the public are made aware of any pecuniary interest of that Member which might reasonably be thought to be relevant to those proceedings". Not only is this sentence difficult to read, but the text is also redundant. I do not understand what it means, right? We must guess its meaning slowly before we can understand what it means. This problem occurs frequently in the drafting of legislation by the Government. We could never have imagined that the Legislative Council encounters a similar problem in amending the RoP, too.

To my understanding, the purpose of this requirement is to ensure that other Members and the public are made aware of any direct or indirect pecuniary interest of a particular Member. The people referred to here are Members other than that particular Member, as well as the public. This sentence is actually very redundant. Why should the expression "other Members" be used? Actually, the word "public" should have included "other Members". President, am I right? We must understand that, from the point of law, disclosure of pecuniary interests cannot make an act which is illegal (such as corruption or misconduct on the part of public officers) legitimate or legal. On the contrary, a stringent declaration system can ensure that Members stay vigilant from time to time and observe political ethics and moral norms at all times. A declaration of relevant interests under specific circumstances can even prove the absence of criminal intent on the part of a Member, and hence his innocence, right? On the contrary, Members stand to benefit from this.

Regarding the exemption of a Member from the disclosure of common interests under Rule 83A(3), the RoP requires that Members should judge whether they have a direct or indirect pecuniary interest in the matter under consideration at the relevant meeting of the Council or a committee. However, the criteria adopted by Members to judge whether they have a direct or indirect pecuniary interest might differ, and the judgments made by different Members might vary, too. As regards "common interests", which means that a Member's interest in a certain matter is in common with the rest of the population of Hong Kong or a sector thereof, different people will inevitably come up with different interpretations.

The exemption of a Member from the disclosure of common interests under Rule 83A(3) will only lead to greater disturbance and confusion, as well as more political disputes. The fact that Members are only required to make a LEGISLATIVE COUNCIL ─ 19 March 2015 7643 declaration of interests in speaking on a proposed motion or an amendment under Rule 83A is not in conflict with Rule 84 under which "Members with common interests are not prohibited from participating in voting". Hence, the inclusion of "common interests" under Rule 84 in Rule 83 is simply unnecessary. In fact, a Member might propose a motion or an amendment or speak on the basis of common interests, and in that case, members of the public are entitled to obtaining information about the disclosure of interests by that Member. Therefore, I cannot but oppose the exemption of a Member from the declaration of common interests, so to speak, under Rule 83A(3).

Regarding the requirement that "repeated disclosures are not required" under Rule 83A(2), given the restriction on the number of times a Member may speak under the RoP, repeated disclosures resulting from a Member speaking repeatedly on the same motion at different meetings will most probably be made only in Bills Committees or the Finance Committee. As these two Committees might involve motions with legal effect, I cannot agree to the requirement of exempting a Member from repeated disclosures under the proposed Rule 83A(2).

Under Rule 83A(2), committee or subcommittee members responsible for scrutinizing legislative proposals are required to disclose their pecuniary interests when they speak for the first time on a certain matter in committees or subcommittees. However, they are not required to make repeated disclosures of relevant interests in subsequent meetings. Since the disclosure of Members' interests is targeted at other Members and members of the public, to exempt the relevant Members from making repeated disclosures will definitely undermine the ability of members of the public to monitor them. Let me cite Bills Committee meetings as an example. Unless members of the public have watched all the previous video recordings or even retained the relevant records, how can they know the interest disclosed by a certain Member at a certain meeting? Hence, the proposed Rule 83A(2) is not only far from being stringent and proper, but also in contravention of the purpose of Rule 83A of the RoP, thus failing to ensure the public's awareness of the involvement of a Member with a relevant pecuniary interest, whether direct or indirect.

It has been suggested that the Legislative Council may follow the practice of the United Kingdom House of Commons, whereby declarations made by Members will be recorded in the minutes of meetings and uploaded onto the House of Commons website for public inspection. Nevertheless, this practice is not included in the proposed amendment. Although the CMI proposes that a list 7644 LEGISLATIVE COUNCIL ─ 19 March 2015 of Members' interests may be uploaded onto the website of the Legislative Council for public inspection, Members may or may not upload the relevant list since they are not required to do so under the RoP. This is not a sound and transparent system, is it?

Furthermore, the practice of the United Kingdom House of Commons is not satisfactory because the preparation of the minutes of meetings takes time, and there is often a lag of a couple of months, thus making it impossible for members of the public to get to know the content of the declarations made by Members in a timely manner. Since the relevant amendment cannot rectify the remedial measures to enable members of the public to learn about the declaration of the relevant interests expeditiously, I cannot support the relevant amendment.

With these remarks, President, I oppose the motion.

MS EMILY LAU (in Cantonese): President, our discussion today is related to a motion on monitoring Members' interests. President, this debate is déjà vu to me. Perhaps you have been in the legislature for a time not as long as I have but in each debate, even on matters that Members had agreed to or most Members had agreed to, once such matters were referred to Council meetings, they would still be hotly debated. Certainly, Members are entitled to the freedom of speech but as a member of the Committee, I also hope that Members could have given play to their freedom of speech earlier by holding thorough discussions together. Had it been known that this would not work, we would have simply refrained from proposing this motion for debate.

The debates on previous occasions, for example, were even more heated. At that time, Ms Miriam LAU was the Chairperson. We proposed that Members had to be regulated because the conduct of some Members was really quite outrageous and Members also agreed to it. However, after the report had been tabled at the Council meeting, some Members castigated it so much that Ms Miriam LAU was almost in tears. I believe Mr IP would not cry but I also remember that at that time, Ms Miriam LAU said, "Even though I am an ox, an ox still deserves some respect.".

Now, I have found the questionnaire of the survey conducted by the Secretariat on our behalf and President, not all Members expressed support. Concerning the amendment of exempting Members from the disclosure of LEGISLATIVE COUNCIL ─ 19 March 2015 7645 common pecuniary interest under Rule 83A, 84% of Members expressed support, those who agreed accounted for 58% and those who disagreed accounted for 9%, whereas two Members did not have any opinion. However, those Members who did not have any opinion at that time have strong views now. In fact, they should have expressed their views at that time but since these Members chose to say that they had no opinion, other people thought that at least, they did not object to the proposal but as it turned out, they have very strong views. On another amendment that dispenses with the need to make repeated disclosures, Members who expressed their support accounted for 87%, that is, the number of Members who expressed agreement stood at 60, whereas seven Members expressed disagreement and again, two Members had no opinion. However, they now have this many views.

President, in fact, no one prohibits Members from speaking but if the situation is like this, the efforts made by us … we are not … as described by Mr Ronny TONG, we absolutely have no wisdom. Perhaps the Member who is the wisest in the universe can also express his views later. In some political parties and groupings, the proportions of Members who expressed support and opposition were half-half but this does not matter either. On some matters, they have different views within their political parties and they have also talked about this here. Of course, we from the Democratic Party were also present and Mr WU Chi-wai also displayed his wisdom in his speech just now. Therefore, there are actually some highly controversial issues that Members should discuss thoroughly and they should not make any changes after discussion.

However, the only thing that I hope Members would do is to be fair to the Committee and also be fairer to the Legislative Council. Since they have such excellent views, of course, they have to express them today but President, had Members expressed them earlier, today, time would not have been wasted on this debate because Members cannot see eye to eye with one another. If they do not agree, not to mention the Committee on Members' Interests (CMI), no committee would have tabled this motion at any Council meeting.

Therefore, I fully understand Members' views and also respect them. The only thing that I ask of Members, including those in my humble party and all Members, is that when we consult them on certain matters, they can waste some of their precious time ― in fact, this cannot be considered a waste either ― I ask Members to take the trouble of spending some of their precious time and energy 7646 LEGISLATIVE COUNCIL ─ 19 March 2015 to look at why the Legislative Council wants to consult you and after looking at it, write down your insightful views, so that we ― in whichever political party or as a group of people ― can know what is going on when sitting down for discussions together and decide whether or not to refer the matter to a Council meeting.

President, in passing, I also wish to mention that since a subcommittee in which I am involved is consulting Members ― it probably has nothing to do with incumbent Members ― on various matters related to applications for reimbursement of operating expenses for Members of the next term, I hope that Members, be it those of various political parties and groupings or independent Members, and no matter if they have any views or not, can take the trouble of reading that paper. It is a complicated one, more or less as complicated as the present one. Take a look at it and express your views. In the event that they have expressed their views but subsequently change them, to be fair to us in the subcommittee, to the legislature and to the public, it would be most advisable for them to explain why they have changed their views.

President, therefore, I believe that the most important thing for us, as Members with indomitable spirit, is to have integrity. They have to speak very honestly and should not think that they are speaking solemnly with the force of justice now ― certainly, I do not take issue with that and that was how some Members were like when they spoke just now ― they have this questionnaire in their hands and if they oppose the proposal, it is right for them to voice their opposition. However, this is not how some Members conducted themselves. In this latter case, they should not try to make any pretences, thinking that others would not know. The President and I would surely know. President, you also have the report before you but of course, you would not read out all of its contents and Mr IP Kwok-him does not have to do so either because the whole report has been uploaded onto the Internet, so everyone already knows about it.

Therefore, I hope that when Members express their views ― of course, we highly respect them ― but when some very humble and newly established committees of the Legislative Council want to seek Members' views and ask Members to express their views, they should not be so unforthcoming. Otherwise, all these committees have to be abolished and we may as well wait for the tabling of motions at Council meetings before we engage in a debate. However, before establishing these committees and working like slaves, we had LEGISLATIVE COUNCIL ─ 19 March 2015 7647 secured Members' approval and all Members also considered it to be the best course of action. Recently, we made a visit to Germany and such an approach is also adopted there. We hope that in the future, the approach adopted in Germany can also be debated somewhat here.

However, today, the entire report is here but huh, it looks as though some Members were not aware of this exercise and they are expressing their views only now. Certainly, they can do so but at least, they should explain to other people why, at that time, they responded in such a way but speak in such a fashion now. I understand Members' speeches. Perhaps if Members had approached us to talk about this at that time, we would have had discussions at the meetings and reached a consensus on not taking further actions because the grounds given by Members are also very sound. In that case, we could have simply discontinued the work.

President, I absolutely am, as Mr Ronny TONG put it, someone who has little wisdom and I do not have any wisdom of the universe either. But I hope that Members, and not just Members in the CMI for that matter … moreover, the members in our committees are all elected by Members and if they think we have done a poor job, they may as well come here and move a motion of no confidence to topple us or the Committee. Why am I saying this? My anger is certainly not even equivalent to one tenth of the wrath swollen in Ms Miriam LAU back then but sometimes, I really find this most lamentable. After I had done some work, I invited Members to come and have discussions but few people expressed their views. Alas, since you mistresses and masters were so busy, we thought we may as well issue some questionnaire and Members also filled it in and returned it. We thought we had secured a support rate of 84% or 87%, so we should proceed with it but on coming back here, we found that Members had heard of this, learnt about this and talked about this only now.

So, all has come to naught now. If the great majority of Members do not agree with this matter, of course, we should not proceed. In that case, Members in our Committee may have to work like slaves again. No matter what we do ― or we may even do nothing ― President, I think Members should, as Ms Miriam LAU said, show some basic respect.

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

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MS STARRY LEE (in Cantonese): President, first of all, I have to thank the Committee on Rules of Procedure (CRoP) for proposing this amendment. Having listened to Ms Emily LAU's speech earlier, I understand why she got worked up, and I thank her for giving us the true picture. In fact, members of the public who are watching our debate here may not understand what happened. Some Members have so righteously criticized the amendment, saying that it is meant to relax the relevant requirements. They even exaggerated the contents of the amendment, describing them as if they are proposed by Mr IP Kwok-him personally. This is simply not true, and I consider it necessary to briefly account for what actually happened.

First, regarding this amendment to the Rules of Procedure (RoP), it was a minor technical amendment tabled before the Legislative Council after obtaining the consent of the majority of Members more than once. I also took part in the process of forging the first consensus. I consider this a consensus because as stated in the paper, the amendment was proposed in response to the point made by more than one Member that the requirements in the existing RoP were unclear during the deliberations of the Bills Committee set up to scrutinize the "double curbs" measures. I believe Members will understand that a Bills Committee scrutinizes the same bill, and it is not the case that a different bill is scrutinized every time. Under the current requirements, Members are required to declare their interests at every meeting. Quite a lot of Members had put forward a host of proposals, such as making a written declaration once, which would then be uploaded onto the Internet or put on the table at each meeting, so that everyone will know that the Member has made a declaration, thereby obviating the need to make the same declaration every time. Members from various political parties and groupings were present back then, and everyone agreed to look into how the existing arrangement under the RoP should be dealt with. According to Members' understanding of the RoP at the time, Members are required to make a declaration once on the same question under discussion. When this rule applies to the Bills Committee or to the many meetings of the Bills Committee, Members' declarations will become redundant. I recall that back then, Members requested that the matter be taken up by me, and I, therefore, asked the Clerk to refer this matter to the CRoP. No Member raised objection when I made this request. Members can check the minutes of the meeting or review the recordings. Nobody raised objection at the time, and everyone agreed that the CRoP should review the need to maintain the requirement of making declarations repeatedly. Members agreed on the need to rationalize this requirement in the RoP, and this is the first consensus.

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As for the second consensus, Ms Emily LAU also mentioned it just now. In fact, this issue was discussed in the Committee on Members' Interests (CMI). The CMI consists of seven members, including three pan-democrat Members and four pro-establishment Members. The amendment was passed at its meeting and they even issued a questionnaire to other Members to consult them on whether they agreed to it. Members of the public may not know this, as they have only heard a number of Members say that the amendment was intended to relax the regulation or worse still, the amendment would tarnish the image of this Council. The first question of the questionnaire is this: Proposal to exclude common pecuniary interests from the requirement of Rule 83A. Results showed that 58 Members agreed, nine disagreed, and only two had no view. In their speeches made today some Members who spoke righteously against the amendment were among those who agreed to this proposal. Just now I heard some Members, such as Mr WU Chi-wai, say that they did not give sufficient consideration to the proposal at that time and so, they had to express their views again today. This, I can understand. But some Members had, in their speeches, neglected their reasons for supporting this proposal back then and only pointed an accusing finger at other Members, describing the amendment as if it was proposed by us in the Democratic Alliance for the Betterment and Progress of Hong Kong. This is simply not true.

The latter amendment is just the same. With regard to the proposal that members of a committee or subcommittee on legislative proposals are only required to disclose pecuniary interests when they first speak and repeated disclosures at subsequent meetings are not required, 60 Members agreed to it, seven disagreed and only two had no view. What is it if this survey is not indicative of Members' majority support?

However, at this meeting of the Legislative Council today, the proposals are outrageously described as if they have not gone through any discussion and no questionnaire survey has been conducted on them. Everything that the CMI has done before seems to be non-existent. I think this is most unfair to the CMI members, and this is grossly unfair to the efforts made by us in the Bills Committee in referring this issue to the CRoP for review. It is fine for Members to hold different views but they should express their views at an appropriate time. If they said in the final debate that they had no idea about what had happened and then exaggerated the contents of the amendment, I think they are being irresponsible.

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To enable the public to better understand the contents of this amendment, I wish to reiterate one point and that is, the stipulation proposed in the amendment that Members are not required to make repeated declarations applies only to meetings of the Bills Committee. If Members care to read the paper again, they will note very clearly that it is provided that repeated disclosure of the same interest is not required in any Bills Committee or any subcommittee appointed pursuant to Rule 75(12) for the purpose of assisting the House Committee in the performance of its functions under Rule 75(10). I believe Members know only too well the difference between a Bills Committee and a panel, as the former scrutinizes the same bill and the issues or contents under discussion are cognate. This is why there is the problem of repeated declarations and why there is a need to rationalize this requirement. In their speeches made just now Members have described this stipulation as if it would be extended to all committees, thus making it unnecessary to make a declaration. This is not true, for this stipulation actually does not apply to other committees. So, can Members speak with relevance to the contents of the amendment? I hope the public can understand that this amendment applies only to Bills Committees or the House Committee or committees in relation to subsidiary legislation or legislation.

All in all, I hope Members can recall and think about the process. If Members have different views, they can express them, but if they neglect the consensus reached by us, and regard the question that we all raised in the Bills Committee and the efforts made by the CMI or even the subsequent questionnaire survey conducted by the CMI as if none of these has ever happened, I think this is gross disrespect to the operation of the entire Council.

We often said that the public nowadays have criticized Members a lot and are far from respectful to us. Today is a good example. We are actually the ones who made things develop to such a sorry state, are we not? If no consensus had been reached, we could have refrained from tabling this amendment before the Legislative Council. Back then, we in the Bills Committee only questioned the need to make a declaration repeatedly because we believed that repeated declarations were actually not consistent with the intention of the RoP upon their formulation, for the intention was to require Members to make declarations on the same matter. Now that the discussion of a Bills Committee is obviously about one single and the same issue. Why should it be necessary to make declarations repeatedly every time? Members raised this question at the time and questionnaires were also distributed to conduct a survey, the results of which LEGISLATIVE COUNCIL ─ 19 March 2015 7651 showed that Members agreed to the proposals but they have now reneged on their words. It does not matter if you disagree with the proposals but you indicated that you agreed to them in the questionnaire survey. Now that these proposals are tabled at this meeting of the Legislative Council, but we are giving the public the impression that we have not sought the consent of Members internally and worse still, it is put in a way as if some Members are seeking to relax the RoP.

In order to uphold the dignity and credibility of this Council, I hope Members can review in retrospect all the developments and find out about what happened before speaking. The fact is that we did go through these procedures and forged a consensus with the majority of Members of this Council before putting forward these amendments.

President, I so submit.

MR CHAN KIN-POR (in Cantonese): This Council needs badly people who do solid work. But regrettably, in this debate today, it is apparent to us that many people do nothing when they are supposed to take actions, and when there is a chance to take advantage of the situation, they will spare no effort in doing so. Nevertheless, I am glad to hear what Ms Emily LAU said today. I do not agree with Ms Emily LAU on every matter, but I find her remarks earlier on really thought-provoking. She has rightly pointed out that the problem of this Council is that no one is willing to do serious business. And subsequent to the discussion by a group of assiduous representatives from various camps, many people have wildly taken advantage of their effort at once. Also, they betray their conscience on many issues without telling the whole truth in an attempt to secure votes by pulling wool over people's eyes.

Hence, I think if "one person, one vote" is practised in Hong Kong and that members of the public cast their votes without getting sufficient information and gaining an understanding of the facts, it will be most dangerous. For this reason, I think the time is really not ripe yet for Hong Kong to implement "one person, one vote" election now. This is mainly because the performance of Members is below standard. Also, very often, the candidates act in an improper way with an improper motive, whereas members of the public also have inadequate understanding of the issues. Hence, I think it will come into reality only after a period of time.

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I am grateful to Ms Starry LEE for making this fact clear earlier on. Members should understand that this motion only deals with the situation of Bills Committees, and so on. Just imagine a committee which keeps discussing the same issue. More than 10 meetings may have to be held, and declaration is required at each of these meetings. So, are we wasting the time of the Legislative Council doing things which are cosmetic, or really acting in the light of actual circumstances? We all will make a declaration in writing, so why bother making an additional one? Basically, the relevant proposal purely seeks to enhance efficiency. If Members have knowledge and understanding of this issue, it is simply like this. Why should we stray far from the subject? This proves that in this Legislative Council of Hong Kong, Members will exhaust every means available to take advantage of the situation. The explanation of our Rules of Procedure by some Members earlier on is also a total digression from the subject, making me feel that it is good to be a lawyer who can question every single issue and charge for every single item.

I hope Hong Kong people can realize that there is indeed a problem with the Legislative Council. Also, there is honestly a problem with this Committee because many people are only preoccupied with taking advantage of the situation. Members of the public often fail to grasp the truth of various issues, and as a result, a number of policies cannot be implemented in Hong Kong. In my view, if members of the public realize that Hong Kong is in such a situation, most of them will be extremely disappointed, and also be sorely disappointed with those people elected by them. But the bitter fact is that from my many years of experience as a legislator, I have really witnessed way too many examples of people acting against their conscience and talking nonsense, or the lamentable reality of a lack of understanding of the truth.

I have to thank two Members today. Earlier on, many people might have just heard those speeches made at the beginning. If they vote on that basis, they will have made a wrong decision. Nevertheless, I hereby offer my hearty thanks to those Members in the Legislative Council who are actually doing solid work for Hong Kong. We have found a phenomenon at internal meetings. Both the President and I are members of the Legislative Council Commission. We have repeatedly seen that although they are selected by certain opposition camps, they helplessly say that they are unable to make any decision on behalf of their respective parties. Very often, they have to go back and discuss with their party members, and their opinion may also be overturned. Seeing their helplessness, sometimes I also feel sad. The reason is that as we are sitting here, we should LEGISLATIVE COUNCIL ─ 19 March 2015 7653 act out of our conscience truly in the long-term interest of members of the public rather than for securing votes for ourselves or pleasing a particular group of people.

President, I wish to reiterate that I support this motion which can enhance efficiency of the Council and will not affect other declarable interest of ours. Thank you, President.

DR KWOK KA-KI (in Cantonese): President, I originally did not wish to speak. But having heard the remarks made by Mr CHAN Kin-por, I think he has gone too far.

Ms Emily LAU is certainly qualified to speak here. She has been dedicated to her duties in this Council. Whether in the Legislative Council or outside this Council, or on issues closely related to the interests of Hong Kong people, she has invariably fulfilled her responsibility in giving speeches. Of course, I understand that in this incident, time has actually changed. But President, as I stated expressly in my reply, I will not and cannot agree with the proposal. I will explain the reason later on as I wish to respond to Mr CHAN Kin-por first.

This Council is sick and this, we all know. This is precisely because there are functional constituencies and Members of his kind. He said categorically just now that he worked in the public interest. How can he be qualified to say that he worked in the public interest? How many things have he done to truly serve the public? Or did he work for his own insurance sector? The public can see this most clearly. This Council is certainly sick, as it has remained feeble even after so many years of operation. I believe the pro-establishment camp will also understand that Members are like having their hands and feet all tied up on many issues. The officials have done a lot of things wrong. There was no way for us to deal with this, and it is only now that we can adopt various means in the hope of monitoring this Government. Mr CHAN Kin-por said that those returned by universal suffrage are not representative. Then what makes him representative? How can he represent all the people of Hong Kong? For the speeches he made or things he did in the past, how many of them were truly representative of all people of Hong Kong? He works merely in the interest of the commercial sector and the insurance sector. Is he in any way qualified to make those remarks?

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This Council must be clearer than water. In fact, some recent incidents have aroused grave concerns among us. In those cases involving a former Chief Executive, a former Chief Secretary for Administration and even the incumbent LEUNG Chun-ying, what have we seen? We have seen many incidents which are, in the eyes of the public, instances of abuse of powers for personal gains and even corruption. So, it is indeed difficult for the Legislative Council to make a choice which can rightly strike a balance between the efficiency of this Council and the transparency of interest declaration. This also explains why, in the Committee on Rules of Procedure, there was a proposal on these amendments put forward by Mr IP Kwok-him today. I do not have any view on Mr IP proposing this motion on the Committee's behalf, for he has only done what he should do in his capacity as Chairman of the Committee, and Mr IP should not be personally held responsible for this. But when we see every day the problems with this Council or the Government and when we see so many cases in which anti-corruption actions were taken in the Mainland bureaucracy, actually we must exercise great care and caution.

I hope every Member will understand that we very much wish to command the trust of the people in everything we do in this Council. We hope that the people will trust that we are clearer than water. If we should introduce a change which will make the public think that the Legislative Council is not moving in the direction as they expected … Perhaps in order to enhance the efficiency of this Council, we may propose to streamline the procedures a bit and this, we understand, because we sit in this Chamber every day and we understand that Members do not wish to waste time. Whether it is just one minute, half a minute or even a dozen seconds, we just do not want to waste it and we wish to have more time for discussion. But as we all know and as Members have said, many members of the public will watch the television. Members of the public who watch the television or read newspapers may not necessarily understand it, but when it comes to the declaration of interests, they would think that while our objective is to save time, this might have sacrificed their due right as they cannot find out more in each declaration of interest. This would be most unwise.

I can neither predict nor know how Members are going to vote later on. But I believe Members will understand that nowadays, people engaging in politics, especially Members of this Council ― I hope that the officials will listen to this clearly too ― will not think that nobody will find out what they have done, for what they have done will definitely be exposed, and they had better confess it themselves. When it comes to interest declaration, Members had better make LEGISLATIVE COUNCIL ─ 19 March 2015 7655 full declarations of all their interests. Therefore, if any arrangement administratively or in this Council is not moving in this direction or if it is moving in a reverse direction, it would only arouse unnecessary suspicions not conducive to commanding public trust in this Council in the future.

I certainly understand that Ms Emily LAU, having been a Member of this Council for so many years, has diligently attended meetings of the Committee on Rules of Procedure. She has been dedicated to her duties, and she has seen that many Members seemed to have taken a different view in the end. But I hope she will understand that the entire Council faces enormous pressure, and it also faces a lot of criticisms and challenges from the public. We wish to do something to enable Members of this Council to command greater public trust and support, disregarding which political parties or groupings they come from or what political background they have. However, if this motion were passed today, I believe this Council might not be moving in this direction.

I so submit. Thank you, President.

MR WONG TING-KWONG (in Cantonese): President, today, Mr IP Kwok-him has proposed a motion on behalf of the Committee on Members' Interests (CMI). It has never occurred to me that such unseemly conduct could be seen in the legislature. The problem does not lie in the need for Members to declare their interests to the public in a timely manner. Such conduct shows that some Members often take the moral high ground to gain advantage through opportunism, acquire political capital and deceive the public by making passionate speeches here. What sort of show are they putting up?

In addition, Dr KWOK Ka-ki ― he has now left ― accused Mr CHAN Kin-por just now, saying that he was not qualified to do certain things. In that case, what qualification does Dr KWOK Ka-ki have to do them? Back then, he was also a Member representing the medical functional constituency but he lost in the election of the next term. It was only in this term that he made his way here again by stepping on Ms Audrey EU's shoulder, yet he still has the temerity to criticize other people so vocally here. What qualification does he have to do so?

I think that today, Ms Emily LAU has indeed shown what the characteristics of a Member should be. On this issue, Ms Emily LAU has talked about the truth based on the facts and set out the facts. It has never occurred to 7656 LEGISLATIVE COUNCIL ─ 19 March 2015 me that some Members could go back on their words and give a so-called "passionate speech" in front of the camera and in the live broadcast of the Council meeting, talking about how innocent they were. However, the dishonourable acts committed by them in private are innumerable. In view of all these transfers of benefit, do they still have the brazenness to step into the limelight?

Today, Mr IP Kwok-him, in proposing a motion on behalf of the CMI, only wanted to streamline the work of the Legislative Council a little to enhance its efficiency. This motion was also examined in detail and with prudence at meetings and a detailed questionnaire was also issued. The support of the great majority of Members had been secured before Mr IP Kwok-him moved the motion on behalf of the CMI. This is really lamentable. It turned out that this group of so-called Members could renege on what they had said in the past. What does it mean? I call on them to do some soul searching. I call on the public to look at them clearly. Why do we have to elect these Members? Next year, the elections for another Legislative Council will be held. I hope the public will look clearly when they vote. Thank you, President.

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

MR LEUNG YIU-CHUNG (in Cantonese): President, many Honourable colleagues have said earlier that this motion is moved by Mr IP Kwok-him not in his personal capacity but on behalf of most of the Members and the Committee on Members' Interests (CMI). I know this, I agree with this and acknowledge this. Why do I have to speak then? For in the course of consultation, I have raised objection. According to the practice in this legislature, I have to explain to Members my reasons for opposing the motion. I do not have to agree with the motion simply because the majority agrees with it. I oppose it. Since I oppose it, I must state my principles and positions and voice my opposition. I will not comment on who is right and who is wrong. I only wish to discuss the issue on its merits and express my views.

President, it is true that I have joined the legislature not for a very long time, but it has not been a short period either. I joined the legislature in 1995. Having been working here for such a long period, I understand that this Council and Bills Committees have heavy schedules, yet I also know that Members' declaration of interest at these meetings has not used up a lot of time. Do you LEGISLATIVE COUNCIL ─ 19 March 2015 7657 think every Member will have direct interest in a lot of matters or motions? I do not think so. At meetings of Bills Committees and other committees, I have not heard many colleagues make declaration of interests. Some colleagues have raised the point of efficiency earlier. It is undeniable that if a smaller number of Members speak at the meeting, more time can be spared for other Members who wish to speak. This is the fact. But this can be interpreted the other way round. That is to say, even if Members are required to make declarations, it will not use up much meeting time, which means it will not have any significant impact on efficiency.

What are the most important concerns? Honesty and integrity. The legislature should involve no conflict of interest, so that the public will consider it trustworthy and reliable and that Members will handle matters impartially. I think this is the most important concern. Nowadays, in society ― not only in society but also in the world ― honesty and integrity are of the utmost importance. Regrettably, the image of Hong Kong society has been eroded by a lot of improper behaviour in recent years. Yet at this juncture, we propose abolishing the requirement on repeated disclosure. I think this is inappropriate at least in terms of timing, and the abolition is not really necessary.

May I ask Members if they really find it so hard to make declarations of interest? Do they really have to spend a lot of time to do so? I hope the Clerk will tell Members, if he has the time, of the number of Members who had made declarations of interests in the past and the meeting time spent on such. We should be specific rather than being vague when we say that the practice will affect efficiency. We should not use a single term to overpower all the other factors. I think this is not a proper practice. Indeed, what is important? What factors should outweigh all the other factors? I think honesty and integrity should outweigh all the other factors. Members being clean of conflicts of interest should outweigh all other factors. It is only against this background that we Members can discuss motions uprightly, and the public will think that there is no conflict of interest. I think this point is of overwhelming importance. I hope Members will consider the issue from this perspective and strive forward in this direction.

It is not easy for Hong Kong to establish its core values. Hong Kong has made strenuous efforts to establish its image of honesty and integrity, and the image of not involving many conflicts of interest. I think the clean image of the legislature is of the utmost importance, so we should made more effort to promote 7658 LEGISLATIVE COUNCIL ─ 19 March 2015 this image. As such, I do not think the abolition of the requirement for repeated disclosure will have any positive effect, and I worry that this will bring a negative impact conversely. I agree that we should ensure efficiency and treasure the meeting time of the legislature. In fact, more often than not, Members consider that they do not have enough time to speak, for their speaking time is often limited to three to four minutes. It is truly undesirable. I think we may try to identify ways to extend the meeting time, so that Members can fulfil their responsibility of expressing their views and asking questions. I think we should address the issue from this perspective rather than cutting the toes to fit the shoes.

President, I do not wish to talk too much, but I wish to give my sincere comments. I do not wish to see colleagues pointing fingers at each other. I think it is meaningless to cast such blame, for it will do no good to addressing the problem. Since we all have to vote shortly, why blame each other? Why can Members not be pragmatic and find a solution to the problem? If Members consider that efficiency is a concern and it may prevent the legislature from having enough time for its business, Members should address the problem from this perspective. Members should not turn the legislature into a place of squabbles where Members are blaming one another, just as some people have commented. It is meaningless to do so. At issue is how to build up a good image, so that the public know that the legislature has credibility and that Members do not have any conflict of interest in the matters they handle. I think the most importance concern is to make honesty and integrity the premise.

President, I so submit.

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

MR STEVEN HO (in Cantonese): President, I am not involved in the Committee on Members' Interests, but I did receive the questionnaire for the survey. I endorse the amendment to the Rules of Procedure (RoP) regarding declaration. I heard many Members mention responsibility earlier. As Mr LEUNG Yiu-chung said just now, probity should override everything; I actually wish to say that there should not be a single matter overriding anything else, because the two are not the same, and things that Members should do more under the RoP or our regulation on declaration should not be omitted.

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It is like the declaration form that I needed to fill in upon joining this Council. I was laughed at by journalists when I included in the form a car for my personal use, because it was not necessary to declare it, but I did. It is also unnecessary to include owner-occupied properties in the declaration form, but some Members may still declare them. In their mind, they actually only wish to have more of their background revealed to the public and inform them of their personal interests, such that in future discussions on bills, Council business and public affairs, the public may have a clear idea of Members' conflict of interest and gauge if their specific remarks are merely made for themselves.

The amendment proposed currently is meant not to discard the declaration of interests but to do away with repeated declaration. For instance, before a Bills Committee meeting begins, if I am aware of a conflict between a company of my family and the bill, I will make a declaration in advance before I start speaking; however, perhaps in the next meeting on the bill two days later, I may need to raise my hand again to declare my ownership of that company. Is this kind of incessant declaration necessary? If probity should override everything, I have come across a report which claims that people's concentration or memory may only last for 1.5 hours, or the so-called static memory, which is short, shall we set the mechanism for declaration under the RoP at an interval of once every 1.5 hours? There is no such need.

We need to clearly know that members of the public have wisdom in this regard. If they care about a bill, they will visit the website to look at Members' background and judge if Members are speaking in defence of their personal interests. Members of the public should have this kind of wisdom. If they do not do so, it only shows that they have yet to attain such a level, and hence they may need to ponder if universal suffrage should be introduced.

Some suggest that, as Dr KWOK Ka-ki put it earlier, in the Hong Kong community, such conflict of interest even happens to former Chief Secretary for Administration and former Chief Executive. The current question is that we want the public to know something clearly. Why are there media reports about some Members having received money, pocketing it first? The question is that they have not made any declaration. We are making declarations nowadays, only that we do not wish to make repeated declarations. Hence, we hold that the focus of today's debate should not be one that confuses making declarations with not making them, which is misleading to the public. Just as Mr CHAN Kin-por 7660 LEGISLATIVE COUNCIL ─ 19 March 2015 said, those who take advantage of the situation or play tricks and give up their right to express views in a committee or subcommittee are acting in defiance of the procedures of this Council.

Therefore, I wish the public can, through the current debate, clearly identify Members who really work in a pragmatic manner and call a spade a spade over every matter without making any issue personal or any unnecessary political motive.

With these remarks, President, I support the motion.

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 Mr IP Kwok-him to reply.

MR IP KWOK-HIM (in Cantonese): President, I really find this a little bit lamentable. Just now, Ms Emily LAU asked me if I would cry as Ms Miriam LAU did, but surely I would not. However, at the thought of the present situation, that is, the approval of the Committee was secured and we had also issued a questionnaire, I really had some sort of an impulse to … I will also talk about the results of the questionnaire survey later on. Of the responses received, over 80% of the Members expressed agreement and we also continued to have further discussions in the Committee on Members' Interests (CMI) before making the final decision of submitting the proposal to the Committee on Rules of Procedure (CRoP) of the Legislative Council. The CRoP is also made up of Members of various political parties and groupings, who also had further discussions. It was only in the absence of any disagreement that I moved the motion in the Chamber on behalf of the CMI.

Just now, in my opening speech, I really had the impulse to simply withdraw the motion. However, I could not bring myself to do so because it was on behalf of the CMI that I moved the motion.

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In fact, in view of our procedures, it is indeed no simple matter for the Legislative Council to make any particular amendments to the Rules of Procedure in this area. It is only after carrying out consultations in respect of various areas, listening to views and having discussions that a decision was made. I respect the different views of many CMI members or other Members. Just now, Mr LEUNG Yiu-chung also expressed his different views and I think it is not a problem because all along, he has disagreed with the two amendments. There is no problem and he can simply spell this out. I believe these views will also be discussed. Of course, I may not agree with his views because the amendments proposed by us now are not related to issues of integrity. We ― any Member, even those who have voiced their support ― surely attach absolute importance to transparency and the integrity of Members. I do not think, nor have I found, that Members who agree with the present amendments do not attach any importance to integrity. However, it does not matter as I have already expressed this view.

Yet, what I find most astonishing and unacceptable is the conduct of expressing one's support in the questionnaire but voicing opposition now. Just now, Dr KWOK Ka-ki expressed his views on whether or not it is necessary to make repeated disclosures. In fact, on the point of having to make disclosures once in a Bills Committee and having no need to make repeated disclosures thereafter, the six Members of the Civic Party, including Dr KWOK Ka-ki, all expressed their support. What Dr KWOK Ka-ki did not agree with was only the proposal related to "common interest". However, today, it looks as though he had completely forgotten his comments in this regard. The same is true of Ms Cyd HO. She agreed with both items, that is, the issues of "common interest" and "repeated disclosures". All these can be found in the record. Just now, Ms Emily LAU also mentioned this. In fact, if we log onto the Internet and browse it, we can also find and learn about the information in this regard.

I respect the views of each Member. However, having come to the present stage and having got into such a situation, if we change suddenly or make a volte face of opposing this proposal, I would be very surprised. In that case, it will not be possible for the CMI to function because all discussions are held openly. Therefore, I call on Members to, and also hope that Members can, summon up their enthusiasm and conscience that drive them to play a part in the legislature and take actions according to the views they have expressed.

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There may be some areas that Members are not clear about or about which they have misunderstandings. One view reiterated by Ms Starry LEE just now was that the present proposed approach of not having to make repeated disclosures will apply only to Bills Committees or in the case of some subsidiary legislation. All these will be uploaded onto the Internet and set out clearly. At present, we upload all the information onto the Internet and after disclosures have been made, they will also be uploaded onto the Internet immediately. If anything in the comments made by Members makes the public think that they are biased, they can also note this clearly on the Internet. Of course, some people think that it does not matter if disclosures are made on each and every occasion as this would make things all the clearer. This would also do and of course, this is a matter of the stances taken by Members. Some people think that it is necessary to do so on each and every occasion, whereas others think that doing so just once would do, yet it can be said that this point is very clear. We will not extend this approach to the relevant panels, the Finance Committee or its two Subcommittees, that is, the Public Works Subcommittee and the Establishment Subcommittee. We would not do so. I remember we once said that in the future, the chairpersons of committees would still say, "If you have any interest, you have to disclose it.". There is no problem with this as everything is spelt out clearly.

As regards "common pecuniary interest", Members can see that regarding the relevant ratio, the number of Members who agreed stood at 58 and those who disagreed stood at nine. On this point, the proposal in this regard was passed at a rate of 84%. In fact, on this point  I respect Mr Dennis KWOK very much because throughout, including in the CMI, he has stated his views clearly and this point is very clear. However, when having discussions, Members could also see that the present addition is Rule 83A, which only reiterates the same provision found in Rule 84, since Rule 84 also says that if there is common interest, so long as disclosure has been made, one can also take part in the voting and discussion. Regarding this provision, we think that since this is the case, in the course of discussion and expression of views, we considered that in the case of common interest, this point should also be added to Rule 83A. In that way, it would be clearer and I do not think such a move would undermine the system for the declaration of interests by Members. If there is any direct or indirect pecuniary interest, according to the existing rules, it is also necessary to make a declaration.

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Therefore, today, having spent so much time and heard some repudiations or the present negation of past promises, I find all these most regrettable. However, here, I wish to make an appeal and thank Ms Emily LAU. As the Vice-Chairperson of the CMI, she has expressed her feelings. I have also shared my feelings with Members, in the hope that Members can all support the motion from the CMI. Thank you, President.

PRESIDENT (in Cantonese): I now put the question to you and that is: That the motion moved by Mr IP Kwok-him 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 LEUNG Yiu-chung rose to claim a division.

PRESIDENT (in Cantonese): Mr LEUNG Yiu-chung 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.

Functional Constituencies:

Prof Joseph LEE, Mr Jeffrey LAM, Mr Andrew LEUNG, Mr WONG Ting-kwong, Ms Starry LEE, Mr CHAN Kin-por, Mr IP Kwok-him, Mr NG Leung-sing, Mr Steven HO, Mr Frankie YICK, Mr YIU Si-wing, Mr MA 7664 LEGISLATIVE COUNCIL ─ 19 March 2015

Fung-kwok, Mr Charles Peter MOK, Miss CHAN Yuen-han, Mr KWOK Wai-keung, Mr Christopher CHEUNG, Mr Martin LIAO, Mr POON Siu-ping, Ir Dr LO Wai-kwok and Mr Tony TSE voted for the motion.

Mr James TO, Mr Frederick FUNG, Mr CHEUNG Kwok-che, Mr Kenneth LEUNG and Mr Dennis KWOK voted against the motion.

Geographical Constituencies:

Mr CHAN Kam-lam, Mr TAM Yiu-chung, Mr WONG Kwok-hing, Mr CHAN Hak-kan, Mr WONG Kwok-kin, Mr Michael TIEN, Mr CHAN Han-pan, Mr LEUNG Che-cheung, Miss Alice MAK, Dr Elizabeth QUAT and Mr Christopher CHUNG voted for the motion.

Mr LEE Cheuk-yan, Mr LEUNG Yiu-chung, Ms Emily LAU, Ms Cyd HO, Mr Alan LEONG, Mr LEUNG Kwok-hung, Mr Albert CHAN, Mr WONG Yuk-man, Mr WU Chi-wai, Mr Gary FAN, Mr CHAN Chi-chuen, Dr Kenneth CHAN, Dr KWOK Ka-ki, Dr Fernando CHEUNG and Mr SIN Chung-kai voted against the motion.

THE PRESIDENT, Mr Jasper TSANG, did not cast any vote.

THE PRESIDENT announced that among the Members returned by functional constituencies, 25 were present, 20 were in favour of the motion and five against it; while among the Members returned by geographical constituencies through direct elections, 27 were present, 11 were in favour of the motion and 15 against it. Since the question was not agreed by a majority of each of the two groups of Members present, he therefore declared that the motion was negatived.

PRESIDENT (in Cantonese): Debates on motions with no legislative effect. I have accepted the recommendations of the House Committee, that is, the movers of the motions may speak for up to 15 minutes for their speeches including their replies, and another five minutes to speak on the amendments; the movers of LEGISLATIVE COUNCIL ─ 19 March 2015 7665 amendments to the motion each may speak for up to 10 minutes, and other Members each may speak for up to seven minutes. I am obliged to direct any Member speaking in excess of the specified time to discontinue.

PRESIDENT (in Cantonese): The motion debate on "Expanding the ratio of the middle-class population".

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

I now call upon Mr Andrew LEUNG to speak and move the motion.

EXPANDING THE RATIO OF THE MIDDLE-CLASS POPULATION

MR ANDREW LEUNG (in Cantonese): President, I believe most Honourable colleagues in the Chamber will not oppose the motion on expanding the ratio of the middle-class population proposed by me today. I hope this motion may serve as a sprat to catch a mackerel, so that colleagues from many different backgrounds and professional sectors may put forward their views for reference by the SAR Government officials present here.

What is "middle class"? Some two years ago, the Financial Secretary pointed out when presenting the Budget that it was a lifestyle, thinking that the middle-class lifestyle was all about a cup of coffee, a French movie, and so on. I have looked up the Oxford dictionary and found that the definition of the middle class is "The social group between the upper and working classes, including professional and business people and their families". According to an earlier special report of the Chinese edition of the Wall Street Journal, "The growth of the middle class has thus marked the path of a country from its emerging status to affluence. Their spending power, lifestyle, cultural taste and political aspirations have affected and dominated all facets of the community. They are acclaimed as the mainstay of society for their diligence and pursuit of stability." In July the year before last, the Bauhinia Foundation Research Centre conducted a survey on public perception of the middle class. According to the findings, in defining the middle class, the public in general consider the economic capital, a measure of wealth, as the most important criterion to define the middle class, and 7666 LEGISLATIVE COUNCIL ─ 19 March 2015 that personal efforts including high academic qualifications or career achievement are more important than family background or social connections in order to be part of the middle class. And in order to move upward to become middle class, education and career top people's list.

In the past, Hong Kong people gradually moved up the social ladder through hard work generation after generation, with the objective of becoming middle class. But nowadays, we often hear the discontent with society voiced among the younger generation. According to them, they cannot see their future or any opportunity for upward mobility. In order to give youngsters a goal to strive for, the Government should first set its targets. This is why the Business and Professionals Alliance for Hong Kong (BPA) has been stressing the need to create a better living environment for the middle class since its establishment in 2012. In 2013, when we submitted our recommendations for the Policy Address and Budget to the SAR Government, we proposed the target of expanding the ratio of the middle-class population, aiming to double the proportion of the middle class in the population in a decade, so that they will account for more than half of the total population. At that time, we already pointed out to officials responsible for policymaking that the middle-class people are the mainstay of society. At present, the ratio of the middle class in Hong Kong is only about 20% to 30%. An increase in the ratio of the middle class will help promote economic development, enhance competitiveness, contribute to social stability and harmony, and ensure ample impetus for the long-term development of Hong Kong.

To achieve this end, the Government should have in place a full set of forward-looking policies as support. In respect of education policy, it should help nurture more talents with specialized skills and techniques. And in the economic aspect, it should support the development of enterprises, especially small and medium enterprises (SMEs) and micro enterprises. The Government should also be firmly committed to maintaining the fundamental strengths of Hong Kong, identify new bright spots to assist Hong Kong's economic development, and capitalize on the momentum of the Mainland's economic development to work on these tasks in order to maintain our edges in such pillar industries as trading, logistics, business and professional services and finance. The Financial Secretary has also mentioned finance, technology and the Internet, and the fostering of innovation and technology in tandem with the development of traditional industries will offer more opportunities. Free trade zones are LEGISLATIVE COUNCIL ─ 19 March 2015 7667 currently the new trend of regional economic development. Hong Kong should more proactively seek to join them, and seize the opportunities arising from various free trade zones and the rapid development of the Pearl River Delta and Pan-Pearl River Delta to strengthen the hinterland for Hong Kong's professional services, expand our transport, logistics and infrastructure, and make good preparations for the substantial growth in people flow and materials.

The middle class attaches great importance to a secure dwelling place. Given the present difficulties in achieving home ownership and the soaring costs in changing residential properties, it is necessary for the Government to do a good job of policymaking in housing and formulate a set of policies which meet the home ownership need of the middle class. Moreover, local policies on healthcare, culture, leisure and sports are also important. A customary belief is that those in the middle class as taxpayers are denied access to such resources. These are the major concerns that attract the attention of the middle class. Given the wide spectrum and variety of departments involved, it is necessary for the SAR Government to properly examine various policy areas to see how they should be adjusted in order to provide the middle class with more support.

President, given the time constraint, I can only talk about a few aspects. The first one is education. In the past several years, I have been in public office relating to vocational education, during which I have seen the effort of such places as Hong Kong, the Mainland and Europe in this regard. In recent years, more and more people have realized that vocational education suits certain youngsters better, by which they can bring their strengths into play and turn their interests into professions. In recent years, 30% to 40% of Higher Diploma graduates of the Vocational Training Council meet the requirements for further studies in traditional universities. In this Chamber, I once talked about my visit to Germany to study its vocational education. The local government there has taken the lead in developing a framework and systematically training the requisite talents for various trades and industries, or even research and development (R&D) personnel. By making reference to methods adopted by other countries, the SAR Government can better perform the role of a bridge between education institutions and the industry. With the provision of on-site studies and on-the-job programmes targeting individual industries and occupations by training institutes, youngsters will have the opportunity to gain exposure to various trades and industries with development potential.

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To workers in general, vocational training is not to be neglected. In this regard, Singapore has put much effort into introducing the Enterprise Training Support Scheme to provide enterprises with comprehensive support measures in human resources development, and offered subsidies to enterprises in a number of aspects such as the remuneration of staff receiving on-the-job training.

We have been discussing continuing education for a long time, but a number of working people still thinks that the Government has not done enough in this regard. A colleague in my office is taking a Master programme. The first thing he told me was about the high tuition fee, and that he had claimed the full reimbursement amount under the Continuing Education Fund previously. Can the Government consider increasing the amount of the Continuing Education Fund which supports young people to take post-graduate diploma or certificate programmes, so that persons aged 35 or below with a degree or equivalent may apply for it?

For those youngsters planning to start a business, we have all along hoped that the Government can give them more encouragement. Hence, we have long been persuading the Government to properly set up "young entrepreneur parks" and specialized funds. The Financial Secretary has also given a positive response in the Budget released last month. At present, the innovation and creative industries have much room for development, and many of the younger generation have innovative ideas and vigour. We may make reference to the development model of the United Kingdom and proactively promote the development of the cultural and creative industries, thereby bringing new development opportunities to young people. In recent years, it has become a popular trend among youngsters to open cafés and teahouses which sell desserts and snacks such as cakes or pastries. In SOHO, there are several restaurants run by local youngsters. We notice that the younger generation from Europe has also got a piece of the action in the vicinity, which shows that youngsters are willing to try. Regarding the food trucks announced by the Financial Secretary earlier on, can more opportunities be offered specifically to young people, so that they can start their business at a relatively low cost?

In order to alleviate the tax burden on proprietors of SMEs, and that given the increasingly fierce global competition and gloomy economic prospects faced by SMEs nowadays, we propose changes to the relevant profits tax, so that SMEs earning less will be subject to a lower tax rate, with a view to encouraging them to make re-investment to enhance their competitiveness, and increase their LEGISLATIVE COUNCIL ─ 19 March 2015 7669 investment to add value to their business. We have long been suggesting that the Government should provide enterprises with tax deductions being three times of the expenditure incurred in R&D, design and brand building.

There are a large number of professionally qualified persons in Hong Kong. In the past few years, we have often heard from persons of professional sectors that there are now far fewer opportunities than in the past. In my view, if this group of professionals are to be given more and larger room of development, we should not limit the room for development of our own affairs to Hong Kong. The commercial and industrial sectors have repeatedly expressed the wish to expand the scope of professional services in Hong Kong before. And many of our manufacturing industries have set up factories in the Mainland since the reform and liberalization. But the provision of such producer services as trading, financial service, accounting, legal service, logistics and supply chain management still relies on the professionals in Hong Kong. With the rapid economic growth in the Mainland, professionally qualified Hong Kong people can find more opportunities of exploring neighbouring regions because our clients are no longer limited to the adjoining Pearl River Delta. Instead, they come from a wider variety of provinces and cities. In recent years, the Government has injection great efforts into marketing our professional services such as trading, accounting and logistics to the Mainland. I think that with the future establishment of Qianhai, Hengqin, and more free trade zones and the rapid development of ASEAN countries, Hong Kong's professional services including accounting, financial service, legal service, arbitration and logistics can have larger room for development. I hope the Government can provide this group of Hong Kong people who travel frequently to and from different regions to work with more assistance and support, and at the same time, proactively consider the introduction of a tax regime for frontier workers in order to alleviate the tax burden of cross-border Hong Kong workers.

The middle class has long been regarded as a group of people paying high tax but enjoying few benefits. Hence, we suggest that the Government should take the initiative in introducing tax concessions to alleviate the burden of the middle class, such as introducing tax allowances for housing expenses, maintaining children and healthcare.

In fact, in recent years, policies and measures tilted to the middle class have been proactively launched all over the world. In February this year, Barrack OBAMA, President of the United States, submitted to the Congress the 7670 LEGISLATIVE COUNCIL ─ 19 March 2015

2016 federal budget of nearly US$400 million targeting at boosting the middle class, and it covers such measures as enhancing investment in aspects like infrastructure, R&D and the Internet, promoting key areas including education, vocational skill training and infrastructural facilities, and expanding the tax concessions for working families. The latest Budget of Singapore is also like handing out envelopes of cash generously to the 1.5 million middle-income locals. It not only offers a tax rebate of 50% subject to a ceiling of $1,000 Singaporean dollars, but also expands the childcare subsidy scheme, exempts the examination fees across the country, doubles the amount of one-off GST vouchers, and allocates 500 Singaporean dollars to persons who have reached the age of 25 individually under SkillsFuture Credit, and so on.

Those middle-class families earning $60,000 or $ 70,000 a month but only manage to live from pay cheque to pay cheque watch with envy the generosity of foreign treasuries towards the middle class. Certainly, many in the middle class are grateful for the multiple relief measures rolled out by the Financial Secretary in his Budget this time around, but we hope the Hong Kong Government can do more. Earlier on, the BPA proposed to the Government a number of initiatives to support the middle class, including increasing tax allowances for maintaining children and newborn babies, encouraging developers to construct more rent-or-buy small flats, increasing the tax allowance for renting private residential units, extending the period for deduction for home loan interest, expeditiously introducing tax concessions on medical insurance, enhancing the management of Mandatory Provident Fund schemes, and reducing the rates percentage charge in the long run.

President, the middle class is a critical part of the population structure of Hong Kong. But in recent years, we have not only heard about the absence of opportunities for upward mobility for professionally qualified youngsters, but even a trend of degentrification of the middle class. Faced with heavy pressure of life, the lower-middle class also blames the Government for turning a blind eye to them and caring naught about them. The BPA firmly believes that the prerequisite for a stable society is to enable more people to become middle class and gradually move up the ladder, turning themselves from the lower-middle class to the middle class, and then further to the upper-middle class.

The BPA supports economic development and upholds the motto of "Business drives economy and professionalism improves livelihood". As part of the middle class, we speak for them and strive to create a more competitive society. The BPA puts particular emphasis on the middle class because we LEGISLATIVE COUNCIL ─ 19 March 2015 7671 firmly believes that through economic development, an increase in government revenue and proper care for the middle class, resources in the community can be more properly centralized to better cater for the grass-roots people.

With these remarks, I move that the motion, as printed on the Agenda, be passed.

Mr Andrew LEUNG moved the following motion: (Translation)

"That this Council urges the SAR Government to formulate feasible policies and measures to increase the opportunities for upward social mobility, thereby expanding the ratio of the middle-class population and enhancing Hong Kong's competitiveness."

PRESIDENT (in Cantonese): I now propose the question to you and that is: That the motion moved by Mr Andrew LEUNG be passed.

PRESIDENT (in Cantonese): Four Members will move amendments to this motion. This Council will now proceed to a joint debate on the motion and the four amendments.

I will call upon Members who move the amendments to speak in the following order: Prof Joseph LEE, Mr SIN Chung-kai, Mr Kenneth LEUNG and Ms Cyd HO; but they may not move amendments at this stage.

PROF JOSEPH LEE (in Cantonese): President, I would like to thank Mr Andrew LEUNG for proposing this motion on the middle class today. We notice that the middle class has often been neglected in the legislature. The focuses of past discussions have been placed mostly on "handing out candies" and curbing property prices, and so on, which do not seem to be directly related to the middle class. It is true that the Financial Secretary has proposed a tax rebate in the Budget, but is it desirable? I will discuss this later.

Mr Andrew LEUNG's motion has provided a definition for the middle class. We notice that the Government neglected this class in the past, but is it because of the lack of a definition? The definition provided by Mr Andrew 7672 LEGISLATIVE COUNCIL ─ 19 March 2015

LEUNG earlier is too general. When I started preparing the speech for this motion, my colleague had done some research for me. The term "middle class" was coined in 1745 by a Frenchman. Back then, the term was used to differentiate the class between the nobility and the peasantry, so it was called the middle class. It seems to be quite a long time since 1745. In 1913, a relatively new concept was proposed in the United Kingdom to identify people falling between the upper class and the working class as the middle class.

According to these views, is the definition for the middle class provided by Mr Andrew LEUNG earlier correct? In my view, the Government does not quite agree with this, for in the policy address two years ago, the Government's reference to the middle class was based on the Quarterly General Household Survey. According to the survey for the fourth quarter of 2014, the meaning of the middle class is 45% of the people with an income ranging from $15,000 to $45,000. Indeed, should people in such circumstances belong to the middle class? We may take on a different perspective, like the Financial Secretary's remark that the middle class may be a specific kind of attitude. However, I recall that the definition for the middle class during our time was straightforward. We called this the "Four-have's Doctrine". For those in the Chamber who are of some age and not so young, they should remember their family members reminding them to work towards this "Four-have's Doctrine" after graduation from universities.

(THE PRESIDENT'S DEPUTY, MR ANDREW LEUNG, took the Chair)

What is this "Four-have's Doctrine"? The "four have's" we were referring to back then was about the attainment of certain achievements after working for some time after graduation, which included "to have a flat", "to have a spouse", "to have a car" and "to have a child". According to the saying back then, these people were regarded as the middle class. However, if the Government now does not have a clear definition for the middle class, it will certainly be difficult to formulate policies and measures to help them. If the Government's reference to the middle class is adopted, which means these people in the middle class are earning some $10,000, may I ask how they can afford to attain the "four have's"? I cannot understand it.

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On the other hand, since the implementation of the minimum wage, security guards and dish washers are also earning over $10,000 a month. Some time ago, it was reported that some female dish washers were earning $20,000 monthly. In that case, should the dish washer be regarded as belonging to the middle class? How can income be used as the sole factor for defining the middle class? Given this, the Government will overlook the needs of the middle class as a whole. Who are we referring to when we mention the middle class? I cannot provide a scientific definition here. Yet as a responsible Government, it is obliged to draw up the definition for people falling between two classes, and then implement policies to help them.

According to Mr Andrew LEUNG, those in the middle class are likely professionals and people in the middle of the social hierarchy. If the definition is based only on income, that is, those earning a monthly income of $10,000-odd, many people in the streets will not admit being middle-class. Why? For they consider that the Government has rendered no assistance to them, and they are having a hard time, failing to make any achievement. In the present situation, a couple who are university graduates may just be earning $20,000 to $30,000 monthly in total, so I can hardly imagine that they can afford pursuing the "Four-have's Doctrine". Will they claim themselves as middle-class then?

Besides, Members should bear in mind that university students may be weighed down by loans by the time they graduate, as the Deputy President mentioned earlier. Why? Their situation is different from ours in the past. Nowadays, students have to take out loans to finance further studies, so they have to repay the loans upon graduation. What can they do then? As the Deputy President commented, can we facilitate the middle class in moving up the social ladder by means of education? Let us take an overview of the situation. Some university students have to repay their loans upon graduation. Yet they are urged to pursue lifelong learning by taking more courses. It is true that they may apply for a subsidy from the Continuing Education Fund, but the subsidy is capped at $10,000. However, a postgraduate programme leading to a master degree will cost $80,000 to $100,000, and there is no guarantee that one can move up the social ladder after attaining the qualification. What can they do? It is evident that under the existing policies in education, the Government has not provided specific assistance in continued education to this group in the middle level ― I dare not call them the middle class ― so that they can remain in the middle level with a view to moving upward. If that is the case, should the Government review the overall policy in education to address the problem we mentioned earlier? 7674 LEGISLATIVE COUNCIL ─ 19 March 2015

Many universities or institutions subsidized by the University Grants Committee say that all master degree programmes are now self-financed courses for unlike the situation in past, the Government has now stopped providing subsidy for these prgrammes. Should this be viewed as a change in policy? As the Government encourages the public to pursue further studies, it means the graduates will have to repay the loans for undergraduate studies on the one hand and spend another $80,000 to $100,000 to take master degree programmes on the other. How can they cope? The subsidy provided under the existing Continuing Education Fund cannot cater for this, so the Government should review this properly and identify ways to enhance the ability of the public.

Certainly, as the Deputy President mentioned earlier, the Government will put forth proposals on innovation and technology, and similar issues have been discussed at the meetings of the Commission on Strategic Development. As we discuss the Government's policies on innovation and technology, we hope that professionals and young people will have access to opportunities for innovation, which do not necessarily rely on information technology. As Mr Charles Peter MOK may agree, innovation does not necessarily have to rely on information technology and the mode of business can be innovative. If the Government can put in place policies to support them rather than making grandiose but empty claims, it will not only help them to stay on the existing ladder but also enable them to continue to move upward. This gives people hope. Actually, this motion does not only aim at expanding the population ratio of the middle class, it also seeks to bring hope to the younger generation, so that they can have the opportunity to move up the social ladder or stay in the existing level to support Hong Kong society.

Why am I saying this? This group is actually paying a lot of tax. Deputy President, please allow me talk about taxation. At present, this group in the middle level ― I dare not call them the middle class ― has to pay a lot of tax, including salaries tax. Although it sounds good that they can enjoy dependent parent allowance and child allowance, how far can these allowances help them? This is the key problem. Have the authorities provided them with any special concessions? The Budget this year has proposed "candies" and they are happy about that. But when they look at the issue closer, they will find out what they get will only be "candies" after "candies" which do not offer much help in the long run. They still have to bear heavy burdens without any assistance in taxation.

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Since they have to pay a lot of tax, the relief of the tax rebate is limited. A more important point is about the housing need of this group in the middle level, yet the government official concerned ― the Secretary is not involved in this ― rules out the possibility of implementing rental control. They are caught in the predicament of high property prices, the Government's failure to curb property prices and impossibility to save money for home purchase. If Members care to watch a television series titled "Come Home. Love" tonight ― I am not promoting the programme ― Members will certainly notice a scene talking about the need to make savings for 10 years in order to keep enough money for home purchase. Although they have to make savings for home purchase, they have to rent a flat before they can achieve this target. Since the Government will not review the possibility of implementing rental control and rents keep rising these days, a significant part of their expenditure is spent on rent.

Will the Government consider introducing rental concession? If the Government worries that the implementation of rental control may affect the market and discourage owners from renting out their flats, will it then consider introducing rental concession, such as providing a tax rebate to people living in rental flats? This kind of arrangement will bring hope to the group in the middle level or the middle class, so that they know they can get help under certain policies in Hong Kong and their heavy burden in living can be alleviated. The Government can actually help this group of people in terms of housing, yet it fails to perceive the possibility of helping them through this policy and focuses only on curbing property prices. In fact, curbing property prices will not do much help. Now, property prices have gone into a rising spiral, even prices of "small-price-tag flats" are rising. How can they make home purchases and how can they find accommodation? It is evident that housing is a great problem to them.

Take transport expenses as an example. The authorities may in fact consider providing more concessions to a certain class. Let us calculate the daily transport expenses of people in the middle level. I will exclude the Western Harbour Crossing with a round trip toll of as high as $120. If we assume that they will take the bus, their daily transport expenses will add up to $40 to $50. If they need to have lunch in Central, it will cost them another $40 to $50, which means they will have to spend $100 each day. If they are working 20 days a month, they will have to spend $2,000 on lunches and transport every month. To a person with a monthly income of some $10,000, how can they live on? It is obvious that the Government has not implemented any policy to help them. 7676 LEGISLATIVE COUNCIL ─ 19 March 2015

Another concern is about medical and health care. For those who are earning a monthly income of tens of thousands, they have to think about it. The Voluntary Health Insurance Scheme now proposed by the authorities is telling those with affordability not to seek treatment in the public healthcare system when they fall ill unfortunately, and they should seek consultation from the private sector under the proposed scheme. The concept is good, but the point is that this group of people already bears a heavy burden in living. What can they do if they lose their entitlement to benefits like public healthcare services? After all, they are taxpayers. It is obvious that the Government thinks differently and fails to put in place a comprehensive policy which can help this group of middle-class people.

Regarding the $50 billion provision earmarked for the Scheme as mentioned by the Financial Secretary, if $30 billion are to be put in a "money follows the person" scheme, the middle class falling into a specified income level who are required to take out health insurance will have their money follow them. It is desirable, is it not? This innovative approach can achieve this aim. Besides, even if the middle class may seek consultation from private doctors when they fall ill, they have to cope with the rather expensive medication expense, and they may not necessarily get any relief from the Samaritan Fund. Why? Although the fee waiver limit of the Fund has been raised to $600,000-odd, they may have to spend all of their savings before they are eligible to the benefit. It will be lamentable.

It is evident from the said circumstances that in the context of housing, taxation and education, the Government has failed to provide practical assistance to this group of middle-class people now. Lastly, I have to reiterate that if the Government can provide a better definition for the middle class, clear adjustments can be made to the several policies mentioned just now to provide assistance to them. I believe this will make more young people feel hopeful and consider themselves as the middle class, so that they will make greater contribution to Hong Kong. Thank you, Deputy President.

MR SIN CHUNG-KAI (in Cantonese): Deputy President, I am a member of the middle class, but I do not think you are. How can you be counted as a member of the middle class? You must be a member of the "super middle class" or the wealthy class.

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When we talk about the definition of the middle class, we often start with the 17th or 18th century, but I will speak in a more practical manner. Hong Kong is one of the places with the highest cost of living in the world. According to the worldwide cost of living survey published by the British Economist Intelligence Unit (EIU) early this month, Hong Kong has surpassed Japan and ranks ninth among the most expensive cities to live in the world, having moved up four places from last year. It is the first time that Hong Kong has appeared in the top 10 over the past 12 years. Under the EIU's analysis, as the US dollar becomes stronger, the simultaneous rise in Hong Kong's cost of living index, coupled with the persistently high rent, has pushed up retail prices. The recent downward adjustment in oil prices may have relieved the pressure of inflation, but I do not think ranking among the top 10 cities with the highest cost of living is something in which Hong Kong should take pride. A high cost of living index has inevitably affected the quality of life of the middle class.

Although the Hong Kong Government does not have any official definition ― Prof Joseph LEE has made it very clear earlier ― if households whose median monthly income is $15,000 to $50,000 are categorized as the middle class, according to the Quarterly Report on General Household Survey for the fourth quarter of 2014, this category accounts for almost 60% of the households in Hong Kong. The middle class is usually regarded as the most important social stratum which can bring stability to the economy and society. While the middle-class people have a higher income than the grassroots, they have a smaller demand for social welfare resources or receive less welfare benefits. They usually need to pay a considerable amount of tax, and their tax burden is the biggest among all the strata. I mean its proportion is the biggest.

In recent years, the inflation rate sustains at 4% on average. Expenses on clothing, food, housing and transport are all very high for the middle class. Not only do they have to pay for their children's schooling, they also need to provide for their parents. Faced with the growing pressure of living, they are unable to ease the tax burden. The life of the middle class cannot be more burdensome. Yet regrettably, the Government's understanding of the middle class is only about business development and economic development. Neither the Financial Services and the Treasury Bureau nor the Home Affairs Bureau has attended the meeting to listen to the views of the middle class. Today, the Democratic Party and I have proposed an amendment in the hope that the Government will adopt specific policy measures, including tax measures, which focus on addressing the aspirations of the middle class. All along, the Democratic Party has called for 7678 LEGISLATIVE COUNCIL ─ 19 March 2015 the establishment of a fairer tax regime which includes widening the three tax bands, increasing the net taxable income from $40,000 to $50,000, and abolishing the standard rate. The standard rate for members of the public should be 17% at the maximum. In simple terms, rich people like the Deputy President should pay more tax. At the same time, we request to raise the various tax allowances to alleviate the pressure of inflation on the middle class.

Another major topic is home ownership of the middle class. Now many people in the middle class are already property owners, but they are also worried about their next generation. Home purchase is another important concern of the middle class. Property prices in Hong Kong have hit a record high. Every day there is a "premium Home Ownership Scheme (HOS) flat" reported under a news headline like "HOS property price hitting new high". As shown by the latest figures of the Rating and Valuation Department, in January, the overall price index for private domestic properties in Hong Kong reached 284.2, representing a monthly increase of approximately 2.2% for 10 consecutive months, and it repeatedly broke the record high in the last 10 months. As regards rent, it also hit new highs for three months in a row. During the same period, the overall rental index for private domestic properties rose about 0.7% per month to 167, having increased for 11 consecutive months. Many middle-class people are already property owners, but their children do not have any property. Now when my old schoolmates get together, a frequently asked question is, have you made a down payment for your children? Sorry, when we were young, we relied on our own efforts to save money for the down payment and mortgage repayment ever since we started to work. In our generation, we do not only have to support our children but also provide for our parents. Yet now we have to start talking about preparing for mortgage repayment for our next generation.

Middle-class people ― or I should say, young middle-class people ― cannot afford to buy any property while rents are also exorbitant. The Democratic Party proposes to rebuild the home ownership ladder which has been broken since 2003. In our view, families whose monthly income is $60,000 or below should be given the opportunity to buy sandwich class housing provided for the middle class. The policy principle we advocate is that the Government should take the lead in housing supply because the Government can control land supply, but it cannot control the supply of private residential properties. As we could see in the past few years, even though the Special Stamp Duty has been introduced, property prices keep spiralling despite the regulatory measure LEGISLATIVE COUNCIL ─ 19 March 2015 7679 imposed, which has failed to curb the demand and improve the supply of private residential properties. In the present situation where property prices are beyond the purchasing power of most families, we find it necessary to address the housing needs of the sandwich class as well. Of course, if property prices drop to a reasonable level in the future, the Government may reduce the support in this regard.

A very crucial point is the importance of the middle class to the establishment of a corruption-free society, since only a corruption-free society will stand for fair play. In 2014, the Transparency International, a global anti-corruption organization, published the Corruption Perceptions Index (CPI) 2014. Affected by the corruption scandals involving a number of government officials and the Chief Executive in recent years, Hong Kong's CPI ranking has slipped for three years in a row. It ranks 17th among 175 countries in the world, having fallen two places from last year. Hong Kong's global ranking has dropped for three consecutive years, falling from 12th in 2011 ― it was due to the scandals about the Chief Executive's acceptance of hospitality offered by tycoons, former Secretary MAK Chai-kwong's fraudulent claim of housing allowance and Secretary for Development Paul CHAN's land hoarding ― from 2012 to 2014, the ranking continuously dropped. Since Timothy TONG, former Commissioner of the Independent Commission Against Corruption, was alleged of corruption, last year the ranking further dropped to 15th. Rafael HUI's case and the case of Chief Executive LEUNG Chun-ying and UGL concerning a sum of $50 million have further tarnished Hong Kong's corruption-free image.

To sum up, our ranking in 2012 was 12th, and now it is 17th. The score is 74, down by one point over last year. I wonder what way there is to reverse the CPI. The fall in the CPI score is an alarm for Hong Kong which the Hong Kong Government must face squarely. We are also worried that any damage to the corruption-free image will affect the business environment.

As a matter of fact, apart from a level playing field and a corruption-free society, people in the middle class and all classes in the territory wish to see a fair and open political system. Hong Kong people have pinned high hopes on the undertaking in the Basic Law. They wish to have genuine universal suffrage to elect the Chief Executive. The 31 August Decision of the Standing Committee of the National People's Congress (NPCSC) has set the election framework for the Hong Kong Chief Executive by force. This is an imbalanced framework which deprives Hong Kong people of real choice.

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Hong Kong people, especially the middle class, have a strong aspiration for democratic elections. We wish to urge the Government, particularly the NPCSC, to annul or revise the NPCSC's decision in accordance with Article 62(11) of the Constitution of the People's Republic of China. The Blue Book has also mentioned that the 31 August Decision may be altered so long as the Central Authorities consider it an inappropriate decision.

Lastly, I would like to say a couple of words in response to the Budget. In the last part of this year's Budget, the Financial Secretary said, "Having developed for more than a century, Hong Kong ranks in the top tier globally for its economic success. However, behind and beyond material fulfilment, the people of this city, our younger generations in particular, are hungering for spiritual contentment. This is what a mature society should manifest …". The Democratic Party believes that the middle class, grassroots and in fact, all members of the public wish to live in a city with good living conditions. While pursuing income and economic growth, they also hope that the Government will provide a fair and reasonable environment which can facilitate upward mobility with no need to be "property slaves", and at the same time defend Hong Kong people's core values.

Regrettably, as we can see today, the officials think that Hong Kong people merely aspire to economic development ― only the Secretary for Commerce and Economic Development is attending the meeting ― and turn a deaf ear to their aspirations for democracy or home ownership. I express regrets at the Government's low-key manner in handling the motion proposed by the Deputy President.

MR KENNETH LEUNG (in Cantonese): Deputy President, this motion today seeks to expand the ratio of the middle-class population, but before coming to the discussion, should we first get to know what is meant by the middle class? Is there any definition or international standard which applies globally?

As a matter of fact, if we look it up in the historical documents, it may be traced back to the French Revolution in 1789. The expression "middle class" may come from the translation of the French word "bourgeois". In Hong Kong, the Special Administrative Region (SAR) Government did not explicitly define what is meant by the middle class. Under the definition of the Census and LEGISLATIVE COUNCIL ─ 19 March 2015 7681

Statistics Department (C&SD) of the SAR Government, households whose monthly income is $10,000 to $45,000 are listed as middle-class households. Actually such categorization of the so-called middle class is simply conducted by dividing the monthly incomes of all the households in the C&SD's data into 16 groups, and the six income groups in the middle are categorized as the middle class. As shown by the information in the Quarterly Report on General Household Survey (October to December 2014), these six income groups account for 45.5% of the total number of households in Hong Kong. Judging from this statistical figure, the situation is acceptable. We can refer to about 45.5% of the households in Hong Kong as the middle class in terms of their financial status or income.

However, if financial income is used as the sole indicator for defining the middle class, such a definition does not seem adequate. Deputy President, in fact, in a lot of discussion, whether it be the academic discussion in Hong Kong or overseas, the definition of middle class is not simply analysed with economic figures. This is a very important point. I wonder if Members still remember that when the Budget was delivered last year, the Financial Secretary opined that the middle class had a certain expectation of their life, living standard and ideology. When the Financial Secretary delivered the last Budget, he said that the middle class might love to drink coffee and watch French, German or Italian movies, which was part of the middle-class life. Of course, many people in society may not concur with such a description of the middle class, but this remark accurately reflects an aspect of the middle-class life. That is the ideological sense of the definition. The middle class is defined not solely by economics or income.

Prof LUI Tai-lok, a local academic, once mentioned that the middle class could be defined on the basis of employment status and occupation. The so-called middle class mainly refers to employees who are professionals, engage in administrative management or work at the managerial level. According to Prof LUI Tai-lok's analysis, middle-class people share some common characteristics in the labour market. The first one is that they became members of the middle class through general education. These people in the middle class also play the role of professionals or management executives. Thus they are more flexible at work. Moreover, their positions in the labour market give them better career prospects and career paths.

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In the light of the characteristics suggested by Prof LUI Tai-lok, we can make a simple analysis of the Government's policy. Earlier on, some Honourable colleagues have also mentioned measures in several aspects, such as education and economic opportunities. Deputy President, we need to ask a most basic question, that is, why do we need to expand the ratio of the middle-class population? It is because according to the simple statistics, the middle class accounts for 45.5% of the total number of households in Hong Kong. Most people may call themselves middle-class, so I need to speak for the middle class. However, why is it necessary to raise the ratio? As early as four or five years ago, I wrote in a column about why a better ratio of the middle-class population would be more conducive to social development. In fact, the middle class is a stabilizing force in society. Owing to their experience gained on the path to the middle class, middle-class people are inclined to the aspiration for progress and improvement in society. This is a very important point. They prefer a progressive society. However, they also resist sudden major political changes in society. They expect changes, but they do not want changes which are abrupt. This is a characteristic of the middle class, and this kind of mentality turns the middle class into a stabilizing force in society.

I have mentioned that the concept of middle class should not be confined to the economic level, and this is the main reason why I have proposed this amendment, since I think a number of Honourable colleagues consider the actual needs of the middle class and policies which should be put in place for them from the economic perspective. In fact, what expectations does the middle class have on social development? Besides, how should society develop to assist in the growth and development of the middle class? This is not merely about some superficial economic issues. It is also an ideological exploration and process.

The modernization theory of political science points out that when the economic development of a place reaches a certain stage, it is highly likely that the democratic political system and government structure will develop in response to industrialization, changes in class structure and general enhancement of people's educational level. The modernization theory also points out that the middle class will become the driving force for democratization. As indicated by the data of the World Bank, the actual per capita Gross Domestic Product of Hong Kong currently stands at US$53,215. Ranking among the top, it is one of the wealthiest places in the world. In fact, our economic development has already secured a footing. Therefore, we need to pursue better development in our systems, especially the establishment of a democratic system. Only then will the middle class have more opportunities of upward movement. LEGISLATIVE COUNCIL ─ 19 March 2015 7683

Hence, to sum up, when we discuss the question of expanding the ratio of the middle-class population, we cannot make consideration solely from the economic perspective. We should foster the trend of upward movement in society and enable members of the public to develop their own career in view of their strengths and interest and pursue the lifestyle they desire. Earlier I mentioned the middle-class lifestyle as perceived by some people. We should enable them to have the room and time for pursuing their own lifestyle. If we want to build this kind of middle-class society in the economic and ideological sense, we must have a stable social environment, and the bedrock of social stability is definitely the rule of law as well as a fair and open political system. A fair and open political system means that the Government's powers should be subject to monitoring and checks and balances, while members of the public may participate in politics through different channels to monitor the Government.

Besides, through this system, the core values of society, including our freedom of speech, freedom of assembly, freedom of association and freedom of the person, can be protected. These are all provided in the Basic Law. Sometime ago, when I visited Germany, I read the German Basic Law enacted in 1949, which also clearly provides for all of these. A most important provision is set out in their Basic Law but not in ours. It is Article 1 of their Basic Law: it shall be the duty of the state authority to respect human dignity. Therefore, to build a society which truly centres on the middle class, we must establish a democratic, free and open society to enable the middle class to grow steadily. Only this is the most effective safeguard.

Deputy President, I so submit.

DEPUTY PRESIDENT (in Cantonese): Mr LEUNG, what Germany adopts should be the constitution rather than the Basic Law.

MR KENNETH LEUNG (in Cantonese): Sorry, Deputy President, the name is indeed translated as the Basic Law. It is called the Basic Law.

MS CYD HO (in Cantonese): Deputy President, I support the points made by Mr Kenneth LEUNG just now, because during my last visit to Germany, I found that the term "Basic Law" was used in the reference book provided to me. 7684 LEGISLATIVE COUNCIL ─ 19 March 2015

Deputy President, I have to thank you for proposing this motion which enables us to explore once again the reasons why so many highly-educated and industrious people who should be middle class by definition have degenerated into the grass-roots in Hong Kong.

On the definition of the middle class, the Financial Secretary said last year that it referred to people who drink coffee and watch French movies. The Central Policy Unit (CPU) has also drawn some sort of a definition of it. When Prof LAU Siu-kai was in charge of the CPU, he conducted a questionnaire survey on the middle class in Hong Kong. One of the questions asked was whether you played mahjong or not. Disregarding whether you like playing mahjong or going to French movies as a matter of culture, we can see from summing up these views that the middle class refers to people whose burden of living is not too heavy and who can have the leisure to choose their way of life and also have the leisure time for suitable recreational and cultural pursuits irrespective of the types of cultural activities chosen as people may not necessarily share the same view on this.

As a matter of fact, the origin of the middle class is that in the past, the ruling class in Europe had both powers and land, but as the noble families kept branching out, many of the successors no longer belonged to the original nobility. They could only have the knowledge of the noble ruling class but not the land or political power. However, these people were free men, for they were not serfs; nor were they soldiers or labourers. Therefore, they gradually became a middle class with professional knowledge in medicine, astronomy, science, and mathematics. However, they shared a common background, which is more or less the same as the definition that you, Deputy President, has just said, and that is, they were likely to be engaged in business, management and other professions with the ability to create wealth but not necessarily in possession of land. They did not have public powers to rule but they had the soft powers financially, and they hoped that through a democratic constitutional system, they could secure protection for their interests and have a share of powers.

However, all of these definitions of the middle class are not quite applicable to Hong Kong because as Members said earlier, even for university graduates in Hong Kong who are sufficiently educated and the professionals who make a high income, if they have yet been able to buy a property, they would be plunged into misery by the housing expenses and live in straitened circumstances. Even for young people with professional knowledge who have newly joined their professions, they have to work long hours like those in the working class. Let us LEGISLATIVE COUNCIL ─ 19 March 2015 7685 look at the Citic Tower across the road. Many accountants who are new entrants to the profession will wait for a taxi to go home at 11 pm or midnight. Exploited by long working hours, they are actually not a lot different from the working class which has no bargaining right.

Therefore, under these unique circumstances in Hong Kong, the definition of the middle class can only be simplified to mean whether or not a person owns a property. It is because whether or not a person owns a property is a determinant of whether or not his family has to worry about living. In other words, we are back to that ancient question in the Middle Ages in that land ownership was the factor determining whether a person belonged to the middle class or not.

Speaking of land, Deputy President, it is actually an onerous task to achieve home ownership in Hong Kong. Apart from asking parents to help making the down payment, one has to spend two decades of his prime to service the mortgage in order to be freed from the burden of housing. Property prices are so high that those 40% of people in the middle strata of society who should belong to the middle class have actually degenerated into the grassroots after deducting their housing expenses.

Therefore, in order to expand the middle class in Hong Kong, the first issue to address is certainly the housing problem. This will enable these middle-class people who are not eligible for public housing to reduce their expenditure on housing, so that after deducting the housing expenses, there is still sufficient disposable household income for them to plan for their children's future or pursue education or a cultural life according to their interests.

Deputy President, it is not easy for the middle-aged people to change jobs as they grow beyond their prime. This is why my amendment has focused on creating an environment conducive to the upward movement of young people. How can we create favourable conditions to help the younger generation become the middle class? This can be done mainly in several aspects. On the education front, as we have said at length before, due to a shortage of subsidized tertiary places, many students are not provided with subsidized places even though they have passed in the Hong Kong Diploma of Secondary Education Examination (HKDSE). As a result, they are forced to enrol on associate degree courses or in private institutions and end up carrying debts amounting to $300,000 after graduation. They bear debts of $300,000 upon graduation at the age of 22 and when they have repaid these debts, they have to worry about home ownership. 7686 LEGISLATIVE COUNCIL ─ 19 March 2015

This is why we have been proposing over and over again that it is imperative to increase the provision of subsidized places in order to help the young people become the middle class and move upward in society. In the education system, there are areas in which improvement can be made. For example, during the financial turmoil in 2008, we proposed that internship opportunities be provided to university graduates, so that it would make it less difficult for them to land the first job. Besides, these internship opportunities will enable them to gain work experience before graduation. In fact, there is more that the Government can do apart from putting in place this system for university graduates and as we have pointed out many times before, reference can also be made to the apprenticeship system in Germany, where students with a tertiary or even secondary level of education can be enabled to avail themselves to these opportunities alike. These internship opportunities are also provided in another way in overseas countries as they have the system of "sandwich courses", so to speak. Students can study in one term and take up internship in another. Upon graduation, they may have worked in two or three companies already, and if the student showed good performance during his internship in these two or three companies, he can take up employment in these companies smoothly.

In fact, we can also find these systems in Hong Kong. The School of Journalism and Communication of The Chinese University of Hong Kong and the Department of Journalism of the Baptist University provide internship opportunities but I think these opportunities are still inadequate and this system of sandwich courses should be adopted in more schools or departments in universities. This system will enable students to gain work experience, and during the terms when students take up work placements, they can ascertain the applicability of the knowledge acquired in class or whether some measure of adjustment is required. Apart from this, it will enable the less well-off students to take a break after studying for several months and work for several months to earn wages for meeting their living expenses in the coming term. This way, they do not have to study while working desperately hard as private tutors, which would otherwise compromise their academic performance. Another merit is that this will indirectly increase the number of school places because when a group of students take up work placements and another group of students study on campus, the number of subsidized places can be increased without having to expand the school premises. I urge the education authorities to take this into detailed consideration.

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Moreover, the economy has to be diversified in order to facilitate employment. If we take a look at the economic background and economic prospect in this year's Budget, we can find that several traditional industries, including financial services, tourism, logistics and professional services actually accounted for 57.8% of the Gross Domestic Product (GDP) of Hong Kong, showing an over-concentration of industries. As for the cultural and creative industries, innovation and technology, testing and certification services, and environmental industries that we wish to take forward vigorously, no matter what promotional efforts have been made and even if we factor in medical services and education services which, in our view, should not be commercialized, they accounted for only 9.1% of the GDP. In particular, the cultural and creative industries accounted for a mere 5.1% of the GDP with a workforce of only 207 500 ― Deputy President, these were the figures of 2013, and the updated figures may be a bit different. The cultural and creative industries are in need of land all the same. Industrial buildings can supposedly serve as a very good base for creative undertakings. But no sooner had we suggested the revitalization of industrial buildings than their rental surged because of speculation to a level beyond the affordability of young people. When we are unable to stop the inflow of hot money and when even industrial buildings have become a target of speculation, the Government is duty-bound to provide land at low costs, so that young people can have a base to start a business and steadily move on.

As I have repeatedly pointed out to the Secretary, apart from promoting the research and development (R&D) industry and training up designers, it is also necessary to revitalize the manufacturing industry, so that designs or R&D concepts aiming to open up high-end markets can have opportunities of implemention in Hong Kong. This will enable Hong Kong to manufacture products on its own and hence create demands in the market. But the Government's policies, which are top-heavy, have failed to achieve this objective or provide any support.

Deputy President, the last area is business start-up. A very successful example is Nicholas TSE. Having acquired sufficient experience in his trade and with the spirit of innovation, he set up a film post-production house which has been doing remarkably well. However, it takes an adventurous spirit to start a business and therefore, we must underwrite their loss by providing them with a safety net, so that they can boldly strive for their goal. This safety net is universal retirement protection. Without universal retirement protection, neither 7688 LEGISLATIVE COUNCIL ─ 19 March 2015 the middle-aged nor the young people will boldly work for their goal. Therefore, I urge the Government to expeditiously make practical arrangements for implementing universal retirement protection. Thank you, Deputy President.

SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT (in Cantonese): Deputy President, thank you for moving this motion today.

The Government attaches great importance to economic development. As emphasized by the Chief Executive time and again, only when the economy enjoys sustained and higher growth can the Government obtain sufficient strength and resources to tackle some deep-rooted problems in society, including the problem of, as mentioned in this motion debate, increasing the opportunities for upward social mobility, thereby expanding the ratio of the middle-class population and enhancing Hong Kong's competitiveness.

What does it mean by middle-class people? As mentioned by many Members just now, different economies have their respective interpretations and it would be difficult to establish a uniform standard. However, it is the general wish of people to, regardless of which economy are they living in, pursue career advancement so as to accumulate wealth, improve their lot and upgrade their social status. Hong Kong is certainly no exception. The Government fully understands the needs of Hong Kong people in regard to employment, business start-up, investment and business operation. Therefore, in terms of the overall economic conditions, the Government has been striving to provide a liberal and open investment environment, uphold a fair and transparent business market and maintain a simple tax regime. The favorable business environment of Hong Kong, which is internationally renowned, facilitates the provision of sufficient and quality employment opportunities for Hong Kong people. It also provides favorable conditions for people intent on starting up, operating or expanding their businesses. In this way, people from different social strata will have access to opportunities of bringing their strengths into play. They can not only make contribution to but also share the fruits of economic development, thereby improving their quality of life and maintaining Hong Kong's competitiveness.

The current economic competitive edge of Hong Kong is actually the fruit of the unremitting efforts made by various industries and trades as well as members of the public. Therefore, subject to the needs of industries and public opinion, the Government formulates suitable facilitation and support measures LEGISLATIVE COUNCIL ─ 19 March 2015 7689 from time to time. For example, the Government launched the "Be the Smart Regulator" Programme since 2007 to improve the customer friendliness, efficiency and transparency of the licensing systems of government departments in order to enhance the business environment of Hong Kong; the Competition Ordinance, which has been passed, regulates possible anti-competitive conduct in various sectors so as to maintain fair and sustainable competition in the market; and the Financial Secretary has also announced various measures in the Budget, which was released in February this year, to help small and medium enterprises rise to challenges. The Government aims to foster the development of industries and consolidate the economic advantages, thereby enhancing the long-term competitiveness of Hong Kong.

Apart from maintaining a favorable macro-environment for doing business, the Government also adopts the "appropriately proactive" approach for supporting pillar industries and emerging industries to promote diversified and high value-added development of industries as well as boosting economic growth. The overall direction of the Government is to expand and strengthen the advantages of our pillar industries, which include trading and logistics, tourism, financial services and business and professional services, and to increase business volume in order to maintain the competitiveness of Hong Kong. Meanwhile, the Government diversifies the products and services of our existing industries, and identifies and nurtures new areas for development. We aim to diversify our industries, create a more prosperous economy and increase the opportunities and choices of employment and starting up business for Hong Kong people so that they can join different industries according to their own interests and abilities, seize the opportunities, realize their full potential and strive hard for upward mobility on the social ladder.

As for the question of how a policy can be formulated specifically for the diversified development of industries, the Economic Development Commission (EDC), established in 2013 and under the leadership of the Chief Executive, has been conducting studies on how best to capitalize on the advantages and opportunities of Hong Kong. It focuses on the overall strategy and policy to broaden the economic base and foster long-term development, and provides visionary direction and advice to the Government. In the past two years, the EDC has progressively submitted specific recommendations to the Government on the policy and measures for supporting the development of individual industries, which are highlighted in the Policy Address and the Budget.

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Deputy President, I would like to keep on listening to the opinions of Members on the motion and give a detailed response later.

Thank you, Deputy President.

MR WONG KWOK-HING (in Cantonese): Deputy President, in giving this speech here today, I have deliberately put on a blazer, though without a tie, and a safety helmet that symbolizes the construction industry. On this safety helmet there is a slogan in two lines: "Rice bowls for over 300 000 people Livelihood of over 1 million people". It is meant to express the view that the construction industry should, by its basic nature, belong to the middle class.

Deputy President, on 8 March, some 5 000 people from various sectors of the construction industry who seldom take part in rallies or petitions came to the petition area on the ground floor of the Legislative Council Complex to lodge a strong appeal. Coming from 18 labour unions, trade associations and professional bodies, they expressed to the Legislative Council their wish for those Members in the opposition and pan-democratic camps to end the filibuster for the rescue of the construction industry; they urged these Members to end the filibuster for the rescue of the middle class; and they called for the end of the non-cooperation movement, so that the middle-class people in the construction industry will not fall back into the grassroots.

Deputy President, according to the information of the Census and Statistics Department (C&SD), there are some 311 700 people in the construction industry. The analysis of the C&SD showed that 17 700 people are managers and administrators, 14 800 people are professionals in various fields, some 49 000 people are allied professionals, some 70 000 are clerical support workers who are engaged in office work, and the rest are skilled workers. The information on income provided by the C&SD clearly shows that their income is at the middle level or above. Deputy President, why did they come forth to air their views even though they had never taken part in any petition or rally before? They said downstairs that they had been forced to come forth. On that day, I was also invited to join them to throw weight behind their actions.

Deputy President, they had submitted a petition to the Legislative Council but much to our regret, the Chairman of the relevant committee did not give us a copy of it after receiving it. Why did they call for the end of the filibuster for LEGISLATIVE COUNCIL ─ 19 March 2015 7691 the rescue of the construction industry and the middle class? Deputy President, in their written petition they pointed out that the new public works projects of the Government were caught in a cliff crisis. They pointed out that in 2011 to 2012, 49 new projects were approved with a total funding of $160.7 billion being granted; in 2012 to 2013, 39 projects were passed with the approved funding totalling $90.9 billion; and in 2013 to 2014, only 13 projects were approved with only $3.6 billion being provided and the $43.1 billion public works funding applications as originally planned by the Government were not approved. Now that in 2014 to 2015, how many projects can be approved? Deputy President, we all know that a filibuster is ongoing in the Public Works Subcommittee and also in the Finance Committee of the Legislative Council. They are still discussing the outstanding items from last year, and the new projects for the new year remain untouched at all.

Deputy President, look at these shocking figures. If funding is not approved, many people engaging in consultancy, research, surveying, design and plans drawing, as well as professionals such as engineers, surveyors, and designers could only face the risk of underemployment and their living would be like a claypot being hung upside down. At this time when a new year has just begun, I did not wish to bring along this claypot which is far from a sign of luck, but in order to show that the construction industry is now caught in a cliff crisis, I cannot but present this claypot at the beginning of a new year to show that they would be deprived of their means of living.

Deputy President, the original motion proposed by you is very good, and the four pan-democrat Members also made very good points when they spoke on their amendments to the motion just now. What is the middle class? Members can save the trouble of looking it up. The 300 000-odd people from various sectors of the construction industry are middle class. They stand for the livelihood of some 310 000 families and 1 million people or one seventh of the population of Hong Kong. While you have made good points in your speeches, you had better to do good deeds. You said emphatically that you very much sympathized with the middle class and stressed the need to expand the middle-class population and facilitate their upward mobility, but you preach one thing but do quite another as you have started the non-cooperation movement and filibuster on all fronts in the Legislative Council to block the passage of all funding applications.

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Some companies now face the risks of having to wind up and lay off their staff. When workers are out of job, they would be deprived of their means of living. This is why the Construction Industry Alliance has come here to lodge an appeal. They have put up four demands, strongly calling on Members to end the non-cooperation movement and filibuster for their rescue. I hope that Members in the pan-democratic and opposition camp will give up evil and deliver salvation. I hope they will not act like "feeding both sugar and faeces" and say flattery words but do all kinds of evil. If you continue to cause the construction industry and the middle class to suffer great losses, you would definitely eat your own bitter fruit.

DR ELIZABETH QUAT (in Cantonese): Deputy President, the last decade or so has seen the emergence of the "M-shape society" phenomenon with the middle class moving downwards in places all over the world. As Hong Kong has failed to endeavour to develop new industries, our economic development has entered a stage of hollow growth. Due to the lack of new growth points in the economy and the shortage of talents and land supply, the costs of business start-up are high while the small and medium enterprises face difficulties in operation, and the opportunity for upward mobility in Hong Kong is indeed on the decline. While buying a property used to be a way to increase wealth for many people, the surge of property prices in recent years has dashed the hope of many young people in buying their first home. Nowadays, even the income of university graduates cannot catch up with the rise in property prices. This is why some of the "post-80s" and "post-90s" hold that it is no longer possible for them to follow the way of the last generation in assiduously working their way up the social ladder. The young generation nowadays feels lost even more strongly than the last generation did when they were young and lack perseverance and diligence as well as motivation. Meanwhile, many Hong Kong people have pent-up discontent with the Government doing nothing for a long time in the past, which has caused our competitiveness to lag farther and farther behind. In this social atmosphere and under the influence of the information on the Internet, it has become increasingly common for young people to take to the streets.

Deputy President, many people in Hong Kong cannot see any prospect for economic development and face the mid-life crisis. They think that there is no room for them to play to their strengths and they are dissatisfied with the Government. Some of these people have savings and even properties but for various reasons, they have become unemployed or quit their job and LEGISLATIVE COUNCIL ─ 19 March 2015 7693 subsequently, they might even stop working for a long time or wind up their business and then take a long holiday. This is indeed a huge waste of human resources.

Deputy President, in fact, both the middle-aged people and young people very much hope that their toil can be rewarded, and they would like to see more opportunities of development in Hong Kong. They wish to move upward; they wish that they can afford buying a property; and they wish to improve their lot. The Government should formulate a comprehensive blueprint for development, with a view to providing various types of housing at a sufficient quantity to enable all members of the public to live in peace. This way, the public will see hope and believe they can live in peace and work with contentment in Hong Kong, leading a life ideal to them.

Although the Budget and the Policy Address this year have handed out "candies" to the middle class, which was rarely seen in the past, and also injected quite a large amount of resources into promoting the diversification of industries, many middle-class people consider it more imperative for the Government to invest in building the future. Deputy President, in view of an ageing population in Hong Kong, we must start planning early. Following the retirement of the baby boom generation, these retirees will definitely cut down on their spending. An ageing economy will make it all the more impossible to provide sufficient drive for 7 million people to move upward. To sustain the drive for upward social mobility, it is necessary for Hong Kong to provide more business opportunities and attract more inbound visitors to use our services, such as attracting more students to study in international schools in Hong Kong, more patients to receive medical treatment in Hong Kong, more from the culturati to participate in exhibitions, and more members of the technology industry to set up business in Hong Kong. The Democratic Alliance for the Betterment and Progress of Hong Kong (DAB) has, over the past decade or so, urged the Government to promote diversification of industries and develop the Mainland market, thereby creating more business opportunities for various industries in Hong Kong. The Government must be more aggressive in working to this end.

During the past five years, thanks to the growth in the Mainland and Asia, many industries in Hong Kong have achieved desirable development. For example, the retail volume has recorded an increase of 80% against the trend of global recession. Regrettably, the retail floor area has increased by only 2% in Hong Kong during the same period, thus turning a good thing into a bad one. 7694 LEGISLATIVE COUNCIL ─ 19 March 2015

An acute shortage of hardware has turned a 80% increase in the retail volume into a 78% increase in rental which is further turned into inflation. A shortage of hardware support will take toll on the people's livelihood and even lead to conflicts between the people of the two places. Therefore, in tandem with the promotion of industrial diversification, we must start planning early and ensure the sufficient provision of hardware and software to retain employment opportunities and the drive for upward mobility in Hong Kong, in order to create the impetus for upward social mobility.

In fact, the Government has also projected that the labour force will retreat from its peak in a few years. But as the core of the world economy shifts from the West to the East, coupled with the structural growth in the Mainland and Asia, there will be increasing demands for the quality and renowned services of Hong Kong. In this connection, the Government has to actively train and import talents. Meanwhile, it is also necessary to examine the policies on tertiary education and employment for young people, review the current life planning education for secondary students, and improve the vocational education ladder as well as the positioning and recognition of associate degrees to ensure that the graduates can fully give play to their talents. We also propose that the Government should make a further injection into the Continuing Education Fund and raise the ceiling of reimbursement for each applicant in order to attract more members of the working population to pursue studies and enhance their personal competitive edges. In parallel, the Government should step up efforts to attract overseas talents to Hong Kong, thereby establishing more business and personal ties and bringing new business and development opportunities to Hong Kong.

Having said that, Deputy President, what does the middle class consider to be most important? It is the rule of law in Hong Kong that they consider most important, because the rule of law is the cornerstone of Hong Kong. Without the rule of law in Hong Kong, all that I have just said would only be a castle in the air. Without the rule of law, there would be no hope for Hong Kong. Therefore, how we should uphold the rule of law in Hong Kong is fundamental to our future.

Deputy President, this original motion moved by you today is precisely a continuation of the position of alleviating the financial burden on the middle class put forward by the DAB some time ago as well as that put forward by me in 2013 of assisting the middle class. Therefore, we will support the motion. As for Mr SIN Chung-kai's amendment, which proposes to "abolish the standard rate for LEGISLATIVE COUNCIL ─ 19 March 2015 7695 salaries tax", the DAB has reservations about this proposal for it would indirectly increase the burden of middle and high income earners. Besides, he also proposes to "fully implement the election of the Chief Executive and that of all Members of the Legislative Council by genuine universal suffrage" and this, we cannot support. The DAB wishes to stress that the election of the Chief Executive should be carried out in accordance with the framework of Hong Kong and that of the 31 August Decision and also in line with the principles of gradual and orderly progress and balanced participation. For this reason, we will vote against the amendment.

As for Ms Cyd HO's amendment, which mentions "promoting diversified economic development", the DAB must point out that the establishment of the Innovation and Technology Bureau proposed by the Government has yet to come to fruition as a result of filibustering by pan-democrat Members including Ms Cyd HO in an attempt to block the passage of the proposal. That she has made this proposal is absolutely hypocritical of her. Meanwhile, her amendment has also narrowed the proposal of "increasing the opportunities for upward social mobility" in the original motion by confining it to the younger generation only, and this is also why we cannot accept her amendment. We believe people in all age groups should have the right to upward movement and therefore, the DAB will vote against the amendment.

Deputy President, I so submit.

DR PRISCILLA LEUNG (in Cantonese): Deputy President, I attended a forum some time ago and among the attendees were Prof Joseph CHAN and Mr Kevin LAU. That was a discussion on "post-Occupy Central" in relation to how Hong Kong should move forward and how we should look at the young generation.

Prof Joseph CHAN mentioned one thing: if young people ask him what he thinks about the situation in Hong Kong right now he would say he is desperate. We actually have always been willing to listen to different judgments, hoping to explore ways to enhance the harmony in the Hong Kong society after Occupy Central so as to prevent it from being torn apart further.

However, at such a moment I feel obliged to express my views. I absolutely cannot agree that at this juncture we continue to instill in young people an ideology and a direction that it seems only one thing in society matters, which 7696 LEGISLATIVE COUNCIL ─ 19 March 2015 is young people and this society should lose hope if they cannot successfully strive for civil nomination or what the opposition camp regards as genuine universal suffrage in the constitutional reform, and then attribute the blame for everything to this reason. I believe it is irresponsible hype.

In fact, truly there is unemployment in Hong Kong. Some people have become unemployed after graduation and some middle-class people have become the proletariat. But looking at some figures, we will notice that the situation is not that bad. In recent years, the unemployment rate has remained at around 3%. The employment rate in Hong Kong is pretty good. Yet why is there such a pessimistic aura permeating the entire society?

Indeed the so-called "middle class", like what Financial Secretary John TSANG has portrayed and often enthusiastically quoted, is about drinking coffee and listening to French music. But honestly, being middles-class can be a self-definition and personal perception. The Government's definition of middle class is having a monthly income of $15,000 to $45,000. Yet some people making $45,000 or $50,000 a month still do not feel they are middle-class. Therefore, it is a way of life ― some may know how to enjoy life and prefer a certain way of life and quality of life. However, I wish to point out that such a traditional idea may have to change gradually, for we, including those who think they are middle-class, as well as those who want to be middle-class, all need to change, because the world has really changed.

I have observed that the problem of associate degrees has made some associate degree graduates to be not good enough to be truly successful but not bad enough to accept low-status jobs. They feel that they will certainly get a bachelor degree after doing an associate degree and want to be a white-collar worker. The fact is, I find one thing very fair in society nowadays, which is the Internet. I often visit the Mainland and some third-world countries and have seen many locals there making great achievements with very little resources, just because they have mastered the use of the Internet so that a blue-collar worker can make a name for himself.

I have shared this experience before. I have been to Yangzhou and met a young girl who was well-known for her pedicure skills. She started learning pedicure when she was about 10 years of age. Later on she managed to promote her skills and her business was growing which then became an enterprise. Now she is even a deputy of the National People's Congress.

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It is the contrary when it comes to teapot making in Wuxi. An accountant left his or her job to search for a sense of satisfaction and transformed the traditional design in the art of teapot making into a business undertaking with personal entrepreneurship and the use of the Internet. Some teapots with new designs can fetch $8,000 to $50,000. The most impressive point is that some could cost a million dollars each. This is indeed a combination of traditional ideas and individual innovation.

I remember a successful entrepreneur once told me, "Priscilla, if you do it well you can run an enterprise selling peanuts. It is just about if the one doing it is focused."

I ran into my hairdresser at the Wine and Dine Festival. He came from being a skilled worker but now judging by his lifestyle he is definitely middle-class. How do we define middle class then?

I wish to raise a new point of view. The society of Hong Kong has always emphasized climbing up the ladder to become middle-class and regarded it as the goal to strive for. But is it possible to develop some technical universities in Hong Kong? In Switzerland, chocolatiers and watchmakers are the most respected in society. Korea has developed its film industry and film editors are equally sought after. What is the situation in Hong Kong? We hold white-collar jobs in such high regard but blue-collar workers can come to the front too.

I know two young people who are brothers. They did not make good grades at school and did not enrol in an associate degree programme after finishing Form 5. They have joined the construction industry for five years, first as construction workers and later as a contractor after training. They set up a construction engineering company in Macao. The younger brother gives over $20,000 to their bone-setter mother as family expenses. I think some people who are white-collar, may be the traditional three prestigious professionals (accountants, doctors and lawyers), cannot do so.

However when they have reached such a level and want to pursue self-enhancement, do they have the opportunity? They may not be too interested in an associate degree. Under the present system, can we set up some technical universities for these people who have already become masters of their 7698 LEGISLATIVE COUNCIL ─ 19 March 2015 trades to learn interpersonal relations, social psychology, sociology and even business theories when they find the need to establish their own business? We can provide assistance to those who have gradually succeeded in their own technical trades and help them advance. Then they can become, from being members of the middle class, business proprietors, while satisfying their pursuit of academic qualifications.

Lastly, I think it is good that the Budget has allocated $300 million to setting up the Youth Foundation. We have been asking for this over the last three years. But I have heard concerns from society about whether this sum will suffer losses. Young people may lose money and why would we do this? To start up a business is a creation and we need to let them try, if they are willing to try and do it with devotion and their feet on the ground. Take studying theories for 10 000 hours as an example, if you are devoted you stand a chance of making it. Even only two out of 100 approved cases succeed, I think this business start-up fund is worth a try and our support. Therefore, what I really want to bring to you today is a change in mindset (The buzzer sounded) …

DEPUTY PRESIDENT (in Cantonese): Dr LEUNG, your speaking time is up.

DR PRISCILLA LEUNG (in Cantonese): … Thank you.

MR CHARLES PETER MOK (in Cantonese): Deputy President, I thank you for proposing the original motion and Members for their amendments. Nevertheless, the first time I heard the motion proposed by the Deputy President, I felt a bit weird. In "expanding the ratio of the middle-class population", who are the middle class actually? Why must a high ratio of middle-class people necessarily be good? Does expanding the ratio of the middle-class population stand for reducing the ratio of the population of those who are not middle-class?

Prof Joseph LEE's amendment proposes that the Administration should define what is meant by the middle class. I do not have any strong objection to this point, but I doubt whether the Government can do it. Moreover, should the definition of middle class be given by an organ of power? I have also pondered, why does the Government need to formulate a policy to expand the middle-class LEGISLATIVE COUNCIL ─ 19 March 2015 7699 population? Why not present it in another way, for example, by talking about the need to help members of the public to break away from poverty and move upward ― I do not think this is to turn the rich into the poor ― or to raise income and increase the amount of assets?

Let us come back to the definition of middle class. This expression has existed for more than 250 years. The time it appeared in a government policy of the modern period was 1913, when it was used by the statistics authorities of the British Government, which stated that the middle class was the class between the upper class and the working class. From the distinction between the Chinese and English expressions, we could notice some cultural differences. First of all, the English phrase "middle class" (translated as "中 產"1 in Chinese) does not carry the connotation of the Chinese character "產". It just refers to the middle. The English expression stresses "class", whereas in Chinese, we usually only mention "中 產 ". In other words, the Chinese expression may put more emphasis on the difference in financial status and assets, whereas the English or Western expression focuses more on the difference in social class. I hope the motion debate today will not make people think that we do not attach importance or extend respect to the contribution of the grassroots.

The General Household Survey of the Census and Statistics Department divides the households in the territory into 16 groups on the basis of monthly income. The monthly income of the six groups in the middle ranges from $15,000 to $45,000. At present, Hong Kong has implemented the minimum wage, but is $15,000 a month sufficient for people to break away from the grass-roots level and become members of the middle class? I guess we know the answer in our heart. On the other hand, many "top employees" whom we consider quite wealthy or big bosses like the Deputy President will kiddingly claim themselves middle-class, too. Hence, the definition of middle class is inevitably very wide, and this may not necessarily be something bad, since I personally also have reservations about defining a social class merely on the basis of assets.

Perhaps we should not mind too much about what is meant by the middle class. We had better focus our discussion on the opportunities of upward movement in society. Whether it be the middle class, working class or

1 "中" (zung1) in "中 產" means middle while "產" (caan2) refers to property and assets. 7700 LEGISLATIVE COUNCIL ─ 19 March 2015 grassroots, I believe Members will not object to providing more opportunities to increase the income of members of the public and wage earners and creating more quality job opportunities.

As a matter of fact, this group with a monthly income of $15,000 to $45,000 in the middle accounted for 40% to 50% of all the households in the territory in the past eight years. However, as the price of everything in Hong Kong keeps soaring, the purchasing power of this group of middle-class people keeps falling. As we probably know, even if they have a monthly income of $45,000, can they be regarded as having a stable life, being able to do whatever they want and save money in preparation for retirement? We all know the answer very well. In our discussion on expanding the ratio of the middle-class population, we also need to ask, what standard of living should the middle class reach? Is it that they will suffer from high rents all the same and cannot afford to acquire any property or save any money? If these structural problems remain unsolved, even if the ratio of the middle-class population increases, it will be a mere label of identity without any actual status. To put it bluntly, it is just putting up an appearance.

Deputy President, in my view, an expansion of the ratio of the middle-class population requires changes in both quality and quantity. The situation of promoting diversification of industries is similar to the problem of high academic qualifications with low wages which we often face in the information and technology sector. Of course, youngsters who wish to stand out in their career do not necessarily need to start their own business. The mainstream choice is securing employment, promotion and pay rises. Nevertheless, recently, I have heard many views pointing out that the mismatch of human resources in Hong Kong is rather serious. Last week I held a discussion session during which the participants expressed a number of views. Some of them said that the technology talents in Hong Kong are by no means inferior to those overseas, but since overseas countries are also short of talents, a large number of outstanding graduates and postgraduates in science and technology left Hong Kong for employment at such places as the United States, Singapore, Shanghai, Beijing and Shenzhen. A young IT professional who has worked at the Silicon Valley in the United States even pointed out that the ability of Hong Kong people working there is absolutely comparable to that of the top-notch locals and people from other countries and regions. Moreover, they enjoy very handsome remuneration packages.

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On the contrary, in the field of science and technology in Hong Kong, the trend of outsourcing is prevalent. There is a profession but not an industry. The trend of outsourcing was even initiated by the Government, affecting young people's opportunities of development in the profession. The Government is unwilling to create more permanent posts and reluctant to procure the technological products and services of local enterprises, thus limiting the room of development of the profession. As such, how can we believe that the Government is sincere in providing support or knows how to develop innovation and technology?

Deputy President, in my opinion, even if the authorities pay attention to innovation and technology afresh, they must administer the right medicine that cures the malady. They should not merely lavish money on encouraging young people to start up businesses, which will only give rise to "successful examples" of those who are shrewd in making applications for subsides, while entrepreneurs who have failed in their start-up or who lack further funds are ignored. The authorities must start out by reforming their bureaucratic work style and introduce more schemes of collaboration with private enterprises, including matching funds, so that professional investors can and will have the opportunities to consider potential business start-up projects. The Government's present proposal for the Science Park to contribute $50 million is in the right direction, yet the vigour is too small. I will elaborate on this in the next motion debate.

Deputy President, I also greatly support Mr Kenneth LEUNG's amendment which points out that the middle class is pivotal in promoting the development of democracy and economic development. Economic development is a matter of course. Yet with regard to promoting democratization, a number of researches have pointed out that societies and countries where the middle class has a high population ratio and strong social impact will stand a bigger chance of developing a stable democratic system, and the middle class can exert immense influence in the process of democratization. Deputy President, I hope this is one of the reasons for your proposal on expanding the ratio of the middle-class population.

Deputy President, I so submit.

DR HELENA WONG (in Cantonese): Deputy President, I rise to speak in support of the original motion as well as the amendments proposed by Mr Sin Chung-kai, Mr Kenneth LEUNG and Ms Cyd HO. However, today I find it 7702 LEGISLATIVE COUNCIL ─ 19 March 2015 deeply regrettable. Despite such importance of the motion moved by the Deputy President, only one Secretary attends the meeting but he is away at the moment, as the subject matter deserves the attention of the community as a whole.

Deputy President, today I would like to focus on point (4) in Mr SIN Chung-kai's amendment, which urges the SAR Government to "fully implement the election of the Chief Executive and that of all Members of the Legislative Council by genuine universal suffrage, respect people's equal rights to make nomination, to vote and to stand for election, and develop in the middle class a sense of belonging to Hong Kong". Deputy President, the Democratic Party endorses expanding the ratio of the middle-class population. In fact, as early as the 1970s, in his multinational comparative study, LIPSET, a political scientist known as the master of modernization theory, looked into the kind of society or country most favourable for transition from autocracy to democracy. He suggested that if a society is more modernized comprising a high level of economic development, vibrant media and well-developed education, the number of middle-class members among the population will increase, giving rise to a shift from a triangle-shaped population profile, a society where there are just a handful of rich people whereas the grass-roots and the middle tier constitute the majority and the minority respectively, to a rhombus-shaped profile, where the richest and the poorest actually constitute just a small part of the overall population and the middle tier makes up the bulk. This is the Deputy President's current proposal of increasing the ratio of the middle-class population. Of course, I am not sure if the Deputy President's subtext is to further Hong Kong's democracy in the future through increasing the ratio of the middle-class population. If that is the case, I see some good intention in it.

Deputy President, in fact, we know that many of the middle-class professionals care about the democratization of Hong Kong. The Umbrella Movement towards the end of last year was perceived by many as a student movement; yet, if Members have really paid attention, they will note that the middle class and professionals are also backbone members of the movement. A questionnaire survey conducted in various occupied zones during the movement showed that students actually accounted for only 26% of the participants, vis-à-vis 58% for those who were white-collar and self-employed; and the main reason for the middle class to join the movement was fighting for genuine universal suffrage. This demonstrates the very strong desire of the middle class for genuine universal suffrage. Furthermore, they practise what they preach. Many professionals joined the medical teams and voluntary lawyers' teams for LEGISLATIVE COUNCIL ─ 19 March 2015 7703

Occupy Central, some from the financial and other sectors offered back-up support to the whole movement, and many of them even took part in the peaceful resistance on the front line.

The Umbrella Movement has also fostered the birth of many new professional bodies concerned about the constitutional reform. Recently, we know that 50 barristers, professionally trained lawyers and law students have formed a new platform for political deliberation named the Progressive Lawyers Group, calling for a withdrawal of the 31 August Decision by the National People's Congress (NPC) and expressing their views on the current constitutional reform package. Apart from the Progressive Lawyers Group formed by legal professionals, the Médecins Inspirés has also been formed by doctors, and I believe "Doctor Weird" is familiar with that. They are monitoring Dr LEUNG Ka-lau's inclination in respect of the constitutional reform. A survey conducted by Dr LEUNG Ka-lau in his sector shows that more than half of the doctors surveyed hold that this Council should veto the constitutional reform package introduced under the NPC's 31 August framework. Apart from doctors, there are also those from the nursing profession, who have recently published in newspapers a joint declaration that if we choose to "pocket it first" today, the Central Authorities and the SAR Government will take it as having honoured the promise of universal suffrage bestowed on Hong Kong people under the Basic Law, and it may not be possible to attain universal suffrage that is truly democratic in future. In addition, there are actuaries and people from the information technology sector who have formed the Frontline Tech Workers Concern Group. Therefore, we can actually see a lot of professionals and middle-class members aspiring to genuine universal suffrage.

Deputy President, be it Mr SIN Chung-kai's proposal of enhancing upward social mobility and offering various tax incentives, or our calls for improving Hong Kong's education, protecting the environment, keeping the air clean and ensuring the safety of our water or food, and so on, these are matters that have captured the attention of the middle class; in particular, we also need to safeguard Hong Kong's core values and establish a society that is democratic, corruption-free and just. These are essential to the middle class as a means to ensure the long-term sound governance of Hong Kong. However, the recent political disturbances in Hong Kong have arisen because democracy and universal suffrage are nowhere in sight. The closing of the gate under the NPC's 31 August Decision has kept genuine universal suffrage far out of reach.

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Over the past few months, we have seen countless secondary school and university students who came out as fearless and valiant as could be to take up on their shoulders various movements of peaceful resistance for promoting genuine universal suffrage, drawing global attention to this magnificent Umbrella Movement. Given the existence of a group of elite members of society and young people who have been so brave as to pay a price for the future of Hong Kong's democracy, we should be proud of them. But regrettably, our SAR and Central Governments have not proactively responded to the aspirations of students and the middle class, but have instead greeted them with canisters of tear gas and arrests. This is a big pity to us, and countless middle-class families are thus very worried and have lost confidence in the future.

Recently, we have obviously noted that in the wake of the Umbrella Movement, a further 20% of middle-class parents have begun to enquire about ways to send their children abroad for studies as they are worried that the SAR Government will adopt a red approach to governance; and since some Beijing officials have explicitly called for re-enlightenment with regard to "one country, two systems", they are worried that their children will be brainwashed. Rita LAW has recently suggested that teachers-to-be head north to pursue one-month studies of the so-called national education, and there is even a suggestion that university students need to pursue studies in the Mainland to receive some brainwashing education. All of these have made middle-class families very worried about Hong Kong's future.

IR DR LO WAI-KWOK (in Cantonese): Deputy President, before all else, I would like to thank the Deputy President for moving the original motion to enable Members to explore this important issue pertaining to Hong Kong's sustainable and healthy development long term.

If we take a look at the world, we will find that the growth and thriving of the middle class can basically be traced back to the growth in social resources and wealth rather than the redistribution of social wealth. Following the take-off of Hong Kong economy and the reform and opening up of the Mainland in the 1980s and 1990s in the last century, rapid economic development had given impetus to wage increases and the rise in asset prices, thereby providing local youths and talents with good opportunities for salary rises and career development. Among them, quite a number of people aspiring to business start-ups had seized the opportunities and turned from wage earners to proprietors. LEGISLATIVE COUNCIL ─ 19 March 2015 7705

Unfortunately, times have changed for the middle class. The gradual emergence of "M society" in developed economies, such as the United States, Europe and Japan, means the shrinking of the middle class and the gradual increase in the number of rich and poor people in the two poles of society.

Why was there a shrinking of the middle class? The main reason is economic globalization. The continued outsourcing of non-core businesses or procedures by quite a number of enterprises has resulted in the loss of middle-level managerial posts and the replacement of permanent jobs by contract posts, thereby rocking the career and income security enjoyed by the middle class. The middle-class people in Hong Kong have even sustained various blows one after another, including the Asian financial turmoil in 1997, the SARS outbreak in 2003, the financial tsunami in 2008, and so on. In addition to the crisis of losing their jobs at any time, they also have to face the depreciation of their assets, the failure of their salary increases to catch up with the economic growth and the deterioration of their standard of living. With the continual growth of their grievances and dissatisfaction with the Government, social harmony has inevitably been adversely affected.

Deputy President, I am the incumbent President of the Hong Kong Professionals and Senior Executives Association (HKPASEA). Between 2006 and 2014, an opinion survey on social harmony was conducted by the HKPASEA every other year. Its findings revealed an initial even trend of harmony but a declining trend since 2012. According to the survey findings in 2014 at the "governance level of the Special Administrative Region (SAR) Government", satisfaction ratings were the highest in the three categories of "the maintenance of the rule of law, including the protection of personal freedom and property", "the maintenance of freedom of the market, speech and the media" and "the maintenance of clean governance", but the lowest in the two categories of "mutual respect" and "mutual trust". At the "economic/family/personal work level", the degrees of satisfaction in the three categories of "family harmony", "economic development" and "job opportunities" were relatively high, but the ratings in the two categories of "the distribution of wealth and income" and "the relationship between the public and major consortia" were the lowest. All this information is helpful to analysing some of the factors affecting social harmony.

In my opinion, the SAR Government should give full attention to the interests and aspirations of the middle class in its administration. In the Budget this year, the Financial Secretary has drawn a $34 billion from the surplus for 7706 LEGISLATIVE COUNCIL ─ 19 March 2015

"handing out candies", including reducing salaries tax and tax under personal assessment by 75% with the ceiling raised to $20,000, increasing the child allowance to $100,000, and waiving rates for two quarters, thereby benefiting the middle class which has long been neglected. Although these measures are worthy of support, they are only one-off in nature. The middle-class people attach more importance to their professional and career prospects.

In the long run, Deputy President, only through promoting the sustainable development of Hong Kong economy can the Government truly give effective assistance to the middle class. To this end, the SAR Government must adopt multi-pronged measures.

Firstly, the authorities should formulate long-term and comprehensive industrial policies, including proactively promoting the innovation and technology industry, the cultural and creative industries, the professional services industry, and so on, thereby enabling Hong Kong economy to develop in the diversified and high value-added direction and constantly find new momentum for growth. Later on, I will move a relevant motion as the next agenda item, express views on this in detail, and seek Members' support.

Secondly, infrastructure projects which are conducive to Hong Kong's long-term development should be planned and launched with reference to previous successful experience. Infrastructure development is not only essential to the economy and people's livelihood, but also a social investment for the future. I have time and again urged the Government to formulate long-term integrated urban infrastructure planning and draw up the order of implementation for various large, medium and minor projects according to their priorities. The importance of this issue has now become even more prominent. No decisions are made for many Public Works Programmes as a result of the filibusters staged in the Legislative Council. This has not only affected the well-being of the public, but also dealt a direct blow to construction works and the industry. On 8 March, the Construction Industry Alliance initiated an "anti-filibuster" procession participated by 5 000 people. Quite many participants were middle-class professionals in the industry, including engineers, surveyors, works supervisors, and so on. They were worried that incessant filibusters would affect the progress of the Public Works Programmes, thereby not only delaying the supply of housing and the planning for traffic and transport, and so on, but also casting shadows over the professional development of young engineers and other related professionals.

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Thirdly, at the level of regional economic co-operation, the rapid development of the emerging markets on the Mainland has given new impetus to Hong Kong's economic development and the expansion of its middle class. In this connection, the SAR Government should take the initiative to open discussions with the relevant departments on the Mainland, improve the implementation of the CEPA mechanism, and assist the professionals and enterprises in Hong Kong in fully seizing the opportunities brought by the development of the Mainland.

Deputy President, the SAR Government must strive to maintain fair competition, create more employment and business start-up opportunities to increase the number of middle and senior posts in different trades and industries, and enhance upward social mobility before the plight of the middle class can be relieved once and for all, thereby increasing the ratio of the middle-class population.

With these remarks, Deputy President, I support your original motion.

MR TONY TSE (in Cantonese): Deputy President, the community has not yet reached a consensus on the meaning and definition of the middle class, the ideal ratio of the middle-class population in a society, and so on. However, the public perception of the middle class usually contains certain elements. For example, middle-class people may have a monthly income of tens of thousand dollars; they usually own more assets than eligible applicants of subsidized housing; and they are professionals or middle-level managers of enterprises. In fact, the middle class is an important component of a healthy society. In recent years, however, middle-class people in Hong Kong are facing more difficulties and bearing increasing pressure in their daily life, including difficulties in career development, promotion, further studies, housing, and so on, while the assistance and support provided by the Government is very limited. It has restricted their upward movement in society and, as a result, created a far-reaching impact on the overall development of Hong Kong. The Government should cease to turn a blind eye to these problems. I therefore agree that the Government should formulate feasible policies and measures and devote more resources to alleviating the difficulties and pressure of the middle class and expanding the ratio of the middle-class population.

(THE PRESIDENT resumed the Chair)

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President, the Government is often criticized for neglecting the middle class, and I share the same view. In recent years, many members of the industry, including numerous middle-class professionals, have discussed this problem with me, complaining about the difficulties faced by the middle class. For example, many of them complained that in recent years, it was expensive to rent a house and difficult to acquire a home. They hoped the Government could pay more attention to their needs and provide suitable assistance to them. Therefore, in recent years, I have proposed time and again both inside and outside this Council that the Government should rebuild and enhance the home ownership ladder and, in particular, provide assistance to middle-class people who are ineligible to apply for subsidized housing and cannot afford private housing units, thereby alleviating their difficulties in housing.

In fact, the housing problems cannot be solved overnight. So, how can we increase the supply of land for development? We can, for example, increase the development intensity by modifying the planned land use, carry out reclamation on an appropriate scale, and so on. I think these proposals are feasible and should be considered by the Government. Certainly, it is inevitable that we have to make some choices in this process. I therefore hope that the community, political parties and the whole Council can be pragmatic and make a decision that can balance the needs of different parties in order to gradually solve the long-standing housing problems. If various sectors of the community and Members of this Council insist on holding fast to their own opinions, and fail to have mutual understanding and complement the Government's measures of expediting the supply of land and housing units, I believe Hong Kong people will eventually be the victims. I hope Members can think twice about it.

Furthermore, members of the industry have reflected that the programmes currently subsidized by the Continuing Education Fund (CEF) only cover certain trades and industries, such as design, financial services, logistics and tourism, while many other professional trades are not applicable. For the professionals concerned, they usually have to keep abreast of the industry information, enhance their standards of professional skills and obtain some professional qualifications through pursuing continued education. However, the cost involved may often amount to a hundred thousand dollars. I therefore urge the Government to further expand the coverage of the CEF to more professional trades, such as architecture, surveying and asset management. It is believed that not only will it help society create an atmosphere of pursuing continued education and training, but also alleviate the burden of the professionals and the middle class. LEGISLATIVE COUNCIL ─ 19 March 2015 7709

Meanwhile, I also hope the Government can allocate more funds to the CEF such that it can complement the further expansion of the coverage of subsidized programmes and increase the amount of funding for each applicant to a minimum of $20,000. I hope the Government can consider this suggestion.

President, the Government absolutely bears the full responsibility for promoting diversification of industries and assisting different professional trades in exploring local as well as overseas development opportunities. However, the professional sector I am representing have indicated many times their dissatisfaction with the Government's failure to formulate appropriate measures for the procurement of professional services and tendering system of construction projects as well as its failure to encourage and assist the participation of more professionals and small and medium enterprises (SMEs). Moreover, the existing procurement system adopted by the Government poses numerous obstacles for SMEs and professionals with fewer resources and less experience. It directly affects their desire to participate in tendering, thereby reducing their opportunities of accumulating experience and upgrading professional standards. Meanwhile, the cost of renting an office is now really high, posing an enormous obstacle for young people and numerous professionals intent on starting up their businesses. Will the Government provide assistance and support to them in this regard? I hope the Government can give a positive response to this question.

President, I so submit.

MR WU CHI-WAI (in Cantonese): Regarding the question of "expanding the ratio of the middle-class population", of course we will discuss what is middle-class. But if we look at the information provided by the Census and Statistics Department (C&SD), we can see that our society gives middle-class a rather pathetic definition. According to the C&SD data, the median household income of the economically active families, even the income of which belonged to the eighth decile, was only $41,400. Of course, it was based on the prices in 2011.

The problem is if we compare this figure to its growth in the last 10 years, it has only increased by 25%. But in the same period of time, the average property prices have risen nearly threefold. In 2003, the average price of units less than 70 sq m on Hong Kong Island was probably about $30,000 per square metre. But in 2011, the average price already climbed to $101,779 per square 7710 LEGISLATIVE COUNCIL ─ 19 March 2015 metre. From this angle, no wonder some of the middle class feel that the predicament they face in housing and home ownership has not been properly recognized and solved. Also because of this reason, the problem of the middle class in Hong Kong is actually attributed to such a structural factor, which greatly limits the growth they can achieve through employment in the course of wealth creation, way behind the growth they need for home ownership, as indicated by the figures just mentioned by me. If they want to accumulate capital, they will face a great deal of pressure as their expenses on housing will be way above what they should be able to afford.

Let me try to give an example. For a family earning $50,000 monthly, according to the mortgage requirements of the Hong Kong Monetary Authority, its monthly mortgage payment would be $20,000. A tad more than this amount would be unaffordable to this family due to credit rating constraints. If the mortgage term is 20 years, the family can only afford a flat priced at $6.5 million, which is about 500 sq ft in size. I think it is a typical home most middle-class families would want. But let us consider that this family will spend 40% of its income every month on mortgage for the next 20 years. Apparently they will become "property slaves", who only accumulate most of their wealth on their property. If this is the case, to many Honourable colleagues, the channels and space of upward mobility we hope to provide are significantly reduced, since to have a dwelling place they have to ascribe most of their accumulated wealth to the "four-wall box". In this case, how can there be no tremendous pressure on social mobility, which arouses such great grievances?

Therefore, I think the Government has the responsibility to identify a solution to the overall housing problem. Of course, increasing the housing supply is the fundamental element but it is also a very important task to make the middle class feel that they are taken care of with regard to the housing ladder. For this reason, we have suggested that the Government should rebuild the home ownership ladder in terms of its housing policy and resume the Sandwich Class Housing Scheme which was frozen due to economic reasons so that families with less than $60,000 as monthly income and the middle class will have access to different means of home ownership and be somewhat taken care of and assisted through the Government's subsidized housing schemes.

Unfortunately, however, when the Chief Executive stated that the Urban Renewal Authority (URA) would take charge of the sale of subsidized housing, Secretary Prof Anthony CHEUNG quickly shut one door, that is, he would not LEGISLATIVE COUNCIL ─ 19 March 2015 7711 relaunch the Sandwich Class Housing Scheme. Such a move made the middle class find that the Government says on the one hand the URA will consider offering subsidized housing schemes but on the other fails to consider introducing the Sandwich Class Housing Scheme. Honestly, can the URA's housing supply reasonably cater for the needs of the sandwich class, as URA flats are usually sold at higher prices? From this perspective, if the sandwich class is included, the whole society would think that as the Government is introducing such a comprehensive housing policy to take care of the home ownership or housing needs of all classes, why is the sandwich class who has made considerable contribution to society and the overall economy being left out?

Let us look at the C&SD information again. Even in the ninth decile, the median household income was only $57,000. Let us think about what it means. It literally means that in the last 10 years, with less social mobility, the entire society and even middle class have sunk towards the grassroots. If their housing needs are not taken care of, the resources they can accumulate will only be further curtailed, making them "property slaves" in the future or spend most of their income on properties. How can our society allow other means to accumulate capital besides employment so that they can access different ladders, such as starting up their own businesses? Therefore, I believe the Government should rebuild the home ownership ladder and resume the Sandwich Class Housing Scheme so as to benefit the middle class.

Thank you, President.

DR KENNETH CHAN (in Cantonese): President, the suitable ratio of the middle-class population in the overall population is a worthy question for debate. Certainly, I do not think that through debating or drawing on collective wisdom, we will come up with a formula which we can use to demonstrate to the Government that a specific ratio is desirable and that it will be a desirable structure for the development of Hong Kong and for Hong Kong people.

In every society, there are people who are rich, people in the middle class and people living in poverty. Honestly, we may claim to be in the middle class today in this Chamber, but no one can tell whether we can still claim to be so due to such objective factors as income, living standard and the then prevailing circumstances 10 to 20 years later. President, we, the so-called middle class, are troubled by a strong sense of uneasiness and anxiety mixed with a lot of 7712 LEGISLATIVE COUNCIL ─ 19 March 2015 aspirations. We thus feel dissatisfied and unhappy every day, yet we can only pray for blessings. Perhaps we should ask this question: How do people emerge as the middle class?

In Hong Kong, the spirit is well expressed in the song "Below the Lion Rock" ("獅子山下"), and we may sing this song again to illustrate our point if Members so desire. Yet in essence, it should be dated back to the British-Hong Kong era when Sir Murray MacLEHOSE introduced a series of social and public policies, covering employment, infrastructure, housing, healthcare and welfare, and so on. At that time, Hong Kong society was suddenly presented with a lot of opportunities. Certainly, as a number of colleagues pointed out earlier, those opportunities were for macroscopic social economic development. But still, the social economic development direction promoted and planned by the Government with government subsidy and assistance, which opened up opportunities during the post-war period, had brought aspirations and hopes to many grassroots in Hong Kong. They aspired to creating their new world with their own hands, their ideas, their toil and perseverance.

Of course, their achievements could only be attained with the support of the many policies implemented by the Government. It is absolutely incorrect for us to say that the middle class emerges on its own without any assistance or support. Today, I have the opportunity to express my views here for I was given the opportunity to receive education in the past. I surely have benefited from the public housing policy, the free education policy, the healthcare and welfare benefits, and various policies implemented in the past. It is due to the many conditions in the past that we can have the opportunity to discuss expanding the ratio of the middle-class population today.

As I mentioned just now, the middle class now faces insecurity mainly because of the disparity between the rich and the poor. The Gini Coefficient of Hong Kong has reached 0.537, which is said to be one of the highest in the world. The problem of disparity between the rich and the poor is so serious in Hong Kong that no other place would like to surpass it. In the face of this situation, many people who are not yet in the middle class worry that they will soon fall out of the middle class even if they manage to join it one day. Today, we are in the middle class, but by the time of our retirement at 60, or after living for another 20 years, we may be living a hand-to-mouth existence, for we may have exhausted all our savings, and we may even have to apply for assistance from the Government. It is obvious that people are overwhelmed by a sense of insecurity in this respect.

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Members may ask the men and women doing exercises in housing estates in the morning. Every time I met them, they would say, "Mr CHAN, please strive for universal retirement protection." The middle class want to have universal retirement protection. They are taxpayers, who have been striving hard in Hong Kong to attain achievements, to establish their career and to raise the next generation, yet their sense of insecurity grows ever more intense and stronger. Members may consider this strong sense of insecurity unfathomable. They do not understand why the middle class will strive for universal retirement protection. It is precisely because they have to take care of the next generation and they are worried about the situation of their children. When society at large is overcome by this extreme or intense sense of insecurity, confrontations and conflicts set in.

If the Government still fails to think ahead and lacks foresight, and if it continues to hold this mindset of muddling through, it will be utterly meaningless for us to discuss this subject on expanding the ratio of the middle class in society. Even if the ratio of the middle class can be raised, what does it mean? People who managed to climb to the middle class would soon fall out of the class. Perhaps we will all fall out of the middle class after a few decades. We must face squarely and appreciate this sense of insecurity in order to discuss and identify policies that can help Hong Kong people to escalate to the middle class rather than only helping the middle class. It is only against this background that the debate will become a realistic instead of an unrealistic debate.

If only people holding properties are regarded as the middle class, the situation will be even worse. A working couple will have to work lifelong as "property slaves". Is this a desirable situation for the middle class? Definitely not. If the authorities wish to encourage the middle class to give birth to children, will it be adequate by simply providing a child allowance in taxation? The reason they do not want to have children is that they hate the education system, they fear that their children will be brainwashed, and they fear that the government official in charge will instil this "love-your-country" sentiment in their children every day and ask them to say: I love China, China is my mother, and my mother is China, and so on. Out of such fear, people query why the Government does not continue to subsidize international schools to provide them a choice to enrol their children in a different system, but the Government rejects their request and they are left to pray their own luck. The children of the 1% wealthiest families will study in the most expensive international schools, whereas other children will be left to pray their own luck and resign to their fate.

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In promoting the expansion of the ratio of the middle-class population, is this the policy portfolio we expect? Definitely not. Therefore, President, the implementation of 15-year free education is a must, the increase in child care services is a must, the introduction of universal retirement protection is a must and the increase in public rental housing supply is a must. Only by doing all of these can the authorities be responsible in telling Hong Kong people that: You will all have a chance to move up to the middle class; you do not have to fear or worry about your life in future; you can be contented and confident in being the middle class and you can be proud of Hong Kong society. I so submit.

MR MA FUNG-KWOK (in Cantonese): President, concerning the expansion of the ratio of the middle-class population, I think we should first settle three issues. First, it is the relationship between the middle class and society; second, it is the definition of the "middle class", and third, it is the assistance required by the middle class required.

The relationship between the middle class and society is a significant factor determining the harmonious and stable development of society. In the past, many people persevered to overcome difficulties and break new grounds and became the corner stone of society supporting its economic development. Back then, they were more concerned about their commitment but less about their welfare, for they were financially self-sufficient. They did not expect the Government to provide a lot of support. They only wanted the Government to provide a fair and corruption-free society and an open, diversified and innovative ladder, so that they could climb up the ladder gradually with their own effort and talent.

During the times we grew up, many encouraging stories about striving for success occurred around us. However, the success of the characters in those stories should be attributed in a large measure to the development of the social environment at the time where opportunities abound. If only a person was prepared to work hard he would in general improve his lot. However, time changes. The development of Hong Kong economy is approaching maturity, so development will not be as rapid as that in the past. In the past, the SAR Government had only responded to economic challenges with the non-intervention or minimal-intervention approach, which had caused Hong Kong economy to be dominated by the real estate sector, the financial industry LEGISLATIVE COUNCIL ─ 19 March 2015 7715 and the tourism industry. The new generation are left with no room and few opportunities to bring their talents into full play, and their income growth lags behind property prices and inflation.

Recently, a report about "a post-80s couple realizing their home ownership dream" has aroused extensive discussion. The man and the woman in the story work as a clerical worker and a nurse respectively. They are earning around $50,000 in total. But since they have to repay the previous loans for studying and support their parents, both of them have been very thrifty since they started working in society. They would walk to work, take bread as lunch, work overtime to earn extra pay and they would only walk around in parks during their dates. After all the hardship, they have eventually saved up to $700,000 to be used for the down payment of home purchase and their marriage. This story is a true depiction of the lives of many young people today. The difference lies in their choice. They can either choose to lead a life of mere survival to make savings for the down payment, home mortgage, marriage and child birth, or they can choose to lead a normal life at the expense of delaying other plans in their life.

These two generations have gone through entirely different experiences in upward movement. It is evident that in the lack of a favourable social and economic environment, it will be much more difficult for the new generation to rise to and enjoy the stable life of the middle class. Many countries and a majority of the public agree that a middle-class social structure of a rhombus shape is the mainstream force stabilizing society and driving development. Regrettably, in society today, many people in the middle class are sliding downward slowly or caught in a standstill. It means that the force maintaining the stability of society is weakening by the day, and such a trend is extremely worrying.

If we agree that supporting the middle class and expanding the ratio of the middle-class population is one of the key factors in maintaining stable development in society, we should then find a solution to the second issue, that is, the definition of the "middle class", in order to prescribe the right remedy for the ailment. For the grassroots, the setting of a poverty line will form a clear and objective definition and set the criteria for policy formulation. But for the so-called "middle class", an objective definition has been lacking all along. Some people use career and income to define it, some use education as a criterion, some use occupation and income, some use education and cultural level 7716 LEGISLATIVE COUNCIL ─ 19 March 2015 and some use the attitude towards life, and even self-recognition is used as a criterion for definition. In gist, everyone is defining it in their own way. No matter which definition is used, a large population is involved and their aspirations may not be the same. As such, a more specific definition and classification is needed to address the issue in a comprehensive and focused manner.

Lastly, it is about how to assist the middle class and introduce suitable policies. In the past, the assistance provided by the Government to the middle class was mainly tax relief measures, such as increases in dependent children allowance and tax rebates. These measures may help alleviate the burden of the middle class, but they are not long-term measures. In fact, the greatest need of the middle class is an environment that enables them to strive for upward mobility with their industry and professional talents, where the reward for work is sufficient for them to support their families, so that they can live in peace and work with contentment.

Therefore, the Government must identify the root of the problem and consider drawing up more comprehensive economic and social policies for the longer term, so as to create room for upward movement for various strata of society. In this connection, the Government should explore new growth points for the establishment of a more diversified and innovative social ladder. For instance, I have been urging the authorities to, apart from allocating land and fundings for the construction of hardware for the West Kowloon Cultural District, provide software support to the cultural and creative industry and the sports industry. In the long run, it should promote the local economy, increase employment opportunities, provide more opportunities for continued education, so that young people will be provided with a ladder for upward movement. For a discussion of this subject in greater depth, I will express my views in the debate on the following motion on "Formulating a long-term and comprehensive industrial policy". As for housing, it should be the key area where the authorities should provide support to the middle class. Nowadays, property prices are seriously out of tune with the salaries and affordability of the younger generation. If the housing need of the middle class cannot be satisfied, how can they enjoy job security? Therefore, the Government must increase the construction of public housing. More importantly, it must implement the various major development plans to provide more potential sites for development, so that the living of the public can be improved.

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President, the success of Hong Kong in the past is the result of the persistent efforts made by the various generations of Hong Kong, who have lived out different success stories with their own hard work. I understand that the Government cannot guarantee that everyone will succeed and everyone will rise to the middle class, but when most of the people cannot get a reasonable reward for their hard work and when many people, who are regarded as the middle class under different definitions, are feeling despaired in buying their first home, this is no longer an individual issue but a social problem. The Government is obliged to deal with this problem.

President, I so submit.

MISS ALICE MAK (in Cantonese): President, as early as in 2006 and 2007, "M-shaped society" has become a common phrase in society, as Japanese economic critic Kenichi OHMAE authored The M-shaped Society 《( M型社會》), which discusses the degentrification of society (社會下流化), that is indeed the shrinking of the Japanese middle class. At the time many people had discussed whether an M-shaped society had also appeared in Hong Kong. In 2007, the Census and Statistics Department even published a feature article to argue that an M-shaped society was yet to emerge in Hong Kong.

Truly if we only look at the figures of employment income and household income, there is no M-shaped society in Hong Kong. However, we need to be concerned about why the ratio between low-income households and middle-class households remains pretty much the same even when the economy has apparently improved and the minimum wage has been implemented.

Take families which earn less than $15,000 a month as an example. These families made up over 35% of the total number of households in Hong Kong in 2001 and still about 32% at the end of 2014. The proportion of those having a monthly income between $15,000 and $60,000 was 54% in 2001 and 55% in the fourth quarter of 2014. These proportions have not changed much over the last 10 years. It is evident that even when the social environment has changed and we said how the economy has improved, the number of middle-class households in Hong Kong has not grown much.

We believe there are three major causes. First, we spend money on education but fail to move up the social ladder. In the last 10 years, the places of tertiary programmes have increased by about 30 000 but among the 7718 LEGISLATIVE COUNCIL ─ 19 March 2015 newly-added places, nearly 90% is associate degree places. Associate degree students have a very slim chance of going to universities and most of the additional places are self-financed. Many students are burdened with hundreds of thousand dollars of "schooling debt" incurred by their studies. When they finish school and take up employment, their income is not particularly high. The median income of associate degree graduates in 2013 was $15,000, just a little higher than that of general workers which was $13,000. We can see that money spent on studying fails to help young people climb the social ladder.

Last year, a young family member of mine graduated from university. After the Hong Kong Certificate of Education Examination he enrolled on an associate degree programme and then switched to a degree programme. After university graduation last year, he took up employment at a foreign bank. In fact his wage is just $1,000 more than mine when I graduated from university 22 years ago. When he first joined the bank last year his wage was $11,500. The wage I earned after graduation from university 22 years ago was $10,500. His is just $1,000 more than mine. Undeniably, is some $11,000 enough for a university graduate to meet his or her own living needs? I remember that when I just graduated from university, I already had enough money to give my family as family expenses while giving pocket money to my brother who was still in school.

However, now this family member of mine who has graduated from university told me, "Sister, things are all so expensive now. I have beef brisket noodle and iced milk tea for lunch and it already costs me $48. My wage is not enough." And my brother is fat and has to eat more to feel satisfied. It costs over $60 with an additional plate of blanched vegetable. He said, for graduates like him, their food expense on a tight budget is already several thousand dollars. Therefore, their income is completely not comparable to that of university graduates in the past. University graduates 20 years ago earned pretty the same as their counterparts today, but the latter has to bear way higher living expenses and pressure.

On the other hand, let us look at the lack of vitality for small businesses. In recent years, the room for business start-up has been seriously narrowing. In the 1970s and 1980s, many grassroots hawked or operated small shops. Back then it was common to set up beverage stands or open Hong Kong-style cafes in industrial buildings, which allowed the owners to support the families. They LEGISLATIVE COUNCIL ─ 19 March 2015 7719 could even make enough money selling groceries, green beans and Chinese glass noodles in the wet markets to send their children for studies overseas. However, it is now no longer the case.

It is because nowadays markets are so totally monopolized by The Link that almost no shop can be seen in Hong Kong. The Government's new town planning has completely failed ― we do not see any street in such new towns as Tin Shui Wai, Tseung Kwan O and Ma On Shan. We used to say go shopping in the street but in these new towns we can only shop in shopping malls or on footbridges. There is simply no shop. Many small business owners rent shops in shopping malls. If they can find a footing running their business, after the contract expires two years later, the shopping mall will raise their rents or ask them to do extensive renovation or move. There is no space left in Hong Kong for these small business owners or young people to start new undertakings. The Government must bear the responsibility for its failure in planning.

Moreover, some scholar done an analysis and said that right now there is a flood of money in Hong Kong where people with capital only "use money to make money" without committing to industrial production. This is a well-known fact. A friend of mine runs a factory. He has already made enough money and almost semi-retired. He said he keeps the factory in operation just to provide for his workers as his major income comes no longer from the factory operation but from rents and shares. The industrial structure in Hong Kong has lost its balance. We have noticed that a lot of employment opportunities are confined to the service industry. Is there really nothing the Government can do? I do not think so.

The OBAMA Administration has established a taskforce on the middle class. I hope the SAR Government can think about how to assist the middle class by formulating some policies, including revitalizing street economy in the planning of new towns to allow small businesses to survive, as well as giving support to some industries, such as the logistics industry. Actually the logistics industry can create a lot of middle-class positions but the Government often overlooks the support to these industries.

We also hope the Government will continue to increase the supply of flats under the Home Ownership Scheme (HOS). I have witnessed how citizens can become middle-class relying on HOS flats and move upward in my constituency, which is an HOS constituency where I have been a District Council member for 22 years. The HOS can truly allow people to keep their wealth.

7720 LEGISLATIVE COUNCIL ─ 19 March 2015

MR ALBERT CHAN (in Cantonese): President, had we all been as smart as "689" LEUNG Chun-ying in getting a $50 million-worth contract, many people in Hong Kong could have leaped into the middle class instantly. But this is only his privilege, for there is only one Chief Executive.

President, on 12 July 2002, the Legislative Council had a motion debate on the issue of negative equity assets. I pointed out at the time that in terms of income and the economic conditions, the gap between Shanghai and Hong Kong were steadily narrowing. I said at the time that Shanghai was gradually developing towards a middle-class society while Hong Kong was becoming increasingly impoverished. Unfortunately, my prediction and observation 13 years ago have come true.

Let us look at the current situation of the middle class. At the time of the reunification, 50% of the people in Hong Kong considered themselves to be middle-class, and the percentage dropped to 30% in 2013. Let us further look at the figures on administrators in the past three years. In the first quarter of 2012, there were 420 000 managers and administrators, and their number dropped to 390 000 in the fourth quarter of last year, 2014. So, comparing to the proletariat and even the working class, the living of the middle-class people in Hong Kong nowadays is more … If they are not allocated public housing, they are actually more miserable than the low-income earners living in public housing, and they are even more miserable than the non-skilled workers living in public housing.

The middle class actually faces difficulties in three areas: Difficulties in buying a property; difficulties in starting a business; and difficulties in moving up the social ladder. Why is there this situation? Simple enough, President, in respect of home purchase, in 2002, a residential unit in Kowloon cost $29,000 per square metre but the price increased to $104,000 last year, which means that a year's savings may only be enough for buying one square metre of a unit. I wonder how many middle-class families can save up $100,000 a year, but the case is that a year's savings can only be enough for buying one square metre of a residential unit.

Second, difficulties in starting a business. Starting a business involves a lot of investment and particularly, it involves commercial rental ― let us not talk about commercial rental for the time being and look at the rental of industrial buildings alone. In 2002, the rental of industrial buildings was $59 per square metre and it was even cheaper in some cases. But in 2014, the rental of LEGISLATIVE COUNCIL ─ 19 March 2015 7721 industrial buildings increased to $112 and it was even more expensive for some buildings. I have seen that the rental of some industrial buildings was even as high as $200 per square metre. Therefore, the expensive rental has made business start-up extremely difficult.

On the retail front, the situation is even more shocking. The rental of retail premises cost $865 in 2002 and surged to $1,527 last year, which is a frantic increase. Without a consortium background or any connection to count on or the support of anyone at the back, middle-class people who wish to start a business or go into the retail industry or engage in some investment projects would be like knocking their heads against the wall and digging their own graves.

Difficulties in moving upward. It is difficult for them to move up the social ladder. Earlier on I mentioned a substantial decline in the number of managers and administrators. The salary of administrators or the so-called middle-class professional managers has also decreased. If inflation is factored into their salary, they are actually making less income now compared with their salary a decade or so ago. So, I would say that the past 17 years since the reunification were a nightmare to the middle class. Let us not talk about democracy or freedom or the core values of Hong Kong for the time being. Just look at the withering of the quality of living and narrowing of the room for personal development, and facts speak for themselves.

As we can see from these specific figures, President, the income or economic structure in Hong Kong has gradually turned into an inverted pyramid. According to what many people have said about the development of the middle class, particularly as pointed out in many analyses in the 1950s and the 1960s, following the development of capitalism and the development of professions and industries, society will gradually become like a barrel that is wider in the middle than at its top and bottom. But this is not the case in Hong Kong. After the reunification in 1997, wealth in Hong Kong has skewed more and more towards the upper strata. As Members can see, the figures on the income are astonishing. Let us take a look at the Gini Coefficient. Many Members have talked about it earlier and we have also repeated this point over and over again before. Despite the continuous increase in the Gross Domestic Product which grew from $1,297.3 billion in 2002 to over $2,000 billion in 2013, representing an increase of close to 55%, the median earnings of the workforce, which was $10,000 in 2001, only increased to $12,500 in 2013. Therefore, the pay adjustment and the overall economic development are entirely incompatible with 7722 LEGISLATIVE COUNCIL ─ 19 March 2015 each other. Economic development and the rate of expansion in the overall income have outgrown the median earnings of the workforce. This is proof that wealth is tilted to the upper strata.

This situation has to do with the Government's taxation policy. It also has to do with the Government's economic policy, and it is even the result of collusion between business and the Government. It is clearly pointed out in some studies that collusion between business and the Government is serious in Hong Kong. It is because without a democratic system, "689" will definitely be tilted to the major consortiums. The major consortiums support the Chief Executive, and they support these Members; and there is also manipulation by the functional constituencies, whereas the Secretaries of Departments and Directors of Bureaux as well as many senior government officials are drawn to the side of the consortiums, currying favour with each other and causing the entire Government to become skewed. This will definitely result in the continuation of the plights faced by the public, especially the middle class, meaning that the people have to bear these sufferings continually. I must, therefore, condemn this system of coterie election and condemn functional constituencies. Functional constituencies are the origin of all evils. Functional constituencies must be eliminated. Coterie election must be eliminated.

MR CHAN CHI-CHUEN (in Cantonese): President, I would like to thank Mr Andrew LEUNG for proposing this motion on "Expanding the ratio of the middle-class population" today. The question of the motion in fact allows a free discussion. We can talk about everything. We can say "I want genuine universal suffrage", we can oppose filibuster or we can call for job security through the protection of "rice bowls". The President can hardly say that we have strayed from the question.

In the discussion on the expansion of the ratio of the middle-class population, the primary task is to define the "middle class". Yet if I bring up a discussion on the definition of the middle class, I will be in trouble, for there will be never-ending disputes and we will not come up with a conclusion even after dark. Indeed, this dispute has lasted for a hundred years. I remember that during my study of sociology, there was a specific stream called social stratification in the discussion on this issue. The definition for it: Population in a society is categorized into various strata based on their financial position. This is the textbook definition, yet how should we define the middle class? In fact, LEGISLATIVE COUNCIL ─ 19 March 2015 7723 the prevailing practice is to adopt the self-identification approach. In that case, the middle class will always be the largest class in society, for when people are asked to which class they belong, they will neither regard themselves as poor nor rich, and they will thus fall into the category of the middle class.

As in my case, I used to live in a partitioned flat when I was young. But when it was necessary to indicate the financial position of my family in the reply slip from my school, my father would choose to tick the status of "moderately well-off", for though we were not very rich, we were not so poor that we had to live on alms. If the definition is based on lifestyle, say watching a movie at the International Film Festival or drinking a coffee costing a few dozen dollars, I think those earning $10,000 or so monthly can also afford doing so.

Actually, when we have this discussion today, we should think about the use of setting this academic concept for the middle class. How can this help in studying social problems and understanding social conditions? To the Government, how will this affect the formulation of policies and how can this help it in governance? Prof Joseph LEE proposes that the Government should give a widely recognized definition for the middle class, which is surely a difficult task. I believe the Government definitely will not do so. It is like the case of the poverty line. We had urged the Government to set a poverty line in the past, but since the Government would be obliged to implement policies to eliminate poverty once a poverty line was set, it was unwilling to do so. Therefore, to date, even though the poverty line has been set, Carrie LAM is still saying that poverty should be a concept in relative terms, under which some people will rise and some people will be left at the bottom, and people in the lowest stratum of society will inevitably be called the poor.

The same applies to the case of the middle class. In a society, apart from the 30% population on the top and the 30% population at the bottom, the remaining 40% will be the middle class. In that case, how can the ratio of the middle-class population be increased? If this is a concept in relative terms, this ratio can in no way be increased. It does not matter though there is no way to increase the population. It does not matter though there is no way to increase the ratio. For the issue of "upward mobility" is a much more important concern in the motion proposed by Mr Andrew LEUNG today. Even though we may not be able to give a definition to the middle class or come up with an objective and widely recognized definition for this class, upward mobility can be calculated and measured.

7724 LEGISLATIVE COUNCIL ─ 19 March 2015

A person of 40 years of age may be asked whether he considers his living standard has improved or deteriorated in comparison with the time he was 30, and whether he considers he has risen to a higher level on the social ladder or to another class. We can find the answer from this perspective. Certainly, the Government has said that income can be a factor for defining the middle class. For instance, people earning a monthly income of $15,000 to $45,000 can be called the middle class. Regarding this definition, I think LEUNG Chun-ying does think so at heart. Or else, he would not have made the remark concerning "people earning a monthly income of $14,000". I am referring to the shocking remark made by LEUNG Chun-ying during his interview with The New York Times. He said, "If you look at the meaning of the term 'broadly representative', it is not numeric representation." He also said that, "You have to take care of all sectors in Hong Kong as much as you can, and if it is entirely a numbers game and numeric representation, then obviously you would be talking to half of the people in Hong Kong who earn less than US$1,800 a month" ― which is around HK$14,000.

In other words, he thinks that people earning $14,000 a month do not support him, or he does not bother to strive for the support of those earning $14,000 a month. In that case, will his popularity rating rise when the ratio of the middle-class population increase? I definitely do not think so. Members should not think that only the grassroots support the People Power. In fact, many of our supporters come from the middle class. If a survey is conducted to find out whether the grassroots or the middle class will be in the majority among those who hates LEUNG Chun-ying, I think the middle class will not be in small number.

The most miserable situation now is that the middle class think their situation is worse than the grassroots. After the Government has drawn a definition for the middle class, those in the middle class will think that they have contributed a lot to society but they have not enjoyed much welfare benefits. On the contrary, the grassroots have received a lot of welfare benefits. When the Government hands out "candies", only the grassroots but not the middle class can benefit. They may have developed a deep sense of bitterness towards the Government, and this is particularly so in the case of singletons in the middle class. The Government says in the Budget that it will return wealth to the people. However, as we often say, those measures can only return wealth to the rich. Take the rates concession as an example. The rich will get wealthier because of the measure, for the amount of rates waived will be larger for flats LEGISLATIVE COUNCIL ─ 19 March 2015 7725 larger in area, and only those with large flats can benefit fully from the rates concession. At present, the Government will waive rates for the first two quarters, subject to a ceiling of $2,500 per quarter. In fact, only 10% to 20% of rate payers can receive the $2,500 benefit fully. For those living in small flats, such as singletons, they are only paying rates of $1,000-odd per quarter, so they will not be able to benefit fully from the $2,500 concession. As such, they feel that when the Government offers "candies", those in the grassroots can benefit, say getting double pay or triple pay in subsidy payments, or rent concessions, whereas those in the highest level, such as those living in luxurious flats, will also benefit, but they in the middle cannot benefit from any of these measures.

There used to be a saying that as the number of middle class in a society increases, that society will become more stable. I think it is time to reflect on this concept. Back then, people thought that since the middle class had to service their mortgage after making home purchase and they had a stable job, they would looked for stability in society and would not throw a tantrum frequently. Since they had to service their mortgages, they would not quit their jobs to go on protest, for they feared that once they were arrested and imprisoned, they would not be able to go to work and could not make mortgage repayments. As such, they would not act that way. Besides, they did not want to see dramatic fluctuations in property prices. This is the mindset adopted in the past, thinking that the greater the middle-class population, the more stable society would be. However, I think the Umbrella Movement this time has changed this thinking, for many of the participants are middle-class ― Members should refrain from thinking that all those taking part in the occupation were "waste youth", "frustrated youth" and the unemployed who have a lot of spare time. In the Occupy movement, we notice that the participation rate of the middle class was very high. This has sounded the alarm to the Government.

DR CHIANG LAI-WAN (in Cantonese): President, today many Honourable colleagues have talked about the meanings of "middle class" today. Some said it is an ideology or an attitude in life. These are all wrong, which can at most be regarded as the way of life of middle-range families.

"Middle class" carries the word "class". As the name per se suggests, it has to do with grouping people in classes according to wealth, production or industries. When Financial Secretary John TSANG who is earning over $3 million a year said he is middle-class, the entire middle class in Hong Kong 7726 LEGISLATIVE COUNCIL ─ 19 March 2015 almost vanished as a result. Why? President, it is because all middle-class people have sunk to the grassroots ― including you, President. As a matter of fact, the definitions of middle class vary all over the world and the name itself may be different too. Some call it "middle class" in English, referring to families in the middle level. In the Mainland, it may be referred to as "well-to-do"(小 康). How do Mainlanders describe the middle class? They say the middle class has to possess four things. What are these four things? Notes (meaning banknotes), wives, children and properties. Having these four types of things make someone middle-class.

Let us bring the discussion back to Hong Kong. According to the data released by the Census and Statistics Department in 2013, local families earning between $15,000 and $50,000 are regarded as middle-class. Are those making a monthly income of $15,000 part of the middle class? I think it is not entirely wrong. President, in this couple of years I have often paid visits to the local communities, especially some public housing districts. I have seen many citizens living in those public housing estates absolutely having a very carefree life, though they are not rich. Why? Because they do not need to endure high rents and bear the heavy burden of mortgage. The occasional handing out of candies and offering of an electricity subsidy by the Government will make many people very happy. Therefore, may I ask the Government to send someone to ask people on the street if they are middle-class. I believe many of them will answer that only if their housing problem is addressed would they be middle-class.

The motion proposes to expand the ratio of the middle-class population. In this connection I believe the Government has to address the housing problem seriously, doesn't it? Talking about the population, there are over 7 million people in Hong Kong. The former Chief Executive even said it should reach 10 million. May the Government please do some computations and see if there are that many flats in Hong Kong to house so many people? Do not forget that part of it is transient population.

I just heard Dr Helena WONG mention universal suffrage ― this motion has nothing to do with universal suffrage but she brought it up all the same, almost suggesting that universal suffrage will tremendously expand the ratio of the middle-class population. I also heard another Member say just now that once there is universal suffrage in Hong Kong everyone can have a dwelling place. What immediately came to my mind was that universal suffrage gives us LEGISLATIVE COUNCIL ─ 19 March 2015 7727 a dwelling place? Take the United States as an example, though we consider it not practising genuine universal suffrage, or it has its own special kind of universal suffrage, it is still considered to be a country with universal suffrage and a democratic country right? I have checked the information online. How many homeless people were there in the United States in 2013? President, there were 610 000. Hence, sometimes we cannot think democracy is all-powerful and universal suffrage can do everything. For a lot of things, everyone needs to make efforts together in various aspects, like economic development.

I just heard Dr Kenneth CHAN express his considerable worries about a lot of middle-class people feeling anxious now. I agree that some of them are suffering from fairly high pressure of life and feeling anxious. Actually their anxiety comes from mortgage, pressure of life and work, apart from which I believe another cause for anxiety is something Members of the opposition camp should reflect on, namely the negative emotions often conveyed by them. Not only is the middle class anxious, the grassroots also have a lot of anxieties. And the rich also say they are leaving, OK?

Moreover, I think to truly enlarge the middle class the Government must pay attention to the next generation. Recently I have received a request for assistance in Oi Man Estate. The mother of a single-parent family passed away suddenly, leaving behind a daughter who is 18, not five. As she is not qualified to stay in the current public housing unit, she hopes the Housing Department can exercise discretion in allowing her to live in a hostel for single persons. At the same time she faces other pressure, for example, she is in the first year of her tertiary education so what should she do with the tuition fee and her living expenses? She instantly feels very helpless because she does not own any property. In fact, right now many youngsters of the next generation are feeling very helpless. Therefore, I suggest the Government seriously consider taking care of our next generation so that they will not all become the proletariat ― they may not all become middle-class immediately but we do want them to possess some asset, right?

I suggest the Government consider setting up a baby fund for newborns and children. What are the main purposes of this fund? It can at least provide them with housing, meaning that when they have the chance to purchase Home Ownership Scheme flats in the future, they will have a little money to make the down payment. When they need to study they will have the money to do so. Even when they are sick they will have some money on hand. This fund 7728 LEGISLATIVE COUNCIL ─ 19 March 2015 provides children from different classes with the chance to become middle-class. At the same time, I believe this suggestion can greatly alleviate the burden of raising children for average families, thereby increasing the incentive for women to bear children. If I propose a motion on the baby fund in the future, I hope Mr Andrew LEUNG who put forward this motion today and other Members will kindly lend me their support.

I so submit. Thank you, President.

MR JEFFREY LAM (in Cantonese): President, back then in our schooldays, everyone was diligent, hoping to get a good job after graduation, be a white-collar office worker and lead a relatively comfortable and stable middle-class life. In those days, the Government only offered very few welfare benefits. Although they had to pay tax, they were still contented because there were many opportunities for upward mobility in society at that time. People could strive to make a breakthrough by personal strengths and effort in order to gradually accumulate wealth.

However, what is the middle class nowadays? They have to pay rents and service mortgages after getting their pay cheque every month, with no assistance from anyone at all, nor is there any education allowance for their children. They not only have to maintain their parents, but also pay insurance premiums and save for tax payment. They will then find that there is not much money left in their wallet. Although they still have spare money to sip a cup of coffee or watch a movie, they have to do some thinking if they wish to pursue a quality life or travel overseas with the whole family. Most importantly, many marginal middle-class people basically cannot find a way out, gradually turning from middle-class to "lower-middle class". "Being worse off than some but better off than many" has landed them in a most embarrassing situation. They cannot get a share of social welfare benefits, nor are they able to afford home ownership or eligible for public housing. Their quality of life may be worse than that of the grass-roots people.

At present, President, the source of grievances of many in the middle class is the high property prices. No matter how hard young people make savings, the increase in wages can never catch up with the prevailing property prices. Some in the middle class who have already owned a home wish to change their property from a two-bedroom unit to a three-bedroom one. But after calculation, they LEGISLATIVE COUNCIL ─ 19 March 2015 7729 have found that they are basically unable to make ends meet as they have to pay stamp duty and commission and set aside a sum of money for decoration and the mortgage if they acquire another property. What is more common is that some middle-class people have been renting a flat for many years and waiting for an opportunity to acquire their home. But after waiting for five or 10 years, they have realized that such opportunities actually do not belong to them. Some middle-class people whom I know are aware that it is hard for them to assist their children in acquiring a home in the future, and believe it is hard for their children to acquire a home on their own. Hence, when their children reach the age of 18, they will tell them to apply for public housing. I think that if everyone holds this kind of mindset, youngsters and the middle class across the territory will find it hard to buy their first home. If the middle-class people also lack the motivation to work hard, how will this society be healthy?

Certainly, President, no one would like to see property prices toppled by the Government. The reason is that with an unstable economy and a slump in property prices, many will join the league of the jobless. By then, no matter how low property prices are, only a handful of people will be able to afford them. I think the Government should start with housing supply in order to solve the problems before us. If the Government wishes to assist the middle class, apart from building more Home Ownership Scheme flats as a ladder for home ownership for the middle class, it should also increase the supply of private housing and stabilize property prices, so as to achieve healthy development of the property market. If people can live in peace and work in contentment, they will have greater motivation to move upward, improve their lot and stimulate local consumption, thereby promoting the economic advancement of Hong Kong.

Currently, the Government has done a lot in an attempt to increase supply, but seemingly, it has met with lots of pressure. The green belt sites in the urban fringe cannot be for housing construction. Also, the import of labour has turned out to be empty talk, and the development of new towns has been confronted with repeated judicial reviews. As a result, incited by some, members of the public have kept blaming the Government for inaction. As far as this point is concerned, I think Members must reflect on how we should strike a balance between development and conservation.

President, the middle-class people receive tax bills without being given any welfare benefits. They have harboured rather deep grievances. If the SAR Government still refuses to squarely address and solve these problems, there will 7730 LEGISLATIVE COUNCIL ─ 19 March 2015 be an eventual outbreak some day. A healthy society has to be supported by a large number of middle-class people. Hence, I hope the Government will introduce measures to assist the middle class in moving upward. In the long run, youngsters will be the major force driving the future development of society. But the existing economic structure of Hong Kong is unitary, offering small room for economic development and narrowing the opportunities for upward mobility. The younger generation cannot see any development prospect. Even if more resources are allocated to education, they may not have a wide variety of pathways.

On the one hand, the Government should develop more growth areas in the economy, adjust the economic structure and work on a number of aspects such as R&D and the creative industry, so as to give youngsters more pathways to bring their strengths into play. On the other hand, the Government should also continue to allocate resources to higher and vocational education in order to equip youngsters with the potential to move upward. At the same time, youngsters should be more farsighted with a broader vision. After all, the trend of globalization will only become increasingly apparent in the future. The pathways of those who possess outstanding abilities will not be limited to Hong Kong. They will be able to find an environment to work and live all over the world.

In respect of short-term measures, the Government should alleviate the burden of the middle-class people in various aspects, including such measures as increasing housing supply and stabilizing property prices as mentioned by me earlier on. Moreover, the Government should waive their rates payment for a certain period of time, and increase the tax allowance for renting residential units or maintaining parents and children. In case of a surplus in public finance, more tax rebates should be given. And in such aspects as healthcare, education and retirement protection, more concessions and corresponding measures should also be provided in order to reduce the expenditure of the middle-class people.

In fact, President, the middle-class people in Hong Kong are capable and enterprising in general. It is not their wish to live on alms given by others. Instead, they expect to get a reasonable return to improve their lot through their own effort. Hence, the Government should provide a level playing field and more opportunities of development, so that anyone can move upward through their own effort.

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Mr Andrew LEUNG's motion today is very simple per se, stating the wish to assist the middle-class people. But some amendments have politicized it. This is the problem faced by Hong Kong now, namely asking for trouble and blowing things out of proportions. I hope those troublemakers who politicize every single matter, including those conducive to the economic development of Hong Kong, can refrain from doing so.

Thank you, President.

MR ALBERT HO (in Cantonese): President, as Hong Kong practises capitalist market economy, it is natural that different classes exist in our society. Since there are disparities in our wealth and income, there will be movement between the classes.

Very often, this kind of free movement instils in society a stabilizing element because everyone may climb from the lower class to the middle class or the highest class. Certainly, we do not advocate class confrontation or conflict. In the past, the Mainland attached importance to class struggle, but actually, that is no longer the case on the Mainland. Now it practises state capitalism, right? There is even a new class of ruling bureaucrats. According to the prevalent "Three Represents" theory, people may exist in different classes and even join the Party to become members of a new ruling class. I am not going to talk about this point.

In the past 30 years or so, since the take-off of Hong Kong industries in the 1970s, the economy had been developing rapidly all the way, and we witnessed the gradual emergence of the middle class. In the 1980s, the middle class grew and expanded noticeably, and in the 1990s, it became the pillar of society.

Our forefathers or people in the 1970s or 1980s really seldom heard about hatred against the rich which we talk about nowadays. Now it is often said that young people seem to hate the rich very much. That may not necessarily be the case, but there is indeed such an impression. Actually, the older generation pinned high hopes on their children. They did not hate any particular tycoon. Rather, they hoped that their children would become wealthy and even took the place of the tycoons. They wanted their children to be as brilliant as those who were rich and powerful or climb up to their class. This is a very important point. 7732 LEGISLATIVE COUNCIL ─ 19 March 2015

This is, as I have mentioned earlier, a stabilizing element in society in the past. However, in the last 10-odd years, it seems that some changes have arisen in the social class structure, thus bringing forth a crisis.

First of all, as we know, in a stable society, even if different classes exist, so long as the two ends are small (that means the upper and the lower classes are comparatively small) while the middle is large or relatively large, in other words, being narrow at both ends and wide in the middle, society will be stable, especially if such a tendency can be maintained in the course of economic development. However, if there is this tendency of being wide at both ends and narrow in the middle, forming a so-called M-shaped society, there will be a grave social crisis, and confrontation between classes will tend to be becoming acute.

What problem does Hong Kong face now? It is the change in the industries over the past two decades. A lot of industries moved to the Mainland, and then the local industrial structure gradually became unitary. Subsequently, the increasing application of technology caused the loss of numerous positions at the managerial level. We have come to notice that the domination of the real estate sector has indeed resulted in a widening wealth gap in Hong Kong. An M-shaped society is slowly emerging, which is worrying to us.

As we can see, the number of Hong Kong tycoons listed on the chart of the richest persons in Asia keeps increasing; the Gini Coefficient, which is 0.533, hit the record high; and the number of grass-roots people in poverty, as we are aware, is over a million. Besides, a phenomenon known as "impoverishment of the middle class" has arisen.

What are the causes of "impoverishment of the middle class"? I do not have any precise figures today, but we have learnt from direct contact that many young professionals had not seen much change in their salaries over the past one or two decades since they joined their professions. In fact, their pay rise cannot catch up with the times.

A more serious problem is that compared with the upsurge in real estate and property prices, it falls way behind. So, if middle-class people in employment miss the opportunity of home purchase or make the wrong choice by not seizing an available opportunity, there will be a vast difference, a world of difference. Those who cannot buy their first home remain incapable of doing so, and later, they will worry whether they can afford the rent. Those whose LEGISLATIVE COUNCIL ─ 19 March 2015 7733 extent of impoverishment is not serious enough to qualify for public housing allocation will worry how they can continue to have a place to live in peace upon retirement. Hence, the soaring property prices have exerted the greatest pressure on the middle class and impoverished people who have not acquired a home. This is the biggest problem in Hong Kong. Most unfortunately, so far our housing policy is still unable to solve this pressing issue. How should we face this problem? This is really a tall challenge for Hong Kong.

Just now a number of Honourable colleagues said that we should not politicize the issue. I would like to tell Members that actually, common sense has told us, and we should also be mature enough to know, politics and economics are inseparable. If our middle class is clear, steady, established and influential, it is a matter of course to protect their property ownership right, uphold freedom and the rule of law, and ensure fair competition and equal opportunities. However, our biggest worry is whether the governance will fail. The cause of many existing problems is that in the past, the Government did not bring itself sufficiently accountable to society and did not feel the needs of the grassroots.

In fact, we have learnt in this Legislative Council that in 2005-2006, during Donald TSANG's governance, we repeatedly objected to long-term suspension of the sale of Home Ownership Scheme (HOS) flats (that means withdrawal of the HOS Scheme) and long-term suspension of land auction, which is the reason for the present shortage of land supply and spiralling land prices. Therefore, democratization is necessary. This is the expectation of members of the public. Otherwise, governance in Hong Kong will be impossible.

DR LAM TAI-FAI (in Cantonese): President, global competition is extremely fierce at present, and it can be regarded as a world of survival of the fittest. Despite the harmonious relations among countries and cities on the surface, these countries and cities are in intense competition striving to oust their counterparts. Therefore, if Hong Kong wants to survive and develop, it must possess sustainable and diversified competitiveness.

In my view, the Government of every term must identify ways to properly enhance the competiveness of Hong Kong, for Hong Kong will lag behind if it is not making any advancement. Hong Kong will not only lag behind other countries but will also be marginalized gradually. And if Hong Kong can 7734 LEGISLATIVE COUNCIL ─ 19 March 2015 eventually successfully implement "one country, two systems" and the election of the Chief Executive in 2017 by universal suffrage, Hong Kong will fail to attain healthy and normal development if it loses its sustainable and diversified competitiveness. The public will not be able to live in peace and work with contentment, and bitterness, conflicts and confrontations in society will intensify.

By then, I am sure there will be protests and marches every day. Those people claiming to represent the lower-middle class, and even Members representing the middle class, will continue with the non-cooperative movement, opposing the Government every day and placing the Government in difficulties in administration. When Hong Kong loses its competitiveness, not only businessmen will fail to make profit, wage earners will also lose their job security, the quality of the people will continue to drop, Hong Kong society will continue to experience unrest, instability and a lack of drive, and the morale of society as a whole will be low. When the situation continues, the final scene will be: large enterprises will withdraw their investment, medium enterprises will consider transferring their investment overseas or to the Mainland to diversify their investment, professionals will choose to emigrate, and people labouring to earn a living may even go to work in the Mainland. By then, a vacuum will emerge in Hong Kong territory-wide. This will trigger a chain reaction and the sustainable competiveness of Hong Kong will wither gradually till there is none left of it. Therefore, it is extremely important to enhance the sustainable competitiveness of Hong Kong by promoting economic development.

(THE PRESIDENT'S DEPUTY, MR ANDREW LEUNG, took the Chair)

Let me turn to the Budget this year. The Financial Secretary has suggested the need to attain diversified development and expand Hong Kong's competitive edge. I have said repeatedly that I very much agree with this concept and I strongly support this mindset of the Financial Secretary, so I earnestly hope that the Financial Secretary will implement all the measures he has proposed in the Budget to enhance the competitiveness of Hong Kong gradually. Come to think about this. During the 30 years of reform and opening up, the State has been geared towards economic development. Our country was once a deprived, poor and underdeveloped place fraught with problems, but today, it has developed into a powerful country and will enter the moderately well-off stage in 2020. As evident in the achievements made by the State, Members will know LEGISLATIVE COUNCIL ─ 19 March 2015 7735 whether the established principle of pursuing economic development is reliable. I think it is definitely reasonable. Hence, I hope Members will try to gain some understanding of the Mainland market, and Hong Kong should not let slip these business opportunities but should look for more instead. We should act in line with the policies of the State to develop the sustainable competitiveness of Hong Kong and capitalize on its strength, influence and economic power to expand our competitive edge. Otherwise, the economic development of Hong Kong will only be caught in a standstill.

Deputy President, the original motion you proposed today is on the expansion of the ratio of the middle-class population to enhance Hong Kong's competitiveness. Is this approach feasible? Just now, a number of colleagues have questioned the definition of "the middle class", and some Members have raked over some previous comments made by the Financial Secretary and expressed disagreement with his reference to people going to French movies and drinking coffee should be regarded as the middle class. Should the definition of the middle class be based on income or assets? If it is based on assets, many Home Ownership Scheme (HOS) flat residents will be holding assets of a few million dollars. However, are these people holding assets amounting to a few million dollars leading a life of the middle class? I think the answer is obvious to all.

Therefore, in the days to come, I think the Government should first consider conducting an analysis on the definition of the middle class, and then set the positioning and definition for the class. In the absence of a definition and specifications, we can hardly request the Government to introduce measures and policies to increase the ratio of the middle-class population as suggested by Mr Andrew LEUNG, for the authorities will have no way to address the issue in a targeted and focused manner. For this reason, the Government should no longer evade the question.

What are the advantages of increasing the ratio of the middle-class population? Is it a blessing to be a member of the middle class in Hong Kong? Many people have pointed out that the middle class in Hong Kong is leading a "muddled and miserable" life. Mr Jeffrey LAM said earlier that many of the middle class were hard-pressed by plights and pressure in life, and they were having a harder time than the grassroots for they could not live in public rental housing or HOS flats but had to spend nearly all of their salary on housing every month. The situation rightly prompts us to think: Is it good or bad to increase 7736 LEGISLATIVE COUNCIL ─ 19 March 2015 the ratio of the middle-class population? I think Mr Andrew LEUNG and Mr Jeffrey LAM should have a thorough discussion on this and see if their concepts are contradictory.

In fact, in the enhancement of the competitiveness of Hong Kong, the primary and essential task is to enhance the competitiveness of our talents. Actually, the competition among countries, societies and enterprises all boils down to competition among talents. I trust the Secretary knows this extremely well. The future society of Hong Kong belongs to the young people, for they are our successors and future masters. In gist, the enhancement of competitiveness of talents means the enhancement of the competitiveness of the young people. To enhance the competitiveness of the young people, we can work on three aspects. First, it definitely begins with education. The authorities should try to provide them with a good learning environment and sufficient school places, so as to spare parents the trouble of "scrambling for places" when their children starts kindergarten and primary education, and they should ensure that students will not be deprived of the opportunities of enrolling in schools they prefer and choose the subjects they like, or to study in universities due to a shortage of places. Apart from education, the authorities may also help to support the young people in terms of employment and business start-up.

Why do we have to do so? Secretary, we have to retain their hearts. If young people lose their sense of belonging to society, lack a sense of mission and fail to attain a sense of accomplishment, they will lose all motivation and ambition and they will merely grumble about the inadequacies of the Government in providing for them and the unfairness in society. If they do not have a sense of belonging to society, they will not see any prospect and they will lose the motivation to move up the social ladder. There is this common saying that "Every man aspires for upward achievement though water always flows downward", but actually, the opportunities for these young people to move upward have been affected by a lot of objective circumstances. If they have to deal with problems encountered in housing and living standard, they can hardly bring their talents into full play (The buzzer sounded) … Deputy President, I so submit.

MR TOMMY CHEUNG (in Cantonese): Deputy President, just now, Dr LAM Tai-fai mentioned the definition of "the middle class", and Members should have heard me describe myself as the most grass-roots Liberal Party member. Two LEGISLATIVE COUNCIL ─ 19 March 2015 7737 days ago ― I can continue with my speech now as Mr James TIEN has just returned to the Chamber ― he told me that one who had $1 billion in assets could only be regarded as a middle-class person. So, I am afraid I am not even qualified to call myself a grass-roots person. If one who had $1 billion in assets was considered to be middle-class, I believe even you, Deputy President, would doubt whether or not you belong to the middle class. Anyhow, Deputy President, our question today is about expanding the ratio of the middle-class population. I believe many democratic societies or countries, or even many people, hope to expand this ratio, but the question is: In order to expand the ratio, do we have to drag the rich people down so that they are on equal terms with us and we can ask them to share some of their money with us, or should poor people like us move upwards until we have $1 billion before we can join the middle class?

Actually, I do not wish to deliver a lengthy speech today. Neither am I as visionary as other Members. However, I have witnessed the changes experienced by Hong Kong over the years ― I joined the Legislative Council 15 years ago and the Urban Council in 1997, as well as the District Councils later ― I understand that the business environment is becoming increasingly difficult. Over the past decade or so, I have noticed that the Hong Kong Government, particularly the Special Administrative Region Government, has jumped onto the bandwagon … another question to be discussed in this Council next week is whether or not the validity of liquor licences should be extended for one more year, as many colleagues take exception to this proposal. In fact, we can now see that the business environment has become increasingly narrow. A Chief Executive once asked me why I opposed the operation of more supermarkets. He questioned why I always opposed the idea and insisted on preserving wet markets when some people proposed operating supermarkets in housing estates to sell less expensive commodities.

Having joined this Council for many years, I regret to see that Hong Kong's business environment has continued to narrow, thereby affecting our competitive edge. Now that a minimum wage has been prescribed in Hong Kong ― fortunately, standard working hours have yet to be introduced, and I have no idea when they will be prescribed ― we also have to pay for paternity leave, and so on, and it is really very difficult to do business. I do not wish to make so many complaints today. Although I have seven minutes to speak, I do not wish to use up my speaking time. Now I would like to say a few words about smaller trader economy.

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I think that assisting traders engaging in small businesses in counteracting the continuous tilting of the market to chain stores and large consortia can help us, the grassroots (such as Tommy CHEUNG), move upwards to join the middle class. This is why I think that the proposal put forward by the Financial Secretary recently on introducing food trucks ― I like their translation as "美食 車 " ― as a new mode of itinerant hawking can undoubtedly bring new opportunities for sole-proprietor investors. Nevertheless, I have to remind the Secretary that I had been warned to be careful about monopolization by large consortia. In my opinion, this situation must be avoided, but what can be done? Although I do not have too much money, I think there is no problem if I am requested to buy a few food trucks for lease to others for operation and share the profit eventually made. This is better than monopolization by large consortia.

Nevertheless, we have learnt from the experience of ice-cream vans that food trucks must not be monopolized by chain groups. In fact, Mr WONG Kwok-hing and I have time and again opposed the contraction of the ice-cream van trade. Fortunately, the Food and Environmental Hygiene Department (FEHD) indicated later that relaxation could be exercised, or else ice-cream vans could have disappeared. In fact, there is a lot of work the Government can do. For instance, despite the sale of many shopping arcades under the Hong Kong Housing Authority (HA) to The Link REIT (The Link), quite a number of shopping arcades have yet to be sold. The Government should lease them to sole proprietors as small or family-run venues to preserve the tradition and characteristics of sole proprietorships. Therefore, the HA must not follow the mode of operation of The Link with the continued introduction of chain stores or large supermarkets.

Furthermore, I think that the operating environment of the wet markets should be improved by all means to ensure that they can compete with large supermarkets. I think the authorities may even put forward bold ideas to provide additional commercial venues in suitable places, be they shopping arcades, markets or bazaars, for operation by small businesses. Throughout the process, it is most imperative for the Government to take the lead in co-ordination and the imposition of thresholds and restrictions to pre-empt monopolization by real estate developers or large chain stores and ensure new room for investment by small and family-run business operators.

Lastly, I would like to reiterate that the Leisure and Cultural Services Department, the FEHD and the Housing Department should change their mindset of cost recovery and charging market rates for many of their retail facilities, stalls and commercial tenants. What is more, the authorities should not regard the LEGISLATIVE COUNCIL ─ 19 March 2015 7739 difference as a deficit. Instead, it should regard the difference as subsidy and assistance with the goal of supporting traders engaging in small businesses and promoting opportunities for upward mobility.

Deputy President, Hong Kong has seen a significant rise in various costs of business operation in recent years. In fact, the business of small and micro enterprises is very difficult. The authorities should introduce more policies and measures to enable these enterprises ― especially wage earners to move upward to operate small or micro enterprises or do business ― to move in the direction of joining the middle class. In my opinion, the Government should take up a major share of the responsibility on this front, too.

I so submit.

DR KWOK KA-KI (in Cantonese): Deputy President, you have proposed a very interesting question, that is, "Expanding the ratio of the middle-class population". If there is a way or a policy to expand the middle-class population ratio, it will be good. Yet, is it possible to expand the middle-class population ratio in reality?

Originally, this is an academic question. I think our discussion on the definition of "the middle class" alone will go on till night time. A senior official once said that the lifestyle of drinking coffee and watching French movies would be regarded as middle-class. This remark eventually became a laughing stock. When we talk about the middle class in Hong Kong today, every comment made will bring us close to tears. In Hong Kong, it is a demonic curse to be in middle-class. People under this demonic curse are deprived of the minimal financial assistance and medical subsidy provided for the grassroots and the underprivileged, though the amount is meagre, and the eligibility for applying for public rental housing. On the other hand, their financial status is far from being wealthy. Yes, there are many wealthy people in Hong Kong, but these people are simply stuck between the grassroots and the wealthy.

In fact, the middle class has two requests. First, as mentioned in the Budget this year, they aspire to spiritual contentment. To those who are already wealthy, such as Mr John TSANG who claims to be middle-class, it is natural that they will aspire to spiritual contentment. However, for the "bogus middle class" who are still far away from the edge of the middle class, they have to endure a long period of actual poverty before they can attain this spiritual contentment. This relative poverty in reality is the product of the distorted society.

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Today, university graduates will have to endure a tough life for at least 10 years, yet their prospect and potential to get higher pay in future are unprecedentedly poor. Many colleagues in Members' offices have graduated from universities for more than 10 years, yet they do not have any long-term planning, and they dare not think about whether or not they will get married in future. In this lopsided society, where the Government and the business sector … the word I am going to say will arouse a great controversy. In fact, I do not know whether I should call the relationship "co-operation" or "collusion", but there is tacit and undeclared understanding between real estate developers and the Government that property prices will not go down, and both parties will try to maintain this situation. The Government is very accurate in projecting housing supply. More often than not, sites are put on sale according to the capacity and demand of real estate developers. The authorities will be very understanding by pointing out that certain sites are not yet mature and can only be launched onto the market when the sites reach maturity. Even if sites are obviously available, the authorities may put up all kinds of reasons to postpone the sale.

For the middle class in Hong Kong who are successful or who enjoy protection by their fathers, such as children of senior government officials, they can solve the housing problem, for they have the money to make the down payment for home purchase. At present, the down payment for home purchase is 40% of the property price. In the case of a flat of $7 million or less, which is regarded as the "starter home", the down payment will be $2.8 million. It will be impossible for a wage earner to save enough for the down payment even if he works for over 20 years, and even if he does not eat, does not rent a flat, does not take care of his parents and does not pay the tax. If so, how can they become middle-class?

At present, what worries us most is not the situation today but the situation in the future. In the eyes of the middle class, there is no chance that the current economic policies focused on real estate will become less intense, so they see no hope in the future but only a tilted economy in Hong Kong. The Individual Visit Scheme (IVS) which has aroused heated discussions recently is a case in point. During the discussions, comments from the business sector unanimously pointed out that the IVS should not be affected, as if Hong Kong's success relies entirely on the IVS. These views are intolerable to many in the middle class, for they expect diversified economic development but not mere reliance on the Mainland. At the outbreak of the financial crisis a few years ago, the Mainland introduced a "money printing" exercise involving $4,000 billion and this had caused the asset bubble in Hong Kong to persist. This bubble has given rise to two situations. First, some people may enter the bubble, which are property owners who have LEGISLATIVE COUNCIL ─ 19 March 2015 7741 taken over the "hot potatoes" in the past few years. The second situation is even more lamentable, that is, when the bubble bursts one day, these people will suffer severe pains and injuries. For these reasons, they see no hope in the future.

(THE PRESIDENT resumed the Chair)

The middle class in Hong Kong share a number of incidents in their collective memory. The first incident of this collective memory is the march of 1 million people taking place soon after the 4 June incident in 1989. I believe many of the participants of the march were in the middle class. Second, it is the protest of 1 million people in 2003 in response to the proposal on legislating on "Article 23". Certainly, the third incident is the Umbrella Movement which concluded last year. Among these three incidents of the collective memory, the first incident was a self-motivated response prompted by their conscience about right or wrong, which was not affected by the economy. As for the incident in 2003 and the Umbrella Movement, they were not mere responses prompted by conscience about right or wrong. In the first incident, people saw the massacre that took place in Tianmen Square on the Mainland. In the incidents in 2003 and today, they feel that Hong Kong, a place where they grow up, can no longer accommodate them, and they can no longer live peacefully here, not to mention to lead a happy life.

Recently, an interesting survey has been conducted. According to the findings, the number of applications for the "certificate of no criminal conviction" was 21 709 in 2014, which is two times of the number in 2013. In fact, Hong Kong people are expressing their views on the future with their action. Despite the discussion on the question on the "Expansion of the middle-class population ratio" in this Chamber, we do not see any increase in the number of the middle class. Honestly, many children of senior government officials have not returned to Hong Kong after going overseas. The middle class in Hong Kong is constantly moving downward, I mean in terms of their assets. They no longer hold out much hope of finding a place to live peacefully and settle down in Hong Kong. Given the existing Government, the prevailing atmosphere and the prevalent mindset, this motion debate will only be a hollow discussion on an unachievable goal, and the various proposals mentioned in the motion can in no way be realized.

I so submit. Thank you, President.

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MR CHUNG KWOK-PAN (in Cantonese): President, today's motion is about "Expanding the ratio of the middle-class population". I believe the first problem is that there is yet a yardstick on the term "middle class" in all developed countries or even the world. What is the meaning of middle class? There is no standard definition. Is it measured by income, assets, or consumption pattern? Many people in Hong Kong are of the view that individuals earning $30,000 to $50,000 a month are considered being middle-class people. Some people, however, say that those earning over $100,000 a month are the middle-class people. Alternatively, as the Financial Secretary has said, those who drink coffee are the middle-class people, including himself. There is simply no set standard on the term "middle class". As such, how are we going to provide a remedy to the present situation and how can we address the issue of upward social mobility of the middle class? I thus think that Mr Andrew LEUNG's motion has missed the focus and failed to target at the group of people that it should.

President, I think what can be done is that, which is also what the Liberal Party proposed in 2012, a committee on the affairs of the middle class be established. If people from different echelons of society can be appointed to the committee, they can at least discuss what is the meaning of middle class, that is, to lay down a definition first. Criteria defining the middle class need to be set before we can formulate policies on its measures.

Anyway, the recent Budget has included measures on tax rebates and subsidies for rates. These measures often give people the impression that they are meant for helping the middle class. Indeed, as I said just now, people earning $30,000 to $50,000 a month would find a $20,000 tax rebate very helpful to them. But to those earning $100,000 a month, as a friend of mine has said, they also welcome a tax rebate than having no rebate at all. Hence, in my opinion, a truly valid definition of "middle class" needs to be laid down before future policies can be more easily formulated, so as to rectify the present situation.

As to another part of the motion, that is "Expanding the ratio of the middle-class population", President, I think the common mentality of the wage earners is to have a successful career and be promoted along the way. This should apply not only to the middle class but also to the grassroots who would also aspire to move up the social ladder and progress from the grassroots to the LEGISLATIVE COUNCIL ─ 19 March 2015 7743 middle class, and then from the middle class to the middle-upper class, and from the middle-upper class further to the upper-upper class. Hence, President, the biggest problem in Hong Kong now is that the variety of industries is too limited.

We all know only too well that when people talk about industries in Hong Kong, they invariably refer to industries relating to financial services, real estate, tourism, services or professional services. Turning the pages on job recruitment in newspapers, one will only find advertisements mainly on the few industries I just mentioned. If industries become too homogeneous, or the variety of industries too limited, only those who work in these industries will have the opportunity for upward social mobility or a chance to broaden their horizon. Those unable to join these industries or those who have joined other industries will have no chance for further development or upward social mobility, and never will they have the opportunity to broaden their horizon and progress to the middle class.

President, in the 17 years since Hong Kong returned to China, the Government has proposed the development of many different industries, such as a traditional Chinese medical port and a Cyberport proposed by the first Chief Executive Mr TUNG; and the six major industries with development potential proposed by the second Chief Executive Donald TSANG. But in fact, to date, not even one of those industries has emerged. Under the current-term Government, many policies related to economic development have been proposed by the incumbent Chief Executive in his Policy Address, but as of now, I do not see one industry that can be truly viable, except the new agricultural policy. Another new initiative proposed by the Financial Secretary in his Budget is the fashion industry. Thanks to the Director of Bureau, I think the fashion industry can be developed. I hope that these two initiatives can turn into new industries in the future, so as to prevent too much emphasis being placed on financial service, real property, tourism and other professional industries.

President, the Government should promote diversification of industries through developing different industries, so as to provide different options for different people. Only by so doing can they have the chance to move up the social ladder and increase their incomes. Hence, it all boils down to … as the Director of Bureau is now present, I hope that the Government can scale up different industries and see which industries have a feasible blueprint. It can also make reference to the cases of South Korea, Singapore, and so on. These 7744 LEGISLATIVE COUNCIL ─ 19 March 2015 places are similar to Hong Kong. They directly inject capital into their emerging industries and then let them thrive by their own ability. When these industries take shape, more people can then join in. Hence, the Government can diversify our industries by expanding their scale, which in turn can increase economic activities, create job opportunities and provide opportunities for upward social mobility. The grassroots will then be able to move up to the middle class and then continue to progress to the middle-upper class. This is the ultimate issue that we need to deal with.

Thank you, President. I so submit.

MR CHAN KIN-POR (in Cantonese): President, I thank Mr Andrew LEUNG very much for moving this motion. Once again, it demonstrates that Members of functional constituencies really do bear in mind the interest of Hong Kong. They are far better than those Members who claim that they can represent the public but actually are just marginally elected in a direct election. They keep smearing Members of functional constituencies once they have entered the legislature. Moreover, they keep doing things to hurt the public. They make all those who have elected or voted for them feel a great pity. I have all along been agreeing with the fact that society should provide more opportunities for upward social mobility. Members in this legislature should endeavour to give young people better chances to join the middle class and have a better way out. This is the goal we should endeavour to achieve.

It is unfortunate that since the economy of Hong Kong has reached its maturity, it is very unlikely for the scale of our economy to enjoy persistent expansion which we have seen in the years before the 1990s. Furthermore, the emigration tide in those years left a large number of vacancies at the middle to high ranks for young people to choose. As long as one was willing to work hard, one could successfully ascend to the middle class in those years. Nevertheless, as the economy has reached its maturity these days, it is very difficult to expand the scale. There are not many new posts of good quality. The current wastage rate of employees is rather low. As a result, even if young people who have just graduated from university are willing to work hard, they may not be able to find a job which can facilitate their upward social mobility. It is even harder for the average young people to find a job.

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This is not unique to Hong Kong. In various European countries, young people not only lack the opportunity of upward social mobility but also have difficulty in securing a stable job. Their situations are worse than that of Hong Kong. Other mature economic entities in Asia are facing similar situations. Such countries include Taiwan, Japan, and even South Korea. Young people in these countries lack the opportunities for upward social mobility. Their competition in the workplace is rather fierce, and the extent is even worse when compared with their counterparts in Hong Kong.

The most direct way to help young people achieve upward social mobility is to create more jobs of good quality and to help them start their own businesses.

The development of traditional industries in Hong Kong has reached its maturity. If we fail to inject new driving forces, it is impossible for us to achieve further expansion. For that reason, I advocated a few years ago the introduction of headquarters economy, which means that the Government would provide tax concession and policy support to attract sizable multinational corporations to come and set up regional headquarters or regional offices in Hong Kong. This would not only enhance Hong Kong's scale of economy and strengthen the competitive edge of Hong Kong directly, but also supply immediately a large quantity of jobs of good quality and jobs with global perspective. Actually the stone will kill many birds. Among Asian countries, Singapore's economic development has reached its maturity but its economic development is still booming. One of the positive factors is that it has successfully attracted a large number of well-known multinational corporations to make investment in Singapore. This is worth our learning.

At present, the Government seems to be heading towards the right direction. The Financial Secretary pointed out in the newly announced Budget that in order to attract multinational and Mainland enterprises to establish corporate treasury centres (CTCs) in Hong Kong, the Government would amend the Inland Revenue Ordinance to allow interest deductions under the profits tax for CTCs and reducing profits tax for specified treasury activities by 50%. Later, a spokesperson of the Hong Kong Monetary Authority added that as a lot of multinational enterprises would establish regional headquarters and CTCs in the same place, it was hoped that the new initiative would encourage multinational enterprises to establish CTCs in the city, thereby boosting the direct capital inflow into Hong Kong.

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The proposal will help enterprises choose Hong Kong as the site for the establishment of their CTCs. It will also help enterprises to set up regional headquarters in Hong Kong. At present, I do not know how attractive the scheme really is. However, I am sure that it is a good start for headquarters economy.

As to the promotion of headquarters economy, Hong Kong actually has a lot of new opportunities. It is reported that a number of technology companies in the Mainland are going to set up international research bases in Hong Kong. For instance, TCL has moved in the Science Park. Xiaomi is considering setting up its headquarters in Hong Kong. These companies are having their eyes on Hong Kong's international network as Hong Kong can attract international talents to come and may facilitate their globalization plan. If Hong Kong can introduce timely policies and tax concessions, I believe we can attract more corporations to come to Hong Kong. The long lasting economic growth of America is driven by its high technology industries. Much to our regret, due to political reasons, we are unable to establish the proposed Innovation and Technology Bureau. I hope the development of Hong Kong will not be seriously hampered because of this.

Moreover, I think if we are to expand the ratio of the middle class among the population, besides providing upward social mobility for young people, we need to provide more assistance to members of the middle class. Otherwise, in view of the huge economic pressure faced by the middle class, we cannot rule out the possibility of the downward mobility for the middle class. I have suggested that instead of making tax refund to all taxpayers, we should concentrate the firepower on waiving all the tax payable by people with a monthly salary of $60,000 or below. To middle-class taxpayers, this suggestion will benefit them most.

The recently announced Budget proposes a reduction of salaries tax and tax under personal assessment for the 2014-2015 year of assessment by 75%, subject to a ceiling of $20,000. The proposal will reduce government revenue by $15.8 billion. In fact, the concession seems to be fair on the surface, but it does no good to anyone at all. Due to the constraint of the 75% reduction and a ceiling of $20,000, it is meaningless to grass-roots taxpayers as they pay less tax. Meanwhile, under the constraint of a ceiling of $20,000, members of the middle class still have to pay a hefty sum of tax. Nevertheless, to people who earn an annual income above $1 million, a reduction of $20,000 is basically something trivial.

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As a matter of fact, according to the information of the year 2012-2013 at hand, the tax paid by taxpayers with an annual income below $700,000 (that is, a monthly salary below $60,000 or a little bit more) only accounts for less than 20% of the total salaries tax, at $9.6 billion. In other words, if the tax of taxpayers who earn an annual income under $700,000 is waived completely, it is not necessary for the Government to use up all the estimated $15.8 billion. The remainder will be adequate to provide partial tax concession to people who are earning an annual income over $700,000.

Under the tax concession scheme proposed by me, about 85% taxpayers are not required to pay a single dime for tax. Yet it will not cost any extra expenditure in the estimates. The middle class will be the most benefited group. I believe the majority of the population will be genuinely benefited. Of course, we should state it clearly to the public that the concession is a temporary measure only. It will depend on the actual circumstances of each year. When financial need arises, the public should observe the taxation system and pay their taxes.

I so submit.

MR CHRISTOPHER CHEUNG (in Cantonese): President, the middle class is the hard core of society and essential driving force for social development. Therefore, I support the motion moved by Mr Andrew LEUNG today, which asks to increase the opportunities for upward social mobility, thereby expanding the ratio of the middle-class population.

In fact, in respect of salaries tax payment, among the working population in the whole territory, which stands at 3.6 million, only 1.6 million odd of them need to pay tax. This accounts for 45% of the working population. Among the taxpayers, 12% of them who pay most of the tax ― around 200 000 people ― have paid 80% of the total amount of salaries tax. That means those who are eligible to pay tax do not necessarily fall into the middle class.

Prof LUI Tai-lok of the Department of Sociology of the University of Hong Kong has defined middle class with occupations as the main indicator. The result shows that the middle class accounted for 20% to 25% of the working population in Hong Kong. The survey conducted by the Hong Kong Institute of Asia-Pacific Studies of The Chinese University of Hong Kong showed that a majority of respondents were of the view that to be classified as a member of the 7748 LEGISLATIVE COUNCIL ─ 19 March 2015 middle class, a person at least needed to possess an asset of at least $1 million, a self-owned property of more than $4 million in value and a monthly income of over $50,000. If we take this as the standard, the most optimistic estimation is that the middle-class population only accounts for 20% of the total population at the most. In comparison to a number of developing countries in our periphery, in any of which over half of the population belong to the middle class, Hong Kong still has a lot of room for development to expand the ratio of the middle-class population.

Since 2000, the Gini Coefficient of Hong Kong has exceeded 0.4, which is an alarming level internationally. In 2012, it even drew near to 0.6, the critical limit set by the United Nations. This has highlighted the problem of wealth gap in Hong Kong.

Obviously, the problem lies in the lack of an effective means in promoting industrial development on the part of the Government, which has reduced the driving forces for upward social mobility. No wonder that social contradictions emerge endlessly in recent years.

Take the financial sector that I represent as an example. Most of the people working in this sector have high educational qualifications at tertiary level and are the core of the middle class. However, since the Government is oblivious to setting fair competition rules within the sector, the income level of a lot of people in the sector has drastically reduced when compared with that of the past. Not only are they unable to move upwards, they move downwards instead.

What is more disappointing is that in a report announced by the Financial Services Development Council early this year, it was pointed out that due to unsatisfactory English and Putonghua standards of local graduates from the departments of finance at universities, employers did not really want to employ them, and it might be necessary to admit talents from the Mainland. After reading this conclusion, I would like to ask: Have we not invested a lot of funding to develop tertiary education every year? Where has the funding gone? Why are our institutions not able to train sufficient personnel for our industrial development? Why are the students trained by us not able to put what they have learnt to good use? I think the Government has to review whether there are any problems with our education and personnel training policies. If we can step up training of local talents, we do not need to rely on admission of overseas talents.

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We should expand the ratio of the middle-class population. They have good education, rational thinking and the law-abiding concept, and are the backbone of social stability and social development.

We all know the advantages of middle-class development, but the problem lies in whether the government officials are determined to do well in the industrial and educational policies. I will express my further views on the Government's promotion of financial industrial development in Ir Dr LO Wai-kwok's motion on industrial development in due course.

I so submit. Thank you, President.

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

MR PAUL TSE (in Cantonese): President, should an elephant be called an elephant only when it has a trunk, a pair of tusks, four big feet and a giant body? Or should it possess different characteristics when viewed from different perspectives? This is the reason why I cannot quite understand or go along with the determination of some colleagues to have a definition for the middle class. Such colleagues include Prof Joseph LEE, who has proposed amendment, and Dr LAM Tai-fai, as well as many other Members, who advocates that the meaning of the middle class be defined first. Basically, it is my opinion that anyone who is neither from the grassroots nor as rich as a multimillionaire can be classified as a member of the middle class. However, it does not mean that a rigid rule should be put in place so that anyone who possesses assets of $1 billion or more, as suggested by Mr Tommy CHEUNG, should be excluded from or included in the definition of the middle class.

I think at all times and in all places, the adoption of a definition for the middle class should more or less be a matter of different considerations from different angles. The simplest way is to use personal income as the determining factor. Even personal assets can be taken into consideration, since the Chinese character "產" (meaning "assets") is included in the Chinese translation of "中 產" for the term "middle class". Yet, judging from the literal meaning of the English term "middle class", it definitely refers to the middle stratum and those who are not at either end are in the middle. Therefore, I do not think a demarcation line should be drawn solely on the basis of personal assets.

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Educational attainment is used by some people as the determining factor and I consider it one of the indicators. A definition can also be provided with regard to occupations and determined by professions in a conventional or not too conventional sense, or even by industries, crafts and trades which are highly professionalized. Alternatively, a person's sense of values, his personal behaviour and lifestyle can also be some of the determining factors and all these are fine with me since different rules may apply under different circumstances. Anyway, in the final analysis, if a person is conceptually living his life reasonably well or in simpler terms, as long as it is firmly believed that he is standing on his own feet and is relying on no one but he himself, I think he may to a certain extent be regarded as a member of the middle class.

Whether it is his personal assets, educational attainment, professionalism, affordable lifestyle or sense of values, in fact they all boil down to the point that he can stand on his own feet and rely on himself without the need to depend on the Government, live at other's mercy and be slavishly dependent on the support from a tycoon. He would be able to give fair and sincere comments which are consistent with his sense of values when appropriate, or lend a helping hand to people who in his opinion may need help, and he would be a man of compassion and integrity. All these would render him a member of the middle class and in fact, this is how a person should conduct himself and develop his sense of values, something which constitute the most valuable quality in him. My apology for using the word "valuable" since it is a term with a certain money sense but the issue in question does not involve money, as it is always possible for a learned man to, though not materially well off, take a very middle-class approach in his choice and in developing his moral character.

Such being the case, I think first of all, it is not really that difficult for us to deal with the subject in question if the issue is perceived in such a broad sense, since our major task is to promote the idea of relying on oneself and the determination to stick to a code of honour. As long as there is an increasing number of people in a society who are willing to rely on their own abilities, the community would naturally progress towards the direction of an advanced, cultured and civilized society. On the contrary, if there is any policy in the society which directly or indirectly encourages its people to give up their own code of honour and rely more on their government, and more and more well-educated people are striving to join the queue for public housing early, this is actually running contrary to the spirit of the middle class.

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President, people like us who are slightly more advanced in age and have experienced the way of life of Hong Kong when it was under British rule would more or less understand that one of the important elements for the cultivation of the middle class actually lies in three English words: "leave them alone", that is, to give them a free rein to development. The Government may of course be required to interfere a little bit at some critical moments, which is in fact understandable, but it can never win the support of the middle class if it constantly behaves in a manner implying that it can accomplish much and it is always correct and well-versed in everything. No wonder the Policy Address and the Budget respectively delivered recently has received significantly different public response, as one of the two has taken a non-middle-class approach to deal with social problems while the other one has followed the spirit of the middle class more closely in handling the problems. As we all know, public response to the Budget is in general favourable but the Policy Address delivered by the Chief Executive, though with much more input as far as financial provisions, macro planning and governance principles are concerned, is comparatively not so well received by the general public.

In the final analysis, the crux of the problem lies, in my opinion, in the need to "leave them alone" or "leave us alone". It is more preferable for the Government to do less or even do nothing so that more room would be allowed for development without too many restrictions, as such restrictions would only create troubles for the operations of various trades and professions and hinder the development of many high ambitions, good visions and interests. It is even more unacceptable that people have become more and more dependent on the Government in nearly everything and the situation has gone to such an extreme as including messages in weather forecasts to remind people to keep themselves warm for the cold weather or wear fewer clothes during warmer days, which has actually gone against our previous understanding of the approach we should take to encourage the growth of the middle class. Some may consider my arguments somewhat over-confident but this should exactly be the general direction for the cultivation of the middle class.

President, as for the request to improve education, I definitely have no objection but the objective of receiving education lies not only in obtaining a university degree but also in achieving self-reliance, since it would be more important to have a mindset of one should rely on oneself. It has come to my attention that although an attractive salary has been offered for some blue collar jobs and jobs in certain trades of the construction industry at present, employers 7752 LEGISLATIVE COUNCIL ─ 19 March 2015 still find difficulty in recruiting workers for such jobs, such as steel bending with a daily wage of $3,000 and welding, which offers $20,000 or even $30,000 a day. This has in fact moved away completely from the discussion on how to define the middle class by occupations and personal income.

In my opinion, it would be a right direction to move on as long as more room can be created in our society for different trades and professions to develop so that people from all walks of life can get away from the predicament of having to rely on others for assistance, depend on the Government's relief efforts and welfare benefits and suffer from exploitation. Judging from the experience of different societies at all times and in all places, it is a universal truth that as long as the middle class of a society can achieve self-reliance and live their lives independently in dignity and respect, there would definitely be economic progress, advancement in democracy and ongoing improvements in all aspects in the society.

Thank you, President.

MR LEE CHEUK-YAN (in Cantonese): President, this motion before us today is proposed by the Business and Professionals Alliance for Hong Kong (BPAHK), and the motion subject is "Expanding the ratio of the middle-class population". However, I cannot help but suspect that the BPAHK is advocating expanding the ratio of the middle-class population just because they want to keep on creating their so-called "middle-class dream". But then, in reality … Certainly, I do agree with the motion that such an objective cannot be achieved without feasible policies and measures. The problem, however, remains that the Labour Party and the BPAHK are holding totally different views on many issues when it comes to feasible policy measures. If we do not address some fundamental conflicts within our society in the first place, how can we talk about expanding the ratio of the middle-class population and increasing the opportunities for upward social mobility? What is the problem before us now? The problem is that the present economic structure is causing the middle class to move downwards. Hong Kong's middle-class population is dwindling as the people are moving downward socially.

Hence, if we do not address properly the internal conflicts of our society, we can hardly talk about expanding the ratio of the middle-class population. So, what are the internal conflicts prevailing in our society? This is actually a LEGISLATIVE COUNCIL ─ 19 March 2015 7753 simple fact. I need to point out that this is not unique to Hong Kong but is an existing trend found in many places across the world. Regardless of the society to which they belong, the middle-class people are moving increasingly downwards. While the whole world, including Hong Kong, is talking about enabling the financial industries to thrive, financial and capital industries are in fact some of the factors leading increasingly to the downward movement of the middle class. Indeed, our society is biased towards one side, towards the capital-related side. Let me explain it in simple words. People with money and capital can earn more with the capital they have while those with nothing to rely on but their own efforts will never get rich no matter how hard they work. This is so simple and obvious. How are we going to resolve this problem? Does the BPAHK have any good ways to resolve the problem?

As for those people without capital, those who have to work very hard because their fathers are not rich and they were not born with a silver spoon in their mouths, what can they do in Hong Kong? Surely, they are in a very disadvantageous position. To begin with, they are already lagging behind at the starting line because they cannot afford to have private tutors, go to international schools or study abroad. Indeed, they lose at the starting line in many aspects. Apart from the starting line, another major issue is that the existing education system is squeezing away many people, making it impossible for them to move upwards socially. These people have no choice but to enrol in self-financing associate degree programmes or degree programmes of the same sort, and end up in massive debts. They were lagging behind at the starting line when they started going to school, and then when they come before the social starting line, they are already heavily in debts when joining the working population. What can they do?

However, those with capital do not have to suffer such. They can make money through investment. Regardless of whether the investments are made by their parents or the rich youngsters themselves, their assets can just keep on expanding. Hence, the problem of disparity between the rich and the poor will intensify incessantly. Actually, this is a problem facing the whole world but it is particularly grave in Hong Kong. As such, if we do not address properly the problem with our economic structure and do nothing about the problem of capital gains being greater than the return of painstaking work, we can hardly do anything meaningful.

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Perhaps some may ask: So, what good ideas does the Labour Party have? The most fundamental step is to introduce a capital returns tax, and that is why we always urge the Government to levy an accretion tax on assets. In particular, why does the Government not consider introducing an accretion tax on real estate properties? If an accretion tax is levied on real estate properties … Actually, if any members of the public have acquired a perfectly located shop premise or have in their ownership 10 shop premises, they do not need to work anymore. Why do they need any jobs at all? As for tax liability, they only need to pay tax like any other wage earners, as Hong Kong does not have any accretion tax on assets. If we are to expand the ratio of the middle-class population, the Government has to curb, to a certain extent, the creation of wealth through capital accumulation, so that the middle-class population can enjoy a more reasonable rate of return from their painstaking work.

Just now I have referred to real estate properties, and Members can all see that flat prices are rather high these days. To the ordinary middle class (and particularly those younger in age), even if they are university graduates, the "four must-haves" we used to talk about in the past can exist in their dreams only. They dare not think about any "must-haves" at all. They dare not have any children because they have to work exceedingly long hours, and they cannot afford to own any flats or cars. So, our "must-haves" in the past are totally beyond their limit. The only "must-have" they can think about is perhaps a "wifey" or "hubby". They just dare not think about the other "must-haves". But then, even having a "wifey" or "hubby" may become an unreachable dream for them in the end. Under such circumstances, what can we discuss about? If the Government does not do anything to put capital gains under control, it can never expand the ratio of the middle-class population.

I wish to draw Members' attention to what Barack OBAMA is doing currently. He is now drafting a middle-class budget, and one of the major tasks is to tackle the problem of uneven distribution of wealth. To tackle the problem, he prepares to levy heavier tax on the rich, hoping that the resources collected can be trickled to the middle class. However, Hong Kong is unwilling to do that. The Labour Party has been advocating the introduction of a dividend tax, and I have also mentioned about that a number of times in my personal capacity. While the major shareholders of some listed companies (such as LI Ka-shing and his family) may earn as much as $7 billion or even over $10 billion a year, such billions of dollars are completely tax-free. However, the Government just turns a blind eye to this issue. Barack OBAMA is proposing to levy tax on the rich, LEGISLATIVE COUNCIL ─ 19 March 2015 7755 and the tax money collected by the treasury can enable the government to invest more in the field of education. Injecting resources into education can help to address the issues facing the middle class at the starting line or social starting line, as universities can at least offer more places for publicly-funded degree programmes, so that people do not have to run up massive debts on education loans.

Last but not least, I wish to point out a great discrepancy in ideologies. In considering the middle class issue, please do not stereotype them as the shallow people who care only about upward social mobility. Actually, sometimes they are asking for equality in society rather than upward social mobility. At present, the Legislative Council functional constituency elections are totally unfair, and the Chief Executive election is not fair either. Please do not describe the middle class as some people who care only about improving their own lives. I believe the middle-class people know it very well that what they cherish most are some value standards, including democracy, justice and liberty. These are the value standards we must mention about.

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

MR WONG YUK-MAN (in Cantonese): President, expanding the ratio of the middle-class population is a pseudo-proposition. In the eyes of the rich and powerful in Hong Kong, there is nothing but money, and they have sought to quantify all values. What is meant by "middle class"? Why should the motion emphasize "ratio"? The Hong Kong communist regime pays no heed to the completely uncontrollable and hysterically surging property and goods prices, and lets people perish on their own. The law of the jungle marked by the strong preying on the weak seems to have restored in Hong Kong. Increases in the incomes of groups with vested interests merely result from their exploitation of the production value of those in the lower strata. This has led people to feel a sense of insecurity and tend to play on the safe side. In that case, what is the point of expanding the ratio of the middle-class population?

Earning an annual salary of nearly $4 million, Financial Secretary John TSANG described himself as a member of the middle class. And years back, former Chief Secretary for Administration Henry TANG likewise referred to 7756 LEGISLATIVE COUNCIL ─ 19 March 2015 those earning a monthly income of $10,000 to $20,000 as middle-class people. Various academic institutions or social elites have all hastened to draw up definitions for "middle class" and "grassroots" and kept labelling people. In the past, there were already obvious distinctions between the upper class, the middle class and the grassroots in term of the education institutions they attend, the life-style they live and the accommodation they have. And present-day Hong Kong has even turned more and more polarized. In fact, the Government should examine afresh the direction in which Hong Kong should develop its society and values, and also our perception of this very city of Hong Kong.

In Taiwan and Japan, for example, building a communitarian, harmonious and well-off civil society, instead of "development is of overriding importance" as advocated by the Chinese Communist Party, is a doctrine and attitude that their citizens follow in their living. It is deplorable that even the Communist Party is now "turning right". So, what is the point of talking about development?

The Global Well-Being Index is a statistical survey. As Members can see, Hong Kong ranks 67th, and among the countries and regions with a per capita gross domestic product of over US$30,000, Hong Kong is one of the few "developed regions" not in the top 30.

A happy way of life cannot be measured by money. The Global Well-Being Index is a quantitative survey based on the following five criteria. The first one is "Purpose", meaning "liking what you do each day and being motivated to achieve your goals". The second one is "Social", meaning "having supportive relationships and love in your life". The third one is "Financial", meaning "managing your economic life to reduce stress and increase security". The fourth one is "Community", meaning "liking where you live, feeling safe, and having pride in your community". And the last one is "Physical", meaning "having good health and enough energy to get things done daily". "Financial" is only one of the criteria.

Apart from betraying Hong Kong by integrating Hong Kong with China, what other goals and vision does LEUNG Chun-ying the Bandit under the Hong Kong communist regime wish to realize? The reason why the Government has kept labelling various social strata and causing social dissension is that this can facilitate its rule. In that case, how can Hong Kong people possibly be happy? Those rich and powerful people in Hong Kong have kept misleading people, in an LEGISLATIVE COUNCIL ─ 19 March 2015 7757 attempt to shape a body of erroneous values. An example is that one can turn himself into a middle-class person by acquiring or owning properties. This is only a ploy to reinforce the perpetuity of developer hegemony.

A famous online game developer called CHENG Lap has written an article entitled "Property speculation and opium". Let me quote several lines from it: "… if those who persistently rely on properties and rents as sources of their incomes lack an active sense of responsibility to society, they will gradually lose their working ability. You cannot expect them to learn how to write software; you cannot expect them to study the latest scientific theories; nor can you expect them to learn a few more languages and adapt themselves to the international market through observations, as they need not do so to maintain a wealthy life. They will become selfish, apathetic and lethargic. While those possessing resources do not create anything, those who want to create something are stripped of any resources. All this has occurred in human societies for as many as a thousand times, and the downfall and decadence of various civilizations can be ascribed to this …"

Even if the ratio of the middle-class population is expanded, it is still impossible to break through the impasse currently faced by Hong Kong. Hong Kong people must figure out why they want to be middle-class people. If they want to be middle-class people because they want to live and work in contentment and build a well-off society, then I must tell them that acquiring properties and becoming middle-class people are not the only means. Hong Kong people need not dance to the tune of the rich and powerful.

In a normal developed country, the richest and the poorest should probably account for 20% or 30% of the total population, and middle-class people should constitute the majority of the total population. However, according to a survey of the Census and Statistics Department last year, while 28% (around 1.4 million people) of the Hong Kong population earned more than $40,000 a month, 30% of the labour force earned less than $14,000 a month. The proportions of the poor and the rich to the total population were more or less the same, and the proportion of the middle class to the total population only stood at some 30%.

As pointed out in the Quarterly Bulletin issued by the Hong Kong Monetary Authority in October last year, the ratio of mortgage repayment to the median household income increased by 4% to 65.9% over a single quarter, meaning that a middle-class family with a monthly income of $30,000 spent $20,000 on mortgage repayment a month. But they had to support their parents 7758 LEGISLATIVE COUNCIL ─ 19 March 2015 and children, go on excursions and afford other daily expenses. Therefore, with property prices surging hysterically, it is utterly pointless to draw up an income-based definition of "middle class".

The purpose of expanding the ratio of the middle-class population is to confine Hong Kong people strictly to the framework pre-set by developer hegemony, under which housing is bundled up with investment, marriage and daily life, and people can get rid of their sufferings as soon as possible only by becoming middle-class people. This has led to confrontation between those with properties and those without. Young people nowadays no longer buy this theory advocated by the rich and powerful. To them, the question of whether they can become middle-class people is not the main concern. They should fight bravely in order to be "the master of the house".

Starring and directed by Charlie CHAPLIN, a movie from the 1940s called "The Great Dictator" contains these lines of dialogue, "… you the people have the power, the power to create machines, the power to create happiness. You the people have the power to make this life free and beautiful, to make this life a wonderful adventure … Dictators free themselves, but they enslave the people … Let us fight … to do away with national barriers … Let us fight for a world of reason."

Hong Kong people should rise up bravely in order to right the wrong, bring down the autocratic political system, and build a fairer and just society.

President, I so submit.

MR ABRAHAM SHEK: President, today's motion touches on the raw nerves of the socio-economic and political fabric of our society. The wording of today's motion is skillfully drafted to embrace the diversities and differences in the interpretation of the "middle class". The term does not mean the passage to happiness, as Mr WONG Yuk-man or Mr LEE Cheuk-yan put it. Happiness is a state of mind. The middle class actually points to those coming from the middle of two bands: the "haves" and the "have-nots". The middle-class concept evolved from the beginning of the Industrial Revolution and reached the climax at the time of the French Revolution. This was how the word "bourgeois" appeared. Bourgeois embraces quite a large band: from the petite bourgeois, or the smaller middle class, to those who are the wealth creators.

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Like what Mr WONG Yuk-man just said, "let us share the wealth." This is exactly what communism is all about. Communism is the very backbone of the proletariat class, the dictatorship of the workers. China has now changed that concept. But capitalism is the backbone of the floundering of the middle class. It creates a conduit between the "haves" and the "have-nots", provides people with social stability, political stability and financial stability so that they can share the wealth. The wealth gap could be checked with the growth of middle class. Like America, the middle class actually dominates the country. Since they are the super rich, there is bound to be some who are extremely poor. Given the importance of the middle class, this motion today gives us the chance to put forward and debate the different opinions so that all together, we can enlighten the Government on what policies should be put in place.

According to the statistics provided by the Government, 55% of Hong Kong's household belongs to the middle class, but the Government is taking a very narrow interpretation of that 55% to mean those who own property or those who have money. However, to some, the middle class can be construed in a different way. Like to the Financial Secretary, he took the term to mean a life style, pointing to people who go to French movies and drink coffee; to others, they may see the middle class as the professionals ― the doctors, the lawyers. Yet, those living in subsidized housing or public rental units can also be construed as the middle class because their actual level of living is much better than that of the petite bourgeois who have bought a house and have to pay a considerable amount of money to finance their loan. So, how are we to ensure that the ratio of the middle class can be increased?

Mr LEE Cheuk-yan asked the Business and Professionals Alliance for Hong Kong (BPA) this question: How can we solve this problem? Nobody can solve this problem. But if he had listened to Mr Andrew LEUNG and to my other colleagues of the BPA, they had given him the answer. He himself in fact is the answer. I presume he came from a humble family, like every one of us, and now, he is a Member of the Legislative Council. How could he have achieved this? This is because he had received a good education, and had the good opportunity of sharing in the wealth which other people had created. He is a property owner, and he can come here to speak loudly about freedom of choices, freedom of belief. This is exactly what the middle-class concept is all about.

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As my time is running out, I would like to talk about how we can actually perpetuate this middle-class concept and increase the ratio of the middle class. The Government has a great part to play.

The Government should give priority to four areas, namely education, economic diversification, housing and land policies, and constitutional reforms.

First, education is a proven prescription for alleviating inter-generational poverty. The Government should treat spending on education as a continual investment that can generate a perpetual stream of returns to the community, rather than merely as a recurrent expenditure which has accounted for around 3% of GDP in recent years. This figure is way below that of our other neighbours. It should also expedite the implementation of 15 years of free education and increase the number of publicly-funded undergraduate places for eligible students. It should also promote diversification and reduce unnecessary hurdles in the education system and school curriculum.

Second, regarding economic diversification, having a variety of choices is the key feature of a market economy. Upward social mobility should be confined to a few designated paths. The Government must, therefore, keep market intervention to a minimum, encourage the inflow of talents and capital and maintain a good business environment and a level playing field so that through this conduit, everyone from the grassroots can climb up the social ladder to join the middle class.

Third, on housing and land policies, this is the area which the Government has yet to deliver. It should increase the number of public rental housing and leave the private sector market to itself. Then, the local population can have a steady and stable life.

Lastly, with regard to constitutional reform, the young people have actually voiced their views in the Occupy Central movement. The Government must take their views into consideration when introducing political reforms in the future. First and foremost, we must pass the 31 August Decision of the Standing Committee of the National People's Congress. Though a small step, it is in fact the biggest one. Thank you, President. (The buzzer sounded)

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PRESIDENT (in Cantonese): As there is no Member who has not spoken in the Chamber at present, Mr Andrew LEUNG, you may now speak on the amendments. You have five minutes to speak.

MR ANDREW LEUNG (in Cantonese): President, the motion that I move this time is listed by the Secretariat as "Expanding the ratio of the middle-class population" in brief. However, the substance of the motion is "That this Council urges the SAR Government to formulate feasible policies and measures to increase the opportunities for upward social mobility, thereby expanding the ratio of the middle-class population and enhancing Hong Kong's competitiveness." This is a comprehensive measure which is not limited to expanding the ratio of the middle-class population.

I am very grateful to the four colleagues for putting forth the amendments. Prof Joseph LEE proposes the need to formulate a definition of the "middle class". We have listened to the speeches for several hours. The definition, however, remains elusive and there indeed is no standard definition of the middle class in the whole world. But if the Government can come up with a definition, we are not going to raise objection. I also agree with Prof Joseph LEE's amendment, which calls for diversification of industries to allow people with different expertise, especially those in the young generations, more opportunities for development in their well-versed areas, and which raises the need for a clear career ladder to dovetail with people's pursuit of continuous education and to provide them with support. These are all important issues.

I also agree that the SAR Government should formulate policies to assist middle-class people in coping with difficulties, in order to alleviate their burdens. To achieve these aims, we can start with tax measures as a first step. In other words, we hope to help them with tax measures as suggested by Prof Joseph LEE, but not to drag down the rich by progressively demanding taxes as suggested by some other Members.

Mr SIN Chung-kai has moved another amendment. We have all heard of it and I agree with his depiction of the modern quandary of the middle class. However, the Business and Professionals Alliance for Hong Kong is not going to support his amendment which proposes to reintroduce the Sandwich Class Housing Scheme. There are indeed a number of better measures for us to consider apart from the Sandwich Class Housing Scheme, and they include 7762 LEGISLATIVE COUNCIL ─ 19 March 2015 increasing the number of units built under the Home Ownership Scheme, or making available more sites for housing development under alternative market models. Mr SIN Chung-kai has of course adopted a "Christmas tree approach" in tying the amendment to political reform and constitutional development. In my opinion, the relevant amendment should strictly hope for the Government's early formulation of feasible policies and measures to enhance our social mobility. Hence, we are not going to support Mr SIN Chung-kai's amendment.

Part of Mr Kenneth LEUNG's amendment is related to the middle class and we agree with his views. However, he has also hijacked the original motion in a way, putting forward amendments in relation to the political reform and democratic development. We do not agree with these amendments.

Ms Cyd HO's amendment stands out in a variety of respects. Some of the proposals raised in the amendment, including the one on facilitating upward mobility of the young generations, are similar to my own view. However, she has put a straitjacket on our original intention of facilitating upward mobility in the whole society as stated in the original proposal, confining it to the young generations. With regard to this view, we consider the young an important section of society but they are much less than its entirety. The Business and Professionals Alliance for Hong Kong and I therefore cannot support Ms Cyd HO's amendment.

President, I so submit.

SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT (in Cantonese): President, I sincerely thank the Members who spoke on the motion "Expanding the ratio of the middle-class population", and the four Members who moved amendments. President, in the discussion today, Members have expressed their substantial views and the scope involved is very wide. In the following, I will respond to the main areas mentioned by Members during the debate and in the amendments.

As I emphasized in the opening speech, the Government has been attaching importance to economic development. It is because only with sustainable economic development can Hong Kong enhance its competitiveness, and can Hong Kong people have more employment and business start-up opportunities in order to increase income and have more space for upward social mobility. LEGISLATIVE COUNCIL ─ 19 March 2015 7763

Therefore, the Government is earnest to implement various policies and measures to consolidate the economic foundation of Hong Kong and to create an environment more beneficial to business operation and industrial development.

In regard to economic development, it is very important to maintain a fair and convenient business environment. Hong Kong possesses a free market environment, as well as a stable and sound legal system, under which the rights and interests of the public are adequately safeguarded. The Hong Kong society is diversified and open. This is the cornerstone of the successful development of the economy all these years.

According to the 2015 Index of Economic Freedom Report published by the Heritage Foundation, Hong Kong remains top in the rankings. According to the Doing Business 2015 Report released by the World Bank, Hong Kong ranks third globally in terms of the ease of doing business, and continues to be in the front rank of the world. The overall market advantages and competitiveness of Hong Kong have long been earning attention and recognition in the international arena. Only if we are appropriately proactive and are not resting on our laurels, we are confident that we can maintain a good business environment with a view to seeking higher economic effectiveness and greater economic development.

The Government has been promoting various measures for business facilitation. We eliminate outdated, unnecessary or burdensome procedures, enhance regulatory efficiency and business-friendliness, and reduce compliance costs to business. In 2007, the Government launched the "Be the Smart Regulator" Programme to improve the transparency and business-friendliness of the licensing services of government departments. The more effective measures in the programme include: researching and developing electronic license issuance system, setting up Business Liaison Groups to help solve matters relating to license issuance regulation, re-engineering of license issuance process through reviewing the procedures concerned and wider application of information technology and electronic government services, and setting up the Business Consultation e-Platform. The Government will continue to closely co-operate with the business sector and other related parties. Through the Business Facilitation Advisory Committee and its task forces, we will study how to improve Hong Kong's business environment. We will implement various facilitating measures and programmes and continue to provide better operating conditions for the sector.

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Most of the enterprises in Hong Kong are small and medium enterprises (SMEs). Hence, SME business is important and indispensable to the economic development of Hong Kong. The Government also keeps on implementing key measures to assist SMEs. In the Budget this year, the Financial Secretary mentions that the Government will support SMEs in various aspects, which include: extending the application period for the special concessionary measures under the SME Financing Guarantee Scheme for one year to the end of February 2016, so as to continue assisting SMEs to obtain loans in the commercial lending market; injecting $1.5 billion into the SME Export Marketing and Development Funds; expanding the scope of the SME Export Marketing Fund; and increasing the maximum amount of funding support for each project under the SME Development Fund from $2 million to $5 million, while the execution period of each project will be extended from two years to three years so as to further support SMEs in exploring export market opportunities and enhancing their competitiveness.

In order to promote a business environment with fair competition, the Government is closely co-operating with the Competition Commission and the Judiciary to seek early implementation of the Competition Ordinance in order to prohibit undertakings in all sectors from adopting anti-competitive conduct which has the effect of preventing, restricting or distorting competition. The Independent Commission Against Corruption will also continue to combat corruption through a three-pronged strategy of enforcement, prevention and education, with a view to maintaining a fair competition environment for businesses in Hong Kong and safeguarding the interests of proper business operators and public members.

In the promotion of industrial diversification, the development of information, science and technology is advancing at a high speed. It is thus easier for enterprises in various places to contact clients in different corners of the world, bringing keener competition among different economies. The industrial development in Hong Kong has already switched from a labour-intensive production mode to high value-added and knowledge-based operation. Since the land and space in Hong Kong are limited, the development of pillar industries which enjoy clear advantages in Hong Kong should be expanded and intensified. At the same time, the potential emerging industries should also be supported. We have to deepen and expand our industries, promote diversification and further development of the Hong Kong economy. By providing different employment options, we can increase the opportunities of development for Hong Kong people and enhance the overall competitiveness of Hong Kong.

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In regard to pillar industries (namely trading and logistics, tourism, financial services, as well as business and professional services), the Policy Address and Budget this year have proposed quite a number of active supporting measures. Some examples are negotiating Free Trade Agreements with other countries, studying the construction of a new convention centre, developing offshore Renminbi business, and assisting the professional service industry in Hong Kong to enter the Mainland market. As regards the supporting measures for emerging industries, they include further injection into the CreateSmart Initiative and the Innovation and Technology Fund, encouragement to business start-ups and the launching of the Art Development Matching Grants Pilot Scheme.

In order to render the industrial policy of Hong Kong more comprehensive, the Chief Executive set up the Economic Development Commission (EDC) in 2013. It explores and identifies growth sectors or clusters of sectors which present opportunities for Hong Kong's further economic growth, and recommends possible policy and other support for these industries. Over the past two years, the EDC has successively submitted concrete proposals to the Government on the policies and measures for supporting the development of individual industries.

The Government has also adopted a number of recommendations from the EDC, such as the recommendation on promoting the development of the fashion industry. Mr CHUNG Kwok-pan also mentioned earlier that the Government would invest a total of $500 million to launch a series of measures on a pilot basis in the next three years. They include rolling out an incubation programme for up-and-coming fashion design start-ups, providing fashion design graduates with overseas internships and study opportunities, improving local fashion events, and setting up an advisory body for the trade. It is hoped that new opportunities can be explored for the up-and-coming fashion designers and they can be assisted to march towards the way of success. At the same time, these can help add value to the economic development of Hong Kong while its competitiveness can also be enhanced.

Concerning the areas of strengthening personnel training and vocational education, increasing the opportunities for upward social mobility and enhancing competitiveness, human resources form the motive force to drive the economy forward. Therefore, the Government has been active in investing in education for cultivation of talents and promoting social mobility, so that Hong Kong can have sustainable development and maintain its competitiveness. Some Members have also mentioned the importance in this aspect.

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I would like to talk about tertiary education first. The Government attaches great importance to the development of tertiary education. It has been striving to provide young people with flexible and diversified articulation pathways with multiple entry and exit points, so as to increase their opportunities for upward social mobility. Through launching various kinds of supporting measures, the Government has been promoting the complementing development of the publicly-funded and self-financing post-secondary education sectors. At present, 38.4% of the students in the relevant cohort have access to degree-level education. Together with the places for sub-degree programmes, nearly 70% of the young people have access to tertiary education. This helps to provide quality people for the future development of Hong Kong. In the Policy Address last year, the Chief Executive announced a series of initiatives to further increase the opportunities of receiving subsidized higher education, thus providing secondary school leavers with broader and more diversified articulation pathways.

As regards on-the-job training, vocational education can integrate education and employment, as well as providing life-wide and diversified learning opportunities for people with different educational levels and engaging in different occupations. It nurtures the personnel needed to support a diversified development of Hong Kong and enhance the competitiveness of Hong Kong. Through the Vocational Training Council (VTC), the Government steps up supporting and promoting vocational education. The measures include the following: the Government has launched a pilot training and support scheme to attract and retain talent for industries with a keen demand for labour by integrating structured apprenticeship training programmes with clear career progression pathways; starting from the 2014-2015 academic year, the Government allocates recurrent funding of about $18 million to the VTC to provide industrial attachment opportunities for students mainly studying Higher Diploma programmes and certain Diploma in Vocational Education programmes, so as to enhance their employment capacity; moreover, the Government has also invited the VTC to draw up a strategic development plan for its campuses to foster synergy and provide state-of-the-art facilities pivotal to enhancing the image and quality of vocational education.

In terms of the Qualifications Framework (QF), the Government also encourages lifelong learning. It is hoped that through this, the quality of the working population in Hong Kong can be constantly enhanced so that the personnel can be more professional and diversified. Under the QF launched by the Government since 2008, Industry Training Advisory Committees have LEGISLATIVE COUNCIL ─ 19 March 2015 7767 already set up for 20 industries. These committees are active in establishing clear advancement paths for different industries and providing appropriate training materials. Through different channels, the industries are provided with the latest information and development opportunities. Under the QF, a Recognition of Prior Learning mechanism has also been formulated so that the knowledge, skills and working experience gained by the employees from work can be formally recognized. The starting point for their further learning can also be set so as to facilitate their continuous learning. While their career can be further developed, their opportunities for upward social mobility can also be increased.

Apart from training and value adding of working people, youth development is also a special task to which the Government attaches importance. For encouraging young people to actively equip themselves and broaden their horizons, the Government will further allocate resources in 2015-2016 to provide young people with more opportunities to participate in Mainland exchange and internship activities. It will continue to study with other countries in organizing more two-way overseas exchange activities for young people so as to broaden their horizons internationally. When they have grasped the development opportunities of the Mainland and the whole world, the stairway of upward mobility can be widened.

As the Chief Executive announced in the Policy Address this year, the Government would set up a $300 million Youth Development Fund. It mainly covers the following: to provide capital, in the form of matching funds in co-operation with non-governmental organizations (NGOs), to the youth people who intend to start their own business, in the hope of assisting their upward social mobility and realizing their dreams; through the provision of subsidies, to support NGOs in organizing creative activities which are beneficial to youth development, with a view to further creating development opportunities and platform for the young people, so that the young people can lay down a good foundation for their future development. As I understand, the Home Affairs Bureau is consulting the Commission on Youth in regard to the specific operational arrangements of the Fund, and will announce the specific details in due course.

In regard to alleviating the taxation and living burden of the general public, facing the challenging international macro environment and changeable economic factors, the Government understands that public members of different strata (including the middle class) will hope that the Government can be sympathetic to 7768 LEGISLATIVE COUNCIL ─ 19 March 2015 the situations that they are facing and can launch some measures to alleviate their pressure of living. Many Members have mentioned the social expectation in this aspect.

In view of the above, the Financial Secretary announced in the Budget this year that a number of one-off tax measures would be launched. They include: reducing salaries tax and tax under personal assessment for 2014-2015 by 75%, subject to a ceiling of $20,000, and about 1.82 million taxpayers can be benefited; reducing profits tax for 2014-2015 by 75%, subject to a ceiling of $20,000, and 130 000 taxpayers can be benefited; and waiving rates for the first two quarters of 2015-2016, subject to a ceiling of $2,500 per quarter for each rateable property, and it is estimated that 3.15 million properties will be involved. Besides, the Financial Secretary will increase the basic and additional child allowances from $70,000 to $100,000 from 2015-2016 onwards, and it is estimated that about 370 000 taxpayers can be benefited. On the one hand, the above measures can help alleviate the living burden on the middle class. On the other hand, they can also have a fiscal stimulus effect in boosting GDP, and can help stabilize the economy and safeguard employment.

Mr SIN Chung-kai has suggested altering the salaries tax regime. The existing progressive rates for salaries tax realize the fairness principle of "earning more, paying more; earning less, paying less". The abolition of the standard rate will raise the tax rates for high-income earners, but the income source of salaries tax will also be further concentrated on a very small number of taxpayers. The tax income will then be more easily affected by the economic cycle and will become unstable. In fact, since the year of assessment 2008-2009, each tax band for salaries tax has already been widened from $35,000 to the existing $40,000. This is the most favourable tax band since the return of Hong Kong to China. In the year of assessment 2012-2013, even before the implementation of the one-off tax relief measures, the overall average effective tax rate for all salaries tax payers was only 8%. In comparison to other economic systems, the tax burden in Hong Kong is already very low.

Next, I would like to respond to the issue of housing needs. In the course of economic development, we understand that the public, in particular the middle class, have the aspiration of acquiring their homes. Mr SIN Chung-kai mentioned the reintroduction of the Sandwich Class Housing Scheme, thereby increasing the opportunities for the middle class to acquire homes. At present, mainly through the Home Ownership Scheme (HOS), the Government provides LEGISLATIVE COUNCIL ─ 19 March 2015 7769 assistance for home ownership to families unable to afford buying a housing unit in the private sector. The Housing Authority will put up approximately 2 700 and 2 000 HOS flats for pre-sale in 2015-2016 and 2016-2017 respectively. Moreover, the Hong Kong Housing Society will also offer 1 600 subsidized sale flats for pre-sale in 2016-2017. As to the long-term solution, the Government released the Long Term Housing Strategy in December last year. The Government has adopted recommendations of a long-term supply target of 480 000 units in the coming decade (2015-2016 to 2024-2025), in which 90 000 are subsidized sale flats. The Government will also endeavour to meet the target of providing 190 000 private flats for people who intend to acquire their homes. Facing the increase of property price, just as the Government mentioned in the past, the crux of the matter lies in increasing and speeding up the supply of homes, as there is no short cut at all. The Government will, from time to time, introduce the necessary measures to stabilize the market in response to market changes.

With regard to the issue of constitutional reform, after the Government issued the Consultation Document on the Method for Selecting the Chief Executive by Universal Suffrage (the Consultation Document) in January 2015, the two-month public consultation on the method for selecting the Chief Executive by universal suffrage was formally started. In accordance with the Basic Law and the 31 August Decision adopted by the Standing Committee of the National People's Congress (the Decision), the Consultation Document set out four major agenda items for public consultation, namely the composition and formation method of the Nominating Committee, the procedures for the Nominating Committee to nominate Chief Executive candidates, the voting arrangements for selecting the Chief Executive by universal suffrage, as well as other related issues for the selection of the Chief Executive by universal suffrage. The consultation period already ended on 7 March. The Government will sum up all the views and decide the next step of work.

President, I thank Mr Andrew LEUNG and other Members for presenting their invaluable views today. In the course of policy formulation, the Government will duly consider the relevant views. Although Hong Kong is a small place, it possesses abundant quality human resources. The achievement of Hong Kong today is attributable to the diligence and perseverance of Hong Kong people. We have overcome one challenge after another. The success is built up bit by bit. The Government cherishes the fruit of the hard work of Hong Kong people. We will keep on working hard to promote the long-term high 7770 LEGISLATIVE COUNCIL ─ 19 March 2015 value-added and diversified development of our industries, so as to further enhance our competitiveness. Hong Kong people will thus benefit from a broader and deeper room for development, thereby increasing the upward social mobility.

Thank you, President, I so submit.

PRESIDENT (in Cantonese): Prof Joseph LEE, you may now move your amendment.

PROF JOSEPH LEE (in Cantonese): President, I move that Mr Andrew LEUNG's motion be amended.

Prof Joseph LEE moved the following amendment: (Translation)

"To add ", given the trend of the dwindling middle-class population in Hong Kong in recent years," after "That"; to add "formulate a widely recognized definition for the middle class and promote diversification of industries, so as to establish a clear career ladder for them and enhance their development potentials," after "upward social mobility,"; and to add "; at the same time, the SAR Government should formulate policies to assist middle-class people in coping with difficulties, in order to alleviate their burdens" immediately before the full stop."

PRESIDENT (in Cantonese): I now propose the question to you and that is: That the amendment, moved by Prof Joseph LEE to Mr Andrew LEUNG's motion, be passed.

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

(Members raised their hands)

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

(No hands raised)

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

PRESIDENT (in Cantonese): Mr SIN Chung-kai, as Prof Joseph LEE's amendment has been passed, you may now move your revised amendment.

MR SIN CHUNG-KAI (in Cantonese): President, I move that Mr Andrew LEUNG's motion as amended by Prof Joseph LEE be further amended by my revised amendment.

Mr SIN Chung-kai moved the following further amendment to the motion as amended by Prof Joseph LEE: (Translation)

"To add "; specific measures include: (1) to raise the various tax allowances, including the basic allowance for individuals, child allowance, married person's allowance as well as dependent parent allowance, and widen the tax bands for salaries tax and abolish the standard rate for salaries tax, so that members of the public pay their salaries tax according to the marginal tax rate, thereby alleviating the tax burden on the middle class; (2) to reintroduce the Sandwich Class Housing Scheme, thereby increasing the opportunities for the middle class to acquire homes; (3) to uphold local core values and combat corruption, so as to rebuild a society with integrity and fairness for providing the middle class with an environment with fair competition; and (4) to fully implement the election of the Chief Executive and that of all Members of the Legislative Council by genuine universal suffrage, respect people's equal rights to make nomination, to vote and to stand for election, and develop in the middle class a sense of belonging to Hong Kong" immediately before the full stop."

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PRESIDENT (in Cantonese): I now propose the question to you and that is: That Mr SIN Chung-kai's amendment to Mr Andrew LEUNG's motion as amended by Prof Joseph LEE be passed.

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

(Members raised their hands)

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

(Members raised their hands)

Mr IP Kwok-him rose to claim a division.

PRESIDENT (in Cantonese): Mr IP Kwok-him 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.

Functional Constituencies:

Prof Joseph LEE, Mr Charles Peter MOK, Mr Kenneth LEUNG and Mr IP Kin-yuen voted for the amendment.

Mr Abraham SHEK, Mr Tommy CHEUNG, Mr Jeffrey LAM, Mr Andrew LEUNG, Mr WONG Ting-kwong, Ms Starry LEE, Dr LAM Tai-fai, Mr CHAN Kin-por, Mr IP Kwok-him, Mr Steven HO, Mr Frankie YICK, Mr YIU Si-wing, LEGISLATIVE COUNCIL ─ 19 March 2015 7773

Mr MA Fung-kwok, Mr KWOK Wai-keung, Mr Christopher CHEUNG, Mr TANG Ka-piu, Ir Dr LO Wai-kwok, Mr CHUNG Kwok-pan and Mr Tony TSE voted against the amendment.

Dr LEUNG Ka-lau and Mr POON Siu-ping abstained.

Geographical Constituencies:

Mr LEE Cheuk-yan, Ms Emily LAU, Ms Cyd HO, Mr WU Chi-wai, Dr KWOK Ka-ki, Mr SIN Chung-kai and Dr Helena WONG voted for the amendment.

Mr CHAN Kam-lam, Mr TAM Yiu-chung, Mr WONG Kwok-hing, Mr CHAN Hak-kan, Dr Priscilla LEUNG, Mr LEUNG Kwok-hung, Mr WONG Yuk-man, Mr Michael TIEN, Mr James TIEN, Miss Alice MAK, Dr Elizabeth QUAT and Dr CHIANG Lai-wan voted against the amendment.

Mr LEUNG Yiu-chung abstained.

THE PRESIDENT, Mr Jasper TSANG, did not cast any vote.

THE PRESIDENT announced that among the Members returned by functional constituencies, 25 were present, four were in favour of the amendment, 19 against it and two abstained; while among the Members returned by geographical constituencies through direct elections, 21 were present, seven were in favour of the amendment, 12 against it and one abstained. Since the question was not agreed by a majority of each of the two groups of Members present, he therefore declared that the amendment was negatived.

MR ANDREW LEUNG (in Cantonese): President, I move that in the event of further divisions being claimed in respect of the motion on "Expanding the ratio of the middle-class population" or any amendments thereto, this Council do proceed to each of such divisions immediately after the division bell has been rung for one minute.

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PRESIDENT (in Cantonese): I now propose the question to you and that is: That the motion moved by Mr Andrew LEUNG be passed.

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

(No Member indicated a wish to speak)

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

(Members raised their hands)

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

(No hands raised)

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

I order that in the event of further divisions being claimed in respect of the motion on "Expanding the ratio of the middle-class population" or any amendments thereto, this Council do proceed to each of such divisions immediately after the division bell has been rung for one minute.

PRESIDENT (in Cantonese): Members have already been informed, as Prof Joseph LEE's amendment has been passed, Mr Kenneth LEUNG has withdrawn his amendment.

PRESIDENT (in Cantonese): Ms Cyd HO, as the amendment of Prof Joseph LEE has been passed, you may now move your revised amendment.

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MS CYD HO (in Cantonese): President, I move that Mr Andrew LEUNG's motion as amended by Prof Joseph LEE be further amended by my revised amendment.

Ms Cyd HO moved the following further amendment to the motion as amended by Prof Joseph LEE: (Translation)

"To add "; this Council also urges the SAR Government to formulate policies conducive to increasing the opportunities for upward social mobility for the young generations in Hong Kong, including improving education and promoting diversified economic development, etc., thereby protecting Hong Kong people's basic human rights and freedom as well as restoring their confidence in the future" immediately before the full stop."

PRESIDENT (in Cantonese): I now propose the question to you and that is: That Ms Cyd HO's amendment to Mr Andrew LEUNG's motion as amended by Prof Joseph LEE be passed.

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

(Members raised their hands)

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

(Members raised their hands)

Mr IP Kwok-him rose to claim a division.

PRESIDENT (in Cantonese): Mr IP Kwok-him has claimed a division. The division bell will ring for one minute.

7776 LEGISLATIVE COUNCIL ─ 19 March 2015

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

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

Functional Constituencies:

Mr Tommy CHEUNG, Prof Joseph LEE, Dr LEUNG Ka-lau, Mr Frankie YICK, Mr Charles Peter MOK, Mr Kenneth LEUNG, Mr IP Kin-yuen and Mr CHUNG Kwok-pan voted for the amendment.

Mr Abraham SHEK, Mr Jeffrey LAM, Mr Andrew LEUNG, Mr WONG Ting-kwong, Ms Starry LEE, Mr IP Kwok-him, Mr Steven HO, Mr KWOK Wai-keung, Mr Christopher CHEUNG, Mr TANG Ka-piu and Ir Dr LO Wai-kwok voted against the amendment.

Dr LAM Tai-fai, Mr CHAN Kin-por, Mr YIU Si-wing, Mr MA Fung-kwok, Mr POON Siu-ping and Mr Tony TSE abstained.

Geographical Constituencies:

Mr LEE Cheuk-yan, Ms Emily LAU, Ms Cyd HO, Mr Michael TIEN, Mr James TIEN, Mr WU Chi-wai, Mr Gary FAN, Mr CHAN Chi-chuen, Dr KWOK Ka-ki, Mr SIN Chung-kai and Dr Helena WONG voted for the amendment.

Mr CHAN Kam-lam, Mr TAM Yiu-chung, Mr WONG Kwok-hing, Mr CHAN Hak-kan, Dr Priscilla LEUNG, Mr LEUNG Kwok-hung, Miss Alice MAK, Dr Elizabeth QUAT and Dr CHIANG Lai-wan voted against the amendment.

Mr WONG Yuk-man abstained.

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THE PRESIDENT, Mr Jasper TSANG, did not cast any vote.

THE PRESIDENT announced that among the Members returned by functional constituencies, 25 were present, eight were in favour of the amendment, 11 against it and six abstained; while among the Members returned by geographical constituencies through direct elections, 22 were present, 11 were in favour of the amendment, nine against it and one abstained. Since the question was not agreed by a majority of each of the two groups of Members present, he therefore declared that the amendment was negatived.

PRESIDENT (in Cantonese): Mr Andrew LEUNG, you may now reply and you still have 50 seconds.

MR ANDREW LEUNG (in Cantonese): President, I am most grateful to the 30 Members who have spoken. We do not hold identical definitions of the middle class but we share the same objective in striving to support the middle class and prevent them from moving downward.

Many Members have spoken on the need to help the young generations to move upward and I agree with most of their views. The proposals put forth span across education, talent, housing, business start-up, provision of support to small and medium enterprises, and development of a diversified economy. However, I am disappointed to see only officials from the Commerce and Economic Development Bureau attending this meeting. As we are discussing the future of Hong Kong from a forward-looking perspective this time, more public officers should have come to the Legislative Council to listen to the views of Members. I hope Secretary Gregory SO can bring all these views back and let the Government consider them one by one. Thank you.

PRESIDENT (in Cantonese): I now put the question to you and that is: That the motion moved by Mr Andrew LEUNG, as amended by Prof Joseph LEE, be passed. Will those in favour please raise their hands?

(Members raised their hands)

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

(Members raised their hands)

Mr LEUNG Kwok-hung rose to claim a division.

PRESIDENT (in Cantonese): Mr LEUNG Kwok-hung has claimed a division. The division bell will ring for one minute.

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

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

Functional Constituencies:

Mr Abraham SHEK, Mr Tommy CHEUNG, Prof Joseph LEE, Mr Jeffrey LAM, Mr Andrew LEUNG, Mr WONG Ting-kwong, Ms Starry LEE, Dr LAM Tai-fai, Mr CHAN Kin-por, Dr LEUNG Ka-lau, Mr IP Kwok-him, Mr Steven HO, Mr Frankie YICK, Mr YIU Si-wing, Mr MA Fung-kwok, Mr Charles Peter MOK, Mr Kenneth LEUNG, Mr KWOK Wai-keung, Mr Christopher CHEUNG, Mr IP Kin-yuen, Mr POON Siu-ping, Mr TANG Ka-piu, Ir Dr LO Wai-kwok, Mr CHUNG Kwok-pan and Mr Tony TSE voted for the motion as amended.

Geographical Constituencies:

Mr LEE Cheuk-yan, Mr CHAN Kam-lam, Ms Emily LAU, Mr TAM Yiu-chung, Mr WONG Kwok-hing, Ms Cyd HO, Mr CHAN Hak-kan, Dr Priscilla LEUNG, Mr Michael TIEN, Mr James TIEN, Mr WU Chi-wai, Mr Gary FAN, Miss Alice MAK, Dr KWOK Ka-ki, Mr SIN Chung-kai, Dr Helena WONG, Dr Elizabeth QUAT and Dr CHIANG Lai-wan voted for the motion as amended.

LEGISLATIVE COUNCIL ─ 19 March 2015 7779

Mr LEUNG Kwok-hung and Mr WONG Yuk-man voted against the motion as amended.

Mr CHAN Chi-chuen abstained.

THE PRESIDENT, Mr Jasper TSANG, did not cast any vote.

THE PRESIDENT announced that among the Members returned by functional constituencies, 25 were present and 25 were in favour of the motion as amended; while among the Members returned by geographical constituencies through direct elections, 22 were present, 18 were in favour of the motion as amended, two against it and one abstained. Since the question was agreed by a majority of each of the two groups of Members present, he therefore declared that the motion as amended was passed.

PRESIDENT (in Cantonese): Debate on the second motion with no legislative effect: "Formulating a long-term and comprehensive industrial policy".

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

I now call upon Ir Dr LO Wai-kwok to speak and move the motion.

FORMULATING A LONG-TERM AND COMPREHENSIVE INDUSTRIAL POLICY

IR DR LO WAI-KWOK (in Cantonese): President, I move that the motion titled "Formulating a long-term and comprehensive industrial policy", as printed on the Agenda, be passed.

President, with the rapid changes in internal and external economic environments in recent years, Hong Kong's economy has already come to a crossroad. On the one hand, Hong Kong has long been over-reliant on the finance and real estate industries while the development of emerging industries has been neglected. When the economic development is not diversified enough, 7780 LEGISLATIVE COUNCIL ─ 19 March 2015 the capacity of Hong Kong to withstand external economic shocks will be weakened. On the other hand, other economies in the region, including the Mainland, Korea, Singapore and others, have speeded up their reform in order to strengthen themselves. They are eager to make progress in economic and industrial development, and their achievements are evident. When we shrink while others grow, some competitive edges of Hong Kong begin to wane. In recent years, Hong Kong's rankings in a number of global competitiveness reports have declined. They have coincidentally rung the alarm bells to us. How to optimize the industrial structure of Hong Kong, enhance the overall competitiveness and ensure the sustainable development of Hong Kong's economy and steady growth of government income have already become the imminent issues of the Hong Kong society at present.

Under the circumstances, I urge the SAR Government to expeditiously formulate a long-term, comprehensive, balanced and forward-looking industrial policy. The reason is very simple. Hong Kong should have sustainable economic growth before it can thoroughly resolve a series of substantial social and livelihood issues. Such challenges include satisfying the housing need of the public, narrowing the wealth gap and preparing for the approaching of an ageing society. An economist points out that there is a kind of interaction relationship between industries and a city. Industrial development can stimulate the economy of a city, and whether the city environment (including the policy environment) is compatible can also determine the success or failure of an industry. However, as we all know, the Hong Kong Government has all along been upholding the principle of positive non-intervention and there are no specific industrial policy. It depends mainly on its strengths in the systems, such as a comprehensive legal system, a highly efficient and incorruptible executive system and the comparatively advanced infrastructural facilities, to attract investors. Nonetheless, as time passes, it is necessary for us to remove certain old thinking that the implementation of industrial policy is tantamount to interfering the operation of a free market.

(THE PRESIDENT'S DEPUTY, MR ANDREW LEUNG, took the Chair)

In all places of the world, even the developed economies such as the United States, Europe and Japan which uphold free market economy, in order to revitalize local economy and create employment opportunities, they adopt positive and aggressive fiscal policies and monetary policy. Through LEGISLATIVE COUNCIL ─ 19 March 2015 7781 well-planned resource allocation, they promote industrial development. In fact, in respect of industrial policies, the cases of our competitors in the neighbouring East Asian region may enlighten us to a greater extent. Some time ago, from the 1970s to the 1990s of the last century, Hong Kong, Taiwan, Korea and Singapore were active in participating in international division of labour. They developed foreign trade and export-oriented economy. They made use of their local labour force which was low in cost but high in quality in order to attract overseas capital and skills. Due to rapid economic development, they became the Four Asian Tigers. Nevertheless, since various economies took different courses in their industrial policies afterwards, their development differed. In terms of their economic achievements, they have their respective strengths and weaknesses. Due to the limited speaking time, I will take South Korea, which is eager to improve and has outstanding achievement in recent years, as an example.

Before the 1990s in the last century, South Korea spurred the economic growth by means of labour-intensive and capital-intensive industries, including automobile industry, iron and steel industry and shipbuilding industry. In 1997, due to the outbreak of the Asian financial crisis, the value of export of the related industries reduced drastically. South Korea was heavily indebted and was facing an economic debacle. It needed the US$57 billion of assistance provided by the International Monetary Fund. The South Korean Government was aware of its economic structural problem. Knowing that it had to switch from being capital-oriented to innovation-oriented, in 1999, it drew up an Integrated Knowledge-based Economic Development Programme, with special support being given to the highest value-added industries. It placed emphasis on the building of information infrastructure and systems, and committed itself to the exploration of core strategic technologies in the future. Over the years, it has promulgated the Special Law for Scientific and Technological Innovation and the Support for Small and Medium Enterprise Establishment Act. It aimed to promote technology innovation, technology transfer and commercialization, thus forming an enterprise-based innovative system with the close co-operation among the industry, academia and the research sectors, so as to bring about an upgrading of the industrial structure. Besides, South Korea also formulated the Cultural Industry Revitalization Act and the Five-Year Plan of Cultural Industry Development in 1999, in order to promote cultural creative industries. It has thus adopted a carrot and stick approach to promote the industries.

In 2006, the South Korean Government also announced the Vision and Strategy on Industrial Development 2015. It was determined to develop itself into an integrator of labour division in global industries. It was active in 7782 LEGISLATIVE COUNCIL ─ 19 March 2015 fostering the strategic industries such as information technology, biotechnology, nanotechnology and environmental technology. Besides, it also stepped up brand competition among advanced economies in order to battle for market share. The manufacturing industry was assisted with infrastructure service industries in the development of logistics, research and design, as well as electronic commerce. Afterwards, it also drew up the Five-Year Plan for Green Growth. Between 2009 and 2013, more resources were being invested to support the Government's mitigation target for greenhouse gas, with a view to promoting greening of industries and fostering green industries. It also drew up the Green Growth SME Support Programme and provided other support programmes on business starting, research and development, and entering overseas markets, so as to assist small and medium enterprises (SMEs) in developing green business opportunities. The economic achievements of South Korea in recent years are universally recognized. The smartphones, digital televisions, environment-friendly vehicles and computing devices produced by that country are sold well all over the world. The movies, television dramas and popular music of South Korea have given rise to a phenomenon of hallyu which has been flooding other countries in the world.

Deputy President, from the case of South Korea, we can see that the success of industrial policy depends on the following essential factors. First, the function of the Government should take advantage of a favourable situation to take forward policies. The industrial policy should be integrated with the exercise of market function. It should place emphasis on creating an environment of fair competition, encouraging innovation, research and development, as well as improving infrastructural facilities. Second, the major approach of assisting the industries is by means of strategic tax policy and financial subsidies, with the Government playing the leading and co-ordinating role in order to foster co-operation among the Government, industry, academia and the research sectors. Third, the formulation of industrial policy has to be based on the relative edges of the economy itself, as well as the strengths and weak points of industrial structure. Mastering the whole picture and with the right prescriptions, it should place emphasis on strengthening the existing competitive industries and fostering the emerging industries with potential of development.

If we do not move forward, we will fall behind. If Hong Kong is to consolidate the existing edges and promote sustainable economic growth, the SAR Government has to implement some measures. However, what can Hong LEGISLATIVE COUNCIL ─ 19 March 2015 7783

Kong do? In my opinion, the authorities should formulate a long-term, comprehensive, balanced and forward-looking industrial policy, setting a clear policy vision and target, putting into practice the public finance principle of allocating resources where they are required. Through the Government's fiscal measures and resource allocation, they should strategically stimulate the growth of different industries. By means of land supply, tax concessions, special subsidies, personnel training, co-operation among the Government, industry, academia and the research sectors, they should provide comprehensive ancillary measures in various aspects to attract overseas investments, while giving an impetus to the industries with competitive edge and potential in Hong Kong. The industrial policy tailor-made for Hong Kong has to bring out different development strategies and ancillary measures for different industries. Furthermore, they should invest resources in the following three industrial areas.

First of all, the Government should strengthen the existing pillar industries, including finance, logistics, tourism, trading and professional services. For instance, the authorities say that trading and logistics industry contribute to about one fourth of our Gross Domestic Product, securing the top place among the four pillar industries. Besides, it is developing towards the provision of high value-added services. It is expected that Hong Kong can develop into a regional trading and distribution centre for high value products. For this purpose, the SAR Government should be active in its planning and support, respond to the aspiration of the industry and allocate land reserve zone to develop logistics facilities. In the Budget this year, it is mentioned that the authorities have reserved 10 hectares of logistics site at Tuen Mun West and the technical assessments have already been completed. The industry expects that the site can be released to the market by phases. The Government also has to speed up its infrastructure planning and work for an overall enhancement of Hong Kong's external transportation network.

In the maritime aspect, after the Study on the Strategic Development Plan for Hong Kong Port 2030 and the Preliminary Feasibility Study for Container Terminal 10 at Southwest Tsing Yi have been completed, the authorities should conduct a long-term and overall planning on port development as soon as possible.

On land, with the construction of the Hong Kong-Zhuhai-Macao Bridge being completed very soon, the SAR Government should implement the transportation ancillary facilities for the road sections within the territory as soon 7784 LEGISLATIVE COUNCIL ─ 19 March 2015 as possible, so as to form a strategic road network at the west side of the Pearl River Delta (PRD) and its peripheral areas.

In respect of aviation, the construction project on the third runway of the Hong Kong International Airport was carried by the Executive Council a few days ago. The industry hopes that the planning can be implemented very soon. At the same time, it urges the Government to carry on discussion with the Mainland departments, co-ordinate and improve the PRD airspace resource arrangements, and conduct long-term and strategic development plan for the aviation business of Hong Kong.

Besides, the Government should promote the development of emerging industries with comparative edges in Hong Kong, for example, innovation technology, testing and certification, cultural and creative industries and green industries. Promoting innovation and technology is the major global trend. Hence, Hong Kong needs to establish an Innovation and Technology Bureau and improve the government structure, so as to draw up and implement the related development strategies, for the purpose of promoting commercialization of scientific and technological achievements, industrialization of commodities and internationalization of industries. Not only are the engineering industry as well as the science and technology sector in support of the establishment of the Innovation and Technology Bureau, but the public in general also give their recognition. It is, however, unfortunate that the funding application for the Innovation and Technology Bureau could not go through the deliberation process of the Finance Committee due to reasons known to all. I hope that this Council can support the passage of the amendments to the legislation and the funding application in relation to the establishment of the Innovation and Technology Bureau resubmitted by the Government.

Thirdly, the Government should revitalize traditional industries, such as food manufacturing and processing industry, textile and clothing industry, as well as toy industry. These traditional industries of Hong Kong have accumulated much experience and strengths, and quite a number of participating operators are SMEs. Therefore, revitalizing traditional industries is closely related to the SAR Government's policy of supporting the development of SMEs. In June 2012, the SAR Government introduced the $1 billion worth BUD Fund in order to assist local enterprises in branding, upgrading and domestic sales. These measures should be reviewed and improved at appropriate time so as to exercise greater function in revitalizing traditional industries.

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Deputy President, the policy measures of the above three industrial areas are complicated ostensibly but they can be streamlined and simplified. The crux lies in whether the Government can actively play the promoting role, especially in formulating a long-tern, comprehensive and diversified industrial policy, and can set a timetable for implementation, so as to indicate the authorities' determination in promoting industrial development and the co-operation among the Government, industry, academia and the research sectors. All these are for the purpose of enhancing the overall sustainable competitiveness, providing more employment and business start-up opportunities for people with different educational level, skills and qualifications, so that various strata of society can enjoy the fruits of economic achievements. We should promote economic development, improve people's livelihood and create more opportunities for upward social mobility of the new generation.

Deputy President, in regard to my views on the amendments of the Members, I will give my supplementary remarks in due course. With these remarks, I call upon Members to support my motion.

Ir Dr LO Wai-kwok moved the following motion: (Translation)

"That this Council urges the SAR Government to expeditiously formulate a long-term, comprehensive, balanced and forward-looking industrial policy to introduce development strategies and ancillary measures for pillar industries, emerging industries and traditional industries respectively, and allocate resources correspondingly, so as to create a diversified environment for employment and business start-up, facilitate Hong Kong's economic restructuring, enhance overall competitiveness, ensure sustainable development of Hong Kong's economy and stable growth of government revenue, and create more upward mobility opportunities for new generations, thus improving people's livelihood."

DEPUTY PRESIDENT (in Cantonese): I now propose the question to you and that is: That the motion moved by Ir Dr LO Wai-kwok be passed.

DEPUTY PRESIDENT (in Cantonese): Five Members will move amendments to this motion. This Council will now proceed to a joint debate on the motion and the five amendments.

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I will call upon Members who move the amendments to speak in the following order: Mr MA Fung-kwok, Mr YIU Si-wing, Mr Kenneth LEUNG, Mr Charles Peter MOK and Mr SIN Chung-kai; but they may not move amendments at this stage.

MR MA FUNG-KWOK (in Cantonese): Deputy President, the term "Four Asian Tigers" was frequently mentioned in 1980s. It refers to the four outstanding Asian economies, namely Hong Kong, Taiwan, South Korea and Singapore, the achievements of which have served as role models to many countries. However, when people talk about these four tigers once again today, their praise will go to the cultural and creative industries of South Korea, the chip technology of Taiwan, the maritime industry and petrochemical industry of Singapore. As for Hong Kong, apart from living on our fat by clinging to our ranking as the freest economy in the world as well as our status as the financial centre in Asia, we have indeed lagged far behind and have made no attempt to make progress as far as the development of an industrial policy is concerned. We can no longer compare ourselves with South Korea in the development of cultural industry. The prospect is not promising for our high-tech industry either, while we have already been overtaken by the Mainland and Singapore in our attempt to maintain the status as a shipping centre. Therefore, I absolutely agree with and support Ir Dr LO Wai-kwok's motion to urge the SAR Government to formulate a long-term and comprehensive industrial policy.

Nevertheless, I would like to emphasize that in determining the strength of a city, economic or industrial development is no longer the only indicator. Enabling its people to have a healthy body and lead a rich spiritual life is equally important in enhancing the city's competitiveness. Therefore, I would like to highlight in my proposed amendment to the original motion that industrial policy should not only serve as a propeller of economic development but also help enhance the humanistic quality of Hong Kong people, bring the metropolitan glamour of Hong Kong into full play and promote the soft power of the city. Hence, I would like to focus my speech on the importance of the cultural and creative industries as well as the sports industry.

By looking into Hong Kong's industrial structure, we can see that in the past 10-odd years, the four pillar industries have contributed about 60% of the Gross Domestic Product (GDP). However, it is neither healthy nor desirable to rely solely on the four pillar industries to support local economic development. LEGISLATIVE COUNCIL ─ 19 March 2015 7787

I, together with friends in the New Century Forum, have been urging the Government to strengthen its efforts to promote diversified development of different industries. Although support measures have been introduced by the SAR Government persistently to nurture emerging industries, these industries are regrettably developing with a very slow growth rate due to the lack of support from an industrial policy and the absence of vigorous promotion and participation on the part of the Government. The growth rate of the so-called six priority industries introduced by the former Chief Executive is barely satisfactory, as its GDP contribution only increased slightly from 7.4% in 2008 to 8.7% in 2012.

Deputy President, among the many emerging industries, the cultural and creative industries are particularly important for the promotion of the soft power of a city. When it comes to the cultural and creative industries, a comparison would inevitably be drawn with South Korea. In recent years, the influence of the cultural industry of South Korea, including its music, television, film, animation and comics or products in other creative sectors, has become so significant in both the Asian region and the international world that it is the envy of many.

We have to understand that the success of South Korea today is not a result achieved by chance or by sheer luck. It is attributable to the planning and proactive efforts made by the South Korean Government as early as over 10 years ago. After the Asian financial turmoil in 1990s, the South Korean Government actively encouraged industrial restructuring and vigorously promoted the development of the cultural and creative industries. In 1999, the Cultural Industry Promotion Act and the Framework Act on the Promotion of Cultural Industry were enacted in South Korea to provide for the development strategy and the medium- and long-term development plan of its creative industry. These acts seek to render policy, legal and financial assistance as well as infrastructural support in this regard. In 2010, another legislative exercise was carried out, and the Creative Content Promotion Act was subsequently enacted in response to the development trend of the creative industry. The Korea Creative Content Agency has also been established to implement the relevant plan so as to allow the nurturing and development of the creative industry to be even more institutionalized. Nowadays, the GDP contribution of the creative industry in South Korea has already increased from 3.5% in 2006 to over 7% in 2012, representing an increase of more than 100% within six years.

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Creative industry in Hong Kong is also an area of concern of the SAR Government. In as early as 2003, it was already proposed in the Policy Address that we should actively promote the development of the creative industry so as to add new elements to our economy. In the 2009-2010 Policy Address, the creative industry was also included as one of the six priority industries. Various measures of different scale have been introduced by the SAR Government over the past 10 years to support the development of the creative industry, including those announced in the Budget this year to inject an additional $400 million into the CreateSmart Initiative and to make an injection of $200 million into the Film Development Fund. However, it seems that the SAR Government has made no attempt to formulate a comprehensive strategy for the development of the local creative industry, and no further development has been seen. As a matter of fact, a very low growth rate was recorded in the GDP contribution of our creative industry, increasing only from 3.9% in 2008 to 4.9% in 2012.

It can be further elaborated that a flourishing creative industry also serves as a catalyst for the development of local arts and culture. Take the current month as an example. It is a blooming time for art fairs as many of them have been scheduled for this month. They include the Art Basel in Hong Kong, the Art Central in the new Central Harbourfront, the Chai Wan Mei Art and Design Festival 2015 in Chai Wan Industrial Area and the Art Gallery Night in Central and Sheung Wan. Apart from fostering the development of the artwork market in Hong Kong, the art fairs have a more important function in building up an atmosphere for cultivating the appreciation of arts in the entire territory so that there would be more opportunity for the general public to come into contact with and take part in art activities. This is also conducive to providing a forum to local artists, who would be given more room to give play to their talents. Therefore, an important objective of developing the cultural and creative industries in Hong Kong is to ensure the optimum use of industrialization for the creation of more room and opportunity for the development of local culture and arts, as well as the provision of diversified channels for their promotion.

Deputy President, I would also like to talk about another emerging industry which is seldom mentioned, that is, the sports industry. The development potential of the sports industry is great since it encompasses a number of trade sectors such as sports training, the supply of sports gear, scientific research and medical science, site management, the organization, sponsorship and promotion of major sports events, and so on. Take the United States as an example. The product value of its sports industry was only US$210 billion in 2002 but it was LEGISLATIVE COUNCIL ─ 19 March 2015 7789 already doubled to US$410 billion in 2010. Realizing the development opportunity arising from the sports industry, researches have been conducted and measures have been introduced persistently in places like Singapore and Taiwan to develop the industry. A policy on the sports industry in China was also announced by the Central Government last year. Its objective is to expand the size of the industry from only Renminbi (RMB) 950 billion yuan in 2012 to over RMB 5,000 billion yuan in 2025, which means an increase by five times in 13 years. In this regard, strategic planning is an important factor to enable the sports industry to become a driving force for sustainable economic and social development.

In fact, Hong Kong's sports industry has good development potential and there are some successful examples in the commercialization of sports events. Every year, visitors from all over the world are attracted to Hong Kong to watch the matches of the Hong Kong Rugby Sevens Tournament. According to the report of a survey conducted by the Hong Kong Tourism Board in 2011, the Tournament held that year attracted over 20 000 overseas visitors to Hong Kong. They stayed for six days in average and each of them spent $12,800. The direct economic benefits brought by these visitors amounted to almost $300 million.

Regarding the contribution of sports to society, the Chief Executive is absolutely wrong in suggesting that sports have no part to play. Thus, I hope efforts would be made by the Government to promote sports development in future so that more major sports events such as the Formula E Championship Race and bicycle racing events would be held in Hong Kong. More international events should also be organized to tie in with the development of a Multi-purpose Sports Complex at Kai Tak so as to attract more visitors to come to attend such sports events in Hong Kong, which will in turn help stimulate consumption. Our failure to fully develop the sports industry in the past is mainly attributable to the fact that the SAR Government has neither attached importance to this area nor tried to explore the ways to bring the economic potential of sports events into full play.

As a matter of fact, the sports industry is developed not solely for the economic benefits it brings but also for the promotion of the sustainable sports development in Hong Kong through industrialization. On the one hand, with the introduction of commercial activities or sponsorship, more development resources can be tapped for the local sports sector to support the development of different athletic activities and the training of athletes. Breaking new grounds 7790 LEGISLATIVE COUNCIL ─ 19 March 2015 for the sports industry would also help to open more alternative career paths for retired athletes and in the long run, encourage young people to take up sports as their career. On the other hand, more people would be attracted to watch and even participate in various sporting games if a greater number and variety of sports events or competitions can be organized. This will promote the spirit of sport for all.

Deputy President, culture and sports are more than leisure activities for the people. If they can prosper, people's quality of life will be improved, their humanistic life will be enriched and social cohesion, as well as people's social commitment, will be enhanced. Moreover, culture and sports are also highlights of the image of a city. That being the case, although government policy and resources are pivotal in local cultural and sports development, the potential of industrializing such sectors can never be neglected. Public or commercial supports should become one of the driving forces to further back up local cultural and sports development. In order to bring these supports to optimum use, the Government has to make efforts to let them work in co-ordination with the policies on land, taxation, population and local industries and give more attention to the creative industry and the sports industry of Hong Kong, thereby providing impetus to local cultural and sports development and enhancing the soft power of our city.

Deputy President, it would not be easy for the SAR Government to have a change in its thinking all at once but it can start to take place from today onward. I hope that when the term "Four Asian Tigers" is mentioned once again in the future, Hong Kong will be appreciated not only for its performance in finance, property and tourism sectors but also as a city of life with metropolitan glamour and characteristics.

I so submit. Thank you, Deputy President.

MR YIU SI-WING (in Cantonese): Deputy President, I thank Ir Dr LO Wai-kwok for moving this motion. In my amendment, I have added wordings pertaining to the tourism industry because since the Mainland introduced the Individual Visit Scheme (IVS) in 2003, the tourism industry in Hong Kong has entered a golden decade. Although this has benefited the economy and created numerous development opportunities for the related trades, a lot of problems affecting people's livelihood have been caused at the same time. People of LEGISLATIVE COUNCIL ─ 19 March 2015 7791 different backgrounds and political stances hold different views, and some have begun to query whether Hong Kong's tourism industry can stand to be one of the four pillar industries for the economy. This is worth our consideration.

Developing tourism brings with it a lot of advantages, which include little pollution and creating employment for people with low skills. Thus, both the developing and developed countries regard tourism as a sunrise industry. A study report by the Oxford Economics forecasted that in the next decade, tourism industry would see an annual growth rate of 5.4%, while that of the global GDP would be 2% only. Among all, the Asia Pacific region would become the strongest driving force for the growth of outbound tourism. It is estimated that by 2023, the Asia Pacific region will out-perform Europe with its consumption reaching as high as US$750 billion and accounting for 40% of the total consumption for outbound tourism worldwide.

China's outbound travel market has always been impressive. In 2005, the growth rate of China's outbound travel just stood at 1%, but with rapid GDP growth and high consumption, it has seen startling development in recent years. In 2014, the number of people departing China rose to 109 million, up from 98 million a year before. By 2017, the Mainland will overtake the United States to become the largest source of outbound tourists worldwide. In the meantime, the report also showed that the rapid growth in tourism was not limited to China. In the coming decade, the annual growth in the number of tourists for Russia, Brazil, India, Indonesia and Turkey will also reach 5%, mainly due to an increase in income and improved life quality of the people.

In face of such trends, all countries are developing tourism. Even for the United States and Japan, which in the past did not have friendly ties with China, they are also having their eye on the Mainland market for inbound tourists, and are trying to remove entry restrictions. When countries around are admiring the handsome number of tourists Hong Kong is receiving, some people here are making a big fuss on the pretext of the deeds of parallel goods traders and uncivilized behaviour of individual tourists from the Mainland. They took radical actions to storm the tourist areas, insult or even push and shove Mainland tourists. They publicized "Hong Kong independence" to incite China-Hong Kong conflicts. Facing these behaviours, the Government needs to enforce the law strictly.

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The problem now is: Given the trend in the global development of tourism, should Hong Kong continue to pursue room for development, or should we close our door and be complacent?

Looking back at the 10-odd years since the introduction of the IVS, the number of Mainland tourists to Hong Kong has been seeing a double-digit growth every year. Apart from the newly opened Disneyland and Ngong Ping 360, only a few other new facilities have been provided by the SAR Government to cope with the increase in tourists. Moreover, since the Government has not paid much attention to the opinions expressed at the districts and by the industry, a raft of problems causing disturbance to the people have cropped up in some areas which see a high concentration of tourists or parallel goods traders. Much popular discontent has erupted in some places. Coupled with those people harbouring political motives who added fuel to fire, it was just normal that some people came up with suggestions to restrict the IVS. However, so long as the SAR Government can understand public sentiment and formulate timely and targeted measures, I believe the people of Hong Kong will treat the problems caused by Mainland tourists in an objective manner. According to the information I have gathered, it is estimated that the capacity of Hong Kong to receive tourists can reach a new level.

Regarding investment in tourism-related construction projects in the mid to long run, we have launched the Hong Kong-Zhuhai-Macao Bridge and the Guangzhou-Shenzhen-Hong Kong Express Rail Link; as for new tourist attractions, we will have the Kai Tak Fantasy, the third hotel and phase two for Disneyland, the expansion of the Ocean Park; other ancillary facilities include the new Convention and Exhibition Centre at the Shatin to Central Link, the West Kowloon Cultural District, the Kai Tak Multi-purpose Sports Complex; large scale infrastructural projects in the future will see tourism elements, including areas like Lantau, Northeast New Territories, Hung Shui Kiu, the Lok Ma Chau Loop. It can be seen that together with the existing facilities, we have favourable tourism resources and transport ancillaries, and the level of convenience is even higher than those of most cities around the world. Hong Kong has all the conditions to become a world-class city for tourists. Therefore, I am confident that tourism can remain a pillar industry for Hong Kong.

To ensure a healthy and sustained development for tourism, the Government should set about drawing up a development blueprint for the future five to 10 years. Through analysing the consumption and travel features of LEGISLATIVE COUNCIL ─ 19 March 2015 7793 different kinds of tourists, and making reference to the transport, accommodation, site-seeing, shopping and catering facilities, as well as the density of residences, the Government should further assess the capacity of the various districts in receiving tourists, and formulate measures to divert tourists, in particular Mainland tourists.

According to the information provided by the Hong Kong Tourism Board, tourists visiting Hong Kong in 2014 can be classified into three consumption models. The first model encompassed overnight visitors coming from overseas and the Mainland. They accounted for around 32 million person-trips and mainly conducted their activities in the conventional busy tourist areas. Their per capita consumption stood at around $8,000, and they made bigger and more obvious contribution to the different levels of Hong Kong's tourism industry. They are the major source of tourists which we are going after.

The second model featured day-trip visitors, estimated at 13 million person-trips. Indisputably, as residents in different parts of Guangdong get more familiar with the conditions in Hong Kong, Hong Kong has become a good place for them to visit and relax during the weekends and festival breaks. As the majority of them have visited the conventional tourist attractions and shopping areas, they will choose some unconventional attractions, such as the outlying islands and country parks, and go to various places to savour delicacies, buy local products and snacks, and take part in Hong Kong's festivities. These tourists help propel the local economy, and contribute to boosting the people flow of museums and country parks which see a low utilization rate. So long as we can step up publicity of those areas or attractions which can receive more tourists, this group of tourists will be conducive to diverting tourists from the busy areas and spurring the local economy.

The third model referred to the shopping tourists and parallel goods traders with Shenzhen residency and who came to Hong Kong on multi-entry permits. It was estimated that they made 15 million trips last year. Together with those Hong Kong residents who make their living on parallel trading, they are the main group causing serious disturbances in the New Territories at the moment. The Government has to think of ways to resolve the situation. Many people suggest that the scrapping of the multi-entry permit system can serve the purpose, but I consider it will only have limited effect, as the parallel goods syndicate can switch to using Hong Kong people to bring the goods. I heard that a shopping centre at the Lok Ma Chau border would open at the end of the year, and it could 7794 LEGISLATIVE COUNCIL ─ 19 March 2015 receive up to 10 million people every year. Although this may not help divert the parallel goods traders, it can definitely divert those tourists who are here to buy other goods. If the Government continues to look for land in the vicinity of the border crossings at Lo Wu, Shenzhen Bay, the artificial island for the Hong Kong-Zhuhai-Macao Bridge, and Liantang for constructing shopping centres of scale at the border to divert shopping tourists, it will surely help ease the grudges of the New Territories residents.

Deputy President, I hope that the Government can learn from past successes or failures, and formulate long-term development planning for tourism based on the future development trend of tourists who come to visit Hong Kong. Then, the overall reception capability of Hong Kong can be enhanced, and the possibility of tourism losing out to remain as one of Hong Kong's pillar industries can be avoided. I hope the Government will make efforts in this regard.

Deputy President, I so submit.

MR KENNETH LEUNG (in Cantonese): Deputy President, mainly out of two important considerations, I proposed an amendment to Ir Dr LO Wai-kwok's original motion.

First of all, having weathered different global economic crises in the past, including the Asian financial turmoil, the economic downturn brought by SARS as well as the financial tsunami, Hong Kong has learnt a stiff lesson, this is, our economic development cannot rely too much on a single or a few industries. An important consideration, among others, in the discussions on economic diversification is the need to control risks or divest risk, so that economic activities will not excessively concentrate on a few areas and our economy will not bear the brunt of a global economic downturn. Another reason why I proposed an amendment is related to the motion we have just debated on. The focus of the motion is to increase the chance of upward social mobility for young people and Hong Kong people, thereby expanding the ratio of the middle-class population. Deputy President, the overall economic structure of Hong Kong has changed very little in the past 20 years. The Government of different terms in the past advocated the development of emerging industries or the restructuring of the economy, but then why, 20 years later, the economic structure of Hong Kong has undergone no significant changes?

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I think a major cause of this phenomenon is the time lag that existed whenever the Government proposed to develop a certain emerging industry. Before putting forth such proposals, the Government needs to conduct detailed analyses and studies on the overall status of Hong Kong and these analyses and studies include the prevailing demand and supply of manpower in Hong Kong, land's planning and even our edges or inadequacies in the entire Asian region and the world. For instance, if the Hong Kong Government notices that the film industries or creative industries in our neighbouring region (such as those in South Korea) are thriving, it will then take a few years for our Government to roll out such measures. But we will lose the business opportunities because we are lagging in time. Hence, the Government should frequently or even annually conduct and update these overall analyses on manpower resources, land's planning or even competitiveness.

In my opinion, in order to successfully develop an industry, we should first look into Hong Kong's prevailing status, its edges and inadequacies. We should also look from the perspective of a competitive economy, that is, how Hong Kong enjoys a comparative advantage, or disadvantage, as compared with other economies in the neighbouring Asian region or even economies worldwide. We should not bank on the personal experience of public officers alone, who would say that Hong Kong could do many things, such as the Cyberport, fashion port and Chinese medicine port put forth in the past 10-odd years. These are nothing but empty talks because, after all, global economic development or market development is market-led. If we are to take a leading position in the market, we need to have foresight and a clear understanding of our own advantages and disadvantages as well as the direction of development, rather than starting to study how to develop an industry only when other countries intend to or have already started to develop such an industry. By then, it would be too late.

According to past experience, many modes have been advocated and adopted for the development of industries, no matter at the era of TUNG Chee-hwa or Donald TSANG. One can say that these advocated mode of industrial development are works projects proposed according to the will of officials. They are flawed and cannot change the present structure of industries. I thus proposed an amendment, calling for comprehensive studies on the mode of long-term development and competitiveness of Hong Kong be conducted before developing an industry, and that the direction of all industrial policies and their measures be formulated on the basis of these studies. We must have a clear 7796 LEGISLATIVE COUNCIL ─ 19 March 2015 grasp of our real situation and the challenges facing us before we can provide remedies that can correctly respond to our economic industries. Here, I will not propose which industry should be, or should not be, developed. As I have said, this should be led by the market. The entrepreneurs in Hong Kong should have the foresight as to which industry to be developed, though the industry should also be compatible with the needs of Hong Kong.

In another debate in this Council I mentioned the four major criteria which need to be met before an industry is qualified as suitable for development in Hong Kong. First, it should focus on research and development; second, it should be high valued-added; third, it should be low in pollution because a city crowded like ours cannot accommodate another high-pollution industry regardless how much economic benefit it could bring us; and fourth, it should occupy little land, as land supply is a critical issue in Hong Kong and we cannot afford to develop an industry that occupies a lot of land.

Another issue that is related to the discussions on the development of industries is the lack of a strategy with detailed planning and a vision after an industry is proposed for development. Take the recent Budget as an example. The Financial Secretary put forth some industry-related proposals. He also mentioned the two main obstacles for developing industries in Hong Kong, that is, land and manpower resources. But these are nothing but cliché. We all know that, and also the economists know that, land and manpower certainly are the two major elements for economic development. The point is, how we are going to tailor these elements to compliment the future economic development of Hong Kong. Unfortunately, the Financial Secretary did not say a word on it.

The Financial Secretary said in the Budget that more commercial buildings are needed. However, does he know that, apart from Grade A office space, we also need Grade B office space or other types of commercial buildings?

Regarding manpower training, apart from training a large number of graduates with skills and knowledge, we also need to consider two criteria, that is, their portability and transferability. In other words, these young graduates, though trained to practice a certain profession, must be able to transfer the skills they have acquired to another profession. That is why Liberal Studies or an all-round education is so important.

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In order to avoid turning the vision of having long-term industrial development into a slogan, in my opinion, the Government can establish indexes or performance indicators when it sets down a certain target industries for development. Such indexes can focus on the following aspects: the contribution of the industry to the overall economic performance, to employment, to the effect of improving local employment structure and social mobility, to tax revenue of the Treasury, as well as to the overall rate of return of government subsidies for industries.

At the same time, I think the Government should clearly define its role when it promotes the development of industries. Instead of taking a leading role, it should work with the business sector because the pre-condition for promoting industrial development is creating a favourable environment for business start-ups, so as to encourage ambitious businessmen to create their own business and continue the entrepreneurship that has been built up in Hong Kong over the past decades. The Government should also maintain a free market and let it identify its opportunities on its own, and complement the business sector on the policy level. By so doing, our economy will be able to operate on its own freely and will not be dragged down by the global economy.

Deputy President, I so submit.

MR CHARLES PETER MOK (in Cantonese): Deputy President, I thank Ir Dr LO Wai-kwok for proposing this motion on "Formulating a long-term and comprehensive industrial policy" today and other Members for proposing amendments. When checking past records, I notice that this Council has debated issues related to the Hong Kong economy and industrial structure for at least three to four times. Despite the different views voiced, we invariably agree that the foundation of our industries is weak and the industries concentrate too much on a few areas such as financial services, real estate, and so on; and that our tourism industry has relied too much on Individual Visit Scheme (IVS) visitors since the past decade, as if the retail industry would collapse without the Mainland visitors.

A lot has been discussed on facilitating diversified economic development, or the four pillar industries proposed earlier by the Government. However, initiatives such as developing other priority industries and a knowledge-based economy, which are often quoted by the Government as its priority tasks, are yet 7798 LEGISLATIVE COUNCIL ─ 19 March 2015 to change our present economic structure, which is still dominated by certain services industries, financial services industries and real estate industries. Regarding competitiveness, I need not repeat our ranking. We can see for ourselves that our competitiveness is dropping as compared with many other economies in the world.

There has never been a standardized definition on industrial policy and we can have different interpretations for it. What we should think about is: Regarding our industrial policy, do we wish to change the extreme non-intervention policy that we have believed in for a few decades to one that is government-led and with active government planning? To what extent do we wish the Government to intervene? What are the things that we want to change?

As a matter of principle, I certainly agree that the Government should formulate a long-term industrial policy. Although the Government says it has not made any intervention, the statement itself is a form of intervention. The pre-condition is whether it is taking up an appropriate role. Some people are of the view that the Government should pre-empt the monopolization of individual industries by people with vested interests. Other people have said to me that they prefer not to have any intervention by the Government and that they would rather be left alone. Hence, if the Government's active involvement in the market is done inappropriately, its action would sometimes be perceived as an excessive intervention in the free market.

I propose a few directions in my amendment, which I think the Government should adopt when it formulates an industrial policy. They include promoting the development of local innovation and technology industries, improving business environment, allocating government surplus to maintain Hong Kong's international status, nurture talents and provide employment opportunities. A point in common in these major directions is that they are mainly playing a role in supporting and co-ordinating so as to minimize the risk of political blunders, and they focus on improving and building up systems, ability and networks.

Apart from supporting industries with public money, the Government should review the ordinances and the procurement policy, improve business environment, stimulate investments, provide lands, nurture talents, facilitate the building up of an industry-friendly environment for its development and avoid directly picking winners. If we believe in a free economy and fair competition, LEGISLATIVE COUNCIL ─ 19 March 2015 7799 we would not support the practice of picking winners. The Government should indeed take up a certain role in creating a fair environment that encourages free expression of creativity by means of policies.

However, the root of the problem is that the Government has not properly evaluated industrial policies and gauged the effectiveness of the resources input. In the end, although the Government has spent the money, firstly it very often failed to conduct frequent review. Secondly, it did not lay down any key performance indicator. Instead, it would only say that its policy had achieved good results.

We certainly support the proposal passed a few weeks ago on injecting $5 billion into the Innovation and Technology Fund (ITF). The funding allocated to ITF earlier has already been used. With interests deducted, the ITF has actually spent $8.9 billion. Since its operation in around 1999 and 2000, the system of ITF has only undergone very minor changes over the past 10-odd years. The Government often stalls on conducting comprehensive reviews on its work, not until its departments are singled out by the Audit Commission for criticism. This precisely echoes the belated awareness of the Government, which Mr Kenneth LEUNG mentioned just now.

Deputy President, next I wish to bring out a few points. First of all, how we can make better use of government resources. The Government has recorded over $38 billion in surplus this year with its fiscal reserves equivalent to 23 months of government expenditure. The Government often says that it will diversify our industries, but at the end of the day, it only resorts to using funds. The innovation and technology industries in Hong Kong, which I am more familiar with and have thus used as an example, are strong in terms of their fundamentals, but we have repeatedly said to the Director of Bureau that financing is what the industries are comparatively weak in when they set up their business. We note that the Financial Secretary has only earmarked $50 million in his Budget for the Hong Kong Science and Technology Parks Corporation to set up a matching fund, which together with the private funds will only pool $100 million to $200 million. As compared, other similar government-led investment funds are doing much better. It has been reported that almost $2.5 billion are accumulated in similar funds in the Guangdong Province, and a few $100 million in funds in Singapore and Taiwan respectively. In China, at least $30-odd billion is pooled in the funds in the Mainland on the whole, not to mention the $1 billion fund set up by the private company the Alibaba Group.

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The Government should explore how to increase matching investment from the private sector, which I think is a very effective and promising strategy that can be used in developing innovation and technology, and it should also increase using deliverables and services from local technology industry. Moreover, a scheme worth making reference to is the Innovation Voucher launched by the British Government recently. The scheme encourages small and medium enterprises to adopt technologies and conduct technological researches. Its funding not only benefits universities and research centres, but also serves to stimulate the market to directly engage in technological researches.

The second point is about international exchanges and co-operations. The uniqueness of Hong Kong lies in our international perspective. We are not just "another city in China". Last year I joined the Legislative Council delegation to visit Finland and I noticed that its government was very supportive of its innovation and technology enterprises. I also went to Korea on another visit and met with its innovation and technology officials. These international exchanges are very inspiring in that they help us to have a clearer picture of how Hong Kong should position itself and formulate its policies.

Eighteen Hong Kong Economic and Trade Offices have been set up across the globe. I hope that the Director of Bureau, or the future Secretary for Innovation and Technology, will make better use of these resources to promote our innovation and technology, and open up more opportunities for Hong Kong to co-operate with overseas countries on the technological front; or they can even set up a centre abroad (such as in the Silicon Valley in the United States) to assist our innovation and technology enterprises to occupy a position in top-notch and internationally influential markets (such as the Silicon Valley), or they can attract overseas technology enterprises and talents to Hong Kong for development. In fact, Singapore and Taiwan have already done so recently. They set up an office in the Silicon Valley to facilitate mutual exchange of technologies.

The third point is about human resources. According to recent figures from the Census and Statistics Department, some 70 000-odd people are currently employed in the Information and Technology (IT) sector. People employed in related industries such as IT consultancy, software development and programming have increased by 30% to 40% over the past decade, but they only account for less than 3% of the total employment population. Some media workers and reporters have asked me whether 3% was too little. I think the problem is that the variety of jobs in the IT sector now cannot match with its LEGISLATIVE COUNCIL ─ 19 March 2015 7801 academic training. Many graduates said only a quarter of them in the class joined the IT sector, while the rest who could not develop their career in the IT sector took up subcontract projects, which had become very popular with the Government taking a leading position in subcontracting its projects, or opted for developing their career overseas. This has resulted in the situation of companies unable to fill their vacancies and people unable to find a job.

Many international enterprises have expressed an interest in setting up a research and development (R&D) base in Hong Kong, which could create many job opportunities. However, the Government, lacking a long-term strategy, did not provide any support or timely incentives to attract these enterprises to come to Hong Kong. In the end, these enterprises chose to set up their bases in Singapore, which is more proactive in this regard. The manager in charge of the Hong Kong office of a multinational IT company told me last week that his company needed to opt between Hong Kong and Singapore to set up an R&D centre, which would need recruiting 3 000 supporting staff; and that Singapore was very proactive to the proposal, while Hong Kong was very "laid-back". In the end, the 3 000-odd job opportunities went to Singapore, while only 200 staff remained in my friend's office performing sales work. Not everyone is suitable to be a boss and not everyone can withstand risks. Thus, we still need to create more quality job opportunities for young people in Hong Kong.

The fourth point focuses on reviewing the law and improving business environment. In response to an oral question on "crowdfunding" yesterday, the Secretary for Financial Services and the Treasury Prof K C CHAN said that Hong Kong was not lagging behind in financial technology, but our policy on Internet financial technology was indeed not very innovative. At present, we lag behind other cities in terms of the development of our financial technology (The buzzer sounded) …

DEPUTY PRESIDENT (in Cantonese): Mr MOK, your speaking time is up.

MR SIN CHUNG-KAI (in Cantonese): Deputy President, first of all, I wish to thank Ir Dr LO Wai-kwok for proposing this motion. As pointed by Mr Charles Peter MOK just now, this is not the first time the current term of Legislative Council discusses subjects in this area. Indeed, subjects in this respect are discussed in every term of Legislative Council. The motion today provides this 7802 LEGISLATIVE COUNCIL ─ 19 March 2015

Council with an opportunity to discuss how policies should be formulated to make good use of the huge fiscal reserve to enhance Hong Kong's competitiveness. The Democratic Party and I will propose an amendment to the motion, as we hope that the Government can come up with a range of policies to address the problem that Hong Kong's global competitiveness has shown signs of decline in recent years.

Let us take a look at the situation, if we are to promote the diversified development of industries … I have mentioned a number of competitiveness reports in my amendment, one of which is the Index of Economic Freedom Report published by the Heritage Foundation this year. According to this report, even though Hong Kong has been at the top of the rankings for 20 consecutive years, Singapore, which stands second, has been catching up with us over the past few years. In the IMD World Competitiveness Yearbook 2014 published by the International Institute for Management Development, Lausanne, Switzerland, Hong Kong has dropped from third in 2013 to fourth, showing a decline for two consecutive years, and this is the first time since 2004 that Hong Kong has dropped out of the top three and been overtaken by Singapore. In the Global Competitiveness Report 2014-2015 published by the World Economic Forum in 2014, although Hong Kong remains seventh in the rankings, it lags far behind Singapore which stands second, and Hong Kong's rankings in innovation and higher education have both declined.

As Members are aware, I have proposed a number of polices and measures in my amendment, including revitalizing the various industrial estates, so as to induce the return of the industrial sector for development; expanding the uses of the existing Innovation and Technology Fund, so as to support the development of innovation and technology industries; and reserving more lands for developing data centres and develop Hong Kong into a data hub of cloud computing in Asia. Besides, I have also proposed measures to promote the setting up of a producer responsibility system and the development of green industries. Certainly, some of the proposed measures are based on our subjective judgment or what we believe the market needs. Perhaps Mr Kenneth LEUNG may not agree, but we call it the "pick winners" approach, and by that we mean the Government should formulate policies to enhance the advantages we already possess.

However, there are some areas where we have to sound the alarm. According to the aforementioned Index of Economic Freedom Report published by the Heritage Foundation early this year, even though Hong Kong remains the LEGISLATIVE COUNCIL ─ 19 March 2015 7803 world's freest economy, our ranking in perceived level of corruption has dropped from third to 15th, showing a decline for two consecutive years. This is good evidence that the corruption case of the former Chief Secretary for Administration, Rafael HUI, has tarnished Hong Kong's clean image. As regards the former Chief Executive Donald TSANG, he has accepted hospitality from some tycoons and is now involved in a serious of corruption allegations. The Independent Commission Against Corruption has been investigating into the case for three years but still has not come up with any result, even though Rimsky YUEN has recently remarked that a decision would soon be made. In view of these series of corruption cases involving senior government officials, one cannot help but worry that the corruption culture prevalent among the Mainland officialdom might spread to Hong Kong. Indeed, a graft-free government is Hong Kong people's most cherished core value. The efforts made by the Government in these 40 years to combat corruption and bribery cases to maintain Hong Kong's quality business environment are a major factor contributing to attracting investors to our city.

Speaking of competitiveness, we always compare our city with Singapore. As indicated in the rankings I have mentioned earlier, Singapore has already surpassed Hong Kong in two to three aspects in recent years. According to the report published by the International Institute for Management Development, Lausanne, Switzerland, Singapore has already surpassed Hong Kong.

One point I wish to raise is related to our so-called major industries. In recent years, the economy of Hong Kong has been relying on four major sectors, namely, trading and logistics, financial services, professional services and industries/businesses, as well as tourism. Among them, trade and logistics make up a large percentage of Hong Kong's domestic product, standing at 24.6% in 2012. According to a Legislative Council research brief, these four major sectors have already constituted 58% of our domestic product. Even though this figure is rather close to 2007's 60.3%, it is still very obvious that some of the trades and industries are declining and thus leading to the fall in percentage share. As for our part, we need to find out the contributory factors.

If we take a closer look at the rates of growth of these four major sectors, we can see that the trade and logistics industry was confirmed as a pillar industry for the first time in 2002, and its growth rate in the 10-year period between 2002 and 2012 is 57%. Compared to the 161% growth rate of the tourism industry and the 105% of the financial services industry recorded in the same period, the 7804 LEGISLATIVE COUNCIL ─ 19 March 2015 growth rate of the trade and logistics industry has obviously slowed down. There is a simple reason. Let us take a look at our neighbouring areas like Shenzhen, and so on, their logistics industries are growing much faster than ours. With the Mainland economy opening up further, Hong Kong's role as a trade intermediary will inevitably be weakened. Hence, in addition to increasing the relevant investments to help the sector to move up the value-added ladder, the Government should also strive to maintain Hong Kong as a transportation hub.

In order to maintain Hong Kong's competitiveness, our economy should not rely solely on the four major industries. Regrettably, since LEUNG Chun-ying assumed office, no mention has ever been made of the six major industries proposed by Donald TSANG a few years ago. As they are not brought up anymore, I wonder if they are considered as obsolete like the way TUNG Chee-hwa treated his policies.

We should promote diversification of Hong Kong's industrial structure, allocate more funding to the education sector and provide more places for subsidized degree programmes, so as to cater for the needs of a knowledge-based economy. Actually, the Government has been recording structural surpluses in the past years. This year's surplus is over $60 billion while last year's surplus was quite handsome too. John TSANG was in office as the Financial Secretary for seven years, and the annual surplus recorded by the Government in each of those seven years was close to $30 billion on average. Nevertheless, the Government is going to allocate only 22% of its expenses on education in the coming year. Even though this figure is higher than 2014's 20.7%, no substantial increase has been made when compared to the education expenses in 1998. As indicated in the Global Competitiveness Report published by the World Economic Forum, Hong Kong's tertiary education ranking is obviously on the low side, only the 22nd.

Secretary, we have to be very careful with one thing. Actually, when we look at the reports … It is a pity that only one Secretary is now present in this Chamber, as Secretary Eddie NG is nowhere to find. Speaking of competitiveness, it is imperative for a knowledge-based economy to attach more importance to education. According to some reports, the number of Hong Kong children studying abroad has increased by 20% in the past two years, and most of them are from middle-class families ― the last motion we debated was related to the middle class. I do not know whether this is because Hong Kong has too many rich people or because the Hong Kong people have no confidence in the LEGISLATIVE COUNCIL ─ 19 March 2015 7805 local education institutions. Compared to Singapore, Hong Kong's ranking in education is lagging far behind. Tertiary education is an important factor contributing to a city or region's enhancement in competitiveness, and the universities across the world are undergoing changes to cope with the needs of the 21st century. With the world economy becoming more globalized and knowledge-based, we have to focus our attention on enhancing our own competitiveness in nurturing local talents and attracting overseas professionals and manpower resources. This is the key to success. Hence, it is crucial to strengthen the support to our tertiary education sector.

Even though Hong Kong is one the freest markets in the world, our innovative capacity is lagging behind other places to a certain extent. According to a report published by Bloomberg, South Korea tops the list of "most innovative countries", Singapore comes 7th. As a regional city, Hong Kong's ranking is lagging far behind, standing at 27th. I and the Democratic Party is currently urging the Government to allow enterprises to have double deduction of the expenses on employee training, environmental-friendly installations and technological research projects when filing their profits returns, so as to encourage enterprises to provide in-service training for their employees, strengthen their environmental efforts and engage in more technological research projects, thereby enhancing Hong Kong's competitiveness. It is our hope that by providing more tax incentives, the Government can help enterprises to upgrade their innovative capacity.

Deputy President, to be very honest, the proposals I put forward to amend the motion have in fact been raised in my motion moved and passed last year, only that not much progress has been made. Ir Dr LO Wai-kwok, now that you have moved this motion this year, who do you think will move a similar motion in the coming year? In my view, when it comes to certain areas, the relevant Policy Secretaries seem to be doing things without achieving any results. I wonder if we are being too anxious or the Government is being too slow in promoting the diversified development of industries. We know that while the Government will be injecting $5 billion into the Innovation and Technology Fund, the funding scope has put no emphasis on requirements like innovation, expansion, and so on.

(THE PRESIDENT resumed the Chair)

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I understand that the Financial Secretary's annual Budget is not the subject matter of today's motion debate, as there is still a week or two to go before the relevant debate commences. Even though this year's budget is a bit more proactive than the previous ones, I still consider that with a surplus of more than $60 billion dollars, the Government should have ample capacity to put in greater efforts. In my view, the Government has put in enough strength in "handing out" money, but its efforts to promote diversified development of industries are still inadequate in strength.

SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT (in Cantonese): President, the development of industry has all along been an indispensable part of Hong Kong's economy. From the manufacturing industry, which was well known internationally for producing high quality products at low cost in the last century, to industrial diversification with emphasis on the development of knowledge-based and high value added industries nowadays in the 21st century, both the traditional and emerging industries of Hong Kong have constantly given impetus to our economy and promoted development and innovation. As these industries give a lift to the overall competitiveness of Hong Kong, they also bring different opportunities to Hong Kong at the same time.

The Government is dedicated to implement industrial policies that can promote diversification and sustainable development of Hong Kong. Hong Kong allows free flow of goods and capital. We have top quality infrastructure, sound financial regulatory framework, simple taxation system and good international reputation. By virtue of such an excellent macro-environment for running business, the four major pillar industries of Hong Kong, namely trading and logistics industry, tourism, financial industry and business and professional services, have managed to grow continuously over the years by leveraging on the geographical advantages. They also facilitated Hong Kong's economic transformation process and enhance the competitive edge of Hong Kong.

The four major pillar industries can generate substantial leveraging effect, which can boost the development of the relevant industries and create employment opportunities. At the same time, they can expand in volume and varieties as they benefit from the rocketing economic development of the nation. The Government will therefore proactively grasp the opportunities before us and implement appropriate facilitation policies and measures to promote further LEGISLATIVE COUNCIL ─ 19 March 2015 7807 development of the pillar industries. For example, the Government has been making efforts to help Hong Kong businesses develop market in the Mainland through various concession policies under the CEPA; negotiating free trade agreements with the Association of South-East Asian Nations (ASEAN) in a bid to help Hong Kong businesses to establish a foothold in the ASEAN markets; assisting in linking up Mainland stock market and international stock markets through the implementation of the Shanghai-Hong Kong Stock Connect last year; as well as the "Silk Road Economic Belt" and "21st Century Maritime Silk Road" (what is simply referred to as "One Belt and One Road"). In addition, the Government will proactively conduct planning accordingly with a view to developing business opportunities for the business sector of Hong Kong, and promoting long-term and diversified growth in the economy of Hong Kong.

The Government is deeply aware that the pillar industries need to evolve with the times and stand up to challenges by keeping pace with the volatile global economic trends. To this end, in recent years, the Government has studied and finalized a number of projects in a bid to enhance the hardware and support facilities of Hong Kong, including, among others, stepping up the construction of transport infrastructure, negotiating with the Walt Disney Company on the expansion of the theme park, exploring the development of logistic sites, and so on, in order to reinforce and beef up the development of the key industries.

In addition to supporting the pillar industries, the Government attaches great importance to exploring emerging industries and markets with potentials, so that new development opportunities can be identified to enlarge the economic base of Hong Kong and to provide more development space to the new generation. In this respect, many people agree that given the limited land resources in Hong Kong, the development of high value added and high technology industries that can generate quality business start-up and employment opportunities is the right direction for our industry. Hence, facilitating the development of innovative technology and creative industries is one of the key areas that the Government works on to enrich and promote diversification in our industries. The Government has indeed initiated a number of support measures. For instance, we have proposed to inject funding to the Innovation and Technology Fund in order to encourage research and innovation, and enhance the technological standards and competitiveness of industries so that they can move up the value adding chain. We have also proposed to provide subsidies to fashion industry, film industry and the cultural and art sector for nurturing a social environment and atmosphere favourable to creativity, expending the local 7808 LEGISLATIVE COUNCIL ─ 19 March 2015 market while developing overseas market. Moreover, the Government has not overlooked the emergence and potentials of start-up businesses and social enterprises. It provides support to these businesses in various aspects, including financing and business development, with a view to making our industrial platform wider and more diversified so as to increase opportunities.

As everyone is aware, the Government has attached great importance to industrial and economic development. I have elaborated on this in details in my response given just now to the motion debate initiated by Mr Andrew LEUNG. The Government has been proactively implementing a number of policies and measures to maintain an environment that facilitates business operation and assist the development of industries, so as to reinforce and strengthen the existing industrial and economic foundations and promote long-term and comprehensive development. If Hong Kong can continue to leverage on its edges and grasp the opportunities, as remarked by the Chief Executive in the Policy Address, Hong Kong can create a more prosperous economy that provides our young people with the opportunity to put what they have learnt to good use and allow all to realize their potential, and improve their livelihood by moving upward socially.

President, I will continue to listen to Members' views on the motion and give a detailed response later on.

Thank you, President.

MR WONG KWOK-HING (in Cantonese): President, I speak in support of Ir Dr LO Wai-kwok's motion. President, Mr Charles Peter MOK said in his speech that the Government was just paying lip service as far as the development of emerging industries was concerned, while Mr SIN Chung-kai commented that in handling the development of the six emerging industries, the Government of the current term had followed the practice adopted by Mr TUNG, regarding the policy as no longer existed by mentioning nothing about it. In the face of the challenge and smearing by these two Members, why does Secretary Gregory SO not strike back? The challenge and smearing will become facts if he chooses not to answer back. Everyone knows that "my mother is a woman" and thus, if an unreasonable statement is made to suggest that "my mother is not a woman", an attempt has to be made to refute it.

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President, I am really unable to put up with this since the Government has chosen to be a silent victim of unreasonable allegations. If he does not set the record straight, all people in Hong Kong will be befuddled. In fact, the Government of the current term has faced up squarely to the need of developing emerging industries and has devoted a lot of resources and efforts in this regard. The establishment of the Innovation and Technology Bureau, which is filled with twists and turns, is a good example to illustrate my point. Where do all the obstructions and problems come from? The crux of the problem lies in the filibuster launched on a full scale by Members of the pan-democratic camp and the opposition camp in this Council.

(Mr LEUNG Kwok-hung stood up)

MR LEUNG KWOK-HUNG (in Cantonese): President, point of order.

PRESIDENT (in Cantonese): What is your point?

MR LEUNG KWOK-HUNG (in Cantonese): Fellow Members have not stayed here to listen to Mr WONG Kwok-hing and I hope they would return to the Chamber as a quorum is not present.

PRESIDENT (in Cantonese): Will the Clerk please ring the bell to summon Members back to the Chamber.

(After the summoning bell had been rung, a number of Members returned to the Chamber)

PRESIDENT (in Cantonese): Mr WONG Kwok-hing, please continue with your speech.

MR WONG KWOK-HING (in Cantonese): President, the establishment of the Innovation and Technology Bureau is the "baby" of Secretary Gregory SO but its delivery has been difficult. The incident is a monster-revealing mirror, enabling us to see clearly the lies told by the pan-democrats as well as their shamelessness.

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President, I think everyone may clearly recall that when the current term of the Government began in 2012, the proposal submitted to reorganize the Government Secretariat actually requested for a set-up of five Secretaries of Departments and 14 Directors of Bureaux, among which the Culture Bureau and the Technology and Communications Bureau were exactly the two new Bureaux proposed to address the widespread concern among the relevant sectors about the development of emerging industries. However, Members of the pan-democratic camp ― all of them are not present now, including Prof Joseph LEE who is leaving the Chamber ― have chosen to sing an opposite tune in order to "overthrow LEUNG" and striven to obstruct the passage of the proposal right from the very beginning. As a result, although we had gone through all the troubles, the attempt to establish the structure of five Secretaries of Departments and 14 Directors of Bureaux ended up in vain. As evidenced from the incident, it is as clear as daylight to all people in Hong Kong that the pan-democratic Members of the opposition camp do not really wish to ensure a promising future of Hong Kong with the development of emerging industries.

President, the pan-democratic Members have definitely been pressurized by the discontent of the relevant sectors after the efforts to set up five Secretaries of Departments and 14 Directors of Bureaux turned out to be futile. Hence, a press conference was held to openly call for the establishment of a Technology Bureau by the Government. President, such comments are well-founded. According to a news report published in Sing Tao Daily on 16 October 2012, (I quote) "A joint press conference was convened yesterday by Mr Charles Peter MOK, the Legislative Council Member representing the Information Technology Functional Constituency, together with over 40 practitioners from 23 organizations of the technology sector to urge for the separation and re-submission of the reorganization proposal by the Chief Executive LEUNG Chun-ying immediately to establish a Technology Bureau. Mr SIN Chung-kai of the Democratic Party and Mr Alan LEONG of the Civic Party had also attended to show their support." (unquote)

What a spectacular scene for the pan-democrats to steer a U-turn by holding a joint press conference together with those in the trade to urge the Government to separate its reorganization proposal and set up a Technology Bureau. This was taken by the Government as a chance that arose only once in a blue moon and a proposal was thus announced by the Chief Executive in the Policy Address last year to establish the Innovation and Technology Bureau. But regrettably, how did things actually turn out? As soon as an announcement LEGISLATIVE COUNCIL ─ 19 March 2015 7811 had been made by LEUNG Chun-ying to take the proposal forward, a non-cooperation movement was initiated on a full scale to filibuster on almost everything. It is well known to all that under such circumstances, the delivery of the "baby" has been very difficult and, using the absence of universal suffrage as an excuse, they have made up their mind to oppose the Government and overturn the whole thing for various political reasons. Six meetings were held by the Finance Committee to scrutinize the relevant funding application but nothing has been accomplished after 24 hours of deliberation.

President, the Government of the current term has spent two and a half years since 2012 to develop emerging industries in the hope that dedicated measures, organizations, work procedures and resources would be in place to achieve the purpose. But what consequences has it brought? Nothing can be done and why is that so? This is all because of the obstruction caused by Members of the opposition camp on my right hand side in this Council, which has made it impossible for us to do anything. In order to solve the problem concerning the future of Hong Kong, we have to tackle the problem of having Members of the opposition camp standing in the way in this Council when the society is trying to march forward, otherwise there will be no way out.

Thus, it is my advice to the pan-democrats of the opposition camp that they should not use fine words to dress ill deeds or talk like a saint but act like a devil, just as what Mr LEUNG Kwok-hung and his like has done. It is my hope that they would stop the filibuster at once, which will really be of boundless beneficence since it will only be possible for our society to operate smoothly when there is no more filibustering.

(Mr LEUNG Kwok-hung stood up)

PRESIDENT (in Cantonese): Mr LEUNG Kwok-hung, what is your point?

MR LEUNG KWOK-HUNG (in Cantonese): President, point of order. I was about to leave when I heard Mr WONG Kwok-hing cautioning that one should not talk like a saint but act like a devil just as what Mr LEUNG Kwok-hung had done. Do you consider such remarks offensive?

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PRESIDENT (in Cantonese): Mr LEUNG, you will have the opportunity to speak later.

MR LEUNG KWOK-HUNG (in Cantonese): Then, please do not stop me when I try to curse him since I enjoy cursing an evil remnant of the Gang of Four.

PRESIDENT (in Cantonese): Mr LEUNG, this is not your turn to speak. Mr WONG Kwok-hing, please continue with your speech.

MR WONG KWOK-HING (in Cantonese): President, I hope Members of the pan-democratic camp would not bundle themselves with those of the radical camp. If they do so, they will have no future; nor will Hong Kong have any future. In order to have emerging industries developed, the ratio of the middle-class population truly expanded and a way out for the young people, Members of the pan-democratic camp should be realistic and rational, and give up the approach of opposing everything, otherwise they will become the real opposition party, raising objection to everything regardless of the rationale behind.

MR TANG KA-PIU (in Cantonese): President, the title of today's motion is "Formulating a long-term and comprehensive industrial policy". Everyone can see that service industry contributes more than 90% to our gross domestic product, amounting to 93%. Of course, people with creativity in the service industry may make some money, but they are no match for the immense rental pressure. Jobs created by the service industry, such as salespersons, front-line service personnel or couriers, are actually low-salary ones. For that reason, what concerns people is that although the current situation of Hong Kong is nearly full employment as mentioned by Secretary Prof K C Chan, because of the slow economic growth, the wages of the vast majority of the middle-class and grass-roots employees can never catch up with the inflation.

Ten years ago, the index of payroll for the transportation, storage, postal and courier services industry in real term was 111.5, but it fell to 101.1 in the third quarter of 2014. Besides, the index of payroll for the accommodation and food service activities sector in real term has dropped when compared with that of LEGISLATIVE COUNCIL ─ 19 March 2015 7813

10 years ago. As such, if we only rely on the service industry by engaging in the speculative high-end real estate industry or financial industry, we are unable to provide the sustainable job opportunities to the vast majority of grass-roots workers for them to make a handsome earning that they can be proud of. Therefore, we fully support the idea of promoting a comprehensive diversification of industries.

Just now Mr WONG Kwok-hing mentioned the issue of the proposed Innovation and Technology Bureau. I wish to relay the views of people in the trade. These people are from the downstream sector of the film industry ― cinemas. I met with representatives of the Hong Kong Theatres Association Ltd (HKTA) earlier. The HKTA issued a submission on 21 September 2011. It recognized the government proposal of setting up the Film Development Fund, and it had no doubt that the Government had listened to the HKTA's views within the existing structure. However, it considered that the Government had not made an effort to help cinemas out. In this year's policy address, the Chief Executive urged everybody to see more movies, and the policy agenda eventually mentioned that the Government would support development of the film industry.

What is the actual development of the film industry? I am going to quote the figures compiled by HKTA. In fact, all cinemas in Hong Kong are members of the HKTA. During its heyday in 1994, the HKTA had 112 members. Each cinema was a member. That is, if the operator of a cinema chain operated nine cinemas in Hong Kong, it would have nine memberships. In 1994, there were 112 cinemas in Hong Kong, with a total of 125 231 seats. At that time, Hong Kong had a population of 6 million. Nevertheless, what is the situation in 2015? It is very miserable. The number of cinemas has declined from 112 to 47 and the total number of seats has decreased from 125 231 to 37 783. Although the Government emphasizes that it will support the film industry, it turns out that the number of cinemas at the downstream sector of the film industry has dropped substantially.

What is our situation when compared with other cities? When compared with Taipei and South Korea, our population ― cinema seats ratio is rather low. It is just a little bit higher than developing regions such as Ho Chi Minh City and Jakarta. One can see from the difficulty faced by the HKTA that efforts should be made from all aspects as far as supporting the film industry is concerned. We should not only focus on the training of talents but also build the necessary facilities, so as to allow Hong Kong people to become movie-goers or patrons. 7814 LEGISLATIVE COUNCIL ─ 19 March 2015

In my opinion, building more cinemas will not only do good to enhancing social harmony and leisure family life but also benefit the film industry itself. Therefore, I wish to take this opportunity to highlight the problems raised by the HKTA on behalf of cinemas ― the downstream sector of the film industry.

I hope the Secretary for Commerce and Economic Development will respond later and tell us how the Government will support the development of cinemas within the film industry. In the planning of the then British Hong Kong Government in the 1960s, cinemas were categorized as community facilities. What does that mean? According to the requirements in those years, there should be 17 cinema seats per 1 000 people. However, in the 1970s, cinemas were defined as retail facilities. In that case, the Government was not required to earmark lands for the construction of cinemas in the planning of new town development.

Nonetheless, it was actually not important. As Hong Kong's economy and film industry were booming in the 1980s and 1990s, a large number of cinemas emerged at that time. In the wake of changes in Hong Kong, however, it seems that the society and Government just let the number of cinemas shrink freely. I hope that in the course of discussing this complicated but holistic issue, the Secretary for Commerce and Economic Development of the SAR Government will talk about ways to support cinemas later. At least the Government should ensure a reasonable growth of cinema seats, rather than allowing a plunge from 120 000 seats at its peak to 37 000 seats now.

In particular, let us take North District and Tai Po as an example. During the 1980s and 1990s, there were four cinemas in each of these two districts, but all of them have subsequently closed down. As such, where can residents see a movie? They can go to Sha Tin or the Festival Walk in Kowloon Tong. However, a cinema in Sha Tin has once been closed for almost three years for renovation works. It is really miserable because the 1 million residents of New Territories East have to go to the Festival Walk if they want to see a movie.

As the Chief Executive urges the public to nurture the appreciation of movies, I hope that the SAR Government will do more than paying lip service only. It should also provide policy support so that cinema operators may be able to find suitable sites and a desirable business environment to operate. If things are purely market-driven, how can developers who owned large shopping centres LEGISLATIVE COUNCIL ─ 19 March 2015 7815 lease premises to cinema operators to operate cinemas at a cheap rent? They might just use the premises to operate supermarkets, restaurants or eateries. For that reason, I hope the SAR Government will carry out the relevant research.

Thank you.

MR ANDREW LEUNG (in Cantonese): President, I speak in support of Ir Dr LO Wai-kwok's motion, which is actually consistent with the motion I moved just now. To expand the ratio of the middle-class population, the authorities have to formulate a long-term and comprehensive industrial policy to increase the opportunities for upward social mobility, thereby facilitating stable and steady development in society.

My speech this time is mainly about the cultural and creative industry. Hong Kong is abundant in creativity, talented people and good intellectual property protection measures, yet it is a pity that the Government gives scanty support to the creative industry. As a result, the industry cannot bring its best into full play. The Government should draw reference from overseas examples and provide funding support to the industry. The authorities should also launch a series of long-term policy initiatives and take the lead to develop the industry. For that reason, I wish to speak briefly on the development strategies of the cultural and creative industries in Hong Kong, South Korea and Singapore.

Singapore attaches great importance to the training of talents. Besides establishing a new arts and design college to nurture talents at professional level and provide manpower training in terms of technical skills and creativity, it makes much efforts in promoting cultural and arts activities in community to cultivate audience, as well as cultivating creativity in elementary education. As to start-up companies, Singapore launched the Early Stage Venture Funding (ESVF) Scheme in 2008 to finance venture capital funds and provide investment for early-stage technology start-ups. The Singapore Government, together with venture capital funds, invested on a 1:1 matching basis to early stage high-tech companies. At the same time, a number of tax concession measures were also provided. Furthermore, it was proposed in its 2015 Policy Address that besides the provision of funding and loans by the Singapore Government to innovation and technology industries, it would also adopt tax concession measures. It would even provide subsidies to enterprises to subsidize the pay rise of their staff, 7816 LEGISLATIVE COUNCIL ─ 19 March 2015 so as to allow enterprises to make use of their capital in research and development investment. Singapore has also formulated a five-year plan for creativity and industrial research, as well as injected $5.7 billion to its National Research Foundation.

Let us take a look at the example of South Korea again. In 1999, the South Korean Government promulgated the Framework Act on the Promotion of Cultural Industries after realizing that it was necessary for the South Korean Government to provide positive support and investment to creative industry. It has also set the estimated expenditure for its Culture Ministry at above 1% of the total national budget. Specifically, the South Korean Government has provided guarantee for loans to be secured by the industry. Various systems are set up to support and establish fair transaction for promoting the circulation of creative works. In view of the production characteristics in its creative industry, South Korea provides intellectual service, transaction and technological development support for one-man creative enterprise. All these have created a very favourable environment for the development of creative industry. In May 2012, a report issued by the Overseas Economic Research Institute of the Export-Import Bank of Korea pointed out that each US$100 worth in export of the South Korean creative contents and cultural industry can prompt a US$412 worth in export of South Korean products, which is commonly referred to as the "four-times effect".

However, if we take a look at Hong Kong, we can see that the promotion of the creative industry is carried out through the funding under various government departments. Most of the funding initiatives are one-off only. The Government makes no long-term commitment. Besides, the allocation mechanism becomes bureaucratic and rigid, which has made the allocation less cost-effective.

More importantly, the Government lacks an overall strategy and target for the development of the industry. It also fails to set up a commanding agency to take the lead in promoting the policy. The ancillary policies are also inadequate. For example, it fails to encourage the public and private sectors to give support to local creation, to cultivate audience and to foster local talents, as well as to draw up measures to cater for the financing needs of the industry. All in all, it fails to create the necessary environment which may help the creative industry take long strides forward.

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The above examples may illustrate that apart from Hong Kong, the other two governments are playing a more active role as far as the creative industry is concerned. They vigorously intervene and support the development of the industry. Nevertheless, the Hong Kong Government lacks an overall development strategy, vision and target for the creative industry. It has not set up the commanding agency to co-ordinate and promote the relevant policies. Hence the development of the industry relies essentially on the scattered allocation from resources under various Policy Bureaux or individual projects.

As the demand in the local market is insufficient, the creative industry needs to rely on the Mainland or overseas markets. However, the effort in opening up foreign markets relies mainly on the hard work of individuals or operators in the industry. As such, Hong Kong is unable to substantially explore foreign markets and build up Hong Kong's brand names. This has affected the scale of development of the industry. High rents and insufficient capital also hamper the development of the creative industry. As the Administration has not put in place appropriate complementary policies to address the development needs of the industry, it fails to give impetus to the growth of the industry.

As more and more regulations are put in place, the cost of business has gradually increased and the competitiveness of Hong Kong's business environment is undermined. While the edge of Hong Kong's pillar industry is eroding away due to internal and external challenges, Hong Kong's economy should not rely on just a handful of industries. The Business and Professionals Alliance for Hong Kong has all along been advocating that the Government should face these issues squarely. It should formulate clear, balanced and forward-looking industrial policies. It should establish the vision and target. It should provide a full set of complementary measures in terms of land, tax, capital, talents and technology. It should also introduce hi-tech and creative technology to integrate with traditional industries for high value adding effect of a new type. When various supporting policies to all industries are in abundance, industries which have moved away from Hong Kong will be attracted to return. Consequently, Hong Kong's economic development will move towards the direction of diversification and high value-adding.

President, I so submit.

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DR CHIANG LAI-WAN (in Cantonese): President, this is the third year since I joined the Legislative Council. As far as I can remember, this is the third time we speak on this topic, as discussion on the development of industries takes place every year. Apparently the Government, the Government of the current term in particular, has taken vigorous actions to promote the establishment of the Innovation and Technology Bureau. However, it is regrettable that this remains long overdue, which is in fact absolutely undesirable for the sustainable economic development of a place. Should the economy of Hong Kong face a contraction in the next couple of years, I believe Legislative Council Members of the current term can hardly absolve themselves from the blame. As we all know, our traditional manufacturing industry has been shrinking since it started to move to the North. At present it only contributes 1.5% to the gross domestic product (GDP). We also know that the manufacturing industry consistently made up more than 20% of the GDP in its heyday.

So, which industry can Hong Kong develop next? The Government has subsequently put forth the development of four pillar industries which include financial services, trading and logistics, tourism and professional services. We can now see that among these four pillar industries, financial services have really made certain growth, but the progress is very slow. With regard to logistics, we have pointed out earlier that the airport is the biggest advantage of Hong Kong. Yet, in terms of international transportation, the existing design of the airport has stopped short of making direct connection with the logistic system in the Mainland by train. Hence, it is plainly impossible for the logistics industry to develop further.

Tourism has been developing in Hong Kong for a number of years and it has achieved considerable success. However, the industry is beginning to face a problem and that is: Has Hong Kong's capacity in receiving visitors met its bottleneck and do we have to suspend its development by not receiving such a large number of visitors? I actually find myself both worried and sad every time I come to consider this issue. As we are all aware, tourism is an industry which engages many grass-roots people. Now, with a problem arising from a few hundred or maybe a thousand parallel traders, Hong Kong is reacting as if it wanted to demand the Central Government to put a halt to the current policy and replace it with an alternative one. We should note that in a document recently released by the Tourism Commission, it is indicated that only 500 people have been arrested for parallel trading activities and the number accounts for only 0.03% ― or 0.3%? ― anyway under 1% of all those who have visited Hong LEGISLATIVE COUNCIL ─ 19 March 2015 7819

Kong on one-year multiple-entry Individual Visit Endorsements. But it looks as if we now wanted to inform the Central Government that Hong Kong would not like to receive so many visitors. Does it mean that tourism in Hong Kong has reached its peak and it is impossible for the industry to further develop? We have to realize how many people among the large number of other visitors are coming to Hong Kong for leisure travel, business, trade meetings and establishing firms, and how many of them are actually coming for shopping. Many of them come for such purposes and we might have already scared off this group of visitors. With regard to professional services, apparently we are quite dependent on its growth, as it takes up more than 90% of the GDP.

What about the other industries? The Government of the Second Term since the reunification, that is, the Donald TSANG Administration, put forth the development of six industries where Hong Kong enjoyed clear advantages. Let us now revisit these six industries, which include education services, medical services, environmental industries, testing and certification, cultural and creative industries, as well as innovation and technology. We have inject capital into each of these industries in the hope that they can flourish. The resulting development is however rather superficial, perhaps because this policy is too diversified and lacks a focus. We are also very worried about this.

I sent out a letter on 29 October 2012 to the Legislative Council Panel on Commerce and Industry, hoping that we could discuss the policy on the diversification of Hong Kong industries. As of now, I am still waiting for the discussion and I hope the Secretary can make an early arrangement for it. Meanwhile, I have also mentioned in the Panel about the beauty industry in Hong Kong, which enjoyed advantage in the past. It was the most prosperous industry in Southeast Asia back then, with more than 100 000 people reportedly making their living in this industry directly or indirectly. Given the above, I think the beauty industry is worth exploring. The secretariat has just informed me that the Panel on Commerce and Industry is going to hold a joint meeting-cum-public hearing with the Panel on Health Services in April. I hope that we can come up with certain directions after the discussion.

Finally, the Democratic Alliance for the Betterment and Progress of Hong Kong has all along been hoping that the Government will consider the development of the Chinese medicine industry and the food industry. At present, these two industries are definitely sizable in Hong Kong and the Mainland adjacent to us is also a large market. I believe that developing 7820 LEGISLATIVE COUNCIL ─ 19 March 2015 towards these two areas is the right direction and once again I urge the Government to seriously consider making a major foray into the food industry and the Chinese medicine industry.

I so submit. Thank you, President.

MR WONG TING-KWONG (in Cantonese): President, I thank Ir Dr LO Wai-kwok for moving this motion on "Formulating a long-term and comprehensive industrial policy". Some time ago, many people were distracted by the illegal occupation movement, filibustering and the non-cooperative movement. I wish that this motion could bring our attention, especially the attention of the pan-democratic Members, back to the importance of the economy and livelihood. They should not just have "fighting" in their minds and forget about the fundamentals.

The original motion is right in saying that the Government should formulate a comprehensive industrial policy. It really has to do so. At present, the Government has in place policies for the key industries but they tend to be piecemeal and fragmented. The Government should present us with a clearer picture of where the entire economy should be heading for and what supporting role the various trades and industries should play.

In my opinion, the development of industries should focus on the consolidation of the bases which already exist, and look for breakthroughs as we endeavour to refine them. Hong Kong now has four pillar industries, namely trading and logistics, business and professional services, financial services and tourism, which in aggregate account for over half of the GDP. These industries form our basis and we have to devote our efforts to preserve them. Among the four pillars, tourism has grown the fastest and it has created the most jobs for the grassroots. Thus, we can place high hopes on it. Yet, with our reception capability reaching a bottleneck, places become crowded and the prices of many items have gone up as the supply fails to meet the demand. Some people unexpectedly vent their anger on the tourists, reject them and even pound on them. Their actions have tarnished our reputation as a shopping paradise. They can be said to be shooting themselves in the foot.

Actually, in order to preserve this pillar, tourism, we should expand our capacity and capability rather than taking it out on the tourists. Therefore, Mr YIU Si-wing's amendment is right. We should take into account Hong LEGISLATIVE COUNCIL ─ 19 March 2015 7821

Kong's capacity and come up with good planning. Our proposals include setting up a shopping centre at the border to divert some tourists and opening up more tourist attractions. We should also expand our convention and exhibition facilities, as well as allocate more resources for overseas promotion to attract more tourists with high-spending power to Hong Kong. Then, not only can this pillar industry of tourism be consolidated, it can also head towards path of high value-adding.

President, apart from the conventional pillar industries, we have to develop emerging industries too. Among them, the innovation and technology industry is the most crucial. Around the globe, regions promoting economic upgrade and transformation regard developing innovation and technology as their most important task. Hong Kong is a place where the East meets the West and where new ideas and old practices integrate. We can even reshape our conventional industries into advanced technologies and novel industries with high added values with the help of innovation and technology. The Chinese medicine industry is a good example. The culture of Chinese medicine has a long history and a strong colour of tradition. If we introduce technology into the Chinese medicine industry, such as managing the production process of Chines medicine with a professional management system, proving to consumers by certification and accreditation that Chinese medicines are safe and effective, or even developing new Chinese medicine products with research and development, this conventional industry can be turned into a novel industry, and can propel economic upgrading and transformation.

Innovation and technology can reshape conventional industries and create huge economic benefits for society. Therefore, I think it is very pressing and necessary for the Government to propose the establishment of the Innovation and Technology Bureau to promote the development of this industry. President, it is very unfortunate that the pan-democratic Members insist repeatedly on filibustering, which has delayed the establishment of the Bureau. I am aware that in his amendment, Mr Charles Peter MOK also supported the development of the innovation and technology industry. I hope that as the representative of the information technology sector, he can make greater efforts to lobby his allies in the pan-democratic camp to stop obstructing the establishment of the Innovation and Technology Bureau, and do some good deeds for Hong Kong.

President, this motion today has reminded us of the importance of our economy and livelihood. We should not be hampered by the unnecessary 7822 LEGISLATIVE COUNCIL ─ 19 March 2015 political struggles any more. We should take some concrete actions to push forward economic development and improve the living of the people.

President, I so submit.

DR HELENA WONG (in Cantonese): President, Mr SIN Chung-kai has put forth an amendment and expressed views on how to develop Hong Kong's industries on behalf of the Democratic Party.

Here I would like to talk about the beauty industry ― an industry that the Government has overlooked ― and the problems relating to its development in Hong Kong.

When I first became Legislative Council Member in 2012, it happened that the incident of the DR beauty group occurred. Hence how to regulate the beauty industry was the subject of the first motion I put forth in the Council.

During these two years, I continued to follow up on the issues relating to the development and regulation of the beauty industry, and kept having communications and dialogues with the industry and government officials concerned. I have a strong feeling that the beauty industry itself is not resistant to regulation by the Government; on the contrary, they are proactively calling for the Government to regulate the trade for the healthy development of the entire trade.

The Government, however, indicated that it only intends to regulate some high-risk industries and is reluctant to regulate and handle the matters related with the beauty industry. It was not until the occurrence of some health-threatening incidents that the Government took the opportunity and let Western medical practitioners take charge and steer the direction of the beauty industry. Most pitiful of all, the Government does not consider the beauty industry as an industry that can create employment opportunities and wealth for Hong Kong.

In 2011, the Department of Health appointed a consultant to compile a business impact assessment report on the proposed regulatory framework for medical devices. The report completed in 2013 sets out the output of the beauty industry in various countries and places. It mentions that the beauty industry brings over 1.2 billion of revenue to Singapore each year. In Britain, its beauty LEGISLATIVE COUNCIL ─ 19 March 2015 7823 industry contributes even more strongly as the trade generated $27.6 billion of revenue to the nation in 2010. The figures show that the beauty industry has potential to become an economic pillar if the trade can develop in a healthy direction and is properly regulated.

Nonetheless, according to the report, the output of Hong Kong's beauty industry is nil. This shows that the SAR Government has not compiled any statistic or conducted any projection on the economic performance and contribution of the beauty industry so far.

Nor has any official information been released on the manpower and qualification distribution of the beauty industry. All the information I have on hand came from the data collected by the beauty trade. The Beauty Care and Hairdressing Training Board of the Vocational Training Council has seen much participation from the trade. In 2014, the board released the 2014 Manpower Survey Report ― Beauty Care, Hairdressing and Cosmetics Industry, which was based on a study it conducted on the ecology of the trade. The report pointed out that the beauty industry as a whole hired over 58 000 employees, of which over 90% were technical employees, about 40% of them worked for beauty salons, health centres or spa, and 30% of them worked for hair salons.

The problem is, while an increasing number of employees working in the beauty industry are eager to receive training, and some of them have already acquired professional qualifications, the Government does not attach importance to these qualifications. For instance, currently only the operators of IPL equipment are required to receive skill test although the trade looks forward to setting up a certified professional qualification system for the operators of laser devices as well. Nonetheless, both the Government and the Education Bureau have not responded to the calls of the trade. If the Government considers the beauty industry as a profession worth developing, it should conduct a comprehensive review on the qualification structure of the beauty industry, and facilitate the employees in the trade to receive training in order to raise their professional standards.

In 2013, a panel of the Legislative Council passed a motion with no legislative effect that urged the Government to set up a steering committee on reviewing the regulation of the beauty industry but the Government has not taken any action to follow up the issue subsequently. When the beauty industry is willing to deliberate on how to set up a regulatory body and look forward to 7824 LEGISLATIVE COUNCIL ─ 19 March 2015 seeing the industry develop in a healthy direction, why does the Government adopt a sidelining approach and take no action? I have never seen an industry imploring the Government to regulate its business, but now the beauty industry seems to have come to such situation.

Take medical equipment as an example. The Government began to consult the public as early as 2003 and released a consultation paper back then. However, everything died down after completion of the consultation. Two years ago, the same issue was brought up again for public consultation. After rounds and rounds of discussion for some 10 years, we are still at the stage of finding the direction, and the Government has not put forth any policy proposal on the regulation of medical equipment so far.

As some beauty groups in the market are expanding the scale of their businesses, the Government should conduct more researches and studies on the existing situation and development potential of this industry, as well as guiding the industry as a whole to develop in a healthy direction. I believe the people of Hong Kong will be happy to see a regulatory framework set up by the Government to protect the interests of the stakeholders.

The Democratic Party supports the development of a diversified industrial structure in Hong Kong. The approach that the Government adopted in the past with respect to the development of beauty industry shows that it is not enthusiastic to support the development of this industry. In addition, when it comes to other emerging industries, the Government also acts without much enthusiasm.

President, the Democratic Party urges the Government, with joint efforts from the Commerce and Economic Development Bureau, Food and Health Bureau and Education Bureau, to set up a steering committee on review of regulation of the beauty industry. The committee will work out a regulatory framework for the beauty industry, set up a complaint system, provide training for the employees of the beauty industry and regulating the trade and advertising practices of the beauty industry. This can promote diversification of industries in Hong Kong, protect the health and interests of consumers and ensure the healthy development of the beauty industry in the long run.

With these remarks, I support the motion.

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DR PRISCILLA LEUNG (in Cantonese): President, I always support formulating a long-term and comprehensive industrial policy. As such, I surely give my full support to today's debate on this matter.

Just now some Members mentioned about the difficulties we encountered in passing the proposal to set up the Innovation and Technology Bureau. I support very much the establishment of the Innovation and Technology Bureau, but very honestly, I am afraid the Innovation and Technology Bureau cannot deal with all the issues raised in the motion today. The Innovation and Technology Bureau can, at most, handle the partnership issue that has been facing the innovation and technology sector all along. For example, while universities may have intellectual property rights for a number of research studies or even inventions, such studies and inventions will be wasted if they do not have the opportunity to be applied to industrialized production, and the Innovation and Technology Bureau can have a dedicated team to look into matters in this respect. Besides, the Innovation and Technology Bureau can also deal with issues relating to young people starting up their own businesses.

Nevertheless, I believe the Innovation and Technology Bureau can hardly deal with an issue we have been voicing out all along, which is the huge expense on welfare for the elderly. I wonder if the Government can come up with a development direction for the industrialization of elderly services, and find out ways to attract elderly persons or the "silver haired generation" to join in as service providers to make elderly services an industry. I am afraid Hong Kong has not conducted any research studies in this respect.

Mr Franklin LAM Fan-keung has commented that this year's Budget lacks long-term investment. I cannot agree more with him. The Financial Secretary is a man of prudence. If he is asked to come up with a new direction, I am afraid his way of thinking may prevent him from doing so. However, for the sake of Hong Kong's long-term interest, the Government has to start thinking about this issue sooner or later, which cannot be resolved solely by the Policy Bureau under the leadership of Secretary Gregory SO which is now present in this Chamber.

President, by the year 2033, one out of four Hong Kong people will be an elderly person aged 60 or above, and hence the expenses on elderly care, medical services will constitute a huge medical bill. While many members of the community, including those of the political circle, have been urging the Government to provide universal retirement protection or comprehensive elderly 7826 LEGISLATIVE COUNCIL ─ 19 March 2015 protection, it is prescribed respectively in Articles 107 and 108 of the Basic Law that in the long term, Hong Kong should maintain a low tax policy and achieve a fiscal balance. So, in what ways can such huge expenses come to terms or co-exist with these two constitutional requirements?

The problem of an ageing population is more serious in Japan and Taiwan, which are in our vicinity, yet their "silver haired generation" businesses are much better developed than ours. As I can recall, at an internal seminar held recently by the Business and Professionals Alliance for Hong Kong, I heard a high-end banker saying that given the shortage of young people and manpower supply, the Hong Kong people should be encouraged to give birth, and couples of this generation should at least have five children. In my view, this idea is indeed an alert to us.

I saw on the Internet some new age groupings claiming that the following groups are introduced by an international organization: people who are 44 in age or below are youngsters, those between 45 and 59 are the middle-aged, those between 60 and 74 are the young elderly … I can recall that the President has also asked me about the "silver haired generation" issues which I had talked about before, and I told him he was a young elderly person. Indeed, this idea about age groupings is now spreading around on the Internet, saying that people between the age of 60 and 74 are young elderly persons. Actually, this Council is really very energetic. It is true that many Members have already reached the age of 60, yet with their wisdom and experience, this is the best time for them to give their best to serve Hong Kong and to share their experience with members of the community. This is even more so in the academia, as the writings and research studies by scholars after reaching the age of 60 may probably be their masterpieces. Then, those between the age of 75 and 89 are the real elderly persons, and naturally, 90 years old and above should be considered longevity. I have recently found out that quite a number of my volunteers are aged between 92 and 102, and they are really doing voluntary work for me.

President, under the present political atmosphere, what kind of elderly care do we have? Some people are required to retire at the age of 55, whom I think are the youngest retirees. While we can find many research studies in this respect recently, Richard SCOTT, who was then a professor in economics, already pointed out in 1976 that if universal suffrage should be granted, voters earning less than the median wage would make use of the universal suffrage to increase their income as politicians would seek to subsidize voters in this bracket at the expense of those above so as to ensure an ample supply of supportive votes. LEGISLATIVE COUNCIL ─ 19 March 2015 7827

Francis CASTLES, Professor of Social and Public Policy at the University of Edinburgh, considers that democratic participation would intensify the competition among political parties and thereby causing politicians to give way to welfarism and incur increasingly greater pressure. A professor of the University of Athens also opines that politicians prefer to increase public expenses because so doing can buy them votes in the short term, as voters often consider welfare expense a windfall, not knowing that the money actually comes out of their own pockets rather than the government or other people's.

Under the present political atmosphere in Hong Kong, people are asking for universal suffrage and more open systems. As such, we have to proceed with the development of our various systems without delay, and we must have new ways of thinking. Actually, we need more than the Innovation and Technology Bureau, but the Innovation and Technology Bureau is the new initiative that should be established expeditiously. As for our long-term budgetary direction and the development of our industries, I hope the Financial Secretary will break away from his conservative way of thinking from now on and not be called a moneygrubber any more. He should allocate funding to those experts with the appropriate opportunities and abilities ― they may be experts in economics who are certainly of higher calibre than we are ― to conduct studies on long-term elderly care expenses to find out ways to turn the "silver haired generation" from expenses generators to income generators, so that we can achieve a fiscal balance. In that way, instead of shouldering some long-term expenses, we will be able to deal with some possible additional expenses arising from a gradually opened up political system as pointed out by the aforementioned scholars. This is the way to ensure that our elderly persons can lead a happy life, and we will all be happy when the whole community is leading a happy life.

President, I so submit.

MR CHAN KAM-LAM (in Cantonese): President, Hong Kong upholds a free economy policy under which no import customs duties are levied. Obviously, the free economic environment has attracted a lot of investment to Hong Kong. However, it is most essential to formulate a long-term economic policy.

Up to 2012, trade and logistics industry has remained the largest pillar industry in Hong Kong. Its share in the Gross Domestic Product was about 5% in 2012 and the number of employees in the industry accounted for 21% of the 7828 LEGISLATIVE COUNCIL ─ 19 March 2015 employed population in total. However, the industry also had the slowest growth rate among the four pillar industries as it had almost no increase in its number of employees during the period from 2002 to 2012. As it is projected that there would be a decelerated growth in the container throughput and the air cargo throughput for a number of years, the performance of the industry will remain weak in future. The container throughput of neighbouring ports now compare far more favourably than that of Hong Kong.

Hong Kong has previously performed its role as a bridge for China's investment abroad since reference can be drawn from our management experience and Chinese financial institutions still demonstrate keen interests in our banking business. Nevertheless, with the setting up of the Free Trade Zone (FTZ) in Shanghai and the acquisition of more experience by Chinese enterprises, Hong Kong's role as a connecting point is gradually fading out. As the FTZ in Shanghai is growing at a remarkable pace, the competitiveness of the Mainland financial and trading markets has undoubtedly been greatly enhanced. The ongoing improvement in the Mainland financial system will add convenience to both overseas investors seeking to make investment in the Mainland and Mainland investors who consider making investment abroad.

In the meantime, the strongest industry of Hong Kong, that is, the service industry, is also facing challenges posed by small and medium-sized Mainland cities which are benefited from lower operating costs. Hence, a "downward mobility" phenomenon has appeared as the development of the service industry has shifted from big cities and first class cities to second class or even third class cities, leaving us little choice but to look forward to the opening up of its service industry fully to Hong Kong by the Guangdong Province.

On the other hand, we also see that the tourism industry, though the smallest among the four pillar industries, has been developing with the fastest growth rate and it has the greatest potential in creating jobs. However, many problems, such as our inadequate capacity to receive tourists, need resolving. Worse still, the anti-parallel trader protests held recently have also dealt a heavy blow to our tourism industry. Figures reveal that there is a drastic decrease of 30% in the number of inbound Mainland tour groups last month, while a significant decrease of nearly 60% in the number of such tour groups as well as a decrease of 20% in the number of visitors from Southeast Asian countries are also recorded at the beginning of this month as compared to the relevant figures of the same period last year.

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As a matter of fact, economic globalization has intensified the competition among Hong Kong and cities in the neighbouring areas and our needs for economic development cannot be met simply by relying on the four pillar industries. The promotion of the cultural and creative industries as well as the innovation and technology industry have become the new thinking for economic development. Neighbouring places and countries like Singapore, Taiwan and even South Korea are all vigorously developing the related industries in recent years.

As far as the cultivation of talents is concerned, education on various aspects of the cultural industry in South Korea is divided into two categories, namely formal and informal education. Cultural and creative subjects are included in the curriculum of 372 post-secondary institutions and 174 schools providing senior secondary and vocational education in South Korea. As for informal education, a distinguishing feature is the provision of professional experience centres for young people to identify diversified job opportunities.

At the beginning of the 21st century, Singapore has also tried to enhance the impetus for economic development in the midst of the global economic downturn by developing its creative industry. The Singapore Government has set the tone for the trades and the direction required for the development of creative industry in the country from the perspective of economic development. It has made infrastructural investment in the industry, improved legislation on intellectual property rights, put in place measures to cultivate and attract talents, devoted efforts to generate demand in the local market, and so on. More emphasis has been given by Singapore as compared with South Korea on making use of space to promote its creative industry, using public facilities and commercial space as venues for cultural and art activities and establishing cultural and art districts in the city centre.

In comparison, an integrated policy direction in this respect is obviously lacking in Hong Kong. Nor have we set up a dedicated organization to co-ordinate the development of the relevant industries and the formulation of policies in this regard. The relevant policies adopted in the three places, namely South Korea, Singapore and Taiwan, are more comprehensive than ours. For example, apart from providing consultation services on a regular basis, assisting in the funding arrangements, granting protection to creative works and promoting 7830 LEGISLATIVE COUNCIL ─ 19 March 2015 the circulation of such works, South Korea has enacted the One-person Creative Enterprise Promotion Act to enhance the entrepreneurial environment for individuals who seek to start their own business.

In fact, the Government should not be criticized for trying to do nothing or having accomplished nothing since two attempts have been made previously to secure funding approval for the establishment of the Innovation and Technology Bureau, which is a gesture to show that the Government has given serious consideration and deep thoughts to the future development of our economy. Besides, there is already a pressing need for the Government to develop the innovation and technology industry. However, due to the non-cooperation movement launched by Members of the opposition camp, the relevant funding application has been hindered by their filibusters. The situation has posed the greatest obstacles to the future economic development of Hong Kong.

On the other hand, in order to maintain the competitive edge of our conventional industries, an adequate capacity to cope with the transport and traffic needs is indispensable. The planned construction of the third runway in the Hong Kong International Airport can undoubtedly provide a sound basis for the promotion of such industries as the trading and tourism industries. It is our hope that widespread public support will be enlisted for the plan as the Airport Authority is now actively taking the plan forward and the financing arrangements for the project have also been announced lately.

The formulation of a comprehensive and long-term industrial policy is of course an essential prerequisite but Members of the opposition camp should also stop placing obstacles in the way indiscriminately.

With these remarks, President, the Democratic Alliance for the Betterment and Progress of Hong Kong will give full support to the motion moved by Ir Dr LO Wai-kwok today.

MR CHUNG KWOK-PAN (in Cantonese): President, I wonder if you notice that today is 19 March and that a year ago, on 19 March 2014, I moved a motion on "Encouraging the return of the industrial sector for development to make Hong Kong's industries more diversified". The content of my motion then was very similar, or almost identical, to that of Ir Dr LO Wai-kwok's motion today. What LEGISLATIVE COUNCIL ─ 19 March 2015 7831 a coincidence that we proposed to discuss the same topic on the same day of the year at the same time slot of the Council meeting. In other words, a year has passed, and we are still of the view that our industries should be diversified. The motion I moved last year was passed with the general support of Members across different parties and groupings. Hence, this definitely warrants our careful consideration, especially the Director of Bureau who is here today. The subject of my motion last year and that of the motion today are very similar.

President, the Chief Executive mentioned the new agricultural policy in his Policy Address. Anyone who has studied economics knows that there are primary industry, secondary industry and tertiary industry. The Government is now bringing up the subject of primary industry, that is, the new agricultural policy again. As for tertiary industry, Hong Kong has a thriving tertiary industry, which accounts for 90% of the Gross Domestic Product (GDP). For secondary industry, however, the Government lacks an industrial policy. Hence, I hope the Government would consider whether it will launch a new industrial policy after the new agricultural policy. The Director of Bureau knows a group of industrialists. They are his good friends. I recently met with them to jointly hammer out an industrial policy for the Director of Bureau's further study and consideration. I believe the options they provide are of substance and can be finalized as policies if the Government is willing to take them into consideration.

In his speech just now, Ir Dr LO Wai-kwok mentioned the traditional industries, expressing his view on how to optimize or revitalize them into emerging industries. Pardon me for being long-winded. I must thank the Director of Bureau again for mentioning that $500 million will be invested to turn our traditional clothing industry into a fashion industry. I hope that we will see some progress on this initiative in the coming few years, so that this mode of development can then be re-applied to other industries, particularly using this mode of development to turn traditional industries into other feasible emerging industries.

Besides, regarding how to encourage traditional industries to come back or re-establish their factories in Hong Kong, I think the SAR Government needs to refer to some agreements or covenants on free trade. In particular negotiations on the Trans-Pacific Partnership Agreement dominated by the United States are recently under way, I believe the Director of Bureau is very familiar with this subject. If Hong Kong is able to join this free trade agreement led by the United States, I believe many traditional industries will be attracted to relocate their 7832 LEGISLATIVE COUNCIL ─ 19 March 2015 businesses and factories back to Hong Kong, and turn their products into Hong Kong-made products. This would indeed be conducive to the new industrial policy mentioned just now.

As a matter of fact, many advanced countries now encourage the development of industry. For instance, the United States encourage investors, overseas and local alike, to manufacture industrial products or even re-open factories in its country. Many Members mentioned the example of South Korea just now. In fact, South Korea has succeeded in developing many industries, and also its soft power. Their industries, including creative industry, certain aspects of electronic industries, heavy industries, electronic automobile industry, and so on, have developed rapidly, thanks to their Government for having put in place supportive policies. I know that the Director of Bureau ― who is here now, which is perfect ― that he has paid a visit to Dongdaemun in South Korea recently to have a look of their fashion industry. The South Korean Government injected US$2 billion into the project of Dongdaemun 10-odd years ago, which now generate a yearly return of over US$100 billion. This proves that such investments will not go down the drain. Instead, they will bring about amazing growth in annual economic returns, employment opportunities and chains of related industries.

Moreover, Mr TANG Ka-piu has made mention of the film industry. The film industry and show business industry in South Korea now rank seventh worldwide, generating an annual GDP amounting to US$47-odd billion. In the 1980s and 1990s when the Korean film industry was not as well-established as it is now, South Korea bought movies produced in Hong Kong. Although very few cinemas are left in Hong Kong today, I think it does not matter because very few people will now take the initiative to go to cinemas to watch a movie. In the Internet Era now, it is very common to watch a movie on the Internet. At the time when Hong Kong movies were sold abroad, which used to be called "block-booking", our film industry generated impressive economic returns and made a lot of money. It is evident that our film industry, just like the clothing industry, thrived in the 1980s and 1990s, though it has now declined. That said, the fundamentals of the industry are still there. If we can make good use of them, I believe Hong Kong definitely can make up the leeway by developing its creative industries such as film, music, show business, fashion, and so on. These industries are not difficult to develop and recover their lost grounds. They can help broaden our industries so that we will not rely solely on the finance industry.

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Moreover, President, another example from South Korea I wish to cite is its heavy industries. The South Korean Government has invested US$20 billion on its automobile industry. As we can see, South Korean automobiles have entered the world market, not just the Asian market. I bring out this point because I want to prove that a government's policy and its investments can facilitate the better development of industries. As an enormous surplus is recorded in our fiscal reserve, and that the Financial Secretary has set up different funds on social protection, such as the one on voluntary health insurance, retirement protection or the Future Fund, I think we can discuss with the Financial Secretary the feasibility of earmarking tens of billions of dollars on setting up a development fund for industries, so as to support the future development of different industries.

President, I so submit. Thank you.

MR MARTIN LIAO (in Cantonese): President, today's motion looks familiar to me. In 2013, I moved a motion on "Promoting Hong Kong's economic restructuring" precisely because the Government all along lacked a comprehensive strategy and a macro perspective on the development of industries.

The structural problem of our industries is aggravating as it becomes too homogeneous. I am worried that this will affect the continuous development of our economy. I thus urged the Government to utilize resources and policy measures to promote economic restructuring. The motion was echoed by many Members and was supported and passed in this Council. With much regret, two years have passed but the development of Hong Kong's economic restructuring and industrial diversification remains fragmented. I feel sad and helpless to see so little progress has been made. Hence, I certainly support Ir Dr LO Wai-kwok in proposing a motion on this issue again today.

In fact, the SAR Government of the past terms have conducted many studies and put forth proposals on how to develop industries. Many such proposals are very good indeed but due to various reasons, the strategies and measures implemented have not achieved very success. As a result, the development of industries has been going nowhere and failed to make ground-breaking progress. For instance, the performance of the six major industries with development potential put forth in earlier years has been 7834 LEGISLATIVE COUNCIL ─ 19 March 2015 unsatisfactory over the past four years. Among them, the development of the cultural and creative industries has been the best, but its contribution to the Gross Domestic Product (GDP) has only increased by 1% to 4.9%, while the contribution of the six industries together has only increased by 1.3% to 8.7% of the GDP. Employment by the industries has increased only by less than 1% to 11.9% of the total working population. These industries are not well developed and their potentials have not been unlocked at all.

The Policy Address and the Budget this year have respectively touched on the development opportunities of some new and traditional industries as well as some measures to be rolled out. I welcome these initiatives. Unfortunately, the measures are too little and too late, and fail to display a comprehensive development blueprint for the industries.

As I have repeatedly pointed out to the Government, Hong Kong can proudly stand out among other debt-ridden countries with the robust revenue of its treasury. The Government should, better late than never, grasp the golden opportunity of a relatively weak external economy to formulate a comprehensive development strategy for the industries in short-, medium- and long-term and lay down a concrete development direction, strategy, procedure, goal as well as auxiliary measures that will facilitate industrial diversification. It should also vigorously and comprehensively restructure traditional pillar industries into high value-added emerging industries and in turn develop them into our new economic strengths. By so doing, it can make a bigger pie for both entrepreneurs and employees to have genuine development opportunities.

As a matter of fact, under intense global competition, strong and vigorous government leadership and support are indispensible to industries around the world to stand out from the rest and achieve better results. Here, I wish to cite the innovation and technology industries as an example because both traditional and emerging industries can be revitalized by new technologies. Moreover, technological innovations are an important impetus for all economies to roll forward.

Let us refer to overseas experience. Israel is now a globally-recognized hub on high-end technologies and innovations. In fact, back in as early as 1974, the Israeli Government set up a dedicated office named the Office of the Chief Scientist to take forward a policy that encourages industries to perform government-sponsored research and development (R&D). The Israeli LEGISLATIVE COUNCIL ─ 19 March 2015 7835

Government later laid down a dedicated piece of legislation, the Law for the Encouragement of Industrial R&D, to encourage enterprises to invest in R&D projects. It would even assume part of the risk of the project by sponsoring industries to conduct R&D, provide incentives for multinational companies to set up R&D centres and improve the system of intellectual property, and so on.

South Korea in the neighbouring region successfully transformed itself into the most robust technological economy in the world after the financial tsunami in 1997. The South Korean Government set up a high-level department on science and technology development long time ago. The department was renamed the Ministry of Science, ICT and Future Planning a year ago. They have enacted a piece of legislation, the Framework Act on Science and Technology. It specifically requires that the Government must formulate a fundamental plan for the technology sector every five years, in which, among others, the extent of funding increase on R&D and the number of newly created posts will be laid down.

Hong Kong, on the contrary, has hardly made any progress although it was affirmed years ago that innovation and technology would be developed. Our technological expenditure only accounts for 0.73% of the GDP, which is shameful and pathetic and is lagging far behind Israel (4.4%), South Korea (4.36%) as well as other advanced economies such as Japan (3.35%). I always say that industries do not come from nowhere. They need long-term investment and nurturing from the Government. In this year's Budget, apart from continuing to inject funds into the Innovation and Technology Fund and setting up a $50 million fund to support start-ups, there are no other supportive measures. Although it is recognized that financial technologies are a new direction for development with great potential, the steering group to study how to develop financial technologies is still pending to be established by the authorities.

A bigger disappointment to society is that the Policy Bureau which the Government wishes to establish to co-ordinate the policy on innovation and technology industries could not secure the support of the Legislative Council due to filibustering for political reasons. In the end, the Chief Executive had to change his tactics and restructure it as the new Advisory Committee on Innovation and Technology, in order to expeditiously kick-start its work in the transition period. Here, I call on fellow Members to expeditiously pass the proposal to set up the Innovation and Technology Bureau, and I hope that the authorities concerned can truly lay down a comprehensive planning with a new 7836 LEGISLATIVE COUNCIL ─ 19 March 2015 perspective and replace their sluggish attitude with quicker response, so as to ensure that the policy is steering in the right direction and show us some achievements soon.

President, I so submit.

MR LEUNG KWOK-HUNG (in Cantonese): President, when Mr WONG Kwok-hing was bombarding earlier, you said I could rebut him when I had the chance to speak afterwards. I will not rebut him. Rather, I will quote the words of Premier LI Keqiang on power rent-seeking in retort. At present, the entire political system of Hong Kong facilitates power rent-seeking. Even the Premier realized this problem. Otherwise, why must Jack MA leave China? Buddy, how he dares to bombard here. Dogs bite not because their mouths are big, but because they have sharp teeth. I cannot figure out what he said.

First, Mr Martin LIAO is a bit fairer. In 2012, I beat LEUNG Chun-ying for infringing our rights here and for putting up illegal structures, and I have given him three years. Would he please write a report to explain? If he has three years to convince the community, can I resist his proposal for establishing the "Innovation and Traumatology Bureau" ― not "Traumatology", but "Technology" ― if he so wishes? Buddy, haunted by scandals, he has no time for work. With regard to cultivate moral character, put family affairs in order, run the country well and achieve universal peace, if he fails to put his family in order, how can he run a country? As he cannot even explain clearly his family affairs, how can he talk to us about vision? Is he not wasting time?

Secretary Gregory SO, you yourself is an example of having powers curtailed. You were a lawyer but why did you become a Secretary instead? Yours is a case of an outsider leading the insiders. This is another example of political reward. You took up the post of Under Secretary because of political reward. When the former Secretary fell ill unfortunately, you became the Secretary. Had Henry TANG been elected the Chief Executive, you would not have been the Secretary. After LEUNG Chun-ying became the Chief Executive, he appointed you to be solely responsible. Secretary, how can you not be a "white glove" for LEUNG Chun-ying? This is what you are. I am not against you as the Secretary, the point is: Do you have plans?

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Regarding the fund mentioned by Mr Martin LIAO earlier, being a member of the accounts committee of that government fund, Mr LIAO is aware that none of the money has been recovered. Now, the fund is saying that because the money cannot be recovered, it will forget it. If someone is willing to pay $1 for the project, we will approve $1. In principle, since this person is willing to pay $1, the project has its commercial value. Buddy, President TSANG, is it acceptable even if you and I pay each other? This is an act of financial maneuver. What kind of a government is this? I should have chopped my head off for approving the funding then.

The Government should convince the Hong Kong people rather than resorting to slogans. Right now, 3D printing is very popular. Does it mean that the Government has to develop 3D printing right away? When we do online shopping on Taobao, the vendors can do 3D printing for the items designed by the buyers and send the samples to the buyers in Hong Kong immediately. Why are you still talking nonsense here? Who can stop the Secretary from developing these? Is it necessary to establish a bureau before things can be done? Nonsense! Who can stand in the way? I am asking him: If someone wants to invest in Hong Kong, who can block him? Hong Kong is a free port. If a business is to be developed, who can block that? Are they nuts?

In South Korea, apart from having to develop technology, the local banks will also encash at a discount. They do not just pay attention to the property speculation business, not just speculate on properties in Seoul, or shift their attention to the properties on the border when it is impossible to do so in Seoul. The local banks encash at a discount according to the needs of their country to attract foreign capital and to make it easier to purchase local products. In other words, they extend loans to foreign enterprises. Even if it means losses, they will go ahead with the transaction. They will lend to the foreign enterprises for them to purchase local products before encashing. China is also very strong in this regard. But how does our Government monitor the banks? It allowed the banks to sell Lehman products to deceive our people. How dare it talk nonsense here. It has achieved nothing.

TUNG Chee-hwa only favoured LI Ka-shing, and he ended up in disaster. When Donald TSANG became the Chief Executive ― he was elected and supported by you ― he proposed the "six major out-and-out damned industries", 7838 LEGISLATIVE COUNCIL ─ 19 March 2015 and said all of them could be achieved. However, they have now turned out to be nothing. Who supported him then? At that time I already pointed out he was bragging.

President, then came LEUNG Chun-ying. On the issue of standard working hours, although he has been the Chief Executive for three years, he has achieved nothing and has come under fire from the labour sector. Yet, Stanley NG Chau-pei still flatters him. LEUNG Chun-ying even fails on such issue. If he had achieved something, no one would block him. He should concentrate on fulfilling the easy tasks, those which he has pledged to do. On innovative technology, I told him he should give tax breaks to R&D. For Mr Martin LIAO, it is shameful of him because he does not think that he should work on these. He thinks he should only speculate on properties. In that case, how can we help him? As an ordinary person, who am I to help this group of bourgeoisie who are here to monopolize? President, this is the "power rent-seeking" which Premier LI Keqiang talked about: Those with power are manipulating political power; if not possible, they will be satisfied with lavishing public money.

President, the Government is now planning to build the third airport runway. President, I really find this ridiculous. Is the amount of cargo an indicator of whether the Hong Kong economy is advanced or not? It will be useless even if he sells 200 tons of preserved pickles, since it will be enough if 200 pounds of those chips and 3D printing products are sold. Why does the Government still have to cling to its old mindset of having to secure a huge amount of cargoes and passengers? Could he please come to his senses? We are now discussing advanced new technology. He should read some books.

President, the speaking time is too short. If you let me speak for 70 minutes, I can still go on. I am a frequent reader of the economics journal The Economist. The title of this issue is "Made in China: New, improved and stronger than ever". I find the comments of the journal very correct: The loyalists nurtured by China with Chinese features are novel, improved and stronger than before, as they are only left with empty talks. Without powers, how are we to block the Government? Over 17 years, all proposals put forward by the Government have been approved by the pro-Government camp. Only this year sees some obstructions. The Government has not prepared any review reports for its failures in these 17 years. It is the Government's "power rent-seeking" which has rendered Hong Kong what it is now: We have the most LEGISLATIVE COUNCIL ─ 19 March 2015 7839 expensive properties and the worst innovative technologies. The three Chief Executives have the support of the pro-Government camp, but they are putting the responsibility on us. I did not elect the Chief Executive; I just protested. They should be the ones to reflect on their mistakes in private, they should commit hara-kiri (The buzzer sounded) …

PRESIDENT (in Cantonese): Mr LEUNG, speaking time is up.

MR LEUNG KWOK-HUNG (in Cantonese): … they should commit hara-kiri, they should chop their dog head off.

PRESIDENT (in Cantonese): Mr LEUNG, stop speaking.

MR WONG YUK-MAN (in Cantonese): President, the misfortune brought about by being dogmatic economically is no less than that by being autocratic politically. Over the years, phrases like "industries where Hong Kong enjoys clear advantages ", "pillar industries" and "high-value-added" could always be found in the Policy Address of the SAR Government. Similar to the content and speeches of the motion today, they are hollow words and devoid of substance. In the eyes of high-ranking officials and financial magnates, the so-called "industries" are the splendorous economic activities that allow them to reap huge profits. They do not care about community economy, agricultural industry or manufacturing industry at all. Without the foundation of local agriculture and industry, high value-added services will become a castle in the air indeed, which definitely will collapse at the end. It is no wonder that the Hong Kong economy is always manoeuvred by China, Europe and the United States.

The financial industry, real estate industry and tourism, to which the SAR Government and the pro-establishment camp attach great importance, are all monopolized by the consortia. In real estate industry, primary consideration is given to land reservation. In financial industry, primary consideration is given to capital. For the so-called tourism, actually hotels and luxury products are the areas of concern. For the general public of Hong Kong who are in lack of capital and professional knowledge, they of course cannot get into these 7840 LEGISLATIVE COUNCIL ─ 19 March 2015 industries. In regard to the community economy which is closely related to people's livelihood, street hawkers, individual food establishments not belonging to chains and small shops selling daily necessities are all eliminated by the consortia and the Government, while members of the public can only serve as cheap labour to the consortia. The economic structure and industrial policy of the Hong Kong SAR always stick to the trickle-down theory, and there is basically no position for the grass-roots people in Hong Kong.

The crux of the question is whether economic development should be led by an autocratic government and the consortia, or the future path be groped about by the general public themselves.

As we all know, most of the Non-official Members of the Executive Council come from the business sector, and government policies are inclined towards the consortia. Under the policy of selling shopping malls and car parks in public housing estates to The Link, as well as the urban renewal policy, all the land resources have gone to the hands of the consortia. Since the Individual Visit Scheme was launched in 2003, in order to meet the consumption needs of Mainland visitors, the consortia have been expediting the construction process of luxury apartments. At the same time, they have introduced a lot of shops selling luxurious products in the shopping malls so that the small shops serving the Hong Kong people were forced to leave. Even though the shopping malls under The Link are located in public housing areas, the rental level keeps on increasing. The shopping malls have become the centres of chain stores. Community economic activities and local consumption markets have long been eliminated by the consortia and the Government.

If the public are submitted to the rules of the game set by the SAR Government and the consortia, the natural consequence is that they will face the problems of low wages, high rental level, long working hours and casualization of employment. From time to time, there will emerge some brilliant business start-ups like 759 Store and Hoixe Cake Shop. However, their operations are in fact rather difficult. Starting business by the general public is a mission impossible, let alone asking Hong Kong to develop community economy, local consumption market and emerging industries. The Hong Kong economy has become homogeneous and lacks vitality, and this is a natural outcome in physics. When the direction of economic development is being determined by the people who monopolize power and wealth, this basically will not bring well-being to the LEGISLATIVE COUNCIL ─ 19 March 2015 7841 community. Furthermore, this may even be an obstacle to innovation. As a result, excessive conformity is found in the economic model, and the economy is lagging behind the global trend.

Being ambitious for great achievements, the SAR Government, in the name of promoting economic development, persists in spending billion and 10 billion dollars of public money wilfully in a number of "white elephant" infrastructural projects, such as Guangzhou-Shenzhen-Hong Kong Express Rail Link, Liantang/Heung Yuen Wai Boundary Control Point, Hong Kong-Zhuhai-Macao Bridge Project and West Kowloon Cultural District. As a result, they are either being procrastinated or have the chance of being suspended. Hundred billion dollars of public money was then being wasted. Today, the Airport Authority Hong Kong says that $141.5 billion are needed to build the third runway of the airport. Nevertheless, the bill is still to be footed by the public, right? It has never occurred to me that the Democratic Party was the first to rush out and say that it supported the Government's decision. As a result, it was being seriously reproached on the Internet. This is against the public. The Government is of course the enemy of the people. Many political parties are also enemies of the people. If the SAR Government had followed the example of the South Korean Government by spending public money on subsidizing and providing financial aid to the development of local agricultural industry and manufacturing industry, how would the Hong Kong economy have gone downhill?

The SAR Government has been implementing a high land-price policy, while the agricultural industry and manufacturing industry are being left idle. In the course of time, we become fetishistic into believing that the economy can grow healthily by simply relying on the development of the service industry. Even Switzerland, which is occupying a leading position in the world in private banking business, is strongly supported by its industries. It is an economy with the highest degree of industrialization in the world. Its milk and chocolate products are also well-known. The influential people in Hong Kong always say that political arguments have dragged the development of Hong Kong behind that of Singapore ― this is similar to the repeated arguments of Mr WONG Kwok-hing. He can be against filibustering in any topic, and politics can be involved in any topic. Why does he not look at other places? Both Switzerland and Singapore are small and sparsely populated countries. Their conditions are similar to those of Hong Kong. Why can they have great achievements in agricultural, manufacturing and service industries while we are unable to do that?

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Hong Kong is not devoid of talents in agricultural and manufacturing industries. Someone has given up a job with an annual remuneration of $10 million and gone to Kam Tin and Fanling to set up hydroponic farms. Someone invested more than $10 million last year to set up in Tsuen Wan a garment factory using new technology. Someone has set up a production line on research, development and production of specially made metal in the Tai Po Industrial Estate. They are brave to make attempts, and are seeking new and possible direction of development for Hong Kong. Nonetheless, the Government is oblivious to these people and continues to be obsessed with its "white elephant" areas of infrastructure, mega events and tourist spots. It is indulging the consortia which monopolize land resources, and the property prices and rental level are drastically increased as a result. Besides, the consortia also encroach the overall productivity of society. Every year, the Policy Address would emphasize that the economy has to be developed. The Government says that it has to assist "industries where Hong Kong enjoys clear advantages" and "emerging industries", but actually it has to maintain the leading positions of finance, real estate and tourism industries in the Hong Kong economy. It is forcing the public to follow the economic policy directives of the Government and the consortia. This kind of economic dogmatism has throttled the space of living and development of the general Hong Kong people (The buzzer sounded) … and the misfortune brought forth will not be less than that by being dictatorial and autocratic politically …

PRESIDENT (in Cantonese): Mr WONG, your speaking time is up.

MR TONY TSE (in Cantonese): President, as an open city with a knowledge-based economic system, Hong Kong always has to face numerous challenges and competition internally and externally. If the Government still insists on adhering to the positive non-intervention attitude when formulating policies, it may not be in the best interest of Hong Kong for its future development.

Apart from market demand, a favourable environment for the inoculation and healthy development of an industry is crucial for its emergence. To a very large extent, this requires the support and assistance of the Government. For instance, for the logistics industry to develop, the Government should assist in LEGISLATIVE COUNCIL ─ 19 March 2015 7843 providing ancillary facilities for smooth and convenient transport, as well as suitable land for use by the industry. Another example is the development of the tourism industry. In the past, in the process of town planning, the Government rarely took tourism into consideration. As a result, the ancillary software and hardware were far from satisfactory, which would in turn obstruct the sustained healthy development of Hong Kong's tourism industry.

On top of a favourable environment, talent training is also essential. In his latest Budget, the Financial Secretary laid his emphasis on "Diversified Development" and "Augmenting Competitiveness". In addition to expanding the edges of the traditional industries, he also invested in the promotion of resources and the boosting of promising industries so as to enhance the overall competitive strength. Yet, a lot of the measures put forward by the Financial Secretary are targeted at promoting and supporting local talents and enterprises to take part in overseas exhibitions and competitions, without mentioning how to reinforce the opportunities for practitioners of the pertaining trades to develop locally.

President, the Government always stresses the need to make the pie bigger, but has it considered how to bring talents into the picture? I think the Government should make the best use of Hong Kong's talents, give the young professionals or the small and medium enterprises more opportunities to participate for them to have more hands-on experience and raise their professional level. Therefore, a comprehensive strategy for talent training is part and parcel to promoting the diversification of industries.

On academic and skill training, it is necessary for the Government to examine the future demand for and supply of Hong Kong talents when urging the institutions to train more of them. By doing so, manpower mismatch resulted from institutions training talents not required by the market can be avoided. The policy and measures for training local talents must dovetail with market development. Take the construction, surveying, landscaping and planning sector as an example. In recent years, the sector has been plagued by manpower shortage. Both locally and overseas, the demand for talents within the sector has been huge. The number of talents trained by the various higher institutions for the sector very often falls short of the market's actual demand. President, in this regard, I really hope that the Government can conduct a comprehensive review and assessment of talent training by the higher institutions and market demand, 7844 LEGISLATIVE COUNCIL ─ 19 March 2015 formulate suitable measures and allocate additional resources, as well as enhance the training of professionals and skilled talents. Then, the related trades will have adequate support for their talent software which is conducive to sustaining a healthy development for the industry.

Furthermore, the Government should make coherent longitudinal consideration for studies and employment. This means that it should be a coherent process from receiving academic education at school, to skill training at school and the workplace and lifelong learning. The Government should also provide comprehensive assistance so that entrepreneurs can have an incubation environment with sufficient nutrients. This will help young people start their own businesses and will promote their upward mobility.

President, the rise of an industry does not happen overnight. It comes with the right timing and favourable geographical and social conditions. However, at present, Hong Kong lacks a comprehensive and long-term industry policy for the industries to develop. More often than not, the Policy Bureaux work on their own and there is a lack of inter-departmental co-ordination among them. These problems must be rectified. For instance, the development of agriculture involves the use of land and ancillary facilities which require inter-departmental co-operation. Meanwhile, agricultural development does not purely involve the development of the industry since other products can derive from agricultural products. If we look at the planting of flowers, it can generate other related industries, such as scented tea, honey and fragrances. Thus, when developing or promoting an industry, the Government should look at it from multi-dimensional and diversified perspectives. It should come up with suitable support measures to help and promote a healthy and sustainable development of the related trade and industry.

Nonetheless, even if the Government is willing to make resource input for an industry and formulate a long-term comprehensive policy, filibustering by Members will obstruct the Council in deliberating and approving items pertaining to society, the economy and people's livelihood. This will seriously impede industry development, and will take a toll on the overall interests of Hong Kong. As filibustering causes the amount of construction works to shrink, the industry ends up with the wrong budget. The uncertain prospect of the construction industry will dampen the eagerness of the young people to join the industry, thereby seriously impacting on the efforts to maintain and enhance Hong Kong's LEGISLATIVE COUNCIL ─ 19 March 2015 7845 overall competitiveness. Members taking part in filibustering cannot dodge their responsibility.

With these remarks, President, I support the original motion of Ir Dr LO Wai-kwok, and the amendments of Mr MA Fung-kwok and Mr YIU Si-wing.

MR ALAN LEONG (in Cantonese): President, Hong Kong lacks an industry policy. Our economy is dominated by the oligopoly of the financial services industry and supported by the property industry from which it derives.

President, during his term as the Chief Executive, TUNG Chee-hwa mentioned the four pillar industries, which include trade and logistics, professional and industrial and commercial support services, financial services and tourism. Apart from the tourism industry which has seen more considerable growth in recent years as a result of the Individual Visit Scheme bringing us Mainland tourists, the other three of the so-called four pillar industries are worth our worries.

As for Donald TSANG, he brought up six priority industries, namely, cultural and creative industries, medical services industries, education services industries, innovation and technology industries, environmental industries, and testing and certification industries. Among these six priority industries, only cultural and creative industries stand out from the rest. In 2012, they accounted for almost 5% of the Gross Domestic Product, while the others are really insignificant.

President, why is this so? The two Chief Executives seemed to have recognized the problem and would like to formulate an industry policy, so as not to let the financial services industry become an oligopoly. They did not want to rely on the property industry for support. Why do we keep on witnessing repeated disheartening and disappointing situations after almost 18 years since the handover?

President, I would like to make a bold analysis using my speaking time today. The many Members who have spoken before me all say that politics are stymieing the economy. They seem to have put economics and politics on opposing ends. However, have we considered that if our public powers come from a system which is more just and fair, it can help break through the situation 7846 LEGISLATIVE COUNCIL ─ 19 March 2015 whereby the economy is monopolized by the financial services industry? The reason is simple ― we have inherited the economic structural arrangement from the colonial master of the times of British Hong Kong rule. Back then, the colonial master highly favoured the financial services industry and the property industry which derived therefrom since it had to implement the high land price policy. These people with vested interests have been manipulating the resources, which is what we referred to as "rent-seeking".

"Rent-seeking" is a rather academic term. In a nutshell, it means that through the political system, some people in possession of resources continue to monopolize power. They do not engage in productive activities, and simply create profits by making use of all they have secured. If such an act is to remain, the talk of formulating an industry policy will be counterproductive.

Under this system of ours, this group of rent-seekers will continue to monopolize and stay away from productive activities through the functional constituencies of this Council, the Election Committee responsible for selecting the Chief Executive, or the future Nominating Committee to be formed in accordance with the decision to "shut the doors" made by the National People's Congress on 31 August to select the Chief Executive. They will only keep on creating profits for themselves by taking advantage of the resources they have already possessed, as well as the economic activities they have manipulated. Nonetheless, this can help Hong Kong in no way since this handful of people are just creating profits for themselves and have not created wealth for Hong Kong. This fast knot must be unravelled. Otherwise, it will be futile to talk about an industry policy. Thus, we must have in place a fair election system to bar these rent-seekers from continuing to monopolize our economy and remaining to be the kingmakers. Failing this, I believe we will surely end up nowhere even if we are here to debate for another eight or 10 years over whether Hong Kong should have an industry policy.

President, I sincerely hope that in these few minutes, I have pointed out to the Hong Kong public that economics and politics are not conflicting each other. Rather, if we have a just and fair election system, the monopoly by the rent-seekers and the secret dealings in the context of black-box operations can be broken, and we will then have hopes.(The buzzer sounded)

I so submit.

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MR LEE CHEUK-YAN (in Cantonese): President, the subject of today's motion has been discussed for many years. We debate it every year, but every time we ended up feeling helpless. As Mr Martin LIAO said, it is shameful that Hong Kong has made so little progress in this area, particularly in research and development (R&D).

We should think about why this subject, which has been discussed for so many years, led us nowhere; why no discussion has been made on the deep-rooted problems that the subject may involve; and why the six priority industries proposed in earlier years and the countless hubs that TUNG Chee-hwa proposed, which have all been discussed, failed in the end. I wish to tell Members loud and clear the reason, which Members know as well. The simple reason is that one-party dictatorship, under which democratic parties and groups cannot survive, is untenable. But today I do not plan to talk about one-party dictatorship. The situation besetting Hong Kong now is that the market is dictated by one industry, or "one-industry dictatorship". The dictatorship and monopoly of a single industry have used up all resources and occupied all leeway for development. Then how could other industries develop? Like the term "crowding out effect", other industries have been crowded out in the present situation and their possibility of development is eliminated.

When our market is hegemonized by the real estate industry, the chance of having other industrial development is slim. However, the Government, the rich and powerful and Members who are concerned about Hong Kong's economic development have not provided a solution to the problem of "one-industry monopoly". Instead, they put forth all sorts of unimportant issues, such as hindering infrastructural development. Do not tell me that infrastructural development can guarantee economic development in Hong Kong. Have Members ever heard of opportunity cost? It is the ABC of economics. If all resources are put on the development of infrastructures to dovetail with and implement the planning of the 12th Five-Year Plan, there will be no opportunity cost because resources to be used on other development is all used on infrastructural projects.

The problem lies in our total failure to address the problem of "one-industry dictatorship", which will lead to several consequences. The first consequence is high rent. High property price affects people on the housing front, while high rent affects all industries, such as retail sales and catering businesses. Instead of addressing the problem of real estate hegemony, the 7848 LEGISLATIVE COUNCIL ─ 19 March 2015

Government has aggravated it by the public listing of The Link Real Estate Investment Trust (The Link). After The Link's divestment, all shopping arcades in public housing estates changed. Primary school students used to buy sport shoes at a very cheap price in the shopping arcades of public housing estates, but now these shops have to pay high rents and only sell goods of famous brands. All people in Hong Kong can now see and feel the harm that The Link has caused.

When the market is monopolized by the real estate industry, rents will hike. The chance for developing other industries is slim, not to mention the innovation and creative industries. After the Government proposed to revitalize industrial buildings, arts groups all moved out from industrial buildings and relocated to a farther place. How could the arts industry develop then? Hence, if we do nothing and let the market be monopolized by one industry and let rents continue to hike, Hong Kong will have no room for developing other industries.

Second, as I said in the first motion debate, if this industry is so lucrative and considering that using money to breed money is very tempting, who will still be willing to work hard and toil for a living? Certainly, there are still many people now toiling for a living, but those who want to make money will definitely join the real estate sector. Property speculation is the best choice. All you need to do is to acquire 10 shops or residential flats and you do not need to work anymore. This mentality has resulted in an atmosphere of property speculation. Why then do people still need to make all the efforts to work in the research industry?

People with talents will not work in the research industry because they would be conditioned by the mindset that the financial industry can make a lot of money and they cannot get rich by working in the research industry. In addition to talents, investments are the same. When large consortia continue to have booming businesses and monopolize different sectors, why do they need to invest in R&D and venture into another business? What are the incentives for them to develop R&D? There is none. They can get high returns in one industry and they do not have any incentives to develop other businesses. If talents do not opt for other industries, and large consortia, which monopolize the sources of wealth, do not invest in other industries, this problem cannot be solved. What can we do then?

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Hence, coming back to today's motion, we unreservedly support creating a diversified environment for our industries and formulating short and medium-term strategies. But I want to ask: Do Members have any strategies to solve the problem of real estate hegemony? The Labour Party repeatedly proposed the introduction of a property gains tax, but Members did not support the proposal. However, if the common practice of property speculation is not suppressed, and if the means of making money is not switched back from capital accumulation to investment on industries, the situation will never be changed and no one will work in industries or venture into other businesses except property speculation. If this problem is not solved, we will have no way out.

Indeed, one of the reasons that we are unable to solve this problem is political in nature. When large property developers and consortia, which monopolize all sectors, dominate the Government as well as functional constituencies of the Legislative Council, we will have to follow their orders. In the end, other modes of developments cannot prevail in Hong Kong and the market will continue to be dominated by one industry. Thank you, President.

MR STEVEN HO (in Cantonese): President, I must first thank Ir Dr LO Wai-kwok for proposing this motion.

Just now, I have heard some Members talk about the problem of homogeneity in Hong Kong's industrial structure. They are right, and I also agree that Hong Kong's industrial structure is homogeneous. The question of how to rectify or change the existing homogeneity in our industrial structure probably requires some more thoughts or discussions under other more specific motions. Likewise, some colleagues have pointed out that the problem of developer hegemony is very serious in Hong Kong at present. I agree that property prices are high, but I think that the main solution to the problems of developer hegemony and exorbitant property prices is probably to tackle the supply by increasing land supply. At present, however, the Legislative Council is not so co-operative, as reflected by the fact that when the Government requests for the allocation of lands, we do not grant approval, and that when the Government wants to take forward its new development plans, we do not grant approval either. In any case, we do not want to cause any impacts. I think Members should be responsible for this, and the Government is also duty-bound to co-ordinate various sides.

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Let me quote a few lines from Ir Dr LO's motion, which read "… formulate a long-term, comprehensive, balanced and forward-looking industrial policy to introduce development strategies and ancillary measures for pillar industries, emerging industries and traditional industries respectively …" I certainly support this proposal, and so does the DAB. The term "industries" that Ir Dr LO refers to is already very comprehensive, as it covers emerging industries, traditional industries and pillar industries. The only thing is that he has not mentioned other peripheral industries in addition to these three types of industries. Otherwise, he would have included all industries in the motion.

As we all know, there are many types of industries. The fact that he has not included all industries in the motion may perhaps arise from an unintended omission of his. I believe he has no intention whatsoever to belittle other industries. Sadly, when I see the amendment of another Member, I think he has some ulterior motives, as he particularly urges the Government not to touch certain industries. Whose amendment is it? It is Mr Kenneth LEUNG's. He has deleted "traditional industries" in his amendment to the original motion. For this reason, I must rise to speak. I do not think that he has deleted these words out of carelessness.

My knowledge is limited, but as far as I know, the term "traditional industries" carries various meanings. Some traditional industries were once pillars of our economy, ones which have gradually evolved from skill-oriented industries to cultural industries. Besides, some consist of only a few practitioners who are found in various places of our communities. But they are almost essential to everybody. Some others are a hybrid of the two.

In fact, there are many such industries in Hong Kong. I wish to give a few examples, including the agricultural and fisheries industry I represent. Actually, the present agricultural and fisheries industry also encompasses emerging industries. Here are some examples. Recently, the Chief Executive has introduced a new agricultural policy and proposed that new technologies such as hydroponics, vertical farming, soilless culture be adopted and the research and development of seeds be initiated. They are all emerging industries closely associated with traditional industries.

Besides, many traditional industries are unheard of, but they do exist in Hong Kong. Some examples are wood barrel manufacturing, cookware repair, key duplication, shoe polishing, and even the production of bamboo-pressed LEGISLATIVE COUNCIL ─ 19 March 2015 7851 noodles for wonton noodles. These industries are closely associated with traditional industries. As for those traditional industries which have now become cultural industries as I mentioned a moment ago, an example is Cantonese opera, which is of great concern to Miss Liza WANG. But Mr Kenneth LEUNG has deleted "traditional industries" in his amendment. If his amendment is passed, and if the Government thus launches measures based on his recommendation, I think there will be big problems.

In fact, the existing pillar industries and emerging industries may become traditional industries one day. If Mr LEUNG's amendment is passed, with the result that the future of traditional industries is shattered, or the Government refrains from providing any support, then how can emerging industries have the drive to continue to operate? As pointed out by an expert, emerging industries may become pillar industries in the future, pillar industries may become traditional industries, and traditional industries may provide insight for emerging industries. This constitutes a big cycle.

I notice that Japan and Germany often participate in a world competition, the name of which seems to be "Olympic Games for the Craft Industry". It is a competition for traditional industries involving bearing and leather production, and the country winning the competition each time is either Japan or Germany. By using the technologies derived from their traditional industries to develop their industries and emerging industries, these two countries have maintained international leading positions in technology. I think the Government is duty-bound to formulate policies to provide an environment favourable to the development of traditional industries.

Just now, I heard some Members say that political development, economic development and an industrial policy were inseparable. I did not realize until a moment ago that functional constituency Members in the pan-democratic camp actually had the mindset of disregarding the importance of traditional industries. I can now understand their feelings and why they have always demanded the abolition of the functional constituencies.

Another question is: How we should protect the interests of traditional industries and their various sectors? In my view, the existing electoral system or political system can actually be improved for the purpose of devising an electoral system or political system suitable for Hong Kong. Members may consider this 7852 LEGISLATIVE COUNCIL ─ 19 March 2015 question: If our traditional industries or first industries have no say in the political system, how can such industries possibly safeguard their already vulnerable interests? I think Hong Kong people should give serious thoughts to Hong Kong's way forward, and pan-democratic Members should stop politicizing various issues without doing anything else.

With these remarks, President, I strongly oppose Mr Kenneth LEUNG's amendment.

Thank you, President.

MR FRANKIE YICK (in Cantonese): President, the Government's support for the four major pillar industries in our economy has lacked strength all along, and its efforts to develop emerging industries do not worth mentioning at all. While the trading and logistics industry of the four major pillar industries is very important to the Hong Kong economy, in the sense that it has constituted as much as 25% of the gross domestic product and provided around 770 000 positions, the Government has not introduced any major initiatives, let alone long-term development strategies, to develop the trading and logistics industry.

The logistics industry I represent has been plagued by land shortage over all these years. The Government has only dealt with this problem perfunctorily by granting temporary sites on short-term tenancies. While it is true that the Government has rolled out permanent sites for the development of the logistics industry, it has only launched three sites of six hectares all together over the past five years in the manner of "squeezing toothpaste out of the tube". Under the high land price policy in Hong Kong, however, these sites have failed to meet the demand for logistics sites. Land prices have thus been pushed up persistently, and rents and operating costs have kept surging instead.

The Government has rolled out sites for the development of the logistics industry "at a tortoise's pace", but it has been ultra-fast in resuming lands. Over the past two years, the Government has resumed three temporary sites on short-term tenancies in Kwai Tsing one after another for housing construction purposes. One of these sites was originally used by the logistics industry as parking lots for container trucks and heavy-duty vehicles and provided around 800 parking spaces for large trucks. The resumption of the site has aggravated LEGISLATIVE COUNCIL ─ 19 March 2015 7853 the parking problem. The community's keen housing demand is naturally understandable, but it will not do any good to Hong Kong's overall development if the Government only focuses on resuming lands for housing construction purposes and disregards the development and needs of other industries.

The development in the Mainland and nearby regions has posed big challenges to the trading and logistics industry. At present, some cargoes are already exported to and from the Pearl River Delta region directly via Mainland ports instead of Hong Kong. However, the Kwai Tsing Container Terminals in Hong Kong now faces congestion as its support facilities have failed to tie in with the changes in the operation mode and the increases in the re-export volume. Some ocean-going vessels have begun to switch to other ports for berthing, and some have already done so. This explains why Hong Kong failed to reclaim its position as the world's third largest port last year which had been taken up by Shenzhen in 2013. Worse still, its container throughput also dropped by 0.3% over the figure in 2013 to only 22 million twenty-foot equivalent units. As the trading and logistics industry is an important traditional industry in Hong Kong's economy, the Government should formulate policies to enhance and reinforce its competitive edge so that it can develop sustainably.

Apart from expeditiously launching the works to construct a third airport runway for reinforcing Hong Kong's position as an aviation centre, the Government should also allocate additional permanent sites more quickly for logistics development. Such efforts include the expeditious implementation of the proposal on building a logistics park at Siu Ho Wan on Lantau Island. In order to achieve sustainable development for small and medium enterprises in the logistics industry, the Government should construct warehouses for rent. Besides, with a view to enhancing the cargo-handling efficiency of container terminals, the Government should expeditiously implement the various improvement measures recommended in the Study on the Strategic Development Plan for Hong Kong Port 2030 report.

In the meantime, the Government should build multi-storey car parks for container trucks and articulated vehicles at container terminals as soon as possible, so as to release more lands as back-up sites for container terminals. In order to reinforce Hong Kong's position as an entrepot, the Government should speed up its efforts in developing a regional electronic logistics system jointly with the Mainland, so as to facilitate seamless customs clearance. In the long run, the Government should act more quickly to set up a statutory maritime body 7854 LEGISLATIVE COUNCIL ─ 19 March 2015 as recommended in the Consultancy Study on Enhancing Hong Kong's Position as an International Maritime Centre, in a bid to formulate a long-term development strategy and blueprint for the shipping and logistics industry.

In the course of developing pillar industries, certain traditional support industries should not be neglected. As an alternative for ocean freight, public cargo working areas (PCWAs) now handle around 30% of the sea cargoes. But the Government seldom provides support to PCWA operators. Today, Hong Kong's shipping and logistics industry occupies a place in the international community. Providing a diversified range of transportation services is of utmost importance. Therefore, I hope that the Government can complete its present PCWA review as soon as possible, and formulate a long-term development strategy for PCWAs.

Industries face a difficulty in their development ― labour shortage. As everybody knows, Hong Kong's unemployment rate now stands at a low level of 3.2%, meaning that almost everybody is in employment. But many industries, including the shipping and logistics industry, are facing serious labour shortage. At present, the airport community is in need of around 5 000 to 6 000 extra workers, and there is a shortage of around 10% to 15% in the numbers of drivers required for container trucks and cross-border container trucks.

In a knowledge-based economy, young people are reluctant to join certain front-line blue-collar jobs which require relatively low skills. In the case of the automobile repair industry, for example, this industry gives people the impression of squeezing under vehicles in a dirty environment. For this reason, not many young people are willing to join this industry. In fact, the automobile repair industry has turned more and more professional these days. With the electronization of motor vehicles, spanners and screw drivers are no longer sufficient to resolve vehicle repair problems.

The Government should launch publicity campaigns to eliminate public misconceptions about those blue-collar jobs. And it should enhance the professional image of such industries through the Qualifications Framework as a means to attract more "new blood". Apart from this, I hope the Government can review its population policy to bring it in line with our industrial development, and provide a diversified range of practical vocational training, so as to nurture various types of necessary manpower and in turn foster our industrial development.

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Due to population ageing and the resultant shrinkage of the labour force, I really cannot see that there will be sufficient local workers who can fill up our vacancies in the near future or even in the next decade. But since it takes time to train up talents, and global economic development will not pause because of this, Hong Kong's competitiveness will inevitably decline. Therefore, while consolidating various resources for manpower training, the Government should actively promote labour importation, lest Hong Kong's pace of economic development may gradually come to a halt due to labour shortage.

President, I so submit.

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

(No Member indicated a wish to speak)

PRESIDENT (in Cantonese): Ir Dr LO Wai-kwok, you may now speak on the amendments. The speaking time limit is five minutes.

IR DR LO WAI-KWOK (in Cantonese): President, I wish to thank the several Members for proposing amendments to the original motion.

I think that when it comes to economic and livelihood issues, there should be room for rational discussion and co-operation among Members from different political parties and groupings. I submitted the original motion in the previous legislative session, but I lost the balloting 10 times, so I was not able to bring it up for discussion in this Chamber. Fortunately, I can move the motion at the Council meeting today. I wish to thank Members for recognizing the importance of this issue.

Mr MA Fung-kwok's amendment puts the main emphasis on how an industrial policy can help to increase the metropolitan glamour of Hong Kong and the soft power of the city. I believe that boosting the innovation and technology as well as the cultural and creative industries can also help achieve the objectives mentioned above.

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Mr YIU Si-wing has stressed that the authorities should "formulate short, medium and long-term planning for the tourism industry … so as to foster the sustainable and healthy development of Hong Kong's tourism industry". As the tourism industry is a pillar industry in Hong Kong, I believe Mr YIU's proposal will command Members' approval.

Two parts in Mr Kenneth LEUNG's amendment warrant our attention. First, he has emphasized that the SAR Government should "conduct comprehensive studies on the mode of long-term economic development and competitiveness of Hong Kong, and based on the findings, to formulate land planning strategies, manpower resource programmes and tax measures which are conducive to the diversified development of Hong Kong's economy". He has further requested the formulation of a long-term and comprehensive industrial policy on this basis. I agree to this.

However, I have reservation about the deletion of "and traditional industries" from the original motion in Mr LEUNG's amendment. Although Hong Kong's economy needs diversified development, this does not mean that we should deny the existence value and contribution of traditional industries. As I emphasized in my keynote speech, if the Government can roll out suitable policy measures, traditional industries can be revitalized and in turn perform greater functions.

Mr Charles Peter MOK's amendment emphasizes that the Government should allocate additional resources for the purpose of promoting the development of the local innovation and technology industry, and continue to nurture local talents who can meet the needs of our industrial development. Apart from asking the Government to support the development of the innovation and technology industry, Mr SIN Chung-kai's amendment also requests the Government to promote the development of the waste recycling industry and also green industries. All these are positive proposals. I even hope that the two Members can truly support the establishment of the Innovation and Technology Bureau.

Mr MOK and Mr SIN have amended "allocate resources" in the original motion to "allocate government surplus" and "optimize the fiscal surplus" respectively. I think there is room for discussion on their amendments. In the course of formulating and implementing an industrial policy, the Government should be proactive not only when there is a fiscal surplus. Rather, as shown in LEGISLATIVE COUNCIL ─ 19 March 2015 7857 the example of South Korea which I gave in my keynote speech, there is a greater need for the Government to launch effective counter-cyclical measures in times of economic downturn, so as to restore our economic vibrancy and lay the foundation for sustained development.

President, I so submit.

SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT (in Cantonese): President, first of all, I need to thank Ir Dr LO Wai-kwok for proposing today this motion on "Formulating a long-term and comprehensive industrial policy". I also wish to thank Members for speaking on the motion and the amendments proposed by five Members. I will respond to the views raised by Members during the debate and the major areas referred to in the amendments.

President, today I have listened to the many views raised by Members in respect of Hong Kong's industrial policy, and some individual Members consider our policy not good enough in many aspects. President, certainly we should not be complacent about our industrial policy, but we should not be unduly humble either. President, as a matter of fact, I have met with many ministers of economic affairs when they visited Hong Kong and I have also attended numerous international meetings on economic affairs. Every time when we discussed about the economy of Hong Kong, the ministers of many other economic entities would express their admiration for Hong Kong's development and relative advantages.

Indeed, Hong Kong's competitive and development edges are by no means inferior to other economic entities. We have the superb regimes indispensable to advanced economic entities, and we also have distinguishing features and charms of an international metropolis. Hong Kong is a city where East meets West and talents from different parts of the world come together. Just now some Members referred to the changes in Hong Kong's rankings in the relevant international economic reports and expressed concern that Hong Kong's competitiveness might be showing signs of decline. Just like any other incessantly developing economic entities, Hong Kong's rankings may be adjusted due to various factors or developments. Nevertheless, Hong Kong's capacity to compete has always been valued and recognized by the international community. Besides, the implementation of "one country" and "two systems" is an edge 7858 LEGISLATIVE COUNCIL ─ 19 March 2015 exclusive to Hong Kong, as we can benefit from the concessions offered by our country and from our own edges that are very different from those of other Mainland cities. If we give full play to these internal and external advantages, we will be fully equipped to promote the diversified development of Hong Kong's industries and attain long-term and sustainable economic growth, thereby enhancing our competitiveness as a whole to retain and attract talents.

Mr WONG Kwok-hing was rather angry when he spoke just now, and he queried why I had not responded to the misunderstandings that Mr Kenneth LEUNG or Mr Charles Peter MOK had about our industrial policy. I wish to say to Mr WONG Kwok-hing that he does not have to be so upset, as we are all aware of the culture of this Council. Indeed, we have the relevant evidence and factual proofs to show people that Hong Kong's industrial policy is heading towards the right direction. Certainly, I will need more time to expound on the various aspects of our policy so as to respond to the many views raised by Members. However, in order not to keep Members in this Chamber for too long, I will shorten substantially this lengthy speech to enable Members to go home earlier. It is getting late actually, as this is eight o'clock already and we have not yet had dinner. As I have mentioned in my opening speech, the Government's industrial policy seeks to maintain Hong Kong's major economic capacity through expanding and enhancing the edges of our pillar industries. It is also our aim to support the development of newly emerged industries to help ensure a more diversified and broader foundation for our economy, so as to cater for Hong Kong people's employment, business start-up, investment and business operation needs. In that way, our younger generations can have more choices and better opportunities to give full play to their potentials, thereby ensuring a prosperous economy and a vibrant community for Hong Kong.

President, I wish to first speak on a few aspects relating to the enhancement of our pillar industries. I will start with the trade and logistics industry. In recent years, the marked economic development in Asia has given a boost to the demand for high-price products and quality logistics services, and the sector has been gradually shifting to the provision of quality logistics services to dovetail with this trend. To support the sector's development in this direction, and to strengthen Hong Kong's position as a logistics hub, the Government will keep on promoting the provision of transport infrastructure and logistics exclusive zones, identify new sites for use as logistics zones, and implement the SMe-Plug Jumpstart Programme to encourage small and medium enterprises engaging in LEGISLATIVE COUNCIL ─ 19 March 2015 7859 logistics services to use the newly developed electronic plugs to connect with the large-scale electronic services platforms for maritime transport and air freight, thereby enhancing the efficiency of cargo data transmission.

Regarding external development, the Association of South East Asian Nations (ASEAN) was Hong Kong's second largest goods trade partner in the past year. The Government is actively negotiating free trade agreement with the ASEAN and target to conclude the negotiation next year, so that our business sector can be benefited as soon as possible. In addition, to consolidate our position as an international trade centre, Hong Kong has also taken the lead in joining the World Trade Organization Agreement on Trade Facilitation.

As regards the opportunities offered by our country, the extensive economic co-operation corridors linking up Asia, Europe and Africa made available under the "One Belt One Road" initiatives will lead to ample intensive development opportunities. The Government will strengthen trade connections with the potential markets along the corridors through high-level mutual visits, with a view to enhancing mutual understanding and concluding free trade agreements and investment promotion and protection agreements, thereby giving further play to Hong Kong's position as an international hub of business, trading and freight services, and to our role as a "super-connector".

President, I would now like to switch to tourism. The Government attached great importance and give support to the development of Hong Kong's tourism industry. As mentioned in the amendment proposed by Mr YIU Si-wing, we have been committed to formulating short, medium and long-term planning to help promote the development of the tourism industry.

Some of the software initiatives introduced can achieve results in the short-term. Such examples include 3D light shows and mega events, as well as the entertainment fairs held on short-term vacant urban sites.

The annual government funding provided for the Hong Kong Tourism Board (HKTB) enables the HKTB to launch promotion projects in both the overseas market and Hong Kong. This year, the Government will allocate an additional $80 million for the HKTB to step up its overseas promotion efforts in the coming year, collaborate with the retail sector in organizing shopping festivals and introducing shopping offers, and invite representatives of overseas tourism sectors to Hong Kong to participate in large-scale exchanges.

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In addition to short and medium-term planning, the Government has also invested plenty of resources in the development of tourism hardware over the past years. Some specify examples include providing support for the Ocean Park and the Hong Kong Disneyland to develop new hotels and new theme areas, enhancing co-operation among relevant departments to launch the hotel sites adjacent to the Kai Tak Cruise Terminal expeditiously, assisting the local community to explore the feasibility of developing shopping centres in border areas, and looking into ways to enhance the tourism attractions and facilities on Lantau Island.

Let me now switch to the field of business and professional services. Hong Kong's business and professional services are among the best in the world and highly competitive. Following the introduction of the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) in 2003, the markets on the Mainland are further opened up to the relevant sectors from Hong Kong. In December last year, the Mainland and Hong Kong signed an agreement under the CEPA framework to achieve early basic liberalization of trade in services between Guangdong Province and Hong Kong. The Government will continue to seek on this basis to further open up Mainland markets, with a view to achieving basic liberalization of trade in services on the Mainland for Hong Kong by the end of the year.

In order to promote the development of Hong Kong into a premier intellectual property trading hub, the Government will set aside $23 million in the coming three years for offering intellectual property consultation and manpower training to small and medium enterprises, supporting the development of intellectual property intermediary services, and conducting promotional and educational activities. We will announce the relevant details in due course.

The last pillar industry is the financial services industry. Hong Kong is an international financial centre, and the Government is currently working on a number of legislative measures, which include implementing the newly enacted Companies Ordinance and reforming the trust laws to promote the further development of the financial services industry. The Financial Services and the Treasury Bureau is currently drafting an amendment bill to improve the corporate insolvency law, with a view to strengthening Hong Kong's competitiveness as a financial centre.

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Besides, the Government will continue to promote the development of Hong Kong into our country's international financial centre attracting capital and talent from within and outside the country. Specifically speaking, the Central Government has announced a series of measures on the basis of the country's 12th Five-Year Plan to support Hong Kong efforts to developing offshore Renminbi business. The Shenzhen-Hong Kong Stock Connect launched in November last year has realized the two-way opening up of the two cities' capital markets, thereby enhancing Hong Kong's position as the chief offshore Renminbi business centre.

Let me now speak on the measures to support the emerging industries. The first area is innovation and technology. Innovation and technology is the major driving force supporting industries and the economy to move up the value ladder. The major measures implemented by the Government include:

(1) to propose injecting $5 billion into the Innovation and Technology Fund and subsuming the Research and Development Cash Rebate Scheme under the Fund;

(2) the Hong Kong Science and Technology Parks Corporation (HKSTPC) to earmark $50 million to establish a Corporate Venture Fund and extend its Leading Enterprises Acceleration Programme;

(3) to set up a Technology Start-up Support Scheme for Universities to provide an annual funding of HK$24 million to six local universities, initially for three years; and

(4) to launch a new Enterprise Support Scheme to replace the Small Entrepreneur Research Assistance Programme, the funding ceiling of which for each approach project is HK$10 million.

To support the development of data centres, the Government has been implementing two concessionary measures since June 2012 to encourage the conversion of industrial buildings into data centres and the development of high-end data centres on industrial sites. In addition, with the support of the Government, 11 high-end data centres have been set up by international enterprises in the Tseung Kwan O Industrial Estate. The Government is planning to make available a second data centre site in Tseung Kwan O, the size of which is around 1 hectare.

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In view of the business opportunities available in the prosperous Mainland markets, the Government has been assisting Hong Kong's information and communications technology (ICT) products to enter the Mainland markets. Besides, the Cyberport, HKSTPC and Hong Kong Trade Development Council will continue to organize exchange tours for the local ICT sector to visit the major markets across the world to present Hong Kong's innovative ICT products and services, with a view to creating more international co-operation opportunities and attracting overseas investment.

In order to strengthen the efforts to promote the development of Hong Kong's innovation and technology sector and to enhance Hong Kong's long-term competitiveness, the Chief Executive announced in last year's Policy Address the decision to re-initiate the setting up of an Innovation and Technology Bureau. The sector has been looking forward to it for years. It is their hope that with the dedicated high-level leadership of the Bureau and its strategic efforts to promote the development of Hong Kong's innovation and technology sector, they can make full use of the favourable circumstances and business opportunities arising from technological advancement. I hope Members will adopt a pragmatic approach and abandon the various filibustering activities to support the prompt establishment of the Innovation and Technology Bureau.

Just now Mr SIN Chung-kai mentioned about revitalizing the various industrial estates to induce the return of the industrial sector for development. I believe many members of the sector do agree that given the limited land and manpower resources in Hong Kong, the land-intensive or low value-added and labour-intensive industries may not be conducive to the long-term economic development of Hong Kong. As such, we should picture the return of industries in the perspective of the overall trend of economic development and make the right move after assessing factors like operating cost and comparative advantages. The HKSTPC will take into consideration the needs of the sector and the latest market situation to revitalize the industrial estates to bring the best economic benefits to Hong Kong.

As regards the creative industries, Hong Kong people's dynamism, unconventional way of thinking and agile business mindset are the factors that have facilitated the emergence of creative industries in recent years. The Government will inject an additional $400 million into the CreateSmart Initiative to give continuous support to the creative industries. Create Hong Kong will also review the management and future development of the CreateSmart LEGISLATIVE COUNCIL ─ 19 March 2015 7863

Initiative, and the review is expected to complete by the middle of the year. The Government will consult the Legislative Council on the additional injection into the CreateSmart Initiative in due course.

The film industry is the flagship of Hong Kong's creative industries. In order to further promote the development of our film industry, the Government will make a further injection of $200 million into the Film Development Fund to help raise the production budget ceiling of the Scheme for Financing Film Production, relaunch the First Feature Film Initiative, and continue with the measures to promote Hong Kong movies on the Mainland and overseas.

The creative industries also serve to enlighten the traditional industries to expand and develop into the area of high value-added activities. Let me cite some examples. The Government is aware of the long-standing edges of Hong Kong's fashion industry and that the industry has been making good efforts to nurture local fashion designers with potentials. Having regard to the industry's discussions and recommendations, the Government will invest existing resources and new resources, totalling $500 million, to implement a series of pilot measures in the coming three years, with a view to supporting the development of the fashion industry through nurturing talents and promoting the collaboration between conventional manufacturing industries and fashion-related industries, strengthening promotional efforts, as well as implementing relevant institutional arrangements, thereby encouraging the fashion designing industry and garments industry to co-operate with each other to achieve greater economic benefits.

On the front of art and culture, as mentioned as in this year Budget, we have seen a blossoming of widely acclaimed local arts groups in recent years. The Government will launch a $300 million Art Development Matching Grants Pilot Scheme, under which the amount of private donation and sponsorship secured by eligible local arts groups will be matched by grants. This measure will offer a platform for the younger generation in particular to actualize themselves and help promote the continuous development of our cultural industry.

With regard to social enterprises, the public has been attaching more and more importance to social enterprises. With the relentless and concerted efforts of the Government and various sectors over the years, local social enterprises have attained solid growth, and the number of social enterprises has increase from 260 to 457 in six years' time. The Government will earmark $150 million to roll 7864 LEGISLATIVE COUNCIL ─ 19 March 2015 out a new phase of the Enhancing Self-Reliance Through District Partnership Programme to benefit more types of social enterprises and encourage greater participation of the commercial sector in the development of social enterprises, so as to give support to the diversified development of our economy and society.

Regarding the development of green industries, this notion of promoting the development of green industries is also mentioned in the amendment proposed by Mr SIN Chung-kai. In this connection, the Government has established the Steering Committee to Promote Sustainable Development of Recycling Industry in 2013 to step up concerted efforts in reducing waste at source and promote the development of the recycling industry. The Government has also earmarked $1 billion for the setting up of a Recycling Fund to help the recycling industry enhance its operational capacity and efficiency, thereby promoting waste recovery and recycling.

On the constitutional front, in order to formulate a more comprehensive and long-term industrial policy, the Chief Executive has established the Economic Development Commission (EDC) in 2013 to focus on efforts to broaden our economic base, work on the overall strategy and policy to enhance our long-term development, as well as identify and explore industries which present opportunities for Hong Kong's further economic growth.

Over the past two years, the EDC has been actively focusing its discussions on the possible policies and measures to promote the development of the relevant industries.

The EDC has continually recommended to the Government a number of policies and measures to support the development of the individual industries concerned. The Working Group on Manufacturing Industries, Innovative Technology, and Cultural and Creative Industries, for example, has made some concrete recommendations, including allowing more young design talents to attend overseas work attachment; encouraging companies to employ research and development talents; strengthening the various incubation programmes; enhancing the support given to film-making and its post-production work, as well as the support measures for promoting the development of our fashion industry mentioned earlier on. The Government is looking forward to more concrete recommendations from the EDC.

LEGISLATIVE COUNCIL ─ 19 March 2015 7865

Mr Kenneth LEUNG's amendment has mentioned land planning strategies. The Government is aware of the importance of land planning to the efforts to cater for Hong Kong's economic development and industrial transformation. As mentioned in this year's Policy Agenda, the Government will update the HK2030 Study published in 2007 for adoption as the territorial development strategy. Besides, the Government will continue to take forward the transformation of Kowloon East into a core business district, look into ways to increase the floor areas of commercial/office premises, and commence studies to explore potential or feasibility of topside development on the Hong Kong Boundary Crossing Facilities Island of the Hong Kong-Zhuhai-Macao Bridge and the development of underground space in urban areas, so as to address the needs of Hong Kong's social and economic development.

The amendments proposed by Mr Kenneth LEUNG and Mr Charles Peter MOK have both referred to Hong Kong's manpower resources. As I have mentioned in my response to the motion moved by Mr Andrew LEUNG, manpower resources is the driving force pushing the economy to move forward. Hence, the Government has all along been actively implementing a number of policies and measures to maintain Hong Kong's competitiveness and sustainable development through investing in education and talent nurturing.

The Government conducts manpower projection from time to time to project the broad trends of Hong Kong's manpower supply and requirements of our economy at the macro level for the medium term, and to assess the potential manpower imbalances at different education levels, so as to review and formulate appropriate measures to cater for the development needs of the industries concerned. As regards the manpower shortage problem facing individual industries, the Government will continue to liaise closely with the stakeholders of the relevant industries and the labour sector. For instance, to deal with the construction industry's problems of shortage in skilled workers and an ageing work force, the Government will, in the light of the industry's characteristics, formulate improvement measures that can further enhance the flexibility of the construction industry.

The various industries are contributing to the economy in a sequential order while leading and affecting each other mutually. The Government knows where Hong Kong's edges lie, and has committed to promoting our economic development through giving support to the leading pillar industries. Having regard to the long-term and continuous development needs, as well as the keen competition from other economic entities, the Government knows it very well 7866 LEGISLATIVE COUNCIL ─ 19 March 2015 that in addition to relying on our existing advantages, Hong Kong should also explore new development directions and orientations. The overall policy of the Government is to advocate and promote diversified development of industries, to achieve economic synergies through efforts to enhance and strengthen the edges of various industries, and to provide the right conditions to help explore and nurture emerging industries with potentials, so as to enhance Hong Kong's competitiveness and enable Hong Kong to cope with the ever-changing international economic situation. In that way, in addition to living in peace and working in contentment, the people can also enjoy more upward mobility opportunities.

President, I so submit.

PRESIDENT (in Cantonese): I now call upon Mr MA Fung-kwok to move an amendment to the motion.

MR MA FUNG-KWOK (in Cantonese): President, I move that Ir Dr LO Wai-kwok's motion be amended.

Mr MA Fung-kwok moved the following amendment: (Translation)

"To add ", as the diversified development of industries is conducive to building a healthy and mature economy," after "That"; to add "increase the metropolitan glamour of Hong Kong," after "start-up,"; and to add "and the soft power of the city" after "competitiveness"."

PRESIDENT (in Cantonese): I now propose the question to you and that is: That the amendment, moved by Mr MA Fung-kwok to Ir Dr LO Wai-Kwok's motion, be passed.

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

(Members raised their hands)

LEGISLATIVE COUNCIL ─ 19 March 2015 7867

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

(No hands raised)

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

PRESIDENT (in Cantonese): Mr YIU Si-wing, as Mr MA Fung-kwok's amendment has been passed, you may now move your revised amendment.

MR YIU SI-WING (in Cantonese): President, I move that Ir Dr LO Wai-Kwok's motion as amended by Mr MA Fung-kwok be further amended by my revised amendment.

Mr YIU Si-wing moved the following further amendment to the motion as amended by Mr MA Fung-kwok: (Translation)

"To add "; at the same time, in response to the development trends of the tourism industries worldwide and in China, the SAR Government should also formulate short, medium and long-term planning for the tourism industry, which serves as one of the pillar industries of Hong Kong, in the light of the capacities of tourism supporting facilities and future development of tourism resources, so as to foster the sustainable and healthy development of Hong Kong's tourism industry" immediately before the full stop."

PRESIDENT (in Cantonese): I now propose the question to you and that is: That Mr YIU Si-wing's amendment to Ir Dr LO Wai-Kwok's motion as amended by Mr MA Fung-kwok be passed.

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

(Members raised their hands)

7868 LEGISLATIVE COUNCIL ─ 19 March 2015

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

(No hands raised)

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

PRESIDENT (in Cantonese): Mr Kenneth LEUNG, as the amendments of Mr MA Fung-kwok and Mr YIU Si-wing have been passed, you may now move your revised amendment.

MR KENNETH LEUNG (in Cantonese): President, I move that Ir Dr LO Wai-Kwok's motion as amended by Mr MA Fung-kwok and Mr YIU Si-wing be further amended by my revised amendment.

Mr Kenneth LEUNG moved the following further amendment to the motion as amended by Mr MA Fung-kwok and Mr YIU Si-wing: (Translation)

"To add "; this Council also urges the SAR Government to conduct comprehensive studies on the mode of long-term economic development and competitiveness of Hong Kong, and based on the findings, to formulate land planning strategies, manpower resource programmes and tax measures which are conducive to the diversified development of Hong Kong's economy" immediately before the full stop."

PRESIDENT (in Cantonese): I now propose the question to you and that is: That Mr Kenneth LEUNG's amendment to Ir Dr LO Wai-kwok's motion as amended by Mr MA Fung-kwok and Mr YIU Si-wing be passed.

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

(Members raised their hands)

LEGISLATIVE COUNCIL ─ 19 March 2015 7869

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

(No hands raised)

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

PRESIDENT (in Cantonese): Mr Charles Peter MOK, as the amendments of Mr MA Fung-kwok, Mr YIU Si-wing and Mr Kenneth LEUNG have been passed, you may now move your revised amendment.

MR CHARLES PETER MOK (in Cantonese): President, I move that Ir Dr LO Wai-Kwok's motion as amended by Mr MA Fung-kwok, Mr YIU Si-wing and Mr Kenneth LEUNG be further amended by my revised amendment.

Mr Charles Peter MOK moved the following further amendment to the motion as amended by Mr MA Fung-kwok, Mr YIU Si-wing and Mr Kenneth LEUNG: (Translation)

"To add "; this Council also urges the SAR Government to promote the development of local innovation and technology industries and consolidate Hong Kong's competitive edge in Asia Pacific and internationally, and allocate more resources to sustainably nurture local talents which meet the needs of the development of industries, and enhance the quality of manpower resources; at the same time, the SAR Government should also formulate specific support measures for the development of industries, create employment opportunities to retain talents, improve the mismatch of local manpower resources" immediately before the full stop."

PRESIDENT (in Cantonese): I now propose the question to you and that is: That Mr Charles Peter MOK's amendment to Ir Dr LO Wai-kwok's motion as amended by Mr MA Fung-kwok, Mr YIU Si-wing and Mr Kenneth LEUNG be passed.

7870 LEGISLATIVE COUNCIL ─ 19 March 2015

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

(Members raised their hands)

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

(No hands raised)

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

PRESIDENT (in Cantonese): Mr SIN Chung-kai, as the amendments of Mr MA Fung-kwok, Mr YIU Si-wing, Mr Kenneth LEUNG and Mr Charles Peter MOK have been passed, you may now move your revised amendment.

MR SIN CHUNG-KAI (in Cantonese): President, I move that Ir Dr LO Wai-Kwok's motion as amended by Mr MA Fung-kwok, Mr YIU Si-wing, Mr Kenneth LEUNG and Mr Charles Peter MOK be further amended by my revised amendment.

Mr SIN Chung-kai moved the following further amendment to the motion as amended by Mr MA Fung-kwok, Mr YIU Si-wing, Mr Kenneth LEUNG and Mr Charles Peter MOK: (Translation)

"To add "; this Council also urges the SAR Government to optimize the fiscal surplus to increase substantially the investment in human capital and social infrastructure; the relevant policies and measures should include: (1) to revitalize the various industrial estates, so as to induce the return of the industrial sector for development; (2) to expand the uses of the existing Innovation and Technology Fund, so as to support the development of innovation and technology industries; (3) to reserve more lands for developing data centres and develop Hong Kong into a data hub LEGISLATIVE COUNCIL ─ 19 March 2015 7871

of cloud computing in Asia; and (4) by making reference to the practices under the New Producer Responsibility Scheme on Glass Beverage Bottles, to provide market values for recyclable waste with low market values (e.g. plastics), and establish a government-funded body corporate for operating the waste recycling industry on its own, thereby promoting the development of green industries" immediately before the full stop."

PRESIDENT (in Cantonese): I now propose the question to you and that is: That Mr SIN Chung-kai's amendment to Ir Dr LO Wai-Kwok's motion as amended by Mr MA Fung-kwok, Mr YIU Si-wing, Mr Kenneth LEUNG and Mr Charles Peter MOK be passed.

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

(Members raised their hands)

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

(No hands raised)

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

PRESIDENT (in Cantonese): Ir Dr LO Wai-Kwok, you may now reply and you still have one minute eight seconds.

IR DR LO WAI-KWOK (in Cantonese): President, a total of 22 Members, including five Members who have moved amendments, have spoken on my motion today. I have listened to their speeches which are full of profound knowledge and penetrating insight. I hereby express my thanks. I believe and 7872 LEGISLATIVE COUNCIL ─ 19 March 2015 also hope that my motion can arouse the concern of various sectors of society. We will then draw on collective wisdom and adopt all useful ideas. I thus urge the SAR Government to expeditiously formulate a long-term, comprehensive, balanced and forward-looking industrial policy, so as to ensure sustainable development of Hong Kong's economy.

Since all the amendments have been passed, I believe that my motion can also be passed. I hereby thank Members for supporting this motion. Thank you.

PRESIDENT (in Cantonese): I now put the question to you and that is: That the motion moved by Ir Dr LO Wai-kwok, as amended by Mr MA Fung-kwok, Mr YIU Si-wing, Mr Kenneth LEUNG, Mr Charles Peter MOK and Mr SIN Chung-kai, 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 as amended passed.

NEXT MEETING

PRESIDENT (in Cantonese): I now adjourn the Council until 11 am on Wednesday 25 March 2015.

Adjourned accordingly at 8.19 pm.