For Meeting on 8 September 2016 Paper Ref : CSD/3/2016

Commission on Strategic Development

Promotion of Cultural and Creative Industries in Hong Kong

Introduction

Cultural and creative industries (CCIs) comprise a set of knowledge-based activities that deploy creativity and intellectual capital as primary inputs and deliver goods and services with cultural, artistic and creative contents1. The Census and Statistics Department (C&SD) has identified the following 11 sectors as CCIs: art, antiques and crafts; cultural education and library, archive and museum services; performing arts; film, video and music; television and radio; publishing; software, computer games and interactive media; design; architecture; advertising; and amusement services.

2. In terms of organisation of business in the Hong Kong SAR Government, a division of responsibility is drawn between cultural and creative industries. Those sectors which traditionally have a higher commercial element (design, digital entertainment, advertising, architecture, film, broadcasting, music, publishing and printing) are classified as creative industries, and have been put under the purview of the Commerce and Economic Development Bureau (CEDB). Those less commercially-oriented and art-focused sectors fall under the purview of the Home Affairs Bureau (HAB) and are regarded as arts and cultural activities. In the context of supporting arts development in Hong Kong by the Hong Kong Arts Development Council (HKADC), arts activities

1 In the international community, the concept and definition of CCIs are still evolving. The terms “cultural and creative industries”, “creative industries”, “cultural industries” and “copyright industries” are used by different international organisations and countries/territories to describe CCIs. Based on the definition adopted by the United Kingdom, one of the countries which first sought to define and identify CCIs for promotion and development, CCIs are “those industries which have their origin in individual creativity, skill and talent and which have a potential for wealth and job creation through the generation and exploitation of intellectual property”.

- 1 - are categorised into ten art forms – music, dance, drama, xiqu (Chinese opera), literary arts, visual arts, film (and media) arts, arts education, arts administration, and arts criticism. Nevertheless, there are also other genres in the arts that are multi-disciplinary in nature (such as theatre technical arts).

3. In general, arts and cultural activities cannot easily develop into a financially self-sustaining industry. Cultural services in Hong Kong such as museums, libraries and performance venues are mostly publicly run by the Government. For the non-governmental players in the sector, most of them require government support in different aspects, including funding support for the creation and production of arts programmes, provision of publicly funded venues for presentation of programmes, grooming of talents through arts education programmes provided by the publicly-funded Hong Kong Academy for Performing Arts (HKAPA), as well as audience building and arts education to promote the long-term development of the arts.

4. Notwithstanding the division of responsibilities within the Government for CCIs, in real life, the distinction between cultural industries and creative industries is much less clear. There are some examples of cultural activities developing into an industry, for example, art trading. There are also examples of creative industries becoming part of Hong Kong’s culture, for example, local comics and the local film industry. A brief note on art trading in Hong Kong is at Annex A.

Economic and social significance of CCIs to Hong Kong

5. It is a global trend for advanced economies to make use of CCIs as engines for propelling economic growth and tools for diversifying the economic base. The economic contribution of CCIs to Hong Kong can be partly quantified in the generation of value added for gross domestic product (GDP) and job creation. Some headline figures compiled by C&SD are as follows –

˙ In 2014, the value added of CCIs was $109.7 billion. From 2005 to 2014, the value added of CCIs in nominal terms increased at an average annual rate of 8.6%, significantly - 2 -

faster than the average annual growth rate of the GDP of Hong Kong at 5.4%. CCIs’ share of Hong Kong’s GDP increased from 3.8% in 2005 to 5.0% in 2014;

˙ Between 2005 and 2014, double-digit growths for value-added were registered in various sectors, namely advertising (10.2%), architecture (14.9%), design (16.9%) as well as software, computer games and interactive media (11.6%);

˙ Employment in CCIs increased from 171 990 in 2005 to 213 060 in 2014. This represents an average annual growth rate of 2.4%, which is faster than the average annual rate of increase of total employment in Hong Kong at 1.3% over the same period. Accordingly, CCIs’ share of total employment of Hong Kong climbed from 5.1% in 2005 to 5.7% in 2014; and

˙ Between 2005 and 2014, significant growth rates for employment were registered for some sectors such as architecture (4.5%) and design (5.7%) as well as software, computer games and interactive media (3.7%).

Arts and cultural industries

6. Promotion of the arts and culture is crucial to every society. It not only enriches the quality of life for people in Hong Kong and adds colors to our diversified city life, but also highlights our cultural identity as an international city rooted in traditional Chinese culture. Arts and cultural development also provides a good platform for engaging youths and helps attract incoming visitors to experience the unique cultural landscape of Hong Kong, a place where the east meets the west. Snapshots of the state of development of specific genres of arts, including performing arts, visual arts and literary arts, are at Annex B.

7. Arts and culture also plays a significant role in building social cohesion by enabling dialogues between peoples and nations, thus contributing to social wellbeing, strengthening our communities, and enhancing understanding and acceptance of differences. - 3 -

Creative industries

8. Creative industries are characterised by a large number of small and medium enterprises (SMEs). They enable our economy to more flexibly respond to the changing economic environment. Cross-sectoral collaboration (crossover) is common among creative sectors. Harnessing the use of digital technologies and platforms as well as lower-cost distribution and promotional channels, local creative industries can be readily expanded to cover markets outside Hong Kong. However, the business opportunities provided by the digital technologies and platforms have no boundaries and are equally available to local and overseas entities in the industry.

9. Creative industries also have a broader positive impact on the society. As consumers, members of the public are able to enjoy the products of creative industries. The growth of creative industries also provides employment opportunities to our young people and helps diversify our economic base. As creative industries mainly rely on creative thinking rather than capital, academic qualifications or working experience, the entry barrier and start-up cost is relatively low. Self-employed entrepreneurs and start-ups are common. More importantly, creative industries provide young people with an avenue to realise their potential and a path to self-actualisation.

Relevant Government policy, strategy and current landscape

(A) Arts and cultural industries

Arts and cultural policy and current landscape

10. The Government’s vision is to develop Hong Kong into an international cultural metropolis with a distinct identity grounded in Chinese traditions and enriched by different cultures, where life is celebrated through cultural pursuit; and creativity is a constant driver of progress in the community. It is the Government’s objectives to –

(a) provide opportunities for wide participation in culture and the arts; - 4 -

(b) provide opportunities for those with potentials to develop their artistic talents;

(c) create an environment conducive to the diversified and balanced development of culture and the arts;

(d) support the preservation and promotion of our traditional cultures while encouraging artistic creation and innovation; and

(e) develop Hong Kong into a prominent hub of cultural exchanges.

Strategy and support measures

11. The Government has been actively creating an environment conducive to the diversified development of culture and the arts, upholding the freedom of artistic expression and creation, and encouraging wide participation.

12. In 2016-17, HAB allocates $4 billion on arts and culture development (excluding capital works expenditure). The recurrent resources are mainly deployed for running public cultural services by Leisure and Cultural Services Department (LCSD), subvention to our key strategic partners in arts and culture, i.e. the HKADC and the HKAPA; providing recurrent subvention to the nine Major Performing Arts Groups; provision of venue support for arts activities; as well as arts education and promotion. A breakdown of the provision in 2016-17 is at Annex C. From 2014-15 to 2016-17, the annual recurrent expenditure on the arts and culture has increased by 15%. With additional resources available from dedicated funds such as the Arts and Sport Development Fund and the Cantonese Opera Development Fund, etc., funding support, in the form of time-limited or project grants, is also available for nurturing small and medium performing arts groups as well as budding artists to ensure a healthy and vibrant arts scene. Major areas of work are outlined at Annex D.

- 5 -

Hardware development

13. The Government supports the development of the arts and culture in Hong Kong through the construction and operation of various types of cultural venues, including performance venues, public museums and public libraries.

14. At present, the LCSD manages 16 performance venues of varying sizes and capacities situated at accessible locations all over the territory, including the multi-purposed venues such as the Hong Kong Cultural Centre and the Hong Kong City Hall, the revitalised Yau Ma Tei Theatre dedicated to nurturing young talents for Cantonese opera opened in July 2012, and Ko Shan Theatre New Wing opened in October 2014.

15. The LCSD also manages 14 public museums, the Hong Kong Film Archive, two heritage centres and two visual arts centres, and operates a network of Hong Kong Public Libraries comprising 69 static and 12 mobile libraries.

The West Kowloon Cultural District

16. The West Kowloon Cultural District (WKCD) project is a strategic investment by the Government to promote the development of art and creative industries, meet the growing cultural needs of the public, attract and nurture artistic talents, and strengthen Hong Kong’s position as an international art and cultural metropolis. The Government granted an upfront endowment of $21.6 billion to the WKCD Authority to develop a prime 40-hectare waterfront site into an integrated arts and cultural hub with world-class facilities.

17. With construction works currently underway, a mix of arts and cultural facilities would come on stream in two batches starting from 2016. Its first venue, the M+ Pavilion, has been completed in July and is scheduled to open to the public in September 2016. This will be followed by the opening of the Xiqu Centre in 2018, the Art Park including the Freespace with a black box theatre and an outdoor stage from 2018 in stages, the M+ Building accommodating a museum on contemporary visual culture in 2019, as well as the Lyric Theatre - 6 -

Complex in 2021. Planning for the arts and cultural facilities in the last batch, including a Great Theatre, a Music Centre and a Medium Theatre, will commence at a later stage.

Art fairs and auctions

18. In tandem with the growth in the overall convention and exhibition industries, there has been an increase in the number of events related to arts, culture and creative industries (including design) covering a wide range of fairs and auctions as these industries developed rapidly in recent years. The rise in the visual arts and antiques segment is particularly visible to the trade and the public at large.

19. Many top-tier galleries have been set up in Hong Kong recently, such as Gagosian Gallery (US), White Cube (UK), Edouard Malingue Gallery (France), Galerie Perrotin (France), Simon Lee Gallery (UK) Galerie NeC (France), Pearl Lam Galleries (Mainland China), etc. The growth of art fairs in Hong Kong has gone beyond the imagination of the public. Art Hong Kong was debuted in 2009 amidst a gloomy market sentiment. Fast forward by seven years, the fourth edition of Art Basel Hong Kong in 2016 featured 239 galleries from 35 countries and territories and it attracted 70 000 visitors breaking the record since its debut in Hong Kong in 2013. Art Central, which inaugurated last year, also featured over 100 galleries and attracted 32 000 visitors in 2016.

20. Art auction has also grown significantly in Hong Kong. Global market leaders have expanded their footprint in Hong Kong in recent years. For instance, Sotheby’s opened its gallery in Hong Kong in May 2012 while Christie’s opened its permanent gallery space in March 2016. Hong Kong has now become the world’s 3rd largest art trading market in terms of auction sale and both Sotheby’s and Christie’s have achieved record-breaking sales in Hong Kong. Apart from these traditional market leaders, art auction houses from emerging markets are also investing in Hong Kong. This year the Indonesia-based Masterpiece Auction House opened an office in Hong Kong to help expand its market share of the growing Asian modern and contemporary art market and its first auction in Hong Kong featuring Southeast Asian and Chinese modern and contemporary art works was held in March - 7 -

2016.

(B) Creative industries

Government policy and current landscape

21. Creative industries have developed in Hong Kong for a long time. Certain sectors have traditionally enjoyed a high standing regionally and internationally, for example, our film, television and publishing sectors have gained popularity in Hong Kong as well as among Chinese communities overseas.

22. The expression “cultural and creative industries” was first mentioned in the 2005 Policy Address when the Government systematically grouped relevant economic sectors under the banner of “cultural and creative industries” and stated that such sectors “[add] value to products and services through design, packaging, image building and advertising serves to consolidate and realise the intangible values of culture”2. Since then, furthering the development of creative industries in Hong Kong has been a recurring theme in subsequent Policy Addresses and Budget Speeches.

23. Create Hong Kong (CreateHK) was set up in June 2009 as a dedicated office under the CEDB to spearhead the Government’s efforts to promote the development of creative industries, provide one-stop services to the trade and manage resources set aside for supporting the industries. Details of CreateHK’s specific duties in promoting the development of creative industries are set out at Annex E.

24. Hong Kong is well positioned to develop creative industries. Our strengths lie in our business-friendly environment; open, multicultural and inclusive society; excellent infrastructure and readily available professional services; ready pool of talents3; and our close proximity to the Mainland which offers a less costly production base and

2 Source: Paragraph 85 of the 2005 Policy Address.

3 The number of full-time graduates of creative industries-related disciplines has steadily increased from some 7 000 in 2012 to about 9 600 in 2014.

- 8 - a massive market.

25. As in other advanced economies, industry and trade bodies naturally come into place and with their knowledge and expertise, they become Government’s partners in promoting the development of creative industries. Apart from the industry bodies, entities like the Federation of Hong Kong Industries, the Hong Kong Trade Development Council, the Hong Kong Design Centre (HKDC), the Hong Kong International Film Festival Society (HKIFFS), as well as non-governmental organisations like PMQ (revitalised from the former Police Married Quarters on Hollywood Road) and Fashion Farm Foundation have a role to play in promoting cross-sectoral collaboration. The academia (e.g. design schools and film faculties of local tertiary institutes) also work closely with the trade. There is generally good rapport amongst the agencies and the collaborative spirit is strong.

Vision and Strategies

26. In terms of promoting economic development, we seek to export our products and services and look for inward investment. The strategy in respect of creative industries is the same. It is the Government’s vision to entrench Hong Kong’s position as a trend setting creative hub where investors and buyers would look for high-value business opportunities, products, services and talents.

27. To drive the development of creative industries, our current areas of focus are –

(a) market development (i.e. bringing “high value” customers to Hong Kong, and taking our talents and products to the Mainland and overseas markets);

(b) talent and start-up nurturing (i.e. a nurture-based ladder of capacity-building support initiatives targeting graduates, practitioners and start-ups); and

(c) promotion of cross-sectoral and cross-territorial collaboration (i.e. encouraging crossover collaboration, and - 9 -

strengthening ties between Hong Kong and other countries/cities to facilitate sharing of experiences, exchange and collaboration).

28. Government plays a facilitative role. Through two funding schemes operated by CreateHK, the CreateSmart Initiative and the Film Development Fund (details of the two schemes are at Annex F), a partnership approach is adopted whereby the trade or industry bodies initiate and implement different kinds of support programmes with funding support from the Government. Under this approach, the Government harnesses the capacity, creativity, expertise and networks of a wide range of professional and trade bodies and the community. The market-driven and trade-championed approach allows the trade to organise programmes which best fit the needs of their respective sectors. By pooling together the resources of multiple parties, we make the best use of the available resources and the cooperative spirit of the trade and community.

29. We work closely with the stakeholders and review our strategies from time to time. Under the Economic Development Commission (EDC) chaired by the Chief Executive, the Working Group on Manufacturing Industries, Innovative Technology, and Cultural and Creative Industries (MICWG) has been set up to discuss policies and measures to promote the development of cultural and creative industries. MICWG has examined the landscape in respect of design, film and fashion industries. In relation to design and film industries, specific recommendations have been made on nurturing of design talents, incubation support for design start-ups, financial support for small-budget film productions, etc., with a view to helping these sectors scale new heights. Specific proposals in relation to uplifting the fashion industry have also been made and implementation actions are in the pipeline.

30. For the film sector, the Film Development Council (FDC) advises the Government on the policies, strategies and allocation of resources in supporting the sector. The Government adopts a four-pronged strategy in further supporting the development of the film industry, as announced in the 2015 Policy Address. Details of the sector-specific policy in respect of fashion and film industries, developed - 10 - in consultation with EDC and FDC as mentioned above, are set out in Annex G.

Support measures

31. Apart from providing funding support as mentioned above, the Government is committed to fostering cross-sectoral and cross-territorial collaboration for creative industries. Hong Kong annually hosts creative signature events, such as Business of Design Week (BODW), Art Basel Hong Kong, Hong Kong International Film Festival, Entertainment Expo (including Hong Kong International Film and TV Market (FILMART)). Details of these signature events are at Annex H. All these events which carry a creative industry focus are cross-sectoral and cross-territorial in nature. Apart from trade promotion, these signature events attract high value international visitors and reinforce Hong Kong’s position as an exhibition and convention hub.

32. Taking a more macro perspective, strengthening our ties with overseas countries or cities help facilitate networking, promote the brand of “Hong Kong Creative Hub” and open up new markets for Hong Kong. Apart from the 12 BODW partner countries or cities established over the years, we have worked closely with cities in the Pearl River Delta area, e.g. Guangzhou and Shenzhen, and have more recently furthered our ties with Korea. Hong Kong has entered into Memoranda of Understanding or co-operation agreements on creative industries with the Guangdong Province, Shenzhen and Korea.

Comparison with other cities/economies

33. Hong Kong mainly provides indirect funding support to creative industries by capitalising on the expertise of strategic partners which in turn organise programmes for the benefit of practitioners and enterprises.

34. There are also other forms of support for SMEs across all industries in Hong Kong, including SMEs in the creative industries. These include the SME funding schemes administered by the Trade and Industry Department, viz SME Export Marketing Fund, SME Loan - 11 -

Guarantee Scheme and SME Development Fund.

35. By comparison, other economies in the region, such as Taiwan, Korea and Singapore as well as some Mainland cities such as Shenzhen and Shanghai (which are also our key competitors) provide in some cases more direct monetary support measures to businesses/industries in the form of, for example, tax incentives, grant, loan, loan guarantee, etc. to enterprises to attract inflow of investment and talents. Development of creative industries in neighbouring Asian economies and their support measures are set out at Annex I.

Opportunities and challenges

(A) Opportunities

36. The Government is committed to respecting the freedom of expression and artistic autonomy of arts groups and arts practitioners. There is also a general respect for such in the community. Market players of creative industries will continue to enjoy access to free flow of information and benefit from a robust intellectual property protection regime.

The WKCD Project

37. The development of WKCD provides excellent opportunities for unleashing synergy and fostering partnership between the traditional art forms and emerging creative industries. For example –

(a) some performing arts venue are designed in such manner that they can cater for the needs of the film industry to accommodate film screening and red-carpet event;

(b) space requirement for creative industries (such as HKIFFS, HKDC, commercial cinemas) may be accommodated in the WKCD with the provision of spaces designated for other ancillary and cultural facilities;

(c) different venues may be provided for entertainment and events - 12 -

industry (e.g. The Park has emerged as a high-impact venue for outdoor large scale events);

(d) M+ will showcase moving images, architecture and design on top of other contemporary visual culture; and

(e) exhibitions and performances involving the crossover of different art forms can be explored using WKCD’s world-class venues and the vast public open space.

38. Cultural collaboration is a key pillar underpinning the artistic strategy of the WKCD. In preparation for the commissioning of arts and cultural facilities in the next few years, the West Kowloon Cultural District Authority (WKCDA) has made great strides on three fronts, as set out in paragraphs 39-41 below.

(1) Exchange for professional development

39. WKCDA has been undertaking in-depth cultural exchanges with regional, national and overseas partners, in order to promote artistic development, academic research, and skills development. Cultural exchange will be an inspiration throughout the entire cycle of work development in WKCD from creation to presentation, and WKCDA will aim to develop specialist knowledge, skills, and understanding in order to become a leader in specific focus areas (such as Cantonese opera). WKCDA’s key initiatives are highlighted as follows –

(a) Producers’ Network Meeting and Forum took place in both 2015 and 2016 and brought together cultural workers from Hong Kong, Macau, Taiwan, Mainland China and overseas countries ranging from Thailand to Belgium to foster networking building within the arts ecosystem and to shape the development of the region’s burgeoning performing arts sector;

(b) Xiqu Centre Seminar Series was organised in collaboration with The Chinese Artists Association of Hong Kong and the HKAPA. Xiqu experts and artists from the region, including - 13 -

those from the Mainland and Taiwan, were invited to conduct dialogues with local experts and share their experience and insights on the revitalisation, innovation and future development of traditional Chinese theatre. Public seminars, workshops and master classes were arranged for young artists to widen their artistic horizon;

(c) Xiqu Cultural Exchange Programme was launched by WKCDA in 2014 in collaboration with The Chinese Artists Association of Hong Kong. The programme provides opportunities for young local artists to learn from key Xiqu institutions and experts in the region, such as Zhejiang Xiaobaihua Yue Opera Troupe and Chongqing Chuan Theatre;

(d) New Works Forum was organised to provide a platform for Hong Kong artists working across different fields to expand their practice into new areas through exploring innovative ways of creating and performing, as well as thinking and discussing topics around contemporary performances. Overseas artists were engaged to provide insight into different art forms, such as mixture of digital technology and dance in the latest episode; and

(e) International Workshop Festival of Theatre in 2015 invited 11 international theatre and contemporary performance makers from various overseas countries such as Indonesia, Germany, Norway, Spain, Belgium, UK, and Switzerland etc. to share their experience and approaches to performance-making. The Festival featured workshops, public lectures, dialogues with Hong Kong artists and an online archive giving theatre practitioners the opportunity to augment their knowledge and skills in the company of leading theatre and contemporary performance makers from around the world.

(2) Building Venue Network

40. WKCDA has been building venue networks to increase the - 14 - profile of local artists and works on the international stage, as well as improve the quality of local artists and audiences through increased exposure. For example, the Xiqu Centre has entered into a Memorandum of Understanding on exchange and collaboration with the Shanghai Center of Chinese Operas in July 2016 and will continue to explore exchange and collaborative relationships with other Xiqu institutions outside Hong Kong.

(3) Presenting and showcasing local artists

41. Starting from 2013, M+ has collaborated with the HKADC in presenting Hong Kong artists at the Venice Biennale. Solo exhibitions were curated for two homegrown talents, Lee Kit and Tsang Kin-wah, in 2013 and 2015 respectively. The two exhibitions have attracted significant international attention and put young Hong Kong visual artists firmly on the world map.

42. Hong Kong has been a “super-connector” between China and the rest of the world, providing an ideal business environment for overseas enterprises and is the key conduit to the flourishing Mainland China market. It is also our policy to foster cultural links with different countries to enrich the development of culture and the arts in Hong Kong. Hong Kong offers the freedom and an environment conducive to artistic creation and cultural diversity. Coupled with our efficient immigration control policies, we can attract artists, art groups and cultural organisations from all over the world to perform, exhibit works or participate in various art and cultural exchange activities in Hong Kong.

43. For the future development and cross-fertilisation of the CCIs, we can harness the market development opportunities brought by the National 13th Five-Year Plan and the Belt and Road Initiative to help Hong Kong develop new markets.

National 13th Five-Year Plan

44. The National 13th Five-Year Plan (13-5 Plan) expresses clear support for Hong Kong in leveraging our unique advantages to enhance our role and functions in the country's economic development and - 15 - opening up to other countries. It emphasises deepening co-operation between the Mainland and Hong Kong (particularly Guangdong-Hong Kong co-operation). In terms of the development of CCIs in the Mainland, Section 3 of Chapter 68 (第六十八章第三節) of the 13-5 Plan refers specifically to “推進文化業態創新，大力發展創意文化產業，促 進文化與科技、信息、旅遊……產業融合發展”. In this regard, we should encourage more exchange and experience sharing between the Hong Kong creative industries sector with their counterparts in the Mainland. Apart from the transfer of knowledge and experience, our creative sectors should be alive to the collaborative and investment opportunities as the CCIs of the Mainland transform and take off. Taking the film industry as an example, through co-productions, the Hong Kong film industry has played an active role in the further development of the film industry in the Mainland; co-productions, by their very nature of having Hong Kong’s participation, have a stronger international appeal and there are examples of such productions having successfully entered overseas markets.

45. On the front of arts and culture, in addition to the cultural co-operation agreements entered with the Ministry of Culture as well as other provinces/cities in the Mainland4, we have also established strategic platforms for cultural exchange and collaboration including the annual Greater Pearl River Delta Cultural Co-operation Meeting (partnering with the Department of Culture of Guangdong Province and the Cultural Affairs Bureau of the Macau SAR), as well as the Hong Kong-Taiwan Cultural Co-operation Committee (CCC) to take forward cultural co-operation initiatives with Taiwan. Amongst other things, the CCC has organised the annual “Hong Kong Week” since 2012 to present to the Taiwanese audience the vitality of Hong Kong’s arts, cultural and creative sectors.

Belt and Road Initiative

46. As for the Belt and Road Initiative, it is a significant development initiative proposed by the Central People’s Government with the intention of promoting economic co-operation among countries

4 They include Guangdong Province, Yunnan Province, Zhejiang Province, Shanghai and Beijing.

- 16 - along the Belt and Road routes. Hong Kong can ride on it to explore new markets in the international arena and strengthen its unique role in providing international trade and networking platforms. For example, we could seek to invite suitable Belt and Road countries like Iran to participate in our FILMART.

47. Hong Kong can also play an active role in cultural exchanges under the Belt and Road Initiative. In line with the framework of the Belt and Road Initiative, the HAB will continue the efforts to promote cultural exchanges to foster “people-to-people bond” with the Belt and Road countries. For example, Hong Kong has been hosting the Asia Cultural Co-operation Forum (ACCF) since 2003, which is now a biennial event since 2007. We will invite countries along the Belt and Road to participate in the future editions of the ACCF to facilitate experience sharing on cultural co-operation and exchange with other places in the Region.

48. Furthermore, we will continue to enhance co-operation with overseas countries in the field of culture and the arts through the signing of Memorandum of Understanding on Cultural Co-operation, which sets out the principles of promoting and strengthening cultural co-operation and exchange between signatories. We will also strengthen the co-operation and exchange with our counterparts along the Belt and Road by organising various cultural exchange activities such as organising thematic international cultural conferences, exhibitions and cultural activities like World Cultures Festival, Asian Ethnic Cultural Performance.

(B) Challenges

49. Given our relatively small local market, Hong Kong’s creative industries need to think big and be willing to venture into non-local markets as they mature. The Mainland market is a natural choice for Hong Kong’s CCIs given Hong Kong’s deepening economic co-operation and shared culture with the Mainland. Different creative sectors have different pace of entering the Mainland market. While great strides have been made by the film sector (mainly in the form of co-productions), it is less so for some others (see details at Annex J). The need to observe - 17 - content restrictions, for example in the publishing, comic and digital entertainment industries, remains a challenge. We will continue to engage the relevant Mainland authorities to seek further facilitative measures for the Hong Kong creative industries.

50. Hong Kong is not alone in seeking to position itself as a creative hub. Our neighbouring economies are seeking the same with fervour. For example, Korea has made it a national policy to develop CCIs and embarked on a global drive to export its CCIs, particularly pop-culture. Singapore has drawn up sector-specific development strategies and set up various funding schemes for three major CCI sectors: arts and culture; design; and media. As for Shenzhen, it has one of the largest design communities and clusters in the Mainland. Hong Kong needs to move up the value chain and identify its niche. Our strength lies in the unique broad perspective of our young talents who grow up in a liberal environment where eastern culture meets with western values. The relative ease of starting a business in Hong Kong also helps enrich our talent pool.

51. In relation to the culture sector, having the necessary space for artist creation and production is important for the continuous growth of the sector. There is an increasing trend for artists and arts groups to set up their studios in industrial buildings for artwork production due to their relatively lower rental, higher headroom and loading capacity, and more spacious physical layout, etc. This has given rise to planning and regulatory issues concerning the use of industrial buildings for artwork production. To cater for the need of the artists and arts groups, the Government has been actively exploring the provision of space for local artists and budding arts groups to support their engagement of artistic creation. Details on the measures taken to address this challenge are set out at Annex K.

52. In the development of the arts and culture, people are the key factor. Whether people with artistic talents are willing and able to devote themselves to arts creation and arts activities depends on the interplay of many factors, including the overall value and importance that the society attaches to the arts and culture; the ecology of the arts sector; and the availability of opportunities for them to develop and showcase - 18 - their talents. In particular, in the area of performing arts, the grooming of talents in various art forms requires intensive training starting from a very early age. Traditionally, as parents in Hong Kong attach great importance to the academic development of their children, relatively few of them would allow or encourage their children to choose an artistic career. Nevertheless, we are seeing signs that, with the efforts made by the Government and various arts organisations and collaborators in promoting arts to the community, the overall community is becoming more supportive and appreciative of the importance of the arts and culture.

53. With the growing development of the arts and culture sector in the past years, nurturing a strong pool of arts talents and arts administrators become more crucial to the success to the Hong Kong as an international arts and cultural metropolis. In this connection, the Government is committed to enhancing our support in nurturing arts talents through various grant schemes and by funding various training and education programmes. Details are set out at Annex K.

54. In relation to financial sustainability of arts groups/organisations, arts and culture is less commercially oriented than creative industries and thus require Government funding support for it to grow and develop. While recognising the continued need for Government’s financial support in various forms, we are mindful of the potential problem of over-reliance of the sector on public funding. We believe that the Government should further enhance the overall operating environment of the sector and support arts groups in capacity building, and encourage them to diversify their source of income so as to create a more conducive environment for their sustainable development. Efforts made by the Government to enhance the ability of arts groups/organisations to solicit donations and sponsorships are set out at Annex K.

55. Raising publicity and awareness holds the key to attracting investment and new bloods for the industries. We consider that there is room for improvement in terms of raising public awareness of the prospects of the industry and opportunities for young people, particularly opportunities available in the Mainland. - 19 -

56. The challenge of identifying objective tools to measure the success of Government’s efforts in promoting the development of creative industries in quantitative terms is not to be understated. There have been views, echoed by members of the Legislative Council, on the lack of concrete information on the outcome or realised economic benefits of the Government’s support for creative industries in terms of, say, the number of jobs created in the creative sectors, additional value added for GDP, etc.

Way Forward

57. While arts and culture may not be a commercially viable business on its own, it does serve as one of the promising ways to increase opportunity for the development of creative industries. Cultural and creative industries have become increasingly integrated. Culture has great potential to act as a catalyst of creativity and innovation. By building a society with cultural diversity, it will not only help fuel a creative industry with creative talents who seek to experiment and explore, but also build up a market that is receptive to innovation and imaginative ideas and products. On the other hand, the entrepreneurial and innovative services from the creative industries may help the trading and marketing of traditional non-profit making art and culture and also contribute to the cross-fertilisation of the two sectors through sharing of talents, knowhow and network.

58. Arts and cultural activities are also drivers for other related economic undertakings - creating an industry that supports jobs, attracting visitors for the development of tourism industry, catalyzing the development of related ancillary creative industries of good commercial value such as marketing and advertising, media and entertainment, etc. Facilitating cultural and creative institutions to operate in clusters may generate synergies for the sectors. For example, operating art and design schools and museums in the same locality may provide better support for fostering networking, generate training opportunities for the creative workforce and facilitate closer partnership and skills transfer between the institutions. The development of WKCD provides a good opportunity for materializing such synergy - apart from promoting the creation and development of traditional arts sectors and activities, the - 20 -

WKCD will also play a role in fostering the growth of creative industries.

59. Generally, the Government treats all the creative sectors in the same manner. However, given the different developmental opportunities and the stages of development, it is for consideration whether there is a need to pick winners, accord priority to specific creative sectors with a higher growth potential and focus limited public resources on, for example, a few strategic sectors such as design, digital entertainment and film. In terms of funding, there may be a need to re-visit our approach of providing time limited or one-off funding to specific entities or projects, given the “recurrent” nature of some of the support projects and measures. In reality, there is little prospect for certain types of support measures, like capacity building or talent nurturing projects undertaken by the trade, to become financially self-sustainable even in the long run.

60. As in other industries, working with the trade and stakeholders is crucial to drawing up pertinent facilitative and support measures. At present, such engagement is undertaken in a multi-faceted manner through the EDC and its working group, advisory groups (Film Development Council) and other day to day contacts with stakeholders. The pros and cons of instituting a more structured form of stakeholder engagement without duplicating the present setup is perhaps something worth exploring.

Commerce and Economic Development Bureau Home Affairs Bureau August 2016

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Annex A

Art Trading in Hong Kong

 Hong Kong is the third largest art market by auction sales. Auction sales in Hong Kong have grown in importance in comparison to New York and London in recent years. Many international galleries have also been set up in Hong Kong.

 With simple and low tax, absence of foreign exchange control, full currency convertibility and availability of professional services, Hong Kong provides access to high net worth individuals in Asia Pacific. The rapidly growing number of wealthy Asian and Chinese collectors has resulted in significant demand for contemporary and western art, adding to the buoyancy of Hong Kong’s art market.

 Hong Kong has a thriving art scene with an art district based around Central, SoHo and Sheung Wan as well as destinations which are evolving into art clusters in former industrial districts such as Wong Chuk Hang, Aberdeen, Chai Wan, Kwun Tong, Fo Tan, etc. Projects in the pipeline are the West Kowloon Cultural District and Tai Kwun (Central Police Station Compound).

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Annex B

Snapshots of the state of development of specific genres of arts

Performing arts

 Hong Kong has a vibrant performing arts scene with more than 8 000 performing arts performances every year, attracting an annual audience of over 3 million.

 The nine Major Performing Arts Groups 1 (MPAGs), altogether receiving about $330 million recurrent subvention in a year, presented a total of 630 performances in 2015-16.

 The LCSD also provides subvention to the Hong Kong Arts Festival, and presents a year-round programme of performances by visiting and local artists including two international festivals (i.e. the International Arts Carnival for children, young people and families in the summer and a thematic arts festival in autumn) each year2. In 2015-16, over 4 900 performances and activities were presented with LCSD’s funding support, providing opportunities for arts creation and performance for arts groups and artists.

Cantonese opera as a traditional performing art form

 Cantonese opera is one of the traditional genres of Chinese opera having a history of nearly 300 years. It is a popular entertainment and important vehicle for the transmission of Lingnan culture reflecting the life and ethos of the Cantonese-speaking community. In 2009, Cantonese opera was successfully inscribed onto the United Nations Educational, Scientific and Cultural Organization Representative List of the Intangible Cultural Heritage (ICH) of Humanity as a world heritage, and has gained wider

1 Namely, the Hong Kong Philharmonic, the Hong Kong Chinese Orchestra, the Hong Kong Sinfonietta, the Hong Kong Dance Company, the Hong Kong Ballet, the City Contemporary Dance Company, the Hong Kong Repertory Theatre, the Chung Ying Theatre Company and Zuni Icosahedron.

2 Namely, the World Cultures Festival and the New Vision Arts Festival which are being held in alternate years during autumn.

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attention in both overseas and local communities, contributing to more exchanges between the Hong Kong Cantonese opera industry and other Chinese opera genres in the Mainland, as well as more opportunities for Cantonese opera troupes to perform abroad.

 The art of Cantonese opera in Hong Kong is a mix of both traditional essence and local features, and is widely taken as an emblem of our local culture. To safeguard this valuable ICH item and to enhance public appreciation of the art form, the Government has made continuous efforts over the years in providing venues, training young artists, building audience and supporting Cantonese opera troupes to create favourable conditions for the sustainable development of this heritage.

 With the joint efforts of various stakeholders, Cantonese opera performances have grown in popularity again in recent years. In 2015-16, a total of 857 Cantonese opera performances were held in the LCSD’s performing arts venues, with attendance over 500 000, accounting for 16% of the total number of audience of the art and cultural performances recorded in the LCSD’s performing venues. Some troupes can also manage to operate on a commercial basis.

Visual arts

 Visual arts is one of the important categories of art forms which contributes to Hong Kong’s diversified local art scene. The visual arts sector is composed more of individual artists rather than art groups or companies as in the case of performing arts sector. The Government has been offering different kinds of support to visual artists through the provision of art space and venues; funding support for visual artists and arts groups; education programmes by the LCSD; and collaborative exhibition opportunities.

 To provide visual artists with opportunities to showcase their artworks on a frequent and continual basis, the public museums of the LCSD (the Hong Kong Museum of Art (HKMA) and the Hong Kong Heritage Museum (HKHM) in particular) have been actively collaborating with local and overseas museum counterparts as well as art organisations in organising exhibitions. The average number of

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exhibitions related to visual arts held3 and number of attendance4 in a year are around 25 and 1.8 million respectively. Also, an additional funding of $50 million has been allocated to the LCSD for acquiring and commissioning artworks by local artists since 2013-14 so as to foster the development of visual arts and nurture local artists.

 The exhibition space of HKMA will also be upgraded after completion of the refurbishment and expansion project in early 2019 with a view to featuring more contemporary art display and promoting renowned or emerging young local artists.

 Regarding public art in relation to visual arts, we have also been actively promoting its development in Hong Kong and providing support to local artists, through display of their creative works in public space, thus bringing art to the community. ArtAlive@Park, ARTivating Public Buildings and Art Display @ TI Tower - ‘Fusion' Sculpture Exhibition are a few examples.

 Although the Government is a major supporter of the arts, the arts scene in Hong Kong bustles with private sector initiatives, and many cultural activities are held throughout the year by non-Government cultural organisations (such as the HK Arts Centre, the Fringe Club, the Asia Society, etc.) as well as the corporate sector.

 The market for the trade in art works is very vibrant, and the large number of private auctions and international art fairs that take place here (such as the annual Art Basel HK) have helped make Hong Kong one of the most significant locations for visual arts trading in Asia.

3 The exhibitions counted are “in house” and “offsite” exhibitions organised by HKMA and HKHM, but not “outbound” exhibitions.

4 The number of attendance refers to the total attendance of HKMA and HKHM, but not the sum of attendance of individual exhibitions.

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Literary arts

 The Hong Kong Public Libraries under the LCSD is dedicated to promoting literary arts and reading culture in Hong Kong, in addition to meeting the community’s needs for knowledge, information, self-learning and continuous education, as well as the constructive use of leisure time. It organises a wide range of extension activities of more than 20 000 events with an attendance of over 3 million annually. In 2015, the numbers of library materials borrowed, the books and multimedia materials in stock, and the registered borrowers were 51.3 million, 14.2 million and 4.4 million respectively. On the other hand, the HKADC’s funding for promoting literary arts has been increased from $3.9 million in 2011-12 to $8.4 million in 2016-17.

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Annex C

The Government’s Provision for the Arts and Culture (2016-17 Estimates)

Million

Public performing arts venues and programmes 1,138.7

Public libraries and activities 1,191.2

Public heritage, museums and exhibitions 800.0

Subvention for major performing arts groups 334.6

Subvention for the Hong Kong Academy for 309.3 Performing Arts

Subvention for the Hong Kong Arts Development 124.4 Council

Culture-related expenditures 173.5 (e.g. Promotion work and administration)

Total: 4,071.7

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Annex D

Major areas of work of the Home Affairs Bureau (HAB)

(a) Hong Kong Arts Development Council (HKADC)

Through annual subvention provided by the Government, the HKADC plans, promotes, funds and supports the overall development of arts. It runs a number of grant schemes to support activities of local art groups and practitioners, organises different large scale art promotion projects to promote the interest and appreciation of arts among the community, support local art groups and practitioners to participate in overseas art events to raise the standard of local arts as well as deepen international understanding of Hong Kong art scene. The HKADC also grooms talented people and cultivates art administrators and budding artists by providing them with opportunities to receive training and to take part in cultural exchanges and internships both in Hong Kong and abroad.

(b) Hong Kong Academy of Performing Arts (HKAPA)

The HKAPA, a degree-awarding tertiary institution, offers professional education, training and research facilities in the performing arts including music, dance, drama, theatre and entertainment arts, film and television and Chinese opera. The Academy is a key strategic partner of the Government and plays a pivotal role in training performing arts talents.

(c) Support for Arts Groups and Artists

The Government is providing recurrent funding support for nine major performing arts groups1 (MPAGs). They play a key role in promoting performing arts development in Hong Kong through

1 Namely, the Hong Kong Philharmonic, the Hong Kong Chinese Orchestra, the Hong Kong Sinfonietta, the Hong Kong Dance Company, the Hong Kong Ballet, the City Contemporary Dance Company, the Hong Kong Repertory Theatre, the Chung Ying Theatre Company and Zuni Icosahedron.

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developing quality performing arts programmes, strengthening audience building and supporting arts education, cultivating artistic and arts administrative talents as well as promoting Hong Kong’s arts and culture to the international community through cultural exchange activities.

On top of the MPAGs, support is also available for nurturing small and medium performing arts groups as well as budding artists through various support measures, including the Arts Capacity Development Funding Scheme under HAB. The HKADC is also providing funding support to 53 small and medium arts groups through its One-Year/ Two-Year/ Three-Year Grant Scheme, while a total of 236 arts groups and artists have received funding under the HKADC’s Project Grant Scheme in 2015-16. This ensures a healthy and vibrant arts sector with wide participation.

(d) Venue support for Art Activities

The LCSD implements the Venue Partnership Scheme at most of its performing arts venues to foster partnership between the venues and art groups with the objectives of enhancing the artistic image and character of the venue and its partner, enlarging the audience base, optimising usage of facilities, and encouraging community involvement in the development of the arts. Moreover, through its Venue Subsidy Scheme, the HKADC provides subsidies to arts groups and artists in booking venues for rehearsals and performances.

(e) Arts Promotion and Education

The LCSD has set up the Audience Building Office, the Art Promotion Office and the Music Office to promote knowledge and appreciation of various art forms through audience building activities, public and community art projects and musical training classes. The Offices work to raise cultural literacy at community and school levels, making arts a lifelong pursuit especially for the young generation and benefiting the entire community of Hong Kong. The MPAGs and the HKADC also conduct a wide variety of arts education activities and launch various arts promotion programmes to bring the arts closer - 2 -

to the community and encourage participation in cultural activities.

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Annex E

Create Hong Kong’s Specific Duties in Promoting the Development of Creative Industries

Funding support

 Create Hong Kong (CreateHK) runs two funding schemes, namely the CreateSmart Initiative (CSI) and the Film Development Fund (FDF) to provide funding support to projects which promote the creative industries. The CSI covers those projects initiated by the trade and relevant stakeholders for supporting the development and promotion of the non-film creative sectors. The FDF provides co-financing and cash subsidies to film production projects, and funds other projects (e.g. Hong Kong-Asia Film Financing Forum, sponsorship of participation in film festivals) which are conducive to the development of the film sector. CreateHK provides secretarial support to the CSI Vetting Committee and the Film Development Council in processing all the funding applications.

Supporting strategic partners

 CreateHK supports trade bodies in promoting individual creative sectors. Specifically, CreateHK provides time-limited funding to the Hong Kong Design Centre for its basic operation and specific projects (e.g. Design Incubation Programme), as well as annual funding to the Hong Kong International Film Festival Society for the organisation of the Hong Kong International Film Festival.

Talent and start-up nurturing

 Through CreateHK’s funding support, the trade offers internship programmes to graduates of selected disciplines of creative industries. Practitioners of creative industries are able to enrich professional knowledge and business skills through participation in forums, seminars and workshops funded by CreateHK. For start-ups in - 1 -

advertising, design, animation and mobile games sectors, support or incubation programmes with different financial assistance packages and mentorship/training are available.

 CreateHK implements the First Feature Film Initiative, which identifies outstanding film practitioners and film school graduates through competition for the best production proposals and provides winning teams with production financing to make their directorial debut.

Market development

 CreateHK funds the organisation of business and networking platforms such as the Business of Design Week, Hong Kong-Asia Film Financing Forum, etc. CreateHK also provides funding support to enable market players to participate in trade fairs outside Hong Kong, such as book fairs, fashion weeks, etc., with a view to facilitating market development.

 CreateHK has co-organised a series of film promotional programmes with the relevant organisations of Guangdong and Macao. Such programmes, including Hong Kong film exhibitions held in Guangzhou, networking sessions and film financing forums, aim at enhancing exchange and collaboration among the trade of the three places, with a view to creating business co-operation opportunities.

 CreateHK also works with the relevant authorities of the Mainland and Macau to promote location filming and film production services in the Pearl River Delta Region (including Hong Kong), with a view to attracting overseas production crews to shoot films in the region and thereby encouraging film production, post-production and other related business activities in Hong Kong. For example, CreateHK showcased the filming locations and film production services of Hong Kong and the Pearl River Delta Region at FILMART 2016 to promote Hong Kong as a premium fixer which facilitates location filming by overseas film crews in the region.

 CreateHK pursues regional collaboration initiatives with the relevant - 2 -

organisations of the Mainland, such as strengthened co-operation with Shenzhen on creative industries, particularly design and architecture.

Fostering a creative atmosphere

 CreateHK has funded public engagement programmes for promoting creative industries, such as exhibitions on design, comics and architecture as well as film appreciation programmes. CreateHK is also a major sponsor of the annual Hong Kong International Film Festival.

 CreateHK has worked closely with the trade to launch large-scale promotional campaigns, namely 2012 Hong Kong Design Year and Hong Kong Ani-com Summer 2013, and has been supporting local creative landmarks, such as PMQ (revitalised from the former Police Married Quarters on Hollywood Road) and Comix Home Base, to promote greater awareness of Hong Kong design and ani-com among the general public.

Direct services to the trade

 CreateHK facilitates production of local and overseas film and television programmes in Hong Kong. CreateHK handles filming enquiries and follows up on requests for assistance raised by production crews on matters such as location scouting, obtaining permission for location filming in public or private premises, lane closure, etc.

 CreateHK performs statutory functions of issuing licences on the use of special effects materials (e.g. pyrotechnics and inflammable materials) in production of films, television programmes and other entertainment programmes.

Engaging the trade

 CreateHK liaises with the trade and relevant stakeholders on matters relating to the development and promotion of creative industries. - 3 -

 CreateHK provides secretarial support to the Hong Kong Film Development Council, which advises the Government on policy, strategies and funding arrangements for the promotion and development of the film industry.

 CreateHK engages the fashion industry through the Advisory Group on Implementation of Fashion Initiatives, which advises on, guides and co-ordinates the implementation of the Fashion Initiatives.

 CreateHK conducts research on issues relevant to creative industries, such as manpower demand and supply, creative clusters in Hong Kong, etc.

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Annex F

CreateSmart Initiative and Film Development Fund

 The Government provides a platform and necessary funding support for relevant stakeholders to support the overall development of creative industries while benefitting individual practitioners or entities. The Government has since 20071 injected $520 million into the Film Development Fund (FDF) and $1,000 million into the CreateSmart Initiative (CSI) respectively.

 The CSI assists in nurturing talents, supporting start-ups and expanding markets for non-film creative sectors while fostering a creative atmosphere in the community.

 The FDF supports similar programmes for the film sector with an ambit which also covers provision of co-financing to medium-to-small budget film productions and cash grant to small-budget productions.

 Each year, the CSI and the FDF commit, on average, about $75.7 million for around 35 projects and $34.7 million for around 19 projects respectively. Each year, about 1.6 million and 0.2 million 2 of participants, who include industry practitioners and members of general public, have benefited from the programmes funded by the CSI and the FDF respectively.

 The Government’s funding support for the CSI and the FDF is made in addition to other funding support to the Hong Kong Design Centre in promoting design and providing incubation services to design

1 The FDF was set up in April 1999. In July 2007, the Government increased the commitment for FDF by $300 million and expanded its scope to provide financial support for the production of small-to-medium budget films while continuing to finance film-related projects, which include those promoting Hong Kong films in the Mainland and overseas; training talents in various aspects of film production and distribution; and enhancing the interest and appreciation of Hong Kong films by the local audience. The CSI was subsequently established in June 2009.

2 The number of participants only covers those in respect of the film-related projects. It is not applicable to those film production projects funded by the FDF.

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start-ups and the Hong Kong International Film Festival Society for annually organising the Hong Kong International Film Festival.

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Annex G

Sector-specific policy in respect of the fashion and film industries

Fashion industry

 In November 2014, the Economic Development Commission (EDC) endorsed the recommendations made by the Expert Group on Fashion Industry under the Working Group on Manufacturing Industries, Innovative Technology, and Cultural and Creative Industries on support measures required for promoting the sustainable development of the fashion industry. The Government announced in the 2015-16 Budget that it agreed with the EDC’s recommendations and would consolidate existing and new resources totaling $500 million to launch a series of measures on a pilot basis for implementing the recommendations concerned over a three-year period between 2016-17 and 2018-19.

 It is further elaborated in the 2016-17 Budget that, specifically, the Government will –

(a) strengthen the promotion of local fashion designers and emerging fashion brands in Hong Kong and overseas;

(b) set up a resource centre to provide technical training and support for young designers; and

(c) establish the Fashion Incubation Programme.

Film industry

 In the 2015 Policy Address, the Chief Executive announced that the Government would continue to promote the development of the film industry through a four-pronged strategy as follows –

(a) to encourage more local film productions;

(b) to nurture production talent;

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(c) to promote film appreciation among students and young people to build up audiences; and

(d) to showcase and promote the brand of “Hong Kong Films” in the Mainland, Taiwan and overseas markets, facilitate the participation of local films in international film festivals, and help drive Hong Kong’s development as a film financing platform in Asia.

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Annex H

Efforts to Foster Cross-sectoral Collaboration in Creative Industries

International conferences and trade fairs

International conferences and trade fairs help raise the international profiles of Hong Kong as a creative hub and draw to Hong Kong industry leaders, VIP guests, trade delegates and tourists from the Mainland and overseas countries. The networking opportunities thus arising have created enormous opportunities for cross-sectoral collaboration.

Business of Design  BODW is a leading event in Asia on design, Week (BODW) innovation and brands. It provides ample opportunities for exchanging information and ideas between creative communities and business sectors through conferences, forums, exhibitions, networking gatherings, etc.

 With promotion of design as its core mission, BODW has facilitated crossover with other relevant creative disciplines such as arts, architecture, fashion, technology, urban design, etc.

 Each year, BODW and its concurrent events attract over 100 000 participants.

Hong Kong  FILMART is the largest marketplace in Asia for International Film the entertainment industry. It offers a and TV Market cross-media, cross-industry entertainment trade (FILMART) platform covering digital entertainment, film financing, licensing, post-production, etc.

 FILMART 2016 attracted more than 800 exhibitors from 30-plus countries and regions and over 7 300 visitors from 60 countries and - 1 -

regions. Internationally renowned producers, distributors, investors and professionals use FILMART to launch product and company promotions, network with key industry players and negotiate deals.

Art Basel Hong  Art Basel Hong Kong provides a platform in Kong Asia for galleries to showcase a diverse collection of artworks which comprise pieces by established and emerging artists as well as curated projects.

 Art Basel Hong Kong attracts private collectors and arts institutions from around the world, and provides a platform for artists, gallerists, collectors and museum directors to meet and exchange ideas.

 Art Basel Hong Kong 2016 presented 239 galleries from 35 countries and regions. 28 galleries exhibited at Art Basel Hong Kong for the first time. The show attracted over 70 000 visitors over five show days.

Infrastructural support

The Government’s support for PMQ (revitalised from the former Police Married Quarters on Hollywood Road) and the Urban Renewal Authority’s collaboration with the Hong Kong Arts Centre to set up the Comix Home Base (revitalised from pre-war buildings in Wanchai) show how heritage premises have been creatively put to good use to serve our local creative sectors.

PMQ  PMQ is a design-oriented creative landmark which showcases the works of local designers to tourists.

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 PMQ offers studios to over 100 entrepreneurs and start-ups engaged in design and creative industries. Space is also available for organising creative events.

 By building up a cluster of design and creative establishments to serve as focal point for relevant industries and creative events in the central business district, the potential for cross-sectoral collaboration has been greatly enhanced.

Comix Home Base  CHB was revitalised by the Urban Renewal (CHB) Authority from some pre-war buildings known as “Green House” in Wanchai.

 The Commerce and Economic Development Bureau (CEDB) has engaged the ani-com sector and the Federation of Hong Kong Industries to discuss possibilities of further promoting crossover collaboration by making better use of CHB.

Software support

The Government strives to promote intellectual property (IP) trading and crossover of different creative sectors.

Intellectual  CEDB is working in full swing on property (IP) implementation of the recommendations made trading by the Working Group on IP Trading to promote IP trading.

 The Intellectual Property Department has launched programmes which aim at raising IP awareness of enterprises, particularly SMEs, and assisting them in developing effective IP - 3 -

management and commercialisation strategies.

 CEDB has reached out to different industries such as fashion and textile, retail and publishing to promote cross-sector IP trading. Discussion sessions have been lined up for industry players such as toy manufacturers to network with comics artists and film production professionals.

Crossover of  Through the funding support of the CSI, a creative sectors crossover programme has been launched to match advertising production start-ups and budding producers with up-and-coming pop singers in producing microfilms. Through the crossover project, dual purpose has been served: supporting advertising production start-ups and providing performance opportunities and exposure to budding artistes.

 Create Hong Kong will continue to explore with the trade opportunities for promoting crossover of creative sectors.

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Annex I

The Development of Creative Industries in Neighboring Asian Economies and Their Support Measures

Singapore

 Creative industries in Singapore generally cover architecture, design, animation, broadcasting, film, games, interactive digital media, publishing and music. The nominal value added of creative industries in 2013 was approximately S$13.46 billion (HK$77.2 billion), representing about 14.7% of the GDP. The creative industries in Singapore was engaging around 112 070 persons, constituting 5.5% of the total employment of Singapore.

 Design Singapore Council (DSC), Media Development Authority (MDA) and National Arts Council (NAC) are three major government agencies overseeing the respective creative sectors in Singapore. DSC, MDA and NAC offer various types of grant and funding schemes to assist the development of Singapore’s creative industries.

 In 2009, MDA introduced the Singapore Media Fusion Plan which aimed to turn Singapore as Asia’s foremost business centre for financing, production and trading of media content, application and services, helping the media sector exploit new opportunities in digital media and making Singapore as a global capital for new Asia Media. NAC rolled out the National Arts Council Arts Education Programme to develop a database of quality arts education programmes organised by professional arts groups and artists. Schools participating in these programmes would receive up to a 50% subsidy on the programme cost. NAC also financially supports schools in stage performances at public performing spaces. On the other hand, NAC administers the Arts Housing Scheme so as to provide affordable spaces to arts groups and artists for development.

 Creative clusters are popular in Singapore. Some publicly-funded - 1 -

creative clusters are Mediapolis@one-north, Goodman Arts Centre, Aliwal Arts Centre, National Design Centre and Games Solution Centre.

South Korea

 The creative industries in South Korea generally include publishing, cartoon, music, gaming, film, animation, broadcasting, advertising, character, knowledge information and content solution. In 2013, South Korea’s creative industries employed 619 400 persons and generated the value added of 38,038 billion won (HK$258.7 billion), accounting for 2.9% of the GDP.

 Korea Creative Content Agency (KOCCA) is one of the main government agencies which supports the growth of the creative industries and dedicated to promoting different facets of creative industries. Since the establishment of KOCCA in May 2009, KOCCA supports commercialization of contents, promotion of various overseas expansion projects and promotion of game distribution.

 Since 2014, South Korea Government has promulgated the last Wednesday in each month as “Cultural Day”. On that day, some cultural-related activities such as film appreciation and facilities offer access/ admission discount to general public. For example, the public can enjoy discount at some famous cinemas such as CGV, Lotte and Megabox on that day.

 South Korea Government introduced discounted tickets to assist the unprivileged to access to different cultural and performing arts activities. For instance, watching films, dramas and opera. The South Korea Government also rolled out cultural pass to encourage the people aged 18-24 to access countrywide cultural facilities at discount.

 Creative clusters are prevalent in South Korea. Some government-supported creative clusters are Pajubookcity, Heyri, Digital Media City, Seoul Animation Centre, Seoul Game Contents - 2 -

Centre.

Taiwan

 Cultural and creative industries in Taiwan comprises 15 sub-sectors, namely visual arts, music & performing arts, cultural assets application/exhibition/performing facility, handicrafts, film, radio & television broadcasting, publication, advertising, product design, visual communication design, fashion design, architectural design, digital content, creativity living as well as popular music and cultural content industry. In 2013, Taiwan’s cultural and creative industries generated the sales of NT$780.4 billion (HK$189.3 billion) and 240 100 job opportunities.

 Taiwan unveiled in 2013 a proposal called “價值產值化-文創產 業價值鏈建構與創新” to underline the openness of cultural contents and added-value application, to forge cross-sectors and cross-industry collaboration, and to foster the connection and innovation of the upstream and downstream value chains so as to enhance the value added of the industries. Relevant authorities of Taiwan offer different types of funding schemes to support various projects or activities which are conducive to Taiwan’s cultural and creative industries.

 Taiwan is also committed to developing creative clusters, including Huashan 1914 Creative Park, Taichung Cultural & Creative Industries Park, etc.

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Annex J

Development of the Mainland Market by Hong Kong’s Creative Industries

 Since the negative list approach 1 does not apply to creative industries under the Agreement on Trade in Services signed under the framework of the Mainland-Hong Kong Closer Economic Partnership Arrangement (CEPA), Hong Kong’s service providers in creative industries are not accorded with “national treatment”.

 On the front of the film industry, the CEPA allows the import of Hong Kong movies into the Mainland on a quota-free basis and the distribution of Hong Kong-Mainland co-productions as Mainland movies. Hong Kong’s film industry has benefitted from the preferential market access measures available under the CEPA to collaborate with its Mainland counterpart. The number of Mainland-Hong Kong co-productions has increased from about 10 per year before 2004 to about 30 in recent years, and some of these co-productions have become box office hits in the Mainland.

 For certain creative sectors – covering publishing of books, animation, digital games and music – the Mainland market remained largely inaccessible to Hong Kong’s service providers. Attempts to lobby relevant Mainland authorities for further liberalising the Mainland market on either a full or partial scale to Hong Kong’s creative industries or subjecting Hong Kong’s works to the same vetting procedures applicable to the Mainland works have met with little success.

1 “Negative list” is a more transparent, stable and predictable way of listing liberalisation commitments in free trade agreements or investment agreements. Measures listed in the negative list are restrictive measures. With the adoption of the negative list, except for those restrictive measures as well as the horizontal management measures, the Mainland will not impose any particular restrictions on eligible Hong Kong service suppliers, i.e. “permitted if not forbidden”.

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Annex K

Measures to address challenges on the front of culture and arts

Arts space

 The Home Affairs Bureau (HAB) has explored possible means to relax the restriction on artwork productions in industrial buildings with relevant bureaux and departments, and has reached consensus with relevant departments including the Planning Department (PlanD) to include “Art Studio (excluding those involving direct provision of services or goods)” as an always-permitted use in industrial-office buildings in “I”, “OU (B)” and “Residential (Group E)” zones. PlanD also undertook to incorporate the inclusion of “Art Studio” into their submission to Town Planning Board in relation to amendments to outline zoning plans when opportunities arise.

 Funded by HAB and with the generous sponsorship by a landlord, the Hong Kong Arts Development Council (HKADC) has launched the first arts space scheme, namely “ADC Artspace” at a building in Wong Chuk Hang in 2014. The ADC Artspace provides 17 arts studios for leasing to visual artists and media artists at affordable rates. In addition, the Government has reserved spaces in the future development of a land sale site at Aberdeen for providing more arts space. The HKADC has been working with the Government in planning for the facilities to be provided therein, which will include 28 artist studios for renting to visual artists and media artists at affordable rates, an exhibition gallery and an arts information centre.

 The Tai Po District Council has also been in close collaboration with the HKADC to retrofit the former Tai Po Government Secondary School into an arts centre to provide artist studios for renting to performing arts groups at affordable rates, as well as multi-purpose rooms and music practice rooms for public hiring.

Cultural venues

 In response to the relatively high rates of unsuccessful applications for performing arts venues managed by LCSD and the aging equipment and deteriorating internal fittings of some venues which also affect the standard of performance delivered, we have - 1 -

commenced the construction of the East Kowloon Cultural Centre in 2016 for completion in late 2020. Some new and renovation projects are also under planning. In addition to the performing arts venues of the LCSD, the West Kowloon Cultural District will develop also a cluster of arts and cultural facilities targeting at different art forms and world class presentation.

Arts talents and support for arts groups

 We have been providing annual funding of about $310 million and policy support to the Hong Kong Academy for Performing Arts (HKAPA) for delivering professional arts training and education programmes in various performing arts disciplines. With Government’s provision of additional funding, the HKAPA started to migrate from a three-year to a four-year undergraduate degree structure from the academic year 2012/13, providing both undergraduate and sub-degree programmes. There are around 250 full-time equivalent graduates every year.

 The HAB continues to strengthen support for small and medium-sized arts groups and artists through various schemes implemented by the HKADC, including the One-Year/ Two-Year/ Three-Year Grant Scheme, literary arts platform schemes, as well as project grant scheme. Since 2014-15, the Government has provided additional recurrent funding to the HKADC to increase the provision for the above grant schemes, raising the annual budget for these schemes to about $78 million.

 Apart from the various grant schemes, the HKADC will continue to implement new pro-active projects in 2016-17 to support the development of local arts groups and artists, including new outbound projects (e.g. participation in Tanzmesse in Germany, OzAsia Festival in Australia and Gwangju Biennale in Korea) to showcase the talents of Hong Kong’s local artists and arts groups and promote them to the international community.

 The amount of recurrent subvention provided by HAB to the nine Major Performing Arts Groups has been increased from $220 million from 2007-08 to $334 million in 2016-17. The increase in funding support help the groups to enhance the artistic excellence of the groups through grooming and retention of talents and production of new works; strengthen the groups’ capacity in terms of management - 2 -

and financial development; and support the groups to cope with rising operating costs such as rental expenditure and salary increase.

 Moreover, we have earmarked an additional funding of $150 million to strengthen the training for arts administrators of various levels of experience in five years from 2013-14 onwards covering local internships, attachments to/internships with overseas cultural institutions, scholarships and training courses for arts administrators. It is estimated that a total of 600 training opportunities will be provided during the five-year period.

Financial sustainability of arts groups/organisations

 We have launched the Art Development Matching Grants Pilot Scheme in June 2016 with a view to facilitating the more established arts groups/organisations to enhance their ability in soliciting donations and sponsorships through matching grants provided by the Government, thereby widening their sources of funding and inculcating a donation culture for arts and cultural development.

 As part of the initiative, the HKADC also introduces and operates its own matching fund scheme under which small and medium-sized arts groups may receive matching grants from the HKADC for the amount of donations/ sponsorships they raise. The Scheme will help improve the financial capability of arts groups, large and small, thus enabling their further optimisation of human resources and enhancement in artistic excellence and operation.

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