• The global economic crisis has underscored the need for Hong Kong to diversify its economic base in areas that complemented the four traditional pillar industries of financial services, tourism, trade and logistics and professional services.
   
• The Chief Executive in his 2009-10 Policy Address announced that the Government will strive to promote six industries where Hong Kong enjoys clear advantages and which will add impetus to the city’s economic development. They are: testing and certification services, medical services, innovation and technology, cultural and creative industries, environmental industries and educational services.

• With appropriate policies to remove obstacles to their development, the six industries will enter a new phase of development, propelling Hong Kong towards a knowledge-based economy.
   
• The market has responded positively to the wine duty exemption announced in 2008 and the various supportive measures that have since been rolled out. Wine trading, distribution and other related businesses have all shown notable growth. The Government will introduce further measures to reinforce Hong Kong’s status as a regional hub for wine distribution and trading.

Optimising Land Use

• Land resources are crucial to the development of the six industries. Industrial buildings usually have spacious floors, flexible floor layouts and are conveniently located.  They have good potential for conversion to serve other uses, providing precious land resources to meet economic and social needs.
   
• The Government has proposed a series of measures to release the potential of over 1 000 old industrial buildings and to encourage the redevelopment or conversion of industrial buildings by owners.

 Testing and Certification

• The sector enjoys excellent international reputation. It is supported by a robust accreditation system.  Huge market and manufacturing base in the Mainland is an additional advantage.

• At present, there are some 160 accredited laboratories in Hong Kong providing a wide range of testing services, including those for food, consumer goods, industrial products and construction materials.

• Hong Kong has the potential to develop into a major testing and certification centre in the region because the demand for various types of testing and certification service is rising as consumers are increasingly concerned about the safety and quality of food and products.  Testing laboratories, certification bodies and inspection bodies will seek to expand their services and explore new markets.
   
• The Government established the Hong Kong Council for Testing and Certification in September 2009 to promote the professional standards and international recognition of the industry. The Council will work with the industry to formulate a three-year market-oriented development plan within six months of its establishment.
   
• The Government will assist the industry to promote its services in the Mainland and abroad; and seek Mainland authorities’ agreement through CEPA to recognise the testing reports issued by accredited laboratories in Hong Kong.
   

Medical services

• Hong Kong’s medical services, healthcare personnel training, code of conduct and transparency in delivery of services are of a high standard, resulting in an increasing number of medical tourists visiting Hong Kong. It is feasible to commercialise Hong Kong’s medical services.

• Hong Kong is renowned for several top-notch specialties, such as cardiology, arthroplasty for artificial joint and traumatology, all of which have amassed lot of experience. 
   
• The direction of development is that private hospitals should become the major service provider, supplemented by the establishment of an electronic health records system and training of healthcare personnel.
   
• The Government will:

⇒ reserve suitable sites for auction by private medical services operators;

⇒ speed up the establishment of the medical centres of excellence in paediatrics and neuroscience to further promote public-private partnership;

⇒ enhance training of medical professionals, including doctors, nurses, and allied health professionals;

⇒ create favourable conditions to attract more medical talents from outside Hong Kong for exchange of expertise, research and training, with a view to further raising the professional standard of the local healthcare sector; and

⇒ facilitate the promotion of medical professionals and private medical services of Hong Kong in the Mainland.

• The Hospital Authority will continue to explore integrated use of Chinese and Western medical treatment on a trial basis with a view to optimising the potential of Chinese medicine treatment.

Innovation and technology

• The Government attaches great importance to innovation and technology development in fostering the economic development of Hong Kong.
   
• The Science Park provides state-of-art infrastructural support to technology-based companies and start-ups. It has five clusters: biotechnology, electronics, information technology and telecommunications, precision engineering and green technology. There are currently over 280 companies in Science Park and the Government is considering the potential to develop its Phase 3.
   
• The HK$5 billion Innovation and Technology Fund (ITF), established in 1999, provides a secure source of funding for applied R&D projects and helps promote innovation and technology upgrading in our manufacturing and service industries. As at end September 2009, some 1 700 applications were approved, with a total project funding of HK$4.7 billion.
   
• The Chief Executive announced in his 2009-10 Policy Address the introduction of an “R&D Cash Rebate Scheme”, under which enterprises conducting applied R&D projects with the support of the ITF or in partnership with local designated research institutions will enjoy a cash rebate equivalent to 10 per cent of their investments.  The Government has allocated HK$200 million for the Scheme with a view to launching the Scheme in April 2010.
   
• In 2006, the Government set up R&D centres in five technology areas to drive and co-ordinate applied R&D efforts and to promote technology transfer to relevant industry. By the end of September 2009, the five R&D centres have undertaken over 240 R&D projects with a total project cost of HK$1.4 billion.  The centres will focus on commercialisation of their R&D results in the coming years.
   
• The Government will reinforce its technological collaboration with Shenzhen under the Shenzhen-Hong Kong Innovation Circle to make joint efforts to attract more R&D establishments into the region.

Cultural and creative industries

• Hong Kong is a melting pot of Eastern and Western cultures and is an excellent nurturing ground for cultural creation.

• Hong Kong has spectacular achievements in the fields ranging from architecture, advertising, comics, design, music, to films.
   
• We aim to drive Hong Kong’s cultural creation into economic gains and promote them in the Mainland and overseas markets.
   
• The “Create Hong Kong” (CreateHK) office was set up on 1 June 2009 for consolidation and allocation of work and resources which at present are designated among various departments.

• The Government has appropriated HK$300 million putting in place the “CreateSmart Initiatives”(CSI) with a view to providing funding to projects that are conducive to creative industries development in the next three years. 
   
• The Government will:

⇒ actively promote the interest and ability of Hong Kong people, particularly the youths, to appreciate art and culture;

⇒ provide more opportunities for artists to perform and display their works;

⇒ consider how to expedite the retrofitting or redevelopment of under-utilised industrial buildings for use by cultural and creative industries.

Environmental industry

• Green industry does not confine itself to specific environment-related trades like recovery/recycling.
   
• The concept of “green economy” impinges on a broad spectrum of businesses as “green DNA” is embedded in every sector of our economy.
   
• At present, Mainland authorities have taken a more liberal stance towards applications for Clean Development Mechanism (CDM) projects by Hong Kong enterprises. This will in turn help the transfer of greenhouse gas emissions reduction technology, thus setting a milestone in the development of green industry and the development of the Greater PRD region into a Green and Quality Living area.
   
• Investment from the public sector such as the over HK$30 billion input in environmental infrastructure will create jobs of all ranks.
   
• The Government has set up funding schemes, e.g. the HK$450-million Building Efficiency Funding Schemes which subsidize building owners to promote building energy efficiency, to offer more incentive for the private sector to join us for this cause. The Government has also planned to develop glass recovery/recycling services.
   
• The Government will take the lead in making Hong Kong a green city. Special measures include:

⇒ promoting wider use of electric vehicles;

⇒ expanding the scope of government green procurement;

⇒ ceasing the purchase of filament lamps; and

⇒ further devising green procurement guidelines for government departments in order to promote the green procurement policy.

Educational services

• Hong Kong will further enhance its status as a regional education hub through internationalisation and diversification.
   
• Three of the universities in Hong Kong have been rated in the top 50 universities in the world.

• Hong Kong has introduced measures to internationalise our higher education by :

⇒ doubling the non-local student quotas of the publicly-funded programmes to 20 per cent;

⇒ establishing the HK$1billion HKSAR Government Scholarship Fund to provide government scholarships

⇒ to outstanding local and non-local students;

⇒ allowing non-local students to take on summer jobs and on-campus part-time jobs; and
enabling non-local students to stay in Hong Kong without limitations for 12 months after graduation.

There are over 9 000 non-local students studying in our local higher education institutions.  There are also over 1 000 non-local courses in Hong Kong, providing degree or above level education to over 30 000 students.
 

• To further the development of education services, the Government will

⇒ continue to attract quality non-local students;

⇒ explore the possibility of allowing Mainland students to pursue studies in non-local courses at degree level or above in Hong Kong;

⇒ encourage our higher education institutions to step up exchange and promotion efforts overseas, particularly in Asia;

⇒ facilitate the development of more self-financing degree programmes;

⇒ reserve two sites in the urban area for self-financing post-secondary and continue to identify more suitable sites; and

⇒ seek necessary approval for increasing the commitment of the Start-up Loan Scheme by $2 billion to support the development of self-financing post secondary institutions.

Wine hub

• Hong Kong is quickly becoming a regional hub for wine trading and distribution. With the exemption of all wine duties in February 2008, Hong Kong became the first free wine port among major economies.
   
• Wine cooperation agreements signed with France, Bordeaux, Spain, Australia, Italy, Hungary and New Zealand since August 2008 have fortified Hong Kong's position as a regional wine hub.

• In 2008, the value of our wine imports jumped 80 per cent year-on-year to HK$2.9 billion.  In the first nine months of 2009, imports amounted to HK$2.7 billion, a 41 per cent increase year-on-year. As of early November 2009, a total of 19 wine auctions, with sales amounting to HK$658 million, have been held in Hong Kong since the duty exemption. The industry forecasts that Hong Kong is surpassing London to become the world’s second largest wine auction centre after New York.
   
• Apart from the Wine and Dine Festival organised by HKTB, the Trade Development Council’s Hong Kong International Wine Fair held from 4 to 6 November 2009 attracted some 525 exhibitors and 12 000 business visitors, representing a growth of 120 per cent and 36 per cent as compared with last year respectively.
   
• The Government has been working on support measures in various areas, including customs facilitation, trade and investment promotion, manpower training and education and combating counterfeits. We also facilitated the industry to launch a certification scheme for wine storage facilities in December 2009.
   
• We have just reached an agreement with the Mainland Customs to provide customs facilitation measures for wine exported from Hong Kong to the Mainland.