Business Environment

64. During the past few years we have been encouraging enterprises to improve management and to promote market competition as a way of improving Hong Kong's competitiveness in the face of economic change. Now we are exploring ways to further streamline licensing and reporting procedures. We will also ensure that prior to formulating new policies and legislation, the impact on the business environment will be fully assessed.

65. In Hong Kong, a number of industries such as clothing, toys and watch-making have long enjoyed a competitive edge. They are among world market leaders and have great potential for further development. They are facing an urgent need to further enhance their capabilities. I will cite two examples to illustrate this. Our fashion designers are known worldwide and their products sell well in the international market place. However, under WTO rules, the planned abolition of the quota system in 2005 will usher in a completely new set of conditions. To help meet this challenge, we will strengthen training in fashion design at our tertiary institutions and boost promotion overseas so that our local fashion industry can carve its own niche in the world market and set international trends. Another example is our film industry, which has been competing in the international market for many years. We are doing much to provide a favourable environment for the industry to grow - promoting the establishment of an advanced film production centre, funding relevant manpower training, carrying out overseas promotions and facilitating location shooting in Hong Kong. The measures are to help this creative industry to realise its full potential.

66. Government departments should always be conscious of the need to enhance our institutional framework so that these and other industries can operate in an environment that is conducive to their further development.

67. Over the past few years, the Government has been vigorously promoting the application of technology and encouraging innovation. We have placed special emphasis on the wider use of information technology to improve overall productivity and help create new jobs opportunities. As a result, there has been a remarkable change in the community's attitude. Innovation and technology have been recognised as an important part of our restructuring. We have also set up the Council of Advisers on Innovation and Technology and established a $5 billion Innovation and Technology Fund. The Hong Kong Science Park, Applied Science and Technology Research Institute and the Cyberport will lead to greater synergies between teaching, research and business. We are encouraging traditional industries to use technology and innovation to improve competitiveness, and provide the right conditions for the 'incubation' of emerging industries.

68. The importance of electronic commerce is increasingly being recognised. In May this year, we announced our revised 'Digital 21' IT strategy to promote the development of e-commerce under the theme 'connecting the world'.