Published on "ComputerWorld Hong Kong", on 1 Jul 2010

Years of discussions between Guangdong and Hong Kong resulted in the signing of the Framework Agreement on Hong Kong/Guangdong Co-operation by Chief Executive Donald Tsang and the Governor of Guangdong Province-Huang Huahua-in Beijing this April. This agreement defined the direction of joint socio-economic development and outlined specific initiatives. To aid implementation, LegCo held a Motion Debate in May.

My prime concern was how to secure more policy support for the technology and creative industries under the Framework Agreement for the purpose of creating more employment. For this reason, I moved amendments to the motion: to incorporate training of talent, to promote technology and innovation, and to develop high-end industries-amendments which passed with majority votes.

The five areas

I believe that if Hong Kong can fully implement the policies and measures set out in the motion, they will augment Hong Kongˇs economic driving force. How to practically implement the promotion of technology and innovation to generate new growth to the economy is important.

I met officials of the Economic & Information Technology Commission of Guangdong Province and learned that Guangdong Province had already selected five areas as the focus of development for its modern information services: (1) consolidating infrastructural information communications services; (2) developing integrated circuit design services; (3) enhancing network value-add services; (4) strengthening the software industry; and (5) training and developing cloud computing and digital media content services.

To Hong Kong, we have the ¨six advantage industries,〃 while technology innovation applies especially to cultural and creative industries, innovation and technology industries, testing and certification services and environmental industries. How can Hong Kong and Guangdong work together to develop the six advantage industries, particularly those involving technology and innovation? What is Hong Kongˇs role?

The HKSAR Government should set the direction and draw up a plan as soon as possible. I believe Guangdong has already formulated its plan and each of its cities has a specific position-e.g. Foshan is planned as the national network innovation centre and GPS industrial base, and Dongguan as the international information services and technology transfer and production base.

Outpaced by Guangdong?

Another area of concern: how much the Hong Kong government will invest to promote the development of the technology and innovation industry. The Guangdong Provincial government has announced that during the period covered by the 12-5 Plan, it will allocate RMB $2 billion each year, making a total of RMB $10 billion to support the development of strategic new industries, including information network and Internet applications. However, the HKSAR government so far has made no clear funding commitment. This is worrisome: Hong Kong will be disadvantaged or marginalized if it cannot keep pace with Guangdong in the ¨three-legged race.〃

Thereˇs another important issue in co-operating with Guangdong: how to create employment opportunities and preserve Hong Kong citizensˇ livelihood while making sure our industries wonˇt suffer? Back in the 70s and 80s, Hong Kong had a manufacturing labor force of well over 800,000. As our industries have shifted north, less than 30,000 remain. Luckily, Hong Kong has successfully transformed into a service-oriented economy over the last two decades. We are concerned that if our service sector moves north under implementation of the Framework Agreement, this may lead to the loss of many local jobs.

In my view, the closer co-operation between Guangdong and Hong Kong will make the regional economic boundary less obvious over time. We need two-way ¨enterprise flow〃-i.e. as Hong Kong enterprises move north to seek development opportunity, the HKSAR Government should attract more multi-international companies to set up regional headquarters in Hong Kong as a step to enter the mainland market. We should also encourage mainland companies to open offices in Hong Kong as a springboard to overseas markets.

Salary-differences between the mainland and Hong Kong will even out in due course. Therefore, mainland enterprises may make more use of Hong Kong personnel and services, thus making Hong Kong a ¨headquarters economy〃 for international businesses. Only when we have a long-term plan will we be able to protect Hong Kongˇs continual development and give its citizens a better place to live.

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