Daily Information Bulletin - 1990s - 1996 - MAR - ENG

 DAILY INFORMATION BULLETIN

ISSUED BY GOVERNMENT INFORMATION SERVICES BEACONSFIELD HOUSE, HONG KONG. TEL: 2842 8777

Friday, March 1, 1996

Governor's transcript....................................................... 1

More money to boost key services............................................ 2

Proposed estimates on education welcomed..................................   6

Monetary statistics for January............................................. 6

Residential mortgage survey results for January............................. 9

New Deputy Commissioner of Police appointed................................ 14

Government vehicle maintenance service explained....................... 15

Fire Services strikes to maintain high standard of services................ 16

Bus fare increases to take effect on Sunday................................ 17

Voters urged to support Tuen Mun by-election........................... 18

Three nominations for Eastern DB by-election..............................  18

North-east Lantau Port Outline Zoning Plan amended......................... 19

Tenders invited for mainslaying works in Sham Tseng.................... 21

Road construction and improvement works in Tai Po Kau...................... 21

Hong Mong Monetary Authority money market operations....................... 22

1

Governor's transcript *****

Following is the transcript of the media session by the Governor, the Rt Hon Christopher Patten, after opening the renovated Queen Mary Hospital this (Friday) afternoon:

Question: About the Budget. Does the Government give a copy to the Chinese side?

Governor: I think you'd better ask the Financial Secretary any questions about the Budget. We'll be doing what we always do with budgets or have done in the last few years. And as you know, we've kept the Chinese side fully informed about the process of budget making this year. We have to go further in the next financial year quite properly because the next budget will cover nine months after the change of sovereignty.

Question: What about the expenditure ...? Social welfare expenditure will get the largest increment...

Governor: I'm sure everybody in the community will be delighted by that because the community wants to see us providing good and comprehensive services for the needy, for the elderly, for the sake, for those with disabilities. So I'm sure that everybody will be delighted that welfare spending in real terms - that is after inflation — is going up in the coming year by almost 15 per cent.

Question: (on PM's visit)

Governor: My first priority will be to ensure that he is up to date about the challenges facing Hong Kong. Of course. I am in touch with him reasonably frequently, so what I say to him won't come as a great surprise. He wanted to come to Hong Kong for a couple of pretty obvious reasons. First of all. he’s taking part at the moment in the Europe-Asia Summit Meeting in Bangkok and he believes as I do that Hong Kong is the major gateway to Asia for European Union countries, just as Britain in a sense is the main gateway to Europe for Asian countries. So Hong Kong has a really key part in the economic and trading relationship between Europe and Asia as it does between Asia and the United States. Secondly, I'm sure that he will want to make it clear to the people of Hong Kong, to legislators, to Executive Council members, to businessmen and to ordinary members of the public that he meets that Britain has a strong sense of commitment to I long Kong not just up to 1997 but beyond that as well, morally and in other ways. And I'm sure he'll want to underline that.

Question: (on visa free access)

2

Governor: You all know what my position is on that. I’ve been pressing in public and in private for visa free access for SAR passport holders to the United Kingdom, just as I’ve been pressing the Chinese side to come forward as soon as possible with practical proposals for implementing Mr Qian Qichen’s promise that everybody with permanent residence before 1997 will have it after 1997. We want to see proposals on that brought forward as soon as possible. Now the United Kingdom's response to my request and to the request of Legislative Councillors and Executive Councillors is for the Prime Minister and ... to set out. I very much hope that we'll be able to deal with that issue as soon as possible. I noticed that British ministers said we could expect a decision soon. I hope soon really means soon.

Question: Do you think Mr Major will announce the free entry ...?

Governor: I just answered that question.

Question: Back to the expenditure. The Chinese side has criticised the Government over the social welfare expenditure, but it still got the largest increase here. Will this lead to further criticism ...?

Governor: That shows that we have in Government people who listen to what the aspirations and ambitions and concerns of the ordinary people of Hong Kong are. It shows that the Government listens to the public. It shows that the Government listens to legislators and acts. It also shows that we have a strong economy which we are determined to keep strong. So we have to be prudent in all we do. While we've seen a substantial increase in spending on welfare, which will continue, overall we've seen a proper control of public spending so that it remains in relation to the economy overall at a fiscally responsible level Thank you very much.

End

More money to boost key services *****

rhe draft estimates of expenditure for 1996-97, published today (Friday) together with the gazetting of the Appropriation Bill, propose significant increases in spending to improve services in areas where they are most needed.

Announcing this today, the Secretary for the Treasury, Mr K C Kwong emphasised that the draft estimates had been drawn up in accordance with the long established budgetary principle that over time, the growth in government expenditure should not exceed the trend growth rate of the economy.

3

’’With a forecast trend economic growth rate of 5% a year in real terms, we are able once again to make significant improvements to services in the areas where they are most needed and to do so whilst still living within our means," he said.

"The estimates represent a further step towards achieving the improvement targets for the future set by the Governor in his policy addresses since 1992. They also provide the funds to meet the commitments published by policy secretaries in October last year," he said.

Total government expenditure, including expenditure by the funds, for the new financial year will rise to $183.7 billion.

Mr Kwong explained that, of the total of $183.7 billion, $137.9 billion is for recurrent expenses on existing and new services and $45.8 billion on capital projects.

"Our spending priorities have been decided after consultations held by the Financial Secretary with members of the Legislative Council and community groups during the past year," he said.

Some examples are :

On social welfare, the Government recurrent spending will grow to $16.5 billion.

The Government will be providing :

* For the elderly :

an extra 1594 residential places

43 social centres

3 day care centres and

6 multi-service centres;

* For people with a disability :

an additional 384 residential places and 848 day places;

* For children with a disability :

an additional 537 pre-school places;

4

* For children generally :

an extra 1400 day nursery places

447 day creche places

175 residential home places

9 small group homes

75 occasional child care places and

40 foster care places;

* For vulnerable children :

an extra 32 social workers for the child protection and custody services;

* For youths at school :

22 extra school social workers;

* To strengthen family support:

an extra 68 family caseworkers

11 clinical psychologists and

12 home help teams;

* A new counselling centre for psychotropic substance abusers

* A comprehensive package of improvements to the comprehensive social security assistance scheme

On health, the Government recurrent spending will grow to $22.6 billion.

New facilities will include :

* 830 additional hospital beds

8 new patients and carers resources centres

* 3 new general out-patients clinics

* 3 new elderly health centres

* 2 new maternal and child health centres

5

a new health centre for women

a new renal dialysis centre

* a new adolescent care centre

* a new child assessment centre

a new school dental clinic

4 additional specialist medical teams to provide medical and psychiatric

care for 15.000 elderly patients a year

2 additional rehabilitation co-ordination teams for the chronically ill

* and extension of the student health service to secondary students

On education, the Government recurrent spending will grow to $34.5 billion.

"This increased spending is despite a declining school age population (the number of children in the 6-14 age group is estimated to drop from 721,700 in 1995-96 to 712.200 in 1996-97).

"We will therefore be able to make further improvements in pupil teacher ratios and class sizes in primary schools, provide for 300 additional graduate teachers in primary schools and enhance support for Band 5 students," said Mr Kwong.

For a better environment, the Government recurrent spending will increase to $2.6 billion.

"This will provide extra staff to implement air quality improvement programmes and additional resources for the proper disposal of waste."

For the fight against crime the Government will be providing :

* 227 additional posts for the police to strengthen anti-triad work

* 37 posts for customs and excise to tackle the illicit use of diesel oil and

for enhancing the protection of intellectual property rights.

"These impressive improvements in services are all made possible by our continuing economic growth. Sustained economic growth will permit continued improvements in services in the future." he said.

End

6

Proposed estimates on education welcomed *****

In response to media enquiries, the Director of Education, Mrs Helen C P Lai Yu, today (Friday) welcomed the Government's proposal to allocate over $19 billion to the Education Department for recurrent spending in the 1996-97 financial year.

She said: "This is an increase of more than $727 million, or four per cent in real terms, over the 1995-96 revised estimates of $18.38 billion. The proposed allocation is evidence of the priority Government continues to give to education services.

"It will enable us to fulfil the Governor's policy commitments announced in October 1995 and to initiate new improvement measures as well as enhance some existing services."

End

Monetary statistics for January

*****

Total deposits rose moderately in January while total loans and advances fell, according to statistics published by the Hong Kong Monetary Authority today (Friday).

Table 1 summarises the figures for January and the comparisons with earlier months.

Deposits

Total deposits rose modestly by 0.2% in January, compared with the 1.6% increase in December. The growth was due to a 0.8% increase in Hong Kong dollar deposits, offsetting the 0.5% reduction in foreign currency deposits.

Within Hong Kong dollar deposits, demand deposits rose by 5.4% in January. Growth might have been boosted by the Chinese New Year payrolls and bonuses. Besides, refunds to unsuccessful subscribers of two new stock issues on January 31 might have also contributed to the increase in demand deposit growth.

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Both Hong Kong dollar savings deposits and Hong Kong dollar time deposits decelerated to 0.2% and 0.5% growth during the month from 4.1% and 2.4% respectively in December.

Foreign currency swap deposits fell by a further 3.9% in January, cumulating in a 54% reduction since the peak of November 1994.

The foreign currency deposits fell by 0.5% and was attributable to a 1.9% decrease in US dollar deposits, which more than offset the 0.9% increase in non-US dollar foreign currency deposits during the month.

Loans and advances

Total loans and advances fell by 1.4% in January, after a 0.2% increase in December. This was mainly due to the fall of 3.6% in the loans for use outside Hong Kong (including those where the place of use is unknown). Loans for use in Hong Kong (including those to finance visible trade), on the other hand, rose by 1.6% in January.

Analysed by currency, Hong Kong dollar loans rose by 1.8% and foreign currency loans fell by 3% during the month.

As Hong Kong loans grew more rapidly than Hong Kong deposits, the Hong Kong dollar loan-to-deposit ratio rebounded to 106.7%, compared with 105.7% in December.

Money supply

In line with the increase in Hong Kong dollar demand deposits, HK$M1 rose by 2.9% in January. HK$M2 and HKSM3 rose by 0.9% and 0.8% respectively.

8

TABLE 1 : MONETARY STATISTICS - JANUARY 1996°

(IIKSmn)

Jan_l996

Earlier months (% change to Jan 1996)

Dec 1995 Oct 1995 Jan 1995

Money Supply

Ml - HKS 176.481 171.424 ( 2.9 ) 171.127 ( 3.1 ) 177.U0 ( -0.4 )

Foreign currency 19351 18,227 ( 6.2 ) 16.457 ( 17.6 ) 16.095 ( 20.2 )

Total 195.832 189,651 ( 3.3 ) . 187384 ( 4.4 ) 193,205 ( 1.4 )

M2 - HKS@ 1.271.678 1.260.212 ( 0.9 ) 1,254,130 ( » 4 ) 1.103,955 ( 15.2 )

Foreign currency* 1.000.07.1 1.005.065 ( -0.5 ) 978.009 ( 2.3 ) 882.945 ( 13.3 )

Total 2.271.751 2.265.277 ( 0.3 ) 2.232.139 ( 1.8 ) 1,986.900 ( 14.3 )

M3 - HKS@ 1.287.896 1.278.079 ( 0.8 ) 1.271.260 ( 1.3 ) 1.122.490 ( 14.7 )

Foreign currency* 1.062.069 1.068318 ( -0.6 ) 1.038,934 ( 2.2 ) 943.652 ( 125 )

Total 2.349,965 2.346.398 ( 0.2 ) 2.310.194 ( 1.7 ) 2.066.142 ( 13.7 )

Notes and coins in circulation 82.40.1 81,667 ( 0.9 ) 78397 ( 4.8 ) 96.966 ( -15.0 )

of which held by public 70.949 71335 ( -0.5 ) 69.176 ( 2.6 ) 83.950 ( -15.5 )

Total Deposits

Total Demand deposits 124,883 118.316 ( 5.6 ) 118.408 ( 5.5 ) 109.255 ( 14.3 )

Total Savings deposits 440.940 439.397 ( 0.4 ) 422355 ( 4.4 ) 378.246 ( 16.6 )

Total Time deposits with licensed banks 1.592.64.1 1.594.478 ( -0.1 ) 1380,246 ( 0.8 ) 1.378,997 ( 15.5 )

Total Time deposits with restricted licence banks .17.119 38.125 ( -2.6 ) 36,186 ( 2.6 ) 37.685 ( -15 )

Total Time deposits with deposit - taking companies 17.013 18356 ( -7.3 ) 18,636 ( -8.7 ) 19.754 ( -13.9 )

HKS deposits© 1.180,868 1,171.418 ( 0.8 ) 1.167.617 ( 1.1 ) 1.010,113 ( 16.9 )

Demand deposits 105.532 100.089 ( 5.4 ) 101.951 ( 3.5 ) 93,159 ( 13.3 )

Savings deposits 301.200 300.697 ( 0.2 ) 292,768 ( 2.9 ) 261509 ( 15.2 )

Time deposits© 774.135 770.631 ( 0.5 ) 772.898 ( 0.2 ) 655.444 ( IS. 1 )

USS deposits* 513.709 523.731 ( -1.9 ) 508333 ( 1.0 ) 483.983 ( .6 1 )

Other foreign currency deposits * 518.021 513523 ( 0.9 ) 499,881 ( 3.6 ) 429.841 ( 20.5 )

Foreign currency deposits* 1.031.730 1.037.255 ( -0.5 ) 1,008,414 ( 2.3 ) 913.824 ( 12.9 )

All deposits 2.212,597 2,208,673 ( 0.2 ) 2,176,031 ( 1.7 ) 1.923,937 ( 15.0 )

Foreign currency swap deposits 47.849 49.808 ( -3.9 ) 55.772 ( -14.2 ) 88.886 ( -46.2 )

Total Loans and advances

To finance H.K.'s visible trade 157.225 155.737 ( 1.0 ) 154.687 ( 1.6 ) 133.899 ( 17.4 )

To finance merchandising trade not touching H.K. 19.106 17.732 ( 7.7 ) 17.830 ( 7.2 ) 14.934 ( 27-9 ).

Other loans for use in H.K. 1.419.941 1.398.137 ( 1.6 ) 1.376.341 ( 3.2 ) 1.276.243 ( 11.3 )

Other loans for use outside H.K. 2.050.772 2.128.148 ( -3.6 ) 2.107.243 ( -17 ) 1.825.629 ( 12.3 )

Other loans where the place of use is not known 38.225 38.106 ( 0-3 ) 37.337 ( 2.2 ) 42.050 ( -9.1 )

Loans in HKS 1.259.605 1.237.641 ( 1.8 ) 1.224,203 ( 2.9 ) 1.127.900 ( 11.7 )

Loans in foreign currencies 2.425.663 2500.219 ( -3.0 ) 2.469.284 ( -1.8 ) 2.164.854 ( 12.0 )

Total loans and advances 3,685.268 3.737.860 ( -1.4 ) 3.693.487 ( -0.2 ) 3.292.754 ( 11.9 )

• Adjusted to exclude foreign currency swap deposits. @ Adjusted to include foreign currency swap deposits.

Note : Data may not add up to total due to rounding

End

9

Residential mortgage survey results for January *****

The growth of residential mortgage loans for the purchase of properties in Hong Kong slightly moderated in January, according to the results of the latest monthly-survey conducted by the Hong Kong Monetary Authority (HKMA).

The latest figures show that the total amount of outstanding mortgage lending by the 33 institutions in the survey grew by 1.2% in January (1.4% in December 1995) to $276 billion. The growth rate is slightly below the monthly average of 1.3% over the last 12 months.

"The growth rate in January reflects the modest trading activity in the property market during December 1995", said the Deputy Chief Executive (Banking) of HKMA, Mr David Carse.

The annualised rate of growth in lending over the last three months increased to 15.8% from 13.5% in the three-month period to December. The 12-month average of outstanding loans showed an annualised growth rate of 15.7%, compared with 15% in December 1995.

The amount of new loans approved but not yet drawn increased by $0.5 billion (9.3%) to $5.8 billion in January.

"These figures, coupled with the increased trading activity in both the primary and secondary property market in January, suggest that the growth rate of outstanding loans will be higher in February," said Mr Carse.

Lending for the purchase of properties in China increased by 1.3% to $5.4 billion in January. Gross loans made in January increased both in number (to 293 from 131) and in amount (to $147 million from $118 million).

New loans approved in January also increased both in number (to 279 from 222) and in amount (to $146 million from $131 million).

10

Residential Mortgage Loans in Hong Kong Results of Survey for January 1996 Jan 1996 HKSMn Dec 1995 HK$ Mn

33 authorised institutions

1. Outstanding lending

a. Amount 275,968 272,695

b. Monthly change 1.2% 1.4%

c. Twelve-month change 15.7% 14.9%

d. Average change (annualized)

Latest three months 15.8% 13. b7o

Latest twelve months 15.7% 15.0%

2. Gross loans made during month

a. Amount 9,312 9,356

b. Number 7208 6957

3. New loans approved during month

a. Amount 9,029 8,530

b. Number 7117 6189

4. New loans approved during month but not yet drawn

a. Amount b. Number

5,818

4462

5,323

3854

Note : ** Adjusted for the effect of sale and reclassification of residential mortgage loans by some institutions amounting to HKS0.6 billion.

11

Chart A

RESIDENTIAL MORTGAGE LOANS IN HONG KONG (33 institutions)

Outstanding balance at end of month

Remarks : The significant fall of outstanding balance in December 1994 was due to the effect of reclassification, securitization and sale of loans by some institutions.

Monthly growth rate

3-month and 12-month moving average growth rate on annualised basis

O 3-month + 12-month

12

Chart B

RESIDENTIAL MORTGAGE LOANS IN HONG KONG (33 institutions)

GROSS LOANS MADE DURING THE MONTH

Thousand Billion

Amount

B1

Number of accounts

-13.-‘ V •1 ;■ • *

Chart C

RESIDENTIAL MORTGAGE LOANS IN HONG KONG (33 institutions)

NEW LOANS APPROVED BUT NOT YET DRAWN

End

14

New Deputy Commissioner of Police appointed *****

The Government announced today (Friday) that Mr Tsang Yam-pui will be promoted to the rank of Deputy Commissioner of Police with effect from May 1. He will replace Mr So Lai-yin who will begin his pre-retirement leave on the same day.

Following are biographical notes of Mr Tsang and Mr So:

Mr Tsang Yam-pui. QPM, CPM

Mr Tsang, 49, joined the Royal Hong Kong Police Force as a probationary Inspector in 1966. He was promoted to Assistant Commissioner in 1992 and Senior Assistant Commissioner in 1994.

Before taking up his current post as Director of Crime and Security, he was Regional Commander, Hong Kong Island.

Mr Tsang was awarded the Colonial Police Medal and Queen's Police Medal in 1987 and 1994 respectively.

Mr So Lai-yin. QPM, CPM

Mr So, 54, joined the Government in April, 1961, and was appointed as a probationary Inspector of the Royal Hong Kong Police Force in July the same year.

He was promoted to Assistant Commissioner in 1985, Senior Assistant Commissioner in 1991 and Deputy Commissioner in 1994. On his retirement at the age of 55, Mr So will have completed 36 years of service with the Hong Kong Government.

Mr So was awarded the Colonial Police Medal and Queen's Police Medal in 1981 and 1988 respectively.

End

15

Government vehicle maintenance service explained

*****

• The Government car fleet is heavily utilised and the mileage of the majority of the vehicles are much higher than the average mileage of a private saloon, with some of the vehicles having mileage four to six times more than that of an average private vehicle, a spokesman for the Electrical and Mechanical Services Department (EMSD) said today (Friday).

He said some vehicles were fitted with special equipment and accessories requiring more items to maintain, and thus more care and attention were needed. For specialist vehicles, technical complexity was even more profound.

The EMSD vehicle maintenance service has been established for over 40 years. The types of vehicles being maintained range from ambulances, police vehicles, road sweeper, refuse collection vehicles to common types of saloons, light buses and trucks.

Currently, the department is maintaining over 7,300 vehicles for the various government departments. Many of the special vehicles require special maintenance set ups and skills.

“It is our duty of care to maintain all vehicles in good physical conditions. All vehicle bodies and paint works are regularly carried out on need basis. Poor looking vehicles affect the image of the government departments," he said.

"As a government department, EMSD is conscious that it has to set an example on the engineering standards associated with its maintenance service. Accordingly, it has set itself a high quality standards in its vehicle maintenance services.

"All vehicles are serviced regularly at intervals recommended by the manufacturers. They are certified road worthy which in turn enhance drivers, passengers and pedestrians safety. Besides, it is our policy to use only genuine spare parts and consumable.

"Vehicles are maintained at good condition and are thus available for use whenever needed. This is particularly important for police cars, ambulance and public service vehicles."

He explained that all engines were tuned to optimise fuel combustion and to minimise smoke emission. This helps to conserve energy efficiency and reduce air pollution. All solid and fluid waste arising from vehicle services are disposed of properly to protect our environment.

16

Vehicle bodies are always maintained at good condition. One could hardly find a government vehicle with a loose bumper, dented body or with faded body paint running in the streets.

"As far as cost is concerned, we tend to compare ourselves with major servicing centres and from the data available to us, we consider ourselves broadly comparable with the charges of the private sector in terms of labour hourly rates.

"We have data to indicate that for comprehensive maintenance, i.e. all inclusive of preventive maintenance, corrective maintenance, fault attendance, vehicles towing, etc , our charges are comparable with the large servicing centres in the private sector. " he said.

The spokesman added that refuse collection vehicles cost a lot more to maintain because its refuse compactor were heavily used, and the refuse collecting bins and parts were subject to heavy corrosion from refuse.

It also takes time to clean some of the refuse stuck in the machine parts which are difficult to access during normal cleaning. As a result, over 60% of the vehicle servicing charges of the Regional Council and the Urban Council are on the refuse collection vehicles.

End

Fire Services strikes to maintain high standard of sendees *****

The Fire Services Department enjoys an enviable reputation among fire brigades around the world because of the full support of all its staff with their hard work, dedication and professionalism, the Deputy Director of Fire Services, Mr John Tsang Kwong-yu, said today (Friday).

Speaking at the department's passing-out parade, Mr Tsang said fire sendees personnel were often admired for their devotion and bravery.

"We all know that higher and higher standard of government services is the essential demand of the modern society of Hong Kong," he said.

Noting that he had witnessed rapid development of the department in the past three decades, Mr Tsang said: "There is one thing that the department never changes -its aims to render the best possible standard of services."

Mr Tsang called upon the graduates on parade to commit themselves to upkeep the high standard maintained by their predecessors and to provide quality services to the community.

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“During this transition period, I am pleased to commit myself, together with all of you new graduates, to offer our best endeavour for the prosperity and security of Hong Kong," Mr Tsang said.

In order to enhance the department’s operational efficiency, Mr Tsang said five new fire stations, a fireboat station in Tuen Mun and the Lam Tin Ambulance Depot would be put in commission between 1996 and 1997.

On parade were 12 Probation Station Officers and 43 Firemen who had completed their respective basic training courses and who would soon be posted out to various fire stations to gain more field experience.

End

Bus fare increases to take effect on Sunday *****

Fare increases for Citybus and China Motor Bus (CMB) will take effect on Sunday (March 3).

A 9.5 per cent fare increase for Citybus's Hong Kong Island routes, and a 10 per cent fare increase for its cross harbour routes were approved by the Govemor-in-Council on February 13. The increase is well below the anticipated inflation since Citybus's last fare adjustment.

Meanwhile, a 10.7 per cent fare increase will be levied on CMB's Hong Kong Island routes as well as a 10 per cent fare increase for its cross harbour routes.

The new fares will take effect on Sunday.

As most cross harbour routes are jointly operated by CMB. Citybus and KMB. it is necessary to maintain a common fare scale to avoid confusion to the commuters. For this reason, a 10 per cent fare increase will also be applied to the cross harbour routes operated by KMB.

CMB will also extend its elderly concessionary fare scheme to cover all its cross harbour routes when the new fares come into effect.

End

18

Voters urged to support Tuen Mun by-election

*****

Tuen Mun district officer, Mr Patrick Chan, today (Friday) urged registered voters to cast their ballots in this Sunday’s Tuen Mun District Board by-election for the Tin King constituency.

Mr Chan reminded the electorate that district boards are an important consultative body on government policies and had made important contributions to improving the living environment, public services, new town planning and facilities in the district.

"The district board is the avenue through which your valuable views on local matters are collected and reflected to the Government for discussion," he said.

The balloting will be held from 7.30 am to 10.30 pm.

A polling station will be set up at the Ho Sau Ki School. Ting King Estate, Tuen Mun. Voters arc reminded to bring their identity cards and their poll cards.

Four candidates - Mr Lee Hung-sham. Ms Ho Hang-mui, Mr 1'se Yee-fong and Mr Lee Yiu-hung - will be vying for the seat vacated by Mr Li Man-kwong.

fhe Tin King constituency, comprising mainly Ting King Estate, Siu Pong Court and Siu Kwai Court, has an electorate of 8.387.

Enquiries can be made to the Tuen Mun district office on 2465 1401.

End

Three nominations for Eastern DB by-election *****

A total of three nominations were received for the Eastern District Board byelection in respect of Kam Ping constituency to be held on March 31, after the two-week nomination period closes today (Friday).

All three nominations were received today.

Details of the nominations are as follows:

19

Name/Age

Ms Leung Suk-ching (43)

Occupation

Chinese Medical Practitioner

Mr Shek Kwei-chun (44)

Ms Tsang Angela (48)

Civil Engineer

Principal

2898 3399 (day/night)

7116 8923

#2320

2856 3331 (day)

2973 0233 (night)

2578 1745 (day)

2561 2296 (day)

7112 8909 (night)

#1607

This by-election is the third of its kind scheduled in March.

The two other by-elections, for the Tin King and the Siu Hei constituencies of the Tuen Mun District Board, will be held on Sunday (March 3) and March 24 respectively.

End

North-cast l.antau Port Outline Zoning Plan amended ♦ * * * ♦

The Town Planning Board today (Friday) announced amendments to the draft North-east Lantau Port Outline Zoning Plan.

The changes include minor textual amendments to the notes of the plan to rectify the discrepancies between the annotations for three ’Other Specified Uses’ (’OU’) zones and the description for the corresponding ’OU’ zones in the notes, a spokesman for the Board said.

The amendments are as follows:

(a) 'OU' zone annotated 'Container Back-up Uses' has been amended to 'OU' zone annotated 'Container Back-up Area':

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(b) 'OU' zone annotated 'River Trade Cargo Terminal and Back-up Uses’ has been amended to 'OU' zone annotated 'River Trade Cargo Terminal and Back-up Area; and

(c) 'OU' zone annotated 'Boatyard, Marine-oriented Industrial Use and Marine Services Support Use' has been amended to 'Boatyard, Marine-oriented Industrial Use and Marine Services Support Area'.

The amendment plan (No S/I-NELP/2) is now available for public inspection until March 22 during normal office hours at:

Planning Department, 16th floor, Murray Building, Garden Road, Central, Hong Kong;

* Sai Kung and Islands District Planning Office, 10th floor, Leighton Centre, 77 Leighton Road, Causeway Bay, Hong Kong;

* Islands District Office. 20th floor. Harbour Building, 38 Pier Road, Central, Hong Kong;

* Islands District Office, Mui Wo Sub-office, ground floor, Mui Wo Government Offices, 2 Ngan Kwong Wan Road, Mui Wo, Lantau Island; and

* Tsuen Wan District Office, first floor, Tsuen Wan Station Multi-storey Car Park Building, 174-208 Castle Peak Road.

Tsuen Wan, New Territories.

Any person affected by the amendment plan may submit written objections to the Secretary of the Town Planning Board, c/o Planning Department, 13th floor, Murray Building. Garden Road, Central, Hong Kong before March 22.

Copies of the draft plan are available for sale al the Survey and Mapping Office. Lands Department. 14th floor. Murray Building. Garden Road. Hong Kong and Kowloon Map Sales Office, ground floor, 382 Nathan Road. Kowloon.

End

21

l enders invited for mainsiaying works in Sham Tseng * ♦ ♦ ♦ ♦

The Water Supplies Department is inviting tenders for the laying of about 1,600' metres of 300 millimetres diameter duetile iron fresh water mains in Sham Tseng.

The contract will be the first to be awarded under the $191.7 million Water Supply to Tsing Lung Tau and Sham Tseng Stage II project. When completed, the project will improve the water supply system in the areas to meet future demand.

Work will commence in June and scheduled for completion in 10 months.

Details of the tender notice are contained in the Government Gazette published today (Friday).

Tender forms and further particulars may be obtained from the Water Supplies Department. Immigration Power, 44th floor, 7 Gloucester Road, Wan Chai, Hong Kong.

Tenders must be clearly marked and addressed to the Chairman of the Public Works 1 endcr Board. They must be placed in the Public Works lender Box at the lift lobby on 34th floor. Queensway Government Offices, 66 Queensway, Hong Kong before noon on Friday, March 22.

Late tenders will not be accepted.

End

Road construction and improvement works in Tai Po Kau *****

The prospective grantee of a land lot in Tai Po has proposed to construct an access road from l ai Po Road to the proposed residential development.

The proposed works will also include improvements to the section of Tai Po Road at Tai Po Kau and closure of some access roads affected.

During the construction period, necessary access will be maintained to minimise inconvenience to the public. A notice concerning the proposed works is contained in the Government Gazette published today (Friday).

22

A plan showing the proposed works can be seen at the Central and Western District Office, Public Enquiry Centre, Ground Floor, Harbour Building, 38 Pier Road, Central, Hong Kong and at the District Lands Office (Tai Po) and Tai Po District Office, on the first and second floor of Tai Po Government Offices Building, 1 Ting Kok Road, Tai Po , New Territories.

Any person objecting the proposed works must submit a written objection to the Secretary for Transport, Central Government Offices, East Wing, second floor, Lower Albert Road, Hong Kong not later than April 30, 1996.

End

Hong Kong Monetary Authority money market operations

*****

$ million Time fllQULS) Cumulative change (Smillion)

Opening balance in the account 2,050 0930 +752

Closing balance in the account 2.057 1000 +752

Change attributable to : 1100 +752

Money market activity +757 1200 +762

LAF today -750 1500 +762

1600 +757

LAF rate 4.00% bid/6.00% offer TW1 123.5 *+0.1* 01.03.96

I long Kong Monetary Authority

EF bills EF notes

Terms Yield Term Issue Coupon Price Yield

1 week 4.72 2 years 2802 5.16 99.49 5.51

I month 4.83 3 years 3901 5.57 99.60 5.80

3 months 4.98 5 years 5012 6.38 100.60 6.33

6 months 5.09 7 years 7302 6.02 96.71 6.72

12 months 5.17 5 years M502 7.30 103.10 6.62

Total turnover of IF bills and notes - $15,497 million

Closed March 1, 1996

End

DAILY INFORMATION BULLETIN

ISSUED BY GOVERNMENT INFORMATION SERVICES BEACONSFIELD HOUSE, HONG KONG. TEL: 2842 8777

Saturday, March 2,1996

Contents Pagv Ntu

Prudence exercised in drawing up health, welfare expenditure......... 1

Electors reminded to vote in by-election tomorrow.................... 5

Prosecution against labour law offenders in 1995 ....................

Salt water cut in Kowloon East....................................... 6

Hong Kong Monetary Authority money market operations.................

Sunday, March 3, 1996

Contents EageJ^h

Transcripts of the Governor's speech....................................... 8

Child abuse: early detection essential.................................... 10

DB by-election results............................................... 11

1

Prudence exercised in drawing up health, welfare expenditure *****

The Government plans to spend $22.6 billion on health and $16.5 billion on welfare in recurrent expenditure in 1996-97, an increase of 4.4 and 14.7 per cent respectively compared with 1995-96.

The money will ensure that the Administration is in a position to meet its policy commitments as well as responding to the community’s expectations for improved health and welfare services for the people of Hong Kong.

’’The community’s wish to see expanded services is clear and we are responding to that,” the Secretary for Health and Welfare, Mrs Katherine Fok, said today (Saturday) at a press conference outlining expenditure on health and welfare in the coming financial year.

"But we are doing so in a financially prudent way. While spending, especially on welfare, is increasing significantly, it is growing in a way we can afford," she added.

On health, welfare and social security for the elderly, Mrs Fok noted that spending next year would be about $10.2 billion.

This includes $1.2 billion on direct welfare services for the elderly which is a 20 per cent increase over 1995-96. It should be noted that the 1995-96 figure represented a massive 36 per cent increase over the previous year.

Mrs Fok said good progress had been made on the implementation of all the recommendations of the 1994 Report of the Working Group on Care for the Elderly.

For example, plans are in hand to train next year an additional 630 health workers to work in residential homes for the elderly, establish one additional community geriatric assessment team and three psychogeriatric teams to strengthen outreaching medical services in residential institutions, and conduct a study to establish the needs of and review the services for elderly people.

In addition, an extra 43 social centres and nearly 1,600 more residential places for the elderly will be provided, and 12 more home help teams on top of the 114 existing ones will be set up.

2

In spite of the wide range of the services provided, Mrs Fok said there would always be more that needed to be done.

’’Concerns expressed for the welfare of the elderly during the recent cold spell made that very clear," she said.

"It has made me even more aware that Government and the NGOs (nongovernmental organisations) cannot do it all; we cannot ultimately replace the role of the family and of good neighbourliness.

"That is why we are encouraging social networking through our ambitious plans to expand social centres for the elderly and our programmes using volunteers to reach out to elderly people - especially those living alone.

"Both aim to ensure that they become more a part of the community in which they live and that their potential to provide mutual support is developed."

The Director of Social Welfare is drawing up initiatives with the Director of Home Affairs and in liaison with the Hong Kong Council of Social Service and NGOs to promote further the need for community involvement in caring for the elderly.

Direct welfare services for people with a disability will take up $1.3 billion next year which is a 15 per cent increase over this year.

In order to improve the opportunities for such people to obtain jobs and thus encourage their integration, the Government plans to expand vocational assessment and training services for about 900 people in sheltered workshops, traffic accident victims and injured workers.

The number of supported employment places will also be increased by 164 per cent, from the existing 360 to 950 in 1996-97.

To make it easier for the disabled to get to their workplaces, eight extra scheduled routes and three more buses will be added to the "dial-a-ride" Rehabus service. This will boost the number of passenger trips by 21 per cent to nearly 390,000 per year.

Expenditure on the non-contributory Comprehensive Social Security Assistance (CSSA) Scheme is estimated to rise by about 23 per cent next year to $5.9 billion.

3

To ensure the support given to CSSA recipients is adequate, the Government has started a comprehensive review of the CSSA Scheme in November 1994.

The review had been completed and the recommendations in the final report would be announced next week, said Mrs Fok.

Meanwhile, the CSSA standard rates for certain groups will be increased from April this year. The proposed enhancements will benefit up to 52,000 people at an annual cost of $300 million.

On family and child welfare, the Government will be spending about $1.4 billion to provide about 80 more family case workers and clinical psychologists, 13 more specially trained social workers to fight child abuse and to reduce the trauma of children, and 19 extra social workers to advise on arrangements for child custody in divorce cases.

In addition, about $1 billion will be used on helping young persons at risk and providing services for the rehabilitation of offenders.

Turning to health services, Mrs Fok stressed that disease prevention and the promotion of good health practices remained a priority.

The Department of Health, which will be allocated about $1.8 billion in recurrent expenditure for 1996-97, aims to increase health awareness both in the community and among specific target groups and to emphasise the importance of leading a healthy lifestyle.

To achieve these targets, the following new public health services will be provided during the year:

* 155 infirmary beds;

* two maternal and child health centres in Ma On Shan and Tseung Kwan O;

* a child assessment centre and a school dental clinic in Ha Kwai Chung;

* three clinics in Ha Kwai Chung, Ma On Shan and Tseung Kwan O;

* a woman health centre in Tuen Mun;

* three elderly health centres in Kennedy Town, Yuen Chau Kok and Tsuen Wan;

4

* extension of the Student Health Service to cover 443,000 secondary school students; and

* with a grant of $8 million from the AIDS Trust Fund, a community-based AIDS Education. Research and Resource Centre to tailor AIDS education programmes to target groups at risk.

Moreover, funding has been secured for 1,400 nursing home beds to help reduce the pressure on infirmary beds.

As regards the Hospital Authority, its recurrent grant in 1996-97 will amount to $19.2 billion, an increase of 14.8 per cent over this year. The following improved or new facilities will be provided:

* 830 new beds;

* a dialysis centre to serve 100 chronic patients with end-stage renal failure;

* two rehabilitation co-ordination teams to provide rehabilitation programmes and enhance community care for 1,000 chronic patients;

* one community geriatric assessment team and three psychogeriatric teams to strengthen outreach medical and psychiatric support for 15,000 elderly patients;

* a pilot adolescent care centre to provide medical and psychiatric care to adolescents in need; and

* eight patients and carers resource centres to promote the concept of self-help and mutual support among patient groups.

Furthermore, the final phase of the Castle Peak Hospital redevelopment will take place during the year at a capital cost of about $850 million.

"This will enable us to improve the curative and rehabilitative services for mental patients so that they can enjoy better prospects for reintegration into society,” Mrs Fok said.

End

5

Electors reminded to vote in by-election tomorrow

*****

The Registration and Electoral Office (REO) today (Saturday) reminded the 8,387 electors of Tin King constituency to vote in the Tuen Mun District Board byelection in respect of their constituency tomorrow (Sunday).

The polling station will be set up in Ho Sau Ki School, Tin King Estate, Tuen Mun, and opened from 7.30 am to 10.30 pm.

An REO spokesman said an elector must bring along his identity card to the polling station. But it would facilitate polling proceeding if he could also carry the poll card sent to him earlier.

For enquiries, please call 2827 1122.

End

Prosecution against labour law offenders in 1995

*****

The Labour Department achieved 8,621 convicted cases against labour law offenders in 1995, resulting in a total fine of more than $47.8 million.

Compared with the figures in 1994, the number of convictions and total fines imposed last year increased by 11.3 and 59.3 per cent respectively.

Senior Labour Officer (Prosecutions), Mr John Sung, said today (Saturday) that the department would continue to step up prosecutions against employers who did not abide by labour law.

"They will have to pay for their malpractices if they do not take the safety and welfare of workers seriously," he added.

About 39 per cent or 3,387 of the convicted cases last year were related to industrial safety. Among them. 3.252 involved the violation of the Factories and Industrial Undertakings Ordinance and 135 the Boilers and Pressure Vessels Ordinance.

6

Apart from industrial safety offences, there were 5,218 convictions concerning the violation of the Women and Young Persons (Industry) Regulations, Employment of Children Regulations, Employment Ordinance and Employees’ Compensation Ordinance. Fines imposed totalled $8.3 million.

Of the 5,218 convictions, 687 were related to the employment of women and young persons to work overtime or on rest days. Convictions concerning the failure of employers to take out insurance policies for employees or give them statutory holiday pay totalled 2,117.

Sixty cases were related to the failure of employers to pay their employees wages on the due date or upon termination of their service.

There were also 16 cases relating to the failure of employers to keep or produce employees' records for inspection by labour inspectors as required by the Immigration Ordinance.

End

Sall water cut in Kowloon East *****

Flushing water supply to all premises in Kowloon East will be temporarily suspended from 11 pm on Wednesday (March 6) to 6 am the following day to facilitate works for the maintenance of watermains.

The suspension will affect San Po Kong, Ngau Chi Wan, Choi Hung Estate, Choi Wan Estate. Ping Shek Estate, United Christian Hospital, Shun Lee Estate, Shun Tin Estate, Shun On Estate, Shun Chi Court, Shun Lee Tsuen Temporary Housing Area, Ngau Tan Kok. Lok Wah Estate. Jordan Valley. Kowloon Bay, Kwun long, Lam Tin.Sau Mau Ping and Cha Kwo Ling.

End

7

Hong Kong Monetary Authority money market operations

*****

$ million Time (hours) Cumulative change (S million)

Opening balance in the account 2,057 09:30 +530

Closing balance in the account 1,932 10:00 +530

Change attributable to: 11:00 +530

Money market activity +530 11:30 +530

LAF today -655

LAF rate 4.00% bid/6.00% offer TWI 123.5 *+0.0* 2.3.96

End

8

Transcripts of the Governor's speech

*****

The following is a transcript of a speech given by the Governor, the Rt Hon Christopher Patten, at a dinner given in honour of the Prime Minister, the Rt Hon John Major, at Government House last (Sunday) night:

Prime Minister, ladies and gentlemen,

The last time. Prime Minister, that you and 1 spoke as it were side by side, the circumstances were certainly very different. 1 think it is fair to say the continent was different too. But going back even further into the dark ages, when we were both young with hardly a grey hair between us, the first time we spoke, if not side by side then certainly seriatim, was when we were in the same queue of aspirants applying to become the Conservative Party's candidate in Huntingdon, a safe seat in England.

As my guests may have noticed this evening. I was not chosen. I doubt whether either of us. Prime Minister, would have guessed then where politics and chance-were to carry us. I break no secrets when I say again, which you know I mean, that I am delighted that a fair wind carried you to Number 10 Downing Street, and that it's brought you here again tonight.

You are the second British Prime Minister to have visited Hong Kong in office. This is-the fourth visit by a serving Prime Minister. Your predecessor came twice, and you have come on your second visit as well. But this is a community which of course you know well, first as a banker and we have Ian Wilson here tonight to prove it - I hope John Gray doesn't mind me making that point - and more recently, as politician and as Prime Minister.

We are delighted that we arc able to see you at the end of a week which has included among much else the Anglo-Irish Summit and the Bangkok Summit. All of us are accustomed to being introduced by chairmen who express their gratitude that we’ve interrupted our busy schedules to come and speak to them. Prime Minister, we are a part not just of your busy schedule this week but of an extraordinarily punishing schedule, and we are extremely pleased that you arc able in those circumstances to spend a couple of days here with us in I long Kong.

9

You know. Prime Minister, how tough and how difficult are the challenges that we face in Hong Kong. The last time you came here you were hotfoot from Peking where you had just signed the Memorandum of Understanding on the Airport. While it is true that things did not subsequently work out quite as smoothly as we had all hoped - I speak with my usual mixture of euphemism and diplomatic tact - we nevertheless just got on with things and built the airport anyway, and you were able to see the spectacular results today.

I think that's typical of Hong Kong. Whatever the challenges, Hong Kong manages to rise to them so that today we remain one of the most successful, one of the most prosperous and one of the most decent cities in the world. I’m optimistic that Hong Kong with its magnificent civil service will work its way just as successfully through the problems of the next few years.

In managing the transition, in managing this unique enterprise, both Britain and China face very difficult tasks. I want to thank you personally. Prime Minister, for the generous and unequivocal support that you've given to us in I long Kong since I've been Governor. We couldn't have asked for more and 1 think it's particularly valuable that the question of Hong Kong and its future has never been allowed to become a matter of cross-party controversy at Westminster.

1 know. Prime Minister, that you will be making your principal speeches in Hong Kong tomorrow, talking to the Legislative Council and talking to the Chambers of Commerce at lunch and then addressing an open press conference later in the day. And I also suspect - in fact I know - that you share with me an antipathy to spoiling the digestive process by making lengthy speeches after dinner. But we would all be grateful if on what may be the last occasion on which a British Prime Minister visits this house under British sovereignty, we would all be very gratefid if you would say a few words to us this evening. Thank you.

End

10

Child abuse: early detection essential *****

Early detection and reporting of suspected child abuse cases arc essential in the fight against child abuse, the Director of Social Welfare, Mr Ian Strachan, said today (Sunday).

Speaking at the opening ceremony of the Eastern/Wan Chai District Public Education Programme on Prevention of Child Abuse, Mr Strachan said awareness among the general public and sensitivity on the part of professionals working with children were fundamental to prevent and combat child abuse.

"In Hong Kong, we adopt a multi-disciplinary approach to deal with the problem of child abuse, both at a territory-wide and at district level.

"I am pleased to learn that the Eastern/Wan Chai District Committee on Child Abuse was set up in mid-1995, with the aim to promote better understanding of the child abuse problem amongst different professionals, to examine the problem on a district basis, and to effect better co-ordination in the protection for vulnerable children and better management of child abuse cases in the district," Mr Strachan said.

The event today featured a seminar on child care, an exhibition on protection of children. Child Care Information Counter and family games.

"Through this programme, all of us will appreciate more the importance of protecting our children from being abused.

"It is important that parents and children learn to understand and communicate each other in a positive manner which would strengthen parent-child relationship rather than to mishandling, damage, neglect or abuse." he added.

The Eastern/Wan Chai District Committee on Child Abuse is one of the live district committees set up to better co-ordinate multi-disciplinary resources to tackle child abuse at a district level. The other four districts arc l ai Po/North. Tuen Mun. Sham Shui Po and Kvvun l ong.

End

11

DB by-election results *****

The following is the number of votes received by each of the four candidates of the Tuen Mun District Board by-election in respect of the Tin King constituency:

Mr Lee Yiu-hung 209 votes

Ms Ho Hang-mui 1132 votes

Mr Tse Yee-fong 134 votes

Mr Lee Hung-sham Lothar 1579 votes

Mr Lee Hung-sham Lothar elected by the Returning Officer, Mr Patrick Chan.

End

DAILY INFORMATION BULLETIN

ISSUED BY GOVERNMENT INFORMATION SERVICES BEACONSFIELD HOUSE, HONG KONG. TEL: 2842 8777

Monday, March 4, 1996

Press conference by Prime Minister.......................................... 1

ExCo welcomes visa-free assurance by Prime Minister........................ 12

Visa-free status will help boost confidence................................ 12

Government committed to promoting human rights............................. 13

New members of housing strategy review group appointed..................... 17

Government House gardens open to public................................ 18

New interest rate on tax reserve certificate authorised.................... 19

Magistrate's resignation announced......................................... 20

Hung Hom road links contract signed........................................ 20

Over 9,000 agreements lodged with Land Registry in February................ 22

Sponsor for 1997 Lunar New Year fireworks display sought................... 22

Central allocation of primary one places................................... 23

Special stamps on 1996 Olympic Games to be issued.......................... 24

New maternal and child health centre open.................................. 26

Water storage figure....................................................... 26

Hong Kong Monetary Authority money market operations....................... 27

1

Press conference by Prime Minister *****

Following is a transcript of a press conference given by the Prime Minister, the Rt Hon John Major, today (Monday):

Governor: Good afternoon and welcome, as David Frost would say. The Prime Minister will make a few remarks and then questions. If you could as ever declare your identity and which great organ you represent it would be helpful. And time is a bit limited because some of you - us - including the Prime Minister - have somewhere else to go this evening. That is Korea.

Prime Minister: Well Chris, thank you very much. I don't propose to say a great deal at the outset of this press conference. I have had opportunities elsewhere on this visit to say what I had to say, most noticeably at lunch-time and I dare say most of you have had the opportunity of seeing that before deciding what questions to ask this afternoon.

Let me just simply say how much I have enjoyed this particular visit to Hong Kong. It is over four years since last I was here. The speed of change here never ceases to amaze me but I am delighted to have been here again and on this occasion have enjoyed the visit as much as 1 always do.

We've had a very lively debate on one or two issues over the last couple of days - I enjoyed my meetings with ExCo and LegCo this morning - and I just want to say one or two general things about the present circumstance and the future.

The first thing I would like to say is just to add to a point I know that the Governor has made on many occasions in the past and that is just to express my admiration for the way in which the civil service has coped with matters here in Hong Kong over the last few years. I think Hong Kong are extremely lucky in the quality of their civil service, in the apolitical nature of their civil service, and I think that is something that is well understood here and well appreciated, also, in London.

Let me say a word or two about the natural fears that I think many people may have about the transition. There are some very important issues that I know are of concern to people, still, in Hong Kong. The question of the future of LegCo, whether the through-train arrives at its destination or whether there is a stop in 1997. The question of the Bill of Rights. Both of those 1 touched upon earlier and on earlier occasions but they may well come up again this afternoon.

2

When people worry, perhaps, about those problems, I wonder if I might just remind everybody of the problems in the past that seemed insoluble and yet now are behind us. They’ve been solved. The Court of Final Appeal, airport contracts, a range of other things in the past that were a matter of huge concern at the time but where satisfactory solutions were in the end actually found.

We are going to have to be both persistent and persuasive in our negotiations with China on the problems that remain. We will be so in private and we will express wherever it seems to be of advantage to Hong Kong for us to do so, we will express our views on those matters in public as well.

What I do want to reiterate as an assurance to Hong Kong is that Britain's commitment to Hong Kong and its future is not something that is dribbling away with the 450 or so days that remain. There is a commitment that is very deep, very long standing, and although the legal position may change in June 1997, the practical commitment will not change, the moral imperative will not change, and Britain's interest in Hong Kong, affection for Hong Kong, and trade and commercial relationships with Hong Kong will continue in the future as they have done in the past.

On the occasions I have been able to speak publicly on this trip I have tried to set out - most obviously in the speech at lunch-time today - some reassurance on five points. I will just remind you of them without going through them at any length, I think, again.

Firstly, our long term commitment to Hong Kong both moral and economic.

Secondly, our pledge to pursue every avenue that is open to us if there is to be a breach of the Joint Declaration, including using Britain's influence with the international community to ensure that agreements that were signed are the agreements that are met.

Thirdly, the announcement I made earlier today about visa-free access.

Fourthly, the extra guarantee to the ethnic minorities, the relatively small number of people of Indian and Pakistani ethnic extraction, who fear particular difficulties after 1997.

And fifthly, the commitment I was able to make today to effectively ensure British citizenship for war widows and wives.

Those were the five principal points I have made during this trip.

3

The next 400-500 days are self-evidently going to be a testing time for Hong Kong. Hong Kong has shown its courage and its persistence on many occasions in the past. It will need to do so again over the next 500 days or so. I’ve no doubt that it will do so. And neither do I have any doubt, if he will permit me to say so, that in the Governor, Hong Kong could not have a better representative of Hong Kong's views both with London and with China and with other countries. So I think you will remain in very good hands and the Governor will continue to have the direct and immediate access to London that he has always enjoyed.

I think those are the only preliminary points I wish to make. Let us now see if we can field some of your questions. 1 will let the Governor, by far the highest quality - if my present Press Officer will forgive me - by far the highest quality press officer I've ever had, to select the questioners because he will know them rather better than I do, with the exception of a small present minority.

Question (Chris Yeung, SCMP): Prime Minister, you just spoke firmly and clearly (about) the British commitment to Hong Kong but can you also be equally firm and clear that in the UK Government's will, the Chinese plan to set up a provisional legislature and dilute the Bill or Rights is a breach of the Joint Declaration?

Prime Minister: Well, I touched upon those points earlier and I reiterate them again today. 1 don’t have any doubt at all in my mind that it would be a very grave mistake were LegCo not to proceed right to the end of their natural elected life. I don’t think we could, or would, understand if LegCo’s life were cut in half in 1997. And neither do I believe the world at large would understand that. There is now an elective democracy in Hong Kong. The present LegCo were elected with a very substantial popular vote. They were elected to do a particular job and I believe they should be permitted to see that job through to its conclusion. Those points have long been put privately to the Chinese leaders. I have made the point entirely publicly. We will do all we can to persuade China that that is the right way to proceed, both in China’s interest, for the world would not understand anything else were it to happen in 1997, and also in the interest of people in Hong Kong.

There are of course allied matters on human rights and on the Bill of Rights and I won’t reiterate what I said at lunch-time. I think it's probably quite clear.

Question (Sally Blyth, Eastern Express): Mr Major, the guarantees which you gave today to the ethnic minorities, do they actually differ from earlier guarantees which were given by Sir Geoffrey Howe during Parliamentary debates, about ten years ago I think, when he said that the British Government would look favourably upon any application by any of the ethnic minorities here, so that they could enter Britain and the British Government would look favourably upon that? How does the guarantee today differ from that?

4

Prime Minister: The guarantee today is more specific and a good deal harder. What was said in the past that we would look favourably upon those applications. That doesn't necessarily mean in given circumstances that that would be granted in any sense. What I'm saying today is that where those people have a well founded fear that it is necessary for them to leave Hong Kong, we won't just look favourably upon their application. What I have offered them in those circumstances is a cast iron guarantee that they will be able to come to the United Kingdom. So it is —

Question (Sally Blyth, Eastern Express): Well why not just offer them British passports then?

Prime Minister: So it is a good deal firmer than anything we have seen in the past. 1 am not in the position to go further than that.

Question (S F Yeo, HK Economic Times): We just heard that we will have visa-free for the SAR passport holders and at present, officially, the British passport holder, I mean the Hong Kong ones, will not need to have a visa to land in Britain, but your Government and the immigration authorities in Hong Kong advise people of Hong Kong to take a visa first. So will you apply the same sort of policy towards the SAR passport?

Prime Minister: Well, in future people with an SAR passport certainly will not need a visa when they are coming to United Kingdom. That's not a short-term position, that's the position that I announced today. That wasn't the position before today. It is the position after today. I think it will make a material difference, a beneficial difference to many people who visit the United Kingdom from Hong Kong. Nobody should sniff around and try and find something in the undergrowth that isn't as it appears on the surface. What I said this morning should be taken at it's face value. Visas will not be required by holders of an SAR passport visiting the United Kingdom.

Question (S F Yeo, HK Economic Times): How about the BN(O) holders?

Governor: One at a time.

Question (Stanley Ma, HK Metro News): There are many persons ......

Governor:.... what about Francis Moriarty?

Question (Stanley Ma, HK Metro News): There have been many persons and organisations in Hong Kong ....

Speaker (?): It is Francis pretending....

5

Question (Stanley Ma, HK Metro News): I thought you were asking me.

Governor: Are you Francis Moriarty? Go ahead, carry on.

Question (Stanley Ma, HK Metro News): There are many persons and organisations in Hong Kong who are currently promoting democratic movement of China. You have made promises to give minorities entry into UK after 1997, what about that honourable groups after 1997, because they have ample opportunities to be suppressed by the Chinese Government?

Prime Minister: Well I think if you look at the commitments we’ve got in the Basic Law and the Joint Declaration, I know people are concerned. I understand the concern that people will have over the changes that are to come. If I may say so, although we have had differences with China from time to time over the Joint Declaration and the Basic Law, they have in essence been differences of interpretation over what was meant by the Joint Declaration and the Basic Law and I think it is wise to understand that it has been differences of interpretation not what both sides could clearly see was a breach of the Joint Declaration that had been the points at issue.

I understand the concerns that people fear about persecution. I have to say I think those fears are greatly overdone. Where we have seen a potential risk we have acted.

What I would say more generally on the subject is simply this, those sort of fears sometimes arise because people have the impression that after 1997, in some curious way, Hong Kong is going to be entirely on its own. But if there is an open city anywhere in the world upon whom the eyes of the world are constantly fixed, if there is a more open city than Hong Kong, I cannot myself imagine where that city might be. This is the gateway to the whole of Asia. The trade, commercial gateway for the whole of Asia. It is very much in the interests of Hong Kong that it remains that way but more relevantly from the point of view of your question, it is very much in the interests of China that it remains that way and I think people often imagine that the sheer impact of the world looking at Hong Kong and the sheer impact of the nature of Hong Kong is not going to have any effect upon the future after the end of June, 1997. I do not myself believe that and I think the fears that you raise are unfounded.

Governor: The real Francis Moriarty.

Prime Minister: Are you sure? Can you guarantee that?

Governor: We’ll find out from the question I’ll tell you.

6

Question (Francis Moriarty, RTHK): Prime Minister, a subject not on your list of five. You say Hong Kong is not alone but when Mr Rifkind was here —

Prime Minister: Can you get closer to a mouthpiece?

Question (Francis Moriarty, RTHK): Sorry, perhaps 1'11 stand up, you can hear that microphone better.

You say Hong Kong is not alone but when Mr Rifkind was here he suggested that when it came to solving the Boat People question, it was a Hong Kong question. Now iff can just for a moment go back to your last press conference in Hong Kong in 1991, at which you said: "we are discussing regularly, we, I mean the British Government and the Hong Kong Government". You go on several times to talk about we and us. So the question is, where, when it comes to the Vietnamese Boat People does the British responsibility end and the Hong Kong responsibility begin?

Prime Minister: You're quite right, it's the real Francis Moriarty.

Let me tell you exactly what's happening. When I was in Bangkok last week I saw the Vietnamese Prime Minister to discuss the specific problem of the Vietnamese Boat People. Iff can take a little bit of history to that, it was very soon after my visit in 1991, that activity on the Boat People began to accelerate. There was clearly a need for decisions to be taken, I agreed with that, the Governor agreed with that. Progress began to be made. Progress was preceding very satisfactorily with volunteers, nonrefugees returning back to Vietnam until there was, what I think I might delphically call an external intercession from across the water, and 1 do not mean by that the United Kingdom.

I spoke to the Vietnamese Prime Minister to see how we can accelerate this process. The objective would be to deal with the problem entirely before the end of June 1997. That is the objective. Satisfying that objective is not wholly in British hands but that is the objective that I seek. With that in mind I agreed with the Vietnamese Prime Minister that I would send British officials immediately from London to Vietnam to discuss how we might re-accelerate this programme. The reason I am sending officials first is that I shall be sending a Minister, a Foreign Office Minister, to Vietnam in April and I want the preliminary ground-clearing work done in advance of that so that we may deal compassionately, sensitively, but speedily and comprehensively with the problem of the non-refugees who are still here in Hong Kong in camps.

7

So I do see a role for the British Government. We played a role before. I see a role for the British Government, the Hong Kong Government, and the Vietnamese Government. I do not see quite such a role for individuals elsewhere. But for those three groups I do see a role and we are acting to see if we can get this programme moving again satisfactorily.

Question (Mike Brunson): Prime Minister, in your speech you mentioned in passing that if necessary, you would be prepared to take legal action if China is in breach of the Joint Declaration. Will you underline that again? But on the other hand do you not think that that is likely to anger Beijing as much as it might reassure those people here?

Prime Minister: We are not in the business of angering anyone. We have had significant discussions and negotiations with the Chinese and that will continue to be the position. We are not in the business of angering anyone but neither are we in the business of not making clear what the options are in certain circumstances. And I think it is right that everybody should know what the options are that might conceivably be pursued by the British Government 'were it necessary to do so'. And I stress that last point 'were it necessary to do so'.

And what we have said is that if there were breaches of the Joint Declaration, we would have - we the British Government - would have a duty to pursue every legal and other avenue available to us. And what I reaffirmed at lunch-time today is that that is precisely what we would do. We would pursue every legal and other avenue open to us. And I hope that will be a clear reassurance to people who fear that there can, with impunity, be a breach of the Joint Declaration with no response.

Question (Carrie Tan, Oriental Daily): Does that mean that you are going to sue China in the International Court if China is going to dismantle LegCo?

Prime Minister: I have set out precisely what I meant. I am not going to put further flesh on it. What I said was perfectly clear. We will pursue every legal and other avenue available to us. But I am not going to sit down and set out in each and individual circumstance precisely how we would deal with it. I don't think that would be productive and what I wish to do is to try and ensure that the circumstance doesn't arise in the first place. By a circumstance I mean a breach of the Joint Declaration. But those options are open to us should we need them.

Question (Don Macintyre): Prime Minister, can I just return to the ethnic minority question for a moment. Who will decide whether these people are under pressure to leave Hong Kong? I mean will the burden of the proof be as it were on the individual as in asylum cases?

8

Prime Minister: I considered whether we should actually set down a specific series of circumstances that would be met. We could do that and we will consider, in the period between now and June 1997, whether that might be an appropriate way to deal with the problem.

At this moment, Don, I am not convinced that it is. There are many alternative scenarios that may arise. One thing is certain, these people that we are talking about will not wish to leave Hong Kong of their own volition unless it is absolutely necessary for them to do so. They have their lives here, their businesses here, their interests here, their families here. Every indication we have is that they will wish to stay in Hong Kong if they possibly can.

But if circumstances arise where it is inappropriate for them to remain in Hong Kong, I think that will be apparent. It is a little like designing an elephant - you're not quite sure where to start the design but, by golly, you know when you see it. And I think it is probably wise to leave it upon that basis because that gives the greatest degree of flexibility which I would anticipate we would exercise benevolently if there were risk, to deal with the relatively small number of people who may face this problem. But we could, as I say, identify specific sets of circumstances where we would act. But without further discussion and consideration I am not convinced that would particularly be in the interests of the people concemefd.

Question (Washington Post): I am wondering, do you think there is something that China could be doing right now to help calm some of the anxieties? For example, talking to the elected Democratic Party officials or talking to the Governor here.

Prime Minister: I think that would be very helpful, yes. I think they could and I very much hope that they will. If I may return to the point 1 made earlier. Over the last two or three years many issues that looked as though they were going to provoke huge dissent and may be unbrokerable between Britain. Hong Kong and China, have now been solved. So I think we may well be able to solve some of those matters that so much concern people at present. But yes, self-evidently it would help if there were a dialogue with LegCo and a further and more comprehensive dialogue with the Governor and I would hope there will be such a dialogue.

Question: How much have you raised in the past few days for your Party, in Hong Kong? Free?

Prime Minister: Not what I came here for. Not what I have done. I didn't come here for that purpose, I haven't discussed that purpose. It has not been on my agenda. It has neither crossed my mind nor has it crossed my lips. The answer is that was not why I was here. Is that clear enough?

9

Governor: But the bet that Martin Lee and the Legislative Council had with Malcolm Rifkind —

Prime Minister: That has been paid.

Governor: - that Britain would not do anything about visa-free access,- has been handed over.

Prime Minister: The Governor is holding that and I will take it back to the Foreign Secretary who is a Scot, has won his bet and will receive his winnings.

Question (Robin Oakley): Prime Minister, how would you respond to critics at home in Britain in your own Party, some perhaps in your own Cabinet, who are suggesting that the visa-free access for SAR passport holders could be abused by potential political asylum-seekers?

Prime Minister: I don't believe it would have been honourable for us not to act as we have and I know no one in my Cabinet who is going to dissent with that view because my Cabinet has approved that view.

Question (Apple Daily): Prime Minister, you have just announced good news for Hong Kong people. I think most of us welcome that. But unfortunately, there was one Hong Kong people who happened to be a journalist, were not welcomed by Mainland China - they just take away their re-entry permits. So can you guarantee to us, Mr Prime Minister, after 1997, those permanent residents here in Hong Kong can come back to Hong Kong? Did you get any guarantee from China that we can come back to Hong Kong after 1997, June 30th?

Prime Minister: I am not quite sure of the facts of this particular case. I don't know where these journalists might be at the moment. I am always very protective of the interests of journalists, as the travelling party with me from the United Kingdom will confirm. But 1 don't know the background to this. If it seems as though there is some malpractice of some sort, clearly we would examine it and do what we could to help. But without having the details of the particular case. 1 would like to restrict my comment to that. 1 will make enquiries about it. If you will give the details to the Governor I will look at it.

Question (Paul Harrington, Agency France Press): We are all aware. Prime Minister, of the political obstructions to granting more British passports to Hong Kong people but you mentioned the moral imperative that Britain also had. Do you think that Hong Kong has got everything it deserved from Britain in this regard?

10

Prime Minister: We have tried to deal fairly with Hong Kong over the years. But the underlying premise of your question seemed to me to be that one is coming to the end of a period in which Britain will have any interest in Hong Kong. That emphatically is not the case. The Governor has been here representing, as well as I think anyone could have done, the interests of Hong Kong over recent years. Going back even earlier, the negotiation of the Joint Declaration was essential, and the determination of Basic Law was essential in the interests of Hong Kong, essential that the rule of law continues. And 1 have been here to try and assist with some of the problems that Hong Kong has.

So I believe yes, we have dealt fairly and honestly and openly with Hong Kong, and we will continue to do so, both in the short term and the long term.

Question: Specifically on the passports?

Governor: You've had your question.

Prime Minister: Yes, that is the answer.

Question (Bruce Gillie, Far East Economic Review): You announced with a great flourish the visa-free access decision and yet we all know that that can be revoked within a matter of days if someone, for example, the question raised by my British colleague about abuses comes up. So shouldn't you have offered some greater guarantee that that visa-free travel requirement can somehow be maintained? What is to stop the British Government from revoking it the moment some abuse is discovered?

Prime Minister: Well I don't see why we would be likely to do that. 1 didn't have to offer visa-free access now. I did so because I think it is in the interests of Hong Kong that we do so and I think it is in the interests of the United Kingdom that we do so for a raft of reasons as well. So I don't anticipate a short term reversal of this.

We have visa-free access for other countries. Il would be equally true of you to say to me we could reverse visa-free access for all those other countries but we have had visa-free access for them for years, it hasn't been reversed. I his is not an offer made in bad faith. This is an offer made in good faith and it is an offer that is going to be maintained. All visa-free access around the world is upon that basis and that is the basis upon which I have announced it today.

There is no need and no justification for people to poke around in the undergrowth of this statement to see if there is some trick underlying it. There is no trick.

11

Question (Trevor Cavanagh, The Sun): Prime Minister, a domestic question but one which I think may be of interest in this Crown territory. A number of MPs back home have expressed concern about the Royal Family, including Conservative MPs and including one Minister of the Crown who has asked for a debate on the Royal Family and the future of the Royal Family. Are you prepared to have one?

Prime Minister: I have heard no such comments made myself, Trevor, and 1 am disinclined to comment on domestic matters when 1 am so far away without having heard the domestic debate. I will happily respond to that point-when I am back in the United Kingdom.

Governor: So we can have one more question on Hong Kong.

Question (John Leicester, the Asscoaited Press): Prime Minister, could you just for the record explain to us in your opinion would disbanding Legco equal a breach of the Joint Declaration?

Prime Minister: I've said that. I've said that earlier.

Question (John Leicester, Associated Press): Not clearly though, I mean, 50 that we know that would disbanding Legco equal a breach of the Joint Declaration in your view1.

Prime Minister: We believe that the Joint Declaration shouldn't be changed and this is partly for that reason that we've been arguing that Legco needs to go right the way through and 1 made it clear the damage that we believe would be done if Legco were to be disbanded, damage not just to Hong Kong, though certainly to Hong Kong, but also to China and that is a point we have made repeatedly to China and will continue to make to China.

Governor: Okay, thank you very much indeed. Many thanks Prime Minister.

End

12

ExCo welcomes visa-free assurance by Prime Minister

*****

The following is a statement issued by the Convenor of the Executive Council, Rosanna Wong today (Monday):

"I am very pleased to learn the British Prime Minister Mr John Major has given the assurance that the future holders of the Hong Kong Special Administrative Region passports will not be required to obtain visas to enter the United Kingdom after 1997. This will serve as a positive encouragement for other countries to offer similar visa-free arrangements in the future.

I am also heartened that the British Government has provided a guarantee to the non-Chinese ethnic minorities regarding admission and settlement in the UK after 1997 in the event that any member of this group should come under pressure to leave Hong Kong after the transfer of sovereignty. I particularly welcome the promise of full British citizenship for the wives and widows of ex-servicemen from HK who fought in the war.

All my colleagues in the Executive Council join me in welcoming this good news which is indeed a boost to the confidence of the Hong Kong community.”

End

Visa-free status will help boost confidence

*****

fhe decision by the British Government to grant holders of Hong Kong SAR passports visa free access to the United Kingdom will help boost confidence in Hong Kong, a government spokesman said today (Monday).

Welcoming the announcement made by the Prime Minister, the Rt Hon Mr John Major, the spokesman said it was important to the people of Hong Kong that their way of life would remain unchanged beyond 1997.

’’Ease of travel for the people of Hong Kong is of vital importance to maintaining their confidence as well as the territory’s status as a world-class financial and trading centre.” he said.

13

"We hope that other countries around the world will follow the lead taken by the British Government and that the Chinese side will work closely with the British side to promote visa-free travel throughout the world for all Hong Kong people."

The spokesman also welcomed the guarantee given by the British Government in respect of admission and settlement for the non-Chinese ethnic minorities who would have no nationality other than British and would come under possible pressure to leave Hong Kong after 1997.

"Hong Kong Government had long recognised that non-Chinese ethnic minorities with solely British nationality represent a unique group who had particular anxieties about their own status in Hong Kong," he said.

"Their families have been in Hong Kong for many generations and generally they want to remain in Hong Kong which is their home.

"But they also need reassurances about their future."

The spokesman said the assurances given by the Prime Minister that wives and widows of ex-servicemen from Hong Kong would be granted full British citizenship discharged the debt of honour to the wives and widows of men who had fought to defend Hong Kong.

He noted that these decisions were taken after various representations from the Governor, the Executive Council, the Legislative Council and other parties concerned in the territory.

End

Government committed to promoting human rights *****

The Hong Kong Government's firm commitment to promoting, enhancing and protecting internationally recognised human rights has been reflected by the extension and application of human rights treaties to the territory. Principal Crown Counsel, Mr Stephen Wong, told the United Nations Committee on the Elimination of Racial Discrimination in Geneva today (Monday, Geneva time).

In an opening statement at a meeting in which Hong Kong's 13th periodic report under the International Convention on the Elimination of All Forms of Racial Discrimination (ICERD) was examined, Mr Wong said the Hong Kong Government had pursued this policy through legal processes, by adopting appropriate administrative measures and social programmes.

14

Noting that ICERD was the first of the major human rights treaties to be accepted and applied in the territory, he said it had always been regarded with particular importance by the Government and people of Hong Kong.

ICERD has since been followed by the International Covenant on Civil and Political Rights, the International Covenant on Economic, Social and Cultural Rights, the conventions on torture and the rights of the child, while the Convention on the Elimination of All Forms of Discrimination Against Women will shortly join the list.

Mr Wong updated members of the Committee on a number of developments in the territory following the submission of the 13 th report to United Nations last August.

On the translation of the law into Chinese, he informed members that the process was progressing well.

"By December 31, 1995, we had prepared Chinese drafts of all the laws, including subsidiary-legislation, originally enacted in English only.

"The Bilingual Law Advisory Committee had examined a total of 275 ordinances and 190 had been declared authentic. The aim is to authenticate all remaining legislation before July 1997," Mr Wong said.

He also noted that the progress of the review of laws in the light of the Bill of Rights Ordinance (BORO) had been good and the number of amending bills had risen to 36.

Mr Wong said action was in hand to bring the provisions of a further four ordinances into line with the BORO.

"Provided that we can secure the necessary time slot, we intend to enact these amendments within the current legislative session," he said.

Further to the amendment to the Brewin Trust Ordinance which had been found inconsistent with the provisions of the BORO, the Wills Ordinance had recently been amended to remove a similar inconsistency.

"Previously, wills written wholly or substantially in Chinese by testators of Chinese race were exempt from the formal rules governing the valid execution of wills.

15

"That provision has been repealed so that the rules apply equally to the execution of all wills, regardless of the race of the testator or the language in which the will was drafted," he said.

Turning to equal opportunities, Mr Wong informed Committee members that the Sex Discrimination Ordinance and Disability Discrimination Ordinance had already been enacted last year.

He said the Hong Kong Government was currently consulting the public on the need for measures to deal with discrimination on the grounds of sexual orientation and family status while the public consultation on discrimination on the grounds of age was expected to be carried out in late April or early May.

Mr Wong said when the resources committed to these exercises were released, probably by the autumn of this year, the Administration would initiate a study on the question of racial discrimination with a view to establishing the extent of any problems in that area and to determine what measures may be necessary.

He said in the course of the study, the Government would examine each ordinance which appeared to confer benefits on persons of one race to the exclusion of others.

"Should the examination indicate that any of them are discriminatory, we will take whatever steps may be necessary to remedy the position," he said.

On the recreational needs of Hong Kong’s community of foreign domestic helpers. Mr Wong said the Government, in collaboration with the voluntary Bayanihan Trust had opened five "Sunday-only" and one five-day recreational centres.

"These have proved popular and we intend to open a second five-day centre shortly. We are exploring the possibility of setting up permanent centres and facilities," he said.

On the Vietnamese migrants, Mr Wong reported to the Committee that some 48,000 of those who arrived after June 1988 had returned to Vietnam, 46,000 of them voluntarily.

He said the international community had resolved to expedite the process of repatriation in order to bring this unhappy saga to a close.

16

Turning to the objective of having all judicial proceedings conducted either in Chinese or in English and more judicial posts to be filled by local candidates by July 1997, Mr Wong said progress in both areas had been satisfactory.

He said legal history was made in December last year when for the first time in Hong Kong the High Court heard a civil case entirely in Chinese.

"This is a practice which the Judiciary will seek to use more and more whenever it is appropriate," he said.

Mr Wong also pointed out that further progress was achieved in mid-February when the restriction on the use of Chinese in the District Court and the Lands Tribunal was lifted.

"Also in the course of last year, five outstanding local lawyers joined the Court of Appeal, the High Court and the District Court. And six local lawyers, from both branches of the legal profession, volunteered to serve the community by accepting appointments to the Magistrates' Court."

"We are confident that by 1 July 1997. 50 per cent of all judicial posts would be filled by local candidates," he said.

On the Hong Kong Government's recruitment policy to the civil service. Mr Wong said since July 1993, it had been possible for officers originally recruited on overseas terms to transfer to local terms provided they were Hong Kong permanent residents.

He told the committee that as at January 1. there were 181,643 public servants, 179.999 (99.1 per cent) of them were on local terms and 1,644 (0.9 per cent) were on overseas terms, the latter having fallen from 3.5 per cent in I960 and 2.3 per cent in 1980.

In conclusion. Mr Wong assured members of the committee that their comments and suggestions on the report would be faithfully reported back to London and 1 long Kong and would be given the utmost detailed and careful study.

The study will be done constructively and positively and with an open mind at all times with the aim. which the United Kingdom and Hong Kong governments shared with the committee, of securing and advancing the full enjoyment in the territory of the rights set out in the Convention, he said.

End

17

New members of housing strategy review group appointed ♦ ♦ * * *

The Secretary for Housing, Mr Dominic Wong, has made two new appointments to the Steering Group set up to assist him in reviewing all major aspects of housing policy.

The group is also to suggest the most cost-effective way of meeting the Government's policy objective of providing adequate and affordable housing for the community.

r

The appointments of the Director of the Society for Community Organisation (SOCO), Mr Ho Hei-wah. and member of the Regional Council and Tai Po District Board with extensive public service, Mr Leung Wo-ping, were made after the Administration had carefully considered various suggestions for including more grassroots people on the Steering Group. • b

With the new appointments, the Steering Group under the chairmanship of the Secretary for Housing now has 12 members who come from various sections of the community.

In thanking Mr Ho and Mr Leung for accepting the appointments, Mr Wong said: "The expanded membership will ensure even greater input from the public and the housing-related sections of the community.

"We aim to complete the internal review in a few months' time and to issue a public consultation paper in the middle of this year, setting out our main conclusions and recommendations on the way ahead."

Mr Wong said the Steering Group was one of the avenues for the Administration to canvass public views during the course of review.

"We briefed the Legislative Council and the Housing Authority at the start of the exercise and have invited submissions from the general public.

"We will continue to monitor public views," he said.

All members of the Steering Group were appointed in their personal capacities to provide advice based upon their knowledge, and experience of housing-related matters.

Q

18

Following is the membership list of the Steering Group on Long Term Housing Strategy Review:

Chairman

Mr Dominic Wong

(Secretary for Housing)

Members

Mr Fung Tung

Mr K Y Tang

Miss Rosanna Wong

Mr Victor So

Mr K Y Yeung

Mr Wan Man-yee

Mr Barry Cheung

Mr Anthony Wong Kin-wan

Mr Kwok Kwok-chuen

Mr Lau Kwok-yu

Mr Ho Hei-wah

Mr Leung Wo-ping

(Director of Housing)

(Government Economist)

(Chairman of Housing Authority)

(Executive Director of Housing Society)

(businessman)

(businessman)

(businessman)

(banker)

(economist)

(academic)

(social worker)

(Regional Council and District Board member)

End

Government House gardens open to public *****

fhe Gardens of Government House will be open to the public on Sunday (March 10) from 10 am to 5 pm for residents to enjoy the azaleas in full bloom.

I'he open day has been an annual event since 1968.

Those wishing to visit Government House during the opening hours should enter by the east gate, which is located on Upper Albert Road facing the American Consulate.

They can leave by the main gate on Upper Albert Road or the west gate on Albert Path.

19

As a large number of people are expected to turn up. visitors are advised not to travel by private car or taxi.

If they do come by car or taxi, they arc advised not to alight on Upper Albert

Road.

End

New interest rate on tax reserve certificate authorised *****

The Secretary for the Treasury has authorised a decrease in the rate of interest payable on tax reserve certificates, it was gazetted last Friday (March 1).

As from March 4, the new annual interest rate will be 5.28 per cent as against the current rate of 5.64 per cent.

Interest on tax reserve certificates is calculated in monthly steps and the new rate will be $0.44 per month per $100. Simple interest will be credited as before in respect of complete months between purchase and surrender in payment of tax.

Interest is only credited when certificates are used to pay tax and no interest is due where the principal value of a certificate is repaid to the holders of such certificates.

fhe new rate will apply to all certificates issued on or after March 4.

Certificates which were issued before that day, subject to the general rule that interest ceases to accrue after 36 complete months, will continue to earn interest at the rates prevailing on their respective issue dates as follows:

3% per annum for certificates issued on or after July 8. 1992, and before

March 30, 1994;

3.84% per annum

4.56% per annum

for certificates issued on or after March 30. 1994. and before May 25, 1994;

for certificates issued on or after May 25. 1994. and before August 24, 1994;

20

End

5.04% per annum

5.64% per annum

5.28% per annum

for certificates issued on or alter August 24, 1994, and before December 4, 1995;

for certificates issued on or after December 4, 1995, and before March 4, 1996; and

for certificates issued on or after March 4, 1996, until further notice.

Magistrate's resignation announced *****

The Judiciary announced today (Monday) that Mr Warner Banks had tendered his resignation as a Magistrate on March 2. The resignation took immediate effect.

On his resignation. Mr Banks ceased to be a public officer, and the disciplinary hearing before the Investigating Committee which was scheduled to commence this morning therefore came to a halt.

End

I lung Hom road links contract signed *****

Work on the Hung Hom Bypass and Princess Margaret Road Link and roadwork in I lung I lorn Bay project is to commence on Friday (March 8).

The $1,444 million contract for the project was signed today (Monday) by the Director of Highways, Mr Leung K. wok-sun, and representatives of the Maeda-Chun Wo Joint Venture.

The Hung Hom Bypass will be a 1.3 kilometre-long elevated dual-two carriageway from Salisbury Road in Tsim Sha Tsui to Hung Hom Road in Hung Hom.

21

The Princess Margaret Road Link will be a 1.2 kilometre-long elevated dual-two carriageway connecting the Hung Hom Bypass with Chatham Road South, and Princess Margaret Road.

These elevated carriageways comprise a number of pre-stressed concrete bridge structures. To maintain traffic flows in the area, segmental construction method will be employed for some bridge sections.

Upon completion in 1999, these two roads will be the primary access to the Hung Hom Bay reclamation area and help improve the existing traffic conditions in Hung Hom.

Motorists can then use the Princess Margaret Road Link and the Hung Hom Bypass for access to the Kowloon-Canton Railway podium and Tsim Sha Tsui East and Hung Hom areas thus relieving traffic congestion on the Cross Harbour Tunnel approach roads and Chatham Road South.

The contract also includes the construction of 3.7 kilometres of ground level roads in the Hung Hom Bay Reclamation. These roads will link with the two main elevated carriageways via slip road ramps to form an integrated road network serving future developments on the reclamation.

Comprehensive landscaping works will be carried out at the Tsim Sha Tsui waterfront promenade and on the Hung Hom reclamation area.

The existing Tsim Sha Tsui waterfront promenade will be extended eastward by an elevated walkway to connect with the future Hung Hom Bay waterfront promenade.

The works have been designed on behalf of the Major Works Project Management Office of the Highways Department by Maunsell Consultants Asia Limited who will also supervise the contractor's work.

End

22

Over 9,000 agreements lodged with Land Registry in February

*****

A total of 9,175 sale and purchase agreements for building units, including both residential and non-residential properties, were lodged with the Land Registry in February.

The figure represented an increase of 0.2 per cent from that of January 1996, and an increase of 127.4 per cent when compared with the same month last year.

The total consideration of these agreements is $26.02 billion, up 14.4 per cent and up 118.9 per cent as compared with the amounts for January 1996 and February' 1995 respectively.

The figures are contained in the monthly statistics released today (Monday) by the Land Registry on deeds relating to property transactions received for registration in the Urban and New Territories Land Registries last month.

Relevant statistics for January 1996 and February 1995 were provided for comparison.

Figures on sale and purchase agreements received for the past 12 months and the year-on-year rate of change were also released.

The statistics generally relate to land transactions executed up to four weeks prior to their submission for registration, as there is usually a time lag between the execution of deeds and their lodgement for registration.

End

Sponsor for 1997 Lunar New Year fireworks display sought

*****

Organisations wishing to sponsor the 1997 Lunar New Year fireworks display are requested to submit expressions of interest to the Government before April 30, a spokesman for the Recreation and Culture Branch (RCB) said today (Friday).

Fireworks displays have been held over the Victoria Harbour in the evening of the second day of the Lunar New Year since 1982 to celebrate the spring festival.

23

Each year, the event has attracted hundreds of thousands of spectators, some even from overseas, the spokesman said.

Expressions of interest should be sent in writing to the Secretary for Recreation and Culture (SRC), 41st floor, Revenue Tower, 5 Gloucester Road, Wan Chai.

They will be considered by the Fireworks Vetting Committee to be chaired by the SRC, with representatives from the two municipal councils and a number of departments and branches.

Enquiries can be made at RCB on 2594 5657 during office hours.

End

Central allocation of primary one places *****

All children who have applied for a public-sector primary one place but have not secured a discretionary place will be centrally allocated to a government or aided primary school for school entry in September.

Parents will receive a letter from the Primary One Admission Unit of the Education Department requesting them to go to a specified distribution and collection centre to collect a ’’choice of schools” form and a list of all government and aided primary schools in their home school net from Saturday (March 9) to March 11 (Monday) from 9.30 am to 12.30 pm and 1.30 pm to 4.30 pm.

Senior Education Officer (Primary One Admission), Mrs Pak Au Tak-chuen, reminded parents to return the completed forms to the same centre within the specified period.

All distribution and collection centres will remain open during the specified time on Sunday (March 10).

If parents have not received the letter by Friday (March 8), they should contact the Primary One Admission Unit on 2832 7700 immediately.

"The central allocation of primary one places is solely based on parents’ choices with no reference to the points system", Mrs Pak said.

24

’’However, when a school is oversubscribed, a randomisation method will be used to ensure fairness to all,” she added.

Parents who have moved house recently or are planning to move house in the near future must inform the Primary One Admission Unit so that arrangements can be made to allocate a place to their children in their new home school net.

i

Results of the central allocation will be released in early June.

Meanwhile, parents and members of the public are welcome to make use of the department’s automatic telephone enquiry service 2891 0088 for the latest information on the primary one central allocation system.

End

Special stamps on 1996 Olympic Games to be issued ♦ ♦ ♦ ♦ ♦

The Postmaster General, Mr Robert Footman, today (Monday) announced that a set of special stamps on the theme of "1996 Olympic Games" will be issued on March 20.

There will be four denominations depicting four popular sports in Hong Kong -gymnastics ($1.2), diving ($2.1), athletics ($2.6) and basketball ($5).

Souvenir sheet incorporating the four stamps will also be issued but the colour used for the Royal Cypher, the Olympic rings and the inscription "Hong Kong" will be different. The stamps were designed by Mr Bon Kwan and printed by Ashton-Potter (USA) Ltd.

A special feature of the stamps is that they will be tagged with a phosphorescent ink which will facilitate the automatic process of mail facing and segregation by Culler Facer Canceller machines to be introduced by the Post Office shortly.

The stamps will be displayed for the advance information of the public at the General Post Office, Tsim Sha Tsui, Tsuen Wan and Sha Tin Central post offices as from Wednesday (March 6).

25

Official first day covers will be on sale at $1 each at all post offices as from Wednesday. Advance order for serviced first day covers will be accepted from Wednesday to March 13. The minimum number of serviced first day covers per order is five.

A restriction of 20 souvenir sheets and two sheets of each denomination (that is 100 sets of stamps) per customer queuing will be imposed on the first day of issue on March 20.

A beautifully designed presentation pack containing the four stamps will also be on sale at $19 each at all post offices from the same day.

Serviced first day covers affixed with the set of stamps and cancelled with the first day of issue special postmark will be on sale at $14.40 each on March 20 at the following eight philatelic offices:

* Airport Post Office

* Beaconsfield House Post Office

* General Post Office

Granville Road Post Office

Peak Post Office

Sha Tin Central Post Office

* Tsim Sha Tsui Post Office

* Tsuen Wan Post Office

A special postmark will be introduced for the hand-back service at all post offices on the same day to official and privately made covers bearing the first day of issue indication.

A set of five postcards reproducing the stamp and first day cover designs, issued by the Amateur Sports Federation and Olympic Committee of Hong Kong, will also be on sale at all post offices at $18 per set as from Wednesday.

End

- 26 -

New maternal and child health centre open * * * * *

A new maternal and child health centre set up by the Department of Health in Sai Wan Ho will commence operation on Friday (March 8), bringing the total number of such centres in Hong Kong to 47.

"The centre will provide a comprehensive range of health services to women of child-bearing ages and children from birth to five years old.

"These services include infant and child health care, immunisation, comprehensive observation service, as well as antenatal, postnatal and family planning services," a spokesman for the department said today (Monday).

The centre is located on the second floor, Sai Wan Ho Health Centre, 28 Tai Hong Street, Sai Wan Ho, and its telephone number is 2884 4599.

It will be open from 9 am to 1 pm and 2 pm to 5 pm on weekdays, and 9 am to 1 pm on Saturdays. No service will be provided on Sundays and public holidays.

End

Water storage figure

*****

Storage in Hong Kong's reservoirs at 9 am today (Monday) stood at 79.2 per cent of capacity or 463.966 million cubic metres.

This time last year the reservoirs contained 402.348 million cubic metres of water, representing 68.7 per cent of capacity.

End

27

Hong Kong Monetary Authority money market operations

*****

$ million Time (hours) Cumulative change (tmillion)

Opening balance in the account 1,932 0930 +868

Closing balance in the account 2,197 1000 +868

Change attributable to : 1100 +868

Money market activity +868 1200 +868

LAF today -603 1500 +868

1600 +868

LAF rate 4.00% bid/6.00% offer TWI 123.5 *+0.0* 04.03.96

Hong Kong Monetary Authority

EF bills EF notes

Terms Yield Term Issue Coupon Price Yield

1 week 4.70 2 years 2802 5.16 99.74 5.37

1 month 4.80 3 years 3901 5.57 99.99 5.65

3 months 4.92 5 years 5012 6.38 101.05 6.21

6 months 5.02 7 years 7302 6.02 97.34 6.61

12 months 5.06 5 years M502 7.30 103.54 6.51

Total turnover of EF bills and notes - $10,033 million

Closed March 4, 1996

End

DAILY INFORMATION BULLETIN

ISSUED BY GOVERNMENT INFORMATION SERVICES BEACONSFIELD HOUSE, HONG KONG. TEL: 2842 8777

Tuesday, March 5, 1996

Contents Page No,

Transcript of the Governor media session.................................. 1

Transcript of the Governor................................................ 3

New Director of Environmental Protection appointed...................... 6

Transport Department's response to CMB's labour dispute................... 7

Majority of primary schools to adopt TOC.................................. 7

Financial Secretary to answer questions oi? Budget........................ 8

Budget summary broadcast on TV and radio.................................. 9

Budget guide for public collection tomorrow.............................. 10

Contract to convert plan data to digital format signed................ 11

Hong Kong Monetary Authority tender results.............................. 12

Hong Kong Monetary Authority money market operations..................... 13

1

Transcript of the Governor media session * * * ♦ ♦

Following is the transcript of the media session by the Governor, the Rt Hon Christopher Patten, after attending the SHA's Spring Reception this (Tuesday) evening:

Question: Have you been cheered up by Mr Major who came for the visit? He is on your side ....

Governor: Not very surprising, since he is the Prime Minister who appointed me and I’ve been implementing the British Government’s policy, and a very sensible policy it is too. I said this morning that I think his visit was an excellent one, extremely successful. He brought good news for Hong Kong and I very much hope that Chinese officials will bring good news for Hong Kong on right of abode. Now that we've sorted out the issue of visa-free access for SAR passport holders to the United Kingdom, we want to move on as rapidly as possible to deal with the right of abode issue. And the sooner we can have sensible and practical and generous proposals to implement the promise that Mr Qian Qichen has made about everybody who has permanent residence before 1997 enjoying it after 1997, the sooner we can have proposals on the table about that the better. I also think it is extremely important for us now to start lobbying other countries in the European Union and North America and elsewhere to ensure that we have as much visa-free access for people from Hong Kong as possible.

Question: But the Chinese side thinks Mr Major is using the international pressure ....

Governor: 1 answered the question on that this morning. It is a ridiculous charge by the united front newspapers.

Question: Chinese officials think that the Hong Kong Government hasn't been in contact with them for the liaison office. So when will the Government be in contact with them?

Governor: The Hong Kong Government has offered assistance to the Preparatory Committee. We've established the liaison office. We've made it absolutely clear that we arc standing by to be co-operative whenever we are asked for help. We are still waiting to know what the Preparatory Committee would like us to help them with.

Question: The Chinese side has said yes to the Lutheran Church to hold its world assembly in July 1997. But today Dr Noko of the Lutheran Church said the Chinese side has yet to make a very firm promise on allowing Taiwanese delegates to enter Hong Kong. What is your comment on this?

2

Governor: Well, I haven't heard about the latter point. But it's nothing to do with the Chinese Government or any other Chinese authority whether the Lutherans hold the conference here in 1997. It's entirely a matter for them. This is a free society in which people enjoy freedom of religious worship, in which they enjoy freedom to organise conferences as they wish. The Hong Kong Government doesn't interfere in those matters now. Those are things that are guaranteed in the Joint Declaration. It's nothing to do with the Chinese Government whether the Lutherans have the conference in the summer of 1997, and I very much hope that they will have a successful conference and enjoy Hong Kong as much as the rest of us do.

Question: But is it already on JLG discussions ...?

Governor: You've asked about three questions already. No. It’s nothing to do with the JLG as I've just said in my reply.

Question: You think the SAR should also give the visa-free arrangement for the British people who will come to Hong Kong after 1997 in return?

Governor: I am sure the SAR Government will want to have as open a policy as far as travellers and visitors and business people are concerned as we have today. Hong Kong is a great international city. One of the reasons for its success is that people can come in and out very freely as to do business , to invest, to set up firms, to visit. We're one of the business centres in the world and one of the tourist centres in the world as well. O.K.

Question: What is your plan after 1997?

Governor: To have a rest. 1 shall have a lie-in and hope that somebody brings me a cup of coffee in bed. And then I shall spend some time reading and writing and reflecting on what a happy five years I've had in Hong Kong.

End

3

Transcript of the Governor *****

Following is the transcript of the media session by the Governor, the Rt Hon Christopher Patten, after the Executive Council meeting this (Tuesday) morning:

Governor: Good morning. I’m obviously delighted that the Prime Minister had such a successful visit to Hong Kong and, from his point of view, I think he found the visit both very' useful and extremely enjoyable. It was a successful visit above all because I think it gave all of us in the community a considerable confidence boost because of the decisions made by the British Cabinet about visa-free access, because of the further decisions made about war widows, which 1 very much welcomed, and of course the decision made about the ethnic minorities. Some people would have liked to have gone further, but I think it’s an important step in very much the right direction. I think that after the Prime Minister's speech yesterday, and after his answers to questions, nobody should be able to say again that Britain doesn’t recognise its substantial and substantive commitment in the short, the medium and the long term to Hong Kong, a commitment that is legal, that is moral and that is economic. And that commitment was underlined by the Prime Minister yesterday I think as forcefully as it's ever been done by any British minister or politician. I think there are now a number of consequences which follow from that visit, f irst of all, we in Hong Kong must do all we can to ensure that private members legislation comes forward rapidly on the war widows. I think there are a number of things that the Chinese have to do in order to make their contribution to greater confidence in the community. The British Government has made a sensible and helpful decision on visa-free access. Now it's for Chinese officials, for Chinese leaders, to make as rapidly as possible an equally sensible and positive decision on right of abode in Hong Kong after 1997. The sooner we can have proposals brought forward for the detailed and sensitive implementation for Mr Qian Qichen's promises and the promises in the Joint Declaration and the Basic Law on right of abode the better. And I think the whole community will be looking to Chinese officials for those sort of assurances within the coming weeks. So there's obviously still much work for us to do. There are decisions which we still need to take and to get right, but I think that this week has been a good one for I long Kong, and a week whose consequences will echo down the coming months and indeed years. Thank you very much indeed.

Question: Did Mr Prime Minister discuss about the right of abode with the Chinese Premier in Bangkok?

Governor: I think you'll have to ask the Prime Minister's Office or the Foreign Office for details of his meeting. I think that every British official who has met an opposite number recently has raised the question of right of abode. I'm pretty certain that the Prime Minister after telling Premier Li Peng about our decision on visa-free access went on to mention the importance of an early decision on right of abode as well. But in order to get confirmation of that, you have to ask the Foreign Office.

4

Question: (on China's reaction to PM's remarks)

Governor: Well of course, the sort of thing that is said by some of those united front newspapers in Hong Kong doesn't surprise anybody. That's what you expect them to say. The notion that it's inappropriate for the Prime Minister to talk about how best one can safeguard the way of life in Hong Kong, how best one can honour the commitments and obligations set out in the Joint Declaration, the notion that it's inappropriate for the British Prime Minister to discuss those things is one that could only feature in a united front editorial. Of course, everybody recognises that the most effective way in which Chinese officials could meet what they say is their aim of boosting confidence in Hong Kong would be by making it absolutely clear that they stand by the promises that have been made to Hong Kong on both human rights and (heir safeguarding, and as well on the development of representative institutions, the development of democracy on Hong Kong. It's difficult to see how commitments on those matters can be matched by what's been said by Chinese officials about dismantling the Legislative Council. Does one dismantle the Legislative Council in order to have a fairer electoral system? And it's difficult to match those promises with what's been said about gutting, filleting the Bill of Rights, and about reporting obligations under the international covenants. So obviously we would very much like to see positive responses by Chinese officials on those matters. And I'm sure those positive responses, were they to come, would meet with overwhelming relief and overwhelming enthusiasm here in I long Kong. I think those matters are exceptionally important. And I don't doubt that it would take some effort of will and some political effort to reverse positions that have been taken publicly. But I'm equally no doubt that it would be hugely in Hong Kong's interest were that to happen.

Question: How about your role in the hand-over ceremony ...?

Governor: Shiny. Can I just make this point as vigorously as I have made it before, and I don't want to answer any more questions about it. It is a ridiculous issue for anybody to harp on. Who represents the British Government at the hand-over in 1997 is entirely a matter for the British Government. It has nothing to do with Chinese officials. It has nothing to do with NCNA sources, it has nothing to do with those who write editorials and comments for united front newspapers. It is a matter for the British Government and it is impertinent for anybody to suggest otherwise. Is that now reasonably clear? Have we got it absolutely plain?

Question: Is it true that in your closed door and background briefings for the British press, you've said ... back to British politics?

5

Governor: No, What is true is what they actually reported on the record because that part of my discussion with them was entirely on the record and let me tell you what is on the record and then you can decide what you think it means. When asked about my future intentions, 1 said I didn't intend making up my mind until after I've completed this job and I went on to say that I didn't rule in trying to get back into British politics and I didn't rule out trying to get back to British politics. That sounds to me about as neutral as one can get in the circumstances though some people wrote it up a bit. I think that sometimes happens in newsrooms.

Question: Yesterday John major when talking about confidence levels in Hong Kong, he talked about how the eyes of the world will be on Hong Kong after it reverts to Chinese rule. China today announced it is going to stage missile test in the sea north of Taiwan. What effect do you think the missile tests have on people's confidence ...?

Governor: I think that people look at what's happening in the region as a whole and it affects their confidence both today and their confidence in the future. I don’t want to get involved in arguments that take place elsewhere in the region. Life is difficult enough without that. But I very much hope that all those disputes and arguments can be settled amicably and peacefully and through negotiation. This is a community more than most others which reads the newspapers and watches the television and knows what's going on and we know from previous events that these matters do have an impact on public opinion and do have an impact on sentiment and do have an impact on confidence. So, I hope that we'll see a peaceful and negotiated settlement of all these matters which arc obviously of considerable consequence.

Question: The Chinese are likely to say what John Mgjor has done is to internationalise the Hong Kong issue and ... he mustn't drag the Hong Kong issue into the international arena ...?

Governor: Next year, there will be some people think three, four, five, six thousand journalists from all over the world in Hong Kong to report what happens in June and July. Why are they here? Because what happens in Hong Kong is of interest to the whole world. It's of interest to the whole world for a number of reasons partly because it is one of the most open cities anywhere, partly because it is a city which culturally, economically, socially is not only at the hub of Asia, but at the cross-roads between Asia, North America and Europe. Whatever anybody may like, whatever any united front editorialist may write. I long Kong is going to remain al the top of the world's interest for some lime to come. It's also of course true that the treaty which guarantees Hong Kong's way of life for the indefinite future is lodged at the United Nations. It is true that our human rights, our civil liberties here in Hong Kong are guaranteed by international covenants which arc agreed by the United Nations. So. nobody should kid themselves that Hong Kong is somehow going to be lost to public view internationally in 1997 or thereafter. Hong Kong is going to be a very big issue as far as the world is concerned and I am sure the world is going to want to sec Hong Kong as successful after 1997 as it’s been before 1997. It will be. provided it’s way of life is maintained. Thank You.

End

6

New Director of Environmental Protection appointed *****

The Government today (Tuesday) announced that the Deputy Director of Environmental Protection, Mr R J S Law, has been selected to succeed Dr S B Reed as the Director of Environmental Protection from April 27. Dr Reed will proceed on pre-retirement leave on the same day.

In making the announcement, a government spokesman said a promotion exercise was conducted in December last year to consider the suitability of professional grades directorate officers in the Planning, Environment and Lands Branch, Works Branch and their groups of departments.

All serving professional officers with relevant administrative experience at D3/DL3 and D4 levels and assistant directors of Environmental Protection (D2) were considered.

Mr Law was selected as the most suitable candidate for the job.

Following are biographical notes of Mr Law and Dr Reed:

Mr R J S Law

Aged 46, Mr Law first joined the civil service as a Senior Environmental Protection Officer in July 1981.

He was promoted to Assistant Director of Environmental Protection in April 1987 and to Deputy Director of Environmental Protection in December 1990.

Dr S B Reed

Aged 59, Dr Reed first joined the civil service as Environmental Protection Adviser in July 1977.

He became the Commissioner for Environmental Protection in November 1980 and the Director of Environmental Protection in April 1986. He will retire from the civil service on reaching the normal retirement age of 60.

End

7

Transport Department's response to CMB's labour dispute ♦ ♦ ♦ ♦ ♦

In response to press enquiries on today’s dispute between maintenance staff at the China Motor Bus Company's Chai Wan Depot and CMB management, a spokesman for the Transport Department said:

"The department has monitored the situation ver}' closely throughout the day to ensure that normal bus operation is not affected.

"Despite the dispute at Chai Wan depot, CMB managed to provide normal service and we will continue to monitor its operation.

"Throughout the day, the department has maintained close contact with Labour Department, union representatives and CMB management.

"We understand that staff representatives and CMB management had held a meeting, with the Labour Department as mediator, to solve their differences.

"We welcome the staffs decision to resume their normal duties tomorrow."

End

Majority of primary schools to adopt TOC

*****

fhe Target Oriented Curriculum (TOC) will be adopted by about 500 schools in September, representing more than 60 per cent of all primary schools in Hong Kong, the Director of Education, Mrs Helen C P I ai Yu. said today (Tuesday).

Opening a TOC Resource Centre for Hong Kong region, Mrs Yu urged other schools to join in so as to improve the quality of education, adding that TOC would be used in the subjects of Chinese. English and Mathematics at Primary One.

The new centre is the second one in the territory to provide a comprehensive range of services and resource support which would help schools to effectively implement TOC.

The first one. in To Kvva Wan. is already in operation and the third one will be opened later this month in Sheung Shui.

8

The resources provided include exemplar learning and assessment tasks produced by the TOC Development Unit; a collection of reference materials, including books, journals, worksheets, teaching kits and audio visual materials from other countries practising curriculum similar to TOC; and a computerised cataloguing system for retrieving reference materials.

The centres are equipped for viewing audio-visual materials, and there is a loan system for exemplar learning and assessment tasks.

Training programmes, seminars and workshops will be organised for school heads and teachers. There will also be talks, exhibitions and experience sharing sessions.

The TOC Resource Centre for Hong Kong region is situated at 14th floor, CRE Building, 303 Henessy Road, Wan Chai, and the one for Kowloon Region is at seveth floor, To Kwa Wan Market and Government Offices, 165 Ma Tau Wai Road. To Kwa Wan.

The New Territories Region centre will be located at Units 709-711, seventh floor. Landmark North, Sheung Shui.

The opening hours are 9 am to 5 pm from Mondays to Fridays and 9 am to noon on Saturdays.

Enquiries may be made at the TOC Assessment Unit. Curriculum Development Institute, Education Department on 2762 1769.

End

Financial Secretary to answer questions on Budget *****

The Financial Secretary. Mr Donald Tsang, will have direct dialogues with members of the public on matters relating to the 1996/97 Budget through a radio phone-in programme to be broadcast live on Thursday (March 7) morning.

The Financial Secretary will take questions from callers of RTHK Radio 1 and 5’s "Talkabout" and Radio 3’s "I long Kong Today’’ programmes from 7.45am to 9 am.

Ihe programme. "Financial Secretary Phone-in", with simultaneous interpretation, will take place in Broadcasting House. 30 Broadcast Drive. Kowloon.

9

The phone-in numbers are 187 2311 for Cantonese speaking callers and 2338 8266 for English speaking callers.

Later in the morning, the Financial Secretary will brief chairmen of the two municipal councils and 18 district boards at 10 am at the Home Affairs Department Headquarters on the 96/97 Budget.

In the afternoon, Mr Tsang will give his second press conference at 3 pm in the Information Services Department.

On Friday (March 8), Mr Tsang will brief legislative councillors at 9 am at the Legislative Council.

End

Budget summary broadcast on TV and radio *****

Television and radio stations will broadcast the 1996-97 budget summary by the Financial Secretary, Mr Donald Tsang, tomorrow (Wednesday).

Following is the timetable for the broadcast:

Station Time

TVB Jade 5.46 pm

TVB Pearl 7.10 pm

ATV Home 5.50 pm

ATV World 6.55 pm

Cable TV News Channel 7.25 pm

RTHK Radio 1 (Chinese) 5.30 pm

RTHK Radio 2 (Chinese) 6.15 pm

RTHK Radio 3 (English) 5.30 pm

10

End

Commercial Radio 1 (Chinese)

Commercial Radio 2 (Chinese)

Commercial Radio (English)

Metro News (English)

5 pm (after main news)

6 pm (after main news)

6 pm (after main news)

6.30 pm

Budget guide for public collection tomorrow

*****

A budget guide highlighting the major points of the 1996-97 budget and how they affect the average Hong Kong citizen will be distributed free to the public tomorrow (Wednesday) immediately after the Financial Secretary has delivered his Budget Speech.

Entitled "What the 1996 Budget Means for You", the leaflet is a bilingual publication with 200,000 copies to be issued by the Government on Budget Day.

The easy-to-read leaflet, giving budget facts and figures at a glance, will be available from 4.30 pm at:

* Mass Transit Railway stations in Central, Causeway Bay, Mong Kok, Wong Tai Sin, Kwun Tong, Tsim Sha Tsui, Tsuen Wan;

* Kowloon and Sha Tin stations of the Kowloon-Canton Railway Corporation;

and from 4.30 pm to 7 pm from:

the Publishing Sub-Division of the Government Information Services, 17th floor, Siu On Centre, 188Lockhart Road, Wan Chai;

the Government Publications Centre, Queensway Government Offices, Lower Block, ground floor, 66 Queensway, and

- 11

* all district offices.

Meanwhile, copies of the 1996-97 Budget Speech will also be available for collection by members of the public from all district offices and the Publishing SubDivision of the Government Information Services from 10 am on Thursday (March 7).

End

Contract to convert plan data to digital format signed

*****

The Planning Department has signed an agreement with China Siwei Surveying and Mapping Technology Corporation today (Tuesday) for the provision of service to convert plan data to digital format.

The project would involve converting plan data on about 300 Outline Development Plans/Layout Plans and 300 land supply record plans covering the New Territories to digital format, a spokesman for the department said.

"The digital plan data will facilitate the implementation of various computer projects which include computer aided drafting systems and geographical information systems in the department," he said.

The project will take about six months to complete.

End


- 12 -

I long Kong Monetary Authority lender results

*****

Tender date 5 Mar 96

Paper on offer EF Bills

Issue number Q610

• Issue date 6 Mar 96

Maturity dale 5 Jun 96

Coupon -

Amount applied HKS7.560 MN

Amount allotted 1 IKS 1.500 MN

Average yield accepted 4.90 PCT

Highest yield accepted 4.91 PCI

Pro rata ratio About 33 PCT

Average tender yield 4.92 PCT 1 long Kong Monetary Authority 4

Tenders to be held in the week beginning 11 Mar. 1996

Tender date 12 Mar 96 12 Mar 96

Paper on offer EF Bills I I Bills

Issue number Q61I 11660

Issue date 13 Mar 96 13 Mar 96

Maturity date 12 Jun 96 11 Sept 96

Tenor 91 days 182 days

Amount on offer HK$1,500+300 MN 1IKS800+160 MN

End

13

Hong Kong Monetary Authority money market operations

*****

S million fime (hours) Cumulative change (Smillion)

Opening balance in the account 2,197 0930 +605

Closing balance in the account 2,184 1000 +605

Change attributable to : 1100 +605

Money market activity +605 1200 +605

LAF today -618 1500 +605

1600 +605

LAF rate 4.00% bid/6.00% offer TW1 123.6 *+0.1* 05.03.96

Hong Kong Monetary Authority

EF bills EF notes

Terms Yield Term Issue Coupon Price Yield

1 week 4.67 2 years 2802 5.16 99.81 5.33

1 month 4.79 3 years 3901 5.57 100.09 5.61

3 months 4.92 5 years 5012 6.38 101.25 6.16

6 months 5.02 7 years 7302 6.02 97.52 6.57

12 months 5.07 5 years M502 7.30 103.68 6.48

Total turnover of EF bills and notes - $13,484 million

Closed March 5, 1996

End

DAILY INFORMATION BULLETIN

ISSUED BY GOVERNMENT INFORMATION SERVICES BEACONSFIELD HOUSE, HONG KONG. TEL: 2842 8777

Wednesday, March 6, 1996

Contents

EageNo.

Transcript of the Governor's media session................................ 1

Government to tackle discrimination step-by-step.......................... 3

Governor visits Wong Tai Sin.............................................. 5

Budget Speech on Internet................................................. 6

Building numbering campaign..........................................

Tsuen Wan lot to let.................................................

Hong Kong Monetary Authority money market operations...................... 8

1

Transcript of the Governor's media session *****

4 . 1 I . •

Following is the transcript of the media session by the Governor, the Rt Hon Christopher Patten, after visiting Wong Tai Sin District this (Wednesday) afternoon:

Governor: This is the third official visit that I've made to Wong Tai Sin. I was very pleased indeed to see the work being done at the nunnery which I'd visited before. I'm delighted as well to see the work of the Spastics Association. Obviously the main issues of concern to the District Board members are questions affecting public housing and questions affecting the environment, for example the smell from the mullah. And we are addressing the concerns which they have expressed to me this afternoon. It's been a good visit and I'm continuing as you know my round of District Board visits. Perhaps I can say one other thing, now that Donald Tsang has completed his budget statement. This is the first budget by a local Hong Kong Chinese Financial Secretary, and I'm sure the whole community will have recognised that Donald Tsang has risen superbly to the occasion, that he has presented exactly the sort of strong and prudent and self-confident budget which the people of this community would expect. It's a self-confident budget for a successful community. He is as you know being prudent with our finances, but he is also being compassionate wherever he can. And I think what he said about the development of our economic base, the development of our service industries shows a vision for the future. Things don't stop for Hong Kong in 1997. They go on, and we hope they go on getting better. And that's why what the Financial Secretary had to say today about support for manufacturing industry and the support for the development of our service industries was so important. So I think it was a very good budget by a very good Financial Secretary.

Question: (on tobacco duty and cigarette smuggling from China)

Governor: We've considered that issue. We've considered it each year. But I think we took the view that it was a sensible increase to make this year. We don't believe that it should encourage smuggling and of course we're taking increasingly tough and effective measures both through Customs and with the police to discourage and prevent smuggling.

Question: (inaudible)

Governor: 1 believe that we've done what we honourably and decently and competently could to ensure that Hong Kong remains a free and open and successful community. I think that this week the Prime Minister gave a message as a strong and committed friend of Hong Kong. He made it clear that Britain's moral, legal and economic commitment to Hong Kong doesn't end in 1997, but goes on well beyond. Hong Kong will remain Europe's main gateway into Asia, just as Britain has been Asia's main gateway into Europe. So I do believe we've done what we reasonably could and I believe that will be recognised. But obviously, obviously, the test for us will be what happens in Hong Kong not on the 30th June 1997, but in the years after that. And I very much hope that people will be saying that we did as much as we reasonably could.

2

Question: The Government has already given a copy of the budget proposals to the Chinese side. What do you think about the response from the Chinese side?

Governor: I haven’t heard that because I've been here enjoying myself in meeting people in Wong Tai Sin.

Question: (inaudible)

Governor: It is hugely in China's interest to do so. China has much the biggest stake in Hong Kong's continuing success. There are commercial interests, there are economic interests, there are matters of face. It matters very much that China does keep its word under the Joint Declaration, and of course everybody will be watching to see what happens. I think that people will take a continuing and very active interest in what happens in one of the most remarkable cities in the world.

Question: For the last budget, what aspect do you think is most important for the Hong Kong Government to co-operate with the Chinese side?

Governor: I think that we have a record which speaks for itself. It's a record of I think 36 years now of uninterrupted economic growth. It's a record which has turned this community into the 8th largest most successful trading community in the world. It's a record that means six million people in Hong Kong producing an economy which is worth over a fifth of China's gross domestic product. So it's been a very successful formula and we must continue that formula. You know what the crucial ingredient is. Of course it matters that we have a sensible tax policy. Of course it matters that we are an open market. Of course it matters that we keep a sensible control of public spending. But the thing that matters more than anything else is that Hong Kong should be able to go on running its own affairs, that Hong Kong should have that high degree of autonomy which is promised. When in the past government has changed in London, it's made no difference to the policies that are pursued in Hong Kong because Hong Kong has autonomy in economic and financial and trade affairs. And so long as that continues to be the case, so long as the people who are running the economy in Hong Kong have "Made in Hong Kong" stamped on them. So long as that is the case, I think Hong Kong will continue to be very successful.

Question: (inaudible)

Governor: I think that the British Government's policy on for example visa-free access announced this week is an extremely sensible one, and I was delighted that the Prime Minister announced it. It has nothing to do with immigration, it has nothing to do with right of abode. It has everything to do with ease of travel, and everything to do with the close, strong and important economic relationship between Hong Kong and Britain and between Britain and Asia.

3

Question: (on spending on social services)

Governor: No. We've taken the decisions that were required in order to continue to develop our welfare provision in Hong Kong and our education provision and other forms of services. Of course as you know during the last year we've told the Chinese side how in Hong Kong the budget is created. We've walked them through the whole budget process in a very sensible way so they know how we manage things here in Hong Kong. But the decisions, the decisions that we've taken, they are in the interest of people in Hong Kong. We've made substantial increases in priority programmes, for example in programmes for the needy, the disabled, the elderly, where spending has gone up by nearly 15 per cent in real terms. But we can afford to do that because we are a successful community. We are still only spending about 18 per cent of our GDP through the public sector. We're spending twice as much as a proportion of public spending on education as we spend on welfare. It is a very successfill mix, and it is a mix which is so successful that we must remember compassionately the needs of those who haven't done as well as the rest of us in life. Thank you very much.

End

Government to tackle discrimination step-by-step * ♦ ♦ ♦ ♦

The Hong Kong Government has taken a step-by-step approach to study individual areas of possible discrimination. Principal Crown Counsel, Mr Stephen Wong, said at a meeting of the United Nations Committee on the Elimination of Racial Discrimination in Geneva yesterday (Tuesday).

The Government would initiate to study the question of racial discrimination later this year with a view to establishing to what extent problems existed that were not adequately catered for by the existing legislation or by other measures, he said.

Mr Wong, leader of the Hong Kong Government team attending the meeting as part of the British delegation, was responding to observations regarding the Bill of Rights Ordinance made by the Committee's Country Rapporteur, Professor Theo Van Boven.

The Committee has been examining the territory's 13th periodic report under the International Convention on the Elimination of All Forms of Racial Discrimination (ICERD) during a one-and-a-half day meeting starting Monday (March 4).

4

Responding to committee member, Professor Zou Deci’s concern over the wider use of Chinese in the courts of Hong Kong, Mr Wong said an eight-phase implementation strategy had been adopted.

’’The aim is to put in place a framework which allows the use of Chinese, along with English, in all court proceedings in Hong Kong before July 1, 1997,” he said.

Meanwhile, Professor Van Boven noted with satisfaction that Hong Kong had distributed and disseminated human rights instruments and previous reports under the Convention.

Responding, another team member, Assistant Secretary for Home Affairs, Mr John Dean, assured the Committee that the Hong Kong Government would, as a matter of normal practice, distribute the concluding observations to the Legislative Council, to the public and to interested non-government organisations.

As regards the treatment of foreign domestic helpers and effective protection of their rights, member of the Hong Kong team and Principal Assistant Secretary for Security, Mrs Maureen Chan, said the two-week rule applied on premature termination of contract.

"It was established to combat problems of overstaying and job-hopping," she said.

Foreign domestic workers received the same protection and rights under labour legislation as local worker, Mrs Chan stressed.

On the question on Vietnamese migrants (VMs), Mr Wong reiterated that Hong Kong had no wish to detain them, pointing out that the 1 long Kong Government and the United Nations High Commissioner of Refugees had been counselling them to return to Vietnam voluntarily.

The living conditions in the camps had been made as amicable as possible within the resource available, he said, stressing that the long-term solution of the saga lied in the VMs returning to their .homeland rather than wasting their lives in the camps.

Regarding reporting to the Convention in the future, the Country Rapporteur wished that suitable and special arrangements would be made between the Central Government of the People’s Republic of China and the Special Administrate Region.

5

In their final remarks, the Chairman Mr Eduardo Ferrero Costa and the Country Rapporteur thanked the British and Hong Kong delegations for (heir comprehensive report, exhaustive replies and a frank and highly constructive dialogue.

Concluding observations of the Committee arc expected to be published in about two weeks’ lime.

Governor visits Wong lai Sin * * * * *

fhe Governor, the Rl Hon Christopher Patten, toured Wong lai Sin today (Wednesday) to gel first-hand information on the latest dev dopments in the district.

Accompanied by ihe Director of Home Affairs. Mrs Shelley Lau. and the Wong Tai Sin District Officer. Mr Richard Luk. Mr Patten first called on the Spastics Association of Hong Kong’s Jockey C lub Conductive Learning Centre in Wang l au Hom Estate, where he was briefed on the operation and leaching objectives of the centre which caters mainly to children vv ilh cerebral pals).

I he Governor then stopped al the Chi Lin Nunncrv in Diamond Hill and was greeted by a group of about 10 elder!) women, average 85 years old. performing Japanese dancing.

He also saw a model of the Chi Lin redevelopment plan as well as the process of making Buddhist statues.

This was followed by a tour in the Wong lai Sin Shopping Centre before he met district board members and community leaders at a reception.

End

6

Budget Speech on Internet *****

Ihe full text of the 1996-97 Budget Speech delivered by the financial Secretary, Mr Donald Tsang, in the Legislative Council today (Wednesday), is now available to Internet users via the Hong Kong Government Home Page at website http://www.info.gov.hk.

Copies of the Budget Speech will also be available for collection by members of the public from the Publishing Sub-division of the Government Information Services from 10 am and from all district offices from 4 pm tomorrow (Thursday).

A budget guide highlighting the major points of the 1996-97 budget and how they affect the average Hong Kong citizen is now being distributed free to the public.

Entitled "What the 1996 Budget Means for You", the leatlel is a bilingual publication with 200,000 copies to be issued by the Government today.

The easy-to-read leaflet, giving budget facts and figures at a glance, is now available at:

* Mass Transit Railway stations in Central, Causeway Bay, Mong Kok, Wong Tai Sin, Kwun Tong, Tsim Sha Tsui, Tsuen Wan;

* Kowloon and Sha Tin stations of the Kowloon-Canton Railway Corporation: and from 4.30 pm to 7 pm at:

* the Publishing Sub-Division of the Government Information Services, 17th floor, Siu On Centre, 188 Lockhart Road. Wan Chai:

* the Government Publications Centre. Queensway Government Offices. Lower Block, ground floor. 66 Queensway, and

* all district offices.

End

- 7 -

Building numbering campaign *****

The Rating and Valuation Department has started a Building Numbering Campaign to encourage owners and ratepayers of non-domestic ground floor premises to correctly display officially allocated building numbers. Some 80,000 campaign letters have been issued.

"Correct display of building number, apart from benefiting the public at large, will also enable public services to be provided to the owners/occupiers more efficiently," a spokesman for the department said today (Wednesday).

Any enquiries on the campaign should be directed to the Department's Technical Secretary (Information) at Hennessy Centre. 500 Hennessy Road. Causeway Bay. Hong Kong, either by telephone 2805 7614 or by fax 2504 4778.

End

Tsuen Wan lot to let *****

The Lands Department is inviting tenders for the short-term tenancy of a piece of government land in Tsuen Wan.

The site, located at the junction of Cheung Wing Road and Yau Ma Hom Road, has an area of about 4,950 square metres. It is intended for use as a fee-paying public car park for the parking of vehicles including goods vehicles and container tractors and trailers.

The tenancy is for three years, renewable quarterly.

The closing date for submission of tenders is noon on March 22.

Tender form. Tender Notice and Conditions may be obtained from the District Lands Office, Tsuen Wan. 10th floor, Tsuen Wan Station Multi-storey Carpark Building. 174-208 Castle Peak Road. Tsuen Wan; the Lands Department. 14th floor. Murray Building. Garden Road and the District Lands Office. Kowloon. Yau Ma Tei Car Park Building. 10th floor, 250 Shanghai Street. Kowloon.

Tender plans can also be inspected at these of fices.

End

Hong Kong Monetary Authority money market operations

*****

$ million Time (hours) Cumulative change (Smillion)

Opening balance in the account 2,184 0930 +616

Closing balance in the account 2,137 1000 +616

Change attributable to : 1100 +616

Money market activity +613 1200 +616

LAF today -660 1500 +616

1600 +613

LAF rate 4.00% bid/6.00% offer TWI 123.5 *-0.1* 06.03.96

I long Kong Monetary Authority

EF bills EF notes

Terms Yield Term Issue Coupon Price Yield

1 week 4.68 2 years 2802 5.16 99.43 5.54

1 month 4.86 3 years 3901 5.57 99.60 5.80

3 months 4.99 5 years 5012 6.38 100.57 6.33

6 months 5.11 7 years 7302 6.02 96.76 6.72

12 months 5.19 5 years M502 7.30 103.18 6.60

Total turnover of EF bills and notes - $35,533 million

Closed March 6, 1996

End

DAILY INFORMATION BULLETIN

ISSUED BY GOVERNMENT INFORMATION SERVICES BEACONSFIELD HOUSE, HONG KONG. TEL: 2842 8777

SUPPLEMENT

Wednesday, March 6, 1996

Contents Page No.

Legislative Council meeting:

Transcript of FS's press conference.................................... 1

FS highlights the importance of Budget................................ 14

Hong Kong success and Government’s contributions...................... 16

Performance in 1995 remains robust.................................... 18

Deficit forecast...................................................... 22

Improved economic performance forecast................................ 23

”Feel-bad” factors cannot be ignored: FS.............................. 25

CSSA review completed................................................. 26

Elderly caring is a top priority...................................... 27

FS outlines ’’Seven Heavenly Virtues’’................................ 30

Fees and charges policy simple and nice............................... 32

/Not time....

Contents

Page No.

Not time for reducing healthy reserves.................................... 33

No change to tax enforcement.............................................. 33

Legislation on source concept uncalled for................................ 34

Tax relief for housing-related expenditure................................ 34

No change in corporate profits tax........................................ 35

Review on depreciation allowances completed............................... 36

No change in stamp duty on stock transfers................................ 36

Serious thought to conduct annual rates revaluations...................... 37

No change to alcohol duty................................................. 38

Tobacco, fuel duties rise by 9 per cent................................... 38

More betting tax.......................................................... 39

More air passenger departure tax.......................................... 40

Tax concessions to business firms......................................... 41

FS proposes wide range of personal tax concessions........................ 41

Estate duty revised....................................................... 43

Relief measures to home buyers............................................ 44

Owners lured to scrap old cars for fresher air............................ 45

Refurbishment allowance for hotels set.................................... 46

/Overall financial ..

4

Contents Page No,

Overall financial position 1996-97 ...................................... 47

Healthy surpluses forecast............................................... 47

East Asia to provide dynamism for economy................................ 48

Upgrade for protection of intellectual property rights laws.............. 49

User-friendly Government for business community.......................... 50

World-class infrastructure vital for economy......................... 51

No slip-up in language skills............................................ 52

Support for manufacturing sector underlined.............................. 53

Task Force on Service Promotion.......................................... 55

Mortgage corporation for housing under study............................. 57

Tax concessions in financial services.................................... 58

Contributing to business efficiency....................................   59

Co-operation with Chinese side........................................... 59

Continuing the economic success story.................................... 60

Remarkable transformation of the economy................................. 62

Eight key components in framework for action............................. 64

Financial Secretary’s TV Broadcast....................................... 70

/Quotable quotes.....

Contents

Rage No.

Quotable quotes in the Budget Speech 1996 .............................. 72

Government’s public transport policy reiterated......................... 79

Ferry Services Order.................................................... 79

Minor Employment Claims Adjudication Board Rules........................ 82

Collapse of footbridge in Tseung Kwan O................................. 83

Orderly repatriation of VMs............................................. 85

Escape of prisoners..................................................... 86

Categorisation of land in NT..........................................   88

Community groups members to sit on Govt advisory bodies................. 90

Container thefts.................................................... 91

Extension of KMB franchise.......................................... 94

Police in debts..................................................... 95

Occupational Deafness Compensation Scheme........................... 98

Required processing time for visitors to clear immigration............. 100

Civic education........................................................ 102

Government's emergency response system explained....................... 104

/Pat Sin ...

Contents

Page No,

Pat Sin Leng hill fire tragedy........................................... 107

Task Force on expansion of service industries......................... 110

Occupational deafness compensation....................................... 112

Government's role in meeting needs of vulnerable groups.................. 115

Rehousing policy on cottage area residents............................ 117

Respiratory diseases.................................................. 118

Smuggling of prohibited articles in prison by CSD staff...,........... 119

Industrial Technology Centre's leasable area...................:......... 121

Transcript of FS's press conference ♦ ♦ ♦ ♦ ♦

Following is the transcript of the Budget press conference held by the Financial Secretary, Mr Donald Tsang, today (Wednesday):

FS (in Cantonese): Thank you. I have been speaking for two hours and some of you had the opportunity to read the Budget Speech starting from noon today.

May I just give you a number of salient points in the Budget.

First in 1996-97, we expect the growth rate to be 5% and the inflation rate would drop to 7.5% and then in 1995-96 we will have a deficit which is $2.5 billion and in 1996-97 this will disappear. We hope to be able to achieve an even budget and with a small surplus, around $1.6 billion.

And in relation to expenditure I have said very clearly that the Governor's pledges in the Policy Address about CSSA will all be funded and that will be $300 million and apart from that I have put in an additional $200 million and there will be $300 million for retraining and $39 million for Education Commission Report No. 6 proposals and $50 million for the Services Support Fund and another $50 million for the Tourism Development Fund and in relation to the small and medium sized property, there will be a reduction in stamp duty.

As for profits tax, there's been some adjustment in order to increase the competitiveness of the financial sector.

And for the service sector I've also got an addendum on that and there will be Action Agendas and that's an important proposal and we have already commissioned Federal National Mortgage Association a very big mortgage corporation in the US to try and help us with the study of the setting up of a mortgage corporation in Hong Kong and we are now planning to have a Science Park and a fourth industrial estate and a second industrial technology centre.

And so that briefly is what I wish to say. I will be delivering what I have just said in English and then 1 will give you a chance for questions.

You have been listening to me for two hours in the Legislative Council and some of you might have also had a chance to look at the Budget in greater detail in the 'lock-up' session. I think some of you participated in that.

- 2 -

You will see from my Budget speech that I am forecasting that the economy will grow by 5% in 1996-97, and I also expect inflation to come down to 7.5% in the year. But for the current year, that is 1995-96, I'm forecasting a deficit of $2.5 billion but we will then regain a balanced position in 1996-97, resulting in a forecast surplus of $1.6 billion.

We already published the Expenditure Estimates last Friday, and then you know the results but there are a few new items in my Budget speech which I announced this afternoon. These include first of all that in addition to the $300 million improvements in CSSA pledged by the Governor in his Policy Address, I propose to spend $200 million more on a variety of improvements, with some particular emphasis on the elderly. I also propose to spend $300 million on the Employees Retraining Board to increase its reserve capability so that it may then expand its programmes. There would be a $39 million a year to make an early start in implementing the Education Commission Report No. 6 on the Improvement of Language Ability in Hong Kong. Then I propose to inject $50 million each, one for the Services Support Fund and another to set up a Tourism Development Fund. Both of which will be very important in the development of our service industry.

On the revenue side I set out very generous salaries tax concessions at levels well above inflation and there was also a reduction which I have proposed to stamp duty for the purchase of lower/medium priced flats. There are some profits tax adjustments so as to improve our competitiveness for financial services.

So particularly on the promotion of service industry, I have set out in an addendum to my Budget speech what I consider to be important areas. An eight-point "Framework for Action" and there were 14 "Action Agendas". I his is what we see as the present situation in the various service industries and what we should aim at in the years ahead.

And for the manufacturing I have proposed to get started on site selection for the Science Park and further planning on the second industrial technology centre and the fourth industrial estate.

So that perhaps is a snapshot of what I have proposed this afternoon. I am quite happy to answer you questions both in English and Chinese.

Question (Apply Daily, Chan Wei Yi) (in Cantonese): Mr Secretary, just now you have told us a lot of measures on tax concessions, that’s good news, but still some LegCo Members think you are being mingy, so you have such a huge reserve, why don’t you do something to improve the services for the elderly?

3

Now also some Members have said they will vote against some of the measures in the Budget. What's your view on that?

Now on the CSSA Review you say it has been completed and the report will be published on Friday. You will be spending an additional $200 million. Does it mean that you will not accept other recommendations in the Review Report?

FS (in Cantonese): Now going back to CSSA. 1 think you had belter wait until Friday when you see Mrs Fok, then you can discuss with her in detail the report of the Review, but don't say that we are only doing some of the measures and not others.

Now under the CSSA system, in the Policy Address the Governor has already pledged that there should be improvements costing $300 million and now I am proposing an additional $200 million so I think we are doing a lol already in that regard.

As for the broader question of CSSA and other welfare services for the elderly. I think we need to strike a balance somewhere, especially when we are talking about spending on the elderly. Now this year, in the year 1995-96, we have spent $9 billion and that covers medical service, CSSA payments and so on, but other than that sum we have an annual increase. Now from 1992 until now we already have an increase of over 50% and then next year there will be yet another 17% increase.

Now right now we have an economic growth rate of 5%, so do you think under the circumstances we should have an even higher increase? I think we are already doing very well in terms of striking a balance.

Now on the question of the reserve. Fiscal reserve. Now the Fiscal reserve is not there to be spent. Il is for emergency, for contingency. This is not just the policy of the Hong Kong Government to keep a reserve. Now all other overseas economists and experts, as I said in my speech, even the International Monetary Fund has done an indepth survey in I long Kong recently and the survey result was that we should not dip into our reserve, especially given the political uncertainties involving 1997. Also there is still a lol of speculation, currency speculation activities around the world. So under the circumstances we do not think we should dip into our reserve at the moment. Especially now we still have high inflation. Now spending is now under control so is it the time for us to expand our spending programme? So that's why having taken all these factors into account, we think that for social welfare and CSSA spending, that's an increase of over 14% already, and that's already good enough given the circumstances and I think this is just a right balance. If we go further than that it may not be appropriate, in my view.

4

Question (in Cantonese): When we look at last year's Budget and it was antieipated that this year the surplus would be $5.9 billion and yet now it is about $1.6 billion only. So in other words, it is less than anticipated. The most important point, probably, is because you are getting less from property transactions and you are paying more in tax allowances. So when you compare the figure you give this year and the original one. there is a reduction.

FS (in Cantonese): Yes, let me answer that question first. When you talk about revenue, last year Sir Hamish made a forecast and it was different from the figure that I have given now. That is because our forecast for 96-97 is different because at that time it was anticipated that the economy would continue to grow and the growth rate would be 5.5%. But now the figure is 4.6% only and so we do have a downturn.

But even though the rate itself is a good one, it is slowing down and it will go on to 96-97. It will affect a lot of things, for instance, stamp duty and property transactions, etc. And therefore, Sir Hamish gave a figure for 96-97 which 1 don't think we will be able to get and that is the reason why I have revised it to $1.6 billion and that is quite a good figure already. And in 1997-98 we will see a growth and this is a balanced Budget and this is quite a practical forecast.

Question: The impression that 1 get from your Budget is it is more for business rather than people oriented. You have described the people of Hong Kong as your key software package. Are there any political considerations or any constraints economically or politically to redirect your Budget towards more economic, you know, macro economics rather than maybe more spending on social services and welfare?

FS: I believe it is always the same. I think 1 explained quite clearly in my Budget Speech our philosophical and economic beliefs and that is, we certainly rely on the market. And in that respect, I also explained the real meaning of economic growth. Economic growth is going to generate wealth and wealth will enable us to improve our standard of living and our spending capacity on social services and so on.

But the starting point must be economic growth and prosperous business opportunities, not only now but well into the next century. For that reason, what I am saying is, we must be able to develop our economy. We must be able to maintain our economic growth. And after we have done that, then in so doing we then reap the fruits of economic growth and invest that into our social infrastructure. And that is the whole purpose of it. So it is a Budget for the community as a whole, not only for one sector but for all the sectors.

5

Question (Asian Wall Street Journal): A two part question. Sir. One, could you explain, for the lower than expected revenue from land premium, which sites were those and could you sort of run through the numbers on that please?*

And then as a second question -

FS: Can I deal with one question at a time. I am afraid I will not be able at this press conference to list out all the sites for you for the coming year. First of all, they comprise a programme for land disposal yet to be agreed by the Land Commission and we must let them agree it first before we can announce the details. But I can assure you we are taking a very broad view of land prices - prevailing land prices - and the value of various sites which we arc going to put in the Land Disposal Programme. And then comes a realistic estimate of our total land revenue we are going to obtain in the year to come.

I’m sorry, at this stage I won’t be able to give you all the details. You have to wait until we have formally consulted the Land Commission on this matter.

Question (Asian Wall Street Journal): and then a second question on financial services —

S for Tsy: Sorry, if I may add. It would not be correct to do a year on year comparison of land revenue because by definition, the value of individual sites vary depending on the location, the size, the permitted use, the permitted scale of development and so on. And once a site has been sold, it can’t be included in next year’s Land Sales Programme so it is not a like for like comparison. That is why we classify land revenue as a capital revenue and for capital revenue you can perhaps look at it on a trend basis but not on a year on year basis.

Question (Asian Wall Street Journal): As a follow up. Sir. You spoke at length about your commitment to promoting financial services. If you were to aggregate that, how much will you be spending, including the Government's spending on the TDC for its new role in promoting financial services?

FS: Well, there arc a number of things. I haven't aggregated the whole amount because some of them are revenue measures and some of (hem arc expenditure measures. But if you want to try to do a detailed analysis, I am sure my colleagues will be able to help you do that later on. But as you see. there are some in the form of tax concessions like in the profits tax concession and like special concessions for stockbrokers and so on, and some arc in the form of expenditure like my support for the Services Support Fund and for the Tourism Development Fund.

6

But it could be very misleading, if I may say so Eric, to try to aggregate all of them into one whole figure. And then, because some of them are actual plans where there is no price-tag for them for the time being.

Question (Commercial Radio) (in Cantonese): Mr Tsang, you said for the 97-98 Budget you will be consulting the Chinese side, so would you first of all prepare the Budget and then listen to the views of the Chinese side, or how would you do it? And how would you take up discussions with the Chief Executive Designate?

FS (in Cantonese): Miss Ko, we have already laid down some criteria, I don't think it is a matter of who is taking the lead, what is important is that we have some initial consensus on the matter. Now at the last session of the Expert Group’s Meeting. Mr Kwong has already talked to Mr Chen that wc will be doing a full year budget but as to how we are going to prepare the budget and how wc are going to conduct the consultation, we still need to think that through.

Hopefully, in the next meeting coming up in the middle of this month, we would have some detailed discussion. But in my Budget Speech I have made it clear that we need to strengthen co-operation. As long as we have the same objective, that is a smooth transition, then we will be able to draw up a good Budget for Hong Kong in the next year. So it is not a matter of who is to take the lead, that is not our major concern.

I Question (Sing Tao Daily News) (in Cantonese): Now this year the theme is "Building our Prosperous Future" so why don't you allow for a deficit budget? Are you afraid of criticisms from the Chinese side that you arc boosting your expenditure substantially? So how would you deal with that?

FS (in Cantonese); I think in my Budget Speech I've made it quite clear why we don't need any measures to stimulate the economy because in our view wc don't see the need for that and also at the time we do have stable economic growth. At the same time inflation is going down. So 1 think for this year wc have forecast an economic growth rate of 5%. Now we are in a mature economy, with such a result it is already very good. So if we want to stimulate the economy then it may be too much for us all.

But it has nothing really to do with the Chinese side. I think what is important is that we must look at whether wc have a need to do certain measures or as I said there will only be certain circumstances when wc will use our reserve. For example, 1995-96, wc did dip into our reserve. Wc look at our trend growth curve for our expenditure. We don't look at the expenditure on the year on year basis. For example, you know we have a trend growth rate of 5% so if expenditure. GDP is above 5% there will be surplus and we would put it to the reserve but if GDP growth is below 5% then we will have a deficit. And that means wc will have to dip into the reserves. So that's a prudent way, a sound way of dealing with our public finance. But of course when there are crises we would have to dip into our reserve.

7

Now as our economy progresses and develops in a steady manner, we shouldn't be big spenders. Now you asked when we had to use our reserve. In 1995-96 we have to do it and the sum could be $2.5 billion.

S for Tsy (in Cantonese): In 1995-96, we have a deficit and if you look at the detailed figures then I am sure you are aware of the situation.

The most important reason is because with the MTRC and with the Airport Authority we have to have capital injection and so the reserve is for certain purposes. When we need to develop major infrastructure projects and we need to put in money then this is a source of resources for us.

Question (Hong Kong Daily News) (in Cantonese): You think that the growth rate is going slower and therefore the figure is now revised to $1.6 billion, that is the surplus. And yet when we talk about tax concessions and also new initiatives we are talking about billions. And so how can you persuade the Chinese authorities that you are not spending too much money?

FS (in Cantonese): Well the most important thing is, this is a very balanced budget and we do have a surplus of $1.6 billion and therefore we are not overspending. And if we talk about overspending, then probably we will have a bad deficit but we arc not giving a deficit budget and last year we did have a deficit because we had to take care of very major infrastructure projects. So all along we have been taking a very prudent approach.

Now when you talk about tax concessions, yes we feel that we should have tax concessions because there's no reason why we should keep on accumulating surpluses and we do not expect that it will have a very severe inflationary impact then we should return some of the money to our tax payers.

And then of course you can also see that I have also increased some of our taxes. For instance, in relation to hydrocarbon oil, betting duty, tobacco duty etc., and so, by so doing I have the ability to put in the tax concessions. Now this is very important because to the man in the street and also to the tax payers, they feel that tax concessions are important. We have 96% of our salary tax payers benefiting from our tax concessions. Therefore I think it is worth our while and in the end we have a very balanced budget and we have $1.6 billion surplus, so that is not overspending.

Question (Metro Broadcast) (in Cantonese): In formulating this year’s Budget, did you consult the Chinese authorities and have their views been taken into consideration?

8

FS (in Cantonese): Mr Ma, in coming up with this year's Budget what we did with the Chinese authorities is that we show them how we go about working out the Budget. Now, of course, you are aware of the fact that they are worried about welfare expenditure, fearing that there might be adverse consequences. We did listen to their views and we also assessed the views of our public and our people and then you can see the result of our decision and we have increased our spending and that is within our affordability and ultimately our total expenditure is in fact within our trend growth rate and in so doing I think we have persuaded the Chinese authorities that it will not actually have long-term adverse impact.

Question (? organisation) (in Cantonese): A question for Mr Tsang. In talking about the service industry, you have two tax concessions and then you are also saying that in the year 2000 the cost to revenue will only be SI35 million. And $135 million actually is very meagre for the whole sector. Will it actually be able to produce its effect?

FS (in Cantonese): Well, our tax is very low. What we need to do is actually to try and give it a push and our service industry is already fairly competitive so you can't really look at the amount and say whether it will be effective or not. If you talk to the people in the sector I'm sure that you will find that it will act as a catalyst.

Question (HK Economic Journal, Lam Kit-yee) (in Cantonese): I would like to talk about economic growth rate. As you have said, this year it is 4.6% and it is lower than anticipated. And then in the medium forecast you did revise it downwards and what are the factors that are beyond your expectation that lead to your having to repeatedly revise the rate, the percentage and why is it 5% next year?

FS (in Cantonese): Well, it's not that we keep revising it downwards but rather we have one trend growth rate, that is 5%. It's for last year, it's for this year, it’s for next year. And last year, at the beginning of the year we expected it to be 5.5% and now we are talking about 4.6%. The reasons are very easy. Consumer consumption is slowing down and it is also the economic cycle that is there is a downturn and there are external factors affecting us. But this is not something that is worrying because when we talk about 4.6% in economic growth, it is a pass-mark already. As for next year, because of the external factors, they are improving, the US, Japan, China and the situation is improving and our economic cycle again is on the upward curve and therefore in 1996-97 we feel that we can have a 5% growth rate.

Question (? organisation) (in Cantonese): Now since your economic forecast remains the same, then why is it the public spending as a percentage of GDP growth, why is it it still exceeds 18% and is higher than the medium range forecast made last year?

9

FS (in Cantonese): Now I think we arc still in the region of 17.98%.

Question (? organisation) (in Cantonese): But in the past few years the percentage has been 18.1%. Last year when you did the MRF it was 17.something per cent. Is it because the percentage of the private sector is reduced, that's why you have this figure?

S for Tsy (in Cantonese): In 1995 the growth rate of GDP was revised downwards and so the basis was reduced, and if you use that as the basis and then you work out the MRF forecast of 5%. then public spending in relation to GDP growth will be increased and that is why it is 18%.

FS (in Cantonese): 1 don't think you need to be too concerned about that, it is just our forecast. There could be some minor adjustment, it really depends on our economic performance at the time. But I think what is important is that wc must always observe a principle, i.e. economic growth must be the indicator for our expenditure growth.

Question: (inaudible) with Chinese officials before this Budget, is this Budget generally in line with what they were looking for and were they made aware of the contents of it before you got up on your feet this afternoon?

FS: Well, you know we have got a plan for taking the Chinese through the preparation of this year's Budget and they have been involved throughout from April last year up till now and they have made certain views. We have listened to those views. But as far as giving them the Budget, yes we have briefed the Chinese side and copies of my Budget Speech were given to the Chinese side today, this afternoon, both in Peking and to the New China News Agency, and to Mr Chen Zou'cr in the Expert Group, as well as Ambassador Chao of the Joint Liaison Group.

Question: My other point was. is the Budget generally in line with the discussions you had with the Chinese?

FS: 1 believe so far the Chinese side have expressed only general comments al the Expert Group. Perhaps Mr Kwong who is the leader on the British side will be able to tell you a bit more.

S for Tsy: I am afraid I would not be able to give you any details of the discussions in the Expert Group because we are bound by the confidentiality rules, as are the Chinese side. And in case. I think the decision on the expenditure are really made on the basis of our assessment of the priority expressed to us through LegCo and also various sectors of the community. At the end of the day, our aim is to provide a Budget which meets the community's needs while respecting strictly our budgetary guidelines. I am confident that the Financial Secretary's Budget has achieved that and I hope that the Chinese side will appreciate it.

10

Question (in Cantonese): Again on stimulating the economy. Why is it that you don't want to reduce the profits tax rate? And is the tax base too narrow, so next year when we have a poorer than expected economy, then would you have trouble?

FS (in Cantonese): Now what do you want? Do you want me to widen the tax base or reduce the profits tax rate? That is two separate things really. If you want to reduce the profit tax rate that is a very costly exercise. As I said, for every percentage of deduction we would have to pay a heavy price for that. And also, for people in the business sector, really I dare say they would not mind so much about how much profits tax they have to pay and what is important is they must make money first before they worry about taxes.

As 1 said in my Budget Speech, there was a survey done and for most in the business sector, especially senior executives and proprietors, they do not regard profits tax as their prime concern. So I think it is important that we consider where we should offer tax concessions - on salaries tax or profits tax. And after consideration, because of limited resources we decided we would offer tax concessions to salaries tax payers because that would benefit the community more. And I think that is the right approach.

Question (Oriental Daily, Chan Ka-lai) (in Cantonese): Why do you have to cut stamp duty for the low and medium priced property? Are you trying to stimulate the property market and do you expect the property market to go up?

FS (in Cantonese): Well, it is now stable, as we have said, and we do not really see speculation and we have a very sound and stable market and the measures that we have put in place have worked. What we are doing now, in fact, is in response to legislators; they want us to do something particularly for those who buy a small or medium sized property and so that is what we are trying to do. And we want to encourage home ownership in Hong Kong. This is very important, it will create social and political stability. And it has nothing to do with our trying to boost the property market and I don't think you should further speculate on the reasons.

Now what are we talking about, what sort of property are we talking about? We are talking about IIOS flats. Those are not the fiats for speculation, I am sure you are aware of that.

Question: To put it rather bluntly, what went wrong with the Airport fax last year?

FS: Well. I just got a lot more flack than I thought I deserved. It was originally $150. I slashed it to $50. 1 thought I'd have got overall applause but indeed I did not have the applause. That is one thing wrong - on a personal level.

11

What really went wrong was the purpose of the reduction - to encourage those people who are on transit to come out of the airport and do more shopping so that they are going to buy more things from our market and at the same time will not cause congestion in the airport terminal itself. But unfortunately, that reduction did not achieve that objective and we still have lots of people wandering around in the airport terminal in transit. And at the same time, we have now discovered that the level of Air Passenger Departure Tax has almost no correlation with the passenger throughput at the airport. Then having regard to what other places have been collecting, I thought I can make use of that $50 more and translate it in terms of tax concessions for other people.

Question (SCMP) (in Cantonese): This year you have two new tax concessions for salaries tax, one is for siblings and another one is in relation to training courses at approved institutions and it is as high as $12,000. Now every year we have been asking for concessions with salaries tax and we have been told that we want a very simple tax system. When you talk about concessions for training courses, what are the factors that you take into consideration and are you afraid of a dangerous precedent?

FS (in Cantonese): Whatever we do we have to balance the factors. When we talk about an allowance for siblings I feel that this is very worthwhile and we hope to be able to enhance family values. There arc people in Hong Kong, a lot of them, who will have to pay for the education of their brothers and sisters and so we should encourage them to continue to do so .and to put their brothers and sisters through university as well. And so this is something that is worthwhile.

And when we talk about a deduction in relation to fees for training courses, actually this again is in response to suggestions from the Legislative Council. Our economy is undergoing transformation and there are people who will have to try and improve their skills in order to improve their standard of living. And how can we help them? I feel that therefore a deduction of $12,000 per year is worthwhile.

Question (TVB) (in Cantonese): You have a lot of measures trying to promote business and promoting social services, promoting the financial sector, and does that mean that you are no longer going away from the non-intervention policy?

FS: In my Budget Speech I mentioned at least four times, i.e. we will minimise intervention and we will give them maximum support. We will not take the lead. Now if you look at the Addendum on social services you should be aware of our main direction but of course we need to get a positive response from the business sector first. Now, the principle is definitely that. And yet somehow we need to be proactive - the Government needs to be proactive - we have to be forward looking. And we will look at what the business sector is doing and we will give them whatever support we

can.

12

Question (AP Dow Jones): You did announce some things regarding research and development - the new Industrial Park and the Science Park plans - is there any focus to these plans? Are you trying to lure any particular type of business or is it just we've got some real estate coming and locate something here? I mean what is the real focus with that plan?

FS: The focus quite clearly emanates from our recognition that the economy as a whole is changing very rapidly. It is changing rapidly in the sense that all the labour intensive manufacturing operations have now migrated northwards. We need a high value added technology based industry in Hong Kong and for that to materialise we have to do something special and in that regard we have consultancy reports studying a science park and come to some very positive recommendations. For that reason we want to make this bold step forward.

This is not in response to any specific proposal of sites or not that we have more sites to spare therefore we want to create a science park. But rather in recognition that we have now reached a state of development that in order to maintain a vibrant, a prosperous and a leading role for our manufacturing industry, we have to make further investment and this is one of the investment areas.

Question: some places ... target some ... industry (inaudible)

FS: We don't do that. We don't target. It is our philosophy that targeting is done by entrepreneur. As a government I should not lead the economy into specific field like, in some countries, might wish to go to ship building, the others might wish to go to electronics. It is a commercial decision which should be taken by manufacturers, by our industrialists, not by this government. Our role is to provide the environment where such decision can be made in a most convenient way.

Question (? organisation) (in Cantonese): Now Mr Tsang, in the process of the Budget preparation were you under serious constraints because we get the feeling that you are treading a very careful line? You don't want to give the Chinese side an impression of overspending and at the same time you are concerned that your Budget would not be approved by LegCo. So do you feel that you are under heavy constraints an also what is your assessment of the chance of the Budget being approved in LegCo?

13

FS (in Cantonese): I wouldn’t say those are constraints, rather our society is progressing. Now every year we have done our budget in a certain way but now our society has progressed to a stage that we need some new strategies, new attitude and a pragmatic attitude in the preparation of the Budget. So that’s the direction we are taking now. Of course, community aspirations are now higher, LegCo aspirations are also higher and also because of the change of sovereignty, there are now new political dimensions. But to me they are really secondary'. What is important is how we would prepare the best Budget that would meet the needs of Hong Kong well into the next century. Especially we need to keep our competitiveness in the trade sector and so on, we need to keep our leadership position. So that's how we draw up our Budget. Of course we could listen to the views of different sectors and when there are difficulties, of course we must try to overcome them.

Whether we are under a lot of constraints - of course, we are. Everything we do, even you, you have a harder time trying to make a living, and for us we have a harder time making a living, LegCo Members have a harder time making a living. But it only means that society is progressing so it is nothing we need to be concerned about.

Question (? organisation) (in Cantonese): I don’t think you have answered a part of my question. Do you think there is a good chance of the Budget being approved?

FS (in Cantonese): Now since the history of Hong Kong we have never had the case of a Budget not being approved. Now we have put in great effort in that regard and of course this is not unilateral effort. As I said from the outset of my speech this is not just my personal view. We have taken into account views of the community and views of LegCo Members, as far as possible.

Now there is some initial response from LegCo Members. Just now I watched on TV, press reports, that 70% of their wishes have been taken into account so I find that gratifying and you can already gauge what their voting would be like.

Question (Reuters): I’m just curious as to the Policy Reviews that you're asking the different departments to go through. What are you looking for, what arc you expecting to come from that and how long do you expect that to take?

FS: Very good question. Maybe I’ll ask the proposed Chairman of that Committee, the Secretary for the Treasury.

S for Tsy: We've only just started work on it. In fact, the work will be staged and the very first phase would be the selection of some services and some departments and some projects.

14

What I am thinking about for immediate action is about six in all. So that it would be manageable. We will look at, for example, the regulations, the controls, the way in which the selected departments interface with the business sector and look at how that could be streamlined, review whether certain regulations are outdated and should be, for example, completely deleted from our statute books and so on.

Our aim is to be able to report progress within about six months for this first phase.

FS: Thank you very much.

End

FS highlights the importance of Budget *****

A Budget is not simply an accounting exercise. Neither is it just a routine report on the territory’s economic and financial well-being, the Financial Secretary, Mr Donald Tsang, said in the Legislative Council today (Wednesday).

It is, with the Governor's Policy Address, one of the two set-piece occasions each year when the Government:

* accounts for its stewardship of Hong Kong's economic and social affairs;

addresses the concerns of the community, which Members of the

Legislative Council have articulated so forcefully; and

* discharges its duty of leadership by offering a clear vision of what the future holds for Hong Kong.

Moving the second reading of the Appropriation Bill 1996, Mr Tsang said this was a very proud, a very privileged moment for him.

"Proud because I am the first Financial Secretary who grew up here. Privileged because I am delivering this Budget to the first fully-elected Legislative Council in Hong Kong's history.

"The fact that 1, like all the Members of this Council, am very much part of this community gives the Budget special meaning and gives all of us a special responsibility. I say this because Hong Kong is our community. It is our home. And its future is our future," the Financial Secretary said.

15

"I spoke of a duty of leadership. It is a duty I and my colleagues in the Civil Service take very seriously. To put it simply, it is our duty to offer our community a clear description of what can be achieved and what we need to do to make our vision a reality."

Like his distinguished predecessor. Sir Hamish Macleod. Mr Tsang said he had made personal consultations with every Member of the Legislative Council a central feature of his budget preparations.

"In preparing my first Budget. 1 have continued this practice.

"The responsibility for the Budget is mine, of course, but the valuable contributions of Honourable Members have made my task a great deal easier. I am also grateful for the support and sheer hard work of my colleagues in the Civil Service in preparing my Budget." he said.

Mr Tsang said he had broken with Sir I lamish’s approach in one respect.

"1 want to make the Budget more accessible. I want to make it easier for the community, as well as for members of this Council. Io get at the facts, the assumptions and the policy proposals which it contains," he said.

So. besides producing the entire set of budget documents in both English and Chinese for the first lime, he had adopted a very simple, three-part structure.

In the first part, the Financial Secretary shall look back at the trends and developments which have shaped Hong Kong’s economy and the way of life and brought Hong Kong people the prosperity they enjoy today.

In the second part, he will describe the current performance of the economy and look at the prospects for the year ahead.

In the final part, he will describe how. in the next century. Hong Kong can achieve its full potential as a world-class sen ice economy.

End

16

Hong Kong success and Government's contributions *****

The Financial Secretary, Mr Donald Tsang, in wrapping up the past success and government's contributions to the success of the economic history of Hong Kong, believed that the time had come to give the services sector the place it deserves in economic policies.

He said the economic fiistory of Hong Kong could be summed up very simply.

"Manufacturing formed the backbone of our economy for three decades from the 1950s. During those years, the 'Made in Hong Kong' label came to mean high-class fashions instead of cheap textiles.

"This transformation became a symbol the world over of our determination to lay the foundations of the economic and social success we now enjoy," he said today (Wednesday).

However, the Financial Secretary noted that over the past 15 years, Hong Kong had undergone a second revolution in the way the people earned their living.

He said by last year. 72 per cent of the total workforce was employed in the services sector, and 83 per cent of GDP came from services and even if the public sector was excluded, services still account for an astonishing 73 per cent of GDP.

Mr Tsang said the change brought about, perhaps inevitable in a free-market economy, had been so swill that "it has taken us policy-makers time to catch up with the new economic reality".

"Entrepreneurs and markets, and not Financial Secretaries, must lead economic change.

"I believe that the time has come to give the services sector the place it deserves in our economic policies." he said.

According to Mr Tsang, a service economy simply means to enable people to earn their living by selling their skills, creativity, enterprise, professionalism and reputation for integrity or to put it another way, was to move up market as an economy and as a community.

Noting the achievements in this pursuit, Mr Tsang said Hong Kong now already had a well-educated and skilled workforce. The recurrent spending on education has increased 61 per cent in real terms in the past 10 years.

17

"We are now prosperous not only by the standards of our own past but prosperous by the standards of the developed world. Our per capita GDP has increased by 65 per cent in real terms in the past ten years." he said.

Mr Tsang went on noting that in putting 1 long Kong's prosperity to good use by investing in its social as well as its physical infrastructure, the Government, as a result, had increased its recurrent spending on health, welfare and housing programmes by 117 per cent in real terms in the past ten years.

The results of these improvements are self-evident, lor example, he said:

* in the past ten years, we have built about 400.000 new public housing units.

Over the same period, the proportion of the relevant age group studying for degrees has risen from four per cent to 18 per cent.

Since 1984. life expectancy at birth has increased by two full years. Our life expectancy rates are now among the longest in the world.

"Hong Kong has much to be proud of. We have exercised self discipline, and we have made the investments which have brought us our success." Mr Tsang said.

However, he cautioned: "We cannot rest on our laurels. Past success is no guarantee of future prosperity."

He noted that this success would not have been possible without three fundamental economic developments which took place outside Hong Kong. I hey were:

* the success of the GATT in opening up world trade and keeping protectionism at bay. World trade has doubled every six years since 1969.

* the dramatic surge in China's growth. Thanks to its "open-door policies". China's real GDP has doubled every eight years since 1979. Hong Kong links with Chinese economy have grown so rapidly and so extensively that Hong Kong now play a vital part in the world's most dynamic economy.

the take-off into sustained economic growth of I long Kong's neighbours in Asia. Trading with them has doubled every four years since 1966.

18

Turning to the Government’s contribution, Mr Tsang said over the last forty years, Hong Kong had developed its own way of managing its economic and social affairs. It had its own blend of enterprise and regulation, balance between the public and the private sectors, formula for individual liberty and social responsibility.

"I do not think it is going too far to say that there is a distinct Hong Kong model of economic and social development.

"We might describe this model most simply as a commitment to markets and enterprise but with a recognition that, for these to work fairly and effectively, the Government cannot be passive.

"The community wants vigour and inspiration from its government, not lethargy," he said, adding that the Government’s contribution had been:

* to provide the legal and regulatory infrastructure which underpins free and fair markets;

* to encourage enterprise through small government and low, stable and predictable taxation; and

* to manage public finances to meet the community’s priorities for a modern infrastructure, better homes and health care, belter schools and social welfare.

End

Performance in 1995 remains robust *****

The achievement of a real GDP growth of 4.6 per cent last year, though lower than the Government had originally hoped, was still robust, the Financial Secretary, Mr Donald Tsang , said today (Wednesday).

Reviewing the performance of economic growth in his first Budget speech, Mr Tsang noted that there was no better testimony to the success of the Hong Kong model than the simple fact that it had enjoyed unbroken economic growth since the Government began to compile GDP figures in 1961 with growth in some years had been faster than in others.

19

He said as in the past, last year Hong Kong experienced a cyclical adjustment following a period of particular buoyancy in domestic consumption and reduced private sector building activity as the property market consolidated with the growth in these two areas dampened by a sharp slowdown.

He pointed out that total exports of goods grew by 12 per cent in real terms. Imports of goods, however, grew more rapidly, by 14 per cent in real terms resulting in the visible trade deficit thus widened to ten per cent of the value of imports, somewhat above the average for the past decade.

Mr Tsang explained that this increased deficit reflected in part a 15 per cent increase in retained imports of raw materials for production and infrastructure construction, and in part an impressive 20 per cent growth of investment in machinery and equipment from which the Government should draw considerable encouragement.

"Our balance of trade has deteriorated principally because we have been investing in the expansion of our productive capacity. In due course, this will show itself in increased output, a growth in exports and higher GDP.

"We should also draw encouragement from an 11 per cent growth in real terms in our exports of services, and from the fact that the substantial invisible trade surplus largely offset our visible trade deficit," he emphasised.

Turning to inflation. Mr Tsang noted that the average rate for inflation during 1995, as measured by the CPI(A), was 8.7 per cent. Underlying this was a sharp fall, from 10.1 per cent in January to 6.6 per cent at the end of the year.

He explained that the easing of inflation owed a great deal to the way in which the US dollar gained strength in the latter part of the year. Also contributing were more stable world commodity prices, as well as a significant moderation in China's inflation.

In addition, locally-generated inflationary pressures eased. Specifically, rents and labour costs moderated, while the prices of consumer goods softened.

On labour market, Mr Tsang said last year, Hong Kong experienced an uncomfortable rise in the rate of unemployment.

The increase in the number of people looking for jobs was caused not so much by the lower than expected rate of’ GDP growth, but was largely a consequence of changes in the labour supply situation. He attributed the trend to the following reasons:

20

* The total supply of labour increased by over three per cent in each of the last two years. More emigrants returned from overseas and more immigrants arrived from China. Also, there has been a larger proportion of women entering the workforce.

* Total employment also increased healthily in 1995. But at two per cent, the rise was not sufficient to keep pace with the additional labour supply.

* Consequently, the unemployment rate rose to 3.5 per cent at the end of the year.

He stressed that the employment situation, low though our rate is by international standards was a matter that the Government cannot be complacent about.

He said in the latter part of the year, the private sector was still reporting 50,000 vacancies and that the problem seemed to be less a lack of jobs than a mismatch between the skills on offer by the unemployed and the skills required by potential employers.

On the residential property market, Mr Tsang believed that, following the successful implementation of the measures devised by the 1994 Task Force, the property market, which continued to consolidate during 1995. had stabilised.

He said by the end of the year, average prices for residential flats were 24 per cent lower than the peak levels reached in the early part of 1994.

Although prices were some 20 per cent above the levels seen at the end of 1992. they were still lower in real terms than three years earlier. Mr Tsang however noted that the ground had been laid for the healthy development of the market in the future as flats had become generally more affordable to home-buyers, and speculation had subsided.

Turning to the financial markets last year, Mr Tsang noted that Hong Kong performed well in this aspect of economic activities as evidenced by the fact that: The stock market was the best performing in the region, with a 23 per cent increase in the Hang Seng Index for the year.

The futures market recorded over five million contracts for the year, an all-time high, although this was a year of reverses for overseas futures markets generally.

21

The banking sector saw solid gains. Total deposits and loans both rose by around 14 per cent. The Hong Kong dollar debt market increased by 29 per cent over the year to reach $197 billion, an indication of its impressive liquidity.

Moreover, he pointed out that last year was also important because of the further reassurance it offered of the resilience of our financial institutions which he, in particular, referred to the linked exchange rate.

He cited an example that during the fall-out from the Mexican currency crisis in early 1995 which had also affected Hong Kong together with a number of other Asian currencies, the Hong Kong Monetary Authority handled the pressures decisively and demonstrated the effectiveness of its contingency measures to defend the linked rate.

He said during the year, the Monetary Authority took further steps to reinforce the stability of the territory's financial institutions and had strengthened ties with other regional central banks.

He disclosed that arrangements were now in place to exchange information with them on currency speculation, as well as for formal repurchase agreements to increase the liquidity of each parties' official reserves.

"The lessons of last year should be very clear. Our commitment to the linked exchange rate at its current parity is absolute.

"We will not allow speculators to undermine the stability of our financial system. We have both the expertise and the resources that we need to defeat them," he said.

On the Government's commitment to openness and transparency in the operations of the Exchange Fund, Mr Tsang an example as noting that last year, the Government increased the frequency with which we publish information about the Fund and was now doing so quarterly.

He was pleased to report that the underlying foreign exchange assets in the Exchange Fund rose again in the last quarter of 1995.

He pointed out that the figures of the Fund, now standing at US$57.2 billion and 12 per cent higher than the corresponding total for the year before, were impressive indeed.

End

22

Deficit forecast * * * ♦ ♦

The Government is now forecasting a deficit for the current year of $2.5 billion. This is virtually the same as the deficit it originally estimated, the Financial Secretary. Mr Donald Tsang said.

I

In overall terms, thife outcome has arisen because a reduction in revenue of $8.2 billion has been offset by ah underspending of $8.3 billion.

However, the original estimates for both revenue and expenditure included the Post Office and the Office of the Telecommunications Authority.

During the year, these became trading funds.

"As a result, we have to account for their revenues and expenditures in the books of the new Trading Funds rather than, as previously, in the General Revenue Account," Mr Tsang said.

After eliminating the effect of this accounting change, revenue for the year is $6.4 billion less than originally estimated, while underspending amounts to $6.6 billion.

On the expenditure side, there are two main reasons for the underspending.

* First, there has been underspending of $4.5 billion from the Capital Works Reserve Fund. This is a result of reduced expenditure on land acquisition of $ 1.5 billion and a slippage in capital works of $3.0 billion.

* Second, there has also been underspending of $1.8 billion from the Loan Fund. This arises as a result of the payment of loans to the Housing Society being made in March 1995 rather than in the current financial year as anticipated when preparing the original estimates.

The underspending of $4.5 billion in the Capital Works Reserve Fund amounts to 12 per cent of the original estimate. This is the third year in which underspending has been reduced from the high levels of over 30 per cent experienced in both 1991-92 and 1992-93.

On the revenue side, the Government has seen a shortfall in both capital and recurrent revenues as a result of two main factors:

23

♦ First, land revenue. During the year, land prices have generally been in line with our expectations. Indeed, the total land premia collected in the year will exceed the original estimate. However, the premia for several sites will not be collected until the final quarter of the current financial year. Because of the sharing arrangements with the future I long Kong Special Administrative Region Government, the Administration will not receive the proceeds of these land premia collected in the final quarter till the next financial year. As a result, our actual receipts of land revenue in 1995-96 will be $3.0 billion less than originally forecast.

* Second, recurrent receipts are lower than originally forecast, reflecting the slower pace of economic growth in 1995. The principal shortfalls in receipts are those from motor vehicle first registration lax of $1.5 billion, duties of $0.5 billion and internal revenue of $0.9 billion.

End

Improved economic performance forecast ♦ * * * ♦

The Financial Secretary today forecast in his Budget Day that GDP would grow in 1996 by five per cent in real terms - an improved economic performance from last year - with expectation of inflation .as measured by the CPI(A). to ease appreciably further to an annual rate of 7.5 per cent.

Mr Tsang noted that the moderating trend in both domestically-generated and imported inflation that had emerged in the latter part of last year was expected to carry over into the current year.

On the labour front, he expected that the level of unemployment would continue to depend primarily on the labour supply.

He said: "On current indications it seems unlikely the unemployment rate would revert quickly to the very low levels to which we arc more accustomed" but on a positive outlook, he believed that the better economic prospects that he was forecasting would bring a gradual improvement to the situation.

Mr Tsang was also optimistic about the trading environment which he expected to be favourable, noting that economic growth in major overseas markets, including the United States, Europe and Japan, was generally improving coupled with the recent easing in interest rates.

24

He noted that in the Asia-Pacific region, growth continued to be dynamic, trade liberalisation was gathering momentum although the annual threat to China's most-favoured-nation status in the US market was still a "cloud on the horizon".

He also noted that the APEC initiatives on trade liberalisation were now winning wider support and was of the opinion that a key objective of China's Ninth Five Year Plan to ensure steady growth and to keep inflation in check would provide a solid foundation for the continuing healthy development of Hong Kong's trade and other economic links with China.

Overall. Mr Tsang forecast the total exports of goods to grow this year by ten per cent in real terms; a growth of only 0.5 per cent in domestic exports but a 12 per cent growth in re-exports, and for exports of services, continued robust growth also at ten per cent in real terms.

He expected that overall, the surplus on invisible trade would be enough to offset the deficit on visible trade.

Turning to the domestic economy. Mr Tsang said the business prospects also looked favourable with wages and salaries rising more moderately, and property prices and rentals unlikely to rebound sharply.

He anticipated that together with the recent substantial investment in machinery and equipment, all this promised well for holding down the costs of doing business and enhancing Hong Kong's competitiveness.

On domestic consumption, his forecast was for an accelerated growth in consumer spending to four per cent in real terms for 1996 as a whole, with probably a stronger pick-up in the second half of the year.

Consumer sentiment is expected to turn better following the rebound in both the stock and the property markets, to be helped further by the recent casing in interest rates.

On domestic investment Mr Tsang forecast the growth in fixed asset investment to be slightly less rapid than last year, al around six per cent in real terms.

He expected that construction work on our Airport Core Programme would peak this year, while private sector building activity was to bottom out while on the other hand, expenditure on machinery and equipment was likely to rise al a more moderale pace after two consecutive years of substantial growth.

End

25

’’Feel-bad” factors cannot be ignored: FS *****

Although the immediate economic prospects remain good, the so-called "feel bad" factor: the concerns about unemployment and persistent inflation and the cautious attitude on consumption, even though the situation has improved somewhat, cannot be ignored, the f inancial Secretary, Mr Donald 1 sang, said.

The economic statistics of higher GDP, lower inflation, stabilised unemployment rate, rising exports and increased investment are of little comfort to those who have lost their jobs or to businesses under pressure as consumers hold back spending.

In his Policy Address last October, the Governor announced a series of measures aimed at tackling directly the problems of unemployment and low incomes.

"Let me assure Members of this Council and the community that this Budget makes provision for funding all the measures announced by the Governor. Where possible, 1 shall be proposing that we go even further in improving and expanding these programmes," Mr Tsang said.

The first priority is to get the unemployed back to work. A major challenge is matching skills to jobs.

In 1992, the Government set up an Employees Retraining Scheme to provide retraining for displaced workers.

To date, the Employees Retraining Board has provided over 100.000 places on its courses, teaching workers new skills or helping them to upgrade their existing skills.

In 1992. a grant of $300 million was made to the Board as its reserve. But its primary source of income is the levy imposed on employers of imported workers admitted under the various importation of labour schemes.

The freeze since April 1995 on the allocation of quotas under the General Importation of Labour Scheme has reduced the income of the Board from its lew

Consequently, the Board has begun to draw down the $300 million reserve, which now stands at $186 million. 1 he General Scheme has been replaced by the Supplementary Labour Scheme.

26

"This provides for the entry of a limited number of imported workers, which will further reduce the income available from the levy. I propose to inject another $300 million into the Board's reserves to ensure that it has the financial resources to expand its programmes," Mr Tsang said.

But retraining is only part of the solution.

"When people have skills to offer which the market needs, workers have to be put in touch with potential employers.

"This is why our Job Matching Programme is so crucial. Wc have now extended the scope of this scheme to cover all job-seekers. Its success rate has been increasing steadily, and has now reached 71 per cent." he added.

End

CSSA review completed

*****

The Government has completed a review of the Comprehensive Social Security Assistance (CSSA) Scheme and identified areas for further improvements.

The Financial Secretary. Mr Donald Tsang, in his first Budget Speech to the Legislative Council today (Wednesday), gave a brief summary of the main benefits the Government would provide, including the additional improvements to the CSSA Scheme which would cost an extra $200 million a year on top of the amount pledged by the Governor:

* For adults not expected to work (for example, those in ill-health, single parents and family carers), taking into account the increases announced by the Governor the current monthly standard rate will be increased by $600. I his will be adjusted for inflation, as approved by members. As a result, the new rate will be $1,935 a month for a single person and $1,760 for a family member from 1 April. These new rates represent real increases of between 50 per cent and 57 per cent.

* For adults expected to work but currently without jobs, taking into account the increase announced by the Governor the current monthly standard rate will be increased by $300. Together with the inflation adjustment approved by Members, the new rate will be $1,615 a month for a single person and $1,440 for a family member from I April These new rates represent real increases of between 25 per cent and 29 per cent.

27

* For adults with a 50 per cent disability living in a family, the current monthly standard rate will be increased by $140. Together with the inflation adjustment approved by members, the new rate will be $1,760 a month. This new rate represents a real increase of nine per cent.

Mr Tsang said the standard rates were only .one aspect of the review exercise. A number of other improvements are being recommended. For example:

* Higher rent allowances will be available to CSSA recipients living in private housing.

* A new special grant of $320 a year will be payable to the elderly to reimburse their spending on social and recreational activities. They will also be paid a special allowance of $200 at Chinese New Year.

The current rules will be revised to permit the elderly to receive CSSA standard rates and long term supplements if they retire to China.

Taking into account the proposed increases in standard rates and the special grants payable to those in need (such as rents, school expenses of children, water charges, etc), the Director of Social Welfare estimates that, from April 1:

a singleton household will on average receive $2,940 a month; and

* a four person household will on average receive $10,270 a month.

End

Elderly caring is a top priority *****

The Financial Secretary, Mr Donald Tsang, today (Wednesday) confirmed the Government's commitment to providing continuous resources for the services the elderly need.

" I want to make it plain to honourable members today that our commitment to providing resources for the services our elderly need will continue. Caring for the elderly is, and will remain, a major priority," he said.

28

He said the Government had been reminded in recent weeks that the elderly were particularly vulnerable members of the community.

”It is for this reason that we are providing substantial resources to meet their needs," said Mr Tsang.

For example:

* This year, the Government has provided $9 billion both on financial assistance and on health and welfare services for the elderly. This represents an increase of 50 per cent in real terms over 1992.

* Next year, expenditure on welfare services for the elderly will increase by 17 per cent.

He said the Government was putting these resources to good use:

* By the end of next year, the Government will be subventing 16,455 residential care places, more than three times as many as ten years ago.

* it will provide an additional 43 social centres for the elderly, six multiservice centres and three day care centres.

* it has already provided four elderly health centres and three more will come on stream by 1997.

Mr Tsang said concern expressed over the welfare of elderly persons in the recent cold spell had focused attention on the issue of outreaching to elderly persons living alone.

In emergency situations like this, the Social Welfare Department mobilises a large number of professional staff to reach out e.g. those serving in Family Service Centres.

f r

In normal times, in addition to the two elderly outreach teams in operation, staff of the Home Help service are in regular contact with elderly persons since 80 per cent of their clients are elderly.

Through these home visits, elderly persons with special needs are identified and referred by home helpers to other welfare services as necessary.

29

"We have doubled the number of these teams over the past six years. Next year, we will increase the total number to 126 teams enabling us to serve about 12,000 elderly people," said Mr Tsang.

He said volunteers were also used to reach out to elderly persons at risk through experimental programmes for older volunteers and other volunteer workers.

"This month, on a pilot basis, we will establish a multi-disciplinary' team to provide intensive outreach services to elderly street sleepers," he said.

"As a new initiative, we will provide financial support for selected multiservice centres for the elderly to organise new services to reach out to elderly people at risk."

The Director of Social Welfare is now examining how best to take this forward through voluntary agencies who will be encouraged to make full use of volunteers to supplement the efforts of professional social workers.

As a direct result of the experience of the recent cold spell, the Director of Social Welfare is looking at ways to speed up the provision of special grants for such items as telephones for elderly CSSA recipients.

"In addition, we shall provide the resources needed to improve the facilities at temporary' shelters operated by the Home Affairs Department," said Mr Tsang.

The Financial Secretary said the Government’s programmes had been guided by a clear-sighted strategy. This is based on the landmark report in 1994 by the Working Group on Care for the Elderly chaired by the Secretary' for Health and Welfare.

The Working Group made a total of 71 recommendations.

"We have funded, and we are implementing, every single one of these recommendations. But we cannot afford to stand still when it comes to taking care of the elderly members of our community. Next month, we will launch an important follow-up study into the needs of the elderly," said the Financial Secretary.

After the review of the Government’s initiatives on unemployment, support for those with low incomes and help for the elderly, Mr Tsang summarised the Government’s plans for expanding other social service programmes in the current year:

30

* There will be further improvements in the education programmes, on which the Government proposes to spend $34.5 billion in recurrent expenditure.

* There will be major improvements in the medical and health services, on which the Government proposes to spend over $22.6 billion in recurrent expenditure.

There will be major improvements to the social welfare programmes, on which it proposes to spend over $16.5 billion in recurrent expenditure. This will represent an increase of 14.7 per cent in real terms.

"I want to make it absolutely plain to this Council and the community that we are in the fortunate position of being able to make all these improvements to our social welfare, health and educational programmes without breaching our budgetary guidelines.

"Indeed if there had been any danger of breaking our guidelines because of these improvements, we would not have made them," said Mr Tsang.

The new wealth generated by the robust economic performance will fully fund all these new measures, he added.

End ■ • , ..i

FS outlines "Seven Heavenly Virtues" *****

The Financial Secretary, Mr Donald Tsang, restates the principles which are the foundations of the management of public revenue: the "seven heavenly virtues".

Mr Tsang said Hong Kong must:

* retain a low, simple and predictable tax regime;

raise sufficient revenue to meet known spending commitments;

*

maintain a rigorous "user-pays" system for setting fees and charges so as to keep tax rates low;

31

* keep adequate fiscal reserves to provide a cushion against future uncertainties;

* combat tax avoidance and evasion;

* provide concessions where most needed; and finally,

* minimise the inflationary impact.

The Government has not devised these principles in isolation.

"I believe that they represent a community consensus. They have served us well in the past, and I am convinced that they must remain our guide for the future. These are the principles upon which I have framed my revenue proposals in this year’s Budget," he said.

From time to time, there have been calls for the Government to implement bold revenue measures in order to "stimulate the economy", to reduce inflation or to cut unemployment.

"I have no doubt that the motives of those making such suggestions are genuine, and we share their concerns. But do they make practical sense in Hong Kong's circumstances? Total public spending as a proportion of GDP is 18 per cent. Government spending itself is only about 14 per cent of GDP. In consequence, we have been able to maintain low taxes."

With the standard rate of salaries tax at 15 per cent and corporate profits tax at 16.5 per cent, the tax rates are among the lowest of any advanced economy in the world.

Together they provide about 40 per cent of the Government's total revenue. As a result, the Government's ability to directly influence the overall level of economic activity through fiscal means is very limited.

In order to achieve any appreciable impact on GDP, taxes would have to be cut very substantially indeed.

For example, to engineer an increase of one percentage point in GDP, the Government would have to slash taxes by over 10 percentage points, throwing the Budget and the Government's financial guidelines into serious disarray.

32

"This is simply unrealistic, especially considering there is no guarantee it would work and no guarantee that the money released would not go straight into savings instead of into spending.

"We do better - far, far better - in the long run to stick with our tried and tested formula of living within our means and keeping taxes low and predictable. We do best of all by maintaining our commitment to free markets and minimal government interference," he said.

End

Fees and charges policy simple and nice 9k * * * *

The government policy on fees and charges is simple, practical and fair, the Financial Secretary, Mr Donald Tsang, said in the Legislative Council today (Wednesday).

In his first Budget speech, he said where there were overwhelming social considerations, the Government subsidised heavily, providing services free or at a tiny fraction of their cost.

This is the basis on which the Government provides hospital services, education and public housing.

But for other services which the Government provides, where there is no overriding social need, the Government must maintain the principle of user pays and full cost recovery.

Those who use these services, often for commercial purposes, should pay the full cost.

"I can see no case for taxpayers subsidising such services. The user-pays principle is an integral part of our system of public finances.

"It is part of the balance we have to strike if we are to go on providing heavily-subsidised services while, at the same time, keeping taxes low," he said.

Short-term gestures made at the taxpayers' expense would only jeopardise the fundamentals of the public finances, Mr Tsang added.

End

33

Not time for reducing healthy reserves *****

This is not the time, with all its inherent uncertainties, to reduce the cushion of healthy reserves that Hong Kong at present enjoyed, the Financial Secretary. Mr Donald Tsang, stated unequivocally.

"Our reserves underpin the soundness of our financial system and must be maintained," he said.

Mr Tsang said following a recent visit by the International Monetary Fund, its report wholeheartedly endorsed the Government's commitment to maintaining Hong Kong's long-established fiscal policies.

"Indeed they emphasised, and I use their words, the need to preserve the reserves for 'torrential downpours not the mild showers' we arc currcntlj experiencing," he added.

End

No change to lax enforcement *****

The Financial Secretary. Mr Donald Isang. proposes no changes to lax enforcement.

"On lax enforcement, we have recently introduced legislation to counter the use of service companies to avoid or significantly reduce lax liability." Mr I sang said today (Wednesday).

"We have also legislated to specify the minimum records which all businesses must keep for taxation purposes."

The financial Secretary said he was confident that the new legislation was achieving its aims and he did not propose any further measures for the time being.

Over the past three years, the Inland Revenue Department's investigation and field audit staff had tackled some 3.700 cases and collected about $3 billion in back taxes and penalties.

"In the coming year, we will step up our efforts in this area by establishing an additional field audit team, increasing the total to nine." he added.

End

34

Legislation on source concept uncalled for *****

There is no need to introduce legislation to clarify the territorial source concept which underlies Hong Kong's tax system.

Such law would not even be helpful, the Financial Secretary. Mr Donald Tsang, said today (Wednesday).

Where further clarification is necessary, he believes the Government should rely on administrative measures, such as Practice Notes issued by the Commissioner of Inland Revenue.

In brief, this concept means that only those profits which originate in Hong Kong are liable to tax here.

End

Tax relief for housing-related expenditure *****

The Financial Secretary, Mr Donald Isang. said today (Wednesday) the Government should continue to invest in the existing housing programmes to provide direct assistance to those genuinely in need rather than providing a concession to first-time home buyers.

Mr Tsang said during the Budget consultations, some legislators asked him to consider introducing an allowance lor expenditure on mortgage interest or rental payments. Some others asked for concessions to first-time home buyers.

"I share their enthusiasm for encouraging home ownership. Indeed, the Government already does a great deal to provide decent homes for Hong Kong people.” he said.

But he added that the total cost over five years of the various suggestions could be as high as $17.5 billion.

35

"This is a significant sum. Also, there would be serious difficulties in defining first-time home buyers without creating the potential for widespread abuse.

" I believe we should continue to invest in our existing housing programmes in order to provide direct assistance to those genuinely in need. Thus with great regret, I cannot agree to provide a concession of such a nature,” Mr Tsang said.

End

No change in corporate profits tax *****

The Financial Secretary, Mr Donald Tsang, proposes no change in the level of corporate profits tax.

Mr Tsang said comparisons with other countries in the region continued to support his view that the level of profits tax here was already very low.

A recent survey of senior executives in 16 industries found that 93 per cent of them were happy with the current tax arrangements.

"In any case, the cost to the revenue of reducing the rate of profits tax would be substantial. A one percentage point reduction would mean $1.7 billion of revenue forgone in 1996-7 and over $11 billion up to 1999-2000," he said today (Wednesday).

Mr Tsang also did not consider that the Government should provide further tax concessions to encourage expenditure on research and development.

"Expenditure on scientific research is fully deductible," he said.

The Government could do more to stimulate research and development but the tax system would be the wrong vehicle, he added.

End

36

Review on depreciation allowances completed ******

The Board of Inland Revenue has largely completed its review on the classification of items that fall into the existing three categories for an annual depreciation allowance.

It has concluded that, on the basis of the estimated useful life of plant and machinery, the present classification is over-generous and should be changed for some items. The result would be to reduce the annual allowance for these items.

"I am grateful for the work of the Board," the Financial Secretary, Mr Donald Tsang, said today (Wednesday).

"However, I accept that the change could affect investment in plant and machinery, in particular in the manufacturing sector."

In consequence, Mr Tsang proposed to ask the Board to examine how the rationalisation of the classification should best be implemented in order to ameliorate the impact on investment in plant and machinery.

Any changes to be introduced as a result would be subject to approval by the Legislative Council, he added.

End

No change in stamp duty on stock transfers *****

The Financial Secretary, Mr Donald Tsang, today (Wednesday) said he did not propose to change the stamp duty on stock transfers for the time being.

However, he said, he was prepared to review the issue next year if there were initiatives from the securities industry to reduce the brokerage cost in order to make the market even more competitive.

The Government reduced the stamp duty on stock transfers for three consecutive years from 1991 to 1993, from 0.6 per cent to 0.3 per cent for a complete transaction, where it stands at the moment.

37

In practice, the overall cost of stock transfers in the local market is largely the brokerage cost.

’’This is not high compared with other markets in the region, and our market remains competitive," said Mr Tsang.

End

Serious thought to conduct annual rates revaluations

*****

i

The Financial Secretary, Mr Donald Tsang, said he would seriously consider the feasibility of conducting annual rates revaluations after the completion of the forthcoming revaluation exercise.

Mr Tsang, delivering his Budget Speech in the Legislative Council today (Wednesday), said it was far better to make regular adjustments in the rates than to introduce substantial increases at less frequent intervals.

"In the concluding speech to the 1994-95 Budget debate, my predecessor said that we would look at the option of indexing rateable values between revaluation years, so as to soften the impact of any large increase immediately following a general revaluation.

"We have examined this issue. 1 have concluded that a better option might be to consider conducting a revaluation on an annual basis," he said.

Rates are significant as a relatively progressive tax and a stable source of revenue.

It was important that the Government should go on adjusting the rates charged to reflect the changing rental values of different types of properties and in different locations, said Mr Tsang.

"We will conduct our routine three-year rates revaluation this year, with any changes coming into effect on 1 April 1997.

"I will also consider if it is necessary to introduce a suitable rates relief scheme to cushion the effect of the revaluation on those experiencing large increases in rateable values," he said.

End

38

No change to alcohol duty *****

There will be no change to the alcohol duty system as duty revenue from alcoholic beverages has gradually picked up, the Financial Secretary, Mr Donald Tsang, told the Legislative Council today (Wednesday).

A new simple ad valorem duty system on alcoholic beverages was introduced in April 1994.

’’The new system has benefited ordinary consumers through the effects of greater competition, especially at the lower end of the market.’’

There was a drop in duty revenue immediately after the introduction of the new system, as most products enjoyed a duty reduction.

"But I note that the situation has changed, and duty revenue from alcoholic beverages has gradually picked up. I do not propose any change to the duty system," he said.

End

Tobacco, fuel duties rise by 9 per cent *****

A proposal by the Financial Secretary, Mr Donald Tsang, to increase duties levied on tobacco and fuel, both by nine per cent, came into immediate effect today (Wednesday) under a Public Revenue Protection Order issued.

The anti-cigarette smuggling task force established in the Customs and Excise Department in April 1994 had proved to be extremely effective in tackling the problem of cigarette smuggling, Mr Tsang said.

There had been a substantial increase in seizures of contraband cigarettes, and the black market price of cigarettes had continued to increase.

"These are sure signs that we are hurting the smugglers at current rates of duty." Mr Tsang said.

39

On fuel, Mr Tsang said there had been an increase in the smuggling and illegal use of diesel oil.

"We have provided resources to the Customs and Excise Department to set up additional investigation and enforcement teams in 1996-97 to tackle the problem.”

The situation should improve and it was considered appropriate to increase the duty on petrol and other hydrocarbon oils.

The increases in duties for both tobacco and fuel oil by nine per cent were an amount broadly in line with the rate of inflation, Mr Tsang said.

End

More betting tax * ♦ ♦ ♦ ♦

It is time to raise the Betting Tax.

The Financial Secretary, Mr Donald Tsang, said there had been no increase in the tax since 1992.

"I consider that it is now appropriate to raise the tax from 11.5 per cent to 12 percent for standard bets and 17.5 per cent to 18 per cent for exotic bets."

He said this was a modest increase, and he had asked the Royal Hong Kong Jockey Club to absorb the cost of the increase by reducing its betting commission.

There will be no reduction in the prize money pool, so this should not give any encouragement to the activities of illegal bookmakers.

The increase should take effect from the beginning of the next racing season in September.

End

40

More air passenger departure tax * ♦ ♦ ♦ ♦

The Financial Secretary, Mr Donald Tsang, proposes to increase the Air Passenger Departure Tax from $50 to $100, which was the level when the tax was first introduced in 1983.

He said the current level of the tax was well below the average for the region.

The raise will bring the tax more in line with the level charged by other places in the region.

The tax was reduced from $150 to $50 in the 1994-95 Budget. Some legislators felt that the reduction was excessive and unjustified, and criticised the Government.

"With hindsight, these criticisms had some validity. The reduction obviously affected revenue."

But it did not achieve the intended purpose of encouraging transit passengers to leave the transit halls so as to enhance the business of our retail trade and alleviate congestion at the airport.

Mr Tsang said statistics also showed that an increase or a decrease in the tax had no effect on passenger throughput.

He emphasised that the proposed increases in air passenger departure tax, like those on tobacco and fuel duties and betting, are essential in order to allow the Government to fund the various revenue concessions that he proposed to introduce in this Budget.

"They are an integral part of my Budget package," said Mr Tsang.

End

41

l ax concessions to business firms *****

The Financial Secretary, Mr Donald Tsang, proposes to offer three tax concessions which should benefit business firms directly. They are:

to halve the ad valorem fees on company registration from the current level of 0.6 per cent to 0.3 per cent.

* to double the maximum average monthly turnover levels below which businesses are exempt from payment of business registration fees from $15,000 to $30,000, for the sales of goods.

to raise the exemption level by 150 per cent, from $4,000 to $10,000. where the profits of the business are mainly derived from the sale of services.

" I believe that these concessions will make a direct contribution to reducing the cost of capital, as well as the operating costs of small businesses,” Mr Tsang said.

These two measures will cost $190 million in 1996-97 and $930 million up to 1999-2000. They will come into effect on April 1.

End

FS proposes wide range of personal tax concessions *****

The Financial Secretary, Mr Donald Tsang, proposes a wide range of concessions on personal taxation which will reduce the tax burden for some 95 per cent of salaries taxpayers.

These concessions arc:

* To increase the basic allowance from $79,000 to $90,000 and the married person’s allowance from $158,000 to $180,000. The allowances will rise by 14 per cent, well above the rate of inflation in 1995

* To increase the allowance for the first and second child by 11 per cent.

from $22,000 to $24,500.

42

* To increase the allowance for the third to ninth child by 14 per cent, from $11,000 to $12,500.

* To increase the basic and the additional allowance for dependent parents and grandparents from $22,000 and $6,000 by 11 per cent and 17 per cent, to $24,500 and $7,000 respectively.

* To increase the single parent allowance by 13 per cent, from $40,000 to $45,000.

* To increase the disabled dependant allowance by 36 per cent, from $11,000 to $15,000.

* To introduce a new allowance of $24,500 for a taxpayer maintaining a brother or sister for whom no child allowance is being claimed, with an additional allowance of $15,000 where the brother or sister is disabled. This concession will strengthen our family values.

* To introduce a specific deduction to allow taxpayers to claim as a deductible expense fees for training courses attended at approved institutions, up to a maximum of $12,000 a year. This is to recognise the changing nature of the economy and the need to upgrade skill levels,

"Taken together these improvements will reduce the tax burden for some 95 per cent of salaries taxpayers," Mr Tsang told the Legislative Council.

The Financial Secretary also gave examples to show what the concessions would mean in practice:

* A single person with a monthly income of $15,000, with two dependent parents living with him and a dependent brother or sister still receiving full-time education, will have his tax bill cut by over 98 per cent. He will pay less than $5 a month in tax.

* fhe salaries tax bill for a single-parent family earning $16,000 a month with one child and a dependent parent living together will be reduced by . 97 per cent to less than $2 a month.

* The typical "sandwich-class" family of four with monthly earnings of $25,000 will have its tax bill cut by some 43 per cent. It will pay only $556 a month in tax.

43

He estimated that these concessions will cost $1.9 billion in 1996-97 and $12.4 billion up to 1999-2000.

Mr Tsang said the last three Budgets had already provided substantial benefits to salaries taxpayers. As a result,

* There has been a real increase of 34 per cent in both the basic and the married person's allowances.

The proportion of the total workforce with no liability to pay Salaries Tax has increased from 46 per cent to 60 per cent.

* The proportion of standard rate taxpayers has decreased from six per cent to two per cent of the workforce.

The average effective rate of tax paid by salaries taxpayers has decreased from nine per cent to eight per cent.

These have been substantial improvements, he said, but priority should be given to salaries taxpayers when it comes to tax concessions as they are the largest single group of taxpayers and they are by no means the wealthiest sector of the community.

End

Estate duty revised *****

The rates of Estate Duty will be further revised this year to offset the effect of inflation.

"This year, I propose to further increase the level below which no duty is payable from $6 million to $6.5 million, " the Financial Secretary, Mr Donald Tsang, said.

Above that level, Mr Tsang proposes that Estate Duty be payable at 6 per cent on estates between $6.5 million and $8 million: 12 per cent for estates between $8 million and $9.5 million: and 18 per cent on estates over $9.5 million.

44

The width of the two bands will thus be increased from $1 million to $1.5 million.

The cost of this proposal will be some $50 million in 1996-97 and $240 million up to 1999-2000.

•>

End

Relief measures to home buyers *****

Relief measures are afoot to home buyers, particularly at the lower to middle end of the market.

The Financial Secretary, Mr Donald Tsang, in his maiden Budget Speech to the Legislative Council today (Wednesday), proposed to reduce the impact of stamp duty to directly benefit buyers of lower and medium-value Hats with property values of up to $3.5 million.

This will be of particular assistance to buyers of Home Ownership Flats and Sandwich Class Housing Scheme properties.

The proposed changes are:

The limit below which only the nominal fee of $100 is charged will be raised from $500,000 to $750,000.

* The rate of 0.75 per cent will apply to properties with a value of $750,000 to $1.5 million.

The rate of 1.5 per cent will apply to properties with a value of $1.5 million to $2.5 million.

* The rate of 2 per cent will apply to properties with a value of $2.5 million to $3.5 million.

* The threshold at which the maximum rate of 2.75 per cent begins to apply will be raised from $3 million to $3.5 million.

45

As a result of the proposed adjustments, the stamp duty paid on a typical $1.5 million flat under the Home Ownership Scheme will be halved, from $22,500 to $11,250.

He estimated that about 54.000 property transactions would benefit from the proposal each year. These concessions will cost $550 million in 1996-97 and $2.7 billion up to 1999-2000.

He said he had examined suggestions by legislators to reduce the impact of stamp duty on property transactions but concluded that they were not feasible.

"It is more practical to focus on reviewing the structure of stamp duty rates in order to relieve the burden on the home-buyer.

"Accordingly, I propose to reduce the impact of stamp duly in a manner which will directly benefit buyers of lower and medium-value fiats with property values of up to $3.5 million," he said.

End

Owners lured to scrap old cars for fresher air *****

The Government proposes to offer lax relief to encourage owners to scrap their old vehicles so as to help improve air quality.

The Financial Secretary. Mr Donald Tsang, said if the owner of a private vehicle of 10 or more years old decided to scrap his old car and replaced it with a new one, he might enjoy a reduction in First Registration fax of 20 per cent of the tax payable or $30,000 whichever was the lower amount.

"This initiative is designed to help to improve air quality by reducing the number of old vehicles without increasing the total vehicle fleet," Mr Tsang said today (Wednesday).

There are now over 40.000 private vehicles which arc 10 or more years old. Most of these vehicles run on leaded fuel and are not fitted w ith catalytic converters.

"They are a significant source of pollution." he said.

46

There will be a number of measures to safeguard against abuse of the scheme which will only apply to private vehicles.

Commercial vehicles seldom have an economic life exceeding 10 years, and, in any case, they pay a much lower First Registration Tax.

Mr Tsang said the Government would review the effect of the proposed scheme after 12 months.

The Financial Secretary also said it had become apparent that some motor vehicle dealers had been manipulating their First Registration l ax liability,.

They artificially suppressed the retail price of the standard motor vehicle and over-declared the value of tax exempted items like vehicle accessories and distributor's warranties, he said.

"I intend to stop this abuse and ensure that all vehicle dealers can operate on a level playing field," Mr Tsang stressed.

He will introduce an amendment Bill into the Legislative Council within this legislative session to set a reasonable ceiling value for these lax exempted items. 1 he excess of the value of these items over the ceiling value will be subject to First Registration Tax.

End

Refurbishment allowance for hotels set

*****

The Government proposes to introduce a specific allowance to enable hotels to deduct refurbishment expenditure over a five year period using an annual 20 per cent write-off.

The Financial Secretary, Mr Donald Tsang, said the cost of this proposal was estimated to be $2 million in 1996-97 and $100 million up to 1999-2000.

At present, such refurbishment expenditure is subject to a commercial rebuilding allowance of just two per cent, meaning that it can only be wrillen-off over 50 years.

"I recognise that, for a hotel, refurbishments have only a limited life before the hotel has to be renovated again to maintain quality and standards," Mr Tsang said.

End

47

Overall financial position 1996-97 *****

The Financial Secretary, Mr Donald Tsailg, expects that the Government will see a surplus in 1996-97 of $1.6 billion.

"This is lower than my predecessor forecast in his 1995 Budget. Nevertheless, as he predicted, we will have drawn on our reserves only in 1995-96 when our investment in the Airport Core Programme has been at a peak.

"In 1996-97. we will see a return to a surplus, albeit a very modest one." Mr Tsang said.

End

Healthy surpluses forecast

*****

The Financial Secretary. Mr Donald Lsang. envisages that the future Special Administrative Region (SAR) Government will enjoy substantial surpluses throughout the remainder of the Medium Range Forecast (MRF) period.

It will benefit from the retention of the full proceeds from land premia and the collection of rents from the extension of the New 1 erritories leases.

The Medium Range Forecast of revenue and expenditure over the next four years was published in the Financial Secretary's Budget Speech at the Legislative Council today (Wednesday).

Mr Tsang said the fiscal reserves at March 31. 1997. three months before the change of sovereignty, were expected to stand at a health) $150 billion.

In March 2000. total reserves including the SAR Government Land Fund arc forecast to be in excess of $365 billion.

In presenting these figures, the Financial Secretary pointed out that one of the probable calls on these funds would be the need for capital injections into the KCRC and perhaps the MTRC towards the cost of the priority railway development projects.

48

"At the present time, the precise cost, liming and mode of financing of these projects are uncertain. In the circumstances, I have made no allowance for any such payments in my Medium Range Forecast," he said.

Mr Tsang said the economic growth he was forecasting for the period up to March 2000, and the corresponding growth in the Government expenditure, will enable Hong Kong to go on enjoying the fruits of its success.

"These increases in our real expenditure and the benefits that they bring, can and will be funded from the Government's share of the wealth that our successful economy will generate," he added.

He emphasised that the MRF was a forecast only.

"It has been prepared to reassure ourselves that the proposals which I have put forward today are affordable both in the context of the next financial year and over the medium term.

"It does not impose any commitment on the future Special Administrative Region Government." he said.

End

East Asia to provide dynamism for economy *****

East Asia will provide the fresh dynamism for I long Kong's economy . the Financial Secretary, Mr Donald Tsang, said.

If our recent past, economically, has been impressive, the future "promises to be spectacular". Mr Tsang said.

The economic growth rate for the region over the past five years had been twice as high as the OECD average. Mr Tsang said.

East Asian growth rales are sei to out-perform the rest of the world well into the next century.

Mr Tsang added: "Even by the year 2000 in East Asia, average GDP per head is expected to reach US$5,200. compared with only US$2,500 in 1990."

49

Hong Kong’s economic growth would be derived from regional trade in goods and services.

"Our traditional markets will remain important to us. But it is East Asia that will provide the fresh dynamism for our economy," he said.

Hong Kong could take even greater pride in the economic progress made by China, "if we can take pride as part of the region in East Asia's progress".

Mr Tsang said: "China will continue to offer the prospects of high and sustainable rates of growth well into the next century. We, in Hong Kong, are part of China's past success and its future prospects."

China's Ninth Five-Year Plan, begun this year, acknowledged Hong Kong's special status and also provided encouraging indications of the areas in which Hong Kong could do most to contribute to the country's economic development, he said.

Mr Tsang said: "In making its contribution, Hong Kong will also benefit substantially."

End

Upgrade for protection of intellectual property rights laws *****

The Government shares the concerns of the international business community about the protection of intellectual property rights and its goal is to develop a modern and internationally-accepted framework to protect such rights, the Financial Secretary. Mr Donald Tsang, said.

Legislation on the protection of trade marks, patents, copyright and registered designs would be updated "to bring it into line with prevailing international standards".

The Secretary for Trade and Industry would introduce draft legislation to this effect by the end of this year. Mr Tsang said.

50

Enforcement against copyright piracy and trade marks counterfeiting would continue.

"We are setting up a new 24-strong team in the Intellectual Property Investigation Bureau of the Customs and Excise Department to strengthen intelligence-gathering, border operations and co-operation to hit hard at piracy and counterfeiting," said Mr Tsang.

End

User-friendly Government for business community *****

The Government can do more to help the business community in generating the wealth on which our future prosperity depends, the Financial Secretary, Mr Donald Tsang, said.

"We should set ourselves the task of making the Government, as far as possible, user-friendly for business," he added.

As a first step, all Policy Branches and their Departments which directly served the business community would be asked to carry out a high-level review of their current policies and practices. The goal will be to create an environment which is positively business-friendly.

Mr Tsang said: "This review will not be done in a vacuum. I expect Policy Branches and Departments to consult extensively with their customers and partners in the business world."

The Branches and Departments would be expected to identify opportunities to streamline existing services through new technology and process re-engineering; to eliminate any over-regulation and unnecessary bureaucracy; to transfer services to the business sector where market conditions make this possible; and to introduce new services which meet the needs of the business sector.

Efforts would not be confined to those parts of the Government directly involved in serving the business community, Mr Tsang said.

In response to concerns expressed by Legislative Council members, Mr Tsang said, the Branches and Departments would also be asked to review the process and costs associated with the provision of services for which the Government levied a fee or charge; and to use the improvements identified by these reviews as the basis for specific efficiency plans.

End

51

World-class infrastructure vital for economy *****

Hong Kong needs a world-class infrastructure in order to take the fullest advantage of the special opportunities which rapid Asian and Chinese economic growth will bring, the Financial Secretary, Mr Donald Tsang, said.

Hong Kong must equip itself with the skills and technological know-how to compete in the international market place, Mr Tsang added.

"But we must also develop our physical infrastructure - the railway, the port, the airport and the support services.

"Investments in our skills and our physical infrastructure make a very real contribution to our competitiveness," he said.

Hong Kong was moving forward with planning for the three rail links recommended in the Railway Development Strategy and the Government would allocate $15 million in 1996-97 to provide additional staff resources to the Transport Branch and related departments to handle the appraisal and planning work involved.

Mr Tsang said that since nearly 90 per cent of Hong Kong’s total trade went through the port, and demand was forecast to rise steadily, more container terminals would continue to be built to meet this higher demand.

"We shall need to have in place not only CT9 but also C 1’10 and the first berths of CT11 before the century is out," he said, adding that Hong Kong also must ensure that its airport was able to handle efficiently the increasing How of passengers and goods in and out of Hong Kong by air.

He noted that Hong Kong was on track to achieve the target opening date of April 1998 for the new airport at Chek Lap Kok and the Airport Authority, in conjunction with the Government, was looking further into the future and examining air traffic forecasts to determine the timing for developing the second runway at Chek Lap Kok.

These investments in the physical infrastructure, once completed, would make a contribution to every service and product that was sold. Mr Tsang said.

fhe same is true of our telecommunications and other support services.

52

"Our fully digitised telephone system and comprehensive optical fibre network are among the most advanced in the world," he said.

He noted that competition brought about through the deregulation of local fixed network services in July last year would bring investment of more than $32 billion over the next 10 years from new operators.

He said:"We shall continue to discuss with the Chinese side our proposal to license new mobile communications services to relieve congestion in the existing networks.

"We need to increase our capacity to meet the strong local demand for mobile phone services".

The Government would continue to pursue a pro-competition policy in telecommunications which had already reduced the real cost of domestic line rentals by 32 per cent over the last 10 years and of international calls by up to 75 per cent. Mr Tsang said.

End

No slip-up in language skills *****

The Financial Secretary. Mr Donald Tsang, said I long Kong would not be able to maintain its position as an international centre for trade and finance if it allowed its language skills to slip.

He said: "We need English for much of our international trade and financial services. We need Putonghua for our Chinese future."

The Education Commission Report No. 6 (ECR6) had made a convincing case on the urgent need to improve Hong Kong's language skills. Mr Tsang said.

Funds in the Draft Estimates of $14.2 million, rising to $29.1 million on a fullyear basis, had been earmarked for this purpose, and would enable the recruitment of some 100 native English-speaking teachers for the schools and the organisation of intensive English language courses for an additional 11.300 Secondary Six and Seven students.

53

ECR6 also made important recommendations on Putonghua education, including a provision of $10 million annually in recurrent expenses to enable the introduction of a new Putonghua curriculum in September 1998, covering all levels from Primary One to Secondary Five in schools, e

Mr Tsang also said Hong Kong must go on investing in education and in skills training and the Government and the private sector must work together.

Productivity per manufacturing worker has increased by 227 per cent over the last decade, according to Mr Tsang.

The Government was reviewing the New Technology Training Scheme under which employers could obtain matching giants for training their employees in new technology in local or overseas institutions.

A number of proposals were being considered, including raising the level of grants and widening the eligibility for application.

The object of this was to allow more people to receive training and to widen the range and level of skills to be covered by the Scheme, Mr Tsang said.

End

Support for manufacturing sector underlined *****

Hong Kong must support its manufacturing sector in its drive to compete in the high-value added and high-technology market of the next century, the Financial Secretary, Mr Donald Tsang, said.

"Our manufacturers have already relocated to Southern China the lower-skilled, lower value-added production operations.

' "The priority for manufacturing in the future must be to move further upmarket," Mr Tsang said.

Recognising this, Mr Tsang said, manufacturers were already devoting more attention to applied research and development, product design, prototypes, quality control and the sourcing of materials and components.

54

“These high-value processes are essentially creative in nature and technology-based.”

Hong Kong must also take full advantage of its strategic location.

Mr Tsang said: "China is much more than a low-cost production base. It contains a large pool of technological and research expertise which can make a major contribution to our own development."

The Government would encourage manufacturers to get into the business of applied research and development with enthusiasm, he said.

The Applied Research Council already operated two funding schemes which, in effect, were a form of venture capital fund.

More than a dozen projects were being supported through loans or equity investments for individual firms, Mr Tsang said.

More were being done to secure an advanced technology base, he said.

The Government had accepted the need for a science park and would proceed with final site selection and the design of appropriate institutional arrangements.

The case for developing a second industrial technology centre was also accepted and the Government was also about to begin planning for the fourth industrial estate.

The Government had also offered to help finance a private sector initiative to study the longer-term industrial development prospects and identify promoting new industries in Hong Kong.

Mr Tsang said: "The Government is moving forward on these initiatives. But I want to emphasise that industry must make the best case for these initiatives.

End

55

Task Force on Service Promotion *****

The Financial Secretary, Mr Donald Tsang, today (Wednesday) reported on progress made by the Task Force on Services Promotion which he set up in August last year.

"Markets and enterprise have already made Hong Kong a regional and global service centre in the premier league of service providers, and the challenge now is to compete and to rise within the premier league," he said in presenting his Budget to the Legislative Council.

"Standing still is simply not an option, and the Government will play its part in supporting the market momentum already created by the private sector."

He said the Government's aim had been to identify ways in which it could facilitate the success of the services sector.

"Our aim has not been, and never will be, to direct development, to 'pick winners' or to second-guess markets and entrepreneurs," he said.

"To ensure that the Task Force is kept close to business realities, I have set up an Ad Hoc Group with prominent business leaders, professionals and academics to provide us with their input.

"And to expand the range of outside views and contributions, a symposium will be organised jointly with the major trade and industrial associations on March 12 to discuss specific issues confronting the services sector."

Mr Tsang said among the Budget documents published today was the first concrete outcome from the Task Force's work. This new document, The Services Sector: Support and Promotion, set out:

* an eight-point "Framework for Action". This describes the strategic thrust of the Government's support for this sector;

* and 14 individual "Action Agendas”. They describe the current performance of key service sectors. They stale the Government's current commitments to them and outline the directions for future policy. They also set out the principal initiatives taken by the private sector and the major challenges that lie ahead.

5b

Mr Tsang gave examples of what the Framework for Action and the individual Action Agendas were proposing. He said:

* We must do more to promote our trade in services. The Trade Development Council has already done an outstanding job in promoting our visible trade. It has agreed to expand its work in promoting trade in services, particularly the exports of sendees. This will complement the work of the Trade Department and our ten economic and trade offices overseas in gaining market access under the multilateral trading regime for our service exporters.

* We must do more to promote inward investment in the services sector. The Industry Department is already very successful in attracting inward investment for the manufacturing sector. It will in future undertake a similar role for the services sector.

* We must do more to maintain Hong Kong's position as the premier tourist destination in the region. The Hong Kong Tourist Association has recently formulated a visitor and tourism strategy to help us achieve that in the increasingly competitive environment in which we operate. We will continue to give it support in this.

* The Export Credit Insurance Corporation has developed a range of facilities to support the services sector in its drive for new markets abroad. It will bring these vital sendees to the attention of the whole of the sector which has, so far, not made the fullest use of the Corporation's facilities.

* We must do more to support the small and medium enterprises employing less than 50 workers which make up the bulk of the sendees sector. We shall work with the private sector to formulate new initiatives to enhance productivity, upgrade management systems, identify financing options and make market information morfe accessible.

Mr Tsang said the Government needed to be very cautious in committing public funds to support what were essentially commercial projects.

There could be no question of feather-bedding business or bailing out failed enterprises. But there was a good case for providing financial support to specific projects which could make a general contribution to the competitiveness of the services sector.

57

There was already an Industrial Support Fund, and he believed the time has come to set up a parallel Services Support Fund with an initial allocation of $50 million.

There was also a good case for providing additional funds to the Hong Kong Tourist Association to help it implement the visitor and tourist strategy.

"I therefore propose to make a one-off grant of $50 million to the Association to set up a Tourism Development Fund for the purpose," said Mr Tsang.

End

Mortgage corporation for housing under study

*****

The Financial Secretary, Mr Donald Tsang, said today (Wednesday) that in housing finance there is a strong case for establishing a mortgage corporation.

Presenting his Budget in the Legislative Council, Mr Tsang said that improving the efficiency and reducing the risks in financial intermediation was one of the Government's core strategies in promoting the financial services sector.

He said a mortgage corporation would offer the following benefits:

* it will reduce the concentration and liquidity risks of mortgage lending

by banks;

* it will increase the availability of mortgage funds to home buyers and widen their choice of mortgage products; and

* it will issue high quality securities which help to improve the depth and the liquidity of the local debt market.

Mr Tsang said that while the establishment of a mortgage corporation in Hong Kong would be no simple task, the benefits of such an institution were large enough to warrant further, detailed study.

58

"We have engaged the Federal National Mortgage Association, the United States' largest and most profitable mortgage corporation, to assist us in studying the business and technical issues involved. The Hong Kong Monetary Authority will then prepare a detailed proposal for consultation with the banking community, capital market participants and other relevant parties.

"Subject to the outcome of the consultations, I would hope that preparatory work for the actual setting up of such a corporation could commence as soon as possible," he said.

End

Tax concessions in financial services *****

Two tax concessions to encourage the further development of financial services were announced by the Financial Secretary, Mr Donald Tsang, in his Budget speech in the Legislative Council today (Wednesday).

Firstly, he proposed that the interest income and trading profits derived from certain debt instruments be subject to a concessionary tax rate equivalent to 50 per cent of the normal Profits Tax rate.

"Instruments qualifying for this concession must be lodged with and cleared through the Hong Kong Monetary Authority, carry a suitable rating, have an original maturity of five years or more and a minimum denomination of $500,000.

"This concession should help to attract overseas issuers to Hong Kong, enlarge our debt market and enhance our competitiveness vis-a-vis other financial centres in the region," he said.

Secondly, Mr Tsang proposed to waive stamp duty for market makers on stock transactions for the purpose of hedging options transactions. This would help to increase trading volume, improve market liquidity and the quality of risk management, and reduce the underlying price volatility of stocks.

He estimated that these two measures would reduce revenue by $30 million in 1996-97 and $135 million up to 1999-2000. They would come into effect as soon as the necessary’ legislation had been put in place.

59

The Financial Secretary said he also intended to amend the Inland Revenue Ordinance to reflect existing.practice.

He would include a specific exemption for certain income derived from bona fide offshore funds managed in Hong Kong; and exclude stock brokers from potential profits tax liability in respect of share trading profits derived by non-resident investors for whom they acted as agents.

End

Contributing to business efficiency *****

The Financial Secretary, Mr Donald Tsang, said in his Budget Speech in the Legislative Council today (Wednesday) that he had outlined a package of measures in promoting services designed not simply to make the Government more businessfriendly but to tackle key areas where it could contribute directly to business efficiency.

"Members will find further details in the new Budget document to which I have already referred. I want to emphasise that this is not the end of our work. This document, and the Task Force's deliberations, should be taken as the first steps towards developing a policy support for the services sector, without neglecting manufacturing, well into the next century," he said.

End

Co-operation with Chinese side

*****

As previously envisaged, co-operation with the Chinese side will be strengthened in the preparation of the Budget for 1997-98 to ensure a smooth transition, the Financial Secretary, Mr Donald Tsang, said in the Legislative Council today (Wednesday).

Mr Tsang noted that last March his predecessor had outlined a four stage programme for consultation with China.

60

In essence, this programme involved , a steady intensification of work from a general background briefing in stage one, to the specific subject-related seminars in stage two, the detailed introduction of the budgetary cycle in stage three, and full consultation in the preparation of the 1997-98 Budget in stage four.

"An Expert Group has since been set up under the Sino-British Joint Liaison Group to carry this forward. This Expert Group has gone through the first three stages of the programme of work in a pragmatic and co-operative manner. We expect this to continue in the final stage of the programme," he said.

Mr Tsang said that this afternoon he had outlined a bold range of proposals, particularly for developing the manufacturing and service industries.

"In the near future, we shall consider these proposals in greater detail. In doing so, the views of Members of this Council and of the community as a whole will be invaluable.

"But obviously many of the proposals have financial implications beyond 1997. They will have to be considered and, if appropriate, carried forward by the future Hong Kong Special Administrative Region Government.

"As our consideration progresses, I will ask the Secretary for the Treasury to discuss those proposals having expenditure implications for the 1997-98 Budget in the Expert Group. I also stand ready to explain these proposals personally to the Chief Executive (Designate) as soon as he or she is appointed," he said.

End

Continuing the economic success story *****

The Financial Secretary, Mr Donald Tsang, told the Legislative Council today (Wednesday) that his aim in presenting the Budget had been to enable Hong Kong’s economic success story to continue well into the next century.

The people would be equipped with the skills they needed to go on improving their quality of life and building our community's prosperous future.

He said, "This future must include everyone. Economic success would enable us to provide the care, support and protection for those who needed it.

61

"We would be able:

* to help the elderly live active and full lives enjoying the dignity and respect that they deserve by, for example, providing more home help services, social centres, residential care and financial assistance;

to improve our health care facilities still further and promote an environment in which each member of the community has better control over his or her own health; and

to promote an integrated education system which enables students at all ages to develop their capabilities to the full and qualify at internationally recognised academic, professional and vocational standards to meet the changing needs of our economy."

"This is what real growth really means. The actual effect of improving the lives of people: their health, their living conditions, their education, their careers," Mr Tsang said.

"This real growth has been and will remain our most important objective. And the continual improvement in our standard of living and the constant upgrading of our public services will be funded from within Government's share of the additional wealth created. We will not increase that share and compete with the private sector for resources because, as Hong Kong continues with its success story, we will not need to. It is as simple as that."

Mr Tsang said Hong Kong people had much to do to build their prosperous future, and added: "Fortunately, we know what to do, and we know how to do it."

End

62

Remarkable transformation of the economy ♦ ♦ ♦ ♦ ♦

Hong Kong’s economy has undergone a remarkable transformation in the past two decades, and there has been a rapid expansion in the services sector, the Financial Secretary, Mr Donald Tsang, told the Legislative Council today (Wednesday).

By the end of 1995, the services sector had generated over 80 per cent of the territory's Gross Domestic Product (GDP), Mr Tsang said in presenting a document on ’The Services Sector - Support and Promotion" as part of his Budget.

He noted that even without the public sector, services still accounted for about 73 per cent of GDP.

Mr Tsang said there had also been a restructuring of the manufacturing industry, as firms moved their low value-added work out of Hong Kong and concentrated on high-value, technology-based markets.

This restructuring had given Hong Kong both the incentive and the resources to expand its role as a world-class services centre for the next century.

Under business leadership, market forces had driven this profound restructuring of the economy. What dictated the pace and direction of the transformation had been the response of business men and women to changing market conditions and the willingness of the business community to meet new challenges and to seize new opportunities.

At the same time, the business community had successfully secured the cooperation of the workforce in moving out of lower value-added manufacturing and into service and technology-based jobs. This combination of business enterprise and workforce co-operation explained why Hong Kong had accomplished the transformation so smoothly and so rapidly.

Mr Tsang said: "The Hong Kong Government understands very well that it is not its task to dictate business decisions or to second-guess markets. The Government's role is to keep bureaucratic interference to a minimum and to provide the maximum level of support for business consistent with Hong Kong's long-established and successful free market economic philosophy.

"What this means in practice is that the Government must ensure that its policies and programmes are as business-friendly as possible and that it does nothing to hinder enterprise and everything to promote it. The Government has a good track record in its support for manufacturing. But it has paid less attention to the services sector. The Government now needs to review its approach to the services sector to ensure that the right policies and programmes are in place to facilitate its growth and development."

63

He noted that in August last year, the Government had established a Task Force on Services Promotion. Its objective was to frame initiatives to ensure that the Hong Kong Government offered the policies and programmes necessary to support the territory’s continued success as a major global and regional sendees centre.

This exercise had involved a review of the impact of existing policies and programmes, as well as the identification of new approaches to help the services sector realise its full potential.

At the same time, the Task Force had encouraged the private sector to undertake a number of initiatives to reinforce Hong Kong’s long term competitiveness.

Mr Tsang said the document on "The Services Sector - Support and Promotion” described the preliminary results of the Task Force’s work. The Task Force had produced "Action Agendas" for 14 leading service industries. Each "Action Agenda" recorded the current standards of the industry’s performance. It sets out, where appropriate, key comparisons with the industry’s principal competitors overseas. It then summarised the Government’s existing level of commitment to the industry, as well as the Government’s goals and options for future action in support of the industry.

Finally, each "Action Agenda" identified the longer term issues which our community must tackle together.

Mr Tsang said there were two vital points about these "Action Agendas".

First, they act as a basis for dialogue between the Government and the services sector. They arc not the end of our work but the start of a closer relationship between the Government and business. The proposals they contain are intended for public discussion. The Task Force will refine and develop them in response to the reaction from the Legislative Council and the business community in particular.

Second, in updating our support for all sectors of business, the Government remains committed to market mechanisms and to competition. Its economic policies are intended to enable markets to work more efficiently and for Hong Kong businesses to compete more effectively.

64

Mr Tsang then went on to describe the vision, saying:

* Hong Kong is already well-established as one of the principal services centres both globally and in the Asia-Pacific region. The Government accepts the challenge of building on this success to ensure that Hong Kong strengthens its position as a provider of high-quality services to the rest ol the region and to the world.

* Hong Kong has a special role to play as an international business centre, in particular by providing world-class services to the Asia-Pacific region. The Government believes that Hong Kong's economic success in the next century will depend crucially upon the quality and the competitiveness of its service industries.

* Markets and private businesses have led Hong Kong's past success in the development of its services sector, and this must continue in the future. The Government believes that free markets, competition and enterprise best assure innovation, competitiveness and quality.

* Business leaders must determine the pace and direction of the future development of Hong Kong's services sector. The Government accepts a commitment to support the services sector by ensuring that official policies and programmes facilitate rather than hinder business decisions and by ensuring that the markets for services are as open and competitive as possible.

End

Eight key components in framework for action * * * ♦ ♦

The Government believes that its framework for supporting the services sector of the economy should be built around eight key components, the Financial Secretary. Mr Donald Tsang, said in presenting the budget document, " The Scrvi js Sector -Support and Promotion" in the Legislative Council today (Wednesday).

These key components described in the document were:

65

1. Promoting Exports

Sales and Marketing

The Trade Development Council's (TDC) success in the past three decades in promoting international trade in goods makes it the ideal vehicle for helping Hong Kong develop external markets for its services. The TDC will expand its work in promoting trade in services, particularly exports of sendees.

Market Access

Hong Kong will use its position as a member ol the World Trade Organisation to press for further liberalisation of trade in services, in conjunction with the business community, the Trade Department, together with the Hong Kong Economic and Trade Offices overseas, will identify and challenge restrictive practices which infringe the letter and spirit of the General Agreement on Trade in Services.

Export Credit Insurance

Export credit insurance facilities help Hong Kong's exporters reduce the risks involved in selling to markets overseas. Because such facilities are not usually provided by private insurers, the Export Credit Insurance Corporation (EC1C) has been providing this support to exporters for the past three decades. EC1C will tailor its facilities to meet the particular needs of exporters of sen ices and market its facilities more vigorously.

2. Promoting Inward Investment

The Industry Department has been encouraging inward investment in manufacturing for 23 years very successfully. It is well placed to build on this important work in support of the services sector. I he Industry Department, in conjunction with its seven overseas Industrial Promotion Units, will expand its role to provide advice and assistance to potential investors in Hong Kong's services sector.

3. Hong Kong as an International Financial Centre

The Government will continue to support the private sector in its drive to make Hong Kong the region's leading financial centre. This will mean encouraging the private sector in the development of new financial products and the provision of new services while, al the same time, maintaining the highest prudential and regulatory standards. The aim is to provide an open, fair and reliable operating environment in which Hong Kong's financial services and businesses can compete and flourish.

66

4. Enhancing Productivity

Supporting Productivity Growth

The services sector recognises that the key to improved competitiveness and profitability is higher productivity through innovation. To be successful. I long Kong's service providers must be able to offer their customers the right products at the right prices. The Government will continue to assist the services sector, particularly small and medium firms, to improve their productivity through organisations such as the Hong Kong Productivity Council, the Hong Kong Article Numbering Association, the Hong Kong Management Association and the Hong Kong Information Technology Federation. The principal objectives will be to promote more extensive use of information technology, human resources development and quality management.

A Services Support Fund

Innovation in new technologies must be led by the private sector. However, government incentives may be justified where the gains from technology transfer to the whole economy exceed the benefits which an individual firm by itself can expect from adopting the new technology, fhe launch of the Industrial Support Fund in 1994 signified the Government's commitment to providing additional resources to support the development and application of new technologies in manufacturing industry. The Government will seek to establish a Services Support Fund of $50 million to provide funding support for projects which will benefit the further development, and increase the competitiveness, of Hong Kong's service industries.

A Small and Medium Enterprises Committee

Throughout most of Hong Kong's services sector, small and medium enterprises (SMEs) employing fewer than 50 people make up 90 per cent of the firms involved. Hong Kong owes much of its success to the flexibility and agility of these SMEs. Yet their size may make it difficult for them to take advantage of the latest productivity enhancement techniques and management systems. They may also experience difficulties in obtaining finance and access to market information. An SMI’s Committee, serviced by the Industry Department and drawing its membership from chambers of commerce and various trade and industry support organisations, will be established by August 1996 to address these and other issues of concern to SMEs. The Committee will cover SME issues relating to both services and manufacturing.

- 67 -

5. An Infrastructure of Support

Upgrading Our Infrastructure

Improvements to the infrastructure arc important to the development of Hong Kong as a regional services centre. Telecommunications, the port and airport, and domestic transportation facilities arc some of the most obvious examples of the way in which infrastructure development supports the services sector of the economy. As the principal provider of Hong Kong’s infrastructure, the Government will continue to review the requirements of the community and the economy to ensure that the necessary investments are made to provide I long Kong with the high-quality infrastructure it needs to compete successfully. We arc determined to invest in new railway projects, provide a financial services complex and launch the Electronic Data Interchange system.

Fair Competition

Keen domestic and international competition provides the best incentive for our service industries to innovate and improve their productivity. The Government will maintain a level playing Held and an open market in services by removing rules and regulations in any of our service industries which may restrict market entry or reduce competition. A review of market transparency will be undertaken in 1996. in accordance with Hong Kong's commitment under the Bogor Declaration.

The Environment

No effort to promote Hong Kong as a services centre would succeed if the territory is perceived locally and internationally as a polluted and environmentally unfriendly place. The Government will continue with its investments in environmental infrastructure and legislative measures aimed at improving Hong Kong's environment. We shall also lay the foundations to achieve sustainable development to take us into the next century.

A Culture of Service and Quality

A service culture and a commitment to quality are essential if our services sector firms are to compete successfully. Most services depend for delivery on their front-line staff. It is essential that Hong Kong continues to develop its service culture and its commitment to quality through improved personnel policies and training. In conjunction with the private sector, the Government will ensure that ample training will be provided for the front-line staff. The Government also intends to work with private sector organisations, such as the Retail Management Association, to provide more extensive awards to recognise courtesy and excellence in the delivery of service, and to promote a service culture.

68

Business Facilitation

The Government should not usurp business's role in making and implementing business decisions. But the Government can play an important supporting role by fostering an attitude change within its Policy Branches and Departments. Civil servants should not see their role merely as regulators but more as supporters and partners for business. The key areas in which initiatives could be taken to achieve this goal include ensuring transparency in the content and enforcement of existing rules and regulations, more user-friendly immigration procedures and the inclusion of specific commitments to facilitate business in the Government's Performance Pledges.

Better and More Service Statistics

Statistics provide both the Government and the business community with vital information needed to make day-to-day decisions. A considerable range of statistical information on services is currently available covering areas such as trade and inward investment in services. However, new and more detailed statistics on service products, sector operating characteristics, outward investment and service productivity would also be valuable. I Tie Census and Statistics Department has been asked to assess the options for improving the available statistics without imposing heavy additional reporting burdens on business.

6. Investing in Education and Training

Meeting Today 's Needs

We are committed to giving greater emphasis in the school curriculum to those areas that are important to the practical needs of the service industries. The Curriculum Development Council includes members from the academic and business sectors and keeps the school curriculum under constant review to ensure it meets the changing needs of the service-led economy. As a result of the Council's continuing efforts. Travel and I ourism has recently been included in the school curriculum. The Council intends to include Electronics next year. We have commenced a review of* the curriculum for prc-vocational schools, and are about to commence a review of how we provide vocational education and training. We expect to complete the reviews by mid-1996. The recommendations arising from the reviews should point the way forward for a longer term strategy which will take full account of the needs of our service industries.

69

Language Proficiency

Language proficiency is probably the area .of our education provision which requires the most urgent attention. If Hong Kong is to continue to succeed as an international financial and services centre, good standards must be attained both in English, the international language of trade, and in Chinese, the mother tongue of the bulk of the population. The Education Commission has set out detailed proposals on how to enhance language proficiency in its sixth report. Following the current public consultation, the agreed recommendations should be implemented expeditiously. Funds have already been earmarked for the implementation in 1996-97 of the more important recommendations including the early establishment of the Standing Committee on Language Education and Research (SCOLAR), the employment of an additional 100 native English-speaking school teachers, the extension of the Intensive English Language Programme to some 11 000 Secondary Six and Secondary Seven students as well as the enhancement of Putonghua teaching and learning in our schools. This will include the development of a new Putonghua curriculum for Primary One to Secondary Five for use in 1998. Funds are also being sought from the Language Fund to enable the extension of the reading and writing schemes to cover Primary One to Secondary Five in our schools, the launching of research projects by SCOLAR as well as the establishment of a new Language Resource Centre for our teachers.

A New Technology Training Scheme for Services

I he New Technology Training Scheme (N I I S), currently administered by the Vocational braining Council, provides assistance for employers to train their staff, either locally or overseas, in new technologies which are important to the industrial and economic development of I long Kong. At present, the Scheme does not systematically cover training for employees in service industries. I he scope of N I I S will be reviewed to see how best it could be adapted to enable employees in the services sector to be trained in the latest technologies and management techniques.

7. Getting out the Message

Ihe initiatives described above will be supported internationally by a comprehensive programme to promote Hong Kong’s strengths as a global and regional services centre. I he Government Information Services, supported by the network of overseas Economic and Trade Offices and business community, will lead efforts to promote Hong Kong as a business centre committed to providing first-class services. In the next 12 months, there will be five promotion campaigns in six countries.

70

8. The Organisation of Government Support

The Government is considering whether a permanent institution should be established within the Government Secretariat to co-ordinate and monitor the progress of these services-rclatcd initiatives. The views of the private sector w ill pla\ an important part in this decision

End

Financial Secretary's TV Broadcast *****

Following is the lull text of the Financial Secretary. Mr Donald 1 sang's IV Broadcast today (Wednesday):

Good Evening.

This afternoon, I presented tny first Budget to the Legislative Council. It was naturally a great honour for me, as the first local Financial Secretary, to present a Budget to the first fully elected legislature.

But of course the Budget is not just the work of one person. Nor does it reflect the thinking of only one individual. It represents the efforts of many people in the Flong Kong Government and the Legislative Council. And it sums up the philosophy of the entire Administration and. indeed, the whole 1 long Kong community.

What is it that we arc telling the world about ourselves?

Well, the first thing we're saying is that I long Kong lives within its means. We will have a small deficit this year as we expected, because we are investing so much in the new airport. But next year, we'll be back in the black as usual. Hong Kong pays its way.

But balancing the books doesn't mean we can't spend more. On the contrary, because we've been so careful with public finances, we've kept the economy growing. And that means new wealth is being created to pay for new services. An extra $300 million for the Employees Retraining Board. An enhanced CSSA package costing $500 million. Plus many other improvements to our social services. So once again, the lion's share of the extra money has gone to help the elderly and those unable to help themselves. I long Kong has a heart.

71

And what have we done on taxes? Well, we've made some improvements, but we have not changed the fundamentals at all. There are some minor increases in fuel and tobacco duties to keep up with inflation. And Air Passenger Departure l ax will be back up to $100. But none of this should affect the ordinary citizen very much.

On the concession side, once again we've been able to be generous with increases in personal allowances well above the rale ol inflation. Some 95% of salaries taxpayers will benefit from these changes. We have cut stamp duty to help home buyers. Also some fine tuning of profits tax to keep us competitive as one of the world's top financial centres. We have also helped the hotel industry. We have introduced incentives to get old cars off the road and reduce air pollution. Apart from that, it's very much a case of steady as she goes. Wherever 1 go in the world, people always tell me how much they admire our tax system: low. simple, predictable. I think the lesson for us is clear. When you've got it right, don't linker.

There was one more message that I wanted to pul across this afternoon. That is, a message about Hong Kong's future. I've tried to look ahead over the next five years and into the next century. And I've tried to lay the groundwork so that our economy continues to grow and we can continue to thrive. I hat means recognising the changes that have already taken place in our economy, and will continue to take place. Then preparing ourselves, both institutionally and as individuals, to make the most of the opportunities that lie ahead.

I announced plans for a science park, and other measures to upgrade our manufacturing industry. 1 also put forward a whole series of initiatives to support our service industries. And I gave priority - and provided cash - to upgrade our human skills in such areas as languages. So that we Hong Kong people will be ready for the new employment opportunities that await us.

And. of course, underlying that message is another one: we I long Kong people are looking to the future calmly, with confidence and with determination. Great changes, great challenges lie ahead. But we are ready to lace them.

Thank you. and good night.

End

72

Quotable quotes in the Budget Speech 1996 *****

Following are some ol the quotable quotes in the Budget Speech 1996 delivered by the Financial Secretary, the Hon Donald Tsang, in the Legislative Council today (Wednesday):

INTRODUCTION

*"The fact that 1, like all the Members of this Council, am very much part ol this community gives the Budget special meaning and gives all of us a special responsibility." (Para 2)

"The Budget accounts for our stewardship of Hong Kong’s economic and social affairs, addresses the concerns of the community, and discharges our duty ol leadership by offering a clear vision" (Para 3)

"I want to make it easier for the community to get at the facts, the assumptions and the policy proposals which the Budget contains." (Para 6)

HONG KONG PAST

A Tradition of Success

"Entrepreneurs and markets, and not f inancial Secretaries, must lead economic change." (Para 7)

”We arc now prosperous not only by the standards ol our own past but prosperous by the standards of the developed world." (Para 8)

"In the past ten years, we have built about 400.000 new public housing units. The proportion of the relevant age group studying for degrees has risen from four per cent to 18 per cent. Life expectancy at birth has increased by two full years, making our life expectancy rates among the longest in the world." (Para 10)

The Government’s Contribution

"We might describe the Hong Kong model most simply as a commitment to markets and enterprise" (Para 12)

73

1995 Performance

The Residential Property Market

"The property market has stabilised. By the end of 1995. average prices for residential flats were 24 per cent lower than the peak levels reached in the early part of 1994. They were lower in real terms than three years earlier." (Para 19)

Financial Markets

"Hong Kong’s stock market was the best performing in the region in 1995. with a 23 per cent increase in the Hang Seng Index for the year." (Para 20)

"Our commitment to the linked exchange rate at its current parity is absolute." (Para 21)

"We have both the expertise and the resources that we need to defeat speculators against our currency." (Para 21)

The Exchange Fund

"The Administration is committed to openness and transparency in the operations of the Exchange Fund." (Para 22)

"The foreign exchange assets in our Exchange Fund now stand at US$57 billion." (Para 22)

HONG KONG PRESENT

1996-97 Prospects

1996 Forecasts

"I expect inflation to ease appreciably in 1996 to an annual rate of 7.5 per cent." (Para 28)

"On current indications it seems unlikely that the unemployment rate will revert quickly to the very low levels to which we are more accustomed." (Para 28)

74

The Trading Environment

"The general external environment for our trade looks favourable in 1996." (Para 29)

The Domestic Economy

"The business prospects also look favourable." (Para 31)

"Consumer sentiment is expected to turn better following the rebound in both the stock and the property markets. This will be helped further by the recent easing in interest rates." (Para 31)

Social Concerns

"The Budget makes provision for funding all the measures announced by the Governor in his Address in October 1995. Where possible. 1 shall be proposing that we go even further." (Para 32)

Getting People Back to Work

"I propose to inject another $300 million into the Employees Retraining Board." (Para 33)

Safety Net

"We will provide additional improvements to the CSSA Scheme which will cost an extra $200 million a year on top of the $300 million pledged by the Governor." (Para 36)

Care for the Elderly

"This year, we have provided $9 billion both on financial assistance and on health and welfare services for the elderly. This represents an increase of 50 per cent in real terms over 1992. Next year, expenditure on welfare services for the elderly will increase by 17 per cent." (Para 39)

"We have doubled the number of Home Help teams for the elderly over the past six years. Next year, we will increase the total number to 126 teams enabling us to serve about 12.000 elderly people." (Para 40)

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"Our programmes for the elderly have been guided by a clear-sighted strategy.". (Para 43)

"The Working Group on Care for the Elderly made a total of 71 recommendations. We have funded, and we are implementing, every single one of these recommendations." (Para 43)

"We are in fortunate position of being able to make all the improvements to our social welfare, health and educational programmes without breaching our budgetary guidelines. Indeed if there had been any danger of breaking our guidelines because of these improvements, we would not have made them." (Para 45)

Revenue Proposals

Living within Our Means

"To engineer an increase of one percentage point in GDP. we would have to slash taxes by over ten percentage points." (Para 49)

"We do better - far. far better - in the long run to stick with our tried and tested formula of living within our means and keeping taxes low and predictable." (Para 49)

Fees and Charges

"I can see no case for taxpayers subsidising commercial activities. The userpays principle is an integral part of our system of public finances." (Para 50)

"Short-term gestures made at the taxpayers' expense would only jeopardise the fundamentals of our public finances." (Para 50)

The Reserves

"This is not the time, with all its inherent uncertainties, to reduce the cushion of healthy reserves that Hong Kong at present enjoys." (Para 51)

"Wc need to preserve the reserves for 'torrential downpours not the mild showers' "(Para 51)

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Areas of No Change

Tax Relief for Housing-Related Expenditure

"There would be serious difficulties in defining first-time home buyers without creating the potential for widespread abuse." (Para 57)

Profits Tax

"A recent survey of senior executives in 16 industries found that 93 per cent of them are happy with our current corporate profits tax arrangements." (Para 58)

Tax Concessions

Salaries Tax

"I am proposing a wide range of concessions on personal taxation." (Para 73)

"1 propose to introduce a new allowance of $24,500 for a taxpayer maintaining a brother or sister." (Para 74)

"I propose to introduce a specific deduction to allow taxpayers to claim as a deductible expense fees for training courses up to a maximum of $12,000 a year." (Para 74) .

Stamp Duty on Property Transactions

"1 propose to reduce the impact of Stamp Duty in a manner which will directly benefit buyers of lower and medium-value flats with property values of up to $3.5 million." (Para 78)

Refurbishment allowance for Hotels

"I propose the introduction of a specific allowance to enable hotels to deduct refurbishment expenditure over a five year period" (Para 82)

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HONG KONG FUTURE

Economic Prospects

East Asia

"How could we, as part of Asia, feel anything other than pride at the spectacular success of our region over the past two decades." (Para 92)

Economic Developments in China

"If we can take pride as part of the region in East Asia’s progress, Hong Kong can take even greater pride in the economic progress made by China." (Para 93)

A Modern Business Environment

"We must get right the blend of commercial freedom and regulation which encourages rather than stifles enterprise and innovation." (Para 94)

A Business-Friendly Government

"We should set ourselves the task of making the Government user-friendly for business." (Para 97)

A World-Class Infrastructure

"We must equip ourselves with the skills and technological know-how to compete in the international market place." (Para 103)

Telecommunications

"Our fully digitised telephone system and comprehensive optical fibre network are among the most advanced in the world." (Para 105)

"The Government will continue to pursue a pro-competition policy in telecommunications" (Para 105)

Language Skills

"Hong Kong will not be able to maintain its position as an international centre for trade and finance if it allows its language skills to slip." (Para 107)

78

Manufacturing

"We have to support our manufacturing sector in its drive to compete in the high-value added and high-technology market place of the next century." (Para 110)

"China is much more than a low-cost production base. It contains a large pool of technological and research expertise which can make a major contribution to Hong Kong’s development." (Para 110)

Services

A Task Force on Services Promotion

"Our aim has not been, and never will be, to direct development, to "pick winners” or to second-guess markets and entrepreneurs." (Para 114)

"There can be no question of feather-bedding business or bailing out failed enterprises". (Para 117)

A Mortgage Corporation

"There is a strong case for establishing a mortgage corporation which will offer the many benefits" (Para 118)

CONSULTATIONS WITH CHINA

"We will strengthen co-operation with the Chinese side in the preparation of the Budget for 1997-98 to ensure a smooth transition." (Para 123)

CONCLUSION

"My vision is to meet the community’s expectations for Hong Kong as a premier centre for international trade, manufacturing and services in the region. For this I have mapped out an ambitious strategy." (Para 130)

"In presenting this Budget, my aim, has been to enable our economic success story to continue well into the next century." (Para 133)

"Economic success will enable us to provide the care, support and protection for those who need it." (Para 133)

End

19

Government’s public transport policy reiterated

*****

The Secretary for Transport, Mr Haider Barma, today (Wednesday) reiterated that the Government's fundamental policy on public transport was that all such services should be provided by the private sector without any subsidy.

Speaking at Legislative Council on a resolution relating to Star Ferry fare adjustments, Mr Barma said this formula had served the territory well and Hong Kong risked changing this at the community's peril.

He said the accounts had now been audited and verified that Star Ferry had suffered a loss of $4.79 million last year and therefore, to be realistic and pragmatic, the very modest fare increase sought was fully justified.

End

Ferry Services Order *****

Following is the speech by the Secretary for Transport, Mr Haider Barma, in the motion debate on the Ferry Services (The ’’Star" Ferry Company, Limited) (Determination of Fares) (Amendment) Order 1996 in the Legislative Council today (Wednesday):

Mr President,

Some Members of this Council seem to enjoy the merry-go-round. Virtually every time when proposals to revise fees and charges are tabled in this Council or when applications are submitted by public transport operators to increase their fares we have to box and cox. The Administration does not begrudge Honourable Members the right to examine and scrutinise such proposals - indeed, it is because we fully recognise this to be a legitimate discharge of their responsibilities that we in turn do our best to provide all the information that is necessary and that can be made available to facilitate the process. However, after all the facts and figures have been provided and it has been clearly demonstrated that a public transport operator needs a fare increase because the company would otherwise sustain a loss, the stubborn adherence to indefensible principles on the part of some political parties and Members, and their continued attempts to frustrate fare adjustments is beyond comprehension and certainly not in the wider public interest. This scenario applies to the Motion now before the Council pertaining to the Star Ferry Company Limited.

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I fully share the Honourable Paul Cheng's views on the dangers of politicising such cases.

Mr President, the Administration's fundamental policy on public transport is that all such services should be provided by the private sector without any subsidy. This formula has served Hong Kong well and we risk changing this at our peril. There have been many debates on this subject. The arguments and counter-arguments have been rehearsed over and over again and are well documented in the Hansard. Likewise Members are fully aware of the consultative process and the criteria which the Administration has adopted in processing applications for fare increases. There is no need for me to reiterate these points again to-day. Instead, let me focus on the basic facts pertaining to the present application from Star Ferry.

At this juncture, let me particularly thanks the Honourable Miriam Lau and the Honourable Chan Kam-lam for so clearly expressing the views of the Liberal party and the DAB respectively and so convincingly demonstrating why the fare increase sought is totally justify.

Let me now trying to echo some of these points and explain why the Government likewise believes that the Star Ferry application merit full support.

First, the Company's undertaking - its commitment not to seek another fare increase in 1995 was subject to the caveat that its profits would remain at more or less the same level as then forecast. As the Honourable Selina Chow and the Honourable Miriam Lau have pointed out, there can be no misunderstanding since it was explicitly stated in the Star Ferry’s letter dated 7 December 1994 to which had been circulate to Members of this Council. Although the Company's forecast of its financial performance has not been accurate, the actual position to-day is that its audited accounts show that it made but a very small profit in 1994 but incurred a loss of $4.79 million in 1995. The Company has not therefore reneged on any promise in seeking an adjustment in fares now.

Second, the amount of the fare increase - although this appears to be excessive in percentage terms, the real impact is better described and understood in monetary sums. About 90% of the 96,000 daily passengers will pay but 20 to 30 cents extra per trip. This is minimal and affordable. Senior citizens, comprising 6% of Star Ferry's commuters, will continue to enjoy free rides. It is also worth pointing out that there has been no protest from commuters and no adverse editorial comment on the proposed fare increase. Indeed, even with this increase, Star Ferry will still provide the cheapest public transport mode for cross-harbour services. I am glad that the survey undertaken by the DAB and I thank them for their initiative as re-confirm the public acceptability for the fare increase now sought.

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Third, Star Ferry's performance - the Company has consistently provided a high level of services, in terms of both adequacy and quality. Its ferries are clean and comfortable, and certainly good value for money. This is borne out by the fact that in the calendar year 1995, there were only three complaints.

Fourth, the Star Ferry's own efforts to economise - the Company has made conscious efforts to keep operating costs down. These include a bridge control automation programme completed in 1994 and special training for its coxswains on measures to safeguard the fender system, resulting in cost savings of $4 million per year. This clearly demonstrates Star Ferry's willingness to cut costs whilst striving to maintain quality services to commuters. Unfortunately, even with such internal economy measures, total costs have still gone up. necessitating a fare rise.

Fifth, a pier development package - Some Members have asked why not grant Star Ferry pier development rights to help redress the situation, particularly since there is already a precedent vis a vis the Hong Kong and Yaumati Ferry Company (HYF). The answer is that we are not comparing like with like. In Star Ferry's case modest adjustments in fares at regular intervals would suffice but not so for HYF which requires a substantial injection of funds to make their services viable and even then they would require annual fare increases in line with inflation. In short, a transport justification to support a pier development package for Star Ferry' has not been established.

Several honourable members have suggested that the Government should be more pro-active in supporting ferry services, for example, by taking on some responsibility for pier maintenance. I shall certainly follow this up. I also look forward to the motion debate on the review of long term ferry policy which I understand the Honourable Miriam has given notice to propose. This would provide an opportunity for a further exchange of views.

Mr President, Star Ferry's submission has been vetted very meticulously by the Sub-Committee chaired by the Hon Selina Chow. May I record the Administration's appreciation to her and all Members for their time and interest. Not surprisingly, and possibly because of the predetermined stance on the part of the Democrats and the ADPL to deny any fare increase, an unanimous view could not be reached.

May I add a personal observation on this point: I am surprise that the Honourable Zachary Wong has attempted to criticised the DAB for changing their minds. In fact credit is due to them for their preparedness in analysing the facts and coming to the right decision. Mr President, we have to be realistic and pragmatic. The very modest fare increase sought by the Star Ferry is fully justify. I urge honourable members to vote against both resolutions.

End

82

Minor Employment Claims Adjudication Board Rules

*****

Following is the speech by the Secretary for Education and Manpower, Mr Joseph Wong, in the motion debate on the Interpretation and General Clauses Ordinance to repeal the Minor Employment Claims Adjudication Board (Fees) (Amendment) Rules 1996 in the Legislative Council today (Wednesday):

Mr President,

The Minor Employment Claims Adjudication Board (MECAB) was established in December 1994. It provides a quick and inexpensive service for the adjudication of minor employment claims involving five or less claimants for a sum of money not exceeding $5,000 per claimant. As at 29 February 1996 it has adjudicated 1,890 cases.

The MECAB (Fees) Rules specify the fees payable for the proceedings taken in MECAB. The fees have not been revised since their introduction.

As a matter of principle, all fees are subject to regular review. On 7 February 1996 we tabled in the Legislative Council the MECAB (Fees) (Amendment) Rules 1996 which proposes to raise the fees by 10%.

We estimate that the existing fees, ranging from $5 to $50, only recover a very small portion of the total cost. The effect of the proposed fee increases, which range from 50 cents to $5, does no more than to maintain the real value of the existing fees.

What I want to emphasis is Section 3 of MECAB (Fees) Rules provides that the Registrar may reduce, remit or defer payment of the fees. An applicant may apply for waiver of fees on ground of financial difficulty. So far, no such application has been received.

The proposed fee increases will not affect the livelihood of the general public and will not have the slightest impact on inflation.

1 urge members to oppose the motion.

Thank you.

End

83

Collapse of footbridge in Tseung Kwan O * * * * *

Following is a question by the Hon Lo Suk-ching and a written reply by the acting Secretary for Works, Mr Lee Shing-see, in the Legislative Council today (Wednesday):

Question:

Following the collapse of a footbridge under construction off Hau Tak Estate, it is learnt that the building contractor of the project has been awarded many Government projects in the Tseung Kwan O area. In this connection, will the Government inform this Council:

(a) of the number of Government and Housing Authority projects undertaken by the contractor and his subsidiaries (including those relating to the construction of public housing and home ownership scheme estates) in which accidents have occurred in the past three years;

(b) whether the Government has taken into account the past performance records of contractors, particularly in regard to safety records, before awarding a contract; if so, whether the Government will consider reexamining the other projects undertaken by the contractor concerned if an accident which has occurred in a project is found to have been caused by human negligence on the part of the contractor;

(c) whether, in the light of the report that the accident mentioned above has been caused by the temporary props developing problems in the course of the construction of the bridge, the Government has laid down a set of safety standards for inspecting such temporary props, and whether such props can only be used after they have been inspected by the Government before the commencement of each project; and

(d) whether the Government will consider suspending all similar projects temporarily until the cause of the accident is know'n?

Reply:

Mr President,

My answer to the respective parts of the question is as follows:

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(a) Wan Hin & Co. Ltd has undertaken 11 Public Works Contracts and 9 Housing Authority Contracts in the past 3 years. Of these, there were 1 (the recent one in Tseung Kwan O) fatal accident in the former and 2 in the latter.

(b) The past performance of the lowest three tenderers are assessed in detail before tender recommendations are made. One important aspect of the tenderers’ performance is their safety performance in previous contracts. Tenderers’ site safety convictions under the Factory & Industrial Safety Regulations will also be considered before recommending award of contract.

Where the cause of a major accident can be clearly identified it is our practice to make the circumstances known to all works departments, the Housing Authority and other agencies who are or may be responsible for similar contracts.

(c) The exact cause of the accident has yet to be identified and investigation is being actively undertaken by the Police and the Labour Department with assistance from the Territory Development Department. In order to ensure temporary works such as supporting props are properly designed and constructed, the contractor is required under the contract to engage a professionally qualified independent checking engineer to check and certify the different stages of the design and construction of the temporary works. Accordingly, the contractor has to ensure that all temporary works throughout all construction stages are constructed in accordance with the certified design.

(d) The in-situ casting of concrete decks and beams above carriageways in use has been used successfully in previous projects in particular where circumstances have been against the use of pre-casting within a reasonable distance or in view of undesirable closure of busy roads during the erection of the precast beams. Following the tragic accident at Tseung Kwan O we have advised Departments with projects involving works over roads to be especially vigilant. However there are currently no project with casting the beams in-situ above their final position similar to Tseung Kwan O and were any to arise we would re-assess the methodology in the light of this accident.

End

85

Orderly repatriation of VMs

*****

Following is a question by the Hon Cheng Yiu-tong and a written reply by the acting Secretary for Security, Mrs Carrie Yau, in the Legislative Council today (Wednesday):

Question:

As a result of the implementation of the policy of orderly repatriation of Vietnamese migrants (VMs) by the Government, the number of VMs stranded in the territory has been decreasing and Vietnamese detention centres will be closed down gradually. This will have an impact on the staff of the Correctional Services Department (CSD) responsible for taking charge of these VMs. In this connection, will the Government inform this Council:

(a) of the number of CSD staff presently serving in the Vietnamese Unit,

(b) what arrangements will be made by CSD for the staff of the Vietnamese Unit upon the closing down of all Vietnamese detention centres; whether these staff can be regarded as regular staff, and if so, how many have been regarded as regular staff to date, and

(c) whether the existing staff of the Vietnamese Unit who wish to be regraded as regular staff are required to re-apply and undergo the same recruitment process as other new applicants; if so, what are the reasons for such an arrangement, and whether the Government will revise the existing arrangement so as to facilitate the regrading of these staff as regular staff?

Reply:

Mr President,

(a) At present, the CSD has a total strength of 903 staff serving in the Vietnamese Migrants Division. The Division comprises 614 regular disciplined staff, 4 Common Grades staff, 42 General Grades staff, 226 VM staff (employed specifically to man Vietnamese Migrant Detention Centres) and 17 technical grades staff.

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(b) With the gradual closure of the VM camps, the service of most of the staff in VM camps will no longer be required. The regular staff and the Common Grades staff will be posted back to penal institutions to fill existing and anticipated vacancies. The General Grades staff will either be absorbed by the CSD or returned to the central government. The VM staff and the technical grades staff will be absorbed by the CSD as far as possible. Those who wish to continue working in the Civil Service will be helped to find job placements; they will be given priority for appointment if they are found suitable to fill the vacancies. Those who do not wish to work in the Civil Service will be offered retirement on abolition-of-office terms. The staff have been fully briefed on these arrangements.

To reduce the number of surplus staff, the CSD has been actively recruiting VM staff to join the regular stream, subject to their willingness and suitability. Over the years, a total of 171 VM staff have been appointed to similar ranks in the regular stream. Efforts to encourage the rest of the VM staff to apply to switch will continue.

(c) In line with the normal practice in the Civil Service, VM staff who wish to apply to work in the regular stream will follow the same basic application procedure as for new recruits. If they fulfil the basic entry-requirements and are found suitable by the Department, we will accept them readily. We have examined the transfer arrangements carefully. There is no need to change the existing arrangements given the ongoing successful transfer of a large number of VM staff to the regular stream.

End

Escape of prisoners

*****

Following is a question by the Hon James To Kun-sun and a written reply by the acting Secretary for Security, Mrs Carrie Yau, in the Legislative Council today (Wednesday):

Question:

In regard to the escape of prisoners from correctional institutions, will the Government inform this Council of:

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(a) the number of prisoners who have successfully escaped from each correctional institution in the past three years (irrespective of whether they have been recaptured afterwards);

(b) the number of escapees who have been recaptured in the same period;

(c) the average term of imprisonment served by these escapees and the average remaining length of sentence yet to be served when they made their escape; and

(d) the major reasons for prisoners escaping from correctional institutions as known to the Correctional Services Department?

Reply:

Mr President,

(a) Over the past three years, 14 prisoners have escaped, including two Training Centre (Cape Collinson) inmates. The table below shows the breakdown by institution:

. Number of

Institution escaped prisoners

1222 1924 1925

Medium Security

Hei Ling Chau Correctional Institution 1

Ma Po Ping Prison 3

Minimum Security

Cape Collinson Correctional Institution 2

Lai Sun Correctional Institution 3 ' 2

Pik Uk Prison 3

Total 2 4 8

(b) Of these 14 persons, 12 have been recaptured.

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(c) The terms of sentence of the two Training Centre inmates were not fixed: they should serve a period of no less than six months, but no more than 36 months, depending on their performance in the course of their training. The 12 prisoners, who were given fixed sentences, were serving 22 months on average.

In respect of the two Training Centre inmates, the average remaining length of sentence was no more than 29 months. The average remaining sentence of the 12 prisoners was 10 months.

(d) The main reasons given by the recaptured prisoners were that they felt homesick or they claimed they had to take care of important personal matters outside the institution.

End

Categorisation of land in NT

*****

Following is a question by the Hon Lau Wong-fat and a written reply by the Secretary for Planning, Environment and Lands, Mr Bowen Leung, in the Legislative Council today (Wednesday):

Question:

For historical reasons, land in the New Territories is divided into different categories, such as those which are commonly known as "old scheduled building lot", "old scheduled lot", "agricultural lot", etc. In this connection, will the Government inform this Council:

(a) how many categories is land in the New Territories divided into; and ’ what were the respective dates for the commencement and completion of the categorisation process;

(b) of the rationale for dividing land into such categories, together with the restrictions on land use imposed on each category'; and

(c) whether the Government has reviewed the land categorisation process so as to assess if the land use of each category meets today's need?

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Reply:

Mr President,

(a) lots in the New Territories can be classified into two broad categories, namely old schedule lots (i.e. those held under Block Crown Leases) and new grant lots (i.e. those other than old schedule lots).

Old schedule lots were covered by a survey the Government undertook between 1899 and 1903 in respect of all privately-owned land holdings in the New Territories. Following the survey, the land was granted by means of Block Crown Leases. Within each Block Crown Lease, the land was further subdivided into lots, classified mainly as "building" or "agricultural" land according to the then current use.

New grant lots are simply land that was granted after the above survey. They can be subdivided into pre-war new grant lots and post-war new grant lots;

(b) as explained in (a) above, the categorisation of land arose out of historical reasons. The permissible land use of a lot in each category is governed by the relevant lease conditions as well as statutory plans prepared under the Town Planning Ordinance.

Developments on old schedule lots are subject to covenants contained in Block Crown Leases. These covenants prohibit building without the prior approval of the Land Authority. Developments on pre-war new grant lots are subject to the conditions contained in the General and Special Conditions of Sale of Land in the New Territories prevailing at the time when the lots were disposed of. Developments on post-war new grant lots are, as a general rule, subject to a set of general and special conditions which have been drawn up for each grant.

As regards statutory planning control over land use, the statutory plans are prepared on the basis of findings from various strategic and district planning studies and are revised from time to time to cater for changing needs and circumstances; and

90

(c) we have no intention to re-categorise lots in the New Territories. But as explained in (b) above, the statutory plans which govern land use in the New Territories are revised from time to time to cater for changing needs and circumstances. Where the existing lease conditions of a lot are not consistent with the current statutory plans and administrative controls, the Government is prepared to consider applications for lease modifications. They may be approved subject to such terms and conditions as imposed by the Government, including the charging of a premium.

End

Community groups members to sit on Govt advisory bodies

*****

Following is a question by the Hon Choy Kan-pui and a written reply by the Secretary for Home Affairs, Mr Michael Suen, in the Legislative Council today (Wednesday):

Question:

Will the Government inform this Council:

(a) how many of the members sitting on various government advisory bodies are people appointed from local community groups in the past three years; of this group, how many are elected district board members; and

(b) whether it will appoint more people at the district level to these advisory bodies so that they can put forward their views to the Government; if so, what will be the anticipated rate of increase in such appointment in 1996/97; if not, why not?

Reply:

(a) For the purpose of this reply, we have taken major local community groups to mean District Boards, Area Committees, Rural Committees and District Fight Crime Committees. The number of members from these local groups who were appointed to sit on Government advisory bodies over the past three years is as follows:

91

1923 1224 122_5

97 77 82

Of the above, the follows: number of elected District Board members is as

1223 1224 1922

27 25 31

(b) When making appointments to advisory boards and committees. Government’s overriding objective is to ensure that the best persons capable of meeting the specific requirements of the concerned advisory bodies are appointed. To this end, appointments are made on the basis of the merits of the individuals concerned taking account of their personal ability, expertise, experience, integrity, commitment to public service and their overall suitability for appointment. The experience and background of those people from local community groups will also be taken into consideration. It is not possible to predict whether an increase in appointment of such people will take place next year. However. Government will continue to keep in view the suitability of the members from local community groups for appointments to advisory bodies.

End

Container thefts *****

Following is a question by the Hon Miriam Lau and a written reply by the acting Secretary for Security, Mrs Carrie Yau, in the Legislative Council today (Wednesday):

Question:

In view of the frequent occurrence of container thefts, will the Government inform this Council:

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(a) of the number of container thefts reported to the Police over the past three years, as well as the number of such thefts in which the stolen containers have been recovered;

(b) of the specific actions and measures which have been put in place to combat such crimes, so as to prevent the problem from deteriorating and to guard against both the goods owners and the freight companies suffering from unnecessary losses; and

(c) whether, in the event of the stolen containers being found in Mainland China, the Police will request the Chinese authorities to arrange for the return of the containers to the territory?

Reply:

Mr President.

(a) The Police only started to capture separate statistics on theft of containers since September last year. Before that, these statistics were grouped under theft or miscellaneous thefts. From September 1995 to February 1996, a total of 120 containers was reported stolen and 28 of them have been recovered. The breakdowns by Police regions are set out below:

Number of Containers Reported Stolen and Recovered Sep 1995 - Feb 1996

Police Regions Number of Containers Reported stolen Number of Containers Recovered

New Territories North 107 27

New Territories South 13 i 1

Kowloon East NIL NIL

Kowloon West NIL NIL

Hong Kong Island NIL NIL

Marine NIL NIL

Total 120 28

(b) The Police have accorded high priority in tackling container thefts and adopted the following measures:

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(i) Proactive intelligence-led operations

Evidence indicates that the vast majority of these thefts were committed by syndicates. Dedicated units have been set up to collect intelligence and mount operations against targeted suspects in a number of blackspots;

(ii) Detection at Border Crossing Points

The Police maintain close liaison with the Immigration Department and the Customs & Excise Department to detect stolen containers at the various border crossing points when they are being smuggled across the border;

(iii) Preventive Measures

With the assistance of insurance companies and the container tractor drivers' associations, the Police provide advice on crime prevention to operators in the trade to heighten their awareness on container thefts.

(c) The Police maintain close liaison with the Chinese authorities to combat cross border crimes. In the event that stolen tractors or containers are found in China, the Police will request for their return. So far. the Chinese authorities have returned to us a total of 22 container tractors, one trailer and one container which were stolen in Hong Kong and recovered from different areas of Guangdong Province during their anticrime operations.

End

94

Extension of KMB franchise *****

Following is question by the Hon Lau Chin-shek and a written reply by the Secretary for Transport, Mr Haider Barma, in the Legislative Council today (Wednesday):

Question:

In regard to the extension of the franchise granted to the Kowloon Motor Bus Company Limited (KMB), will the Government inform this Council:

(a) of the progress in the negotiation between the Government and KMB over the extension of the franchise, including the latest developments regarding the proposed exemption of KMB from the Profit Control Scheme, as well as the date when the negotiation is expected to complete, and whether this Council will be consulted on the matter: and

(b) whether the Government will consider extending the franchise granted to the KMB to another bus company, so as to allow two bus companies operating on the same specified routes concurrently to enhance competition?

Reply:

Mr President.

(a) fhe Kowloon Motor Bus Company Limited (KMB)'s current franchise will expire on 31 August 1997. The Administration expects to award a new franchise to KMB and has started negotiations with the company. Our intention is to abolish the current profit control scheme in this new franchise. As requested by Honourable Members, and now stipulated under section 6(2A) of the Public Bus Services Ordinance, a recommendation on a bus franchise renewal should be put to the Governor in Council not less than nine months before the expiry of the franchise i.e. before December 1996. We are working towards and should meet this timetable. As part of this exercise w e shall consult both the Transport Advisory Committee and the Transport Panel of this Council.

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(b) In general, il is the Government's poliey to encourage competition. However, in so far as bus services are concerned, it is not practicable nor viable to allow for a complete duplication of bus routes. Franchised bus operators like KMB are required to operate a network of services, some of which are profitable and some arc not. Allowing an additional operator to run parallel services throughout the same network would affect the operating efficiency and financial viability of the franchisee. There arc also other practical problems such as the difficulty in finding suitable depot sites for bus operations.

End

Police in debts *****

Following is a question by the Hon Cheung Man-kwong and a written reply by the acting Secretary for Security, Mrs Carrie Yau. in the Legislative Council today (Wednesday):

Question:

Regarding the problem of policemen running into debts, will the Government inform this Council:

(a) of the amount of loan which policemen have borrowed from the Credit Union of the Police Force in each of the past three years, together with a breakdown of the Police Districts to which they belong and their respective ranks;

(b) whether the Government has any knowledge of the amount of loan borrowed from licensed banks or financial institutions by policemen in each of the past three years; if so. will the Government provide a breakdown of the Police Districts to which they belong and their respective ranks;

(c) whether any policemen are found to have borrowed money from illegal loan-sharks in the past three years: if so. will the Government provide a breakdown of the Police Districts to which they belong, their respective ranks and the loan amounts borrowed by them:

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(d) whether the Police Force management has conducted an analysis of the situation regarding policemen borrowing money; if so, whether there is an upward trend for such borrowing and whether an examination of the causes for policemen running into debts has been made, and how the problem of policemen borrowing money can be rectified; and

(e) what monitoring measures does the Police Force management have to prevent policemen who run into debts from being exploited by criminal gangs, and thus prevent the law-enforcement capability of the Police Force from being jeopardised?

Reply:

Mr President,

The answer to the five parts in this question is as follows:

(a) The Police Credit Union currently has assets of over $490 million. These assets arc in fact savings of Police Force members. The amount of loans borrowed from the Union in the past three years arc:-

1993 $295.8 million

1994 $344.7 million

1995 $433.5 million

The increase in loan over the years was mainly due to a steady increase in membership. The Police do not keep statistics on the breakdown of loans by police regions or ranks of the officers.

(b) There is no requirement for police officers to disclose details ol their private loans as this would constitute an arbitrary interference with their privacy. We therefore do not have the amount of loans borrowed by police officers from licensed banks or financial institutions.

(c) In the past three years, a total of five police officers were found and disciplined for obtaining loans from illegal money-lenders including loan sharks. The breakdowns arc as follows:

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Year Rank

1993 NIL

1994 Police Constable

Police Constable

1995 Police Constable

Police Constable

Sergeant

Region Amount

NIL NIL

Kowloon West $20,000

Hong Kong Island $22,500

New Territories $240,000

South

Hong Kong Island $180,000

Kowloon West $20,000

(d) The Force monitors closely the situation of unmanageable debts among police officers by conducting six monthly surveys. The number of cases of unmanageable debts had dropped from 145 for the second hall of 1994 to 132 for the first half of 1995. The survey for the second half of 1995 showed a further decrease to 87. Overspending and gambling were the main reasons for having unmanageable debts.

The Commissioner of Police maintains a strict policy on indebtedness of police officers as serious pecuniary embarrassment might compromise the integrity of the officer concerned. Police officers are required to be prudent and temperate in their financial affairs and encouraged to adopt a healthy lifestyle.

Accordingly, the Force has developed a comprehensive strategy for preventing, identifying and dealing with the indebtedness of police officers. It includes briefings and seminars for new recruits and serving officers on indebtedness and personal budgeting. Where appropriate, counselling will also be offered. Officers who are indebted under the following circumstances may be subject to criminal or disciplinary proceedings:

(i) betting, gambling, or otherwise related indebtedness:

(ii) having financial obligation to any person or organisation other than as permitted by the Acceptance of Advantage (Governor's Permission) Notice or the Police General Orders.

The Force has also issued an administrative guideline outlining steps to be taken at different levels of management to monitor and tackle indebtedness. A list of indicators of indebtedness has been drawn up to heighten the awareness of the management on the extent of indebtedness of individual officers.

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(e) In addition to (d), there are well-established measures to prevent police officers from being exploited by criminals:

(i) Vetting - Officers posted to sensitive posts, for example, antitriad or anti-vice units, are vetted to ensure only officers of high integrity are placed in these positions;

(ii) Unofficial Association with Criminals - The Police General Orders specify that police officers, other than in the course of their duty, shall not associate with known criminals or triad personalities. If proved to have done so, an officer can be subject to disciplinary action;

(iii) Turnover of Posting - An officer in a sensitive post will not normally be allowed to remain in that post for an excessive period;

(iv) Cross-territorial - Operations Officers from different units are allowed to conduct raids and make arrests in other Divisions, Districts and Regions;

(v) Organisational Structure Reviews - Organisational structures are constantly reviewed to minimise opportunities for corruption.

End

Occupational Deafness Compensation Scheme

*****

Following is a question by the Hon Lee Kai-ming and a written reply by the Secretary for Education and Manpower, Mr Joseph W P Wong, in the Legislative Council today (Wednesday):

Question :

The Occupational Deafness Compensation Scheme has started accepting applications since July 1995. In this connection, will the Government inform this Council :

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(a) when the Occupational Deafness Compensation Board ("the Board") will start paying out compensation to the first batch of deaf workers who have applied, and how many of these applicants will be paid compensation:

(b) of the annual income received and the monthly administrative expenses incurred by the Board;

(c) whether the Board is able to offer assistance to applicants who cannot produce the 10 years' reference by employers required so that their applications can be accepted: and

(d) whether, in cases where several applicants have been employed by the same company or employer before, consideration will be given to admitting cross evidence supporting one another's claim?

Reply:

Mr President,

(a) As of 29 February 1996, 45 applications for compensation

payment have been approved under the Scheme. The first batch of payments by the Occupational Deafness Compensation Board for 9 of these applications were made in early I ebruary 1996.

(b) In 1995, the Government provided a funding injection of $100

million to the Board and an interest-free loan of $115 million as a start-up fund for the Occupational Deafness Compensation Scheme. As for its recurrent income, the Scheme is funded by an across-the-board levy of* 1.5% on the insurance premia of’ all employees' compensation policies which employers are required to purchase, in accordance with the Employees Compensation Ordinance. This levy income is collected by the Employees Compensation Insurance Eevies Management Board and distributed to the Occupational Deafness Compensation Board ("the Board") at quarterly intervals. The first quarterly levy income was distributed to the Board in December 1995 and the estimated levy income for the whole year is around $30 million. As of 29 February 1996, the average monthly administrative expenses incurred by the Board amount to $520,000.

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(c)&(d) According to Section 14 of the Occupational Deafness Compensation Ordinance, a person who suffers noise-induced deafness and who wishes to claim compensation under the Scheme has to satisfy a requirement that before the date of application, he has had at least 10 years of employment in aggregate in noisy occupations in Hong Kong as defined under the Ordinance.

Apart from the references from employers, the Board will lake into account statements made by co-workers of the applicant, as well as other documentary proofs such as tax returns, employment contracts, and wage records in deciding whether the applicant meets this requirement. The Board will also seek information from other relevant parties during the verification process as and when necessary.

End

Required processing lime for visitors to clear immigration *****

Following is a question by the Hon Chim Pui-chung and a written reply by the acting Secretary for Security, Mrs Carrie Yau. in the Legislative Council today (Wednesday):

Question:

Will the Government inform this Council:

(a) of the average processing time required by the Immigration Department to clear the immigration procedures for each visitor to the territory;

(b) how does the processing time referred to in the reply to (a) above compare with those in Singapore and Japan; and

(c) whether the Immigration Department will consider shortening the processing time for overseas visitors so as to provide a more efficient service?

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Reply:

Mr President.

Processing time may refer to waiting lime, which is the standard used in our performance pledge, or lime required to process each transaction. 1 shall include both references in my reply.

(a) The average time required to clear the immigration procedure for each visitor at the airport is 90 seconds on arrival and 50 seconds on departure. During the months of November and December 1995 and January 1996. on average 92% of arriving visitors were cleared within the target wailing time of 30 minutes. For departing passengers, our performances has consistently been close to 100%.

(b) We have approached to the Japanese and Singaporean Authorities to obtain the information, which is still not available al the lime this reply is issued. We will separately provide the information to the Council when it is available.

(c) The Government is committed to providing an efficient immigration clearance service to facilitate ease of travel by overseas visitors to Hong Kong. In September 1995. the Immigration Department implemented a new computer system to process machine readable passports by optical scanners. This results in a reduction of 20 seconds of the lime required for each transaction involving a machine readable passport. Apart from the transaction time, we have also taken steps to reduce the overall wailing time of visitors. At the airport, we have taken the following improvement measures:

(i) the addition of 51 staff to increase the number of counters from 116tol28;

(ii) adjustment of the roster and staggering meal breaks of counter staff over a longer period to maximise the number of counters that can be manned at any one lime:

(iii) implementation of single queuing arrangement at the departure level in the near future;

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(iv) a consultancy on the current system, conducted from October to December 1995, has identified measures for further improvement; and

(v) during festive rush periods such as Easter, Christmas and the Chinese New Year, all roster leave for the staff is suspended so as to deploy additional staff to cope with the heavy workload.

End

Civic education *****

Following is a question by Dr the Hon David Li Kwok-po and a written reply by the Secretary for Education and Manpower. Mr Joseph W P Wong, in the Legislative Council today (Wednesday):

Question:

According to a recent survey commissioned by the Curriculum Development Council. 10 per cent of primary school pupils thought there was no need to respect Chinese traditions. Moreover, the survey found that the pupils' civic knowledge was generally confined to classroom teaching. In this connection, will the Government inform this Council:

(a) how it plans to reinforce pupils' appreciation of Chinese culture and history, which is vital for developing national identity: and

(b) what specific programmes will be implemented by primary schools to enhance pupils' awareness of civic issues?

Reply:

Mr President.

(a) Primary students learn about Chinese culture and Chinese history through different subjects such as Social Studies and Chinese Language, extra-curricular activities, school assemblies and class teacher periods. The Education Department encourages schools to organise civic education related extra-curricular activities, such as interest clubs and inter-school competitions, by providing advisory services, co-ordination and financial assistance as necessary.

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From September 1996, Government will reinforce learning in these areas through the introduction of a new set of Guidelines on Civic Education which is now under public consultation. One of the five areas in the suggested curriculum framework is on China. This will enhance the students’ understanding of Chinese culture and Chinese history, and give them a better knowledge of China’s political, economic and administrative systems.

To support teaching of these areas, the Education Department will provide teaching kits to schools on different aspects of China from the school year 1996/97. These will be supplemented by Education Television Programmes covering a range of topics on Chinese society and culture.

(b) We will implement additional measures to promote civic education in both primary and secondary schools. Specifically at primary level, we will introduce a new core subject of General Studies in the 1996/97 school year. It aims to equip our primary children with the basic knowledge relating to the individual, family, society, and science and technology; and to develop in them study and life skills, problem solving capability and analytical thinking. At Primary 5 and 6, the content extends from the individual and the society to Hong Kong, China and the world as a whole.

Under the proposed new Guidelines on Civic Education, emphasis will be put on promoting our students' critical thinking. In handling a topic on civic education, school teachers will be advised to present different views and to assist students to discover and evaluate their own values through reflection. At primary level, the teaching objectives will progress from helping students to recognise their role within the school, family and community to developing their concern for major events in Hong Kong, China and the world.

To prepare teachers to implement the new Guidelines on Civic Education through classroom teaching and extra-curricular activities, we will organise in-service teacher training starting around May 1996.

End

104

Government's emergency response system explained

*****

The acting Secretary for Security, Mrs Carrie Yau, said today (Wednesday) that the Government Secretariat Emergency Co-ordination Centre (GSECC) was opened only when the scale of response required was likely to be in excess of that which could be dealt with by the emergency services under their normal operating conditions.

In a written reply to a question by the Hon Chan Kam-lam in the Legislative Council, Mrs Yau said the Government's emergency response system was built upon professional, well-trained disciplined services staff (primarily Fire Sendees and Police), on call 24 hours a day to respond to emergencies.

"The Government's emergency services are mobilised by departmental command and communication centres (CCCs) operating 24 hours a day.

"Through these CCCs, the emergency services involving different departments and agencies are well coordinated to provide the necessary response in most emergencies," she said.

As for GSECC, Mrs Yau pointed out that it was required to operate in situations which were usually of a territory wide nature (for example, rainstorms) to facilitate inter-departmental liaison; and to ensure all relevant information was gathered centrally to facilitate any decision to be made in the Government Secretariat as necessary.

In the case of the Pat Sin Leng hill fire, she said that as it was largely a localised incident, the Fire Services Communication Centre (FSCC) quickly involved the Police, Civil Aid Services, Agriculture and Fisheries Department, Government Flying Service (GFS), Auxiliary Medical Services, the Hospital Authority, Information Services Department, Education Department, Social Welfare Department and the Home Affairs Department.

She stressed that to provide an effective and efficient response to emergencies, it was essential to keep emergency command and communication systems as simple as possible.

"The Security Branch Duty Officer was informed by the FSCC and the Secretary for Security was kept informed through this channel and through his talks directly with the Director of Fire Services.

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"As the response was under proper and effective coordination by the Department, we did not consider it necessary to activate the GSECC to add an extra layer to the communication process,” she said.

On why the British Garrison was not enlisted in assisting the rescue operation, Mrs Yau said that the authorities would ask the Commander, British Forces for assistance when they knew that Government’s resources were insufficient or inadequate to deal with a situation effectively and within a reasonable period.

"On this occasion, the GFS had sufficient helicopters to perform all the necessary duties and did not, therefore, need to seek additional assistance from the British Forces.

"The area where rescue services were being conducted was very small. In order to ensure flight safety in the operational area, there was a practical limit on how many helicopters could be deployed.

"With reinforcement from Civil Aid Services to form the rescue teams, it was not considered necessary to seek assistance from the British Garrison on rescue support," she said.

Mrs Yau said the investigation team appointed by the Director of Fire Services to look into the Pat Sin Leng hill fire would report on the practice of taking patients to the nearest accident and emergency facility and would consider what improvements might be made.

Also, the need for additional equipment on ambulances would be one of the issues that would be addressed in the report on the hill fire, she said.

Mrs Yau explained that the practice of taking patients to the nearest accident and emergency facility was a standard procedure that had been developed by the Fire Services Department, in consultation with the Hospital Authority and the Department of Health.

"Getting the earliest possible life-saving aid to casualties is in their best interests, even if patients subsequently need to be transferred to receive more specialised treatment.

"A decision was made to transfer patients to the Prince of Wales Hospital (PWH) by land, because they could then receive continuous ambulance care and treatment en route.

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"This form of transfer, in fact, allowed the patients to be delivered to PWH as quickly as any alternative," she said.

As for equipment on ambulances, Mrs Yau said that all ambulances had radio telephones to communicate with FSCC.

"For on-site communication, the incident commander, the incident ambulance officer and the officers leading working crews have hand-held radios to communicate with each other and with the Incident Command Post," she said.

"All ambulances have, as standard equipment, cling film and bum sheets to treat bums. They also have analgesic apparatus to reduce pain.

"The ambulancemen's objective is to cover burns, to reduce the risk of infection and to prevent fluid loss in the time before patients reach hospital."

Mrs Yau said that the authorities would study the recommendations in the Pat Sin Leng hill fire report before deciding what improvements might be necessary.

Turning to the Hospital Authority's coordinating role, Mrs Yau said that the Hospital Authority Head Office (HAHO) was responsible for liaison to ensure that adequate medical resources were provided.

"On this occasion, the Hospital Authority implemented its contingency plans when the FSCC notified it of the need to treat the casualties.

"An emergency medical team was despatched immediately to the scene and supporting staff were mobilised in PWH to prepare for admission of the burn patients," she said.

To ensure speedy and effective treatment of these patients, Mrs Yau said that HAHO also coordinated efforts to support the hospital by making contingency arrangements to transfer patients to other hospitals if necessary, and providing emergency funding for additional supplies of medical consumables and equipment.

She said that there was a sufficient supply of skin in the public hospital system to cater for the short-term skin graft requirements of all the bum patients admitted to PWH.

"Transplant coordinators facilitated access to the skin banks. The public appeal for skin donations was made in anticipation of the long-term requirements for the management of the bum patients," she added.

End

107

Pat Sin Leng hill fire tragedy *****

Following is a question by the Hon Chan Kam-lam and a written reply by the acting Secretary for Security, Mrs Carrie Yau, in the Legislative Council today (Wednesday):

Question:

The recent fire tragedy at Hsien Ku Fung in Pat Sin Leng Country Park has given rise to public concern over the ability of various government departments to coordinate sufficiently their efforts in both the rescue operation and the subsequent medical treatment process. In this connection, will the Government inform this Council:

(a) why the Government Secretariat Emergency Co-ordination Centre, which is specifically set up to deal with major incidents, was not in operation on the day of the tragedy; under what circumstances will the Co-ordination Centre be put into operation;

(b) whether there is a need to review the existing guideline which specifies that ambulance crew should send the injured to the nearest hospital or clinic for treatment; and whether a review will be conducted to ascertain if the arrangement of sending all the injured to the Prince of Wales Hospital by land on that day might have caused a delay in giving emergency treatment to the victims;

(c) why the Government did not enlist the assistance of the British Garrison in rescuing the injured and taking them by helicopters to hospitals; under what circumstances will the Government approach the British Garrison for assistance;

(d) what co-ordinating role does the Hospital Authority play in coping with major incidents of this kind; why the situation has arisen where the Prince of Wales Hospital openly appeals for skin-donors while there is a reserved stock of skin available in Queen Mary Hospital; and

(e) what measures does the Government have to improve the communication equipment of the ambulance crew of the Fire Services Department and to tackle the problem of ambulances having inadequate equipment for the treatment of burns?

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Reply:

Mr President:

(a) Government’s emergency response system is built upon professional, well-trained disciplined services staff (primarily Fire Services and Police), on call 24 hours a day to respond to emergencies. Government's emergency services are mobilised by departmental command and communication centres (CCCs) operating 24 hours a day. Through these CCCs, the emergency services involving different departments and agencies are well co-ordinated to provide the necessary response in most emergencies. The Government Secretariat Emergency Co-ordination Centre (GSECC) is opened only when the scale of response required is likely to be in excess of that which can be dealt with by the emergency services under their normal operating conditions. The GSECC is required to operate in situations which are usually of a territory wide nature (e.g., rainstorms) to facilitate inter-departmental liaison; and to ensure all relevant information is gathered centrally to facilitate any decision to be made in the Government Secretariat as necessary. In the case of the Pat Sin Leng hill fire, as it was largely a localised incident, the Fire Services Communication Centre (FSCC) quickly involved the Police, Civil Aid Services, Agriculture & Fisheries Department, Government Flying Services, Auxiliary Medical Services, the Hospital Authority, Information Services Department, Education Department, Social Welfare Department and the Home Affairs Department.

To provide an effective and efficient response to emergencies, it is essential to keep emergency command and communication systems as simple as possible. The Security Branch Duty Officer was informed by the FSCC and the Secretary for Security was kept informed through this channel and through his talks directly with the Director of Fire Services. As the response was under proper and effective co-ordination by the Department, we did not consider it necessary to activate the GSECC to add an extra layer to the communication process.

109

(b) The practice of taking patients to the nearest accident and emergency facility is a standard procedure that has been developed by the Fire Services Department, in consultation with the Hospital Authority and the Department of Health. Getting the earliest possible life-saving aid to casualties is in their best interests, even if patients subsequently need to be transferred to receive more specialised treatment. A decision was made to transfer patients to the Prince of Wales Hospital (PWH) by land, because they could then receive continuous ambulance care and treatment cn route. This form of transfer, in fact, allowed the patients to be delivered to PWH as quickly as any alternative. The investigation team appointed by the Director of Fire Services will report on this practice and will consider what improvements may be made.

(c) We would ask the Commander, British f orces for assistance when we know that Government's resources are insufficient or inadequate to deal with a situation effectively and within a reasonable period. On this occasion, the Government Flying Services (GFS) had sufficient helicopters to perform all the necessary duties and did not. therefore, need to seek additional assistance from the British Forces. The area where rescue services were being conducted was very small. In order to ensure flight safety in the operational area, there was a practical limit on how many helicopters could be deployed. With reinforcement from Civil Aid Services to form the rescue teams, it was not considered necessary to seek assistance from the British Garrison on rescue support.

(d) The Hospital Authority Head Office (HAI IO) is responsible for liaison to ensure that adequate medical resources are provided. On this occasion, the HA implemented its contingency plans when the FSCC notified it of the need to treat the casualties. An emergency medical team was despatched immediately to the scene and supporting staff were mobilised in PWH to prepare for admission of the burn patients. To ensure speedy and effective treatment of these patients. HAHO also coordinated efforts to support the hospital by making contingency arrangements to transfer patients to other hospitals if necessary, and providing emergency funding for additional supplies of medical consumable and equipment.

There was a sufficient supply of skin in the public hospital system to cater for the short-term skin graft requirements of all the burn patients admitted to PWH. Transplant co-ordinators facilitated access to the skin banks. The public appeal for skin donations was made in anticipation of the long-term requirements for the management of the burn patients.

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(e) All ambulances have radio telephones to communicate with the FSCC. For on-site communication, the incident commander, the incident ambulance officer and the officers leading working crews have handheld radios to communicate with each other and with the Incident Command post.

All ambulances have, as standard equipment, cling film and burn sheets to treat burns. They also have analgesic apparatus to reduce pain. The ambulancemen’s objective is to cover burns, to reduce the risk of infection and to prevent fluid loss in the time before patients reach hospital.

The need for additional equipment on ambulances will be one of the issues that will be addressed in the report on the Pal Sin Leng hill fire. We will study the recommendations before deciding what improvements may be necessary.

End

Task Force on expansion of service industries *****

Following is a question by the Hon Eric Li Ka-cheung and a written reply by the Secretary for Trade Industry. Miss Denise Yue. in the Legislative Council today (Wednesday):

Question:

It is mentioned in the Governor’s Policy Address last year that a Task Force has been established by the Financial Secretary to chart a course for the further expansion of the territory's service industries and that the Task Force will listen carefully to the views of the business representatives and the professional experts concerned. In this connection, will the Government inform this Council :

(a) of the number of meetings held by the I ask Force since its establishment and the concrete conclusions reached in assisting the development of the service industries:

Ill

(b) which sectors of the business representatives whose views have been sought by the Task Force; and which of those views have been accepted; and

(c) whether consideration will be given to disclosing the issues discussed and the conclusions reached by the Task Force after each meeting, so as to enhance its transparency?

Reply:

Mr President,

The Task Force on Services Promotion has met five limes since its establishment in August 1995. Details of the preliminary results of the Task Force's work are set out in a public document.

The Government is fully aware of the need to have the benefit of the views of the business community in the formulation of the Task Force’s recommendations. For this reason, the Financial Secretary has set up an Ad Hoc Consultative Group with prominent business leaders, professionals and academics. In addition, a symposium co-organised by the Government and the business community will be held on 12 March to enable further exchange of ideas relating to the development of the services sector and the facilitating role of the Government.

The public document which I referred to earlier serves to keep the community informed of the work of the Task Force. It also provides a basis for extensive public discussion on this important sector of the economy. Views from the public and the services sector are pivotal to the deliberations of the Task Force which, on completion of its work, will publish a final report for public information.

End

112

Occupational deafness compensation

*****

Following is a question by the 1 Ion Leung Yiu-chung and a written reply by the Secretary for Education and Manpower. Mr Joseph W P Wong, in the Legislative Council today (Wednesday):

Question:

Recently, some deaf workers have complained that the eligibility criteria for applying to the Occupational Deafness Compensation Board (the Board) for compensation are too stringent, such that many workers with hearing loss in one .ar are still not eligible for compensation. Moreover, it is learnt that the average pure-tone hearing loss of a worker measured in a public hospital often varies greatly from that measured in a private clinic. In view of this, will the Government inform this Council:

(a) what is the total number of applications for compensation received by the Board since its establishment; of this, how many are still under consideration;

(b) whether there is a common method used by both public hospitals and private clinics to measure the average pure-lone hearing loss of a worker; if so. what the method is: if not. why not;

(c) given the similar nature of the Pneumoconiosis Compensation Fund and the Occupational Deafness Compensation Fund, why a claimant applying for compensation from the former is not required to pay for the cost of a pulmonary function lest himself, whereas a claimant applying for compensation from the latter is required to undergo a hearing test at his own expenses; and

(d) what is the basis for requiring claimants applying for occupational deafness compensation to have al least ten years’ employment in noisy occupations?

Reply:

Mr President.

The Occupational Deafness Compensation Scheme is a collective liability compensation scheme which was set up under the Occupational Deafness (Compensation) Ordinance in April 1995. with the objective of compensating employees who suffer from noise-induced deafness by reason of their employment. The Scheme came into operation in July 1995.

113

To be eligible for compensation under the scheme, a claimant is required under the Ordinance to fulfil the following disability and occupational requirements :

(a) he should be suffering from sensorineural hearing loss amounting to not less than 50 dB in each ear, where such loss is due in the case of at least one ear to noise and being the average of pure tone losses measured by audiometry over the 1.2 and 3 kl Iz frequencies; and

(b) he should have

(i) at least 10 years of employment in aggregate in specified noisy occupations in Hong Kong; and

(ii) a period of continuous employment in a noisy occupation at any time either within the 12 months preceding the application for compensation or within the 72 months before the date of implementation of the scheme, i.e. 1 July 1995, provided that he submits his application for compensation w ithin 12 months after the commencement of the Scheme, i.e. by 30 June 1996.

As regards Part (a) of the question, up to 29 February 1996, the Occupational Deafness Compensation Board ("the Board") has received 231 applications for compensation of which 142 are under consideration. 45 have been approved, 39 were rejected, and 5 withdrawn by the applicants.

As regards Part (b) of the question, according to Section 15 of the Ordinance, a claimant who applies for compensation under the Scheme and who fulfils the occupational requirements has to undergo a hearing lest at a hearing lest centre designated by the Board for the purpose of assessing the degree of hearing loss suffered by the claimant. The Yaumati ENT Clinic of the Hospital Authority is the only clinic which has been designated by the Board under Section 36 of the Ordinance as the hearing test centre for the Scheme.

The audiological facilities and calibration methods being used in the hearing tests conducted al the Yaumati ENT Clinic conform with well-established international standards. Moreover, as an administrative rule, the Board requires each claimant who applies for the hearing test to be away from excessive noise at work for at least 24 hours prior to taking the audiometric test, so that the measurements can truly reflect his/her permanent hearing disability. This rule is also in line with international standards. As regards tests conducted by private clinics, we have no information on the audiological facilities and calibration methods which may be used to determine hearing loss. Nevertheless, the results of hearing tests conducted by any of these private clinics will not be accepted for the purpose of compensation under the Scheme.

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Part (c) of the question concerns the requirement that the claimant has to pay for the hearing test under the Scheme. This requirement was drawn up as a means to prevent abuse of the hearing test arrangement, having regard to the limited audiological resources in Hong Kong. However, all claimants who have passed the hearing test conducted by the hearing test centre designated by the Board will be reimbursed the full amount of the cost and will not be required to pay for the cost of the subsequent medical examination which will be fully borne by the Board.

It is not appropriate to compare this aspect of the Scheme with the Pneumoconiosis Compensation Scheme(PCS)-another collective liability compensation scheme established by statute for persons who arc diagnosed after 1 January 1981 to be suffering from pneumoconiosis. The incidence of pneumoconiosis suffered by claimants under the PCS is usually identified through a lengthy curative process. Patients have normally been suffering from chest diseases and receiving medical care for a considerable time. When their medical conditions have become stabilised, their attending physicians (usually doctors in the Government chest clinics) will be in a position to diagnose that they may have contracted pneumoconiosis and refer them to the Pneumoconiosis Medical Board (a body established for the determination of the degree of incapacity of eligible pneumoconiotics under the PCS) for consideration. In other words, these claimants have already undergone the necessary screening procedure during the treatment process. It is therefore not necessary to require them to pay for the cost of a pulmonary function test.

As regards Part (d) of the question, an occupational requirement was required so as to establish a casual relationship between a claimant’s deafness and his occupation. This is essential because the objective of the Scheme is to provide compensation for persons suffering for noise-induced deafness by reason of their employment.

The occupational requirement was set at ten years on the basis of medical advice that this time period was considered appropriate for the development of the minimum sensorineural hearing loss of 50 dB measured at 1,2. and 3 kHz frequencies as specified under the Scheme. This was also determined with reference to the same requirement used in the United Kingdom and Singapore for their own occupational deafness compensation schemes.

In the light of its operational experience, we will conduct a review on all the various aspects of the Scheme after it has been in operation for one year.

End

115

Government’s role in meeting needs of vulnerable groups

*****

Following is a question by the Hon Elizabeth Wong and a written reply by the Secretary for Health and Welfare, Mrs Katherine Fok, in the Legislative Council today (Wednesday):

Question:

Arising from the large numbers of deaths of old people, suspected to have been caused by hypothermia, over the Lunar New Year holiday period, will the Governmentinform this Council whether it has conducted an investigation into the appropriateness of Government’s action to meet the needs of the vulnerable groups in the recent cold spell experienced in the territory; if so, what is the outcome of the investigation; if not, why not?

Reply:

Hypothermia was not reported as the cause of death of any of the elderly people who died during the recent cold weather. Post mortems show that other underlying medical problems were the cause of death in these cases. The low temperatures may have contributed to exacerbating such medical problems.

The Government has reviewed the actions taken during this period to meet the needs of people vulnerable to such cold weather.

One of the most vulnerable groups were street-sleepers. In accordance with standing arrangements, the Home Affairs Department opened shelters for anybody who needed them. They were opened on a 24-hour basis and provided blankets, ground mats, mattresses, hot drinking water and hot meals. Staff also offered street sleepers transport to take them to the shelters. Social Welfare Department staff distributed blankets to street sleepers who were also given information regarding how to obtain further assistance if needed. All street sleepers have been offered alternative accommodation as a matter of policy. The Subventions and Lotteries Fund Advisory Committee is about to consider a request to start this month on outreaching multidisciplinary team to encourage elderly street sleepers to accept housing and reintegration into society.

The other main vulnerable group was identified as elderly persons living alone. This group is vulnerable at all times and especially so in cold weather. In the recent cold spell. Social Welfare Department staff at District level contacted voluntary agencies providing services to the elderly and all local Government welfare offices to make a special effort to contact known elderly persons living alone to check that they were alright.

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Various new initiatives are being taken or existing programmes speeded up to improve the care of elderly persons living alone, for example -

Social Welfare Department will take the lead to introduce measures to mobilise a higher level of community and volunteer support to develop a better social networking system to support the elderly and other vulnerable groups. It will build on the network of multi-service centres for the elderly and the experience already gained in various volunteer pilot programmes already in hand. The ongoing expansion of home help teams will also bring practical benefit to elderly people living alone.

Steps are being taken to identify those single elderly persons and other at-risk recipients of Comprehensive Social Security Assistance (CSSA) who may not have a telephone to encourage and assist them to apply for one. CSSA grants are available to cover both the installation and recurrent costs of telephones for those in need. The cold weather highlighted how important it is for vulnerable groups to have easy access to telephones to call for help.

Since 1990, the Housing Department has been fitting alarm bells in public housing units occupied by elderly persons living alone. The Department is now considering a system which would link such alarm devices to a central control system.

The review concluded that the immediate measures taken by Government during the cold weather constituted an effective and practical response to an emergency situation. But there are always things that can be done better and lessons have been learnt. It is clear that it cannot be left to Government alone to act in such circumstances. The family and the community as a whole have a vital role to play in showing care and concern at such times by checking on elderly relatives, neighbours and friends. In the final analysis, there are simply not enough professional social workers and others to knock on every door. The Government and non-governmental organisations can and do provide a comprehensive range of professional sendees but they will always rely, to a certain extent, on caring members of the community to act as referral agents to bring the vulnerable into contact with the professional advice and services which are available to help them.

End

117

Rehousing policy on cottage area residents

*****

Following is a question by the Hon Ip Kwok-him and a written reply by the Secretary for Housing, Mr Dominic S W Wong, in the Legislative Council today (Wednesday):

Question:

Will the Government inform this Council:

(a) whether it has any plan to clear all the remaining cottage areas in the

territory;

(b) if the answer to (a) is affirmative, what is the time-table for the clearance

of the cottage areas in order of priority, and how the residents in cottage areas affected by the clearance will be resettled; and

(c) if the answer to (a) is in the negative, whether consideration will be given to formulating a long-term policy on the rehousing of residents in cottage areas?

Reply:

Mr President.

There are six cottage areas (CAs) in the territory, namely. Fo Tan. Tung Tau. Lai Chi Kok. Mount Davis. So Kon Po and Tiu Keng Leng. Clearance of Tiu Keng Leng CA to allow for the development of Tseung Kwan O new town, including major public housing projects, was announced in April 1995. Partial clearance of So Kon Po CA and Mount Davis CA was announced in April and July 1995 respectively for slope safety reasons. There is no plan to clear the remaining CAs.

It is the Government's policy that no one will be rendered homeless as a result of Government clearance operations. Eligible residents will be offered public rental housing, or given priority to buy Home Ownership Scheme flats, or allowed to join the Home Purchase Loan Scheme to buy flats in the private sector. Ineligible residents in need will be offered accommodation in temporary housing areas.

We will keep the need to clear the remaining CAs under review, taking into account also the availability of our rehousing resources.

End

118

Respiratory diseases

*****

Following is a question by Dr the Hon Law Cheung-kwok and a written reply by the Secretary for Health and Welfare, Mrs Katherine Fok, in the Legislative Council today (Wednesday):

Question:

Will the Government inform this Council:

(a) of the major respiratory diseases which have affected the people in the territory in recent years;

(b) whether the number of people who have died of respiratory diseases is on the increase; and

(c) what measures will be taken to educate the public how to prevent such diseases?

Reply:

(a) The major respiratory diseases which have affected the people of Hong Kong in recent years are lung cancer, pneumonia and chronic obstructive pulmonary diseases including asthma. Tuberculosis has undergone a resurgence in many parts of the world in recent years and remains a threat.

(b) The death rate from the major respiratory diseases has remained relatively stable over the past three years.

(c) Cigarette smoking is a very significant health hazard and is a recognised cause of bronchitis, emphysema and other lung diseases as well as being implicated in a number of cancers and significant disease conditions. The Government has, since 1982. been taking active and increasingly stringent measures to combat smoking, including the banning of smoking in public places, the requirement to display health warnings and tar contents on cigarette packs, the restriction of' tobacco advertisements in the electronic media and the establishment of non-smoking areas in restaurants. The Hospital Authority has also identified chronic lung diseases as one of the priority health areas targeted for concerted action. Public hospitals have taken the initiative in launching smoking reduction and cessation programmes to reduce the risk of cigarette smoking, particularly to those who arc already suffering from respiratory diseases.

119

Turning to the other major preventable respiratory disease, that is tuberculosis, the Government has in place a universal vaccination programme for preventing tuberculosis and a dedicated service for early detection, control and treatment of the disease, hi addition, patient education on respiratory diseases is given through the Central Health Education Unit of the Department of Health, at Government out-patient clinics, specialist outpatient clinics and patient resource centres of public hospitals. The setting up of the Health Care and Promotion Fund to further the promotion of a healthy lifestyle, including suitable nutrition and exercise, is also likely to benefit those prone to respiratory illnesses.

End

Smuggling of prohibited articles in prison by CSD staff

*****

Following is a question by the Hon Selina Chow and a written reply by the acting Secretary for Security, Mrs Carrie Yau. in the Legislative Council today (Wednesday):

Question:

It is reported that the smuggle of prohibited articles into prisons by staff of the Correctional Services Department (CSD) is causing concern. Will the Government inform this Council:

(a) of the number of cases involving CSD staff being found to have smuggled prohibited articles into prisons in the past three years;

(b) what measures have been put in place by CSD to check whether its staff are involved in such illegal activities;

(c) what action will be taken by CSD in the event that its staff are found to have carried.out such illegal activities; and

(d) what measures will be adopted by CSD to strengthen security in prisons?

120

Reply:

Mr President,

The answer to the four parts in this question is as follows:

(a) In the past three years, there were six cases of CSD staff caught smuggling unauthorised articles into prisons.

(b) The CSD maintains a high degree of vigilance to prevent and to identify such smuggling activity. Detectors and prescribed search methods are used to check the belongings of every person, including staff, entering an institution. Training courses and simulation exercises are conducted to enhance the staffs skills in detecting smuggling activity. Prison staff who show signs of becoming "at risk" due to financial difficulties are interviewed and given necessary counselling. Inmates' cells are searched regularly, and if unauthorised articles are found, a thorough investigation will be carried out.

(c) Apart from internal investigation, the CSD refers all smuggling cases involving staff to the ICAC for follow up action. Of the six cases, three have been convicted, one is awaiting trial and two are on bail pending further ICAC investigation.

(d) Security measures mentioned in (b) above are taken in each penal institution to prevent and to detect smuggling activity. Throughout the Department, a comprehensive intelligence gathering network is maintained to monitor possible smuggling activity. The Department also regularly reviews its measures and improves its training material in the light of the cases referred to the ICAC in order to prevent similar recurrences of smuggling. Besides strengthening security, it is also important to deter smuggling through education. Refresher courses are organised regularly to remind staff of the serious consequences of smuggling unauthorised articles into penal institutions.

End

121

Industrial Technology Centre’s leasable area

*****

Following is a question by Dr the Hon Huang Chen-ya and a written reply by the Secretary for Trade and Industry, Miss Denise Yue, in the Legislative Council today (Wednesday):

Question:

Will the Government inform this Council: •

(a) whether the leasable area of the Hong Kong Industrial Technology Centre has all been committed to tenants; if so, how many enterprises are put on the waiting list; if not, what is the occupancy rate;

(b) of the total number of tenants in the Centre, together with a breakdown of these tenants by trade and number of employees; and

(c) whether there is any plan for the construction of a second industrial technology centre; if so, when will this plan be implemented, whether the second centre will be built on a larger scale than the existing one, and what is the estimated amount of funds involved; if not, whether it will support a joint venture with private developers for the construction of the second centre?

Reply:

Mr President,

(a) The Technology Centre is 96% leased out. This is broken down into 98% occupancy for regular tenants who pay market rents and form the ma jority of occupants and 85% for incubatees who pay discounted rents. At present, there is no waiting list for new occupants since the Centre is not yet full. Nevertheless the Centre has received numerous enquiries from companies about taking up the remaining available space. However, since these companies have yet to submit formal applications and indicate their respective space requirements, it is too early to say how many of them will eventually be admitted and accommodated.

(b) There are a total of 33 tenants and 20 incubatees which are classified as follows:

122

Breakdown by sector

Regular tenants Incubatees

Software and system 12 37% 6 30%

Microelectronics & components 4 12% 3 15%

Telecommunications 5 15% 3 15%

Multi-media & Networking 5 15% 8 40%

Others * 7 21% - -

Total 33 100% 20 100%

Breakdown by number of employees

10 employees or less 9 27% 16 80%

11-30 17 52% 4 20%

31-50 3 9% -

51-70 2 6% - -

71 -90 2 6% - -

Total 33 100% 20 100%

(c) fhe Board of the Hong Kong Industrial Technology Centre Corporation has proposed the construction and management of a second technology centre. It comprises an 8-storey office building, with a gross floor area of about 32.500 m2 (compared to 21.850 m2 for the existing centre), to be built at an estimated cost of$520 million (at 1995 prices), by way of a direct capital injection from the Government to the Corporation, fhe proposal is being considered by the Administration.

End

DAILY INFORMATION BULLETIN

ISSUED BY GOVERNMENT INFORMATION SERVICES BEACONSFIELD HOUSE, HONG KONG. TEL: 2842 8777

Thursday, March 7, 1996

Contents Eage No..

Transcript of FS’s second Budget press conference......................... 1

Govt fully committed to enhance language skills in schools............... 12

$300 million grant for retraining programme proposed..................... 16

Outcome of Geneva meeting on VMs welcomed................................ 18

Asbestos regulation to be gazetted................................... 18

Governor to open Hong Kong Promotion in Scotland......................... 19

Recovered eagle to be free again......................................... 21

Views sought on prevocational and technical education................ 21

Beat drugs seminar for social workers.................................... 22

7th and 8th ’’Get together” between HK and Chinese officials............. 23

Dangerous squatter structures closed for public safety................... 24

210 VMs transferred to Victoria Prison................................... 25

Transfer of VMs from High Island Detention Centre today.................. 26

Queen’s Gurkha Signals take part in Commissioning Parade................. 26

Immigration officers to visit UK......................................... 27

Hong Kong Monetary Authority money market operations..................... 28

1

Transcript of FS's second Budget press conference ♦ * * * *

The following is a transcript of the second Budget press conference held by the Financial Secretary, Mr Donald Tsang, today (Thursday):

FS (in Cantonese): Thank you. It is actually part of a tradition that we met with you yesterday and we meet with you again today. May I give some introductory remarks.

This morning I got up and I looked at what is in the press and I also heard coverage on the radio and I have been very encouraged, and my colleagues have also been very encouraged. What we aim to do in the Budget is to reflect what the community wants and it seems what we have done has been by and large accepted by the community.

And this morning I was at the Phone-in Programme at RTHK and I heard the views directly from the community. I must say that today, to me, the weather is extremely good when I was on my way to Broadcast Drive and on Waterloo Road -you know that I was in a Government car which is recognised - and then I was driving along and suddenly there was a PLB that tried to overtake my car. When the PLB driver past my car the driver lowered the window and he gave me a thumbs up three times. So even members of the public did listen to the Budget and they felt that actually there is something that they could accept and identify with.

And I also took calls on the radio and broadly speaking we have got their support. And they talk about - I have a vision and I have a heart. And of course I wish to thank them all. And of course, as 1. have said, the Budget is not my personal efforts; rather it is the Government's Budget and also the work of all my colleagues.

And I also met with the District Board Chairmen and also the Chairmen of the two Municipal Councils and they also gave me their views and in general I think we have got their support. And some have told me that* we have managed to score 80 marks and this is very satisfactory.

From the radio and also from the press we have also got the initial response from the legislators and they have said what they felt and then they also told us about the inadequacies. And when I met with the District Board Chairmen whom I understand have consulted some of their contestants. I took comfort that the general feeling is that this is in fact a very balanced Budget. I wish to say that there are three very important principles in our Budget and we have followed these principles. And since we have managed to get broad acceptance, it confirms that our principles are correct.

2

The first principle is that for the short term, i.e. the 96-97 Budget, we must have a balanced budget because we had a deficit in 1995-96. Two consecutive years of budget deficit might hit the confidence of the people in Hong Kong and also international investors albeit psychologically, and therefore it is essential that we have a balanced budget for 96-97.

The second principle is in the medium term the target is to ensure a smooth transition. In other words we can't really look at this year's Budget in isolation and ignore the importance of a smooth transition. And this has been accepted by the DB Chairmen and it is as important as a balanced budget.

And then the third principle, we must also plan on a long term basis. In other words, what is our direction, how do we try and face the new millennium? And we have big changes in the market and we have changes in our economic structure and in the business sector we have got some new changes coming in and the Government will have to respond. And one-third of my Budget actually covered that question. And it seems as if the response has been very good and they accept the proposals. And so initially, I am quite satisfied with this.

But of course a day has passed and you have read more carefully all the different documents and I am sure you will have more in depth questions and probably I might not be able to answer all those questions so well, and so I have got with me all the experts and they will be able to help us.

I do not want to bore you again to say the same thing in English. But what I have just said, in summary, is that I am quite gratified and encouraged by the initial response; the response given by the community as a whole, in general, and the District Boards and the Municipal Councils’ Chairmen whom I met this morning in particular, to my Budget. The response of the Legislative Councillors, so far, is balanced as well.

I am looking forward to a very useful dialogue in the coming three weeks before the vote is taken on the Budget and I am very glad, in particular, that there seems to be a general agreement on the three objectives that my colleagues and I set out to achieve.

The short term one of a balanced budget; a medium term one of making sure the Budget will help to ensure a smooth transition, will complement our other works on creating a smooth transition across 1997; and we must have a longer term vision in the Budget, being the longer term objective. These three objectives seem to have struck a common chord among all the interlocutors I have met so far.

3

Perhaps I will stop here. You have had a chance to examine the documentation and 1 hope any detailed question will be given a reasonable response by my expert colleagues here.

Question (Cable TV - in Cantonese): On tax concessions, of course a lot of people applaud that but for people earning a monthly salary of, say, $30,000-$40.000. people who are paying the standard tax rate, now they will feel that this time they do not enjoy concessions like those in the lower income group. At the same time they shoulder a greater and greater proportion of tax revenue to be paid to the Government. So have you considered the plight of the middle class and would you consider any measures to help them out in future?

FS (in Cantonese): Now for the standard tax rate, at the moment in Hong Kong it is not as high as in other places. At the moment it is only 15% so this time we have not proposed any changes to the standard tax rate. Tax concessions are offered to those who are in genuine need, say for a sandwich class earning a monthly salary of $30,000 as you mentioned. Now we have some examples. A family with two children, a dependent parent living together. If they have an annual income of $300,000, this time they would get tax concessions of over $3,000. In our example the family would have paid $4,600 under the present system but then as proposed they will be paying just $800, so a saving of over $3,000. This concession is not bad at all.

And for others who have to pay the standard tax rate, they would have to be earning something like $60,000 per month. It is true that they are not getting any benefit from my proposed tax concessions but I am in the same boat as they are. At the same time we must remind ourselves that they are people who are already very fortunate. For the salaried class, 2% of them pay standard tax rate and 1 am among one of them. But I think when we are earning such a handsome salary we should shoulder a bigger burden of the Government spending. So while I am sympathetic with them because my colleagues and I are all in the same shoe, I would say that we are playing our part in ensuring progress in society.

Question (Commercial Radio - in Cantonese): Now in the Budget you say that you have commissioned a company to consider the setting up of a mortgage corporation in Hong Kong. So in the course of study what technical difficulties may be faced and when the company is set up how would the public benefit from it?

FS (in Cantonese): Now I could answer that question briefly but since there are experts here perhaps I could defer it to the expert, Mr Hui.

SFS (in Cantonese): I wouldn't say I'm an expert. Tomorrow at the press conference you will really come to meet the experts. So today I don't intend to go into details because tomorrow the Hong Kong Monetary Authority, Mr Joseph Yam, would be with me to discuss this question with you.

4

Now you talk about the study and that’s about the operation of the corporation and risk management as well as the regulatory regime. We would, in particular, refer to experience overseas like the USA and so on. In fact one of the prime objectives of such a corporation is to ensure the stability of the banking sector and the financial sector in Hong Kong. We want to decentralise risks shouldered by banks in Hong Kong because the stability of the banking sector is of utmost importance to the stability of society as a whole.

Now for individual members of the public, when they wish to buy their own homes; in fact when we talk about the operation of this company we want to take a progressive approach so when we reach a certain stage, not immediate, it would be possible for home buyers to enjoy greater accessibility and availability in mortgage because right now banks offering mortgages are under a strict regulatory regime and risks are pretty centralised risks. So in other words with the setting up of the corporation there should be more funds available and that would lead to a reduction in interest rates but that should be the medium effect because we don't want to be too drastic, we want to take a progressive approach.

Question (HK Economic Times - in Cantonese): Coming back to the tax net. Now this year you have fewer tax-payers. In other words, the tax base will be much weaker and then you have an increase in recurrent expenditure. So, in the long-term revenue might not be stable and the Chinese side might be worried?

And I have a second question.

FS (in Cantonese): Well, let me take the first question first. In relation to the tax net. now this is not a question that arises this year. As our economy grows, our revenue will exceed expenditure. It is only reasonable for us to return some of the money to our tax-payers and in the process, therefore, the tax net will be affected. So this is something that is rather inevitable and is a conflict that cannot be avoided.

But if you look back in the past years, now we have been relying on our existing revenue base and we have got direct taxes including profits taxes and also personal assessment, salaries taxes for individuals, and that account for 40% of our revenue and it has been stable. For years it has been 40% even though we have been making changes that have an effect on the tax net. The 40% has remained quite stable and so under the circumstances when we listen to people saying that our revenue base will become weaker. I don't think that is an argument that can be substantiated but, of course, a wider revenue base might be better. But behind what is a wider revenue base might mean more people caught into the net and that is what is meant by extending our tax net.

5

And so I don't believe that the community would welcome something like that and I am sure you do understand the situation. But as I have pointed out our revenue base is still quite stable and therefore we needn't worry too much.

Question (? speaker - in Cantonese): Mr Tsang, in relation to your consultation and cooperation with China in relation to the next budget; now you are saying that you will be trying to explain the proposals personally to the Chief Executive Designate but does that mean that the Hong Kong Government has already worked out all the proposals and will be informing them and see whether they accept, rather than working with the Chinese side?

FS (in Cantonese): As 1 have told you, talking about the transitional budget, we have already got a plan as mentioned by Sir Hamish last year and there are four stages and we are now at the fourth stage. And what is involved in the first stage is this. The cooperation will, of course, be enhanced when compared with the previous stages but our targets are the same. Smooth transition and it's something that the budget will have to be accepted both by government and also it should reflect the wishes of the people of Hong Kong. And so the objectives are common. And so what we call (say) about it, who is going to lead the whole thing, all those arc in fact just technical points and a question of presentations. What we are saying is we should deal with this year's budget first and then after we have done that then we will have to deal with the other specific questions and we will have to talk to the experts of the Chinese side but I don't believe there will be insurmountable difficulties because after all we have a common goal and co-operation is something that is necessary. I don't believe it's difficult.

Question (? Speaker - in Cantonese): You are saying who should be taking the lead, it will be merely a technical point and secondary. The most important is the cooperation ...

Question (in Cantonese): Are you saying that who should be taking the lead is merely a technical point and is secondary, the most important is the co-operation ?

FS (in Cantonese): What 1 said was that whether who is taking the lead, what we have to look at are all practical issues that we have to face but we are not talking about any difficulties in principle. We have to look at a number of logistics, for instance, documents - should documents be translated ? Now, I don't have to worry about that. And Mr Kwong will have to give some thought to that and then within Government we will have to carefully deliberate on that. But to me, the question that is right in front of us is what I have to deal with now.

Question (in Cantonese ): Could Mr Kwong supplement what you have said?

(Mr K C Kwong did not speak)

6

Question (in Cantonese): Mr Tsang, now you are considering setting up a mortgage corporation. You say you support it. Does it mean that the Government will inject capital into it or would the Exchange Fund inject capital into this quasi government corporation?

FS (in Cantonese ): I think we are still at the stage of engaging a consultant to study the issue. I think Mr Hui did explain to you clearly, the whole objective is to maintain stability in the financial sector. So if there is a need for capital injection or to give an undertaking or whatever, certainly the Exchange Fund would be the appropriate instrument and nothing else. I think that must be the fairest approach. But at this stage we are still just commissioning a consultant to look at the issue, so that nothing is set yet.

Question (in Cantonese): Financial Secretary, on economic prospects you say there would not be a drastic upswing in property prices and rental. What is the basis for that forecast?

FS (in Cantonese): 1 think this question should best be deferred to the economist. The property task force did some work and made some recommendations in 1994 and it is quite obvious that almost all the speculators have left the market. So now most of them arc end-users or long term investors in the property market. I am sure Hong Kong people arc very smart. After such a turbulent period in property prices, I don't think the same sort of speculative activities would re-emerge so soon. So that is why we expect stable prices.

Question (in Cantonese): We have asked some major developers. They say that in major housing estates prices have gone up by 10%-l 5% already. Now you have depressed prices by 30% with the measures, so what is your forecast? Will it go up at least half-way?

FS (in Cantonese ): 1 think when we look at the property market we do not just look at the movement in the past year or two. I think what is important is that in the last year or two there has been substantial moderation in the market. If you look at the number of transactions and property prices, it seems that in September last year the market bottomed out and then there was a gradual increase in prices.

Government Economist (in Cantonese): Now the recent rebound since October 1995, when compared to the drop from the peak in April 94, that was still modest. So in other words, in recent months, when compared to the peak two years ago, when you compare the prices I would say that there is still a very modest situation

7

The Financial Secretary has said just now, yes it is true recently there have been more transactions. But then there are two important points to bear in mind. First of all on land auctioning activities, or rather on speculation activities, so far we do not see any evidence of that. I think most of the transactions really involve end-users. So that is why many in the trade believe that there would be healthy and steady growth in the market; there wouldn't be any surge in prices.

Question (HK Standard): Have you set a ball-park figure on how much all your suggestions would cost Hong Kong? And have you also set the timetable to reach those or at least implement some of them in phases or something? Especially today you said some of the money — I mean your medium term forecast has not included the expenditure for M FR and KCR and other major projects. I low does that sit in with your plans, you know for improving the sectors - I mean the services centre and also the business and everything?

FS: You are talking about various proposals I have made in the third part of my Budget Speech. For some of the proposals I have provided funds and I have mentioned them specifically here and there - for language training and so on. And for some others, they are still subject to further consultation with the private sector and the further development of the various action agendas included in the I Oth Addendum to the Budget Speech. So it is not possible at this stage to set a timetable for completion of this. Quite clearly it is a priority area from my point of view and we will continue to pursue it. It is no more than a first step, as I mentioned, in my Budget Speech, and it is a product of only a few months work. We have a lot more work to carry out and it is in a priority area.

If I may ask you also not to quantify the benefits of these various action agendas in terms of the money we arc going to spend in the coming few years because there will be an enormous multiplying effect involved and there will be contributions by the private sector as well. So it is important for you to look at this thing in a much wider and more liberal context. The agenda is set out for further discussion and I am looking forward for a partnership with the private sector in this.

Question (Commercial Radio): If we could just stay with English for a minute Mr Tsang. It seems like this Budget is constructed around certain ideas but perhaps with unintended consequences. You give a lot of benefits to families with two. three, four children which would be quite disadvantageous to individuals or couples who choose not to have children or have only one child. By comparison there is a discrepancy.

The other possibility is that the working poor would be less inclined, and have less incentive to hold a job given what they would cam as working poor versus what they could receive if they simply took CSSA and other benefits coming their way. There’s an incentive to become unemployed.

8

FS: Well, two quite different questions.

1 do attach importance to family values and 1 have said so in the Budget speech. It doesn't mean that 1 am encouraging very big families, going beyond the scope of । what the family planners think is reasonable and rational. But it is, of course, necessary to recognise the financial burden of a larger family in relation to a smaller one. There has always been an incentive in our revenue system, in our tax system to give allowances for the second, for the third and the fourth child. But, if you look at it carefully, Francis if you look through this carefully, the allowances for the third and fourth child are less than the allowance we give to the first two children. This indicates the priority we believe is important in the system itself.

Then you are talking about the level of CSSA. It is clearly an area which has been debated long and hard in the community, particularly among the social welfare sector. Only this morning I was exposed to a large number of telephone calls suggesting that perhaps we are now sailing quite close to the wind on CSSA.

But quite clearly, also, if you look back on the sort of messages and the sort of pressure that the Administration have been put under in the Legislative Council, in the professional bodies, it was a clear message that any additional new money that we may be able to find, which is generated by the growing economy, we should devote that sort of money to the welfare sector and that has been the priority we have adhered to and 1 do not see that there is a case, a clear case, that the level of CSSA payment is actually discouraging people from working, otherwise there would not be a common outcry about the unemployment rate because a lot of people are still very anxious to re-enter the employment market, the labour market. But it is something we I'm sure, in the Administration, would be guarding against. We will not produce a safety net going beyond doing a function, beyond that of a safety net.

Question (Commercial Radio - follow-up): In effect, if I understand what you are saying, the Administration has effectively succumbed to the political pressure to spend this money because it's very difficult to justify how much you arc holding on to?

FS: 1 say nothing of the sort. What I am saying is we must be able to construct a Budget which meets community aspirations and at the same time a Budget which would be totally consistent with my budgetary guidelines and I think my Budget has complied with those two criteria.

K. C Kwong has mentioned this other point which I've omitted, that our provision on CSSA has a very firm foundation. The firm foundation is the outcome of the Household Expenditure Survey in which we have looked at those peoples' spending pattern in the assisted sector and those people who are outside that sector and that would be a useful benchmark against which we could verify CSSA level of assistance.

9

Question (? speaker): Just going on from that, I think there’s been a few rumblings in the pro-China press today. Are you resigned to criticisms from the Chinese quarter that you are spending too much on social welfare or going in the direction of a welfare state?

FS: We are certainly not going into a welfare state but we certainly believe that welfare is important in this community. We have noted the Chinese side comments, we have to say it, not for the first time, and we have taken that into account in constructing the budget. But there are contending pressures in the community and if you hear, I’m sure you all have, what has been said so far by Legislative Council across the board practically, there seems to be more criticism on what they call the inadequate provision in this regard.

So some balance needs to be struck and I believe the Administration has struck the right balance in producing the Budget. And the same point 1 think was echoed in my meeting with the District Boards and the Municipal Council this morning and I gather that various Chairmen had consulted their constituency before the meeting today. They seem to agree that we have struck the right balance, hence the score of 80 points.

Question (UK Economic Journal - in Cantonese): Again some questions raised by proChina newspapers. Now in some of their editorials and commentaries it was said that there was such huge tax concessions but at the same time there wouldn't be an additional increased income from land sales, so where does the money come from? That seems to be the question asked and they say that for many of the spending items and revenue proposals (it) means that the SAR Government would have to pick up the bills and also there are some items which may have an impact on the 1997-98 budget. So are you confident that they will allow you to carry out those proposals after next year?

FS (in Cantonese): Of course there are a lot of comments expressed and varied comments too. I think it is important we must bear in mind the fact that Hong Kong is a vibrant society, it is still on the move, it is not stagnant in any way. So there are some projects that are still on going. There are some projects reaching their peak and there are other projects which arc just about to commence. So we can't say that on 30 June, 1997, all projects must come to a halt and then starting from 1 July, 1997, we only start new projects then so that there wouldn't be projects straddling 1997. We can't do that because if we do that it means everything must come to a halt or come to completion on 30 June. 1997, before we start new infrastructural projects.

y

- 10 -

Now only then would there be no financial commitment being carried forward beyond 1997 but that wouldn't be the way to do things because Hong Kong is a vibrant society, that's a dynamic society. Because if we take such a short-term view then there would be a period in 1997 when Hong Kong would have come to standstill because no infrastructural projects could be carried out. But we all know that for any infrastructural projects, of course, there would be lead time, especially for major ones. So we need to start planning on those projects and of course when there are some projects which have huge cost implications they must be taken up in discussion with the Chinese side. So Mr Kwong will certainly take up these matters with his counterparts in the Expert Group. Now I don’t see there would be major difficulties here. We have overcome other, even bigger difficulties so I see no problem with this.

Question (HK Economic Journal - in Cantonese): So what will be the difficulties Mr Kwong, would there be any?

S for Tsy (in Cantonese): Now as the f inancial Secretary has made it clear we have a common objective that is a smooth transition ...

S for Tsy (in Cantonese): As the Financial Secretary has made it clear we have a common objective, that is a smooth transition. In the past eleven or twelve months we have explained in great detail the formulation process of the Budget and in the last few days we've published our expenditure figures and from these figures you can see that we do follow strict budgetary guidelines. So under the circumstances we are confident we will get China's acceptance of all the proposals.

Question (? speaker - in Cantonese): 1 have two questions.

(One question al a lime please)

Now in the medium-range forecast it is mentioned that by the year 2000 we will have a reserve of $365 billion and then in the Budget speech you stressed that no-one should even think of touching that reserve now. So what would you consider to be an optimum reserve for a Government? Is there any such ceiling set by the Government? For example, is it one year recurrent expenditure? Would you consider that to be the optimum reserve or do you have any other indicators?

FS (in Cantonese): I don't think we should have an indicator as such. When we talk about using the reserve, there must be an important condition to be satisfied. That is there must be a need for dipping into the reserve. Because a reserve is a reserve, we shouldn't just spend it on recurrent items. As I said in my Budget speech, the International Monetary Fund has looked at our situation and it is of the view that we must not touch our reserve given our present economic climate. Especially in view of the 1997 issue.

- II -

Now we have a reserve of $150 billion and that's rather sound. It's not excessive certainly. And by the year 2000, there will be $300 billion dollars. But maybe after 1997 we would have other major plans in the pipeline. We don't know yet. Of course the Financial Secretary will always give a forecast for next year. But right now we don't have any major new projects to come on stream. We're just talking about projects already on going. So that's why by the year 2000 we will have over $300 billion in reserve. That’s a fact.

But then every year we may have new plans and we need to review our economic situation every year. As to when would be the time to use the reserves, in 1995-96, for instance, we did dip into the reserve because we had a deficit budget. So we have to look at the trend growth rate of the economy to control our expenditure. Now we have a trend growth rate of 5% and we plan our expenditure accordingly. If we have less expenditure then we may have a surplus. But as in 1995-96 for instance our average growth rate was 4.6% and that's below 5%, we have a deficit. That’s whv, then we would use the reserves. So it doesn't mean that when we have money we must spend it. Otherwise we will have a deficit budget every time.

As I said, a deficit budget for 1996-97 goes against one of the major principles. That is why we must avoid a deficit budget in 1996-97as far as possible.

Question (? speaker - in Cantonese): Mr I’sang. talking about family values in your Budget. Now this is Chinese values and it is only a Chinese Financial Secretary who will come up with such a concept - would you agree?

And then here we also have allowances for siblings. I lave you got actual cases that have led to such proposals?

FS (in Cantonese): As I have said the Budget is not my sole efforts. It's actually team work and I will not claim total credit for it. But then, of course, different Financial Secretaries will have different views on this and I'm not the first in starting to give more allowances for the family. Sir Hamish started with the disabled, single parent allowances and with more allowances for the family. But of course my upbringing has also influenced this.

Question (? speaker - in Cantonese): You talk about improving, helping the industrial sector and also promoting the services sector and you also talk about you have to discuss these with the Chinese side. With all these concepts, how far do you think these can be implemented and how much arc we talking about?

12

FS (in Cantonese): Where we can allocate funds, it is already in our medium-range forecast and there arc certain things that we are doing already. I or instance, things in relation to language proficiency. But there are other things, for instance Science Park. Even if we start today, we will not be able to be really on the go before 1997. We're just now identifying sites. So this is a very major project and we will have to look at this in conjunction with the business sector. When we have reached a consensus then next year it will have to compete against other items at the resource allocation exercise.

Question (? speaker - in Cantonese): So you will have to further look at future things such as Science Park and it will not materialise in the short-term?

FS (in Cantonese): Yes. We do agree that we need to have a Science Park. So we are now trying to find a site and then we will have to work out the cost and then Mr Kwong will have to take it to the Expert Group to see how we can come up with funds, and that will be after 1997 that we can really implement that. But there are others that we are working on already. But others perhaps may still be in its conceptual stage and therefore I have put it down very clearly in the Budget.

We have worked at it for five months and the Task Force will continue to look at this. We hope that the business sector, the manufacturing sector and the services sector will give their views. If they agree, then we can go to the Finance Committee.

End

Govt fully committed to enhance language skills in schools *****

The Secretary for Education and Manpower. Mr Joseph W P Wong, today (Thursday) announced that the Government has accepted fully the final recommendations of the Education Commission Report No 6 (ECR6) on enhancing language proficiency and had made available sufficient resources to implement the major recommendations this year.

Speaking at a post-Budget briefing for the media. Mr Wong pointed out that the Government had earmarked some $44.4 million a year to make an early start on implementing ECR6's recommendations which set out a comprehensive strategy for enhancing language proficiency of students in I nglish and Chinese (including Putonghua).

13

This amount will include some $6 million to be provided within his global allocation.

In the Draft Estimates for 1996-97, a recurrent expenditure of $2.7 million, rising to $17.6 million on a full year basis, has been earmarked for recruiting some 100 qualified native English speaking teachers for schools.

"The scheme will help increase the exposure of our students to the use of English language, in particular the spoken English," Mr Wong said.

To implement another important recommendation of ECR on Putonghua education, Mr Wong said the Government had provided $10 million annually in recurrent expenditure to improve and expand teaching and learning of Putonghua in schools.

In 1996-97, $1.2 million will be used to develop a new Putonghua curriculum for Primary One to Secondary Five students for introduction in September 1998.

Starting this summer, the Government will organise summer classes for primary and secondary students who wish to learn Putonghua. The annual cost for this project will be about $10 million.

Also, training for teachers will be enhanced this year to ensure that there will be an adequate supply of trained teachers for teaching new Putonghua curriculum in primary and secondary schools.

As recommended by EC, schools would be encouraged to employ qualified native Putonghua speaking teachers who should assist in training teacher trainers and trainees of both the pre-service and in-service teacher education programme.

"All these measures will pave way for including Putonghua in the Hong Kong Certificate of Education Examination as an independent subject in the year 2000 as announced in the 1995 Policy Address," Mr Wong said.

On ECR6's recommendation that intensive English courses should be extended to some 10.000 Secondary Six and Seven students in English medium schools to further improve their language skills at university entrance level. Mr Wong said a recurrent cost of $11.5 million a year had been earmarked to start the programme from September this year.

14

"Another important measure to help solve the problem at this level is a strict enforcement of entrance requirements in English by University Grants Committee-funded institutions.

"We will liaise closely with UGC on this matter and will continue to impress upon the heads and staff of the institutions that they should be more rigorous in enforcing English language entrance requirements with a view to upholding the quality of higher education," Mr Wong stressed.

Welcoming EC's final report, Mr Wong said the Government shared the Commission's view that the more pressing problems should be tackled as quickly as possible.

"We agree with the Commission’s proposal to implement the various recommendations in phases, with Phase One concentrating on laying the foundation for the long-term measures and implementing the priority short-term initiatives," he said.

He pointed out that a major initiative under Phase I was the setting up of the Standing Committee on Language Education and Research (SCOLAR) later this year to provide an institutional framework for formulating and implementing language in education policy in a coherent and systematic manner.

Noting that EC in its Final Report recognised the need to rationalise the relationship between SCOLAR and the Language Fund Advisory Committee (LFAC), Mr Wong said the Government considered that SCOLAR should be set up as an independent body providing a coherent framework for language in education and to carry out various executive functions.

"Given the primary task of SCOLAR in the research and implementation of the policy on language in education, we consider it logical for SCOLAR to take over the function of LFAC in processing applications under the Language Fund. Action is now in hand to set up SCOLAR as soon as possible in 1996 and to allow LFAC to lapse," he said.

On teacher development and support, Mr Wong said the Government supported EC's recommendation that benchmarks should be set for language and non-language teachers as one of the measures to improve the language proficiency of students.

"We have invited the Advisory Committee on Teacher Education and Qualifications (ACTEQ) to consider the issue. ACTEQ has recently invited consultants to develop minimum language proficiency standards for all teachers by April 1996, and to develop minimum standards, competence and qualifications for language teachers by July 1996.

15

’’After receiving recommendations from consultants, ACTEQ will make proposals to the Government as soon as possible,” Mr Wong said.

Commenting on teachers’ and educators’ support of ECR6’s recommendation that the workload of language teachers should be reviewed and reduced, Mr Wong said the Education Department would soon set up a task group to review and assess the workload of language teachers at a cost of $0.8 million.

On EC’s recommendation that support services should be provided for teachers such as the setting up of a Language Resource Centre and computerisation projects to promote professional exchanges of ideas and materials, Mr Wong said he had allocated within his global allocation a recurrent annual expenditure of $3.4 million a year to improve the support services for teachers.

"Also, applications will also be made this month to the Language Fund for the establishment of a Language Resource Centre at a cost of $3 million,” he added.

To implement EC's other recommendations, Mr Wong also outlined the following programme of work:

SCOLAR which will consist of representatives of employers’ associations and the business sector to consider how to develop ECR6’s recommendation on launching a new Intensive Vocational Language Scheme to provide tailor-made language programmes both in English and Putonghua for school leavers joining the workforce.

* Education Department to set up a task force to work out details on extending the existing Reading Schemes in Chinese and English to cover all levels of primary and secondary schooling and to develop similar schemes to strengthen the writing skills of

* students. About $ I million will be required for this programme.

In addition, the Government will examine the feasibility of introducing exit examination in tertiary institutions and immersion-type language training to enhance the language proficiency of Secondary Seven students.

Mr Wong stressed that the Government fully recognised the need to enhance the language proficiency of the young people in Hong Kong and was committed to make available sufficient resources to meet the major recommendations of ECR6 under Phase One.

16

"Implementation of all Phase One proposals will require additional recurrent expenditure of $21.3 million in the first year rising to $44.4 million on a full year basis, and non-recurrent expenditure of $65 million.

"The implementation of other recommendations in Phases II and III will await the deliberations of SCOLAR and ACTEQ and the resources required will be worked out after firm proposals have been formulated and accepted by the Government," Mr Wong said.

He pointed out that whilst results of long-term measures could not be felt within a short period of time, the implementation of short-term initiatives was expected to bring about improvements in language standards in general, and in particular, at university entrance level after two to three years time.

"The Administration will monitor the situation closely and will undertake a thorough evaluation of the relevant measures in 1998," he said.

Mr Wong said he was confident that the implementation of the recommendations would enhance the language proficiency of Hong Kong's young people and the workforce such that the territory's position as a leading service, financial and economic centre in the Asian Pacific Region would be maintained.

End

$300 million grant for retraining programme proposed

*****

The government's proposal to make a $300 million grant to the Employees Retraining Board (ERB) reserve fund is to enable the Board to have the necessary financial backing for its current activities and future programmes.

Furthermore, the Government is about to appoint consultants to undertake a comprehensive review of the Employees Retraining Scheme with the aim of fine tuning the Scheme to meet market needs and tightening quality control of the retraining programmes.

This was stated today (Thursday) by the Secretary for Education and Manpower, Mr Joseph W P Wong, when speaking to the media at a post-Budget briefing.

17

Mr Wong pointed out that ERB's retraining fund would continue to sustain a deficit in 1996-97 and the balance of the fund was expected to be further reduced.

"It is because the Board's primary income from levy is decreasing as a result of the freeze of the General Labour Importation Scheme since April 1995 and the retraining expenditures have gone up significantly following the expansion of training programmes in recent years." he said.

In the 1993-94 financial year, retraining expenses was at $106.3 million which was readily met by the levy income of $130.5 million.

However, in 1994-95, the levy income dropped to $97.6 million while the retraining expenses had gone up to $245.8 million. During the period, the balance of the Fund dropped from $437.1 million to $310.6 million.

As at January 1996, the levy income was $60 million whereas the retraining expenditure amounted to $190 million, further bringing down the balance of the Fund to $186 million.

Mr Wong underlined the importance of injecting the necessary hind into the Board which had assumed a greater role in tackling unemployment by providing retraining to displaced workers to help them re-enter the workforce.

The consultancy study will set the direction and map out a strategy for the provision of retraining for the next few years, he added.

"In 1992. the Finance Committee approved a capital injection of $300 million, which is equivalent to two and a half years’ levy income.

"Calculating with this principle and using the estimated levy income in 1996-97, we recommend that another $300 million should be injected into the ERB." Mr Wong said.

On the New Technology Training Scheme providing matching grants to companies which intend to help their staff acquire skills in new technologies. Mr Wong said it was the right time to review the parameters of the Scheme because having properly trained workers in the latest advanced technological skills was of great importance to Hong Kong's economy.

End

18

Outcome of Geneva meeting on VMs welcomed

*****

A government spokesman today (Thursday) welcomes the outcome at the seventh meeting of the Steering Committee of International Conference on Indo-Chinese Refugees in Geneva to reaffirm unanimously that the only viable option for Vietnamese who have been determined to be non-refugees is return to Vietnam.

"We are pleased to note that while Comprehensive Plan of Action would officially come to a conclusion by the end of June 1996, special arrangements will continue to be made in the case of Hong Kong in the light of prevailing special circumstances, with the aim of solving the Vietnamese boat people problem in Hong Kong as soon as possible after June 30, 1996," he said.

"In other words, UNHCR will continue its operations in, and assistance to Hong Kong beyond that date."

The Secretary for Security, Mr Peter Lai, and the Refugee Co-ordinator, Mr Brian Bresnihan, attended the meeting which was held on March 5 and 6.

End

Asbestos regulation to be gazetted *****

The Air Pollution Control (Asbestos) (Administration) Regulation, setting out the qualifications, conditions and procedures for registration as asbestos consultants, contractors, supervisors and laboratories, will be gazetted tomorrow (Friday).

The registration system will start shortly after the implementation of the Regulation on May 1.

"This will enable the control of environmental asbestos under the Air Pollution Control Ordinance to take full effect by the end of the year," Principal Environmental Protection Officer of the Environmental Protection Department, Mr Tse Chin-wan, said today.

"Statutory control of asbestos is necessary. It is well proven that inhalation of airborne asbestos fibres may lead to serious illnesses, such as asbestosis, lung cancer and mesothelioma.

19

"With a registration system in place, asbestos removal and related work will in future only be carried out by qualified personnel conforming to the codes of practice of the trade."

Their performance will be monitored by an Asbestos Administration Committee, w'hose membership will also be gazetted tomorrow.

The 11-member Committee will assist in processing applications for registration and would conduct inquiry into complaints concerning misconduct of registered personnel, company or laboratory.

"This is to ensure a high standard of performance during the carrying out of asbestos related work and to reduce the risk of public exposure to environmental asbestos," Mr Tse said.

Persons or companies applying for registration will have to pay a fee of $2,905 and an annual fee of $910.

End

Governor to open Flong Kong Promotion in Scotland *****

The Governor, the Rt Hon Christopher Patten, will open a major Hong Kong promotion in Scotland's capital city, Edinburgh, in October.

Announcing details of the "Hong Kong: City of Tomorrow" architectural exhibition and the "Hong Kong 1997 and Beyond" business conference to the Scottish media in Edinburgh yesterday (Wednesday), the Hong Kong Commissioner Sir David Ford said: "We want to show examples of our lifestyle and the tremendous strives made over the years in the sphere of housing and also tell the business community and investors here of the opportunities that Hong Kong has to offer them."

The promotion, which brings Hong Kong to Scotland, will also include special cultural events. Artists from the territory and from Hong Kong Chinese community groups in Scotland will give a series of performances.

The architectural exhibition will be held in Edinburgh's prestigious City Arts Centre from October to January 1997, is expected to attract thousands of visitors.

20

It will highlight aspects of housing and building developments over the years to its present day international status as a city of architectural excellence.

A typical public housing apartment occupied by a Hong Kong family will be included in the exhibits to show everyday home-life in the territory.

"We have attracted first rate architects and are in the forefront of technological and architectural design, we want to bring a flavour of the Hong Kong lifestyle to Scotland and show how we have made a success of high-rise public housing and high density living," Sir David said.

"We are also delighted to be part of the second Edinburgh Festival of Building and Design," he added.

The Business Conference will be held on October 24 at the Edinburgh International Conference Centre.

The Governor and leading businessmen from Hong Kong and the United Kingdom will give keynote speeches at the one-day conference.

They will highlight opportunities for developing and doing business in Hong Kong and explain the strategic role the territory plays in China's development programme and that of the Asia Pacific Region as a whole.

"Scotland is an important financial centre in the UK and there is increasing interest in doing business in the region," Sir David said.

In addition to the architectural exhibition and business conference, he said, the cultural events planned would add another dimension to the Hong Kong message to be brought to Scotland.

"Our promotion will be an exciting event, bringing I long Kong to Scotland and is sure to be one that will stimulate the public," said Sir David.

Also attending the press conference were the Rt Hon Norman Irons, Lord Provost of Edinburgh and Councillor Eric Milligan. Convenor Lothian Regional Council who will be the Lord Provost when the exhibition is held and Mr Henry Tse, President of Edinburgh and District Chinese Association.

End

21

Recovered eagle to be free again

*****

The eagle which was injured after being trapped by a piece of kite string on a tree at Stanley in late January has recovered and will become free again tomorrow (Friday).

Announcing the good news, an Agriculture and Fisheries Department (AFD) veterinary officer. Dr Thomas Sit. said the eagle had recovered from its injury faster than expected.

"Apart from having a quick recovery from wounds to its wing and other parts of its body, the bird has gained some weight." said Dr Sit. who had been taking care of it since it was admitted to the Shek Wu Hui Government Kennels.

The frequency of the bird flying within the big cage had increased considerably in the past several days, indicating that it had been gaining more confidence and strength to return to its normal wild life, he said.

Dr Sit is also optimistic that the bird will survive in the wild after being freed near the Tai Po Kau Nature Reserve.

Another wild animal, a civet cat. will also be released at the nature reserve tomorrow.

End

Views sought on prevocational and technical education

*****

Educators and members of the public are invited to participate in a public forum on Saturday (March 9) to express their views on Hong Kong's prevocational and secondary technical education system, which is being reviewed by the Government.

The forum will be held at Harbour View Room. 3rd floor, the Excelsior Hotel. 281 Gloucester Road. Causeway Bay. from 9.30 am to noon.

The Education Department has set up a working group to conduct a comprehensive review of prevocational and secondary technical education in I long Kong, covering such topics as curriculum, interface with tertiary institutes, teaching facilities and teacher training.

n

Meanwhile, members of the public arc invited to send their views to the Secretary, Working Group to Review Prevocational and Secondary Technical Education at Room 1404, Wu Chung House. 213 Queen's Road East. Wan Chai. Hong Kong, before April 1. 1996.

Enquiries may be made on 2892 6315.

End

Beat drugs seminar for social workers

*****

A seminar aims al enhancing the capability of frontline social workers in dealing with young drug abusers will be jointly organised by the Narcotics Division and the Social Welfare Department tomorrow (Friday).

Entitled "Working with Young Drug Abusers - An Overview of Work Approaches of Different Professions", the seminar will discuss collaboration between social work profession and other disciplines in working with young drug abusers.

More than 370 in-service and student social workers will attend the seminar which is part of the Government's on-going efforts in tackling the problem of drug abuse among young people.

The event will bring together different professionals in the drugs-related field to share their views and experience and will provide a forum for discussion among social workers.

The Assistant Director (Youth and Rehabilitation) of Social Welfare Department (SWD). Mr Carlos Leung: Assistant Secretary for Security (Narcotics). Miss Vicki Wong; and Consultant Psychiatrist of Castle Peak Hospital, Dr Leung Shung-pun are invited to speak at the seminar.

Other speakers include Inspector Fong Ying-hon of the Narcotics Bureau. Supervisor of SWD's Against Substance Abuse Scheme), Mr I an I ick-yee. and secondary school principal, Mr Ying Yu-hing.

End

23

7th and 8th "Get together" between UK and Chinese officials * *****

Following consultation with the Xinhua News Agency (Hong Kong Branch), we are pleased to announce that the seventh and eighth informal get-together between senior Hong Kong civil servants and officials of the Chinese side will take place respectively on March 14 and 15 at the Voting Members’ Box. Happy Valley Racecourse starting at 10.30 am. It will end after lunch.

Participating officers will be:

March 14

Mr Bowen Leung

Secretary for Planning, Environment and Lands

Dr Pun Kwok-shing

Director of Planning

Mr R D Pope

Director of Lands

Dr Choi Yu-leuk

Director of Buildings

Mr R JS Law

Director of Environmental Protection (Designate)

They will be accompanied by Deputy Secretary for the Civil Service. Mr Michael V Stone, and Principal Assistant Secretary for the Civil Service. Mr Pang King-chow.

March 15

Mr Kwong Hon-sang

Secretary for Works

Mr Lam Chung-lun. Billy

Director of New Airport Projects Co-ordination Office

Mr I lu Man-shiu

Director of Water Supplies

24

Mr Lee Shing-see

Director of Territory Development

Mr Chan Yat-sun. Kenneth

Director of Architectural Services

Mr Ng Yee-yum

Director of Drainage Services

Mr H B Phillipson

Director of Electrical and Mechanical Services

Mr Lam Moon-tim. Bernard

Director of Civil Engineering (Designate)

They will be accompanied by Deputy Secretary for the Civil Service, Mr C I C Jackson, and Principal Assistant Secretary for the Civil Service, Mr Pang King-chow.

End

Dangerous squatter structures closed for public safety

*****

The Buildings Department today (Thursday) applied for a Court Order to close a number of squatter structures on the hillside ad jacent to Grantham I lospital in Wong Chuk Hang for public safety.

A total of 76 residents from 33 families arc affected by the operation. Those eligible for rehousing have been offered allocations by the I lousing Department, while others would be accommodated in transit centres if necessary.

Chief Building Surveyor (Dangerous Buildings) of the Buildings Department. Mr Kwok Yui-chung, said that the structures were built of wooden boards and metal sheets with no proper foundation. Some of the stilt supports also showed signs of instability.

’’The huts arc so dilapidated and poorly maintained that they are no longer suitable for occupation.

25

"Furthermore, according to the advice of the Geotechnical Engineering Office, the slopes affecting the huts are liable to become dangerous.

"For the safety of the residents and the general public, it is necessary to vacate and demolish the structures and to carry out remedial work to the slopes." Mr Kwok said.

Mr Kwok noted that some of the squatters were still unwilling to accept the rehousing arrangement, although they were provided with several choices.

"I hope that the occupants will accept the offers without further delay so that the slope remedial work can commence as soon as possible.

"The Social Welfare Department and the South District Office will also render assistance to them if necessary," Mr Kwok said.

End

210 VMs transferred to Victoria Prison *****

The operation today (Thursday) to transfer 210 Vietnamese migrants (VMs) from the North Section of the High Island Detention Centre (HIDC) to Victoria Prison was completed around 3 pm.

This group of VMs has been selected for return to Vietnam on two Orderly Repatriation Programme flights to be held over the next two weeks.

The operation had been advanced to this morning following the holding of hostage of a Correctional Services Department (CSD) officer by a group of VMs at HIDC yesterday. The officer was released early this morning after being held for 11 hours.

Passive resistance was encountered during today's operation, with more than 10 targeted VMs and their supporters staying on the hut roofs at one stage. It took CSD officers two hours to remove all the VMs from the roofs. No injury was reported.

As is the practice, the whole operation was observed by independent monitors.

26

Commenting on the operation, the acting Refugee Co-ordinator, Mr Gordon Leung, said he was pleased that no violence was encountered.

He also commended the officers who had conducted the operation for their patience.

"The Government is totally committed to the repatriation of all VMs as soon as possible,” he said.

"The future of the VMs in our camps lies in Vietnam."

End

Transfer of VMs from High Island Detention Centre today

*****

The Government announced that a group of about 200 Vietnamese migrants will be transferred from the High Island Detention Centre today (Thursday) in preparation for their return under the Orderly Repatriation Programme.

They will be transferred to Victoria Prison for pre-flight documentation and medical checks prior to leaving Hong Kong in two groups within the next two weeks.

The transfer will be observed by independent monitors.

End

Queen’s Gurkha Signals take part in Commissioning Parade *****

Over 60 men from the Queen's Gurkha Signals will take part in a Commissioning Parade at the Prince of Wales Barracks tomorrow (Friday).

During the parade Commander British Forces, Major General Bryan Dutton, will commission Lieutenant (Queen's Gurkha Officer) Bhaktabahadur Sahi and will also present five Long Service and Good Conduct medals.

- 27

The Queen's Gurkha Signals, based at the Prince of Wales Barracks, not only enjoys a cosmopolitan mix of British, Gurkha and Chinese soldiers but is also made up of both Army and Royal Navy personnel.

It consists of a Regimental Headquarters. HQ Squadron (formerly HQ British Forces Administration Unit), Hong Kong Gurkha Signal Squadron and an Administration Unit at Sek Kong. New Territories.

End

Immigration officers to visit UK

*****

Four immigration officers will leave for the United Kingdom in mid-March for a six-week attachment programme with the UK Immigration Service.

The four officers are acting Senior Immigration Officers Mrs Kwok Lam Yec-kwan. Mr Ngan Chor-keung and Mr So Kam-tong; and acting Immigration Officer Ms Leung Chui-wa. They will visit branches of the Home Office handling immigration and nationality matters as well as immigration offices and ports.

At a briefing before their departure, the Director of Immigration, Mr Laurence Leung Ming-yin. said the Immigration Department placed great importance on giving its staff professional training.

Due to the growing complexity of immigration work, members of the Service were required to be vigilant and alert towards changes that had taken place, he said.

He hoped that the attachment would provide a good opportunity for the officers to broaden their horizon and to have a better understanding of the work of their • counterparts in the UK. he added.

End

28

I long Kong Monetary Authority money market operations

*****

$ million lime (hours) Cumulative change ($mi Ilion)

Opening balance in the account 2.137 0930 +667

Closing balance in the account 2.314 1000 +667

Change attributable to : 1100 I 667

Money market activity +650 1200 +667

LAF today -473 1500 +668

1600 +650

LAF rate 4.00% bid/6.00% offer TWI 123.6 *+0.1 * 07.03.96

I long Kong Monetary Authority

EF bills I'F notes

Terms Yield Term Issue Coupon Price Yield

1 week 4.68 2 years 2802 5.16 99.37 5.58

1 month 4.86 3 years 3901 5.57 99.50 5.84

3 months 5.00 5 years 5012 6.38 100.49 6.35

6 months 5.12 7 years 7302 6.02 96.67 6.73

12 months 5.22 5 years M5O2 7.30 103.02 6.64

Total turnover of EF bills and notes - $25,8X7 million

Closed March 7. 1996

End

DAILY INFORMATION BULLETIN

ISSUED BY GOVERNMENT INFORMATION SERVICES BEACONSFIELD HOUSE. HONG KONG. TEL: 2842 8777

Friday, March 8,1996

Contents Page No.

Transcript of CS's media session......................................... 1

Transcript of the Financial Secretary's media session.................... 2

Transcript of SFS's opening statement at post-budget PC.................. 2

Major improvements to CSSA Scheme recommended............................ 5

Govt set to strengthen elderly outreach services........................ 10

Chinese delegation to visit Hong Kong................................ 11

1996 Population By-census to commence................................... 12

New office rental allowance for DB members.............................. 14

New HK Academy for Performing Arts Council member appointed.......... 15

Monitors' report submitted to CS........................................ 16

Volume and price movements of external trade............................ 16

Nominations for Education Council invited............................... 23

Customs set up special lines to encourage crime reporting............... 24

Medical seminars on growing up.......................................... 25

Architectural design...

Contents

Page No.

Architectural design for school wins award.............................. 25

Tenders invited for Pokfulam skills centre.............................. 26

Propo sed road works for Tseung Kwan O.................................. 27

Tenders for mainlaying works in Central Kowloon......................... 28

Hong Kong Monetary Authority money market operations.................... 29

1

Transcript of CS's media session *****

Following is the transcript of the remarks (English) to the media by the Chief Secretary, Mrs Anson Chan, after attending the International Women's Day Luncheon this (Friday) afternoon:

Question: Do you think it is appropriate for civil servants to sit on the selection committee which would choose the future chief executive?

CS: I think the selection committee, the way in which the selection committee will be organised is clearly laid down in the Basic Law. On the part of the Hong Kong Government, we have said that we fully intend to co-operate with the Preparatory Committee. The exact modality for co-operation is a matter that remains to be discussed with our side and the Chinese side. In the meantime of course, as you know, we have set up the liaison office and we are ready at anytime to discuss actual proposals for co-operation with the Chinese side.

Question: Some people are still not satisfied with the budget, among them seems to be the elderly, the unemployed and the disabled. Do you think they have a case?

CS: I think that the Financial Secretary will be extremely surprised if he doesn't receive some criticisms on his budget. But I think that to a very large extent he has met the needs and the wishes of different sectors of the community, bearing in mind that our resources are limited and it is not possible in fact to meet the demands of every sector. I think this is an extremely good budget. It does take into account the needs of different sectors. It on the one hand not only improves social services, particularly social security payments for the elderly which is a matter that is of great concern to the community, but at the same time it enables Hong Kong to maintain our competitive business environment so that we can continue to enjoy the economic growth that enables us to improve our services across a wide range.

End

2

Transcript of the Financial Secretary's media session

* * * * ♦

Following is a transcript of the media session by the Financial Secretary, Mr Donald Tsang, after briefing Legislative Council members on the 1996-97 Budget this (Friday) morning:

Question: There have been calls from many groups that there should be further spending on welfare, such as the CSSA. Are you prepared to make concessions and give out more?

FS: We have done what we believe to be possible within our expenditure guideline and there is an overriding aim of mine and my colleagues that we should try to aim to balance the budget for 1996-97. I think in respect of social spending we have done the right thing. We have allowed it to increase in terms of expenditure in real terms - 14.7 per cent in the coming year. I think it is a right balance. But if Members feel that it is not adequate they have to consider in what way we can compensate, what is the additional expenditure, we must give to this. Up to now I still believe it is a right balance, a right provision, for Hong Kong.

End

Transcript of SFS's opening statement at post-budge PC

*****

Following is a transcript of the opening statement made by the Secretary for Financial Services, Mr Rafael Hui, at a post-budget press conference today (Friday):

Ladies and Gentlemen,

Good afternoon. In his Budget Speech, the Financial Secretary has underlined the importance of maintaining Hong Kong as an international financial centre into the next century and beyond. Being an international financial centre could indeed help build a prosperous future for Hong Kong. Before my colleagues go into the details of how the financial services sector, in particular the private sector, would assist in furthering the vision of the Financial Secretary, let me make a few general remarks by way of introduction.

3

First, the importance of financial services in Hong Kong. Financial services include banking, insurance and retirement protection, financial markets and fund management services. Between them, they account for over 10% [10.8%] of Hong Kong's Gross Domestic Product in 1994, employing over 155,000 people.

The Government is committed to supporting Hong Kong's development as a major international financial centre. The Joint-Declaration stipulates that "The Hong Kong SAR will retain the status of an international financial centre, and its markets for foreign exchange, gold, securities and futures will continue. There will be free flow of capital. The Hong Kong dollar will continue to circulate and remain freely convertible." The concept is further developed in the Basic Law, and Article 109 stipulates that "The Government of the Hong Kong Special Administrative Region shall provide an appropriate economic and legal environment for the maintenance of the status of Hong Kong as an international financial centre".

The Government believes in market forces. Our economy has always been and will continue to be led by the market. We simply strive to provide an environment and the infrastructure that will be most conducive to business and commerce. We lay down the ground rules and continue to improve them in the interests of Hong Kong and in order to maintain our competitiveness vis-a-vis other financial markets. We seek to provide a level playing field for everyone. There are no restrictions for overseas investors, and similarly we do not seek to prevent local investment moving offshore.

Hong Kong's importance in the regional and international scene will continue to grow as the partnership between Hong Kong and China intensifies. Realised direct investment by Hong Kong companies in China has increased by more than 20 times in the past decade. On a cumulative basis, our realised direct investment in China is now estimated at US$60 billion, or 60% of China's total. On the other hand, direct investment in Hong Kong by China has doubled from an estimated US$10 billion at the end of 1990 to over US$20 billion at the end of 1994. the investments are predominantly in the service sectors - trade-related services, hotels and tourism, real estate, banking and finance, and major infrastructural projects.

Meanwhile, many economies in the Region are now making extra efforts to liberalise, promote and upgrade their own service sectors. While this would give rise to greater competition in the Region, liberalisation has also opened up more opportunities for trade in services. With GDP in the region projected to continue to grow strongly, at an average annual rate of around 7% to probably US$10 trillion by the year 2000; the value-added contribution of the services sector in this region can reach almost US$6 trillion. Assuming that imports of services in various economies in the Region will increase at the same pace as their GDP, the size of the regional market for imports of services can grow to over US$400 billion in the year 2000.

4

Hong Kong is well-placed to play a big role in the anticipated rapid growth in the Region’s trade in services. We are the freest and one of the most competitive economies in the world; we already have developed strong trade links and close investment relations with neighbouring economies; we have an unbeatable location; a critical mass of financial institutions; the necessary infrastructure in transport and communications; sound and rigorous supervisory framework; ample supply of experienced professionals in all fields of commerce; a skilful and diligent work-force; a community spirit and tradition of enterprise and a long history of doing business with China. All these attributes make us a pretty good place to be a major trading, financial and business services centre for the region generally and for China in particular.

The Addendum on Promotion of Services which accompanies the FS's Budget Speech has outlined how we have been developing policies to encourage and facilitate participation of the private sector and the markets. I should stress that this is not central planning. We have never practised central planning of the economy and we never will.

As far as financial services are concerned, the addendum is meant to stimulate discussion on how Hong Kong can best promote, develop and improve the range of financial services. It does not and should not stop there. It certainly is not exclusive. Any new ideas and proposals are welcome, in particular when they come from the financial markets. Indeed I am aware that both the Stock Exchange and the Futures Exchange have developed work-plans geared to maintaining Hong Kong as a leading financial centre in the region, and we all look forward to hearing their separate announcements in the very near future.

Finally, let me stress that the FS’ vision to carry Hong Kong into the 21st Century through promotion of services is an on-going process. Our mission is to ensure that the process will continue so that Hong Kong will always be a leading international financial centre and so that Hong Kong will have a more prosperous future.

I would now invite Dr Edgar Cheng, Mr Joseph Yam and Mrs Lessie Wei to talk about specific items as listed in the Addendum, starting with Dr Edgar Cheng.

End

5

Major improvements to CSSA Scheme recommended *****

Single parents, family carers and adults in ill-health who are currently receiving Comprehensive Social Security Assistance (CSSA) payments are to benefit most under a basket of recommendations made by the Steering Group set up to review the scheme in March 1995.

Unveiling details of the Review at a press conference today (Friday), the Secretary for Health and Welfare. Mrs Katherine Fok. reaffirmed the validity of the Government's underlying policy on social security - to provide financial assistance to those who needed it to bring their income up to a level where their basic and special needs could be met. •

She said: "This policy goal is easier said than met. But it is important that we bear this policy objective in mind."

She said social security was not a form of retirement protection. It cannot and should not be used, for example, to guarantee a certain type of lifestyle for the elderly - a function more appropriate for a retirement protection or pension scheme to which beneficiaries are normally expected to contribute.

"It is not, therefore, fair to test the new levels of CSSA payments recommended in the Review against such criteria. The test should rather be whether the payments are fair and whether they meet adequately basic needs." Mrs Fok said.

The recommendations of the Steering Group which was chaired by the Director of Social Welfare, will require a total cost of $508 million to implement, including the $300 million already pledged by the Governor in his Policy Address last October.

If the funds are approved by the Finance Committee of the Legislative Council, the recommendations will come into effect on April I.

Of the total, $317 million will be used to increase CSSA standard rates; $46 million to increase the maximum rent allowance to CSSA rent paying households living in private housing; $45 million to meet new special grants for the elderly; $41 million to meet a flat-rate grant for school related expenses; and $59 million to meet additional staffing costs to improve customer service.

6

Methodology

During the year-long review, the Group compared the expenditures of the CSSA group and the lowest five per cent income group shown in the 1994-95 Household Expenditure Survey (HES) with the standard rates plus the monthly apportionment of the annual long term supplement (Modified Standard Rates or MSR's).

The full 12-month HES data showed that MSR's exceeded the expenditure of the lowest five per cent income group except for the able-bodied adult category.

When further compared with the expenditure levels of the lowest 10, 15 and 20 per cent income groups, the results were broadly the same, that is, MSR's exceeded these expenditure levels except for able-bodied adults and elderly persons living in a family.

The Group further constructed basic baskets of commodities and services representing the basic needs for food and non-food household expenditure for various categories of CSSA customers.

Again. MSR's exceeded the basic needs budgets for all CSSA groups except for able-bodied adults and for 50 per cent disabled adults in a family.

While these findings showed clearly that rates for some categories were too low, especially in the case of adults, the statistics showed that others such as the single elderly rates were above even the spending levels of such people in the lowest 20 per cent income group.

New standard rates

Based on this analysis, the Group proposed to increase the monthly standard rate for an elderly person living in a family by $180; an able-bodied adult unable and not expected to work by $600; an adult able and expected to work by $300; and a 50 per cent disabled adult living in a family by $140.

About 54.000 people, including about 16.000 people newly drawn into the CSSA net as a result of the proposed increases, will benefit.

Together with the seven per cent inflation adjustments already announced for 1996-97. the new standard rates for these groups of recipients will be:

7

Current Rate ($ per month) New Rate From April 1996 (S per month)

Elderly person living in a family 1,505 1,805 (+20%)

Able-bodied adult Single 1,210 1,615 (+33%)

Single parent or family carer 1,045 1,760 (+68%)

Other adult living in a family 1,045 1,440 (+38%)

Adult in ill-health Single 1,210 1,935 (+60%)

Living in a family 1,045 1,760 (+68%)

50% disabled adult living in a family 1,505 1,760 (+17%)

Other recommendations The Group also proposed the following:

Payment ot'CSSA to elderly persons retiring to China

I'he Group recommended that elderly recipients be given a new option of retiring permanently to China while continuing to receive their monthly CSSA standard rate payment and annual long term supplement.

The Group also recommended that if elderly recipients were to continue receiving CSSA while living permanently in mainland China, they must be permanent residents of Hong Kong and have resided in I long Kong for at least seven years; and they must have been receiving CSSA continuously for a period of not less than three years before moving to mainland China.

The new option will be introduced once all the detailed procedures have been agreed.

8

Special grants

For elderly recipients, they will be given a $200 "lai see" grant at Chinese New Year and a new special grant of $320 a year, on a reimbursement basis, to participate in recreational and social activities. About 100,000 elderly recipients will benefit.

School children from pre-primary to upper secondary will be given an annual flat-rate grant for school related expenses, that is, books, stationery, school uniforms, meaning an average additional payment of about $1,500 in most cases. About 28,000 school children will benefit.

Rent allowance

The current maximum rent allowance for CSSA households living in private housing will be increased by between 17 and 52 per cent, depending on household size. About 19,000 CSSA households will benefit.

For example, the maximum rent allowance for a three-person household will increase from $2,265 to $3,452. an increase of 52 per cent.

Asset limits

The existing two categories of assets will be simplified to one by excluding the category of real property not occupied by the family.

The limit for cash, savings and valuable possessions will be increased by between nine and 41 per cent, depending on household size. As a result, the asset limit for single person households would be set at $33,000. An additional $16,500 will be allowed for each eligible member of a household.

Disregarded earnings

The level of earnings which a CSSA recipient may retain without being offset against CSSA payments will continue to be set at an amount equivalent to the monthly standard rate for a single able-bodied adult.

As a result, it will increase from the current $1,210 a month to $1,615 a month with effect from April, up 33 per cent.

9

Staffing

To improve customer service, the Social Welfare Department's Social Security Field Units will be provided with an additional 211 posts. Following the increased staffing, CSSA applicants can expect to receive assistance more speedily and effectively.

The improvement will reduce the time span for processing cases and widen the dissemination of information to CSSA customers so that they know what assistance they would receive under the CSSA Scheme.

Average CSSA payments

As a result of the proposed improvements to CSSA and the annual inflation adjustments, the average monthly CSSA payment (i.c. standard rates, rent allowance and other special grants) will increase:

* by 10% to $2,980 for a single elderly person

* by 18% to $5,000 for an elderly couple

* by 21% to $7,960 for a three-member single parent family

* by 19% to $10,270 for a four-person household

by 45% to $2,550 for a single adult in ill-health

* by 28% to $2,150 for a single unemployed adult

Pamphlet

A pamphlet, in Chinese and English, showing the main recommendations of the CSSA Review is available at all Social Security Field Units. District Social Welfare Offices and District’Offices.

End

10

Govt set to strengthen elderly outreach services *****

The Secretary for Health and Welfare. Mrs Katherine Fok, today (Friday) underlined the need for the Government, non-governmental organisations and the community as a whole to do more to reach out to elderly persons, particularly those living alone, and to encourage them to continue an active life in the community.

"Being more a part of the community, they will he less vulnerable in times of difficulty." she said.

Speaking at the press conference on the new health and welfare funding for 1996/97. Mrs Fok said the Government would launch two initiatives to achieve these objectives.

First, the 24 existing multi-service centres for the elderly and the six new ones due to come on stream in 1996/97 will be allocated over $17 million under a two-year pilot project to organise new ways of reaching out to elderly people at risk.

Additional staff will be provided specifically to mobilise resources in the community to help contact and support vulnerable elderly people living in their respective districts. Running parallel to this, the Government will conduct a 15-month consultancy study on elderly needs.

"At the end of the study and the pilot project, we shall be well placed to review how best to take forward the development of elderly outreach services", Mrs Fok stated.

The second initiative seeks to foster social networking by co-ordinating, through District Social Welfare Officers, the resources of non-governmental organisations, the Home Affairs Department. Housing Department, district boards and other district-based organisations.

Local groups and organisations will now be invited by the Social Welfare Department annually to put forward new' ideas and projects they have developed which will strengthen the links between the elderly themselves and between them and their local community.

On the Comprehensive Social Security Assistance (CSSA) Scheme, Mrs Fok spoke at length explaining the various improvements recommended by the Steering Group set up to review the scheme in March 1995.

II

The recommendations will require a total of $508 million to implement, including the $300 million already pledged by the Governor in his Policy Address last October. Subject to approval of funds by the Finance Committee of the Legislative Council, the new CSSA proposals will come into effect on April 1 this year.

On the health front, the Secretary reiterated the increasing importance Government placed on disease prevention and the promotion of good health practices. Of the $1.8 billion allocated to the Department of Health in 1996/97. over $800 million would be spent in these areas of activities.

To instil in the younger generation a new culture of taking responsibility for their own health, the Student Health Service will be extended to cover an additional 443.000 children, bringing the total number of students covered under this scheme to some 900.000.

On the Hospital Authority side, the Secretary noted that apart from the opening of 830 new beds in the coming year, five additional teams will be set up to look after various types of patients and elderly people. These include two rehabilitation coordination teams, one community geriatric assessment team and three psychogeriatric teams.

In addition, a number of capital works projects to expand and develop some existing facilities will also be underway, these include the final phase of the Castle Peak Hospital redevelopment project at a cost of $850 million: construction of the Lai King Hospital and West Kowloon Medical Rehabilitation Centre at $1.03 billion: refurbishment of the Caritas Medical Centre at $500 million, and the reprovision of the specialist clinics in Sai Ying Pun and South Kwai Chung at $570 million.

End

Chinese delegation to visit Hong Kong *****

A Chinese delegation led by the Director of the 1 long Kong and Macao Affairs Office of the Ministry of Foreign Affairs. Mr Wang Guisheng. will visit Hong Kong from March 10 to 19. the Government announced today (Friday).

12

There will be seven other members in the delegation, who work in different departments in the Ministry of Foreign Affairs.

A government spokesman said this was one in a series of sponsored visits between China and Hong Kong.

"The objective of the sponsored visit programme is to enhance mutual understanding of Chinese and Hong Kong Government officials on each other’s systems," he said.

The delegation will be briefed by senior Hong Kong government officials on policies relating to matters such as infrastructure development, economic, trade, and the civil service.

End

1996 Population By-census to commence *****

The 1996 Population By-census will be conducted from March 16 to 24 for the purpose of obtaining up-to-date information on the demographic, social and economic characteristics of the population.

About one-seventh of all households in Hong Kong will be selected for enumeration.

The Commissioner for Census and Statistics, Mr Frederick Ho. appealed to members of the public for co-operation and support, asking sampled households to provide accurate information at the interviews.

Other people could help in facilitating the enumerators' work, he added.

"Statistics compiled from the information collected in the by-census are vital to Government in planning, particularly in such fields as housing, education, transport, medical care and social services, and to the private sector in formulating business strategies." said Mr Ho.

"Through assisting the by-census. every member of the public directly or indirectly helps build a better I long Kong.'

- 13 -

He explained that a by-census differed from a census in that the former did not a complete head count of the population,- but collected detailed information on the population from a sample, based on which the size and the characteristics of the entire population were estimated.

It differs from other sample surveys in that it has a much larger sample size, so that it can provide reliable population data on small geographical areas for local planning, and data on population sub-groups for the planning of government services for such groups.

About one-seventh of all quarters in Hong Kong have been selected according to a probability sampling scheme for enumerating all households living therein.

During the by-census operation period, enumerators will visit such households and the household members will be asked about their particulars, including year and month of birth, sex, place of birth, marital status, language, nationality, educational attainment, place of study/work, employment details, income, household rent and previous residence.

The 1996 Population By-census would be targeted at the entire population of Hong Kong, including the land population and the marine population, said Mr Ho, adding that persons living in special types of quarters such as infirmaries and penal institutions would also be covered.

The Census and Statistics Department has despatched letters informing all sampled households of the visiting enumerator's name.

During the visit, each enumerator will identify himself/herself with a Census Officer Certificate of Identity issued by the department. If in doubt, households can verify the enumerator's identity on 2590 8000.

rhe visits will usually be carried out from 10 am to 10 pm on weekdays and from 9 am to 10 pm on Saturdays and Sundays during the nine-day operation period.

"This large scale project is estimated to cost $185 million," Mr Ho said.

fhe 1996 Population By-census is conducted under the provisions of Section 9 of the Census and Statistics Ordinance. Under this Ordinance, persons specified to give information are obliged to do so.

14

"Information on individual persons and households collected in the by-census will be used for statistical purposes only.

"The Census and Statistics Department is legally prohibited to allow access to this information by any other government departments or organisations.

"Enumerators are also required to keep the collected information regarding individual persons and households in strict confidence and not to disclose such information to any person not performing functions relating to the by-census.

"All questionnaires containing collected information will be destroyed within one year after the By-census operation." Mr I Io stressed.

End

New office rental allowance for DB members

*****

District Board (DB) members will receive an accountable office rental allowance of up to $4,500 per month from April 1.

I he allowance, to help DB members set up and maintain their ward offices, was approved by the Legislative Council’s Finance Committee today (Friday).

A spokesman for the Home Affairs Department said the new allowance will be used to meet office rental, rates, management fees, charges for water, electricity and fixed telephone and/or fax lines installed in the DB members' offices.

"In view of the increasing need for DB members to set up their own ward offices to discharge their duties more effectively, we conducted a review in mid-1995," the spokesman said.

"As it was found that the current monthly honorarium of $15,800 is insufficient to meet rental and related expenses of DB members' ward offices, we concluded that there was a case for introducing a new accountable office rental allowance for them.

"Using the median office size of 30 square metres as a yardstick, we consider an average rental of $7,000 reasonable.

15

"Given that an element of rental allowance (equivalent to about $2,500) has already been incorporated in the existing DB honorarium, the new allowance is therefore set at $4,500 per month."

The spokesman pointed out that the allowance would be 100 per cent accountable, paid on a reimbursement basis on production of certified receipts, for expenses actually paid by DB members related to the running of their ward offices in the district.

"Claims for reimbursement will be made available for public inspection upon request," he said.

The allowance will be adjusted annually in October in accordance with the movement of the Hang Seng Consumer Price Index.

End

New HK Academy for Performing Arts Council member appointed *****

The Governor has appointed Mr Clarence Chang Ching-po as a member of the Council of the Hong Kong Academy for Performing Arts for the period from January 19 to December 31.

Mr Chang, the Deputy Chief Executive of Asia Television Limited, will replace Mrs Ng Young Tse-yu who has resigned from the Council for personal reasons, a government spokesman said today (Friday).

The Academy for Performing Arts is a statutory organisation to foster and provide for training, education and research in the performing arts and related technical arts.

End

16

Monitors' report submitted to CS *****

The monitors appointed to observe yesterday's transfer of 210 Vietnamese migrants (VMs) selected for the Orderly Repatriation Programme from the High Island Detention Centre to Victoria Prison have submitted their report to the Chief Secretary today (Friday).

The four monitors comprised two non-official Justices of the Peace, Mr Lee Jark-pui and Professor Nelson Chow Wing-sun: and representatives from two nongovernmental organisations - Ms Emily Liu from Christian Action and Mr Christopher Stokes from Medecins Sans Frontieres.

End

Volume and price movements of external trade

*****

In 1995. the volume of re-exports increased by 14% as compared to 1994, while the volume of domestic exports increased by 1.9%, according to the statistics released today (Friday) by the Census and Statistics Department.

Taking re-exports and domestic exports together, the volume of total exports increased by 12%. Meanwhile, imports increased by 14% in volume.

The growth in the volume of trade is derived from the growth in trade values with the effect of price changes discounted.

As regards price changes over the same period of comparison, the prices of reexports and domestic exports increased by 3.5% and 2.4% respectively. Import prices increased by 5%.

Price changes are reflected by changes in unit value indices, which are compiled based on average unit values or, for certain commodities, based on specific price data.

The terms of trade index, defined as the ratio of total export price index to import price index, decreased by 1.6% in 1995 as compared to 1994.

17

Comparing December 1995 with December 1994, the volume of re-exports increased by 15%, while that of domestic exports decreased by 1.4%. The volume of total exports and the volume of imports, on the other hand, both increased by 11%.

Over the same period of comparison, the prices of re-exports and domestic exports both increased by 1.7%. Import prices increased by 2.4%.

The changes in the value, unit value and volume of re-exports by end-use category are shown in Table 1.

Comparing December 1995 with December 1994, the volume of re-exports of all the end-use categories recorded increases of various magnitudes: capital goods (+32%), fuels (+24%), raw materials and semi-manufactures (+20%), consumer goods (+5.1%), and foodstuffs (+4.3%).

Over the same period of comparison, increases in the prices of re-exports were noted of most of the end-use categories: raw materials and semi-manufactures (+4%), fuels (+2.8%), foodstuffs (+1.4%), and consumer goods (+1.3%).

On the other hand, the re-export price of capital goods decreased marginally by 0.6%.

The changes in the value, unit value and volume of domestic exports by principal commodity group are shown in Table 2.

Comparing December 1995 with December 1994. commodity groups which recorded increases in the volume of domestic exports included radios of all kinds (+271%); and metal ores and scrap (+25%).

On the other hand, the volume of domestic exports of textile made-ups and related articles; and footwear decreased by 61% and 47% respectively.

Commodity groups which recorded increases in domestic export prices included metal manufactures (+7.9%); and metal ores and scrap (+7.8%).

On the other hand, the domestic export prices of electronic components and domestic electrical appliances decreased by 1.2% and 0.9% respectively.

The changes in the value, unit value and volume of imports by end-use category are shown in Table 3.

18

The import volume of foodstuffs increased marginally by 0.5% in December 1995 compared with December 1994.

Significant increases in the import volume were noted of sugar; and wheat and flour. However, decreases in the import volume were noted of soya bean oil, peanut oil, vegetable oil and lard; and animals of the bovine species, live.

Over the same period of comparison, the import volume of consumer goods increased by 3%.

Significant increases in the import volume were noted of passenger motor cars; and footwear. However, decreases in the import volume were recorded in householdtype electrical appliances; and alcoholic beverages.

The import volume of raw materials and semi-manufactures increased by 13% in December 1995 compared with December 1994.

Significant increases in the import volume were noted of iron and steel; and leather and dressed fur skins. However, the import volume of yarn of wool and mixtures; and silk fabrics declined.

Imports of fuels increased by 21% in volume in December 1995 compared with December 1994.

As regards capital goods, the import volume increased by 29% in December 1995 over December 1994.

Notable increases were recorded in the import volume of transport equipment; and construction machinery. The import volume of textile machinery however declined.

Comparing December 1995 with December 1994, the import prices of all the end-use categories increased: raw materials and semi-manufactures (+3.5%), consumer goods (+2.2%). foodstuffs (+2%). capital goods (+1%) and fuels (+0.4%).

Details of the above statistics are published in the December 1995 issue of the Hong Kong Trade Index Numbers.

19

The report will be on sale around March 12 at $14 per copy at either the Government Publications Centre on the ground floor, Low Block, Queensway Government Offices, 66 Queensway; or the Publications Unit of the Census and Statistics Department on the 19th Floor, Wanchai Tower. 12 Harbour Road. Wan Chai.

Enquiries regarding regular subscription to this report may be directed to the Publications (Sales) Office of the Information Services Department at 28th floor, Siu On Centre, 188 Lockhart Road. Wan Chai. Hong Kong, Tel 2598 8194; and enquiries on trade indices to the Census and Statistics Department. Tel 2582 4918.

20

Table 1 ; Changes in re-exports by end-use category

Comparing DEC 1995 Comparing JAN-DEC 1995 with DEC 1994 with JAN-DEC 1994

% changes % changes

End-use category Value Unit Value Volume Unit

Value Value Volume

Foodstuffs 4.7 1.4 4.3 14.2 1.9 13.3

Consumer goods 6.9 1.3 5.1 9.6 2.2 7.4

Raw materials and semi-manufactures 24.6 4.0 19.8 27.3 8.0 17.7

Fuels 27.4 2.8 23.7 53.8 0.4 52.6

Capital goods 28.8 -0.6 32.4 23.9 0.4 27.7

ALL COMMODITIES 16.0 1.7 14.5 17.3 3.5 14.3

21

Table 2 : Changes in domestic exports by principal commodity group

Comparing DEC 1995 Comparing JAN-DEC 1995 with DEC 1994 with JAN-DEC 1994

Commodity group % changes % changes

Value Unit Value Volume Value Unit Value Volume

Clothing -6.9 1.5 -8.7 1.0 1.7 -0.2

Textile fabrics -10.7 1.4 -14.3 -6.7 4.0 -11.4

Textile yarn and thread 4.8 3.2 2.1 -6.8 4.9 -11.6

Textile made-ups and related articles -59.8 3.9 -61.1 -8.9 7.0 -15.0

Radios of all kinds 319.6 5.1 271.2 51.2 3.1 48.6

Electronic components 20.7 -1.2 21.1 19.9 4.1 17.1

Footwear -48.7 -0.6 -47.3 -57.6 2.4 -59.9

Metal manufactures 26.7 7.9 16.4 4.3 4.0 *

Metal ores and scrap 23.7 7.8 24.5 28.9 6.7 22.6

Watches and clocks -11.6 0.3 -11.4 3.1 1.6 0.9

Travel goods, handbags and similar articles -12.4 0.7 -13.3 3.9 -0.9 5.8

Domestic electrical appliances 12.8 -0.9 10.4 -4.0 0.3 -4.4

ALL COMMODITIES 0.2 1.7 -1.4 4.4 2.4 1.9

less than 0.05%

22

Table 3 : Changes in imports by end-use category

Comparing DEC 1995 Comparing JAN-DEC 1995 with DEC 1994 with JAN-DEC 1994

% changes % changes

End-use category Value Unit Unit Value Volume

Value Volume Value

Foodstuffs 2.5 2.0 0.5 14.5 4.2 -'10.1

Consumer goods 5.3 2.2 3.0 9.4 3.5 5.9

Raw materials and semi-manufactures 17.2 3.5 13.3 25.8 7.9 16.6

Fuels 20.4 0.4 20.8 18.1 -1.4 20.2

Capital goods 31.4 1.0 28.6 30.2 3.5 26.1

ALL COMMODITIES 14.4 2.4 11.4 19.2 5.0 13.7

End

23

Nominations for Education Council invited *****

Schools and educational bodies arc reminded to send nominations to stand for election to the second term of the Council on Professional Conduct in Education (CPCE) before next Wednesday (March 13).

All nominations should reach the Education Department by noon.

Education Officer (CPCE), Mr Lau Mun-lap, said today (Friday): ’’Each day school may nominate a regular full-time registered teacher including school head to stand for election to the Council.

’’Teachers may also run for election as independent candidates if they have the support of 60 or more full-time teachers teaching in the same type of school.

"Eligible educational bodies have also been invited to make nominations. Other organisations intending to nominate a candidate or to vote in the election of the Council should first become registered with the Education Department," Mr Lau added.

To be eligible for registration, organisations must fulfil the following criteria:

* They must have been registered with the Registry of Trade Unions, Societies Office or Companies Registry unless they are exempted from registration by the Companies Registry; and

* At least 80 per cent of their members must be serving full-time teachers or registered teachers or teachers exempted from registration by the Director of Education.

The department appeals to teachers, schools and educational bodies to participate in the forthcoming election campaign and support the Council.

The Council was first set up in April 1994 following the recommendations of Education Commission Report No 5 and members were appointed to serve for two years.

The term of appointment of the serving Council members will expire on May 1 and new members will be appointed. The structure, terms of reference and method of formation of the Council all remain unchanged.

24

The Council has 28 members divided into three categories: organisation-nominated categories, teacher-nominated categories and the Director of Education nominated members.

Further enquires related to the election could be made on 2892 6302 or directed to Room 1025, 10th floor, Wu Chung House, 213 Queen's Road East, Wan Chai.

End

Customs set up special lines to encourage crime reporting

*****

The Customs Investigation Branch of the Customs and Excise Department has set up two additional special telephone lines for the purpose of further encouraging the public to report and provide intelligence of any intellectual property violations and dangerous drug offences, respectively.

In addition to the department's existing hotline 25456182, the installation of the two new special lines, manned 24-hour a day, is an initiative taken by the Department to show its determination and commitment to the protection of intellectual property rights and the fight against dangerous drugs.

They are:

* 2545 4546 - for direct report of any intellectual property right violations, such as copyright infringement, false labelling and counterfeiting crimes;

* 2545 4542 - for dangerous drug offences and related information.

Like other crime reporting, all information provided will be kept in strict confidence. Information leading to seizures, arrests and successful prosecutions will be rewarded in accordance with the existing reward scale or system available.

End

25

Medical seminars on growing up *****

Secondary school students, parents and teachers have been invited to attend three regional medical seminars on the common problems that children may face during growing up stage.

Over 1,000 students, parents and teachers will attend the talks.

The seminars, ”1 Have a Date with Doctors - the Growing Hearts", are jointly organised by the Education Department and the I long Kong Medical Association.

Medical practitioners will give short talks on two topics, self-destructive tendency and sex education, which are the common concerns of students, parents and teachers. They will also answer questions from the audience.

The first seminar will be held on Sunday (March 10) from 3 pm to 5 pm at the lecture hall, Hong Kong Science Museum, 2 Science Museum Road, Tsim Sha Tsui East.

Another two seminars will be held at the threatre, Sheung Wan Civic Centre, 345 Queen's Road Central and the auditorium. North District Town Hall, 3 Lung Sum Avenue, Sheung Shui, respectively on the following Sundays (April 7 and April 28) from 3 pm to 5 pm.

End

Architectural design for school wins award

*****

Chan Nam Chong Memorial School, a school specially designed for moderately mentally handicapped children by the Architectural Services Department, has won the President's Prize in the Hong Kong Institute of Architects (HK1A) Annual Awards 1995.

rhe project architect, Mr James Beveridge, received the award at the HK1A annual spring dinner and award presentation this (f riday) evening.

26

The school, which has ten classrooms covering over 2.000 square metres in floor area, is located in a densely populated area at 22 Wing l ong Road in Kwai Chung.

"To protect the school from noise and air pollution from the surrounding roads, we decided to use an inward looking courtyard design," Mr Beveridge said.

"The courtyard design allows all rooms and spaces to be easily observed facilitating supervision of the children. Balcony corridors around the courtyard with feature staircases at opposite corners also provides an easily understood circulation pattern for the children.

"The central court in particular acts as a focus for school activities and is a quiet green oasis in this otherwise hard urban environment.

"The structure is simple and small-scale with double pitched roofs over the first floors to provide a domestic appearance. Finishes are in standard 'low-tech', low budget materials with bright paint colours to create a welcoming, friendly atmosphere." he said.

The HK1A President's Prize is intended for a small size project not exceeding $20 million in value.

End

fenders invited for Pokfulam skills centre

*****

The Architectural Services Department is inviting tenders for the construction of a ten-storey skills centre building at Pokfulam Road in I long Kong.

Works will also involve constructing a link bridge joining this new building to the adjacent Pokfulam Training Centre Complex, together with drainage and external works.

The skills centre, covering 9,800 square metres in total floor area, will provide vocational training and boarding facilities for the disabled.

27

Construction will commence in June this year and scheduled for completion in July next year.

When completed, the centre will have four workshops, four classrooms, four special rooms, an assembly hall cum gymnasium. 15 dormitories, a library, covered playground, car parking spaces and facilities for the disabled.

Details of the tender notice are contained in the Government Gazette published today (Friday).

Forms of tender and further particulars may be obtained from the Architectural Services Department, 34th floor. Queensway Government Offices, 66 Queensway, Hong Kong.

Tenders must be clearly marked and addressed to the Chairman of the Central Tender Board. They must be placed in the Government Secretariat tender box at the lift lobby, lower ground floor. Central Government Offices (East Wing), Lower Albert Road. Hong Kong before noon on Friday, March 29.

Late tenders will not be accepted.

End

Proposed road works for Tseung Kwan () *****

The Government is proposing works to upgrade the existing haul road linking Lam Tin in East Kowloon with Tseung Kwan O.

The upgrading forms part of the Tseung Kwan O development works and provides vehicular access for a private residential development in the district.

Proposed works will involve upgrading of the existing haul road to form an access road with footpath linking Lam I in and Tseung Kwan ().

It will also involve construction of a footbridge and footpath together with associated drainage and slope works.

28

During the construction period, necessary access will be maintained to minimise inconvenience to the public.

A notice concerning the proposed works is published in the Government Gazette today (Friday).

Plan and scheme showing the proposed works can be seen at the Public Enquiry Service Centre of the Central and Western District Office, on the ground floor, Harbour Building, 38 Pier Road, Hong Kong; Sai Kung District Lands Office , third floor, Sai Kung Government Offices Building. 34 Chun Man Street, Sai Kung, New Territories and at Kwun Tong District Office. Kwun Tong District Branch Office Building. Tung Yan Street, ground floor. Kowloon.

Any person who wishes to object to the proposal is required to submit a written objection to the Secretary for Transport, Central Government Offices, East Wing, 2nd floor. Lower Albert Road. Hong Kong not later than May 7.

End

l enders for mainlaying works in Central Kowloon *****

The Water Supplies Department is inviting tenders for mainlaying works to improve the salt water flushing system in Central Kowloon.

Works will involve the laying of 4.5 kilometres of salt water mains with diameters ranging from 450 to 900 millimetres from Kowloon City to Lok Fu Salt Water Service Reservoir and Diamond Hill Salt Water Service Reservoir.

Construction work will commence in June and scheduled for completion in 21 months.

Details of the tender invitation arc contained in the Government Gazette published today (Friday).

Tender forms and further particulars may be obtained from the Water Supplies Department, Immigration Tower, 44th floor, 7 Gloucester Road, Wan Chai, Hong Kong.

29

Tenders must be elearly marked and addressed to the Chairman oi the C entra! Tender Board and placed in the Government Secretariat l ender Box at the lower ground floor lift lobby. Central Government Offices (East Wing), Lower Albert Road. Hong Kong, before noon on Friday, April 12.

Late tenders will not be accepted.

End

Hong Kong Monetary Authority money market operations

* * * * *

$ million lime (hours) Cumulative change ($millionJ

Opening balance in the account 2,314 0930 +489

Closing balance in the account 1.922 1000 +489

Change attributable to : 1100 +489

Money market activity +434 1200 +493

LAF todav -826 1500 +493

1600 +434

LAF rate 4.00% bid/6.00% offer TW1 123.5 *-().1 * 08.03.96

Hong Kong Monetary Authority

EF bills EF notes

Terms Yield Term Issue Coupon Price Yield

1 week 4.73 2 years 2802 5.16 99.21 5.67

1 month 4.94 3 years 3901 5.57 99.27 5.93

3 months 5.08 5 years 5012 6.38 100.25 6.42

6 months 5.18 7 years 7302 6.02 96.23 6.82

12 months 5.28 5 years M502 7.30 102.74 6.71

Total turnover of EF bills and notes - $26,454 million

Closed March 8, 1996

End

DAILY INFORMATION BULLETIN

ISSUED BY GOVERNMENT INFORMATION SERVICES BEACONSFIELD HOUSE. HONG KONG. TEL: 2842 8777

Saturday, March 9, 1996

Contents PagfiJNo,

Economic impact on HK on revocation of China's MFN status.......... 1

Lady Youde presents awards to 850 students......................... 2

Workshop to promote human rights teaching kit for children............. 6

School Heritage Festival begins on Monday..........................

Hong Kong Monetary Authority money market operations............... 8

Sunday, March 10, 1996

Contents Page No-

Queen's Commonwealth Day message....................................... 9

Governor's "Letter to Hong Kong"................................... 10

Symposium and gala dinner on services sector forthcoming........... 13

Programme improvements for Chinese immigrant children.............. 14

Blankets distributed to street-sleepers............................ 15

Elderly home operators urged to apply licences early............... 15

Contact with Education Department encouraged....................... 17

Applications open for recreation grants............................ 18

Late payment of wages incurs fine.................................. 19

Fresh water cut in Mong Kok........................................ 19

1

Economic impact on HK on revocation of China’s MFN status *****

The Government has completed a broad assessment of the potential impact on Hong Kong's economy if China lost its Most Favoured Nation (MFN) trading status in the United States.

Should China's MFN status be revoked, Hong Kong might suffer a reduction by 31 to 45 per cent (or $66 to $96 billion) worth of re-exports from China to the US, the Secretary for Trade and Industry, Miss Denise Yue, revealed at a post-Budget press conference held today (Saturday).

Together with other related trade flows, there might be a reduction of six to eight per cent (or $161 to $234 billion) worth of Hong Kong's overall trade, a loss of around $23 to $34 billion in income and around 61,000 to 89,000 jobs.

Government's estimates also show that Hong Kong's GDP growth rate might be curtailed by 2.1 to three percentage points (or by around two-fifths to three-fifths from its trend rate of five per cent in real terms) in the year when the effect of loss of MFN is fully felt.

"There would be a further loss in income and jobs if China cut back on its imports from the US as a result," Miss Yue said.

"Manufacturing investments and other production arrangements by Hong Kong and foreign companies in China would also be adversely affected."

Miss Yue was also concerned that Hong Kong's role as a gateway to China would be undermined, thereby affecting longer term growth potential and business confidence in Hong Kong.

On the outlook of MFN renewal this year, Miss Yue envisaged that there would be a lively debate in the US Congress.

"The situation is more complex this year with the Presidential and Congressional elections coming up," Miss Yue said.

"The climate is also affected by overall Sino-US relations, but we shall argue strongly that the MFN issue should not be linked with non-trade issues."

2

In view of the vital importance of MFN renewal to Hong Kong, Miss Yue will leave for Washington DC tomorrow (Sunday) to lobby US officials and Congressmen on renewal.

"MFN renewal is a crucial element in the continued economic development of Hong Kong, particularly at this critical phase of the transition. We will do everything we can to get our message across," said Miss Yue.

This will be Miss Yue's first visit to the United States after taking up her portfolio as Secretary for Trade and Industry last November.

During her visit, Miss Yue will meet US Trade Representative, Mickey Kantor; the Assistant to the President for Economic Policy, Laura Tyson; and call on the Chairmen of several Congressional committees and sub-committees to apprise them of the severe damage to Hong Kong in case of non-renew'al of China's MFN status.

Miss Yue will also attend the Hong Kong - US and US - Hong Kong Economic Co-operation Committees Plenary Session to be held in Washington DC on Friday (March 15).

Miss Yue will be back in Hong Kong on March 17.

End

Lady Youde presents awards to 850 students *****

A total of 850 students were granted awards and scholarships under the Sir Edward Youde Memorial Fund.

Presenting the awards to them today (Saturday), Lady Youde said: "Today we are meeting some of the best Hong Kong students who have succeeded in winning the Sir Edward Youde Awards against very strong competition.

"I am sure you will join me in congratulating our scholars, fellows and award winners on their success and thanking their parents, school principals and teachers.

3

"They have had the responsibility of bringing up these young people to be responsible individuals and of helping them to achieve academic excellence; they have also encouraged them to develop an interest in community affairs and to have a clear vision of their goals and a firm commitment to Hong Kong." she said.

Chairman of the Council, Mr Ronald Arculli, also officiated at the Ceremony held in Sha Tin Town Hall.

In pursuing its objective to encourage and promote education and learning of the young people of Hong Kong, the Fund has disbursed a total of $11.3 million in the 1995-96 academic year.

Awards made include 14 awards for overseas studies; 3 medals for students who have obtained outstanding results in public examinations; 22 awards for disabled students; 82 scholarships for diploma and undergraduate students; 44 fellowships for post-graduate students and 682 prizes for senior secondary school students.

Exclusive sponsorship in the amount of $600,000 towards the Young Friends of the Hong Kong Arts Festival Scheme has continued in 1995-96 with the aim to increase secondary school students’ exposure to and knowledge of the performing arts.

For the first time, the Fund launched the visiting professorship scheme which aimed to promote cultural exchange between Hong Kong and the other parts of the world.

Competition for the overseas fellowships and scholarships for 1996-97 is extremely keen. 12 brilliant students from among 297 applicants have won the awards.

They will each receive a maximum of $218,000 and $200,000 a year for a fellowship award and a scholarship award respectively. These students will have to return to work in Hong Kong for at least three years alter completion of their studies.

The four award recipients for the Overseas Fellowships 1996-97 are:

(1) Miss Bernice Jocelyn Chen, 23, currently an Architectural Assistant and plans to pursue a Master of Architecture at Columbia University, USA.

(2) Mr Fung Kwok-tung, 22, currently a primary school teacher and plans to pursue a Master of Music in oboe performance at the University of Cincinnati, USA.

4

(3) Miss Szeto May, Mirana. 29, a first class honours graduate in Bachelor of Arts and currently a Master of Philosophy student of the University of Hong Kong who intends to pursue a doctorate in Literature and Cultural Studies at the University of California, Berkeley, USA.

(4) Miss Wong Wing-han, Esther, 25, currently a research officer of Federation of Hong Kong Industries and intends to pursue a Master degree in International Relations at the University of London, UK.

The eight Overseas Scholarships winners are:

(1) Mr Cheung Ho. 18. of Wah Yan College. Hong Kong, who scored nine distinctions in the Hong Kong Certificate Education Examination (HKCEE) in 1995. He plans to study Computer Science at Massachusetts Institute of Technology (MIT), USA;

(2) Mr Chiang Mung. 19. of Queen's College, who obtained 10 distinctions in HKCEE in 1995. He plans to study Engineering at Stanford University. USA;

,(3) Mr Choi Yat-lun, 17. of Queen's College, who obtained 10 distinctions in HKCEE in 1995. He plans to study Engineering at MIT, USA;

(4) Mr Choy Long-yin, 18, of St Paul's Co-educational College, who obtained eight distinctions and one credit in HKCEE 1995. He plans to study Computer Science at MIT, USA;

(5) Mr leong Sze-ming, Samuel, 17, of Queen's College, who obtained 10 distinctions in HKCEE in 1995. He plans to study Computer Science at MIT, USA;

(6) Miss Lau Li-yan, 19, of Maryknoll Convent School, who obtained eight distinctions and one credit in HKCEE 1994. She plans to study Politics and Economics at University of Oxford, UK;

(7) Miss Tsang Sum-yee. Diana, 19. of Diocesan Girls' School, who obtained nine distinctions in HKCEE in 1994. She plans to study Architecture at Princeton University. USA; and

5

(8) Miss Stefanie Tanya Willis, 19 of Hcadington School, Oxford, who obtained one distinction in General Certificate of Education ’A' in 1994 and 12 distinctions in General Certificate of Secondary Education in 1993 and 1994. She plans to study Law at the University of Oxford, UK.

An overseas award exclusively for disabled students was introduced in 1994. The 1996-97 fellowship recipient is Mr Luk Wai-yip, 29, a visually impaired graduate who plans to study for a Master degree in Music at Bcrklee College of Music, USA.

Three students who obtained outstanding results in the 1995 public examinations have been awarded the Sir Edward Youde Memorial Medals. They are:

(1) Mr Tang Yue-tan of Wah Yan College, who scored 10 distinctions in the 1995 HKCEE;

(2) Miss Li Yuen-yung of St Catherine's School for Girls, who scored five distinctions in the 1995 Hong Kong Advanced Level Examination (Science Stream); and

(3) Miss Ng Siu-wai of St Paul's Co-educational College, who scored six distinctions in the 1995 Hong Kong Advanced Level Examination (Arts Stream).

A total of $492,530 has been expended on the Award Scheme for the Disabled Students, under which 22 students have been provided with financial assistance for the purchase of study aids.

This year also sees 26 postgraduate students having been awarded the local fellowship al $38,000 each and 82 undergraduate/diploma students awarded the local scholarship at $22,000 each. In addition. 18 postgraduate students have their local fellowships renewed.

Since its inception, the Sir Edward Youde Memorial fund has supported more than 6,340 Hong Kong students under its major awards schemes.

More than 500 scholars and fellows have completed their studies and are now working in Hong Kong in different fields, contributing to the well being and development of the territory.

End

6

Workshop to promote human rights teaching kit for children *****

The Secretary for Home Affairs, Mr Michael Suen, today (Saturday) praised efforts to impress upon young children the basic concepts of human rights through innovative teaching aids.

Speaking at the opening of a workshop organised by the Committee on the Promotion of Civic Education (CPCE) to promote a new human rights teaching kit for children, Mr Suen said that he was deeply impressed by the content of the teaching aid which stressed the indivisible relationship between everyday life and the application of fundamental human rights concepts, namely the value of life, freedom, mutual respect and equality.

With the help of interesting activity plans and attractive illustrations, Mr Suen believed the teaching kit would arouse children’s interest and improve their understanding of basic human rights concepts. It would also become a useful reference for teachers when they prepare extra-curricular activities for their students.

He called on members of the public to support the human rights education campaign. "Promotion of human rights could not be done by the CPCE alone but has to rely on everyone of us," he stressed.

Speaking on the same occasion, the Convenor of Human Rights Education Subcommittee of the CPCE, Mr William Tsui, said human rights concepts were often construed as abstract and not easily understood.

"In fact, there is an indivisible linkage between the fundamental concepts of human rights and the cultivation of a positive attitude to life. However, to instil these basic concepts to children is no easy task. We have thus decided at the outset to adopt a lively and diversified approach and through interesting activities, introduce to. children the profound meaning of human rights," Mr. Tsui said.

The new teaching kit. which includes a handbook for teachers on human rights concepts and a handbook on 15 activity plans, has translated abstract notions in human rights into everyday life scenarios so that they can be easily understood by children aged between seven and 14. It has been well received by voluntary agencies and schools.

7

The production of the kit will be followed by children story books, compact discs and cassette tapes. Parents’ handbooks and song books will also be published later.

Besides the human rights teaching kit for children, leaching kits for pre-school children and youngsters are also in the pipeline, Mr Tsui added.

End

School Heritage Festival begins on Monday *****

The first School Heritage Festival will kick off on Monday (March 11) at the Antiquities and Monument Office (AMO) with an exhibition on the Lord Wilson Heritage Project Scheme 1995.

Apart from the two-week exhibition, other events to be held during the festival include heritage tours, demonstrations on traditional handicrafts, grass cutting activities for preserved monuments and archaeological workshops.

Funded by the Lord Wilson Heritage Trust, the festival aims at promoting students' interest in cultural heritage and their protection.

It is jointly organised by the AMO of the Recreation and Culture Branch and the Education Department and will last until March 24.

The Chairman of the Board ofTrustees of the Lord Wilson Heritage Trust, Mr Alexander Au; the Chairman of the Council of the Lord Wilson Heritage Trust. Mr Edward Ho; the Chairman of the Antiquities Advisory Board, Mr David Lung; the Deputy Secretary for Recreation and Culture, Mr Benjamin Tang; and the Deputy Director of Education, Mr Kwan Ting-fai, will officiate at an opening ceremony to be held on Monday at 11 am at AMO, 136 Nathan Road, Kowloon.

Prizes will also be presented to winners of a drawing competition held earlier on Hong Kong's historical monuments.

End

8

Hong Kong Monetary Authority money market operations

*****

$ Million Time LH.Qu.rs) Cumulative Change ($ Million.)

Opening Balance in the account 1,922 09:30 +390

Closing Balance in the account 1,572 10:00 +390

Change Attributable to: 11:00 +390

Money Market Activity +390 11:30 +390

Laf Today

-740

Laf Rate 4% Bid/6% Offer TWI 123.8 *+0.3* 09.03.96

End

9

Queen’s Commonwealth Day message * ♦ ♦ ♦ ♦

Following is the Commonwealth Day message 1996 from the Queen, Head of the Commonwealth:

The theme for Commonwealth Day this year is “Working in Partnership”.

This theme reminds us that we can achieve much more if we work in a team, making use of each other's different skills and experience, than if we are all separately trying to do the same thing. A successful partnership depends on mutual respect and friendship, and what matters is not what people are but what they can contribute to the common purpose. Partnership builds on experience, drawing lessons from the past and cementing shared friendships; and it looks to the future as it tackles the challenges of the present.

The Commonwealth is an excellent example of this kind of partnership. The fifty-three sovereign nations who belong to it have vastly different social and ethnic traditions, but it has been able to fashion unity out of this diversity and to become a working partnership of governments and peoples. One of the most valuable aspects of this partnership is the network of Commonwealth Non-Governmental Organisations which link members of a wide range of professions and activities - architects, engineers, journalists and broadcasters, doctors and vets, magistrates and judges, and so on - and help them to benefit from each other’s experience and to work together for the common good. There are thriving partnerships between the Universities, the parliamentarians and the Trade Unions of the Commonwealth countries. In the arts, literature and music, there are Commonwealth links which enrich the cultural life of all the members, and there is also a friendly rivalry in a wide range of sporting activities.

The Heads of Government of the Commonwealth set out its fundamental aims and principles in a statement adopted at Harare in 1991, and last November in New Zealand they agreed on an important Action Programme to give that mission statement a real cutting edge, with the emphasis on democracy, development and consensus building. Those aims, like so many others, can best be pursued in partnership both within the Commonwealth and on a wider global scale.

Young people learn early the value of taking part in teams and tackling projects in partnership. I hope that you will carry those lessons into later life and, with the idealism and clear vision which the young can offer, help to build lasting partnerships to make the world a better and safer place.

End

10

Governor's "Letter to Hong Kong"

*****

Following is the full text of the Governor, the Rt Hon Christopher Patten's broadcast on RTHK’s "Letter to Hong Kong" this (Sunday) morning:

Well, it hasn't been a boring week. So much has happened here that has a direct bearing on our futures in Hong Kong.

We had the visit by Britain's Prime Minister, John Major, who was clearly moved by the warmth of his reception. We've had our Budget - the first Budget ever delivered by a local Hong Kong public servant, Donald Tsang. And there's been the National People's Congress in Peking, and much else besides.

I'd like to start with the announcement made by the Prime Minister about visa free entry to Britain. Why did that matter so much? Why should we be so pleased that Britain is offering something, when it is no longer the sovereign power, which those who will be affected don't actually enjoy today?

The answer is simple. Our future success - like our past - will depend as much as anything on Hong Kong remaining an open, international city. Sovereignty changes, but that should remain the same. An open city - open to ideas, open to trade, open to people, businessmen, tourists, relatives, first-time visitors, would-be investors, people from every land and every continent. Start closing some of the doors, start interrupting the flow, and Hong Kong rapidly ceases to be the New York of Asia.

So Britain's lead on visa free access was important. It was a gesture of confidence in our continuing success as an open society and a crucial way of helping to maintain that success.

What now stems from that?

First, we've got to persuade others to follow Britain's example. That's what the British Government will be helping us to try to do in the coming weeks.

I hope that the European Union countries will lead the way. After all, European Presidents and Premiers have just been in Bangkok with their Asian opposite numbers pledging their determination to work hand-in-glove with the emerging Asian nations. What better way of underlining all that rhetoric, what better way - to use some English slang - of Europe putting its money where its mouth is, than to put visa free access where Europe's mouth is. I'll be pressing for that in speeches, and perhaps one or two visits if necessary, during this year.

11

The second thing which follows - or should follow - as night follows day from the visa decision is a prompt, sensible and generous decision by China on right of abode in Hong Kong. The promises have been made, most recently by Mr Qian Qichen. Hong Kong is promised that everyone with permanent resident status before 1997 will have it afterwards. Now this really is an issue on which the Preparatory Committee should speak up for Hong Kong. An issue where it should get its skates on. Better for the Preparatory Committee to give this matter priority and drop the threats to Hong Kong’s civil liberties and human rights.

This matters so much to so many families. It matters to Hong Kong’s substantial diaspora overseas. It matters to present and future confidence. Perhaps one or two business leaders could call for this, too. Hong Kong expects, has a right to expect, simple and practical arrangements to be brought forward as soon as possible.

Third, as I’ve said already, one reason why visa free travel is so important to Hong Kong is because of the international nature of our community. As one of the largest trading centres in the world, one of the predominant financial and business centres, how could it not be a truly international place. Presumably Chinese leaders recognise that as well - and that’s one reason why they’ve rightly pressed for the decision that Britain has now made.

The Prime Minister gave another very important reassurance in his speech last Monday - that Britain will be watching carefully over the implementation of the Joint Declaration after 1997; and will ensure that others are watching too. Obviously, he -like the rest of us - hopes that China will abide rigorously by the Joint Declaration, and I can quite understand Chinese antipathy to the assumption, made perhaps unfairly in some quarters, that China won’t in fact keep its word. Assume the best, sounds fair to me. But in life you also have to prepare yourself in case things don't go right. And the Prime Minister made clear that Britain has in and out of the Joint Declaration, a legal, moral and economic commitment to the well-being of Hong Kong. So, he said, we will stand by Hong Kong, and if anything goes wrong, Britain will pursue matters through every appropriate channel with as much international support as we can muster.

To those who raise an eyebrow at such a suggestion, let me say this : when the Joint Declaration, an international treaty between Britain and China, was lodged at the United Nations, what on earth do you suppose was intended by that symbolic act? What do you suppose are the practical implications of the fact that our rights are guaranteed in international U.N. covenants applied directly to Hong Kong?

12

Sovereignty over Hong Kong after 1997 will be China’s. No one disputes that. But the whole world will be interested in how that sovereignty is exercised. That’s the reality. Hong Kong is an international city, with friends and partners, as the Prime Minister put it, in both hemispheres and five continents. They will be watching to see that the letter and spirit of the Joint Declaration are honoured, now and for fifty years beyond 1997.

The interest will be sharpest at the moment of transition. It's reckoned that next June and July there will be up to 6,000 foreign journalists encamped in Hong Kong. 100 international broadcasters will be carrying live pictures of the transition. Why will they be here? Because the whole world is interested in Hong Kong. Interested in how two members of the U.N.'s Security Council have managed to tackle a truly difficult enterprise. Interested in how "one country two systems" can work in practice. And that interest will not just fade away. As John Major said, in the strong voice of a good friend, Hong Kong will never walk alone.

What I hope and believe the world will see is Hong Kong continuing to thrive and prosper as a fair and open society. China has the biggest stake in that continuing success. We'll certainly be able to count on that in the economic sphere if we stick to the principles which underpinned Donald Tsang's Budget.

It was a self-confident Budget for a self-confident community. It was prudent. It was compassionate. And it was far-sighted. 1997 is a fact of political life. But we must look to the distant horizon as the Financial Secretary did in his vision of the future development of Hong Kong.

fhe Prime Minister talked about the values and ideas, and not just the products in the marketplace, that bear the stamp "Made in Hong Kong". But that stamp, "Made in Hong Kong", is found on our community leaders, too. People like the Financial Secretary. This city has all the talent - the "Made in Hong Kong" talent - that's required, if all those pledges on autonomy and freedom and the rule of law are kept, all the talent that's needed to take the future by storm.

And when you do that, no one will be more delighted than your part-time radio correspondent this morning.

End

13

Symposium and gala dinner on services sector forthcoming * ♦ ♦ * *

A symposium jointly organised by the Government and the business community will be held on March 12 to provide an opportunity for public discussion and exchange of views on the development of flong Kong's services sector and the facilitating role of the Government.

Entitled "Hong Kong into the 21st Century : The Servicing Economy", the symposium will be opened by the Governor, the Rt Hon Christopher Patten.

The Financial Secretary, Mr Donald Tsang, will deliver a keynote speech.

The symposium, to be held at the Hong Kong Convention and Exhibition Centre, will be attended by over 600 participants from the Government, business community and the academia.

It will start off with a plenary session to be chaired by the Chairman of Hong Kong Trade Development Council, Dr Victor Fung.

Panel speakers include the Director of Hong Kong Centre for Economic Research, the University of Hong Kong, Prof Richard Wong; the Executive Director of Hong Kong and Shanghai Banking Corporation Ltd. Mr Vincent Cheng; the Chairman of Federation of Hong Kong Industries, Mr Henry Tang, and the Chairman of Hong Kong Coalition of Service Industries, Mr Brian Stevenson.

Five breakaway sessions will follow, covering issues on financial services such as capital market, insurance and retirement funds, as well as issues facing a number of services sector, such as trading sectors, information technology, and quality in service delivery.

Speakers in these breakaway sessions will be leaders from trade and industrial organisations, as well as local and overseas experts and practitioners in the services sector.

Discussions on the future direction of Hong Kong's services economy will culminate in a gala dinner in the evening to be attended by the Financial Secretary and the business community.

Former US Secretary of State and currently Distinguished Fellow at the Hoover Institution. Stanford University, Mr George Shultz, has been invited to speak at the dinner gathering.

End

14

Programme improvements for Chinese immigrant children

*****

The Education Department is seeking service enhancement for Chinese immigrant children by reducing class sizes in induction courses, producing a selflearning package on English and reviewing longer term requirements to assess how induction programmes can be further improved.

The Assistant Director of Education (Services), Mr David Pun, said the department had reduced the class size from 15 to 20 to 10 to 15 per class in respect of induction programmes for children who had newly arrived from China.

’’Wherever applicable, we are also implementing split class teaching for age groups 6 to 10 and 11 to 14,” he said.

"This will considerably reduce the instances in which teachers have to tackle significant differences in standards of pupils in the same class.”

In addition, Mr Pun said the department would produce a self-learning package on English for self-study by these children at home.

"This package will be distributed through non-profit-making voluntary agencies and schools," he said.

Mr Pun emphasised that the induction and extended programmes for Chinese immigrant children were meant to complement rather than to replace formal schooling.

lie said: "There is a wide range of support services in schools available to Chinese immigrant children, among which is remedial teaching in the subjects of English, Chinese and Mathematics.

"However, having operated the induction programmes for a year, we will conduct a review of the longer term requirements starting this month to assess how they can be further improved."

At present, a total of 19 non-profit-making voluntary agencies provide induction and extended programmes for newly arrived Chinese immigrant children in 46 centres all over Hong Kong. The courses are free of charge.

15

The 60-hour induction programme covers both social adjustment and education aspects which include remedial teaching in Chinese and English, as well as homework guidance.

The extended programme, which is also 60 hours in duration, centres on remedial English to help improve the standard of English of immigrant children.

End

Blankets distributed to street-sleepers

*****

The Social Welfare Department distributed a total of 491 blankets in a territorywide operation last (Saturday) night.

Among the blankets distributed, 144 were given to street-sleepers on Hong Kong Island, 46 in Kowloon East, 201 in Kowloon West, 44 in New Territories East and 56 in New Territories West.

"It is a normal practice for the department to distribute blankets to street sleepers when the temperature drops to or near 10 degrees Celsius," a department spokesman said, noting that the exercise conducted last might was the sixth during the current winter season.

End

Elderly home operators urged to apply licences early

*****

Operators of residential care homes for the elderly who have not yet submitted applications to the Social Welfare Department (SWD) for a licence or a certificate of exemption are urged to apply as early as possible because time is required to process their applications.

16

Making the appeal, a spokesman for the department said today (Sunday) that the Government Gazette had announced that Section 6 of the Residential Care Homes (Elderly Persons) Ordinance should come into operation on June 1, 1996.

”Section 6 of the Ordinance stipulates that any person, who on any occasion operates, keeps, manages or otherwise has control of a residential care home in respect of which neither a licence nor a certificate of exemption has been issued, commits an offence and is liable to a fine of $100,000 and to imprisonment for two years,” the spokesman said.

He reiterated the department’s policy that all residential care homes which came into existence and which intended to commence operation on or after April 1, 1995 should be subject to regulation by the issue of a licence rather than the issue of a certificate of exemption.

"Unless there is something exceptional in the circumstances which warrant a departure from this policy, it is unlikely that a certificate of exemption will be issued for any residential care home which commences operation on or after April 1, 1995.

"Licences may be issued to residential care homes which are able to comply with the requirements in accordance with the Residential Care Homes (Elderly Persons) Ordinance.

"Certificates of exemption are to be granted to residential care homes already in operation before April 1, 1995 but which are unable to comply fully with the legislative requirements so as to allow these homes to continue operation in the interests of the residents as well as the operators in business terms," he said.

However, the spokesman said if there was danger to the residents or their wellbeing might be adversely affected, the certificate of exemption would be revoked.

Since the implementation of the Residential Care Homes (Elderly Persons) Ordinance, 548 residential care homes for the elderly out of a total of 586 have applied to the SWD for licences or certificates of exemption.

Application forms and relevant materials can be obtained from SWD's Licensing Office of Residential Care Homes for the Elderly at Room 2354 on the 23rd floor of Wu Chung House, 213 Queen’s Road East, Wan Chai.

Elderly home operators who have enquiries about licensing requirements as well as application procedures may call 2961 7211 or 2834 7414.

End

17

Contact with Education Department encouraged *****

The Education Department has produced a full-colour comprehensive telephone guide to assist members of the public to obtain general information on education services provided by the department.

Entitled 'Get in Touch with the Education Department', the new telephone guide carries illustrations on how to use the 24-hour Automatic Telephone Enquiry System and provides a list of useful telephone numbers of various sections of the department as well as the 19 district education offices.

A total of 550,000 copies of the guide have been produced in Chinese and English and are now available from all district education offices, district offices, and family services centres of the Social Welfare Department.

The Senior Education Officer (Serving the Community Unit), Mrs Kitty Cheung, said that the department had just added a Putonghua option to its 24-hour Automatic Telephone Enquiry System.

"Starting this month, by dialling 2891 0088, members of the public can listen to pre-recorded messages in Cantonese, English or Putonghua concerning a wide range of education services," she said.

"The topics range from Primary One admission, junior secondary education assessment and student guidance to teacher registration, application for supply teacher posts and information on teacher welfare such as procedure for provident fund withdrawal and mortgage interest subsidy scheme.

"In times of typhoon or rainstorms, the department will also make emergency announcements such as school closure through the system."

End

18

Applications open for recreation grants *****

The Sir David Trench Fund Committee is inviting applications for grants from the Sir David Trench Fund for Recreation and the Jockey Club Grant for Permanent Recreational Facilities for Youth.

The Sir David Trench Fund for Recreation is aimed at providing recreational, sporting, cultural and social activities facilities to promote personal development, purposeful use of leisure and community involvement, particularly of young people.

The Jockey Club Grant is mainly for the construction of recreational facilities to meet the needs of young people.

A single application form is available for the Sir David Trench Fund for Recreation Capital Works Projects and the Jockey Club Grant for Permanent Recreational Facilities for Youth.

Application forms are obtainable at all district offices of the Home Affairs Department, and at the Education, Social Welfare, Health, Urban Services and Regional Services Departments as well as the Hong Kong Council of Social Service.

They are also available at the Recreation and Sports Division of the Recreation and Culture Branch and the Secretariat of the Sir David Trench Fund Committee, which is responsible for administering both the Sir David Trench Fund for Recreation for capital and non-capital works projects and advising on the disbursement of the Jockey Club Grant.

Completed forms should be returned to the Secretariat of the Sir David Trench Fund Committee at Room 4015, 40th Floor, Revenue Tower, 5 Gloucester Road, Wan Chai, Hong Kong.

Applications for capital works projects will close on May 20 while that for noncapital works projects is open throughout the year.

Enquiries about the Sir David Trench Fund for Recreation capital works projects and the Jockey Club Grant for Permanent Recreational Facilities for Youth can be made on 2594 5659 while those about non-capital works projects on 2594 5660.

End

19

Late payment of wages incurs fine *****

The Labour Department today (Sunday) reminded employers that wages had to be paid at the end of a wage period and in any case not later than seven days thereafter.

Li Muk Shu Restaurant Limited in Kwai Chung and Nancy Electronics Industrial Company Limited in Sha Tin were recently fined in Tsuen Wan and Sha Tin Magistracies respectively for not paying wages to their employees within the statutory period.

Six summonses were served on the restaurant for failing to pay wages to two imported workers within seven days after the completion of several wage periods. Fines totalling $90,000 were imposed.

In the other case, the electronics company was fined $45,000 for failing to pay wages to an employee within the statutory period.

Labour Officer (Prosecutions), Mrs Tonia Leung, said late payment of wages at the end of a wage period or on termination of an employment contract were both offences under the Employment Ordinance.

*

The maximum penalty for each offence is a fine of $200,000 and imprisonment for one year.

’’Employees whose wages are not paid within the statutory period should approach the Labour Relations Service for advice and assistance as soon as possible,” she said.

End

Fresh water cut in Mong Kok *****

Fresh water supply to some premises in Mong Kok will be temporarily suspended from 11 pm on Wednesday (March 13) to 6 am the following day to facilitate testing of watermains.

All premises in the area bounded by Lai Chi Kok Road, Shanghai Street, Mong Kok Road, Nathan Road, and Prince Edward Road West, including Concourse Hotel, will be affected.

End

DAILY INFORMATION BULLETIN

ISSUED BY GOVERNMENT INFORMATION SERVICES BEACONSFIELD HOUSE, HONG KONG. TEL: 2842 8777

Monday, March 11, 1996

Contents

Page No.

Study to tackle drug and suicide problems among youths

Building Department's statement on Fortuna Hotel case..................

Activity Approach Exhibition 1996 .....................................

Tender for issue of exchange fund notes................................

Water storage figure...................................................

Salt water cut on Tsing Yi Island......................................

Hong Kong Monetary Authority money market operations...................

1

Study to tackle drug and suicide problems among youths

*****

The Department of Psychology of the University of Hong Kong has been commissioned to conduct a $1 million study project on the use of peer support and life skill counsellors in schools to help tackle the drug problem and adolescent suicides.

Commissioned by the Education Department, the study is one of the initiatives taken by the department to echo the call for follow-up actions at the Drug Summit chaired by the Governor, the Rt Hon Christopher Patten, in March last year.

The aim of the study is to find ways to promote teenagers' awareness of building up their confidence and techniques in handling difficulties in life.

Principals, teachers and students of Primary Four to Primary Six and Secondary One to Secondary Seven in local schools will fall within the scope of the study target.

The study will explore, among other things, the possibilities and effective use of peer support and life skill counsellors to prevent the drug problem and adolescent suicides in local primary and secondary schools.

Another objective is to develop a peer support life skill training programme for implementation in local primary and secondary schools.

The study is expected to be completed by the end of this year.

End

Building Department's statement on Fortuna Hotel case

*****

The Director of Buildings, Dr Choi Yu-leuk, today (Monday) commented in response to press enquiries that his department had recommended that legal actions be taken against the persons involved in the trial of the Fortuna Hotel case despite the decision by the Legal Department of dropping the charges against the four remaining defendants this morning.

"We have submitted a full investigation report together with the related information to the Legal Department for its consideration.

2 -

"Furthermore, a private practising building professional was employed to provide expert opinion. We understand that the Legal Department has fully considered all the information and evidence before making the decision of dropping the charges.

"We will also review the trial case in great details to see whether further improvement can be made in the legislation and the system of submitting and approving demolition plans," Dr Choi said.

Dr Choi also noted that after the collapse accident in September 1994, the Buildings Department had implemented a series of programmes to improve demolition work safety. These include:

the setting up of the Site Monitoring Section to monitor the safety operation of construction and demolition sites;

the Buildings (Amendments) (No.3) Bill proposing better work supervision in sites and introducing a new contractor registration system including that for demolition works.

the commissioning of a consultant firm to undertake a study on demolition works and to produce a code of practice.

End

Activity Approach Exhibition 1996 *****

The Curriculum Development Institute of the Education Department will hold the Activity Approach Exhibition 1996 from Thursday (March 14) to March 19.

The theme of the exhibition is "Exploring and Reading Together" which is aimed at promoting the effective implementation of the Activity Approach. Teachers are encouraged to take the opportunity to share their experiences in the design and implementation of study projects and reading activities.

Teacher-design study projects from 20 participating primary schools will be displayed at the exhibition. The exhibits include photographs and video-tapes on the learning process, teaching resources and learning outcomes.

- 3 -

A seminar will be organised during the exhibition period on March 18 to promote the effectiveness of Activity Approach in improving the quality of primary education, and to introduce supportive measures provided by the Education Department.

The Activity Approach Exhibition 1996 will be held at the Activity Approach Centre, 19 Hok Yuen Street, Flung Hom, from 9 am to 4 pm on weekdays and from 9 am to noon on Saturdays.

Enquiries concerning the exhibition and group visit arrangements can be directed to the Activity Approach Team of the Curriculum Development Institute on 2892 5833 or 2892 5834.

End

Tender for the 7th issue of 5-year exchange fund notes

*****

Tender for the seventh issue of 5-year exchange fund notes will be held on March 18 for settlement on March 19, the Hong Kong Monetary Authority (HKMA) announces today (Monday).

Similar to the previous issue, an amount of $500 million 5-year notes will be on offer. In addition to that, another $100 million will be held as reserve by HKMA for supply to market makers in the secondary market.

The notes will mature on March 19, 2001, and will carry interest at the rate of 6.75% per annum payable semi-annually in arrears.

Members of the public who wish to tender for the notes may do so through any market makers or recognised dealers on the published list which can be obtained from the HKMA at 30th floor, 3 Garden Road, Hong Kong, Tel 2878 8150. Each tender must be for an amount of $50,000 or integral multiples thereof.

Following is the tender information for the seventh issue of 5-year exchange fund notes:

Issue Number : 5103

Tender Date and Time : Monday, March 18, 1996, 9.30 am to 10.30 am

f

- 4 -

Issue and Settlement Date : Tuesday, March 19, 1996

Amount on Offer : $500 million plus an additional $100 million as reserve stock for the Monetary Authority

Maturity : Five years

Maturity Date : March 19,2001

Interest Rate : 6.75% per annum payable semi-annually in arrears

Interest Payment Dates : Sept 19. 1996, Mar 19, 1997, Sept 19, 1997, Mar 19, 1998, Sept 21, 1998, Mar 19, 1999, Sept 20, 1999, Mar 20, 2000, Sept 19, 2000, Mar 19, 2001

fender Amount Each tender must be for an amount of $50,000 or integral multiples thereof. Members of the public who wish to tender for the notes may approach market makers or recognised dealers on the published list

Other details : Please see Information Memorandum published or approach market makers or recognised dealers

End

Water storage figure ♦ ♦ ♦ ♦ ♦

Storage in Hong Kong’s reservoirs at 9 am today (Monday) stood at 79 per cent of capacity or 462.771 million cubic metres.

This time last year the reservoirs contained 399.409 million cubic metres of water, representing 68.2 per cent of capacity.

End

5

Salt water cut on Tsing Yi Island *****

Flushing water supply to all premises on Tsing Yi Island will be temporarily suspended from 5 pm on Thursday (March 14)to 8 am the following day to facilitate watermains work.

End

Hong Kong Monetary Authority money market operations * ♦ ♦ ♦ ♦

$ million Time (hours) Cumulative change (Smillion)

Opening balance in the account 1,572 0930 +1,230

Closing balance in the account 1,469 1000 + 1,230

Change attributable to : 1100 +1,230

Money market activity +1,224 1200 + 1,230

LAF today - 1,327 1500 +1,226

1600 +1,224

LAF rate 4.00% bid/6.00% offer TWI 123.7 *-0.1* 011.03.96

Hong Kong Monetary Authority

EF bills EF notes

Terms Yield Term Issue Coupon Price Yield

1 week 4.94 2 years 2802 5.16 98.29 6.21

1 month 5.30 3 years 3901 5.57 97.99 6.44

3 months 5.42 5 years 5012 6.38 98.16 6.95

6 months 5.54 7 years 7302 6.02 93.86 7.28

12 months 5.70 5 years M502 7.30 100.59 7.27

Total turnover of EF bills and notes - $21,466 million

Closed March 11, 1996

End

DAILY INFORMATION BULLETIN

ISSUED BY GOVERNMENT INFORMATION SERVICES BEACONSFIELD HOUSE, HONG KONG. TEL.: 2842 8777

Tuesday, March 12, 1996

Contents Page No,

Services promotion a timely exercise : Governor...................... 1

Partnership to promote Hong Kong as a servicing economy.............. 3

Transcript of FS’s media session..................................... 5

Seventh meeting of JLG expert group.................................. 6

Governor grieves at loss of lives in hill fire....................... 6

Spring Breeze Pavilion opened........................................ 7

S2.5M grant to assist snowstorm victims in Qinghai................... 8

KMB fare rise endorsed............................................... 9

Privacy Commissioner for Personal Data sought....................... 10

DGT to attend Awashima Trade Forum.................................. 11

/96 VMs

Contents

Page No,

96 VMs depart on orderly repatriation flight................................. 12

Monitors' Report submitted to CS............................................. 12

Services for the elderly expand......................................... 13

Elderly health services strengthened......................................... 14

Tug and barge operators urged to take safety measures........................ 15

Souvenir cover to mark Indonesia stamp exhibition............................ 16

Appeal against tax evasion conviction dismissed.............................. 16

Apply travel document early to avoid holiday rush....................... 17

Man jailed for selling own ID card........................................... 18

Hong Kong Monetary Authority tender results.................................. 18

Hong Kong Monetary Authority money market operations......................... 19

Services promotion a timely exercise : Governor ♦ ♦ * ♦ ♦

Hong Kong is now at a juncture where it must examine clear-headedly how it can move forward in producing goods and services that create more value in order to help raise the standards of living of our community.

In this pursuit, the role of the Government is to help the business community remove constraints, to help improve the culture and the infrastructure that give the flexibility and the freedom to respond to opportunity and to develop business.

The remarks were made by the Governor, the Rt I Ion Christopher Patten, at the Symposium "Hong Kong Into the 21st Century: The Servicing Economy”, today (Tuesday).

The symposium is jointly organised by the Government and the business community to discuss and exchange views on the development of Hong Kong's services sector and the facilitating role of the Government.

The Governor noted that during the past decade, Hong Kong had experienced dynamic growth in its services sector and had now ranked as the world's 10th largest exporter of services.

"More recently our services surplus has grown at a more deliberate pace. There are concerns that problems with productivity and high costs may be eroding our competitiveness as a service provider." he said.

The Governor stressed that Hong Kong had reached a juncture where it was timely for the Government and business community to jointly develop practical ideas to reinvigorate services sector productivity and deal with rising costs and sharpen it competitiveness as a service provider.

Noting that manufacturing and services together constituted the key pillars of our economy, Mr Patten said the transformation from a manufacturing to a service-oriented economy in the territory should be seen more accurately as a transformation from a lower-skilled, lower value-added economy to a higher-skilled and higher value-added one.

"Restructuring and realignment ma) be required but it has been one oi Hong Kong's great advantages, both economical!) and socially, that it is not afraid of such change.

2

"The community does not seek to stand still and our development in the past 50 years has been characterised by successful restructuring in response to changing world economic conditions and internal demand," he said.

The Governor further noted that the transformation of Hong Kong into one of the world's leading services centres had not taken place at the result of directives or central planning by Government.

"That Hong Kong is now one of the world's foremost financial centres; a regional telecommunications, transport and trading hub; a leading tourist and convention destination in Asia; one of the world's most prolific film and entertainment production centres; and a major exporter of professional services to the rest of the region - all that is thanks to the creativity and initiative of our businessmen and the skills of our workforce.

"Exposure to international competition makes sure that they are seasoned competitors in the global marketplace," he said, adding that the recent success of Hong Kong-directed and Hong Kong-made films in Hollywood was a case in point.

He said the success of Hong Kong's services illustrated the paramount importance of keeping our markets open, and giving free rein to the creativity and entrepreneurship of our businessmen.

One must not overlook the fact that as governmental intervention increases, creativity and entrepreneurship invariably become constrained, he added.

Echoing the Financial Secretary's call for a Government-business partnership in supporting the further development of services industries in his Budget Speech, the Governor said the Government was committed to providing the infrastructure for business to flourish.

He noted that the Government's contribution was not just the 'hard' infrastructure in the form of the necessary physical facilities, but even more so the vital 'soft' infrastructure - the availability of a skilled workforce; the rule of law; a level playing field for all; and a corruption-free society.

3

"We are committed to find and to provide the right level of support for the services sector : support that will enhance not stifle the spirit of entrepreneurship and creativity.

"Outside Hong Kong, as a member in good standing of the World Trade Organisation, we are committed to keeping our markets open. We will continue to play a constructive role in negotiations on trade in services so as to help roll back the barriers to free trade that shackle the potential of our own and every community for mutual growth," Mr Patten said.

End

Partnership to promote Hong Kong as a servicing economy ♦ ♦ ♦ ♦ ♦

The Financial Secretary, Mr Donald Tsang today (Tuesday) urged leaders in the business and industry to work with the government to improve Hong Kong’s competitiveness in providing services which are in demand in the global marketplace.

Speaking at the opening of the symposium on Services Promotion "Hong Kong Into the 21st Century: The Servicing Economy", Mr Tsang said while the government would continue to provide an environment for business to succeed, the major part would be played by the private sector.

"Together we will be able to reinforce Hong Kong's position as a regional service centre, servicing the emerging economies of the region, as well as servicing the business of our economy."

Mr Tsang said since he took up office as the Financial Secretary in September last year, he had been concerned with what the government could do to promote and support the development of the services sector.

"I set up the Task Force on Services Promotion and received advice from the Ad Hoc Group comprising of private sector members."

He also commissioned studies into Hong Kong's burgeoning services sectors, to examine its strengths and weakness, threats and opportunities and the linkage with the other sectors of the economy.

4

"The findings so far suggest not only that our services sector should continue to play a vital role in the intermediation of our trade in goods.

"But that it possesses excellent potential to radiate outwards to penetrate and complement the less developed services markets in other developing economies in the Asia Pacific region."

Mr Tsang emphasised that the government was committed to fostering free markets in services, promoting competition and maintaining a level playing field.

"While we are committed to providing infrastructural and developmental support for the further development of our services sector, we firmly believe that business decisions must be left to businessmen.

"Markets, not bureaucrats, must decide which products, whether goods or services, are commercially viable. In other words, we must ensure that the market continues to drive the development of specific services."

Mr Tsang said the government would continue investments in human capital -as a means of facilitating the transition of our workforce to the most productive use.

"By this I do not mean just continuing to invest billions of dollar. We must also fashion the right curriculum at schools and tertiary institutions that will equip our young with the appropriate skills which are global, not parochial. We must also strive to design the right training and retraining programmes that will help upgrade the skills of our workforce." he added.

The Financial Secretary said the government would continue to promote the most productive use of our scarce physical capital.

"We will preserve these policies which have proven to be effective in encouraging a high level of savings and investments; policies which channel investments towards enhancing the productive capacity of our economy. In this regard, we are committed to boosting the breadth and depth of our financial markets.

"Last but not the least, we will continue to play an active role in international economic policy-making in such fora as the World Trade Organisation, APEC and the OECD, to encourage the liberalisation of the international trade in services," he added.

End

5

Transcript of FS's media session ♦ ♦ ♦ ♦ *

Following is the transcript of the meet-the-media session by the Financial Secretary, Mr Donald Tsang after attending the Symposium "Hong Kong Into the 21st Century : The Servicing Economy", today (Tuesday):

Question: Do you consider today’s stock market.... the Hang Seng Index dropped ....? Do you also .... the China factor .... in your Budget?

FS: Too many questions in one. First of all, as far as the Hang Seng Index is concerned, we must realise the Hong Kong stock market and the Hong Kong futures market are part of the international financial system. And what happens in Wall Street inevitably will affect the performance of our local market. It is very natural. What is important is to make sure that the clearance system, the settlement system remain intact and efficient. And Hong Kong market maintains its integrity and open nature. And then we have demonstrated quite clearly yesterday that we are able to handle the transaction very smoothly. There's no sign of anxiety at all. This system has now proved to be first rate. That again. I'm sure will be reassuring to investors. And not only that when you bring money in that you can easily invest, when you bring money out, you can easily do so. For that reason you can see the rebound today which is quite satisfactory. As regards the political situation across Taiwan Strait, all I can say is, it is certainly not helpful to the economic development in the region. 1 hope that leaders on both sides will deal with the market very cautiously and will find amicable solutions before too long. As regards my forecast of economic growth rate in 1996 at 5%, I have assumed, I have assumed that China for instance will continue to enjoy MFN status. And I have also assumed that the disagreement across Taiwan Strait will not escalate to armed conflict. If these extraordinary things are likely to happen, of course Hong Kong's economy and our growth rate will be impaired.

Question: You seemed to be confident .... about MFN .... earlier that this year will be particularly difficult.

FS: This year will be particularly difficult because of what's happening in Taiwan. But Hong Kong will continue to do its utmost, in lobbying in American Congress and American administration the importance of China's MFN status to Hong Kong. The Governor will be visiting the United States and so with our Chief Secretary. They will bring in Hong Kong message very clearly to the United States.

End

6

Seventh meeting of JLG expert group

* * * * *

The Sino-British Joint Liaison Group will hold their seventh round of Expert Talks on March 13 to 14 in Hong Kong to discuss the preparation of Hong Kong's transitional Budget and related matters.

The British team will be led by Mr K C Kwong. Secretary for the Treasury of the Hong Kong Government. The Chinese team will be led by Mr Chen Zuo'er, Chinese Representative on the Sino-British Joint Liaison Group. They will be assisted by experts.

End

Governor grieves at loss of lives in hill fire

*****

The Governor, the Rt Hon Christopher Patten, today (Tuesday) opened the Spring Breeze Pavilion, built at the Pat Sin Leng Country Park as a memorial to the two teachers and three students who died in a hill tire last month.

Speaking at the ceremony, the Governor said that one must remember the light that the teachers. Miss Wong Sau-mei and Mr Chau Chi-chai, and the students showed in their lives, apart from grieving at their loss.

"In the midst of fear, Wong Sau-mei and Chau Chi-chai put care for the children before care for themselves; children helped their friends; others put their own lives in peril to bring aid : love cast out fear.

"We should remember those who worked tirelessly to save the injured and who are still doing so. We should remember all those who are still working with love to comfort and relieve all who have been hurl in body, in mind or in spirit by the lire.” he said.

The Governor also reminded people of the need of assurance of continuing care and respect for the feelings of the parents, the family and the friends of those who had died.

’’They have a need for our love and we have a need to give love, for it is only by love that we live and only the love we have for others that lives after us." he added.

End

7

Spring Breeze Pavilion opened ♦ ♦ ♦ ♦ ♦

The Spring Breeze Pavilion at Tai Mei Tuk, Tai Po, which is a memorial to the Pat Sin Leng hill fire last month, was officially opened today (Tuesday).

The convenor of the working group for the construction of the pavilion, Deputy Director of Education Mr T F Kwan, said that the Chinese characters of the name of the pavilion was handwritten by renowned artist, Ms Fang Zhaoling, mother of the Chief Secretary, Mrs Anson Chan.

Mr Kwan said that the name ’’Spring Breeze Pavilion” was adopted after taking into consideration the views of educators and members of the public.

Attending today’s ceremony were the Governor, the Rt Hon Christopher Patten, and Mrs Patten; the Chairman of the Board of Education, Dr Tam Man-kwan; the Chairman of the Professional Teachers’ Union, Mr Cheung Man-kwong; the Chairman of the Hong Kong Federation of Education Workers, Mr Yeung Yiu-chung; the Principal and teacher and student representatives of Hong Kong Chinese Women's Club Fung Yiu King Memorial Secondary School; and representatives from Sha Tin and Tai Po District Boards.

They were joined by Deputy Secretary for Education and Manpower, Mr Joshua Law; the Director of Education, Mrs Helen C P Lai YU; the Director of Agriculture and Fisheries, Dr Lawrence Lee; and representatives from the Fire Services Department and district offices.

In the Chinese culture, the worthwhile mission of educators is often likened to spring breeze. The breeze also brings new life and hope to devastated vegetation.

Mr Kwan said: "After the hill fire at Pat Sin Leng, suggestions came from the Professional Teachers' Union, Hong Kong Federation of Education Workers, the Board of Education, the working group for the Respect Our Teachers Campaign, other educators, the media and the public on commemorating the incident and ways to show support for families of the victims.

"These views were fully taken into consideration by a working group comprising the Education Department, the Agriculture and Fisheries Department, the Professional Teachers' Union and the Hong Kong Federation of Education Workers, which then decided to build a pavilion at the Nature Trail at Tai Mei Tuk. Pat Sin Leng Country Park.

8

"The group named it Spring Breeze Pavilion to commemorate the hill fire and to stress to visitors the importance of preserving the countryside and preventing hill fires.

"It was also decided that the opening of the pavilion should tie in with the Tree Planting Festival on March 12."

Inside the pavilion was a plaque with a message in English and Chinese by the Director of Education, which recounted the incident on February 10, 1996. »

The pavilion was built by the Agriculture and Fisheries Department.

A tree planting ceremony preceded the opening of the pavilion. The Deputy Secretary of Education and Manpower, the Director of Agriculture and Fisheries, the Chairmen of the Board of Education, the Professional Teachers’ Union, and the Hong Kong Federation of Education Workers, as well as teacher and student representatives, took part in planting two pine trees.

Right after the ceremony, visitors to the pavilion were provided with yellow Chrysanthemums to pay respect to the victims of the hill fire.

End

$2.5M grant to assist snowstorm victims in Qinghai ♦ ♦ ♦ ♦ ♦

The Disaster Relief Fund Advisory Committee has approved a grant of $2.5 million to Medecins sans Frontieres as a contribution to their emergency intervention to assist the people affected by snowstorms in Qinghai Province, China.

The Advisory Committee is concerned with the plight of these semi-nomadic people who have been adversely affected by repeated snowstorms and the severe cold weather.

"The Committee hopes that the grant will stimulate further responses from the public towards the plight of the people there," a government spokesman said today (Tuesday).

9

To ensure that the money will be used for the designated purpose, the Hong Kong Government will require Mcdecins Sans Frontieres to submit an evaluation report and an audited account on the use of the grant.

Noting that public donations and appropriations from general revenue were the main sources of the fund, the spokesman said: "Members of the public are welcome to donate to the fund for general relief purposes."

Enquiries can be made to the secretary to the Disaster Relief Fund Advisory Committee in Room 553, East Wing, Central Government Offices or on 2801 3503.

The Advisory Committee is chaired by the Chief Secretary. Other members are Dr Raymond Ch’ien, Mr J D McGregor, Mr Cheung Hon-chung, Mr Lau Chin-shek, the Secretary for Health and Welfare, and the Secretary for the Treasury.

End

KMB fare rise endorsed

*****

At the meeting held this morning (Tuesday), the Transport Advisory Committee endorsed the Administration's recommendation oT a 2.7 per cent fare increase for KMB's local routes to take effect in April 1996. The recommendation will be submitted to the Executive Council for consideration.

The recommended fare increase would mean that about 7.7 per cent of KMB’s passengers on local routes would have no increase in fares at all, whilst about 90.7 per cent of them would pay only 10 cents to 20 cents more per trip.

The TAC noted that KMB last increased the fares on its local routes on April 2, 1995 by 8 per cent. The recommended increase of 2.7 per cent is well below the inflation rate of 7.1 per cent since the last fare increase.

The TAC was satisfied that KMB had been providing a good and effective service. The recommended increase, together with the 10 per cent rise in cross harbour fares already implemented on March 3, 1996, would give KMB a weighted average fare rise of 3.6 per cent. This fare increase would provide KMB an incentive to continue to invest and improve its services.

End

10

Privacy Commissioner for Personal Data sought *****

The Government welcomes qualified candidates from both the public and private sectors to apply for the post of Privacy Commissioner for Personal Data (the Privacy Commissioner).

The Privacy Commissioner is tasked with enforcing and promoting compliance with the Personal Data (Privacy) Ordinance.

A Government spokesman said press advertisements would be placed on Saturday (March 16) to invite applications to fill the post of the Privacy Commissioner.

"We are looking for candidates who have an interest in privacy issues and possess appropriate administrative and managerial experience, leadership qualities and interpersonal skills. Candidates with a legal background and a good command of English and Chinese will be preferred," the spokesman said.

Remuneration for the Privacy Commissioner will be equivalent to Point 5 of the Directorate Pay Scale in the Civil Service - a basic salary of $133,900 a month. A monthly cash allowance of $59,880 in lieu of housing, passage and other benefits will also be provided.

The spokesman said the successful candidate will be appointed by the Governor on a full-time basis for an initial term of office of five years.

Applications should reach the Privacy Commissioner's Office (Preparatory Office) on 29th floor, Southern Centre, 130 Hennessy Road, Wan Chai, Hong Kong, not later than April 9, 1996.

End

11

DGT to attend Awashima Trade Forum ♦ ♦ ♦ ♦ ♦

The Director-General of Trade, Mr Tony Miller, will depart for Japan tomorrow (Wednesday) to attend the Third Conference on Asia Pacific Cooperation in the Global Economy organised by the Japan Institute of International Affairs on Awashima Island between March 15 and 17.

Organised with the full support of the Ministry of Foreign Affairs of the Japanese Government, the conference, also known as the Awashima Forum, will discuss multilateral trade and co-operation, development strategy and future expansion in the Asia Pacific region.

Mr Miller has been invited to chair the Forum’s first session on "Asia Pacific Co-operation and the Multilateral Trading System” on the opening day to examine the initiatives that can be taken by the Asia Pacific Economic Co-operation (APEC) and explore how APEC can contribute towards strengthening and developing the multilateral trading system under the World Trade Organisation (WTO) framework.

It will also discuss the new challenges for the multilateral trading system, including the possible agenda for the coming WTO Ministerial Meeting in Singapore in December, and APEC's possible contributions in the area of trade and investment liberalisation and facilitation in tackling such challenges.

There will be two other sessions to examine the actions needed to realise the sustainable economic prosperity in the Asia Pacific region and the evolution of the development strategy in Asia for the development of other developing economies in the region.

The three-day Forum will be attended by senior officials, academics and businessmen from the Asia Pacific region including Canada, Australia, New Zealand, Singapore, Korea, China, Malaysia, Indonesia, Philippines, Japan and Hong Kong.

During his stay in Japan, Mr Miller will meet senior officials of the Ministry of International Trade and Industry and the Ministry of Foreign Affairs to exchange views with them on trade issues of mutual interest.

He will also address a luncheon meeting of the Japan Hong Kong Society.

End

12

96 VMs depart on orderly repatriation flight *****

A group of 96 Vietnamese migrants (VMs) returned by air to Hanoi, Vietnam, today (Tuesday) on the 31st flight under the Orderly Repatriation Programme (ORP).

The returnees, comprising 52 men, 23 women, 13 boys and eight girls, are all from North Vietnam.

The majority of them arrived in Hong Kong in 1989, with the remaining in 1988, 1990. 1991 and last year.

The group brought the total number repatriated on ORP flights since November 1991 to 2,167.

The seventh Steering Committee of the Comprehensive Plan of Action reaffirmed last week that the only viable option for the non-refugees was return to Vietnam.

Commenting on today's flight, the Refugee Co-ordinator, Mr Brian Bresnihan, said the Government would prefer if the remaining VM population in Hong Kong opted to return home voluntarily.

"If they do not choose to do so, they will be returned under ORP. We are determined to resolve the VM problem as soon as possible," he said.

End

Monitors' Report submitted to CS

*****

The monitors appointed to observe the Orderly Repatriation Programme operation this (Tuesday) morning have submitted their report to the Chief Secretary.

The monitors were Dr Li Sze-bay, a Justice of the Peace, and Mr Tik Chi-yuen from Oxfam.

End

13

Services for the elderly expand ♦ * ♦ ♦ ♦

The government, taking into account the trend of a growing ageing population, has been rapidly expanding the various services for the elderly.

This was stated by the Director of Social Welfare, Mr lan Strachan, when he officiated at the opening ceremony of the Pok Oi Hospital Jockey Club Care and Attention Home in Yuen Long today (Tuesday).

"One of the basic principles underlying services for the elderly is 'ageing in place', i.e. care in the community.

"A range of community support services, such as home help service, day care centres, social centres, volunteer workers programme and older volunteers programme are provided to enable our senior citizens to live with dignity in their home environment as long as possible.

"For those, due to health, social or other reasons who cannot be cared for at home, a continuum of residential care services is to be provided," Mr Strachan said.

He said over 1,200 additional subvented care and attention places had been made available in the past year, adding that the government had committed to further expand the residential care service for the elderly in the years to come.

"Whilst the government is working at full speed to develop subvented residential places to the elderly, there is still a need to develop non-profit-making self-financing homes to serve the 'sandwich class'.

"The development of these self-financing homes offers an advantage of flexibility of management and provision of better quality services in meeting the increasing demand and changing needs of our seniors," he said.

The Pok Oi Hospital Jockey Club Care and Attention Home is the first subvented care and attention home with the provision of self-financing places which marks another milestone in the provision of residential services to the elderly. It provides 205 residential places for the elderly of which 44 are operated on the self-financing basis.

End

14

Elderly health services strengthened *****

Two more elderly health centres run by the Department of Health have begun operation in early March to provide health screening, physical examination and health education to people aged 65 and above.

The Shek Wu Hui Elderly Health Centre and Shau Kei Wan Elderly Health Centre are the department's third and fourth such clinics.

The two others are located in Shek Kip Mei and Kwun Tong.

A spokesman for the department said: "The objectives of the elderly health service are for the promotion of the health and well-being of elderly persons as well as the prevention and early detection of common diseases.

"Services provided include health risk assessment and simple screening test. Those found to have health problems will be referred to appropriate specialist clinics for further assessment and follow-up.

"Health education will be emphasised and conducted in the form of health talks, small group discussions and seminars.

"Each client is issued with a health record and will receive individual counselling."

The annual fee for these services is $220. However, the fee will be waived for those receiving Comprehensive Social Security Assistance (CSSA).

Shek Wu Hui Elderly Health Centre is situated on the first floor of Shek Wu Hui Jockey Club Clinic, Jockey Club Road, Shek Wu Hui, Sheung Shui, while Shau Kei Wan Elderly Health Centre is located on the ground floor of Shau Kei Wan Jockey Club Clinic at 8 Chai Wan Road.

Those who wish to join the programme can book an appointment either in person at the general office of the clinics or call the clinics direct on 2672 5858 (Shek Wu Hui Elderly Health Centre) or 2569 4333 (Shau Kei Wan Elderly Health Centre).

End

15

Tug and barge operators urged to take safety measures *****

The Marine Department today (Tuesday) appealed to operators and masters of all tow vessels and dumb steel lighters to follow safety measures and ensure proper handling of tow ropes.

The appeal was issued following a recent investigation into a fatal accident on a tow vessel.

A worker assigned to cast off the tow rope of a tow vessel was fatally injured by the backlash of a broken rope.

The investigation revealed that the tow rope did not safely clear the vessel after being released from the tow hook. It was caught in a ring on the after deck and parted.

As a result, the backlash of the broken tow rope hit the worker and fatally injured him.

The department urged owners, operators and masters of all tow vessels and dumb steel lighters to take the following safety measures:

to ensure the tow ropes are of the appropriate size and are in good condition for the tow voyage;

that tow ropes are led and secured properly;

that tow ropes are capable of being released quickly from the tow hood on the towing vessel;

that normally tow ropes should be released only when there is no stress on them, and

to ensure tow ropes are safely clear from the tow vessel, after release, before any engine movements are given.

End

16

Souvenir cover to mark Indonesia stamp exhibition ♦ * * ♦ ♦

To commemorate Hong Kong Post Office’s participation in the Indonesia ’96 Stamp Exhibition, a souvenir cover will be issued on March 21 and placed on sale at all post offices at $2 each as from Thursday (March 14), the Postmaster General, Mr Robert Footman, announced today (Tuesday).

Indonesia ’96, to be held in Bandung from March 21 to 30, is sponsored by the Public Corporation for Posts and Giro of Indonesia. It is under the patronage of the Federation Internationale de Philatelic and the auspices of the Federation of InterAsian Philately.

Hand-back service will be provided at all post offices on March 21 to official and privately-made covers bearing an indication of the event. A special postmark and a cachet for general cancellation purposes will also be introduced on the same day.

End

Appeal against tax evasion conviction dismissed ♦ ♦ * ♦ ♦

The Court of Appeal today (Tuesday) dismissed an appeal by a 57-year-old businessman against conviction of tax evasion charges.

The Appellant Yip Kam-sing, the director and shareholder of York Industries Limited, was convicted of 12 counts of tax evasion on July 17 1995. It was the largest criminal tax evasion case brought to Hong Kong Courts. He was sentenced to imprisonment for 15 months and fined a total of $3,725,701, being 100 per cent of the tax evaded and was ordered to pay cost of $100,000 to prosecution.

Representing the Crown was Senior Assistant Crown Prosecutor Mr Michael Blanchflower, and appearing for the Appellant was Mr Gary J Plowman Q C.

The Court of Appeal with Justices Power, Mortimer and Mayo, after hearing the submission made by the counsel for the Appellant, immediately dismissed the appeal.

fhe Inland Revenue Department reminded the public that the tax evasion is a criminal offence. Upon conviction, the maximum sentence is three years imprisonment and fine of $50,000 on each charge, in addition to a further fine equivalent to three times the amount of tax undercharged.

End

17

Apply travel document early to avoid holiday rush

*****

The Immigration Department today (Tuesday) advised people intending to travel abroad during the Easter holidays to apply for travel document as early as possible.

A spokesman for the department noted that during this time of the year, the number of people travelling outside Hong Kong would be greatly increased.

"In order to avoid last minute rush, people are advised to apply for passports and certificates of identity well in advance of the date on which they intend to travel," the spokesman said.

Under the present arrangement, applications for British National (Overseas) passports and Hong Kong certificates of identity can be submitted to the Immigration Department by post or deposited into the Drop-in boxes at the Immigration Headquarters or at any immigration branch offices.

Meanwhile, the spokesman pointed out that other than applications for Hong Kong travel documents, applications for identity cards and other services in connection with registration of persons were also expected to be on high demand.

He suggested applicants to submit their applications before the Eastern school/public holidays and to make full use of the 24-hour service of the Automated Telephone Appointment Booking System by calling 2598 0888.

Information leaflets on application procedures and documents required, together with application forms, are available at the Immigration Headquarters and all immigration offices.

For enquiry, members of the public may telephone 2824 6111 or use faxline 2877 7711.

End

18

Man jailed for selling own ID card *****

The Immigration Department today (Tuesday) warned that it was an offence to transfer one's identity card to another person and the offender, if convicted, would face a maximum fine of $100,000 and imprisonment for ten years.

The warning was prompted by a court case in which a I long Kong resident was sentenced at Western Magistracy to nine months' imprisonment after he was convicted of the offence.

Investigation revealed that the defendant had been issued with a Hong Kong identity card in December 1989. Due to financial difficulty, the man sold his identity card for $2,500 to another man in April 1994 reportedly for illegal use by someone in the Philippines.

The man subsequently reported loss his identity card and applied for a replacement.

End

I long Kong Monetary Authority tender results

*****

Tender date 12 Mar 1996 12 Mar 1996

Paper on offer EF Bills EF Bills

Issue number Q61 1 11660

Issue date 13 Mar 1996 13 Mar 1996

Maturity date 12 Jun 1996 11 Sep 1996

Amount applied HKD3.628 MN I1KD2,378 MN

Amount allotted HKD1.500 MN HKD800 MN

Average yield accepted 5.39 PCT 5.49 PCT

Highest yield accepted 5.40 PCT 5.50 PCT

Pro rata ratio About 40 PC T About 50 PCT

Average tender yield 5.42 PCT 5.54 PC I

19

Hong Kong Monetary Authority

Tenders to be held in the week begining 18 Mar 1996 -

Tender date 18 Mar 1996 19 Mar 1996 19 Mar 1996

Paper on offer EF Notes EF Bills EF Bills

Issue number 5103 Q612 Y687

Issue date 19 Mar 196 20 Mar 1996 20 Mar 1996

Maturity date 19 Mar 2001 19 Jun 1996 19 Mar 1997

Tenor 5 years 91 days 364 days

Amount on offer HKD500+100MN HKD1.500+300MN HKD500+150MN

Coupon 6.75 PCT

End

Hong Kong Monetary Authority money market operations

*****

$ million Time (hours) Cumulative change (^million)

Opening balance in the account 1,469 0930 +1,333

Closing balance in the account 2,041 1000 + 1,333

Change attributable to : 1100 + 1,333

Money market activity + 1,332 1200 +1,332

LAF today -760 1500 + 1,332

1600 +1,332

LAF rate 4.00% bid/6.00% offer TWI 123.7 *+0.0*

12.03.96

20

Hong Kong Monetary Authority

EF bills EF notes Yield

Terms Yield Term Issue Coupon Price

1 week 4.86 2 years 2802 5.16 98.32 6.19

1 month 5.20 3 years 3901 5.57 98.04 6.42

3 months 5.40 5 years 5012 6.38 98.39 6.89

6 months ' " 5.52 7 years 7302 6.02 94.16 7.22

12 months 5.70 5 years M502 7.30 100.84 7.21

Total turnover of EF bills and notes - $17,313 million

Closed March 12, 1996

End

DAILY INFORMATION BULLETIN

ISSUED BY GOVERNMENT INFORMATION SERVICES BEACONSFIELD HOUSE, HONG KONG. TEL: 2842 8777

Thursday, March 13,1996

Contents Page No.

More resources to meet development & environmental needs............... 1

Six amendment bills seek to combat smuggling........................... 3

New franchise granted to Citybus....................................... 4

Insider Dealing Tribunal............................................... 5

Conduct council election nominations close............................. 5

Chinese herbal poisoning............................................... 6

Trial passage at night of large vessel at Ma Wan....................... 7

Government promotes computerised school management...................   9

Hong Kong Monetary Authority money market operations.................. 10

1

More resources to meet development & environmental needs ♦ ♦ ♦ * ♦

The Secretary for Planning, Environment and Lands, Mr Bowen Leung, said today (Wednesday) there would be more resources in 1996-97 to implement the commitments within his policy areas of meeting Hong Kong's development needs and cleaning up the environment.

Mr Leung said a total of 191 new posts would be created in 1996-97 to provide new and improved services mainly related to slope safety, flood prevention, building safety, conservation and environmental protection.

Of these new posts, 46 will be created in the Buildings, Drainage Services and Lands Departments in connection with implementation of the Landslip Preventive Measures Programme.

Mr Leung said: "The Buildings Department will establish a new section this year to deal with enforcement action arising from a scheme to require building owners to carry out regular inspections of buried private drains and services which may affect the safety of their slopes.

"For the Lands Department, they will commission a consultancy study to identify systematically the maintenance responsibility of all 50,000 registerable manmade slopes in Hong Kong."

On flood prevention, Mr Leung said: "The Drainage Services Department will have 15 new posts to implement the flood control strategy. This will enable them to speed up work in upgrading the stormwater drainage system throughout Hong Kong, reducing flood risks in low-lying areas, particularly in the Northwest New Territories and in implementing the Shenzhen River Regulation Project."

He noted that work on Stage I of the river regulation project was progressing smoothly for completion in mid-1997 and Stage II work would commence in late 1996.

Turning to building safety, Mr Leung said: "We tightened up safety control and supervision over building and demolition work following the enactment of the Buildings Amendment Ordinance and the creation of a site monitoring team in Buildings Department last year.

2

"To further strengthen work in this area, the Buildings Department will get 16 new posts largely to deal with work on improving fire safety standards in commercial buildings.”

Mr Leung noted that the Buildings Department was also working on a scheme to require owners to hire building professionals to inspect their building periodically and repair any defects identified. The public would be consulted on the proposed scheme in the second half of this year.

On conservation, the Policy Secretary said: "We will create 15 new posts in the Agriculture and Fisheries Department for deployment on work related to management of marine parks and a marine reserve and the protection of the Ramsar site at Mai Po and Inner Deep Bay.

"It is expected three Marine Parks located at Hoi Ha Wan, Yan Chau Tong and Sha Chau-Lung Kwu Chau respectively and the Marine Reserve at Cape D’Aguilar will be established in the second half of 1996. The Sha Chau-Lung Kwu Chau Marine Park will enclose a sanctuary for Chinese White Dolphins. Consideration is being given to implement an artificial reef programme to enhance the marine environment there."

Expending on environmental protection, Mr Leung said: "We will create 15 new posts in the Agriculture and Fisheries Department and the Environmental Protection Department in connection with the enactment of the Environmental Impact Assessment Bill which will provide a statutory framework to ensure that environmental mitigation measures will be taken in the design and construction of projects.

"EPD will get 35 more new posts to beef up work on improving air quality.

"We aim to set up before the end of 1997 three more air quality monitoring stations at Causeway Bay, Central, and Eastern Districts and two more toxic air pollution monitoring stations at Central and Tsuen Wan.

"We are also working on some administrative and legislative measures to tighten emission controls on vehicles and considering the way forward for the proposed Diesel to Petrol Scheme."

Other new posts will be created in the Lands Department for work related mainly to land resumption and clearance for major works projects and in the Planning Department for work arising from amendments to the Town Planning Ordinance.

3

Commenting on land revenue, Mr Leung said, "The revised estimate for 1995-96 is $5.5 billion (14.9%) higher than the original estimate largely because we managed to make better sites available and the premia realised are higher than expected.

"We should not at this stage read too much into the 1996-97 land revenue estimate which is $6.4 billion lower than the 1995-96 revised estimate. The estimate has been prepared based on the anticipated site availability in the year and prevailing market conditions. This reflects the location, area and permitted use of the overall land sales programme proposed for 1996-97 which has yet to be approved by the Land Commission."

End

Six amendment bills seek to combat smuggling *****

Six amendment bills seeking to remove a loophole in the existing definitions which hinders the Government's effort in combating smuggling from China by vehicle will be gazetted this Friday (March 15).

The six amendment bills are: the Import and Export (Amendment) Bill, the Control of Chemicals (Amendment) Bill, the Reserved Commodities (Amendment) Bill, the Trade Description (Amendment) Bill, the Toys and Children's Products Safety (Amendment) Bill and the Consumer Goods Safety (Amendment) Bill.

A Government spokesman said: "The bills seek to amend the definition of 'article in transit', 'goods in transit' and 'controlled chemical in transit' in the six corresponding Ordinances by deleting the references to 'vehicle'.

"Currently, items in transit are exempted from certain import and export controls.

"Under the existing definitions, an item is in transit if it is brought into Hong Kong solely for the purpose of taking it out of Hong Kong and remains on board the same vessel, aircraft or vehicle throughout its passage through Hong Kong."

4

The spokesman explained: "Since no other place besides China is contiguous to Hong Kong, items remaining on the same vehicle coming in from China can only be destined for Hong Kong.

"It is practically impossible for any item carried on a vehicle from China to qualify as being in transit," he added.

The spokesman noted that in several cases regarding contraband found on incoming vehicles from China at the border point, the court accepted the claim that the contraband was ’goods in transit', for when the goods was seized at the border, it remained on the vehicle.

He said: "A loophole thus exists in the current definitions. The proposed amendments will remove the loophole so that items carried by vehicle would not be regarded as being in transit."

I he amendment bills have been approved by the Governor in Council on March 5 and will be introduced into the Legislative Council on April 3.

End

New franchise granted to Citybus *****

The Secretary for Transport, Mr Haider Barma, said he was delighted that the Sino-British Joint Liaison Group had reached agreement on a grant of a new franchise for Citybus Limited.

"On December 12, 1995, the Govemor-in-Council approved in principle the terms of a new franchise for Citybus Limited which would confer upon the company the right to operate a public bus service for 10 years from September 1, 1996.

"On March 12, 1996, the Sino-British Joint Liaison Group reached a common view on the grant of this new franchise to Citybus," he said.

"Approval by the Executive Council of a formal grant of the new franchise to Citybus will be sought as soon as possible," Mr Barma added.

End

5

Insider Dealing Tribunal

*****

The Governor has appointed Mr Justice Burrell to be the Chairman of the Second Division of the Insider Dealing Tribunal.

A spokesman for the Financial Services Branch said today (Wednesday) that Mr Justice Burrell would assume duty on March 22, 1996 and his task was to conduct an inquiry into certain dealings involving the shares of Yanion International Holdings Ltd.

Mr Justice Burrell, aged 47, first joined the Judiciary as a Magistrate in 1986. He whs appointed High Court Judge in July 1995.

The spokesman also announced that the main hearing on the CNPC (Hong Kong) Ltd insider dealing case would start on March 25, 1996.

A preliminary hearing on the case was held in early February 1996 before Mr Justice Yam, Chairman of the First Division of the Insider Dealing Tribunal. The Chairman is assisted by two lay members. They are Mr Lawrence Tse Kar-leung and Ms Connie Tsui Suet-mui.

At the main hearing, the First Division of the Tribunal will receive evidence and testimonies from parties involved in the case.

The hearing scheduled for 9:30 am on March 25 will be held at Room 702, Peregrine Tower, Lippo Centre, 89 Queensway. Hong Kong.

End

Conduct council election nominations close *****

A total of 18 nominations were received for the organisation-nominated seats in the election to the Council on Professional Conduct in Education (CPCE) as nominations closed at noon today (Wednesday).

They will compete for 11 scats in this particular category.

6

The Secretary to the council. Mr M L Lau, expressed satisfaction over the response to the nominations.

Nominations to the teacher-nominated category of seats are coming in through district education offices and the total number will not be known until tomorrow.

Voting for the council election will be held on April 24 at which all full-time registered teachers, permitted teachers and government school teachers are eligible to take part.

Details of the election procedure will be sent to schools and organisations shortly.

CPCE is a non-statutory body to advise the Government on measures to promote professional conduct in education including the drafting of operational criteria defining the conduct expected of an educator, and to advise the Director of Education in cases of dispute or on alleged professional misconduct.

End

Chinese herbal poisoning

*****

Following three recent cases of poisoning by a highly toxic Chinese herb, Gwai Kuo, sold as Wai Ling Sin, a spokesman for the Department of Health today (Wednesday) urged members of the public to seek proper advice before using it.

"They should consult Chinese herbal practitioners and avoid self-medication," the spokesman said.

"Wholesalers and retailers of Chinese herbs are asked to check carefully their stock of Wai Ling Sin to make sure that it had not been contaminated by Gwai Kuo, a herb for external use," he added.

I'he spokesman said subsequent investigation revealed that Gwai Kub sold as Wai Ling Sin was included in the Chinese herbal medicine consumed by the three victims. They fell ill within hours of consumption of the medicine and were admitted to Tuen Mun Hospital.

7

Chemical analysis of the herbal medicine used in all three cases confirmed the presence of podophyllotoxin, a toxin commonly found in Gwai Kuo. It is suspected that the poisoning was due to the unintentional contamination of Wai Ling Sin by Gwai Kuo.

"We are concerned about the incidents and follow-up actions have been taken to trace the source of the incriminated herbs," the spokesman said.

"The Department of Health has alerted wholesalers of herbal medicine and retailers in the NT West region to examine their stock of Wai Ling Sin and to submit any suspected contaminated batches to the Department for examination.”

The spokesman noted that traditional Chinese herbal medicine has been commonly used by the Chinese community. If used properly, they do not have harmful effects.

The three patients were one man and two women. The man involved in the first case had already been discharged. The conditions of the other two were improving.

End

Trial passage at night of large vessel at Ma Wan *****

fhe Marine Department is evaluating the data gathered from a one-off trial transit of a 292-metre container vessel at night through the Ma Wan Channel last (Tuesday) night.

At present ships exceeding 183 metres are not allowed to pass through the channel at night though no such restriction is imposed during day time. But a trial scheme to allow ships between 183 and 250 metres to pass through the channel at night is underway.

Due to the geographical and currents constraints, large ships passing through Ma Wan are restricted by tidal windows, effectively reducing the use of the channel by large ships.

"Piloting a ship through the channel in darkness is more difficult and posed more risks than in day time," the Director of Marine. Mr Ian Dale, said.

8

The Ma Wan Channel is considered to be a dangerous zone not only because of the strong currents and the professional skill required in negotiating a 90 degree turn but also due to the busy traffic in the area.

"My department is working closely with the Hong Kong Pilots Association to extend the usage of the channel by large vessels at night without compromising safety," Mr Dale said.

Recent moves included the setting up of a control station at Gemini Point in Tsuen Wan to provide on-the-spot regulatory actions in the area round the clock and the restructuring of marine pilot classes.

"Nowadays, shipowners tend to bring in larger and larger vessels. Besides the 292-metre Newport Bay we have in our port this week one of the world's largest ship capable of carrying 6 000 standard-size container boxes," he said.

With the opening of a new container terminal in Shekou, the volume of marine traffic at the already-congested Ma Chan channel is expected to increase substantially as it is the only deep water channel for cargo ships trading between the two places.

I he ship started entering the Channel at 8 pm yesterday and completed the passage within 30 minutes.

"The success of the trial is due to the joint efforts of the Pilotage Advisory Committee, the Pilots Association, the shipowners and of course the hardwork and detailed planning of my staff." Mr Dale said.

Marine Pilot Cheung Hai-loi and co-pilot Lui Yan-hon volunteered for the operation.

To facilitate this special transit, the Marine Department deployed a hydrographic launch to provide real time tidal current information to the two pilots on board the vessel. A Senior Marine Officer also joined the crew on the bridge of the vessel as observer.

In addition three Marine Department launches were assigned to regulate traffic and to clear the passage for the ship.

"It is still too early to lift the night-time restriction for large vessel at this stage." Mr Dale said.

9

’’Data and experience gained from this one-off exercise shed light on what sort of additional facilities and knowledge are required to make these transits at night as safe as possible," he said.

"At present we are not satisfied that it is safe to handle ships exceeding the permitted length to pass through Ma Wan at night though we are encouraged by the results of the trial." Mr Dale said.

The Newport Bay docked overnight at Shekou and re-entered Hong Kong through Ma Wan this afternoon. She is now berthing at Kwai Chung container terminals.

End

Government promotes computerised school management ♦ ♦ * ♦ *

The Education Department is promoting computerised school management by organising exhibitions and talks on its computer-based School Administration and Management System (SAMS) from Saturday (March 16).

Staff of all public sector primary and secondary schools and educational bodies are invited to participate in the SAMS. Days activities under the theme "SAMS Made Easy”.

The SAMS Days to be conducted on March 16, 18, 29 and 30 will feature a range of activities including exhibitions, video programmes, talks, demonstrations and hands-on sessions which present a comprehensive picture on SAMS and focus on ways in which school staff can apply SAMS to their daily administrative work and school activities.

The SAMS Days will be held at Lui Kee Education Services Centre, 269 Queen’s Road East, Wanchai from 9.30 pm to 1 pm on March 16 (Saturday), 9.30 am to 5 pm on March 18 (Monday), 9.30 am to 5 pm on March 29 (Friday) and 9.30 am to 1 pm on March 30 (Saturday).

The SAMS is one of the projects within the Information System Strategy of the Education Department. It provides all public sector schools with a networked computer system to assist with their administration and management and to enable efficient electronic transmission of information between schools and the Education Department.

10

Up to now, about 550 schools have been equipped with computer hardwares, the majority of which have been installed with SAMS applications.

End

Hong Kong Monetary Authority money market operations

*****

$ million Time (hours) Cumulative change (^million)

Opening balance in the account 2,041 0930 +761

Closing balance in the account 1.903 1000 +761

Change attributable to : 1100 +761

Money market activity +747 1200 +759

LAF today -885 1500 +749

1600 +747

LAF rate 4.00% bid/6.00% offer TWI 123.7 *+0.0* 13.3.96

I long Kong Monetary Authority

EF bills EF notes

Terms Yield Term Issue Coupon Price Yield

1 week 4.98 2 years 2802 5.16 98.20 6.26

1 month 5.24 3 years 3901 5.57 97.85 6.50

3 months 5.42 5 years 5012 6.38 98.14 6.96

6 months 5.53 7 years 7302 6.02 93.56 7.34

12 months 5.73 5 years M502 7.30 100.46 7.31

Total turnover of EF bills and notes - $24,872 million

Closed March 13. 1996

End

DAILY INFORMATION BULLETIN

ISSUED BY GOVERNMENT INFORMATION SERVICES BEACONSFIELD HOUSE, HONG KONG. TEL: 2842 8777

SUPPLEMENT

Wednesday, March 13,1996

Contents Page No.

Legislative Council meeting:

Debate on HKSAR Preparatory Committee.................................. 1

Public Finance Ordinance............................................... 3

Evidence Bill.......................................................... 4

Kadoorie Agricultural Aid Loan Fund Bill............................... 7

Leveraged Foreign Exchange Trading Bill................................ 8

Securities and Futures Commission Bill................................. 9

Bankruptcy (Amendment) Bill 1996....................................... 9

Pneumoconiosis Bill................................................... 12

Gas Safety Bill....................................................... 14

Measures to adopt on women’s rights................................... 15

/’’Executive-led" system......

4

Contents PageNo,

"Executive-led" system in Government.................................... 17

Police disciplinary regulations explained............................... 18

Conversion of Lo Wu military camp being considered................. 22

Issue of food premises licenses explained............................... 23

Government programmes on TV and radio.............................. 25

Registration of proprietary Chinese medicine............................ 26

Crimes in disciplined services.......................................... 28

Crimes on flights within Hong Kong airspace........................ 32

Differences in unit costs for courses explained.................... 34

Closed road permit system on Lantau................................ 41

Review of health care financing.................................... 42

Temporary staff of Hospital Authority.............................. 43

Space shortage in Polytechnic University........................... 44

Procedures to obtain JP's service to witness signing............... 46

Emergency ambulance services in East Kowloon....................... 46

Upward trend in child abuse cases.................................. 48

Policy on energy conservation...................................... 49

Bus-only-lane and freight transport studies........................ 51

Supply and demand of paramedical personnel......................... 52

1

Debate on HKSAR Preparatory Committee *****

Following is a speech by the Secretary for Constitutional Affairs, Mr Nicholas Ng, in the motion debate on Preparatory Committee of the Hong Kong Special Administrative Region in the Legislative Council today (Wednesday):

Mr President,

Mr Leung’s motion, and the amendment motion put forward by Mr Liu, raises foui ‘ranSitional issues, namely

* -he work of the Preparatory Committee;

the question of a Provisional Legislature;

* the formation of the HKSAR Legislative Council; and

* the selection of the first Chief Executive.

These are all well trodden ground: it was only one and a half months ago, on 31 January, that they were exhaustively debated in this Council. I have set out the Government’s position on these issues then. Let me reiterate our position this afternoon.

First, the operation of Preparatory Committee. The Decision of the National People's Congress adopted on 4 April 1990 provides that the Preparatory Committee is to be responsible for preparing for the establishment of the HKSAR Government, including the formation of the first HKSAR Legislative Council. Given that the Preparatory Committee carries with it heavy and important responsibilities, it is perfectly natural that the community should have a close interest in its work. Thus, whilst it must be for the Preparatory Committee to decide how it carries out its tasks, we earnestly hope that the Committee will take full account of the Hong Kong community's wish in working for a successful transition, and in establishing a truly credible HKSAR Government and representative institutions. In this connection, we are pleased to note that Vice Premier Qian Qichen has said that the Preparatory Committee should extensively solicit opinions from Hong Kong people, and that this principle is enshrined in one of the working rules adopted by the Preparatory Committee. Various Chinese officials have also urged Hong Kong people to participate in preparation for the transition.

There are, of course, 94 Hong Kong members on the Preparatory' Committee, including 14 from this Council. Presumably, these 94 members will serve as a conduit in reflecting the views and concern of the people of Hong Kong. Presumably, too, they will account to the people of Hong Kong for their actions in connection with the work of the Preparatory Committee.

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On our part, we are committed to co-operate closely with the Committee. Indeed, the British and the Chinese sides have agreed that the Hong Kong Government’s Liaison Office and the Preparatory Committee Secretariat, including its Hong Kong Office, could begin to liaise. As I explained to this Council on previous occasions, our Liaison Office will co-operate with the Preparatory Committee on the basis of three established parameters. I will not repeat our basic principles here.

In addition, we are committed to openness and transparency in our dealings with the Preparatory Committee, and will account to this Council and the public for our actions.

When the Chief Executive (Designate) is in place, we will likewise render immediate and practical co-operation.

Mr Leung’s motion also deals with the question of a Provisional Legislature. The Hong Kong Government’s position on this question is clear and consistent. The current Legislative Council has been elected through open and fair arrangements which are fully consistent with the Joint Declaration and the Basic Law. These arrangements meet the community’s wish for credible and representative institutions which are capable of transcending 1997. As the British Prime Minister said just a week ago, "those elected by the people of Hong Kong in record numbers should be allowed to serve their full four-year term. That is what Hong Kong people wish to see. That is what the world wish to see." In that way, we will have an experienced legislature in place on 1 July 1997 which commands the confidence of the community. This is the best way to avoid confusion or disruption in our legislative affairs.

For the above reasons, we do not accept that there is any need for new arrangements in 1997.

I would now like to turn to two different but closely related issues: the formation of the first and subsequent SAR Legislature, and the selection of the first and subsequent Chief Executive. The relevant methods and procedures are already prescribed in the Basic Law and the Decision of the National People’s Congress adopted on 4 April 1990. Implementation of these provisions, or amendments to these provisions, will be a matter for the Chinese Government and the future HKSAR Government. I would, therefore, only make one statement of fact. Article 45 of the Basic Law provides that "the ultimate aim is the selection of the Chief Executive by universal suffrage upon nomination by a broadly representative nominating committee in accordance with democratic procedures”. Article 68 of the Basic Law provides that "the ultimate aim is the election of all the members of the Legislative Council by universal suffrage."

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This said, I can hardly over-emphasise the crucial importance of processes for forming the SAR Legislative Council, and for selecting the Chief Executive. The Hong Kong community expects these to be nothing less than open, fair and transparent. So does the international community. The Hong Kong Government, too, fully shares such expectations. Those who are responsible for determining the formation processes will do well to take full account the wishes of the Hong Kong people, if they are serious about establishing an SAR Government which is credible and truly representative.

Finally, let me reassure this Council and the community that the Hong Kong Government is firmly committed a successful transition. We will continue to be responsible for the administration of Hong Kong with the object of preserving its economic prosperity and social stability. We are ready to provide practical cooperation with the Preparatory Committee and the Chief Executive (Designate), once he or she is in place. We hope others will join us in this solemn and historic endeavour.

End

Public Finance Ordinance *****

Following is a speech by the Secretary for the Treasury, Mr K C Kwong, in moving the resolution of the Pubic Finance Ordinance in the Legislative Council today (Wednesday):

Mr President,

I move the motion standing in my name in the Order Paper.

The purpose of this motion is to seek funds on account to enable the Government to carry on existing services between the start of the financial year on 1 April 1996 and the enactment of the Appropriation Bill. This follows the procedure long established in this Council.

We have determined the funds on account sought under each subhead in accordance with paragraph four of the resolution, by reference to percentages of the provision shown in the draft Estimates. If the draft Estimates are changed, by the Finance Committee or under delegated powers, the prevision to which the percentages are applied will also change accordingly. Thus the provision on account under each head is not constant but may vary, with every increase being matched by an equal decrease. The initial provision on account under each head is shown in the footnote to this speech. The aggregate total under all heads is fixed, however, at $49,596,849,000 and cannot be exceeded without the approval of this Council.

4

The resolution also enables the Financial Secretary to vary the funds on account in respect of any subhead, provided that these variations do not cause an excess over the amount of provision entered for that subhead in the draft Estimates or an excess over the amount of funds on account for the head.

The Financial Secretary will issue a vote on account warrant to the Director of Accounting Services authorising him to make payments up to the amount specified in this motion and in accordance with its conditions. The vote on account will be subsumed upon the enactment of the Appropriation Bill, and the general warrant issued after the enactment of the Appropriation Bill will replace the vote on account warrant.

Mr President, I beg to move.

End

Evidence Bill

*****

Following is a speech by the Attorney General, the Hon Jeremy Mathews, in moving the second reading of the Evidence (Amendment) Bill 1996 in the Legislative Council today (Wednesday):

Mr President,

•i

I move that the Evidence (Amendment) Bill 1996 be read a second time.

The purpose of the Bill is twofold. First, it proposes to enhance the powers of the High Court to obtain evidence for the purpose of criminal proceedings in other jurisdictions. Secondly, it proposes to abolish the corroboration rules in respect of sexual offences, f . . .

Obtaining of evidence for overseas jurisdictions

I will first deal with the provisions relating to obtaining of evidence for overseas jurisdictions. Under the existing law, the courts in Hong Kong may, on the request of another jurisdiction, take evidence here for use in criminal proceedings in that jurisdiction. However, before the court can assist in obtaining evidence for proceedings in another jurisdiction, it must be satisfied, firstly, that the request was made by or on behalf of a ’’court or tribunal" and, secondly, that the evidence in question is to be obtained for proceedings which have been instituted or which are likely to be instituted if the evidence is obtained.

5

These two criteria severely restrict the power of the courts in Hong Kong to respond to requests for assistance from other jurisdictions, and cause particular difficulty in relation to civil law jurisdictions. To give an example, in a recent case relating to a request from Italy, the High Court held that it did not have jurisdiction to respond to the request because it was issued by a Magistrate who, under Italian law, was performing the function of a public prosecutor. Therefore, the request was not one made by or on behalf of a court or tribunal. Moreover, the restrictions prevent evidence from being obtained for the purposes of proceedings before an examining magistrate who, under the civil law system, conducts the investigation. In such cases, it cannot be argued that the evidence to be obtained is for the purpose of proceedings which are likely to be instituted.

It is important for Hong Kong to play a full part in the world effort to combat crime. However, it cannot now do this because of the restrictions I have referred to. Our inability to respond satisfactorily to requests for legal assistance could damage Hong Kong's reputation as an important legal, commercial and financial centre. It could also cause problems when Hong Kong seeks to enter into agreements with other jurisdictions in respect of mutual legal assistance.

The Bill proposes to overcome these difficulties by enhancing the powers of the High Court to assist in obtaining evidence for use in other jurisdictions. It does this by allowing a request for assistance from another jurisdiction to be made not only by a court, tribunal or other juridical authority, but also by a prosecuting authority. It also provides that the evidence in question may be obtained for the purposes of a "criminal matter", which is defined to mean a prosecution, an investigation, or an ancillary criminal matter, such as the restraint or confiscation of the proceeds of crime.

The Bill does, however, place restrictions on the power of the courts to obtain evidence. In particular, a person cannot be compelled to give evidence which he could not be compelled to give in Hong Kong on the ground that to do so might tend to incriminate him, or which he could not be compelled to give in the other jurisdiction in the criminal matter for which the evidence is being obtained;

Corroboration rules in respect of sexual offences

I now turn to the proposed abolition of the corroboration rules in respect of sexual offences. Under our law, the general rule is that a court may act on the evidence of a single witness to decide whether or not an accused is guilty. However, in respect of sexual offences, there are special rules of corroboration. The evidence of a witness is corroborated if there is independent testimony implicating the accused. The reason for the corroboration rules in respect of sexual offences is said to be that sexual allegations are easy to make but difficult to refute. The alleged victim's evidence may have been the result of fantasy, spite or remorse.

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There are two different rules of corroboration in respect of sexual offences. One rule requires that, where the allegation against an accused is supported by the evidence of one witness only, that witness’ evidence must be corroborated by some independent evidence tending to prove the guilt of the accused. Without such corroborative evidence, the accused cannot be convicted of the offence alleged, even if the judge or jury is convinced that he is guilty of the offence. There are seven types of a sexual offences under the Crimes Ordinance to which this rule applies. These include procuring a person by threats or intimidation to do an unlawful sexual act, and procuring a person to become a prostitute.

The other rule applies to all other types of sexual offences. It requires a judge to give a warning of the dangers of convicting a person on the uncorroborated evidence of a victim of sexual offence. If a judge fails to give such a warning, this may result in the accused’s conviction being overturned on appeal, even though the evidence was, in fact, corroborated.

In many common law jurisdictions, the rules governing corroboration have been criticised as unsatisfactory. They work particularly to the disadvantage of victims of sexual offences whose evidence is characterised as inherently unreliable. In addition, the rules are extremely difficult to explain and apply, and are rigid in their application. The corroboration rules applying to sexual offences have already been abolished in England, Canada, New Zealand and some Australian states.

I would remind Members that, in Hong Kong, the corroboration rules that used to apply to the evidence of an accomplice and a child witness were recently abolished. This Bill now proposes to abolish the corroboration rules applying to sexual offences. I would add that the abolition of the rules would not prevent a judge from giving a warning about the reliability of the evidence of any witness in proceedings for a sexual offence if, on the particular facts of the case, the judge considered this necessary.

Clause 2 of the Bill introduces a new section 4B into the Evidence Ordinance to provide for the abolition of the rule requiring a corroboration warning to be given in proceedings for a sexual offence. Section 4 of the Schedule to the Bill repeals the requirement for corroboration in respect of seven sexual offences under the Crimes Ordinance.

Mr President, the proposed enhancement of the powers of the High Court to obtain evidence is consistent with the bilateral legal mutual assistance agreements that Hong Kong is negotiating, and with international practice. The proposed abolition of the rules of corroboration applying to sexual offences is consistent with developments in other common law jurisdictions and with I long Kong's recent reforms to the law regarding accomplices and children. Both measures will improve the administration of justice. I commend the Bill to this Council.

End

7

Kadoorie Agricultural Aid Loan Fund Bill ♦ ♦ ♦ ♦ ♦

Following is a speech by the Secretary for Economic Services, Mr Gordon Siu, in moving the second reading of the Kadoorie Agricultural Aid Loan Fund (Amendment) Bill 1996 in the Legislative Council today (Wednesday):

Mr President,

I move that the Kadoorie Agricultural Aid Loan Fund (Amendment) Bill 1996 be read a second time.

The purpose of the Bill is to improve the administration of the Kadoorie Agricultural Aid Loan Fund.

The Kadoorie Agricultural Aid Loan Fund Ordinance was enacted in 1995 to establish the Kadoorie Agricultural Aid Loan Fund. The Fund consists of funds donated by the late Lord Kadoorie, the late Sir Horace Kadoorie and the Government for the purpose of encouraging or improving agriculture in Hong Kong by the issue of loans to farmers or groups of farmers.

The Ordinance provides for the Fund to be administered by a committee of six members, the composition of which includes Lawrence Kadoorie and Horace Kadoorie. The passing away of Lord Kadoorie and Sir Horace Kadoorie removed the link between the Kadoorie family and the loan fund committee and reduced the number of members of the committee from six to four. Consequently, the loan fund committee is unable to function as effectively as before.

fhe Bill proposes that the membership be increased to seven through the addition of one member nominated by Sir Elly Kadoorie & Sons Limited and two other new members to be appointed by the Governor. It also provides for the term of office for members appointed by the Governor to be reduced from three years to two. These changes will ensure that the link between the Kadoorie family and the loan fund committee is re-established and that there are more opportunities for different representatives of the agricultural sector to experience the workings of the committee.

In addition, the Bill amends the definition of "agriculture" in the Ordinance, which already includes fish culture, to include all forms of aquaculture, to make it clear that both pond fish farmers and mariculturists may apply for loans from the Fund.

Mr President, the proposals in the Bill will improve the arrangements for approving loans to farmers from the Kadoorie Agricultural Aid Loan Fund and thereby promote the development of agriculture and aquaculture in Hong Kong. I commend the Bill to this Council.

End

8

Leveraged Foreign Exchange Trading Bill ♦ ♦ ♦ ♦ ♦

Following is a speech by the Secretary for Financial Services, Mr Rafael Hui, in moving the second reading of the Leveraged Foreign Exchange Trading (Amendment) Bill 1996 in Legislative Council today (Wednesday):

Mr President,

I move the second reading of the Leveraged Foreign Exchange Trading (Amendment) Bill 1996.

The Bill seeks to require a trader licensed under the Leveraged Foreign Exchange Trading Ordinance to obtain the consent of the Securities and Futures Commission (SFC) prior to the sale or issue of substantial holdings in its shares. The Bill also seeks to amend the Ordinance so that the making of orders by the High Court under section 13 will apply to any person, instead of to licence holders only, and any such order may specify assets instead of currency.

Under the present Ordinance, a licence to operate leveraged foreign exchange trading can be granted only to limited companies and their representatives, while traders which were in business prior to the introduction of the Ordinance are allowed to continue their businesses pending processing of their applications by the SFC. At present, the Ordinance does not explicitly and expressly prohibit a company which is considered not ‘fit and proper’, including a company which has been refused a licence to be a trader, from acquiring shares of a licensed trader and therefore gaining control of the latter. The proposed amendment in the Bill is intended to close this possible loophole.

Separately, section 13 of the present Ordinance empowers the High Court to make orders against a licence holder who has contravened or is about to contravene the provisions of the Ordinance and its subsidiary legislation or any conditions of its licence. An order made under section 13 can only apply to a licence holder, but not to an applicant. Furthermore, under the same section 13, the High Court may make orders restraining a person from acquiring, disposing of, or otherwise dealing with any currency specified in the order. For better protection of investors, the word ’currency’ should be extended to cover assets which may have been obtained by fraudulent misappropriation of clients' monies. Therefore it is necessary to amend the relevant provisions so that an order made under section 13 will apply to any person, and any such order may specify assets instead of currency.

The overall objective of the bill is to strengthen the relevant risk management system and to enhance protection for investors.

Thank you. Mr President.

End

9

Securities and Futures Commission Bill *****

Following is a speech by the Secretary for Financial Services, Mr Rafael Hui, in moving the second reading of the Securities and Futures Commission (Amendment) Bill 1996 in Legislative Council today (Wednesday):

Mr President,

I move the second reading of the Securities and Futures Commission (Amendment) Bill 1996.

The Bill seeks to amend the Securities and Futures Commission Ordinance so that the consent of the SFC is required prior to the sale or issue of substantial holdings in shares in a company registered with the SFC as a dealer in securities or commodities or investment adviser.

The proposed amendments to the Securities and Futures Commission Ordinance stems from the same considerations as in the case of similar amendments to the Leveraged Foreign Exchange Trading Ordinance as contained in the Bill which I moved a moment ago. In other words, currently there are no provisions in the Securities and Futures Commission Ordinance to prevent a person who is not fit and proper from acquiring shares in, and thereby gaining control of, a company registered as a dealer or investment adviser. The Bill seeks to close this loophole.

Thank you, Mr President.

End

Bankruptcy (Amendment) Bill 1996 ♦ * * ♦ ♦

Following is a speech by the Secretary for Financial Services, Mr Rafael Hui, in moving the second reading of the Bankruptcy (Amendment) Bill 1996 in the Legislative Council today (Wednesday):

Mr President,

I move the second reading of the Bankruptcy (Amendment) Bill 1996.

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The Bankruptcy Ordinance is based on obsolete English legislation of 1914. It embodies procedures and practices that are cumbersome and outmoded. In the UK and in certain other jurisdictions whose insolvency legislation has had similar origins, such as Singapore, insolvency laws have been modernised.

The Bankruptcy Ordinance is an important element in our legal framework for the operation of business and it is therefore important for Hong Kong as a major commercial and financial centre to bring our regulatory regime into line with the changing needs and expectations of the community.

This Bill largely implements the recommendations of the Law Reform Commission's "Report on Bankruptcy" which took on board many of the changes implemented in the UK and in Australia. These changes have shifted the emphasis more towards rehabilitation than punishment. In the one or two places where we have differed from the Law Reform Commission's recommendations, this has been for technical reasons which emerged during the drafting of the Bill. Our proposed approach on these matters has either resulted from subsequent discussion with the Commission's Insolvency Sub-committee or has been accepted by the Chairman of the Sub-committee.

May I mention briefly some of the more significant proposals contained in the Bill:

* Acts of Bankruptcy, which constitute the grounds on which a bankruptcy

petition may be presented, are mostly obsolete and will be abolished;

* bankruptcy notices issued to creditors, which are based on court judgements and require a debtor to pay a debt due or make some other arrangement satisfactory to his creditors and the court, will also be abolished and replaced with a simpler procedure;

* the current procedures will be replaced by more straightforward arrangements which will entail the issuing of a statutory demand requiring a debtor to pay his debts, then due, within 21 days. Failure to comply with this will enable a bankruptcy petition to be presented, as will an unsatisfied execution of a judgement against the property of a debtor. If a debtor departs from Hong Kong or intends to do so knowing that his departure would delay or thwart his creditors, this will also be grounds for presenting a petition;

* a single bankruptcy order will replace the present two-stage system of a receiving order followed by an adjudication order, thereby simplifying procedures and reducing costs;

11

the present requirement that a bankrupt must apply to the Court for discharge from bankruptcy will be repealed and provisions will be introduced for an automatic discharge, subject to there being no objections from the trustee of the bankrupt's estate or any creditor;

the present procedures for compromises or schemes of arrangement that a debtor can make with his creditors will be replaced by new provisions based on the individual voluntary arrangements procedures under the UK Insolvency Act. These provide a more flexible procedure which will encourage debtors to sort out their financial difficulties in a structured way without having to become bankrupt;

arrangements for holding meetings of creditors will be made more flexible and the Official Receiver given greater discretion to determine the need for such meetings;

the present monetary limits of $3,000 on the total value of tools of trade and domestic goods that a bankrupt can retain will be abolished. The bankrupt will instead be allowed to retain such equipment as will enable him to continue his trade or occupation so as to earn a reasonable living for himself and his dependants. Excess earnings will continue to be paid into the bankrupt's estate. The bankrupt will be able to retain such domestic equipment as may be necessary for satisfying his and his family's basic needs; and

new "anti-avoidance" provisions will be introduced to enable the trustee of the bankrupt's estate to challenge disposals of property made prior to the commencement of the bankruptcy, when the trustee considers the bankrupt may have acted contrary to the interests of his estate by conferring benefits on some other persons.

This Bill also generally will streamline the procedures associated with insolvencies and will help to reduce the time and costs involved in their administration.

Thank you, Mr President.

End

12

Pneumoconiosis Bill ♦ * * * +

Following is the speeches by the acting Secretary for Education and Manpower, Miss Jacqueline Willis, in moving the second and third readings of the Pneumoconiosis (Compensation) (Amendment) Bill 1995 in the Legislative Council today (Wednesday):

Mr President,

First of all, 1 am grateful to members for their support of this important Bill which seeks to make improvements to the Pneumoconiosis Compensation Scheme in a way which is broadly acceptable to both employers and employees. I should also like to thank the Chairman, Dr The Hon LEONG Che-hung, and members of the Bills Committee for their careful examination of the Bill and for their valuable views on it.

As members are aware, this Bill is the outcome of the Government's conscious decision to bring about substantial improvements to the Pneumoconiosis Compensation Scheme. The most important improvement is the proposal to remove from the existing compensation formula the compensation amount intended for pain, suffering and loss of amenities (PSLA) but without being specified as such, and make it a separate compensation item so that all eligible pneumoconiotics will be entitled to this amount irrespective of their degree of incapacity under the Scheme. Another significant improvement is the introduction of a reasonable degree of flexibility in the assessment of incapacity under the Scheme, by two means, as set out in Clause 13 of the Bill. First, it empowers the Pneumoconiosis Medical Board (PMB) to consider findings of not only the standard Forced Vital Capacity (FVC test) for assessment of lung function loss under the Scheme, but also other lung function tests or clinical findings relevant to a pneumoconiotic's loss of lung function, and as a result, to adjust the degree of incapacity as assessed by reference to the FVC test by no more than 5%. Second, it empowers the PMB to assess the degree of a pneumoconiotic's loss of lung function on the basis of other relevant clinical tests, or physical or radiological findings if he/she cannot perform the FVC test at all because of certain co-existing medical conditions.

In the course of examining the Bill, Members expressed concern that in a number of cases, the family members of the deceased pneumoconiotics were not eligible for compensation because the PMB had determined that the pneumoconiotics in those cases did not die of pneumoconiosis. Members considered that the criteria adopted by the Pneumoconiosis Medical Board in determining the cause of death of pneumoconiotics might have been too stringent. While we appreciate members' concern, I wish to stress the importance of ensuring that the compensation for death under the Scheme is strictly confined to family members of only those deceased persons whose death was really caused by pneumoconiosis. Nevertheless, we have conveyed members' concern to the PMB. which will continue to take into account all factors relating to pneumoconiosis in their assessment of the cause of the deceased pneumoconiotics.

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In addition to supporting this Bill, Members of the Bills Committee expressed the wish to see improvements to the Pneumoconiosis Ex-Gratia Scheme which is a separate administrative scheme providing benefits to persons who were diagnosed before 1981 to be suffering from pneumoconiosis. At present, the Scheme provides this group with compensation payments which comprise quarterly ex gratia payments at the current rate of $10,560 which are payable until death, and reimbursement of funeral expenses in respect of a deceased pneumoconiotic, subject to a maximum, which was increased from $12,000 to $14,000 from 1 January this year.

I would take this opportunity to inform Members that we have conducted a review of this Scheme and are planning to make a series of improvements to it. They include the arrangement for the Pneumoconiosis Compensation Fund Board to supply and pay for the expenses of medical appliances required by the pneumoconiotics including wheelchairs, oxygen concentrators and cylinders and their accessories to the pneumoconiotics. The other changes are the arrangements to make annual adjustment to the rate of ex gratia payments in accordance with changes in the CPI(A) on 1 July each year, and the revision of the maximum amount of reimbursement of funeral expenses once every two years which is in line with our existing administrative arrangement of adjusting the corresponding ceiling under the Ordinance on a biennial basis. These improvements have been endorsed by the Labour Advisory Board and will take effect on the same date as all the proposals under this Bill.

Following the passage of a resolution by this Council on 13 December 1995, the amount of $2,100 in the formula for the calculation of the monthly compensation for total incapacity in Part II of the First Schedule of the Pneumoconiosis (Compensation) Ordinance was increased to $2,570 with effect from 1 January 1996. It is therefore necessary to adjust the amount of $2,100 in Clause 12(b) of this Bill correspondingly to $2,570. 1 shall move an amendment to cllcct this change at the Committee Stage.

Thank you, Mr President.

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Mr President,

I move that clause 12B of the Bill be amended as set out in the papers circulated to members. This amendment seeks to replace the amount of $2,100 by $2,570 in the proposed part 2A to be added to the First Schedule of the Pneumoconiosis (Compensation) Ordinance. I his amendment is necessary as a result of the passage of a resolution by this Council on 13 December 1995 for increasing the amount of $2,100 in the formula for the calculation of the compensation for total incapacity in Part 2 of the First Schedule of the Pneumoconiosis (Compensation) Ordinance to $2,570 with effect from 1 January 1996. As Clause 12B of the Bill seeks to remove the set amount of $2,100 from the formula for the calculation of compensation for incapacity and make it a separate item of compensation for pain, suffering and loss of amenities under Part 2A of the First Schedule of the Ordinance. This compensation amount should be revised correspondingly to $2,570.

Mr President, 1 beg to move.

End

Gas Safety Bill *****

Following is a speech by the Secretary lor Economic Services, Mr Gordon Siu, at the committee stage of the Gas Safety (Amendment) (No 2) Bill 1995 in the Legislative Council today (Wednesday):

I move that clause 2 be amended as set out in the paper circulated to Members.

The purpose of the proposed amendment is to define more comprehensively the type of works which may give rise to damage to gas pipes by defining such works to include works on footpaths, the extraction of material from the land or the seabed, landfill works and reclamation works.

Mr Chairman, I beg to move.

End

15

Measures to adopt on women's rights

*****

Following is a question by the Hon Lee Cheuk-yan and a reply by the Secretary for Home Affairs, Mr Michael Suen, in the Legislative Council today (Wednesday):

Question:

The Government undertook last year that it would adopt two measures concerning women's rights, viz. the setting up of an Equal Opportunities Commission (EOC) and the extension of the United Nations’ Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW) to the territory. However, these two measures have still not been implemented by the Government. In this connection, will the Government inform this Council:

(a) what is the timetable for the setting up of the EOC and when its membership will be announced;

(b) whether the Government will consider setting up the I OC first to start work before its chairman is appointed;

(c) whether, having regard to the fact that the Government has planned to draw up certain reservations for inclusion in CEDAW upon its extension to the territory and that the matter will be discussed by the Sino-British Joint Liaison Group, women's groups will be consulted on these reservations; if not, why not;

(d) what is the timetable for discussion of the reservations referred to in (c) above by the Joint Liaison Group?

Reply:

As Members are aware, we are in the process of recruiting the Chairperson of the Equal Opportunities Commission. We hope to complete the selection process before the end of March. As the individual circumstances of the person selected may involve certain formalities to be completed before an announcement of appointment can be made, a firm timetable for the setting up of the Commission cannot be given at this point. However, Members may rest assured that we intend to make an announcement of the full composition of the Commission as soon as possible.

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We do not consider it proper to set up the Equal Opportunities Commission without its Chairperson. In order to ensure that the Commission can function effectively upon its commissioning, the preparatory team in my Branch has already secured its funding and office accommodation has been leased and furbished. Other preparatory work such as the drawing up of the proposed organisation structure and terms of reference for the Commission and its committees, and the terms and conditions for the recruitment of some 60 staff for the Commission office is being finalised. Work has also started on the preparation of draft Codes of Practice on employment for consideration by the Commission.

I would now turn to the second part of the question on the Convention on the Elimination of all forms of Discrimination Against Women, which many referred to as CEDAW. As the application of CEDAW will confer new international rights and obligations on Hong Kong, and as the Convention is intended to continue to apply after 1997, we need to consult the Chinese side at the Joint Liaison Group. We have handed over a speaking note together with the relevant information to the Chinese side in January this year and are awaiting their response.

In September last year, the United Kingdom completed a comprehensive review of the previous reservations which it entered under CEDAW. We have since then examined these reservations in respect of their relevance for Hong Kong. We propose to enter seven reservations upon the extension of CEDAW to Hong Kong. These seek to either clarify our obligations under the Convention or to reiterate the compatibility of some of our existing regulations and practices with the Convention. All but one are modelled on similar reservations to be retained by the United Kingdom. The exception covers the rent concessions provided for under the Joint Declaration and the small house policy. On this latter reservation, we had explained to the public the need for it in 1994 when we announced our intention to seek an extension of the Convention to Hong Kong.

End

17

’’Executive-led” system in Government » ♦ ♦ ♦ ♦

Following is a question by the Hon Tsang Kin-shing and a reply by the Chief Secretary, the Hon Anson Chan, in the Legislative Council today (Wednesday):

Question:

As the Governor and the Chief Secretary have described on a number of occasions the existing system of government as an "executive-led” system, will the Government inform this Council:

(a) what is an ’’executive-led” system and what are the specific contents in such a system;

(b) whether the introduction of Members’ bills under the Standing Orders of this Council is contrary to the "executive-led" system;

(c) whether the Governor’s intention to refuse assent to a Member's bill under certain circumstances as stated in his Policy Address last year is to uphold the "executive-led" system; and

(d) how the Government will ensure that the "executive-led" system will not hamper the development of democracy in the territory?

Reply:

(a) The political system of Hong Kong is built on the principle of'separation of powers' with an executive-led government. The executive, legislature and judiciary have different and independent roles, which check, balance and support each other. Under our executive-led system of government, the executive is responsible for formulating and implementing policies and providing various services to the community. In line with this, it is the Administration's role to put its legislative and expenditure proposals to the Legislative Council for consideration. In short, the Administration proposes and the legislature disposes.

(b) LegCo Members have a constitutional right to introduce Private Members' Bills provided that their proposals do not have the object or effect of disposing of or charging any part of the public revenue. But a proliferation of Private Members' Bills on important issues of public policy would undermine the present division of responsibilities between the executive and the legislature. It would also upset the Administration's own legislative programme, which has been carefully drawn up to take account of the views and aspirations of the various sectors of our community, including I egCo. As the Governor said in his Policy Address, wc believe that the public interest would be belter served if we moved forward on an agreed basis, rather than on parallel tracks.

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(c) The Governor's statement in his 1995 Policy Address was no more than a recognition of the constitutional position. The Governor also emphasised that the Administration is committed to working together with Members of this Council on behalf of the community we all serve.

(d) The principle of 'executive-led' government does not mean that the executive can do whatever it wants. In the Hong Kong system, the legislature and the executive perform distinct roles and provide checks and balances to each other. Thus, the Administration's legislative and financial proposals all have to be approved by the Legislative Council, in which we have no votes.

End

Police disciplinary regulations explained ♦ ♦ ♦ ♦ ♦

Following is a question by the Hon Selina Chow and a reply by the Secretary for Security, Mr Peter Lai, in the Legislative Council today (Wednesday):

Question:

The Expatriate Inspectors' Association has criticised the Police Force management for the way in which senior police officers suspected of corruption are treated by the management. In view of this, will the Government inform this Council:

(a) whether both senior and junior officers have to abide by the same set of disciplinary regulations under the present internal disciplinary system of the Police Force; if not, why not;

(b) of the number and rank of senior police officers who are currently not bound by the Force's general internal code of discipline; and

(c) of the number of police officers in various ranks who were investigated for corruption or other crimes, as well as the number and rank of those who were eventually disciplined, over the past three years?

19

Reply:

Mr President,

(a) All police officers, irrespective of their rank, have to abide by the requirements of conduct and discipline laid down in the Civil Service Regulations and police internal orders. For disciplinary matters relating to officers at Inspectorate ranks or below, they are dealt with under the Police (Discipline) Regulations made in accordance with S.45 of the Police Force Ordinance . The authority for dealing with these cases rests with the Commissioner of Police. For disciplinary matters relating to officers at the rank of Superintendent and above, they are dealt with under the Colonial Regulations in accordance with s. 13 of the Police Force Ordinance. The authority for dealing with these cases rests with the Governor.

The underlying principles of both sets of Regulations are the same, i.e. fairness and justice. T he procedures for both types of proceedings including hearing, punishment and appeal are similar so as to ensure that all cases are dealt with thoroughly and impartially. Obviously, senior officers are dealt with by a higher level of authority in view of the more important positions they hold. However, there is no question that they will be treated more leniently; they are expected to uphold the same level of integrity as any other Police officers.

(b) As explained in Part (a) of my reply, all police officers irrespective of rank are bound by the same requirements of conduct and discipline. There are therefore no police officers who are not bound by the Force’s internal code of discipline.

(c) Statistics are only kept in respect of officers investigated for corruption or other crimes who were eventually prosecuted and/or disciplined. In the past three years, a total of 87 officers were disciplined following corruption allegations and 32 for other criminal allegations. A breakdown by number and rank is annexed to the written version of my reply.

In addition. 82 police officers were convicted of criminal offences (including corruption offences) during the past three years. Of these, 69 officers were dismissed from the Force, and 12 were reprimanded under s. 37(5) of the Police Force Ordinance, without involving formal disciplinary proceedings. One of the cases is under appeal. A breakdown by number and rank of these cases is also annexed to the written version of my reply.

20

Annex

Breakdown of Police Officers disciplined following investigations into corruption or other criminal allegations by rank.over the past 3 years

(1) Officers disciplined following investigations into corruption allegations

Year Rank 1993 1994 1995 Total

Superintendent and above - to

Inspectorate 4 5 3 12

JPO* 15 30 30 75

Total 19 35 33 87

(ff) Qfficers. disciplined.following investigations into other criminal allegation

Year Rank 1993 1994 1995 Total

Superintendent and above -

Inspectorate <• 1 1

JPO* 4 7 20 31

Total 4 7 21 32

JPO : Junior Police Officers include officers at the rank of police constable and sergeant.

21

Breakdown of Police Officers Convicted of Criminal Offences over the past 3 vears

(III) Officers convicted of corruption offences

Year Rank - 1993 1994 1995 Total

Superintendent and above - - -

Inspectorate - 3 3

jpo 6 3 8 17

Total 6 6 8 20* •

* All 20 officers were dismissed.

(IV) Officers convicted of other criminal offences

Year Rark '"-'-. 1993 1994 1995 1 Total

Superintendent and above - 1 !(•) | t

Inspectorate - 3(1] <2> 311] <2>

JPO 21(21] 28 18]<10> 9[9] 58(48] <10> !

Total 21 32 9 1 62 :

[21] [19] <12> [9] (*) [49] <12>

[ ] Number of officers dismissed.

< > Number of officers reprimanded.

(*) Case being appealed.

End

22

Conversion of Lo Wu military camp being considered ♦ * ♦ * ♦

Following is a question by the Hon Cheung Hon-chung and a reply by the Secretary for Security, Mr Peter Lai, in the Legislative Council today (Wednesday):

Question:

It was mentioned in the Policy Commitments published by the Government in 1995 that consideration was being given to converting a former military camp at Lo Wu into a penal institution. In this connection, will the Government inform this Council:

(a) of the progress of the study mentioned above:

(b) whether the Government will still go ahead with the plan without the support of the North District Board which has passed a motion opposing the plan; and

(c) Whether, as the proposed conversion of the military camp at Lo Wu will only provide 300 prison places and there is an overall shortage of some 3,000 prison places in the territory, there is a comprehensive plan to resolve the problem of shortage of prison places?

Reply:

Mr President.

(a) Our study has concluded that it is feasible to convert the former military camp at Lo Wu into a minimum security prison. Since December last year, we have been consulting the North District Board on this proposal. Certain concerns were expressed to us, in response to which we have last month forwarded a comprehensive response to the District Board. We have not received further comments from the District Board.

(b) Consultation with the local community, including the North District Board, is an on-going exercise and I would not wish to speculate on the final outcome or the Government’s decision.’ We are still pursuing this proposal, and will do what we can to address the concerns expressed by the local community. I would, however, take this opportunity to urge North District Board members not to close their minds to the Government’s proposal, and to play their part in addressing the whole community's concern on the need to relief prison over-crowding.

23

(c) The Lo Wu project is, of course, just one of a series of proposed projects to ease over-crowding in prisons. Over the past five years, we have increased our penal capacity by about 1 250 places through redevelopment projects at existing institutions. But we still currently have a total shortage of about 3 000 penal places. We are now undertaking other redevelopment projects at existing institutions in Chimawan and in the Stanley Prison area. By early 1997, Chimawan (Lower) Detention Centre will have been converted into a female drug addiction treatment centre for up to 250 inmates transferred from existing female penal institutions. The redevelopment project in Stanley will generate, in two phases, about 700 additional penal places between 1998 and 1999. We are also looking into the feasibility of redeveloping Tai Lam Prison, Tai Lam Correctional Institution, which can generate up to 260 additional places. While these projects will bring significant relief to the current unacceptable situation, they are not enough. We have virtually exhausted the potential for redevelopment of existing penal institutions, and are thus looking for new sites for about 2 000 penal places. But developing new prison institutions takes several years. In the meantime, the Lo Wu project, though small, will provide an additional 300 places and thus bring some relief.

End

Issue of food premises licenses explained * ♦ ♦ ♦ ♦

Following is a question by the Hon Chan Wing-chan and a reply by the Secretary for Planning, Environment and Lands, Mr Bowen Leung, in the Legislative Council today (Wednesday):

Question:

Recently a number of food establishment operators have applied to the Urban Council for food premises licences or permits, but the issue of such licences and premises has been held up due to the long period of time taken by the Buildings Department in processing such applications. This has led to a delay in the operators starting their business. In this connection, will the Government inform this Council:

(a) of the average time taken by the Buildings Department to process an application for a food premises licence or permit;

24

(b) of the existing staff establishment of the Department responsible for the processing of such applications, and whether there is sufficient manpower to cope with the workload; and

(c) whether consideration has been given to recruiting more building surveyors so as to speed up the processing of such applications?

Answer:

Mr President,

My answers to the three parts of the question are as follows:

(a) I want to point out first that the Urban Services Department and the Regional Services Departments, as the executive arms of the two Municipal Councils, are responsible for the processing of General or Light Refreshment Restaurant Licence applications. In doing so, these two councils seek the comments of other Government departments on various matters. The Buildings Department is consulted on the structural suitability of the concerned premises, adequacy of the means of escape and the existence of any unauthorised building works posing a risk to safety.

Since the introduction by the Municipal Councils of the Central Application Vetting Panel System in 1993, the Buildings Department has been able to give its comment on all new applications within 30 days. However, in cases where the applicant has to submit revised plans or structural plans, to carry out alterations, to remove unauthorised building works, or where re-inspection of the premises has to be conducted, it may take about six months on some occasions to process the applications.

(b) The Licensing Unit of Buildings Department deals with restaurant licence applications, and also licence applications for places of public entertainment and for certificates under the Education Ordinance and Child Care Centre Ordinance regarding the suitability of premises to be used as education facilities or child care centres.

The unit is responsible for the overall work. Its current establishment consisted of one senior building surveyor, five building surveyors and five survey officers. The Licensing Unit is also supported by one senior structural engineer and two structural engineers.

(c) In view of the recent increase in licence applications, two building surveyors have been redeployed by the Housing Department since January this year on a temporary basis from other units to deal with the additional workload. As a further measure, one senior building surveyor and two more building surveyors will be redeployed to the Licensing Unit next month.

In the longer term, we will consider in consultation with the Municipal Councils and other Government departments whether further changes to the present system should be made. Failing that, we will have to consider whether more staff should be posted to the Unit on a permanent basis, given the overall resource constraints.

End

Government programmes on TV and radio

*****

Following is a question by the Hon Howard Young and a written reply by the Secretary for Recreation and Culture, Mr T H Chau, in the Legislative Council today (Wednesday):

Question:

Will the Government inform this Council

(a) of the respective amounts of air time set aside by commercial television and radio broadcasters for government programmes as well as the respective utilisation rates; and

(b) whether the Government will consider allocating part of the time set aside for such use to the Preparatory Committee secretariat to facilitate them to broadcast public affairs programmes relating to the setting up of the SAR Government during the transition period?

26

Reply:

Mr President,

Radio broadcasters are not required to broadcast Government programmes, but may be required by the Broadcasting Authority to broadcast Announcements of Public Interest (APIs) for periods not exceeding one minute in each hour. During 1995, the percentage of the available time used for broadcasting APIs averaged 41 %.

As regards television broadcasters, the Broadcasting Authority require ATV and TVB to broadcast such programmes, announcements and other material as the Authority may specify. Section 8A of the Television Ordinance sets out the time which may be used for broadcasting Government programmes. During 1995, the percentage of available time used for broadcasting Government programmes (including APIs) averaged 53% .

We are, of course, committed to co-operating with the Preparatory Committee, within the parameters announced by the Governor in his 1995 Policy Address. However, neither we, nor the Broadcasting Authority, have received any request from the Preparatory Committee Secretariat to facilitate the broadcast, during the transition period, of public affairs programmes relating to the setting up of the SAR Government. I am sure that the Broadcasting Authority would give careful consideration to any such request.

End

Registration of proprietary Chinese medicine

*****

Following is a question by the Hon Lo Suk-ching and a written reply by the Secretary for Health and Welfare, Mrs Katherine Fok, in the Legislative Council today (Wednesday):

Question:

It is learnt that in January this year the Department of Health refused to process an application for registration of a proprietary Chinese medicine used for drug rehabilitation. In this connection, will the Government inform this Council:

(a) whether there is any mechanism to handle applications for the registration of proprietary Chinese medicines; if so, what arc the details; if not. why not;

4

27

(b) whether the Government adopts different approaches in the registration and regulation of Chinese and Western medicines; and

(c) whether the Government has conducted any tests or imposed any regulation on proprietary Chinese medicines available in the market; if so, what criteria the Government has adopted in determining which medicines should be selected for tests and regulation ?

Reply:

(a) The Pharmacy and Poisons Ordinance provides for the registration and control of pharmaceutical products and medicines that are to be sold in Hong Kong. Section 37 of the Ordinance provides for the exemption of this requirement for traditional Chinese medicines as listed in the Chinese Herbal Materia Medica or which are made from herbs customarily used by Chinese people. Hence Chinese proprietary medicines not containing western drug ingredients are not required to be registered.

(b) The mode of control of western medicine stipulated under the Pharmacy and Poisons Ordinance follows international practice, which is not directly applicable to Chinese medicine. Regulation of Chinese medicine in the long term is a subject which will be considered by the Preparatory Committee on Chinese Medicine.

(c) The Department of Health regularly takes random samples of proprietary Chinese medicines to analyse for the presence of western drug ingredients and the level of heavy metals. Medicines containing western drug ingredients are required to be registered as in the case of western medicines. The level of heavy metal is checked to ensure that it does not exceed the safety limit.

End

28

Crimes in disciplined services *****

Following is a question by the Hon Cheung Man-kwong and a written reply by the Secretary for Security, Mr Peter Lai, in the Legislative Council today (Wednesday):

Question:

Recently, a number of cases have been brought to light in which members of the disciplined services have been found to have committed criminal offences or breaches of internal discipline. In view of this, will the Government inform this Council:

(a) of the number of staff in the disciplined services who have been accused

of committing criminal offences in the past three years, together with a breakdown by type of offence of the number of such cases proceeding to prosecution as well as the number of prosecutions resulting in conviction;

(b) of the breakdown, by type of offence, of the number of staff in the disciplined services who have been accused of committing breaches of internal discipline, as well as the number of staff who have been disciplined for such breaches, in the past three years; and

(c) what strategy does the Government have to maintain discipline so as to prevent members of the disciplined services from collaborating with criminals to commit crimes as a result of their coming into frequent contact with criminal activities; and how it will prevent staff in the disciplined services from abusing their power to engage in illegal activities in the course of carrying out their law-enforcement duties?

Reply:

Mr President,

The answer to the three parts of the question is as follows:

(a) Statistics on the number of staff in the main disciplined services (including the ICAC) who have been accused of committing criminal offences are not available. Statistics on the number of cases in which staff of the disciplined services were prosecuted for criminal offences, and the respective number of convictions in the past three years are as follows:

29

No of cases of Disciplined Services Staff Prosecuted for Criminal Offences and the Respective No. of Convictions (1993 -1995)

Offences 1993 1994 1995

Corruption related offences 42(21) 49(17)[10] 31(4)[15]

Perverting the course of justice 2(1) 13(1) 18(14]

Theft 16(7) 16(8) 8(3)[3]

Assault/Wounding/ Intimidation 21(8) 24(3) 19(1)[81

Sexual Offences 8(4) 8(5) 7[5]

Gambling 0 1 H [9]

Deception & Related Offences 1(D 5(4)[1] 8(3)[3]

Robbery 2(1) 2(2) 3[3]

Driving Offences 5(5) 3(3) 5(4)[1J

Others 14(5) 9(5) 19(12)[4J

Total 111(53) 130(48)[ll] 129(27)|65]

Note: i) Disciplined Services here include the Customs & Excise Department, Correctional Services Department, Fire Services Department, Immigration Department, Royal Hong Kong Police Force, and the Independent Commission Against Corruption;

ii) The above figures are based on the number of counts of offences and an officer can be accused of more than one offence in some cases

iii) figures in ( ) indicate the number of conviction

iv) figures in [ 1 indicate the number of cases still under court proceedings

(b) The number of cases in which staff in the disciplined services who were accused of breach of internal discipline, and the number of staff who were subsequently disciplined for such breaches in the past three years are as follows:

30

No of cases of Disciplined Services Staff Accused of Breach of Internal Discipline and the Respective No. of Disciplinary Actions Taken (1993-1995)

Nature of offences 1993 accused discipline 1994 accused discipline 1995 accused discipline

Late/Absent from duties & related offences 81 78 99 91 82 80 »

Neglect of duty/Fail to carry out orders 100 93 121 116 131 113

Conduct to the prejudice of good order & discipline 21 18 32 29 40 36

Disobedience of orders 35 30 71 62 38 33

Conduct calculated to bring the public service into disrepute 37 31 31 25 43 32

Breach of regulation/ working procedures 146 140 275 265 260 250

Making a false statement 52 43 64 51 63 47

Others 22 16 15 14 38 36

Total 494 449 708 653 695 627

(c) We take a very serious view on cases where staff of the disciplined services are involved in criminal offences. Measures have been taken by the various disciplined services to maintain discipline of their staff and to prevent them from collaborating with criminals, or abusing their power in the course of their work. These measures may vary to suit the particular requirements of the respective disciplined services. Nevertheless, the strategies adopted are similar and cover the following areas:

(i) Integrity Checking

Integrity checking is conducted on all new recruits to ensure only persons of good integrity are taken in. In addition, serving officers will also be "integrity checked" again before they are posted to occupy certain sensitive offices.

31

(ii) Education

A strong sense of good conduct and discipline is developed among new recruits and serving officers through induction courses, in-service training courses, day-to-day management practices, and reinforced through various internal orders.

(iii) Clear Guidelines and Procedures

There are clear guidelines and orders for all major aspects of the work of members of the disciplined services, such as conducting an investigation, making an arrest, taking statements and manners towards members of the public. These procedural controls are designed to prevent officers from abusing their authority in discharging their duties.

(iv) Monitoring Performance

There are well established systems for the management to monitor the performance and discipline of officers. Regular inspections and spotchecks are conducted and all officers are required to report to their supervisors immediately any misbehaviour or suspected offences coming to their notice.

(v) Regular Review of Work Procedures

Work procedures and organisational structure are regularly reviewed to minimise opportunities for corruption and abuse of authority. Some of these reviews are conducted jointly with the ICAC. In addition, proper checks and balances are incorporated in the work procedures where appropriate. For example, Police officers from different units are allowed to conduct raids and make arrests in other Divisions, Districts and Regions.

(vi) Turnover of Postings

Officers, especially those in sensitive posts, arc normally not allowed to remain in their posts for an excessive period.

32

(vii) Channels of Complaints

There are well established channels for members of the public to report on any abuse of authority or illegal activities of members of the disciplined services. These channels include the Commissioner of Administrative Complaints, the Complaints Against the Police Office or the ICAC. For complaints against ICAC officers and Police officers, the investigation results are monitored by the ICAC Complaints Committee and the Independent Police Complaints Council respectively, which comprise non-official members appointed by the Governor. The availability of various channels of complaint and monitoring by independent bodies ensure that all complaints are investigated thoroughly and impartially.

End

Crimes on flights within Hong Kong airspace *****

Following is a question by the Hon Chim Pui-chung and a written reply by the Secretary for Security, Mr Peter Lai, in the Legislative Council today (Wednesday):

Question:

Will the Government inform this Council:

(a) of the span of the airspace which comes under the jurisdiction of Hong Kong;

(b) of the number of criminal cases (excluding hijackings) which have taken place on flights within the territory's airspace in the past three years; and

(c) how will criminal cases occurring on flights outside the territory's airspace be handled?

Reply:

Mr President,

I he answer to the three parts of the question is as follows:

33

(a) Hong Kong’s jurisdiction extends to the airspace above the land and waters of Hong Kong. This is in accordance with the Chicago Convention on International Civil Aviation 1944, which applies to Hong Kong.

(b) The Police only started to keep separate statistics on crimes committed on flights within Hong Kong's airspace since June 1995. From June 1995 to February 1996, a total of eight such criminal cases were reported and the details are set out below:

Crimes Committed on Flights within Hong Kong’s Airspace

June 1995 - February 1996

Offence No of Cases

Serious Assault 1

Miscellaneous Thefts 4

Deception 2

Disorder/Fighting in Public Place 1

Total 8

(c) The Tokyo Convention on Offences and Certain Other Acts Committed on Board Aircraft provides for jurisdiction over offences and acts committed on aircraft to be exercised by the authorities of the place where the aircraft is registered. Therefore, where an offence is committed outside Hong Kong's airspace, the jurisdiction is exercisable under international law by the state of registry of the aircraft. Where an offence is committed on a Hong Kong registered aircraft outside Hong Kong's airspace, the jurisdiction is therefore exercisable by the courts of Hong Kong under the Tokyo Convention.

End

34

Differences in unit costs for courses explained

*****

Following is a question by the Hon Cheung Bing-leung and a written reply by the acting Secretary for Education and manpower, Miss Jacqueline Willis, in the Legislative Council today (Wednesday):

Question :

Recently, the Government has proposed that fees for degree courses be pegged to the average student unit cost of tertiary institutions so as to achieve the target of recovering 18% of the recurrent cost by 1997-98, and that fees for sub-degree courses should be set at a level of 75% of the fees for degree courses. In this connection, will the Government inform this council: -

(a) of the differences in the unit costs for the same type of courses offered by various tertiary institutions presently funded by the University Grants Committee; and whether it will consider adopting specific measures to narrow the gap if there are significant differences in such costs;

(b) of the differences in the unit costs for different subjects (such as arts, science, engineering, medicine, social sciences, law etc.); and whether it will consider adopting specific measures so as to ensure that the fees charged will reflect the different unit costs for different courses;

(c) whether the average unit cost for sub-degree courses offered by various tertiary institutions is equivalent to 75% of the average unit cost for degree courses; if not, whether it will review its policy for subsidising sub-degree courses and

(d) whether it has any information showing how the average unit cost of an undergraduate place and the rate of cost recovery through tuition fees in the territory compare with the corresponding figures in the countries in Europe, America and Asia?

Reply :

(a) The average unit cost per full-time equivalent (fte) student in the University Grants Committee (UGC)-funded institutions for the academic year 1994-95 is given by institutions in the table attached at Annex A. The differences in unit cost for comparable academic programme categories may be negligible or large between institutions for a variety of reasons such as -

35

(b)

(i) different mix of subjects - the range of subjects for an academic programme category may vary from institution to institution. Moreover, the number of students taking the same subject will vary in different institutions;

(ii) different levels of studies - the mix of different levels of studies also varies from institution to institution. A course at sub-degree level is normally cheaper than the same course at first-degree level which, in turn, is normally cheaper than the one at postgraduate level. This contributes to the relatively higher unit costs at institutions which focus on first-degree and postgraduate studies;

(iii) different staffing structures - student to staff and senior to junior staff ratios are different at different institutions, as they have different emphasis on higher degrees and research. At a microlevel, an older faculty/department usually has more "senior" staff remunerated at higher salary points than a younger faculty/department; and

(iv) institutions may choose to invest more heavily in certain programmes which it hopes to develop as areas of excellence.

The above examples are intended to be illustrative rather than exhaustive. They demonstrate, however, that unit cost figures are affected by a variety of factors and should accordingly be interpreted with caution.

For the purposes of assessing institutions' funding requirements for programmes at the same level in the same academic programme category, the University Grants Committee (UGC) adopts the same cost weighting for the teaching element.* Yet in view of the variety of reasons for cost differentiation and the need for institutions to be allowed the flexibility in internal allocation of resources to meet specific developmental needs and other circumstances specific to the institutions, it is not desirable for the Government or the UGC to seek to narrow the differences in unit costs for individual courses offered by the institutions.

The average unit cost per full-time equivalent (fte) student in the UGC-funded institutions by academic programme categories are also given in Annex A.

36

Before 1974-75, differential fees were charged at the University of Hong Kong and the Chinese University of Hong Kong and between faculties. A single uniform fee for degree courses at HKU and CUHK was introduced in 1974-75 to avoid the negative effect of higher fees on the supply of manpower in some of the higher-cost specialities. It was also felt that differential fees for comparable courses at different institutions might perpetuate a pecking order among higher education institutions in Hong Kong.

This principle of uniform fees was re-affirmed in the reviews of tuition fee policy in 1986 and 1991. When consulted in 1991, both the University and Polytechnic Grants Committee (UPGC) and the heads of institutions were opposed to charging differential fees as being impractical and socially unacceptable.

In response to recent interests in the re-introduction of differential fees, the Government has invited the UGC to tender advice on the feasibility and desirability of charging differential fees for different courses, and will further consider this issue in the light of the UGC's advice.

(c) Under the existing accounting/reporting system, unit costs are calculated with reference to academic programme categories by broad disciplines, without differentiation by sub-degree, degree or taught postgraduate levels. Notionally, however, average unit costs for sub-degree programmes are about 75% of those of the degree programmes in the same academic programme category.

(d) The Administration has not located any published comparative statistics on the costs of undergraduate education specifically. However, some information is available from the Organisation for Economic Cooperation and Development based on the United States Department of Education statistics published in 1995 on the public expenditure per student by level of study for selected countries from 1985 to 1992. A table, incorporating similar statistics compiled by the Administration, is at Annex B. The comparison gives the public education expenditure per student in the higher education sectors of selected countries in Europe, America and Asia, and includes recurrent and capital expenditure on students studying at sub-degree, degree and postgraduate levels. Direct comparisons are difficult to make in view of the very different economic and social systems and the different mix of sub-degree, degree and postgraduate provision.

- 37 -

Annex C, on the other hand, sets out the recovery rates of the recurrent cost of public undergraduate education in public universities in Hong Kong and several other advanced economies in the Asia Pacific Region. The figures were gathered from the consulates or commission of these countries in Hong Kong. Direct comparisons based on these figures may not be entirely appropriate due to possible differences in the calculation of unit costs, cost recovery rates and student financing in different countries. *

* Footnote : The funding requirement for the research element for the same type of course at the same level is not assessed on a uniform basis. It varies in accordance with the number of staff and their research activeness. Other extra-formulaic considerations also produce differences to the assumed costs of the same type of courses, e.g. new institutions and newly developed subject disciplines will attract front-end loading to different extent.

38

Annex A

Unit Cott for UGC-funded Programmes bv Academic Programme Category bv Institution (Awftmfc YwJ»A%a

a * ^A^nie Programme Category (APC) Cftyu HKBU DC_ CUHK PolytF HKUST HKU AU

A. Clinical medicine 837 - - $24 669

B. Clinical Dentistry - •» - 562 562

C. PrC'Clinieal studies 301 - 283 291

D. Subjects & Professions allied to medicine & dentistry 214 152 261 167

E. Biological Sciences 186 . 189 187 166 423 225 238

F. Physical Sciences 205 184 209 15$ 382 280 230

Engineering <fc Technology 169 * 185 150 330 213 193

H. Built Environment 112 171 137 - 196 146

J. Mathematical Sciences 126 161 139 120 251 161 155

J. Tnfonnatioxx technology & Computing science. 106 138 59 155 143 263 192 143

K. Business & Management 92 123 110 132 118 245 142 134

L. Social sciences 108 139 106 138 133 243 169 139

M. Languages 93 128 91 149 124 - 141 117

N. Humanities (ex languages) 127 122 •» 135 239 181 158

0. Art, design & performing arts - 157 * 187 149 - 219 162

p, Education 97 139 - 133 102 - 169 145

?... AU APCs 116 142 105 193 139 297 219 172

39

Annex B

Public Education Expendin^ejxg Student ipJHigher fetacatioi? for Selectt^oungfes

Selected countries 1992 (USS)

Austria 5,820

Belgium 6,590

Denmark 6,710

France 6,020

Japan 11,850

Ireland 7,270

Norway 8,720

Spain 3,770

Sweden 7,120

Switzerland 12.900

United Kingdom 10,370

United States 11,880

Hong Kong 10,886

Notes : (1) Figure for Hoag Kong includes public expenditure per headcount student for the UGC-fonded institutions, the Hong Kong Academy of Performing .Arts, and the Technical Colleges of the Vocational Training Council. The figure was converted to USS by applying an average exchange rate of 7.741 for 1992.

(2) Figures for other selected countries were extracted from the ^Digest of Education Statistics 1995” published by the U.S. Department of Education and based upon full time equivalent students.

(3) Expenditure includes current and capital expenditure. The expenditure for Hong Kong excludes capital expenditure for large scale projects. The coverage of "current” and "capital” expenditure between countries may differ.

40

Annex C

Recurrent Cost Recovery Rates of Public Undergraduate Education in the AsiaPacific Region

Country Year Cost Recovery Rate

Hotg Kong1 1994-95 14.7%

Singapore2 1994-95 20.6%

Japan’ 1995 9,0%

South Korea' 1994-95 36.7%

Australia’ 1994 28.0%

Source

1, University Grants Committee

2. Singapore Commi ssion in Hong Kong

3. Japan Information & Cultural Centre., Consulate-General of Japan

4. Consulate General of the Republic of Korea

5. Australian International Education Foundation. Australian Consulate General

End

41

Closed road permit system on Lantau

*****

Following is a question by the Hon Chan Wai-yip and a written reply by the Secretary for Transport, Mr Haider Barma, in the Legislative Council today (Wednesday):

Question :

Representatives of the Transport Department advised me in June 1994 that the system for the issue of prohibited zone permits to private light buses on Lantau Island would be reviewed. However, the outcome of the review is still not known up to the present moment. In this connection, will the Government inform this Council of:

(a) the reasons for the Department's delay in completing the review; and

(b) the exact date for the completion of the review?

Reply:

Mr President,

The Closed Road Permit System on Lantau was introduced in 1973 to regulate the number of vehicles on Lantau Island because of limited road capacity on the island. The system applies to all classes of motor vehicles.

For private light buses, permits are only issued where the need for such vehicles has been justified e.g. for school transport or to cater for tourist groups. The Commissioner for Transport also takes into account other factors such as the availability of parking facilities and the adequacy of public transport.

The Closed Road Permit System on Lantau is reviewed periodically. The latest review was completed at the end of February this year and the conclusion reached, having regard to the prevailing traffic conditions and the afore-mentioned factors, was that the present Closed Road Permit System should continue. This review could not be conducted earlier because of other priorities of work in the Transport Department.

End

42

Review of health care financing

*****

Following is a question by the Hon Chan Kam-lam and a written reply by the Secretary for Health and Welfare, Mrs Katherine Fok, in the Legislative Council today (Wednesday):

Question:

Will the Government inform this Council of the following:

(a) what is the progress of the overall review of health care financing, when the review will be completed and when the findings of the review will be promulgated;

(b) what is the proportion of the revenue received by the hospitals of the Hospital Authority on the ten categories of "privately purchased medical items" to the overall expenditure on medical services; and

(c) whether consideration will be given to providing more resources with a view to discontinuing the charging policy mentioned in (b) above?

Reply:

Government recognises the need to devise a set of strategies on the long-term development of our public health care system,.taking account of community sentiments along the way. The "Towards Better Health" Consultation Document published in 1993 represents a major step towards addressing the issues involved.

While public views expressed during the consultation exercise indicated general support for the introduction of semi-private rooms and the implementation of a co-ordinated voluntary insurance scheme, these new initiatives must be complemented by other funding options to achieve a balance between affordability, equity and quality in line with our established policy that no one should be prevented from obtaining adequate medical treatment through lack of means. We currently estimate our deliberations on this subject may take a period of some 18 months.

As I explained to this Council on various occasions, the historical practice of requiring patients to purchase certain medical items for their own use during the course of treatment is a means to provide them with access to new, expensive or nonstandard appliances not covered under the inventory of public hospitals. Since it does not involve any revenue either on the part of Government or the Hospital Authority, it is misleading to compare the cost of privately purchased medical items with overall health care expenditure.

43

The list of privately purchased medical items will evolve with advancement in technology and availability of new products in the market. The Hospital Authority has undertaken to review this list on a regular basis and has recently added to its inventory some items required by chronic patients. Government has also injected $20 million into the Samaritan Fund, relaxed its assessment criteria and simplified its application procedures with effect from 1 December 1995 to strengthen the safety net for those in financial need.

End

Temporary staff of Hospital Authority ♦ ♦ ♦ * ♦

Following is a question by the Hon Leung Yiu-chung and a written reply by the Secretary for Health and Welfare, Mrs Katherine Fok, in the Legislative Council today (Wednesday):

Question:

Recently, I have received complaints about the Hospital Authority (the HA) employing a large number of temporary staff In this connection, will the Government inform this Council of:

(a) the total number of temporary staff currently employed in hospitals under the management of the HA, together with a breakdown of these staff in each hospital by number, post, average salary and average period of employment;

(b) the basis used by the HA for determining which posts should be filled by temporary staff instead of permanent staff; and

(c) the criteria adopted by the HA for determining the renewal of contract of temporary staff and the range of adjustment of their salary?

Reply:

Although it is the Hospital Authority’s corporate objective to maintain a core team of permanent staff to ensure the quality of patient services, employment of temporary staff is also necessary from time to time to meet short-term operational needs. Given the high turnover rate, it will be misleading to quote take reference on the number of temporary staff employed at any specific period. It is, however, worth noting that the salary paid to temporary staff in 1995/96 represents less than 1% of the total expenditure on personal remuneration.

44

Employment of temporary staff to complement the core permanent workforce is governed by relevant provisions in the Hospital Authority Human Resources Policies and Administration Manual which can be made available for reference on request. As in Government departments, the decision of whether or not to engage temporary staff is made taking into account the job nature and prevailing circumstances to meet organisational requirements.

Temporary staff in the Hospital Authority are informed on appointment of their expected duration of employment and given prior notice if extension of their services is necessary. They are eligible for annual adjustment approved by the Authority in line with its personnel policy. At present, this follows the rate of salary revision awarded to civil servants.

End

Space shortage in Polytechnic University *****

Following is a question by the Hon Eric Li Ka-cheung and a written reply by the acting Secretary for Education and Manpower, Miss Jacqueline Willis, in the Legislative Council today (Wednesday):

Question:

The University Grants Committee Secretariat has earlier recognised that the Hong Kong Polytechnic University has a shortfall of space totalling some 9,700 m2. In this connection, will the Government inform this Council:

(a) what measures have been adopted to solve the problem of space shortage in the Polytechnic University; and

(b) whether consideration will be given to allocating the land adjacent to the Polytechnic University, which is now occupied by the Gun Club Hill Barracks, to the Polytechnic University after the withdrawal of the British garrison; if not, why not ?

45

Reply:

Mr President,

A review of the space and accommodation provision at the University Grants Committee (UGC)-funded institutions undertaken by the UGC Working Group in 1994 showed that space provided at the Hong Kong Polytechnic University (PolyU) fell about 7% or 9,700m2 net short of the assessment of space requirements based on the United Kingdom UGC norms. These norms are adopted by the UGC for the purpose of making a global assessment of the space requirements of the local institutions and are meant, therefore, to provide a guide only.

To help relieve the problem of space shortage at PolyU, the Government has recently given approval in principle for the University to proceed with the planning of its Phase VI Development Project. Under this project, redevelopment will take place within the University's existing campus so that an additional 8,700m2 would be provided to the University in three years' time for general and specialist teaching, research, staff and communal accommodation. Following the approval of initial funding by the Finance Committee of the Legislative Council on 15 December 1995, planning, site investigation and preliminary design work have already commenced. In addition to the above project, the UGC will shortly be considering two minor capital works proposals from PolyU which would provide the University with additional space of l,200m2 for academic activities in about two years' time.

It is not possible to allocate the land occupied by the Gun Club Hill Barracks to the PolyU as under the Defence Lands Agreement reached in the Sino-British Joint Liaison Group in June 1994, the Barracks will be one of the 14 sites to be handed to the Chinese garrison for use from 1 July 1997. It would also not be cost-effective for the University to make use of the site temporarily given that the accommodation in the Barracks is old and somewhat dilapidated and not really suited for use by tertiary level students.

End

46

Procedures to obtain JP's service to witness signing ♦ * * * ♦

Following is a question by the Hon Elizabeth Wong and a written reply by the Chief Secretary, the Hon Anson Chan, in the Legislative Council today (Wednesday):

Question:

Will the Government inform this Council what is the procedure for obtaining the services of a Justice of the Peace to witness the signature of a member of the public who wish to have certain documents signed and witnessed?

Reply:

On certain documents, e.g. under the Adoption Ordinance, the attestation of a signature by a Justice of the Peace is specifically required by law. Members of the public who have difficulties in locating a Justice of the Peace to witness their signature on such documents may approach the nearest District Officer of the Home Affairs Department.

Justices of the Peace are also at liberty to volunteer their service to attest the signature of a member of the public on other documents. Requests for attestation of signature by a Justice of the Peace where this is not specifically required by law will be considered on a case by case basis.

End

Emergency ambulance services in East Kowloon

*****

Following is a question by the Hon Fred Li and a written reply by the Secretary for Security, Mr Peter Lai, in the Legislative Council today (Wednesday):

Question:

It is mentioned in the Consultancy Study on Emergency Ambulance Services that the ambulance services in East Kowloon fall short of the targets set in the Performance Pledge by a wider margin when compared with other districts. In this connection, will the Government inform this Council:

(a) of the reasons why the ambulance services in East Kowloon fail to meet

the targets set in the Performance Pledge; and

47

(b) what immediate measures have been put in place to improve and reinforce ambulance services in East Kowloon in order that the targets set in the Performance Pledge can be met?

Reply:

(a) According to the survey conducted by the Consultant, emergency ambulance services in East Kowloon in the first quarter of 1995 met 89.2% of all calls within the target travel time of 10 minutes, which came close to the overall performance of the territory in the same period (i.e. 89.8% ). The reasons for failing to meet the performance target are mainly due to the increased number of emergency calls, deteriorating traffic conditions, and disruptions caused by bad weather.

(b) The Director of Fire Services is already taking action on those measures recommended by the Consultant to improve ambulance services that can be implemented quickly. The measures include: the stationing of ambulances in fire stations to extend emergency ambulance coverage; streamlining of operational procedures for ambulance deployments; transfer of residual non-emergency cases to another agency; and the redeployment of ambulances and their crews from stations with relatively adequate manning to those where manning is inadequate to meet local demand.

On 1 January 1996, two additional ambulances were deployed to Ngau Tau Kok Ambulance Depot and Tseung Kwan O Ambulance Depot. The Lam Tin Ambulance Depot is scheduled to be completed at the end of 1997.

End

48

Upward trend in child abuse cases *****

Following is a question by the Hon Ip Kwok-him and a written reply by the Secretary for Health and Welfare, Mrs Katherine Fok, in the Legislative Council today (Wednesday):

Question:

Recently, there has been an upward trend in the number of sex abuse cases on children and the extent of sex abuse is also becoming more and more serious. In view of this, will the Government inform this Council:

(a) of the reasons for the upward trend in such cases;

(b) whether it is a common phenomenon that such cases go unreported because the abusers and the abused are direct relatives; and

(c) whether, apart from the establishment of the special investigation team by the Police and the Social Welfare Department in December, any specific measures have been put in place to help the abused children?

Reply:

(a) The number of child sexual abuse cases handled by the Social Welfare Department (SWD) and non-governmental organisations (NGOs) increased from 61 in 1993 to 77 in 1994 and 116 in 1995. The rising trend is probably mainly due to enhanced public education and publicity efforts by the Government in recent years to promote early identification and reporting of child abuse cases.

(b) In the past, children were usually reluctant to disclose incidents of abuse perpetrated by family members. It is also possible that abusers were not necessarily aware that their treatment of their children could be termed abuse. Reporting of child abuse by family members was, therefore, not common. The situation, however, is improving. Of the child sexual abuse cases handled by SWD and NGOs in 1994, 18% were reported by the child or a member of his/her family. In 1995, this increased to 23%. It is anticipated that the situation will further improve as a result of continuing public education and publicity programmes.

(c) Apart from the establishment of the Child Protection Special Investigation Team, the Government has also put in place the following measures to help abused children:

49

(i) a new set of procedures for handling child sexual abuse cases to provide guidance for and to improve co-ordination and cooperation among multi-disciplinary professionals who help abused children;

(ii) additional staffing for the Child Protective Services Unit and Clinical Psychology Units of SWD to strengthen the services for victims of child abuse;

(iii) enhanced training for front-line professionals including social workers, police officers, doctors, clinical psychologists and educators on the skills and knowledge needed to handle child abuse cases through a series of training programmes conducted by expert trainers from overseas;

(iv) compilation of a "Child Witness Pack" to prepare victims of child abuse for court procedures so as to reduce the stress involved;

(v) the establishment of multi-disciplinary committees on child abuse in the five districts with the highest incidence of child abuse to tackle the problem on a district basis; and

(vi) a wide range of supportive services for victims of child abuse, such as child care, foster care, and small group homes.

End

Policy on energy conservation *****

Following is a question by Dr the Hon Law Chcung-kwok and a written reply by the Secretary for Economic Services, Mr Gordon Siu. in the Legislative Council today (Wednesday):

Question:

Will the Government inform this Council:

(a) of its policy on energy conservation;

50

(b) whether it knows of the specific energy conservation measures taken by. the China Light and Power Company Limited and the Hongkong Electric Company Limited; if so, what are the details of those measures; and

(c) whether consideration has been given to establishing an energy management council to handle all matters relating to the supply and demand of energy in the territory?

Reply:

(a) The Government’s policy on energy efficiency and conservation is to promote such practices as far as possible without impeding either economic growth or improvement in the community’s standard of living. This involves promoting public awareness of, and providing advice on, energy saving opportunities and benefits through education and publicity programmes and establishing energy saving standards for the design of buildings and building services.

(b) The two power companies have either undertaken, or are drawing up, various pilot energy conservation schemes as precursors to large-scale demand side management programmes. These include pilot schemes to introduce energy-efficient lighting to housing estate residents, schools and the commercial sector. The companies have also revised their tariff structures so as to phase out incentives to consume more electricity and to provide incentives to shift electricity demand to off-peak hours as a means of deferring purchase of additional plant to meet growth in peak demand for electricity. They also provide energy audit services to commercial and industrial customers seeking to save energy. In addition, the two power companies are promoting public awareness of energy efficiency and conservation. They have prepared teaching kits for use in primary schools, visited secondary schools and donated $11 million to the Urban Council for developing an Energy Efficiency Display Centre, which will be open later this year. As members of the Energy Efficiency Advisory Committee, they have provided useful advice on development of energy codes and sponsorship of various energy efficiency campaigns and schemes developed by the Committee.

51

(c) The Government has decided that an Energy Advisory Committee should be set up this year to advise it on energy policy and other related matters referred to it by the Government. The new committee will absorb the functions of the Energy Efficiency Advisory Committee, be chaired by a non-official and be composed of professional, academic and business people knowledgeable about energy management in their respective fields as well as other interested persons. The Government will review the need for an energy commission after several years of working experience with the Energy Advisory Committee.

End

Bus-only-lane and freight transport studies

*****

Following is a question by Dr the Hon Samuel Wong Ping-wai and a written reply by the Secretary for Transport, Mr Haider Barma, in the Legislative Council today (Wednesday):

Question:

Will the Government inform this Council of the present progress of the Bus-only-lane Study and the Freight Transport Study now being carried out by the Transport Department, as well as the expected completion dates of these studies?

Reply:

Mr President,

(a) Our proposal to give greater priority to buses in the use of road space received widespread support, including that of this Council, during the consultation exercise on Measures to Address Traffic Congestion early last year.

52

To enable us to identify and implement large-scale bus-only-lane schemes, we need to study in detail their impact on the major traffic corridors and the surrounding road network and also take into account the need for other associated traffic management measures. We intend to engage consultants to carry out this study to assist us in assessing the feasibility of such schemes. If these schemes are considered practicable, we will also ask the consultants to design and implement them. Transport Department is working on a study brief and we will be seeking funding from the Finance Committee shortly. Subject to funds being made available, the study will start in August this year with a view to implementing bus-only-lane schemes during 1997 and 1998.

(b) The Freight Transport Study was completed in June 1994. It identified key problems in the freight transport industry and recommended both short and long term measures to improve the efficiency of that industry, together with an implementation programme. Many of these have land and planning implications and need to be carefully assessed by Government. Following consultation with the freight trade and other concerned parties on the study’s recommendations, a Freight Transport Strategy is now being drafted which we aim to finalise by around the middle of this year.

End

Supply and demand of paramedical personnel *****

Following is a question by Dr the Hon John Tse Wing-ling and a written reply by the Secretary for Health and Welfare, Mrs Katherine Fok, in the Legislative Council today (Wednesday):

Question:

Regarding the supply and demand of paramedical personnel such as clinical psychologists; educational psychologists, physiotherapists, occupational therapists and speech therapists, will the Government inform this Council:

(a) of the current supply and demand, as well as the projected supply and demand over the next three years, of the above-mentioned paramedical personnel in the territory; and whether the supply of such paramedical staff will be sufficient; if not, what is the shortfall;

53

(b) of the criteria adopted by the Government in assessing the demand for such paramedical personnel; and

(c) whether the Government has any comprehensive plan or measures to meet the demand for such paramedical personnel?

Reply:

The reply is as follows:

(a) There is a general shortage of allied health personnel (the term for paramedical staff preferred by the professionals concerned) including clinical psychologists, physiotherapists, occupational therapists, educational psychologists and speech therapists in both the public and sub vented sectors.

The Health and Welfare Branch (HWB) has set up a working group to study problems stemming from a shortage in the first three professions mentioned and to propose solutions. A working group has been set up under the Education and Manpower Branch to review the supply and demand situation of speech therapists. The working groups comprise representatives from the relevant professions, non-governmental organisations and government branches and departments. The HWB working group has completed its study on clinical psychologists and reported its findings to a joint meeting of the Legislative Council’s Panels on Welfare and Health Services on 8 December 1995. The studies on physiotherapists and occupational therapists are in progress. The working groups aim to finalise proposals on all the professions by this summer.

In addition, a Working Group on the supply and demand situation of Educational Psychologists was set up under the Sub-committee on Education and Personnel of the Rehabilitation Advisory Committee. The Working Group is now finalising its recommendations and will forward them, through the Sub-committee, to the Education Department and the Education and Manpower Branch for consideration and followup action.

(b) In assessing the demand for these allied health personnel, the Government takes into consideration shortfalls in existing strength, the anticipated expansion of existing services, the introduction of new services and any essential revisions of manning ratios.

54

On the basis of the projected demand for and supply of these allied health personnel, the Government will take appropriate action to meet the projected demand through various means. These could include increases in the number of student places for these professions in local tertiary institutions, better co-ordination in clinical placements for these students, overseas training and recruitment, as well as scholarships for training. The Government will also set up a mechanism to review regularly the supply and demand situation of these allied health personnel in future.

While the studies on the allied health personnel are still in progress, the Government has already taken certain steps to tackle problems so far identified. For example, at the request of the Government, the University Grants Committee has provided necessary funding to the University of Hong Kong and the Chinese University of Hong Kong to expand the number of places for their Master Degree courses for clinical psychologists for 1996-97. The University of Hong Kong has also, in view of community demand, initiated an increase in the number of first degree places for speech therapists. The Government is now discussing with the Polytechnic University of Hong Kong the feasibility of expanding the number of places for its physiotherapy degree course. The Social Welfare Department has, for the first time, co-ordinated the recruitment of clinical psychologists from overseas for both itself and for non-governmental organisations. Action is also in hand to identity-appropriate sources of funding for training scholarships.

End

I

DAILY INFORMATION BULLETIN

ISSUED BY GOVERNMENT INFORMATION SERVICES BEACONSFIELD HOUSE, HONG KONG. TEL: 2842 8777

Thursday, March 14,1996

Clients Page N.q_.

Govt committed to intellectual property protection......................... 1

Mis-interpreted news reports on JLG talk................................... 2

Family and community support for the elderly more important................ 4

Study on telecommunications market to be examined.......................... 6

HK delegation to leave for APEC meeting................................

Warning against textiles-related malpractices..........................

Hong Kong's external trade statistics for January...................... 10

Weather of February....................................................

35 nominated for conduct council election................................. 23

Regiment's 'good sport' pull together for charity......................... 23

Hong Kong Monetary Authority money market operations...................... 24

1

Govt committed to intellectual property protection *****

Hong Kong is fully committed to the protection of intellectual property in all its forms for the encouragement of its growing international trade in services as well as for the security of its position as a trusted trading partner.

Moreover, this is also because of the need to preserve its strong manufacturing base, and as a major exporter of creative works, Hong Kong has substantial intellectual property assets of its own to protect.

Addressing a luncheon meeting today (Thursday), the Governor, the Rt Hon Christopher Patten, said that in this pursuit the Government had a key role to play.

He said already Hong Kong was well equipped to protect intellectual property now, and after 1997 would continue to be equipped to the highest international standards.

The Governor noted that the present legal regime for intellectual property protection in Hong Kong was excellent.

"It is comparable with the standards in other developed economies and in some areas - for example, the protection of integrated circuit layouts - we are in advance of many countries," Mr Patten said.

He said much work was now under way to review intellectual property laws in the run-up to 1997 with new laws to protect patents, copyright and designs to be presented to the Legislative Council in the coming twelve months, together with a bill to modernise the trademarks law.

On another positive aspect, Mr Patten noted that the Chinese and British Governments had agreed on the basis for modernising and localising intellectual property laws in the territory as well as to the continued application of major international intellectual property treaties.

Mr Patten said that the Government was committed to backing up good intellectual property laws with effective enforcement despite the fact that enforcement of intellectual property laws throughout Asia was problematic with the extraordinarily rapid spread of technology that allows huge amounts of copyright material to be reproduced easily and illegally.

2

The Governor said the Government would try every effort to address these problems in order to ensure that HK would draw the full benefits that free trade and legally supported markets had to offer.

On the enforcement aspect, Mr Patten noted that the Intellectual Property Investigation Bureau of Customs and Excise Department had been trying every effort to combat piracy with the setting up of a dedicated copyright piracy hotline, enhancement of cooperation with counterparts in China, and linkage with the Police to gather intelligence and hard evidence.

’’They have been doing a terrific job. Special operations in the first two weeks of this month have netted over 85,000 CD-ROMs’and video discs with a value of $5.88 million, while regular action in the last two months has pulled in over 37,000 more such articles valued at over $2.2 million," the Governor added.

Mr Patten also noted that new provisions aimed at combating cross-border piracy were being discussed by LegCo to strengthen the enforcement capability.

"For Customs, the new provisions will make it an offence for anyone to procure, aid or abet any person, in Hong Kong or elsewhere, to manufacture outside Hong Kong or import into Hong Kong pirated copyright works," he said.

Whilst noting that the Government clearly had a key role to play, Mr Patten said increased public awareness was also an important means of protecting intellectual property and that a copyright owner had the responsibility to protect his own work.

Cooperation of copyright owners, the only one who can proved that the seized article has infringed copyright, was needed in combating piracy, he said.

End . . j' t .

* I

Mis-interpreted news reports on JLG talk ♦ * ♦ ♦ ♦

There has been mis-interpreted news reports on the conclusion of the seventh meeting of the JLG Budget Expert Group.

The following transcript of the remarks made by the Secretary for the Treasury, Mr K C Kwong, at the media session after the meeting will clarify the position.

3

Transcript of the remarks in English made by Mr K C Kwong today (Thursday):

Question: Mr Kwong, can you give me an English brief?

Mr Kwong: Yes. We have two pragmatic and useful days of meetings and the focus is on the mode of co-operation in the preparation of the 97/98 budget. On the basis of the co-operation and understanding that we have built up in the past 12 months, we have made further progress. In particular, we have agreed on generally an outline timetable for the preparation of the 97/98 budget. That timetable follows broadly the normal timetable in previous years, but of course we have made allowance for discussions of all major issues in the budget expert group. On the discussion of the major issues, it is our aim that we should reach rapid consensus on them as far as possible so that we can continue with the budgetary process on a step by step basis.

Question: Is there an agreement on the mode of co-operation between China and Hong Kong in formulating the budget and.....that Mr Chen has said China has to take

a leading role in formulating the budget. Do you say the British side has said yes to this?

Mr Kwong: We have made some progress in the discussion on the mode of cooperation in preparation of the 97/98 budget. Specific areas where progress has been made, I have already outlined. But I think the most important thing before us is to strengthen co-operation in order to reach consensus on 97/98 through budget so that we can have a smooth transition, and the important thing which Mr Chen has also said, is that, the detailed preparation of 97/98 budget is something which will have to be undertaken by Hong Kong Government departments.

Question: Mr Kwong, does it mean that China is not going to take a leading role in formulating the budget?

Mr Kwong: I think it is really not a question which is important to us. The important question is how we can co-operate to prepare a budget which is a through budget for 97/98 and which will help a smooth transition and we have made it very clear that in the expert group under the Joint Liaison Group, we are equal partners in this cooperation.

End

4

Family and community support for the elderly more important *****

The Secretary for Health and Welfare, Mrs Katherine Fok, today (Thursday) refuted suggestions that the Government had refrained from increasing the rate for the single elderly in the recent Review of the Comprehensive Social Security Assistance (CSSA) Scheme because of cost considerations.

"I shall state categorically that that is simply not true," she said.

"The Review made recommendations which were then costed. There was no question of a sum being made available and the recommendations being tailored to meet it."

Addressing the Rotary Club of Kingspark, Mrs Fok explained that to devise a methodology for checking the adequacy of the standard rates, the Government took the data from the Household Expenditure Survey (HES) and compared the CSSA standard rates with what people actually spend.

"We looked at the spending levels of people in the lowest five per cent to the lowest 20 per cent income groups. We also constructed basic needs budgets for each category of CSSA recipient - a time-consuming detailed exercise completely separate from the HES approach.

"The findings of the two approaches corroborated each other. Both told us the same thing : the adult rates were very inadequate, the elderly in family rate was a little low, as was that for the 50 per cent disabled adult category.

"In all other cases, the standard rates were higher than the spending of persons in the lowest 20 per cent income group. In some cases, such as for the single elderly, the standard rate was significantly higher than the spending of the entire lowest 20 per cent income group. As a result of these findings, we proposed major increases for the adult standard rates," she explained.

However, Mrs Fok told the Rotarians that the Review had sought to address the social security needs of the elderly in many other ways.

For example, the Government proposed to introduce a new option for elderly CSSA recipients to retire to Guangdong while continuing to receive their standard and long term supplement payments which amount to S 1,935 per month and $1,435 per year respectively as from April.

5

In addition, she noted, elderly persons would be granted $320 per year to encourage them to participate more fully in the life of the community, thus enjoy the benefits this brings in terms of support by neighbours and friends. They would also be given an annual $200 "lai see" at Chinese New Year.

Mrs Fok stressed that it was inappropriate to test CSSA rates for the elderly by comparing them with the level of financial support envisaged in retirement protection schemes such as the original Old Age Pension Scheme or the Mandatory Provident Fund.

She said: "CSSA payments for the elderly, as for all other groups, are set at a level to meet their basic needs.

"Payments from a pension or retirement protection scheme seek to do more than this - they are normally the accrued benefits from savings which seek to provide financial security and support a certain lifestyle for an elderly person. Because such payments are higher, these schemes are normally contributory because it is recognised that they are too costly to fund exclusively from Government revenues," she added.

Apart from financial assistance, the Secretary believed that the provision of appropriate services and community support for the elderly was of much greater importance.

In this respect, the Government will be spending $3.7 billion on health and welfare services for the elderly in 1996/97 which is a 15 per cent increase over this year.

Services to be provided include in-patient care, elderly health clinics, outreaching geriatric and psycho-geriatric teams, a wide range of residential care facilities, home help services, day care services and social centres.

The Government will also promote social networking to provide support to the single elderly living alone.

The Director of Social Welfare is also launching two inter-related initiatives to address this issue. The first involves a two-year pilot project costing over $17 million in which the 24 existing multi-service centres for the elderly and the six new ones due to open this year will be given extra resources to organise new ways of reaching out to elderly people at risk.

The second initiative is for District Social Welfare Officers to create Districtbased Committees involving representatives of non-governmental organisations, the Housing Department and the Home Affairs Department to foster new social networking.

6

However, Mrs Fok pointed out that in a caring society, the burden of care could not just lie with the Government. ’’The Government plays an important role in meeting the needs of the vulnerable but it can succeed only if the community as a whole also actively participates,” she said.

"It is also important that we continue to reinforce the normal family and community responsibilities which have traditionally been so strong in our society.

"We are now working much harder to encourage more people to take the same attitude so that, in particular for the growing number of elderly persons, they can expect a more fulfilling future by participating in and having the support of the community around them," Mrs Fok said.

End

Study on telecommunications market to be examined * ♦ ♦ ♦ ♦

The Government today (Thursday) welcomed the publication of the Consumer Council's report entitled "Achieving Competition in the Liberalised Telecommunications Market".

A government spokesman said: ’’This is a complex subject and we shall examine very carefully the recommendations in the report. A government response will be finalised in about six months’ time.

"We welcome comments on the report from the general public as well as interested parties. , ✓

"We shall approach the recommendations with an open mind taking into account these comments.”

Members of the public may send their views on the report in writing to the Economic Services Branch, Hong Kong Government at second floor, Main Wing, Central Government Offices, Central, before May 15.

End

7

HK delegation to leave for APEC meeting *****

The Secretary for the Treasury, Mr K C Kwong, will lead a Hong Kong delegation to take part in the third Asia Pacific Economic Co-operation (APEC) Finance Ministers Meeting in Japan.

Ministers of the 18 APEC member economies will attend the conference which will be held at the Kyoto International Conference Hall on March 16 and 17.

Major issues to be discussed include recent marcoeconomic developments in APEC member economies, financial and capital market development, the effects of exchange rate movements on trade and investment and mobilisation of resources for financing infrastructure development.

End

Warning against textiles-related malpractices

*****

The Trade Department today ( Thursday) reminded traders that involvement in malpractices relating to the importation, exportation, re-exportation and transhipment of textiles products is an offence in law and is liable upon conviction to heavy fines and imprisonment..

The department further warned that such malpractices is also liable to stringent administrative action by the department which may result in permanent surrender of the full amount of the quota involved in the malpractice and cancellation of the textiles control registration of the offender.

A department spokesman said: "The department takes a serious view of such malpractices and legal and administrative actions would be taken against the offender to uphold the law and to safeguard the integrity of the Hong Kong's textiles export control system."

The spokesman said a company/registered business found committing an offence under the Import and Export Ordinance is liable upon conviction to a maximum penalty of a fine of $500,000 and two years' imprisonment.

8

"The Trade Descriptions Ordinance also provides for a fine of $500,000 and five years' imprisonment for offences relating to the false labelling of textiles products," the spokesman said, adding that depending on the circumstances of the malpractice in question, the traders concerned may be prosecuted for other offences under the laws of Hong Kong.

In addition to prosecution action, the spokesman said, it is the department's policy to take administrative action against traders in cases of malpractice relating to the importation, exportation, re-exportation and transhipment of textiles products to uphold Hong Kong's international reputation amongst her trading partners.

"Traders infringing the textiles origin rules and/or in breach of any of the provisions of the textiles export control system may be subject to administrative action irrespective of whether they have been prosecuted, whether they are engaged in the export of restrained textiles or are parties to the export licence(s), and if this is the case, whether they are quota suppliers for the shipments concerned," he said.

"Administrative action may also been taken against traders involved in transhipment fraud or other malpractices, irrespective of whether the goods have been shipped, whether Hong Kong quotas have been misused, and whether import/export/rc-export licences have been applied for or cancelled.

"In the event that there is more than one party involved, the department may take administrative action against one or more of the parties involved. If, for any reason, one of the parties ceases to be available for administrative actions, then the remaining party or parties will be held wholly responsible for the administrative action.

"Such administrative actions may include permanent surrender of the full amount of quota involved in the malpractice."

The administrative actions may involve, but shall not necessarily be confined to. any or all of the following :

* suspension or cancellation of the textiles control registration of the company/registered business concerned and retrieval of all the quotas held by that company/registered business;

* permanent forfeiture or surrender of quota;

* withdrawal of the balance of quota remaining unlicensed at that time;

9

* disqualification from eligibility for receipt of future allocations of quota; discount of the shipment performance gained by the licence(s) for the purpose of quota allocation;

* debarment from all facilities of the textiles export control system;

* debarment from all export licensing, quota transfer and certification facilities;

* debarment from participation in textiles export control schemes; refusal to issue a licence;

invalidation/cancellation of a licence; suspension of a licence,

* and suspension and revocation of any exemption and/or registration granted under the Textiles Trader Registration Scheme.

The spokesman said administrative action is normally taken as soon as practicable.

"However, circumstances are such that action may be instituted some time after the malpractice has occurred. Traders should take note that notwithstanding the allocation of quota in a subsequent year on the basis of the shipment performance of particular consignments, in cases where malpractices has been uncovered, the department may take administrative action against the parties concerned, including the quota supplier, where it deems appropriate," he said.

Traders were further reminded that in respect of the quotas involved in fraud or improperly utilised, they were not eligible for quota allocation.

"As such, even though the quota suppliers and/or the transferors of temporary quota concerned were not implicated in the fraud, their future allocation may be adversely affected in case previous shipment performance already credited is discounted as a result of subsequent administrative action," the spokesman added.

Further information abput actions against textiles-related malpractices can be obtained from the department's Systems and Common Services Branch by telephoning 2398 5505.

End

10

Hong Kong’s external trade statistics for January ♦ * * * *

The Census and Statistics Department today (Thursday) released detailed statistics on external trade with breakdown by country/territory and commodity for January 1996.

The value of re-exports increased by 22% over a year earlier to $101.2 billion in January 1996.

Comparing January 1996 with January 1995, the value of re-exports to most of the main destinations showed increases of various magnitudes: China (+43%), Japan (+35%), Taiwan (+21%), France (+19%), Singapore (+19%), the United Kingdom (+17%), the Netherlands (+14%), Germany (+14%) and South Korea (+11%).

However, the value of re-exports to the United States decreased by 2.8%.

Changes in the value of Hong Kong's re-exports to 10 main destinations are shown in Table 1.

As the external trade figures for a single month at the beginning of each year tend to be fluctuating due to effects of the Lunar Near Year holidays, it is more meaningful to make comparisons over a longer period.

Comparing the three months ending January 1996 with the three months ending January 1995, the value of re-exports to most main destinations showed increases of various magnitudes : Japan (+30%), China (+25%), France (+21%), the Netherlands (+20%), the United Kingdom (+19%), South Korea (+16%), Singapore (+16%), Taiwan (+15%) and Germany (+12%).

However, the value of re-exports to the United States decreased marginally by 0.9%.

Table 2 shows changes in the value of re-exports of 10 principal commodity divisions.

11

Comparing the three months ending January 1996 with the three months ending January 1995, increases of various magnitudes were recorded in the value of reexports of all principal commodity divisions. More notable increases were registered for electrical machinery, apparatus and appliances, and electrical parts thereof (by $5.8 billion or 24%); office machines and automatic data processing machines (by $5.1 billion or 44%); plastics in primary forms (by $2.5 billion or 44%); miscellaneous manufactured articles consisting mainly of baby carriages, toys, games and sporting goods (by $2.3 billion or 7.4%); textiles (by $2.1 billion or 9.9%); photographic apparatus, equipment and supplies, optical goods, watches and clocks (by $2 billion or 16%); and footwear (by $1.9 billion or 13%).

The value of domestic exports in January 1996, at $19 billion, increased by 4.5% over a year earlier.

Comparing January 1996 with January 1995, increases were recorded in the value of domestic exports to Taiwan (+32%), China (+23%), the United Kingdom (+4.3%) and France (+1.2%).

However, the value of domestic exports to Japan, Germany, the Netherlands, Singapore, Canada and the United States decreased by 8.5%, 4.4%, 4.3%, 4.3%, 2.9% and 2.8% respectively.

Changes in the value of domestic exports to ten main destinations are shown in Table 3.

Comparing the three months ending January 1996 with the three months ending January 1995, decreases were recorded in the value of domestic exports to Canada (-8.4%), Germany (-7.7%), the United States (-6.8%), Singapore (-6.7%), France (-6.6%), the Netherlands (-5.9%), Japan (-4.7%) and the United Kingdom (-0.5%).

However, the value of domestic exports to Taiwan and China increased by 27% and 6.6% respectively.

Table 4 shows changes in the value of domestic exports of 10 principal commodity divisions.

12

Comparing the three months ending January 1996 with the three months ending January 1995, decreases in the value of domestic exports were registered for office machines and automatic data processing machines (by $1.3 billion or 25%); clothing (by $916 million or 4.7%); photographic apparatus, equipment and supplies, optical goods, watches and clocks (by $426 million or 8.6%); telecommunications and sound recording and reproducing apparatus and equipment (by $420 million or 15%); and textiles (by $177 million or 4.8%).

Over the same period, increases in the value of domestic exports were recorded for electrical machinery, apparatus and appliances, and electrical parts thereof (by $2.1 billion or 32%); and manufactures of metals (by $173 million or 16%).

The value of imports increased by 24% over a year earlier to $130.3 billion in January 1996.

Changes in the value of imports from 10 main suppliers are shown in Table 5.

Comparing January 1996 with January 1995, the value of imports from all main suppliers showed increases of various magnitudes: Italy (+69%), Malaysia (+57%), Germany (+44%), the United States (+35%), Taiwan (+33%), the United Kingdom (+28%), South Korea (+25%), Singapore (+20%), Japan (+19%) and China (+15%).

Comparing the three months ending January 1996 with the three months ending January 1995, the value of imports from all main suppliers showed increases of various magnitudes: Malaysia (+43%), Italy (+40%), the United States (+28%), Singapore (+17%), South Korea (+16%), Taiwan (+15%), Germany (+9.7%), China (+9.3%), the United Kingdom (+8.4%) and Japan (+7.6%).

Table 6 shows changes in the value of imports of 10 principal commodity divisions.

Comparing the three months ending January 1996 with the three months ending January 1995, increases were recorded in the value of imports of most principal commodity divisions. More notable increases were registered for electrical machinery, apparatus and appliances, and electrical parts thereof (by $8 billion or 20%); office machines and automatic data processing machines (by $5.1 billion or 36%); telecommunications and sound recording and reproducing apparatus and equipment (by $3.7 billion or 11%); miscellaneous manufactured articles consisting mainly of baby carriages, toys, games and sporting goods (by $2.1 billion or 9.5%); general industrial machinery and equipment, and machine parts (by $1.9 billion or 23%); and textiles (by $1.8 billion or 6.1%).

13

Over the same period, a decrease in the value of imports was recorded for road vehicles (by $357 million or 3.1%).

All the trade statistics described here are measured at current prices and no account has been taken of changes in prices between the periods of comparison.

A separate analysis of the volume and price movements of external trade for January 1996 will be released in early April 1996.

Detailed trade statistics analysed by commodity and by country/ territory are published in trade statistics reports.

The January 1996 issue of the "Hong Kong External Trade" with detailed analyses on.the performance of Hong Kong’s external trade in January 1996 will be on sale at $129 per copy around March 23.

The report can be purchased at either the Government Publications Centre, ground floor, Low Block, Queensway Government Offices, 66 Queensway, Hong Kong or the Publications Unit of the Census and Statistics Department, 19th floor, Wanchai Tower, 12 Harbour Road, Wan Chai, Hong Kong.

Enquiries regarding regular subscription to this report may be directed to the Publications (Sales) Office, 28th floor, Siu On Centre, 188 Lockhart Road, Wan Chai, Hong Kong (Tel 2598 8194) and enquiries on trade statistics to the Census and Statistics Department (Tel 2582 4915).

14

TABLE 1 : RE-EXPORTS TO TEN MAIN DESTINATIONS

DESTINATION JAN 1996 (HKD Mn.) JAN 96 OVER JAN 95 (% CHANGE) NOV 95 TO JAN 96 (HKD Mn.) NOV 95 TO JAN 96 OVER NOV 94 TO JAN 95 (% CHANGE)

CHINA 37,271 + 43.4 105,226 + 25.2

UNITED STATES 17,626 - 2.8 51,603 - 0.9

JAPAN 6,903 ♦ 34.7 20,034 + 30.0

GERMANY 4,444 + 14.2 12,912 + 11.7

UNITED KINGDOM 2,804 + 16.9 8,631 + 19.2

TAIWAN 2,544 + 20.7 7,350 + 15.1

SINGAPORE 2,323 + 18.8 6,902 + 16.0

FRANCE 1,652 + 18.9 4,708 + 21.2

NETHERLANDS 1,643 + 14.3 4,716 + 19.8

SOUTH KOREA 1,603 + 10.8 4,945 + 16.3

15

TABLE 2 : RE-EXPORTS OF TEN PRINCIPAL COMMODITY DIVISIONS

JAN JAN 96 NOV 95 NOV 95 TO JAN 96

COMMODITY DIVISION 1996 OVER TO OVER

JAN 95 JAN 96 NOV 94 TO JAN 95

(HKD Mn.) (% CHANGE) (HKD Mn.) (% CHANGE)

MISCELLANEOUS MANUFACTURED

ARTICLES (MAINLY BABY CARRIAGES, TOYS, GAMES AND SPORTING GOODS) 10,895 + 4.9 33,018 + 7.4

ELECTRICAL MACHINERY, APPARATUS AND APPLIANCES, AND ELECTRICAL PARTS THEREOF 10,455 + 31.8 30,431 + 23.6

TELECOMMUNICATIONS AND SOUND RECORDING AND REPRODUCING APPARATUS AND EQUIPMENT 9,566 - 2.6 29,102 + 0.2

ARTICLES OF APPAREL AND CLOTHING ACCESSORIES 8,892 + 14.4 23,694 + 5.4

TEXTILE YARN, FABRICS, MADE-UP ARTICLES AND RELATED PRODUCTS 8,763 + 33.5 23,577 + 9.9

FOOTWEAR 6,199 + 12.8 16,040 + 13.1

OFFICE MACHINES AND AUTOMATIC DATA PROCESSING MACHINES 5,729 + 52.9 16,879 + 43.8

PHOTOGRAPHIC APPARATUS, EQUIPMENT AND SUPPLIES, OPTICAL GOODS, WATCHES AND CLOCKS 4,641 + 23.9 14,283 + 16.2

TRAVEL GOODS, HANDBAGS AND SIMILAR CONTAINERS 3,131 - 0.7 8,527 + 4.5

PLASTICS IN PRIMARY FORMS 2,861 + 50.3 8,319 + 43.7

16

TABLE 3 : DOMESTIC EXPORTS TO TEN MAIN DESTINATIONS

DESTINATION JAN 1996 (HKD Mn.) JAN 96 OVER JAN 95 (% CHANGE) NOV 95 TO JAN 96 (HKD Mn.) NOV 95 TO JAN 96 OVER NOV 94 TO JAN 95 (% CHANGE)

CHINA 5,456 + 22.9 15,872 + 6.6

UNITED STATES 4,433 - 2.8 14,585 - 6.8

GERMANY 1,071 - 4.4 3,421 - 7.7

SINGAPORE 1,069 - 4.3 3,057 - 6.7

JAPAN 960 - 8.5 2,951 - 4.7

UNITED KINGDOM 889 + 4.3 2,900 - 0.5

TAIWAN 704 + 32.1 2,047 + 27.0

NETHERLANDS 461 - 4.3 1,404 - 5.9

CANADA 367 - 2.9 1,056 - 8.4

FRANCE 288 + 1.2 855 - 6.6

17

TABLE 4 : DOMESTIC EXPORTS OF TEN PRINCIPAL COMMODITY DIVISIONS

COMMODITY DIVISION

JAN JAN 96 NOV 95 NOV 95 TO JAN 96

1996 OVER TO OVER

JAN 95 JAN 96 NOV 94 TO JAN 95

(HKD Mn.) .(% CHANGE) (HKD Mn.) (% CHANGE)

ARTICLES OF APPAREL AND CLOTHING ACCESSORIES 5,858 4- 2.9 18,656 - 4.7

ELECTRICAL MACHINERY, APPARATUS AND APPLIANCES, AND ELECTRICAL PARTS THEREOF 2,841 + 32.2 8,689 + 32.1

MISCELLANEOUS MANUFACTURED ARTICLES (MAINLY PRINTED MATTER) 1,503 - 1.2 4,729 - 0.2

PHOTOGRAPHIC APPARATUS, EQUIPMENT AND SUPPLIES, OPTICAL GOODS, WATCHES AND CLOCKS 1,469 2.0 4,521 8.6

TEXTILE YARN, FABRICS, MADE-UP . ARTICLES AND RELATED PRODUCTS 1,251 + 14.8 3,498 - 4.8

OFFICE MACHINES AND AUTOMATIC DATA PROCESSING MACHINES 1,232 - 28.8 3,942 - 24.8

TELECOMMUNICATIONS AND SOUND RECORDING AND REPRODUCING .. APPARATUS AND EQUIPMENT 830 - 7.0 2,364 15.1

MANUFACTURES OF METALS 394 4- 19.6 1,222 4- 16.5

PLASTICS IN PRIMARY FORMS 327 - 2.8 1,039 4- 0.1

MACHINERY SPECIALIZED FOR PARTICULAR INDUSTRIES 304 + 37.9 779 4- 8.6

18

TABLE 5 : IMPORTS FROM TEN MAIN SUPPLIERS

SUPPLIER JAN 1996 (HKD Mn.) JAN 96 OVER JAN 95 (% CHANGE) NOV 95 TO JAN 96 (HKD Mn.) NOV 95 TO JAN 96 OVER NOV 94 TO JAN 95 (% CHANGE)

CHINA 48,030 + 15.0 138,490 + 9.3

JAPAN 16,618 + 19.5 52,323 + 7.6

TAIWAN 11,372 + 33.1 33,310 + 15.4

UNITED STATES 10,031 + 34.7 30,092 + 28.1

SINGAPORE 7,078 + 19.6 20,563 + 17.2

SOUTH KOREA 5,998 + 25.3 17,820 + 16.4

GERMANY 3,141 + 43.8 8,373 + 9.7

MALAYSIA 2,917 + 56.8 8,140 + 42.9

UNITED KINGDOM 2,719 + 28.4 8,021 + 8.4

ITALY 2,708 + 69.4 7,970 + 40.1

19

TABLE 6 : IMPORTS OF TEN PRINCIPAL COMMODITY DIVISIONS

COMMODITY DIVISION (F JAN 1996 IKD Mn.) JAN 96 OVER JAN 95 (% CHANGE) NOV 95 TO JAN 96 (HKD Mn.) NOV 95 TO JAN 96 OVER NOV 94 TO JAN 95 (% CHANGE)

ELECTRICAL MACHINERY, APPARATUS AND APPLIANCES, AND ELECTRICAL PARTS THEREOF 16,501 + 35.2 47,825 + 20.2

TELECOMMUNICATIONS AND SOUND RECORDING AND REPRODUCING APPARATUS AND EQUIPMENT 12,403 + 11.5 36,769 + 11.2

TEXTILE YARN, FABRICS, MADE-UP ARTICLES AND RELATED PRODUCTS 10,977 + 21.4 31,869 + 6.1

ARTICLES OF APPAREL AND CLOTHING ACCESSORIES 8,844 + 17.8 25,310 + 6.3

MISCELLANEOUS MANUFACTURED ARTICLES (MAINLY BABY CARRIAGES, TOYS, GAMES AND SPORTING GOODS) 8,138 + 16.6 24,803 + 9.5

OFFICE MACHINES AND AUTOMATIC DATA PROCESSING MACHINES 6,422 + 54.5 19,270 + 36.0

FOOTWEAR 5,356 + 14.2 14,205 + 11.5

PHOTOGRAPHIC APPARATUS, EQUIPMENT AND SUPPLIES, OPTICAL GOODS, WATCHES AND CLOCKS 5,268 + 9.3 15,874 + 0.2

ROAD VEHICLES 3,897 + 22.2 11,350 - 3.1

GENERAL INDUSTRIAL MACHINERY AND EQUIPMENT, AND MACHINE PARTS 3,655 + 43.4 10,224 + 23.3

End

20

Weather of February *****

February 1996 was characterised by one of the longest cold spells recorded in Hong Kong. Daily minimum temperatures of below 10 degrees were recorded for seven consecutive days from 18 to 24 February, the sixth longest for February. Some media reports associated this cold spell to be directly or indirectly related to the deaths of some elderly people.

As the winter monsoon dominated the major part of the month, it was colder than normal. The daily mean temperature of 6.9 degrees on 21 February was the sixth lowest for the month. In addition, the monthly mean sea-level pressure of 1 020.7 hectopascals was the tenth highest for February. Although the weather in the latter half of the month was gloomy, the monthly total rainfall amounted to only 27.2 millimetres, 43 per cent below the normal figure.

Fine and dry weather brought by the northeast monsoon prevailed during the first four days of the month. It turned cloudy on 5 February and winds strengthened from the east that night. There were periods of rain the next day and winds weakened later on 7 February.

A northerly surge arrived on 9 February bringing drier air and fine weather to the territory. A hill fire at Pat Sin Range the next day took the lives of two teachers and three students and injured several others.

The weather turned cloudy again on 12 February. Winds became light and was subsequently replaced by a southerly airstream the next day. The warm airstream brought the temperature up to 26.4 degrees, the highest for the month, on 15 February. Winds turned easterly the next day as periods of rain set in and lasted for almost two weeks.

Meanwhile, an intense anticyclone over China advanced south and a cold front crossed the south China coast on the night of 17 February. As a result of this intense northerly surge, temperatures dropped nearly eight degrees in seven hours that night. It marked the beginning of a prolonged cold spell of seven consecutive days with daily minimum temperatures falling below 10 degrees. The lowest temperature of the month, 5.8 degrees, was recorded on the morning of 21 February. Temperatures fell below the freezing point at Tate’s Cairn on 20 February and frost was observed at Tai Mo Shan on the mornings of 20 and 21 February.

21

The weather remained gloomy for almost the rest of the month until rain stopped on 28 February and it became brighter. As winds became light, haze was reported on 29 February and visibility fell to 1 000 metres at Waglan Island in the evening.

There was only one tropical cyclone over the western North Pacific and the South China Sea in the month of February. Details of the issuance/hoisting and cancellation/lowering of various wamings/signals in the month are summarised in Table 1.1. Monthly meteorological figures and departures from normal of February are tabulated in Table 1.2.

Table 1.1 Warnings and signals in February 1996

Warnings / Signals Effective date and time

Strong Monsoon Signals 5 Feb 2300- 7 Feb 1020 17 Feb 2300 - 18 Feb 1135 19 Feb 0015- 19 Feb 0600

Fire Danger Warnings

Yellow Red Yellow Red 31 Jan 0600 - 1 Feb 0600 1 Feb 0600 - 5 Feb 0600 5 Feb 0600- 6 Feb 0600 6 Feb 0600- 6 Feb 1345

Yellow Red 9 Feb 0600- 9 Feb 1810 9 Feb 1810- 12 Feb 0600

Gas Heater Alerts

1 Feb 1630- 2 Feb 1120

2 Feb 1630- 3 Feb 0700

17 Feb 1630- 28 Feb 1620

22

Table 1.2 Figures and Departures from Normal - February 1996

Total Bright Sunshine 80.0 hours; 17.7 hours below normal

Mean Daily Global Solar Radiation 8.60 MJ/SQM; 2.09 MJ/SQM below normal

Total Rainfall 27.2 mm ; 20.8 mm below normal

Mean Cloud Amount 73 % ; normal

Mean Relative Humidity 74 % ; 4 % below normal

Mean Daily Maximum Temperature 17.1 Degree Celsius; 1.5 Degree Celsius below normal

Mean Air Temperature 14.9 Degree Celsius; 1.0 Degree Celsius below normal

Mean Daily Minimum Temperature 12.9 Degree Celsius; 1.0 Degree Celsius below normal

Mean Dew Point 10.1 Degree Celsius; 1.7 Degree Celsius below normal

Total Evaporation 51.6 mm ; 27.4 mm below normal

Remarks: All measurements were made at the Royal Observatory except sunshine, solar radiation and evaporation which were recorded at King's Park.

End

23

35 nominated for conduct council election *****

The Education Department has received a total of 35 nominations in the second election to the Council on Professional Conduct in Education (CPCE).

They comprise 18 nominations for organisation-nominated seats and 17 for teacher-nominated seats. The candidates will compete for 20 elected seats in the two categories on the council.

Besides the 20 seats, there are five elected seats in the two categories which will be left vacant during the coming term because no nominations have been received.

The Director of Education will appoint the Assistant Director of Education (Services), Mr David Pun, and two lay members to the council, making a total of 23 members in the coming term.

Voting will take place on April 24, 1996.

All full-time registered teachers, permitted teachers and Government school teachers are eligible to vote. Details about election procedures will be sent to schools and organisations shortly.

End

Regiment’s 'good sport' pull together for charity

*****

Over 60 British, Chinese and Gurkha soldiers from I long Kong's newest and shortest-lived regiment, the Hong Kong Logistic Support Regiment, Royal Logistic Corps, will be gritting their teeth and pulling more than a few faces tomorrow (Friday) in their attempt to raise money for charity.

As part of a strenuous Inter-Squadron 24-hour Sportathon, four 15-man teams will try to pull a four-tonne truck 80 metres uphill at their base at Osborn Barracks, Kowloon Tong, in aid of the Gurkha Welfare Trust and the Kely Support Group, a local charity that offers support to Hong Kong's youngsters.

24

The truck-pull is only one of 12 sporting activities which organiser Warrant Officer (WO1) Sandy McCauley has arranged to put the men through their paces.

"It’s going to be a busy 24 hours,” said WO1 McCauley, ’’with the teams taking part in rugby, football, basketball and hockey games. However, we’ll sort out the men from the boys in the early hours of the morning when they will be expected to work out on the rowing machines, run a relay race and finish off with tug-of-war.

’’They'll be very tired at the end of the event," he added, "but it will be worth it if we can raise plenty of money for the two charities."

The Hong Kong Logistic Support Regiment is known as the 1,000-Day Regiment because of its short lifespan and it is unusual in that it is made up of British, Chinese and Gurkha personnel.

It was formed in April 1994 as part of the drawdown of British Forces in the territory and the need to concentrate and manage the remaining logistic expertise.

The regiment employs over 500 military and civilian personnel and has its headquarters at Osborn Barracks, Kowloon Tong.

End

Hong Kong Monetary Authority money market operations

*****

$ million Time (hours) Cumulative change (^million)

Opening balance in the account 1,903 0930 +898

Closing balance in the account 1,859 1000 +898

Change attributable to : 1100 +898

Money market activity +896 1200 +896

LAF today -940 1500 +896

1600 +896

LAF rate 4.00% bid/6.00% offer TWI 123.7 *+0.0* 14.3.96

25

Hong Kong Monetary Authority

EF bills EF notes

Terms Yield Term Issue Coupon Price Yield

1 week 4.82 2 years 2802 5.16 98.31 6.20

1 month 5.13 3 years 3901 5.57 97.98 6.45

3 months 5.35 5 years 5012 6.38 98.31 6.91

6 months 5.47 7 years 7302 6.02 93.84 7.29

12 months 5.68 5 years M502 7.30 100.80 7.22

Total turnover of EF bills and notes - $17,306 million

Closed March 14, 1996

End

DAILY INFORMATION BULLETIN

ISSUED BY GOVERNMENT INFORMATION SERVICES BEACONSFIELD HOUSE, HONG KONG. TEL: 2842 8777

Friday, March 15,1996

Contents Eage>f<h

Transcript of Governor's media session........................................ 1

Transcript of Chief Secretary's media session................................. 2

UN committee's observations on racial discrimination.................... 3

HAD plays important role in owners' corporations formation..............

HK to promote sales of services overseas: DGT...........................

Insurance industry enjoys 20% growth in 1994............................ 9

1996 Population By-census to start tomorrow............................. 11

Pharmacists registration examinations results announced................. 12

Teaching kit on helping and caring pupils in schools.................... 13

Five sub-contractors summonsed for late payment......................... 14

Language Fund applications close on March 31............................ 14

/Four lots....

Contents

Page No.

Four lots of land up for auction.......................................... 1 b

Roadside emergency telephone system for highways........................ 16

Pak Shek Kok to be used as public dump.................................. 17

Formation work for San Tsuen Pai Northeast Platform.................. 18

Improvement to elevated walkway system in Central....................... 19

Water cut in Wan Chai................................................... 20

Tenders invited for noise insulation work at Tsing Yi................... 20

Prequalification tenders invited for Tai Po treatment works.......... 21

Hong Kong tops the world's container throughput......................... 21

Air Quality Report for February......................................... 22

Family day of Government Supplies Department............................ 24

Hong Kong Monetary Authority money market operations

24

1

Transcript of Governor’s media session * ♦ ♦ ♦ ♦

Following is the transcript of the media session by the Governor, the Rt Hon Christopher Patten, after opening the Wong Chuk Hang Complex for the Elderly this (Friday) afternoon:

Question: About yesterday’s decision made at the JLG expert talk, do you feel that Britain has implicitly given the veto power to China to veto the next budget?

Governor: No. Let's be absolutely clear what the position is. The transfer of sovereignty takes place after three months of the next financial year. Now there are two choices for us in Hong Kong, and I think people had better face up to which choice they want to make. First of all, we could have a budget for three months and then another budget after July 1, 1997. Now if that happens, there will be uncertainties about people’s tax rates; there will be uncertainties about the provision of services, and frankly I don’t think it would be very encouraging for the financial markets which would be concerned that there wasn't continuity in our financial arrangements through 1997. So we could have a budget for three months and then another budget for nine months. Or we can try to .have a consensus between the present Hong Kong Government and those representing the future Hong Kong Government to have a twelve-month budget, a proper budget for Hong Kong. What we are working for is a consensus and by the time we make the most important decisions, the leading players on the other side of the table will of course be the Chief Executive (Designate) and his or her team of senior officials (designate).

When people talk about veto, what do they really mean? They mean that if either the future Hong Kong Government or the present Hong Kong Government or the Legislative Council or the community doesn't like the look of our twelve-month budget next Spring, then there won't be one. That's perfectly correct. Either side could walk away from the table. The community could give it the thumbs-down. But at the end of the day, the Legislative Council, don't forget, have to vote for it, yes or no. I think if people walk away from the idea of a twelve-month budget, the community will suffer. I don’t think it would be a sensible way of proceeding.

Question: Sources ...

2

Governor: Can I just, let’s not talk about sources, let's talk about what is actually said on what I am saying on the record, on what the Chief Secretary is saying on the record, and don't forget whatever sources, private sources, sources behind closed hands, sources behind closed doors, whatever sources say, the Government of Hong Kong is run today by me, and it’s run by Mrs Chan, the Chief Secretary, and it’s run by Donald Tsang, and in the future the Hong Kong Government will continue to have autonomy in budgetary and financial affairs. What do sources say? I will tell you what one source says. I will tell you what Chinese officials say to us behind closed doors, and I am sure they’d say it outside as well.

They say that the future SAR Government will have all the autonomy in fiscal matters in the future it has today. Indeed some of them say that Hong Kong will have more autonomy. I don’t quite know what that means, because Hong Kong has complete autonomy today. Does the Governor of Hong Kong go back to London to check the budget before a budget is announced? The first thing the British Treasury know about a Hong Kong budget is when they read about it in the newspapers. And that is exactly what is promised for Hong Kong after July 1, 1997. So sources this or sources that, but that is the situation. I do think there is one thing which is extremely important and which I hope that sources either publicly or privately will make absolutely clear. The 97-98 budget is the only budget in Hong Kong's history where we will have to have this sort of arrangements. And it is the only budget like this in Hong Kong's history because it's the only budget which actually straddles a transfer of sovereignty. Okay. Thank you very much indeed.

End

Transcript of Chief Secretary's media session *****

Following is the transcript of the Chief Secretary, Mrs Anson Chan's media session after addressing the Conference on Work Ethics of Young People in the Hong Kong Convention and Exhibition Centre this (Friday) afternoon:

Chief Secretary: I want to say something about preparation of the 1997/98 budget because I don't want there to be any misunderstanding about this. As you know, at the moment, preparation of all our budgets is solely the responsibility of the Hong Kong Government. The UK Government has no role to play in this and that will be so after 1997. Under the Basic Law, Hong Kong enjoys a high degree of financial autonomy and the Chinese side has made it abundantly clear that they see no role for themselves in the preparation of our'budget after 1997. It will be solely a matter for the SAR Government. Of course the 1997/98 budget is a rather special one because three months fall on this side of 1997 and nine months fall on the other side of 1997.

3

It is clearly in the interest of the entire community that we should have what I would call a through budge, i.e. a budget covering the normal 12-month cycle. This is what the community of Hong Kong wants because continuity is what we want and continuity in administration and continuity in our financial provision is clearly very important. It is also important from the business point of view particularly from the international financial market. And it is because of this that the two sides have agreed that we should co-operation and together work out the 1997/98 budge. As you know, the Secretary for the Treasury and the Chinese side have held useful talks over the last two days. We've reached agreement on a number of important areas. But the important point to stress is that we have a shared objective in ensuring preparation of the 1997 budget according to pur usual timetable. Clearly both sides wish to reach consensus on this budget and both sides will be doing our very best to reach this consensus. And of course that budget - the 1997 budget - will have to reflect the views of the community and the views of the Legislative Council.

Question: Is this sacrificing Hong Kong's autonomy?

Chief Secretary: I don't see that there is any sacrifice of Hong Kong's autonomy. I have already explained why it is necessary to involve the Chinese side on the preparation of the 1997/98 budget because it is in the community's interest to have a budget that covers the normal 12-month cycle. People in Hong Kong wish to know what financial provisions there will be, covering various services after 1997. The international investing public wishes to know what our budget is going to be after 1997.

End

UN committee's observations on racial discrimination ♦ ♦ ♦ ♦ ♦

The Government today (Friday) received the concluding observations of the United Nations Committee on the Elimination of Racial Discrimination following its consideration on March 4 and 5 of the 13th periodic report submitted by the United Kingdom under the. International Convention on the Elimination of All Forms of Racial Discrimination.

The Committee viewed the Hong Kong Government's proposal to study racial discrimination later this year "as a constructive means of determining the extent of problems in the area of racial discrimination.”

4

It added that ’’where discrimination is found to exist, the study could serve as an important basis for the development of solutions".

Commenting on the observations, a government spokesman said the Administration would take careful note of the Committee’s views and would respond to all of them in the 14th report.

"The UK Government aims to submit its report to the Committee in August this year. We will ensure that our contribution, which will deal with all the points raised by the Committee, is ready in good time to ensure its inclusion," the spokesman said.

On the Committee's comments about the population census, the spokesman said the 1991 Census included questions about place of birth and usual language (these were included in the 13th report). It did not include direct questions about racial or ethnic origin as such questions might themselves be construed as racist and give rise to unease amongst some members of the community.

"Clearly, it is too late to take account of the Committee's views in the 1996 ByCensus which starts this month. But we note that the United Kingdom included such information in its most recent Census and we will keep an open mind on the subject," the spokesman said.

With respect to the two-week rule, the spokesman said the rule existed to deter overstaying and job-hopping which had been serious problems before its introduction. It applied to all domestic helpers and imported workers whatever their country of origin and did not entail any element of racial discrimination.

"If termination is not the helpers' fault - for example, if they have suffered maltreatment or if their employers are in financial difficulties or are emigrating - they can, with the agreement of the Immigration Department, change employers without leaving the territory. Helpers with claims against their employers can also remain here pending the outcome of their cases.

"As to the need for measures against racial discrimination on the part of private individuals, groups or organisations, this is something that the Government will look at later this year in the course of its study of - and subsequent consultation on - racial discrimination," said the spokesman.

Commenting on the Committee's recommendation on citizenship for the ethnic minorities the spokesman said the Hong Kong Government's stance on citizenship for this unique group was well known.

5

"We welcome the additional move announced by the Prime Minister to respond to their specific concerns and to seek to reassure them about their future in Hong Kong," the spokesman said.

Copies of the Committee's observations (English only) are now available at the Marketing Office of Government Information Services on 17th floor, Siu On Centre, 176-192 Lockhart Road, Wan Chai.

End

HAD plays important role in owners' corporations formation

*****

The Home Affairs Department (HAD) plays an important role in facilitating the formation of owners' corporations (OCs) among building owners by providing them with procedural and technical advice, the Secretary for Home Affairs, Mr Michael Suen, said today (Friday).

Speaking at a luncheon meeting of the Lions Club of Metropolitan Hong Kong, Mr Suen said HAD had been providing a wide variety of services to encourage and facilitate owners to incorporate themselves.

"For example, the liaison staff of district offices will explain the formation procedures to the owners, such as obtaining sufficient quorum and giving sufficient notice for the formation meeting," he said.

"And after the formation of OCs, the liaison officers will maintain contact with them by attending their annual meetings and functions.

"They will also give advice to the OCs whenever they encounter problems in managing the buildings."

Up to the end of last year, there were over 4,500 OCs in Hong Kong, of which about 75% were established with the assistance of HAD staff.

Noting that the Building Management Ordinance provided a comprehensive framework for the formation and effective operation of OCs, Mr Suen said OCs, individual owners and residents should seek legal advice from professionals in case of legal arguments.

6

"Whilst HAD will endeavour to render as much advice and assistance as possible, the department maintains a neutral and impartial stance in case of legal disputes among owners or residents," he said. »

Meanwhile, HAD has formed nine Building Management Co-ordination Teams (BMCTs) to help owners and occupants to resolve building management problems.

These teams work closely with other government departments to identify "target buildings" with serious management problems for inclusion in an improvement programme.

Mr Suen pointed out that since the formation of the first BMCT in 1985, over 1,000 target buildings had been identified.

Among these buildings, over 400 have seen promising improvements after the joint action of various government departments and the respective owners and residents.

On HAD's work to enrich the knowledge of owners in building management and to enhance their awareness, Mr Suen noted that the department had been organising training courses, publicity and educational activities, such as seminars, exhibitions and workshops on a regular basis.

A number of booklets, leaflets and videos on building management have also been produced to promote public understanding of building management.

Two booklets - "Building Management" and "How to Form an Owners' Corporation and Achieve Effective Building Management" - were published last year and are free of charge from various district offices.

Mr Suen said: "The annual building management seminar will be held on May 18 at the Hong Kong Convention and Exhibition Centre. Professionals in the field will be invited to speak on various aspects of the topic."

To conclude, Mr Suen said HAD will continue to allocate the necessary resources to publicise effective building management and to help the public manage their buildings better.

End

7

HK to promote sales of services overseas: DGT *****

Hong Kong will be looking to identify ways of promoting sales of services overseas, including through constructive involvement in negotiations under the World Trade Organisation, the Director-General of Trade, Mr Tony Miller, said today (Friday).

"We will also be looking at our own regulatory systems with a view to ensuring that they enhance rather than impede competitiveness," he said,

"We will also be giving a new emphasis in education and training to meet the needs of our services sector for the future."

Addressing a luncheon meeting of the Japan Hong Kong Society in Tokyo, Mr Miller said: "In the early days, Hong Kong made its money from warehousing, trade finance, insurance, shipping and port services. Manufacturing came much later, almost by accident, during the quarter century when China was shut off from trade and investment with the rest of the world.

"At the end of the 70s, China re-opened its door. During the 80s, Hong Kong's manufacturers moved land and labour intensive processes north of the border and invested in new production there.

"Yet, unemployment was kept very low as new jobs were created to service the growing re-export trade."

Describing Hong Kong as a community which cultivates competition rather than resisting it, Mr Miller said Hong Kong had not simply gone from manufacturing to services, but rather from low skill to higher skill jobs, and from low value-added to higher value-added functions.

"Our burgeoning new services economy is not simply the shipping, warehousing, insurance and trade financing of the pre-war entrepot days, but now covers an enormously broad range of highly skilled professional, business, social, artistic and entertainment services, as well as tourism, transportation and communications," he said.

"We have also developed our own way of doing things, our own skills, our own solutions to problems, our own designs, our own culture.

8

"This is evident too in the dramatic grace of our architecture, whose spacious interiors defy impressions of crowded streets, in our imaginative films, which Hollywood is beginning to watch, and the lyrical dynamism of Canto-pop music, song and dance."

Noting that services now account for 80 per cent of Hong Kong's GDP and 80 per cent of employment, Mr Miller said this transformation had been market-driven, not Government-led but it is Government supported.

"It reflects a shared vision of Hong Kong's role in the future and the measures needed to ensure that we are properly placed to play that role," he added.

The Director-General told the luncheon gathering that last week, the Financial Secretary, Mr Donald Tsang, set out the action agendas for Hong Kong's leading services industries and unveiled the following initiatives to strengthen Hong Kong's position as an international finance and services centre:

A HK$50 million Service Support Fund to benefit the further development of service industries and improve their competitiveness;

A HK$50 million Tourism Development Fund;

Plans to create a Hong Kong mortgage corporation, with the US Federal National Mortgage Association assisting in a study for the project;

Plans to launch 10-year Exchange Fund Notes;

The establishment of a fourth Hong Kong Industrial Estate;

A Science Park to help nurture technology-based industries and promote technology transfer;

A tax allowance for hotels to write off refurbishment expenditure over a five-year period;

A reduction of Ad valorem fees on company registration by half from 0.6 per cent to 0.3 per cent, and

An initiative to enhance language proficiency in both English and Chinese (including Putonghua) in schools.

9

"Cities only prosper and grow when they have a clear economic role and when those who live and work in them have a clear-eyed perception of that role and how it can be enhanced," Mr Miller said.

"Hong Kong has survived and prospered precisely because it has both. Our natural role is that of entrepot. Geography and a deep-water harbour dictate that.

"But it is the shared vision of business and government of Hong Kong as the region's pre-eminent service centre, and their collective determination to build and plan for that vision which guarantee us success," he added.

End

Insurance industry enjoys 20% growth in 1994

*****

The Hong Kong insurance industry grew by 20% in terms of premium income in 1994, according to the Annual Report of the Office of the Commissioner of Insurance and Office of the Registrar of Occupational Retirement Schemes released today (Friday).

Speaking on the publication of the Report at a press conference, the Commissioner of Insurance, Mr Ros Lam, noted that this was the fourth consecutive year that the industry recorded a double digit growth since 1991.

As detailed in the Report, total premium income in respect of general and longterm business in 1994 amounted to $39.2 billion which represents about 3.8% of the Hong Kong gross domestic product of the year.

Gross premiums in respect of general business maintained a healthy growth of 16% to $19.7 billion. Property damage business remained the largest class, accounting for 27% of total gross premiums.

Except for motor vehicle business, all major classes experienced growth in gross premiums, with general liability business achieving the highest growth of 46%.

Highlighting other achievements. Mr Lam noted that the general insurance industry continued to enjoy an underwriting profit for the second consecutive year, with the amount increasing to $1,119 million in 1994.

10

Office premiums for long-term business increased by 26% to $19.5 billion. I hr increase is mainly due to the significant growth in individual life business of 30% to $14 billion. Al the end of 1994, the total number ol individual life policies in force exceeded 2.5 million which covers about 40% of the population in the territory.

At present, there are 222 authorised insurers operating in Hong Kong with 160 writing general business, 42 writing long-term business and the remaining 20 engaging in both types of business. Of these insurers, 100 are incorporated in Hong Kong and the others being incorporated in 28 different countries with the UK and USA taking the lead.

Mr Lam said: "As the Commissioner of Insurance, my primary responsibility is to ensure the overall financial soundness of the Hong Kong insurance industry.

"Hong Kong has an effective insurance regulatory system which combines adequate protection of the insuring public while allowing maximum opportunity for industry growth."

He pointed out that 1995 marked an important year for the development of insurance legislation in Hong Kong. The legislative changes which came into operation during the year affected both insurers and insurance intermediaries.

"The most important ones are that insurance intermediaries have, for the first time, been brought under the regulation of the Insurance Companies Ordinance with effect from June 30, 1995; a long-term business insurer is required to maintain a new solvency margin which is commensurate with its liabilities; and a general business insurer is required to value its assets and liabilities in accordance with a prudent standard.

"As an on-going process to review and update the Insurance Companies Ordinance, the Insurance Companies (Amendment) Bill 1996. gazetted on February 2, 1996, seeks to revise the minimum capital and solvency margin requirement to compensate for the effect of inflation as well as bring them in line with international standards." he explained.

On the work of the Office of the Registrar of Occupational Retirement Schemes, Mr Lam said that the transitional period for employers to register their retirement schemes expired on October 15, 1995.

As at December 31, 1995, the Registrar's Office had received 15,352 applications for registration of the schemes. Of the 13.378 schemes approved, 93% were defined contribution schemes while 7% were defined benefit schemes.

11

As regards the regulatory framework for retirement schemes, Mr Lam noted that the Occupational Retirement Schemes Ordinance was amended on July 6, 1995 to allow assets of schemes participating in pooling agreements to be pooled together. Besides, scheme administrators are allowed to invest, up to 15% of the assets of a registered scheme, in listed shares on stock exchanges in emerging markets which are not recognised by the Securities and Futures Commission.

The Report in English is now on sale at $46 each at the Government Publications Centre at Low Block, Queensway Government Offices, 66 Queensway, Hong Kong. The Chinese version of the Report will be available shortly.

End

1996 Population By-census to start tomorrow *****

The nine-day operation of the 1996 Population By-census will commence tomorrow (Saturday).

About one-seventh of all quarters in Hong Kong have been selected according to a probability sampling scheme for enumerating all households living therein. From March 16 to 24, enumerators will visit sampled households.

All members therein will be asked about their particulars, including year and month of birth, sex. place of birth, marital status, language, nationality, educational attainment, place of work/study, employment details, income, household rent and previous residence.

The Commissioner for Census and Statistics, Mr Frederick Ho, appealed to members of the public for co-operation and support, asking sampled households to provide accurate information at the interviews.

Other people can help in facilitating our enumerators’ work, he added.

’’Statistics compiled from the information collected in the by-census are vital to Government in planning, particularly in such fields as housing, education, transport, medical care and social services, and to the private sector in formulating business strategies,” said Mr Ho.

12

"Through assisting the by-census, every member of the public directly or indirectly helps build a better Hong Kong."

The 1996 Population By-census is conducted under the provisions of Section 9 of the Census and Statistics Ordinance. Under the law, persons specified to give information are legally obliged to do so.

The department has despatched letters informing all sampled householders of the visiting enumerator's name.

During the visit, each enumerator will identify himself/herself with a Census Officer Certificate of Identity issued by the department. If in doubt, households can verify the enumerator's identity by telephoning the department on 2590 8000.

"Information on individual persons and households collected in the by-census will be used for statistical purposes only.

"The Census and Statistics Department is legally prohibited to allow access to this information by any other government departments or organisations.

"Enumerators are also required to keep the collected information regarding individual persons and households in strict confidence and not to disclose such information to any person not perform functions relating to the by-census.

"All questionnaires containing collected information will be destroyed within one year after the by-census operation," Mr Ho stressed.

End

Pharmacists registration examinations results announced *****

The Pharmacy and Poisons Board of Hong Kong today (Friday) announced results of the registration examinations for pharmacists held in December.

A total of 75, 80 and 73 candidates sat for the examinations in Pharmacy Legislation in Hong Kong, Pharmacy Practice and Pharmacology respectively with corresponding passing rates of 52 per cent, 21.3 per cent and 30.1 per cent.

13

Apart from meeting other conditions set by the Board, a pharmacy graduate returning from overseas who intends to be registered as a pharmacist is required to pass all the three subjects.

The Board conducts its examinations twice a year, normally in June and December.

End

Teaching kit on helping and caring pupils in schools . *****

The Education Department will produce a teaching kit on Whole School Approach to Guidance with a $1.6 million grant from the Hong Kong Jockey Club Charities Trust.

The project is aimed at equipping primary and secondary schools with professional suggestions and resource materials for the development of a helping and caring system for their pupils.

The kit will focus on how to enhance pupils' self-esteem, improve their social skills and maintain effective communication with parents. It will also help teachers to identify pupils who are "at risk" so that pupils' problems, if any, can be addressed at an early stage.

The teaching kit will comprise guidelines for school heads and teachers, worksheets, aids and resource materials for classroom teachers and videotapes.

The Education Department has begun research and preparation work. The kit is expected to be completed and ready for distribution to primary and secondary schools in early 1997.

End

14

Five sub-contractors summonsed for late payment *****

The Labour Department has recently issued a total of 29 summonses to five sub-contractors, all engaged in the works contract of the Airport Railway’s Tsing Yi Station, for suspected late payment of wages to a group of imported workers from China between July and October last year.

Two summonses were served on Bcnco Engineering Company, six on Construction Limited, six on Croft Engineering Limited, six on Sun Wing Kee Foundation Engineering Limited and nine on Cheukman Engineering Company Limited, under Section 23 of the Employment Ordinance.

Section 23 stipulates that wages shall become due on the expiry of the last day of the wage period and shall be paid as soon as is practicable but in any case not later than seven days thereafter. The maximum penalty for each summons is $200,000 and imprisonment for one year.

The 29 summonses have been set down for hearing on May 7 in Tsuen Wan Magistracy.

A Labour Department spokesman said the sub-contractors, except Manstone Construction Limited, had been charged earlier for suspected non-grant of a statutory holiday to a number of imported workers from China in August last year.

That case, involving 16 summonses, will also be heard in the same court on the same day.

End

Language Fund applications close on March 31

*****

Interested parties are reminded to send in their applications to the Language Fund on or before March 31.

Mrs Joyce Lui of the Secretariat for the Language Fund said applications were invited once a year.

15

"Organisations, schools including kindergartens, and individuals are invited to apply for funds to undertake projects or activities to improve the proficiency in the use of Chinese (including Putonghua) and English languages in Hong Kong," she said.

The fund was set up in May 1994. It is a trust fund held under the Director of Education Incorporation Ordinance with an initial allocation of $300 million.

It's main objective is to support proposal and initiatives which will raise the standards in Chinese (including Putonghua) and English, enhance existing efforts and meet temporary shortfalls in language teaching resources.

In addition, it will encourage research into problem areas and initiations of new approaches.

Projects or activities to be funded should be able to fulfil any one or more of the following objectives:

* improving the motivation for language learning;

* enhancing the quality of teacher education for language in education;

* increasing the supply and quality of textbooks, reference materials and appropriate teaching aids; and

* launching innovative projects which maximise proficiency.

Application forms are available for collection from the General Enquiry Office of the Education Department, 15th floor, Wu Chung House, 213 Queen's Road East, Wan Chai, or by writing to the Language Fund Secretariat, Room 1141, Wu Chung House, 213 Queen's Road East, Wan Chai.

Further enquiries can be directed to the Language Fund Secretariat on 2892 5772 and 2892 6642 or by fax on 2574 0340.

End

16

Four lots of land up for auction

*****

The Lands Department will auction four lots of land on Monday (March 18).

The public auction will begin at 2.30 pm in the Concert 1 fall of the Hong Kong Cultural Centre, Tsim Sha Tsui.

The first lot located in Hong Man Street, Chai Wan, has an area of 1,590.7 square metres for non-industrial use, excluding godown, hotel, and service apartment.

Located at the junction of Wyndham Street and Arbuthnot Road in Central, the second lot has an area of 1,585 square metres. The lot is intended for non-industrial use, excluding private residential, hotel, service apartment and godown.

With an area of 15,073 square metres, the third lot is located at Hung Hom Bay Reclamation, southwest of Whampoa Street and Po Loi Street. It is earmarked for non-industrial use, excluding godown and petrol filling station.

The fourth lot located in Area 2, Tai Po, has an area of 465.8 square metres for non-industrial use, excluding godown.

End

Roadside emergency telephone system for highways

*****

The Electrical and Mechanical Services Department (EMSD) is inviting tenders for the supply and installation of a territory-wide second-generation roadside emergency telephone system for highways.

The system would include both central computerised equipment and roadside handouts, a spokesman for EMSD said today (Friday).

"It will allow motorists to dial up from a roadside telephone and communicate with Police’s Control Centres for emergency assistance in all types of traffic incidents.

"A computerised control equipment to be provided for the Police Control Centres will allow for speedier response to the motorist and easy identification of the location of the incident to effect any necessary rescue or recovery operation," he said.

17

The new system will be deployed to new road networks commissioned in 1996-97 and early 1997-98, including a major portion of the expressways leading to the new airport in Chek Lap Kok.

Details of the tender are contained in the Government Gazette published today.

Tender forms and further particulars may be obtained from the Contract Section of EMSD, Room 811, eighth floor, 98 Caroline Hill Road, Causeway Bay, Hong Kong.

Tenders must be clearly marked and addressed to the Chairman of the Central Tender Board. They must be placed in the Government Secretariat Tender Box at the lift lobby, lower ground floor. Central Government Offices, East Wing, Lower Albert Road, Hong Kong, before noon on Friday, May 3.

Late tenders will not be accepted.

End

Pak Shek Kok to be used as public dump *****

The Government intends to use about 89 hectares of foreshore and sea-bed in Tolo Harbour near Pak Shek Kok for disposal of surplus construction material that is suitable for reclamation.

A government spokesman said a total of 68 hectares of land would be formed.

’’The findings of an Environmental Impact Assessment Study have concluded that the implementation of the project, with suitable mitigation measures, is environmentally acceptable.” he said.

Work will commence in September and scheduled for completion in seven to eight years.

The extent of the area affected is contained in a notice published in the Government Gazette today (Friday).

Any person who considers that his interest, right or easement in or over the foreshore and seabed involved would be injuriously affected may submit a written claim for compensation to the Director of Lands on or before March 15, 1997.

18

He should state in the submission the sum of money which he is willing to accept in full and final settlement of his claim and should submit particulars to substantiate his claim.

The notice (in both English and Chinese) together with related plans can be seen at the Lands Department, Survey and Mapping Office, 14th floor, Murray Building, Garden Road, Hong Kong, (where copies can be purchased on order); the Tai Po District Office, ground floor, Tai Po Government Offices Building. Ting Kok Road, Tai Po, New Territories; and the Sha Tin District Office, first floor, Kowloon-Canton Railway House, Sha Tin Station, New Territories.

End

Formation work for San Tsuen Pai Northeast Platform

* * * * *

The Civil Engineering Department (CED) is inviting tenders for the formation of San Tsuen Pai Northeast Platform in Tsuen Wan under the Rural Planning and Improvement Strategy.

The project comprises the formation of 1.2 hectare of site supported mainly by about 700 metres of retaining wall, together with the construction of an access road, a footpath, stormwater drains and sewers.

It will also include slope improvement works underneath the proposed access

road.

On completion, the works will provide new serviced sites for 31 small village houses at the San Tsuen Pai Northeast Platform.

Construction is expected to commence in July and will take 15 months to complete.

Tender forms and further particulars of the project can be obtained from the Chief Engineer, Development and Airport Division, Civil Engineering Office, CED, second floor, Civil Engineering Building, 101 Princess Margaret Road, Ho Man Tin, Kowloon.

Tender offers for the project will close at noon on April 12.

End

19

Improvement to elevated walkway system in Central ♦ * * ♦ ♦

The Highways Department proposes to construct a covered pedestrian footbridge at Pedder Street across Connaught Road Central connecting World Wide House and Exchange Square.

The proposed project includes a lift access for disabled people and related ancillary road realignment work.

The proposed footbridge is required to meet the anticipated pedestrian demand arising from the development of the Central Reclamation area.

It will, in conjunction with the existing footbridge, serve to ensure the safe and effective conveyance of pedestrians crossing Connaught Road Central upon completion.

The lift will facilitate the access of people with a disability to the elevated walkway system in Central and supplement the one provided near the Star Ferry.

A notice of the proposed works is published in the Government Gazette today (Friday).

The plan and scheme showing the proposed works may be inspected at the Public Enquiry Service Centre, Central and Western District Office, ground floor. Harbour Building, 38 Pier Road, Hong Kong; and at the District Lands Office, Hong Kong West, 19th floor, Southorn Centre, 130 Hennessy Road, Wan Chai, Hong Kong during normal office hours.

Any person objecting to the proposed works must send his/her objection in writing to the Secretary for Transport, Central Government Offices, second floor, East Wing, Lower Albert Road, Hong Kong not later than May 14, 1996.

End

20

Water cut in Wan Chai ♦ ♦ ♦ * ♦

Fresh and flushing water supply to some premises in Wan Chai will be suspended from 11 pm on Monday (March 18) to 6 am the following day to facilitate testing of watermains.

The suspension will affect Convention Avenue, all odd number premises between 1-27 and even number premises between 2-28, Harbour Road and all odd number premises between 5-7 Gloucester Road.

End

Tenders invited for noise insulation work at Tsing Yi *****

The Territory Development Department is inviting tenders for noise insulation work at Cheung Ching Estate in Tsing Yi as part of the programme for the Duplicate Tsing Yi South Bridge project.

Works will involve installation of single glazed windows, split type airconditioners, exhaust fans, double burner gas hotplates, power upgrading and associated works.

Construction work will commence in June and scheduled for completion in 20 months.

Tender forms and further particulars may be obtained from Scott Wilson Kirkpatrick (HK) Ltd, 38th floor. Metroplaza I, 223 Hing Fong Road, Kwai Fong.

Tenders must be clearly marked and addressed to the Chairman of the Central Tender Board. They must be placed in the Government Secretariat Tender Box in the lift lobby, lower ground floor. Central Government Offices (East Wing), Lower Albert Road, Hong Kong before noon on Friday, April 12.

Late tenders will not be accepted.

End

21

Prequalification tenders invited for Tai Po treatment works ♦ ♦ ♦ ♦ ♦

The Water Supplies Department is inviting approved contractors to participate in prequalification exercise for the construction of raw water and treated water aqueducts for the proposed Tai Po treatment works.

The contract will involve the design and construction of the treated water aqueduct and the raw water aqueduct for the Tai Po treatment works project.

It will also include the formation of the northern quarter of the treatment works site, other associated areas for access to the tunnel portals and shafts, and the construction of the postal structures and a building on the Shing Mun shaft.

A notice of prequalification of tenderers was published in the Government Gazette today (Friday).

Those interested in the project are invited to apply for prequalification documents from Binnie Consultants Limited, 11th floor, New Town Tower, Pak Hok Ting Street, Sha Tin, New Territories.

Completed applications should reach the Chief Engineer, Special Duties, Water Supplies Department, Immigration l ower, 46th floor, 7 Gloucester Road, Hong Kong, not later than noon on April 12.

End

Hong Kong tops the world's container throughput

*****

Hong Kong handled more than 12.5 million TEUs (twenty-foot equivalent units) of containers in 1995, representing an increase of 13.4 per cent over 1994, according to figures compiled by the Marine Department.

Commenting on the figures, the Deputy Director of Marine, Mr S Y Tsui, said today (Friday) that the annual container throughput was in line with our projections.

With an annual throughput at 12,528,692 TEUs, Hong Kong for the fourth consecutive year tops the world's container throughput to be the busiest container port in the world.

22

Hong Kong acquired the world’s busiest container port status first in 1992 when it handled 7,971,758 TEUs. In the following years, the annual container throughput rose by 15.5 per cent to 9,204,236 TEUs in 1993; and 11,050,030 TEUs in 1994.

’’These annual figures showed a sustained and growing demand. They underline the urgent need for the development of additional container terminal facilities to meet the projected demands," Mr Tsui said.

The container terminals in Kwai Chung and on Stonecutters Island handled 8,256,171 TEUs in 1995, representing an increase of 13.4 per cent over 1994.

The throughput of river trade and the stream sector also rose to 1,344,620 TEUs and 2,927,901 TEUs, or an increase of 44.2 per cent and 3.1 per cent over 1994, respectively.

The comparative container statistics in TEUs are :

1995 1924 Percentage Increase

Kwai Chung & Stonecutters 8,256,171 7,278,117 13.4

Stream and Elsewhere 2,927,901 2,839,319 3.1

River Trade 1,344,620 932,594 44.2

Total 12,528,692 11,050,030 13.4

These figures and other essential port statistics are also available at the Marine Department Homepage on the Internet. The address is:http://www.info.gov.hk/mardep.

End

Air Quality Report for February *****

The Environmental Protection Department today (Friday) released air quality information for February.

The purpose of the announcement is to keep the public informed of the air quality levels in the territory and to explain the measurements.

23

The announcement contains monitoring results from Mong Kok, Central/Western and Kwai Chung, which represent three important land use types in the territory:

* locations close to road traffic in built-up urban areas,

combined commercial and residential districts, and

* districts close to industrial areas.

The reported air pollutants include sulphur dioxide (SO2), nitrogen dioxide (NO2), total suspended particulates (TSP) which comprise all sizes of dust particles, and the respirable fraction of the dust (RSP). All these pollutants can affect respiratory health in sufficient concentration.

In February, there was no exceedance of the 24-hour Air Quality Objectives (AQO).

The monthly mean levels of all pollutants were lower than those in January.

The gases and particles described originated from various sources. SO2 is mostly produced when fuels that contain sulphur are burned. NO2 is formed during combustion by the combination of nitrogen and oxygen, and by the atmospheric oxidation of nitric oxide (NO), also a product of combustion.

Vehicle exhaust is an important source of NO and NO2 in terms of impact on local air quality. It is also a major source of airborne particulate matter, especially the smaller respirable particles.

Diesel-engined vehicles such as taxis, public light buses, passenger coaches, franchised buses and light and heavy goods vehicles are the greatest contributor of particulate matter. Other sources include industry, furnaces and boilers, construction activities, the sea and the soil.

It is worth noting that while the weather and climate always affect the concentrations of pollutants in the air, the only sure way of reducing the levels is to reduce emissions from the man-made sources.

End

24

Family day of Government Supplies Department * * ♦ ♦ ♦

The Government Supplies Department will hold a party for some 2,000 staff members and their families on Sunday (March 17) in the compound of its headquarters in Oil Street, North Point.

The party will start at 1 pm with an eye-dotting ceremony by the Director of Government Supplies, Mr Nigel Shipman, for the lion dance to be followed by band and music performances by the Auxiliary Medical Services and the Tai Tam Gap Girl Pipers and marching Team.

Other programmes will include game stalls, fire appliance display, lucky draw, karaoke singing competition, marital art display and a demonstration of cycling skills by the Civil Aid Services.

End

Hong Kong Monetary Authority money market operations

*****

$ million Time (hours) Cumulative change (Smillion)

Opening balance in the account 1,859 0930 +941

Closing balance in the account 2,089 1000 +941

Change attributable to : 1100 +941

Money market activity +942 1200 +942

LAF today -712 1500 +942

1600 +942

LAF rate 4.00% bid/6.00% offer TWI 123.7 *+0.0* 15.3.96

25

Hong Kong Monetary Authority

EF bills EF notes

Terms Yield Term Issue Coupon Price Yield

1 week 4.54 2 years 2802 5.16 98.57 6.05

1 month 4.94 3 years 3901 5.57 98.36 6.30

3 months 5.17 5 years 5012 6.38 98.73 6.80

6 months 5.29 7 years 7302 6.02 94.23 7.21

12 months 5.53 5 years M502 7.30 101.20 7.11

Total turnover of EF bills and notes - $29,522 million

Closed March 15, 1996

End

DAILY INFORMATION BULLETIN

ISSUED BY GOVERNMENT INFORMATION SERVICES BEACONSFIELD HOUSE, HONG KONG. TEL: 2842 8777

Saturday, March 16,1996

Contents PageNo.

Call to stop using Wai Ling Sin......................................... 1

New Deputy Director for Home Affairs.................................. 2

New District Officer for Tsuen Wan...................................... 3

Hong Kong Monetary Authority money market operations.................... 3

Sunday, March 17, 1996

Contents Page No,

Unconditional MFN vital in preserving HK's confidence: STI.............. 4

Chinese guidebook on slope maintenance published........................ 5

Fresh water cut in Mong Kok and Sai Kung................................ 6

Salt water cut in Yau Tsim Mong......................................... 6

1

Call to stop using Wai Ling Sin ♦ ♦ ♦ ♦ ♦

Chinese herbal medicine retailers and wholesalers are asked to temporarily stop selling a Chinese herb, Wai Ling Sin, to avoid inadvertent poisoning due to contamination by a similar looking herb which contains podophyllotoxin, also known as Kwai Gou toxin.

The measure was taken immediately by the Department of Health after it found the presence of the podophyllotoxin among samples of Wai Ling Sin collected from retailers in the past few days for testing and reports of further Chinese herbal poisoning cases, a spokesman for the Department said today (Saturday).

The Department also appealed to Chinese herbal practitioners to temporarily stop prescribing Wai Ling Sin, also known as Fung Che.

"Members of the public should also refrain from self-medication and selfprescription of this herb. They should seek proper advice from Chinese herbal practitioners before the use of traditional Chinese medicine," the spokesman said.

He said that following three recent cases of Chinese herbal poisoning by podophyllotoxin, the Department had contacted some 53 wholesalers and 55 retailers advising them to be on the alert of possible contamination of Wai Ling Sin by herbs which contained podophyllotoxin, also known as Kwai Gou toxin.

Of the 78 samples of Wai Ling Sin collected from traders in the past few days, seven were confirmed to contain podophyllotoxin.

Meanwhile, there are three more confirmed cases and three suspected cases of poisoning by podophyllotoxin after ingestion of "Wai Ling Sin". The Department of Health was notified of these cases by the Hospital Authority and a member of the public.

"We are most concerned about these incidents and are writing to wholesalers and retailers asking them to temporarily suspend the sale of Wai Ling Sin." the spokesman said.

"Retailers are also advised to obtain their stock of Chinese herbs only from reliable and reputable sources."

2

The spokesman noted that the retailers, whose stock of Wai Ling Sin had been found to contain podophyl lotoxin in the seven confirmed cases, had already surrendered their stock to the Department of Health.

"All efforts are now being made by the Department to trace the source of the incriminated herbs," the spokesman said.

However, he pointed out that there should be no cause for panic over these incidents. Traditional Chinese herbal medicine has been commonly used by the Chinese community. If used properly, it does not have harmful effects.

End

New Deputy Director for Home Affairs *****

Mr Dominic Law Yiu-ming will assume the post of Deputy Director of Home Affairs on Monday (March 18) following the transfer of Ms Sandra Lee Suk-yee from the department.

Aged 46, Mr Law joined the Civil Service in 1972 and was appointed to the Administrative Service in 1978.

He has served in a number of departments and branches including the former New Territories Administration, the former Social Services Branch, the Health and Welfare Branch and the Civil Service Branch before being promoted to his present rank of Administrative Officer Staff Grade B this year.

He was the Assistant Commissioner for the Television and Entertainment Licensing Authority from 1988 to 1991 and became the Commissioner for Chinese Language in 1991.

His last posting was the Deputy Director-General of Industry.

End

3

New District Officer for Tsuen Wan *****

Mr Gavin Munro Neville Ure will take up the post of Tsuen Wan District Officer tomorrow (Sunday), replacing Mr Thomas Chow.

Mr Ure, aged 43, joined the Government Service in 1975 and was promoted to the rank of Senior Administrative Officer in 1988.

He has served in the Urban Services Department, the former City and New Territories Administration, Finance Branch, Land and Works Branch, Iransport Branch and Industry' Department.

His last posting was Secretary of the working party to review the briefing out system in the Legal Department.

End

Hong Kong Monetary Authority money market operations

*****

$ million Time (hours) Cumulative change ($ million)

Opening balance in the account 2.089 09:30 +515

Closing balance in the account 1.559 10:00 +515

Change attributable to: 1 1:00 +515

Money market activity +515 11:30 +515

LAF today -1.045

LAF rate 4.00% bid/6.00% offer TWI 123.7 *+0.0* 16.3.96

End

4

Unconditional MFN vital in preserving HK's confidence: STI

*****

The Secretary for Trade and Industry, Miss Denise Yue, returned to Hong Kong tonight (Sunday) after a week of intensive lobbying activities in Washington DC on the importance of unconditional renewal of China's most-favourcd-nation (MFN) trading status to Hong Kong.

"I stressed that unconditional MFN is of vital importance to preserving confidence in Flong Kong during this critical phase of our transition,” she said.

Miss Yue said she had pointed out to senior US government officials and members of the Congress the grave economic implications for Hong Kong in the event of revocation or conditional renewal of China' MFN status.

She said she was very pleased to learn that US government's policy remained firm, namely there should be unconditional renewal of China's MFN status in 1996.

However, congressional members had warned that the renewal issue would be more difficult this year because of US-China relations and US electioneering politics, she said.

Miss Yue said Hong Kong fully recognised (he MFN issue was particularly complex this year and her Washington visit marked the beginning of a co-ordinated series of intensive lobbying efforts by the Hong Kong Government in the coming months.

"In May, the Governor will visit Washington. The Chief Secretary will also visit the US in June. And Hong Kong's Economic and Trade Office in Washington will continue to work together with the US business sector and other relevant parties in the US," she said.

During her week in the US capital, Miss Yue had met the US Trade Representative, Ambassador Mickey Kantor; the Assistant Secretary of State for East Asian and Pacific Affairs, Ambassador Winston Lord; other senior US government officials; as well as 12 Congress members.

She also conveyed Hong Kong's message to US business community at meetings with the US-China Business Council and the US Business Coalition.

She had attended the Hong Kong-US and US-Hong Kong Economic Cooperation Committee Plenary Session on March 15.

5

She also briefed US officials on Hong Kong Government's vigorous efforts in protecting intellectual property rights in the territory both by legislative means and through robust pro-active enforcement actions.

f!

End

I

Chinese guidebook on slope maintenance published

*****

The Geotechnical Engineering Office (GEO) of the Civil Engineering Department has published the Chinese version of the 'Geoguide 5' on slope maintenance.

The guidebook presents a recommended standard of good practice for the maintenance of man-made slopes and retaining walls in Hong Kong, head of GEO, Dr Andrew Malone, said today (Sunday).

"The guide is primarily aimed at the engineering professions. However, it also serves as a useful reference for property management people who are concerned with slope and retaining wall maintenance," he said.

The general public, however, will be more interested in the abridged version of the 'Geoguide 5’, which comes under the title 'Layman's Guide to Slope Maintenance*.

It is a bi-lingual publication published by GEO in November last year to provide simplified guidance on matters related to slope maintenance. It is free of charge and 25,000 copies have already in circulation.

Dr Malone said people were beginning to get the message that regular maintenance was essential for all slopes and retaining walls.

"Property owners should arrange for regular inspections of their slopes and retaining walls within their own lots.

"If not properly maintained, a slope will deteriorate and a landslip may occur. This could result in injury to persons or damage to property.

"If this happens, suffering and hardship may result and great expense may be incurred in reinstating the ground and making the slope safe," he said.

6

The English and Chinese version of ’Geoguide 5' are now on sale at $30 and $40 per copy from the Government Publications Centre, Low Block, ground floor, Queensway Government Offices, 66 Queensway, Hong Kong.

Copies of the 'Layman’s Guide To Slope Maintenance' is available at all District Offices or by calling the GEO slope maintenance hotline 2762 5165.

End

Fresh water cut in Mong Kok and Sai Kung *****

Fresh water cut to some premises in Mong Kok and Sai Kung will be temporarily suspended from 11 pm on Wednesday (March 20) to 6 am the following day to facilitate testing of watermains.

In Mong Kok, all premises in the area bounded by Li Tak Street, Wong Tai Street, Wai On Street, Lok Kwan Street, Chung Wui Street and Tai Kok Tsui Road will be affected.

In Sai Kung, the affected area is bounded by Man Nin Street, Po Tung Road, Yi Chun Street and Sai Kung Hoi Pong Square including Wan King Path and Sai Tsui Path.

End

Salt water cut in Yau Tsim Mong *****

Flushing water supply to all premises in Mong Kok, Yau Ma Tei and Tsim Sha Tsui will be temporarily suspended from 10 pm on Wednesday (March 20) to 6 am the following day to facilitate watermains works.

The suspension will affect all premises in the area bounded by Mong Kok Road, Sai Yee Street, Yim Po Fong Street, Waterloo Road, Gascoigne Road, Hong Chong Road, Salisbury Road, Canton Road, Man Cheong Street and Ferry Street.

End

DAILY INFORMATION BULLETIN

ISSUED BY GOVERNMENT INFORMATION SERVICES BEACONSFIELD HOUSE, HONG KONG. TEL: 2842 8777

Monday, March 18,1996

Contents

Page No.

Improvements to ACP Labour Importation Scheme.......................

Latest unemployment and underemployment figures.....................

Senior postings announced...........................................

Research into nine-year compulsory education........................

Lantau and Ma Wan bridged over......................................

Four lots of land sold for $6,000 million...........................

Industrial safety slogan designers awarded..........................

Water storage figures...............................................

Fresh water cut in Sheung Shui......................................

Hong Kong Monetary Authority tender results.........................

Hong Kong Monetary Authority money market operations................

1

Improvements to ACP Labour Importation Scheme * * * * *

The Secretary for Education and Manpower, Mr Joseph W P Wong, today (Monday) said that the package of measures to improve the operation and strengthen the monitoring of the Special Labour Importation Scheme for the New Airport and Related Projects (ACP Scheme) was to ensure that the Scheme will continue to achieve its objectives.

Writing to the Chairman of the Manpower Panel of the Legislative Council, Mr Wong said he hoped the improvement measures would help the Panel's on-going inquiry into the labour disputes involving workers admitted under the ACP.

He said the spate of labour disputes at the end of last year revealed that the operation of ACP Labour Importation Scheme needed to be improved, noting that the Government had reviewed the operation of the Scheme and had introduced a series of new measures in recent months. They include:

Vetting and approval of quota applications

NAPCO (New Airport Projects Co-ordination Office) since February this year, has extended the vetting and verification procedures on the number, type, and duration of employment of imported workers from principal contract to the subcontract level. The move is to help the Government ascertain more accurately the manpower requirements of the awarded subcontracts and guard against excessive bids for quotas by subcontractors.

Recruitment of Local Workers

To address the concern that local workers should be given priority in filling ACP jobs, Labour Department (LD) has provided a special placement service since March 1995 and assisted the Airport Authority and the Mass Transit Railway Corporation to open a job centre in mid-January this year to facilitate the recruitment of local workers.

In order to attract more local workers to work on Chek Lap Kok, improvements have been made to the ferry service and on-site accommodation has been made available at a fee for local workers.

2

Labour Service Companies (LSCs)

A great majority of workers imported for the ACP come from China, Thailand and the Philippines. The Government has drawn to the attention of the relevant consulates and organisations of these countries, the malpractice of LSCs and the impacts they would have on imported workers. The response of these bodies has been very positive and they advised that their Governments would tighten control on the operation of the LSCs in their countries.

Since last November, the LD has operated a four-language (Cantonese, Putonghua, English and Thai) 24-hour telephone service to facilitate the imported workers' access to information and complaints channel.

Early Termination of Contracts

With immediate effect, NAPCO will notify Immigration Department (ID) and LD regularly of any early completion of works contracts under which imported workers are employed. ID , on receipt of such information, will remind employers of their obligations under the conditions of the ACP Scheme to retrench their imported workers and arrange for their return to the place of origin within 14 days after their contract termination.

Inspection of places of employment

Contractors have been asked to provide LD with information on related employment records and location of work sites relevant to the imported workers. The additional information will enable LD to ascertain whether there is improper deployment by cross-checking attendance records kept by contractors during inspection visits.

In addition to the established briefing sessions for workers and contractors, LD also conducts inspections to their places of work and accommodation to check wage and employment records, interview some imported workers and distribute copies of employment contracts to them.

These multi-pronged actions have been very effective in reaching out to some 90 percent of the workers on site. To ensure that in future all imported workers are aware of their rights and benefits, the Government has introduced a new condition compelling employers to grant paid leave to all imported workers to enable them to attend LD's briefing sessions within eight weeks after arrival.

3

Improper deployment of imported workers to jobs not stipulated in their employment

From February this year, the landing conditions on the employment visa have been changed by specifying that workers are not allowed to change employer, post, and place of work. The employment contracts that clearly identify the post and place of work of the worker will bear a unique employment contract number. Entry visas and landing conditions will also contain the employment contract number, thus effectively forbidding any unauthorised change of employer, post and place of work. These new requirements enable the government to prosecute those employers and workers who have breached any of the landing conditions.

With effect from March this year, employers at the time of visa application, are also required to give an undertaking to the effect that they will abide by the rules and conditions of the ACP Scheme.

Employers when applying for workers' visa extension are required to lodge a certification declaring that the workers are working in the approved posts and are paid the stipulated wages. Workers are also required to acknowledge by signing on the certification form.

Food and accommodation provisions

Since last November, LD inspects the accommodation of imported workers prior to their arrival. ID will not issue employment visas unless LD is satisfied that the employers have met the accommodation requirements as stipulated in the employment contract.

Since January, the clause on the employment contract regarding wage deduction for food provision has been deleted. With this change, meals have been made the responsibility of the employee. If meals are provided by the employer, they shall be provided free of charge.

Underpayment o f wages

With effect from November last year, ACP contractors are required to provide the workers with details of their earnings including overtime wages and allowances and ask each imported worker to acknowledge the receipt of the wage information if he agrees to the amount of payment.

4

Contractors also need to keep the wage record and acknowledgement list for inspection; to arrange the distribution to workers their monthly bank statement so that they know all transactions of his bank account; and refrain from keeping passbooks or electronic teller machine cards of imported workers.

ID has also made it a condition of approval of entry visa that each imported worker is required to produce his original copy of employment contract for inspection at the time of their registration for Hong Kong Identity Card. Moreover, ID has made it a condition of approval for extension of stay that employers are required to provide a Certification of Wage with workers’ signature, declaring that the workers are working in the specified posts and have been paid wages in accordance with their employment contracts.

Mr Wong stressed that the government would not tolerate any abuses of the Scheme and would take all possible measures to combat them.

"Any employers who have breached the labour laws will be liable to prosecutions and sanctions will be imposed on those who are in breach of the conditions of the Scheme, including the withdrawal of quotas, and refusal of future applications to import workers under the Scheme," Mr Wong said.

End

Latest unemployment and underemployment figures *****

The provisional seasonally adjusted unemployment rate for the period December 1995 - February 1996 edged further lower to 3.1%, while the provisional underemployment rate was also lower, at 2.2%. These latest labour force statistics are released today (Monday) by the Census and Statistics Department.

The seasonally adjusted unemployment rate for the period November 1995 -January 1996 was 3.2%, and the underemployment rate was 2.4%.

Commenting on the latest figures, a Government spokesman said that decreases in the unemployment rate were recorded in most major sectors, including restaurants and hotels, transport, construction and manufacturing. As to the underemployment rate, decreases were recorded mainly in the construction and transport sectors. In overall terms, the labour market continued to stabilise in the most recent months.

5

Total labour supply continued to rise at a faster rate than total employment. In the three months ending January 1996, total labour supply rose by 3.6% over a year earlier, while total employment was 2.4% higher.

During the period November 1995 - January 1996, the number of unemployed persons with previous jobs was estimated at 89,300. Another 9,000 unemployed persons were first-time job-seekers. The number of underemployed persons was estimated at 74 800.

The unemployment and underemployment statistics were obtained from a continuous General Household Survey. The survey for November 1995 - January 1996 covered a quarterly sample of some 18,100 households or 61,400 persons, selected scientifically to represent the land-based civilian non-institutional population in Hong Kong. Data were obtained from the survey by interviewing each member aged 15 or over in the households sampled.

In the survey, the definitions used in measuring unemployment and underemployment follow closely those recommended by the International Labour Organisation.

'Seasonally adjusted’ refers to adjustment for seasonal variations in the proportion of first-time job-seekers in the labour force.

Detailed analysis of labour force characteristics is given in the report on the General Household Survey which is published four times a year.

The next report covering the quarter ending December 1995 will be on sale at the Government Publications Centre on ground floor, Low Block, 66 Queensway, Hong Kong, by the end of March.

End

6

Senior postings announced

*****

A government spokesman today (Monday) announced that Mr Matthew Cheung Kin-chung, Deputy Head of the Central Policy Unit, will take over from Miss Jacqueline Willis as Deputy Secretary for Education and Manpower from March 29.

Miss Willis will succeed Mr Stephen Ip as the Commissioner for Labour in late April while Mr Ip will assume the post of the Secretary for Economic Services in June after attending a Tsinghua course.

Mr Joshua Law has replaced Mr Kevin Mak as the Deputy Secretary for Education and Manpower from March 1 after Mr Mak had left the Branch to take up the post of Vice-chairman, Administrative Officers Recruitment Board.

End

Research into nine-year compulsory education

*****

The Faculties of Education of the Chinese University of Hong Kong and the University of Hong Kong have been commissioned to conduct research into the existing nine-year compulsory education.

At a meeting today (Monday), members of the Board of Education (BOE) were told that the research will hopefully be completed in July as part of the initiatives taken by a sub-committee of the Board to review the school education system.

At a briefing on the work progress of the sub-committee, its convenor, Dr Tam Man-kwan, informed the meeting that so far, the sub-committee had held seven meetings and its two task groups had met 10 and eight times respectively.

The sub-committee has gauged views from primary and secondary school heads and teachers, school councils, associations and sponsoring bodies as well as tertiary institutions.

Dr Tam said these included the organisation of two public forums and a focus discussion session. The response was encouraging.

7

"A total of 21 written submissions were received and 204 participants attended the functions," he added.

The sub-committec also examined the existing system of nine-year compulsory education and identified areas of concern on aims, objectives, targets and enforcement of compulsory education as well as on assessment and allocation.

He said sub-committee members made a number of visits to various local schools to see for themselves the current school situation.

In addition, three overseas study visits were organised in early February this year to get more specific information about the education systems in North America and Scandinavian countries, and to share their experience in the implementation of compulsory education.

Dr Tam informed BOE members that the immediate tasks for the subcommittee would be the monitoring of the progress of the research; continuing to discuss the aims and objectives of nine-year compulsory education: continuing to examine the existing allocation systems with a view to making suggestions and improvements; and preparing a first draft of the review report.

"In view of the complexity of the review, it is likely that the sub-committee's work will straddle the 1996/97 school year." he said.

End

Lantau and Ma Wan bridged over * * ♦ * *

Lantau and Ma Wan have been connected for the first time by the Kap Shui Mun Bridge following completion of the bridge's main span.

This historical moment came at noon today (Monday) when the cable-stayed bridge's "final closure" segment was lifted into position over the middle of the Kap Shui Mun Channel, bringing the nine-month long deck erection work to a successful conclusion.

8

Rising 45 metres above the sea, the Kap Siiui Mun Bridge's 430-metre main span comprises a total of 39 prefabricated segments made of steel and concrete. Each segment measures 8.7 metres long, 35.7 metres wide and 7.7 metres high, as well as weighing 500 tonnes.

"It is most encouraging that the contractor has successfully completed all the lifting operations on schedule, a major step towards completing the bridge on time next year," said the Project Director of the Lantau Fixed Crossing Project Management Office of the Highways Department, MrC K I an.

The main span steel and concrete composite segments were fabricated in Shekou, China, and precast on site. After precasting, the segments were taken to the Kap Shui Mun Channel by a purpose-built barge, lifted by specially designed cranes and then connected at bridge deck level.

Following completion of the two side spans, erection of the main span started in late May last year with segments lifted by cantilevering from each side span towards the middle.

Before the "final closure" segment was lifted into position in the middle of the main span today. 19 segments have been erected on each side of the span.

The Kap Shui Mun Bridge has an overall length of 820 metres with a cable-stayed main span of 430 metres with a minimum clear vertical headroom of 45 metres.

Contract works on the $L6-billion Kap Shui Mun Bridge started in December in 1992 for completion in May 1997.

Together with the Ma Wan Viaduct and the suspension Tsing Ma Bridge, the Kap Shui Mun Bridge forms the Lantau Fixed Crossing on the 34-kilometre highway network of the Airport Core Programme linking the new airport at Chck Lap Kok and the Tung Chung new town to urban Kowloon and I long Kong Island.

On completion next year, both bridges will be the longest of their kind in the world carrying both road and railway traffic.

"We anticipate that the last lifting for the main span of the Tsing Ma Bridge will also be carried out shortly. That will be another significant milestone for the Lantau Fixed Crossing. After that, the railway works can be completed and the electrical works and other finishing works can commence," said Mr Lau.

End

9

Four lots of land sold for $6,000 million *****

Four lots of government land were sold for a total of $6,000 million at a public auction held by the Lands Department this (Monday) afternoon.

The first lot located at Hung Hom Bay Reclamation, southwest of Whampoa Street and Po Loi Street, was sold to Topcycle Development Limited at $4,725 million, with bidding opening at $3,200 million.

The lot has an area of 15,073 square metres and is earmarked for non-industrial use. excluding godown and petrol filling station.

The developer will need to complete a gross floor area of not less than 82.417 square metres on or before April 1, 2001.

The second lot located at the junction of Wyndham Street and Arbuthnot Road in Central, was sold to Firm Wise Investment Limited at $765 million, with bidding opening at $580 million.

Covering an area of 1.585 square metres, the lot is earmarked for non-industrial use. excluding private residential, hotel, service apartment and godown.

The developer will be required to complete a gross floor area of not less than 14.265 square metres on or before March 31.2000.

The third lot located in Hong Man Street. Chai Wan. was bought by Forlink Limited at $440 million, with bidding opening at $250 million.

With an area of 1.590.7 square metres, the lol is intended for non-industrial use. excluding godown, hotel, and service apartment.

The developer has to complete a gross floor area of not less than 8.523 square metres on or before March 31. 1999.

i

The fourth lot located in Area 2, Tai Po. was bought by Cosmos Best Development Limited at $70 million, with bidding opening at $48 million.

With an area of 465.8 square metres, the lot is intended for non-industrial use. excluding godown.

10

The developer has to complete a gross floor area of not less than 1,700 square metres on or before March 31, 1999.

Held at the Concert Hall of the Hong Kong Cultural Centre, Tsim Sha Tsui, the auction was conducted by Government Land Agent, Mr John Corrigall.

End

Industrial safety slogan designers awarded *****

A number of students were awarded today (Monday) for drawing public attention to the importance of industrial safety through slogans.

The Slogan Design Competition on Safety at Work for Students 1996, held earlier this year, had attracted a total of 4,020 entries from 75 schools.

The competition aimed at promoting students’ awareness of the importance of work safety. It was divided into Chinese Junior, Chinese Senior and English sections.

The top three winners for the Chinese Junior Section are Ho Wing-yin. Pau Ding-chung and Yuk Kai-yao. In the Chinese Senior Section, Wu Kei-shek, Chan Shuk-man and Pang Chi-man won the first, second and third prizes respectively.

The top three prizes in the English Section went to Allan Au, Cheng Yee-wah and Tsang Chi-mun.

Winners were awarded with cash prizes ranging from $1,500 to $3,500 and a certificate.

Merit prize winners each received a cash prize of $350 in addition to a certificate.

The competition was organised by the Labour Department. Education Department, 1 long Kong Association of Careers Masters and Guidance Masters as well as the Occupational Safety and Health Council.

End

11

Water storage figures

*****

Storage in Hong Kong's reservoirs at 9 a.m. today (Monday) stood at 78.9 per cent of capacity or 462.332 million cubic metres.

This time last year the reservoirs contained 397.467 million cubic metres of water, representing 67.8 per cent of capacity.

End

Fresh water cut in Sheung Shui

*****

Fresh water supply to some premises in Sheung Shui will be temporarily suspended from 11 pm on Thursday (March 21) to 6 am the following day to facilitate testing of watermains.

All premises in the area bounded by Hang Tau Road and Fan Kam Road, including Kwu Tung Tin Sum, Hang Tau Tai Po, Tsiu Keng, Tsiu Keng Lo Wai, Tsiu Keng Pang Uk, Chan Uk Po, Tong Kung Leng, Cheung Lek, Kwu Tung Market, Hang Tau, Hang Tau Tsuen and Lin Tong Mei will be affected.

.* it • •' * •

End

12

Hong Kong Monetary Authority tender results

*****

Tender date 18 Mar 1996

Paper on offer EF notes

Issue number 5103

Issue date 19 Mar 1996

Maturity date 19 Mar 2003

Coupon 6.75 PCT

Amount applied HK$2,240 MN

Amount allotted HK$500 MN

Average price accepted (yield) 99.48 (6.99 PCT)

Lowest price accepted (yield) 99.43 (7.01 PCT)

Pro rata ratio About 12 PCT

Average tender price (yield) 99.32 (7.03 PCT)

End

13

Hong Kong Monetary Authority money market operations * * ♦ ♦ ♦

S million Time (hours) Cumulative change (Smillion)

Opening balance in the account 1,559 0930 + 1240

Closing balance in the account 2,165 1000 + 1240

Change attributable to : 1100 +1240

Money market activity +1,252 1200 +1254

LAF today -646 1500 +1254

1600 +1252

LAF rate 4.00% bid/6.00% offer TWI 123.7 *+0.0* 18.3.96

Hong Kong Monetary Authority

EF bills EF notes

Terms Yield Term Issue Coupon Price Yield

1 week 4.60 2 years 2802 5.16 98.39 6.16

1 month 4.88 3 years 3901 5.57 98.07 6.42

3 months 5.18 5 years 5012 6.38 98.25 6.93

6 months 5.29 7 years 7302 6.02 93.73 7.31

12 months 5.60 5 years M502 7.30 100.73 7.24

Total turnover of EF bills and notes - $27,485 million

Closed March 18, 1996

End

DAILY INFORMATION BULLETIN

ISSUED BY GOVERNMENT INFORMATION SERVICES BEACONSFIELD HOUSE, HONG KONG. TEL: 2842 8777

Tuesday, March 19,1996

Contents Page No,

FCO official and RC to attend talks in Hanoi.............................. 1

Recommendations on LegCo members’ remuneration accepted................... 1

Renovation contractors urged to ensure work safety........................ 2

112 VMs depart on orderly repatriation flight............................. 4

67 pollution convictions in February...................................... 4

37 new building plans approved in January................................. 5

Olympic Games stamps on display........................................... 6

Monitors’ Report submitted to CS.......................................... 6

Fresh water cut in Tai Po.............................................

Hong Kong Monetary Authority tender results...........................

Hong Kong Monetary Authority money market operations...................... 8

1

FCO official and RC to attend talks in Hanoi

* * * * *

During his visit to Hong Kong earlier this month, the Prime Minister, Mr John Major, announced that, following his meeting in Bangkok with his Vietnamese counterpart Vo Van Kiet, he would be sending a Foreign Office official to Hanoi to discuss the Vietnamese migrant (VM) problem with the Vietnamese authorities in advance of the visit to Vietnam in April of Foreign Office Minister, Mr Jeremy Hanley.

In response to press enquiries, a Government spokesman confirmed today (Tuesday) that Mr David Dain, an assistant under-secretary in the Foreign Office would be holding talks on VM matters in Hanoi tomorrow. The Refugee Coordinator, Mr Brian Bresnihan, will also attend the talks.

End

Recommendations on LegCo members' remuneration accepted * * * * *

The Commission on Remuneration for members of the Legislative Council has completed its consideration of the report of the LegCo Subcommittee on Review of Allowances for Members of the Legislative Council and other comments made by members relating to their remuneration.

The Commission has accepted most of the Subcommittee's recommendations and has proposed some modifications to the existing remuneration package for members.

"These have been fully accepted by the Government," a government spokesman said today (Tuesday).

"The Commission's conclusions are well-balanced and sensible. We will seek the approval of the Finance Committee next month to implement those proposals which have financial implications," he added.

The recommendations of the Commission include:

2

(a) Increasing from 30 to 50 per cent the non-accountable element of the travelling and entertainment component of LegCo members' operating expenses reimbursement.

(b) Allowing all LegCo members to have both a central office and an allowance with which to establish their own district offices.

(c) Allowing LegCo members to use the district office setting up and monthly allowance for more than one office, subject to the approved allowance not being exceeded.

(d) Allowing LegCo members to use the setting up allowance for the renovation of an office as well as the removal or expansion of an office or the purchase of equipment and furniture.

(e) Allowing LegCo members to claim the winding up allowance to compensate their staff who have worked for them for less than two years, on a pro-rata basis at the rate of two-thirds of last month's salary of the employee for each year of service, should a member have to cease office for reasons beyond his control before the end of a LegCo term.

The Commission is chaired by Mr J D McGregor. Its members include Dr Cheng Hon-kwan. Dr Thomas Leting Kwok-fai, Mr Christopher Cheng Wai-chee, Miss Gladys Li Chi-hei and Mr Lawrence Lam Yin-ming.

End

Renovation contractors urged to ensure work safety

*****

"Renovation contractors would be totally wrong if they consider that the current safety and health laws are not meant for them," Labour Department’s Chief Factory Inspector Chan Tat-king said today (Tuesday).

He said that contractors of renovation or repair work, like any other building contractors, also had the legal responsibility to ensure their workers' safety when carrying out internal alteration and repair work in any building, be it domestic, commercial or industrial.

3

Mr Chan made the remarks following a recent accident in which a worker fell to his death while trying to dismantle a window frame of a domestic flat under renovation in Wan Chai.

He stressed that renovation contractors, like other employers, were also legally bound to adopt a safe system of work.

They must take all necessary safety precautions, including the effective supervision over the safe conduct of work by their employees when they are engaged in alteration or repair work as well as the safe use of proper tools and personal protective equipment.

’’Renovation contractors should make a greater effort in ensuring the safety of those workers working in these premises. They should plan ahead for their work on safety aspect, including passing on of training, information and instruction in this connection to their workers," he added.

Failure to take steps to ensure compliance with the necessary safety precautions may constitute an offence under the general duties provisions of the Factories and Industrial Undertakings Ordinance and the Construction Sites (Safety) Regulations.

On the other hand, renovation workers are required to take reasonable care for the safety and health of themselves and others by co-operating with their employers in the adoption of safety precautions and in the proper use of personal protective equipment.

On conviction, contractors who fail to comply with the safety provisions are liable to a maximum fine of $200,000 and 12 months' imprisonment while the maximum penalty for an offending employee is a line of $50,000.

End

4

112 VMs depart on orderly repatriation flight *****

A group of 112 Vietnamese migrants (VMs) returned by air to Hanoi, Vietnam today (Tuesday) on the 32nd flight under the Orderly Repatriation Programme (ORP).

All of the returnees, comprising 62 men, 26 women, 17 boys and seven girls, are from North Vietnam.

The majority of them arrived in Hong Kong in 1989, with the remaining in 1991 and 1995.

The group brought to 2,279 the total number repatriated on ORP flights since November 1991.

End

67 pollution convictions in February *****

A total of 67 convictions were recorded in courts last month for breaching antipollution legislation enforced by the Environmental Protection Department.

Among them, 21 were made under the Water Pollution Control Ordinance, 18 under the Noise Control Ordinance, 16 under the Air Pollution Control Ordinance and another 12 under the Waste Disposal Ordinance.

The fines imposed on the offenders ranged from $1,000 to $60,000. Hong Kong Paper Mills Ltd was fined $60,000 for failing to comply with the requirements of a Noise Abatement Notice.

End

5

37 new building plans approved in January ♦ ♦ ♦ ♦ ♦

The Buildings Department approved 37 building plans in January this year.

Of the plans, 15 are for Hong Kong Island, nine for Kowloon and 13 for the New Territories.

The approved plans include 14 for apartment and apartment/commercial developments, 11 for commercial developments, five for factory and industrial developments, and seven for community services developments.

In the same month, consent was given for work to start on 43 building projects, which involve 91,919 square metres of usable domestic floor area and 117,801 square metres of usable non-domestic floor area.

During the same period, the Department also issued 27 Occupation Permits -eight for Hong Kong Island, nine for Kowloon and 10 for the New Territories.

Of the buildings certified for occupation in the month, the usable floor areas for domestic and non-domestic uses are 58,766 square metres and 93,898 square metres respectively.

The declared cost of new buildings completed in the month totalled $1,491 million.

In addition. 21 demolition consents involving 49 buildings and structures were issued.

In the same month, the Buildings Department’s Control and Enforcement Division received 879 complaints of unauthorised building works, and issued 351 Removal Orders on unauthorised works.

End

6

Olympic Games stamps on display ♦ ♦ ♦ ♦ ♦

An Olympic Games Stamp Exhibition is being held at the Rotunda, Exchange Square, today (Tuesday).

On display are the 1996 Olympic Games special stamps to be officially issued by the Hong Kong Post Office tomorrow.

It is a comprehensive set of stamps issued by the host countries to commemorate the Olympic Games since the first modem Games in 1896 and a full collection of official first day .covers issued by the Post Office in connection with its special stamp issues since May 1962.

Postmaster General, Mr Robert Footman, and President of the Amateur Sports Federation and Olympic Committee of Hong Kong, Mr A de O Sales, officiated at the opening ceremony this morning.

The Exhibition will last until March 27. The opening hours are from noon to 8 pm today and from 8 am to 8 pm from March 20 to 27.

End

Monitors’ Report submitted to CS

*****

The monitors appointed to observe the Orderly Repatriation Programme operation this (Tuesday) morning have submitted their report to the Chief Secretary.

They were Professor Poon Chung-kwong, a Justice of the Peace, and Ms Harriet Sewell from Christian Action.

End

7

Fresh water cut in Tai Po *****

j?

Fresh water supply to some villages in Tai Po will be temporarily suspended from 11 pm on Friday (March 22) to 6 am the following day to facilitate testing of watermains.

The suspension will affect all premises in Pan Chung Tsuen, Pan Chung San Tsuen, Ma Wo, including the Youth Centre and Community Centre in Po Heung Street.

End

Hong Kong Monetary Authority tender results

*****

Tender date 19 Mar 1996 19 Mar 1996

Paper on offer EF bills EF bills

Issue number Q612 • Y687

Issue date 20 Mar 1996 20 Mar 1996

Maturity date 19 Jun 1996 19 Mar 1997

Coupon - -

Amount applied HK$6,460 MN HK$2,090 MN

Amount allotted HK$ 1,500 MN HK$500 MN

Average yield accepted 5.09 PCT 5.52 PCT

Highest yield accepted 5.10 PCT 5.54 PCT

Pro rata ratio About 45 PCT About 20 PCT

Average tender yield 5.11 PCT 5.56 PCT

8

Hong Kong Monetary Authority

Tenders to be held in the week beginning 26 Feb 1996

Tender date 26 Mar 1996 26 Mar 1996

Paper on offer EF bills EF bills

Issue number Q613 H661

Issue date 27 Mar 1996 27 Mar 1996

Maturity date 26 Jun 1996 25 Sept 1996

Tenor 91 days 182 days

Amount on offer HK$l,500+300MN HKS800+160MN

End

Hong Kong Monetary Authority money market operations

*****

$ million Time (hours) Cumulative change (^million)

Opening balance in the account 2,165 0930 +636

Closing balance in the account 2,007 1000 +636

Change attributable to : 1100 +636

Money market activity +637 1200 +636

LAF today -795 1500 +637

1600 +637

LAF rate 4.00% bid/6.00% offer TWI 123.8 *+0.1* 19.3.96

- 9 -

Hong Kong Monetary Authority

EF bills EF notes

Terms Yield Term Issue Coupon Price Yield

1 week 4.56 2 years 2802 5.16 98.55 6.06

1 month 4.85 3 years 3901 5.57 98.31 6.32

3 months 5.09 5 years 5103 6.75 99.65 6.95

6 months 5.19 7 years 7302 6.02 93.92 7.27

12 months 5.54 5 years M502 7.30 100.83 7.21

Total turnover of EF bills and notes - $23,560 million

Closed March 19, 1996

End

DAILY INFORMATION BULLETIN

ISSUED BY GOVERNMENT INFORMATION SERVICES BEACONSFIELD HOUSE, HONG KONG. TEL: 2842 8777

Wednesday, March 20,1996

Contents Page No.

Transcript of Governor’s media session.................................. 1

Transcript of FS’s media session........................................ 4

White Paper on Annual Report on HK to Parliament........................ 4

Government aims to provide effective transport system................... 5

$3.7 million spent on heritage projects................................. 6

Seminar on Personal Data (Privacy) Ordinance............................ 7

Meter Approval Scheme................................................... 9

Land Registry keeps customers better informed.......................... 10

Value of manufacturers' orders-on-hand in January................... 11

Enrolment for safety and health management symposium starts............ 12

Application for Putonghua summer courses grant invited................. 13

Hong Kong Monetary Authority money market operations................... 14

1

Transcript of Governor's media session ♦ * * ♦ ♦

Following is the transcript of the media session by the Governor, the Rt Hon Christopher Patten, after opening the Po Leung Kuk Vicwoood K T Chong Building today (Wednesday):

Question: Governor, you mentioned in your speech that Po Leung Kuk has done a good job in helping those helpless people. But what about ... the situation of Hong Kong people in resolving the VM issue?

Governor: There is an important meeting in Vietnam this week following the Prime Minister's discussion with his opposite number at the Bangkok summit and officials from the Foreign Office in Vietnam this week, hoping to pave the way, prepare the way for a visit next month by the Minister of State at the Foreign Office, Mr Hanley. And we very much hope that will help to speed up the return of Vietnamese migrants to Vietnam. We’ve seen in the early months of this year an increase in the number of Vietnamese migrants who are returning voluntarily to Vietnam. We've also seen as you know some efficiently carried through flights under the orderly repatriation programme. So we're still working very hard to get things back onto track and to ensure that we complete the job as soon as possible.

Governor: It's reported that your Government has appointed a senior official, Simon Vickers, for sending the archive, something concerning probably the civil servants. Do you think this will arouse the disagreement between both the Chinese and British sides for that?

Governor: No. There is an agreement between the British and Chinese sides which will be honoured by the British side to the letter.

Question: Has this official already been appointed?

Governor: I’ve answered the question.

Question: Will you meet with Lu Ping next month?

Governor: If Director Lu comes to Hong Kong, and even if he doesn't come to Hong Kong, I'd be delighted to see him at his convenience. You know perfectly well that that is the situation; you know perfectly well that there is a commitment on Director Lu and me as Governor to meet regularly; you know perfectly well that I’m prepared to meet Director Lu at anytime; you know perfectly well that Director Lu hasn't been prepared to meet me. I think that's bad for Hong Kong. But it's Director Lu who has to explain that, not me.

2

Question: (on the future of the UNHCR in Hong Kong)

Governor: I'm sure since you've been in Hong Kong for some time and know the difficulties and complexities of the problem, you'd recognise that giving predictions of dates when people will leave or when things will be finished doesn't make very much sense. But we'll obviously complete the job as rapidly as we can.

Question: Did you meet this morning with delegates from the Conference of European Security and Co-operation ...?

Governor: Yes, I did. 1 think they're here as part of a trip to the region. They've been in Taiwan: they're going on to China. They're spending a few days here and that I think I'm right in saying that you'd have to check with them. They're visiting some of the Central Asian countries as well. I think they're on a fact-finding trip.

Question: Did you talk about...?

Governor: We talked about issues surrounding present regional concerns. I mean you don't have to be a genius to guess the sort of things we talked about. And I explained to them some of our anxieties here in Hong Kong.

Question: Have you got Mr Lu Ping's reply yet?

Governor: No. But it's for Director Lu Ping to reply. Anytime Director Lu Ping wishes to see me, I'm delighted to see him. You know perfectly well that it's not me who's avoided seeing him; it's Director Lu who's avoided seeing me. All around the world people even though they have disagreements and arguments meet one another and talk. It's only in this unique case of China that people seem to think they can behave in a totally different way to the civilised way in which the rest of the world behaves. But it's for them to explain, not for me.

Question: What are some of the topics that you will be discussing?

Governor: We'd discuss the whole range of issues which are concerning people in Hong Kong. I think there are three that are near the top of people's issues. The first is the whole question of right of abode. Britain has given a clear lead on visa-free access for SAR passport holders from Hong Kong to the United Kingdom, and I think that really underlines the importance of dealing with the right of abode issue, that people are concerned about nationality and abode issues.

3

Look at the queues for BNO passports outside the Immigration Department this morning. That’s an indication of people’s concern about these issues. So we’d first of all talk about right of abode. Secondly, I’m sure that the people of Hong Kong would expect us to talk about the protection of human rights in Hong Kong because there are anxieties both about China's commitment to report on the international covenants compliance and there are concerns about some of the threats to gut or fillet the Bill of Rights here in Hong Kong. And then there are concerns about the promises that have been made to Hong Kong about the development of representative government, of accountable government, the future of the Legislative Council.

There are, I understand, meetings in Peking taking place this week talking about these matters. Let's be absolutely clear what it's all about. Behind all the trips to Peking, behind all the airline flights, behind all the meetings, the issue is perfectly clear. We’ll see of course attempts to justify the establishment of a provisional legislature which isn't required. We'll see attempts to justify that under the Basic Law. And I'm sure that people of Hong Kong will look at those attempts of justification with a good deal of scepticism.

But what is actually being attempted is perfectly plain. What Chinese officials want to do is to exclude certain particular individuals from the legislature, and what they want to do is to reduce the number of democrats in the legislature. There is no point in looking for more sophisticated motivations than that; there is no point in thinking the argument is about whether or not there is a better way of electing the legislature. The argument is about those two precise things. And that was what the argument was about during 17 rounds of talks.

We refuse to do that because we don't think that the objective of a fair election should be to ensure that the Government has political control over the legislature. We think that it's the people of Hong Kong who need to be represented in the legislature. So those are the issues that will really be on the table over the coming weeks and months. Whether or not individuals are excluded from the legislature because of their opinions, and whether or not attempts are really going to be made to reduce the number of democrats because they represent 60 to 70 per cent of the people of Hong Kong. Needn't be too sophisticated about it; that's what the argument's about. Bye.

End

4

Transcript of FS's media session * * * * ♦

Following is the transcript of the media session by the Financial Secretary, Mr Donald Tsang, after officiating at the opening ceremony of the Clothing Industry Fair '96 this (Wednesday) morning:

Question: Mr Tsang, There has been a sharp drop in the private property on the market. How would it affect prices and also potential property buyers? Do you think there are needs for some changes to the present anti-speculation policy?

FS: Well, the anti-speculation policy has been very effective and we have been reviewing these measures regularly. They are taking good effect. The number of flats on the market particular on the supply side is determined by the market itself. It's not a question of what the government wants to do and what not to do. The present situation is supply has been lower than expected. You must look at the issue not only from the supply way, but also look at the number of vacant flats on the market and take a break for property under construction. And I believe the supply overall is still quite satisfactory because prices have been very stable and the whole property market has consolidated.

End

White Paper on Annual Report on UK to Parliament

*****

The Annual Report on Hong Kong 1995 to Parliament (Annual Report) has been presented to Parliament by Her Majesty's Government today (Wednesday).

As in past years, the Annual Report has been published in the form of a White Paper both in London and Hong Kong. It will be tabled at the Legislative Council on March 27.

A government spokesman said Her Majesty's Government had agreed in 1985, during the parliamentary debates on the Hong Kong Bill, to produce annual reports on Hong Kong and to lay them before Parliament.

The purpose of this series of reports is to keep Parliament informed of developments in Hong Kong on a regular basis.

5

The 1995 Annual Report is the eleventh such report. It contains a survey of major events in Hong Kong during 1995. Topics covered include visits to Hong Kong by government ministers and overseas visits by the Governor and the Chief Secretary of Hong Kong.

They also include constitutional development, contacts between Hong Kong and China, human rights, Vietnamese migrants, emigration and nationality, infrastructure, general economic and social conditions, law and order, legal and judicial systems and civil service.

Copies of the Annual Rep.ort and the Chinese translation will be available free of charge to members of the public from tomorrow.

They can be obtained from all District Offices, the Government Publications Centre, Low Block, ground floor, Queensway Government Offices, 66 Queensway, Hong Kong, and the Marketing Section of the Information Services Department, 17th floor, Siu On Centre, 188 Lockhart Road, Wan Chai, Hong Kong.

End

Government aims to provide effective transport system *****

The Secretary for Transport, Mr Haider Barma, said the government's fundamental policy objective was to provide an effective transport system which would meet the economic, social and recreational needs of Hong Kong.

Speaking at the post-Budget press conference today (Wednesday), Mr Barma said this approach had served the community well.

He said in practice this meant expanding and improving the transport infrastructure; improving the availability and quality of public transport and managing road use to reduce congestion and giving priority to public transport.

In the past five years, the Government have spent a total of $25.6 billion on capital projects on transport. In the next five years, it will spend another $28.6 billion at 1995 price level.

Referring to the reduction in the total expenditure on transport by 9.1 per cent, Mr Barma said this arose mainly because expenditure on the Airport Core Programme related transport projects had peaked in 1995-96.

6

"If we disregard this portion and focus only on capital expenditure on other transport projects, the draft estimates have actually provided for an increase of $765 million. This represents a real growth of 18.7 per cent," he said.

Mr Barma said the Government had the opportunity to invite private sector participation in Build Operate and Transfer projects and major transport modes were provided by the private sector without any government subsidy.

End

$3.7 million spent on heritage projects *****

The Lord Wilson Heritage Trust, with the executive support of the Antiquities and Monuments Office, has disbursed grants totalling $3.7 million to a wide range of heritage projects during 1994-95.

Presenting the second annual report at a press conference today (Wednesday), the Chairman of the Board of Trustees, Mr Alexander Au, outlined the main activities of the Trust in the past year.

"The main focus of the Trust's programme of activities is to arouse community awareness of the importance of heritage preservation, as well as to promote learning opportunities and to support community initiatives in this area," he said.

The Trust spent $1.5 million in sponsoring a 13-episode TV series produced by RTHK on Hong Kong's heritage last year and the programme had generated much publicity for heritage protection.

A total of $700,000 had been used to fund a five-day international conference on archaeology in Southeast Asia which was organised by the University Museum and Art Gallery of the University of Hong Kong.

"The conference provided a forum for leading archaeologists to discuss the latest findings in archaeological research in South China and Southeast Asia. It was the first of its kind in Hong Kong and was a great success," Mr Au noted.

Other major projects of the Trust included:

the production of pamphlets and photo albums for free distribution to schools and the general public to promote the Ping Shan Heritage Trail;

7

* the funding of district community organisations in staging 47 heritage-related activities for young people in the summer of 1994 ; and

* the production of a teaching kit on local history for junior secondary school students.

Also speaking at the occasion, the Trust's Council Chairman. Mr Edward Ho. described the first School Heritage Festival which commenced just last week as the most exciting heritage event.

The two-week event, with indoor and outdoor activities specially designed for students, was to promote their interest in cultural heritage, he said.

Displays, demonstrations of traditional handicrafts, heritage tours to places such as the Kowloon Walled City and Tsang Tai Uk. archaeological workshops and environmental improvement programmes at historical monuments are highlights of the festival.

A series of English TV programme on Hong Kong's heritage has also begun, and there are plans for the Trust to lake part in the establishment of a new heritage trail in Kam Tin.

Established in 1992, the Lord Wilson Heritage Trust is to provide an opportunity for the community to join hands to promote the preservation and conservation of Hong Kong's heritage.

End

Seminar on Personal Data (Privacy) Ordinance *****

About 170 officers from 80 government policy branches and departments today (Wednesday) attended a seminar offering practical guidance on complying with the Personal Data (Privacy) Ordinance.

Principal Assistant Secretary for Home Affairs, Mr Robin McLeish, and a specialist on employment law, Mr Michael Downey, presided over the seminar which provided an overview of the ordinance and dealt with common questions about its implementation.

8

The seminar was attended by officers directly involved in the handling of personal data or who have responsibility for preparing for compliance with the ordinance, or whose work comes under its purview.

Separately, the Home Affairs Branch (HAB) has produced a number of publicity items to promote public awareness of the Personal Data (Privacy) Ordinance, particularly among users of personal data.

Some 50,000 copies of a bilingual guide on compliance with data access and correction requests for data users have recently been published.

The booklet gives detailed guidance on the rights of subject access and data correction, and the requirements on complying with requests for such access and correction.

Some 60,000 copies of two posters publicising the major principles of data protection and the concept of "protect privacy, respect personal data" have also been distributed.

Posters promoting the six principles of data protection have been put up in all Mass Transit Railway stations.

About 60,000 copies of a bilingual leaflet giving an introduction to the key provisions of the ordinance have also been distributed to data users in both the public and private sectors.

Copies of the booklet, leaflet and posters have been sent to private sector professional bodies which have notified their members about the availability of these publicity materials.

Such information materials have also been distributed to government departments, public bodies, schools, tertiary education institutions and social welfare organisations.

All publicity items are available at district offices and the Marketing Office of the Information Services Department on the 17th floor. Siu On Centre, 176-192 Lockhart Road, Wan Chai.

End

9

Meter Approval Scheme *****

The Office of the Telecommunications Authority (OFTA) today (Wednesday) announces commissioning the British Approvals Board for Telecommunications (BABT) to provide consultancy for establishing a telecommunications meter approval scheme for Hong Kong.

The Telecommunications Authority .sees the requirement to set up such a scheme for the regulation of the fixed and cellular telecommunications carriers.

The aim is to establish customer confidence in the metering and billing operations of the telecommunications carriers by:

(a) laying down and maintaining a basis on which meter systems and billing systems of the telecommunications carriers will be evaluated;

(b) monitoring the ongoing compliance of the telecommunications carriers with the requirements of the approval scheme: and

(c) approving the meter systems and billing systems that meet the requirements of the approval scheme.

The Telecommunications Authority has also in mind to extend the scheme at a later stage to cover the Internet and other value-added services providers.

BABT, an internationally renowned testing and approving body in the telecommunications field, has been appointed by the United Kingdom Department of Trade and Industry to approve the meters operated by the public telecommunications operators in UK.

In this consultancy, BABT will recommend to OFTA an implementation plan for the establishment of a telecommunications meter approval scheme that can be adopted and used for the next 15 years.

To start the consultancy, an industry workshop will be held on March 26 with both the fixed and cellular telecommunications carriers.

BABT will submit a final report to the Telecommunications Authority by June.

End

10

I and Registry keeps customers better informed *****

The Land Registry has started to display in all of its regional offices its performance pledges as well as the actual performance levels and estimated service delivery time achieved by that particular office.

This is to keep customers better informed of the Registry's performance and standard of services they can expect from the office they visit, the Land Registrar. Mr Kenneth Pang, said today (Wednesday).

"We believe that well-informed customers will help us monitor our services more effectively and provide the feedback we need to further improve our services," he said.

Unveiling a plaque of performance pledges at the Urban Land Registry. Mr Pang said the Registry has achieved very satisfactory results in meeting all its enhanced performance pledges for 1995-96, both in terms of service delivery time and the quality of service.

"The new arrangement will also give due recognition to staff, especially those working in offices which have done well in meeting the performance pledges," he said.

"The Land Registry provides four major areas of services to the public, namely, registration of land documents, search of land records, supply of copies of records and certification of land documents.

"Currently the Registry's target is that at least 95 per cent of the requests for services is met within the pledged delivery time."

End

11

Value of manufacturers' orders-on-hand in January * * * ♦ *

The value of manufacturers' orders-on-hand for local production in January 1996 increased by 2% over a year earlier, according to the provisional results of a monthly survey released today (Wednesday) by the Census and Statistics Department.

Comparing January 1996 with January 1995, increases in the value of orders were registered in the electrical products industry (+9%), the fabricated metal products industry (+9%), the electronic products industry (+7%) and the printing and publishing industry (+1%).

The value of orders for the plastic products industry showed little change.

On the other hand, decreases in the value of orders were recorded in the textiles industry (-8%) and the wearing apparel industry (-2%).

Compared with December 1995, and bearing in mind this comparison may be affected by seasonal factors, the value of manufacturers' orders-on-hand in January 1996 increased by 6%.

The Monthly Survey of Orders-on-hand covers a sample of some 300 manufacturing firms engaging 50 or more workers.

Manufacturers' orders-on-hand refer to orders and parts of orders received earlier by manufacturers for local production which remain unfilled as at the end of the reference month.

Orders received by traders not engaged in production are included if such orders are further placed to manufacturers for production locally.

However, orders placed to manufacturing firms for production in China and other places outside Hong Kong are not included in this series of orders-on-hand statistics.

A spokesman of the department pointed out that caution should be exercised in interpreting the manufacturers' orders-on-hand figures in a single month. Instead, the trend movement of the series as displayed over a wider span of time points should be looked at.

The survey report for January 1996, at $7 a copy, is now on sale at the Government Publications Centre, Queensway Government Offices, Low Block, ground floor. Queensway, and at the Census and Statistics Department Publications Unit. 19th Floor. Wanchai Tower. 12 Harbour Road. Wan Chai.

12

Enquiries about the survey results may be made to the Industrial Production Statistics Section of the Census and Statistics Department on 2805 6441.

The following table shows the year-on-year percentage changes in the value of orders-on-hand in different manufacturing industries:

Percentage changes in the

value of orders-on-hand in

December 1995 over December 1994 (Revised) Janaury 1996 over January 1995 (Provisional)

All industries covered in the survey +4 +2

* Wearing apparel # -2

* Textiles - 15 -8

♦ Electronic products + 12 +7

* Electrical products +6 +9

* Fabricated metal products +5 +9

* Plastic products # #

* Printing and publishing + 10 + 1

# Changes within +/-().5%

End

Enrolment for safety and health management symposium starts

*****

Enrolment has started for a symposium on safety and health management organised by the Labour Department and Occupational Safety and Health Council to be held on April 2.

The symposium will provide an opportunity for the management and staff of Hong Kong companies who arc concerned with safety and health in workplace to share their experiences in safety management.

- 13 -

Three experts from Australia, Singapore and the United Kingdom will be giving talks. Participants will also be briefed on the future Hong Kong legal framework and government strategy in safety management.

The symposium is designed for managers and supervisors in industries and construction companies as well as people who are responsible for safety and health at work. It will be held at J W Marriott Hotel, Pacific Place, 88 Queensway, Hong Kong.

Enrolment fee ( including lunch) per person is $500. Forms can be obtained from the Labour Department’s Industrial Safety Training Centre, 13th floor, Harbour Building, 38 Pier Road, Central, and all branch offices of the Factory Inspectorate Division.

For enquiries, please call 2852 3562 during office hours.

End

Application for Putonghua summer courses grant invited *****

Primary and secondary schools are invited to apply for an Education Department grant to organise a 20-hour introductory Putonghua course for their students during the summer holidays in 1996.

Applications are open to government, aided and caput schools, all English Schools Foundation institutions and special schools (except those for the severely mentally handicapped), which can not at present offer Putonghua as a subject within school hours or as a special programme after school hours.

The course is part of the Government’s three-year programme to provide Putonghua education from 1996 to 1998 to schools which do not yet have formal Putonghua classes.

The course will be free to students. The school will receive a grant of $5,400 per class. Each primary school may apply to run up to two classes and each secondary school four. Related seminars will be organised for teachers and teaching materials provided for their reference.

Relevant circulars have been sent to schools. Applications should be received by the department by April 22.

Enquiries may be directed to the Chinese and Chinese History Section, Advisory Inspectorate, Education Department on 2892 6477 and 2892 6538.

End

- 14 -

Hong Kong Monetary Authority money market operations $ * * $ *

$ million Time (hours) Cumulative change (Smillion)

Opening balance in the account 2,007 0930 +794

Closing balance in the account 2,370 1000 . +800

Change attributable to : 1100 +795

Money market activity +763 1200 +795

LAF today -400 1500 +814

1600 +763

LAF rate 4.00% bid/6.00% offer TWI 123.6 *-0.2* 20.3.96

Hong Kong Monetary Authority

EF bills EF notes

Terms Yield Term Issue Coupon Price Yield

1 week 4.68 2 years 2802 5.16 98.42 6.14

1 month 4.90 3 years 3901 5.57 98.15 6.38

3 months 5.14 5 years 5103 6.75 99.46 7.00

6 months 5.21 7 years 7302 6.02 93.65 7.33

12 months 5.60 5 years M502 7.30 100.54 7.29

Total turnover of EF bills and notes - $34,362 million

Closed March 20, 1996

End

DAILY INFORMATION BULLETIN

ISSUED BY GOVERNMENT INFORMATION SERVICES BEACONSFIELD HOUSE, HONG KONG. TEL: 2842 8777

Thursday, March 21,1996

Contents Page No,

Transcript of Governor's media session.................................... 1

Results of pay TV review published for public consultation................ 3

Oil industry joins in to combat illegal use of diesel..................... 6

Consultancy teams to study language benchmarking appointed................ 7

Bill seeks to ban unsafe household electrical products.................... 8

Consumer price indices for February...................................... 10

Commitment to bring VM issue to a close reaffirmed....................... 16

Labour tribunals to be relocated to Mong Kok............................. 16

New appointments to HK Sports Development Board made.................. 18

Representation to EC on anti-circumvention actions....................... 20

Governor visits Kwai Tsing District...................................... 22

Masters urged to navigate at safe speed...............................

Eastern District by-election forum....................................... 23

Hong Kong Monetary Authority money market operations..................... 24

Transcript of Governor's media session *****

Following is the transcript of the media session by the Governor, the Rt Hon Christopher Patten, after visiting Kwai Tsing District this (Thursday) afternoon:

Governor: I’m delighted to have been able to visit Kwai Tsing again today. This is an area which is in the front line of Hong Kong's economic development, partly as a result they face a number of environmental problems, and I've been grateful for the opportunity of seeing some of them first-hand and discussing them with the chairman of the district board and members of the district board. So I'll be taking back some of the thoughts that I've received from the district board today. Any questions?

Question: What do you think about the Preparatory Committee saying that the 1994 National People's Congress resolution has given the legitimacy of the proposed provisional legislature?

Governor: I was interested that those who replied very quickly to the remarks 1 made yesterday, quickly and rather intemperately, didn't actually respond to the main point that I've made. Now it may be that over the coming months, members of the Preparatory Committee and Chinese officials will drum up all sorts of spurious justifications for dismantling the lawfully constituted Legislative Council here in Hong Kong, and I think the community will look at those justifications with a good deal of scepticism. Why? Because 1 think the view in the community is that there is only one purpose which Chinese officials are seeking, and that is to exclude from the legislature some of the politicians in Hong Kong who most clearly represent the majority view of Hong Kong. That is the purpose. Now let's hear some of the members of the Preparatory Committee and Chinese officials responding to that point. If they think that we are wrong, let them deny categorically that they will put forward any arrangements designed to exclude some of those politicians in Hong Kong who've demonstrated that they clearly represent majority opinion. They could be even more reassuring in what they say about the legislature. Fourteen members of the Preparatory Committee are themselves members of the Legislative Council. One of them addressed remarks on this subject yesterday. They work very happily alongside other members of the Legislative Council, members for example who are in the democrat party. I think those members of the Preparatory Committee should themselves state categorically that they won't support any proposals for a provisional legislature or for another Legislative Council which exclude specifically from membership some of those that they sit alongside in the Legislative Council today. Now until those points are addressed, the whole community is going to view these discussions within the Preparatory Committee with a very considerable amount of suspicion to put it no more strongly. So I hope those points will be addressed by Chinese officials and by members of the Preparatory Committee over the next few days. And I hope the Preparatory Committee will demonstrate that it's prepared to speak up for Hong Kong and not just go along with whatever some Chinese officials propose.

2

Question: Will Government compensate those excluded individuals?

Governor: Well, we've made perfectly clear that we are not doing anything to threaten the future of the Legislative Council. The Legislative Council was elected for. four years. Why do people want to disrupt its work? Do they want to disrupt its work because they want to have election arrangements in place which arc more fair? Do they disrupt its work because they want to have arrangements in place which are more democratic? Nobody thinks that for one moment. If there is disruption which leads to problems, then those who do the disrupting have to bear the consequences.

Question: But will the Government compensate for...?

Governor: I've just answered that question.

Question: (on container terminal 9)

Governor: Well, I was very pleased that at Mr Rifkind's meeting with Mr Qian Qichen, the Chinese Vice Premier in January, Mr Qian made it perfectly clear that the arrangement which emerged from the discussions between the commercial parties would be satisfactory to the Chinese side. 1 very much hope that those commercial negotiations will end satisfactory as soon as possible. They are still going on. Obviously we'd like to see them concluded in a satisfactory way as soon as we can and for us, a satisfactory conclusion as you know is one that combines continuing development of the facilities of the port with a little more competition.

Question: Do you think Britain can do anything at this eleventh hour now to prevent the setting up of the provisional legislature ... ?

Governor: Well, you heard what the Prime Minister said during his visit to Hong Kong. I think that if the Preparatory Committee and Chinese officials insist on tearing out the roots of democracy in Hong Kong, they will have to justify that to the people of Hong Kong and they will have to justify it beyond as well, particularly given the questions that I've raised which have still not received answers. But 1 am sure all of us in Hong Kong will go on asking those questions until somebody does answer them. Okay. Thank you very much.

End

3

Results of pay TV review published for public consultation ♦ ♦ ♦ ♦ ♦

The Government is proposing to offer two Video on Demand (VOD) programme service licences for application later this year, but no further pay TV licences will be issued for the time being.

A further review will be conducted in 1998 to consider whether any new pay TV or programme service licences should be issued and what adjustments should be made to the regulatory regime for licensees under the Television Ordinance in the light of market changes and technological advances.

The proposals were made following examination of an economic analysis of impact upon the television market of new services commissioned by the Recreation and Culture Branch late last year.

The review which followed looked at how the pay TV market could be deregulated in a structured and orderly manner, with minimal impact on both existing and potential broadcasters.

The Secretary for Recreation and Culture, Mr Chau Tak-hay, told a press conference this (Thursday) afternoon that the economic analysis had shown that the local pay TV and VOD programme service market was not ready to accommodate many new licensees.

”If the pay TV market was fully deregulated, the financial position of the existing pay TV licensee could deteriorate significantly,” he said, adding that even. partial deregulation could threaten its economic viability.

But the Government did not think it would be in Hong Kong’s interests to attempt to suppress the commercial exploitation of VOD technology, which would allow more choice to consumers, and help to develop the Information Superhighway in Hong Kong.

"Neither do we think that it would be reasonable to allow a single VOD operator to monopolise the market. Consumers would benefit from competition, both in terms of competitive pricing, and a wider choice of services,” he said.

"We therefore propose that while no more pay TV licence should be issued until after a review in 1998, two VOD programme service licences should be offered later this year, subject to the approval of the Legislative Council of the necessary amendments.

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"We intend to bring forward these amendments during the current legislative session if possible, or early in the following session."

Meanwhile, Mr Chau proposed to remove the following with a view to liberalise the television market:

* the restrictions preventing satellite broadcasters from bidding for domestic licences under the Television Ordinance, including pay TV, VOD programme services, and free-to-air licences;

the requirement on licensed satellite broadcasters to pay a service origination charge, in order to promote Hong Kong as a regional broadcasting hub;

the obstacles to domestic licensees competing in the regional satellite broadcasting market; and

the restriction on carrying advertising, for both the existing and future pay TV licensees with effect from June 1, 1996, subject to appropriate Codes of Practice.

The Government also saw no grounds to limit the number of channels which pay TV licensees may provide, or the amount of material which VOD programme service licensees can make available.

"There are no maximum restrictions on the current pay TV licensee, and we do not propose to introduce any," Mr Chau said.

On royalty payments, Mr Chau noted that the top rate at which royalties were payable by ATV and TVB was reduced in 1993, in anticipation of competition from Hutchvision, which was given permission to launch Cantonese programmes on Star TV in the same year.

"As you know, this competition has not yet occurred, although broadcasters continue to enjoy the benefits of the concession.

"We are therefore not persuaded that a further reduction is justified. However, we remain ready to consider the representations of broadcasters, and to reconsider our stance if it can be demonstrated that a fundamental change in the television market has already occurred," Mr Chau said.

5

Following the removal of the existing ban on advertising on pay TV, the Government proposed that pay TV and programme service licensees should be required to pay advertising and subscription royalties.

As regards licence fees, it remains government's policy that licensees should pay the full cost of preparing and administering their licences. The Government will take account of this when granting new programme service licences.

It will also take account of this policy in the mid-term reviews of existing licences and consider reintroducing to the Legislative Council proposals to charge fullcost licence fees in respect of those broadcasters, that is, ATV and TVB, whose midterm reviews were concluded recently.

Concern about possible domination of the media by a few large companies has prompted calls for restrictions on cross media ownership.

There are already restrictions on cross ownership of radio and television licensees. The Consumer Council also recommended last month that newspaper owners be disqualified from owning television licences.

The Secretary said there were arguments on both sides of the case.

"But we have decided on balance to propose that newspaper owners be disqualified from exercising control over domestic television licensees, except with the permission of the Governor in Council," he said.

The proposed disqualification of newspaper owners would prevent one owner from exercising control over a licensee if he also exercised control over a newspaper.

"Subject to the approval of the Legislative Council, we intend that this restriction should apply from today (Thursday), with safeguards for the rights of existing shareholders," Mr Chau said.

"Those persons who currently exercise control of television licensees, who would as a result of the amendment become disqualified persons, would be allowed to continue exercising control of the relevant licensee, provided that they did not increase their holdings after the proposals are published.

"This would allow existing shareholders to retain their shareholdings, if they wish, but means that others who acquire an interest in more than 15 per cent of the voting shares of a licensee under the Television Ordinance after today may be required to reduce their shareholdings to 15 per cent if our proposals become law."

6

The Government’s proposals are set out in a consultation paper which is available in English and Chinese, at the office of the Recreation and Culture Branch, 41st floor, Revenue Tower, 5 Gloucester Road, Wan Chai.

During the month-long consultation period which is scheduled to end on April 22, the Branch will solicit views from broadcasters, legislators, the Broadcasting Authority and other interested parties.

Public comments and suggestions are welcomed and should be sent to the Branch either by mail or fax 2511 1458.

End

Oil industry joins in to combat illegal use of diesel *****

The oil industry and the Customs and Excise Department today (Thursday) signed an agreement to start operating a reward scheme from April 1 in addition to the department's other similar schemes.

Five oil companies - Caltex, CRPC, Esso, Mobil and Shell - have contributed a total of $1 million to pay rewards ranging from $3,000 to $170,000 to anyone who provides information leading to the seizure and forfeiture of illicit diesel or conviction of persons so connected.

The department is determined to counter all kinds of illicit diesel activities including smuggling, unlawful distribution and sale.

Last year, a total of 1,469,800 litres illicit diesel was seized and 1,212 offenders were arrested in this connection.

The department welcomes the contribution of the oil industry in the campaign of combating against the illegal use of diesel oil.

The scheme will help to enhance the public's awareness of the seriousness of the problem and provide monetary incentive to persons who can supply useful information on illicit diesel activities.

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Information can be passed to the department:

(a) by telephone 2545 6182 (24 hours);

(b) by fax 2543 4962 (24 hours);

(c) by “Customs Crime Report" aerogramme, available at all Customs. Offices and District Offices;

(d) by letter to the Department, GPO Box 1166; or

(e) in person.

The identity of the person(s) providing information will be kept strictly confidential.

End

Consultancy teams to study language benchmarking appointed

*****

The Advisory Committee on Teacher Education and Qualifications (ACTEQ) has appointed two consultancy teams to develop language benchmarks for language and non-language teachers in schools.

The appointments are made on advice of its Task Force setting up to oversee the exercise to establish the language benchmarks as recommended by the Education Commission Report No 6.

The two teams, involve participation of the Hong Kong University, Chinese University and the Hong Kong Institute of Education, are expected to submit their recommendations around August setting out a framework of language benchmarks.

The consultancy studies will also include an assessment mechanism and the training required to bring new and serving teachers to the language benchmarks.

The principal investigators to conduct studies on setting benchmarks for teachers using Chinese as the medium of instruction and Chinese language (including Putonghua) teachers in primary and secondary schools are Dr Winnie Auyeung Lai, Department of Curriculum Studies, University of Hong Kong, and Mrs Ivy Tse of Hong Kong Institute of Education.

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The Consultancy team to study the setting of benchmarks for teachers using English as the medium of instruction and English language teachers in primary and secondary schools are Dr David Coniam, Department of Curriculum and Instruction, Chinese University of Hong Kong, and Dr Peter Falvey, Department of Curriculum Studies, University of Hong Kong.

The Task Force was chaired by Professor Felice Lieh Mak, and comprised ACTEQ members as well as co-opted members who are front-line language teachers.

End

Bill seeks to ban unsafe household electrical products *****

The Electricity (Amendment) Bill 1996, to be gazetted by the Government tomorrow (Friday), paves the way for enactment of regulations to provide for safety requirements of household electrical products.

The Bill will enable the Director of Electrical and Mechanical Services, to prohibit the supply of an unsafe electrical product, in the interests of safety, with "supply” being defined to include all of the commercial means through which a product may reach a consumer.

The Bill increases the maximum penalty for a first conviction of supplying a prohibited electrical product from a fine of $50,000 and six months’ imprisonment to a fine of $100,000 and one year's imprisonment.

The Bill will be introduced into the Legislative Council on April 3.

If enacted by the Legislative Council, the Bill will be followed by new regulations requiring that all electrical products designed for household use should comply with certain essential safety requirements to ensure that, during normal use of the product, the user is protected from electrical shock and other dangers from hazardous materials or design.

In addition, some electrical products will have to comply with specific safety requirements. These products are plugs, adaptors, lampholders, flexible cords, extension units (plug, flexible cord and socket) which frequently bring the public into close proximity with live terminals or conductors and pose particular danger if not designed for safe handling and operation, and unvented thermal type electric water heaters, which require special safety devices to regulate temperature and pressure inside them.

9

The safety requirements will be based upon well established standards recognised internationally.

The new regulations will make the supplier of a household electrical product responsible for ensuring that it complies with the safety requirements before it can be supplied to consumers. It will also make it an offence to supply an unsafe electrical product.

Explaining the proposals, Principal Assistant Secretary for Economic Services, Mr Eric Johnson, said from 1991 to 1995, 28 severe electrical accidents relating to unsafe household electrical products, of which 19 involved death and nine involved in jury, were reported to the Director of Electrical and Mechanical Services.

The proposals, he said, reflected the Government's concern that tests carried out by the Consumer Council had shown that some models of common household electrical products could not pass examination when examined against international safety standards.

"The new safety requirements for plugs and adaptors, introduced in March 1995 after wide consultation and a grace period for the trade to adjust, were successful in improving the safety of those products, so the Government is adopting a similar approach for other household electrical products," he said.

A spokesman for the Electrical and Mechanical Services Department said: "The majority of household electrical products available locally meet international safety standards, but there are still some sub-standard electrical products available in the market which could pose risks to the user".

"The objective of the new regulations is to eliminate unsafe electrical products from the market."

Existing safety requirements relating to plugs and adaptors, which came into force in March 1995, will be incorporated into the new regulations.

Over 60 organisations, including the Consumer Council, the electrical trade and other interested parties, were consulted as the proposals were being drawn up. A 12-month grace period will be allowed for the trade to make arrangements for complying with the new requirements.

End

10

Consumer price indices for February * * * * *

The Consumer Price Index (A) was 6.6% higher in February 1996 than a year ago. The corresponding rate of increase in January was 5.9%, according to the latest CPIs released by the Census and Statistics Department today (Thursday).

The rates of increase in the Consumer Price Index (B) and the Hang Seng CPI were also higher in February than in January - 7.3% against 6.8% for CPI(B); and 8.2% against 7.9% for Hang Seng CPI.

The Composite CPI, which is compiled based on the combined expenditure pattern of all households, showed an increase of 7.3% in February 1996, against 6.8% in January.

A government spokesman said reflecting a general moderation in inflationary pressures from both domestic and imported sources, the prices of most consumer items continued to show less rapid increases in February.

These included clothing and footwear, durable goods, alcoholic drinks and tobacco, housing cost, fuel and light, and meals away from home.

The faster year-on-year rate of increase in CPI in February than in January was mainly due to the festival effect, in particular, the difference in timing of the Chinese New Year, which occurred in mid-February this year, but in end January/early February last year.

While the prices of a number of basic food items and the charges for hairdressing and package tours were generally higher before the festival, the unusually cold weather in the latter part of February also caused a temporary upsurge in the prices of vegetables.

These together had lifted the increase in CPI in February on a year-on-year comparison.

Taking the first two months of the year together, the increase in CPI(A) averaged 6.2% over a year earlier. The respective increase was 7.1% for CPI(B), 8% for Hang Seng CPI and 7% for Composite CPI. They were all significantly slower tha