Hong Kong Yearbook - Annual Report for the Year 1985

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NG KONG PUBLIC LIBRAR

HONG KONG 1986

A review of 1985

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市政局公共圖書館 UCPL

3 3288 00218340 0

HONG KONG 1986

Editor:

Bill Knight,

Government Information Services

Designer:

Arthur Hacker,

Government Information Services

Photography: David H. P. Au, Eddie T. K. Cheng and

other staff photographers,

Government Information Services

Special

Contributor: Anthony Dyson (Chapter 1)

Statistical

Sources:

Census and Statistics Department

The Editor acknowledges all contributors and sources

Copyright reserved

Code No.: F300186 (ISBN 962-02-0001-2)

Price: HK$32.00

US$7.00 UK£5.50

URBAN COUNCIL PUBLIC LIBRARIES

Acc. No.

646422

Class. HK

951.25

Author

HON

HKC

Cover: The Legislative Council Building, viewed from Chater Garden.

    Frontispiece: The Governor, Sir Edward Youde, presiding over the Legislative Council.

Contents

Chapter

1

HONG KONG IN TOUCH WITH THE WORLD

Page

2

CONSTITUTION AND ADMINISTRATION

3

THE ECONOMY

4

INDUSTRY ANd Trade

5

EMPLOYMENT

5E

1

14

34

51

71

6

PRIMARY PRODUCTION

80

7

EDUCATION

87

8

HEALTH

110

9

Social Welfare

125

10

HOUSING

135

11

LAND, PUBLIC Works and Utilities

147

12

TRANSPORT

168

13

PUBLIC ORDER

188

14

IMMIGRATION AND TOURISM

208

15

THE ARMED Services anD AUXILIARY SERVICES

213

16

COMMUNICATIONS and The Media

219

17

RELIGION AND CUSTOM

231

18

RECREATION AND THE ARTS

236

19

THE ENVIRONMENT

254

20

POPULATION

268

21

NATURAL HISTORY

271

22

HISTORY

275

APPENDICES

285

INDEX

336

Frontispiece

Keeping in Touch

Events

Illustrations

Between pages

4-5

20-1

Statue Square

44-5

Watches and Clocks

60-1

Education

92-3

Flowers

Transport

Printing

Youth

Villages

END-PAPER MAPS

Front:

The Territory of Hong Kong

Back:

Communications and Trade

132-3

172-3

220-1

244-5

268-9

Appendices

Appendix

1

UNITS OF MEASUREMENT

Page

288

2

OVERSEAS REPRESENTATION

289

3-10

THE ECONOMY

292

11-12

INDUSTRY AND TRADE

303

13-16

EMPLOYMENT

307

17-19

PRIMARY PRODUCTION

312

20-23

EDUCATION

24-27

HEALTH

28

HOUSING

314

316

318

29-30

Land, Public Works and Utilities

319

}

31-32

TRANSPORT

321

33-36

PUBLIC ORDER

323

37

COMMUNICATIONS AND THE Media

327

38

RECREATION AND THE ARTS

328

39

THE ENVIRONMENT

328

40-43

CONSTITUTION AND ADMINISTRATION

329

44

SOCIAL WELFARE

334

لا

When dollars are quoted in this report, they are, unless otherwise stated, Hong Kong dollars. Since October 17, 1983, the Hong Kong dollar has been linked to the US dollar, through a new arrangement in the note-issue mechanism, at a fixed rate of HK$7.80=US$1.

**

*

*

Some figures in the text are estimated; actual figures appear in the appendices.

1

Hong Kong in Touch with the World

IN JUNE 1841, Captain Charles Elliot, RN, proclaimed that the merchants and traders at Canton, along with those from other centres 'have free permission to resort to and trade at the port of Hong Kong... and that Hong Kong being on the shores of the Chinese Empire, neither will there be any charges on imports and exports . . .'.

In December 1984, the Sino-British Joint Declaration on the future of Hong Kong provided that the Hong Kong Special Administrative Region, to be established on July 1, 1997... shall retain the status of a free port and continue a free trade policy, including the free movement of goods and capital.'

     These two statements, separated by more than 140 years, yet so similar in spirit and intent, summarise Hong Kong as it was then and as it is now - a place from which to trade. Indeed, the Hong Kong of 1841 offered few other prospects. Apart from its harbour - 'the noblest roadstead in the East' - the settlement had no room for agricultural development and possessed no natural resources. Even the small flow of fresh water which had earlier attracted passing ships was certainly not sufficient for growth.

     It was an unlikely beginning for a place chosen to be an administrative, commercial and military centre in the East, and contemporary comments on Hong Kong's prospects were predictably negative. According to The Bombay Gentlemen's Gazette, in an article comparing Hong Kong unfavourably with Chusan, in January 1841, Hong Kong had been ceded to Captain Charles Elliot 'and great offers were made by him and Commodore Sir Gordon Bremer to induce settlers to go there. The floating population on its being taken was about 7 800 smugglers, stonecutters and vagabonds; in March 1842 it rose to 12 360; in July 1845, it was about 19 000, . . .'

6

     But vagabonds or not, an administration was in place by mid-1844, civic improvements had begun and the basis of a township had started to emerge along the harbourside. The arrival of the traders however, proved more a trickle than the expected flood and even official views of Hong Kong's prospects which filtered back to London along the 15 000 nautical mile sea route around the Cape of Good Hope were pessimistic.

Hong Kong was, in the jaundiced view of an early Treasurer, Robert Martin, a ... small, barren, unhealthy valueless island, the expenditure on which outstripped revenue by a ratio of some 10 to one'. Moreover, Martin maintained, the precipices and rocky ravines would always prevent the growth of a large town, 'the decomposing granite and disintegrating sandstone emitted a foetid odour productive of disease, the harbour was being filled up by silt... and the conditions that contributed to the commercial prosperity of Singapore were entirely absent in Hong Kong'.

In the settlement, Martin concluded, he had 'in vain sought for one valuable quality', and he could see 'no justification for the British government spending one shilling on Hong Kong.'

2

HONG KONG IN TOUCH WITH THE WORLD

     Yet amid the prevailing pessimism there flickered more positive attitudes. By May 1847, the trader Alexander Matheson was able to tell a House of Commons Select Committee that 'the Chinese showed every disposition to frequent the place, and there was a fair prospect of it becoming a place of considerable trade.'

      While London, cut off from Hong Kong in more than a physical sense, chose to ignore the pessimists, there was a basis for complaint. Even for the purpose of trading, Hong Kong in its early days presented on unattractive prospect for its first settlers. Dispirited by the climate, to which they made little concession in regard to clothing or more abstemious appetites, the settlers soon came to fear the typhoons which arrived with little warning to batter their flimsy shelters. Crime was a significant problem. With disease beyond the control of those who misunderstood its causes, the cemetery filled up.

Tenuous communications, with home and even with Canton, depending on the vagaries of the sea, the weather and the pirates, added to the problems of traders and of the government, who already had to deal with a currency mixture of British coins, Spanish and Mexican silver dollars, rupees and Chinese Cash - a small coin rated at 280 to the shilling. And yet, in mid-1984, the Financial Secretary, Sir John Bremridge, the 18th successor to the pessimist Martin, and 140 years removed from his negative outlook, was able to note that in the preceding decade, Hong Kong's Gross Domestic Product (GDP) had grown by an average of eight per cent a year, and to forecast that in the decade to come its per capita GDP 'could with a bit of luck be of the same order as that in the United Kingdom.'

     Supporting this prediction, Sir John could point proudly to the post-war achievements of the settlement on which Martin had maintained that a shilling spent was a shilling wasted: Hong Kong is the financial capital of Asia, and the world's third most important banking and financial centre, trailing only London and New York; Hong Kong is the world's largest exporter of garments, toys, radios and watches; Hong Kong is among the world's top 20 trading countries and territories, it has the world's third busiest container port and the third busiest air cargo operation. Hong Kong is also the world's third biggest gold market, and a leader in the diamond trade;

Of the world's top 50 banking groups, 44 are represented in Hong Kong and the territory's own big bank, the Hongkong and Shanghai Banking Corporation, is among the world's top 20 banks and the biggest based outside the major industrialised

countries of Europe, North America and Japan.

This is the position of Hong Kong in the mid-1980s. Yet how and when did the former entrepôt port become the wealthy banking centre, the busy world trader, the diversified manufacturer it is today?

The Years of Industrial Growth

Hong Kong has been both beneficiary and victim of an accident of geography. Little more than a dot on China's southern flank, it is also on the edge of the Pacific Basin, with all that implies for trading opportunities in such a dynamic area. But by December 1941, this same geographical position made Hong Kong an obvious strategic target in the Pacific War. At the start of World War II, Hong Kong's population, swelled by refugees from southern China, was some 1 600 000. By the end of the war, and three and a half years of Japanese occupation, this had slumped to about 600 000. Yet by late 1947 the population had rebounded to 1 800 000, topping the pre-war figure, and by mid-1950 the population was estimated at 2 200 000.

HONG KONG IN TOUCH WITH THE WORLD

3

     War-battered Hong Kong began to rebuild both its physical structure and the entrepôt role that had successfully been expanded in the pre-war years, only to find the process hobbled by another conflict, this time in Korea. Once more the territory stood both to lose and to gain from a significant external influence. By gouging a hole in the traditional entrepôt trade, the United Nations ban on trading with China during the Korean War forced Hong Kong to reassess its economic prospects and realign its industries in the first of several substantial economic swings which have marked its development in the past 35 years.

     In the following decade, Hong Kong was well placed to take advantage of the influx of skills and capital which followed the Communist takeover in China in 1949. This provided a spur to manufacturing and particularly the production of light manufactured goods including textiles. While clothing exports had been only one-twentieth of the value of total exports in 1951, by 1962 they represented over one-third of domestic exports. Contemporaneously, the United States and the United Kingdom replaced China as Hong Kong's biggest export markets.

Manufacturing, and the exports of its products, was the cornerstone of Hong Kong's economy through the 1960s. Although textiles and clothing remained dominant, other product areas, such as toys, dolls and electronic goods, began to grow in importance. In the 1970s, the economic base continued to diversify and mature to such an extent that, despite ever increasing output, manufacturing industry was overtaken by the steadily expanding financial and service sector.

     By 1980, the manufacturing sector's relative contribution to GDP had fallen, while that of the financial and related services sector had risen to the point where both sectors were making nearly equal contributions of just under one quarter of GDP, completing another significant change of emphasis in Hong Kong's economy. While it is difficult to be precise about when such broad economic changes began to take place, it was during the 1970s that Hong Kong businessmen began to appreciate the need for diversification if the economy's rate of expansion was to be sustained.

     Hong Kong people have been described as having an almost instinctive grasp of economic reality, and as being pragmatic in outlook. These characteristics make them tend to accept that some of the economic losses imposed by external adversity cannot be avoided, and that such costs are best minimised by the economy adjusting rapidly to restore external competitiveness.

     This pragmatism is evident in the response of Hong Kong's industrialists to the pressures of the 1980s: increasing competition from neighbouring countries, rising production costs, ever tighter quota restrictions. The response was to move up-market, to increase the value per unit of output, and to diversify into new, more sophisticated product areas.

     Thus, while maintaining its strong base in the traditional textile and clothing industries, Hong Kong began to move increasingly into other industries, such as optical goods, metal and chemical products, and especially electronics manufacturing of all types. So rapid was growth in this sector that domestic exports of electronic products in 1984 were worth $24,600 million, making electronics the second largest export earner among manufactured products. Some 1 500 factories were turning out a huge range of electronic products, from integrated circuits, liquid crystal displays, calculators, microcomputers and television receivers to cordless telephones and telephones with memories and automatic re-dialling functions. Nearly half of the total domestic exports of electronic products were tele- communications and sound recording and reproducing equipment. Hong Kong also

4

HONG KONG IN TOUCH WITH THE WORLD

    has a substantial domestic market for telecommunications equipment, for the territory's businessmen are quick to take advantage of new electronic aids which keep them more effectively in touch with the world.

The shifts of emphasis in Hong Kong's economy, and the impressive trade figures they have produced, would not have been possible without the associated services that Hong Kong provides to support the flow of goods: the banking network providing finance for trade, for the expansion of existing plant or for the opening of new factories; the high technology communication which puts London, New York, Vancouver or Sydney only as far away as the time it takes to punch buttons on a computer keyboard or a telephone; the free flow of foreign currency flashing in and out in microseconds to finance a trade deal or take advantage of a sudden movement in exchange rates.

Keeping in Touch

Off Telegraph Bay, on the southwestern corner of Hong Kong Island, a group of local people are swimming from their pleasure junk. From a cruiser moored nearby comes the distinctive sound of a telephone ringing. A crew member shouts over the side, and a man climbs out of the water to take the call. The businessman enjoying a sunny weekend outing with his family may not be actively seeking business - yet he does not have to, for business will seek him.

     Although some people might regard a boat or car portable telephone as more of an intrusion than an asset, they are in widespread use in the territory and have come to symbolise Hong Kong's reliance on the latest technology to keep in touch with the world.

     It was more than a century ago that the first submarine telegraph cable was dragged ashore in Telegraph Bay, pulling Hong Kong into a new era of electronic communications. Suddenly, in 1871, London was minutes away, rather than weeks. In 1882, only six years after Alexander Graham Bell invented the instrument, Hong Kong installed its first public telephone system. While early growth was slow, the territory increasingly took advantage of developments in communications.

Another milestone was reached with the arrival of the first trunk cable in 1931 allowing telephone calls to be made from Hong Kong to Canton. Later, in 1949, radio telephone links were established to the United States, Britain, and to parts of China. A telex service began in 1959, and in 1967 the Southeast Asia Commonwealth submarine cable (SEACOM) introduced international telephone calls by cable. In 1969, the first satellite earth station opened, bringing international telephone and television transmission and reception.

In 1976, the introduction of International Direct Dialling (IDD) saw savings in time and money for international calls made without using an operator. The use of IDD has proved popular, and calls to more than 130 countries can now be direct-dialled. For those who lack an IDD connection on their home telephone, or for the businessman away from his office, card-operated IDD telephones have been installed in many areas of Hong Kong. Using a stored value ticket - not unlike those used by regular travellers on Hong Kong's Mass Transit Railway -- IDD calls can be made from some designated public telephones with a digital readout telling the caller how much remains stored on the ticket.

So popular is the telephone now in Hong Kong that small queues of people can often be seen outside shops, especially fast-food outlets, waiting to use telephones provided for free public use by the owners. And Hong Kong is one of the few cities in the world where one can buy a telephone on the way to or from work. A Cable and Wireless subsidiary has opened shops on some of the Mass Transit Railway stations where customers can

 KEEPING IN TOUCH

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Previous page: The satellite earth station operated by Cable and Wireless (HK) Ltd at Stanley. Top: The new unified Stock Exchange of Hong Kong is designed for technological efficiency. Above: The 'nerve centre' for foreign exchange dealing at a major international bank, one of the 143 banks in Hong Kong.

The first two towers of Exchange Square dominate the Central District waterfront. Con- struction of a third tower is underway.

This image is unavailable for access

18the Network

due to copyright restrictions. To view the image, please contact library staff for a printed copy of the copyright wor

The container port at Kwai Chung ranks among the top three in the world.

HONG KONG IN TOUCH WITH THE WORLD

5

purchase an instrument which needs only to be plugged into a socket previously installed at home.

       In mid-September 1985, Hong Kong's Governor, Sir Edward Youde, spoke to Britain's Minister of State for Industry and Information Technology, Mr Geoffrey Pattie, inaugurating the new Whitehill satellite communications centre in Britain, which provides digital satellite links to Hong Kong. In his conversation, Sir Edward noted the important role that efficient and reliable telecommunications, as exemplified by the new satellite link, played in Hong Kong's ties with Europe and the rest of the world. Hong Kong had gained yet another channel enabling it to keep in touch with the world, adding to a system which already offered services from a basic public telegram to advanced high-speed data communication.

      Hong Kong's telecommunications links, those wires and telephones, satellite stations, cables and microchips, telex machines and facsimile receivers which have been such an important factor in the territory's development as a leading business, financial and industrial centre, are a characteristic Hong Kong blend of public and private sectors. Essentially, the Postmaster General, as the Telecommunications Authority, is the regulatory body, while the day-to-day operation of telecommunications is left to the private

sector.

         The Telecommunications Branch of the Post Office ensures that laws on telecom- munications are observed, manages radio frequencies, monitors the performance of franchised companies, and advises the government on telecommunications planning.

      Hong Kong's external telecommunications are in the hands of Cable and Wireless (Hong Kong) Limited, in which the government has a 20 per cent stake. The other 80 per cent is owned by Cable and Wireless PLC in the United Kingdom. The company operates all Hong Kong's international telecommunications, installs and maintains radar and other navigational aids at the airport and provides engineering services and studio control for the government-owned Radio Television Hong Kong. Domestic telephone services are provided by the Hong Kong Telephone Company, in which Cable and Wireless PLC has a controlling interest.

      Cable and Wireless (HK) also provides international leased voice, data and telegraph circuits for private communication networks, ship-to-shore and air-to-ground communica- tions, international television transmission and reception, international and internal telex, the international telephone service and electronic mail.

      Apart from the services of Cable and Wireless (HK), electronic mail is operated by a number of other companies, and it is one of the fastest growth areas in Hong Kong's tele- communications facilities. The sender uses a personal or business computer to file a message into an electronic 'pigeonhole' in the main computer. The recipient receives the message the next time he checks the 'pigeonhole'.

       A variation of this, known as Fone-Mail, allows spoken messages to be sent, stored and received 24 hours a day, eliminating the problems of missed calls or engaged numbers. The storage facility is especially important to Hong Kong because of its ability to transcend international time zones: a message lodged from Hong Kong in, for example, the middle of the local business day, is waiting in London as soon as the London office opens for business, well after the Hong Kong sender has gone home.

      The system has the advantage of being intrinsically multilingual, and Hong Kong users can have the standard instructions on use to be spoken in English or Cantonese. This is important in polyglot Hong Kong, which has two official languages Chinese - but where many of the world's major tongues can be heard.

English and

6

HONG KONG IN TOUCH WITH THE WORLD

      Naturally, in a city where some 98 per cent of people are ethnically Chinese, more than half of them born in Hong Kong, Cantonese predominates. It is the language of southern China, an intricate tonal language baffling to the foreign ear, and often spoken so loudly and rapidly that a friendly discussion may sound, to the alien, like a heated argument.

There are, too, other Chinese dialects: the softer-sounding Putonghua, China's common language; Shanghainese, Chiu Chow, Hakka ... and of course English in as many variations as there are people to speak it: perfectly enunciated Oxford English, twanging American, drawling Australian, the distinctive Spanish-American accent of Filipino English. German, too, and Japanese, Hindi, Thai, French, Malay. And in Statue Square on Sunday, when Hong Kong's thousands of Filipino domestic helpers have the day off, the machinegun rattle of Tagalog.

      This multiplicity of languages in a small territory is one of the hidden factors behind Hong Kong's international success. In particular, the role of English, the international language of business, is recognised. The Hong Kong businessman able to communicate with a client in the United States, England, Canada or Australia, in the client's own language, has a decided advantage over many of his Southeast Asian competitors. The telephone, telex, and facsimile machine are tools of business, and language is another.

       Hong Kong's links to the world are both public and private. For example, the Hong- kong and Shanghai Banking Corporation uses circuits leased from Cable and Wireless for its own telecommunications network, on which some three million banking messages are sent to more than 100 offices throughout the Asian region each year. The bank's data exchange service, based in Hong Kong, also uses leased circuits carrying messages to branches and clients around the world.

      Such advanced technology is vital to the operations of Hong Kong's money brokers, who depend on it for the split-second deals which generate their profits. Traffic growth has been phenomenal: in 1985, Cable and Wireless handled more than 44 million minutes of outgoing telex calls, more than 142 million minutes of outward telephone calls and 1.3 million outward public telegrams.

      Rapid growth has also been seen in the facsimile service known as Bureaufax operated by Cable and Wireless and the similar service known as Intelpost provided by the Post Office, which can handle any type of written or printed material, from legal documents to the design of a garment or a computer printout. This service is particularly valuable to Hong Kong businessmen because of its ability to transmit and receive material written in Chinese characters, which do not lend themselves easily to other forms of data transmission.

      Not all messages to and from Hong Kong are business-related, however, and the sophisticated systems which allow communication with ships and aircraft are equally important to the territory's trade. Marine links are provided through the Cable and Wire- less Coast Station, which gives nearly instantaneous communication - radio, telephone, telegram, telex - to ships anywhere in the world through INMARSAT, the international maritime satellite system. Aviation links are provided by the Hong Kong Dragon, a long-range radiotelephone system which allows contact with the crew of an aircraft up to 8 000 kilometres from Hong Kong.

Banking and Finance

Statue Square, in the heart of Hong Kong's Central District, has but one statue. Frock-coated, the tall figure gazes across the square to the old Supreme Court building,

HONG KONG IN TOUCH WITH THE WORLD

7

      now the new home of Hong Kong's Legislative Council. The statue is not of a statesman, explorer, military man or an early Governor, but of a banker, Sir Thomas Jackson, and was erected, as the inscription notes, 'in grateful recognition of his eminent services to the Hongkong and Shanghai Banking Corporation, whose destiny he guided as Chief Manager from 1876 to 1902'.

       On Sir Thomas' right hand, across busy Des Voeux Road, is the bank's new head- quarters, 52 storeys of grey metal and glistening glass. Customers entering at ground level ride an escalator to the banking floor under an atrium which soars a cathedral-like 52 metres.

      To the left and right of the new building stand the more traditional headquarters of the Bank of China and the Standard Chartered Bank. Both banks have plans to replace these buildings - indeed, foundation work has begun on the new Bank of China on a site only a few hundred metres away. The building, designed by the Chinese-American architect I. M. Pei, is of towering pyramid-like structures and will be not only Hong Kong's but Southeast Asia's tallest.

      While these banks replace their headquarters with modern affirmations of past prosperity and faith in the future, they are only three of the 143 licensed banks operating in Hong Kong, along with 35 licensed deposit taking companies (DTCs) and 278 registered DTCs.

      Some of the banks have large and expanding local branch networks to meet domestic banking needs, while others, including many of the 131 bank representative offices, concentrate on international financing, loans and foreign currency trading.

      By providing essential finance, the banks have played a vital part in the flowering of Hong Kong's post-war economy, a process which was itself nurtured by a government policy for which there have been many descriptions, if no formal definition. It has been called market-disciplined free enterprise; the promotion of efficient free enterprise through respect for individual property rights; positive non-interventionism.

      What the policy means, in layman's terms, is minimal government involvement in the private sector, while ensuring an adequate base for monetary policy, the promotion of sound business practices and appropriate protection for depositors and investors.

       Flexibility remains the core of the policy, along with a disinclination to regulate merely for the sake of regulation. Controls do exist, or are devised, and applied as required, leaving the government like a horseman holding the reins loosely, but ready to pull them in if his mount shows signs of galloping off dangerously in the wrong direction. This role has sometimes been misunderstood, or the very will to act at all has been questioned, but fundamentally the government believes that it is not its business to be daily in the market place. In return, it expects an appreciation by industry and commerce that such a lack of interference helps them to get on with their tasks of producing and buying and selling, and that market forces mean rewards for the successful and no return for the failures.

      Addressing the Stock Exchange, London, in January 1985 on the political and commercial prospects for Hong Kong, the Governor, Sir Edward Youde, vowed that the government would remain non-interventionist and would regulate only when the orderly conduct of business, fair treatment of the work force, and the good name of Hong Kong so required.

      Hong Kong's good name did so require in October 1983 when, at a delicate stage of the Sino-British negotiations on the future of the territory, political uncertainty spawned a lack of confidence in the Hong Kong dollar, bringing subsequent fluctuations in the exchange rate.

8

HONG KONG IN TOUCH WITH THE WORLD

Uniquely for a financial centre of world standing, Hong Kong has no central bank, and note-issuing is handled by the Hongkong and Shanghai Bank and the Standard Chartered Bank. Note issuing arrangements were revised in October 1983 so that the rate for transac- tions between the note-issuing banks and the Exchange Fund was fixed at HK$7.80 to US$1. This had the effect of stabilising market rates for the Hong Kong dollar, which has subsequently traded within a narrow margin on either side of the link rate.

      Foreign currency trading, not only in the US dollar, but in Sterling, Deutschmarks, yen and a host of other international monetary units, has been at the heart of Hong Kong's emergence as the world's third largest financial centre, and has in itself been assisted by state-of-the-art communications and a policy which places no restrictions on the flow of funds. Currency dealers daily exchange hundreds of billions of dollars into pounds, marks into yen, lira into pesetas. Some of this serves international trade, but most of it is now believed to be money looking for the most profitable home. So lucrative has this business become that banks compete against each other 24 hours a day around the globe, making money out of money. Hong Kong is ideally placed to be one of the world's centres of this electronic market, capitalising on a thousand years of Chinese trading tradition. The Chinese, after all, invented money.

      In part, this is once again a happy accident of geography and the world's time zones, which allow the territory to trade while the world sleeps - and vice versa. At the start of a typical 8 a.m. to 5.30 p.m. business day in Hong Kong, it is midnight in London. As the Hong Kong dealers are snapping closed their briefcases and preparing to go home, the London market has burst into life. And by Hong Kong's dinner time, New York, too, has come on line.

But the Hong Kong currency trader's day begins long before he reaches his Central dealing room. At 6.30 a.m., Radio Television Hong Kong presents an economic roundup - beamed by satellite from the BBC in London - charting the movement of currencies over- night and latest prices for gold, silver and the less-glamorous metals and other commodities. Having digested this information, and supplemented it with a scan of leading Chinese and English newspapers for any important news that may affect currency movements, the dealer arrives at his office where, using an array of electronic aids and his computer screen, he quickly checks the movement of the currency in which he specialises. Sterling is moving up, and appears likely to strengthen further. With a quick final check on the market figures, he punches several buttons and buys five million pounds, then another three million as the market keeps climbing.

      By mid-morning he may have bought as much as 20 million pounds, reacting to a rising market or relying on an instinct honed by experience. A good dealer admits the job is addictive, requiring strong nerves, concentration and the ability to react quickly in the face of a falling market. Most dealers are young, under 30, and burned out in a few years of pressure. Even outside the office, dealers keep in touch by following the market fluctuations on a pocket-sized receiver which displays the latest quotes.

Now the market is falling and it is time to get out. But just as fast, large-scale buying can push the market up, too-rapid selling can force it down, so getting out must be done carefully. Five fingers wave, almost casually, and five million pounds which a few seconds ago were in Hong Kong are now in New York or London. Dealers in other cities are playing the same game at the same time, shuffling millions from bank to bank, country to country. Doing this for a living, they tend not to think consciously about the size of their deals, although at least one Hong Kong trader has a solitary pound note taped to his computer terminal as a gentle reminder of reality.

HONG KONG IN TOUCH WITH THE WORLD

The Stock Exchange

9

The international money movers are not alone in using the latest technology to make their millions: Hong Kong's unified stock exchange, due to open in 1986, will feature a $50 million computerised trading system. Some brokers fear that the new exchange will lack atmosphere, with the click of computer keyboards replacing the shouting, arm-waving, face-to-face bargain-making of a traditional trading floor. It has even been suggested that tapes be made at the existing stock exchanges, to be piped into the new premises as a sort of financial Muzak.

       Hong Kong now has four stock exchanges: the Hong Kong, Far East, Kam Ngan and Kowloon (though in a typical Hong Kong quirk, the Kowloon stock exchange is not in Kowloon at all, but on Hong Kong Island). The four are to merge and move into the new Exchange Square buildings on the Central waterfront. Brokers will enter transactions on their computer screens and the information will be flashed to the screens of other brokers. Deals can be made by telephone, and the computer does the bookkeeping.

      Despite its high-technology image, the new exchange will not be all flashing screens and buzzing telephones. A space has been left in the middle of the trading area for personal bargain-striking and those who need the one-on-one system to spur the flow of adrenalin. Transactions made here will, however, also be put into the computer.

      The amalgamation is expected to reduce the number of brokers from the present 900 to some 500-600 with some smaller brokers leaving the industry and others forming partnerships. Bank related brokers, previously barred from exchange membership, will also be entering the new exchange. While this will affect the small and medium-sized brokers, the unification of the four exchanges is certain to help Hong Kong to further develop as a regional and world financial centre.

       The ups and downs of Hong Kong's volatile share market are keenly followed by the man in the street. Many banks and some retail stores display latest prices on video screens for the benefit of customers, along with relevant financial information, including interest rates and currency fluctuations. Newspapers, radio and television also give prominent coverage to financial news.

Air Transport

New York's John F. Kennedy International Airport is more than 30 kilometres from downtown Manhattan. Heathrow Airport is 24 kilometres from central London, while Gatwick is nearly 20 kilometres farther out. Tokyo's Narita airport is 66 kilometres outside the city. Hong Kong International Airport, however, is less than five kilometres from Central District a drive of about 15 minutes, depending on traffic in the Cross-Harbour Tunnel.

      Known locally as Kai Tak airport, after a Legislative Councillor, Dr Ho Kai, and Mr Au Tak, who owned the land on which the small original airport was built, Hong Kong International Airport's single runway juts more than 3 300 metres into Kowloon Bay, forming Hong Kong's most important link with the rest of the world. The western approach to the airport is spectacular, and many a first time visitor to Hong Kong has stared from his aircraft window surprised, if not a little alarmed, to realise that washing, hung out to dry on bamboo poles from high rise housing in Kowloon is above the level of the aircraft's wings.

      Despite having only one runway and operating a night curfew, Hong Kong International Airport handles nearly 10 million passengers a year, ranking it seventh in the world for international air passenger traffic, and over 400 000 tonnes of air freight. From it, a total of

10

HONG KONG IN TOUCH WITH THE WORLD

32 international airlines operate scheduled services to about 75 destinations in Southeast Asia, the Middle East, North America, Europe, Africa and Australasia. The only significant gap in services is the lack of a direct link to South America.

      With some 1 000 scheduled passenger and freight services a week, the airport makes a vital contribution to tourism, business travel and trade. In 1984, by value more than a quarter of Hong Kong's domestic exports and a fifth of its imports were transported by air. Hong Kong's strategic position in Asia also makes the airport an important tranship- ment centre for the region.

      The major markets for airborne exports are the United States, West Germany, the United Kingdom, Japan and Canada. With many Hong Kong-made products being small and lightweight, and thus suited to carriage by air, the territory has seen a rapid growth in air freight. The air cargo terminal, which came into full operation in 1976, had an original annual capacity of 250 000 tonnes. The expansion of trade made a bigger terminal imperative, and extensions completed in 1984 gave the terminal the capacity to handle 700 000 tonnes of freight a year.

      The growth of aviation traffic through Hong Kong has also seen the development of an important maintenance service. The Hong Kong Aircraft Engineering Company has four hangars at the airport, providing complete airframe and engine overhaul facilities for almost any type of aircraft. It also provides maintenance and repair services for most of the airlines using Hong Kong.

      Work is continuing at the airport on a $270 million scheme to expand and improve the passenger terminal building. This is scheduled for completion in 1988. The two-level extension to the building will provide additional passenger handling facilities to meet the expected increase in passenger traffic from the present 10 million a year to 18 million by the early 1990s. Other new projects include the expansion of the existing apron to provide new holding areas and better access to aircraft parked in the outer bays. This extension will allow five Boeing 747 freighters to be handled at the same time.

      The ease of travel to Hong Kong, with its 'downtown' airport, is a fundamental part of its appeal to tourists, and the tourism industry plays an important role in the economy. The vast majority - some 90 per cent of visitors arrive by air, and total receipts from tourism in 1985 were more than $14,000 million. Tourist spending is one of Hong Kong's major sources of foreign currency, and creates a significant local job market. For the future, the Sino-British Joint Declaration provides that Hong Kong will maintain its status as an international and regional aviation centre and, by implication, its appeal as a centre for business and communication.

Sea Transport

Historically, Hong Kong's best asset has been not its small land area, or the more than five million people packed into it, but the stretch of water between the Kowloon peninsula and Hong Kong Island. The 5 000 hectares of Victoria Harbour form one of the world's great natural anchorages, along with San Francisco, Sydney and Rio de Janeiro. Not only does much of Hong Kong's trade depend on its ocean links with the rest of the world, but the harbour provides the major link between the Island (to local people, Hong Kong side) and Kowloon (Kowloon side), to the point where they make some 130 million trips a year on ferries, travelling to and from work, or visiting the outlying islands at weekends.

      The harbour has been in turn naval base, trading centre and tourist destination. Even today the arrival of a big passenger liner, such as the Queen Elizabeth 2, can draw crowds to the Star Ferry pier and the Ocean Terminal. While the boom in air travel has meant

HONG KONG IN TOUCH WITH THE WORLD

11

fewer liners calling at Hong Kong, the harbour is busier than ever, with some 13 000 ocean- going vessels arriving each year. Turnover is rapid. Ships working cargo while moored at buoys are in port for an average of less than three days, while container ships turn around in 13 hours, giving Hong Kong the fastest turn around rate in Asia. On average, some 140 ocean-going ships are working in the port every day, and more than 200 can be accommodated if necessary - for example during a typhoon.

The tradition of an efficient shipping service is particularly important to Hong Kong because more than 90 per cent in volume of all imports and exports goes by sea. Hong Kong's situation on the Far East trade routes is of growing importance in the context of the fast-developing Asian Pacific Basin. The territory's geographical position allows it to focus on developing access to China and to Southeast Asia. In the first half of 1985, ocean shipping was up 11 per cent, total cargo volume was up more than 13 per cent, and China cargoes up 35 per cent, compared with the first half of 1984.

Hong Kong has long relied on the mid-stream loading and unloading of cargo, and despite the growth of containerisation, deepwater harbour moorings retain their value. Cargo for ships moored in mid-stream is taken on lighters and junks to and from land-based cargo handling areas, both public and private. More than 2 000 lighters and junks, all privately owned, work in this trade, with the vessels often being both home and workplace for the families who operate them. As cargo is loaded or unloaded from the hold, laundry flutters from a line at the rear of the cabin.

      Hong Kong's container port at Kwai Chung is the third busiest in the world, after Rotterdam and New York. About half of Hong Kong's inward general cargo arrives in containers, while about three-fifths of the outward cargo is also in containers. More than two million TEUs (20-foot equivalent units) were handled in 1985. For perspective, this was three times the throughput at England's largest container port, Felixstowe. The container handling system is being expanded in three phases to prepare for expected future growth, beginning with reclamation and going on to the construction of three new terminals to be finished by the early 1990s.

      Along with physical facilities, the present and future successful operation of the port of Hong Kong requires a substantial legal framework. Shipping is specifically mentioned in an annex to the Joint Declaration on the future of Hong Kong, which confirms that private shipping businesses, including container terminals, may continue to operate freely. It also provides for the establishment of an autonomous shipping register.

      Ships arriving in Hong Kong follow the same approaches as the sailing ships of the early days. Entrance is through the East Lamma Channel from the west and the Tathong Channel from the east. These approaches and the harbour itself are equipped with a comprehensive series of navigational aids which, with the traffic separation schemes operating throughout the approaches, provide safe operation for vessels by day or night. The Marine Department is also developing, in association with Canadian marine authorities, a vessel traffic management system. The idea behind this system is to ensure the safety and efficiency of the port and its approaches by providing almost solid cover of all Hong Kong waters used by ocean-going vessels.

      Hong Kong is an important centre for the recruitment of seamen. Some 11 000 registered Hong Kong seamen serve on some 950 foreign-going vessels flying various flags.

The China Connection

The rapid increase in the volume of trade with China has strengthened economic ties and co-operation between the two centres and Hong Kong, as the Asia-Pacific region's major

12

HONG KONG IN TOUCH WITH THE WORLD

financial centre, should also be able to increase its contribution of expertise in the financial and related services which link China with the rest of the world.

While the first half of 1985 saw Hong Kong's domestic exports to its former traditional markets decline, those to China grew by 70 per cent in real terms over the same period in 1984. Reflecting the adoption of more liberal economic policies, China's demand for imports increased rapidly, and included Hong Kong-made products as well as foreign products imported through Hong Kong. Unlike Hong Kong's domestic exports to other parts of the world, domestic exports to China include a significant proportion of semi-manufactures for use in Chinese factories.

In addition to being the largest source of Hong Kong's re-exports, China has become the largest market for re-exports through Hong Kong. China's share of this market rose from 22 per cent in 1983 to 34 per cent in 1984 and to 47 per cent in the first half of 1985 representing a growth of 140 per cent in money terms.

The late 1970s witnessed the explosive re-emergence of Hong Kong's traditional role as the entrepôt for a nation whose determination to modernise its economy was exemplified by the adoption of its 'open door' policy. In the process, Hong Kong has become China's second largest trading partner, trailing only Japan, and China has overtaken the United States to become Hong Kong's biggest single trading partner. Between 1978 and 1984, the value of Hong Kong's domestic exports to China, shooting up at an average annual growth rate of more than 120 per cent, leaped from $81 million to $11,280 million. Re-exports also grew rapidly, from $214 million in 1978 to $28,060 million in 1984.

China's expansion and diversification of its direct trade and economic links with other parts of the world brought predictions of a choking-off in Hong Kong-China trade. Instead, Hong Kong has become an ever expanding conduit for China's trade with the outside world, relying on excellent communications and trade handling facilities and its historical position as the best and longest established door to China, a door that remained at least partly open when all others were closed.

      The extent of this trade boom is revealed in figures for Hong Kong exports to China. For example, exports to China of textile yarn, fabrics, made-up articles and related products which in 1978 were worth $39 million topped $2,030 million in 1984. Shipments of telecommunications and sound recording and reproducing equipment leaped from 1978's $1 million to $2,050 million in 1984 - in itself an indication of changing trends in China's economy. Apparel and clothing accessories, worth a mere $400,000 in 1978 rose to $512 million in 1984. Hong Kong's total world trade (imports, domestic exports and re-exports) rose from 1978's $116,960 million to $444,810 million in 1984.

So, along with its proportional importance to total trade, Hong Kong-China trade growth has been reassuring for a territory in which the sum of imports and exports represents some 180 per cent of GDP, and one which remains vulnerable to any adverse factor affecting exports.

      In harness with the growth in cross-border visible trade has come an expansion of invisible trade, as China seeks to update its knowledge of management techniques and to learn how best to apply modern technology. The flow of Chinese visiting Hong Kong to attend courses, and of Hong Kong experts going to China to give them, has risen steadily since 1979. While much of the emphasis has been on data processing and general computer applications, other fields of mutual interest and benefit have ranged from banking to industrial manufacturing management. And this from a 1 068 square kilometre territory which imports some 80 per cent of its food and a significant proportion of its fresh water from across the same border.

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Previous page: A ballot box being emptied for counting of votes in the Legislative Council elections held in September. Above: The Chief Secretary, Sir David Akers-Jones, at the counting centre for functional constituencies.

TESTED

L.CONFESTED

JACONTESTER

農看處

NOTEBO

The British Minister of State with responsibility for Hong Kong, Mr Timothy Renton, charting to Vietnamese refugees during a five-day visit in October.

The Vice President of the United States, Mr George Bush, made a three-day visit in October.

and was met on arrival by the Governor, Sir Edward Youde.

A member of China's State Council, and Director of the council's Hong Kong and Macau Affairs Office, Mr Ji Pengfei, made an official visit in December. Here he is seen admiring an electronic robot presented to him by the Chairman of the Trade Development Council, Miss Lydia Dunn, at the TDC's Display Centre.

132

=

A new landmark on the Wan Chai waterfront, the Hong Kong Academy for Performing Arts. was opened by the Governor in September.

20

The Hong Kong Stadium was packed for the return leg of Hong Kong's World Cup qualifying match against Japan.

1

3

Tin

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A Community Chest charity walk was held on the new Tolo Highway in September.

HONG KONG IN TOUCH WITH THE WORLD

13

The development of Hong Kong as an entrepôt in general, and for China in particular, has been both cause and effect of its evolution as a financial, commercial, communications and business centre in Asia and its efficiency as a transhipper of goods: more than 56 000 aircraft movements a year, and the arrival and departure of 137 million net registered tonnes of shipping. Some 47.5 million tonnes of sea cargo went in or out in 1984, along with 417 000 tonnes of air cargo. Another 4.9 million tonnes of cargo went to and from China by land in the same year.

       For Hong Kong's overseas trade, 1985 was a difficult year, with the notable exception of Hong Kong-China trade. Presenting his revised estimates for economic growth in late September, the Financial Secretary, Sir John Bremridge, noted that while domestic exports in the first half of the year had been down, re-exports were up, there was a low inflation rate and virtually no unemployment. Sir John also noted that 1984 had been an exceptional year for domestic exports and, given the state of demand in most of Hong Kong's markets, it had, in retrospect, been unrealistic to expect as good a performance in 1985. Com- paratively, Hong Kong had done well, though the slowing in the growth of visible trade was also expected to see a drop in net exports of services such as shipping, air transport, insurance and finance. In the light of this, and the possibility of a fall in the growth rate of re-exports in the second half of the year, Sir John adjusted his forecast of the growth rate in real terms of the gross domestic product in 1985 to 41⁄2 to five per cent, down from a budget forecast of about seven per cent.

It was also pointed out that a Hong Kong in touch with the world was a Hong Kong reliant on the world, and as always vulnerable to external forces. Among the most dangerous of these was the call for further protectionist measures, especially in the United States. Measures being considered in this area would, if they became law, undermine not only world textile trade, but also the Multi-Fibre Arrangement and the General Agreement on Tariffs and Trade.

      So 1985 has seen Hong Kong begin building a future on the solid foundation laid by the Joint Declaration. However, the growing cloud of international protectionism remains a positive threat to a territory which must trade to survive, and which throws up no walls of its own to the import of other people's exports. The financial services sector in Hong Kong remains equally open to the rest of the world.

      Hong Kong believes that any extension of protectionist measures would not only be damaging to world trade as a whole, but doubly unfair to a territory which itself imposes no restrictions. The fight against protectionism, and the encouragement of freer world trade, will remain vital goals for Hong Kong now and in the future.

Given success in this fight, Hong Kong will be well-placed to fulfil what its people believe to be its ultimate destiny - to be the regional capital city of the Far East. Thus Hong Kong, in touch with the world, will have acquired an additional dimension.

2

3A

Constitution and Administration

T3

     HONG KONG is administered by the Hong Kong Government, and its administration has developed from the basic pattern applied in all British-governed territories overseas. The head of the Hong Kong Government is the Governor. Under the terms of the Joint Declaration of the British and Chinese Governments on the future of Hong Kong which entered into force on May 27, 1985, Hong Kong will become with effect from July 1, 1997 a Special Administrative Region of the People's Republic of China.

Role of the Governor

The Governor is the representative of the Queen in Hong Kong. He has ultimate direction of the administration of Hong Kong and is also the titular Commander-in-Chief. As head of the government he presides at meetings of both the Executive Council and the Legislative Council. The Executive Council offers advice to the Governor on which he makes directions. The Bills which are passed by the Legislative Council must receive the Governor's assent before becoming laws.

      The Governor is in close touch with the administration of the territory and exerts a major influence over the direction of affairs. Sir Edward Youde has been the Governor of Hong Kong since May 1982.

      The Governor is appointed by the Queen and derives his authority from the Letters Patent passed under the Great Seal of the United Kingdom. The Letters Patent establish the basic framework of the administration of Hong Kong and, together with the Royal Instructions passed under the Royal Sign Manual and Signet which lay down procedures that must be followed, form the constitution of Hong Kong.

The Letters Patent specifically create the office of Governor and Commander-in-Chief of Hong Kong, and require him to observe its laws and the instructions given to him by the Queen or the Secretary of State. They also deal with the constitution of the Executive and Legislative Councils, and the Governor's powers in respect of legislation, disposal of land, the appointment of judges and public officers, pardons, and the tenure of office of Supreme Court and District Court judges.

      The Royal Instructions deal with the appointment of members of the Executive and Legislative Councils, the nature of proceedings in the Executive Council, the Governor's responsibility to consult the Executive Council and his right to act in opposition to it. They also deal with the membership of, and election to, the Legislative Council, the nature of proceedings there, the format of the legislation passed by the council, and the nature of legislation which may not be passed. The Standing Orders of the Legislative Council, made under the authority of Royal Instruction XXIII, provide how Bills are to be passed. (Several amendments were made to the Standing Orders in March and July 1985 with a view to improving the procedures followed by the council.)

CONSTITUTION AND ADMINISTRATION

Central Government

Executive Council

15

The Executive Council consists of four ex-officio members - the Chief Secretary, the Commander British Forces, the Financial Secretary and the Attorney General - together with other members who are appointed by the Governor on the instructions of the Secretary of State. There are, as at December 31, 1985, 10 appointed members - eight unofficial and two official. Appointed members hold office for fixed periods.

The council meets once a week in camera, and its proceedings remain confidential, although many of its decisions are made public. The function of the council is to advise the Governor, who is required by the Royal Instructions to consult it on all important matters of policy, other than those which are too urgent to allow the council to be consulted (in which case the Governor must explain to the council as soon as possible what action he has taken). The Executive Council's advice on matters of policy involving the expenditure of public funds is subject to the approval of the necessary funds by the Finance Committee of the Legislative Council. The council also considers all principal legislation before it is introduced into the Legislative Council, and it is responsible for making subsidiary legislation (regulations) under a number of ordinances.

       Under the Royal Instructions, it is the prerogative of the Governor to decide what matters should be put before the council. Should a member request the discussion of a specific matter and the Governor refuses his permission, then a record of both the request and the refusal must be entered in the minutes of the council, should the member so desire. Constitutionally, the council advises the Governor who then makes a decision. If he decides to act against the advice of the Executive Council, then the Governor is required to report his reasons to the Secretary of State.

      The Governor in Council - the Governor acting after consulting the Executive Council - also considers appeals, petitions and objections under those ordinances which confer a statutory right of appeal.

Legislative Council

The Legislative Council is constituted by virtue of the Letters Patent, and its primary function is the enactment of legislation, including legislation for the appropriation of public funds. A Bill passed by the Legislative Council does not become law until the Governor gives his assent to it; after the Governor's assent a Bill becomes an ordinance without being subject to external approval, although the Queen has reserve powers to disallow an ordinance. The power of disallowance has not been used for very many years.

The Legislative Council has a maximum membership of 57, comprising the Governor, who is the President; three ex-officio members, namely the Chief Secretary, the Financial Secretary and the Attorney General; seven Official Members, 22 Appointed Members and 24 Elected Members.

The official members and appointed members are appointed by the Governor with the approval of the Secretary of State. Official members normally remain appointed for as long as they hold office under the Crown in Hong Kong. Appointed members can be appointed for up to three years and may be reappointed for further periods of not more than three years each.

Elected members took their seats following the first-ever election held on September 26, 1985. They were returned from nine functional constituencies and from 12 electoral colleges comprising the members of the district boards, the Urban Council and the Provisional Regional Council.

16

CONSTITUTION AND ADMINISTRATION

Each functional constituency represented an occupational or professional group: com- mercial; industrial; financial; labour; social services; medical; teaching; legal; and engineer- ing, architectural, surveying and planning. Of these, the commercial, industrial and labour functional constituencies returned two members each while the other six returned one member each.

      The district board members of the electoral colleges were grouped into 10 geographical constituencies, consisting of one, two or three district boards, representing roughly 500 000 people. Members of the Urban Council and the Provisional Regional Council formed separate electoral colleges.

In the normal course of events, elections will be held at three-year intervals. The Governor has power to dissolve the council, and on dissolution all elected members would vacate their seats and an election would be held within three months. A by-election would be held should a casual vacancy arise.

The Legislative Council meets in public. Before October 1985 it met once a fortnight but it now meets once a week. There is a recess of about two months in August and September. Proceedings are bilingual; members may address the council in Chinese and English, and facilities for simultaneous interpretation of the proceedings are provided.

Legislation is enacted in the form of Bills, which go through three readings and a committee stage. A question is put at each stage and is decided by the majority of votes. If a clear majority either for or against any motion is not apparent from a voice vote, the President may order the council or the committee to proceed to a division, when votes will be taken from members individually and recorded by the Clerk to the Council. Official members are expected to vote with the government on all issues, except those where a 'free vote' is expressly permitted. Private Bills, not representing government measures and intended to benefit particular persons, associations or corporate bodies, are introduced from time to time and enacted in the same way. All Bills after passing through the Legislative Council receive the assent of the Governor and are then gazetted as ordinances. Apart from the enactment of legislation, the business of the council includes two major debates in each legislative session: a wide-ranging debate on government policy which follows the Governor's address at the opening of the new session of the council in October each year; and the budget debate on financial and economic affairs, which takes place in February and March during the second reading of the annual Appropriation Bill.

      Both the unofficial appointed members and the elected members may also address questions to the government on public issues for which the government is responsible, either seeking information on such issues or asking for official action on them. Oral questions and answers are dealt with in the Legislative Council, and supplementary questions for the purpose of elucidating an answer already given may also be asked.

Other business of the council includes motions on subsidiary legislation, statements and policy papers (Green Papers and White Papers) for debate. A complete record of all papers laid before the council together with a verbatim record of proceedings (Hansard) is kept in respect of each legislative session.

Finance Committee

The Finance Committee of the Legislative Council consists of the Chief Secretary (chairman), the Financial Secretary, one other official member of the council (at present the Secretary for Lands and Works) and all the unofficial members of the council. It scrutinises public expenditure, both at special meetings held in March at which members examine the draft Estimates of Expenditure, and at regular meetings held throughout the year to

CONSTITUTION AND ADMINISTRATION

17

consider requests which entail changes to the provisions agreed by the Legislative Council in the estimates each year, or to note financial implications of new policies. The special meetings have been held in public since 1984 and all regular meetings have been in public since March 1985 unless the chairman has otherwise ordered in accordance with the decision of the committee. The Finance Committee has two sub-committees, the Establish- ment Sub-Committee and the Public Works Sub-Committee.

The Establishment Sub-Committee consists of 12 unofficial members of the Legislative Council, one of whom is the chairman, the Secretary for the Civil Service and the Deputy Financial Secretary. It examines in detail staffing proposals for directorate posts and for the creation of new ranks or changes in salary scales, and makes recommendations on them to the Finance Committee. It also examines reports on the establishments of departments.

The Public Works Sub-Committee consists of the Financial Secretary (chairman), the Secretary for Lands and Works and 18 unofficial members of the Legislative Council. It reviews the progress and priority of capital works in the Public Works Programme, and make recommendations to the Finance Committee on proposals for changes to the programme.

Public Accounts Committee

The Public Accounts Committee, established by resolution of the Legislative Council on May 10, 1978, is a standing committee of the Legislative Council consisting of a chairman and six members, all of whom are unofficial members of the council. Its main function is to examine and report on the findings in the Director of Audit's report on the audit of the government's annual statements of account prepared by the Director of Accounting Services, and on any matter relating to the performance of his duties and the exercise of his powers under the Audit Ordinance. The prime concerns of the committee are to see that public expenditure has not been incurred for purposes other than those for which the money was granted, that full value has been obtained for the sums expended, and that the administration has not been faulty or negligent in its conduct of financial affairs.

The Director of Audit's Report is tabled in the Legislative Council in November. The committee then meets in public and the controlling officers of different heads of expenditure give evidence on the different aspects of public expenditure covered in the Director of Audit's report. The committee's report is 'laid' on the table of the Legislative Council in January. The government's response to the report of the committee is contained in the government minute which describes the measures taken to give effect to the committee's recommendations or the reasons why acceptance of those recommendations is not considered appropriate. This minute is also laid on the table of the Legislative Council, within three months of the laying of the Public Accounts Committee's report each year.

UMELCO

The role of Unofficial Members of the Executive and Legislative Councils (UMELCO) has always been significant in the administration of Hong Kong, but will become increasingly so as members, in addition to being advisers, become more involved in policy making. At the same time, their role will also undergo changes as Hong Kong moves towards a more representative form of government, with elected members taking their seats in the Legislative Council for the first time.

       With the commencement of the new legislative session in October 1985, the enlarged Legislative Council has moved to new premises in the former Supreme Court building, renovated and renamed the Legislative Council Building. In addition to housing the

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Council Chamber, the building also provides accommodation for UMELCO members and staff of the UMELCO Office.

       Through their work, unofficial members are involved in most major public issues. Their responsibilities include advising on the formulation of government policies, participating in the enactment of legislation, monitoring the effectiveness of public administration and considering public complaints against government departments. They study and comment on all Bills and major policy initiatives proposed by the government and receive repre- sentations from public bodies or members of the public.

       Members have formed a total of 21 specialist panels which look in-depth at different areas of activity such as education and manpower, health and welfare, the Civil Service, housing, transport, trade and industry, public relations and matters concerning the future of Hong Kong. Besides meeting among themselves, panel members also hold regular meetings with senior government officials. The issues raised may be debated and publicly questioned in the Legislative Council. There are also UMELCO groups appointed by the Governor which monitor the handling of complaints against the Independent Commis- sion Against Corruption and the Royal Hong Kong Police Force. With regard to the latter, however, a new and expanded group, called the Police Complaints Committee, was being established to take over from the UMELCO Police Group from January 1986, with the new committee including UMELCO members and Justices of the Peace.

      Unofficial members keep in touch with what is happening throughout the territory by regular visits to government departments and to urban and New Territories districts. They obtain the latest information on development plans and the problems people face, and it is as a result of these visits that many of the questions in the Legislative Council are raised.

      The UMELCO Office provides members with administrative support and assists them with research. The office is not a government department, although it is funded by the government and includes a number of seconded government officers in its establishment. It is also a channel through which the public may express grievances and it handles all public complaints, appeals and representations on behalf of unofficial members alleging maladministration by government officers.

      In the light of impending constitutional changes in the system of government in Hong Kong, UMELCO has undertaken a review of redress systems in parallel with a similar review being conducted by the administration. A full record of the work of UMELCO is contained in its annual report.

Urban Council, Regional Council and District Administration

Urban Council

The Urban Council is the statutory council for the urban areas with a jurisdiction covering the provision of municipal services to almost four million people. As such, the council has considerable executive authority and is charged with full responsibility in a wide range of municipal functions. These functions include street cleansing, collection of refuse, control of general environmental hygiene, and enforcing - through licensing - requirements on the hygienic handling and preparation of food in, among others, restaurants, shops and abattoirs.

       During the year, the council conducted a comprehensive review of the policy governing street traders and public markets. District boards were consulted widely in the proposals contained in the review. Control of street traders (hawkers) has proved difficult because of the large scale and long tradition of the practice in Hong Kong.

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       Within the urban area, the Urban Council constructs and manages all public sporting facilities such as swimming pools, parks, playgrounds, indoor and outdoor stadia, tennis courts, football grounds, squash courts, basketball courts. In 1985, the council took over responsibility for the recreation and sports services in the urban areas previously run by the Recreation and Culture Department. The council manages museums, public libraries and the major cultural venues and multi-purpose facilities, including the City Hall, Queen Elizabeth Stadium and Hong Kong Coliseum. It also promotes cultural performances and runs a comprehensive programme of public entertainments throughout the urban areas.

The council's chief executive is the Director of Urban Services who controls the operations of the Urban Services Department with a staff of around 18 000. The director is charged with carrying out the council's policies and implementing its decisions.

       The council has been financially autonomous since 1973 and during 1985-6 was spending some $1,800 million on council-controlled activities and projects. The council is financed by a share of the rates which provides about 75 per cent of its income, the balance coming from various licence fees and other charges.

      The council consists of 30 members, 15 elected from district constituencies and 15 appointed by the Governor. It meets in public once a month when it passes by-laws, deals with finances, formal motions and questions on its activities. The council's Standing Committee now conducts most of its business in public and the Liquor Licensing Board and the Libraries, Food Hygiene and Clean Hong Kong Committees have opened their meetings to the public.

      The routine business of the council is conducted by 13 select committees and 15 sub-committees. Simultaneous interpretation is available at all meetings where required.

      The council has individual or collective ward offices spread throughout the urban areas where councillors deal with and answer complaints from the public on a great variety of matters. Although the majority of matters raised lie outside the council's jurisdiction councillors are often able to assist and obtain redress where appropriate from the various government departments and public bodies.

Regional Council

A new Regional Council will be set up on April 1, 1986. Two main purposes lie behind the decision to establish this council. The first is to achieve a more efficient provision of services to cope with the future increase in population in the new towns in the New Territories. The second is to rectify the anomalous situation whereby a wide range of services was provided to the public in the urban areas by the Urban Services Department under the direction of the Urban Council, while similar services were provided to the public in the non-urban areas by the New Territories Services Department under the direction of the central government.

      To allow some working experience to be gained before the Regional Council came into being, a Provisional Regional Council was established in April 1985 for a period of one year. In addition to advising the Governor on planning, inaugural and operational matters relating to the establishment of the Regional Council, the Provisional Regional Council also advised the newly formed Regional Services Department on environmental matters, public health, sanitation, hygiene, recreation and culture in the non-urban areas. The Provisional Regional Council consisted of 24 members, 12 of whom were appointed, nine were indirectly elected from the district boards in the non-urban areas, and three (the chairman and two vice-chairmen of the Heung Yee Kuk) were ex-officio members.

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In 1985, the Provisional Regional Council held 12 meetings, which were open to the public. The council set up three functional select committees and nine geographically based district committees: the former dealt with finance and administration, environmental hygiene, recreation and culture while the latter considered all operational matters within the purview of the council for each district. Meetings of the select and district committees were also open to the public. All meetings of the council and committees were conducted in Chinese and English with simultaneous interpretation provided where necessary. Discus- sion papers issued to the council and committees were in both Chinese and English.

The Regional Council to be established in April will comprise 36 members, 12 of whom will be directly elected, nine indirectly elected from the district boards in the Regional Council area, 12 appointed, and three (the chairman and two vice-chairmen of the Heung Yee Kuk) will be ex-officio members. It will elect its own chairman. ]

      The council will be a statutory body providing municipal services to 1.7 million people living in its area of responsibility. It will be a financially autonomous, corporate body with full control over its expenditure within the limits of its revenue resources. Its major sources of income will be from fees, charges and rates collected in its area. It will work through its executive department, the Regional Services Department, and it will be able to set up committees and sub-committees, within the basic framework provided for in the Regional Council Ordinance, for the better discharge of its functions.

      The Regional Council will maintain a close liaison with the district boards and the Heung Yee Kuk (a statutory body, representing the indigenous inhabitants, which advises the government on New Territories affairs) to ensure that local aspirations are taken into account in its deliberations.

Liaison will also be maintained between the Regional Council and the Urban Council to ensure that the policies in respect of the provision of municipal services in the two areas are consistent.}

District Administration

District boards are statutory bodies established in 1982 to provide an effective forum for public consultation and participation.

There are 19 district boards throughout the territory. They consist of appointed unofficial members, elected members from the constituencies and Urban Councillors or rural committee chairmen. The elected members are in the majority. The boards have a mainly advisory role, with substantial responsibility for the management of district affairs. In monitoring the government's performance and achievements, the district boards discuss a wide range of matters affecting the well-being of residents in the districts. District boards have also been allocated public funds for local recreational and cultural activities and for minor environmental work.

District boards are serviced by their respective district management committees chaired by district officers and comprising local government officials. The district management committees provide a forum for inter-departmental consultation aimed at producing more effective government at the district level.

       The second district board elections, which were the first held on a territory-wide scale, took place on March 7. In all, 501 candidates stood for election to 237 seats, with 24 of the candidates being returned unopposed. Of the 1.27 million registered voters in constituen- cies where seats were contested, 476 530 (or 37 per cent) turned out to vote, representing an increase of almost 140 000 voters compared with the elections in 1982. There were 150 000 registered electors in the uncontested constituencies.

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       Following the elections, a number of changes in district board administration were introduced with effect from April 1. These changes included the creation of a district board to serve Kwai Chung and Tsing Yi Island, which increased the total number of boards to 19. The district boards were also given greater management responsibilities for municipal facilities and services as well as for community centres.

        The size of the elected element in district boards was increased in 1985 to 237 seats compared with 132 for appointed members. The officials ceased to be board members but continued to be in regular attendance at board meetings to receive advice, present papers, answer questions and give explanations. A related change was that whereas district boards were previously chaired by district officers, members elected their own chairmen at the first post-election meetings.

As part of the development of representative government, the district board electoral colleges elected 10 members to the enlarged Legislative Council. This, together with the other changes described above, has enabled the boards to become even more effective in serving the interests of residents and in reflecting their views to the central government.

Links with the Urban Council, Regional Council and the Heung Yee Kuk All Urban Councillors sit on district boards. Elected councillors are ex-officio members of the boards of the districts in which their constituencies lie and appointed councillors are assigned to the various boards. The Regional Council will have a different direct link with the boards in its area of operation as each district board has a right to elect a representative member to the council. But in both regions stronger links than mere cross-membership are necessary and district boards are consulted on a wide range of council matters affecting them. The Regional Council, moreover, will establish special district committees which will include district board members to which it will likely delegate operational responsibilities at district level for many of its functions. In the urban areas, the Urban Council is cultivating a closer relationship with the boards through regular meetings with groups of district board chairmen. The Regional Council will also have a formal link with the Heung Yee Kuk through the ex-officio membership of the chairman and the two vice-chairmen on the council. Initially, three of its appointed members will also be chosen from members of the kuk to ensure a strong relationship with the traditional inhabitants of the New Territories.

Electoral System for the Urban Council, Regional Council and District Boards Elections to the Urban Council, Regional Council and district boards are on a constituency basis and through a broad franchise. Practically everyone who is 21 years of age or over and who is a Hong Kong belonger, or has been resident in Hong Kong for the preceding seven years, is eligible to apply for registration as an elector in the constituency in which he lives. Registration of new electors is conducted on a voluntary basis annually between August and September. The registration exercise for 1985 resulted in an addition of 20 149 new electors. At the end of the year, there were 1 441 540 electors, representing 47 per cent of an estimated total potential electorate of three million. Of these electors, 998 177 are resident in the urban areas and are entitled to vote at Urban Council elections and at district board elections in the urban areas; the remaining 443 363 are resident in non-urban areas and are entitled to vote at district board elections in non-urban areas and at the Regional Council elections in March 1986 (when the next Urban Council elections will also be held).

For district board elections, there are altogether 145 constituencies in the 19 districts - 83 constituencies in the 10 urban districts and 62 constituencies in the nine non-urban districts. For Urban Council elections, there are 15 constituencies, each covering an area made up

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of a number of district board constituencies in the urban areas. The new Regional Council will have 12 constituencies, each covering a number of district board constituencies in non-urban areas. In total, there are 237 elected district board members and 15 elected Urban Councillors, and the Regional Council will have 12 elected members.

      An elector may vote only in the constituency in which he has been registered. He may, however, stand for election to the Urban Council, the Regional Council or a district board in any constituency, provided he has been resident in Hong Kong for the preceding 10 or more years and that his nomination is supported by 10 electors in that constituency. Voting is by simple majority. Elections are held on a three-year cycle.

Electoral System for the Legislative Council

A new system for indirect elections to return unofficial members to the Legislative Council was introduced in 1985 as part of the further development of representative government in Hong Kong.

      The franchise for Legislative Council elections is necessarily restrictive. An elector must be a member of an organisation which forms part of the relevant constituency; where an elector may be eligible for more than one functional constituency he can, however, register in only one. However, if eligible, an individual may be registered to vote both in the electoral college and in the functional constituency to which he belongs. An elector who is not an individual must nominate an individual to be its authorised representative to vote at an election. Out of an eligible electorate of 434 in the electoral college constituencies, 433 have become registered. The number of electors registered in the functional constituencies was 46 645, representing about two-thirds of an estimated eligible electorate of 68 900.

The rules for candidature are simple: for an electoral college constituency, any person who is a registered elector under the Electoral Provisions Ordinance (and not necessarily be an elector in any electoral college constituency) and who has been resident in Hong Kong for the preceding 10 or more years may be nominated if supported by five electors in that constituency. For a functional constituency, any individual who is a registered elector under the Electoral Provisions Ordinance, has been resident in Hong Kong for the preceding 10 or more years and is substantially connected with a relevant functional constituency may be nominated if supported by 10 electors in the constituency concerned. In the elections held in September, a total of 39 candidates received nominations in the 12 electoral colleges; one was elected unopposed and the remaining 38 candidates contested the other 11 seats. Of the 409 electors in the contested constituencies, 404 cast their vote. A total of 25 candidates received nominations for the 12 functional constituency seats; five were elected unopposed and the remaining 20 candidates contested the other seven seats. Of the 43 076 electors in the contested functional constituencies, 24 806 cast their vote, a turnout of 57.6 per cent.

An absolute majority system of voting was introduced to ensure the return of candidates who commanded the greatest support of their electorate.

Advisory Committees

     The network of government boards and committees is a distinctive feature of the system of government in the territory which seeks to obtain, through consultation with interested groups in the community, the best possible advice on which to base decisions. Thus advisory bodies of one kind or another are found in nearly all government departments. In general, advisory bodies may be divided into five categories: statutory bodies which give advice to a head of department (such as the Endangered Species Advisory Committee);

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statutory bodies which give advice to the government (such as the Board of Education); non-statutory bodies which give advice to a head of department (such as the Airport Facilitation Committee); non-statutory bodies which give advice to the government (such as the Transport Advisory Committee); and committees which are executive in nature (such as the Chinese Temples Committee).

      Government officials and members of the public are represented on these committees. Well over 3 400 members of the public are appointed to serve on a total of 384 boards and committees, and some serve on more than one of these advisory bodies. These unofficial members are appointed on account of their specialist knowledge or expertise, or through their record or interest in contributing to the life of the community. Increasing importance has been attached to the contribution of unofficials to the formulation and execution of government policies and, in order to utilise their potential to the full, a systematic and regular monitoring of the composition and effectiveness of these bodies is carried out. The government also broadens the cross-section of representation and encourages the constant inflow of new ideas by maintaining, whenever possible, a reasonable turnover of membership.

The Executive

Role of the Chief Secretary

The Chief Secretary is the principal adviser to the Governor on matters of policy. He is the chief executive of the Hong Kong Government. Together with the Financial Secretary and the Attorney General, he is one of the three officers of the Executive with the right of direct access to the Governor.

The Chief Secretary has a very small personal staff. He exercises direction primarily as head of the Government Secretariat, the central organisation comprising the secretaries of the policy branches and their staff. Since 1902, when the office of Lieutenant-Governor lapsed, the Chief Secretary (or his predecessor, the Colonial Secretary) has deputised for the Governor during his absence. He is the leading official member of the Legislative Council and the chairman of the Finance Committee.

Role of the Financial Secretary

The Financial Secretary is responsible for the fiscal and economic policies of the Hong Kong Government, and is an ex-officio member of both the Executive and Legislative Councils. He is, in addition, a member of the Finance Committee of the Legislative Council, and chairman of the Public Works Sub-Committee of the Finance Committee. As the government officer with primary responsibility for Hong Kong's fiscal and economic policies, the Financial Secretary oversees the operations of the Finance, Monetary Affairs, Trade and Industry, and Economic Services Branches of the government.

The Financial Secretary is responsible under the Public Finance Ordinance for laying before the legislature each year the government's Estimates of Revenue and Expenditure. In his capacity as an official member of the Legislative Council, he makes a speech each year outlining the government's budgetary proposals and moving the adoption of the Appropriation Bill which gives legal effect to the annual expenditure proposals contained in the Budget.

      He is also personally responsible under a number of ordinances for carrying out various executive duties such as setting levels of certain charges and remunerations and overseeing the accounts of certain trust funds and statutory bodies.

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Role of the Director of Audit

CONSTITUTION AND ADMINISTRATION

The audit of all the government's accounts is carried out by the Director of Audit. He also audits the accounts of the Urban Council, the Housing Authority and more than 50 statutory and non-statutory funds and other public bodies, as well as reviewing the financial aspect of the operations of the multifarious government-subvented organisations working in Hong Kong. The director's appointment, tenure of office, duties and powers are prescribed in the Audit Ordinance. To ensure his complete autonomy and independence in the exercise of his functions, the Director of Audit is not a civil servant and the ordinance provides that he shall not be subject to the direction or control of any other person or authority. It also prescribes certain safeguards against his dismissal or premature retire- ment from office.

Structure of the Executive

The Executive of the Hong Kong Government is organised into branches and departments. The branches collectively form the Government Secretariat. There are currently 12 policy branches, two resource branches and a branch with special responsibility for co-ordinating measures to implement the terms of the Sino-British Joint Declaration on the future of Hong Kong. All branches are headed by secretaries.

The policy branches whose secretaries report directly to the Chief Secretary are Administrative Services and Information, City and New Territories Administration, Security, Housing, Education and Manpower, Lands and Works, Health and Welfare, Municipal Services and Transport. The Civil Service Branch, a resource branch, and the General Duties Branch also come under the aegis of the Chief Secretary. The policy branches whose secretaries report directly to the Financial Secretary are Economic Services, Monetary Affairs, and Trade and Industry. The Finance Branch, a resource branch, is also responsible to the Financial Secretary.

      The head of the Finance Branch is the Deputy Financial Secretary who, despite his title, is of the same rank and status as other secretaries.

With certain exceptions, the heads of government departments are responsible to the branch secretaries for the direction of their departments and the efficient implementation of approved government policy. The exceptions are such bodies as the Audit Department and the Independent Commission Against Corruption, whose independence is safeguarded by their director and commissioner respectively reporting directly to the Governor; the Judiciary, which is the responsibility of the Chief Justice; and the Legal Department, which is the responsibility of the Attorney General. There are currently 59 departments and agencies in this structure.

The office of the Deputy Chief Secretary was set up in October 1985 to co-ordinate the work on issues spanning the responsibilities of two or more branches and to undertake specific tasks in relation to constitutional development. Certain changes in the structure of the Secretariat have been recommended following the establishment of the Regional Council in April 1986.

Foreign Relations

The Role of the British Government and the Political Adviser

     Because of Hong Kong's status as a dependent territory, the Secretary of State for Foreign and Commonwealth Affairs is constitutionally responsible to the British Parliament for the

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actions of the Hong Kong Government and he has authority to give directions to the Governor of Hong Kong. In practice, however, such formal directions are rarely issued, and the relationship between London and Hong Kong is essentially one of co-operation. For example, one important task routinely undertaken by the Foreign and Commonwealth Office is to ensure that Hong Kong's interests and views (which are not always identical with those of the United Kingdom) are properly considered within the British Government machinery, particularly when new policies are being formulated by other Whitehall departments.

      Hong Kong's foreign relations are constitutionally the direct responsibility of the British Government. Thus the British Government is internationally responsible for ensuring that the Hong Kong Government fulfils its obligations under the many international conven- tions and agreements which extend to Hong Kong as well as to the United Kingdom. But in the day-to-day conduct of external affairs Hong Kong in practice now enjoys a considera- ble degree of autonomy, particularly regarding trade matters.

The Political Adviser is a senior member of the British Diplomatic Service, seconded to the Hong Kong Government to advise on the political aspects of Hong Kong's foreign relations. His office provides the principal channel of communication between the Hong Kong Government and the representatives in Hong Kong of foreign and Commonwealth Governments. Following extensive involvement in the Sino-British negotiations which culminated in the Joint Declaration, the Political Adviser's office, in conjunction with the General Duties Branch, will be closely involved in the work of implementing the Joint Declaration. The Political Adviser's office continues to offer advice, and, in some cases, to co-ordinate action on a great many more routine matters, notably in promoting the wide range of contacts between Hong Kong Government departments and their counterparts in Guangdong Province, particularly in the Shenzhen Special Economic Zone. Close and effective cross-border co-operation has developed in such diverse areas as opening new border crossing points and transport links, and in coping with environmental pollution and flooding problems, as well as on questions concerning immigration, customs, postal services and telecommunications.

External Commercial Relations

     Hong Kong has considerable latitude in the management of its external commercial relations. The General Agreement on Tariffs and Trade (GATT), the basic aim of which is to liberalise world trade and protect the most-favoured-nation principle, is the cornerstone of Hong Kong's external trade relations. The Multi-Fibre Arrangement (MFA), which aims at the orderly development and expansion of international trade in textiles, provides the framework within which Hong Kong negotiates bilateral restraint agreements with textiles importing countries.

Under GATT rules, Hong Kong, being a separate customs territory (from the United Kingdom), is treated as if it were a separate contracting party to the GATT. Hong Kong, because of its status as a dependent territory of the United Kingdom, is represented in the GATT by the United Kingdom speaking on behalf of Hong Kong.

When the United Kingdom joined the European Economic Community (EEC), the GATT was informed by Her Majesty's Government that a member of the United Kingdom delegation would continue to speak for Hong Kong. In practice, the United Kingdom spokesman in GATT meetings is invariably a Hong Kong Government official. This arrangement means that Hong Kong is able to take positions that are different from those of the EEC, and, by implication, the United Kingdom.

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Hong Kong Government Offices Overseas

The Hong Kong Government maintains representative offices in London, Geneva, Brussels, Washington and New York. The London Office is the largest and carries the widest range of functions among the overseas offices. Besides providing a point of direct contact in London between Hong Kong and departments of the British Government, Members of Parliament, the media and organisations with an interest in Hong Kong, it also performs a range of specialised functions. It is responsible for all recruitment in the United Kingdom to the Hong Kong Civil Service and the Royal Hong Kong Police Force and supervises further training courses. It keeps under review British commercial, economic and industrial developments and official thinking on international trade policies, and advises the Hong Kong Government on the likely repercussions of these developments. It incorporates an industrial promotion office to advise United Kingdom firms about opportunities for investment in Hong Kong industries. Another division of the office liaises with Hong Kong people in Britain and helps with problems arising from their living in Britain or relating to their families and interests in Hong Kong. It also provides advice and assistance to visiting Hong Kong residents, regarding problems encountered. The News and Public Affairs Division operates well-developed publicity services aimed at projecting Hong Kong's image to the British public. The Students Division looks after the interests of Hong Kong students in the United Kingdom and runs the Hong Kong Students Centre in London. With the ratification of the Joint Declaration, the London Office will continue to play a major representational role for Hong Kong.

      Apart from playing a much wider representational role for Hong Kong, the other overseas offices are heavily engaged in developing Hong Kong's commercial affairs in the countries they cover. The Geneva Office represents Hong Kong, through membership in the United Kingdom delegation, in the General Agreement on Tariffs and Trade (GATT), and the United Nations Conference on Trade and Development (UNCTAD). It keeps under review developments arising from the deliberations of the GATT, the UNCTAD and other international organisations in Geneva. The Brussels Office represents Hong Kong's economic and related interests concerning the European Community and the governments of the Member States (other than the United Kingdom). The New York and Washington Offices keep under review economic or other developments, proposed legislation, and other matters in the United States of America that might affect Hong Kong's economic interests in general and its trade with the United States in particular. The overseas offices are also developing a wider role in the public relations field. To this effect, a public relations company has been appointed as the Hong Kong Government's consultants in the United States, working under the direction of the Commissioner (New York). A senior officer has also been posted to the Brussels Office to strengthen Hong Kong's representations in the European Economic Community and its Member States (excluding the United Kingdom). Details of representation overseas are at Appendix 2.

Civil Service

The Civil Service provides the staff for all government departments and other units of the administration. With Hong Kong's centralised form of government, the Civil Service operates a wide range of services which in many countries would be administered by other public authorities, for example medical services, public works and utilities, urban cleansing and public health, education, fire services and the police force. The departments in charge of these areas - namely the Medical and Health Department, with an establishment of 24 338, the Lands and Works group of departments (22 176), the Municipal Services group of

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departments (26 423), the Education Department (6 298), the Fire Services Department (6 513) and the Royal Hong Kong Police Force (30 307) - account for 64.78 per cent of the establishment of the entire Civil Service. During the 1984-5 financial year, the Civil Service establishment grew by less than two per cent mainly to provide additional services to the community in the medical field and in the disciplined services. At April 1, 1985, the total strength of the service was 172 641, more than 98 per cent of this number being local officers.

       Recruitment and promotions to the middle and senior ranks of the Civil Service are subject to the advice of the Public Service Commission which is independent of the government. The commission has a full-time chairman and leading citizens are appointed as members on a voluntary basis.

the

       The government is advised on matters relating to pay and conditions of service by two independent bodies. The Standing Committee on Directorate Salaries and Conditions of Service advises on matters affecting directorate officers (the 1000 most senior civil servants). During the year, the Standing Committee completed its ninth overall review of directorate salaries and conditions of service. The Standing Commission on Civil Service Salaries and Conditions of Service deals with all other civil servants. During the year, commission completed its review of the job-related allowances in the civil service and recommended several improvements to the current system. It continued its study of the way in which fringe benefits should be valued for the purpose of comparing the total pay package of civil servants with that of employees in the private sector, and engaged consultants to advise on certain aspects of this subject. The commission also monitored the conduct of the 1984-5 pay trend survey, reviewed the methodology used in the survey, and tendered advice on the pay structure of several individual grades.

      Responsibility for the management of the Civil Service lies with the Civil Service Branch of the Government Secretariat. The branch deals with such matters as pay and conditions of service, appointments, staff management, manpower planning, training and discipline and is also the focal point for consultation with the principal staff associations.

       The government fully recognises the value of good staff relations in the Civil Service and apart from providing welfare facilities to the staff, much effort is devoted to the promotion of staff consultation. The consultative machinery comprises two central consultative councils, namely the Senior Civil Service Council and the Model Scale I Staff Consultative Council, and consultative committees in the departments. Outside these councils and committees, individual members of the Civil Service or staff associations have ready access to their heads of departments or grades and the Civil Service Branch.

      Efforts to improve productivity and quality of service at the point of delivery to the public continued in 1985. During the year, studies were conducted at 319 selected offices. The implementation of the recommendations of these studies resulted in improvement both in the quality of the service and the efficiency of the offices.

      The government attaches great importance to the training of civil servants to improve their operational efficiency, to prepare them for higher responsibilities and to meet the developing manpower requirements of the service. The Civil Service Training Centre organises management and language training, and provides advice and assistance to departments on training matters. The centre also administers the Government Training Scholarship Scheme and various overseas training programmes.

      A series of courses designed to prepare mid-career officers for senior management responsibilities is being conducted under the auspices of the Senior Staff Course Advisory Board. Each course lasts for 12 weeks and has up to 40 participants, including a few from

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the private sector. Since the inception of the programme in September 1984, 96 officers and 12 private sector participants have attended the courses.

Language

Chinese and English, the two official languages of Hong Kong, are widely used, the former among the local Chinese community and the latter among the commercial and financial circle. Laws are enacted in English but Chinese translations are provided for selected pieces of legislation. Cantonese, a South China dialect, is spoken commonly, although more and more people are learning to speak Putonghua (Mandarin) because of increasing opportunities for travel and trade in China.

The Legal System

Law in Hong Kong

     Generally, the law of Hong Kong follows that of England and Wales. The Application of English Law Ordinance was passed in 1966 to declare the extent to which English law is in force in the territory. Section 3 provides that the common law of England and the rules of equity shall be in force in Hong Kong so far as they are applicable to the circumstances of Hong Kong or its inhabitants subject to such modifications as such circumstances may require.

      Additionally, some English Acts apply to Hong Kong, such as the Justices of the Peace Act of 1361 and the Habeas Corpus Act of 1679.

On occasions, laws are made to apply to Hong Kong by order of Her Majesty in Council: the power to make all such law as may appear necessary for the peace, order and good government of the territory being expressly preserved by Article IX of the Letters Patent. In practice, this is largely confined to matters which have a bearing on Hong Kong's international position. For example, the Air Navigation (Overseas Territories) Order 1977 is an Order in Council applying provisions of civil aviation treaties, to which the United Kingdom is a party, to the United Kingdom's overseas territories including Hong Kong.

Local legislation (that is, ordinances passed by the Legislative Council and assented to by the Governor) usually starts with one of the policy branches of the Hong Kong Govern- ment formulating drafting instructions for the Drafting Division of the Attorney General's Chambers. The instructions are prepared after consultation with the relevant government departments and, if appropriate, with interested public groups, as to the policy to adopt. After a Bill has been drafted it is submitted to the Governor in Council for approval to submit it to the Legislative Council. If the Bill is passed by vote of the Legislative Council, the Governor is empowered to enact by giving his assent to it and it is passed into law.

In much the same way that the common law of England has evolved, so has that of Hong Kong, based on the English common law and rules of equity, following and applying local ordinances and English or United Kingdom Acts where applicable. Hong Kong ordinances are often closely modelled on United Kingdom statutes or the legislation of Common- wealth countries if considered more appropriate. Cases from Commonwealth countries and the United States of America are quoted in the courts and considered with respect. The Hong Kong courts apply a doctrine of binding precedent similar to that adopted by the English courts. The Hong Kong Court of Appeal is bound by its own previous decisions. Appeal from the Court of Appeal lies to the Privy Council and it was said in a Full Court case in 1969 that the Hong Kong courts were 'clearly bound by decisions of the Privy Council and of the House of Lords'. The Full Court again considered the question of

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precedent in 1973 and stated that 'any relevant decision of the Privy Council' was binding on the Hong Kong courts.

Judiciary

The Chief Justice is the head of the Judiciary. He is assisted in the discharge of his administra- tive duties by the Registrar as well as Deputy Assistant Registrars of the Supreme Court. The Chief Justice, the Justices of Appeal and the Judges of the High Court are appointed by Letters Patent issued under the Public Seal by the Governor on instructions from the Queen, conveyed through the Secretary of State. District Judges are appointed by the Governor, by instrument under the Public Seal, and Magistrates by the Governor by warrant.

      The Judiciary tries all prosecutions and determines civil disputes, whether between individuals or between individuals and the government. The principle of English constitu- tional law, that in the performance of their judicial acts members of the Judiciary are completely independent of the executive and legislative organs of the government, is fundamental in Hong Kong.

The courts of justice in Hong Kong are the Supreme Court (comprising the Court of Appeal and the High Court), the District Court, the Magistrates' Court, the Coroners' Court, the Juvenile Court and also include the Lands Tribunal, the Labour Tribunal and the Small Claims Tribunal.

The Lands Tribunal, established in 1974, has three principal judicial functions. First, it determines the sums payable by the government and others for compensation to persons whose land is compulsorily resumed or has its value reduced because of public or private developments. Second, the tribunal has an appellate jurisdiction from the Commissioner of Rating and Valuation. This includes appeals in respect of rateable values under the Rating Ordinance and appeals against certificates of increase in rents and other determina- tions under the Landlord and Tenant (Consolidation) Ordinance. Third, since 1982, the tribunal's jurisdiction has included all claims for possession of premises under the Landlord and Tenant (Consolidation) Ordinance, and ancillary money claims.

In the exercise of its jurisdiction, the tribunal has the powers of the District Court. In addition, it enjoys the powers of the High Court in relation to certain matters and is empowered, so far as it thinks fit, to follow the practice and procedure of the High Court.

      The Small Claims Tribunal deals with monetary claims involving amounts not exceeding $5,000. The procedure followed is simple, informal and legal representation is not allowed.

The Labour Tribunal deals with individual money claims arising from contracts of employment. The informal procedure followed is initially directed at reconciling the parties to the dispute.

Magistrates exercise criminal jurisdiction over a wide range of indictable and summary offences. Their powers of punishment are generally restricted to a maximum of two years' imprisonment, or a fine of $10,000, though cumulative sentences of imprisonment up to three years may be imposed for two or more offences tried together.

Proceedings in all indictable offences originate in a Magistracy. The Attorney General may apply to have a case transferred to the District Court or committed to the High Court depending on the seriousness of the case. Formerly, committals to the High Court for trial were only made by a magistrate if, after hearing evidence in a preliminary inquiry, he was of the opinion that there was sufficient evidence to put the defendant on trial in the High Court. However, since the Criminal Procedure (Preliminary Proceedings on an Indictable Offence) Ordinance 1983 became law on January 1, 1984, a defendant is allowed to elect to have an automatic committal instead of a preliminary inquiry.

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Lay assessors sit as advisers with newly arrived magistrates recruited from overseas. Assessors are local residents with a knowledge of local customs, traditions and community feelings. They are drawn from a panel of about 320 assessors.

      Four Cantonese speaking special magistrates, who are not legally qualified but experi- enced in judicial work, were appointed to deal with cases of a more routine nature, such as hawking and minor traffic cases. Their powers of punishment, however, do not include the power of imprisonment.

      Two coroners conduct inquiries into the cause of, or circumstances connected with, deaths which occur suddenly, by accident or violence, or under suspicious circumstances. They may sit with a jury of three people.

      The Juvenile Court has jurisdiction to hear charges against children (aged under 14) and young persons (aged between 14 and 16) for any offence other than homicide.

The District Court, established in 1953, has limited jurisdiction in both civil and criminal matters. It has civil jurisdiction to hear monetary claims up to $60,000 or, where the claims are for recovery of land, the annual rent or rateable value does not exceed $45,000. In its criminal jurisdiction, the court may try the more serious cases with the exception of a few very serious offences such as murder, manslaughter and rape. The maximum term of imprisonment it can impose is seven years. It also exercises appellate jurisdiction in appeals against the assessment of stamp duty imposed by the Collector of Stamp Revenue.

The jurisdiction of the High Court is unlimited in both civil and criminal matters. The court also exercises jurisdiction in bankruptcy, company winding-up, adoption, probate and lunacy matters.

      The most serious criminal offences, such as murder, manslaughter, rape, armed robbery and drug offences involving large quantities, are tried by a judge of the High Court, sitting with a jury of seven. It is the jury which decides whether the accused is guilty or not guilty. The decision of the jury must be unanimous in cases in which the law provides for a death sentence. In other cases, a jury may return a majority vote of five to two.

      The Court of Appeal is the highest court in Hong Kong. It hears appeals on all matters, civil and criminal, from the High Court and the District Court, as well as appeals from the Lands Tribunal. It also makes rulings on questions of law referred to it by the lower courts.

Further appeals can be brought from the Court of Appeal to the Judicial Committee of the Privy Council in London. Such appeals are not frequent because of the expense involved and the stringent conditions which govern the grant of special leave to appeal.

Attorney General

The Attorney General is the Governor's legal adviser. The Royal Instructions provide for him to be an ex-officio member of both the Executive Council and the Legislative Council. In addition, he is chairman of the Law Reform Commission of Hong Kong, a member of the Judicial Services Commission, and a member of the ICAC Operations Review and Complaints Committees. He is titular head of the Hong Kong Bar.

All government departments requiring legal advice receive it from the Attorney General. He is the representative of the Crown in all actions brought by or against the Crown. He is further responsible for the drafting of all legislation and for the conduct of all prosecutions. The Attorney General's Chambers are divided into four divisions and a Special Duties Unit each headed by a law officer to whom the Attorney General delegates certain of his powers and responsibilities. The Civil Division is headed by the Crown Solicitor, and is responsible for giving all legal advice in civil matters and conducting all civil litigation

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involving the Crown. The Prosecutions Division is headed by the Crown Prosecutor who is responsible for deciding whether a prosecution shall be instituted. The Law Drafting Division is headed by the Law Draftsman who is responsible for drafting all legislation and subsidiary legislation. The Solicitor General heads the Policy and Administration Division, a part of which consists of the Law Reform Commission Secretariat. The Special Duties Unit has recently been set up to consider treaties to which Hong Kong is a party and other international obligations in the light of the Sino-British Joint Declaration.

      In the courts, the Attorney General is usually represented by crown counsel who are members of his chambers. On occasions, the services of outside counsel are obtained.

       It is the Attorney General who is responsible for all prosecutions in Hong Kong, and it is for him alone to decide whether or not a prosecution should be instituted in any particular case and it is his responsibility to conduct and control the action. In this respect, the Court of Appeal in Hong Kong held in 1979 that the powers and responsibilities of the Attorney General in Hong Kong were mutatis mutandis, the same as those of the Attorney General in England.

      The vast majority of minor prosecutions heard before magistrates are routine matters which are dealt with by law enforcement departments along settled guidelines issued under the authority of the Attorney General and without individual reference to the Attorney General's Chambers. Where such cases are complicated matters, or give rise to difficult points of law, then advice is sought from the Prosecutions Division. The advice of the Attorney General's Chambers must be sought in the case of serious offences where the venue of trial will be the District Court or the Supreme Court.

Legal Aid

To ensure that justice is made available to those persons who are unable to bear the cost of protecting their lawful rights and freedom, Hong Kong has developed over the years a comprehensive and sophisticated system of legal aid. This system is administered by the Legal Aid Department and provides legal representation in both civil and criminal courts while the Law Society Legal Advice and Duty Lawyer Schemes provide free legal advice in civil law matters and free legal representation to defendants in certain criminal cases in the Magistrates' Courts.

       Funded by the Hong Kong Government, legal aid is available to residents and non-residents in Hong Kong who satisfy the Director of Legal Aid on financial eligibility and justification for legal action. The financial limits in both civil and criminal cases are the same. The maximum eligibility limits for legal aid in 1985 were a monthly disposable in- come of $1,500 and disposable capital of $15,000. A review conducted during the year proposed an increase in the eligibility limits on income. Disposable income and capital are arrived at after 'allowances' have been deducted from actual earnings and capital of applicants. Legal aid is provided either free or on payment of a contribution depending on the amount of the disposable income and capital. If a legally aided person in civil litigation is successful and legal costs are recovered in the proceedings, then any contribution he may have paid will be refunded. In unsuccessful litigation, the liability for costs of an aided person is limited to the amount of the contribution, if any.

       In addition to financial eligibility, the applicant must satisfy the Director of Legal Aid in civil cases that he has a reasonable chance of succeeding in the litigation for which he seeks aid. Legal aid is available for a wide range of civil proceedings in the District Courts, High Court, Court of Appeal and appeals to the Judicial Committee of the Privy Council in London. Traffic accident claims, claims in respect of industrial accidents and employees'

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compensation, immigration matters and every branch of family law ranging from divorce, separation, maintenance and custody to wardship, all lie within the scope and jurisdiction of the department. Cases such as admiralty, bankruptcy and companies winding-up proceedings are also undertaken together with a large number of general litigation cases involving landlord and tenant, breach of contract and professional negligence. An applicant who is refused legal aid may appeal against such refusal to the Registrar of the Supreme Court or in Privy Council cases to a committee of review.

      The total estimated expenditure for 1985-6 was $22 million in civil cases. In all, 14 359 applications were received for legal aid in civil matters, of which 4 942 were granted legal aid with a sum of $72 million being recovered for aided clients in civil cases.

     Legal aid is available for criminal proceedings in the District Courts, High Court, Court of Appeal, the Judicial Committee of the Privy Council and for representation at proceedings in the Magistrates' Courts where the prosecution is seeking committal of a defendant to the High Court for trial. The majority of accused persons in the courts are legally aided. For High Court criminal trials, legal aid is invariably given - subject to financial eligibility - because of the severity of the charge coupled with the possible gravity of sentence. Legal aid can also be given to conduct pleas in mitigation of sentence. For appeals against conviction of murder, irrespective of whether there are grounds of appeal, legal aid is mandatory. For all other criminal appeals, including appeals from the decisions of magistrates, legal aid will be given again subject to financial eligibility, if the Director of Legal Aid is satisfied that there are arguable grounds of appeal. A person who is refused legal aid on a criminal matter may nevertheless be granted legal aid - subject to financial eligibility - by a trial judge or by the Court of Appeal or, in relation to appeal to the Judicial Committee of the Privy Council, by a committee of review.

The total estimated expenditure in 1985-6 was $21.6 million in criminal cases. In all, 3 276 applications were received for legal aid in criminal cases, and 1 894 were granted.

If a person is granted legal aid, the Director of Legal Aid will assign the matter either to a private solicitor, and a barrister where necessary, or to one of his own professional officers.

Supplementary Legal Aid Scheme

The Supplementary Legal Aid Scheme provides legal assistance to those persons in the 'sandwich' class, whose means place them outside the financial limits for legal aid but are not sufficient to meet the high cost of conducting litigation on a private basis. This scheme, introduced in October 1984, is limited to claims in the High Court for damages for personal injuries or death. Under this scheme, applicants may be granted legal aid if their gross income does not exceed $15,000 per month and their total assets, excluding the value of an owner occupied residence and other allowances, do not exceed $100,000. The scheme is financed by a fund established by a loan from the Government Lotteries Fund and it is a condition of being granted legal aid under this scheme that applicants agree to make a con- tribution of a percentage of any damages recovered for them, such percentage depending on the amount recovered and whether or not the case is settled prior to the trial of the action. This percentage ranges from 10 per cent to 12 per cent.

      The total estimated expenditure in 1985-6 was $100,000. Since inception of the scheme, 111 applications have been received, and 34 have been granted.

Legal Advice and Duty Lawyer Schemes

The Law Society has, since 1978, administered two schemes which provide free legal advice in civil law matters and free legal representation to defendants for certain criminal cases

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heard in the Magistrates' Courts; and more recently, the Tel-Law Scheme in which taped messages containing legal information on a large number of topics are made available to the public by phone. The administration of the schemes is through a management committee in which the Bar Association is represented by a number of nominees and the work is funded by the government which provided a subvention of $15.757 million in the 1985-6 financial year.

       The Duty Lawyer Scheme makes available 461 remunerated lawyers (barristers and solicitors) by roster and assignment in the eight magistracies and four Juvenile Courts. Offences covered in Magistrates' Courts are: membership of a triad society, loitering, unlawful possession, being equipped for stealing, resisting arrest, possession of dangerous drugs, possession of apparatus fit for using dangerous drugs, possession of dangerous drugs for unlawful trafficking, and possession of offensive weapons. In the juvenile courts all except minor offences attract free legal representation. There is no means test. During the year, some 18 334 defendants facing 29 335 charges received preliminary legal advice, and representation at trial, with a significant acquittal rate.

       The Free Legal Advice Scheme operates in the evening, at centres in Sha Tin, Tsuen Wan, Wan Chai, Eastern, Mong Kok, Wong Tai Sin, Kwun Tong and Yau Ma Tei District Offices through 322 volunteer lawyers, 24 of whom are deployed weekly. Some 3 500 people are advised annually, having been referred through 120 agencies. Once the problem is identified appointments are given within seven days, and, because details of the problems are written down by the staff of the agencies during their interviews with clients, the lawyers are able to give authoritative advice based on the necessary research done before the meeting. People are assisted on matrimonial and employment matters, landlord and tenant queries, and a host of other subjects.

       The Tel-Law Project was launched in March 1984 with 26 tapes of 24 minutes duration available through 10 manned telephone lines in working hours and evenings. The original tapes give information in four core areas - matrimonial, landlord and tenant, criminal, and financial law. Later, a further 24 tapes were added on other topics such as gambling, wills, noise, and conveyancing. The project, despite limited running hours, has proved to be extremely popular; more than 50 000 calls were taken in the first nine months, and answered calls in 1985 averaged more than 4 500 monthly, with a high proportion of repeat users.

Law Reform Commission

The Law Reform Commission was appointed by the Governor in Council to consider and report on such topics as may be referred to it by the Attorney General or Chief Justice. Its membership includes Legislative Councillors, academic and practising lawyers, and prominent members of the community. The commission's proposals on commercial arbitration, bills of exchange, community service orders and contribution between wrong- doers have been enacted. The report on damages for personal injuries and death is in the course of implementation. Reports on aspects of insurance law and the admissibility of confession statements have been published and will shortly be followed by a report on contempt of court. The commission is considering hearsay evidence in civil proceedings, the legal effects of age, breach of confidence actions, unfair contract terms, coroners, wills and intestate succession, the law relating to bail, and the law of international arbitration.

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The Economy

AFTER a year of rapid growth in 1984, the Hong Kong economy slowed down significantly in 1985. The gross domestic product (GDP) recorded only limited growth in real terms in 1985, compared with a growth rate of 9.3 per cent in 1984. The decline in domestic exports was the major factor behind the sluggish economic performance. Nevertheless, the unemployment and underemployment rates remained at a relatively low level, as the effect of job losses in manufacturing was, to a large extent, offset by increased employment in the services sectors, particularly those associated with the re-export trade. The rate of inflation was also relatively low.

Structure of the Economy

Hong Kong, because of its limited natural resources, has to depend on imports for virtually all of its requirements, including food and other consumer goods, raw materials, capital goods and fuel. It must, therefore, export on a sufficient scale to generate the foreign exchange earnings to pay for these imports, and the volume of exports must continue to grow if the population is to enjoy a rising standard of living.

The externally oriented nature of the economy can be seen from the fact that in 1985 the total value of visible trade (including domestic exports, re-exports and imports) amounted to 176 per cent of the gross domestic product. Between 1975 and 1985, the average annual growth rate of domestic exports in real terms was about 10 per cent, roughly twice the growth rate of world trade. As a result, Hong Kong ranks high among the world's trading economies.

Contribution of Various Economic Sectors

The relative importance of the various economic sectors can be assessed in terms of their value-added contribution to the GDP and their shares of total employment.

     Primary production (comprising agriculture and fishing, and mining and quarrying) is relatively insignificant in terms of its contribution to the GDP and to total employment.

     Within secondary production (comprising manufacturing, electricity, gas and water, and construction), manufacturing accounts for the largest share of the GDP as well as of employment. The contribution of manufacturing to the GDP, after a steady decline from 31 per cent in 1970 to 21 per cent in 1982, recovered in 1983 and 1984 to about 25 per cent, coinciding with the export boom over these years. The share of the construction sector in the GDP increased from four per cent in 1970 to eight per cent in 1981, before decreasing to five per cent in 1984 as building and construction activity slackened.

The contribution of the tertiary services sectors as a whole (comprising wholesale and retail trades and restaurants and hotels; transport, storage and communications; the financial and related services sector; and the community, social and personal services

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sector) to the GDP increased from 61 per cent in 1970 to 65 per cent in 1982 before declining to about 62 per cent in 1983 and 1984. However, the contribution of the financial and related services sector increased significantly, from 15 per cent in 1970 to 24 per cent in 1981. It fell to 16 per cent in 1984, mainly reflecting the depressing effects of the slump in the property market.

In terms of employment, the most noticeable change in recent years is that employ- ment in the manufacturing sector, though still accounting for the largest share of the total employed labour force, has declined in relative terms from 47 per cent in 1971 to 41 per cent in 1981 and to 37 per cent in 1985, while the share of the tertiary services sectors increased from 44 per cent in 1971 to 50 per cent in 1981 and further to 53 per cent in 1985.

Nature and Relative Importance of Manufacturing

Though trade statistics indicate that Hong Kong's domestic exports are still dominated by a few major product groups, there has been considerable upgrading of quality and diversification within these product groups. The increasing pressure of protectionism and growing competition from other economies have resulted in efforts to diversify, not only in respect of products but also markets. It is estimated that up to 90 per cent of Hong Kong's manufacturing output is eventually exported. In 1985, manufactured goods accounted for about 95 per cent of total domestic exports by value.

Hong Kong firms must be flexible and adaptable to cope with the frequent changes in demand patterns and to maintain their external competitiveness. The existence of many small establishments and an extensive sub-contracting system have greatly facilitated the necessary shifts in production and increased the flexibility of the economy. Because of the limited amount of usable land, manufacturing industries in Hong Kong are generally those which can operate successfully in multi-storey factory buildings. In practice, this has meant a concentration on the production of light manufactures.

Since the post-war years, many new industries have emerged and grown, the more prominent being plastics and electronics. Other new industries include fabricated metal products, watches and clocks, toys, precision and optical instruments, and genuine and imitation jewellery.

Between 1973 and 1983, the average annual growth rate of the value of net output by the manufacturing sector was 16 per cent, while the growth rate of employment was four per cent. During this period, the most significant change was the textiles industry's declining share in the net output by manufacturing, from 27 per cent to 14 per cent, and in manu- facturing employment, from 21 per cent to 12 per cent. The decline was largely matched by the relative expansion of the clothing, electrical and electronics, and professional and scientific equipment (including watches and clocks) industries. Their shares of net output in- creased from 20 per cent to 25 per cent, from nine per cent to 17 per cent, and from one per cent to five per cent respectively; and their shares of employment increased from 26 per cent to 30 per cent, from 11 per cent to 14 per cent and from two per cent to five per cent respec- tively. Domestic exports in 1985 consisted principally of articles of apparel and clothing accessories (35 per cent of the total value), electronics (21 per cent), plastic products (eight per cent), textiles (six per cent), watches and clocks (seven per cent), electrical household appliances (four per cent) and metal products (three per cent). In terms of domestic export shares, the most significant changes in the past 10 years relate to the decline in the relative importance of clothing (from 45 per cent in 1975 to 35 per cent in 1985) and textiles (from nine per cent in 1975 to six per cent in 1985), and the increase in the relative importance of

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THE ECONOMY

electronics (from 12 per cent in 1975 to 21 per cent in 1985), and watches and clocks (from three per cent in 1975 to seven per cent in 1985).

Market diversification, partly as a result of the promotion efforts financed by the government, has long ended the predominance of the United Kingdom and Common- wealth countries as Hong Kong's main export markets. Since the establishment of the 'certificate of origin' system in the late 1950s, the United States has become Hong Kong's largest export market. Gradually, the share of exports going to other countries such as the Federal Republic of Germany, Japan, Canada, Australia and those in Southeast Asia has also increased. In recent years, Hong Kong has also diversified into new markets, particularly China, which is now the second largest market for Hong Kong's domestic exports, and also countries in the Middle East, Eastern Europe, Latin America and Africa.

Nature and Relative Importance of the Financial Sector

The financial and related services (excluding real estate services) sector, apart from growing in domestic importance as indicated by its rising contribution to the GDP, from 9.8 per cent in 1980 to 10.2 per cent in 1983, has also continued to enhance its international importance. Banks and deposit-taking companies, insurance companies, pension funds, unit trusts and similar operations, foreign exchange and money brokers, stock and commodity brokers, other financial organisations and ancillaries such as international firms of lawyers and of accountants, combine to provide a wide range of financial and related services to both local and international customers. The government has continually worked towards providing a favourable environment, with sufficient regulation to ensure, as far as possible, sound business standards and confidence in the institutional framework, but without unnecessary impediments of a bureaucratic or fiscal nature. The favourable geographical position of Hong Kong, which provides a bridge in the time gap between Japan and Europe, together with the traditionally strong links with Southeast Asian countries and assisted by excellent communications with the rest of the world, has helped to develop the territory into one of the world's leading international financial centres.

Unlike most major economies, Hong Kong has no central bank. Most of the functions which might typically be performed by one - such as prudential supervision of financial institutions, managing official foreign exchange reserves, certain open market operations, issuing banknotes or providing banking services to the government are carried out by different government offices or by selected commercial banks.

✓ The deposit-taking sector in Hong Kong, under the three-tier structure established since 1981, is made up of three distinct classes of institutions: licensed banks, licensed deposit- taking companies and registered deposit-taking companies.

      Banking licences are granted at the absolute discretion of the Governor in Council in accordance with the provisions of the Banking Ordinance. At present, a domestic company (that is, a company incorporated in Hong Kong and predominantly beneficially owned by Hong Kong interests), in order to be considered for a banking licence, must have a paid-up capital of at least $100 million, have been in the business of taking deposits from and granting credit to the public for at least 10 years, and have at least $1,750 million of deposits from the public and total assets of at least $2,500 million. A bank incorporated outside Hong Kong wishing to apply for a banking licence is required to satisfy a separate set of criteria: it must show total assets (net of contra items) of at least US$12,000 million, and its country of incorporation must apply an adequate form of prudential supervision and offer some acceptable form of reciprocity to banks in Hong Kong. At the end of 1985, there were 143 licensed banks in Hong Kong, 35 of them being locally incorporated. They maintained

THE ECONOMY

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      a total of 1 394 offices in Hong Kong. In addition, there were 131 representative offices of foreign banks.

      Only licensed banks may operate cheque or savings accounts. They may also accept deposits from the public of any size and any maturity. But the interest rate rules of the Hong Kong Association of Banks (of which all licensed banks are required by law to be members) result in the setting of maximum rates payable on bank deposits of original maturities up to 15 months less a day, with the exception of deposits of $500,000 or above for less than three months term to maturity, for which banks may compete freely.

       Licensed deposit-taking company status is granted at the discretion of the Financial Secretary. Licensed deposit-taking companies are required to have a minimum issued share capital of $100 million and paid-up capital of $75 million, and to meet certain partially subjective criteria regarding size, ownership and quality of management. They may also take deposits of any maturity from the public, but in amounts of not less than $500,000. There are no restrictions on the interest rates they may offer. At the end of 1985, there were 35 licensed deposit-taking companies.

The authority to register deposit-taking companies rests with the Commissioner of Deposit-taking Companies. Since April 1981, the commissioner has, at the direction of the Governor, restricted new registrations to companies which, as well as meeting certain basic criteria such as minimum paid-up capital of $10 million, are more than 50 per cent owned by banks in Hong Kong or elsewhere. Registered deposit-taking companies are restricted to taking deposits of $50,000 (this will be increased to $100,000 from March 1986) or more with an original term to maturity of at least three months. At the end of 1985, there were 278 registered deposit-taking companies.

       The Commissioner of Banking, who is also the Commissioner of Deposit-taking Companies, is the authority for the prudential supervision of all deposit-taking institutions, as provided for by the Banking and Deposit-taking Companies Ordinances. The commis- sioner's office also operates an international division which obtains monthly returns from and sends examination teams to the overseas branches of Hong Kong incorporated banks and deposit-taking companies (subject to the permission of the local authorities). The principles of the revised Concordat issued by the Committee on Banking Regulations and Supervisory Practices, which meets regularly at Basle in Switzerland, and the principles of world-wide supervision of banking groups based in Hong Kong are accepted and practised.

Exchange Fund and Currency

The Hong Kong Government Exchange Fund was established by the Currency Ordinance of 1935 (later renamed the Exchange Fund Ordinance). From its inception, the Exchange Fund has held the backing to the note issue, with notes being issued nowadays by two note-issuing banks - the Hongkong and Shanghai Banking Corporation and the Standard Chartered Bank against their holdings of certificates of indebtedness. These are non-interest-bearing liabilities of the Exchange Fund, and are issued or redeemed as the amount of notes in circulation rises or falls. In 1976, the role of the fund was expanded, with the assets of the Coinage Security Fund (which held the backing for coins issued by the government) as well as the bulk of the foreign currency assets held in the government's General Revenue Account being transferred to the fund. In both cases, the transfers were made against the issue by the fund of interest-bearing debt certificates denominated in Hong Kong dollars. On December 31, 1978, the Coinage Security Fund was merged with the Exchange Fund and all the certificates held by the Coinage Security Fund were redeemed.

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The Exchange Fund was further expanded in 1978 when the government began to transfer the Hong Kong dollar balances of its General Revenue Account (apart from working balances) to the Exchange Fund against the issue of interest-bearing debt certificates. Thus the bulk of the government's financial assets are now held in the Exchange Fund, mainly in the form of bank deposits in certain foreign currencies and in Hong Kong dollars, and of various interest-bearing instruments in foreign currencies. Today, the principal activity of the fund is the day-to-day management of these assets, while its statutory role as defined in the Exchange Fund Ordinance is to influence the exchange value of the Hong Kong dollar. The Exchange Fund is managed by the Monetary Affairs Branch under the direction of the Financial Secretary, who is advised by a committee comprising prominent members of the banking community.

Another function related to the fund is the supply of notes and coins to the banking system. Currency notes in everyday circulation are $10, $20, $50, $100, $500 and $1,000 and may only be issued by the two note-issuing commercial banks against holdings of Exchange Fund certificates of indebtedness, apart from a very small fiduciary issue, which is backed by securities issued or guaranteed by the British or Hong Kong Governments. When the Hong Kong dollar was pegged to sterling prior to June 1972, certificates of indebtedness were issued and redeemed in sterling at a fixed exchange rate. But between June 23, 1972 and October 15, 1983, such payments were made in Hong Kong dollars. With effect from October 17, 1983, certificates of indebtedness have been issued and redeemed by the note-issuing banks against payment in US dollars at a fixed exchange rate of US$1 HK$7.80. The Exchange Fund bears the costs of maintaining the note issue (apart from the proportion of the costs which relates to the fiduciary issue), and the net profits of the note issue accrue to the fund. Coins of $5, $2, $1, 50 cents, 20 cents, 10 cents and five cents, and currency notes of one cent denomination, are issued by the government. The tenth of a series of $1,000 gold coins minted to commemorate the Lunar New Year was issued early in 1985. These gold coins are legal tender, but do not circulate. The total currency in circulation at the end of 1985, with details of its composition, is shown at Appendix 5.

Foreign Exchange, Money and Other Financial Markets

=

Hong Kong has a mature foreign exchange market where the local currency and major international currencies are actively traded. Several factors have contributed to the development of the foreign exchange market which has been an integral part of Hong Kong's emergence as a major international financial centre. First, there are no exchange controls in Hong Kong. Second, international banks may trade through their Hong Kong offices while other centres in Europe and North America are closed. Third, the continuous requirements of local industry and commerce in relation to their transactions with the rest of the world have ensured active trading in the local currency.

There is also a well developed interbank money market, where wholesale Hong Kong dollar deposits are traded among the banks and deposit-taking companies. Other short-term instruments are less in evidence than in some other centres, partly because the government is not itself active as a regulator of the monetary system's reserves through open market operations in such instruments. Nevertheless, markets in locally issued certificates of deposit and commercial paper have been growing in significance.

      The stock market provides a source of capital to local enterprises and has attracted significant overseas investor interest. There are at present four stock exchanges in Hong Kong, namely, Far East Exchange, Hong Kong Stock Exchange, Kam Ngan Stock Exchange and Kowloon Stock Exchange. The Stock Exchanges Unification Ordinance

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was brought into operation in February 1981. Under this ordinance, the Stock Exchange of Hong Kong Limited will have the exclusive right to operate a stock market in Hong Kong from a date to be appointed by the Financial Secretary. The unification of the existing exchanges is expected to bring better overall management and to provide for more effective regulation. The Stock Exchange of Hong Kong Limited is expected to commence trading in 1986. At the end of 1985, the new stock exchange had 924 members.

      The Commissioner for Securities continues to provide prudential supervision of the securities industry in Hong Kong by enforcing the Securities Ordinance, the Protection of Investors Ordinance and the Stock Exchanges Unification Ordinance. The Securities Ordinance provides for a regulatory framework within which the stock exchanges operate. It offers protection to investors in securities by requiring registration of dealers, dealing partnerships, investment advisers, investment advisers' partnerships and representatives and regulating trading practices in securities. It also provides for the investigation of malpractices and for the establishment of a Stock Exchanges Compensation Fund to com- pensate clients of defaulting stockbrokers. The Protection of Investors Ordinance aims at protecting investors by prohibiting the use of fraudulent or reckless means to induce investors to buy or sell securities or to take part in investment arrangements, and regulates the issues of related publications.

       During the year, and in order to meet changing circumstances, amendments were made to the Stock Exchanges Unification Ordinance. The amendments permit corporations to become members of the Stock Exchange of Hong Kong Limited and remove the dis- qualifications from membership of that exchange of practising solicitors and accountants, directors or employees of banks and deposit-taking companies licensed or registered under the Banking and the Deposit-taking Companies Ordinances. In addition, they also provide for members to trade in partnership with other members or non-members of the exchange. Amendments were also introduced to the Securities Ordinance to bring in financial requirements comprising a minimum net worth requirement and liquidity margin require- ment for compliance by registered dealers. The Securities (Stock Exchange Listing) Rules 1986, which require the disclosure of shareholdings and company information, were to be considered by the Executive Council in January 1986.

      The Commissioner for Commodities Trading, who is also the Commissioner for Securities, continues to provide prudential supervision of the commodity futures industry in Hong Kong by enforcing the Commodities Trading Ordinance. The Hong Kong Commodity Exchange Limited, which was established in 1977 and licensed under this ordinance as the sole company permitted to operate an exchange trading in futures contracts, was reorganised and renamed as the Hong Kong Futures Exchange Limited in 1985. The exchange now has four markets offering contracts in cotton (though no trading in cotton has taken place in recent years), sugar, soyabeans and gold. The exchange is preparing for trading in Stock Index Futures contracts in early 1986.

       The Chinese Gold and Silver Exchange Society operates a gold bullion market which is one of the largest in the world. Gold traded on the society is of 99 per cent fineness, measured in taels and quoted in Hong Kong dollars. Prices, after allowing for exchange rate fluctuations, follow closely those in the other major markets of London, Zurich and New York. Membership of the society remained closed at 193 member firms. There is another gold market in Hong Kong, the main participants in which are major international gold trading companies. Trading in this market, which is commonly known as the loco-London gold market, has been growing in recent years. Dealings principally take place in US dollars per troy ounce of 99.95 per cent fine gold, with delivery in London.

40

Diversification of the Services Sectors

THE ECONOMY

Not only has the financial and business services sector grown in importance, other services sectors such as insurance, transport and tourism have also expanded. Most of the insurance and transport services are related to merchandise trade transactions. Hong Kong shipown- ers have long been engaged in operating ships for charter and in providing international liner services.

The steady growth of Hong Kong's external trade has led to the expansion of a number of services related to shipping, notably cargo handling and storage facilities in the container port. Hong Kong's air cargo handling facility ranks as one of the largest in the world. According to the 1983 Survey of Transport Establishments, the direct contribution of ocean and air transport and related services to the GDP was about three per cent in value-added terms. The tourist industry has also expanded rapidly. The number of incoming tourists has increased from 1.3 million in 1975 to 3.4 million in 1985, with total spending reaching an estimated $14,700 million.

Inflation

Inflation has been a much more significant phenomenon in Hong Kong in the 1970s and early 1980s than in the 1960s. Given the externally oriented nature of the economy, even under a floating exchange rate system, the inflation rate in Hong Kong could not be insulated completely from what was happening in the rest of the world.

In the late 1970s, the inflation rate stayed at double-digit levels. Three factors were relevant during this period. First, the double-digit real growth rates of the economy for each year since 1976 resulted in a persistent imbalance, with the aggregate demand for domestic resources being in excess of their supply. Second, the rate of world inflation accelerated sharply in 1979, resulting in a rapid rate of increase in import and export prices. Third, the growth rate of the money supply was faster than the growth rate of GDP in money terms. In 1983, the rate of inflation, in terms of the Consumer Price Index (A), was 10.0 per cent, mainly due to the depreciation of the Hong Kong dollar. With the moderate increase in world commodity prices and the return of stability in the Hong Kong dollar under the linked exchange rate system, the rate of inflation slowed down from 12.4 per cent in January 1984 (on a year-on-year basis) to 4.6 per cent at the end of the year. It remained at a relatively low level throughout 1985, at about 3.2 per cent on average.

Economic Policy

     Economic policy in Hong Kong is to a certain extent dictated, and constrained, by the special circumstances of the Hong Kong economy. Owing to its small and open nature, the economy is vulnerable to external factors and government action to offset unfavourable external factors is often of limited effectiveness. The government is of the view that, except where social considerations are regarded as over-riding, the allocation of resources in the economy is normally most efficient if left to market forces, and government intervention is kept to the minimum.

      This basically free-enterprise market-disciplined system has contributed to Hong Kong's economic success. The narrowly based tax structure with low tax rates provides incentives for workers to work and for entrepreneurs to invest. Both workers and entrepreneurs are highly motivated, given that all individuals have equal opportunity to pursue the goal of individual betterment and accumulation of wealth. The primary role of the government is to provide the necessary infrastructure, together with a stable legal and administrative framework, conducive to economic growth and prosperity.

THE ECONOMY

Monetary Policy

41

There are few monetary instruments available to the government for monetary policy purposes. From 1974 until October 1983, the Hong Kong dollar was a conventional floating currency and during this period the Exchange Fund's role in directly influencing the exchange rate through intervention in the foreign exchange market was limited at most to ironing out short-term fluctuations.

      On October 17, 1983, after a period of much instability in the exchange rate, a revised system was introduced. Under the new arrangement, certificates of indebtedness issued by the Exchange Fund, which the two note-issuing banks are required to hold as cover for the issue of Hong Kong dollar banknotes, are issued and redeemed against payments in US dollars at the fixed exchange rate of US$1 = HK$7.80. In practice, therefore, any rise in the note circulation has to be matched by a US dollar payment to the Exchange Fund and any fall in circulation is matched by a similar payment from the fund. The note-issuing banks in turn extend this fixed rate to their note transactions with all other banks in Hong Kong. The forces of competition and arbitrage, aided by a largely favourable psychological impact, have ensured that the market exchange rate has been stable at a level close to the fixed rate since October 1983.

      This important change in Hong Kong's monetary framework means that the exchange rate is, in effect, no longer a major variable element in the economy's adjustment process. Factors such as interest rates, money supply and the level of economic activity, rather than the exchange rate, now tend to adjust automatically to balance of payments pressures, without government intervention being necessary. The role of interest rates as an instru- ment of monetary policy has therefore altered. They now assume a more passive role, changing, more frequently perhaps, in response to balance of payments inflows and outflows.

      The Hong Kong Association of Banks, which sets the maximum rates of interest payable on deposits with licensed banks, still has a statutory obligation to consult the government on these interest rates. This procedure is designed to ensure that the association takes account of the wider public interest in its decisions, including their effect on the exchange rate. Under the new exchange rate system, however, it is neither so necessary nor so desirable for the government to play an active role in this process.

      Through its bankers, the Exchange Fund has operated a scheme which enables it to draw funds out of the local interbank market and to ensure that these funds are not directly recycled into that market. This arrangement is capable of tightening up the money market and putting upward pressure on market interest rates in the short term. Thus, despite the change in the monetary framework which took place in October 1983, the arrangements whereby the government may influence interest rates through the Hong Kong Association of Banks or the money market remain in place.

Public Sector and Public Finances

     For the purpose of formulating annual budgetary policies, the public sector is defined in terms of the deployment of funds under the government's control. Thus public sector expenditure is conventionally taken to include expenditure on the General Revenue Account, expenditure by the Urban Council and the Housing Authority, expenditure financed from certain statutory funds, and expenditure on public works projects financed with loans from the Asian Development Bank. Expenditure by institutions in the private or quasi-private sector is included to the extent that it is met by government subventions but expenditure by those organisations in which the government has only an equity position,

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THE ECONOMY

such as the Mass Transit Railway Corporation and the Kowloon-Canton Railway Corporation, is not included.

As an indication of the size of public sector spending, expenditure on the Consolidated Account rose from $6,586 million in 1975-6 to a revised estimate of $43,795 million in 1985-6. The average annual growth rate for these years taken together was 21.4 per cent in money terms. Over this period, the relative size of the public sector (defined as the ratio of expenditure on the Consolidated Account to the GDP at current prices) rose from 14.2 per cent to around 16.5 per cent.

       Several principles are observed in formulating the government's budgetary policy. The first is that the growth rate of public sector expenditure should have regard to the growth rate of the economy, so that the government does not pre-empt resources which would otherwise be used more efficiently by the private sector. The second principle is that the pattern of public sector expenditure should reflect the government's conscious view as to priorities. The third principle is that a certain balance should prevail between direct and indirect taxation, and between direct and indirect taxation taken together and all other recurrent revenue, and the tax system should meet certain defined requirements such as simplicity, neutrality and equity. The fourth principle is that expenditure and revenue should meet certain guideline ratios, to ensure the financing of the capital account.

Public Expenditure

     Expenditure on the General Revenue Account is the main instrument of budgetary policy. It is estimated expenditure on the General Revenue Account that makes up the draft Estimates of Expenditure which are presented by the Financial Secretary to the Legislative Council when he delivers his annual Budget speech, and it is the total estimated expenditure on the General Revenue Account for which appropriation is sought in the Appropriation Bill introduced into the Legislative Council at the same time.

The Estimates of Expenditure contain details of the estimated recurrent and capital expenditure of all government departments, including estimated payments to subvented organisations and estimated transfers to the statutory funds. They also provide for the repayment of the public debt.

      With only four exceptions, the General Revenue Account has shown a surplus at the end of each year in the past 20 years. The exceptions were 1974-5 when there was a deficit of $380 million, 1982-3 when there was a deficit of $3,500 million, 1983-4 when there was a deficit of $2,993 million and 1984-5 when there was a deficit of $1,563 million of which $1,004 million was financed by the issue of Government Bonds. The accumulated net surpluses on the General Revenue Account form the government's fiscal reserves, and these secure the government's contingent liabilities and ensure that it is able to cope with any short-term tendency for expenditure to exceed revenue.

       The Urban Council, operating through the Urban Services Department, draws up its own budget and expenditure priorities. This expenditure is financed mainly from a fixed percentage of rates from property in the urban area and from fees and charges for services provided by the council.

The Housing Authority, operating through the Housing Department, is also financially autonomous. Its income is derived mainly from rents. Where cash flow is inadequate to meet the construction costs of new estates, the authority borrows from the Development Loan Fund on concessionary terms. The authority is provided with land at nil premium, but the value of the land is shown in its balance sheet as a government contribution. Part of the authority's recurrent expenditure is financed from the General Revenue Account for

THE ECONOMY

43

such activities as squatter control and the management of temporary housing areas. The authority is also responsible for carrying out a programme of squatter area improvements funded from the Capital Works Reserve Fund.

      The statutory funds included in the public sector comprise the Capital Works Reserve Fund, the Development Loan Fund, the Home Ownership Fund, the Lotteries Fund, the Mass Transit Fund and the Student Loan Fund.

The Capital Works Reserve Fund finances the Public Works Programme and land acquisitions. With effect from the entry into force on May 27 of the Sino-British Joint Declaration, the fund was restructured to allow for implementation of Annex III to the Joint Declaration dealing with the accounting of premium income obtained from land transactions. The income of the fund is derived mainly from this source and from transfers from the General Revenue Account.

The Development Loan Fund is used mainly to finance social and economic develop- ments including, in particular, loans to the Housing Authority for the construction of public housing estates. Transfers are made from the General Revenue Account to the fund to meet the loan requirements of the Housing Authority. Otherwise the fund's income is derived from interest payments and capital repayments.

The Home Ownership Fund finances mainly the construction of flats for sale under the Home Ownership Scheme. The Housing Authority is the government's agent for the design, construction and marketing of these flats. The fund was initially established by a transfer from the General Revenue Account and derives its income from the proceeds of sales of the flats. The fund also finances the recurrent expenditure on the administration and planning of the Private Sector Participation Scheme.

      The Lotteries Fund is used to finance the development of social welfare services through loans and grants. It derives its income mainly from a share of the proceeds of the Mark Six lotteries.

The Mass Transit Fund is used to finance the purchase of government equity in the Mass Transit Railway Corporation. Its income is derived entirely from transfers from the General Revenue Account.

The Student Loan Fund is used to finance loans to students at the two universities, the two polytechnics, the Baptist College and other approved post-secondary institutions, and to Hong Kong students studying in the United Kingdom. Transfers are made as necessary from the General Revenue Account to enable the fund to meet its commitments, the only other source of funds being loan repayments.

Revenue Sources

There is no general tariff on goods entering Hong Kong but duties are charged on six groups of commodities irrespective of whether they are imported or manufactured locally. These are alcoholic liquors, tobacco, certain hydrocarbon oils, methyl alcohol and, since February 1985, certain non-alcoholic beverages and cosmetics. All firms engaged in the import, export, manufacture, storage or sale of dutiable commodities must be licensed.

Since February 1984, duty is payable on European-type liquor, except beer, cider and perry, at the rate of 20 per cent of the c.i.f. value of liquor and, in addition, at the relevant specific duty rates. The specific duty rates on alcohol now range from $1.20 a litre for beer to $60 per litre on brandy. On tobacco, the rates range from $40 a kilogram on Chinese prepared tobacco to $210 a kilogram on cigarettes. On motor and aircraft spirits the duty is $2.20 a litre and on diesel oil for road vehicles $1.10 a litre. On methyl alcohol the duty is $4 a litre. On non-alcoholic beverages the duty is $60 a hectolitre. There is a 25 per cent ad

44

THE ECONOMY

valorem duty on the c.i.f. price for imported, or wholesale price for locally produced, cosmetics.

      Rates are levied on the occupation of landed property at a percentage of the assessed rateable value which is, briefly, the annual rent at which the property might reasonably be expected to be let. New valuation lists are prepared periodically as directed by the Governor, enabling rateable values to be reviewed and updated in line with market rental levels. The current lists came into effect on April 1, 1984, with all rateable values determined by reference to rents as at July 1, 1983. For newly assessed premises, the rateable values are also based on rental levels as at this reference date.

      The percentage charges on rateable values are determined annually by resolution of the Legislative Council. For 1985-6 the charge is 5.5 per cent. In the urban areas part of the rates charged is paid to the Urban Council, the remainder being credited to General Revenue, but in the New Territories all the rates are credited to General Revenue. It is intended that with effect from April 1986, the newly established Regional Council will obtain most of its revenue from rates charged in the New Territories.

      To cushion the impact of the increase in rates on ratepayers following the revaluation, a relief scheme was introduced on April 1, 1984. Under this scheme, the maximum increase in the rates payable for any property in any year will not exceed a prescribed percentage of the amount payable in the preceding year. The percentage prescribed for the year 1985-6 is 20 per cent.

      Rates are payable quarterly in advance and exemptions are few. However, the govern- ment generally provides financial assistance towards the payment of rates to non-profit- making educational, charitable and welfare organisations if the premises they occupy are being run in accordance with an approved target or policy. No refund of rates is allowed for vacant domestic premises but half of the rates paid may be refunded in the case of vacant non-domestic premises.

      The taxes and duties making up the internal revenue, with the exception of the air passenger departure tax and the Cross-Harbour Tunnel passage tax, are collected by the Inland Revenue Department. These consist of betting duty, entertainments tax, estate duty, hotel accommodation tax, stamp duty and earnings and profits tax.

Betting duty is imposed on bets on authorised totalisators and the proceeds of Mark Six lotteries. The rate of duty is either 9.5 per cent or 16 per cent depending on the type of bet placed, and is 30 per cent on the proceeds of lotteries.

      Entertainments tax is imposed on the price of admission to cinemas and race meetings at rates which vary with the prices charged for admission. This averages about nine per cent in the case of cinemas and 29 per cent in the case of race meetings.

Estate duty is imposed on that part of a deceased's estate situated in Hong Kong. The rates of duty charged range from a minimum of 10 per cent on estates valued between $2 million and $2.5 million to a maximum of 18 per cent on estates valued in excess of $4 million. Estates valued at less than $2 million are exempt from duty.

      Hotel accommodation tax of five per cent is imposed on expenditure on accommodation by guests in hotels and guest-houses.

The Stamp Duty Ordinance imposes fixed and ad valorem duties on different classes of documents relating to assignments of immovable property, leases and share transfers.

Earnings and profits tax is levied under the Inland Revenue Ordinance. Hong Kong has a schedular system of taxation whereby persons liable are assessed and required to account for tax on four separate and distinct sources of income, namely business profits, salaries, income from property and interest income. Personal assessment is a form of aggregation

STATUE SQUARE

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Previous page: The Hongkong and Shanghai Banking Corporation's new building towers over Statue Square during a Remembrance Day service at the Cenotaph. Top: The statue of Queen Victoria (now in Victoria Park) and the Hong Kong Club, circa 1919. Above: The Supreme Court building around the same time.

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Top: Statue Square on November 13, 1918, during celebrations to mark Armistice Day. City Hall is on the left and the Hongkong and Shanghai Bank on the right. Above: Prince's Building (left) and Queen's Building on the same occasion.

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The heart of Central District in 1928, with the waterfront bordering Connaught Road.

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The changing face of Statue Square between 1981 and 1985, showing the reconstruction of the Hong Kong Club and the Hongkong and Shanghai Bank.

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Despite the changes, Statue Square still provides a haven for peaceful relaxation.

THE ECONOMY

45

superimposed upon the schedular system. Since April 1, 1984, the standard rate of tax has been 17 per cent.

Profits tax is charged only on profits arising in, or derived from, Hong Kong from a trade, profession or business carried on in Hong Kong. Profits of unincorporated businesses are taxed at 17 per cent whereas profits of corporations are taxed at 18.5 per cent. Assessable profits are determined on the actual profits for the year of assessment. The tax is paid provisionally on the basis of profits of the year preceding the year of assessment. As in many countries, profits assessable to profits tax in Hong Kong are the net profits. Generally, all expenses incurred in the production of assessable profits are deductible, as are charitable donations to the extent of 10 per cent of net assessable profits. There is no withholding tax on dividends paid by corporations, and dividends received from corporations are exempt.

Salaries tax is charged on emoluments arising in, or derived from, Hong Kong. The basis of assessment and the method of payment are similar to the system for profits tax. Tax payable is calculated on a sliding scale which varies from five per cent to 25 per cent on $10,000 segments of income (that is, income after deduction of allowances). With effect from the year of assessment commencing on April 1, 1985, the segment to which the 20 per cent rate applies has been widened from $10,000 to $20,000. However, the overall effective rate is restricted to a maximum of 17 per cent of income before the deduction of personal or other allowances.

Property tax is charged on the owner of land or buildings in Hong Kong at the standard rate of 17 per cent on the actual rent received, less an allowance of 20 per cent for repairs and maintenance. A system of provisional payment of tax similar to that under profits tax and salaries tax has been in operation since April 1, 1983. Property owned by a corporation carrying on a business in Hong Kong is exempt from property tax but the profits derived from the ownership are chargeable to profits tax.

Interest tax is charged on interest arising in or derived from Hong Kong. This is basically a withholding tax deducted at source unless the interest forms part of the profits of a corporation carrying on a trade or business in Hong Kong, in which case it is subject to profits tax. The rate of interest tax on chargeable interest is 17 per cent. Interest payable on foreign and Hong Kong currency deposits placed with financial institutions carrying on business in Hong Kong is exempt from tax. Interest paid or payable by the government and public utilities is also exempt from tax, provided it does not exceed a specified rate, which varies according to the prevailing level of interest rates.

Business registration fees, which form part of the revenue from fees and charges, are also collected by the Inland Revenue Department. Business registration is compulsory for companies incorporated in Hong Kong, overseas companies with a place of business in Hong Kong and businesses operating in Hong Kong, except those run by charitable institutions and licensed hawkers. The annual registration fee is $500 but exemption from payment is granted where the business is small. With effect from October 1, 1984, every branch of a business is required to obtain a branch registration certificate and pay an annual registration fee of $15. In addition, a levy of $100, which is to be paid to the Protection of Wages on Insolvency Fund, is imposed on each business registration certificate issued to a business or its branch.

       Other revenue arises from taxes on the registration of motor vehicles, fines, forfeitures and penalties, royalties and concessions, yields from properties, investments and land transactions, reimbursements and contributions, government utilities, and from fees and charges for the provision of a wide range of goods and services.

46

Audit of Public Accounts

THE ECONOMY

The audit of all the government's accounts is carried out by the Director of Audit. He also audits the accounts of the Urban Council, the Housing Authority and more than 50 statutory and non-statutory funds and other public bodies, as well as reviewing the financial aspect of the operations of the multifarious government-subvented organisations in Hong Kong. The director's appointment, tenure of office, duties and powers are set out in the Audit Ordinance, which also provides that he shall not be subject to the direction or control of any other person or authority.

      The Director of Audit's report on the annual accounts of the government is submitted to the Governor as President of the Legislative Council for tabling. It is then referred to the Public Accounts Committee, comprising a chairman and six members, all of whom are unofficial members of the Legislative Council. In the exercise of its authority, the committee may call any public officer or other person concerned to give information and explanations and to produce any documents and records which it may require. Up to 1983, the committee held all its meetings in camera but this was changed in 1984 and hearings are now held in public except where the committee is of the opinion that the public interest requires confidentiality. The report by the Public Accounts Committee on the Director of Audit's report relating to the accounts of the government is also tabled in the Legislative Council. Both are copied to the Secretary of State.

The Economy in 1985

Despite the substantial slowing down in economic growth and the sluggish performance of domestic exports, some areas of the economy continued to show favourable developments in 1985. Re-exports recorded substantial growth; the unemployment rate remained at a relatively low level; earnings continued to improve both in money terms and in real terms; and the rate of inflation was low. Moreover, the property market, which had been overshadowed in the past two years by the problem of oversupply and the anxiety over the future of Hong Kong, staged a strong recovery in 1985. This was attributable to a combination of factors, including the return of confidence in the future of Hong Kong, the continued improvement in real incomes, the fall in property prices and rentals over the past few years to more realistic levels, and the several reductions in mortgage rates during the year. Nevertheless, there were some areas of concern, including the growing threat of protectionism in Hong Kong's export markets, particularly the United States, and China's. tighter controls on the use of its foreign exchange reserves, both of which could have serious implications for the performance of the Hong Kong economy.

      The preliminary estimates show that the growth rate in real terms of the gross domestic product (GDP) in 1985 was only 0.8 per cent, considerably lower than the provisional estimate of 9.3 per cent for 1984. As domestic exports declined by five per cent in real terms while domestic demand showed limited growth, the fall in domestic exports was the major factor contributing to the weak economic performance in 1985. This was in sharp contrast to the situation in 1983 and 1984 when domestic exports provided the main impetus to the growth of the GDP.

In 1985, domestic exports fell by six per cent in money terms or about five per cent in real terms. This represented a sharp deceleration from the real growth rates of 14 per cent in 1983 and of 17 per cent in 1984. The poor performance in 1985 was largely due to the slowing down in the growth rates of the economies of many of Hong Kong's export markets, particularly the United States. The relative strength of the Hong Kong dollar against the currencies of most of the territory's major competitors in 1984 and in early 1985 also

THE ECONOMY

47

reduced the price competitiveness of Hong Kong's exports in world markets for most of 1985. Domestic exports to the major markets showed different movements. While domestic exports to China continued to grow rapidly, by an estimated 32 per cent in real terms, those to other major markets recorded decreases, including falls of seven per cent to the United States, 18 per cent to the United Kingdom, 12 per cent to Japan, and 14 per cent to the Federal Republic of Germany. In respect of domestic exports to China, however, there was a sharp deceleration in the year-on-year growth rate in real terms during the course of 1985, from a growth of 96 per cent in January to an estimated decline of 10 per cent in December, largely reflecting China's recent tightening of control over its foreign exchange spending.

      Analysed by major commodities, domestic exports of textiles decreased by about seven per cent and of clothing by about six per cent in real terms. Domestic exports of footwear and watches and clocks registered increases in real terms, but they together accounted for only eight per cent of the total value of domestic exports. Domestic exports of other products declined, by about nine per cent in real terms.

      The entrepôt trade continued to expand rapidly in 1985, with re-exports growing by 26 per cent in money terms or about 25 per cent in real terms. China continued to be the largest market for Hong Kong's re-exports, following by the United States, Japan, Singapore, Taiwan and the Republic of Korea. China was also the most important source of the goods re-exported through Hong Kong, followed by Japan and Taiwan. The major end-use categories of goods re-exported through Hong Kong were raw materials and semi- manufactures and consumer goods, representing 33 per cent and 29 per cent respectively of the total value of re-exports. Analysed by major product categories, textile yarn, fabrics and made-up articles, electrical machinery, and clothing which accounted for 15 per cent, nine per cent and seven per cent respectively of the total value of re-exports, showed substantial increases in real terms.

      Imports grew by four per cent in money terms or about six per cent in real terms in 1985, against the corresponding increases of 27 per cent and 15 per cent in 1984. As in the previous year, this growth was strongly influenced by the substantial increase in re-exports. Retained imports, on the other hand, decreased by 10 per cent in money terms or roughly five per cent in real terms. Among the major end-use categories, retained imports of raw materials and semi-manufactures declined by around nine per cent in real terms, made up of decreases of 12 per cent in the first half of the year and about six per cent in the second half.

      As the value of total exports (domestic exports plus re-exports) exceeded the value of imports, in 1985 the visible trade account recorded a surplus of $3,733 million, equivalent to 1.6 per cent of the value of imports. This was exceptional, and reflected mainly the decline in retained imports. In 1984, a deficit of $3,361 million, or a visible trade gap of 0.9 per cent, was recorded.

      Domestic demand, on the other hand, grew by one per cent in real terms in 1985, made up of a growth of three per cent in private sector demand and a decrease of eight per cent in public sector demand. Private consumption expenditure registered a growth rate of five per cent in real terms, compared with six per cent in 1984. Overall expenditure on building and construction (including civil engineering) decreased by 10 per cent in real terms. Public sector expenditure on building and construction fell by 22 per cent, due to the completion of some public works projects and the major part of the MTR Island Line. Private sector expenditure on building and construction also declined, by one per cent in real terms, reflecting the effect of the completion of two large private sector building projects the new

48

THE ECONOMY

Hongkong Bank building and Phase I of Exchange Square. Concerning investment in plant, machinery and equipment, private sector expenditure decreased by three per cent in real terms in 1985, after the growth rate of 24 per cent in 1984. This reflected in part the effect on investment intention in the manufacturing sector of the sluggish domestic export performance throughout 1985.

Labour Market

The supply of labour was generally stable in 1985, with an increase in the population of working age largely offset by a decline in the labour force participation rate. The demand for labour was sustained at a relatively high level, with a further increase in employment in the services sectors more than offsetting the declines in employment in the manufacturing sector and on building and construction sites. Thus for the labour force as a whole, the unemployment rate and the underemployment rate remained at a relatively low level. The seasonally-adjusted unemployment rate and the underemployment rate stood at 3.2 per cent and 1.1 per cent respectively in the fourth quarter of 1985, compared with 3.8 per cent and 1.0 per cent respectively in the fourth quarter of 1984.

      Consistent with the weak performance of domestic exports, industrial production, measured in terms of the quantity index of manufacturing output, declined by five per cent on average in the first three quarters of 1985, compared with the same period in 1984. The fall in manufacturing output was accompanied by a fall in labour productivity, measured in terms of manufacturing output per person engaged. This was in part due to the smaller number of hours worked and a lower utilisation of plant and machinery.

Comparing September 1985 with September 1984, employment in the manufacturing sector (at 848 900) fell by six per cent. Over this period, employment in the wholesale, retail and import/export trades (at 415 200) increased by nine per cent, and in the finance, insurance, real estate and business services sector (at 179 200) by seven per cent, but that in restaurants and hotels (at 174 500) remained stable. Employment on building and construc- tion (including civil engineering) sites (at 64 400) fell by five per cent. During the year, there was a shift in employment from civil engineering projects to building projects, as well as from public sector building sites to private sector building sites.

      Wages and earnings in the manufacturing sector continued to increase both in money terms and in real terms in the 12 months ending September 1985, although at a slower rate compared with the previous 12-month period, reflecting the adverse effects of the sluggish domestic export performance on incomes. On the other hand, salaries in the tertiary services sectors, in terms of payroll per person engaged, showed more rapid increases. Construc- tion wage rates increased moderately in money terms but only slightly in real terms.

Property Market

The property market has shown clear signs of revival upon a return of confidence following the initialling of the Sino-British Agreement in September 1984. The rate of take-up for most major categories of finished property improved during 1985 and vacancy rates fell. Prices and rentals of residential property generally, and of medium to large residential flats in particular, showed quite significant increases. Prices and rentals of other types of property, however, remained fairly stable or recorded slight increases during 1985.

Movements in land prices are closely related to movements in the prices of property. Although there is no reliable overall measure of movements in land prices, land prices appeared to have followed an uptrend in 1985. The government land auctions met with favourable responses, indicating increased confidence among property developers.

THE ECONOMY

The Financial Scene in 1985

49

      The behaviour of the Hong Kong dollar and of local interest rates during the year reflected the working of the linked exchange rate system adopted since October 1983. Despite the volatility in the international foreign exchange markets, the exchange rate of the Hong Kong dollar held steady against the US dollar, most of the time within half a per cent on either side of the linked rate of $7.80 per US dollar. During the year, the Hong Kong dollar was the strongest against the US dollar on July 18, reaching $7.72 (closing middle market telegraphic transfer rate), amid speculation of an imminent revaluation. But it moved back close to the linked rate after the government's determination to maintain it at $7.80 became clear to the market. The trade-weighted exchange rate index for the Hong Kong dollar generally followed the movement of the US dollar against other major currencies: it peaked at 79.1 in March, before declining steadily to close the year at 70.6, a depreciation of seven per cent since the end of 1984.

      The stable performance of the Hong Kong dollar was accompanied by frequent changes in local interest rates. The interest rates administered by the Hong Kong Association of Banks were adjusted nine times during the year, mostly downwards. Hong Kong dollar interest rates were generally lower than the corresponding US dollar rates.

During the year, deposits in banks and deposit-taking companies and the money supply aggregates increased at rates of between 20-25 per cent, with the foreign currency components mostly increasing at a faster rate than the corresponding Hong Kong dollar components, partly reflecting lower Hong Kong dollar interest rates. About half of the total deposits were in Hong Kong dollars. As part of a wider trend, and taking advantage of the lower interest rates and liquidity in the monetary sector, financial institutions increased the issue of negotiable certificates of deposit, in particular, Hong Kong dollar denominated certificates. But these deposits still constituted only a small part of the total deposits or the money supply.

In the monetary sector, the year was marked by the failure of a local bank, the Overseas Trust Bank. It was taken over by the government on June 7, to safeguard the integrity of Hong Kong's financial system and so to maintain stability in the exchange rate of the Hong Kong dollar. It also served to protect the interests of the bank's depositors. Despite this incident, the sector as a whole expanded further during the year with three more licences being granted to foreign banks, besides three additional deposit-taking company licences and six new registrations of deposit-taking companies. There were, over the same period, a number of revocations and suspensions of deposit-taking companies registrations because of cessation of business, or failure to meet statutory liquidity requirements.

       The turnover on the four stock exchanges in 1985 was: Far East Exchange, $30,923 million; Hong Kong Stock Exchange, $19,984 million; Kam Ngan Stock Exchange, $24,783 million; and Kowloon Stock Exchange, $118 million. The total turnover of $75,808 million was 55.4 per cent higher than in 1984. The Hang Seng Index ended the year at 1 752.45 (July 31, 1964100), compared with 1 200.38 at the end of 1984. The highest point reached during the year was 1 762.51, recorded on November 21.

      There were six instances of companies going public, raising a total capital of $1,034 million, and 11 rights issues, raising $2,068 million; 20 reconstructions of companies and re-activations of shell companies took place in 1985.

       The total number of authorised issues of commercial paper and certificates of deposit at December 31, 1985 was 90, representing a substantial increase of 87.5 per cent over 1984.

       In 1985, the turnover on the Futures Exchange was: sugar, 210 515 lots of 50 long tons each; soyabeans, 340 545 lots of 30 000 kg each; and gold, 5 977 lots of 100 troy ounces each.

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THE ECONOMY

      The price of loco-London gold moved between US$300 and US$330 an ounce in lacklustre trading throughout most of 1985. The price of gold on the Chinese Gold and Silver Exchange Society followed similar movements as that for loco-London gold. The tael price of gold fluctuated mostly between $2,800 and $3,100, touching a high of $3,215 on March 20, before ending the year at $3,041.

Inflation

The rate of inflation, as measured by the increase in the Consumer Price Index (A), averaged 3.2 per cent in 1985. This compared very favourably with a rate of 8.1 per cent in 1984 and 10.0 per cent in 1983. During the course of 1985, the year-on-year rate of increase in the Consumer Price Index (A) remained fairly stable, moving mostly within a narrow range of three per cent to four per cent. A number of favourable factors have contributed to the relative stability in consumer prices. Domestically, aggregate demand for resources in the economy was not imposing undue pressure on the aggregate supply of resources, and hence on the general price level. Externally, the Hong Kong dollar was stable against the US dollar under the linked exchange rate system, the rates of inflation in Hong Kong's major trading partners were moderate, and world commodity prices remained generally soft.

      Apart from alcoholic drinks and tobacco, the prices for most components of goods and services in the Consumer Price Index (A) showed only moderate changes during 1985. The 12.4 per cent increase in the prices of alcoholic drinks and tobacco largely reflected the increase in the duties on imported cigarettes and tobacco, and on beer and non-European type wines and spirits effected at the end of February 1985.

Expenditure on the General Revenue Account in 1984-5 and 1985--6

In the financial year 1984-5, total expenditure on the General Revenue Account was $36,902 million, comprising recurrent expenditure of $25,992 million and capital expendi- ture of $10,910 million. Estimated expenditure in 1985-6 is $38,362 million, comprising recurrent expenditure of $29,685 million and capital expenditure of $8,677 million. In 1984-5, there was a deficit of $1,563 million (of which $1,004 million was financed by the issue of Government Bonds), and for 1985-6 an overall deficit of $960 million was anticipated in the Budget. Detailed breakdowns of revenue by source are given at Appendices 7 and 7a, and of expenditure by function at Appendices 8 and 8a. A comparative statement of recurrent and capital revenue and expenditure is given at Appendix 9, while a statement of revenue from duties is given at Appendix 10. At March 31, 1985, the accumulated reserves stood at about $15,518 million. At the same date, the public debt amounted to $1,317 million.

4

F

Industry and Trade

      FACED with a slowdown in the economic recovery of many of its major export markets, in particular the United States, Hong Kong's trade performance in 1985 was characterised by a fall in domestic exports, a larger increase in re-exports and a slowing down in the growth. rate of visible trade. The value of domestic exports during the year amounted to $129,882 million, compared with $137,936 million in 1984.

Overall, the major factors that have given Hong Kong its international reputation as a leading manufacturing and commercial centre continued to work well. Among these are the consistent economic policies of free enterprise and free trade, low salaries and profits tax rates, an industrious workforce, a sophisticated commercial and industrial infrastructure, a modern and efficient seaport, in which is located the world's third busiest container port, a centrally located airport with a computerised cargo terminal, and excellent world- wide communications.

There are no import tariffs; and revenue duties are levied only on tobacco, alcoholic liquors, methyl alcohol, hydrocarbon oils, cosmetics and non-alcoholic beverages.

A levy is also payable on first registration of motor vehicles, except franchised buses.

Apart from ensuring the provision of the necessary infrastructure, either through direct services or by co-operation with privately owned public utility companies and autonomous bodies, the government's principal role in the economy is to provide a stable framework in which commerce and industry can function efficiently and effectively with minimum interference. The government normally intervenes only in response to the pressure of economic and social needs. It neither protects nor subsidises manufacturers.

The manufacturing sector is the mainstay of the Hong Kong economy, accounting for some 25 per cent of the gross domestic product and 36 per cent of total employment. It is estimated that up to 90 per cent of Hong Kong's manufacturing output is eventually exported. Light manufacturing industry, producing mainly consumer goods, predominates. About 67 per cent of the total industrial workforce is employed in the textiles, clothing, electronics, plastic products, toys, and watches and clocks industries. These industries together accounted for 78 per cent of Hong Kong's total domestic exports in 1985, a pattern which is likely to continue.

However, within industries there have been considerable changes and improvements in the range of products made. Many new and sophisticated product lines have been introduced and many simpler product lines have been abandoned, partly because of competition from lower cost producers within the region and partly in response to pressures to move up-market resulting from the emergence of various forms of protectionism in some of Hong Kong's main markets. There is an increasing emphasis on quality and technical excellence.

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INDUSTRY AND TRADE

Industrial Land The Hong Kong Industrial Estates Corporation, a statutory body established in March 1977, develops and manages industrial estates intended to accommodate industries with a relatively high level of technology that cannot be operated in the ordinary multi-storey factory buildings which house the bulk of Hong Kong's manufacturing industry. The first two stages of the Tai Po Industrial Estate provide 55 hectares of industrial land. The third stage, now under construction, will produce a further 14 hectares by 1987. A second estate at Yuen Long provides an additional 67 hectares of land.

The corporation offers land at a fixed premium, although it may be varied to reflect the current market conditions. By the end of 1985, 111 of the 248 applications received by the corporation had been approved and sites were granted to 56 companies in the Tai Po and Yuen Long Industrial Estates. Besides offering sites to industrialists for the construction of their own purpose-built factory buildings, the Hong Kong Industrial Estates Corporation also offers pre-built factory premises for purchase by those who wish to begin production with a minimum of delay. The standard factories are fully serviced and units are designed with maximum flexibility to suit the varied requirements of potential occupiers. Two blocks of four-storey standard factories at the Tai Po and Yuen Long Industrial Estates have been occupied. Six units of single-storey standard factories are scheduled for completion in 1986. Outside the industrial estates, nine sites with an overall area of 20 264 square metres were sold by public auction in 1985 for industrial use.

Industrial Support Facilities and Technical Back-Up Services

Since its establishment in October 1983, the Industry Development Board, chaired by the Financial Secretary and comprising representatives from trade and industry, and tertiary education institutions, and officials, has been considering the various industrial matters that fall within its purview. Three committees and two sub-committees have been established to assist the board in its work. The General Development Committee is respon- sible for the consideration of the needs of industry, for example, through techno-economic and marketing research studies and for the supervision of industrial development projects. The Science and Technology Support Committee provides advice on technical and scientific issues relating to industry including the provision of technical information for industry. The Infrastructure and Support Services Committee considers all other issues relating to the provision, by government, of a suitable infrastructure within which industry can operate. Two sub-committees have been established under the Science and Technology Support Committee to advise on the development of electronics technology and computer- aided design and computer-aided manufacture technology.

      Throughout the year, the Industry Development Board and its committees continued to work towards improvements in the provision of industrial support facilities and technical back-up services for industry.

      The government's Standards and Calibration Laboratory, which came into operation in September 1984, maintains local reference standards of measurement which are traceable to international standards. It also provides a calibration service, primarily to meet the needs of the electrical and electronics manufacturing sector of industry. Planning is in hand to expand this service to cover other fields. The Hong Kong Laboratory Accreditation Scheme - which is administered by the Industry Department on behalf of the government -- was launched in May with the assistance of the Australian National Association of Testing Authorities. The scheme seeks to enhance local quality certification services. The first formal assessment for accreditation took place in November.

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53

       On the recommendation of the Industry Development Board, the Hong Kong Design Innovation Company Limited, a private company, was formed and incorporated in October, with government financial assistance initially, to provide local industry with a product innovation and design service.

      During the year, the board formulated a three-year plan for a unified approach to implementing various proposals for supporting industry in a co-ordinated and effective way. In addition, a techno-economic and marketing research study on the plastics industry began in April and a research study on computer-aided design and manufacture systems started in July. The board was also in the process of commissioning an in-depth study on the textiles and clothing industry. Three research projects on electronics technologies undertaken by the two universities and the Hong Kong Polytechnic continued.

Industrial Investment Promotion

To strengthen industrial investment promotion activities, the fifth overseas investment promotion office of the Industry Department is being established in New York. The four existing offices - in London, Stuttgart, Tokyo and San Francisco - continued to generate considerable interest in Hong Kong as a manufacturing base, but with the United States remaining by far the most important source of investment and enquiries, the need for a second office in the United States had become clear.

      The department's promotion activities are geared towards encouraging the introduction into Hong Kong of new or improved production technology and processes, so that local industry can upgrade its methods and continue to move towards higher technology and higher manufacturing skills.

       The overseas offices are linked to a 'One Stop Unit' in Hong Kong, which, with its wide network of contacts in both the government and the private sector, is well placed to provide useful information to assist potential investors. This unit also helps local manufacturers to find overseas partners or firms willing to enter into licensing or other agreements.

      In 1985, the department received a total of 405 industrial investment enquiries from around the world, and at the end of December was dealing with 496 active investment promotion projects. The department also increased its efforts in making the services provided by the One Stop Unit better known to local industrialists and overseas investors visiting Hong Kong. In May, the department appointed an advertising agent to co-ordinate its overseas advertising campaign.

      As well as responding to enquiries, following through individual projects and developing personal contacts with the public and private sectors, the Industrial Promotion Division carried out a formal promotion programme of outward missions, participation in trade fairs and seminars, and speaking engagements. The Director of Industry spoke at seminars in the United Kingdom, the United States, Japan and Germany, and led a mission of local manufacturers to the United Kingdom in June. Staff from both Hong Kong and overseas offices organised missions and attended trade and industrial fairs, seminars and other functions in North America, Europe, Australia and East Asia.

      During the year, an industrial investment promotion film was produced to encourage potential overseas investors to choose Hong Kong as their manufacturing base in the region. Work began on another film, centring on the need for local manufacturers to upgrade their operations. This was scheduled for completion in 1986.

      Hong Kong continues to be an attractive location for overseas manufacturers. At the end of 1985, there were some 556 factories either fully or partly owned by overseas interests. These factories employed 91 580 workers or 11 per cent of total industrial employment in

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Hong Kong. The United States remains the largest source of overseas industrial investment in Hong Kong, accounting for some 53 per cent of the total. Japan is second with 21 per cent and Britain third with about seven per cent. The principal industries involved are electronics, textiles and clothing, electrical products, non-metallic mineral products and food and beverages.

      The Hong Kong/Japan Business Co-operation Committee continued to work closely with its counterpart in Japan. It provided considerable assistance and support to the Industry Department's industrial promotion work in Japan.

Textiles and Clothing

The textiles and clothing industries are Hong Kong's largest. Together they employ about 42 per cent of the total industrial employment and produce some 41 per cent by value of total domestic exports. Total domestic exports of textiles and clothing in 1985 were valued at $52,735 million, compared with $55,345 million in 1984.

The output of cotton yarn in 1985 was 142 million kilograms, compared with 136 million kilograms in 1984. Production of man-made fibre yarn and cotton man-made fibre blended yarn was 16 million kilograms, compared with 20 million kilograms in 1984, and production of woollen and worsted yarn was four million kilograms, compared with four million kilograms the previous year. Most of the yarn produced was used locally.

The weaving sector, with 20 114 looms, produced 662 million square metres of woven fabrics of various fibres and blends, compared with 718 million square metres in 1984. The bulk of the production - 94 per cent was of cotton. Much of the fabric produced was exported in the piece, but local clothing manufacturers used the major proportion of locally woven and finished fabrics.

      The knitting sector exported 22 million kilograms of knitted fabrics in 1985 - of which 24 per cent was of man-made fibres or blended cotton man-made fibres, and 75 per cent was of cotton compared with 23 million kilograms in 1984. In addition, a large quantity of knitted fabric of all fibres was used by local clothing manufacturers.

The finishing sector of the industry provides sophisticated support facilities to the spinning, weaving and knitting sectors. It handles a large amount of textile fabrics for bleaching, dyeing, printing and finishing. The processes include yarn texturising, multi- colour roller and screen printing, transfer printing, pre-shrinking, permanent pressing and polymerising.

      The clothing sector is the largest single sector within the manufacturing industry, employing some 292 163 workers or about 34 per cent of the total industrial employment. Domestic exports of clothing in 1985 were valued at $44,912 million, compared with $46,714 million in 1984. In response to changes in the United States' country of origin rules, many knitwear manufacturers made heavy investment in modern computerised and automatic machinery in 1985.

Other Light Industries

The electronics industry is the second largest export-earner among Hong Kong's manufac- turing industries. Domestic exports of electronics products in 1985 were valued at $27,014 million, compared with $31,213 million in 1984. (These figures correspond to electronic products as delineated in a review in 1985 by relevant government departments and trade organisations on the classification of electronic products. Although such delineation cannot be exact due to the continuous proliferation of electronics technology, it nevertheless helps in monitoring the development of the electronics industry). The industry comprises

INDUSTRY AND TRADE

55

     1 284 establishments employing 81 995 workers. It produces a wide range of sophisticated and high quality products and components such as calculators, radios, cassette recorders, hi-fi systems, television sets, wired and cordless telephones with built-in memories and automatic dialling functions, telecommunication equipment, photocopying equipment, microcomputers, computer memory systems, Winchester and floppy disk drives, read/write magnetic heads, computer printers, switching power supplies, and computer-aided design and testing equipment. It also produces multi-layer printed circuit boards, electronic modules, liquid crystal displays, quartz crystals and semi-conductor devices including integrated circuit wafers (such as microprocessor, RAM/ROM memory and logic chips).

The plastics industry accounted for 8 per cent of the total domestic exports and 10 per cent of the total industrial employment in 1985. Domestic exports of plastic products during the year were valued at $10,678 million, compared with $12,305 million in 1984. The industry has 5 295 establishments and 85 825 workers. Hong Kong continues to be the world's largest supplier of toys, which represented the bulk of the industry's output.

Hong Kong is an important world exporter of watches and clocks. Domestic exports in 1985 were valued at $9,573 million compared with $9,227 million in 1984. The industry has 1 837 establishments employing 38 395 workers. Production includes both mechanical and electronic watches, clocks, watch cases, dials, metal watch bands, assembled watch movements and watch straps of various materials. Other important light industries produce electrical machinery, apparatus and appliances, metal products, jewellery, optical and photographic goods and travel goods, handbags and similar articles.

Heavy and Service Industries

Hong Kong shipyards provide a competitive repair service and build a variety of vessels. Several large shipbuilding and repair yards on Tsing Yi Island provide services to the shipping industry and construct oil rigs for exploration activities.

      The port of Hong Kong, which ranks among the top three container ports in the world, handled approximately 2.25 million TEUS (20-foot equivalent units) in 1985.

      The aircraft engineering industry has a high international reputation and provides maintenance, overhaul and repair facilities for most Asian airlines.

      The manufacture of machinery, machine tools and their parts provides support to other local industries and also contributes to Hong Kong's export trade. Of particular import- ance are blow moulding, extrusion, and injection moulding machines of up to 12 256-gram injection capacity for the plastics industry; power presses; lathes, shapers and drilling machines; polishing machines; printing presses; textile knitting and warping machines; and electroplating equipment.

Industry Department

Manufacturing industry is the mainstay of Hong Kong's economy and the department's major role is to ensure that industry is provided with the infrastructure it needs in order to prosper.

The Industry Department consists of four divisions: the Data and Services Division, Industrial Infrastructure Division, Industrial Promotion Division and Industrial Support Division. In addition, the department includes staff responsible for the Standards and Calibration Laboratory and the Laboratory Accreditation Scheme, and administrative support.

The Data and Services Division is responsible for liaison with local and international trade and industry organisations and with local factories. It produces publicity materials

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INDUSTRY AND TRADE

for industrial investment promotion purposes, collects and collates industrial data, con- ducts research and surveys and handles special issues affecting industry.

The Industrial Infrastructure Division monitors raw material supplies (in particular fuel and other essential oil products), and plays an active role in ensuring the provision of adequate infrastructural facilities including the smooth movement of freight within and outside Hong Kong at equitable freight rates, in the provision of training facilities to satisfy manpower needs of industry, and in the examination of the effects of environmental legislation on industry. It also advises the government on industrial land matters.

      The promotion of investment, by local as well as overseas interests, in Hong Kong's manufacturing industry is the task of the Industrial Promotion Division. The division carries out this work through a 'One Stop Unit' in the department's head office in Hong Kong and through overseas offices in London, Stuttgart, Tokyo and San Francisco as well as the new office in New York. All the offices are staffed by specialist industrial promotion officers whose main aims are to publicise Hong Kong's attractions as a manufacturing location and to provide comprehensive advice and assistance to potential investors.

The Industrial Support Division is concerned with the government's contribution towards the provision of industrial support facilities and technical back-up services. It comprises the secretariat for the Industry Development Board; a Product Standards Branch responsible for providing industry with information on overseas standards requirements and for issues relating to industrial product design and packaging and quality assurance, and the Standards and Calibration Laboratory.

External Trade

Total merchandise trade in 1985 amounted to $466,572 million, an increase of 5 per cent over 1984. Imports rose by 4 per cent to $231,420 million and re-exports by 26 per cent to $105,270 million while domestic exports decreased by 5.8 per cent to $129,882 million. Domestic exports and re-exports together, valued at $235,152 million, registered an increase of 6 per cent. Appendices 11 and 12 provide summary statistics of external trade.

      Hong Kong is almost entirely dependent on imported resources to meet the needs of its population of more than 5.4 million and its diverse industries. In 1985, imports of raw materials and semi-manufactured goods totalled $97,385 million, representing 42 per cent of total imports. The principal items imported were transistors, diodes, semi-conductors and integrated circuits ($6,242 million); fabrics of man-made fibres ($9,979 million); iron and steel ($6,072 million); woven cotton fabrics ($5,853 million); plastic moulding materials ($5,128 million) as well as watch and clock movements, cases and parts ($5,379 million).

Imports of consumer goods, valued at $66,730 million, constituted 29 per cent of total imports. The major consumer goods imported were clothing ($13,216 million); radios, television receivers, gramophones, records, amplifiers and tape recorders ($7,619 million); diamonds ($4,028 million); watches ($3,749 million); baby carriages, toys, games and sporting goods ($3,034 million); cameras and photography supplies ($2,743 million).

      Imports of capital goods amounted to $36,228 million, or 16 per cent of total imports. Imported capital goods consisted mainly of transport equipment ($5,269 million), office machines ($3,944 million), electrical machinery ($5,145 million), electronic components and parts for computers ($4,529 million) and textile machinery ($1,669 million).

      Imports of foodstuffs were valued at $20,752 million, representing 9 per cent of total imports. The principal imported food items were fish and fish preparations ($3,424 million), fruit ($2,900 million), meat and meat preparations ($2,535 million) and vegetables ($2,083 million).

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57

Mineral fuels, lubricants and related materials worth some $10,324 million were imported in 1985, representing 4 per cent of total imports.

      China and Japan were the two principal suppliers of imports in 1985, providing 25 per cent and 23 per cent, respectively, of the total. China alone supplied 42 per cent of Hong Kong's imported foodstuffs. The United States ranked third, providing 9 per cent of total imports, followed by Taiwan, Singapore, the United Kingdom, the Republic of Korea and West Germany.

Clothing remained the largest component of domestic exports in 1985, valued at $44,912 million or 35 per cent of the total. Exports of miscellaneous manufactured articles con- sisting mainly of plastic toys and dolls; jewellery; goldsmiths' and silversmiths' wares as well as artificial flowers were valued at $20,769 million, representing 16 per cent of total domestic exports. Electrical machinery, apparatus and appliances consisting mainly of transistors, diodes and household type appliances amounted to $10,037 million or 8 per cent of the total. Domestic exports of photographic apparatus, equipment, supplies and optical goods, watches and clocks, valued at $10,883 million, contributed another 8 per cent to the total. Other important exports included telecommunications and sound record- ing and reproducing apparatus and equipment (7 per cent of the total); office machines and automatic data processing equipment (5 per cent) as well as textiles (6 per cent).

The direction and level of Hong Kong's export trade is much influenced by economic conditions and commercial policies in major overseas markets. In 1985, 62 per cent of all domestic exports went to the United States and the European Economic Community. The largest market was the United States ($57,687 million or 44 per cent of the total), followed by China ($15,189 million or 12 per cent), the United Kingdom ($8,546 million or 7 per cent) and West Germany ($7,998 million or 6 per cent). Domestic exports to Japan and Canada decreased to $4,480 million and $4,405 million respectively, with Japan repre- senting 3 per cent and Canada 3 per cent of total domestic exports. Other important markets were Australia and Singapore.

Re-exports continued to increase in 1985, accounting for 45 per cent of the combined total of domestic exports and re-exports. The principal commodities re-exported were textiles ($15,999 million); electrical machinery, apparatus and appliances ($8,989 million); telecommunication and sound recording and reproducing apparatus and equipment ($6,999 million); clothing ($7,652 million) as well as photographic apparatus, equipment and supplies and optical goods, watches and clocks ($5,575 million). The main places of origin of these re-exports were China, Japan, Taiwan and the United States. The largest re-export markets were China, the United States, Japan, Singapore and Taiwan.

International Commercial Relations

Hong Kong believes in free trade. The aims of Hong Kong's external commercial relations policy are thus to safeguard its rights and to discharge its obligations in the pursuit of free trade. Certain important aspects of these rights and obligations are enshrined in various bilateral agreements as well as multilateral instruments such as the General Agreement on Tariffs and Trade (GATT) and the Multi-Fibre Arrangement (MFA).

Textiles

Textiles trade is the major sector that has been subject to restraint. Bilateral agreements negotiated under the MFA govern Hong Kong's textiles exports to Austria, Canada, the European Economic Community (EEC), Finland, Norway, Sweden, Switzerland and the United States.

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       The current textiles agreement between Hong Kong and the EEC governs Hong Kong's exports of cotton, man-made fibre and wool textile products to the 10 member states of the EEC for the period 1983-6. To take into account the accession of Spain and Portugal to the EEC on January 1, 1986, consultations were held between Hong Kong and the EEC Commission in November on adjustments to the HK/EEC Textiles Agreement concerning Hong Kong's exports of textile products to the two countries.

       The Hong Kong/Switzerland agreement which provided for an export authorisation arrangement for Hong Kong's exports of certain clothing items to Switzerland was extended in June for six months until December. The agreement was further extended in December for three months until March 1986.

In 1985, two major developments initiated by the United States threatened to disrupt and curtail textile trade from Hong Kong. Firstly, on March 19, the Textile and Apparel Enforce- ment Bill was introduced into the US Congress. The Bill proposed substantial unilateral cut- backs in the export potential of most third world suppliers of textiles and apparel, while leaving the EEC and Canada unscathed. In the case of Hong Kong, the Bill would reduce MFA exports made under the United States/Hong Kong bilateral textiles agreement by about 13 per cent and non-MFA exports by an uncertain amount, possibly as much as 70 per cent. The Bill violated the spirit and letter of the Multi-Fibre Arrangement and would abrogate 34 bilateral agreements between the United States and developing exporting coun- tries. Hong Kong co-operated with the developing exporting countries in taking concerted action on a multilateral front to counter the Bill, and also made direct representations to United States legislators and officials. The Bill was passed by both the House of Representa- tives and the Senate, but, in December, it was vetoed by the President of the United States. The Bill typified the strong protectionist pressures at work in the United States during 1985. ̧

       Secondly, following the interim regulations published in August 1984 on determination of origin for textile imports subject to bilateral agreements, the United States Government published the final regulations in March. Despite several rounds of consultations between the United States and Hong Kong, and a subsequent ruling by the Textiles Surveillance Body in Geneva favourable to the territory, the final regulations were not substantially moderated to address Hong Kong's concern. The sector most seriously affected by the regulations was the knitwear industry which had yet to adjust fully to the new rules on origin by investing in new knitting machinery and training new workers.

In addition, the United States/Hong Kong Textiles Agreement (1982-7) imposes specific quantitative limits on 49 categories of textile products. It also subjects all other categories to an export authorisation (EA) system. Under the EA system, the United States may seek consultations with Hong Kong with a view to establishing an appropriate level of restraint where it considers that imports from Hong Kong in respect of a particular category are causing disruption to the domestic market. During the year, the United States made four calls on Hong Kong, and consultations were held on all of them. Following consultations, limits on two calls were imposed and the other two calls were withdrawn.

       The MFA is due to expire at the end of July 1986. In July, parties to the MFA began consideration of whether it should be extended, modified or discontinued. No decision emerged and discussions on the future of the MFA were continuing at year's end. Hong Kong participated fully in these discussions in close co-ordination with other developing exporting members - less developed countries (LDCs) of the MFA.

       The year saw the establishment of the International Textiles and Clothing Bureau whose objective is to advance LDC interests in international textiles trade. Hong Kong is a founder member.

INDUSTRY AND TRADE

Non-Textiles Issues

59

French quantitative restrictions: France has been maintaining unilateral quantitative restrictions against imports of three products from Hong Kong, namely, digital quartz watches, radios and toys. This is a subject of continuing consultations between Hong Kong and the EEC Commission.

Generalised Schemes of Preferences (GSP): GSP are operated by most developed countries to promote the exports of goods from developing countries and territories by providing duty-free or reduced import tariff treatment. Following the inclusion of Hong Kong in Finland's GSP in May, Hong Kong is now a beneficiary of all the GSP operated by developed countries. However, certain products from Hong Kong are excluded in a discriminatory way from the schemes operated by Australia, Austria, Finland, Norway, Switzerland and the United States. These exclusions are the subject of continuing discussions between Hong Kong and the countries concerned.

In May, the EEC Commission reviewed the EEC GSP and proposed to exclude 12 Hong Kong products from GSP benefits. Hong Kong made a detailed submission to the commission in September, opposing the exclusion. The Council of Ministers decided in December that these products would retain GSP benefits under the EEC's 1986 scheme but would be subject to reduced quota levels.

The New Zealand Government introduced a new policy in its GSP whereby existing beneficiaries with per capita GNP equal to or exceeding 70 per cent of that of New Zealand would lose their beneficiary status from July 1985. Hong Kong and other LDCs expressed objections to this policy, and the subject continued to be under discussion between Hong Kong and New Zealand.

The US GSP was extended for 8 years in January and Hong Kong continues to be a beneficiary. Under the extended scheme, the US President is required to conduct a general review to determine the extent of preferential treatment granted to beneficiary countries. Any modification made as a result of the review will take effect on July 1, 1987. The Hong Kong Government and private sectors have participated actively in the review.

New round of trade negotiations: During the year, there were extensive discussions in the GATT on beginning a round of multilateral trade negotiations to further liberalise world trade and reaffirm the commitment of contracting parties to observe the disciplines of the agreement. An agreement was eventually reached by GATT contracting parties in November that a preparatory committee should be formed to pave the way for a new round. Hong Kong participated fully in the discussions.

Documentation of Imports and Exports

As a free port, Hong Kong keeps its import and export licensing requirements to a minimum. Products over a wide range do not need licences to enter or leave Hong Kong. Where licences are required, they are intended to achieve two main objectives. Firstly, they help Hong Kong to fulfil its international obligations to restrain exports of textiles products and, related to this, to monitor the flow of these products into Hong Kong. Thus there is a requirement for all imports and exports of such products to be covered by licences issued by the Director of Trade. Secondly, they help Hong Kong to control, on health and safety grounds, exports and imports of a few types of non-textiles products such as pharmaceuticals.

      There is in Hong Kong a certification of origin system to establish the origin of the goods which Hong Kong exports and to meet the requirements of the importing authorities. The Trade Department administers and safeguards the integrity of this system, and issues

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certificates of origin where required. Other government-approved certificate issuing or- ganisations are the Hong Kong General Chamber of Commerce, the Indian Chamber of Commerce, Hong Kong, the Federation of Hong Kong Industries, the Chinese Manu- facturers' Association of Hong Kong, and the Chinese General Chamber of Commerce, Hong Kong.

      During the year, Hong Kong followed the United Kingdom in revoking import prohibitions against Argentina. Through the Import Prohibition (Argentina) (Revocation) Regulations 1985, the prohibition imposed on the import of goods from Argentina or goods of Argentinian origin since April 1982, was revoked.

Hong Kong Trade Facilitation Council

An independent body incorporated in 1981, the Hong Kong Trade Facilitation Council (TFC) was set up to promote, stimulate and assist the facilitation of international trade procedures and the documentation and information flows associated with them. It is partly subvented by the government and its members comprise representatives of the government, and of trade and industrial organisations. In recent years, the emphasis in trade facilitation work has shifted from paper to the transmission of essential trade data by sophisticated electronic means. In line with this trend, the council is developing a project called 'Hotline', which is a proposal for a comprehensive electronic system for the transfer of data between interested parties. To keep itself abreast of developments elsewhere, the council liaises closely with other international bodies and sends representatives to attend United Nations- sponsored and other international meetings from time to time.

Trade Department

The Trade Department is responsible for Hong Kong's commercial relations with foreign governments. It implements trade policy and agreements, and procedures for import and export licensing and origin certification. On matters of policy affecting trade, the Director of Trade takes advice from the Trade Advisory Board and the Textiles Advisory Board, both of which are appointed by the Governor and chaired by the Secretary for Trade and Industry. The department consists of five divisions. Three of them deal with bilateral commercial relations with Hong Kong's trading partners. Their work includes the conduct of trade negotiations and the implementation of textile agreements, as well as collecting and disseminating information on developments, especially those relating to trade policy in Hong Kong's major markets, which may affect Hong Kong. The distribution of work among these three divisions is by geographical area. The fourth division deals with the multilateral aspects of Hong Kong's external commercial relations, such as its participation in the General Agreement on Tariffs and Trade and in the negotiation of the Multi-Fibre Arrangement. The fifth division is responsible for common services, origin certification, the import and export licensing of commodities other than textiles, and a rice control scheme. The department's work is assisted by Hong Kong Government Offices in London, Brussels, Geneva, New York and Washington. Details are at Appendix 2. These overseas offices are administered by the Trade and Industry Branch of the Government Secretariat. They represent Hong Kong's commercial relations interests on a day-to-day basis and provide information on international developments which may affect Hong Kong.

Customs and Excise Department

The department is made up of two component parts - the Customs and Excise Service and the Trade Controls Group.

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Previous page: A Tsim Sha Tsui landmark, the clock tower of the old Kowloon-Canton Railway station stands as a symbol of Hong Kong's importance in the global watch and clock industry. Above: A craftsman at work on cases for grandfather clocks.

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A Tuen Mun factory specialises in traditional hand-painted and carved wall clocks which have cases made of rosewood or teak.

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One of the territory's major watch-making factories, based in Aberdeen, uses computerised equipment to ensure that watches have the correct thickness of gold or silver plating.

An important stage in watch production: factory employees carry out water-resistance checks.

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A factory operating in small premises in a multi-storey building in Tai Kok Tsui produces

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Collectors of rare watches found much to satisfy their fancy at an auction where rare and

valuable watches from China and Europe were among the items.

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The Customs and Excise Service is a disciplined and uniformed force, and its work is described in Chapter 13, Public Order.

The Trade Controls Group is manned by Industry Grade officers, and is responsible for inspection of factories and consignments in connection with certificates of origin, import and export licences, verification of trade declarations and manifests, and control of reserved commodities. It also investigates fraud relating to imports and exports, enforces the Trade Descriptions Ordinance and design copyright aspects of the Copyright Ordin- ance, and handles trade complaints.

During the year, the group completed 56 045 inspections of factories and consignments, 1069 costing checks in connection with applications under the Generalised Schemes of Preferences (Form 'A'), and 40 464 enquiries and verifications relating to trade declarations and manifests. It conducted 6 725 assessments on trade declarations, which resulted in the collection of $3.8 million in ad valorem charges and administrative penalties.

      The group also completed 2051 investigations, resulting in the imposition of fines totalling $11.3 million and prison sentences of up to 18 months. Under the Trade Descriptions Ordinance, goods with a market value of $24.5 million were seized, of which $8 million worth were forfeited to the Crown.

Hong Kong Trade Development Council

The Hong Kong Trade Development Council is a statutory body responsible for promoting and developing Hong Kong's overseas trade and publicising the opportunities and advantages of Hong Kong as a trading partner.

The chairman is appointed by the Governor and the 18 other members include representatives of major trade associations, leading businessmen and industrialists, and two senior government officials. The council is financed by the net proceeds of an ad valorem levy on trade declarations other than foodstuffs, and by miscellaneous income from sources such as advertising fees and sales of publications.

The council was established in 1966 and has built up a network of 24 offices throughout the world in addition to the head office in Hong Kong and local branch offices in Tsuen Wan and Kwun Tong. All offices process trade enquiries, provide up-to-date trade and economic information and offer advice to businessmen interested in developing trade with Hong Kong. The overseas representatives and consultants can put traders in touch with any of the 22 000 Hong Kong manufacturers and exporters registered in the Trade Enquiries Service computer.

Council staff carried out an extensive trade promotion programme in 1985, organising more than 80 major international projects. In the United States, these covered the Winter Consumer Electronics Fair in Las Vegas and the Summer Consumer Electronics Fair in Chicago, the American Toy Fair in New York, the National Hardware Show in Chicago and the New York Premium Show.

In Europe, the council participated in the International Toy Fair in Nuremburg, the International Trade Fair for Watches, Clocks, Jewellery, Precious Stones and Silverware (and related manufacturing equipment) in Munich, the International Sports Equipment Fair in Munich, the Frankfurt International Spring and Autumn Fairs, the Birmingham International Spring Fair, and Domotechnica in Cologne, as well as mounting an exhibi- tion of watches and jewellery to coincide with the Swiss Industries Fair in Basle.

In China, the council mounted its largest overseas exhibition featuring more than 3 000 Hong Kong-made products from 90 different companies. Shanghai was the venue for this exhibition.

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      A variety of Hong Kong business groups under the auspices of the council visited the United States, Europe, China and the Middle East and Japan to enhance old, or establish new, trade contacts. The council also received more than 200 inward missions from more than 30 countries, notably from the United Kingdom, the United States, Japan, China, the Federal Republic of Germany, France, Australia, Canada and Sweden.

      To further promote exports to Japan, the council organised another in-store garment promotion with AIC Inc in leading chain stores throughout the country and a major garment exhibition in both Tokyo and Osaka. In Hong Kong, the council staged the Casual Apparel Show and organised its 11th Hong Kong Toy and Gift Fair, as well as sponsoring the Hong Kong Electronics Fair and acting as an adviser to the Hong Kong Watch and Clock Fair and the Hong Kong International Fur Fair.

      The council produces two product magazines, a fashion magazine and a newspaper on general circulation to 170 countries. They are Hong Kong Enterprise, a monthly general products magazine; the annual Hong Kong Toys, published each October to coincide with the Hong Kong Toy and Gift Fair; Hong Kong Apparel, a biannual fashion magazine, and the Hong Kong Trader, a monthly newspaper (sent airmail) giving news and views of the territory. The council also publishes three specialised trade magazines Hong Kong Jewellery and Watches (an annual); Hong Kong Electronics and Hong Kong Household (both biannuals) - which are distributed at trade fairs throughout the world. A guidebook, Hong Kong For The Business Visitor, is published annually in seven languages (English, Chinese, French, German, Italian, Spanish and Japanese).

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      The computerised Trade Enquiries Service of the council processed more than 100 000 overseas trade enquiries. The Research Department continued to publish special market surveys and detailed product reports, specifying opportunities in overseas markets for Hong Kong exports.

      Construction work is proceeding on the Hong Kong Convention and Exhibition Centre and supporting facilities including two hotels and a 33-storey office/trade mart tower. The government provided the 2.96 hectare site on the Wan Chai waterfront through a private treaty grant, free of premium. The portion of the development to be retained by the council will ultimately comprise around 73 000 square metres, and will include two 9 100 square metre exhibition halls, a 2 600 square metre conference/convention hall, two auditoria seating 700 and 360 respectively, plus a variety of smaller function rooms.

Hong Kong Export Credit Insurance Corporation

The Hong Kong Export Credit Insurance Corporation (ECIC) is a statutory corporation established in 1966 to issue insurance contracts which protect exporters and manufacturing exporters against risks of monetary loss arising from non-payment by their overseas buyers for goods and services supplied on credit. The ECIC is autonomous in its day-to-day operations with major formulation and changes in policy being subject to the approval of the Financial Secretary. Its capital of $20 million is provided by the government which also guarantees the corporation's underwriting liabilities up to $4,200 million. The corporation, which is required to operate commercially, is assisted in the conduct of its business by a 12-member advisory board.

      As a member of the International Union of Credit and Investment Insurers (the Berne Union), the corporation has regular access to confidential and updated economic and marketing information on all major trading countries.

      The primary function of the corporation is to improve the competitiveness of Hong Kong's exports, by protecting policy-holders against losses arising from those risks not

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normally covered by commercial insurers, namely, commercial risks of an overseas buyer and the political risks of his country. The maximum percentage of indemnity is 90 per cent. In performing this function, the protection provided by the corporation's policies helps policy-holders to obtain from their bankers trade finance and discount facilities for export operations.

The corporation also provides policy-holders with supporting services in resolving payment difficulties, and in the supply of political and economic intelligence on overseas markets, as well as giving indications as to the credit-worthiness of individual overseas buyers.

      Transactions which include documents against payment, documents against acceptance and open account invoices concluded on short-term credits (maximum 180 days) are normally insured under a Comprehensive Shipments Policy which gives protection from the date of shipment. Cover can also be made effective from the date of the contract of sale instead of the date of shipment so as to provide the exporter with protection during the manufacturing stage. For exports of capital goods and services sold on medium or long-term credits with payments spreading over two to five years or longer, the corporation provides other types of insurance policies to cater to the individual needs of the exporter.

Although the corporation itself does not provide finance, exporters find a 'letter of authority' is a useful form of collateral security in negotiating export finance facilities. For exports on medium and long-term credits, the corporation can, upon application, provide a full unconditional guarantee directly to the exporter's banker.

Many of the corporation's business operations have been computerised. This enables the corporation to deal with policy-holders' enquiries speedily in respect of around 55 000 overseas buyers and to process 10 000 credit limit applications a year.

In 1985, close to $5,330 million in goods and services were insured by the corporation, which earned a premium income of more than $32.6 million. Some 150 claims were paid, involving a total of $16.54 million.

In recent years, Hong Kong's exporters and manufacturers who export on the basis of irrevocable letters of credit (ILC) are increasingly facing risks at the pre-shipment, or manufacturing stage. They often find themselves having to begin manufacturing before the ILC has arrived and therefore have to face the risk of contract cancellation during the manufacturing stage. The corporation has been preparing a new pre-shipment insurance policy which is likely to be introduced in early 1986.

Hong Kong Productivity Council

The Hong Kong Productivity Council, a statutory organisation established in 1967, is responsible for promoting increased industrial productivity in Hong Kong. The council has a chairman and 20 members, all appointed by the Governor, representing management, labour, academic and professional interests as well as government departments closely associated with productivity. It is financed by an annual government subvention and by fees earned from its services.

The council provides a wide range of industrial and management consultancy as well as process control services. It conducts a diverse range of training programmes in industrial technology, management techniques and computer-related topics. It organises industrial exhibitions and overseas study missions, and operates a technical information service. It also undertakes development work in priority areas with multiple application potential so that upon successful completion newly developed productivity improvement systems can benefit as many users as possible. In 1985, a legislative amendment provided for the

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enlargement of the council's powers and functions to enable it to meet the changing in- dustrial development needs of Hong Kong with greater flexibility and effectiveness.

The council's facilities include four training centres - in Central District, Mong Kok, Tsim Sha Tsui and To Kwa Wan - electronic data processing facilities, microprocessor application laboratory, automation unit, industrial chemistry laboratory, metal finishing laboratory, heat treatment unit, die-casting unit, environmental control laboratory, tech- nical reference library and on-line information retrieval service.

During the year, the council completed two consultancy studies on sheet metal process- ing and precision machining under the sponsorship of the Industry Development Board. It also accepted the government's proposal that it should adopt a 'unified approach' in the provision of industry support facilities, to rationalise various recommendations made in techno-economic studies and to give early implementation to priority projects.

      There was a sustained demand for the council's management and industrial consultancy services from both local and overseas companies in establishing new plants, and in expanding and streamlining their operations. The council completed over 240 consultancy projects, including feasibility studies, production management, personnel recruitment, and various technical assistance services. In metals technology, 2 500 heat treatment and metal finishing assignments were completed on behalf of client companies to improve the quality of their production tooling and to increase the productivity of their operations.

     Throughout the year, the Microprocessor Application Laboratory was engaged in the provision of consultancy services and the development of productivity enhancement systems. Development work on two computer-aided design systems, for garment grading and printed circuit board layout, was completed. Training programmes in microprocessor application were organised. In electronic data processing, the council began projects on system studies and application software development. The council also undertook the development - in a joint venture project of a comprehensive management information system with software specially developed for the garment industry. In environmental management, 46 projects were carried out, covering air pollution control, waste water treatment, noise control and solid waste management.

      The council maintains close contact with industry through its Industry Liaison Scheme. Seminars, forums and presentations were conducted for various district bodies and industrial associations. In the area of training, the council organised 400 courses for over 8 000 people, covering management and supervisory techniques, advanced programming and electronic data processing appreciation courses, and a diverse range of technology programmes for various industries. It also organised exhibitions on clothing technology and industrial automation. Four overseas study missions were organised to observe the latest technology in hot-metal processing and vacuum coating and the latest management techniques in quality control and construction site safety.

As a member of the Asian Productivity Organisation (APO), the council handles all APO matters on behalf of the government. During the year, under the sponsorship of the APO, the council held two seminars, attended by delegates from most Asian countries, on the use of computers in manufacturing.

Other Trade and Industrial Organisations

The Hong Kong General Chamber of Commerce, founded in 1861, is the oldest and largest trade and industrial association in the territory. It comprises more than 2 700 companies representing all branches of commerce and industry. The chamber is actively involved in promoting Hong Kong's trade and attracting new industries. It is a member of the

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International Chamber of Commerce and has been approved by the Economic and Social Commission for Asia and the Pacific to arbitrate in commercial disputes. The chamber provides a wide range of services to its members and to more than 8 000 non-member companies. These include the issue of certificates of origin, commercial carnets, endorse- ment of invoices and the processing of trade and industrial enquiries. The government regularly consults the chamber on important issues affecting trade, industry and aspects of social development.

      The Federation of Hong Kong Industries was established by statute in 1960 to promote and protect the interests of Hong Kong industry and to provide a strong central organisation to which all manufacturing industries in Hong Kong could belong. It advises the government on matters affecting Hong Kong industry and has a membership which is broadly representative of all industries. The federation provides a wide range of services to both members and non-members, covering certificates of origin, trade enquiries and joint venture requests, efficient and accurate translation services, specialised research tailored to particular needs, and, through its Design and Packaging Centre, design and packaging depository and consultancy services. It runs the Q-Mark Scheme under which licences are issued in respect of products found to comply with internationally approved standards and manufactured under an adequate quality control system. The federation publishes a monthly magazine, the Hong Kong Industrial News, and a Members' Directory. It sponsors exhibitions and fairs and organises seminars and conferences on various industrial issues.

The Chinese Manufacturers' Association of Hong Kong was established in 1934. It has a membership of 3 200 industrial and trade establishments. A member of the International Chamber of Commerce, the CMA has played an important role in the industrial development of Hong Kong. It is authorised by the government to issue certificates of origin. It operates a trade enquiry section and sponsors trade fairs in support of trade promotion, promotes product development, and holds the annual Hong Kong New Products Competition. It also provides services to introduce new technology, encourage investment and promote trade. The CMA Testing and Certification Laboratories provide a wide variety of services including product testing, certification, production and pre- shipment inspection, and technical consultancy. The association promotes industrial safety and manpower development in the industrial sector and runs two prevocational schools which provide technical education for more than 2 000 students.

      Founded in 1900, the Chinese General Chamber of Commerce, Hong Kong, is an association of Chinese firms and businessmen resident in Hong Kong. It has a membership of more than 5 000. In addition to the traditional activities of a chamber of commerce, the chamber maintains close contact with trade organisations in China and actively seeks to promote two-way trade between China and Hong Kong. This is highlighted by the fact that since 1957 the chamber has been authorised by the Chinese Export Commodities Fair authorities to issue invitations on their behalf to Chinese firms situated in Hong Kong. It is also one of the five commercial and industrial organisations authorised by the government to issue Hong Kong certificates of origin. In 1985, the chamber became a functional constituency of the Legislative Council, together with the Hong Kong General Chamber of Commerce, the Federation of Hong Kong Industries and the Chinese Manufacturers' Association.

      The Hong Kong Management Association is an incorporated body established in 1960 for the purpose of improving the effectiveness and efficiency of management in Hong Kong. Institutional and individual membership totals over 6 000. The association operates under its auspices a number of specialists clubs which provide opportunities for groups with

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similar interests to share and further develop their expertise. It regularly offers management consultancy and knowledge/skill oriented courses. More than 1000 programmes are offered annually, catering to over 30 000 executives. A highlight of the association's activities is the annual conference which provides a platform for eminent speakers to share their knowledge, experience and new thinking on the practice of management. Other management services provided by the association include the publication of The Hongkong Manager, a bilingual management journal, library and information services, seminars and forums, inter-firm competitions and translation services. To generate better management practices in small to medium-sized businesses, the association operates a Business Enter- prise Management Centre and a series of Chinese-language books on management has been compiled.

Consumer Council

The Consumer Council, established in 1974, is responsible for protecting and promoting the interests of consumers of goods and services. It comprises a chairman and members, not more than 15, who are appointed by the Governor and come from various walks of life. The council has a staff of 92 and is financed primarily by an annual subvention from the government.

The council provides a comprehensive consumer protection service covering consumer representation and legislation, advice and complaints, research and testing, information and education. It maintains close co-operation with the government and is represented on many committees to tender specialist advice on a wide range of consumer concerns.

In 1985, the council opened two more consumer advice centres, bringing the total number throughout the territory to 14. These centres are in daily contact with the public, providing shopping advice and receiving consumer complaints. During the year, the council dealt with 112 304 enquiries for advice and 9 551 complaints.

      In a concerted effort to deal with dishonest or unfair practices by some retailers, the council in 1985 resorted to the public censure of those traders about whom it received a high number of justified complaints. Altogether 13 shops were named. This resulted in widespread publicity in the media and in an improvement in retail trading standards. The year also saw the enactment of three pieces of consumer protection legislation, namely, the Gold Marking Order under the Trade Descriptions Ordinance, the Money Changers (Disclosure of Rates, Charges and Commission) Ordinance, and the Travel Agents Ordinance. This latter ordinance provides for the registration and licensing of travel agents and the creation of a reserve fund to compensate customers of defaulting travel agents.

A vital function of the council is the collection and dissemination of independent and impartial information to assist consumers in the choice of goods and services that will best suit their needs and requirements. To this end, an extensive programme of research and comparative product testing was implemented. Findings of research and tests, complete with information on brand names, are published regularly in the council's monthly magazine Choice. In December, the magazine was given a new look to appeal to a wider audience, boosting the circulation to 40 000.

      As part of a continuing campaign to improve standards of consumer education and awareness, the council worked closely with schools and the Education Department, providing talks to both students and teachers and organising extra-curricular activities. A drama competition on the theme of consumer rights was held in March and a new educational television film, entitled A Fair Deal, was produced to supplement the existing

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syllabus on the topic. At the end of the year, the council organised a campaign for 1986 to educate the public on consumer product safety.

The Consumer Council is a Council Member of the International Organisation of Consumers Unions (IOCU), and maintains strong ties with its counterparts abroad, including those in China.

Trade in Endangered Species

The possession, importation and exportation of endangered species of animals and plants including parts and certain derivatives, into and out of Hong Kong is strictly regulated by the Animals and Plants (Protection of Endangered Species) Ordinance which gives effect to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). While the licensing policy allows legitimate trade in scheduled specimens, import licences may not be granted in certain cases to help the survival of a species. For example, there has been a total ban on the import into Hong Kong of rhino products of all species of Rhinocerotidae since 1979. Hong Kong maintains its place as an important centre for legitimate trade in African ivory.

The ordinance is administered by the Agriculture and Fisheries Department and is enforced by officers of the department and the Customs and Excise Department. The Trade Department is authorised to issue certificates for ivoryware carved in Hong Kong. Illegal trade is investigated and prosecutions follow if there is evidence of a breach of the ordinance. During 1985, there were 487 seizures and 302 prosecutions under the ordinance.

Metrication

In the field of metrication, the government's objective is to facilitate progressive adoption of the International System of Units (SI) in those areas for which it is responsible, and the positive encouragement of the use of metric (SI) units by the private sector. The Metrication Ordinance, enacted in 1976, provides for the eventual replacement of non- metric units by SI units in all legislation in Hong Kong. Most government departments are now using metric units exclusively.

      A Metrication Committee, consisting of representatives of industry, commerce, manage- ment and consumer affairs and government officials appointed by the Governor, is the focal point of liaison on all matters concerning metrication. It advises and encourages the commercial and industrial sectors in the framing of their metrication programmes. Partly through the efforts of the committee, public awareness of metrication has increased and considerable progress has been made in the adoption of SI units in the private sector.

In March, the committee launched a major publicity campaign to promote the use of metric weighing units and metric weighing machines. The campaign activities included a poster design competition, newspaper and radio quizzes, a recipe competition and a television games show in addition to the production of promotional posters, and radio and television commercials. During the year, metric conversion programmes were drawn up for the air-conditioning trade, the footwear manufacturing industry and the publishing and printing industries.

Trade Marks and Patents

Trade Marks are registered under the Trade Marks Ordinance, which is based on the United Kingdom Trade Marks Act 1938. The procedure is laid down in the Trade Marks Rules, and the prescribed forms may be obtained free from the Trade Marks Registry, Registrar General's Department. Every mark, even if already registered in Britain or any

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other country, must satisfy all the requirements of the Hong Kong Trade Marks Ordinance before it may be accepted for registration. During 1985, 6 966 applications were received and 3027, including many made in previous years, were accepted and allowed to be advertised. A total of 2 780 marks were registered. The principal places of origin were: United States, 647; Hong Kong, 610; Japan, 377; United Kingdom, 212; West Germany, 205; France, 185; Italy, 108; Switzerland, 97; Australia, 42; Netherlands, 39. The total number of marks on the register at December 31, 1985 was 44 395.

Although there is no original grant of patents in Hong Kong, the Registration of Patents Ordinance provides that any grantee of a United Kingdom patent or European Patent (UK) may, within five years from the date of its grant, apply to have the patent registered in Hong Kong.

       Registration of a United Kingdom patent or European Patent (UK) in Hong Kong confers on the grantee the same privileges and rights as if the patent had been granted in the United Kingdom with an extension to Hong Kong. The privileges and rights run from the commencement of the term of the patent in the United Kingdom, and continue as long as the patent remains in force there. A total of 1 030 patents were registered during the year, compared with 1 010 in 1984.

Companies Registry

The Companies Registry of the Registrar General's Department keeps records of all companies incorporated in Hong Kong and of all overseas companies that have established a place of business in Hong Kong.

      Local companies are incorporated under the Companies Ordinance which until August 31, 1984, was based, to a large extent, on the Companies Act 1929 - formerly in force in Britain but now replaced by the Companies Acts of 1948 to 1981. However, following recommendations made by the Companies Law Revision Committee (June 1971 and April 1973), several parts of the Companies Ordinance - notably those dealing with pro- spectuses, accounts and audit- were amended and now incorporate most of the relevant provisions of the Companies Acts of 1948 and 1967. Most of the remainder of the recommendations in the committee's second report are given effect in the lengthy Companies (Amendment) Ordinance 1984 which was enacted in January and came into force on August 31, 1984.

      On incorporation, a company pays a registration fee of $600 plus $6 for every $1,000 of nominal capital. In 1985, 18 465 new companies were incorporated - 5 031 more than in 1984. The nominal capital of new companies registered totalled $3,664 million. Of the new companies, 104 had a nominal share capital of $5 million or more. During the year, 5 312 companies increased their nominal capital by amounts totalling $14,412 million on which fees were paid at the same rate of $6 per $1,000. At the end of 1985, there were 147 636 local companies on the register, compared with 130 722 in 1984.

Companies incorporated overseas are required to register certain documents with the Companies Registry within one month of establishing a place of business in Hong Kong. A registration fee of $500 and some small filing fees are payable in such cases. During the year, 231 of these companies were registered and 144 ceased to operate. At the end of 1985, 2 092 companies were registered from 59 countries, including 502 from the United States, 317 from the United Kingdom and 253 from Japan.

      The Companies Registry also deals with the incorporation of trustees under the Registered Trustees Incorporation Ordinance, and with the registration of limited partnerships.

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The Insurance Companies Ordinance (Chapter 41), which came into operation on June 30, 1983, restricts the transaction of all classes of insurance business in or from Hong Kong to a company authorised to do so by the Insurance Authority, to Lloyd's of London, and to an association of underwriters approved by the Governor in Council.

The Registrar General, who has been appointed the Insurance Authority for the purposes of the ordinance, must be satisfied that certain conditions are met before authorising a company.

      These include the suitability of the directors and controllers of the company; a minimum paid-up capital requirement of $5 million ($10 million in cases of companies undertaking both long-term and general business or statutory business, the latter meaning insurance cover required by statute); and a solvency margin requirement of $2 million ($4 million or $6 million in different cases depending on whether both long-term and general business are carried on, and whether statutory business is included).

Any company, irrespective of the place of incorporation, which is authorised to carry on insurance business in the United Kingdom is given certain exemptions under the ordinance and may be authorised by the Insurance Authority on the strength of its compliance with the United Kingdom Insurance Companies Act.

      There are 287 insurance companies, including 129 local companies, authorised to transact insurance business in Hong Kong.

      In November, the protection afforded to motor vehicle policy holders was increased when the Registrar General, in his capacity as the Insurance Authority, signed an agreement with the Motor Insurers' Bureau under which the bureau undertook to establish an insolvency fund to meet the liabilities of an insurer in respect of claims for death and bodily injury arising out of a motor traffic accident when the insurer is unable to meet its liabilities by reason of its insolvency.

This agreement complemented a separate assistance scheme drawn up by the govern- ment, utilising the existing Traffic Accident Victims Assistance Fund, to make ex-gratia payments to traffic accident victims adversely affected by motor insurers who were already insolvent.

Money Lenders

     Under the Money Lenders Ordinance, which came into force in December 1980, anyone wishing to carry on business as a money lender must apply to a Licensing Court, consisting of a magistrate and two lay assessors, for a licence. In the first instance, the application is submitted to the Registrar General as Registrar of Money Lenders and a copy is sent to the Commissioner of Police, who may object to the application. The application is advertised, and any member of the public who has an interest in the matter also has the right to object. During the year, 414 applications were received and 413 licences were granted. At year-end, there were 441 licensed money lenders.

      The ordinance provides severe penalties for a number of statutory offences such as carrying on an unlicensed money lending business. It also provides that any loan made by an unlicensed money lender shall not be recoverable by court action. Any person, whether a licensed money lender or not, who lends or offers to lend money at an interest rate exceeding 60 per cent per annum commits an offence and agreement for the repayment of any such loan or any security given in respect of such loan shall be unenforceable. During the year, the fees payable in certain matters under the ordinance were amended by the Money Lenders (Amendment) Regulations 1985.

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Bankruptcies and Liquidations

In Hong Kong, the number of business failures leading to formal insolvency proceedings in court is always comparatively small in relation to the total number of businesses closing down, but nevertheless it has increased considerably since 1980.

During the year, there were 436 petitions in bankruptcy and 368 petitions for the com- pulsory winding-up of companies. The court made 371 receiving orders, three adminis- tration orders and 325 winding-up orders. As in past years, the Official Receiver was appointed trustee or liquidator in most cases. Assets realised by the Official Receiver during 1985 amounted to $262 million. In addition to these compulsory liquidations, 957 companies went into voluntary liquidation - 900 by members' voluntary winding-up and 57 by creditors' voluntary winding-up.

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Employment

     HONG KONG has a resourceful and energetic workforce of about 2.54 million comprising 64 per cent men and 36 per cent women. This is estimated from the July-September 1985 General Household Survey which is a sample survey covering the land-based, civilian, non-institutional population in Hong Kong. They are mainly engaged in: manufacturing, 35.6 per cent; wholesale and retail trade, restaurants and hotels, 22.9 per cent; community, social and personal services, 17.5 per cent; transport, storage and communications, 8.2 per cent; construction, 7.5 per cent; and financing, insurance, real estate and business services, 5.8 per cent.

      An establishment survey of Employment, Vacancies and Payroll in the manufacturing sector, held in September 1985, recorded 848 900 people engaged in 48 065 establishments. It covered working proprietors and partners, employees receiving pay, and unpaid family workers affiliated to business organisations, but excluded out-workers. Some 367 938 people - the largest portion of the manufacturing workforce - were engaged in the textile and wearing apparel industries. The electrical industry and the plastics industry were the next two largest employers. Details of the distribution of manufacturing establishments, and of the number of people engaged in them, are given at Appendices 13 and 14.

      The bulk of the manufacturing workforce is concentrated in the urban areas of Hong Kong Island and Kowloon. However, industrial development in the New Territories is increasing and more than 30 per cent of the manufacturing workforce now works there.

Labour Legislation

In 1985, 14 items of labour legislation were enacted to provide for better standards of safety, health and welfare for the workforce. This brings the total number of items of labour legislation enacted in the last 10 years to 154 under the overall policy of achieving a level of legislation on safety, health and welfare broadly equivalent to Hong Kong's neighbouring countries at a similar stage of economic development. The most significant items of legislation were the Protection of Wages on Insolvency Ordinance, which provided for payment from a Protection of Wages on Insolvency Fund of arrears in wages to employees whose employers became insolvent, and the amendment to the Employment Ordinance, which provided for a long-service payment. These and other items of legislation are described in greater detail below.

      As a dependent territory of the United Kingdom, Hong Kong is not a member of the International Labour Organisation (ILO) and is not called upon to ratify any International Labour Conventions, which set international labour standards. However, the United Kingdom Government makes declaration on behalf of Hong Kong with regard to the application of conventions it ratifies. This is done after full consultation with the Hong Kong Government. As at December 1985, Hong Kong had applied 30 conventions in full

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and 19 with modification, making a total of 49. This compares favourably with most member nations in the region.

      During the year, there were 3 779 prosecutions for breaches of ordinances and their regulations administered by the Labour Department. Fines totalling $6,721,440 were imposed.

Wages and Conditions of Work

     There is no statutory minimum wage rate in Hong Kong. The wage level prevailing is essentially the result of an interplay of the economic forces of supply and demand.

      Wages rates are usually calculated on a time basis such as hourly, daily or monthly, or on an incentive basis depending on the volume of work performed. The pay period is normally 15 days for daily-rated and piece-rated workers and a month for monthly-rated workers. Most semi-skilled and unskilled workers in the manufacturing industries are piece-rated, although daily rates of pay are also common. Monthly-rated industrial workers are usually employed in skilled trades or in technical, supervisory, clerical and secretarial capacities. On the other hand, monthly rates of pay are most common for workers in the non- manufacturing industries. Men and women receive more or less the same rate for piece-work, but women on average are paid less when working on a time-basis as there may not be strict job comparability.

      Wage rates of manufacturing workers continued to increase in money terms during the year. After allowing for rises in consumer prices, there was an increase in wage rates of 2.1 per cent in real terms during the 12 months ending in September 1985. The rate of increase in wage rates slowed down compared with the previous year, reflecting the weaker export performance, but unemployment and underemployment remained stable at a low level due to the continued expansion of other sectors of the economy.

A Consumer Price Index (A), based on a household expenditure survey conducted from October 1979 to September 1980 and covering about 50 per cent of urban households in Hong Kong, was compiled as an indicator of the average price changes experienced by urban households spending between $1,000 and $3,499 a month in the base period of 1979-80. In December 1985, this index stood at 160.8 (see Appendix 16). A Consumer Price Index (B) was compiled to show the average price changes experienced by urban households spending between $3,500 and $6,499 a month in 1979-80. This covers about 30 per cent of the urban households in Hong Kong.

      In September 1985, 75 per cent of manual workers engaged in manufacturing industries received daily wage rates (including fringe benefits) of $79 or more (males $90 and females . $75), and 25 per cent received $115 or more (males $133 and females $104). The overall average daily wage rate was $98 (males $116 and females $91).

Besides granting rest days, statutory holidays, paid annual leave and other entitlements under the Employment Ordinance, a number of employers in the manufacturing indus- tries provide workers with subsidised meals or food allowances, attendance bonuses, free medical treatment, and a Lunar New Year bonus of one month's pay or more. Free or subsidised accommodation and transport are also provided by some establishments. Since March 1982, an expanded survey of wages, salaries and employee benefits has been conducted to record wage rate statistics for non-manual workers in the manufac- turing industries as well as for manual workers and non-manual workers in the non- manufacturing industries.

     The Employment of Children Regulations, made under the Employment Ordinance, prohibit the employment of children under the age of 15 in any industrial undertakings.

EMPLOYMENT

73

333

     Children who have attained the age of 13 may be employed in non-industrial establish- ments subject to stringent conditions which aim at ensuring their education up to Form 3 and at protecting their health, safety and welfare.

      Under the Women and Young Persons (Industry) Regulations, young persons aged 15 to 17 and women are permitted to work eight hours a day and six days a week in industry. Women and young persons aged 16 and 17 must be given a break of at least 30 minutes after five hours of continuous work. In the case of young persons aged 15, the break must not be less than one hour. Overtime employment for women is restricted to two hours a day and 200 hours a year while young people are not permitted to work overtime. In addition, women are not allowed to work between 8 p.m. and 6 a.m., while young persons are pro- hibited from working between 7 p.m. and 7 a.m. Women and young persons must not be employed on more than six days in any week. The regulations also prohibit women and young persons from working underground or in dangerous trades. Although night work for women is forbidden, some large factories - mostly those engaged in cotton-spinning - have been granted special permission to employ women at night, subject to certain stringent conditions.

      The Labour Inspectorate of the Labour Department is also responsible for enforcing the provisions of compulsory insurance under the Employees' Compensation (Amendment) Ordinance. This ordinance requires all employers to take out an insurance policy for their employees for injury or death resulting from accidents arising out of and in the course of employment. Employers must also display notices at the working place giving details of the insurance policy.

      In 1985, the Labour Inspectorate made 246 078 day and night inspections at both industrial and non-industrial establishments. Three special campaigns were conducted against the employment of children and illegal immigrants, covering 19 135 establishments. During the year, 109 cases of child employment involving 109 children were brought before the courts.

       Under the Factories and Industrial Undertakings Regulations, no male employee may be employed to work underground in mines, quarries, and industrial undertakings involving tunnelling operations unless he has been medically examined and certified fit for such work. Those under 21 have to be medically re-examined each year.

Control on Illegal Employment

     Under the Immigration Ordinance, employers are prohibited from employing persons who have no valid proof of identity and those Vietnamese refugees who are prohibited from work. The ordinance also requires all employees to produce proof of identity for inspection and employers to maintain up-to-date records of their employees. These legislative require- ments which aim at stopping the flow of illegal immigrants into Hong Kong are currently enforced by the Labour Inspectorate.

Long-Service Payment

The Employment Ordinance was amended to provide a long-service payment at a rate of two-thirds of a month's wages for each year of service to employees who have worked continuously for the same employer for a specified number of years and who have been dismissed for reasons other than summary dismissal on disciplinary grounds or redun- dancy. Eligibility for the payment is determined on the basis of age and length of service and workers under 40 are entitled to a proportion of the payment, either 50 per cent or 75 per cent, depending on age.

74

Trade Unions

EMPLOYMENT

Trade unions in Hong Kong must be registered under the Trade Unions Ordinance administered by the Registrar of Trade Unions. Once registered, they are corporate bodies and enjoy immunity from certain civil suits.

      During the year, 15 new unions were registered; 10 were formed by civil servants. At the end of the year, there was a total of 437 unions comprising 391 employees' unions with about 359 100 members, 33 employers' associations with some 3 150 members, and 13 mixed organisations of employees and employers with about 23 520 members.

      About one-third of the employees' unions are affiliated to either one of the two local societies registered under the Societies Ordinance - the Hong Kong Federation of Trade Unions and the Hong Kong and Kowloon Trades Union Council.

      The Hong Kong Federation of Trade Unions, which supports the policies of the Government of the People's Republic of China, has 70 affiliated unions with about 166 380 members. Its affiliated unions are concentrated in shipyards, textile mills, public transport, public utilities and the printing and carpentry trades.

      The Hong Kong and Kowloon Trades Union Council supports the policies of the authorities in Taiwan and is affiliated with the International Confederation of Free Trade Unions. It has 70 affiliated unions with a membership of about 35 550. These unions are mainly in the catering and building trades.

      The remaining 251 employees' unions have a membership of about 157 170, mostly drawn from the Civil Service and the teaching profession.

Labour Administration and Services

The Labour Department has an establishment of 1 655 and its services continue to expand. Branch offices in the urban areas and New Territories deal promptly with labour matters raised by local employers and employees. The Commissioner for Labour is the principal adviser to the government on labour affairs. He is also the Commissioner of Mines.

      The department initiates labour legislation and ensures that Hong Kong's obligations under international labour conventions are observed. It is made up of 16 divisions: administration, air pollution control, development, information and public relations, employees' compensation, employment services, factory inspectorate, labour relations, mines, occupational health, pressure equipment, prosecutions, selective placement, staff training and development, women and young persons, and the youth employment advisory service and overseas employment service.

During the year, the Staff Training and Development Division organised two induction courses for 31 new recruits and 13 in-service training programmes for 726 serving officers. In addition, a total of 21 officers were sent overseas for further training and in preparation for new areas of service to be provided to the public.

Labour Relations

The Labour Relations Ordinance provides machinery for special conciliation, voluntary arbitration and boards of enquiry for settling trade disputes that cannot be resolved through ordinary conciliation. A committee on labour relations was set up under the Labour Advisory Board to promote good labour-management relations.

In 1985, 155 trade disputes were handled by the conciliation service provided by the Labour Relations Service of the Labour Department. These disputes led to three work stoppages, with a loss of 1 160 working days. This compared with 3 083 days lost in 11 work stoppages in 1984. The service also dealt with 17 928 labour problems. These were mostly

EMPLOYMENT

75

grievances involving individual claims for wages in lieu of notice, severance pay, wages in arrears, annual leave pay, holiday pay and end of year bonus.

      During the year, the Promotion Unit of the Labour Relations Service - responsible for the promotion of harmonious labour-management relations made 460 advisory visits to employers and trade unions. A series of promotional activities was conducted and included two certificate courses comprising of 26 half-day sessions on industrial relations and one conference on employee benefits. A total of 1 128 management personnel, union officials and workers' representatives participated. The unit also produced posters and calendars to publicise its activities. In addition, a Labour Relations Supplement was introduced and five mini-exhibitions were organised on a district basis and attracted a total of 24 000 people.

A Protection of Wages on Insolvency Fund was established on October 1, 1984, and an annual levy of $100 on all business registration certificates was imposed to finance its operation. On April 19, 1985, the Protection of Wages on Insolvency Ordinance came into effect. This ordinance established a fund board to administer the Protection of Wages on Insolvency Fund and empowered the Commissioner for Labour to investigate claims on the fund and make payment from it. The purpose of the fund is to make prompt pay- ment to employees of the wages owed to them by their employer but unpaid because of his bankruptcy or insolvency. Previously, employees might have had to wait until the conclusion of winding-up or bankruptcy proceedings before receiving wages owed to them and even then might receive only a small proportion of their entitlements depending on the value of the realised assets of their former employer. Payment from the fund covers wages not exceeding $8,000 due to an employee for services rendered during four months prior to the date of application. This sum is the amount to which he has already in law a priority claim in a winding-up or bankruptcy. Upon payment, the employee's rights are transferred to the fund, which may recover all or part of the money it has paid to the employee from any assets of the employer realised at the conclusion of the winding-up or bankruptcy.

      In most cases, the presentation of a winding-up or bankruptcy petition is a pre-condition for payment. However, the Commissioner for Labour may exercise discretion in certain cases so that payment can be made without the presentation of a petition.

      Between April and December, 5 766 applications were received; 3 894 were approved with payments totalling $8.5 million.

      The Labour Tribunal, which is part of the Judiciary, provides a quick, inexpensive and informal method of adjudicating certain types of dispute between employees and employers with a minimum of formality. The tribunal deals with claims of right, wherever possible in the language of the parties. It complements the Labour Relations Service and does not supersede the conciliation services of the Labour Department. In 1985, the tribunal heard 4 061 cases involving employees as claimants, and a further 319 cases in which the claims were initiated by employers. More than $27 million was awarded by presiding officers. Of the cases dealt with by the tribunal, 93.54 per cent were referred by the Labour Relations Service after unsuccessful conciliation attempts.

Finding Employment

The Local Employment Service of the Labour Department provides a free placement service helping employers to recruit suitable staff and job-seekers to secure employment. It operates from 15 offices which are linked by a facsimile system for the efficient transmission of information on vacancies notified by the employers. The Central Recruitment Unit, an extension of the Local Employment Service, acts as the central agency for all government

76

EMPLOYMENT

departments in the recruitment of non-pensionable staff such as artisans, drivers and labourers. The unit also co-ordinates employment services provided to large employers in the private sector with territory-wide recruitment needs. During the year, 39 534 people were successfully placed in employment including 3 367 who found jobs in the Civil Service.

      The Special Register which gives free employment assistance to graduates of local and overseas universities and job-seekers possessing post-secondary or professional qualifica- tions was retitled the Higher Education Employment Service on August 1. During the year, 365 people found employment through this service.

The Selective Placement Service provides specialised employment placement assistance free of charge to physically handicapped and mentally handicapped persons as well as former mental patients. The employment placement needs of the socially maladjusted job-seekers are still the responsibility of the Employment Service of the Hong Kong Council of Social Service and other voluntary agencies. During the year, the Selective Placement Service found work for 678 disabled persons.

Careers Service

The Youth Employment Advisory Service of the Labour Department provides careers guidance to young people through various programmes of activities. In 1985, officers of the service delivered 578 careers talks in 240 schools and 13 voluntary agencies covering an audience of 99 926. In addition, they organised six regional careers conventions together with the Hong Kong Association of Careers Masters and mounted the 14th large scale annual careers exhibition at the City Hall. This attracted 102 500 visitors.

      To commemorate International Youth Year, the service organised in May and June the first formal Work Orientation Programme which comprised 24 visits to various establish- ments in the private and public sectors. Some 700 students from 23 secondary schools participated in the programme and had a glimpse of the world of work.

      To improve careers education, the service organises training programmes for careers teachers in co-operation with the Education Department, and also produces careers publications which are distributed free of charge to schools, youth centres and other interested parties or persons.

      At present, the service operates three careers information centres, each equipped with a reference library as well as audio-visual recordings of employment and training oppor- tunities. In 1985, some 37 500 students and young people visited the centres and made use of the facilities there.

Overseas Employment

The Contracts for Overseas Employment Ordinance was amended in July. The amend- ments, which aimed at removing deficiencies and improving effectiveness, included the retitling of the ordinance as the Contracts for Employment Outside Hong Kong Ordin- ance to clarify its scope and the introduction of penalties for non-compliance with certain provisions.

      Contracts entered into in Hong Kong between employers, or their authorised repre- sentatives, and manual workers proceeding outside Hong Kong for employment must be attested by the Commissioner for Labour before the workers leave Hong Kong. An employer or his agent who fails to comply with this provision is liable on con- viction to a fine of $50,000. During the year, 440 contracts were attested, compared with 834 in 1984.

EMPLOYMENT

Foreign Domestic Helpers

77

To regulate the employment of foreign domestic helpers, the majority of whom come from the Philippines, existing administrative measures require the contracts of these helpers to be attested by the Labour Department. During the year, 23 774 such contracts were attested. The department is also responsible for the conciliation of disputes arising from the employment of these domestic helpers. In 1985, 335 claims, 935 consultations and 39 412 enquiries were handled.

Employment Agencies

The licensing and operation of all employment agencies are governed by the Employment Agency Regulations made under the Employment Ordinance. During the year, the Labour Department had issued 215 licences to employment agencies handling local employment and 52 to those dealing with overseas employment.

Industrial Safety

The Factory Inspectorate of the Labour Department is responsible for enforcing the Factories and Industrial Undertakings Ordinance and its subsidiary regulations. These provide for the safety and health of workers in factories, on building and engineering construction sites and in other industrial undertakings. Advice and assistance is given to management on guarding dangerous machinery parts, adopting safe working practices and layout of new factories to achieve a better working environment. The inspectorate also investigates industrial accidents and other dangerous occurrences.

      The Factories and Industrial Undertakings (Amendment) Ordinance 1985, which replaces the registration system with a new notification system, came into operation on August 2. Under the new system, the person having the management and control of a notifiable workplace is required to notify the Commissioner for Labour before the workplace commences operation, giving the particulars necessary for the commissioner to assess the safety and health implications. This continues to provide the Commissioner for Labour with the necessary information to plan factory inspections, but, by avoiding the time-consuming registration procedures, allows more resources to be spent on enforcing the safety regulations under the ordinance.

Amendments were also made to the Fire Precautions in Registrable Workplaces Regula- tions and drafting work continued on three new sets of regulations under the Factories and Industrial Undertakings Ordinance, the Carcinogenic Substances Regulations, the Asbestos (Safety) Regulations and the Safety Officers and Safety Supervisors Regulations. The Electronics Industry Safety Sub-committee was formed in the latter part of the year under the Labour Advisory Board Committee on Industrial Safety and Accident Preven- tion. Sub-committees for the construction, textiles, plastics, shipbuilding and ship repairing and metalware industries were set up between 1980-4. These sub-committees, following ILO recommendations, are tripartite organisations, consisting of representatives of em- ployers, workers and the Labour Department and their aim is to promote work safety in various industries.

      The Factory Inspectorate, in collaboration with the Information Services Department, continued its publicity programme for the promotion of industrial safety through extensive use of the media and other means. A 30-series radio programme, Music While You Work, commenced broadcasting on Radio Television Hong Kong in June and ended with a 'Industrial Safety Gala Night' held in December at the Queen Elizabeth Stadium. Also in conjunction with RTHK, a documentary film on industrial safety was produced in

78

EMPLOYMENT

     December and was shown as a Commonsense television programme. To promote industrial safety through entertainment, a five-day industrial safety campaign was launched in early September as part of the popular television programme, Enjoy Yourself Tonight.

      The Labour Advisory Board Committee on Industrial Safety and Accident Prevention organised in August a contest in captioning winning photographs in an industrial safety photographic competition. Various other promotional activities were also undertaken by the industry-based safety sub-committees. These activities included the preparation of codes on safe practices for the relevant industries, the organising of a safety seminar and quiz competitions and the designing of safety stickers. A safety award scheme was organised by the Construction Industry Safety Sub-committee for the third time.

      Throughout the year, the Factory Inspectorate's Industrial Safety Training Centre provided safety training courses for supervisors and workers from various industries and for technical teaching staff and students. In conjunction with the Hong Kong Polytechnic, the centre continued to organise an evening course and a part-time day-release programme, leading to a certificate of proficiency in industrial safety. For the second year, the department assisted the Construction Industry Training Authority to run construction safety officer courses.

Pressure Equipment Division

The Pressure Equipment Division of the Labour Department enforces the requirements of the Boilers and Pressure Receivers Ordinance and the Gasholders Examination Ordinance for ensuring the safe use and operation of all equipment covered by the ordinances. This includes all types of boilers, steam receivers, steam containers, air receivers, cement tanks mounted on trucks or trailers and the gasholders used for storage of town gas. Such equipment must be vetted by the division before it is approved for use. The division is increasingly involved with industry and the Fire Services and other government depart- ments in rendering technical advice relating to pressure equipment, especially that covered by the Dangerous Goods Ordinance.

The division conducts examinations for boiler attendants for the issue of certificates of competency. Comprehensive training courses for electric boiler attendants are organised in collaboration with the Haking Wong Technical Institute. A short training course is also conducted for electric boiler attendants. Technical material on safety of pressure equip- ment is disseminated to the owners and attendants of such equipment.

      Qualified engineers in the private sector appointed under the Boilers and Pressure Receivers Ordinance are authorised to issue certificates of fitness for pressure equipment. Spot checks are carried out by the staff of the division to monitor full compliance with statutory requirements.

Occupational Health and Hygiene

The Occupational Health Division of the Labour Department provides an advisory service to the government and the public on matters concerning the health of workers and the hygiene of the workplace and complements the Factory Inspectorate Division in super- vising health standards and practices in industry. It works to maintain and improve the physical and mental well-being of workers and to protect them against any health hazard arising from their employment. During the year, the division participated in a number of seminars and exhibitions for the promotion of occupational health and also published a series of booklets and codes of practice on the prevention of occupational hazards.

EMPLOYMENT

79

A prime responsibility of the division is to investigate notified occupational diseases and potential health hazards reported by the Factory Inspectorate and to determine preventive action. Surveys were conducted in various industries and an epidemiological study on the health and hygiene conditions in quarries and construction sites is underway.

The division carried out medical examination of personnel exposed to ionising radiation, government divers and compressed air workers. It also deals with cases of silicosis under the Pneumoconiosis (Compensation) Ordinance. The division's nurses handle medical clearance for employees' compensation cases and its occupational health officers are appointed as members of Special Assessment Boards and Prostheses and Surgical Appliance Boards under the Employees' Compensation Ordinance.

The Occupational Health Division's laboratory carries out analytical tests on biological samples from workers and other environmental samples taken during site visits.

Employees' Compensation

The Employees' Compensation Division of the Labour Department administers the Employees' Compensation Ordinance and the Pneumoconiosis (Compensation) Ordin- ance. The division ensures that injured employees and dependants of deceased employees covered by the Employees' Compensation Ordinance obtain from their employers, without undue delay, compensation in respect of injuries or death caused by accidents or occupational diseases arising out of and in the course of employment. It also ensures that persons covered by the Pneumoconiosis (Compensation) Ordinance obtain compensation as soon as possible from the Pneumoconiosis Compensation Fund, which is financed by a levy imposed on the construction and quarry industries.

The certificate system first introduced in July 1983 has proved successful in speeding up the processing of minor claims for injuries resulting in temporary incapacity for not more than 14 days. In early 1985, the Employees' Compensation Ordinance was amended to extend the certificate system to cover all cases in which no permanent incapacity is involved. Under the two-tier Employees' Compensation Assessment Board System, employees with injuries causing permanent incapacity are assessed in eight major hospitals in Hong Kong. In 1985, Ordinary Assessment Boards convened 485 sessions and completed assess- ment of 15 927 cases referred to them by the Commissioner for Labour and 807 review cases. Special Assessment Boards convened 13 sessions and completed assessment of 13 cases referred to them by the Ordinary Assessment Boards and one review case.

In July, the Employees' Compensation Ordinance was further amended to clarify the principles guiding the Employees' Compensation Assessment Boards in their assessments of loss of earning capacity of an injured employee. The amendments were made in response to a compensation case involving an employee whose earnings after his injury were no less than before, and whose employer therefore held that there was no loss of earning capacity and disputed his liability to pay compensation. The amendments make it clear that actual earnings following an injury are not the only factor to be considered in assessing loss of earning capacity.

A review of compensation levels under the Employees' Compensation Ordinance and the Pneumoconiosis (Compensation) Ordinance was carried out. These will be increased by roughly 23 per cent with effect from January 1, 1986, to take account of the changes in wage levels since their last revision in 1983.

6

18/18

童明禁

Primary Production

HONG KONG has a very small agricultural base with only about nine per cent of the total land area being suitable for crop farming. Only about two per cent of the labour force is engaged in primary production - agriculture and fisheries - yet its people, according to the Food and Agriculture Organisation of the United Nations, are among the world's highest consumers of protein.

Each day, the people of Hong Kong consume about 1 000 tonnes of rice, 1 500 tonnes of vegetables, 10 000 pigs, 550 head of cattle, 250 tonnes of poultry, 410 tonnes of fish and 1 000 tonnes of fruit. Much of this is imported, but Hong Kong farmers help to satisfy some of the demand. In terms of quantity, local farmers produce about 30 per cent of fresh vegetables, 55 per cent of live poultry, 20 per cent of live pigs, and 14 per cent of freshwater fish, while the fishing fleet of nearly 4 700 vessels supplies about 90 per cent of all fresh marine fish eaten. The locally produced food is generally of a higher quality than the same types of imported foodstuffs and thus fetches higher prices in the markets.

      Foodstuffs account for about 16 per cent of Hong Kong's imports from China. Local production, which complements rather than competes with imports, is aimed at main- taining some degree of self-sufficiency with respect to highly perishable foodstuffs. Local produce consists mainly of high-value foods and full advantage is taken of the local consumers' preference for fresh food, as opposed to frozen or chilled food.

Agriculture and Fisheries Department

The Agriculture and Fisheries Department encourages the productive use of agricultural land throughout the rural areas. It assists in the development of agriculture, especially in the form of irrigation projects. New concepts, techniques and material input to the farming and fishing industries are evaluated and actively promoted. Controls are exercised to prevent the introduction and spread of plant and livestock pests and diseases.

     Investigatory programmes of the department cover crops, pest control, animal hus- bandry and fisheries. Experiments are conducted on government farms to improve the quality and yield of vegetables, flowers and fruit. The department advises livestock farmers on modern methods of animal production, supplies good quality breeding stocks of pigs and poultry, and provides an artificial insemination service for pigs.

Fisheries research is conducted on marine resources, aquaculture, hydrography and the environmental impact of development activities on fisheries. In marine resources, emphasis is placed on optimising production from the fisheries resources exploited by the local fishing fleet and investigating the development potential of under-exploited resources.

Aquaculture research is concerned with the development both of more efficient culture systems for fish and molluscs and of improved methods of producing marine fish fry. Hydrographic investigations are designed to supply environmental information for an

PRIMARY PRODUCTION

81

assortment of biological programmes. Research is also aimed at assessing the impact of pollution, including red tides, on fisheries, particularly mariculture, in order to minimise. production loss.

      Low-interest loans are administered by the department to help farmers and fishermen to finance their operational or long-term investment requirements. It also organises and finances vocational and technical training for those directly and indirectly involved in primary production. In addition, it is responsible for the registration and supervision of co-operative societies and credit unions. The department manages large areas of open countryside and is responsible for soil and water conservation, woodland management and landscape repair - as well as fire-fighting - and the development of recreational services in country parks.

       Consumer demand and local primary production are monitored to enable appropriate development planning. Statistics on production factors and food supplies, including imports, are collected and analysed to help formulate local production and marketing policies. The business efficiency of different sectors within the primary industries is studied to establish and update productivity standards and to identify areas for improvement.

Development Farming and Fishing

Owing to the shortage of farm labour in Hong Kong and its rising cost, the main development in the agricultural industry in recent years has been the introduction of labour-saving devices. Farmers use pre-emergence herbicides for weed control in market garden crops and there is widespread use of small farm machines and sprinkler irrigation.. At the end of 1985, there were 3 180 rotary cultivators and 2 350 sprinkler units in use on vegetable farms.

      Integrated pest management, a safe method of pest control on vegetables without the use of toxic pesticides, is the subject of an active development programme undertaken by the Agriculture and Fisheries Department. The use of a safe microbial organism to control the diamond-back moth, a major pest on leafy green vegetables, has been adopted by local farmers. Seminars and demonstrations are also organised to publicise and promote inte- grated pest control and safe use of pesticides.

       Technical assistance, agricultural loans and related services have been made available to farmers to promote better farming results.

      The cultivation of edible mushrooms has gained considerable popularity in recent years and at the end of 1985 there were 60 mushroom farms. The locally produced mushroom has about a 80 per cent share of the local market.

      Teams of agricultural extension officers are posted by the department throughout the New Territories to deal with farming and pollution problems, and to liaise with co- operative societies and rural associations.

Credit facilities and technical advice are available to farmers and the agricultural development officers also assist them in land development and rehabilitation.

In the rural development programme during the year, more than 990 farmers took part in group discussions led by professional and technical officers from the department and officers made 96.773 visits to farmers and co-operative societies. Visits were also arranged for farmers to see government experimental farms and farming projects.

Fisheries development work involves modernising fishing craft and introducing more efficient fishing gear and navigational aids. An advisory service on hull design and deck arrangement is provided for fishermen, while experiments and demonstrations are con- ducted to test the suitability of new fishing gear. Training classes in navigation and business

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PRIMARY PRODUCTION

management for coxswains, engineers and radiotelephone operators working on fishing boats are organised in the main fishing centres.

      Education is provided for the children of fishermen at 13 schools run by the Fish Marketing Organisation. At the end of 1985, more than 2 900 children were attending these schools. A further 31 were attending other schools on scholarships awarded by the organisation.

      Close contact with the fishing community is maintained through liaison with producer associations and fishermen's co-operative societies. Ten Fish Marketing Organisation liaison offices operate in the main fishing centres to provide a link with the fishermen.

Loans

Loans are available to the agricultural industry through three main loan funds: the Kadoorie Agricultural Aid Loan Fund, the J. E. Joseph Trust Fund and the Vegetable Marketing Organisation Loan Fund. All are administered by the Agriculture and Fisheries Department.

      By December 31, 1985, loans issued since the inception of these three funds had reached a total of $219 million. Of this, $207 million had been repaid.

      The Fisheries Development Loan Fund, with capital of $7 million, is administered by the Director of Agriculture and Fisheries specifically for developing the fishing fleet.

       Finance from the World Refugee Year Loan Fund for Co-operative Societies, donated by the United Nations High Commissioner for Refugees in 1962, is also available to members of fishermen's co-operative societies.

      The Fish Marketing Organisation Loan Fund, which has operated as a revolving loan fund since January 1, 1983, by the transfer of funds from the organisation's surplus and deficit account, is another important source of loan finance for fishermen. At the end of 1985, the fund capital was $16 million.

      The department administers another revolving loan fund, financed by the Co-operative for American Relief Everywhere (CARE), specifically for shrimp fishermen.

      By December 31, 1985, loans issued since the inception of these four funds totalled $154 million, of which $131 million had been repaid.

      Co-operative societies operate under a Co-operative Societies Ordinance, which provides for the appointment of a registrar- the Director of Agriculture and Fisheries. His powers and duties relate to the registration of co-operative societies and their by-laws, the auditing of accounts, inspection and enquiry, general supervision of operations, and such matters as mediation in disputes and dissolution of co-operative societies when necessary.

At the end of the year, some 12 230 farmers and 1 870 fishermen were members of co-operative societies.

There were 74 societies and two federations among the farming community, and 67 societies and four federations supported by fisherfolk.

Land Usage

     Hong Kong's land area totals 1 068 square kilometres. Of this, 9.0 per cent is used for farming, 74.5 per cent is marginal land with different degrees of sub-grade character, and built-up areas comprise the remaining 16.5 per cent.

The need to establish new towns and expand residential areas in the New Territories has resulted in an encroachment on agricultural land. The effect of the losses in the total area of agricultural land, however, has been offset by more intensive farming on remaining areas. The Lands Department is responsible for land administration throughout Hong Kong.

PRIMARY PRODUCTION

Class

(i) Urban built-up lands

Approximate area (square kilometres)

Percentage of whole

Remarks

102

9.6

(ii) Rural developed lands

74

6.9

(iii) Woodlands

125

(iv) Grass and scrub lands

625

22

11.7

58.5

(v) Badlands

45

4.2

(vi) Swamp and mangrove lands

0.1

(vii) Arable

75

7.0

(viii) Fish ponds

21

2.0

83

Main urban area of Hong Kong Island, Kowloon and six new towns in the New Territories (Tsuen Wan, Tuen Mun, Yuen Long, Fanling, Tai Po and Sha Tin) includ- ing district open space (parks and gardens) but excluding all other non-built-up land. Rural market towns and villages and other developed sites in the New Territories such as reservoirs, roads and railways. Natural and established woodlands. Natural grass and scrub lands, including those

within country parks.

Stripped of cover. Denuded granite country.

Capable of regeneration.

Coastal brackish swamp and mangrove. Cultivable lands, including orchards and market gardens, under cultivation and fallow.

Fresh and brackish water fish farming exclud- ing coastal marine fish farms but including fallow farms.

Agricultural Industry

The government's policy is to foster the development of the agricultural industry in Hong Kong, bearing in mind priorities in land usage and the economics of food production and supply in the region. Its objective is to ensure that a reasonable proportion of Hong Kong's food supply is produced locally.

      Common crops are vegetables, flowers, fruit and other field crops. The value of crop production has increased from $93 million in 1963 to $447 million in 1985. Vegetable production accounts for more than 79 per cent of the total value, having increased from $64 million in 1963 to $356 million in 1985.

The main vegetable crops are white cabbage, flowering cabbage, lettuce, Chinese kale, radish, watercress, leaf mustard, spring onion and chives. They grow throughout the year, with peak production in the cooler months. Water spinach, string beans, Chinese spinach, green cucumber and many species of Chinese gourd are produced in summer. A wide range of exotic temperate vegetables including tomato, sweet pepper, cabbage, celery, head lettuce, cauliflower and carrot is grown in winter. Straw mushroom is also produced, using industrial cotton waste as the growing medium.

      Among the common types of flowers, gladioli and chrysanthemums grow throughout the year; dahlias, roses, asters, snapdragons and carnations are produced in winter; ginger lilies and lotus flowers in summer. A wide range of ornamental plants - including philodendrons, dieffenbachia, bamboo palms and poinsettia - is produced in commercial nurseries. Peach blossom and ornamental citrus are grown specially for the Lunar New Year. The area of land under vegetables and flowers increased from 910 hectares in 1954 to 4 790 hectares in 1976 but has since declined gradually to 2 720 hectares in 1985, mainly as a result of new town development.

       The amount of land used to cultivate rice has dropped from 9 450 hectares in 1954 to less than 10 hectares in 1985. Rice production has given way to intensive vegetable production, which gives a far higher return.

      Much former paddy land around the more remote villages has fallen into disuse and now lies fallow.

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      Various types of fruit are grown in Hong Kong. The principal crops are longan, lychees, wampei, tangerines, local lemons, bananas and guavas. Land under orchards in 1954 totalled 390 hectares; by 1985, it was 540 hectares.

      Other field crops such as sweet potatoes, taro, yams and sugar cane are cultivated on a small scale in the remote and drier areas where water and transport facilities are inadequate for growing vegetables. Some 50 hectares were under rain-fed crops in 1985 compared with 1 410 hectares in 1954.

      Because there is insufficient land for extensive grazing, pigs and poultry are the principal animals reared for food. Pigs in Hong Kong are mostly crosses of local animals with exotic stock. The value of locally produced pigs killed in 1985 amounted to $365 million.

      The production value of poultry, including chickens, ducks, pigeons and quails, amounted to $513 million in 1985. Local chicken production was about 14 million birds, representing 60 per cent of total consumption.

Friesian cattle are kept by dairies, most of which are in the New Territories.

      Sporadic outbreaks of a mild type of foot-and-mouth disease (Type O) and swine fever still occur, but they are kept under control by vaccination. Newcastle Disease in poultry is controlled by the use of Ranikhet and intranasal-drop vaccines. Investigations to establish the incidence of intercurrent disease in both pigs and poultry are carried out at the government's veterinary laboratory.

      Stringent rabies control measures remained in force throughout the year. These include extensive immunisation of dogs and cats against rabies, intensive catching and elimination of stray dogs, and restriction of canine movement into and out of the gazetted rabies- infected area. The gazetted infected area was reduced to include only the Frontier Closed Area on April 12. No rabies had been detected in Hong Kong during the six months preceding that date. By the end of the year, 12 980 dogs had been humanely destroyed and another 28 136 licensed and inoculated against rabies.

      As a standard practice, all imported dogs and cats, other than those from Britain, Ireland, Australia and New Zealand, are subject to six months' quarantine. Any dog that bites a person is required to be detained for observation in government kennels for a period of seven days. All cattle and pigs imported for food are quarantined on arrival in Hong Kong. Importation for breeding purposes is also subject to strict control.

      In view of the increasing awareness of agricultural pollution, the department also provides technical advice to farmers and other government departments on agricultural waste control matters.

Fishing Industry

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Marine fish constitute one of Hong Kong's most important primary products. More than 150 fish species of commercial importance frequent the waters of the adjacent continental shelf. Most important of these in terms of landed weight are golden thread, scads, lizardfishes, big-eyes, croakers and squids. Total estimated production from the two major amounted to 196 000 tonnes with a marine capture and culture fisheries wholesale value of $1,810 million in 1985. These figures represent a decrease of two per cent in weight but an increase of three per cent in value compared with 1984. Of the total production, 96 per cent in weight came from marine capture and four per cent from culture fisheries. In terms of wholesale value, 90 per cent came from marine capture and 10 per cent from culture fisheries.

An estimated 24 000 fishermen work the fleet of nearly 4 700 vessels, of which over 83 per cent are mechanised. There are four major types of fishing in terms of gear: trawling, lining,

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gill-netting and purse-seining. Trawling is the most important, accounting for 70 per cent or 75 000 tonnes of marine fish landed in 1985. The total landed catch of live and fresh marine fish available for local consumption in 1985 amounted to 90 000 tonnes, with a wholesale value of $790 million. This represented 88 per cent of the local consumer demand.

Pond fish farming is the most important culture activity. Fish ponds covering 1 450 hectares are located in the New Territories, mostly in the Yuen Long district. Traditional pond fish farming is similar to that practised in China for hundreds of years. Several different carp species are cultured in the same pond, each deriving its food from a different source and so making the utmost use of the nutrients introduced. Owing to the increasing urbanisation of the New Territories, the land area devoted to fish ponds has gradually declined. During the year, the ponds yielded 5 800 tonnes, or 10 per cent of the local consumption of freshwater fish.

      Marine fish culture has developed considerably in the past decade. Young fish, captured from their natural environment, are fattened in cages suspended from rafts in sheltered bays throughout Hong Kong, particularly in the eastern New Territories. Under the Marine Fish Culture Ordinance, 27 fish culture zones have been designated and all marine fish culture is now required to be conducted at sites within these zones under licences issued by the Director of Agriculture and Fisheries. By year-end, 1 480 licences had been issued. Live marine fish supplied by this activity in 1985 amounted to 1 500 tonnes, valued at $110 million.

Marketing

Much of the wholesale marketing of primary products - particularly fresh foods - is the responsibility of the Agriculture and Fisheries Department and the Vegetable and Fish Marketing Organisations. In 1985, 43 per cent of the total quantity of locally produced vegetables, and 68 per cent of the total landings of marine fish were sold through the organisations.

The Vegetable Marketing Organisation operates under the Agricultural Products (Marketing) Ordinance, which also provides for the establishment of a Marketing Advisory Board to advise the Director of Marketing (the Director of Agriculture and Fisheries). The organisation is responsible for transporting locally produced vegetables from the New Territories to the wholesale market in Kowloon, providing marketing facilities, and supervising sales and financial transactions in the market. Revenue is obtained from a 10 per cent commission on sales. The organisation is non-profit-making. It seeks to maximise returns to farmers by minimising marketing costs. It also provides ancillary services such as the acquisition and sale of agricultural supplies to farmers and the awarding of secondary and tertiary education scholarships to the children of farmers. During the year, 65 000 tonnes of local vegetables valued at $152 million were sold through the organisation.

      The Fish Marketing Organisation operates under the Marine Fish (Marketing) Ordi- nance, which also provides for the establishment of a Fish Marketing Advisory Board. The ordinance provides for the control of the landing, wholesale marketing, and the import and export of marine fish. The organisation operates seven wholesale fish markets. Revenue comes from a six per cent commission on the proceeds of sales. Surplus earnings are channelled back into the industry in the form of various services such as low-interest loans to fishermen, improvements to the markets, financial support for the 13 schools for fishermen's children, and scholarships for secondary and tertiary education.

In 1985, the wholesale fish markets handled 66 000 tonnes of marine fish, crustacea and molluscs which were sold for $460 million. This included 1 170 tonnes of imported marine fish sold through these markets.

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Facilities in the existing wholesale markets are becoming inadequate for handling the ever increasing quantities of imported fresh vegetables, fruit, poultry, eggs, freshwater fish and crustacea. Marketing activities have spilled on to adjacent public streets, causing obstruction and traffic congestion. To improve the situation, plans are going ahead to establish new wholesale markets in Kowloon and on Hong Kong Island to centralise the wholesale marketing of fresh foodstuffs. In the interim, the government has introduced a number of temporary wholesale markets at Cheung Sha Wan in Kowloon for freshwater fish, poultry and imported vegetables, and at Western District on Hong Kong Island for fruit.

Mining

At the end of 1985, one mining lease and three mining licences for extraction of feldspar and kaolin were in operation. Details of the leases and licences are published twice a year in the Government Gazette.

      The Mines Division of the Labour Department enforces legislation and safety regula- tions relating to mining and explosives. It processes mining and prospecting applications; inspects mining and prospecting areas, stone quarries, blasting sites and explosives stores; and issues shotfirers' blasting certificates. The division also controls the possession, conveyance, storage, manufacture and use of explosives in Hong Kong including delivery of explosives from government depots to blasting sites. In addition, it manages government explosives depots that provide bulk storage facilities for imported explosives.

       All the tunnelling works from Admiralty to Chai Wan for the Mass Transit Railway Island Line project were completed during the early part of the year and this section of the Island Line was opened on May 31. The Hong Kong Explosives Depot continued to serve the remaining three tunnelling sites west of Admiralty Station until it was closed on September 1. Storage space was provided for about 3.4 tonnes of fireworks for a display in February to mark the Lunar New Year. Approval was given for continued importation and use in Hong Kong of Chinese-manufactured explosives and blasting accessories, after storage and firing tests were undertaken by the Mines Division. The consumption of explosives during the year was 3 783 tonnes.

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THE Education Commission, set up in April 1984 to co-ordinate and give consolidated advice on educational policy in Hong Kong, released its first report in January. The recommendations set out in the report which were subsequently accepted by the govern- ment included-

(i) the phasing-out of the Junior Secondary Education Assessment (JSEA) in 1991 through a progressive expansion of subsidised full-time post-Form 3 educational opportunities;

(ii) the improvement of the standards of English and Chinese in schools;

(iii) the promotion of Chinese as the medium of instruction in schools;

(iv) the qualitative improvement and quantitative expansion of the teaching service; (v) the need to examine the development of open education at different levels; and (vi) the continuation of the existing educational research efforts and the co-ordination of educational research activities for the purpose of planning and formulation of educational policies.

      During the year, the approved policies for all levels of education as set out in the White Papers of 1978 and 1981 continued to be implemented. Some $910.8 million in capital expenditure and $6,895.8 million in recurrent expenditure was provided for education in the government's Estimates for 1985-6, representing 17 per cent of the Budget.

      The School Building Programme continued to make progress. During the year, 10 secondary schools, including two prevocational schools, and 11 primary schools were completed, providing 11 280 secondary school places and 21 120 primary school places, the latter on a bisessional basis. Thirty-five additional secondary schools, as recommended by the Education Commission in its first report, were also included in the programme and are scheduled for completion between 1987 and 1993.

      In May, the government announced that the provision of two additional non-graduate teachers for each standard-size government and aided secondary school would be advanced by one year, one to be provided in September and the other in September 1986. The additional staff will enable schools to improve services in remedial teaching, pupil counselling and guidance, and extra-curricular activities which complement and reinforce the formal curriculum.

      The year also saw the further extension of computer education. Computer Studies, first introduced in public-sector secondary schools as a pilot scheme in September 1982, had grown to cover 210 secondary schools by September 1985. From September 1986 all public-sector secondary schools will be able to offer the subject of Computer Studies if they so wish. A Computer Education Centre will also be established in 1986 under a grant of $4 million from the MacLehose Fund. The centre will serve both as a training centre and as a resource centre for teachers.

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Kindergartens

In September, there were 787 kindergartens in Hong Kong providing pre-primary educa- tion for 229 089 children in the three-to-five year age group. These are all private institutions, though some of them are operated by non-profit-making organisations They are supervised by officers of the Education Department whose professional advice is available to school managers, teachers, parents and the public. In-service training for teachers is provided through seminars, workshops, exhibitions and training courses, including a two-year part-time course conducted at Grantham College of Education and a 12-week part-time course run twice yearly by the Advisory Inspectorate of the Education Department, with an annual intake of 240 and 360 teachers respectively. Other government assistance includes allocation of premises to non-profit-making kindergartens in public housing estates, reimbursement of rates and rents to non-profit-making kindergartens, and fee assistance to needy parents.

       During the year, five kindergarten teachers were again released from their teaching duties through the courtesy of their employers to serve on the Education Department's Kinder- garten Curriculum Development Team for the production of resource materials. In January, the Manual of Kindergarten Practice was revised and issued to all kindergartens as a guide to their operation.

Primary Education

Primary education has been free in all government schools and nearly all aided schools since September 1971) In the few aided primary schools where fees are charged, fees may be remitted for up to 20 per cent of the total enrolment in cases of genuine hardship. To help needy parents further, an annual textbook grant of up to $190 per pupil is available to a maximum of 25 per cent of pupils enrolled in government and aided primary schools(A minority of parents continue to send their children to the 94 private primary schools, although places are available for them in the public sector

      In September, the primary school enrolment totalled 534 903 compared with 536 220 the previous year. In addition, enrolment in primary-level evening schools for adults totalled 4 025. During the past year, 19 850 primary places were provided in new and developing schools and more are planned to meet the needs of developing areas, particularly in the new towns. Of the 78 173 children who took part in the third cycle of the Primary One Admission System, 45 340 or 58 per cent were allocated discretionary places in schools of their choice. The remainder were allocated places in schools in their own districts by the Education Department, also based on parental choice.

      Primary 6 leavers are allocated junior secondary school places in the public sector through the Secondary School Places Allocation (SSPA) System. The system is based on internal school assessments, scaled by a centrally administered Academic Aptitude Test, and allocation takes into account parental choice of secondary schools. In July, 87 095 Primary 6 pupils participating in the SSPA were allocated Form 1 places in government schools, aided schools, private non-profit-making schools in receipt of per caput grants, and private independent schools in the 'bought place' scheme.

      The Student Guidance Scheme provides a school social work service to 831 primary school sessions.

Secondary Education

There are four main types of secondary schools in Hong Kong: Anglo-Chinese grammar schools, Chinese middle schools, technical schools and prevocational schools. The Anglo-

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      Chinese grammar schools had enrolments totalling 370 615 compared with 375 673 in 1984. They offer a five-year secondary course in a broad range of academic and cultural subjects leading to the Hong Kong Certificate of Education Examination (HKCEE), with the medium of instruction mainly English. Students with satisfactory results in the HKCEE may enter a two-year sixth-form course leading to the Hong Kong Advanced Level Examination for admission to the University of Hong Kong and other tertiary level courses) Many also sit for the United Kingdom General Certificate of Education Examina- tion at both ordinary and advanced levels. Some Anglo-Chinese schools also offer a one-year sixth-form course preparing their students for the Hong Kong Higher Level Examination for admission to the Chinese University of Hong Kong.

       In 1985, there were 57 Chinese middle schools accommodating 35 295 pupils, compared with 63 and 36 841 respectively in 1984. Pupils at these schools also take courses leading to the HKCEE. Instruction is mainly in Chinese with English taught as a second language. Most Chinese middle schools also offer a one-year Middle 6 course leading to the Hong Kong Higher Level Examination for admission to the Chinese University.

       Secondary technical courses are provided for 22 123 students in 22 schools; 10 of these schools are run by the government and 11 are government-aided. Secondary technical schools prepare their students for the HKCEE with emphasis on technical and commercial subjects. Suitably qualified candidates can continue their studies in Form 6 or at technical institutes, the Hong Kong Polytechnic, the City Polytechnic of Hong Kong or the Hong Kong Technical Teachers' College.

       Prevocational schools are government-aided secondary schools which provide students with a general education and an introduction to a wide range of technical skills upon which future vocational training may be based. The curriculum is made up of about 50 per cent technical subjects and about 50 per cent general subjects in Forms 1 to 3. The technical content is reduced to about 30 per cent in Forms 4 and 5. After completion of Form 3 a high proportion of prevocational school students enter approved craft apprenticeship schemes with associated part-time day-release courses at technical institutes. Credit units are given by the institutes for technical subjects which have been studied in depth at school. In addition, direct entry into the second year of an approved craft apprenticeship may be given.

At present, there are 15 prevocational schools providing 11 960 places. A further nine schools of this type have been included in the School Building Programme for completion in the next five years.

       The Junior Secondary Education Assessment (JSEA) System, which selects and allocates Form 3 leavers to Form 4 places in the public sector, completed its fifth cycle in July. Of the 73 322 pupils presented for assessment, 54 375 or 74 per cent were allocated either aided Form 4 places or one-year full-time craft course places. Of those allocated Form 4 places, 85 per cent were allocated back to their own schools.

As a first step in implementing the recommendation of the Education Commission on the phasing out of the JSEA in 1991, a working party was set up in March to review the operation of the existing system with a view to reducing the administrative burden upon participating schools, and to devise a new method of placement for Form 3 leavers after 1991. The Careers Education Section of the Education Department continued to work closely with the Hong Kong Association of Careers Masters and the Labour Department to provide a comprehensive careers service to young people. The section also provides administrative support for the newly established Guidance Division of the Hong Kong Association of Careers Masters.

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The provision of special education continued to develop in line with the objectives of the White Paper on Rehabilitation published in 1977 and the subsequent annual reviews of the Rehabilitation Programme Plan. Over 17 000 special places for handicapped children were provided in 1985.

(There are 71 special schools providing over 8 000 places for the more severely handicap- ped, including the blind, the deaf, the physically handicapped, the mentally handicapped, the maladjusted and the socially deprived) Residential places are also provided in the boarding sections of 14 special schools. In addition, there are 334 special education classes in ordinary schools providing over 9'000 places for the partially sighted, the partially hearing, and children with learning difficulties.

      Intensive remedial services are also provided by the Special Education Section of the Education Department for children with learning difficulties and adjustment problems in ordinary classes. These services include remedial support outside school hours in resource teaching centres and adjustment units, a peripatetic teaching service in ordinary schools during school hours, and advisory services to schools.

      Screening and assessment services are provided to identify special educational needs among school children so that remedial action could be taken as early as possible. Primary 2 pupils are screened under the Combined Screening Programme which comprises speech, hearing and vision screening and group testing. Pupils requiring further assessment are given audiological, speech or psychological assessment while those in need of remedial services such as speech and auditory training, speech therapy and counselling are given such services at the Special Education Services Centres.

      An earmould laboratory and a braille printing unit are run in one of the Special Education Services Centres. The former provides earmoulds to hearing-impaired pupils while the latter provides braille textbooks for blind pupils.

      Two-year part-time in-service courses of training for teachers of children with special educational needs are operated by the Sir Robert Black College of Education. Short courses, seminars, workshops as well as refresher courses are held frequently by the Education Department to enhance professional knowledge of staff in the special educa- tion field.

Post-Secondary Education

There are two approved post-secondary colleges - the Hong Kong Shue Yan College and Lingnan College - registered under the Post Secondary Colleges Ordinance. The Hong Kong Shue Yan College, registered in 1976, has three faculties arts, social science and business, and 13 departments offering day and evening courses with a total enrolment of 3 490 students. It operates a four-year diploma programme without receiving government financial assistance. Lingnan College, registered in October 1978, has three faculties - arts and business and social science, and an enrolment of 1 299 students. It offers two-year Form 6 courses and a two-year post-Form 6 higher diploma course, for which it receives government financial assistance. It also offers a fifth year end-on course leading to an honours diploma for students who complete successfully the higher diploma course.

      Students of the two-year post-Form 6 courses at Lingnan College are eligible to apply for grants and loans, the maximum levels for which were revised to $3,400 and $4,100 per annum respectively in the 1985-6 academic year. Loans up to a maximum of $7,500 per annum were available to students in the further one-year post-Form 6 course at Lingnan College and to students in the four-year course at Shue Yan College.

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There are a number of private day and evening schools registered under the Education Ordinance which offer post-secondary courses of varying standards but they do not receive any financial assistance from the government.

The University and Polytechnic Grants Committee

The government's main source of advice on the development and funding of higher education is the University and Polytechnic Grants Committee (UPGC). The committee is aware of the growing need for additional specialist local advice on Hong Kong's requirements in respect of strategic research and professional and technical standards. Members have been responsible for initiating proposals for a local research grants committee and for a local degree-validating body to examine degree proposals from the two polytechnics and the Baptist College. The UPGC has welcomed these opportunities to increase consultation with specialists and local laymen and women who have an intimate knowledge of higher education needs in Hong Kong, and thus to contribute to the integration of the various sectors of education, a process which has been given considerable impetus by the establishment of the Education Commission.

      During the year, funds were provided for continuing increases in student numbers at the two universities, the Hong Kong Polytechnic and the City Polytechnic of Hong Kong.) Grants were also provided through the UPGC to the Hong Kong Baptist College which is reorganising its academic and administrative structure prior to commencing its degree programmes. Early in 1985, the UPGC conducted an institutional review of the Baptist College and confirmed that the college is capable of providing a suitable academic environment for degree level work. During the year, the Hong Kong Polytechnic started three additional degrees in Manufacturing Engineering, Textile and Clothing Marketing, and Building Services Engineering. The Hong Kong Polytechnic now has 7.2 per cent of its full-time equivalent student population taking undergraduate courses. The UPGC has been consulted by the City Polytechnic and Baptist College which have been preparing their first degree proposals for internal and external validation procedures. It is hoped that they will be in a position to offer degree courses at the beginning of the 1986-7 academic year. bein

\A significant event in higher education in 1985 was the allocation of grants to the five institutions for research projects which could be deemed to be of strategic practical importance to the economic and social development of Hong Kong. Despite cash limits on the expenditure of the five institutions for the 1985-8 triennium, and pending a government decision on the UPGC's proposal for a separate research grants committee, funding for research has been increased in the belief that this is an important contribution which the institutions of higher education can make to the future of Hong Kong. In 1985, the research grants represented a relatively modest 0.7 per cent of the total recurrent grant to each institution. This is in addition to a sum of approximately two per cent of the annual recurrent grant already provided for fundamental and applied research. The UPGC intends to monitor expenditure on strategic research and to encourage the development of links between pure research, which is traditionally pursued to extend the frontiers of knowledge, the institutions' practical contract research undertaken jointly with local industry, and research in subject areas and disciplines which have been identified as being of strategic importance to Hong Kong's economic and social system.

      An important aspect of the UPGC's role is the maintenance of a co-ordinated system of higher education. Duplication of effort by the five institutions is discouraged in order to avoid the dissipation of scarce resources. In this respect, the committee has given consideration to the problem of where best to locate future undergraduate courses in

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speech therapy, para-medical studies, and information technology. The committee has also encouraged co-operation in the funding of research and the sharing of library and sports facilities, and has suggested that institutional co-operation would be essential to a system of open and continuing education now being discussed within the government.

      The UPGC's planning role includes advising the government on long-term requirements in higher education, and in 1985 the committee advised on the number of degree and sub-degree places it would be necessary to create by the turn of the century in order to achieve the government's long-term targets for educational opportunities in this field. The UPGC gave advice on the need for an additional tertiary education institution in order to achieve these targets. In October, the Governor announced in his Address to the Legislative Council that the government would proceed with the planning of a third university, so as to increase the provision of first-year first degree places to over 7 500 within the 1990s.

      The committee is represented on the Education Commission, on the government's Co-ordinating Committee on Para-Medical Education and its working group on the higher training of medical laboratory technicians, and on the Medical Development Advisory Committee's working group on post-graduate medical education and training.

Student Finance

     Financial assistance is made available to Hong Kong students attending higher education institutions in Hong Kong and in the United Kingdom through two means-tested schemes administered by the UPGC Secretariat.

      Full-time students attending the University of Hong Kong, the Chinese University of Hong Kong, the Hong Kong Polytechnic, the City Polytechnic of Hong Kong and the Hong Kong Baptist College may receive grants to cover their faculty expenses, tuition fees and student union fees together with interest-free loans to meet their living expenses. During the year, 8 684 students received grants totalling $35 million and 10 100 students received loans totalling $84 million.

      Under a joint-funding arrangement between the United Kingdom Government and the Hong Kong Government, grants are made to full-time students attending first degree or Higher National Diploma courses in the United Kingdom to meet the difference between home and overseas student fees. To be considered for grants under the joint-funding arrangement, on-course students and new students were required to submit their applica- tions by July 1, 1985, and October 1, 1985, respectively. Late applications from both on-course and new students were accepted until November 1 and were considered for loans from the Hong Kong Government. During the year, grants totalling £3.05 million were paid to 120 institutions on behalf of 1 230 students and loans totalling $700,410 were paid to 30 institutions on behalf of 37 students.

University of Hong Kong

The University of Hong Kong has grown from modest beginnings in 1911 to its present student population of over 7 000. It has faculties of arts, architecture, dentistry, education, engineering, law, medicine, science and social sciences. The university's central estate is on the northwestern slopes of Hong Kong Island; the Faculty of Medicine is adjacent to Queen Mary Hospital, the university's teaching hospital; and the Faculty of Dentistry is located in the Prince Philip Dental Hospital in Western District.

      All the faculties, with the exception of education, teach both undergraduate and postgraduate courses. The Faculty of Education at present teaches only postgraduates, most of whom are preparing for the Certificate in Education. The medium of instruction

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Previous page: These youngsters are among some 229 000 children who attend 787 kinder- gartens in Hong Kong. Above: The well-stocked library of a government secondary school in Mong Kok.

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A valuable aid in language teaching is the 'wire free induction loop system' which the

government has provided to about 860 primary and secondary schools.

  Practical instruction in radiography for students at the Hong Kong Polytechnic's Institute of Medical and Health Care.

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Students carry out a basic experiment in electronic circuitry at the City Polytechnic of Hong Kong, which has centralised laboratories.

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An Education Department Media Production Services Unit provides facilities for teachers to make teaching aids ranging from photographs and cartoon graphics to tape recordings.

A Chinese folk dance class in progress at the newly opened Hong Kong Academy for Performing Arts which has provided a new dimension to cultural life in Hong Kong.

The territory's two universities: the Chinese University of Hong Kong at Sha Tin (top) and the University of Hong Kong at Pok Fu Lam. The government is now proceeding with planning for a third university.

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throughout the university is English, except in the Department of Chinese. Most of the undergraduate courses are of three years duration except the courses for the degrees of Bachelor of Architecture, Bachelor of Dental Surgery, and Bachelor of Medicine and Bachelor of Surgery, which are of five years duration, and those for the degree of Bachelor of Science in Quantity Surveying, which are of four years duration. All courses lead to honours degrees.

Close links are maintained with other universities through the Association of Common- wealth Universities and the Association of Southeast Asian Institutes of Higher Learning. The structure of the degrees and the governance of the university are based mainly on the British system and external examiners who are eminent academics in the field, generally from Britain and the United States, visit in each subject area at least once every three years and moderate each year's finals papers. Competition for places at the university is intense and in many cases there are five times the number of applications from qualified candidates as there are places available. The university's academic staff are recruited by international advertisement.

      The university is in the middle of a substantial building programme. Nearing completion is a 'composite building', with an amenities centre, a hall of residence with 300 student places, and accommodation space for the Faculty of Engineering. Academic visitors to the university and a number of postgraduate students can be accommodated at Robert Black College.

Accommodation is provided for a maximum of 25 per cent of undergraduate students in residential halls. To help students with homes where facilities for study are poor or who wish to avoid lengthy travel yet cannot be accommodated in a hall of residence, the university has increased its emphasis on the provision of general amenities over the past few years. These include study and rest rooms, games and music rooms, and restaurant facilities located at three amenities centres. To improve the sports facilities, a new site, with grandstand, has been developed on reclaimed land at Sandy Bay on the western shore of Hong Kong Island. It has been named the Stanley Ho Sports Centre and was officially opened in August.

The Department of Extra-mural Studies offers a wide variety of vocational and professional courses and courses of general or cultural interest. Evening classes held at the university, and day and evening courses at its town centre, are attended by nearly 25 000 students each year.

      At postgraduate level the university offers facilities for both Master's and Doctor's degrees. Master's degrees by coursework are available in a number of subjects and the Master of Philosophy degree is awarded on the basis of research at Master's level. Doc- torates are awarded on the basis of research.

      With the re-equipping of the university's laboratories under the present development programme, its Science and Engineering Departments contain the latest teaching equip- ment. It also has one of the best-equipped libraries in Southeast Asia. The main library accommodates more than 600 000 volumes - including the Fung Ping Shan Chinese Library with its valuable collection of works in Chinese - while some individual faculties have subsidiary library units. The Fung Ping Shan Museum of Chinese Art is attached to the university and is also used as a teaching museum by the Department of Fine Arts. Research projects continue through the university's various departments, the Language Centre, the Centre of Asian Studies - which serves as a focal point for multi-disciplinary research on China, Hong Kong, East Asia and Southeast Asia - and the Centre for Urban Studies and Urban Planning.

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The Chinese University of Hong Kong

The Chinese University of Hong Kong was inaugurated in 1963 as a federal university composed of three constituent colleges - New Asia College (founded in 1949), Chung Chi College (founded in 1951) and United College (founded in 1956). It is a self-governing corporation which draws its income mainly from government grants. The campus occupies more than 110 hectares of land near Sha Tin.

      Since its early days, the university has adopted a distinctive academic system of its own, which in many ways is different from that of a traditional British university. Most students are admitted to the undergraduate programme after six years of secondary education, and the Bachelor's degree is granted upon the completion of a number of course credits and the passing of a degree examination assessed by external examiners from home and abroad.

      The university offers a wide range of undergraduate courses through its 47 departments grouped under five faculties. Four of the faculties - arts, business administration, science and social science - offer four-year programmes leading to Bachelor's degrees. The Faculty of Medicine, which will produce its first graduates in 1986, runs a five-year programme with two years of pre-clinical studies followed by three years of clinical work. Clinical teaching is conducted mainly in the university's teaching hospital - the Prince of Wales Hospital in Sha Tin. The university emphasises bilingualism; most courses are taught in Chinese, but English is also used widely.

      At the postgraduate level, there are 49 academic and professional programmes leading to the degrees of Doctor of Medicine, Doctor of Philosophy, Master of Philosophy, Master of Business Administration, Master of Social Work, Master of Divinity, Master of Arts, and Master of Arts in Education as well as Diplomas in Education and Social Work.

      Part-time degree programmes leading to Bachelors' degrees (Bachelor of Business Administration; Bachelor of Arts in Chinese and English, Music; and Bachelor of Social Science in Social Work) and Master's degrees in Translation, Business Administration and Social Work as well as professional diplomas in both Education and Social Work are offered to working adults.

      New programmes launched in 1985-6 comprised Doctor of Medicine; Doctor of Philosophy in Chemistry, Clinical and Pathological Sciences, Marketing and International Business and Mathematics; and Master of Philosophy in Clinical and Pathological Sciences. Expansion in the fields of education, social work, computer science and medicine is expected in the coming years. There are plans to establish engineering studies in the near future. In the postgraduate studies, greater emphasis will be placed on research work and training of research students.

      The university is strongly committed to research and other academic activities. In addition to research work conducted in the teaching departments, six research centres are operating under the Research Institutes of Chinese Studies, Science and Technology, and Social Studies.

Competition for university places is intense. Over 20 000 candidates sat the various public examinations held in 1985, and 1 261 were admitted to first year studies in the university. Enrolment as of September 1985 totalled 7 009, including 5 257 full-time and 442 part-time undergraduate students and 418 full-time and 892 part-time postgraduate students. Virtually all students are local. About half of the students are given hostel places. With an annual growth rate set at three per cent, the student population will reach 7 000 at the end of the decade.

      In 1985-6, the Department of Extramural Studies offered more than 1 100 courses with a total enrolment of more than 39 000. Besides general courses and those leading to the

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award of diplomas and certificates, the department also offered correspondence courses, courses on radio and by newspapers, and self-learning courses packaged in the form of audio tapes, programmed texts and resource materials.

      Construction projects completed during the year included an academic building on the central campus, an extension to the Basic Medical Sciences Building, four multi-storey blocks of senior staff quarters and a student hostel on the United College campus. Further development of academic buildings, amenities facilities and hostels, in varying stages of planning and construction are programmed to meet the academic requirements of the next few years.

       The library system consists of the University Library, the Medical Library, and three branch libraries in the colleges. The total collection in 1985 was 860 000 volumes.

The university participates in the affairs of regional and international associations of universities, and has from time to time launched co-operative projects with foreign govern- ments and individual institutions. The university is a member of the Association of Commonwealth Universities, International Association of Universities, the Inter-University Council for Higher Education Overseas and the Association of Southeast Asian Institutes of Higher Learning.

Hong Kong Polytechnic

The Hong Kong Polytechnic was established in 1972, taking over the campus of the former Hong Kong Technical College which formed the basis of the polytechnic's initial develop- ment. Since then the institution has undergone a phased programme of extensive develop- ment and rapid expansion, not only in terms of student population, but also of the range of disciplines offered. Links with academic institutions in China were also initiated during this period. In October 1983, the polytechnic became a degree awarding institution.

       The polytechnic has a total of 22 academic units which are organised into divisions and institutes. The Division of Applied Science comprises the Departments of Applied Science, Mathematical Studies, Nautical Studies, the School of Social Work and the Centre of Environmental Studies. The Division of Commerce and Design comprises the Departments of Accountancy, Business and Management Studies, Computing Studies, Institutional Management and Catering Studies, Languages, and the Swire School of Design. The Division of Construction and Land Use comprises the Departments of Building and Surveying, Building Services Engineering, Civil and Structural Engineering, and the Centre of Land and Engineering Surveying. The Division of Engineering comprises the Depart- ments of Electrical Engineering, Electronic Engineering, Mechanical and Marine Engineering, Production and Industrial Engineering, and the Industrial Centre. Other units are the Institute of Medical and Health Care and the Institute of Textiles and Clothing. The Centre of Environmental Studies and the Industrial Centre are inter-disciplinary units.

       The polytechnic offers a wide range of courses to meet the demands of commerce, industry and the community. These study programmes are offered in different modes of attendance, namely, full-time, sandwich, part-time day release, part-time evening and mixed-mode. The duration of programmes normally ranges from one to four years and leads to the awards of degree, associateship, professional diploma, higher diploma, diploma, post-registration certificate/diploma, endorsement certificate, higher certificate, certificate, and certificate of proficiency.

      The degree programmes offered by the polytechnic in 1985-6 included a BA(Hons) in Computing Studies, a BA in Design, a BA(Hons) in Textile and Clothing Marketing, a BEng(Hons) in Civil Engineering, BEng(Hons) in Electrical Engineering, a BEng(Hons) in

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Electronic Engineering, a BEng(Hons) in Manufacturing Engineering, a BEng(Hons) in Mechanical Engineering, a BEng in Building Services Engineering, a BSc(Hons) in Combined Studies in Mathematics and Science, and a Bachelor of Social Work.

      At present, the Hong Kong Polytechnic degree programmes are validated by the United Kingdom's Council for National Academic Awards (CNAA). The CNAA acts as an adviser to the University and Polytechnic Grants Committee in assessing the standard of the degree programmes to be offered by the Hong Kong Polytechnic and ensuring that it is comparable to that of degree courses offered by universities and polytechnics in the United Kingdom.

      Since 1981, the polytechnic has conducted a phased schedule of discontinuing its diploma and certificate level work as corresponding courses are offered in the technical institutes. This phased schedule reflects the polytechnic's move towards a greater proportion of higher level academic work.

      The polytechnic also offers short full-time and extension courses. Short full-time courses are of less than one year's duration and are offered on a regular basis to meet recurrent demand. Extension courses are organised on an ad hoc and self-supporting basis at different times during the calendar year as community needs arise. Neither type of course leads to any polytechnic academic award.

      In 1985, the polytechnic considered the development of open/distance education conduc- ted wholly or partially 'off campus' on the basis of written materials and supported by tutorial sessions where appropriate. This form of programme will enable the polytechnic to provide more study opportunities for the community at large.

Since 1972, student and staff numbers have increased greatly. At the beginning of the 1985-6 academic year, there were approximately 7 540 full-time, 1 110 sandwich, 470 mixed-mode, 3310 part-time day release and 12 500 part-time evening students. In addition, 824 students were enrolled on short courses and 7452 on extension courses during the year. In June, the staff strength stood at 2 341, comprising 861 teaching, 235 senior administrative and 1 245 technical, clerical and ancillary staff.

      The polytechnic campus has an area of approximately 8.8 hectares and is located in Hung Hom, Kowloon, on a site adjacent to the Cross-Harbour Tunnel. In addition, there is an off-campus Radar and Seamanship Centre and a temporary Dental Technology Building.

Campus development in 1985 saw the completion of the Phase IIB Building which provided additional lecture theatres, as well as general and specialist teaching rooms and staff accommodation. Work has commenced on the provision of a new sports pavilion and outdoor sports facilities on campus and these will be ready for use in 1986.

      The polytechnic library offers a comfortable study environment for staff and students, with over 1700 seats for readers. The library has an extensive reference collection, a comprehensive standards collection, a large collection of audio-visual materials, a news- paper clippings collection and slide collection. The collection has grown to approximately 310 000 volumes, which are mainly in the scientific, engineering and business areas. Special facilities are provided for disabled students.

      Staff are encouraged to offer their services to commerce and industry as consultants within their fields of expertise, and are also actively engaged in research work of direct relevance to Hong Kong. In response to support from the UPGC, the polytechnic in 1985 formulated a set of institutional policies to provide a more co-ordinated framework for an expanded programme of development of various types of research activities in the polytechnic, including fundamental research, applied research, consultancy, professional

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      practice, scholarship, creative work and research into curriculum and pedagogy in higher education. Much effort has also been made to strengthen the research base not only in support of first degree programmes, but also in preparation for the mounting of higher degrees by research in the near future.

In 1985, the polytechnic continued to establish new contacts and maintain close liaison with academic, research and professional institutions in China and overseas. The polytech- nic also gave high priority to staff development programmes for the improvement of staff members' level of academic attainments and administrative skills. These included sponsor- ship for courses, attachments, conference attendance and visits, both locally and overseas. In the years ahead, the polytechnic will be constantly upgrading and maintaining the standards of its study programmes, and will plan and implement new courses to meet the changing demands of the community. High priority is also accorded to the continuous development of part-time programmes and improvement in their quality, with a view to achieving parity of educational provision for full-time and part-time students.

City Polytechnic of Hong Kong

The second year of the City Polytechnic's existence witnessed the intake of approxi- mately 1 700 new full-time and part-time students, bringing the total student number to about 2 600.

       In addition to the nine courses started in 1984-5 by the Departments of Accountancy, Business and Management, Computer Studies, Social Administration and Languages, three other departments (Building and Construction, Electronic Engineering and Mathe- matics and Science) started to offer courses in 1985-6, and the total number of full-time and part-time courses was 18. These represent different levels of study leading to academic awards ranging from Higher Certificate through Diploma, Higher Diploma and Profes- sional Diploma to Postgraduate Diploma. The plan for the introduction of degree courses is also in progress.

The City Polytechnic offers courses which have a strong vocational emphasis, many with periods of practical training. Course design is based on the concept of a modular system. Shared instruction is emphasised where it is appropriate for the same module to be taken by students in different courses. This system provides opportunities for the exchange of ideas and views between students with different academic backgrounds, and leads to more cost-effective use of both human and physical resources. Through this system in part, it was possible to translate into practice the principle of equality of award between full-time and part-time courses, another distinguishing feature of the City Polytechnic's courses. In the areas of administration and academic support service, a strongly centralised system has also been developed and has substantially reduced duplication of manpower and equipment. The polytechnic library has 33 000 volumes of books, 1 550 periodical titles and 1 600 non-print items. Access to library materials is provided by an on-line catalogue system. A computer-based Chinese card catalogue is also being built up. The non-print section is equipped with audio-visual facilities, on-line computer terminals and a network of microcomputers to facilitate students' self-studies.

      The Computer Centre provides all the computing facilities for the polytechnic. It has six main computer systems providing 130 on-line terminals for student use and an additional 29 in academic departments. Besides the main-frame computers, the centre also supports a total of approximately 50 microcomputers.

       The Educational Technology Centre gives general support to all departments in the areas of educational technology, production, engineering and audio-visual services. It operates

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three language laboratories, and a video distribution system which serves all classrooms, lecture theatres and special teaching rooms.

The centralised laboratories and workshops provide laboratory support for the technically-based disciplines. The main laboratories provide 72 multi-purpose work stations equipped with an on-line data collection and processing system. In addition, this academic support centre operates a specialised optics laboratory and a design studio for use by students of building studies.

During the year, mutually beneficial relations were fostered between the City Polytechnic and the community, as well as with foreign institutions. All academic departments have set up departmental advisory committees and members of these committees are drawn from professional bodies, other academic institutions and appropriate sectors of society.

Throughout the year, there was a considerable number of visits from foreign academics. City Polytechnic staff also visited overseas institutions, attended local and international conferences, and delivered lectures and speeches at various meetings to promote further contacts. In particular, close liaison with the academic community in China was cultivated and ways of co-operation and exchange were explored.

      A start was also made in the establishment of a modest research base, and the polytechnic was awarded a grant of $1 million for 1985-6 for the purpose by the UPGC.

The City Polytechnic is currently operating from its interim campus in Argyle Centre Tower II in Mong Kok, and is expected to do so until the beginning of the 1988-9 academic year.

In April, further work on the conversion of the building was undertaken. Empty floors were converted and provided with appropriate fittings. Computers and closed circuit television services were also installed. All work was completed by September.

During the same period, the planning and design of the permanent campus continued. The designated site at Tat Chee Avenue, Kowloon Tong, was formally granted to the polytechnic in April. A 1:200 scale detailed design was completed and working drawings and contract documentation begun. If all operations run on schedule, Phase I development of the permanent campus will be ready for occupation by October 1988 and be completed by the end of 1989.

Hong Kong Baptist College

Established in 1956 by the Baptist Convention of Hong Kong, the Hong Kong Baptist College has since November 1983 become a publicly funded institution of higher education with the bulk of its finances coming from the government through the UPGC. The college is an autonomous institution governed by its own ordinance which was enacted in August 1983 and took effect on January 1, 1984. Its statutory governing bodies - the Board of Governors and the Council - are composed chiefly of members independently appointed by the Governor from the sectors of commerce, industry and education. This form of governance is in line with internationally accepted practice and during the year nine additional members were appointed to the board of governors.

In keeping with the pace of development of its academic programmes, the college launched in May the first phase of a building programme to redevelop the existing campus in north Kowloon which it has been occupying since 1966. Under the programme, five new buildings are to be constructed to increase the space provision by 80 per cent over the existing area, and the first phase covers three buildings among which is an indoor sports centre at a site adjoining the campus. The programme also involves refurnishing the existing buildings.

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      The college is fulfilling a distinctive role within the local spectrum of institutions of higher education, and its goal is to educate students to become well-balanced in academic achievement, professional competence and character development. Its three-year post- Advanced Level courses provide a broad-based vocational or professional education with liberal education as a complement. These courses currently lead to the award of the honours diploma and are offered in 17 disciplines. In September, two degree course proposals were submitted, through the UPGC, to the UK Council for National Academic Awards (CNAA) for academic validation. These courses, the Bachelor of Science (Hons) in Combined Sciences and Bachelor of Social Work, are targetted to begin in September 1986. In December, the college received the CNAA validation team for the Combined Sciences course. Other degree course proposals discussed with the UPGC during the year included Management Studies and Communication.

      There are four faculties: Arts (with departments of Chinese language and literature, English language and literature, music and fine arts, and religion and philosophy); Business (with departments of accounting, business management, economics, and secretarial man- agement); Science and Engineering (with departments of biology, chemistry, civil engineer- ing, mathematics, and physics); and Social Sciences (with departments of communication, geography, history, social work, and sociology). In addition, the language centre, compu- ting studies unit and athletics unit provide service teaching to students from all disciplines. All students are full-time and admitted on the results of the Hong Kong Advanced Level Examination. Demand for places is high and for the 1985-6 academic year there were eight applicants for every available place.

At the end of the 1984-5 academic year, 593 students graduated with the honours diploma. The phasing out of the Basic Studies Programme was also completed on schedule. This two-year programme, started in 1979, prepared students to sit the Hong Kong Advanced Level or the International Baccalaureate Examination. Its discontinuation, with the exception of a specialised course in music which enrols 70 students, is part of the plan to concentrate on degree and honours diploma work.

In October, the total full-time student enrolment in the four faculties was 2 197, with a breakdown of: arts 397, business 649, science 420, and social sciences 731. The teaching staff strength stood at 176, and the majority of the teaching staff hold higher degrees from overseas institutions. Senior academic and administrative staff are recruited through international advertisement.

In addition to the full-time enrolment, the college maintains an active Division of Continuing Education, providing a broad spectrum of courses to meet the needs of people in employment. Most courses are held in the evenings, and some lead to professional qualifications. The division is financially self-supporting and besides using the campus for evening classes, it also maintains five off-campus centres. There were 30 689 students enrolled in 1 213 courses during the year, taught by 1 091 part-time teaching staff.

      As part of the staff development programme, the college encourages its staff to engage in research work and to offer consultancy services to the community. The Fong Shu Chuen Library, completed in 1983, gives support to staff research and the academic work of students. During the year, the library holdings expanded to 141 588 volumes, and the installation of a fully integrated automation system - the first of its kind in Hong Kong - was completed. There is a collection of materials to support research work on contempor- ary China. The college maintains close links with the community and local and overseas institutions. There are course advisory committees with members drawn from the community and a rapidly expanding programme of exchange activities with institutions in China.

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Vocational Training

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To meet the increasing demand for skilled manpower, opportunities for vocational training are being expanded to give more people the opportunity to acquire skills and knowledge in a wide and ever growing range and level of jobs.

Much of this effort is the result of the activities of the Vocational Training Council which was set up in 1982 under the Vocational Training Council Ordinance. The council's role is to advise on measures required to ensure a comprehensive system of technical education and industrial training suited to the developing needs of Hong Kong; to set up, develop and operate training schemes for training operatives, craftsmen, technicians and technologists necessary to maintain and improve Hong Kong's industry, commerce and services; and also to establish, operate and maintain technical institutes and industrial training centres.

Under the council are 19 training boards and six general committees. The training boards cover major economic sectors: accountancy; automobile; banking; building and civil engineering; clothing; electrical; electronics; hotel, catering and tourism; insurance; jewel- lery; journalism; machine shop and metal working; merchant navy; plastics; printing; shipbuilding and ship repair; textiles; transport and physical distribution; and wholesale/ retail and import/export trades. The six general committees deal with apprenticeship and trade testing; electronic data processing training; management and supervisory training; technical education; training of technologists; and translation.

      The training boards assess the future manpower needs of their respective industries or commercial sectors and recommend measures to meet such needs, prepare job specifica- tions, design training programmes and trade test guidelines, and carry out other duties such as operating and maintaining training centres. The general committees are responsible for specific training areas which cut across several sectors of the economy. The council, its training boards and committees are serviced partially by its own staff and partially by staff of the Technical Education and Industrial Training Department.

      During the year, manpower surveys were conducted in the following 11 sectors: building and civil engineering; clothing; electrical; electronic data processing; hotel, catering and tourism; insurance; jewellery; mass media; plastics; textiles; and transport and physical distribution. In the same period, the training boards prepared or revised job specifications, training programmes and trade test guidelines for all principal jobs in their industries. A glossary of common technical terms used in commerce and services was also being finalised. All completed survey reports and manuals are on sale at the Government Publications Centre.

Technical Education

The five existing Technical Institutes - Morrison Hill, Kwai Chung, Kwun Tong, Haking Wong and Lee Wai Lee - continued to provide courses at craft and technician levels by full- time, block-release, part-time day release and part-time evening attendance. A large number of short courses were also offered and these are mainly designed to update the knowledge and skills of persons in employment. The main disciplines covered by the institutes include: clothing, commercial studies, construction, design, electrical engineering, general studies, hotel-keeping and tourism studies, industrial technology, marine and fabrication, mechan- ical engineering, motor vehicle engineering, printing and textiles. Most technician level courses have been validated by the UK Business and Technician Education Council (BTEC) and students attending these courses are able to register for the council's awards.

      The demand for places on most courses continued to be high. The average ratio of qualified applicants to full-time places was 11:1. Student enrolments for the 1985-6

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     academic year were about 6000 full-time, 13 400 part-time day, and 26 200 part-time evening students. In September, the full-time teaching establishment of the technical institutes was about 510 with about 420 supporting staff.

      The annual employment survey of full-time course graduates again showed that they had little difficulty in finding employment in their respective disciplines after completion of their studies.

      A computer centre at the Lee Wai Lee Technical Institute, with terminals linking all five institutes, enables the study of computer applications to be included in most courses. Computer facilities in each technical institute were expanded by the enhancement of the existing minicomputers and the purchase of 100 microcomputers.

      An expansion programme is being undertaken to meet the increasing demand for courses. A five-storey annex to the Haking Wong Technical Institute was completed in August and construction work on two new technical institutes at Tuen Mun and Sha Tin was started in April. These two projects are due for completion in September 1986. Another technical institute is being planned at Chai Wan for 1987.

Industrial Training

Construction of the Vocational Training Council's nine-storey Kowloon Bay Training Centre Complex was completed in December 1984 and the 10-storey Kwai Chung Training Centre Complex in July. The complex at Kowloon Bay houses five training centres for the electronics, hotel, machine shop and metal working, plastics, and printing industries. The complex at Kwai Chung also has six training centres for the automobile, electrical, electronics, gas, machine shop and metal working (including welding), and textiles industries.

       These training centres have the capacity to provide basic off-the-job training for about 9 000 trainees a year, ranging from operative to technologist level.

The council is in the process of setting up a precision tooling training centre and an insurance training centre. A Committee on Precision Tooling was established in December to oversee the establishment and the work of the precision tooling training centre.

The Seamen's Training Temporary Centre at Little Sai Wan started operation in February 1984. It provides 30-day training programmes to Hong Kong seamen to enable them to obtain the necessary certificates required under the International Maritime Organisation's Convention on Standards of Training, Certification and Watchkeeping for Seafarers 1978. The centre can train 1 920 seamen a year. A permanent seamen's training centre at Tai Lam Chung is being planned.

The Engineering Graduate Training Scheme was launched by the Vocational Training Council in February 1983 to provide 18-months' practical training to enable engineering graduates to become qualified professional engineers. In 1985, 67 firms with 364 trainee- engineers participated in the scheme.

The Management Development Centre of Hong Kong started operation in October 1984 with the main purpose of improving management in Hong Kong, and ensuring that it is capable of meeting changing needs, both in the short and the long term. The centre has four principal functions, covering research, development, co-ordination, and promotion.

Apart from industrial apprenticeship schemes, commercial traineeship schemes were also introduced in the accountancy and insurance sectors. The Training Course Subsidy Scheme operated by the Vocational Training Council was popular with the journalism sector and the wholesale/retail and import/export trades.

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Training Authorities

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The Clothing Industry Training Authority and the Construction Industry Training Authority are statutory bodies set up in 1975 to establish and operate training centres for the two industries. The former collects a training levy based on the export value of clothing items and the latter collects a levy based on the value of construction works exceeding $1 million. Two construction industry training centres and two clothing industry training centres are already in operation. A third construction industry training centre is being planned.

Apprenticeship Scheme

The Apprenticeship Ordinance provides a legal framework for the training of craftsmen. and technicians. It requires an employer to enter into a contract of apprenticeship when engaging a person aged between 14 and 18 in one of the 42 designated trades specified in the ordinance, unless that person has completed an apprenticeship in the trade. The contract must be registered with the Director of Technical Education and Industrial Training. Contracts for apprentices engaged in non-designated trades or for apprentices aged over 18 engaged in designated trades may also be registered voluntarily with the director.

The Apprenticeship Section of the Technical Education and Industrial Training Depart- ment is responsible for administering the ordinance. Its duties include advising and assisting employers in the training and employment of apprentices, ensuring that the training is properly carried out, helping to resolve disputes arising out of registered contracts, and co-operating with educational institutes to ensure that apprentices receive the necessary complementary technical education. Courses of instruction for apprentices, normally on a part-time day-release basis, are provided at the Hong Kong Polytechnic and the technical institutes.

Apprenticeship contracts registered in 1985 totalled 4 300 of which 900 were for non-designated trades. These contracts covered 3 540 craft apprentices and 760 technician apprentices. By the end of the year, 8 600 apprentices were being trained in accordance with the ordinance.

Vocational Training for the Disabled

Development of vocational training, assessment, technical aids and resource services continued to make steady progress. The total number of vocational training places in both government and subvented centres was increased to 712, while nearly 200 persons completed vocational assessment, one area of expansion being the opening of the $9 million reprovisioned project at Pinehill Village in Tai Po which, apart from increasing the number of training places from 60 to 108, also greatly improves the facilities and conditions for the trainees.

In the technical institutes, over 100 disabled students attend a wide variety of courses at both craft and technician level.

       There was an increased demand for the Technical Aids and Resource Centre services and over 40 special aids and machine adaptations were produced during the year. The production of videotaped learning programmes for disabled students and trainees con- tinued and these have proved beneficial in their training, especially to those trainees with hearing impairment or low reading ability.

The first steps in introducing a modular training approach to subvented vocational training centres is well underway, with encouraging results. A boarding fee remission. scheme aimed at helping needy disabled trainees was also launched.

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       An employment survey on disabled leavers from skills centres and technical institutes conducted at the beginning of the year showed that about 70 per cent of the survey group found appropriate employment in the government, industrial or commercial sectors.

Teacher Education

      General teacher education is provided at the three Colleges of Education - Grantham, Northcote and Sir Robert Black - and at the Hong Kong Technical Teachers' College, all administered by the Education Department.

       The three general Colleges of Education offer a two-year full-time course of initial teacher training to students with the Hong Kong Advanced Level Examination qualifica- tions and a three-year full-time course to students with the Hong Kong Certificate of Education Examination qualifications. The Colleges of Education also conduct in-service training courses, including part-time courses for serving teachers of kindergartens, primary and secondary schools and for teachers of students with special education needs. In September, there were 1 358 students in the three-year full-time course, 1 003 students in the two-year full-time course, 77 students in the Advanced Course of Teacher Education, and a total of 2 103 students in the in-service training and retraining courses.

Technical teacher education is offered by the Hong Kong Technical Teachers' College. The college trains technical teachers for secondary and prevocational schools. A one-year full-time course is available to mature students who are well qualified and experienced in a technical field and have decided to take up technical teaching as a career. Inducement grants are offered to attract suitable recruits from commerce and industry. A three-year full-time course is open to secondary school leavers who have prior studies in either technical or commercial subjects. The college also offers in-service courses for teachers, including the Advanced Course of Teacher Education in Design and Technology and Commerce, and courses for supervisors and instructors employed in industry. In Septem- ber, there were 176 students in the full-time courses and 150 students in the part-time and short courses.

Financial assistance in the form of interest free loans and maintenance grants is provided by the government for students enrolled in the full-time courses at the four colleges.

Language in Education

The Institute of Language in Education (ILE), founded in 1982 as a training and research institute to improve language learning and teaching in Hong Kong, organises refresher courses, seminars and workshops for teachers of English and Chinese (including Putong- hua); provides consultancy services to teachers and language teaching specialists; and develops and tests language learning and teaching materials for use in schools. The institute is recognised by the Royal Society of Arts Examinations Board as a centre for courses leading to the Diploma for Overseas Teachers of English. During the year, the institute organised refresher courses for over 1 600 teachers of English and Chinese; conducted an international seminar on language teacher education; launched a research programme into problems associated with language learning and teaching, and issued the institute's first professional journal.

       The Education Commission has recommended that secondary schools should be encouraged to adopt Chinese as the medium of teaching, on the grounds that teaching and learning are more effective if conducted in the mother tongue. Secondary schools which teach in English will be asked in 1986 to consider whether they wish to make greater use of Chinese. The availability of suitable texts is an important factor for secondary schools

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contemplating this change, and in October the government announced that a Chinese Textbooks Committee would be established to ensure that sufficient good quality Chinese textbooks would become available within the next five years.

Adult Education

The Adult Education Section of the Education Department provides a wide range of courses and recreational activities for adults and young people who no longer attend formal education courses in day schools. These courses and activities are provided by the Evening School of Higher Chinese Studies, the Evening Institute, 17 Adult Education and Recreation Centres, and 47 subvented voluntary organisations.

A credit unit system for the diploma courses, offering studies in Chinese literature, philosophy and sociology to secondary school leavers, is run by the Evening School of Higher Chinese Studies. It may be completed over three to five years by taking 12 basic core units of the diploma course and 18 other units in aspects of Chinese classics and culture. Enrolment was over 4 000 during the year.

The 113 centres of the Evening Institute offer courses ranging from literacy to secondary and post-secondary studies. A general Adult Education Course offering Chinese, English, Mathematics and Social Studies provides education at the primary level to meet the needs and interests of adults. Another Adult Education Course offers practical courses which teach such skills as sewing, knitting, cookery and woodwork. There are also two courses at secondary school level - the Secondary School Course and the Government Secondary School Course for Adults - which offer arts and science subjects and prepare students of the English and Chinese sections for the Hong Kong Certificate of Education Examina- tion. To improve proficiency in English, a course covering Primary 4 to Form 5 is offered to prepare adult students for the English Language Paper (Syllabus B) of the Hong Kong Certificate of Education Examination. At the post-secondary level, teachers courses provide additional in-service professional training in a variety of academic and cultural subjects. During the year, some 22 000 persons enrolled in these formal courses.

The 17 Adult Education and Recreation Centres organise many cultural, social and recreational activities designed to stimulate individual awareness within the community, cultivate creative ability and develop individual talents. Microcomputer courses were introduced, attracting some 700 participants. Various activities were organised with other government departments and organisations, such as the Independent Commission Against Corruption, the Consumer Council and the St John Ambulance Brigade. During the year, more than 23 000 persons were enrolled in these non-formal courses.

Adult Education retrieval courses run by voluntary bodies have been subvented on a recurrent basis since the 1982-3 school year. In 1985-6, 137 projects operated by 47 organisations were granted government subsidies.

Advisory Inspectorate

The main function of the Education Department's Advisory Inspectorate is to promote the quality of teaching. This involves frequent visits to schools by subject inspectors to advise on curriculum matters, teaching methods and utilisation of resources, and the provision of in-service training courses, seminars and workshops for teachers. The inspectorate is also responsible for curriculum development, production of educational television programmes, and evaluation of textbooks and instructional materials.

The Curriculum Development Committee (CDC) and its many subject committees continued to advise on curriculum innovation and renewal at pre-primary, primary and

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secondary levels. In 1985, the provisional Putonghua syllabus for Primary 4-6 was issued and revised new syllabuses for Primary Mathematics and Principles of Accounts and Social Studies at senior secondary level were implemented. While work continued on the strengthening of sex education and moral education, comprehensive guidelines on civic education were also issued to schools for the first time. The year also saw a further expansion of the Activity Approach in primary schools and of the Computer Studies Scheme at secondary level. The Textbooks Committee continued to give guidance to schools in the selection of textbooks through the publication of recommended textbook lists and also maintained close contact with publishers of educational material.

Teaching Centres

The Advisory Inspectorate runs six teaching centres in connection with the teaching of Chinese, English, Mathematics, Science, Social Subjects and Cultural Crafts. A Field Studies Centre is open to sixth form students and teachers.

       During the year, the Chinese Language Teaching Centre conducted 40 refresher courses, workshops and seminars for over 2 300 teachers in primary and secondary schools. Four courses and seminars on Putonghua teaching were also conducted for nearly 300 teachers. Two periodic displays on special topics were organised and attracted some 900 teachers. Both primary and secondary schools benefitted from the centre's free dubbing service and over 1 460 teaching tapes were made during the year.

The English Language Teaching Centre organised a total of 65 seminars, workshops and talks for over 2 200 participants. As well as providing schools with a free tape-dubbing service, the centre has a tape library containing about 920 English language tapes for teachers' use as listening materials in the Wirefree Induction Loop System. The centre's reference library, which is open to teachers, has a stock of over 6 700 books and a variety of journals on English language teaching and linguistics.

The Mathematics Teaching Centres provide in-service training venues and resource centres for mathematics teachers. Twenty-three seminars, courses and workshops were conducted for mathematics teachers in primary and secondary schools. More than 2 200 teachers visited the centre for in-service training, viewed the display of teaching aids and obtained information on resource materials.

The Science Teaching Centre was used extensively for conducting refresher courses, seminars, workshops and teachers' meetings. More than 3 200 primary and secondary school science teachers and laboratory technicians visited the centre for courses and meetings and saw the display of new science equipment, teaching materials and science projects. A new science laboratory was established at the centre in February to provide teachers with facilities to try out science experiments in relation to curriculum development, making apparatus at home, and doing practical work during science workshops.

       The Social Subjects Teaching Centre is a training venue and resource centre for teachers of various social subjects such as Economics and Public Affairs, Economics, Geography, Health Education, History, and Social Studies at both primary and secondary levels. Various teaching resources and audio-visual equipment relating to these subjects were on display. Over 25 courses or seminars with more than 1 500 participants from primary and secondary schools were conducted at the centre.

The Field Studies Centre, within the campus of the Sai Kung Outdoor Recreation Centre, continued to serve as an educational and resource centre for ecology and geography studies. During the year, 32 residential ecology and geography courses were organised for nearly 1 500 sixth formers.

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       The Cultural Crafts Centre, in addition to co-ordinating activities for the promotion of practical/technical subjects, provides opportunities for teachers in art and design, art and craft and home economics to update their professional knowledge. In 1985, about 3 000 teachers attended various retraining programmes and about 30 000 visitors were attracted to the exhibitions organised by the centre.

Visual Education

The Visual Education Section makes available through its Audio Visual Resources Library a wide range of audio-visual aids for free loan to schools. The stocks include 16mm films, video-cassette tapes, filmstrips, sets of slides and transparencies, filmloops, learning packages and cassette tapes. The section's Media Production Services Unit in Canton Road is open seven days a week to assist teachers in the production of teaching aids. The facilities of the unit include photographic, reprographic, graphic, model making, tape duplicating, booklet binding, picture preservation and screen printing equipment and a microcomputer system. During the year, 6 000 teachers utilised the facilities of the unit, and 3 000 teachers attended over 130 courses and workshops on the production of audio-visual materials.

Physical Education

The Physical Education Section is responsible for the improvement of teaching standards in physical education in schools and the promotion of school sports and dance. In 1985, some 75 courses and seminars in physical education were conducted for over 4 000 teachers, including seven seminars organised to familiarise primary school teachers with the revised syllabus in Physical Education.

In January, the 21st Schools Dance Festival attracted 3 800 participants from over 260 schools. Ninety-six students were selected from the previous festival to perform a Chinese classical dance at the ceremony marking the opening of International Youth Year.

       The section continued to administer the Royal Hong Kong Jockey Club Fund for the Summer Youth Programme for schools, through which some 170 000 students from 527 primary and secondary schools benefitted. Canton joined the Annual Hong Kong - Macau Schools Interport Sports Competitions. In the Peking, Canton, Hong Kong and Macau Schools Inter-city Invitational Basketball Tournament, Hong Kong was the champion in the boys' division. Throughout the year, 128 courses in various sections of the Duke of Edinburgh Award Scheme were conducted for 150 member schools in the scheme.

Music Education

      Fifteen courses and workshops were organised for music teachers in secondary and primary schools and these attracted over 1 300 participants. Opportunities for further study in music at senior secondary level were enhanced with expansion of the Centralised Scheme of Music Training to include an Advanced Level course. This is in line with the introduc- tion of a local Advanced Level syllabus which will be examined for the first time in 1987. The 37th Annual Schools Music Festival organised by the Hong Kong Schools Music and Speech Association attracted more than 6 600 entries involving over 65 000 pupils.

Technical and Commercial Education

      During the year, technical subjects, as part of the general curriculum in secondary schools, continued to expand at both Form 1-3 and Form 4-5 levels. Several new technical subjects were developed for prevocational schools. A full programme of in-service courses for technical teachers was organised, including one on Material Science.

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The year saw the merging of the Hong Kong Youth Designer Award with the International Youth Year 85 Design Award, sponsored jointly by a television company, the Federation of Hong Kong Industries and the Industrial Design Council. Most schools offering technical subjects to Form 5 level participated in the competition. The Design Competition organised by the Chinese Manufacturers Association was also promoted and well received by schools.

       The Commercial Subjects Section organised the third Commercial Projects Competition with the Chinese Gold and Silver Exchange Society. The aims of the competition are to arouse the interest of secondary school pupils in various commercial activities in Hong Kong and to encourage a more lively approach in the teaching of commercial subjects. About 1 200 students took part in the event. The section also conducted a number of in-service courses on the teaching of commercial subjects.

Community Youth Club

The Community Youth Club, established in 1977, has continued to participate in building up a strong community spirit and in promoting civic-mindedness among students. Its 14 000 members contributed substantially to various public campaigns. With the addition of one more new district during the year, there are now 18 district committees co-ordinating the club's activities.

       Thousands of members gained awards under the Merit Award Scheme which required them to set examples of good citizenship by offering services to the community. Out- standing members of the award scheme were selected for an educational tour of Japan at the end of 1985.

School Library Services

School library services expanded with the training of more librarians in secondary schools. In primary schools, following the success of three pilot projects, the Class Library Scheme was fully implemented in Primary 1 to Primary 6 classes in all government and aided primary schools in September. Each class was provided with an initial grant of $500 for bookcases and $10 per pupil per year for library books.

Educational Television

Programmes produced by the Educational Television Service (ETV) are considered the most useful audio-visual supplement to classroom teaching and regular viewing of the educational television programmes has become a normal part of school life in Hong Kong. In 1984-5, the total audience of ETV programmes was estimated to be 351 000 primary and 249 000 secondary school pupils.

      Programmes are produced jointly by the Education Department and Radio Television Hong Kong, and are transmitted to schools by the two commercial television stations. They are based on syllabuses used in primary and secondary schools. ETV programmes for primary schools cover Chinese Language, English Language, Mathematics and Social Studies at Primary 3 to 6 levels, while those for secondary schools are produced for Form 1 to 3 in the same four subjects and in Science.

       ETV programmes on Science and Health Education, which were first transmitted for Primary 3 pupils in 1983, were extended to Primary 4 level in September 1984. These two subjects will be further extended by one level higher each year to reach Primary 6 in 1986. Additional secondary programmes were also produced for English Language, Social Studies and Science.

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In conjunction with the ETV programmes, notes for teachers including suggested preparation and follow-up activities are produced and, in the case of primary programmes, notes for pupils are also provided.

To facilitate reception and utilisation of these programmes in schools, TV equipment, including colour television receivers and video-cassette recorders, are provided and installed in all government and aided schools and private secondary schools with 'bought places'. In 1984-5, about $4.8 million was spent on the provision of equipment to these schools.

Hong Kong Examinations Authority

The Hong Kong Examinations Authority, an independent statutory body, administers the Hong Kong Certificate of Education Examination, the Hong Kong Higher Level Examina- tion, and the Hong Kong Advanced Level Examination. In 1985, a total of 168 335 candidates entered for the Hong Kong Certificate of Education Examination; 12 585 candidates entered for the Hong Kong Higher Level Examination; and 18 844 entered for the Hong Kong Advanced Level Examination.

The authority also assumes responsibility for conducting a large number of overseas examinations on behalf of various examining bodies in the United Kingdom and elsewhere. These examinations include the General Certificate of Education, the Test of English as a Foreign Language, the London Chamber of Commerce and Industry Examinations, and many others which enable students to acquire academic and professional qualifications.

British Council

The British Council's Direct Teaching of English Operation in Hong Kong remains the largest in the world, with 30 500 registrations for the year. The Education Department again commissioned teacher training courses attended by 571 primary and secondary school teachers, as well as two special testing courses for secondary teachers. A computer system was fully commissioned as part of work on Computer Assisted Language Learning (CALL), and work began on Computer Based English Language Testing (CBELT). Senior professional staff contributed papers and ran workshops in five international conferences, served on official examination and syllabus committees and maintained advisory and consultative roles for the government and private sector in English language teaching and media.

Since late 1984, the council has operated an Educational Counselling Service which, apart from promoting British higher education, counsels students wanting to apply for courses in the United Kingdom and assists in providing accelerated placement. This service, provided free of charge, was begun at the request of the Committee of Vice Chancellors and Principals and the Committee of Directors of Polytechnics in the United Kingdom. Hong Kong students constituted the largest group of overseas students studying in the United Kingdom in 1984.

Under the four scholarship schemes administered by the council, one-year postgraduate scholarships were given in fields including arts administration, visual and performing arts, international relations, distance learning, educational technology and medicine. The number of people from Hong Kong attending British Council specialist courses in the United Kingdom more than doubled to 31. Medical courses were the most popular, and the council also sponsored attendance at seven courses, including special educational needs of handicapped children, microcomputers in schools, and in-service training of library staff. Nineteen visiting specialists from the United Kingdom were sponsored by the Council

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(including Professor Christopher Ricks, who gave the Edmund Blunden Lecture at the University of Hong Kong) and a total of 17 visitors went to the United Kingdom from Hong Kong under the council's auspices.

The council's library continued to be popular, with 17 000 visitors using its facilities each month. In addition, the council was again closely associated with activities in arts and culture, sponsoring visits by musicians and entertainers and holding workshops and seminars. These visitors from Britain included Ed Berman (community arts organiser), Roger McGouth (poet) and John Manduel (judge of the Young String Player of the Year competition organised by Radio Television Hong Kong).

Hong Kong Students in Britain

The Students Division of the Hong Kong Government Office in London is responsible for the welfare of Hong Kong students and nurses in training in the United Kingdom. The division continued to work closely with the Education Department and the University and Polytechnic Grants Committee Secretariat, and assisted the latter in administering the United Kingdom - Hong Kong Joint Funding Scheme in the United Kingdom. It moni- tored developments in education in the United Kingdom and, in order to promote the interest of Hong Kong students, established close relations with universities and colleges, departments of the British Government, local education authorities, the British Council, welfare organisations, and, in the case of trainee nurses, medical authorities. It also maintained close contacts with Hong Kong students through college-based student societies. The Hong Kong Students Centre in London provides accommodation for up to 90 students, but during the year it was announced that the centre would close in summer 1986 because of diminishing use of its facilities.

Hong Kong Students Overseas

The Overseas Students and Scholarships Section of the Education Department gives advice to students wishing to further their education overseas and supplies information on educational establishments in Britain and other countries. Altogether, 4 733 students went to Britain for studies during the year; 2 850 to Canada; 1 820 to the United States and 473 to Australia.

8

Health

THE demand for medical and health services continues to grow at a steady rate. To cope with this increase in demand, a wide-ranging development programme is being imple- mented including the construction of at least four major hospitals and 18 additional clinics and polyclinics

      In 1985, all the essential units of the new Prince of Wales Hospital became operational, marking an important step in the regionalisation of medical and health services. The 1 446-bed hospital, which is also the teaching hospital for the Chinese University of Hong Kong, is the regional hospital for the eastern New Territories.

       During the year, the new Wong Siu Ching Clinic, situated in the heart of Tai Po New Town, was opened. It provides general out-patient treatment as well as family health, chest, social hygiene and ophthalmic services for people in the area. Another major clinic opened during the year was the Tuen Mun Polyclinic Stage II. It provides an additional range of medical specialist services for people residing in the Tuen Mun and Yuen Long areas.

      The construction of the Tuen Mun Hospital, with 1 600 beds, is well underway and when completed in 1988 it will support the Princess Margaret Hospital as the major district hospital for the New Territories.

Site formation work on the long-awaited 1 600-bed Eastern District Hospital on Hong Kong Island has started. The hospital will provide a comprehensive range of specialist treatment facilities, including a round-the-clock accident and emergency service and a nurse training school, when it is completed by 1991.

      Work on the Queen Mary Hospital extension is continuing steadily and a $389 million contract was awarded in May for work on the second of a three-stage extension programme.

      The government has also approved funds for extensive redevelopment works to turn the Ruttonjee Sanatorium in Wan Chai from an institution for chest and tuberculosis patients into a general hospital. The 280-bed sanatorium will be upgraded into a 456-bed general hospital.

During the year, the government invited an overseas consultancy firm to undertake a review of the delivery of medical services in government and subvented hospitals. The consultancy will review the organisation and administrative structure of the hospitals and advise how more effective use might be made of existing resources to overcome problems of overcrowding.

For the 1985-6 financial year, the Medical and Health Department's estimated expendi- ture is $2,347 million. In addition, subventions totalling about $1,130 million are being made to many non-government medical institutions and organisations. The capital expenditure on hospitals and other buildings, including equipment and furniture, totals around $313 million.

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      Hong Kong people continue to enjoy good general health, largely due to anti-epidemic and disease surveillance measures, developments in preventive and personal health services, and a high standard of living. This progress is further reflected in the highly satisfactory health indices and the general decline in the incidence of major communicable diseases.

       The leading causes of death today are various forms of cancer, heart disease and cerebrovascular diseases. The low infant mortality rate is attributed to the provision of comprehensive family health care facilities as well as to improvements in environmental and socio-economic conditions.

      Two isolated local cases of cholera were reported in July and September. The disease affected a 71-year-old woman and a 44-year-old man; both recovered after treatment and no secondary case was reported. The common communicable childhood diseases such as diphtheria, whooping cough and poliomyelitis have largely been brought under control. No cases of rabies were reported.

During the year, a total of 168 cases of malaria were notified. Imported cases are still on the increase with 163 cases reported in 1985. The number of indigenous cases fell to three over the same period. These cases occurred in the Ma Wan, Yuen Long and Ta Kwu Ling areas. All notified malaria cases were thoroughly investigated and followed up by regional health staff. This active surveillance programme was undertaken to minimise the possibility of a built-up parasite density in the local community and to ensure that all practicable preven- tion and treatment programmes were being instituted effectively.

Since the establishment of the Central Reference Laboratory for malaria, all positive slides as well as 10 per cent of all initial negative blood slides were cross-checked for the presence of the parasite.

       Malaria control in the territory was concentrated on early case detection and notifica- tion, vector control and health education. Health talks, film shows, posters, pamphlets, press releases and radio and television interviews were utilised to remind the general public to eliminate mosquito breeding sites, and to urge picnickers and international travellers to protect themselves against mosquito bites.

Tuberculosis remains an important disease in Hong Kong. In spite of continued diligence and a dynamic programme in the fight against the disease, the total number of notifications remained at 7 545 in 1985, representing a notification rate of 139.13 per 100 000. The factors which account for the high level in notifications are an increased awareness of the disease by the public and an increased response to case-finding measures. A further important factor is the movement of population from other parts of the region where the incidence of the disease is higher.

       Deaths from tuberculosis, however, continued to fall from 420 in 1984 to 409 in 1985, and the death rate from 7.83 to 7.54 per 100 000.

Measles and rubella vaccination programmes were carried out in family health clinics and schools. Measles vaccinations were given to one-year-old babies and rubella vaccinations to girls in Primary 6 classes. The coverage was in the region of 70 per cent and 95 per cent respectively. To increase the protection of the at-risk group, namely women of child-bearing age, the rubella vaccinations were made available to nurses, teachers, and social workers who are in constant contact with children. These vaccinations are also given to eligible women attending the various Family Health Services clinics.

Both virus hepatitis A and hepatitis B remain prevalent in the community with 1601 notified cases and 13 deaths reported during the year. Because of the public health implications of hepatitis, which usually leads to long-term liver complications such as

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cirrhosis and liver cancers, the department introduced a hepatitis B vaccination programme against the disease.

       Following the recommendation of the World Health Organisation, the present strategy is to provide immunisation against hepatitis B to certain high-risk groups in the community. The first group comprises those babies born to mothers who are carriers of the disease. The second group comprises health care workers who are in frequent contact with blood and blood products or tissue fluids.

       The Medical and Health Department continued to administer a combined neo-natal screening programme for glucose-6-phosphatase dehydrogenose deficiency and congenital hypothyroidism to facilitate early diagnosis and treatment of infants who may otherwise develop disabilities or mental retardation. The programme managed to cover all babies born in government and subvented hospitals. Based on the results of the present screening programme so far, the prevalence of G-6-PD deficiency in local male babies is 4.34 per cent whereas the frequency of congenital hypothyroidism disorder is 1 in 2865 live births. Prompt follow-up and remedial measures were instituted and the development of per- manent disabilities in these children was therefore avoided.

       Since 1981, an epidemic of a new disease causing unexplained immune suppression has been identified in the United States and many other countries throughout the world. The disease, termed Acquired Immune Deficiency Syndrome (AIDS), has since affected some 15 600 persons with over 7 800 deaths.

In November 1984, an Advisory Committee on AIDS consisting of medical experts from the Medical and Health Department and the two universities was established to monitor the global development of this disease. The committee, in the light of available scientific data and knowledge, has recommended measures to contain this syndrome. In the course of its deliberations, it has set up guidelines to medical, nursing and laboratory staff on the diagnosis and reporting of AIDS and precautionary measures to be taken in handling cases. Three confirmed AIDS cases were notified as a result of the intensified surveillance programme. Health educational activities on the subject have been stepped up to educate the public on the facts of the disease and to allay any misconception and undue anxiety that might have arisen. The Central Health Education Unit has also produced special leaflets on this subject. Since March, a 24-hour telephone service has been available to those who are interested.

       In order to prevent the possible transmission of the disease through the blood transfusion process, the Hong Kong Red Cross Blood Transfusion Service introduced a screening programme against the disease, based upon recommendations from other blood transfu- sion centres and the Advisory Committee on AIDS. All blood and blood products in the blood transfusion service were screened for the presence of any antibody to the AIDS virus before use. The department has also established the necessary laboratory facilities and expertise for the screening and diagnosis of the disease when required.

Hospitals and Development Programmes

There are three types of hospitals in Hong Kong - government, government-assisted and private - with a total of 24 638 beds, representing 4.5 beds per thousand of the population. During the year, pressure on the service was experienced on all fronts; this was reflected by the increase in attendances at out-patient clinics and accident and emergency departments, and by the number of hospital admissions.

       As stated earlier, the Medical and Health Department's overall plan for the decade involves the construction of at least four more government hospitals: a 1 600-bed hospital

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in Tuen Mun, a 1 600-bed hospital in Chai Wan and 1 400-bed hospitals in East Kowloon and Tai Po. Plans also include the provision of extension blocks to the first three regional hospitals: the Queen Mary, Queen Elizabeth and Princess Margaret Hospitals.

Other projects in the pipeline include further extensions to the Caritas Medical Centre, United Christian Hospital, Yan Chai Hospital and Pok Oi Hospital and the redevelopment of the Ruttonjee Sanatorium into a 456-bed general hospital. One new private hospital with a capacity of 600 beds is in the planning stage. Emphasis is also placed on the provision of infirmary beds for the elderly infirm and the severely disabled and a total of 2 250 beds are planned in the coming decade.

       In 1985, the total attendance at government and government-assisted accident and emergency departments was 1 151 000, averaging 3 152 attendances per day. More than 635 000 patients were treated at the 14 government and 20 government-assisted hospitals.

Clinics

General out-patient services form a vital part of the health care system. The government now operates 64 general out-patient clinics as well as polyclinics and specialist clinics. Evening, Sunday and public holiday sessions continued at clinics in the more densely populated areas as part of the overall measures to meet the expanding demand for out-patient services. The medical development programme includes 18 clinic and polyclinic projects throughout the territory.

Mobile dispensaries and floating clinics take medical services to the outlying islands and the more remote areas of the New Territories. Other remote areas are visited regularly by the 'flying doctor' service, with the assistance of the Royal Hong Kong Auxiliary Air Force.

At the end of 1985, 336 clinics were registered under the Medical Clinics Ordinance. Of these, 94 clinics were under the control of a registered medical practitioner and 242 were registered under the provisions for exempting certain clinics. Registered medical practitioners members of the Estate Doctor Association set up clinics in housing estates to provide a low-cost service for residents.

The total attendance figure at government out-patient clinics was 15.2 million in 1985, 2.1 per cent more than in the previous year.

Family Health

The Family Health Services of the Medical and Health Department operate 44 maternal and child health centres, providing a comprehensive health programme for women of child-bearing age and children aged up to five years. Family planning is an important component of the Family Health Services. Ante-natal and post-natal health consultation sessions are conducted for mothers. Immunisation programmes are carried out against tuberculosis, diphtheria, whooping cough, tetanus, poliomyelitis, measles and rubella. During the year, about 93 per cent of newborn babies were checked at the family health

centres.

The comprehensive observation scheme to detect and assess early developmental abnormalities, and where necessary to provide follow-up treatment, is now available at 44 family health centres. Children attending these centres may, if their condition warrants it, be referred to child assessment centres or various specialist units for further examination. The system enables rehabilitation processes to start as early as possible. Seven regional multi-disciplinary child assessment centres are included in medical projects planned for the next decade.

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       Health education is extended to expectant mothers at major government hospitals, with particular emphasis placed on the promotion of breastfeeding. A telephone service is available to answer enquiries from the public.

       The government-subvented Family Planning Association of Hong Kong runs 30 birth control clinics. It provides services in such areas as premarital counselling, contraception, sterilisation, vasectomy, and sub-fertility.

       During the year, the association also placed emphasis on health education promotional work involving family planning and sex education.

School Health

The School Medical Service Scheme is operated by an independent School Medical Service Board. Participation is voluntary and for a token fee of $10 a year children from Primary 1 to Form 3 can receive free medical attention from a general medical practitioner of the school's choice. The government contributes $65 a year for each pupil enrolled and also bears the administrative cost. The general response to the scheme is good: more than 310 000 school children from 842 schools have participated - representing about 40 per cent of the eligible school population - and more than 290 general medical practitioners have enlisted.

       The School Health Service, a government responsibility, deals with the environmental health and sanitation of school premises and the control of communicable diseases. School health officers, health visitors and health inspectors make frequent inspections of schools to advise on matters concerning the health of children and organise health education activities and immunisation campaigns.

Mental Health

The Mental Health Service, in conjunction with academic and voluntary bodies, provides a comprehensive psychiatric service for the mentally ill. Sophisticated treatment facilities are available at the two major psychiatric hospitals - Castle Peak Hospital with 1 935 beds and Kwai Chung Hospital with 1 090 beds - and at psychiatric units in various regional and district hospitals. In line with the universal trend of operating smaller psychiatric units within general hospitals, an additional 2 410 beds are planned for such future projects.

Supplementing the hospital facilities are psychiatric day centres which provide a wide range of out-patient treatment, assessment, counselling and after-care services on a regional basis. The centres also operate day hospital places and provide other social, occupational and recreational therapy services for the mentally ill.

Special emphasis is placed on the follow-up and after-care of discharged mental patients during their reintegration into the community. During the year, the Community Psychiatric Nursing Service provided continuity in after-care treatment programmes to patients dis- charged from the Castle Peak Hospital and the Kwai Chung Hospital, and to patients referred from out-patient psychiatric clinics as well. Other complementary rehabilitative supporting services include after-care social services, placement services, halfway houses, long-stay care homes and social clubs organised by various agencies.

       These services are closely monitored and co-ordinated by the Rehabilitation Develop- ment Co-ordinating Committee.

Severely mentally handicapped persons requiring intensive nursing and medical treat- ment are cared for at the 200-bed Siu Lam Hospital and the Caritas Medical Centre, which has 300 beds for this purpose. A further 700 beds in this category have been planned for the next decade to meet the continuing need.

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Dental Services

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The School Dental Care Service provides regular dental examination and treatment services to primary school children. Essentially preventive in nature, the service has proved to be an appropriate and cost effective means of promoting dental health among school children. The response from parents and school authorities has been most encouraging; some 284 800 children, 64.1 per cent of Primary 1, 2, 3, 4 and 5 pupils, participated during 1985-6, compared with 65.9 per cent of Primary 1, 2, 3 and 4 in 1984-5. Four school dental clinics have been established and five more are planned for the next four years. Dental health education programmes, involving lectures and exhibitions, are held to promote dental health awareness in children and adults.

The Government Dental Service provides dental care for all monthly-paid government servants and their dependants, as well as simple dental treatment for inmates of penal institutions and specialist treatment for patients in government hospitals. Emergency treatment is also provided for the public at a number of district dental clinics.

Port Health

The Port Health Service enforces control at Hong Kong International Airport and in the territory's waters to prevent the introduction of quarantinable diseases and to carry out other measures required under the International Health Regulations.

       The service provides facilities for vaccination and the issuing of international vaccination certificates. It also inspects and supervises the eradication of rats from ships on interna- tional voyages. It provides medical assistance to ships in the harbour, transmits medical advice to ships at sea, operates a 24-hour health clearance service for all incoming vessels, and grants radio pratique to ships.

The health staff also maintain close surveillance of the food catering service provided for international airlines to ensure that food and water supplied to flight kitchens is clean and safe. Epidemiological information is exchanged regularly with the World Health Organisa- tion in Geneva and its Western Pacific regional office in Manila, and with neighbouring countries.

Special Services

The Pathology Service provides clinical and public health laboratory services for govern- ment hospitals and clinics, and a consultant service for the government-assisted sector. It also administers hospital mortuaries and blood banks. The Institute of Immunology produces vaccine and other biological products for use in the local health services. The Virus Unit provides a central laboratory service for the diagnosis and surveillance of viral infections and valuable services for the screening, assessment and guidance of vaccination programmes against viral infections.

       A Central Neo-natal Screening Laboratory was established in 1984, in the Kwong Wah Hospital on a temporary basis. The main function of this unit is to co-ordinate the labora- tory activities of the territory-wide neo-natal screening programme on congenital hypothyroidism and glucose-6-phosphatase dehydrogenose deficiency. In 1985, facilities for the screening and diagnosis of AIDS were incorporated into the virus laboratory in the Queen Mary Hospital and in the Immunological Laboratory in the Yan Oi Pathology Institute, Tuen Mun.

       The Forensic Pathology Service, through its forensic laboratory, works closely with the Royal Hong Kong Police Force on the medical aspects of criminology and other medical-legal work. It also administers public mortuaries.

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The Institute of Radiology and Oncology provides diagnostic organ image services for the government as well as consultant services for all government-subvented hospitals and private institutions. Computerised axial tomography (CAT) whole-body scanners are installed in all government regional hospitals including the new Prince of Wales Hospital. The main tasks of the Nuclear Medicine Unit are to co-ordinate and improve the various nuclear medicine procedures and to train medical personnel in the field.

The institute provides comprehensive radiotherapy programmes and a chemotherapy service. It also operates a cancer registry covering the whole territory. Professional staff of the Radiation Health Unit carry out regular inspections of medical, commercial and industrial premises and monitor the working conditions of radiation workers. During the year, more than 1 450 radiation licences were issued to proprietors in accordance with the Radiation Ordinance.

The Pharmaceutical Service is made up of two main divisions. The first is the hospital and clinic pharmacy service which has about 500 professional and technical staff and is responsible for dispensing medicine in all government hospitals and clinics. The second division is the pharmacy law enforcement service whose staff include some 17 pharmacists. During the year, intensified action against the illegal sale and distribution of poisons and antibiotics resulted in a record of about 120 prosecutions.

Community Nursing Service

The Community Nursing Service extends care to patients discharged from hospitals after acute illness and provides domiciliary medical care and support for the sick, the disabled and the elderly in their own homes.

The service is provided by trained community nurses. Jointly operated by eight agencies, including the Medical and Health Department, it is largely hospital-based, with domiciliary services provided through a network of 39 sub-centres. During the year, 10 400 new patients were treated by community nurses and more than 212 000 home visits were made.

Health Education

The Central Health Education Unit of the Medical and Health Department is responsible for organising, co-ordinating and promoting health education activities. In response to International Youth Year and as a follow-up to the Adolescent Health Pilot Project started in 1983, the Central Health Education Unit launched a large scale campaign on adolescent health in August. The major activity was an exhibition in the City Hall with colourful displays, computer games, video and slide shows and tape recordings - all with health themes. During the same period, seminars for teachers, sex education workshops for adolescents and film shows were held in the recital hall.

      Earlier in the year, the Central Health Education Unit had been involved in public education on malaria and AIDS. To enable the public to obtain speedy and easy access to accurate and up-to-date information on AIDS, the 24-hour telephone hotline service, utilising tape recordings, was expanded to six lines. Facilities were also provided for answering more detailed enquiries.

To promote concern among residents of Sai Kung over the problem of malaria, an anti-malaria project for secondary school students was organised.

      Increased community concern for health was shown by the popularity of the resource supply service, where audio-visual materials were loaned free of charge to schools and voluntary agencies. In addition, an increasing number of persons visited the three audio-visual centres to obtain information on health matters.

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Other regular activities of the unit, including the health education van broadcasting in housing estates, the out-patient department slide programme service, regular radio pro- grammes and health talks for specific groups, continued to be popular.

Medical Charges

In July, the charge for consultation at a general out-patient clinic was increased from $7 to $9. The charge for consultation at a specialist clinic was also raised, from $10 to $12. These charges cover medicine as well as X-ray examinations and laboratory tests. Charges for physiotherapy, occupational therapy and child assessment were raised to $12 per visit. Charges for injections and dressings went up from $2 to $3 while charges at visiting family planning clinics and methadone clinics remained unchanged at $1. Even at the increased rate, the charges still represent a substantial subsidy from public funds. They may be reduced or waived in cases of hardship certified by a medical social worker.

From July, patients in third class beds in government hospitals were charged $18 per day, an increase of $3. This fee is all inclusive, covering diet, X-ray examinations, laboratory tests, drugs, surgery and any other forms of special treatment required. The fee for home visits by community nurses was also increased, from $15 to $18. These fees may also be waived if warranted. Despite the increase, hospital charges remain barely adequate to cover the cost of patients' meals. A limited number of private beds, with higher maintenance and treatment charges, are provided at major government hospitals.

Free medical services continued to be offered at maternal and child health centres, tuberculosis and chest clinics, social hygiene clinics, accident and emergency departments, floating clinics and through the 'flying doctor' scheme.

Training of Health Personnel

Graduates of the Faculty of Medicine at the University of Hong Kong are awarded degrees recognised by the General Medical Council of Great Britain. Both the government and the university maintain a comprehensive post-graduate training programme. Opportunities are available for local doctors to sit for higher professional examinations, attain fellowships and attend professional conferences, seminars and workshops. During the year, more than 115 qualified doctors went overseas under government sponsorship or with the help of scholarships to receive further training.

The University of Hong Kong produces about 150 medical doctors a year. The student intake at the Medical School of the Chinese University of Hong Kong remains at 120. The first batch of doctors from the Chinese University of Hong Kong will be graduating in 1986 and be ready for full registration in 1987. In 1985, 85 doctors who had successfully passed the local licentiateship examination started their externship training in local medical institutions.

Training in dentistry is provided at the Prince Philip Dental Hospital, and some 70 dentists graduated in 1986. The Tang Shiu Kin Dental Therapists Training School is responsible for training the dental therapists required by the rapidly expanding school dental care programme.

The number of nurses employed by the government has grown to more than 9 500. Basic training for general registered nurses is available at government, government-assisted and private hospitals. There are now eight such training schools with an average annual training capacity of about 1 050 places. Over the next decade three more nurse training schools are planned. The average annual training capacity for general enrolled nurses will be increased from 568 to 733.

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       Training schools for registered psychiatric nurses are at the Kwai Chung Hospital and Castle Peak Hospital, with an average annual training capacity of 120 and 40 respectively. Two more training schools are planned for the next decade. Psychiatric enrolled nurses are trained at Castle Peak Hospital and the intake capacity will be increased to 80 annually in 1986.

The average annual training capacity for psychiatric registered nurses and enrolled nurses in the government mental institutions is 160 and 60 respectively. Two more training centres for the former grade and one additional training centre for the latter grade have been planned in the coming decade in anticipation of a steady demand on the Mental Health Service.

There is an increasing awareness of the need for continued training and education for nurses. The post-basic school of the Nurse Training Unit continues to provide regular post-registration courses in midwifery, health nursing and community health nursing.

       In-service training for prosthetists and mould laboratory technicians is provided by the respective units in the Medical and Health Department.

       The Institute of Medical and Health Care at the Hong Kong Polytechnic provides training for para-medical and para-dental staff including radiographers, physiotherapists, occupational therapists, medical laboratory technicians, dental technicians and dental surgery assistants.

Government Laboratory

The Government Laboratory conducts analytical, advisory and investigative work in chemistry and the allied sciences, and provides scientific support services for the imple- mentation of government policy on health.

       During the year, the laboratory offered a comprehensive and impartial analytical service and scientific advice to government departments and public institutions. Dangerous goods, government purchases, pesticide formulations and forged consumer goods remained the main areas of interest.

Work on setting up a radiochemistry unit was in progress to provide support to the background radiation monitoring programme prior to the operation of a proposed nuclear power plant in Daya Bay, in China. Cigarettes continued to be tested for tar and nicotine yields and two further biannual tables were published showing the brands ranked according to tar yields.

Analytical work on air and water samples, undertaken principally for the Environmental Protection Agency, continued undiminished. The laboratory was also increasingly called upon to carry out tests for the presence of toxic substances in factory atmospheres and industrial emissions on behalf of the Labour Department.

Pharmaceutical products were tested regularly. Close liaison with the Medical and Health Department was maintained to ensure that pharmaceutical products complied with the required standards of safety, quality and efficiency before being marketed in Hong Kong or prior to dispensing at government hospitals and clinics.

Food commodities continued to be tested for compliance with the Regulations of the Public Health and Urban Services Ordinance. Increase in concern over the use of hormones in animal husbandry has resulted in a much extended survey to ensure poultry products are not contaminated by the illegal use of hormones.

       The laboratory also provided a urine testing service to support the government's methadone maintenance programme in the treatment of drug abusers.

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Drug abuse is a long-standing problem in Hong Kong with serious social, economic, legal, medical and psychological implications. The government's expressed policy is to stop the illicit trafficking of narcotic drugs into Hong Kong, to develop a comprehensive treatment and rehabilitation programme for drug addicts and to dissuade the people of Hong Kong, particularly young people, from experimenting with drugs so as to eradicate drug abuse in the community.

       The exact number of addicts in Hong Kong is not known. However, findings from the government's computerised Central Registry of Drug Abuse and other linked indica- tors show that at the end of 1985 the size of the known and active addict population was in the region of 37 000.

Data collected by the registry, based on 290 000 reports on 53 000 individuals, indicate that 92 per cent are male and eight per cent female. As to age distribution, 73 per cent were over 30 as at the end of 1985, 22 per cent were in the 21 to 30 bracket and five per cent were under 21. The principal drug of abuse in Hong Kong is heroin, which was used by 99 per cent of the addicts reported to the registry in 1985. The remaining one per cent took other drugs. The most widely used method of taking heroin was by injection, followed by fume inhaling, commonly known as 'chasing the dragon'.

       Typical addicts are adult males over 21 in the lower income group, generally employed as casual labourers or as unskilled or semi-skilled workers and living in overcrowded conditions. They have generally not more than six years of formal education and are single or, if married, usually separated from their families.

The government's overall strategy to combat drug abuse consists of four main elements: law enforcement, treatment and rehabilitation, preventive education and publicity, and international co-operation. Law enforcement is the responsibility of the Narcotics Bureau and individual district formations of the Royal Hong Kong Police Force, and the Customs and Excise Department. Treatment and rehabilitation are undertaken by the Medical and Health Department, the Correctional Services Department and a number of voluntary agencies, the largest being the Society for the Aid and Rehabilitation of Drug Abusers (SARDA) which is subvented by the government.

      Preventive education and publicity rests mainly with the Narcotics Division of the Government Secretariat, the Information Services Department and various government district offices concerned with community building efforts. International co-operation is the responsibility of all.

The work undertaken in each of these four areas is inter-related. Effective law enforce- ment action pushes up the price of illicit drugs and reduces their supply, thus inducing addicts to seek treatment voluntarily. Addicts who wish to rid themselves of their drug habits are offered a wide range of treatment programmes, the effectiveness of which reduces the demand for illicit drugs. At the same time, preventive education and publicity measures are used to dissuade others, especially the young, from experimenting with drugs. Co-operation at the international level enhances the effectiveness of efforts in these three areas through the exchange of information and experience.

       All these efforts are co-ordinated by the Action Committee Against Narcotics (ACAN), a non-statutory body comprising a chairman, nine government officials and seven unofficial members. The committee, formed in 1965 and reconstituted in 1974, is the government's sole advisory body on all anti-narcotics policies and actions, whether internal or external, and whether related to government departments or voluntary agencies. It is serviced by the Narcotics Division, which is headed by the Commissioner for Narcotics.

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       In law enforcement, effective action by the police and customs resulted in 12 400 prosecutions being made in respect of drug offences in 1985. The year unfortunately saw the fifth successive bumper harvest being reaped in the 'Golden Triangle', resulting in a continuing influx of illicit drugs into Hong Kong. Drug prices thus remained low and were relatively stable throughout the year.

       The methadone treatment programme which provides both maintenance and detoxifica- tion services on an out-patient basis caters for the majority of addicts who volunteer for treatment. Methadone maintenance is a long-term treatment approach which is intended to prevent an addict's return to illicit heroin or other forms of narcotic abuse, while detoxification is a short-term form of treatment aimed at eliminating the physical dependence on narcotics. At present, there are 24 methadone clinics operated by the Narcotics and Drug Administration Division of the Medical and Health Department.

The largest voluntary in-patient treatment programme is run by SARDA. The society operates two treatment centres, one for men and the other for women. The male centre, on the island of Shek Kwu Chau, has a capacity of 500 patients, while the Women's Treatment Centre, in Wan Chai, can cater for 30 patients. Linked to these centres are three units for the intake of patients, five regional social service centres, four halfway hostels, two out- patient clinics and an employment placement office.

A compulsory treatment programme is operated by the Correctional Services Depart- ment under the Drug Addiction Treatment Centres Ordinance. The ordinance provides for the sentencing of a drug dependent person, who has been found guilty of an offence punishable by imprisonment, to detention in a drug addiction treatment centre. The department now runs two addiction treatment centres on the island of Hei Ling Chau, one for male adults and the other for young males under 21. The former has a capacity of 882 and the latter 146. For the treatment of female addicts, a section of the Tai Lam Centre for Women is set aside to cater for a maximum of 76 inmates. These treatment programmes range from four to 12 months, and all persons discharged are given one year of statutory after-care.

       In 1985, the two voluntary treatment programmes and the Correctional Services Department's compulsory treatment programme admitted 17 700 addicts for treatment. On average, there were 14 500 addicts and ex-addicts receiving some form of treatment, rehabilitation and after-care every day.

Preventive education and publicity plays an important part in Hong Kong's fight against drug abuse. Work in this area is focused on heightening public awareness of the dangers of drug abuse, promoting community involvement in tackling the problem, dis- suading young people from experimenting with drugs or becoming involved in drug crime, and encouraging addicts to come forward for treatment. The objectives of the publicity campaign in 1985 were to draw public attention to drug pushers and the destruction they cause to people's lives and to encourage the public to report drug-peddling activities.

Six district campaigns with community involvement were held. Among the events organised to drive home the anti-narcotics message were concerts, variety shows, sports tournaments, fun fairs, film shows and exhibitions, as well as competitions in essay writing, poster and slogan design, painting and singing.

The major territory-wide event of the year involved the mutual aid committees of densely populated districts. More than 100 000 persons took part in a series of anti-drug activities including a concert, film shows, quiz contests and exhibitions. There activities were aimed at urging parents to ensure their children did not get involved in drugs and calling upon members of the public to report drug pedlars.

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      Formed in 1984, the School Talks Team in the Narcotics Division continued to give drug education talks to students aged between 12 and 15 at secondary schools throughout the territory. During the year, a total of 86 000 students in 161 schools attended.

      The drug education teaching kit, which was produced in 1978 to assist secondary school teachers in giving lessons on this subject, was revised and will be issued to some 400 schools. It provides teaching materials for Form 1 to Form 5 on the drug problem in Hong Kong and the prevention of drug abuse.

      Apart from informing students about the dangers of drug abuse, the Narcotics Division. also encouraged young people to participate directly in combatting the problem. The Youth Against Drugs Scheme, which ran for the fifth year, helped 11 groups of young people to plan and implement 20 anti-narcotics promotional activities. The 60-member ACAN Youth Volunteer Group, which was established in 1981 with a view to training and encouraging young volunteers to play an active part in anti-narcotics work, participated in the six district campaigns and organised various community involvement activities.

       The Narcotics Division also organised seminars for outreach social workers and school administrators for the purpose of giving them a better understanding of the drug problem and enlisting their active support in the fight against drugs. Moreover, anti-narcotics camps, talks and visits were organised for parents and scout leaders.

      To support these activities and publicise the anti-narcotics message, television and radio newsclips and dramas, films, posters and leaflets were produced.

      During the year, the ACAN Drug Abuse Telephone Enquiry Service received 2986 enquiries from both addicts and non-addicts. Most enquiries were related to drug addiction treatment facilities.

      Externally, Hong Kong continued to play an active and important part in international anti-narcotics operations by maintaining close links with the United Nations, inter- government agencies such as the Colombo Plan Bureau, Interpol and the Customs. Co-operation Council - and with individual governments in Southeast Asia, Australia, Europe and North America. Hong Kong took part in 20 regional and international meet- ings and seminars concerned with anti-drug law enforcement, treatment and rehabilitation, and preventive education. Hong Kong also made its 11th annual contribution of $100,000 to the United Nations Fund for Drug Abuse Control in support of its world-wide anti- narcotics efforts. These include the opium poppy crop-substitution programme in the 'Golden Triangle' on the borders of Burma, Laos and Thailand, which area is the source of most of Hong Kong's opiate drugs.

      The techniques and methods employed by Hong Kong in its anti-narcotics work have made it an important venue for training anti-narcotics personnel from overseas. In 1985, 162 anti-narcotics officers from various countries came to Hong Kong on study visits and training courses, either through bilateral arrangements with their governments or under the sponsorship of a United Nations body such as the World Health Organisation or of the Colombo Plan Bureau. At the same time, experienced officers from the Narcotics Division, the Royal Hong Kong Police Force and the Customs and Excise Department frequently went overseas to act as lecturers or consultants on training courses related to anti-drug work.

Environmental Hygiene

The work of the Urban Services Department includes street cleansing, the collection and removal of refuse as well as nightsoil, the management of public toilets and bathhouses, pest control, and the disposal of the dead.

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       In the urban areas, a regular workforce of 6 132 is employed in cleansing duties. This cleansing force is equipped with a fleet of 403 vehicles, including specialised refuse collection vehicles, street-washers, mechanical sweepers, nightsoil collectors and gully emptiers. All streets are swept at least once daily, either mechanically or manually, while busier thoroughfares are swept from four to eight times a day. A daily refuse collection service is provided to all built-up areas in the territory and about 2 600 tonnes of refuse and junk are collected every day. There is also a free nightsoil collection service for the few remaining areas which do not have a water-borne sewage disposal system.

Although the Keep Hong Kong Clean had formally ended in December 1982, the government continued to maintain the higher standard of cleanliness the campaign had achieved. In 1985, a programme in six phases was put into operation covering public housing estates, block-to-block cleansing, villages, squatter areas, beaches, countryside and a general beautification programme. In addition to education, publicity and community involvement, law enforcement remained the major tactic in the fight against littering. During the year, a total of 49 798 people were fined $8,757,093 for litter offences.

The Regional Services Department is responsible for similar environmental hygiene work in the non-urban areas. Cleansing duties are carried out by a regular workforce of 3 540 equipped with a fleet of 217 specialised vehicles. The daily refuse collection service collects an average of 960 tonnes of refuse and junk every day. Law enforcement remained the major tactic in combatting littering, and, in 1985, 6 100 people were convicted of litter offences in the non-urban areas.

Controls

In maintaining and improving standards of hygiene through the enforcement of the Public Health and Urban Services Ordinance and its subsidiary legislation, health inspectors of the Urban Services Department regularly inspect licensed and permitted premises, common parts of residential and commercial buildings, construction and vacant sites and squatter areas in the urban areas. They also carry out special inspections to deal with complaints on sanitation and vermin infestation. Such controls in the non-urban areas are the responsibility of the Regional Services Department. The staff of the Urban Services Department and Regional Services Department also work closely with the staff of the Medical and Health Department in the investigation and control of food poisoning outbreaks and infectious diseases.

Pest control staff continued to employ integrated programmes to control rodents, mosquitoes, flies and other public health pests. Preventive action included environmental improvement and health education. These measures were supplemented by the destruction of breeding places, use of pesticides and law enforcement. Prompt and effective focal control measures were taken to arrest outbreaks of vector-borne diseases. Particular attention is paid to the control of malaria vectors in the non-urban areas.

       General health educational strategies in environmental hygiene were employed with particular emphasis being placed on educating the younger generation. The Health Education Unit manned by health inspectors organised talks, instruction courses, contests and competitions for students and youth groups to stimulate their awareness of and concern for public health matters. During the year, a number of educational campaigns on environmental and food hygiene were launched. Lectures, seminars and courses on topics of public health were conducted for the food trade, members of voluntary welfare agencies, elderly people and Vietnamese refugees. Efforts were also made to educate special groups, including immigrants from China and Filipina maids, chiefly through mobile broadcasting.

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In addition, the Health Education Unit provided a consultancy service on health education methodology and techniques for the public and disseminated public health information on a wide front with the aid of the mass media.

Food

     For the protection of public health, the health inspectorate, backed by medical advice and supported by laboratory staff, continued to monitor food for sale, both imported and locally produced, to ensure it was hygienic and safe for consumption. The ever increasing number of food establishments and the quantities and varieties of food items on sale have increased the importance of law enforcement including systematic inspection, sampling of food products for laboratory examination and frequent surveys to ascertain food hygiene and safety. At the same time, liaison with the World Health Organisation and other international bodies has continued with a view to keeping Hong Kong abreast of international developments in food science and toxicological evaluation for the protection and benefit of local food traders and consumers. During the year, the Food and Drugs (Composition and Labelling) Regulations and the Harmful Substances in Food Regula- tions were updated.

Markets

In the urban areas of Hong Kong Island and Kowloon, the Urban Council runs 56 public markets with more than 8 000 stalls selling different commodities ranging from fresh foodstuffs such as meat, poultry, vegetables and fruits, to general merchandise such as clothing, household goods and other daily necessities. In line with the council's policy of moving street traders into market buildings, a wide range of items is now available for sale in new markets, and the design of new market complexes also includes the standard provision of a cooked food centre.

It is the Urban Council's policy to reprovision outdated markets and replace them with multi-purpose complexes to cater for other needs of the community such as games halls, libraries, rest gardens and auditoria for the performing arts, as well as markets. This results in a more efficient and productive use of available land, while at the same time providing variety of community services at one location. With the completion of Ngau Chi Wan Complex (Phase I), there is now a total of five such market complexes in the urban areas.

The Regional Services Department is responsible for the management of public markets in the non-urban areas. There are 27 public markets and 10 cooked food markets with a total of 4 456 market stalls and 306 cooked food stalls under its management. Four new markets, namely Sai Kung Market, Tai Wai Market, Mui Wo Ferry Concourse Cooked Food Market and Kwu Tung Market, were commissioned in 1985, providing 539 additional market stalls. During the year, three old markets were demolished.

Hawkers

The Urban Council is responsible for the management and control of hawkers in the urban areas of Hong Kong Island and Kowloon. In 1985, there were 23 500 licensed hawkers in the urban areas, a decline of 2 200 compared with 1984. This reduction was the result of continuing efforts to move on-street hawkers into markets. The number of unlicensed hawkers tends to fluctuate from year to year, and it was estimated that there were 17 000 in 1985. These large numbers represent a considerable street management problem in the crowded urban areas. In order to tackle this problem in a more efficient way, a Working Party of six Urban Councillors and three officials was set up in 1984 to review hawker and

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      related policies. The recommendations of the Working Party will be widely circulated in a consultative document, and may result in some significant changes in hawker policies.

       Control of street traders is a responsibility shared between the Royal Hong Kong Police Force and the Urban Council. The Urban Council carried out its responsibilities through the General Duties Teams of the Urban Services Department, whose members are civilian staff trained in law enforcement duties related to hawker management and control. The General Duties Teams were provided with radio communication equipment during 1985 to facilitate effective operations.

      The management and control of hawkers in the non-urban areas are the responsibility of the Regional Services Department. In 1985, there were 4 676 licensed hawkers in the non-urban areas, a drop of 262 compared with 1984. The number of unlicensed hawkers was estimated to be 2 300.

       Generally, the hawker situation in the non-urban areas is under control and the number of on-street hawkers is gradually declining as more and more hawkers are resited in the new markets and as a result of enforcement action taken against unlicensed hawkers.

Abattoirs

The two government abattoirs - in Kennedy Town on Hong Kong Island and in Cheung Sha Wan in Kowloon - continued to supply the bulk of the population with fresh meat. During the year, 2 561 900 pigs, 131 100 head of cattle and 17 600 goats were slaughtered in these abattoirs.

      Slaughtering services in the non-urban areas are provided by three licensed private slaughterhouses in Kwai Chung, Yuen Long and Tai Po. They handled a total of 1 015 288 pigs, 55 197 head of cattle and 2 340 goats during the year. The slaughterhouse at Kwai Chung, which can slaughter up to 3 000 pigs a day, also helps to meet the demand from Kowloon. A small slaughterhouse is being planned for Cheung Chau to cater for the needs of the island.

      All animals slaughtered in these abattoirs were inspected by specially trained and qualified health inspectors of the Urban Services Department and the Regional Services Department.

Cemeteries and Crematoria

It is the government's policy to encourage cremation rather than burial for disposal of the dead. In 1985, 64 per cent of the dead were cremated. To cater for the rising demand for cremation facilities, two additional cremators were installed at the Diamond Hill Crematorium. Human remains in public cemeteries are subject to exhumation after six years. The exhumed remains are then either cremated or removed to an urn cemetery.

       The Urban Council operates two funeral depots, one on Hong Kong Island and one in Kowloon, which provide free services for the disposal of the dead. In the urban areas there are five public cemeteries, two public crematoria and 18 private cemeteries. There are two war cemeteries under the management of the Commonwealth War Graves Commission.

       In the non-urban areas, there are three public crematoria, at Kwai Chung, Sha Tin and Wo Hop Shek, under the management of the Regional Services Department. The first two are used for the cremation of the dead while the third is used solely for cremation of exhumed remains. Niches are provided at the columbaria in these areas. The department also manages five public cemeteries, including the Wo Hop Shek Cemetery, the biggest public cemetery in use in Hong Kong, and supervises eight private cemeteries in the non-urban areas.

FLOWERS

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Previous page: The large trumpet-shaped allamanda is a popular flower in Hong Kong. Above: Red and yellow varieties of celosia at the Zoological and Botanical Gardens.

Stalls at Lan Kwai Fong, off Wyndham Street in Central District, sell cut flowers.

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Blooms of all shapes and sizes are on display at the Urban Council's Annual Flower Show, major event for flower lovers.

   Particular attention is paid to landscaping at new housing developments. Here, bougainvillea adds to the pleasant surroundings of an estate in Sha Tin.

Pentas, a native of tropical Africa and Arabia, grows easily in Hong Kong and is especially popular as a potted plant.

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   Flower markets form an important part of Lunar New Year festivities, selling traditional **flowers such as peach blossoms - symbolising good fortune.

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Social Welfare

THE generally rising expectations of people have generated constant pressure for expanding and improving social welfare services in Hong Kong. In 1985, continuing efforts were made to meet these demands, on the part of both the Social Welfare Department and the subvented welfare sector.

      The policy objectives towards which improvements to services are directed are stated in the three White Papers - Integrating the Disabled into the Community: A United Front (1977); Social Welfare into the 1980s (1979); and Primary Education and Pre-primary Services (1981). Responsibility for carrying out government policies on social security and social welfare rests with the Director of Social Welfare, who heads the Social Welfare Department. On all matters of social welfare policy, except rehabilitation, the government is advised by the Social Welfare Advisory Committee, which is chaired by an unofficial member, with the Director of Social Welfare as vice-chairman, and members appointed by the Governor. The Rehabilitation Development Co-ordinating Committee, also appointed by the Governor and chaired by an unofficial member, advises on the policy and principles governing development of rehabilitation services.

      In the day-to-day planning and development of services, the Social Welfare Department works closely with subvented agencies which play a major role in the provision of welfare services. The majority of agencies are affiliated to the Hong Kong Council of Social Service and are involved, together with the council and the department, in the annual review of the Five Year Plan for Social Welfare Department, which details the policy objectives, and methods of reaching these objectives, in the social welfare field.

      A major development in 1985 was the transfer of responsibility for the management and planning of community centre facilities from the Social Welfare Department to the City and New Territories Administration. The transfer has rationalised the roles of the two departments in community building programmes in such a way that each department concentrates on the provision of services best suited to its expertise, with the Social Welfare Department focusing on promoting group work activities while the City and New Territories Administration is responsible for developing and expanding the role of community centres in the context of its work with the community and local district organisations.

      Continued emphasis has been placed on the provision of welfare services, particularly accommodation for the elderly. The growing number of Hong Kong's residents who are over 60 years old have special accommodation needs which the government is seeking to meet through the provision of more self-care hostels, old people's homes and care-and- attention homes. Both the subvented welfare sector and the Housing Authority have important roles to play in expanding group accommodation for the elderly. Planned provision of hostels received a boost in 1985 by the agreement of the Housing Authority to

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undertake the fitting out and operating of such facilities located in public housing estates. However, to ensure that the housing needs of the elderly continue to be viewed in the context of their welfare as a whole, the Social Welfare Department has been made responsible for planning group accommodation for the elderly and ensuring that a proper integration of services is provided. Planning for a project with combined care-and-attention home and infirmary facilities for the elderly has continued, and the project has been included in the Public Works Programme.

       In the rehabilitation field, much attention was again devoted to the improved provision of services for ex-mental patients in line with the recommendations of the Report of the Working Group on Ex-Mental Patients with a History of Criminal Violence or Assessed Disposition to Violence. A central aspect of provision of such services is the establishment of halfway houses to help ex-mental patients to make a full return to the community and lead independent and useful lives. Unfortunately, there has been a certain amount of opposition from residents to the establishment of such facilities in public housing estates. The Social Welfare Department, the Commissioner for Rehabilitation and the City and New Territories Administration have made great efforts to allay the fears of the public and, it is hoped, the combination of public education and experience of halfway houses in operation will lead to a wider acceptance of the right of ex-mental patients to rehabilitation within the community.

In November, the Working Party on the Transport Needs of the Disabled made comprehensive recommendations to improve transport services for the disabled.

       Expansion of direct welfare services continued in line with approved policies. During the year, 12 day nurseries with 2 098 places, three homes with 345 places and three care-and- attention homes for the elderly with 480 places were opened. Community services for the disabled were improved with the provision of 2 520 places in sheltered workshops and 725 places in day work activity centres for the disabled. For the elderly, two multi-service centres, and eight social centres were established.

      The provision of these additional services was reflected in increased recurrent expendi- ture. Total estimated expenditure on social welfare (social security and Social Welfare Department recurrent expenditure) in the 1985-6 financial year is $1,796.6 million, an increase of $98.6 million over the previous year.

A total of $487.6 million for recurrent and capital subventions is estimated for 1985-6, a rise of $66.3 million.

      The Community Chest, which organises and co-ordinates fund raising activities for its member agencies, raised $30.4 million in 1984-5, compared with $27 million in 1983-4.

      A major constraint to the improvement of the quality of services in past years has been a persistent shortage of trained staff in the social work field. In April, the Report on the Social Manpower Survey 1984, jointly conducted by the Social Welfare Department and the Hong Kong Council of Social Service, was published, identifying requirements and shortfalls in graduate and non-graduate grades of social workers up to 1989-90.

The 1984 modification of recruitment criteria for the rank of Assistant Social Welfare Officer made possible the recruitment of graduates who do not possess a qualification in social work, provided they attend part-time post-graduate courses leading to a professional social work qualification.

      This measure, coupled with a large increase in the number of places on social work courses in post-secondary institutions (notably through the opening of the City Polytechnic of Hong Kong), should help to improve the situation in future years.

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     Social security benefits are all non-contributory, and are provided by the Social Welfare Department, which administers the Public Assistance Scheme, the Special Needs Allow- ance Scheme, the Criminal and Law Enforcement Injuries Compensation Scheme and the Traffic Accident Victims Assistance Scheme. It also provides emergency relief for victims of natural or other disasters.

      The Public Assistance Scheme, which is means tested, aims at bringing the income of needy individuals and families up to a prescribed level. To be eligible, a person must satisfy the criterion of one year's residence in Hong Kong, though the Director of Social Welfare is empowered to waive this requirement in cases of genuine hardship. An able-bodied unemployed adult aged 15 to 59 years is eligible only if he is actively seeking employment and has registered with the Local Employment Service of the Labour Department. At the end of 1985, the number of public assistance cases was 62 828, compared with 59 320 in 1984. Expenditure on public assistance in 1984-5 amounted to $583.4 million, an increase of 19.9 per cent over the previous year.

      The rates of assistance are reviewed and increased periodically to keep them in line with the cost of living. The current monthly basic rate is $510 for a single person, $370 for each of the first three eligible members of a family, $315 for each of the succeeding three members, and $245 for each subsequent eligible member. In addition to the basic rate, an old age supplement, a disability supplement and a long-term supplement can be given. An old age supplement of $255 per month is given to those aged 60 and above who are not receiving a special needs allowance or disability supplement. A disability supplement of $255 per month is payable to those who are partially disabled with at least 50 per cent loss of working capacity, and are not in receipt of an old age supplement or special needs allowance. An annual long-term supplement of $1,290 for a family, or $645 for a single person, is given to those who have received public assistance for a continuous period of 12 months, to enable them to meet the cost of replacing household wares and durable goods. Separate allowances are also payable to cover the costs of accommodation, education, dietary needs or other special requirements.

      To encourage public assistance recipients to take up part-time employment, an individ- ual's earnings up to $255 a month are disregarded in calculating the assistance given. This arrangement does not apply, however, to able-bodied adults who are expected to seek employment actively as a condition of receiving public assistance.

      The non-means-tested Special Needs Allowance provides flat-rate old age and disability allowances. Any person aged 70 and above is eligible to apply for an old age allowance provided he has resided continuously in Hong Kong for at least five years before the date of application. Any person, regardless of age, who is severely disabled and has resided continuously in Hong Kong for at least one year before claiming the allowance, is eligible for a disability allowance. The current monthly rates of old age and disability allowances are $255 and $510 respectively. The number of people receiving these two allowances at the end of the year was 272 595, compared with 255 470 at the end of 1984. Expenditure on special needs allowances in 1984-5 was $823.3 million, an increase of 16.1 per cent.

      The Criminal and Law Enforcement Injuries Compensation Scheme provides cash assistance for people injured and for dependants of those killed in crimes of violence, or through the action of law enforcement officers in the execution of their duties. The scheme, which is non-means tested, is administered by the Criminal Injuries Compensation Board and the Law Enforcement Injuries Compensation Board. Total payments in 1985 amounted to $4.7 million, compared with $4 million in the previous year.

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The Traffic Accident Victims Assistance Scheme provides immediate financial assistance on a non-means-tested basis to traffic accident victims or their dependants in case of death, regardless of who was at fault in causing the accident. The scheme covers only traffic accidents as defined under the Traffic Accident Victims (Assistance Fund) Ordinance. To be eligible, a person must report the accident to the police and have his application lodged within six months of the date of the accident. In case of injury not causing death, evidence of at least three days' loss of earnings or earning capacity must be shown. Damage to property is not covered. The scheme does not affect an applicant's right to make other claims for legal damages. Beneficiaries who subsequently receive damages or other compensation in respect of the same accident are, however, required to refund the payments they have received from the scheme or the amount of damages or compensation, whichever is the less. During the year, 5 670 applications were received, and 5 233 were approved for assistance payments amounting to $34.2 million.

       Emergency relief is provided to victims of natural or other disasters in the form of immediate material aid such as hot meals, eating utensils, blankets and other essentials. In addition, grants from the Emergency Relief Fund are also made to victims of such disasters. During the year, emergency relief was given to 5 045 registered victims on 201 occasions.

      To prevent abuse of the various schemes, a special team conducts in-depth investigation in cases of suspected fraud or over-payment. During the year, the team completed investigation of 253 cases, some of which were subsequently referred to the Attorney General for legal advice and possible prosecution.

      The Social Security Appeal Board is an independent body which considers appeals from individuals against decisions by the Social Welfare Department concerning public assist- ance, special needs allowances and traffic accident victims assistance payments. It heard a total of 110 appeals during the year. Of these, 10 related to public assistance, 99 to special needs allowances, and one to traffic accident victims assistance.

Services for Offenders

The Social Welfare Department has several statutory duties in the field of services for offenders. These duties have the objective of giving effect to the directions of the courts on the treatment of offenders through social work methods. The overall aim is to reintegrate offenders into the community through probation supervision, remand home service, residential training for young offenders and after-care services.

      Probation applies to offenders of all age groups. It allows offenders to remain in the community under the supervision of probation officers and subject to prescribed rules set by the courts. Volunteers from many walks of life participate in the programme under a special scheme which enhances the community involvement in the rehabilitation of offenders.

       Under the Community Service Order Ordinance enacted in November 1984, the courts may in future order offenders aged over 14 years, who are convicted of an offence punishable by imprisonment, to perform unpaid work of benefit to the community in place of, or in addition to, another sentence. Offenders subject to a Community Service Order will be supervised by probation officers of the Social Welfare Department. In order to ensure that the scheme is developed in a way most appropriate to the situation in Hong Kong, the Social Welfare Department has been studying the operation of similar schemes overseas as a preliminary step before establishing a pilot scheme.

      Educational, prevocational, social and recreational training is provided in remand homes and residential institutions to assist juvenile offenders to return to the community as

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law-abiding citizens. The Social Welfare Department operates seven institutions specialis- ing in this work, each with a slightly different training programme to cater for the needs of different sexes and age groups. Following a review of educational programmes in these institutions, the department is planning to introduce major improvements to the curricula, teaching standards and facilities for academic teaching and vocational training. The Begonia Road Boys' Home and Ma Tau Wai Girls' Home are combined remand and probation institutions for offenders, aged under 16 on admission or under 18, in need of statutory care-and-protection. The Pui Chi Boys' Home, opened in November 1984, has helped to alleviate overcrowding in the Begonia Road Boys' Home, and, similarly, a temporary remand home has been provided in the Tai Tam Gap Centre to help improve conditions at the Ma Tau Wai Girls' Home. The Castle Peak Boys' Home caters for boys aged under 16 on admission who need a longer period of training after conviction, while the O Pui Shan Boys' Home is a reformatory school for offenders aged under 13 on admission. The Kwun Tong Hostel is a probation hostel for young men aged between 16 and 21. There are longer term plans to improve residential facilities by construction of a new girls home in Tuen Mun and the reprovisioning of the Castle Peak Boys' Home.

       The Social Welfare Department also operates an after-care unit which helps offenders rejoin society by preparing them before they leave reformatory schools and supporting them after they are discharged. Besides the work carried out by the Social Welfare Department, several welfare agencies also provide services to help young offenders and young people with behavioural problems to reintegrate into the community.

Family Welfare Services and Child Care

The Social Welfare Department and a number of welfare agencies are involved in the provision of family services which have the objective of maintaining and strengthening the family unit through helping individuals and families to solve problems and prevent them arising. The department operates a network of 22 family service centres and the number of active cases in December was 21 437. Services provided under this programme include counselling on personal and family problems; care and protection of young people aged under 21; residential and foster care for children up to the age of 21, day care for children under six; referrals for schooling, housing, employment, financial assistance, legal advice, medical attention, home help and, where appropriate, placement in institutions for elderly or disabled persons.

      A number of statutory responsibilities arising from the Protection of Women and Juveniles Ordinance, the Offences Against the Persons Ordinance, the Marriage Ordinance, the Guardianship of Minors Ordinance and the Matrimonial Causes Ordinance lie with the Social Welfare Department. The department provides supervision and/or residential accommodation for young people aged under 18 whose parents and guardians fail to exercise proper care of them and for those under 21 who have no parents or guardians or who are adopted other than by a court order.

       Child care service continued to be a focus of particular attention in 1985. In November, the Sha Kok Children's Home began operation as an extension to the frequently overcrowded Children's Reception Centre run by the department for the temporary care of children aged up to eight. The Child Protective Services Unit provides services for children who have been, or are suspected to have been, abused, whether physically, psychologically or sexually. The Social Welfare Department's Adoption Unit co-ordinates adoptions both within Hong Kong and overseas - the latter with the assistance of the local branch of the International Social Service. During the year, there were 410 legal adoptions, 90 proposed

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     adoptions and 57 overseas adoptions. Through the Central Foster Care Unit, the Social Welfare Department works closely with three subvented foster care agencies to promote foster care services in Hong Kong. Subvented foster care places totalled 120 in 1985.

      A special working group was set up during the year under the auspices of the Social Welfare Advisory Committee to examine policies on the provision of residential services for children in need of care and protection.

Child care centres are established for the care of children aged under six. Such centres must comply with the standards laid down in the Child Care Centres Ordinance and they are subject to registration and inspection. At the end of the year, there were 25 093 places in day child care centres and another 910 places in residential child care centres. Families with a low income and a social need for children to attend a child care centre may apply to the Social Welfare Department for assistance in meeting fees charged. About 11 700 children were receiving fee assistance at year-end.

      A hotline service is operated by the Social Welfare Department to deal with enquiries from the public on matters relating to the services of the department and to provide immediate telephone counselling or advice where necessary. A total of 15917 calls were received during 1985.

      Social work services are also provided by medical social workers stationed in 57 hospitals and clinics. During the year, they handled 90 580 cases.

      A broad range of family life education programmes are co-ordinated by the Social Welfare Department. The programmes aim at improving the quality of family life through the promotion of interpersonal relationships and social consciousness, which may help prevent family crises and consequent social problems. In 1985, the theme of the annual publicity campaign was again 'Building a Happy Family', and stressed such areas as how to be a good parent, child rearing and the parent-child relationship, which contribute towards the prevention of child abuse. In addition to the major publicity campaign, family life education programmes are organised by social workers at the district level, with 56 family life education workers from 14 subvented welfare agencies providing the service.

Care of the Elderly

'Care in the community' remains the guiding principle for the planning of services for the elderly. Subvented welfare agencies are the main instrument for the provision of a broad range of community support services for the elderly, which have the objective of enabling old people to continue to live independently in the community. Services include home help and 'meals on wheels' operations, community education, day care and social and recrea- tional activities. At the end of 1985, there were two outdoor recreational buses, 35 home help teams, 78 social centres for the elderly, 10 multi-service centres and two day care centres. A priority housing scheme benefits families with elderly relations living with them in applying for public housing and priority is also given to housing old people in public housing estates under a special quota system and the compassionate rehousing scheme.

However, not all elderly people can be catered for within the community and residential facilities are provided for those who, for health or other reasons, can no longer live with their families or alone. In 1985, 825 additional subvented places were provided and at the end of the year there were 5 885 places in homes/hostels (including 1 877 non-subvented places) and 1 367 places in care-and-attention homes. Provision of residential places should be significantly boosted by the decision of the Housing Authority to equip and operate hostels in public housing estates and make more premises available for old people's homes and care-and-attention homes in estates. The government also provides sheltered housing

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for 595 elderly people in good health and able to live independently through the purchase of 103 flats in two separate private housing developments.

Social Work Among Young People

A wide range of services has been designed for young people under the age of 25. The overall objective is to assist and encourage young people to become mature and responsible members of society by fostering the development of their personality, character, sense of civic responsibility, social aptitudes and ability to use their leisure time beneficially.

       Children's and youth centres operated mainly by voluntary agencies serve as focal points for a wide variety of indoor and outdoor activities for the development of character, leadership potential and skills at socialising, under the guidance of social work staff. In 1985, six children's centres, two youth centres and five combined children's and youth centres were opened. At the end of the year, there were 144 children's centres and 152 youth centres in operation - with 93 being combined children's and youth centres.

-

      The Opportunity for Youth Scheme, which is administered by the Social Welfare Department, encourages young people to investigate and identify needs in the community and to propose and implement projects to meet these needs. A total of $230,000 was granted to youth groups to carry out about 90 community projects during the year.

      In addition, the government provides financial assistance to various uniformed youth groups which manage a number of youth camps and hostels.

      Through the establishment of direct contact with young people in the places which they are known to frequent, outreaching social work provides an alternative approach in counselling and guidance to young people who do not normally attend youth centres or participate in organised activities.

       School social work service is available to all primary and secondary schools. Student guidance officers of the Education Department are based in all primary schools to give educational guidance to pupils and to help them to solve their personal problems with professional support by social workers in the Social Welfare Department. Social workers of the Social Welfare Department or subvented welfare agencies visit secondary schools on certain days of the week to assist pupils to make maximum use of their educational opportunities and to provide counselling on individual problems.

Rehabilitation

      Rehabilitation services in Hong Kong are aimed at integrating the disabled into the community. Services provided by government departments in this area therefore have the objective of enabling handicapped people to develop their physical, mental and social capabilities to the fullest extent. Rehabilitation services provided by the departments and welfare agencies are carefully co-ordinated by the Commissioner for Rehabilitation by means of an annual review of the Rehabilitation Programme Plan. The Social Welfare Department is responsible for the planning and development of a wide range of services for the disabled in order to meet their general welfare and social rehabilitation needs either through direct service provision or subvention to welfare agencies. The Education Department is responsible for all aspects of the education and training of disabled children of school age and for boarding care and transport services in special schools. The Technical Education and Industrial Training Department co-ordinates vocational training for disabled young people and adults. Job placement for the deaf, the blind, the physically disabled, the ex-mentally ill and the mentally handicapped is the responsibility of the Selective Placement Service of the Labour Department.

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The Social Welfare Department provides the handicapped with direct services including counselling, compassionate rehousing, financial assistance, technical aids and day and residential care. It directly operates facilities including an integrated child care centre, a composite club for the handicapped, residential homes and hostels, work activity centres and sheltered workshops. The services provided by the 28 subvented agencies active in this field include (in addition to those provided by the department) pre-school care, education and training programmes, special child care centres, home help services, halfway houses for ex-mental patients, special transport schemes, sports, social and recreational programmes, sign language interpretation services and mobility and orientation training for the blind.

By the end of the year, the Social Welfare Department and welfare agencies provided a total of 725 work activity places (with 360 more places in new centres planned for 1986) and 2 520 in sheltered workshops (420 places to become available in 1986). These facilities provide employment for disabled adults unable to compete in the open job market.

Owing to financial constraints, the improved staffing standards recommended in the Sheltered Workshop Working Party's report could not be fully implemented in 1985. However, staffing provision in sheltered workshops in the subvented sector was brought up to a level comparable to the provisions for departmental workshops.

The severely disabled who cannot be cared for adequately at home, or those who have no close relatives to look after them, are entitled to residential care. There are 625 places in homes for mentally handicapped adults with plans in hand to provide an additional 358 places in 1986. Homes for physically disabled adults have 219 places. There are 243 existing residential places for the blind, and 160 more places will be provided in 1986.

At the end of the year, subvented welfare agencies provided 484 places for mildly handicapped pre-school age children in integrated child care centres, 11 special child care centres with 480 places (including 54 residential places) for severely handicapped pre-school age children, 250 halfway houses for ex-mental patients, a fleet of 21 Rehabuses, two sports associations and 18 social clubs for the handicapped.

Further efforts were made to improve after-care and rehabilitation services for discharged mental patients. By the end of 1985, 250 places were provided in halfway houses, and an improved staffing standard for these facilities was implemented during the year in respect of two halfway houses. The Committee on Public Education in Rehabilitation persisted in its attempts to foster a more positive public attitude towards former mental patients.

      The Social Welfare Department, in conjunction with the welfare agencies concerned, completed a review of the policy on social, recreational and sports services for the disabled. The recommendations in the resulting report will be considered by the government departments concerned and the welfare sector.

Training

The training of professional social workers is the responsibility of the two universities, the polytechnics and post-secondary colleges. The Social Welfare Department and welfare agencies assist in the provision of field work placements for social work students from these institutions. The Social Welfare Department, through its Training Section at the Lady Trench Training Centre, provides in-service training programmes, refresher courses and staff development programmes for both departmental staff and staff of welfare agencies. During the year, the number of courses, programmes, seminars and workshops organised by the Training Section totalled 137, compared with 116 in 1984. The Training Section also operates a child care centre which, besides providing day care for 100 children aged between two and five serves as a training facility for trainees in child care work.

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      To equip staff with updated and specialised skills in the various areas of welfare service, the Social Welfare Department sponsors experienced personnel to attend advanced training courses and international seminars. During the year, 37 officers attended 21 such courses and seminars. The Social Work Training Fund and other scholarships also provide funds to promote advanced social work training.

Research and Evaluation

The Research and Statistics Section of the Social Welfare Department conducts studies to support the planning and monitoring of services provided by the department, and in 1985 nine such studies were undertaken. These studies were geared to obtaining statistical information for planning and review of the social security schemes, and family and other services.

      The Evaluation Section of the department is responsible for monitoring and assessing services provided by the subvented welfare agencies. For this purpose, departmental staff make regular visits to these agencies and the agencies are required to submit service statistics to the department at regular intervals. Where appropriate, findings are submitted to the Subventions and Lotteries Fund Advisory Committee which advises on allocation of subventions. During the year, the department conducted five in-depth evaluations of the service programmes of individual subvented agencies as well as experimental projects financed by the Lotteries Fund.

Community Building

'Community building' aims at fostering among the people of Hong Kong a sense of belonging, mutual care and civic responsibility so that the society as a whole will be more cohesive and harmonious. This is necessary because of rapid social and economic development over the years resulting in the creation of new communities, population relocation and high density living. In addition, imported culture has helped to break up the traditional Chinese family system and the clan's existence as a social entity, thus weakening the social and human ties among the people of Hong Kong. Community building efforts involve the provision of purpose-built facilities for group and community activities, formation of citizens' organisations and encouragement of community participation in the administration of public affairs, in solving community problems, in promoting social stability and in improving the quality of life.

      A number of government departments and voluntary organisations contribute towards the community building programme which is monitored and co-ordinated by the Com- munity Building Policy Committee, established in 1977. The City and New Territories Administration and the Social Welfare Department are the two departments principally responsible for this programme. The former implements the specific objectives of com- munity building through a network of district offices, and is primarily concerned with promoting mutual care and community spirit through local organisations such as area committees, mutual aid committees, rural committees, kaifong welfare associations, women's organisations and local arts and sports associations. The Social Welfare Depart- ment is responsible for various aspects of group and community work aimed at promoting the development of individuals and groups and at fostering a sense of community responsibility.

      Community centres, run by either the government or voluntary agencies, are provided throughout the territory to serve as bases for community building work. In June, the City and New Territories Administration took over from the Social Welfare Department

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     general administrative responsibility for community centre facilities. This change enabled the department to devote its resources to extending and developing its work among young people and adults with special welfare needs, where the skill of trained social workers is more needed.

International Youth Year Activities

The government's community building efforts received added impetus through 1985 being designated by the United Nations as International Youth Year (IYY) with themes of 'participation, development and peace'. A central co-ordinating committee was set up by the government to formulate an overall strategy to commemorate and celebrate the year in Hong Kong.

The committee organised four main activities: a variety show with 'participation' as the main theme, to mark the IYY opening; a conference on the subject of 'youth policies in perspective'; a 'civic day for youth' to drive home the message of 'knowing, be concerned with and serving the community'; and a youth peace rally to round off the year's events. In addition, the committee encouraged other organisations, including the district boards, voluntary agencies, uniformed youth groups and student associations, to set up their own activities to promote the IYY's central themes. More than 300 individual events were organised as a result.

10

EIVI

Housing

     HOUSING Continues to be a priority commitment for the government. In the 1985 Budget, about one-third of the total public capital expenditure was earmarked for the development of public housing. At present, about 2.4 million people, or 45 per cent of Hong Kong's population, are living in either rental or home ownership public housing.

      For the sixth successive year, the Housing Authority exceeded its annual production target of 35 000 flats by producing 49 724 new units in 1985.

      Apart from quantity, the Housing Authority places equal emphasis on the quality of public housing. The newer housing estates offer comfortable and well-designed homes in a pleasant landscaped environment. They are also provided with a wide range of facilities, such as schools, shopping complexes, welfare centres, community halls, children's play- grounds, sports grounds and a good transport infrastructure.

      The authority is also continuing its programme of redeveloping old estates where the living environment and the provision of community facilities are not as satisfactory.

Housing needs and policies are kept under constant review. Following the success of the public consultation exercise on public housing allocation policies in 1984, the authority embarked on another major public consultation exercise in 1985. A Green Paper was published in August to seek the views of the public on suggestions to reduce public housing subsidies to long-term public housing tenants who had improved their financial situation. The views of all district boards and opinions given by organisations, individuals and the media were carefully considered. In addition, a public opinion survey on the subject was conducted by an independent private research company.

      In July, the Housing Authority set up a special committee to undertake a full-scale review of its policy on domestic rents.

The Home Ownership Scheme (HOS) and Private Sector Participation Scheme (PSPS) provide lower-middle income families with the opportunity to purchase their own flats at prices below those of comparable units on the open market. The annual production target for the two schemes has been increased from 5 000 to 10 000 units, in response to increas- ing demand.

In 1985, a total of 19 634 units were produced under these two schemes. This was well in excess of the production target, and was mainly due to the early completion of some projects.

The Hong Kong Housing Society supplements, on a smaller scale, the Housing Authority's contribution to the provision of public housing and also carries out urban redevelopment schemes. The society completed its first rural public housing estate in Sai Kung during the year.

In the private sector, around 30 000 units were completed in 1985, well above the annual average of 25 000 units completed during the previous five years.

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Housing Authority The Hong Kong Housing Authority, established under the Housing Ordinance, is a statutory body responsible for co-ordinating all aspects of public housing. The authority advises the Governor on all public housing policy matters and through its executive arm, the Housing Department, plans and builds public housing estates for categories of people determined by the authority with the approval of the Governor. It also manages public housing estates, cottage areas, temporary housing areas and transit centres throughout the territory; clears land for development; prevents and controls squatting; and plans and co-ordinates improvements to squatter areas. The authority plans, builds and manages, on behalf of the government, flats provided under the Home Ownership Scheme. It acts as the government's agent in the development of land and construction of flats for the Home Ownership Scheme, and also nominates purchasers for flats built under the Private Sector Participation Scheme.

      The authority meets quarterly under the chairmanship of the Secretary for Housing to review the work of six standing committees which are responsible for dealing with finance, building, estate management, home ownership, operations, and appeals. There are also two special committees responsible for reviewing housing subsidies to tenants of public housing and domestic rent policy. The authority comprises 14 unofficial members representing a wide spectrum of the community, and six official members from government departments directly involved in housing matters. All members are appointed by the Governor. There are also 21 co-opted members who sit on one or more of the committees. Many of the unofficial members of the authority also serve the community as Legislative Councillors, Urban Councillors, Regional Councillors, or as members of the Heung Yee Kuk, district boards and mutual aid committees. Together, they have a broad range of experience and representation and are able to apply a critical and conscientious perspective in determining public housing policies.

      The Housing Authority is responsible for its own finance and management. Capital funding for the public housing programme is provided through government funds on the basis of a four-year expenditure forecast rolled forward annually. The government subsidises the programme by providing free land for rental and home ownership projects, and loans from the Development Loan Fund to finance the construction of rental estates. The Home Ownership Scheme is financed by the government which recoups its expenditure from the sale of the flats.

      The authority obtains loans from the Development Loan Fund for the construction of the domestic portion of public rental housing estates. The loans are repayable over 40 years at an annual interest rate of five per cent. However, in order to alleviate the cash flow burden on the authority, the government does not require the interest to be paid in cash. The interest charge must, nonetheless, be fully accounted for, along with the free land provided, in the Housing Authority's balance sheet as part of the government's contribu- tion to public housing. On March 31, 1985, the government's contribution stood at $21,626 million which included, among other subsidies, $18,446 million for free land and $1,392 million in interest foregone. Furthermore, the 40-year repayment period for loans means that, having regard to the declining value of money over time, the government recovers only a fraction of the real value of the housing loans.

      In the 1984-5 financial year, recurrent expenditure on the Housing Authority's domestic rental properties - covering mostly management and maintenance costs - totalled $1,751 million while income from domestic rents was $1,593 million, resulting in a deficit of $158 million. This deficit arose because the low rents in old estates were insufficient to meet

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     management expenses and the high cost of maintenance and improvements. The authority was able to offset the deficit from income derived from its non-domestic (commercial) properties which in the same period generated $955 million against an expenditure of $455 million. Any surplus funds were used to finance the public housing construction programme.

      The authority spent $2,443 million on its capital programmes, of which $1,941 million was financed by the government (mostly loans on concessionary terms) with the balance being financed from the authority's funds. In addition, the authority, acting as the government's agent, spent $608 million on the construction of flats for sale under the Home Ownership Scheme.

Construction

For the sixth year in succession, the Housing Authority exceeded in 1985 its annual production target of 35 000 flats. To maintain this momentum of construction, the authority is firmly committed to a programme of building more than 200 000 flats during the next five years. These will comprise 158 000 rental flats, 32 900 Home Ownership flats and 27 000 Private Sector Participation Scheme flats.

      In 1985, 24 building contracts having a total value of $3,548 million were let. Of these, five were under the 'mechanised construction method' category, which is a more modern approach designed to increase efficiency and facilitate a very high quality of construction workmanship. This action has borne fruit as an increasing number of contractors are now gearing themselves up to use these modern construction techniques.

      To further enhance the efficiency of the authority's work, a Computer Aided Draughting and Design (CADD) System was installed early in the year. It is expected to be fully operational in 1986, and will be another important tool in the implementation of the housing programme.

Home Ownership Scheme

The Home Ownership Scheme (HOS) is administered by the Housing Authority with funds from the government to provide comfortable and reasonably priced flats for sale to public housing tenants, and to lower-middle income families in the private sector. Since the Phase I sales exercise started in 1978, a total of 60 527 flats built under the HOS and the related Private Sector Participation Scheme (PSPS) have been sold to eligible families. About 42 per cent of these families were public housing tenants who, although not subject to restrictions on incomes and property ownership, were required to surrender their flats for reallocation to families in greater need of public housing. Applicants from the private sector are currently subject to a family income ceiling of $7,500 per month in order to keep these flats within the reach of the target population. Following a review of public housing allocation policies, the 'Green Form' priority status for public housing tenants to buy HOS flats was extended to include residents of temporary housing and cottage areas, waiting list applicants, households displaced by clearance of squatter areas for development and disaster victims.

Successful applicants from this enlarged category would no longer be eligible for public rental housing.

Four sales exercises were held during the year, and involved a total of 19 634 flats. The first exercise (Phase VIIA) took place in January when 3 776 flats were offered for sale with prices ranging from $96,000 for a 50 m2 (gross area) flat at Ching Shing Court, Tsing Yi, to $186,200 for a 64 m2 flat at Fung Shing Court, Sha Tin.

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The second sales exercise (Phase VIIB) began in March, and a total of 5 020 PSPS flats in four estates were sold. Prices ranged from $103,500 for a 43 m2 flat at Prime View Garden in Tuen Mun to $406,900 for an 81 m2 flat at Greenwood Terrace in Chai Wan.

The Phase VIIC sales exercise was held in July, and involved 2 800 HOS flats and 978 PSPS flats. HOS prices ranged from $81,000 for a 43 m2 flat at Siu Hei Court in Tuen Mun to $217,000 for a 55 m2 flat at Ming Nga Court in Tai Po. Prices for the PSPS flats were in the range of $272,000 for a 63 m2 flat to $450,000 for a 92 m2 flat, all at Neptune Terrace in Chai Wan. Finally, in November, 7 060 flats in Tuen Mun, Tsing Yi, Wong Tai Sin and Tai Po were offered for sale in Phase VIIIA at prices ranging from $82,600 to $337,100.

Urban Housing

Two major contracts were awarded during the year for housing projects at Ap Lei Chau on the south side of Hong Kong Island - Lei Tung Phase II comprising 3 248 rental flats and Yue On Court with 1 848 Home Ownership flats. On the east side of Hong Kong Island, site formation work was well underway at Siu Chai Wan, while piling work for another rental estate at Chai Wan had started. These two sites together will provide 6.900 rental flats and 660 Home Ownership flats.

Other new sites on Hong Kong Island have been identified and they will add a further 7 140 rental flats and 1 050 Home Ownership flats in the urban area. The detailed planning for one of these sites, on land to be reclaimed at Kellet Bay, was completed.

       In East Kowloon, tenders were invited for site formation work for an estate at Lam Tin South. This is one of the largest housing sites in the urban area and is planned to accommodate 5 880 rental flats and 1 400 Home Ownership flats. The estate is scheduled to be completed in stages between 1991 and 1992.

In central Kowloon, construction work on the 7 054 flats in the remaining phases of Chuk Yuen Estate had started, while the 1 680 Home Ownership flats in the first phase of Tin Ma Court at Ma Chai Hang were nearing completion. Construction of the 3 340 Home Ownership flats at Diamond Hill was on schedule and expected to be completed

in late 1986.

Housing in New Towns and Rural Townships

In the Tsuen Wan/Tsing Yi area, the contract for the construction of 3 426 flats in the first phase of Cheung On Estate on Tsing Yi Island was awarded, and piling work for its second phase comprising 3 625 flats commenced.

      In Sha Tin, 2 416 flats were completed under Pok Hong Estate Phase II, and a further 12 570 flats will soon be completed in Hin Keng, Sun Chui and Kwong Yuen Estates. Farther down the Shing Mun River, 10 600 rental flats and 1 050 Home Ownership flats are under construction at Ma On Shan. Hang On Estate, the first estate in Ma On Shan, is scheduled for completion by late 1986.

      In Tuen Mun, 2 800 flats in Siu Hei Court, the second largest Home Ownership Scheme in the area, have been completed. Construction work on the first two phases of Leung King Estate started, and work was progressing smoothly on the remaining phases of Shan King Estate. Upon completion, these two estates will provide a total of 12 860 rental flats.

Construction work on the first two phases of another major housing project in Tai Po began. When fully completed in 1989, this estate will provide a total of 8 800 rental flats. Other rental estates under construction in the northeastern New Territories include Fu Shin in Tai Po, Cheung Wah in Fanling, and Tin Ping in Shek Wu Hui. These estates will add a further 11 290 flats to the housing stock in the next two years.

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Satisfactory progress was maintained at Long Ping Estate in Yuen Long, which is scheduled for completion progressively between early 1986 and late 1987, providing a total of 8 480 rental flats.

In Junk Bay, construction work on five major contracts for two estates is well underway at Areas 5 and 6 and Area 14. The first phase of these estates will be completed in late 1986. When fully completed in 1988, they will provide a total of 9 860 rental flats and 2 800 Home Ownership flats.

      On the outlying islands, tenders will be invited for piling work for 420 flats in Mui Wo on Lantau. This is the first of a new generation of rural housing, and similar designs will be adopted at other rural sites.

Redevelopment

In 1983, the Housing Authority decided to accelerate the redevelopment programme for the old Mark I and II housing blocks, with the intention of rehousing all the families living in the remaining blocks by 1990-1. Under this programme, about 6 000 families will be rehoused annually. Families living in these blocks who wish to improve their living conditions in advance of scheduled redevelopment are offered the opportunity to move to new flats in new towns.

During the year, a further 22 old blocks in Lower Wong Tai Sin, Tung Tau, Wang Tau Hom, Lei Cheng Uk and Tai Wo Hau estates were demolished to make way for the construction of new blocks. In November, the Housing Authority announced its decision to extend the redevelopment programme to include 26 other estate blocks, in which the condition of the concrete was found to be unsatisfactory.

Allocations

The Housing Authority possesses one of the world's largest housing stocks, with 2.3 million tenants living in 557 000 rental flats in 118 housing estates. These flats are of varying sizes, amenities and rent levels in order to meet the wide ranging requirements of families in need of public housing.

During the year, 29 654 new flats and 6 741 vacated units were let to various categories of eligible applicants. The largest proportion went to waiting list applicants (37 per cent), followed by families affected by development clearances (20 per cent) and tenants involved in the redevelopment of the Mark I and II old blocks (22 per cent). Victims of fires and natural disasters, occupants of huts and other structures in dangerous locations, and compassionate cases recommended by the Social Welfare Department took up the rest of the allocated flats.

Information regarding waiting list applicants and more than 3.1 million tenants has been computerised and stored in the Housing Applications and Tenancies Management Information System (HATMIS). The computer system enables housing allocations and duplication checks to be carried out effectively and produces useful statistical information for management.

      The 13 700 flats allocated to waiting list applicants during the year were located in Kowloon East, Tai Po, Tsuen Wan, Sha Tin and Tuen Mun. Waiting time ranged from seven years for estates in Sha Tin to four years for those in Tuen Mun.

Applications were considered in the order of registration and in accordance with the choice of districts indicated. Accommodation was offered to those who, on investigation, were found eligible in respect of their family income. The space limits were removed following a review of this criterion during the year. The income limits were set having

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regard to the average household expenditure, plus the rent for a self-contained flat in the private sector. Currently, the income limits range from $4,800 for a family of three to $7,400 for a family of 10 or more. Since January 1985, and subsequent to the Housing Authority's decision to provide public rental flats for two-person households and single persons, applications from these groups of households have been registered. The monthly income limits for single persons and two-person households have been set at $2,900 and $4,200 respectively. The number of live applications at the end of the year stood at 173 000. In the past, about 60 per cent of applications were found to be eligible on investigation.

As a means of helping elderly persons, the Housing Authority has been operating a priority scheme whereby single elderly persons applying in groups of two or more will be allocated public housing within two years. So far, 3 200 flats have been allocated in this manner. In addition, since 1982, the authority has been operating an incentive scheme under which families with elderly members are allocated housing one year ahead of their normal waiting time, and so far over 2 350 families have benefitted from this scheme.

Domestic Rent Policy for Public Housing

Rents for domestic premises in public housing estates have been maintained at low levels despite increasing operating and maintenance costs. The median rent-to-household-income proportion for tenants in public housing is at present around five to six per cent - an extremely low figure compared with the corresponding figure of 17 per cent paid by tenants in the private sector. (In terms of average rent to household income proportion, tenants in public housing pay seven to eight per cent whereas those in private housing pay 20 to 21 per cent.)

It has been possible for the Housing Authority to keep rents low because of heavy government subsidies: land is provided free of charge, and construction of rental estates is financed largely by loans provided by the government on concessionary terms.

Rents for existing estates are reviewed every two years, taking into account increases in rates, maintenance and other costs; estate values in terms of location, facilities and services provided; and tenants' ability to pay. This comprehensive approach resulted in the successful implementation of two rent increases for 93 237 flats in 45 estates during the year.

Before the rent increases were implemented, briefings were given to district board. members, mutual aid committee office bearers and tenants' representatives with a view to explaining the rationale behind the increases. The affected tenants were also individually notified of the reasons for the increase.

In July, the authority appointed a committee to review its domestic rent policy.

Commercial, Community and Welfare Facilities

Commercial centres complete with shops, markets, cooked food stalls, restaurants, supermarkets and banks are provided in all new Housing Authority estates to cater for the everyday needs of tenants and residents in neighbouring areas.

      The authority does not subsidise commercial operators, and keeps rents for commercial premises in estates in line with fair market rents. Shop units are normally let through a tendering process. During the year, 878 new commercial lettings were let on fixed terms of three years and 2 970 existing tenancies were renewed for another term of three years at reassessed rents. However, in many cases, where the increases were substantial, they were applied in stages according to a fixed pattern to avoid the tenants having to suffer any hardship.

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In 1985, there were 16 236 properties under the management of the authority, which also managed 18 130 factory units in 35 purpose-built blocks in 17 factory estates.

Some 564 welfare premises in estates have been let at concessionary rents which are intended to recover only the cost of management, maintenance and other recurrent expenses of the premises. The existing rent level of $11 per m2 was revised to $15 per m2 during the year. Altogether, 63 welfare lettings were made, covering premises for children's and youth centres, nurseries, social and community services centres, libraries, study rooms, welfare clinics, sheltered workshops, hostels and centres for the mentally or physically handicapped. Hostels for the elderly were let to voluntary agencies at normal domestic rents.

      In order to maintain a balanced community for public housing tenants, a total of 455 premises have been let for educational purposes, such as kindergartens, and primary and secondary schools. In addition, mutual aid committees were provided with office accom- modation in housing blocks. Medical clinics and premises for various government departments were generally let at commercial rents. During the year, the Housing Authority also approved the letting of office accommodation to district board members, upon application.

      Besides providing shared flats and housing for single persons, the Housing Authority decided to provide and manage sheltered housing for able-bodied elderly people in place of hostels which were previously run by voluntary agencies. This arrangement will enable the Social Welfare Department and voluntary agencies to devote more of their resources to caring for old people who require more supportive services, such as counselling, recreation and nursing care.

Management

Senior staff of the Housing Authority continued to foster close contacts with district boards and mutual aid committees as well as local interest groups by participating in meetings and community building activities. Close contacts with tenants were also maintained through door-to-door visits by estate staff.

      The introduction of the Commercial and Non-Domestic Tenancies Management Inform- ation System (CANTMIS) during the year brought about a more efficient control and management of all commercial properties under the authority's charge. The Commercial Tenancies Division was set up to deal with design and research, marketing and promotion. as well as various management aspects of commercial properties.

To ensure that public housing is offered to the most deserving families, some policy changes were made, including the adoption of new criteria for the relief of overcrowding and voluntary transfer, and the discontinuation of automatic inheritance of a public housing tenancy.

      The Housing Ordinance empowers the Housing Authority to introduce road restrictions in estates and impose charges for the impounding and removal of vehicles parked illegally within estates. Offending car owners or drivers may also be prosecuted under the provisions of the Housing (Traffic) By-laws. These arrangements make it possible to keep the access roads in estates, including factories, free from obstruction caused by illegal parking and hawking, thereby improving the estate environment. The Housing (Traffic) By-laws were substantially amended on February 1, 1985, to bring them in line with the new provisions in the Road Traffic (Parking) Regulations made under the Road Traffic Ordinance. The main amendments included the adoption of new signs and road markings; an increase in the maximum penalty for various offences and in fees for impounding, removing and storing a

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vehicle; and the introduction of some offences and provisions based on the Road Traffic (Parking) Regulations.

Estate management staff continued to take vigorous action against illegal hawking activities inside housing estates. A special major operations team consisting of 100 workers was formed in the year to bring black spots under better control.

Temporary Housing

During the year, 17 500 people were rehoused in Temporary Housing Areas (THAs) managed by the Housing Department. The majority were people affected by development clearances or victims of natural disasters who were not immediately qualified for perma- nent public housing.

Tenants moved into the first of the 'full-built' temporary housing units in Mui Wo on Lantau Island and Kwai Fuk in Tsuen Wan. These full-built THAS were constructed of more substantial materials and provided a much improved living environment.

The Housing Authority agreed in early 1985 that a start should be made on providing permanent housing for single persons and two-member households with priority given to those living in THAS. During the year, 540 single persons and 400 two-member households moved from THAS into permanent housing. In parallel with the provision of permanent housing for single persons, a start has also been made on providing individual units for single persons in THAS. This gives more space and privacy and dispenses with the need to provide hostel-type accommodation.

A free water supply has been provided in THAS built before 1982, with water charges borne by the Housing Department. To curb water wastage, reduce expenditure and bring the situation in line with the practice in new THAs, a programme was drawn up to introduce an individual metered water supply to 25 of the older THAS. So far, one THA has been metered, and the programme will be completed by mid-1986.

      In May, the Housing Authority adopted a new policy concerning additions of persons to THA households. The policy set out stricter criteria, and was brought in line with that in force in public housing estates.

During the year, 18 500 temporary housing residents moved into permanent public housing mainly through clearance or through the waiting list. At the end of the year, 123 000 people were living in 47 THAS and development of 10 new THAs was underway.

Transit Centres

There are nine transit centres in the territory providing immediate shelter for people made homeless by natural disasters. The transit centre at Kai Cheung was expanded during the year, bringing the total capacity of transit centres to over 5 100 people.

Cottage Areas

The programme to provide individual metered water supply to cottage areas continued in 1985 and four more areas were receiving metered supply. At the end of the year, 13 000 people were living in nine cottage areas.

Squatter Control

The Squatter Control Division of the Housing Department operates a system of daily patrols to detect new squatting. Full control over squatting has been maintained with racketeering the construction of squatter huts for sale - effectively suppressed and 14 400 illegal structures or extensions demolished in 1985.

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       At present, the system of control is based on the structure rather than occupancy. To minimise the commitment for public housing, a new measure was introduced in April whereby newcomers were prevented from moving into structures vacated by the original occupants upon their obtaining a public housing unit through the general waiting list.

A territory-wide survey to register all occupants of squatter huts was completed in September. A total of 123 626 families, comprising 477 189 people, were recorded. The results of the registration exercise should enable the eligibility for permanent housing to be tightened up by requiring registered occupancy of the structure to be an additional criterion.

Clearance

The year saw 400 hectares of land cleared for development, and the beginning of the non-development clearance programme: the clearance of squatters from sites not required for development projects with priority being given to huts on dangerous slopes.

This resulted in the rehousing of 37 700 people - 24 800 into permanent housing and the remainder into temporary housing. In addition, 700 workshops and other commercial undertakings were paid ex-gratia allowances on clearance. During the year, 3 900 people had to be rehoused as a result of fires, landslides and other emergencies.

      To facilitate forward planning, a 10-year clearance programme has been drawn up, matching the anticipated housing demand arising from clearance operations with the projected supply of housing stock. The intention is to clear all squatter concentrations in the urban area within the next 10 years.

Improvements to Squatter Areas

The squatter area improvement programme continued to concentrate on the large and more densely populated squatter settlements in the urban areas, including those in Tsuen Wan, with a total of 15 projects undertaken to improve safety and basic services.

       All major urban squatter areas have now been divided into smaller units by the creation of firebreaks, which, together with the installation of fire hydrants and fire mains, have made an appreciable improvement to safety in these areas.

      Since the start of the squatter area improvement programme in 1983, about 70 000 squatters have benefitted from a total of 31 projects costing $42 million.

Management of Private Residential Buildings in Multiple Ownership

Privately owned buildings constitute more than half of the territory's housing stock and accommodate about half of the population. The vast majority of these buildings are high rise blocks which are held in multiple ownership by a number of owners, who may or may not be residents of the building..

The nature of ownership of these buildings, combined with other factors, has resulted in a situation over the years where the management of some private properties has deterio- rated to an extent which is most undesirable.

Although the management of privately owned buildings is, strictly speaking, the respon- sibility of property owners, the consequences of consistent neglect are of serious concern to the government.

      In view of this situation, the government is taking steps to provide assistance to private management bodies, in order to stimulate a more effective, self-help process among property owners and tenants. The nature of this assistance is both legislative and administrative.

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On the legal front, the government intends to make certain amendments to the Multi-storey Buildings (Owners Incorporation) Ordinance which will facilitate the forma- tion of owners corporations. Such corporations act in the interests of individual owners regarding their rights, powers, duties and liabilities in relation to those parts of a building held in common ownership.

Although the existence of an owners corporation does not guarantee good management of a building, it has been found from experience that management standards in buildings which have owners corporations have tended to be better than in cases where no comparable management body exists.

As well as making the formation of owners corporations easier, the legislative amend- ments contain new clauses governing the conduct of management committees. These clauses define more clearly the powers and responsibilities of management committee members and specify certain requirements in relation to the conduct of their meetings.

      In parallel with the amendments to the Multi-storey Buildings (Owners Incorporation) Ordinance, the government intends to recommend the inclusion of a number of standard clauses in all new deeds of mutual covenant. These clauses specify more clearly the rights and responsibilities of developers and owners in relation to the management of common areas in a building.

      Administrative arrangements aimed at improving private building management consist mainly of the establishment, in two districts to date, of Building Management Coordina- tion Teams. These teams consist of professional housing managers and assistants, who, together with the liaison staff of district offices, offer advice to owners corporations, mutual aid committees and other building management bodies, at a district level.

      The teams play an important role in encouraging the formation of owners corporations and in providing advice to the members of management committees. They also work towards improving public awareness in building management matters by means of seminars and discussion groups.

      An equally important task carried out by the teams is the co-ordination, under the supervision of the district officer, of the various enforcement agencies which have statutory responsibility for building management matters under several ordinances.

Rent Control in the Private Sector

Statutory controls on rents and security of tenure in Hong Kong date back to 1921. The present legislation governing these matters is the Landlord and Tenant (Consolidation) Ordinance.

      The legislation is complicated but is under constant review to improve its working and to achieve the objective, recommended in 1981 by a Committee of Review and endorsed by the government, that as soon as circumstances permit, rent control should be phased out.

      At present, statutory controls apply only to domestic premises in the private sector unless otherwise excepted. Tenants are afforded rent increase control and security of tenure. Unless a tenant voluntarily vacates the premises, a landlord must apply on certain specified grounds and obtain an order from the Lands Tribunal before he can recover possession.

Heavy penalties are prescribed for harassment of a protected tenant with intent to induce him to leave. However, provisions exist to facilitate negotiations by which the parties may reach an agreement whereby the tenant surrenders his protected tenancy in exchange for a consideration.

      The Rating and Valuation Department publishes explanatory pamphlets to help people understand their position in relation to the legislation, and provides an advisory and

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mediatory service to deal with the many practical problems arising from rent controls. It also operates a scheme under which rent officers attend district offices on set days each week to deal with referred cases and answer enquiries on landlord and tenant matters.

Pre-War Premises

Legislation controlling rents of pre-war premises and providing security of tenure was instituted by proclamation immediately after World War II and in 1947 was embodied in the Landlord and Tenant Ordinance since re-enacted as Part I of the Landlord and Tenant (Consolidation) Ordinance.

       Part I previously applied to both domestic and business premises but as from July 1, 1984, it applies only to domestic premises. It restricts rents by reference to pre-war levels (standard rent). New or substantially reconstructed buildings are excluded from Part I controls.

       Increases in rents have been permitted annually in recent years, the latest being in July 1985 when the legislation was amended to provide for permitted rents to be 27 times (previously 21 times) the standard rent. However, in no case is the permitted rent to exceed the prevailing market rent. The Commissioner of Rating and Valuation is empowered to certify the standard rent and the prevailing market rent.

       There is provision in the legislation for the exclusion from control of premises for the purpose of redevelopment, and generally possession is subject to the payment of compensa- tion to the protected tenants. Jurisdiction under Part I is exercised by the Lands Tribunal while technical functions are performed by the Commissioner of Rating and Valuation.

Post-War Premises

Comprehensive rent control legislation affecting post-war domestic premises has been in force in one form or another since 1963 - apart from the period between 1966 and 1970 - and is now embodied as Part II of the Landlord and Tenant (Consolidation) Ordinance.

       Part II, which provides security of tenure and controls rent increases, now covers the majority of tenancies and sub-tenancies in post-war domestic premises completed or substantially rebuilt after August 16, 1945. It does not, however, apply to tenancies in buildings first certified for occupation after June 18, 1981, nor to new lettings created on or after June 10, 1983, nor with effect from December 19, 1985 to tenancies of premises having a rateable value of or above $30,000 as at June 10, 1983.

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       Under Part II, landlords and tenants are free to agree on an increase in rent, but such agreements must be endorsed by the Commissioner of Rating and Valuation. Increases, except by agreement, are permitted only once every two years. Where an increase is not agreed, the landlord may apply to the commissioner for his certificate of what increase may be made to the current rent. From December 19, 1985, the permitted increase is arrived at by taking the lesser of (i) the difference between the prevailing market rent and the current rent, or (ii) 30 per cent of the current rent. However, if the increase so determined, when added to the current rent, results in a rent being less than 55 per cent of the prevailing market rent, the permitted increase will be an amount necessary to bring the current rent up to 55 per cent of the prevailing market rent. Both landlord and tenant are at liberty to apply to the commissioner for a review of his certificate and further to appeal to the Lands Tribunal against the commissioner's review.

       For domestic tenancies outside these controls, Part IV of the Landlord and Tenant (Consolidation) Ordinance provides a measure of security of tenure for a sitting tenant who wishes to renew his tenancy and who is prepared to pay the prevailing market rent on

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renewal. However, Part IV does not impose control on rents. Under these provisions, a new tenancy must be granted unless the landlord can satisfy the Lands Tribunal that he requires the premises for his own occupation or that he intends to rebuild the premises, or on one of the other grounds specified in the legislation. The parties are free to agree on the rent and terms for the new tenancy but failing agreement they can apply to the Lands Tribunal for a determination.

The scheme under Part IV is intended as a permanent framework regulating the relationships of landlords and tenants for nearly all domestic tenancies not otherwise subject to the Part I or II controls. Moreover, there are provisions enacted in June 1984 enabling tenancies to be transferred, under certain statutory conditions, from the ambit of Part II to Part IV.

11

Land, Public Works and Utilities

煙韞

THE setting up of the Sino-British Land Commission in May was the major development in 1985. The main function of the commission is to conduct consultations on the implementa- tion of Annex III to the Sino-British Joint Declaration on the future of Hong Kong which sets down the principles governing land leases and other related matters, following the entry into force of the Joint Declaration. The commission, made up of three senior officials from each side, is based in Hong Kong and met regularly during the latter half of the year. Another development during the year was the establishment of the Land and Building Advisory Committee to replace the former Special Committee on Land Supply and the former Building Development Advisory Committee. The chairman and eight members of the new committee are drawn from the private sector; most of them represent professional and business interests in the field of land development and building. Its terms of reference provide for it to advise the government on a wide range of issues, including the adequacy of land development programmes and of the policies and procedures relating to land, buildings and the construction industry. The committee has established sub-committees on real estate, land supply and legislation as well as a steering committee to oversee the setting up of a Land Development Corporation.

The primary objectives of the government's lands and works policies are to ensure an adequate supply of land to meet the needs of both the public and the private sector and to optimise the use of that land within the framework of land use zoning and development plans. Hong Kong's limited land resources must be fully exploited if the competing demands for land for housing, commerce, industry, transportation, social services and community facilities are to be met. The Land Development Policy Committee, chaired by the Chief Secretary, is responsible for overseeing all aspects of the physical development of the territory and for approving, in principle, all major proposals affecting the development or planned use of land.

      Policy responsibility for land, public works and private building rests with the Secretary for Lands and Works who heads a branch which, in addition to its policy functions, monitors the performance of the six departments in the Lands and Works group, namely the Lands, Building Development, Engineering Development, New Territories Develop- ment, Water Supplies and Electrical and Mechanical Services Departments. He is chairman of the Town Planning Board and also of the Development Progress Committee which is responsible, among other things, for considering and approving detailed planning briefs and planning layouts for development areas in accordance with standards laid down by the Land Development Policy Committee.

      The development of land through public works projects is one of the largest items on which the government incurs expenditure. Projects financed through the Public Works Programme include the formation and reclamation of land; its servicing by the provision of

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roads, drains, sewers and water supplies; the construction of highways, bridges and tunnels, port and airport works; public buildings; railway works; and the disposal of liquid and solid wastes.

In 1985-6, funds for capital works amounted to $5,864 million, about 15 per cent of the government's total expenditure. The largest portion, $3,168 million, was for the develop- ment of new towns. Some $939 million was earmarked for expenditure on roads, $1,762 million on new buildings and $619 million on waterworks. In addition, $920 million was allocated for the acquisition of leased land for the projects involved. Details of the more important projects are contained in this chapter and in Chapters 12 and 19.

Apart from its development for public purposes, land is also required for private commercial, residential and industrial development. All land in Hong Kong is owned by the Crown and its disposal by lease for private development provides an important element of government revenue. It was originally estimated that around $1,700 million might be realised from land transactions in 1985-6 but, in the event, the upturn in the property market was reflected in higher than expected sale prices for several key sites and this estimate has since been revised upwards to $3,600 million.

The initial results of a series of strategic land use and transport planning studies were announced in 1984. These studies look beyond the present new town development programmes and identify a wide range of potential development options which will provide ample scope for still further growth during the 1990s and well into the next century. Following comparison of different strategies, two alternatives have been identified as the most promising in terms of meeting the continuing need for new land for population growth and further development of the territory's economic infrastructure.

     Certain harbour reclamation proposals are favoured under both strategies. It is therefore concluded that first efforts beyond existing programmes should focus on these further reclamation areas, together with maximising the potential of areas already committed for development. Further work on the 'common component' areas continued in 1985, to determine the feasibility of each project in the light of particular planning, engineering and environmental considerations and to draw up a preliminary programme for implementing the necessary works.

Land Administration

The Lands Department co-ordinates all aspects of land administration throughout the territory. In addition to its headquarters, the department has 12 district land offices: two on Hong Kong Island, two in Kowloon and eight in the New Territories. District lands officers are responsible for most aspects of land administration and land disposal, while the headquarters formulate territory-wide policy and give guidance on more complex matters.

Land Supply

All land in Hong Kong is owned by the Crown which sells or grants leasehold interests. In the early days, leases were for terms of 75, 99 or 999 years, subsequently standardised in the urban areas of Hong Kong Island and Kowloon to a term of 75 years, renewable at a reassessed annual rent under the provisions of the Crown Leases Ordinance. Leases for land in the New Territories and New Kowloon were normally sold for the residue of a term of 99 years less three days from July 1, 1898.

As from May 27, 1985 (the date of entry into force of the Sino-British Joint Declaration), the policy with regard to land grants and leases has been changed to accord with the provisions of Annex III to the Joint Declaration. In essence, normal land grants throughout

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      the whole of the territory are now made for terms expiring not later than June 30, 2047. They are made at a premium and nominal rental until June 30, 1997, after which date an annual rent equivalent to three per cent of the property's rateable value will apply. Leases expiring in or before 1997, with the exception of short-term tenancies and leases for special purposes, may also be extended to 2047 under the provisions of the Joint Declaration and steps are being taken to enact the necessary legislation for this purpose.

      The first priority with regard to land supply is to make available sufficient land for the government's development programmes, including the public housing programme. Land for the Hong Kong Housing Authority's public rental estates is provided free by the government, as is land for the residential element of the authority's Home Ownership Scheme. Land for the rental estates constructed by the Hong Kong Housing Society, a non-profit-making body with aims similar to those of the Housing Authority, is provided on concessionary terms. Land is also granted by private treaty, at nil or nominal premium, to non-profit-making charitable institutions which operate schools, hospitals, and social welfare and other community services in accordance with the government's policy objectives.

Most land available for private sector commercial, industrial or residential development is sold by public auction or tender. The formulation of overall targets for the production and sale of land is carried out under the auspices of the Land and Building Advisory Committee. Regular auctions are held by the government and a six-monthly provisional government land sales forecast is published twice a year. In the towns of the New Territories, however, where much of the land required for development has to be resumed, a high proportion of land is disposed of by tender. Since 1984, it has been possible for the holders of Land Exchange Entitlements to bid in auction and tender sales of New Territories sites and certain urban area sites by offering surrender of these entitlements in lieu of cash. However, owing to the upturn in the property market in 1985 and the consequential increase in the value of these entitlements, owners and developers were less willing to take up this option.

Leases for certain special purposes, which have particular site requirements or other factors which would make public auction inappropriate, are also offered for sale by public tender. Such special purposes include capital intensive industry, introducing higher technology which cannot be adequately housed in more conventional multi-storey flatted factory buildings. Such sales are initiated only in response to formal applications and, in certain circumstances, may be concluded by private treaty, subject to the approval of the Governor in Council.

Land Office

The issue, renewal, variation and termination of government leases are dealt with by the Land Office, a division of the Registrar General's Department.

Records of transactions relating to land on Hong Kong Island, in Kowloon, New Kowloon (with a few exceptions) and some of the urban areas of the New Territories are kept at the Land Office. Records relating to transactions affecting the remainder of the New Territories and the few exceptional New Kowloon lots are kept at District Land Offices.

      The Registrar General's Department is assuming responsibility for land registration throughout the New Territories under a phased programme: the District Land Offices in Tsuen Wan and Yuen Long were taken over in 1982, the Sha Tin office in 1983, the Sai Kung office in 1984 and the Tuen Mun office in 1985.

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      The Land Office is responsible for the registration of all instruments affecting land; the drafting, completion and registration of conditions of sale, grant and exchange of government land; the granting of mining leases; the registration of owners' corporations; the apportionment of government rents and premia; and the recovery of outstanding rents. It also provides conveyancing services for the Housing Authority in connection with the sale of flats built under the Home Ownership Scheme and for the Financial Secretary Incorporated in connection with re-grants, interest-free loans to schools and the purchase of properties for government staff quarters and group housing schemes for the elderly. The Land Office gives legal and other advice to the government on matters relating to land.

Since June 1981, under the Land Registration Ordinance, all memorials delivered to the Land Office for registration have been microfilmed. All the 2 096 156 memorials registered before that date had been microfilmed by the end of 1984. They have been transferred to satellite storage and are available for search at the Land Office in microfilm form only.

Work on the computerisation of Land Office register cards, with a view to introducing a computerised land registration system, continued on schedule during the year.

      The Land Registration Ordinance provides that all instruments registered under it shall have priority according to their respective dates of registration. This provision applies unless they are registered within one month of execution, in which case priority generally relates back to the date of the instrument. In the case of charging orders and pending actions, priority runs from the day following the date of actual registration. The ordinance also provides that unregistered instruments, other than bona fide leases at a rack rent for any term not exceeding three years, shall be null and void as against any subsequent bona fide purchaser or mortgagee for valuable consideration. Registration is therefore essential to the protection of title, but does not guarantee it.

During the year, 262 934 instruments were registered at the Land Office, compared with 176 625 in 1984. Detailed statistics are at Appendix 29. At the end of the year, the card index of property owners contained the names of 498 843 owners, an increase of 30 828 over the previous year. Some own several properties throughout the territory, but most are owners or part-owners of small, individual flats.

Important Transactions

Important land transactions in 1985 included the sale by public auction of a site on Hong Kong Island of 10 690 square metres for commercial and/or residential development. This site is located in Queensway and was part of the former Victoria Barracks.

      A further site of 3 400 square metres on Hong Kong Island, situated in Harbour Road, Wan Chai, was also sold by public auction for commercial or hotel development. Both this site and the Victoria Barracks site produced keen bidding, indicative of the upturn in the property market following the initialling of the Sino-British Joint Declaration in 1984.

      The sale by private treaty grant to the Mass Transit Railway Corporation of a site of about 27 hectares for its Pak Chai Wan depot was completed in April. Comprehensive development above the depot will provide 27 000 square metres of commercial floor space, about 7 500 apartments and a full range of supporting facilities. The development will be phased, with full completion expected in seven to 10 years' time. Pak Chai Wan is one of seven sites granted by private treaty to the MTRC for commercial and residential development at stations located along the route of the Hong Kong Island section of the railway which came into operation in May.

In Kowloon, a site of 6 400 square metres at the junction of Canton Road and Peking Road in the busy Tsim Sha Tsui tourist area was sold by auction for commercial and/or

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     residential development. This site also produced keen bidding, being one of the last major commercial sites available in this district.

       In the New Territories, sites continued to be sold in the new towns for private sector development. Of particular interest was the sale by public tender of a 7.3 hectare site on newly formed land at Ma On Shan overlooking the Shing Mun River and Sha Tin New Town. The tender was awarded in March and the purchaser proposes a development which will provide 4 000 flats for sale to purchasers within limited income groups nominated by the Housing Authority.

Environmental Improvement and Urban Renewal

      Environmental improvement, particularly with regard to the provision of open space, continued to be given impetus in 1985. About $30 million was spent to acquire private properties within those sites earmarked for open space and government, institutional and community uses in the town plans for the urban areas. Of particular note was the resumption in July of 9 400 square metres of private land in Kowloon City for the construction of Stage II, Phase II, of the Carpenter Road Park. Considerable efforts were also made towards assembling project sites that had been partially acquired in the urban improvement districts of Western, Wan Chai and Yau Ma Tei.

      After evaluating the results of the pilot scheme in 1984 to resume private streets in residential areas, a programme to acquire seven private streets was formulated. These streets, in multiple and sub-divided ownership, were in a poor state of repair. The transference of ownership of these streets has enabled the government to effect proper repair works and a traffic management scheme, which will greatly improve the environment of the residential areas concerned.

      It is also government policy, in certain areas, to modify old lease conditions which restrict the development permitted on a lot in order to allow redevelopment complying with the applicable town planning requirements.

      A premium equivalent to the difference in land value between the development permitted under the existing lease and that permissible under the new lease terms - is normally payable for any modification granted.

      To facilitate the process of urban renewal in areas where satisfactory redevelopment is inhibited by factors such as multiple ownership of properties, small size of the site or obsolescent layout, the government has decided that a Land Development Corporation should be established. The corporation's task will be to negotiate the surrender of existing properties and to oversee comprehensive redevelopment of the area. The Town Planning Division of the Lands Department has been undertaking studies to identify areas which would be suitable for redevelopment in this way.

Acquisition for Public Purposes

When private property needed for carrying out public works projects cannot be acquired by negotiation, the use of compulsory powers becomes necessary. Property may then be acquired under either the Crown Lands Resumption Ordinance or the Land Acquisition (Possessory Title) Ordinance, the Mass Transit Railway (Land Resumption and Related Provisions) Ordinance, or through the Roads (Works, Use and Compensation) Ordinance in the case of land required for road projects. These ordinances provide for the payment of compensation based on the value of the affected properties at the date of reversion. If agreement cannot be reached on the amount payable, either party can refer the claim for compensation to the Lands Tribunal for determination.

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When it is necessary for the government to acquire private land for new town. development in the New Territories, power is exercised under the Crown Lands Resump- tion Ordinance and statutory compensation is paid for the extinguishment of rights conferred by a lease. In practice, a system of ex-gratia compensation applies with enhanced rates paid for land situated within the new town development areas. In the case of building land, the ex-gratia compensation is paid in addition to the assessed statutory compensation. The compulsory acquisition of marine rights, usually required for reclamation projects or the grant of pier leases, is effected under the Foreshore and Sea-bed (Reclamations) Ordinance. This ordinance, enacted in August to replace two previous ordinances, provides for the lodging of objections to a scheme and for payment of compensation. Private rights over foreshores or seabed affected as a result of road projects are dealt with under the Roads (Works, Use and Compensation) Ordinance.

      The need for land for development continued to grow and, during 1985, some 1.77 million square metres of private land were acquired in the New Territories in order to carry out various public works projects. These included the development of various phases of the Junk Bay New Town and Fanling New Town, the formation of a Light Rail Transit Reserve in the Tuen Mun and Yuen Long Corridor, the vehicular border link at Lok Ma Chau (Shenzhen River Bridge), the New Territories Trunk Road system (the section from Au Tau to Fan Kam Road) and the Route 5 highway from Sha Tin to Tsuen Wan (Shing Mun section). The total land acquisition and clearance costs for these projects was about $960 million.

     During the year, about $25 million was paid in compensation for land and buildings acquired for various road projects, either under compulsory powers or by agreement, in the urban areas of Hong Kong Island and Kowloon. These projects included the construction of the West Kowloon Corridor (Stage IV), the external road network in connection with the Whampoa Dockyard Redevelopment and the improvement of Victoria Road on Hong Kong Island.

Land Development

In the 1985-6 financial year, land development was still the largest item of expenditure within the Public Works Programme, with some $1,300 million budgetted for new projects to start in the new towns and rural townships in the New Territories and $90 million for Hong Kong Island and Kowloon. Works included the completion of reclamation and formation of a total of 580 hectares of land in the New Territories and 20.6 hectares in the urban area.

Development of the New Towns and Rural Townships

The impetus for the new towns development programmes was the drawing up, in 1972, of a major housing programme, the objective of which was to provide proper housing for 1.8 million people, the majority of whom would be accommodated in new towns in the New Territories. Since then the new towns programme has been extended into the 1990s and extensive development beyond the 'first generation' of the new towns - Tsuen Wan, Sha Tin and Tuen Mun - is underway in the market towns of the northern New Territories and at Junk Bay on the Sai Kung peninsula. In 1987, major reclamation will begin at Tin Shui Wai in the northwestern New Territories, where a further 140 000 people will be housed by the 1990s. On completion of present development programmes, the population of the New Territories will have risen to nearly 3 million people, compared with the present two million and less than half a million 15 years ago.

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To ensure proper co-ordination of the major task of planning and constructing the new towns, the New Territories Development Department was established in 1973. The department is constituted on a multi-disciplinary basis and includes professional officers with expertise in civil engineering, town planning, architecture and landscaping. The department works closely with the Housing Department in implementing the public housing programme and with the City and New Territories Administration in fostering the growth of new well-balanced communities.

A major contribution is also being made by the private sector in the provision of consulting services to the new town development offices and in a range of privately financed housing developments and facilities.

Tsuen Wan

The new town development plan covers an area of 2970 hectares and the present population is 700 000. When all major development is completed in the early 1990s, the new town will be home to about 790 000 people and offer job opportunities to 280 000 workers in the industrial sector.

Reclamation is now in progress in Kwai Chung to provide for extensions to the container port, now with the third largest throughput in the world, plus land for container related activities, and in Tsuen Wan Bay to provide land for open space and recreational facilities and government, residential and industrial uses. On this reclamation, adjacent to the Tsuen Wan Town Hall, a new ferry pier has been opened and behind this the territory's largest transport complex is now completed.

Cheung Ching, the first of six large public housing estates on Tsing Yi Island, has been completed. The first four phases of Cheung Hong Estate have also been completed, and the remaining fifth phase should be ready in early 1986. In the southern half of the island, large areas of land produced by earthworks and reclamation are intended for specialist and land intensive industries. The Tsing Yi North Bridge is under construction and is expected to be completed by mid-1987. This will greatly improve access to and from the island and will promote rapid development in the north and in the town centre.

      The greater proportion of the new town's population now lives in public housing. There is also considerable private sector activity. For example, 20 000 people are now housed above the Tsuen Wan and Kwai Fong Mass Transit Railway Stations and at both ends of the Tsuen Wan Bay reclamation substantial industrial areas have been re-zoned for comprehensive residential development.

Transport continues to be a matter of prime interest in the new town. The Tsuen Wan Bypass, across the Tsuen Wan Bay reclamation, was opened in November. Projects about to start include the Route 5 highway to Sha Tin and the Texaco Road improvement and connection to the Tsing Yi North Bridge.

An extensive programme to provide additional park and recreational facilities is under- way to meet the needs of an expanding population. More swimming pools, games halls and squash courts are planned, together with the reconstruction of Yeung Uk Road Sportsground as a modern stadium.

About 1 400 hectares of serviced, developed land already exist within the new town and another 500 hectares will be made available in the future. About 30 per cent of this will be used for public housing and community facilities and a further 20 per cent set aside for open space and recreational facilities. Consideration is also being given to the comprehensive development of Sham Tseng, farther along the coast, for a planned population of up to 100 000 people.

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Sha Tin valley contains some 1 700 hectares of serviced land which include 450 hectares of reclamation. The development of Ma On Shan Phase 1, as an extension of the new town, will add another 230 hectares, of which 110 hectares will be reclaimed land.

      Since 1974, the population of Sha Tin has grown from 25 000 to well over 300 000. The ultimate population of 750 000 will be reached by the mid-1990s. About 55 per cent of the population will be housed in over 20 public housing estates (including Home Ownership and Private Sector Participation Schemes) with the remainder in private development schemes or in existing villages.

One of the features of Sha Tin is its recreational and social facilities along the Shing Mun River. Added to the Sha Tin Racecourse and the Jubilee Sports Centre will be an international rowing course, a stadium, swimming pool complex and squash and tennis courts. All these will be linked by a proposed river-side promenade and culminate in a 9.5 hectare town park which will be completed in 1986. The town park will in turn link with the town centre, where New Town Plaza, a major commercial complex, was completed in late 1984 and has a pedestrian connection to the Kowloon-Canton Railway's Sha Tin Station. Alongside this, construction of a cultural complex and other commercial office and hotel accommodation is underway, reflecting the fact that the new town is rapidly maturing.

Other important facilities include the Prince of Wales Hospital, providing over 1 400 beds, and the Chinese University of Hong Kong. Plans for other hospitals, a college of education, and a technical institute are being considered.

Tuen Mun

The new town already houses 265 000 people and it is estimated that by the mid-1990s the total population will exceed 500 000.

High density development is concentrated on reclamation areas in Castle Peak Bay and land formed in the adjacent valley floor. The new town contains eight public housing estates accommodating more than 165 000 people in addition to over 40 000 people accommodated in housing built under the Home Ownership and Private Sector Participa- tion Schemes. Sites are being formed on hillsides to accommodate mainly medium and low density residential developments.

Areas of high landscape value, which give Tuen Mun its impressive natural setting, are being preserved as far as possible.

       About 30 hectares of industrial land within the core of Tuen Mun have been developed, accommodating a wide range of light manufacturing industries and godowns. New sites are being formed and serviced to meet the growing needs of various industrial operations. Development of land intensive marine oriented industries and cargo handling facilities is proposed at suitable locations along the waterfront.

To the west of the town, Castle Peak Power Station and a cement manufacturing plant are substantially complete.

      Development work has started on a new district shopping centre, and a cultural complex in the town centre which will be a focus of the new town's social and economic activities, while the first phase of the new town park is complete.

      The six-lane Tuen Mun Road, a high-speed hoverferry service to Hong Kong Island and the Mass Transit Railway extension from Kowloon to Tsuen Wan have brought the new town within much easier reach of the main urban areas. A Light Rail Transit System, due to start operation in the late 1980s, will provide rapid tram links within the town and between Tuen Mun and Yuen Long.

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Tai Po is located at the northwest extremity of Tolo Harbour, about 20 kilometres north of Kowloon by road, and the rapid build-up in population in recent years has overshadowed its traditional role as a market centre. The new town (including the Shuen Wan area) covers about 3 400 hectares and in 1985 had a population of about 120 000. Under present plans this will grow to 270 000. About 170 000 people will be accommodated in six planned public housing estates, four of which will include an element of home ownership. Private residential areas are expected to house approximately 100 000 people.

      To cope with this growth in population, transport links with the urban area have been improved. In September, the Governor opened the Sha Tin-Fanling section of the New Territories Trunk Road, which, incorporating the Tai Po Bypass, provides residents of Tai Po with an uninterrupted dual carriageway all the way to Kowloon. This augments the Kowloon-Canton Railway. Job opportunities for residents of the new town are provided at the Tai Po Industrial Estate.

Fanling

Fanling New Town, which includes Fanling, Luen Wo Hui, Shek Wu Hui and Sheung Shui, covers 780 hectares and lies about eight kilometres north of Tai Po. Connections with Yuen Long, Sha Tin and Tai Po will be greatly improved on completion of the New Terri- tories Trunk Road, now under construction. Fanling Bypass, which forms part of this route, was opened in June and since the opening of the Sha Tin-Fanling section of the trunk road the new town has enjoyed a rapid road link with Kowloon, uninterrupted by traffic lights. The population of the new town reached over 100 000 during 1985, its projected total capacity being about 220 000. About 100 000 people will be accommodated in public housing including Home Ownership schemes. The existing retail and commercial 'core' of Shek Wu Hui and Luen Wo Hui will be redeveloped and the On Lok Tsuen industrial area is being improved. Provision has been made for the retention and expansion of existing villages.

Yuen Long and Northwest New Territories

The population of Yuen Long now exceeds 80 000 and the projected total for the year 2000 is more than 160 000. The town will be linked to Tuen Mun by the new Light Rail Transit System, construction of which will start in early 1986. A major new public housing estate, which will accommodate more than 30 000 people by 1990, is being built at Long Ping to the northwest of the town. An industrial estate at Wang Chau and an industrial area nearby at Tung Tau together provide over 70 hectares of serviced industrial land.

In addition to the further development of Yuen Long, another major urban development project has commenced at Tin Shui Wai, with a planned population of over 140 000. Tin Shui Wai is an area to the west of Yuen Long, at present occupied by fish ponds. Preparatory engineering works began in 1984 and land formation work is programmed to start in early 1987. The first new town residents will move in during 1990-1.

A study carried out for the government by consultants on the remaining rural areas in the northwestern New Territories was completed in 1984. The study proposes a comprehensive planning strategy to direct future development in an orderly manner, to upgrade existing settlements with limited intervention by the government, and to protect the small but valuable amount of agricultural land in the area. The major areas of concentrated urbanisation will be limited to Yuen Long, Tin Shui Wai and parts of the Tuen Mun-Yuen Long Corridor.

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Junk Bay and Sai Kung The first phase of Junk Bay New Town is being planned around two main districts, to accommodate about 175 000 people. The two districts will be served by a centrally located and easily accessible commercial complex which will include open space and community facilities and a transport interchange. Formation of land for the first public housing estates for 47 000 people has been completed and estate construction is underway. Initially, the town will be served by an improved Po Lam Road linking Junk Bay with East Kowloon. In future, the principal access will be via a new road tunnel, currently scheduled to open in 1990. If the territory's longer term housing needs require it, a second phase of the new town may be considered.

Outside the new town, plans for Sai Kung District have given priority to developing recreation potential and to discouraging new urban development beyond selected develop- ment areas. A planning study for the future development of Sai Kung Town and its immediate hinterland has been completed and an outline development plan for a design population of 40 000 people has been finalised.

Islands District

In recent years, the outlying islands have taken on an increasingly important role in the life of Hong Kong. As part of the Island Development Programme, projects continued during the year - both planned and underway to provide for existing and future growth in population, to upgrade living standards, and to improve general facilities for the increasing number of visitors to the islands. Although development remains generally low-rise and rural in character, the programme of works is large and diverse, concentrating mainly on the population centres of Mui Wo and Tai O on Lantau, and on Cheung Chau and Peng Chau. Work on the construction of a new rural public housing estate at Mui Wo for about 2 000 people will start in early 1986, to add to the existing rural public housing estates at Tai O and on Cheung Chau. More facilities will also become available throughout the district, including ferries, schools, market buildings, recreational facilities, sewage treatment plants and abattoirs.

Other New Development Areas

During the year, activity focused on reclamation works on the northeastern and south- western coasts of Hong Kong Island and the western part of the Kowloon peninsula.

On Hong Kong Island, five hectares were reclaimed at Chai Wan and 1.5 hectares at Ap Lei Chau for road construction, industrial development and government uses. Part of Telegraph Bay was under reclamation and the year saw the formation of two hectares of land. Reclamation at Aldrich Bay and Aberdeen also provided respectively one hectare and 0.3 hectare of much needed space for road improvements and other uses.

In Kowloon, reclamation at Cheung Sha Wan formed eight hectares for the construction of the West Kowloon Corridor, a wholesale food market and industrial facilities and amenity areas. To the north of Stonecutters Island, 2.8 hectares of land were reclaimed to accommodate the North West Kowloon Sewage Treatment Plant.

In the eastern part of the New Territories, the site of the Tai Po Industrial Estate was expanded by seven hectares as part of the third and final stage of development there.

Town Planning

The main aim of town planning in Hong Kong is to provide a good living and working en- vironment for its present and future population. This applies both to the new development

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areas, such as Tuen Mun and Sha Tin and to the older congested urban districts, such as Yau Ma Tei and Western District where the need for improvement is most apparent. Town plans can be broadly classified into two groups: statutory and administrative. Their purpose is to control land use and building volume on individual sites to meet the demands of the territory's growing population and to ensure the provision of the required com- munity facilities and public utility services.

Statutory plans for existing and potential urban areas are prepared under the provisions of the Town Planning Ordinance, under the direction of the Town Planning Board. These statutory outline zoning plans show areas set aside or zoned for residential, commercial, industrial, government, institutional and other purposes. They act as important links between the government and the public, providing a guide to public and private investment by indicating the future broad land use pattern, including major public works for developing areas. Once a statutory plan is gazetted for public inspection, it has statutory effect. Under the Buildings Ordinance, the Building Authority may refuse to give approval to any plan of building works which would contravene any draft or approved plan pre- pared under the Town Planning Ordinance. To avoid piecemeal redevelopment and to encourage comprehensive urban design, suitable areas are designated as comprehensive redevelopment areas on statutory plans. Under this designation, redevelopment may only proceed in a comprehensive manner according to master layout plans approved by the Town Planning Board.

       During the year, the board published 25 draft statutory plans including five new draft outline zoning plans for Mong Kok and Yau Ma Tei East, Mid-levels East, Jardine's Lookout and Wong Nai Chung Gap, Ho Man Tin, and 20 amended plans. It considered 12 objections to the published plans and, as a result, some of the draft plans were amended for further public examination. By the end of the year, 31 out of 41 planning areas in the main urban areas were covered by gazetted or approved statutory plans. In the New Territories, there were seven draft statutory plans covering Tsuen Wan, Kwai Chung, Tsing Yi, Sha Tin, Tai Po, Tuen Mun and the South Lantau coast.

       The Town Planning Ordinance makes provision for a Schedule of Notes to be attached to each statutory plan. This schedule shows the land uses permitted in a particular zone together with other uses for which the Town Planning Board's permission must be sought. This provision for applications for planning permission allows greater flexibility in land use planning and improved control of development to meet changing needs. During the year, the board considered 182 applications, compared with 142 the previous year. Should the board refuse to grant permission, the applicant may apply for a review of the decision. In 1985, there were four applications for review, compared with 10 in 1984.

       Outline development and layout plans are used administratively within the government to guide development. Compared with statutory plans they are normally drawn to a larger scale, showing road proposals and the disposition of sites in greater detail. They are action plans enabling land to be prepared and released for public and private development. Exam- ples of such plans prepared during the year include those for Victoria Barracks, Tsing Yi North, Tseng Lan Shue - Tai Po Tsai, Silverstrand and for several other planning areas in Kwai Chung, Tai Po, Fanling and Tin Shui Wai. In addition, many existing plans were revised to take account of changes in population forecasts, government policies, planning standards and other trends.

       Guidelines for the reservation of land for various uses, standards of provision for community facilities and locational and site requirements crucial to the preparation of town plans are contained in the Hong Kong Planning Standards and Guidelines - changes to

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which must be approved by the Land Development Policy Committee. The document is constantly kept under review to take account of changes in government policies, demog- raphic characteristics and other social and economic trends. Sections revised during the year dealt with electricity, gas, telephone services, radio and broadcast communications, community and commercial car parking, noise, waste management and planning, rural environment and urban landscape.

      Surveys in land and floor uses covering the whole territory were conducted or updated to provide the basic input in the preparation of both statutory and administrative plans. Special planning studies, such as the impact of office automation and the forecast of land supply in the territory, were also carried out during the year to provide information in the formulation of land development policies. To expedite the retrieval of planning informa- tion and to achieve greater efficiency and accuracy, work began on developing and maintaining computer systems for the storage and processing of planning data.

      During the year, work continued on the formulation of a new type of planning statement setting out the implications of the government's overall planning and development objectives as they apply to each of the five sub-regions into which the territory has been divided for planning purposes. Once all these statements are formalised and approved, they will describe the territorial context within which district and local plans, both statutory and administrative, will be prepared, revised, assessed and monitored.

Survey

     The Survey Division of the Lands Department is mainly engaged in the revision and production of topographical and special use maps of Hong Kong, land title boundary surveys, geodetic surveys, large scale basic mapping, aerial photography and photo- grammetry, and reprographic services.

The territory has a comprehensive map coverage from the basic mapping series at 1:1 000 scale to the 1:200 000 scale topographic series. The cyclic revision programme for some 3 500 standard map sheets was maintained and the new 1:5 000 series was extended into the rural areas of the New Territories. The Hong Kong Streets and Places Guide and the Countryside Series Sheet 3 for Lantau and Islands were redesigned and reprinted. There was an increase in requests from other government departments for cartographic services for special uses such as civil aviation requirements, transport, country parks, electoral boundary maps, and a new geological series at 1:20 000 scale covering the entire territory.

      There is a high demand for cadastral surveys in the New Territories with the emphasis shifting from the new towns to the village areas where boundary surveys for village house lots are being carried out. In the urban areas, cadastral surveys for the alienation of government land, allocation of land for government purposes and the re-establishment of boundaries of old lots for redevelopment remained the major tasks.

The geodetic control networks, both horizontal and vertical, have been maintained and extended as required for mapping, engineering and cadastral surveys.

      The Air Survey Unit, with the aid of the Royal Hong Kong Auxiliary Air Force, continued to provide aerial photography for engineering designs, volumetric calculations of quarries and reservoirs, environmental studies and the large scale mapping programme being carried out by the Photogrammetric Unit. Vertical and oblique photography, using an air survey camera in an RHKAAF helicopter, has been particularly useful in obtaining photographs of dangerous slopes.

      The processing of field survey data and plotting of record plans for cadastral surveys and large scale site plans has been rationalised with the installation of three sets of

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computer-plotters, one each in Hong Kong, Kowloon and Tai Po District Survey Offices. The in-house investigation into setting up a computerised land information system for the Lands Department was completed.

Public Building

In 1984-5, the Architectural Office of the Building Development Department completed 104 building projects under the Public Works Programme. Total capital expenditure, including that on minor works, was $1,565 million. In addition, the office's Maintenance Branch spent $356 million in carrying out maintenance and alteration work on 6210 government, Urban Council and British Forces buildings, including leased offices and quarters.

      The capital expenditure was some 20 per cent lower than the estimated sum of $1,995 million allocated in the Estimates and 27 per cent lower than the 1983-4 expenditure of $2,130 million. This drop was largely attributable to a reduction in spending on purchasing quarters for government officers and to delays in the start of some major projects, including the Hong Kong Cultural Centre and the new District Magistracy Building in Wan Chai.

      Tendering continued to be active and competitive. During the 12-month period to March 1985, tender prices showed only small fluctuations with an overall drop of less than one per cent, and increased only slightly in the last nine months of the year. During the same 12-month period, labour costs and basic material costs increased by about four per cent and three per cent respectively.

Major projects completed during 1985 included the Harbour Building Government Offices in Connaught Road which provided 30 000 square metres of office accommodation including a post office on the first floor. This building also houses the Hong Kong Area Traffic Control Centre. The basement and foundations for another government office complex, the Harbour Road development, near Wan Chai waterfront, were completed in May. In June, part of the basement was sold by auction to a developer who plans to construct an office tower on that part of the site. Developments on the remaining parts of the basement in this multi-phased scheme include a 30-storey building housing District and Magistrates Courts in the lower portion with offices for other government departments in the upper portion. The courts in the lower portions of the lower block are due for completion in mid-1986 and the offices above are expected to be occupied by the end of that year. Further developments are in hand on this complex, with the design of one of two proposed 49-storey office towers nearing completion; its construction is expected to start in late 1986. Construction of a fire station at the complex began in October and will be completed by September 1986, allowing the existing adjacent fire station to be demolished to provide part of the site for the Hong Kong Convention and Exhibition Centre.

      The construction of the Queensway Government Offices, adjacent to the now completed Supreme Court Building, proceeded apace during 1985. Phase I of the scheme, comprising the whole of the low block and the first 16 floors of the tower block, were ready for occupation in November. Phase II, the 17th to 32nd floors, is due for completion in mid-1986. Completion of the remainder of the building, of 49 storeys, the tallest building project ever undertaken by the government, will be achieved by late 1986. Early possession of the first phase of the scheme means that the lower half of the building will be occupied and functioning while the upper part is still under construction.

      Conversion of the old Supreme Court Building was completed in October and it now provides a new home for the Legislative Council as well as new offices for Unofficial Members of the Executive and Legislative Councils (UMELCO). The exterior of this

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building, dating from the first decade of the 20th century, has been declared of historical interest. Careful restoration work has returned it to its original appearance, and although extensive internal modifications have been undertaken, the Central Chamber, which features the high domed ceiling of what was the original Great Court, has in essence been preserved, and is now in use as the Legislative Council Chamber.

      Expansion of the Kai Tak (Passenger) Terminal Building is well underway, the initial reprovisioning works having been completed as well as a new tower for airfield surface detection equipment. A new transport terminus on the former western carpark was also completed and has removed the taxi operations from the arrivals tunnel. Work on the major part of the passenger terminal extension started in December and is planned to be completed in early 1988. This work by necessity will be carried out while the airport is in full operation, and upon completion will provide a new baggage area and two new baggage reclaim loops at the arrivals level, an enlarged departure hall with two new check-in islands as well as extended lounges, offices and restaurant facilities. The expansion work will increase the passenger handling capacity of the airport from the present 10 million passengers a year to 18 million.

Expansion of the territory's medical facilities continued during the year, with several hospital contracts in progress. Work on the 1 600-bed Tuen Mun Hospital, to serve the northwestern part of the New Territories, progressed steadily, and is expected to be completed in 1988. This hospital is thought to be the largest now under construction in the world. Work on the adjacent nurses' quarters and training school began in July and is phased to be completed in late 1988. Site formation for the Queen Mary Hospital extension was completed at the beginning of the year and work then began on the superstructure which will comprise two new buildings, one of 29 storeys and one of 12 storeys which together will provide an additional 844 beds. This phase is expected to be completed in late 1988, when work will begin on upgrading existing wards eventually to provide a total of 2 000 beds by 1990.

Improvement works at the Tang Shiu Kin Hospital began in October with the start of construction of a new ward block which is due for completion in early 1988. Other reprovisioning and improvement works will follow in the existing buildings and these are due for completion by the end of 1989. The hospital will remain fully functional throughout this redevelopment.

In July, consultants were appointed for the Eastern District Hospital, polyclinic and staff quarters project in Chai Wan. Site formation work on this large project is now in progress and is due for completion at the end of 1986. The hospital development, estimated to cost around $1,310 million, will also include a nurses' training school. The development is spread over a nine hectare site and is projected for completion in 1991.

-

      The year saw the start of a project which is architecturally interesting and of great public interest the Hong Kong Cultural Centre adjacent to the Space Museum. The centre will be surrounded by a pedestrian piazza linked to the Tsim Sha Tsui promenade and will occupy an imposing position on the waterfront. One of the many interesting design features of the centre will be the suspended cable roof which will be a first in Hong Kong. Construction of this project is due for completion at the end of 1987. The final phase of the development, the Arts Museum on an adjacent site, is at an advanced stage of design.

At district level, the offices and bus station of the Civic and Cultural Complex in the Tuen Mun Town Centre were completed. The auditorium is due for completion in late 1986. Work on the Sha Tin Cultural Complex and Library also proceeded well during the year, it too being due for completion in late 1986.

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Various projects for the disciplined services were also completed. These included Phase I of Tai Lam Prison, a new workshop at Pik Uk Prison and Phase II of the expansion of the Drug Addiction Treatment Centre on Hei Ling Chau. Temporary reprovisioning of the Royal Hong Kong Auxiliary Police Force Headquarters was completed in October and demolition work for the first stage of the new Police Headquarters, at Arsenal Street, commenced at the end of the year. Sub-structure work will begin in mid-1986, and Phase I of this development, comprising a six-storey podium, is due for completion in 1988. Phases II and III of the development, comprising two adjacent 40-storey tower blocks, are in the planning stages.

       In addition to its own building contracts, the Architectural Office increased its involve- ment in joint ventures with private developers and with community facilities that are subvented by the government. Among the joint venture developments completed in 1985 were 142 residential flats in Ventris Road in Happy Valley, 84 of which were for the government, the new Hong Kong-Macau Ferry Terminal and the new Stock Exchange in Central District, 31 houses for high-ranking government servants in three mixed residential developments on Hong Kong Island, and 200 flats in King's Park, Kowloon, 120 of which were for the government.

Private Building

      In 1985, there was a higher level of private building activity than in each of the previous two years, and the number of new building proposals submitted to the Buildings Ordinance Office for approval increased in comparison. Private developers also showed interest in resuming several development schemes which had earlier been shelved to await a more favourable investment climate.

During the year, 644 proposals for private building development were submitted for approval. The usable floor area of building projects for which consent to begin work was given totalled 2712 416 square metres, which represented an approximate increase of 20 per cent compared with 1984. Occupation permits issued for completed buildings numbered 415, providing a total usable floor area of 2 906 556 square metres, an increase of 50 per cent over the previous year. The total sum spent on private building works, excluding land values, was $10,370 million, an increase of 49 per cent.

New residential developments still occupied a significant position. Phase I of the extensive Hung Hom Estate, managed by the Hong Kong Housing Society, and a large Private Sector Participation Scheme housing project at Kowloon Bay were both completed. Other sizeable residential developments at various stages of construction included the Whampoa Dockyard Redevelopment, the Kornhill Development and the Heng Fa Chuen Development.

Commercial developments completed during the year included the new 46-storey headquarters of the Hongkong and Shanghai Banking Corporation, and Phase I of the Exchange Square project. Development proposals for the Bank of China were approved and construction work on a new 70-storey building began.

Other types of development completed in the year included the Academy for Performing Arts, a second grandstand at the Sha Tin Racecourse, and Phase I (tower and podium) of the new Hong Kong-Macau Ferry Terminal. Proposals for a new Hong Kong-Canton Ferry Terminal Building, and for the Hong Kong Convention and Exhibition Centre on the Wan Chai Reclamation were submitted in 1985.

       There was a marked increase in the number of new hotel projects submitted to the Building Authority for approval. These numbered 15.

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In 1985, new legislation was introduced for the mandatory provision of facilities for the handicapped in certain categories of buildings. The review of other building legislation continued. Appeals and litigation cases concerning building law remained at about the same level as in 1984.

Since the establishment of the Control and Enforcement Branch in the Building Ordinance Office, in January 1984, there has been an increasing awareness, among members of the public, of the problems associated with illegal structures and unauthorised building works. Large scale enforcement operations, for example at a building in San Po Kong where more than 650 illegal extensions were removed, and at a new building in Kwai Chung in which over 1 100 illegal obstructive gates were taken down, attracted wide coverage in the media. In its second year, the branch made 21 154 inspections and issued 6 312 removal orders while 7 558 complaints were received. In an attempt to curb the proliferation of illegal structures, publicity through television and radio, and by posters, was stepped up. This initiative will be maintained and expanded.

With regard to the maintenance of dilapidated private buildings, the Building Authority closed 43 dangerous buildings, and served 620 orders requiring the demolition or repair of dangerous buildings, eight orders requiring remedial works to be carried out to dangerous slopes and 83 orders requiring repairs to defective drainage.

Apart from administering the Buildings Ordinance and allied legislation, the Buildings Ordinance Office also offered expert advice to various licensing authorities on the suitability of premises for the proposed licensed uses. In this respect, 2 684 applications for food businesses, 673 for places of public entertainment, 205 for schools, 61 for child care centres and 28 for oil storage installations were examined. The office also dealt with 373 applications for permitted work permits concerning the control of building construction noise for environmental reasons.

Port Works

Sections of seawall extending 900 metres were built around the coast of Hong Kong Island, with a further 450 metres constructed to the north of Stonecutters Island. For the disposal of industrial and domestic wastes and other developments, seawalls were also built at Junk Bay and Cheung Sha Wan. At Chai Wan, a 200 metre breakwater was completed to provide shelter for mooring vessels.

Following the completion of the North Point (East) Passenger Ferry Pier, an extension to an existing pier on Lamma Island was being constructed to improve ferry services. Other piers under construction included one for the Army and another for the Correctional Services Department.

Geotechnical Control

     Many of the government's building and civil engineering projects have to be constructed on the steep slopes which are common features of Hong Kong's terrain. The geotechnical aspects of these require careful consideration and are often responsible for a major part of the overall cost. To ensure that economic engineering solutions are achieved consistent with high standards of design and construction, the Geotechnical Control Office continued to offer its geotechnical advisory service for government projects. Under this service, the GCO undertook geotechnical designs for 39 projects and gave advice on 81 other projects to departments in the Lands and Works group. Examples of these include the Tai Hang Road widening undertaken by the Highways Office, the Table Hill Service Reservoir project by the Water Supplies Department, and the Diamond Hill Quarry Development project under the control of the Civil Engineering Office.

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       The Geotechnical Information Unit, which houses a large collection of geotechnical data, continued to provide an important service to the public as a reference centre for geotechnical information. As another service to the public, the Geotechnical Control Office published more reference publications with the aim of increasing the geological and geotechnical knowledge in Hong Kong. Publications during the year included: Review of Hong Kong Stratigraphy, Review of Superficial Deposits and Weathering in Hong Kong, Review of Tectonic History, Structure and Metamorphism of Hong Kong, and Bibliography on the Geology and Geotechnical Engineering of Hong Kong (2nd edition).

      The long-term programme of 1:20 000 scale terrain evaluation mapping of the entire territory, to provide adequate geotechnical information for planning and engineering feasibility purposes, was completed during the year. This information will be made available to the public in due course. Good progress was also achieved with the detailed geological survey mapping programme, and the first 1:20 000 scale map and the accom- panying explanatory memoir will go on sale in early 1986.

      As part of the long-term programme of landslip preventive measures, stabilisation works were completed on 34 slopes and retaining walls at a cost of $27 million, and works commenced on a further 35 slopes and walls. Expenditure on stabilisation works is continuing at a rate of about $80 million per year. The Geotechnical Control Office also continued its routine work of exercising control over the geotechnical aspects of all public and private building and civil engineering works. All new design proposals for works which involved site formation, slopes, earth retaining structures and deep excavations were checked to ensure that they attained the necessary standards of safety. A total of 3 900 design proposals were processed.

Quarrying

The total consumption of crushed rock aggregates in the territory amounted to approx- imately 15 million tonnes. Of the total tonnage of aggregate consumed, 60 per cent was obtained from six local contract quarries, and a further 20 per cent from the two government-operated quarries and a number of rock crushing plants associated with development works. The remaining 20 per cent was imported from China and consisted of both coarse aggregates and natural sand.

Water Supplies

      Full supply was maintained throughout the year. At the beginning of 1985, there were 428 million cubic metres of water in storage, compared with 529 million cubic metres at the start of 1984. The combined storage of Hong Kong's largest reservoirs, High Island and Plover Cove, was 371 million cubic metres. Rainfall for the year was 2 191 millimetres compared with the average of 2 225 millimetres. Water piped from China during the year totalled 319 million cubic metres. The Lok On Pai desalting plant was not operated and continued to remain as a 'stand-by resource'. The salinity of water at High Island remained at about 13 milligrams per litre while at Plover Cove the salinity varied from 66 milligrams per litre in January to 46 milligrams per litre in December.

A peak consumption of 1.95 million cubic metres per day was experienced, compared with the 1984 peak of 1.99 million cubic metres per day. The average daily consumption throughout the year was 1.75 million cubic metres, an increase of 2.3 per cent over the 1984 average of 1.71 million cubic metres. The consumption of potable water totalled 637 million cubic metres compared with 627 million cubic metres. In addition, 101 million cubic metres of salt water for flushing were supplied, compared with 90 million cubic metres.

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      Planning studies were completed for the improvement of water supplies to developments in eastern high level areas of Hong Kong Island and Kowloon, Sheung Shui, Fanling and Yuen Long including Tin Shui Wai, permanent supply to Ma On Shan, Junk Bay and its hinterland, and the improvement of the primary fresh water distribution system in the eastern Hong Kong Island area. The planning of an operational and service centre on Hong Kong Island was also carried out. Other studies in hand included improvements in flushing water supplies to developments in the central Hong Kong Island and southern Kowloon areas, Shau Kei Wan, Sha Tin and Tai Po, and new fresh water supplies to proposed developments on reclamations at Telegraph Bay, Kellet Bay and Siu Chai Wan.

      During the year, construction of the reception and distribution systems for future increases in the supply from China continued, with work commencing on the Tai Po Tau to Ngau Tam Mei aqueduct. The treatment works facilities at Yau Kom Tau were completed and construction work began at the Pak Kong treatment works and transfer facilities for supplying water to the Junk Bay New Town development and for augmenting supplies to Kowloon East and Hong Kong Island East.

      Design work began on laying three submarine mains from the mainland to Tsing Yi and Ma Wan and from Lantau Island to Cheung Chau to extend and improve water supplies to these areas. Design and construction work on projects for extending the supply systems in Sha Tin, Tai Po, Fanling, Sheung Shui, Tuen Mun and Junk Bay New Towns continued to progress satisfactorily. In addition, design work also proceeded on the extension and improvement of supplies to Ma Wan Island, Peng Chau Island and South Lantau and on improving the Kwun Tong salt water flushing system. Further progress was made on design work aimed at increasing the transfer of water within Hong Kong Island.

      Distribution systems were extended and enlarged to meet urban and rural demands in such areas as Sha Tin, Tai Po, Fanling, Tsuen Wan, Tuen Mun, Yuen Long, Junk Bay, Peng Chau and Lantau Island. Salt water for flushing was supplied to most areas on Hong Kong Island and the Kowloon peninsula as well as to Tsuen Wan, Kwai Chung, Tsing Yi and Tuen Mun in the New Territories.

Several mechanical and electrical installations for treatment works, pumping stations and service reservoirs were commissioned during the year. These included new treatment works and pumping stations at Sheung Shui and Yau Kom Tau, increasing the capacity of existing treatment works and pumping stations at Tuen Mun, a new fresh and salt water pumping station in Western District on Hong Kong Island, and boosting the capacity of pumping equipment at Sai Kung, High Island, Cheung Sha and Shek Pik.

New pumping stations were also put into service at Quarry Bay and at the River Ganges. The control and monitoring of water supply zones were enhanced for the eastern districts of Hong Kong Island and for the China Water Supply Scheme by the installation of Supervisory Control and Data Acquisition (SCADA) systems at the Eastern Treatment Works and Muk Wu 'B' Pumping Stations respectively.

     A new consumer enquiry centre was opened in Sai Kung, joining the existing centres in Causeway Bay, Mong Kok, Tsuen Wan, Sha Tin and Tai Po. The network continued to prove successful and plans are in hand to extend it throughout the territory.

Electricity

Kowloon and the New Territories including Lantau and a number of other outlying islands are supplied with electricity by the China Light and Power Company Limited (CLP), while Hong Kong Island and the neighbouring islands of Ap Lei Chau and Lamma receive their supply from the Hongkong Electric Company Limited (HEC). The two

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supply companies are investor-owned and do not operate under franchise. The government monitors the financial arrangements of the companies through the published Schemes of Control. Under these schemes, the long-term financing plans of the companies and any proposed tariff changes require the approval of the Governor in Council.

      In March, the government published a report by an American firm of consultants which had been employed to assess the adequacy of the government's arrangements for moni- toring the supply companies. The consultants concluded that the government's monitoring system has been adequate to ensure compliance with the terms of the Schemes of Control. The consultants also recommended a number of steps to strengthen the monitoring process, to ensure that this process keeps pace with the fast development of Hong Kong's electricity supply system and with the aspirations of consumers. These recommendations are being considered by a special working party responding to the Secretary for Economic Services. One recommendation which the government immediately endorsed was that consultants would be retained to examine the technical aspects of future financing plans submitted by either supply company.

       Generation of electricity in Kowloon and the New Territories is carried out by CLP in conjunction with three associated companies, Peninsula Electric Power Company Limited (PEPCO), Kowloon Electricity Supply Company Limited (KESCO) and Castle Peak Power Company Limited (CAPCO). The combined capacity of the four companies at the end of 1985 was 3 924 MW. PEPCO, KESCO and CAPCO are each financed 60 per cent by Esso and 40 per cent by CLP.

Operation of the power stations owned by the associated companies is in the hands of CLP, which also has its own generating capacity at Hok Un 'B' (total 260 MW). PEPCO owns the generating plant at Tsing Yi 'A' (720 MW), Tsing Yi 'B' (800 MW) and Hok Un 'C' (240 MW). KESCO owns 504 MW of gas turbine capacity, together with the Castle Peak 'A' Power Station, consisting of four 350 MW coal-fired or oil-fired dual fuel units.

The Castle Peak 'B' station, adjacent to the 'A' station, is owned by CAPCO. On completion in 1990, it will comprise four 660 MW dual-fired units. The first unit is due to be commissioned in early 1986. The Castle Peak 'A' and 'B' power stations, with an ultimate capacity of over 4 000 MW, will be the largest power station complex in Southeast Asia. The use of coal as the primary fuel for both stations will benefit consumers by significantly reducing operating costs.

       Transmission of electricity in the CLP system is carried out at 400 kV, 132 kV and 66 kV. Distribution is effected mainly at 33 kV, 11 kV and 346 volts. The supply is 50 hertz alternating current, normally at 200 volts single phase or 346 volts three phase. For bulk consumers, supply is available at 33 kV and 11 kV.

Work continued during the year on the development of an extra high voltage transmis- sion system at 400 kV to transmit power from the Castle Peak Power Stations to the various load centres. This 400 kV network, when complete, will comprise two transmission rings: a primary ring encircling the New Territories and a second ring encompassing a large part of the Kowloon peninsula. The primary ring, consisting of 90 kilometres of double circuit overhead lines and four extra high voltage sub-stations, at Lei Muk Shue, Tsz Wan Shan, Tai Po and Yuen Long, was completed in late 1985. The Kowloon ring is due for completion in 1988 and will consist of 22 kilometres of cable circuits, linking the major sub-stations at Tsz Wan Shan, Tai Wan and Lai Chi Kok.

HEC's Ap Lei Chau Power Station, which started commercial operation in 1968, has an installed capacity of 935 MW. It consists of two 60 MW and six 125 MW oil-fired generating units, together with two gas turbines with a combined capacity of 65 MW.

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In 1978, HEC was granted a site on Lamma Island for a new dual fuel (coal or oil) power station. The first 750 MW phase of this station was completed in February 1984 with the commissioning of the final 250 MW unit. Phase two will consist of two 350 MW units and will ensure that the company can meet rising electricity demand in the future a demand that has grown by 244 per cent over the last decade.

HEC's transmission system operates at 275 kV, 132 kV and 66 kV. Distribution is effected mainly at 11 kV and 346 volts. With the exception of a small proportion of 132 kV overhead transmission lines, all transmission and distribution are carried out underground or by submarine cables. The supply is 50 hertz, 200 volts single phase and 346 volts three phase. For larger consumers, supplies at high voltage are also available.

      The transmission systems of CLP and HEC are interconnected by a cross-harbour link. The interconnector, which was commissioned in 1981, now has a capacity of 480 MVA; when completed, it will have a capacity of 720 MVA. The interconnector brings cost savings to consumers through economic energy transfers between the two systems and a reduction in spinning reserve requirements.

CLP's system is also interconnected with that of Guangdong Power Company of China and over two million units of electricity are exported to Guangdong Province each day. This interconnection results in better utilisation of the company's generating plant during off-peak demand periods. In July, CLP signed a contract with the China Merchants Steam Navigation Company to supply power to the industrial zone of Shekou. This arrangement, which will afford to Shekou a reliable electricity supply without subsidy from Hong Kong consumers, is an example of the close co-operation on energy matters which has developed on both sides of the border.

The most important example of this co-operation during the year was the signing in Peking on January 18 of a joint venture contract between the Hong Kong Nuclear Invest- ment Company and the Guangdong Nuclear Investment Company. The two companies own 25 and 75 per cent respectively of the new Guangdong Nuclear Joint Venture Company, which will construct and operate a nuclear power station at Daya Bay in Guangdong Province. Roughly 70 per cent of the power from this station will be supplied to Hong Kong and will help to meet the territory's demand for electricity well into the 1990s.

The Daya Bay station, when complete, will comprise two 980 MW nuclear reactors. The first unit is expected to enter commercial operation in 1992 and the second unit about a year later. The Daya Bay plant will be built to the highest international safety standards and situated at such a distance from Hong Kong that Hong Kong residents are unlikely to be affected even in the extremely improbable event of an accident at the plant taking -place. The government, however, is aware of potential public concern on any issue relating to nuclear safety. It has therefore commissioned the United Kingdom Atomic Energy Authority to provide expert advice on the details of a radiation monitoring programme. This programme, which will be conducted by the Royal Observatory, will make it possible" to detect any changes in the level of background radiation in the territory.

Main electricity statistics and sales figures are at Appendix 30.

Gas

Gas is supplied for domestic, commercial and industrial use as Towngas by the Hong Kong and China Gas Company (HKCG) and in the form of liquefied petroleum gas (LPG) by most of the major oil companies in Hong Kong. Towngas accounts for approximately 51 per cent of the total gas sold and LPG for 49 per cent. The customer split, however, is approximately 408 000 for Towngas and 950 000 for LPG.

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       About 70 per cent of the total LPG sold is distributed through a dealer network in portable 15 kilogram cylinders. This is the most widely used form of gas supply in Hong Kong at present but, as a result of government action to improve gas safety, all LPG supplied in future to new housing developments will be in the form of piped gas from bulk storage and vaporiser installations. The proportion of LPG supplied from these bulk installations will soon increase significantly from the present level of 30 per cent. Overall sales of LPG are increasing by approximately five per cent per annum, mainly in the form of piped gas to meet new housing demands, but also partly to replace kerosene in existing markets.

      Towngas is produced at Ma Tau Kok by 12 cyclic naphtha reforming plants. At the end of January 1985, the newly expanded Ma Tau Kok plant capacity stood at 2.98 million cubic metres of gas per day. With the continuing demand for Towngas, the plant underwent further enhancement works during the year which increased its capacity to 3.68 million cubic metres per day. There are five gasholders with a total capacity of 113 282 cubic metres.

      HKCG supplies Towngas to Hong Kong Island, Kowloon and many towns in the New Territories. Supply is available throughout the urban area - including Aberdeen, Repulse Bay and Stanley on Hong Kong Island, Ap Lei Chau, Sha Tin and the industrial towns of Kwun Tong, Yau Tong, Kwai Chung, Tsuen Wan and neighbouring Tsing Yi Island. Extension of Towngas supply to Junk Bay is being planned.

       To meet increasing demand, both from the new towns in the New Territories and from the existing urban areas, construction of a second gas production plant in Tai Po began in March. Two units of the new plant are scheduled to be commissioned in the fourth quarter of 1986 and two in the first quarter of 1987. These four units will add another 2.83 million cubic metres per day to HKCG's overall capacity.

       In tandem with the new plant, 58 kilometres of high pressure transmission pipelines of 600 and 750 millimetres diameter are being laid to distribute Towngas throughout the New Territories. In two of the new towns, Tuen Mun and Yuen Long, construction has begun on two LPG/Air plants to supply a temporary substitute for Towngas until gas from the new Tai Po plant can reach those areas.

       Towngas sales are increasing at a rate of more than 14 per cent per annum, mainly as a result of increased sales to housing estates. Sales in 1985 amounted to 7.93 million gigajoules compared with 6.91 million gigajoules in 1984. Consumption and distribution statistics are at Appendix 30.

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Transport

A WELL-RUN internal transport system is essential to sustain Hong Kong's economic activity by moving people and goods quickly and efficiently. In 1985, there were some 301 000 vehicles of all descriptions in the territory and the daily average of passenger trips on public transport was 9.2 million.

      Careful co-ordination and management are necessary to ensure that the road network is improved and public transport services, especially off-road modes, are expanded to meet demand. Optimum use of Hong Kong's limited road capacity is also essential. The Transport Branch and the Lands and Works Branch of the Government Secretariat are charged with this responsibility, with the Highways Office of the Engineering Development Department, the Transport Department, the Traffic Branch of the Royal Hong Kong Police Force and the individual transport operators playing their part at the operational level.

      The year saw continued progress on a number of projects to enhance Hong Kong's internal transport system. On July 25, the second section of the Island Eastern Corridor was opened between Tai Koo Shing and Shau Kei Wan, enabling a journey to be made between Central District and Shau Kei Wan in only 11 minutes. This has significantly helped ease traffic congestion in Shau Kei Wan Road and King's Road.

      The construction of other major road networks, such as the New Territories Trunk Road system, continued. Major sections of these road networks were opened during the year. These include the Sha Tin-Fanling section of the New Territories Trunk Road (part of which is called the Tolo Highway) which was opened in stages in June and September. Design of the Route 5 (Sha Tin to Tsuen Wan) tunnel was completed and the project was put out to tender. The design of the principal access road a tunnel to Junk Bay was substantially complete. Feasibility studies for a second road link between Sha Tin and East Kowloon, the Tate's Cairn Tunnel, were to start in early 1986.

In February, a second bridge was opened at Man Kam To and in March new control facilities were opened at Sha Tau Kok. These facilities include 22 immigration booths (16 for passengers and six for vehicles), six customs and excise booths, and a vehicle holding area with 100 car spaces. Also, work started on a major new road link with China at Lok Ma Chau and on improvements to the access roads to Man Kam To and Sha Tau Kok. All this will considerably facilitate cross-border traffic.

On May 31, the Mass Transit Railway Island Line was officially opened, linking Central District with Chai Wan and enabling a journey to be made between these two points in less than 30 minutes.

The Kowloon-Canton Railway Corporation is planning the 34-kilometre Light Rail Transit (LRT) System in Tuen Mun and Yuen Long, which is scheduled to become operational in mid-1988 and will provide the core transport system in the northwest New Territories. The contract for Phase 1 of the project was let in August. This consists of 22.5

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kilometres of track between Yuen Long and Tuen Mun. Additional alignments will be added to the system later, leading to the completion of the full system by about 1993. An extension to Tin Shui Wai will be included.

Following the Executive Council's decision in 1984 to build a second harbour crossing between Tai Koo Shing and Cha Kwo Ling, the Eastern Harbour Crossing, a number of international consortia and local companies submitted proposals to finance, construct and operate the facility which will provide a four-lane road crossing and a Mass Transit Railway link. On completion of the franchise negotiations, the successful consortium, the New Hong Kong Tunnel Co. Ltd., will start work in early 1986. The tunnel should be ready for use in late 1989.

Subsequent to the opening of the Mass Transit Railway Island Line, the bus services along the northern shore of Hong Kong Island were rescheduled as were the green minibus services, so as to rationalise the services of the various modes of public transport operating along this corridor. The China Motor Bus Company (CMB) which provides bus services on Hong Kong Island and the red public light buses were hardest hit and had to readjust their services.

      This came at a time when CMB's maintenance standards and procedures were subject to much public criticism and concern. Following a serious accident in January 1984, a special working group of the Transport Advisory Committee was appointed to look into CMB's maintenance. The working group's report was published in March, making a series of recommendations on how CMB's maintenance could be improved. These recommenda- tions were endorsed by the Transport Advisory Committee and the Governor in Council, and it was stated that progress made by the company in improving its maintenance would be an important factor in the consideration of the further extension of CMB's franchise. From April, the Transport Department liaised closely with CMB with a view to assisting the company to improve the maintenance of its bus fleet and the Transport Advisory Committee monitored progress on a monthly basis.

Efforts to combat road congestion continued. The pilot study of an Electronic Road Pricing (ERP) System aimed at controlling the use of road space rather than car ownership was completed late in the year and district boards and interested organisations were consulted on whether a full system should be introduced. The reaction from most quarters was not in favour of immediate implementation, and as a result the Governor in Council decided in December not to proceed with the full system for the time being. However, it was decided to investigate in more detail the possibility of using the ERP equipment to facilitate the automatic collection of tolls at tunnels.

Administration

The Transport Branch of the Government Secretariat, whose head is the Secretary for Transport, is responsible for overall policy formulation and the direction and co-ordination of all transport matters. In discharging this responsibility, the Secretary for Transport is joined on major transport issues by the Transport Advisory Committee (TAC), which advises the Governor in Council on transport policies. The TAC is chaired by an unofficial and has 11 unofficial and six official members. The Transport Policy Co-ordinating Committee, with a wholly official membership chaired by the Secretary for Transport, advises on the co-ordination of policies.

The Transport Department is responsible for executing policy and regulating much of the internal transport system. The Commissioner for Transport, who heads the depart- ment, is the administering authority for the Road Traffic Ordinance and other legislation

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affecting public transport operations other than railways. His responsibility covers road traffic management, including government road tunnels, carparks and metered parking spaces, and the regulation of internal road and waterborne public transport. On these matters, he is advised by the Standing Conference on Road Use and the Standing Committee on Waterborne Transport. He is also responsible for the licensing of drivers and the licensing and inspection of vehicles.

A Transport Tribunal, chaired by an unofficial and set up under the Road Traffic Ordinance, provides members of the public with an avenue for appealing against decisions made by the Commissioner for Transport in respect of the registration and licensing of vehicles and the issue of hire car permits and passenger service licences.

The Highways Office of the Engineering Development Department is responsible for the design and building of all highways and roads, and their repair and maintenance. The Royal Hong Kong Police Force enforces traffic legislation and prosecutes offenders.

Legislation

The new Road Traffic Ordinance and seven sets of regulations made under the ordinance were brought into effect on August 25, 1984. The Road Traffic (Driving-Offence Points) Ordinance was implemented on the same day. As a result, traffic accidents, especially those involving serious injuries or loss of life, dropped significantly in 1985.

Legislation was also passed to allow private garages to conduct annual inspections of private cars over six years old and to issue certificates of roadworthiness.

Planning for the Future

Decisions on the long-term territorial development strategy have led to detailed planning and engineering feasibility studies for new harbour reclamation and development both on Hong Kong Island and in Kowloon. In the medium term, it is important that decisions to proceed with new works are guided by this overall development strategy and that the strategy itself is continuously updated in the light of the changing socio-economic situation. To this end, further work by the specialist Land Use Transport Optimisation Study team continued.

At the regional level, three transport studies were completed by consultants to update travel demand forecasts in Junk Bay, Tai Po and Sha Tin New Towns and in the Ma On · Shan extension to Sha Tin New Town.

In addition to these, the Transport Department has also conducted a number of transport studies. To complement the 1984 Kowloon-Canton Railway Corridor (New Territories) Public Transport Requirements Study, a study of KCR feeder services in Kowloon was completed during the year. In addition, a study of traffic in East Kowloon is underway. A number of short-term management schemes to cope with the anticipated increase in demand in the near future were recommended. The second stage of the study will concentrate on the medium and long-term requirements of the area. Meanwhile, a study of the impact of the Eastern Harbour Crossing on ferry services and cross-harbour bus route development is in progress.

Strategic Road Network

The planning process for Hong Kong's Strategic Road Network or trunk road network began in 1968 with the completion of the Hong Kong Long Term Road Study. The construction of these roads began in the 1970s but it was only in the early part of this decade that the people of Hong Kong began, at last, to see the fruits of this labour. This

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network of strategic roads is now growing rapidly throughout the territory and provides a better class of arterial roads than has been seen before in Hong Kong.

      These roads are all dual carriageway facilities with a minimum of two and often three lanes in each direction. The network will connect all the major urban centres and each of the new towns in the New Territories. These roads generally replace or duplicate congested general purpose roads in both the rural and urban areas.

The spine of the system is provided by Route 1 which will connect Aberdeen to Sheung Shui and includes the three tunnels: the Aberdeen Tunnel, the Cross-Harbour Tunnel and the Lion Rock Tunnel. Other strategic routes within the urban areas are provided along the north shore of Hong Kong Island, including the Island Eastern Corridor (Route 8), two routes which follow both the west and east coasts of the Kowloon peninsula, Routes 2 and 3, and Route 4 which runs along the base of the foothills which separate Kowloon from the New Territories.

The strategic road system in the New Territories connects each of the new towns. The major link in the western New Territories is Route 2. It includes the Tsuen Wan Bypass and its connections into Kowloon, and the Tuen Mun Highway which connects Tsuen Wan with Tuen Mun. Travelling north from Tuen Mun there is an existing dual carriageway route through to Yuen Long which forms the starting point for a new improved road which is being provided along the old alignment of the Castle Peak Road so as to provide a high quality connection through to Fanling. A new road link with China, at Lok Ma Chau, will connect directly with this improved road in 1987. The current strategic system in the New Territories is completed by the recently opened road link between Fanling and Sha Tin which forms part of Route 1.

      Future additions to the Strategic Road Network are planned. A new tunnel link, Route 5, will be constructed between Tsuen Wan and Sha Tin. Furthermore, a third tunnel from Sha Tin is being planned so as to provide a much needed additional access route from the northeast New Territories into Kowloon. This new tunnel will connect directly to the planned Eastern Harbour Crossing. Finally, on Hong Kong Island, the Island Eastern Corridor is to be extended through to Chai Wan.

      Over the last 10 years, the government has spent a total of approximately $10,000 million on new roads in addition to that which has been spent on major public transport projects such as the Mass Transit Railway. Current expenditure amounts to approximately $2,000 million per year. This budget is at present split almost equally between the urban areas and the New Territories.

Major Road Projects

The construction of the Island Eastern Corridor has transformed the traffic flow along the northeastern shore of Hong Kong Island, where the older routes had become heavily congested. The first section from Causeway Bay to Tai Koo Shing was opened in 1984 and the opening of the second section, eastwards to Shau Kei Wan, brought the completed length to 5.5 kilometres. Some parts of the third section, from Shau Kei Wan to Chai Wan, have already been built. When completed in 1989, the corridor will total nine kilometres.

      The corridor project has involved considerable reclamation, reprovisioning of ferry piers, and the construction of long piles and large concrete columns to support the elevated sections of the carriageway over the sea. About $1,400 million had been spent on the project by the end of 1985.

      In Kowloon, several projects were under construction and, in particular, a flyover carrying Waterloo Road over Cornwall Street and Junction Road was completed. Great

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     progress was made on the New Territories Trunk Road. From the Lion Rock Tunnel, Sha Tin Road provides a 3.1 kilometre bypass of Sha Tin and links up with a further 1.8 kilometre section of road adjacent to the Sha Tin Racecourse. The next section from Sha Tin to Wo Hop Shek was opened by the Governor on September 24 and includes the Tolo Highway, built on reclaimed land along the coast to Island House, and the Tai Po Bypass which traverses the hills to the west of Tai Po. This part of the route involved the construction of several large multi-span bridges. These were built by an incremental launching method, whereby the bridge deck was manufactured on one side of the valley and jacked across, thus avoiding the need for the expensive temporary supporting structure normally necessary for a bridge deck under construction. The total length of this road, including the Wo Hop Shek interchange and the Fanling Bypass, which had been opened earlier, is 24.2 kilometres. The construction cost was $1,758 million. The next section of the route, towards Yuen Long, will provide a dual carriageway link with China at Lok Ma Chau.

Another major section of the trunk road, the Tsuen Wan Bypass, opened in November. The bypass, which links Kwai Chung Road and Tuen Mun Road, includes about 2.5 kilometres of elevated dual carriageway along Tsuen Wan Bay. The total cost was around $400 million.

New Town Development

To ensure that an efficient and co-ordinated traffic and public transport system is provided for each of the new towns in the New Territories, comprehensive studies of travel requirements are carried out. Most of the new town transport plans reflect the twin policy objectives of economic use of roads and priority development of off-road mass transit systems.

Accessibility to Sha Tin, Tai Po and Fanling New Towns has been significantly improved by the fully electrified Kowloon-Canton Railway, and the opening of the Sha Tin-Fanling section of the New Territories Trunk Road. The Tsuen Wan New Town continued to be well served by the Mass Transit Railway, and the new Tsuen Wan Bypass, which was opened in November, is an important addition to the transport infrastructure. Land resumption for the construction of the Tuen Mun-Yuen Long Light Rail Transit project has also started.

      Although a large volume of traffic in the new towns is moved by the railway system, bus services continued to play an increasingly important role, by providing feeder services to railway stations and ferry piers and serving settlements which are located away from the railway catchments, thus giving new town residents a choice of rail or road-based modes. The role of ferry services in the further development of Tsuen Wan, Tuen Mun and Junk Bay will continue.

Provisions for pedestrians and cyclists are also given due consideration in the new towns. A good system of cycle tracks is provided in Sha Tin, Tai Po and Fanling. Grade-separated pedestrian facilities are provided wherever necessary as part of a highway development project, connecting existing settlements which may be affected by the opening of new high capacity roads, and also forming part of the improved pedestrian facilities in the town centre.

Improvement and Expansion of Public Transport

The expansion and improvement of public transport continues to be one of the principal elements in the government's policy of enhancing the mobility of the population.

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Traffic in the Cross-Harbour Tunnel has become so heavy that a further tunnel is to be built between Tai Koo Shing and Cha Kwo Ling.

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Major transport links are provided by the newly opened Sha Tin-Fanling section of the New Territories trunk road system and the Kowloon-Canton Railway.

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The new Hong Kong-Macau Ferry Terminal can handle more than 10 million passengers a year.

The Governor, Sir Edward Youde, travelled on the first train to use the Mass Transit Railway Island Line after declaring the line open on May 31.

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  Every week, 32 airlines operate about 1000 scheduled flights to and from Hong Kong International Airport.

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      In 1985, great improvements were made to public transport services, both in capacity and quality, to meet the growing demand which in part reflected the spread of population in the new towns and the policy of discouraging the use of private cars. Key developments were the completion of the Mass Transit Railway Island Line between Chai Wan and Admiralty and of a new station on the Kowloon-Canton Railway at Fo Tan.

      Despite these developments, buses will continue to cater for the bulk of passenger journeys in the territory. The productivity continues to be enhanced by reduced traffic congestion through the development of rail transport, construction of new expressways and an increase in the number of modern high capacity buses. The quality of the bus services has also been improved through more effective forward planning by the operators. Their efficiency is reflected in comparatively low fares, with operators maintaining reasonable profit margins.

      With the expansion of the railways and improvements to the bus services there is now keener competition among various transport modes, particularly along the railway corridors. The opening of the MTR Island Line has reduced cross-harbour ferry patronage as well as bus and public light bus passenger numbers along the north shore of Hong Kong Island.

      Further progress has been made on ticket integration. The Common Stored Value Ticket system introduced in late 1984 between the MTR and KCR continues to be popular with travellers and the validity period of these tickets has been extended from three to six months. A similar ticketing system for use between the railways and the Kowloon Motor Bus Company buses is under examination.

Apart from these improvements in public transport services provided by the principal operators, local, low volume demands are met by green minibus and coach operators who are generally responsive to local needs. These modes are continuing to expand as opportunities arise.

Kowloon-Canton Railway

The electrification and modernisation of the Kowloon-Canton Railway (KCR) between Kowloon Station and Lowu was completed in July 1983. In September, 266 000 passengers were carried on an average weekday, an increase of 25 per cent compared with September 1984. The increase in domestic traffic was mainly due to the continuing development of the new towns of Sha Tin, Tai Po and Fanling along the KCR corridor. The number of passengers travelling to Lowu, and hence to China, also increased by 21 per cent in September compared with the same month in 1984. There were three daily through trains to Canton; an additional through train was also operated to Shenzhen on weekdays and three on Sundays. During festival periods, a fourth through train to Canton was operated.

The growth in demand for the train services has been met by progressive increases in train frequency. Trains are now operating from 5.52 a.m. to 0.12 a.m. During the peak periods, they run at three-minute intervals between Kowloon and Tai Po Market, three-minute intervals to Sheung Shui and 15-minute intervals to Lowu. Extensive complementary changes to the bus network in the KCR corridor have been made; and in 1985, a network of 20 feeder bus services was operating to the KCR stations from the rural hinterland and new housing estates. More green minibus services were also introduced as feeders to the railway, and 13 routes were operating in the KCR corridor at year-end.

       The Kowloon-Canton Railway also carried a considerable volume of freight to and from China. In 1985, 2.42 million tonnes of freight (1984: 2.57 million) and 2.06 million head

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of livestock (1984: 2.21 million) were brought into Hong Kong by rail, while exports to China amounted to 554 467 tonnes, compared with the 275 025 tonnes carried in 1984.

The Kowloon-Canton Railway Corporation has accepted the government's invitation to build and operate the Tuen Mun-Yuen Long Light Rail Transit System which will be completed in three stages. Construction started in late 1985 on the first phase consisting of 23 kilometres of track and 41 stations.

Mass Transit Railway

At year-end, the Mass Transit Railway (MTR) was carrying about 1.4 million passengers each weekday, ranking it among the heaviest carriers per route kilometre in the world. The railway passed another milestone in the year with the opening of the Island Line between Chai Wan and Admiralty. The MTR now operates on 37 route kilometres with 36 stations. The overall system has been constructed in three distinct phases, the Modified Initial System from Kwun Tong to Central between 1975 and 1980, the Tsuen Wan Extension from Prince Edward to Tsuen Wan from 1978 to 1982 and the Island Line between 1981 and 1985.

      All three lines now operate as an integrated whole with cross-platform interchange facilities at Prince Edward, Mong Kok and Admiralty. With the completion of the final section of the Island Line from Admiralty to Sheung Wan in May 1986, interchange facilities will be further improved.

The MTR carried a record number of 463 million passengers in 1985 with trains running at two-minute intervals during the morning peak and at 2.5-minute intervals during the evening peak. The arrival of trains at destinations within two minutes of the scheduled time was maintained at 99.73 per cent during the year.

An overall fare increase of 3.5 per cent was introduced in May, resulting in a new adult fare range of $2 to $5. A new $200 Common Stored Value Ticket (CSVT) has been introduced and the denomination of the child/student CSVT was increased from $10 to $15. Half-price child/student single journey tickets continued to be offered. Purchasers of CSVTs continue to enjoy discounts, which include a last-ride bonus and an off-peak fare reduction.

A number of promotional activities were devised throughout the year in order to attract additional passengers and to increase awareness of the benefits of stored value tickets. Besides this, retail services for MTR passengers were expanded within the stations.

The corporation, in conjunction with various developers, is developing a number of important sites above or adjacent to Island Line stations. These include Western Fruit Market, Sheung Wan, Wan Chai (Southorn Playground), Tin Hau, Fortress Hill, Kornhill, Shau Kei Wan, Pak Chai Wan (Heng Fa Chuen) and Chai Wan.

By the end of the year, the MTR network was served by 36 feeder bus services. To encourage motorists to make use of the system, multi-storey carparks are provided at MTR stations in Kwai Fong and Tsuen Wan.

Buses

More than 300 bus routes are operated by three private bus companies under franchises granted by the government on a route basis. Together, they carry 3.9 million passengers a day.

      The largest, the Kowloon Motor Bus Company (1933) Limited (KMB), operates 187 daily bus routes in Kowloon and the New Territories, and 20 cross-harbour routes jointly with the China Motor Bus Company Limited (CMB). During the year, 174 double-deck

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      buses were added to the fleet, which at year-end totalled 2 511 buses comprising 2 368 double-deckers, 105 single-deckers and 38 coaches.

       Bus services continued to be reorganised in several areas to cope with electrified train services of the KCR with a view to further strengthening feeder services to KCR stations.

       Bus fares for KMB were revised in February. Fares on urban routes range from 70 cents to $1.40 and fares on rural routes range from 80 cents to $4. Higher fares are charged on the express bus and coach services. During the year, a total of 1 078 million passengers were carried by KMB and 188 million kilometres were travelled, an increase of one per cent and nine per cent respectively over the previous year.

       The China Motor Bus Company Limited (CMB) operates 80 daily bus routes on Hong Kong Island and Ap Lei Chau and 20 joint cross-harbour routes. In 1985, its fleet of 1 054 double-deckers, including 48 triple-axle buses, carried 344 million passengers and travelled 55 million kilometres.

Following the opening of the MTR Island Line, the service frequency on most of the bus routes running along the north shore of Hong Kong Island were adjusted to suit the reduced demand and a number of MTR feeder routes were cancelled. One Island Eastern Corridor express route was diverted from ground level roads for part of its journey to operate along the second stage of the expressway between Tai Koo Shing and Shau Kei Wan upon its completion in July.

       With the exception of cross-harbour routes, bus fares for CMB have remained un- changed since the last revision in January 1984. CMB fares range from 80 cents to $1.50 on urban routes, and from 80 cents to $2.50 on suburban routes. Bus fares for cross-harbour services operated jointly by CMB and KMB were revised in February. Other than the cross-harbour airport coach service, all-night services, recreational routes to Sha Tin Racecourse and the longest route linking Sha Tin and Wah Fu Estate, all the routes between Hong Kong Island and Kowloon have a flat fare of $2.50 with a section fare of $1 after crossing the harbour.

Following the Report of the Working Group of the Transport Advisory Committee on CMB Maintenance which was completed in December 1984, measures have been taken by CMB to improve its vehicle maintenance standards and by the government to increase the number of buses inspected.

       On Lantau Island, the New Lantao Bus Company (1973) Limited (NLB) operates a fleet of 58 buses, 11 of which are double-deckers, over 10 routes. In 1985, NLB buses carried an average of 8 000 passengers each weekday. Recreational demand increased this figure to an average of 18 000 on Sundays and public holidays.

Franchised bus services are supplemented by a fleet of 2 224 non-franchised public buses which are operated for hire on a contract basis, as well as 165 private buses operated by private housing developments and factories to meet their own needs. In 1985, these services carried a total of 138 million passengers.

Minibuses

The size of the public light bus (PLB) fleet has been fixed at 4 350 since May 1976. PLBs are 14-seater minibuses authorised under the Road Traffic Ordinance to carry passengers at separate fares. Some PLBs are used on scheduled services (green minibus services) and other on non-scheduled services (red PLB services).

In 1985, red PLBs carried an estimated one million passengers a day. There is no control of fares and routes for red PLBs, which are popular with passengers prepared to pay higher fares for a quick, direct and comfortable service with the added advantage of being able to

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board or alight anywhere along the route, assuming no restrictions are in force. However, this type of red PLB contributes to congestion as it tends to concentrate in the main bus and tram corridors, delaying high capacity carriers and other traffic by its frequent stops.

      Expansion of the green minibus scheme continued in 1985 with PLBS being converted to fixed routes and fares under the control of the Transport Department, to serve areas of particular need. At year-end, 138 green minibus routes utilising 1 041 PLBs were in opera- tion throughout the territory, with about 460 000 passengers being carried daily. Con- cessionary fares for handicapped passengers are offered on some green minibus routes.

A fleet of 2010 private light buses is also maintained by schools, private residential developments and commercial enterprises for their own needs.

      The policy on public light buses was reviewed in mid-1984 in the light of changing transport and traffic developments and implementation of some of the recommendations took place in 1985. In areas where the traffic conditions have substantially improved, some of the existing PLB restrictions were relaxed. The review also upheld many of the existing practices on the regulation of PLBs. The reasons for banning PLBs from limited access roads, new public housing estates and new towns were considered prudent.

Residential Coach Service

In order to serve the peak hour transport needs of remote residential areas, particularly those private developments with inadequate franchised bus services which cannot be served satisfactorily by green minibus services, a new category of bus service called a residential coach service was introduced in 1982. The service is intended to complement rather than compete with franchised bus services. With the introduction of the passenger service licences, some buses are authorised under these licences to operate residents' services under certain conditions, the main ones being that the service can only be operated according to the route, timetable and stopping places approved by the Commissioner for Transport. The authorisation to operate a residents' service is usually valid for one year and consideration may be given to renewal upon expiry. In assessing whether a licence should be renewed, account is taken of the continued need for the service and any effect it might have had on parallel franchised services.

To date, 20 licences have been issued for the operation of residential coach services, to serve residential developments in the New Territories.

Trams

The tram service in Hong Kong dates back to 1904 when Hongkong Tramways Limited began services on five overlapping routes. With the introduction of the Happy Valley- Causeway Bay MTR feeder service upon opening of the MTR Island Line, the company now operates six overlapping routes over 30 kilometres of track along the densely populated north shore of Hong Kong Island. The trams are well patronised and the opening of the MTR Island Line had little initial effect on them. During the year, the fleet of 161 double-deck tramcars carried a daily average of 331 600 passengers. Fares were last revised in 1983 and remain at 60 cents for adults, 20 cents for children under 12 years and 30 cents for student travel card holders.

      The Peak Tramway Company Limited has been operating a cable-hauled funicular railway service up Victoria Peak between the lower levels of Hong Kong Island and Victoria Gap, 397 metres above sea level, since 1888. The service stops at four intermediate stations on the 1.4 kilometre line and in places negotiates a gradient of one-in-two. It is popular with tourists, and at the same time provides a direct route to Central District for

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      Peak residents. In 1985, the service carried 6 300 passengers a day, an increase of 13 per cent compared with 1984.

Aerial Ropeways

An aerial ropeway operating at Ocean Park carries visitors between the park's lowland and headland sites. There are 252 cars on the system with a total carrying capacity of 1 512 persons. In 1985, the system carried an average of 3 000 passengers a day.

Ferries

Ferry services in Hong Kong are mainly provided by two principal companies the Hong Kong and Yaumati Ferry Company Limited (HYF) and the Star Ferry Company Limited. The Star Ferry has a fleet of 10 vessels plying across the harbour between Edinburgh Place on Hong Kong Island and Tsim Sha Tsui and Hung Hom in Kowloon. During the year, the company carried 43 million passengers on its two routes. HYF operates a varied fleet of vessels on 16 cross-harbour services (three of which carry vehicles), 10 outlying district services and two excursion services. The company has a fleet of 88 vessels, some of which are air-conditioned, comprising double and triple-deck ferries and high-speed hovercraft. Fares on HYF vehicular services were increased on January 1. The company also introduced concessionary fares for the handicapped on 12 cross-harbour services on October 1. During the year, HYF carried 84 million passengers and 4.5 million vehicles.

As a result of the MTR Island Line opening, HYF passenger ferry services operating in the central and eastern harbour experienced a drop in patronage of 10 per cent compared with 1984. The number of vehicles using vehicular ferry services during the year was one per cent higher than that recorded in 1984. The North Point to Kwun Tong service was withdrawn, the vessels on this route being redeployed to strengthen the other two vehicular ferry services in the eastern harbour. To cope with projected additional demand, facilities at the Sai Wan Ho Vehicular Pier were expanded by the construction of double ramps.

       In addition to the services operated by the two major ferry companies, 11 minor ferry services are provided to isolated communities by six operators. Supplementary services known as 'kaitos' are also available, mostly in the New Territories, to cater for local rural demand. Both types of services are controlled by licences issued by the Transport Department under the Ferry Services Ordinance. In Victoria Harbour, fleets of motor boats known as 'walla-wallas' are available for hire at public piers.

Taxis

Hong Kong is served by three types of taxis: Hong Kong and Kowloon taxis which may operate anywhere within Hong Kong Island, Kowloon and the New Territories (but primarily serve the urban areas); New Territories taxis which operate only in permitted areas in the New Territories; and Lantau taxis which operate only on Lantau Island. In response to the request of the New Territories taxis operators, consideration was being given to further extend the New Territories taxi operation boundaries to allow New Territories taxis to take passengers to hospitals and interchange points on the periphery of urban areas.

In mid-1985, 13 699 Hong Kong and Kowloon taxis were registered. New licences continued to be tendered at the rate of 200 per year up to a limit of 14 000. The number of New Territories taxis was fixed at 2 638 in July 1984. The limit for Lantau taxis was 40; in mid-1985, 34 Lantau taxis were registered.

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For Hong Kong and Kowloon, fares are $5 for the first two kilometres and 70 cents for each subsequent 267 metres; for the New Territories and Lantau, the fare is $3.30 for the first two kilometres and 70 cents for each subsequent 400 metres. A double charge of $20 is applicable for the Cross-Harbour Tunnel toll.

      Following the comprehensive review of taxi policy, the annual licence fee for taxis was increased from $1,600 to $2,000 from January 1, 1985. New limits on the number of Hong Kong and Kowloon and New Territories taxis also came into effect on the same date.

More Economic Use of Roads

A major traffic management scheme was implemented in the popular shopping centre of Causeway Bay to improve pedestrian movement and to facilitate vehicle access to local streets while reducing traffic congestion in the main through roads in the area. Traffic control measures were also introduced in parts of Central District to improve the traffic situation in preparation for the upgrading of Connaught Road.

In Kowloon, area-wide traffic management measures were introduced in the commercial area of Tsim Sha Tsui East to improve traffic circulation, and in Mong Kok East to alleviate traffic congestion north of Argyle Street. Increased industrial activity in Lai Chi Kok also necessitated the introduction of a traffic management scheme. In Tai Po, a central area traffic management scheme was successfully implemented to cope with the development of the new town. A one-way traffic gyratory system was introduced in Luen Wo Hui together with the installation of traffic signals and the widening of Sha Tau Kok Road.

      About 650 sets of traffic lights were in operation, and where possible traffic lights were adjusted to give pedestrians more time to cross the road in safety. Independent signal controlled pedestrian crossings were also installed to regulate pedestrian movements where these were high.

Work on the final Hong Kong Island Area Traffic Control System covering the entire northern corridor of Hong Kong Island was in progress.

Road Tunnels

Hong Kong's road infrastructure includes four twin-tube road tunnels. The Lion Rock, Aberdeen and Airport Tunnels are managed by the Transport Department and the Cross-Harbour Tunnel is owned and operated by a private company, the Cross-Harbour Tunnel Company Limited.

The Lion Rock Tunnel links urban Kowloon to Sha Tin and the northeastern areas of the New Territories. It opened in 1967 as a single tube facility and in 1978 a second tube was added along with a computerised system of surveillance and toll collection. In April, the tolls were increased to $3 for all classes of vehicles. The average daily traffic is 69 200 vehicles.

The Aberdeen Tunnel runs between Happy Valley and Wong Chuk Hang, providing increased road capacity between the north and south sides of Hong Kong Island. Constructed as a two-tube facility, it was opened to one-tube operation in March 1982 and a year later the second tube was opened. The $2 flat toll was revised to $3 in April. The average daily traffic is 34 200 vehicles.

The toll-free Airport Tunnel provides more direct road access from the central area of Kowloon to Hong Kong International Airport and, by crossing beneath the airport runway, to Kwun Tong. Since the tunnel opened in June 1982, the volume of traffic using it has been increasing steadily and now averages about 50 300 vehicles per day.

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The Cross-Harbour Tunnel runs beneath the harbour and links Hong Kong Island to the Kowloon peninsula. It was opened in 1972 and the traffic increased over the years to such an extent that, with an average of 110 000 vehicles per day in 1983, it became the world's busiest four-lane facility. The eight-class toll structure, with charges varying from $2 for motorcycles to $20 for the largest goods vehicles, has remained unaltered. In order to reduce congestion, the government in June 1984 introduced a tax of from $2 to $5 on all vehicles passing through the tunnel except public and private buses and vehicles used by disabled drivers and members of the Consular Corps. After an initial drop of 15 per cent in the number of vehicles using the tunnel, the figure settled at around 102 000 per day in mid-1985, considerably easing congestion.

Parking

At the beginning of the year, a total of 10 multi-storey carparks comprising 6 141 parking spaces were operated on the government's behalf by Wilson Parking (Hong Kong) Pty Limited while the Transport Department operated five open-air carparks comprising 669 parking spaces.

       Wilson Parking's three-year agreement with the government commenced in May 1984. On May 1, 1985, the company increased the Sunday and public holiday hourly parking fees for the five carparks in Central District (Garden Road, Murray Road, City Hall, Star Ferry and Rumsey Street) from $3 to $6 between 7 a.m. to 7 p.m. and the monthly pass fee from $1,200 to $1,300. At the end of 1985, hourly parking fees ranged from $6 for peak period use to $2 for off-peak use, depending on the location of the carpark. Minimum charges for two hours were introduced for carparks in Central District. Monthly passes were available for 70 per cent of the spaces in the multi-storey carparks at charges varying from $400 to $1,300.

The hourly charges in the open-air carparks varied from 50 cents to $3, depending on the time of day, and monthly passes were obtainable at prices ranging from $200 to $400, depending on location, for 50 per cent of the spaces. Motorcycle parking spaces were also available in three carparks at 50 cents per space or $100 per monthly pass.

       Other off-street public parking is provided by the Civil Aviation Department at Hong Kong International Airport and by the Kowloon-Canton Railway Corporation at Kowloon Station. Surveys conducted in late 1984 showed that there were about 32 000 spaces in multi-storey carparks owned and operated by the private sector throughout Hong Kong. The charges in these facilities ranged from $3 to $7 per hour, usually with a minimum charge for two or three hours.

       On-street parking is usually metered and is provided at locations where traffic conditions permit. In mid-1985, there were 14 500 metered spaces throughout the territory operating during the period 8 a.m. to midnight from Monday to Saturday. In such areas as Causeway Bay, Happy Valley and Tsim Sha Tsui, where parking demand is high, the meter operation has been extended to include Sundays and public holidays from 10 a.m. to 10 p.m. Surveys of these areas have shown that the extended operation has proved successful in regulating supply and demand and the scheme was scheduled to be introduced to cover more areas in Wan Chai, Happy Valley, Tsim Sha Tsui, Kowloon City, Yau Ma Tei and Mong Kok by the end of 1985.

       Law enforcement in respect of parking offences is carried out by traffic wardens and officers of the Traffic Branch of the Royal Hong Kong Police Force. Fixed penalty tickets are issued in respect of parking offences, the current fine being $140.

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The decline in the total number of licensed private cars levelled out in 1985. The total number of new private cars registered rose from 6 569 in 1984 to 11 200. The number of new learner drivers remained at about 4 000 per month. Under the Driving-Offence Points System implemented in August 1984, 31 driving licence holders were disqualified after accruing 15 or more points as a result of committing offences scheduled under the Road Traffic (Driving-Offence Points) Ordinance.

Goods Vehicles

The total number of registered goods vehicles increased from 72 060 in December 1984 to 77 000 at the end of 1985. Many more goods vehicles are involved in the movement of goods between Hong Kong and China; these vehicles are required to be registered both in Hong Kong and in China.

       Many of the recommendations made in a consultant's report on the study of the trucking industry conducted in 1984 have been accepted in principle by the government. Priority is to be given to recommendations designed to reduce the shortage of parking for goods vehicles and to improve the operation of loading and unloading. These are being considered and implemented at a local level.

Vehicle Examination

The Transport Department operates four vehicle examination centres at Kowloon Bay, To Kwa Wan, Sheung Kwai Chung and So Kun Po, providing facilities for the annual inspection before relicensing of all public service vehicles, older goods vehicles and vehicles licensed to carry dangerous goods. Vehicles involved in accidents are examined at police pounds at Ho Man Tin, Kwai Shing Circuit and Hung Hing Road. Airport vehicles are inspected at the airport while franchised buses are inspected at the company depots.

       Following the recommendations of the Working Group of the Transport Advisory Committee on CMB Maintenance, the inspection of buses operated by the China Motor Bus Company was intensified and an enforcement unit was set up to undertake prosecution action against the franchised bus companies for operating defective buses. Technical support was also extended to the police with respect to road checks and accident investigation on all vehicles.

      A proposal to allow private garages to carry out annual inspections of private cars over six years old was approved by the Executive and Legislative Councils. Under the scheme, private garages are to be designated as car testing centres and authorised to conduct inspections and issue certificates of roadworthiness, subject to requirements set out in a code of practice and the Road Traffic Ordinance.

Road Safety

Traffic accidents involving injury decreased by 1.13 per cent in 1985. During the year, there were 14 930 accidents, of which 4 390 were serious and 280 fatal. This compares with 15 100 in the previous year (4 650 serious, 290 fatal). Investigations to identify the factors contributing to traffic accidents were carried out by the Transport Department at 88 locations and engineering remedial measures were recommended at 56 of these locations.

       Road safety campaigns continued to play an important role in the reduction of traffic accidents. The major themes of the 1985 campaigns were the consequences of driver and pedestrian negligence, the need for regular vehicle maintenance and cycling safety. Road safety features significantly in the new road traffic legislation. The fitting of reflective

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registration number plates on all vehicles became effective on June 1. The Road Traffic (Driving-Offence Points) Ordinance was implemented in August 1984 and provides an effective method of discouraging persistent bad driving behaviour. Under the ordinance, drivers convicted of various road traffic offences concerned with road safety are assigned points and become liable to disqualification if they accumulate 15 or more points for offences committed within a two-year period.

       By the end of 1985, there were 242 Road Safety School Patrols comprising over 7 300 members, whose main function is to ensure the safety of school children on their way to and from school. The Road Safety Council, an advisory body, continued to co-ordinate all road safety matters in the territory.

Road Pricing

      The 1979 White Paper on Internal Transport Policy predicted that given the limitations on the expansion of the urban road network, it would be necessary to restrain the growth of private vehicles in order to avoid unacceptable levels of congestion. In May 1982, the government introduced a package of fiscal measures designed to restrict the annual growth in the number of private cars to five per cent. These included a doubling of the rate of first registration tax, a tripling of the annual licence fees and an increase of 70 cents a litre in the duty on petrol.

        These measures have resulted in a reduction of about 43 000 in the number of licensed private cars although their effect was accentuated by economic recession. However, the rate of decline has been slowing down since the end of 1983 and in 1985 the drop in the number of private licensed cars was only 24 500 compared with 36 200 in 1984. The total number registered was 169 200, compared with 184 600 in 1984.

The government believes that high taxes on car ownership, although effective in containing congestion, are not the most equitable means of traffic restraint and that it is desirable to tackle the problem directly by reducing vehicle usage in congested areas and at peak periods. One method of doing this is Electronic Road Pricing (ERP) which involves levying a charge for the use of busy roads at peak periods. In 1983, the government approved the pilot stage of an ERP system and consultants were commissioned to estimate its transport benefits, to develop and test the main technological components and to make a full report.

       Work on the ERP pilot scheme was completed in June. The consultants estimated that with continued prosperity, car ownership would grow again if there was no further increase in the real value of annual licence fees. Despite the continued expansion of public transport and the road network, the urban areas of Hong Kong would experience severe and widespread congestion by the early 1990s. This congestion problem could be tackled by ERP or by further increases in annual licence fees. Either policy would be effective in reducing congestion to acceptable levels but ERP would permit higher levels of car ownership, be more selective in its impact on car usage and in general be more economically beneficial in travel time and cost terms.

The pilot scheme demonstrated that ERP is a technically feasible system that can operate reliably in Hong Kong conditions. The equipment was tested for six months and during this period, the movement of 2 600 vehicles fitted with electronic number plates was recorded accurately as they crossed electro-magnetic loops installed beneath the road surface at 18 toll sites in the central area of Hong Kong Island. This data was processed by a central computer which produced mock road-use bills for those vehicle owners participating in the scheme.

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      District boards were consulted on the results of the pilot scheme and were asked to advise on whether a full system should be introduced. The general reaction was negative with nine district boards voting against the implementation of ERP and 10 boards favouring a postponement of a decision. In December, the Governor in Council directed that a full ERP system should not be introduced for the time being but that it should be reconsidered at a later stage. Serious consideration is now being given to the possibility of using the ERP technology as a means of collecting tolls at tunnels.

Port Development and Shipping Services

As one of the world's major ports, Hong Kong has earned a world-wide reputation for efficiency in continuing to meet the increasing demands of modern shipping requirements.

The tonnage of shipping visiting the port, the volume of cargo handled and the passenger numbers reflect the optimum utilisation of all port facilities. Victoria Harbour, lying between Hong Kong Island and Kowloon, is regarded as one of the most perfect natural harbours in the world. It has an area of 5 000 hectares, and varies in width from 1.2 to 9.6 kilometres, and is the only deepwater port on the coast of southern China.

      The administration of the port is the responsibility of the Director of Marine. He is advised by various committees through which the closest liaison with shipping and commercial interests is maintained to ensure that facilities and services are developed to meet the changing needs of Hong Kong and of ships using the port.

      In 1985, some 13 250 ocean-going vessels and 79 740 river-trade vessels called at Hong Kong and loaded and discharged more than 53 million tonnes of cargo. This included 35 million tonnes of general goods from ocean-going vessels; 37 per cent of this was containerised cargo.

Although containerisation is a major cargo transport method, a considerable amount of dry cargo handled in Hong Kong is transported at some stage by lighters and junks. About 2000 of these were operating at the end of 1985, and 26 per cent were mechanised. Break-bulk cargo is normally handled using ships' gear, but floating heavy-lift cranes are available when required.

On average, ships working cargo at harbour moorings are in port for two-and-a-half to three days and container ships at the Kwai Chung terminals remain for about 13 hours. These are probably the fastest turn-round times for ships at any port in the Far East.

      Other wharves and terminals provided and operated by private enterprise are capable of accommodating vessels up to 305 metres in length with draughts up to 14.6 metres. Cargo handling facilities in the public sector include cargo working areas at Wan Chai, Yau Ma Tei, Tsuen Wan, Kwun Tong, Western District, Rambler Channel, Chai Wan and Sham Shui Po. These areas are administered by the Marine Department. Government policy calls for the provision of public cargo working areas throughout Hong Kong to maintain swift and efficient internal cargo movement.

      The port of Hong Kong handled a total of 2.25 million TEUs (20-foot equivalent units) in 1985. The container terminals at Kwai Chung at present provide six berths with more than 2 300 metres of quay backed by about 88 hectares of cargo handling area. This area includes container yards and container freight stations, all of which are operated by private companies or consortia. Up to six 'third generation' container ships can berth simultaneously at the container terminals. A mobile floating roll-on roll-off ramp is provided by a container terminal operator at Kwai Chung who, in addition, has a 12-storey multi-purpose godown in operation. This godown has a usable floor area of 52 400 square metres and the first two floors serve as a container freight station. Nearby, at Tsuen Wan,

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there is a 16-storey godown with a usable floor area of 52 600 square metres, equipped with container lifts serving all floors. A six-storey cargo distribution and handling centre, one of the largest of its kind in the world, is being constructed in Kwai Chung and will more than double the operator's present container capacity.

The Marine Department, with co-operation from other government departments, continued throughout 1985 with a Port Development Strategy Study to examine the needs of the port to the year 2001. The views of the shipping industry and business sector have been sought during the study which commenced in 1984 and is expected to be completed in early 1986.

Although Hong Kong already ranks as the leading container port in Asia and among the top three in the world, further expansion of the Kwai Chung Container Port is constantly under review. The reclamation of some 26 hectares of seabed at Kwai Chung Creek, which commenced in July 1984, continued throughout 1985. The new land formed will be used to provide back-up space for the container terminals.

During the year, as a second phase of the expansion programme, the government completed negotiations with one of the terminal operators to reclaim a further 28 hectares of land for the provision of an additional three berths and associated terminal facilities.

In 1985, 9.3 million passengers were carried between Hong Kong and Macau by jetfoils, hydrofoils, jetcats, hoverferries, high speed ferries and conventional ferries operating from either the Hong Kong-Macau Ferry Terminal on Hong Kong Island or the Sham Shui Po-Macau Ferry Terminal in Kowloon. The construction of a permanent Hong Kong- Macau Ferry Terminal on Hong Kong Island, which replaced the temporary Hong Kong- Macau Ferry Terminal in Central District, was completed and became operational in October.

       This new terminal, which has been provided with innovative and sophisticated equip- ment and operating systems, is capable of handling in excess of 10 million passengers annually.

About 2.1 million passengers travelling between Hong Kong and China passed through the temporary Tai Kok Tsui-China Ferry Terminal and the Sha Tin-Meisha Ferry Terminal. Hoverferries, jetcats, catamarans and conventional ferries operate between Hong Kong and various Chinese ports.

The construction of a permanent Hong Kong-China Ferry Terminal in Tsim Sha Tsui on the site of the existing Kowloon Public Pier Number 54 commenced in August and is expected to be completed by the end of 1987. On completion, this new terminal will replace the temporary Tai Kok Tsui-China Ferry Terminal.

Within the port of Hong Kong, 71 mooring buoys are provided and maintained by the Marine Department. Of these, 43 are classified as 'A Class' moorings suitable for vessels up to 183 metres in length and 28 are classified as 'B Class' moorings suitable for vessels up to 135 metres in length. These moorings include 57 special typhoon moorings to enable vessels to remain secured to them during tropical storms. This improves efficiency and reduces operational costs.

For ships calling at Hong Kong, immigration facilities are available on a 24-hour basis at the Western Quarantine Anchorage and from 6.30 a.m. to 6 p.m. at the Eastern Quarantine Anchorage. Quarantine facilities are available continuously at the Western Quarantine Anchorage. Quarantine service is available at the Eastern Quarantine Anchorage between 8 a.m. to 6 p.m. only on request through the Port Communications Centre. Vessels may, on application, obtain advance clearance, advance immigration processing and advance free pratique by radio.

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      Hong Kong occupies a prominent position as a centre for shipowning and management activities. Hong Kong shipowners control almost 10 per cent of the world's deadweight tonnage though most vessels are registered at places other than Hong Kong. Most local shipowners and connected businesses are represented by the Hong Kong Shipowners Association. The association's aims are to protect and promote the interests of Hong Kong shipowners and to speak on their behalf when necessary, both at international and domestic levels.

       Despite a general recession in world shipping, the Hong Kong registered fleet experien- ced a significant growth from 6.4 million to 7.1 million gross tonnes during the year.

Hong Kong is a British port of registry and as such, in all key aspects, ships registered in Hong Kong adopt the same standards of construction, safety and manning as those registered in the United Kingdom. This status cannot continue beyond 1997 when the territory reverts to Chinese sovereignty. The Sino-British Joint Declaration provides that the future Hong Kong Special Administrative Region may continue to maintain a ship- ping register under its own legislation. It is, therefore, necessary for an autonomous shipping register for Hong Kong to be in place and working well before 1997. To this end, the government published a consultative document in May. The document envisages the autonomous Hong Kong register as being run to internationally accepted standards equivalent to those at present adopted. It is hoped that substantive proposals for the creation of such an autonomous register will be published during the first half of 1986.

      As regards the present register, the Shipping Division of the Marine Department is responsible for the survey and certification of Hong Kong registered vessels under various international conventions and also provides a plan approval and survey service. Statutory surveys of vessels intended for Hong Kong registry are undertaken world-wide by surveyors of the division. Locally, surveyors are made available to any British or foreign ships for the issue of certificates under the International Convention for the Safety of Life at Sea (SOLAS) 1974 and other international maritime conventions. A number of such international certificates were issued to foreign flag ships at the request of foreign governments. Additionally, one of the world's largest fleets of high technology Dynamic- ally Supported Craft, comprising jetfoils, hydrofoils, side wall hovercraft and jetcats, operates from Hong Kong under the survey and certification of the Shipping Division of the Marine Department. With some exceptions, vessels plying within the waters of Hong Kong need to be licensed under the Shipping and Port Control Ordinance. These, too, are inspected and issued with certificates.

      Hong Kong registered ships maintain a high standard of safety in compliance with the SOLAS convention and its amendments for improved safety measures. This conven- tion is generally regarded as the most important of all international treaties relating to maritime safety.

      A convention of particular significance which is in force internationally and observed by Hong Kong registered vessels, is the International Convention for the Prevention of Pollution from Ships (MARPOL) 1973 as modified by its 1978 protocol. Hong Kong registered vessels comply with the requirements of the convention and are issued with International Oil Pollution Prevention (IOPP) certificates. As a result, Hong Kong ships are now able to produce authoritative evidence of compliance with MARPOL, thereby making a positive contribution to the environmental protection of the sea. Moreover, as visiting ships are required to comply with MARPOL standards, the risk of pollution to Hong Kong waters has been reduced.

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      Phase 1 of compulsory pilotage in Hong Kong came into operation on August 1, under the Pilotage (Amendment) Ordinance 1985 which was enacted on May 30. It is hoped that Phase 2 will be introduced in 1987 followed finally by Phase 3 in 1989 after which all ships of 1000 gross registered tonnes and above will be required to engage the services of a Hong Kong licensed pilot.

      The Director of Marine is the Pilotage Authority in Hong Kong. All licensed pilots are members of the Hong Kong Pilots' Association which organises the provision of pilotage services on a commercial basis, the fees for which are governed by statute.

      All the navigation buoys in Hong Kong waters are in uniformity with the International Association of Lighthouse Authorities Maritime Buoyage System and all fairway buoys are lit and fitted with radar reflectors. Other aids to navigation in the harbour and its approaches are constantly being improved to ensure greater safety and the programmed conversion to solar power of a number of light beacons is continuing and proving successful.

      The Port Communications Centre is linked by teleprinter, telephone and VHF radio to Green Island Signal Station and by telephone and VHF radio to Waglan Island Signal Station. The Marine Department operates a continuous VHF radiotelephone port opera- tions service, based on international maritime frequencies, which gives comprehensive marine communications throughout the harbour and its approaches. Marine Department teleprinter and telex facilities are linked directly to users on a world-wide basis.

       There is also a continuously monitored disaster network which links the Marine Department's Search and Rescue Co-ordination Centre with aircraft of the Royal Hong Kong Auxiliary Air Force and military helicopters, Marine Police and Fire Services Department launches and other similar facilities. In the event of a vessel experiencing difficulties in the South China Sea within about 1 300 kilometres of Hong Kong, the Marine Department can activate the Maritime Rescue Co-ordination Centre in liaison with other Rescue Co-ordination Centres in the region.

      Following the government's decision in 1984 to proceed in principle to implementation of a vessel traffic management system for the waters of Hong Kong and its approaches, steps are now being taken to identify a principal contractor.

      Marine Department patrol launches keep a watch on shipping, fairways, typhoon shelters and cargo working areas. The launches are in continuous radio contact with the Port Communications Centre, enabling the centre to initiate and co-ordinate any action required in unusual circumstances. A fleet of fire-fighting vessels operated by the Fire Services Department is kept in a state of readiness with units stationed on both sides of the harbour.

       Good bunkering facilities are provided in the port, and vessels may be supplied with fuel oil either from wharves at oil terminals or from a fleet of floating oilers. Fresh water is obtainable at commercial wharves or from private water boats which service vessels at anchor or on government mooring buoys.

      There are extensive facilities for repairing, maintaining and dry-docking or slipping all types of vessels, including oil rigs, up to about 230 metres in length and 27 metres beam. Five floating dry-docks are located off Tsing Yi Island: the largest is capable of lifting vessels up to 100 000 tonnes deadweight. Hong Kong has a large number of minor shipyards equipped to undertake repairs to small vessels. These yards also build specialised craft including sophisticated pleasure craft and yachts.

      Hong Kong is a prominent centre for the recruiting of seafarers. The Seamen's Recruiting Office and the Mercantile Marine Office register and supervise the employment

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of approximately 11 000 active seafarers on board some 850 ships of many flags. Considerable attention has been given to providing more comprehensive training for Hong Kong seafarers and, in this respect, the temporary seamen's training centre at Little Sai Wan provides additional in-service training to comply with the requirements of the International Convention on Training and Certification of Seafarers 1978 under the auspices of the International Maritime Organisation. Construction of permanent premises for the Seamen's Training Centre is expected to commence in 1986.

       The Examination Centre conducts a wide range of examinations for candidates wishing to prove their competency in the operation of various sizes and types of vessels sailing world-wide or plying within local waters. In addition, the centre inspects, supervises, and monitors all aspects of training at approved establishments for the acquisition of various maritime qualifications recognised by the Hong Kong Government.

      The Mariners' Clubs in Kowloon and Kwai Chung provide recreation and welfare facilities of a high standard to visiting seamen of all nationalities.

Civil Aviation

A steady growth in air travel was recorded during the year following the previous year's significant rise. Passenger traffic rose by 3.1 per cent, compared with 7.8 per cent in 1984.

      A total of 9.8 million passengers passed through Hong Kong International Airport, an increase of about 293 000 over 1984. General cargo including manufactured goods imported, exported and re-exported by air amounted to 415 800 tonnes. The value of goods transported by air amounted to $94,480 million. Viewed against Hong Kong's total trade in import, export and re-export in terms of value, imports by air made up about 20 per cent, exports about 25 per cent and re-exports about 16 per cent. The United States remained the major market for exports and re-exports by air, taking about 55 per cent and 22 per cent of the trade respectively.

      The number of airlines using Hong Kong International Airport and the frequency of their operations remained steady. Throughout the year, 32 airlines operated each week about 1 000 scheduled flights to and from some 75 cities. The air services network covered the United Kingdom, Europe, the United States, Canada, China, South Africa, India, the Middle East, Australasia and Asia. Several other airlines operated an average of 25 non-scheduled services each week into and out of Hong Kong.

      An increase of 4.2 per cent in aircraft movements was recorded during the year, bringing the total to 59 420. More than 80 per cent of the aircraft calling at Hong Kong were of the wide-bodied type. At the end of January, the twice weekly Hong Kong/Port Moresby/Auckland service operated by Air Nuigini in a pool arrangement with Air New Zealand and Cathay Pacific Airways was terminated.

      In July, Cathay Pacific Airways reintroduced one of its Hong Kong/London services as a non-stop service in both directions. At the same time, the airline introduced non-stop services to and from Frankfurt. In November, British Airways started twice weekly services between Hong Kong and Manchester.

      During the year, several local and overseas companies showed an interest in operating scheduled and non-scheduled air services to and from Hong Kong or to set up airlines. In July, Hong Kong Dragon Airlines Limited, after receiving its air operator's certificate, began non-scheduled services.

The aeronautical authorities of China and the United Kingdom met in Peking in September and in London in November to discuss air services under the arrangements provided in the Civil Air Transport Agreement signed in London in 1979. The talks

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      involved air services to and from Hong Kong and the territory was represented by officials from the Government Secretariat and the Civil Aviation Department. As a result of an agreement reached during the talks in London, additional services are to be provided between Hong Kong and Peking to meet the needs of the travelling public. The United Kingdom also concluded an agreement with France under which Cathay Pacific Airways will operate services to Paris.

      In December, after a six-day public inquiry, the Air Transport Licensing Authority, an independent statutory body, granted Hong Kong Dragon Airlines Limited a licence to operate scheduled services to eight cities in China. However, the rights to operate these services were not immediately available.

       The improvement of facilities at the Passenger Terminal Building at Hong Kong International Airport centred on the major extension programme known as the Stage V Development. This project is expected to be completed in 1988. One of the preliminary works associated with the development - a transport terminus - was opened in July. It provides queueing space for taxis and airport coaches. Other works related to the development involved a major new electrical sub-station, changes to the arrival greeting area and a considerable amount of removals and demolition.

       During the year, the Miramar Hotel ceased to be the concessionaire for the main airport restaurant after an association with Kai Tak spanning 26 years. The new concessionaire, Bowater Food Systems (Hong Kong) Limited took over from August 31.

       The year saw the completion of an extension to the cargo apron so that it can now accommodate five B-747 aircraft. Planning is also nearing completion for a major project to provide paved shoulders along the full length of the runway to overcome severe erosion problems.

      Another major installation is the airfield surface detection equipment which is designed to show continuously the positions and movements of aircraft and vehicles on the airfield, and also of ships in the vicinity of the runway promontory.

      A new air traffic control simulator came into operation in February as part of a programme to replace existing training equipment.

       Work on identifying a suitable site for an international heliport continued during the year while on the domestic front a number of potential sites to serve towns in the New Territories were identified. However, demand for helicopter services, whether international or domestic, has so far not developed to the extent previously anticipated. A noise study was undertaken on the effects that operations at the Fenwick Pier Street Helipad have on the adjacent Hong Kong Academy for Performing Arts. The future of the helipad will be considered in the light of the results of this study.

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Public Order

E

THE maintenance of law and order is primarily the duty of the Royal Hong Kong Police Force. The high level of training and the efficiency of the force are best demonstrated by the effective maintenance of law and order in the streets. Compared with other major metropolitan cities of the world, Hong Kong has one of the lowest crime rates.

Other law enforcement agencies have major responsibilities. The Customs and Excise Department, together with the police force, plays an important role in the government's declared effort to stop the illicit trafficking of narcotics and other dangerous drugs. The Correctional Services Department administers the penal system and runs a wide range of highly successful rehabilitation and correctional programmes. The Fire Services Depart- ment, for its part in ensuring public safety, maintains a high state of readiness and provides a dependable service to the community, more than half of which both works and lives in the many high rise buildings of Hong Kong. The Independent Commission Against Cor- ruption continues its important work.

Fight Crime Committee

The fight against crime and the maintenance of law and order are given high priority by the government. The Fight Crime Committee, under the chairmanship of the Chief Secretary, continued to provide advice designed to combat Hong Kong's criminal elements in areas as diverse as triad and gang activities, armed robberies and the use of imitation firearms, youth and juvenile crime, burglaries in residential buildings, commercial crime and nuisance caused by vice establishments.

Although there was a decrease in violent crime, particularly robberies and in theft from vehicles and theft of vehicles, there was an appreciable increase in burglaries in residential flats. The committee's fight crime publicity campaign planned for 1985-6 concentrated in part on protection against burglaries. The campaign was aimed at assisting the introduction of the Neighbourhood Watch scheme, which was designed to mobilise the public against burglaries in residential premises.

The committee considered proposals to ban the possession of imitation firearms and to tighten controls over cartridges used in industrial fixing tools. As the poor standard of watchmen does little to discourage crime in multi-storey buildings, the committee con- sidered amendments to the Watchmen Ordinance. Other measures included the proposed scheme of using closure orders to tackle the problem of nuisance caused by vice establishments in residential buildings and a close liaison with goldsmith and jewellery trade associations in order to induce goldsmith shops to introduce adequate security measures. Discussions were held with government departments on activities under their control where triads and gangs might be operating with a view to neutralising these criminal elements by tightening controls and changing procedures.

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       Through the work of its working group on youth, the committee identified and assessed the effectiveness of the existing legislative and administrative arrangements for dealing with young offenders and other young persons requiring care and protection. It aimed at enhancing such arrangements and improving co-ordination. In particular, it embarked upon a study of means to improve the way young offenders are individually assessed so that the courts might have a better opportunity to commit them on the basis of advice on the correctional programme which would be most likely to reform them.

       The committee endorsed a proposal to set up a standardised law and order statistics system to provide compatible statistics for the use of all branches of the criminal justice system. It also decided to examine the need for a more sophisticated integrated statistics system which would help the government in targetting its crime-fighting efforts.

       Close liaison was established between the committee and its district counterparts. An annual conference of all members of the committee and of the district committees took place in December. The conference highlighted the role of district committees in the task of fighting crime.

Police Force

The three-day visit to China in February by the Commissioner of Police marked a new era in the exchange of information and personal contact relating to the maintenance of law and order on both sides of the border.

The visit arose from China's admission in 1984 to the International Criminal Police Organisation, Interpol. Constructive and useful discussions on law enforcement problems, and their solutions, were held between the Commissioner of Police and officials from China's Public Security Bureau in Peking and from Guangdong Province. Methods of communications and liaison were among the main points raised in the discussions. Other topics included counterfeit currency, narcotics, counter-terrorism, counter-hijacking, fugi- tive offenders and road traffic.

       An initial benefit from the visit was a decision to establish a series of regular meetings between the two law enforcement counterparts. These meetings are now taking place, being held alternately in Peking and Hong Kong.

       During the year, the use of firearms in committing crimes remained a serious threat, although the incidence of armed robberies involving the use of genuine or imitation firearms decreased substantially.

A gunbattle ensued when police confronted armed criminals in the 'Golden Mile' area of Tsim Sha Tsui in the late hours of May 1. Six gunmen raided a watch company in Nathan Road and snatched watches worth more than $1 million. While making their escape, the rob- bers were intercepted by police who had taken up positions outside the shop. Some 120 shots were exchanged, during which four policemen sustained bullet wounds. In the early hours of September 24, the police raided a flat in Happy Valley and arrested seven men. All were charged with offences relating to the robbery and shootout in Nathan Road, and other crimes. Another serious incident involving firearms occurred on March 13, when a goldsmith shop in Kowloon City was raided by five men carrying guns; stock worth over $1 million was taken. In making their getaway, the robbers were stopped by two police officers on plainclothes duty outside the shop. In the exchange of fire that followed, two of three suspects and one officer were wounded. Subsequent investigations led to the seizure of a cache of firearms and several arrests.

       A case which caused widespread concern was the killing of two British teenagers on a hillside in the Braemar Hill area of Hong Kong Island on April 20. The brutal killings led

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to a massive police search operation at the scene and in the rugged surrounding countryside. At the end of November, officers of the Organised and Serious Crime Bureau arrested five young men and charged them with murder. Court proceedings were con- tinuing as the year ended.

Intensive investigations were also launched into an upsurge of criminal acts related to vehi- cles. Over 200 reports of deception relating to motor vehicle transactions were made to police between August 1984 and June. In these cases, buyers and sellers of motor vehicles were deceived by a number of garages into paying exorbitant interest or commission charges. The situation was tackled by a police operation mounted in June. As a result of raids by over 300 police officers on 45 addresses, 14 people were charged with conspiracy to defraud. In the New Territories, the large number of construction projects - arising from the long-term development plans for the region - combined with the opening of more commer- cial and business ventures, attracted threats and demands for 'protection fees'. However, the activities of these extortionists were checked following well planned police operations resulting in the arrest and conviction of a number of leading triad society members.

Police efficiency in the New Territories was greatly improved during the year by the introduction of an interim 'beat radio' system, as a result of which constables on patrol in the new towns were provided with two-way radios. This system will be upgraded in stages within six years to cope with the demand for more effective policing in the region's fast growing urban development.

In 1985, the Royal Hong Kong Police Force continued to extend its use of modern technology and to improve its equipment in the fight against crime.

Police accommodation was kept under review and building projects totalling around $1,100 million were under construction, or being planned, at year's end. Among these is the construction of the new Police Headquarters, within the existing headquarters complex, in Arsenal Yard, Wan Chai. Work on the sub-structure for Phase I is scheduled to start in early 1986. The first phase of this project is expected to be completed in 1989, at a cost of $135 million; the second and third phases are being planned.

Three new police district headquarters, at Sau Mau Ping, Yau Ma Tei and Hong Kong International Airport, were opened during 1985. Planning also proceeded for Kowloon, the most densely populated of the three land regions, to be split into two regions; east and west. The project is expected to be completed in 1989-90.

The Marine Police continued with a 10-year expansion programme and, by the end of the year, had taken delivery of the final 12 divisional patrol launches, each built at a cost of $8.2 million. As the new vessels were commissioned, older vessels were phased out and the sophisticated fleet now bears little resemblance to that of five years ago. Plans are in hand for further expansion with new command and harbour launches and inshore vessels under consideration.

      The Police Bands, accompanied by teams of ribbon, lion and dragon dancers, paid a second visit to the Edinburgh Military Tattoo and received public acclaim. While in the United Kingdom they made many other guest appearances, in particular, providing a touch of the Orient at a lunch-time concert outside Westminster Cathedral.

Crime

In 1985, 86 418 crimes were reported, compared with 83 532 in 1984. There were 6 745 robberies, a decrease of 6.9 per cent compared with 7 245 the previous year. Burglaries increased, from 12 663 in 1984 to 13 922. The overall detection rate was 45.8 per cent, compared with 42.8 per cent the previous year.

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A total of 37 940 people were arrested and prosecuted, compared with 35 538 in 1984. Adults prosecuted totalled 34 778 and juveniles (under 16 years) numbered 3 162, an increase of 6.6 per cent and 8.7 per cent respectively, compared with the previous year.

Organised and Serious Crime

The number of robberies involving genuine or imitation firearms dropped markedly in 1985, partly as a result of the seizure of a large quantity of such illegal weapons the previous year and the neutralisation of certain dangerous criminals. However, the involvement of illegal immigrants in violent crimes continued to pose a problem and close liaison is being maintained with China's law enforcement agencies in this regard.

       In 1985, a total of 160 robberies involving the use of real or imitation firearms were recorded; 36 of these were committed against goldsmith and jewellery shops, accounting for the loss of property valued at $20 million.

A total of 35 firearms were seized during police operations and 63 persons were subsequently charged with various offences, including murder and robbery.

Commercial Crime

The Commercial Crime Bureau continued to handle a number of major fraud investiga- tions. Cases are of increasing complexity and the time and manpower resources required to investigate them has correspondingly increased. In order to cope with the situation, there was a significant increase in manpower during the year; certain aspects of the bureau's work are being computerised.

Close liaison with overseas law enforcement agencies has resulted in a flow of informa- tion and mutual assistance which has been of benefit to the bureau, and has prevented instances of fraud.

Reports of fraud from the financial sector, in respect of the operations of banking and deposit-taking companies, have resulted in three instances in which a number of bank executives and businessmen have been charged with offences.

The situation in respect of counterfeit currency remains a cause for concern. Because of the continued trend to produce counterfeit currency in Hong Kong for use in other countries, co-operation with overseas law enforcement agencies was further strengthened. During the year, significant results were achieved and three counterfeit currency syndicates were neutralised.

Public Order

There were no major incidents affecting Hong Kong's internal security during the year. Officers attached to the Police Tactical Unit continued to play an important role in maintaining order at major public functions, apart from their anti-crime patrol duties and attendance at the scenes of serious crimes to assist in intensive searches. A total of 1 700 officers, from the rank of constable to superintendent, received training in all aspects of internal security tactics and methods of crowd control at the Police Tactical Unit base in the New Territories.

Narcotics

A fifth successive bumper crop of the opium poppy in the 'Golden Triangle' border area of Burma, Laos and Thailand resulted in widespread drug trafficking throughout Southeast Asia and an influx of opiates into Hong Kong. Despite intensive enforcement action by police and customs officers, heroin remained readily available at street level.

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Some 467 kilograms of opiate drugs, including heroin base, No. 3 heroin and opium, were seized, compared with 1 340 kilograms in 1984. There were 12 432 prosecutions for narcotics offences, compared with 11 206 the previous year.

Crime Prevention

The Crime Prevention Bureau intensified its activities during the year. To publicise the crime prevention message and display security products, bureau staff operated a mobile exhibition centre at various locations throughout the territory. A portable display was also available for use in local community exhibitions. Crime prevention officers conducted a large number of security surveys in commercial premises and participated in discussions concerning the possible introduction of legislation affecting security companies in Hong Kong.

Criminal Information

The Police Operational Nominal Index Computer System, which is maintained and operated by the Criminal Records Bureau, is becoming increasingly effective and efficient with more user-knowledge. The $8 million system, in operation since 1983, is now handling around 6 000 enquiries a day.

       Identification Bureau officers attended 23 796 crime scenes to examine fingerprints, resulting in 519 persons being identified as having a connection with 643 cases.

      The main fingerprint collection contains 549 705 sets of fingerprints. During the year, 75 814 arrest fingerprints were processed, and through these 39 887 people were identified as having previous convictions. Searches were also carried out on 47 343 sets of fingerprints for vetting purposes.

The Certificate of No Criminal Conviction Section handled 23 063 applications.

      The Photographic Section, which is staffed by professional photographers as well as police officers, produced 693 606 black and white photographs and 137 054 colour slides and photographs.

Illegal Immigration

     Illegal immigration continued to be one of the most serious problems facing the security forces, necessitating a daily deployment of about 800 police officers. During the year, 12 616 illegal immigrants from China were arrested while attempting to enter Hong Kong. A further 3 394 were apprehended after evading security surveillance.

Patrols by Marine Police launches also helped deter illegal entry by sea.

      The Illegal Immigration Intelligence Bureau took effective action against syndicates bringing illegal immigrants into Hong Kong and those involved in providing illegal identity documents. A total of 512 persons were prosecuted for being involved in these criminal activities.

      Among the evaders who surfaced, 53 were found to be in possession of forged identification documents, a decrease of 64.4 per cent compared with 1984.

The smuggling of children into the territory continued. In 1985, the police located a total of 65 child illegal immigrants, a decrease of 63.9 per cent over the figure for 1984. High-powered speedboats were used by unscrupulous syndicates to transport children into Hong Kong. However, these activities, which have sometimes resulted in tragedy, were suppressed following effective counter-measures taken by the security forces.

The new-style identity card proved to be valuable in the fight against illegal immigration. The card is difficult to forge and contains information that can be readily checked through a computer-assisted verification system.

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     Expertise in traffic accident investigation was enhanced by the introduction of training in accident reconstruction techniques for police officers. The accent on road safety was maintained with an emphasis on pedestrian behaviour and vehicle maintenance.

      Traffic conditions improved generally, following the opening of the Mass Transit Railway Island Line, which had an immediate effect on commuter traffic on Hong Kong Island. Several new, high capacity road networks were completed and these also added to the improved traffic flow throughout the territory.

       Road traffic accidents continued to decrease, underlining the benefits of earlier legislative changes providing for enforcement of various accident control measures. Associated with these measures was the compulsory wearing of front seat belts in private cars. On December 31, provisional figures showed that the total number of accidents dropped by 206, with 303 fatalities and 19 406 persons injured.

Community and Media Relations

The 1985 Fight Crime Campaign, again using the theme 'Police and the People Fighting Crime Together', was one of the most intensive publicity programmes ever mounted by the Police Public Relations Branch. Messages aimed at arousing public awareness of crime pre- vention methods, and emphasising the importance of fighting crime in conjunction with the police, were generated through a broad range of activities at both regional and district levels. A total of five television commercials were produced to advise the public on ways of protecting life and property by taking simple, sensible and inexpensive crime prevention measures. These were shown 682 times on all four Chinese and English television channels. Press releases in support of the campaign were also issued through the PPRB's Information Bureau.

A territory-wide Neighbourhood Watch scheme was introduced in 80 public and private housing blocks to counter the increasing number of burglaries in residential buildings. The scheme was first tried - on an experimental basis - in housing blocks in Sha Tin and Kwai Chung in the New Territories. Under the scheme, which will be further expanded, people in selected areas are encouraged to band together to heighten individual awareness of security risks and, having regard for each other's property, to act to deter would-be criminals. This initiative was launched by the police in conjunction with the Fight Crime Committee.

Apart from the work of the Fight Crime Committee and the District Fight Crime Committees, the Police Community Relations Officer Scheme, the Good Citizen Award Scheme and the Junior Police Call (JPC), also contributed much to improve police-public co-operation and goodwill. Their efforts were well reflected by the number of citizens' arrests, which stood at 14.16 per cent of all arrests for the year.

Junior Police Call, which was first launched in 1974 to provide both the incentive and opportunity for young people to assist the police in reducing crime, has become the largest organisation of its kind in the world. In July, nine-year-old Lee Kin-man became the 400 000th young person to enrol in JPC and, at the end of the year, membership stood at 415 300 - an increase of 29 800 over the previous year. JPC members have also expanded their scope of activity from participation in fight crime campaigns to social, cultural and sporting functions. In addition, they were more than willing to help the less privileged, the elderly and the handicapped.

Early in the year, thousands of JPC members braved bleak weather to complete a charity walk or to sell flags on the streets to raise a total of $200,000 for drought disaster victims in Ethiopia. Among many other JPC activities was a five-day summer camp at Wu Kai Sha

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for 900 members and leaders, a goodwill visit to Singapore, and a mini-Olympic Games. Plans were developed to set up more clubhouses to provide recreational and educational facilities for members. One new clubhouse was opened in 1985, bringing to 16 the total number of clubhouses in operation.

      The Good Citizen Award Scheme, jointly sponsored by the Hong Kong General Chamber of Commerce and the police, received an additional boost from the introduction of a new good citizen of the year award, for those who have displayed exceptional bravery, great resourcefulness or outstanding initiative. In March, the Governor presented awards totalling $60,000 to 11 people, including four young members of one family who arrested a burglar who had broken into their home and threatened them.

      Cash awards totalling $191,000 were presented to a further 118 civic-minded people for brave acts in arresting, or helping to arrest, criminals and bringing them to justice. A total of 1 675 good citizens have received $2,050,400 since the scheme began in 1973.

By the end of the year, the number of criminals arrested as a direct result of calls made to the police hotline rose to 4 091. This hotline was given valuable publicity on the weekly Police 15 and Police Report television programmes. Meanwhile, the fifth series of the popular police TV drama-documentary programme On the Beat was produced by Radio Television Hong Kong and the police and was shown on both Chinese channels. It attracted more than two million viewers.

Another new crime-related television programme, Crime Watch, was introduced on one channel with the aim of inducing viewers to phone in information, in particularly difficult, unsolved cases. The programme used video reconstructions and a special studio set-up, manned by CID personnel, to stimulate immediate viewer interest and response.

      Officers in the PPRB newsroom, who provide a 24-hour information and enquiry service to the press and the public, handled a monthly average of 13 800 enquiries and issued a monthly average of 170 traffic bulletins and 130 press releases on all aspects of police work. Press conferences, background briefings and interviews were also organised by the branch.

Recruitment and Personnel

At the end of 1985, there were 25 182 disciplined officers in the police force an increase of 546 over 1984. Civilian staff, at 5 387, represented 17.4 per cent of the overall establishment. There was a slight increase in applications to join the police - the total number standing at 15 559 compared with 13 861 in 1984. The number of constables appointed during the year was 959, 6.25 per cent of whom were women. Of the total 149 police inspectors appointed, 50 were recruited locally, 59 were employed from overseas and 40 were promoted from the junior ranks through the 'potential officer' selection scheme.

The year also saw 29 gazetted officers promoted to the rank of senior superintendent and above, 21 chief inspectors to superintendent; 53 senior inspectors to chief inspector, 103 sergeants to station sergeant and 15 constables to sergeant. In addition, 10 exceptionally experienced station sergeants were also promoted to the rank of inspector.

Training

Facilities at the Police Training School were further expanded and improved to meet increasing demands. Recruit inspectors continued to undergo a 36-week course and recruit constables began their career with 22-week course. The courses covered criminal law, social studies, police and court procedures, drill and musketry, first aid and, for overseas inspectors, an eight-week course in colloquial Cantonese. Recruit traffic wardens under- went a six-week course covering traffic legislation and procedures.

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      The school provides training for junior police officers, to refresh and update their professional knowledge, for traffic personnel and for newly promoted sergeants and station sergeants to prepare them for the responsibilities of higher rank.

      The Regional Continuation Training Scheme operates from centres in each of the four police regions. It provides supplementary training for some 2 470 constables each year, during their first two years of service. In addition, a scheme of continuation training for inspectors with less than one year's operational service has proved to be most effective as has a series of courses on community relations specially designed for newly appointed Neighbourhood Police Co-ordinators.

       The Detective Training Wing of the Police Training School holds 12-week standard training courses with an average of 25 inspectors, 20 sergeants and station sergeants and 90 constables attending each of the four courses per year. A continuation training course was also conducted for junior and inspectorate CID officers who have served in the rank for at least four years. The academic year provides for 10 two-week courses for detective police constables, one course each for detective sergeants and detective station sergeants and two courses for detective inspectors.

To cope with expansion and to provide additional expertise in certain branches of the force, the universities, polytechnics and management associations are commissioned to arrange special job-related courses for police personnel. In 1985, these courses included radar and navigation training, fire-fighting and first aid for Marine Police officers, and accounting and financial investigation techniques for those in the Commercial Crime Bureau. The scholarship scheme for inspectorate officers continued to attract officers seeking to further their education at university. Since the scheme was introduced in 1970, 32 officers have obtained degrees and at present six are in either the first or second year of their full-time studies.

In addition, 34 officers of various ranks received overseas training by attending professional and technical training courses in the United Kingdom, Canada, the United States, Malaysia and New Zealand.

Police Dogs

      Police dogs are trained at the Police Dog Unit at Yuen Long in the New Territories and are used in a variety of roles, such as patrolling, tracking, and detecting dangerous drugs. A highlight of the year was the presentation of Britain's top bravery award for a working dog, to police dog Lorna. The award, by the Royal Society for the Prevention of Cruelty to Animals, was for exceptional courage in capturing a burglar on Tsing Yi Island in the early hours of July 27, 1984. Despite a near-fatal axe wound, sustained at the time, the dog dutifully pursued her quarry and apprehended him.

Welfare

The Police Welfare Branch provides a comprehensive range of welfare, sport, recreation and catering services for all members of the force and their families. During the year, 3 853 children of regular and auxiliary police officers were granted bursaries from the Police Children's Edu- cation Trust and the Police Education and Welfare Trust to assist them in receiving education. A particular highlight was the drawing to completion of two new clubhouses providing modern facilities for sport and recreation. The Police Sports and Recreation Club in Boundary Street, Kowloon, will provide a wide range of facilities for officers of all ranks and the Police Officers' Club in Causeway Bay on Hong Kong Island will provide recreational facilities for officers of inspectorate rank and above.

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      Thirty-two holiday homes and recreation centres, situated at scenic spots, were also available to members of the force.

      In accordance with the policy to house adequately all married junior police officers, a total of 54 units were purchased by the government in 1985, for allocation to junior police officers. This brought to 1 914 the total number of quarters available for allocation to such officers. In addition, 198 new units will become available in 1986. Demand for quarters by local inspectors remained strong although additional quarters continued to be provided by the government during the year.

Police Cadet School

Since its formation in 1973, enrolment at the Police Cadet School has progressively increased from its original 150 to its present 750. During its 12 years of operation, 2 796 cadets have graduated. Among them, 2 552 joined the police, 39 entered the Fire Services Department, 74 opted for the Customs and Excise Department and 45 joined the Correctional Services Department.

Buildings and Development

Detailed planning for the first phase of the development of a new Police Headquarters within the existing headquarters complex has proceeded steadily. Construction work also began on six new police stations at Lo Wu, Castle Peak, Siu Lek Yuen, Tai Po, Tsing Yi and Tin Sum in the New Territories. All are expected to become operational by mid-1987. Work on the new Marine Police Base in Aberdeen progressed satisfactorily while planning of a further three Marine bases and the Marine Regional Headquarters reached an advanced stage.

      Construction was also nearing completion on a project to provide interim accommoda- tion for the Police Tactical Unit at the New Territories Depot, Fanling, to enable a new depot with improved accommodation and training facilities to be provided at the unit's existing site at Volunteer Slopes, Fanling. As the year ended, the first phase of a project. to refurbish older police stations was nearing completion and work on the second phase, involving five stations, was about to commence.

Communications

The Communications Branch designs, procures, installs and maintains communications. systems and equipment for the force. The extensive reorganisation and development of the branch continued during 1985 and included an increase in the engineering and support staff necessary to cope with the growing demand for more efficient and economic communications.

      During the year, the branch successfully replaced the force teleprinter network with Datanet, which is one of the most modern message switching systems available. The existing Computer Assisted Command and Control System (CACCS) was also refurbished to enable it to function until 1989 when it will be replaced by the Enhanced Computer Assisted Command and Control System (ECACCS).

A number of projects were embarked upon to improve and extend the 'beat radio' system. These include the installation of a communications system for policing the MTR Island Line, the reorganisation of radio communications on Cheung Chau and an extension of the beat radio scheme to built-up areas in the New Territories.

      Of considerable importance is the development of a strategy to integrate most of the existing radio networks and control systems over the next five years.

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The force transport fleet continued to expand. With the addition of new vans, the Police Tactical Unit is now equipped with the latest and most efficient personnel carriers. The force Traffic Branch also benefitted from the modernisation drive, taking delivery of 209 new motorcycles to replace existing machines. The force transport fleet now totals 1825 vehicles and includes many classes of transportation - ranging from those equipped for heavy-lifting duty, and major incident control vehicles, to 650 cc motorcycles.

Computer Development

      Planning for a computerised Personnel and Training Record System continued in 1985. The first phase is due to become operational in mid-1986, with the entire project scheduled for completion in 1988. Computerisation of personnel records will make management of the force's considerable personnel resources more effective and enhance efficiency through improved career planning capabilities and manpower deployment. More than 50 word processors were acquired to assist operational and administrative functions.

Complaints Against Police

The Complaints Against Police Office (CAPO), was set up in 1974 to investigate complaints from members of the public concerning the conduct and behaviour of police officers - with the exception of complaints involving corruption which are dealt with separately. Over the intervening years the unit has expanded considerably, and it now has offices covering Hong Kong Island, Kowloon and the New Territories. In 1985, 4 337 complaints were registered, representing an increase of 4.1 per cent over the previous year. During the year, 100 police officers were disciplined and 10 others were convicted of criminal offences. The rate of substantiated cases at the end of the year was 7.8 per cent, with 1084 cases still to be completed.

      Almost 90 per cent of complaints were made in person or by telephone to CAPO or police stations, indicating that the public continued to have faith in the internal investigation procedures conducted by the police. In addition to investigating complaints, CAPO officers also take action to counter complaints by briefing operational officers on current trends, with a view to reducing conflict with members of the public and promoting good relations.

Licensing and Societies Registration

Amendments made to the Watchmen Ordinance during the year included imposing an upper age limit, simplifying appeal procedures, and the introduction of fees for permits. By the end of the year, a total of 58 728 watchmen were registered, compared with 48 616 the previous year.

       Applications for other licences, for which the Commissioner of Police is the authority, remained relatively steady throughout the year.

A total of 243 groups applied to the police for registration under the Societies Ordinance.

Royal Hong Kong Auxiliary Police Force

      Officers joining the Royal Hong Kong Auxiliary Police Force are volunteers who come from all walks of life. The present strength of the force is 4 813, approximately 10 per cent of whom are women officers. The functional roles of the force are to assist the regular police force in day-to-day constabulary duties and to provide additional manpower during times of need.

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      The average daily turnout of auxiliaries for constabulary duties in 1985 was about 700 officers.

The standard of education of the recruits improved during the year and many were professionally qualified in fields such as engineering, architecture, law, administration and surveying.

      The Auxiliary Police Headquarters were moved from their site in Wan Chai on Hong Kong Island at the end of 1984 and are now established temporarily at Kowloon Bay, adjacent to Hong Kong International Airport.

Customs and Excise Department

In 1985, the Customs and Excise Department was reorganised into three major branches - the Headquarters Branch responsible for departmental administration, revenue and training; the Operations Branch comprising the three Customs and Excise Service regions together with the three Trade Inspection regions, and the Investigation Branch comprising the Customs Investigation Bureau, the Trade Investigation Bureau and the Trading Standards Investigation Bureau.

The major component part of the department is the Customs and Excise Service, a disciplined force of 2 612 officers and men which enforces Hong Kong's laws on dutiable commodities, dangerous drugs, import and export controls and copyright protection. Other responsibilities include the prevention and detection of illegally imported goods which are prohibited or restricted for public health or safety reasons or to meet interna- tional obligations.

The work of the Trade Controls Group, another arm of the department manned by Industry Grade officers, is given in Chapter 4, Industry and Trade.

Revenue Protection

There are six groups of dutiable commodities in Hong Kong - alcoholic liquors, tobacco, methyl alcohol, hydrocarbon oils used as fuel for motor vehicles and aircraft, non-alcoholic beverages and cosmetics. The Customs and Excise Service is responsible for collecting and protecting revenue from dutiable commodities. The Dutiable Commodities Ordinance imposes controls on the import, export, manufacture, sale and storage of these commodities throughout Hong Kong. In 1984-5, $2,343.60 million was collected on dutiable commod- ities, compared with $2,583.60 million in 1983-4.

Anti-Narcotics Operations

The service has a responsibility for the prevention and suppression of illicit trafficking in narcotics and other dangerous drugs. It intercepts illegal imports and takes action against drug manufacturing, trafficking and abuse in Hong Kong. The service co-operates closely with the Royal Hong Kong Police Force, overseas customs authorities and other law enforcement agencies.

During the year, 315 kilograms of dangerous drugs were seized, including 48 kilograms of heroin, 90 kilograms of heroin base, 33 kilograms of opium and 144 kilograms of cannabis. A total of 1 300 people were charged with drug offences.

Copyright Protection

The service is responsible for protecting the copyright of literary, dramatic and musical works. While the problem of pirated sound recordings has been contained, illicit copying of motion pictures and television programmes and unauthorised photocopying of books

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remain a preoccupation. In 1985, the Copyright Division made 76 copyright investigations, which resulted in 127 people being charged and the seizure of 74 pirated books, 16 photocopying machines, 940 pirated video tapes and 43 video recorders. In addition, as an offshoot of the division's activities in this field, 629 pornographic video tapes and 39 pornographic magazines were seized and 19 people charged with offences under the Objectionable Publications Ordinance.

Independent Commission Against Corruption

The Independent Commission Against Corruption (ICAC), which entered its 11th year of operation in 1985, has become firmly ingrained in Hong Kong's social structure. Through the commission's sustained efforts in the areas of investigation, prevention and education, large-scale syndicated corruption has disappeared. The commission has also gained increas- ing international esteem which can best be exemplified by the growing number of distinguished visitors from overseas and the study tours made by anti-corruption officers of other countries, as well as by the leading role played by the commission at high-level conferences and consultations overseas.

During the year, the commission participated in the Second International Conference on Corruption and Economic Crime Against Government which was held in New York City. The conference provided a forum where senior officials from government agencies involved in anti-corruption work exchanged knowledge on areas of concern regarding public and private sector corruption.

      The ICAC is independent of the Civil Service and the commissioner is directly responsi- ble to the Governor. An Advisory Committee on Corruption, consisting of leading citizens and senior government officials, provides guidance for the commission on policy matters con- cerning staffing, financial estimates, administration and other aspects of its work. Each of the three functional departments of the commission, namely the Operations, Corruption Preven- tion, and Community Relations Departments, is also guided by an advisory body with members drawn from various sectors of the community and public service. All complaints against the commission and its staff are handled by an ICAC Complaints Committee, which comprises seven Unofficial Members of the Executive and Legislative Councils and a law officer. In 1985, a total of 25 complaints were received. They were thoroughly investigated and advice was given by the committee on the action considered appropriate.

Operations

The Operations Department investigates all reports related to allegations or suspected offences under the Prevention of Bribery Ordinance, the ICAC Ordinance and the Corrupt and Illegal Practices Ordinance.

In 1985, the department received 2 550 corruption complaints. Of these, 785 were made by members of the public in person, 1 080 by telephone and 507 by letter; 178 were received from government departments. Some 61 per cent of these complaints were made by persons prepared to identify themselves.

The advent of district board elections and election to the Legislative Council resulted in more allegations than usual under the Corrupt and Illegal Practices Ordinance. A total of 73 complaints under this ordinance were received.

During the year, as a result of investigations carried out by the department, 302 persons were prosecuted for corruption or related offences and 233 prosecutions were completed with 169 convictions. The conviction rate on completed cases stood at 73 per cent. At the end of the year, 85 cases were pending trial and 433 investigations were in progress.

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      On the advice of the Operations Review Committee, reports concerning 189 serving or former government officers were referred to the heads of departments and the Civil Service Branch for consideration of disciplinary or administrative action.

Corruption Prevention

The Corruption Prevention Department reviews and recommends changes to procedures in government departments and public bodies which could be conducive to corruption. Its advisory service is also extended to any private organisations or individuals on request. In April, an Advisory Services Group was formed to expand upon this task.

      In 1985, 96 assignment studies were completed, bringing the total since 1975 to 1 013. These studies are detailed examinations of specific areas of a department's activities, covering policy, law, instructions, work methods and management. Reviewing previous studies and monitoring corruption prevention measures continued to be an important aspect of the department's work.

      The year saw the addition of a large number of Corruption Prevention Groups in government departments. Through liaison and discussion, at directorate level, these groups provide a co-ordinated approach to corruption prevention studies, with the individual departments actively participating in the identification of corruption-prone areas in their own organisations. By the end of the year, 31 such groups had been established.

      The Corruption Prevention Department maintained a close working relationship with a large number of government departments, offering advice on draft legislation, new procedures and instructions. The department also played an active part in departmental and inter- departmental working groups, being represented on 36 working groups or committees.

      Reports to the ICAC which indicated deviation from established policy or procedures were followed up by the department. These provided useful information for the evaluation of policy and the effectiveness of corruption prevention measures and helped to pinpoint areas requiring study.

      Training programmes organised for supervisors in the government and in the private sector continued in 1985. The programmes covered the concept of supervisory accountabil- ity, management's role in corruption prevention, and delegation of responsibility and authority. Training for senior and junior supervisors in the government helped to build corruption prevention measures into government policies and procedures as they evolved. During the year, 217 seminars were held for 3 281 government officers in 17 departments, while 32 seminars were attended by 510 people from public bodies and the private sector.

Community Relations

The Community Relations Department is responsible for educating the public against the evils of corruption, harnessing public support in the fight against corruption, and, in the long term, promoting a higher standard of honesty and integrity among individuals and in society. In going about these tasks, the department works on two fronts reaching all sectors of the community through direct liaison and the general public through the mass media.

      Direct contact with the public is made mainly through the 11 ICAC local offices, all located in densely populated districts. Liaison staff keep in close contact with government departments, public bodies, trade and professional organisations, business firms, schools, group welfare bodies and neighbourhood associations.

      During the year, the department conducted 17 703 liaison functions and 166 special programmes, reaching 370 324 people, most of them young people who were private sector

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employers and employees, and civil servants. This was the second year in which the department launched a special programme to involve volunteers in community relations work. About 200 young people from various walks of life were recruited and trained to undertake anti-corruption projects. In response to International Youth Year, a Special Programme for Youth was organised by the commission together with the Outstanding Young Persons Association. Among the 755 young people who attended a jamboree, 300 formed themselves into 42 teams for social service projects. Also, the department particip- ated actively in the Community Involvement Badge Scheme of the Scout Association of Hong Kong in providing information and training programmes on anti-corruption work for the Scouts, Venture Scouts and Rover Scouts.

On the education front, great emphasis was placed by the department's Public Education Office on liaison with students of the Colleges of Education. A major project for the year was a 'Design an Aid' project organised jointly by the office and four teacher training institutes and sponsored by the Lions Club of Victoria. Over 200 student participants designed some 30 teaching packages complete with lesson plan and appropriate aids on the parts of the primary school social studies syllabus which particularly lent themselves to the inculcation of moral values. The project culminated in an exhibition which was attended by over 1 000 primary school teachers and student teachers.

      In its efforts to reach the public through the mass media, the commission independently produced Vanguard II, a television drama series depicting the challenges and achievements of ICAC investigations. The series was aimed at further strengthening the public's confidence in, and their support for, the ICAC. It was shown on a Chinese channel in May and June, capturing an average viewership of 780 000, which made it the top programme on the channel.

      Outstanding results were also achieved by the ICAC with a new anti-corruption advertising package. In the second Annual Creative Awards Competition held by the Association of Accredited Advertising Agents of Hong Kong, the ICAC captured the gold and silver awards in the public service television commercial section as well as the gold award in the poster section.

Government Laboratory

The Government Laboratory provides an essential scientific support service to law enforcement authorities, including the Royal Hong Kong Police Force, the Customs and Excise Service, the Immigration Department and the Independent Commission Against Corruption.

Forensic Science

The Forensic Science Division of the laboratory is heavily engaged in the investigation of such diverse crimes as arson, burglary, counterfeiting, deception, forgery of documents, fraud, hit-and-run traffic accidents, homicide, illegal manufacture and possession of drugs of abuse, rape and robbery. Scene-of-crime examinations played an important part in the service with over 500 scenes attended by laboratory staff during the year. The workload of the division has continued to rise and the urgent nature of much of the work calls for the use of rapid analytical techniques. To this end, new instrumentation has been installed for the semi-automated examination of narcotics, and organs and body fluids in cases of unknown cause of death.

      Following the attachment of a laboratory officer to the Metropolitan Police Forensic Science Laboratory in London for training in traffic accident reconstruction techniques,

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work was initiated on the provision of a new support service to the police. The year also saw continued progress in forensic blood-grouping work as well as research on gunshot residues; and installation of a Fourier Transform Infrared Spectrophotometer has allowed the division to expand appreciably its capacity in supporting the fight against crime.

Correctional Services

Comprehensive treatment and training programmes have been developed to suit the different types of offenders sentenced to correctional institutions administered by the Correctional Services Department. The department currently provides appropriate services for young offenders, drug addicts, first offenders and recidivists, and administers 20 correctional institutions, three halfway houses, a Staff Training Institute and an Escort Unit, with an establishment of 5 860 uniformed staff and 534 non-uniformed staff. There is a capacity for 9 397 inmates, and the average daily population in 1985 was 7 969 compared with 7 895 in 1984. In addition, the department is responsible for managing closed centres housing Vietnamese refugees. The staff in these centres, with the exception of the senior management, have been specially recruited, and trained only to look after refugees. They have no previous experience in connection with prisons or prisoners.

Adult Male Offenders

     Prisoners are assigned to an institution dependent upon their security rating, which takes into account the risk they pose to the community and whether or not they are first offenders. Care is taken to separate recidivists from first offenders.

      Eleven prisons accommodate adult male prisoners, four being maximum security institu- tions. Stanley Prison and Shek Pik Prison house prisoners serving long sentences including those sentenced to life imprisonment. Siu Lam Psychiatric Centre accommodates the criminally insane and those requiring psychiatric treatment, while adult males awaiting trial or remanded in custody during court hearing are detained at Lai Chi Kok Reception Centre. The few male civil debtors who are occasionally admitted are held in a separate section at Lai Chi Kok Reception Centre.

Ma Po Ping Prison, Tung Tau Correctional Institution and Victoria Prison function as medium security institutions for male offenders. In addition to its role as a prison, Victoria Prison also houses illegal immigrants pending repatriation to China, persons arrested mainly in the urban area for immigration offences, and a small number of Vietnamese refugees.

Four institutions are designated as minimum security prisons and they are used to hold prisoners who work outside the institution, usually on community projects. A special section within Ma Hang Prison has been set aside for geriatric prisoners. In this unit, those certified by the medical officer to be clinically old are accommodated in a less demanding environment. The ones who are medically fit are required to work on light industrial tasks or gardening, while the incapacitated may be put in hospital.

Young Male Offenders

Young offenders in the department's custody are persons whose ages range from 14 to 20. After sentence by a court, they follow correctional programmes either in a prison, training centre, drug addiction treatment centre or a detention centre. In 1985, there were 1 125 young offenders in custody compared with 1 203 in 1984.

      There is a maximum security institution for young offenders at Pik Uk Correctional Institution which functions as a reception centre, prison and training centre for the more

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difficult recalcitrant youths. Pre-sentence reports for suitability for admission to a detention centre for young adults between 21 and 25 years of age are also compiled by this institution. Young prisoners who do not require the highest degree of security are held at Lai Sun Correctional Institution on Hei Ling Chau.

      Cape Collinson Correctional Institution and Lai King Training Centre provide a full range of facilities for those sentenced to be detained in a training centre. The older youths aged 18 to 20 are held at Cape Collinson Correctional Institution while those between 14 and 18 years of age are held at Lai King Training Centre.

A very effective detention centre programme is administered at Sha Tsui Detention Centre on Lantau Island. This medium security institution is divided into two sections, one for young persons aged between 14 and 20 and the other for young adults aged between 21 and 24. Strict discipline, hard work, strenuous physical effort and a vigorous routine are emphasised in the programme.

Nei Kwu Chau Addiction Treatment Centre provides treatment for young persons who are addicted to drugs and have been sentenced for treatment.

      A halfway house, known as Phoenix House, has residential facilities for 120 persons released under supervision from a detention or training centre. While residing in this house, they are required to go to work or school but must return in the evenings for counselling, further therapy and close supervision. Residents generally live in the house for up to three months before they are finally permitted to live at home or in other private accommodation while continuing under after-care supervision.

Female Offenders

Tai Lam Centre for Women in the New Territories provides accommodation for women sentenced to imprisonment. It also has a remand section and a separate section where women addicts are given treatment under the Drug Addiction Treatment Centre Ordin- ance. The majority of women are employed in a large industrial laundry which renders services to a number of government departments and public hospitals.

Young female offenders under 21 years of age are accommodated at Tai Tam Gap Correctional Institution. There are separate sections for Training Centre inmates, young prisoners and remands. Bauhinia House serves as a halfway house for girls released under supervision from the training centre.

Drug Addiction Treatment

Under the Drug Addiction Treatment Centre Ordinance, the courts are empowered to sentence drug addicts found guilty of offences punishable by imprisonment to compulsory treatment in a Drug Addiction Treatment Centre for between four and 12 months. This is followed by one year's compulsory after-care supervision.

The department administers three Drug Addiction Treatment Centres, namely Hei Ling Chau Addiction Treatment Centre for adult males, Nei Kwu Chau Addiction Treatment Centre for young males under the age of 20 and a part of Tai Lam Centre for Women for female addicts. Since 1980, there has been a gradual increase in the number of persons admitted for treatment, from 1 518 to 2 621 at the end of 1985 although the number of young addicts admitted has remained constant over the last two years.

The Drug Addiction Treatment Programme is carried out in two stages, in-centre care and after-care supervision following release. The treatment process involves the uprooting of physical, psychological and emotional dependence on drugs, the restoration of physical health and assistance towards readjustment into the community. A halfway house known

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as New Life House provides a temporary home for those in need of more intensive support or accommodation immediately following release. During the 12 months' compulsory supervision after release, after-care staff continuously provide advice, support and assist- ance in order to enhance further the rehabilitation process. Contravention of supervision requirements may result in recall to a treatment centre for further treatment.

After-care Supervision

After-care plays an important part in helping released inmates to resume an indus- trious and law-abiding life within the community. The process starts soon after a person is admitted into an institution when steps are taken to build up a sound relation- ship between the inmate, his family and the supervising officer. Following release, the supervising officer maintains close contact with the ex-offender, offering assistance and guidance in coping with the demands made upon him and ensuring that he leads a law- abiding life.

      Statutory after-care supervision is provided for all persons released from training, detention and drug addiction treatment centres and the majority of young prisoners.

At the end of 1985, the success rate was: detention centre, 94 per cent; training centres, 65 per cent for males and 92 per cent for females; drug addiction treatment centres, 68 per cent for males and 73 per cent for females; young prisoners, 85 per cent for males and 85 per cent for females. (The success rate is defined as the percentage of those who have completed the supervision period without subsequent reconviction and, where applicable, remain drug free). There was an active caseload of 3 530 males and 175 females at year's end.

Correctional Services Industries

     Correctional Services Industries serve the dual purpose of providing gainful employment for inmates and of supplying as economically as possible goods and services to the government. Emphasis is placed on training prisoners and inmates to develop good work habits under conditions comparable with those of outside industries. Most inmates are employed in manufacturing products and providing services for the public sector while a minority are engaged in domestic work related to the running of institutions.

At year's end, 7 021 prisoners were employed in various industries within the institutions. A new workshop complex was opened at Pik Uk Prison in late 1985, providing a further 210 jobs in the garment-making and carpentry trades. Further expansion of the precast concrete workshop at Tai Lam Correctional Institution has been made, thereby increasing production of kerbstones and pavement slabs and other concrete products for government departments.

To meet the training needs of the prisoners, continuous effort is made to expand workshops and to develop new markets and products. Through careful management, an increase in productivity has also been achieved. Goods and services for the year were estimated to have a commercial value of $126.5 million, an increase of 28 per cent over 1984.

Psychological Services

     Qualified psychologists assisted by specially trained officers provide a wide range of counselling services and assessment reports. In addition, the service provides in-depth reports for the courts and for the department's use in deciding the offenders' suitability for participation in various corrective programmes. Research projects are also being under- taken by the psychological unit as part of the effort to fight crime and reduce recidivism.

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Young offenders under the age of 21 may be required to attend compulsory educational classes conducted by qualified teachers. They follow a curriculum recommended by the Curriculum Development Committee on the advice of the Education Department. Adult offenders may, on a voluntary basis, attend evening classes conducted by part-time lecturers from the Adult Education Section of the Education Department. Correspondence courses, self-study courses and special courses leading to external examinations are also undertaken by young and adult offenders. External examinations include the Telecommu- nications Examination of the City and Guilds of London Institute, the London Chamber of Commerce and Industry Examinations, Pitman's Examinations and the Hong Kong Certificate of Education Examination.

Visiting Justices

Justices of the Peace are appointed by the Governor to visit each institution either bi-weekly or monthly depending upon the type of institution. Their statutory duties include investigating complaints, checking meals and reporting on the standards of living and working conditions. They also advise the commissioner on the employment of prisoners and on work opportunities after release. In 1985, 519 visits were made to institutions, including those accommodating Vietnamese refugees, without prior notice.

Medical Services

Hospitals and sick-bays within institutions provide medical and health care to persons in custody including radiodiagnostic and pathological examinations as well as prophylatic inoculations. Medical officers carry out an examination on every person on admission to an institution. If necessary, appropriate medical treatment is given within the institution while anyone requiring specialist care is either referred to a visiting consultant or transferred to a government hospital as appropriate. Essential dental treatment is also provided.

Siu Lam Psychiatric Centre and a psychiatric observation unit at Lai Chi Kok Reception Centre provide treatment for the criminally insane, psychiatric consultations and assess- ments for inmates referred from other institutions and the courts.

Ante-natal and post-natal care is provided at institutions for women and within the closed centres for refugees. Arrangements are invariably made for babies to be born in government hospitals rather than within an institution.

Staff Training

The department's Staff Training Institute is responsible for the training of both new staff and serving officers. A one-year orientation training programme with two intermittent field placements is provided for all recruit assistant officers and officers. Within a disciplined setting, the syllabus includes a study of the Laws of Hong Kong, footdrill, self-defence, weaponry, riot drill, first-aid and social science, including criminology, psychology and social work. The objective of the training is to develop professional skills and technical competence as well as an appropriate attitude towards the work with emphasis being placed on a realistic integration of theory and practice.

Hong Kong Discharged Prisoners' Aid Society

Established in 1957, the Hong Kong Discharged Prisoners' Aid Society, a voluntary organisation, provides assistance to discharged prisoners and helps with their rehabilitation and reintegration into the community. The society provides a wide range of invaluable

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services including casework counselling, hostel accommodation, employment guidance, recreational activities, as well as caring for discharged prisoners who have a history of mental illness.

Refugees

At the end of 1985, there were 4 438 Vietnamese refugees detained in closed centres managed by the department compared with 5 654 in the previous year. Chi Ma Wan Closed Centre and Hei Ling Chau Closed Centre house south Vietnamese and north Vietnamese respec- tively. This separation was made necessary following conflict and unrest between the two groups. In March, Bowring Closed Centre at Tuen Mun was opened to relieve overcrowd- ing at Chi Ma Wan and Hei Ling Chau. The centre accommodates about 1 400 refugees from both north and south Vietnam who have been carefully selected for their ability to live in harmony with each other. In September, Chi Ma Wan Closed Centre was extended by converting the adjacent Chi Ma Wan Prison to provide additional accommodation and facilities for the refugees.

The Save the Children Fund, World Relief and the Salvation Army provide social services, including educational classes and recreational activities, and the United Nations High Commissioner for Refugees has continued to meet the considerable cost of food, medical supplies, utilities and relief items for the refugees. Further developments in vocational training are in hand.

Fire Services

The Fire Services Department responded to and dealt with 348 221 emergencies in 1985 - 14 722 fire calls, 9 594 special service calls and 333 905 ambulance calls. Fires caused 29 deaths, and left a further 630 people injured; of the injured, 36 were firemen. Some 975 persons were rescued by the Fire Services. Of the 4 877 false alarms, the great majority were raised with good intent, either by the public or by over-sensitive or defective automatic alarm systems, particularly smoke detectors.

Buildings and Quarters

Under the government policy to provide an emergency response to all areas within minimum set times according to the category of risk, four new fire stations were commissioned during the year. These are at Tai O on Lantau Island, Sai Wan Ho and Cotton Tree Drive on Hong Kong Island, and Kowloon Bay. There are now 46 fire stations, 18 ambulance depots and five fireboat stations in the territory. Others are included in the Public Works Programme for future construction.

      At the end of the year, more than 2 069 staff quarters were occupied or available for occupation. Planning was in hand for 50 officers' married quarters and 1 726 additional married quarters for firemen and ambulancemen at five selected sites.

Fire Prevention

The department is responsible for enforcing fire safety regulations. It also advises and assists all sections of the community with regard to fire protection measures generally and in the abatement and elimination of fire hazards. The Fire Protection Bureau plays an important role in educating the public on fire prevention. Publicity campaigns launched during the year increased the community's awareness of fire safety, resulting in requests for more fire prevention lectures, exhibitions and demonstrations from kaifong associations, rural com- mittees, schools and community groups. The number of complaints (7 867) received from

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members of the public was seen as an indication of the level of public concern over potential fire hazards and a growing awareness of the services provided by the department. Fire Services personnel made 156 807 inspections of all types of premises and, where fire hazards were found, abatement notices were issued. In 1985, there were 4746 prosecutions for non- compliance with abatement notices resulting in fines amounting to $1.7 million.

All new building plans are vetted by the department, which specifies the requirements for built-in fire protection and advises on related matters. More than 7 364 new building plans were processed during the year. The department is also responsible for carrying out research into matters associated with fire safety.

Ambulance Service

The Fire Services Department operates the government ambulance service with a strength of 1716 in all ranks of uniformed staff, and 127 civilian employees. The service operates 216 ambulances from 18 ambulance depots or stations throughout the territory and from many fire stations. During the year, a total of 333 905 calls, involving 441 174 people, were handled - representing an average of 915 calls every 24 hours. This was an increase of 6.6 per cent in the number of calls compared with the total for 1984.

Appliances and Workshops

To enable fire-fighting and rescue operations to be conducted in an efficient manner, the Fire Services Department is equipped with nearly 700 operational fire appliances, ambulances and vehicles fitted with modern fire-fighting and rescue equipment.

In 1985, 17 new or replacement appliances and vehicles of various kinds were put into service. To maintain its fleet of fire appliances and rescue equipment, the department operates three workshops covering Hong Kong Island, Kowloon and the New Territories.

Staff Training

All recruits except those in the specialist communications ranks of senior firemen (control) and senior firewomen (control) are trained at the Fire Services Training School at Pat Heung in the New Territories. The courses vary in content and last from eight to 26 weeks. The training of senior firemen (control) and senior firewomen (control) is conducted at the Fire Services Communication Centre in Kowloon by instructors from the Training School. During the year, 302 recruits successfully completed initial training, comprising 15 station officers, 201 firemen and 86 ambulancemen.

The school also conducted fire protection courses for senior station officers and station officers; refresher courses for ambulance personnel; and basic courses on fire fighting, fighting fires on ships and on the use of breathing apparatus for government departments and private organisations in Hong Kong and for the Macau Fire Brigade. Some 1 516 people attended these courses during the year. The Driving Training School conducted courses for 950 officers and other ranks.

Establishment and Recruitment

The uniformed establishment of the Fire Services Department at the end of 1985 totalled 6 051. The number of civilian staff employed by the department stood at 592. A number of recruitment exercises were held resulting in the appointment of 43 officers and 282 firemen and ambulancemen. Standards, particularly physical, are high and on average only about five per cent of all applicants are accepted for appointment.

14

Immigration and Tourism

事入 旅務境

遊和

THE main aim of immigration control in Hong Kong is to contain increases in population from immigration to acceptable levels. In 1985, about 27 300 legal immigrants from China settled in Hong Kong. In past years, illegal immigration has been the greatest threat to limiting growth to a reasonable level. In September 1980, the rate of illegal immigration had reached 450 each day. Measures taken since then have greatly improved the situation. These include the abolition of the 'reached base' policy (which allowed illegal immigrants from China who had successfully entered Hong Kong to stay), the enactment of legislation requiring all residents over the age of 15 to carry legal documents of identity at all times, and the gradual introduction of a more secure identity card, backed up by an efficient computer-based record system. In addition, continued efforts have been made by the security forces at the border and in Hong Kong waters to detect and intercept illegal immigration. In 1985, an average of 35 illegal immigrants a day were arrested while entering. A further nine illegal immigrants who evaded detection on entry were arrested each day during the year.

      The illegal immigration of children, often under conditions of great danger and hardship, continued. The numbers reporting to the Immigration Department for permission to stay averaged one per day throughout 1985. Such illegal immigration poses special problems because children under 11 years of age are not required to register for identity cards and many illegal immigrant children may therefore remain undetected in Hong Kong for long periods. Measures to stamp out this despicable and dangerous practice continue and some of the racketeers have been arrested and punished. Although the position is better than in recent years every effort must be made to guard against a resurgence.

The work of the Immigration Department falls into two main streams - controlling people moving into and out of Hong Kong, and providing travel documents and registration facilities for local residents. The work embraces such diverse fields as the issue of travel documents, visas and identity cards, the processing of applications for naturalisa- tion, and the registration of births, deaths and marriages. Much effort also goes into the detection and prosecution of those who breach the immigration laws and the repatriation of those who are in Hong Kong illegally. Immigration policies are framed to limit permanent population growth, while immigration procedures for Hong Kong residents, tourists and businessmen are streamlined to the maximum extent possible.

Immigration Control

The number of passengers moving into and out of Hong Kong has continued to increase, reaching record levels. Passenger traffic in 1985 totalled some 40.8 million, an increase of 21.1 per cent compared with 33.7 million in 1984. The most dramatic increases were in movements to and from China, up 6.4 million from 17.2 million in 1984, but the figures for

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other categories of travellers also showed increases. As a result, all immigration control points had a very busy year. The bulk of the China traffic was carried by rail via Lo Wu which remained under heavy pressure. Conditions at Lo Wu were uncomfortable for both passengers and staff because of severe overcrowding in the present temporary terminal building. The construction of the new permanent terminal is on schedule and it is expected to open in 1987. A new road crossing point was opened at Sha Tau Kok and work was well advanced on improved facilities at the Man Kam To crossing point. In the meantime, to reduce crowding, the opening hours of the control point have been extended and special arrangements are made for passengers on some trains to receive immigration clearance at Kowloon Station.

      Arrangements for residents of China to visit Hong Kong were further extended. In addition to individual visitors coming to see relatives in Hong Kong, there are now group tours arriving from Guangdong and other parts of China. In 1985, there were 53 200 individual visitors and 52 900 visitors who travelled in groups. The arrangements have worked satisfactorily.

      The facilities for dealing with ferry passengers travelling between China and Hong Kong were under great strain and extremely crowded conditions prevailed at the immigration control point at Tai Kok Tsui. Work has now started on the permanent passenger terminal but this will not be completed for several years. In the meantime, efforts are continuing to improve the existing temporary arrangements.

      A new Hong Kong-Macau Ferry Terminal, near the old temporary terminal, was brought into use in October. The new terminal offers modern and comfortable facilities for passengers. Because of limits on the growth of the Civil Service the new immigration facilities could not be fully utilised in 1985. However, there is now scope for improving services and coping with any further increases in travellers on this route.

Planning and preparation work is now in hand for the computerisation of immigration control work at all control points. The system is being designed to increase the productivity of officers working at immigration desks and to make immigration clearance for Hong Kong residents more convenient. It is planned that the system will be introduced in stages, starting in 1987.

Personal Documentation

     During the year, 0.9 million travel documents were issued to Hong Kong residents, compared with 1.2 million issued in 1984. Re-entry permits for travel to China and Macau accounted for some 70 per cent of all issues.

      The four-year programme to replace all existing Hong Kong identity cards with a new type of card continued to make good progress. By the end of 1985, all men, and all women under 38 years of age had obtained new cards. Well over three million cards have now been issued and the exercise will be completed in 1987.

Vietnamese Refugees

There was some improvement in the refugee situation in 1985. At the end of the year, the refugee population was 9 443, compared with 11 896 at the beginning. During the year, 1 112 arrived while 3 953 left for overseas resettlement, and 412 babies were born.

The closed centre policy, which was first introduced in July 1982 in an effort to discourage further arrivals from Vietnam, was maintained in the face of a continuing, though reduced, flow of small boats across the South China Sea and diminishing resettlement opportunities. Under the closed centre policy, new arrivals continue to be

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detained in closed centres pending their resettlement overseas. Those in the closed centres are not allowed to seek outside employment; visits are regulated, and, for their own protection and common benefit, refugees have to abide by rules governing the daily running of the centres. Families split between open and closed centres are allowed to be reunited in closed centres.

      A new closed centre, the Bowring Closed Centre, opened in March on the site of a former army camp in the western New Territories. The four main closed centres accommodated a total of 4 420 refugees at the year's end.

At 1 112, the number of arrivals from Vietnam dropped by half compared with the figure for 1984. This encouraging reduction remained consistent with the fall in the rate of arrivals since the introduction of the closed centres. In addition, the growth of the Orderly Departure Programme from Vietnam, the general decline in resettlement prospects, and the efforts of the Vietnamese Government to discourage illegal departures, appear to have played a part in this trend.

During the year, only the United States, Canada and Australia continued to provide an ongoing resettlement programme for Vietnamese refugees in Hong Kong. Other countries accepted small numbers of refugees for family reunion or because they had been rescued at sea. A total of 3 953 were resettled from Hong Kong in 1985, compared with 3 694 in 1984. In response to the recommendations contained in the SCORRI (Sub-Committee on Race Relations and Immigration) report issued in Britain in 1985, the British Government announced in September that it would relax its family reunion criteria in respect of Vietnamese in refugee camps in countries of temporary asylum and accept about 500 refugees under this category from Hong Kong for resettlement in the United Kingdom. The British Government also announced that it would consider accepting, in addition to the family reunion cases, a further limited number of Vietnamese refugees from Hong Kong in the light of the willingness shown by other resettlement countries to respond to Hong Kong's needs and of all the circumstances at the time. The Hong Kong Government also agreed to consider accepting for settlement in Hong Kong a limited number of ethnic Chinese from the refugee centres, if this could form part of a package aimed both at reducing drastically the size of Hong Kong's refugee population and at resettling all those whose stay in centres here had been prolonged. Following the British announcement, a major effort was mounted by both the British and Hong Kong Governments to persuade other countries to offer more resettlement places to Hong Kong. The initial reaction was encouraging.

      Accommodating Vietnamese refugees in closed centres continued to place its own financial burden on Hong Kong, costing the government $92.8 million in 1985. The United Nations High Commissioner for Refugees (UNHCR) contributed $18 million to the cost of maintaining refugees in these centres. The Hong Kong Government also worked closely with the UNHCR and the voluntary agencies in an effort to improve the educational and vocational training programmes provided for refugees in closed centres with the aim of enhancing their resettlement prospects.

      For those 4 543 who had arrived in Hong Kong before the change in policy in July 1982 and who were still stranded in Hong Kong three years later, life continued in the two open centres much as before. Refugees in these centres are not confined, and adults are allowed to take up temporary employment with which to support themselves and their families, with few restrictions upon their movements within or without the centres. Resettlement from the open centres continues, but at a very slow rate. In October, the International Rescue Committee took over from Caritas Hong Kong the management of the Jubilee

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Transit Centre. At the end of the year, there were still 2 159 refugees in the Jubilee Transit Centre, and 2 384 in the Kai Tak Transit Centre, which continued to be managed by the Hong Kong Red Cross. More than 1 500 had been living in these temporary transit centres for over six years.

Tourism

During the year, Hong Kong earned an estimated $14,700 million (up five per cent over 1984) from the 3 400 000 visitors to the territory (a rise of nine per cent).

Hong Kong Tourist Association

The Hong Kong Tourist Association (HKTA) is responsible for developing tourism. A statutory body set up by the government in 1957, the HKTA co-ordinates the activities of the tourism industry and advises the government and the industry itself on measures aimed at ensuring growth.

       The chairman and members of the board of management of the HKTA are appointed by the Governor. The HKTA derives over 90 per cent of its income from a subvention from the government. Members dues and the sale of publications and souvenirs provide the greater part of the remainder of its revenue.

       The HKTA's headquarters are in Connaught Centre, in Central District on Hong Kong Island. The headquarters also encompass an information and gift centre, and another such centre is located at the Star Ferry Concourse in Tsim Sha Tsui. These centres and the information counter at Hong Kong International Airport gave assistance to more than 1 150 000 visitors in 1985. In addition, the HKTA operates both English and Japanese- language hotline telephone services, which together received over 26 000 calls during the year. All enquiries, whether in person or by telephone, are monitored to provide further insight into visitor interests and spending patterns.

       Following the development of several hotels and shopping centres in recent years in Tsim Sha Tsui East, the HKTA opened, in October, a new tourist information and gift centre there.

The overseas marketing of Hong Kong as a destination is carried out primarily through the HKTA's overseas offices and representatives working in conjunction with the local travel trade. Offices are located in San Francisco, New York, Chicago, Sydney, London, Frankfurt, Singapore, Tokyo and Osaka, and there are representatives in Paris and Rome. In addition, the HKTA is represented by Hong Kong-based Cathay Pacific Airways in 48 cities in Asia, the United States, Europe, Australia and New Zealand, and the Middle East, where the association does not have an office of its own.

In 1985, the HKTA's marketing policy covered three main themes. These promoted Hong Kong as 'a destination for all seasons', as an ideal venue for international conferences and exhibitions, and as a 'must' destination for tourists visiting Asia. The first theme conveyed the message that the territory has much to offer visitors throughout the year, not just in the peak season of October/November. The second reflected a steady growth in the number of international conferences and exhibitions held in Hong Kong, rising from 15 events in 1976 to around 500 in 1985. The large Hong Kong Convention and Exhibition Centre now being developed on the Wan Chai waterfront will add to Hong Kong's appeal as a venue. When completed in 1988, it will enable Hong Kong to stage international conferences for up to 5 000 people. The third theme took account of studies showing that combining Hong Kong with other destinations in the region is an effective measure in overseas marketing.

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Marketing strategies are geared towards higher-yield markets, with an emphasis on increasing length of stay and at encouraging visitors to return. The estimated 3.4 million visitors in 1985 came primarily from the major regional markets of Southeast Asia (20.5 per cent), the United States and Canada (21.7 per cent), Japan (18.5 per cent), Western Europe (14.5 per cent), and Australia and New Zealand (8.7 per cent). Some 50 per cent were repeat visitors.

       The HKTA carries out extensive advertising on its own and also co-operative advertising promotions in conjunction with the different sectors of the travel industry such as airlines, wholesaling agents and hotels. Much promotional work is done through familiarisation visits by both travel agents and overseas media representatives. A total of 3 250 visiting travel trade personnel and 900 members of the overseas media were briefed in Hong Kong in 1985 on the developments concerning the industry and the tourism product. Visits made in conjunction with the HKTA were designed to coincide with activities and interests which supported marketing themes. An example of this occurred in June, with groups arriving at the time of the Dragon Boat Festival, and the International Dragon Boat races held then, an event befitting 'a destination for all seasons'.

      During the year, the HKTA continued to offer tours aimed at widening Hong Kong's range of appeal. These include a 'Sports and Recreation Tour' which offered a day at a private golf and country club; a 'Come Horseracing Tour', enabling visitors to enjoy the racing tracks of Hong Kong; and 'The Land Between Tour', through the New Territories to show the rural side of the territory. Nearly half of all visitors take at least one organised tour, and 'The Land Between Tour' recorded its 20 000th participant in April, less than three years since its inception. A 'Tour Co-ordinator of the Year' Award was organised in 1985. This involved responses from more than 7 000 visitors, who nominated over a period of three months 500 individual tour co-ordinators for the award. The association also continued to promote the 'Effective Selling Skills Certificate' programme, which is a course for those in the retail trade wishing to optimise, through courteous service to the tourist, their retail opportunities.

In 1985, Hong Kong could offer around 18 000 hotel rooms and the HKTA continued to employ a Hotel Reservations Monitor System, introduced in 1984, to assist the travel trade overseas in making advance reservations. In another development, the HKTA began, in October, a six-month scheme to encourage visitors to patronise retail shops operated by its members.

:

15

The Armed Services

and Auxiliary Services

和三

「輔軍

隊助

THE Armed Services operate in Hong Kong under the overall command of the Commander British Forces, who advises the Governor on matters affecting the security of Hong Kong and who is also responsible to the Chief of Defence Staff in London. The Armed Services are stationed in the territory primarily to assist the government in maintaining security and stability and to sustain confidence in the United Kingdom's stated commitment to Hong Kong. The Royal Navy, the British Army and the Royal Air Force are all represented. During the year, the permanent garrison comprised five Royal Navy patrol craft, a naval tug, a Royal Marines raiding squadron, one United Kingdom and four Gurkha infantry battalions, a Gurkha engineer regiment, a Gurkha signals regiment, a Gurkha transport regiment, an Army Air Corps helicopter squadron with nine Scout helicopters and a Royal Air Force squadron with 10 Wessex helicopters.

      The size and composition of the garrison, and Hong Kong's contribution towards its cost, are determined by a Defence Costs Agreement between the Hong Kong and United Kingdom Governments. The current agreement took effect on April 1, 1981, and runs for seven years. Reinforcements may be made available if necessary.

      Although the flow of illegal immigrants has been reduced in recent years, it continues to be necessary for all three services to concentrate a significant part of their effort on the task of preventing illegal immigration by land and sea.

      Hong Kong also has a number of voluntary organisations making up a strong force of auxiliary services to assist the government and the Armed Services.

      Throughout the year, there was increasing emphasis on training for internal security operations and combined exercises - involving the Royal Air Force, the Army, the Royal Navy, the Royal Hong Kong Police Force and the Royal Hong Kong Regiment (The Volunteers) - helped to improve proficiency in such operations.

Royal Navy

The Royal Navy, based at HMS Tamar in Central District, continued to patrol the waters of Hong Kong. Its force of five patrol craft, and Fast Pursuit Craft of the Third Raiding Squadron, Royal Marines, acted in close support of the Royal Hong Kong Police Force in deterring and apprehending illegal immigrants from China, intercepting Viet- namese refugees and conducting operations against smugglers and others who illegally infringe territorial waters.

      The Captain-in-Charge Hong Kong has responsibility for the operational control of the Hong Kong Sea Defence Area which extends to 91 kilometres. He has responsibility for all Royal Navy forces deployed on search and rescue operations in the South China Sea and works closely with the Director of Marine and the Director of Civil Aviation. The naval base of HMS Tamar maintains a recompression chamber for use in diving emergencies

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     and a small clearance diving team assists the police in the recovery of drugs and smuggled goods and is trained in the techniques of searching for and neutralising underwater explosives. The Captain-in-Charge also administers the naval staff in Singapore, where the Royal Navy maintains berths and an oil fuel depot.

      The final three of the Hong Kong Squadron's new 'Peacock' class patrol craft - HM Ships Starling, Swallow and Swift - arrived in 1985. The first two vessels, Peacock and Plover, had arrived in 1984. All the old patrol craft have been decommissioned.

In other movements during the year, the Royal Fleet Auxiliary Sir Bedivere called, and the base was also visited by warships from the United States, Australia, Malaysia and India. Ships of the Hong Kong Squadron called at ports in Thailand, Singapore, Malaysia, the Philippines, Brunei, Japan, Korea, Indonesia, Australia, and Papua New Guinea during ocean training deployments.

The new 763-tonne patrol craft, built in Scotland, have been specially designed for patrol duties in local waters, including search and rescue and have the ability to stay at sea during typhoons. All the vessels are of a steel and aluminium construction and are 63 metres long and 10 metres wide.

      High-definition radar, direction finding equipment, echo sounder and a gyro compass form part of the equipment fitted to give accurate navigation through confined Hong Kong waters. Boarding tasks are usually achieved by using two rigid inflatable Avon Seariders which are widely used throughout the service. A comprehensive communications system enables the ships not only to talk to boarding parties and shore authorities but also to send messages to any part of the world.

Under the direction of the Captain-in-Charge, a team is training to co-ordinate a scheme of control for the protection of commercial shipping using the Port of Hong Kong in times of tension or war. Personnel include officers of the Royal Naval Reserve, United States Naval Reserve and the Canadian Armed Forces Reserve who are resident in Hong Kong and can be ready at short notice. The team enjoys a close liaison with the Marine Department and the shipping companies.

The strength of the Royal Navy, including reinforcements, is about 670, supported by about 70 locally employed civilians. The patrol craft are jointly manned by Chinese ratings and United Kingdom naval personnel serving in Hong Kong. Altogether, about 370 locally entered personnel are employed ashore and afloat in the seaman, engineering, supply and medical branches. A further 300 locally recruited merchant seamen serve world-wide on board ships of the Royal Fleet Auxiliary Service. Manning laundries on ships of the Royal Navy is another task traditionally undertaken by Hong Kong men.

      The Royal Navy plays an active part in the community and during the year personnel provided sea training for the Sea Cadet Corps and the Hong Kong Sea School, and gave assistance to the Home of Loving Faithfulness.

The Army

The Army represents the bulk of the forces in Hong Kong under the direct command of the Commander Land Forces. Command of operational units is exercised on behalf of the Commander Land Forces by the Commander Gurkha Field Force, while logistic units, grouped as support troops, come under the Commander Support Troops.

In 1985, the 2nd Battalion 2nd King Edward VII's Own Gurkha Rifles was replaced by the 10th Princess Mary's Own Gurkha Rifles. Resident throughout the year were the 1st Battalion the 22nd (Cheshire) Regiment, 6th Queen Elizabeth's Own Gurkha Rifles and the 1st and 2nd Battalions 7th Duke of Edinburgh's Gurkha Rifles.

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215

       Support is provided by a number of units permanently based in Hong Kong. These include the Queen's Gurkha Engineers, the Queen's Gurkha Signals, the Gurkha Transport Regiment, 660 Squadron Army Air Corps, the Composite Ordnance Depot, the British Military Hospital, and 50 Hong Kong Workshops, Royal Electrical and Mechanical Engineers.

-

      Hong Kong people play an important role through their support of the Royal Hong Kong Regiment (The Volunteers) - a locally enlisted regiment of part-time soldiers - and the Hong Kong Military Service Corps, which is also locally enlisted but forms part of the British Army. The latter corps is staffed by full-time regular soldiers and numbers 1 263 Chinese officers and men who serve throughout Hong Kong as guards, military policemen, interpreters, dog-handlers, drivers, cooks, clerks, seamen and storemen. The Hong Kong Military Service Corps provides a valuable contribution to the garrison and has played an important role in operations against illegal immigrants.

       The primary role of the Army is to support the Royal Hong Kong Police Force in maintaining internal security; it is also responsible for preserving the integrity of the border. In recent years, its major task has been to help with the control of illegal immigration, with individual battalions spending an average of three months a year on border duties. A high level of border vigilance was maintained throughout 1985. Improvements to border security are constantly being made and anti-illegal immigration operations continue to play a major part in the daily life of the Army.

      Owing to limited space and the unsuitability of much of Hong Kong's terrain for training, a series of overseas exercises was mounted to maintain the high standards of military skills. During the year, exercises took place in Malaysia, Brunei, New Zealand, Fiji, Papua New Guinea, Australia and Singapore. In addition, a detachment from Hong Kong participated in a Five Power Defence Agreement exercise in Australia. Units of the Gurkha Field Force also played host to visiting detachments from the Papua New Guinea Defence Force, 1st Battalion Royal Australian Regiment, the Royal Brunei Armed Forces, and New Zealand Forces based in Singapore.

The high standard of shooting of Hong Kong-based units was demonstrated at the 1985 Regular Skill at Arms Meeting held at Bisley, England. Lance Corporal Khusiman Gurung of the 6th Queen Elizabeth's Own Gurkha Rifles was awarded the Queen's Medal and Army Rifle Association Gold Jewel, and the team from Depot, Hong Kong Military Service Corps, came third for the second successive year in its particular competition.

Royal Air Force

The main element of the Royal Air Force in Hong Kong is based at Sek Kong in the New Territories. The No. 28 (Army Co-operation) Squadron operates 10 Wessex helicopters from Sek Kong airfield, and is supported by engineering and administrative squadrons. Included in the supporting element is an air traffic control unit, which also provides an advisory control service outside Hong Kong International Airport airspace. Movement of military personnel and cargo by air from Hong Kong International Airport is controlled by the RAF Airport Unit based at Kai Tak, while the RAF Provost and Security Services Unit is located at Blackdown Barracks, San Po Kong. Additionally, RAF personnel serve on the staff of Headquarters British Forces, in the Joint Air Tasking Cell, and in the Joint Services Movements Centre.

      The Wessex helicopters are employed in direct support of the Army and can each carry up to 14 troops or 1 400 kilograms of freight anywhere within Hong Kong. The helicopter is the only practicable way of moving troops, rations and equipment quickly to outlying

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      areas, and its speed and flexibility have been significant in the success of the security forces' operations.

      Although illegal immigration has been substantially reduced across the land border, a number of illegal immigrants still attempt to enter Hong Kong in speedboats. These clandestine activities, which are normally carried out at night, are countered by combined operations involving surface vessels and Wessex helicopters. The Wessex uses its 65 million. candle-power Nightsun to illuminate the area, assisting in the capture of the speedboat and occupants by surface vessels. The flying is demanding and involves considerable time on stand-by at night, waiting for call out.

      Throughout the year, one Wessex was available during normal working hours, at 15 minutes stand-by, for casualty evacuation duties. Additionally, RAF aircraft are always available day and night for support of the Royal Hong Kong Auxiliary Air Force in its search and rescue role. During the dry season, the RAF provides fire-fighting assistance in areas inaccessible to normal fire appliances: the Wessex can carry a suspended bucket containing 1 000 kilograms of water for release over a fire.

      In addition to its operational tasks, No. 28 (AC) Squadron provides training and support for the Royal Hong Kong Police Force and has assisted with a number of community service projects including the removal of abandoned vehicles from remote areas, trans- porting young people to camps in the New Territories on government sponsored holidays, and the provision of air experience flights for a large proportion of the Air Scouts and Air Cadet Corps of Hong Kong.

Royal Hong Kong Regiment (The Volunteers)

The Royal Hong Kong Regiment (The Volunteers) is a light reconnaissance regiment made up of part-time volunteers. Its role, though primarily one of internal security, also includes reconnaissance, anti-illegal immigration operations and assistance to other government departments in the event of natural disasters. It is administered and financed by the Hong Kong Government, but if called out it is commanded by the Commander British Forces.

      The regiment has an establishment of 946 volunteers and 54 permanent staff including nine service personnel on loan from the British Army. The volunteers come from all walks of life and are of various nationalities. But over 95 per cent are Chinese.

      The regiment is composed of four reconnaissance squadrons, a home guard squadron and a headquarters squadron. In addition, a women's troop was established in 1983 and expanded to 52 members in 1984 to provide supporting services in internal security and anti-illegal immigration operations as searchers and interpreters. A guard troop of 12 members was established in 1983 to look after the general security of the regimental headquarters. There is also a junior leaders' corps of 300 boys, aged from 14 to 17, trained in youth activities and leadership. As part of the youth activities geared to the Duke of Edinburgh Award Scheme, a junior leaders' band was formed in 1984 to give performances at youth functions. The response to recruiting campaigns has been enthusiastic. A highly selective intake of 119 recruits joined the volunteers in 1985 following a successful campaign which attracted over 1 900 applications.

      The regiment's headquarters are located in the busy residential area of Happy Valley on Hong Kong Island, where the volunteers have been based since 1950. The regiment does not have a training camp of its own and has to share the training facilities of the British Army in Hong Kong. Active planning was underway in 1985 to establish a training camp at Lin Fa Shan, Tsuen Wan.

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217

       The training commitment is two evenings and one weekend each month as well as centrally organised regimental training such as regimental camps and exercises. Regimental camps, the highlights of the year's training, take place over eight days in April and October. For the October camp, the regiment is deployed on the border to relieve a regular battalion of its anti-illegal immigration duties. During the year, selected volunteers were sent for overseas training in the United Kingdom and Singapore.

Royal Hong Kong Auxiliary Air Force

The Royal Hong Kong Auxiliary Air Force, based at Hong Kong International Airport, provides a variety of flying services for the government. It operates a fleet of seven aircraft: a twin-engined Cessna Titan, a Britten-Norman Islander, two Scottish Aviation Bulldog trainers and three Aerospatiale Dauphin twin-engined helicopters. With a self-sufficient engineering squadron and an establishment of 83 permanent staff and 140 volunteers, the RHKAAF can operate round-the-clock for seven days a week during an emergency.

In 1985, the RHKAAF responded to 407 requests for emergency medical evacuation and rescues. Some of these requests came from the local fleet of about 4 700 fishing boats, many of which now have high frequency radios enabling them to call for assistance when necessary. Several search and rescue operations were carried out, involving both helicopters and fixed-wing aircraft. During the dry season, the Dauphins dropped over 600 tonnes of water on bush and forest fires in areas inaccessible to conventional fire-fighting appliances. The Royal Hong Kong Police Force and the Correctional Services Department made frequent use of helicopters for training and operational purposes. Helicopter flights were routinely provided to transport engineering staff to hilltops to carry out maintenance and repair work at communications repeater stations. During the year, about 5 700 government officers were flown to various areas in the course of their duties. Flying services were also provided to give official visitors from overseas an overview of the territory.

      The Titan and Islander maintained regular offshore patrols in connection with anti- illegal immigration operations and were also heavily employed in support of the Lands Department's continuing need for aerial survey, photography and map-making. The Bulldogs provided pilot training for the squadron's own volunteers and student air traffic controllers.

Civil Aid Services

The primary role of the Civil Aid Services, a uniformed and disciplined volunteer force with an establishment of 3 671 adults and 2 626 cadets, is to support the regular emergency services in times of natural or other disasters and during emergencies. Members of the Civil Aid Services are trained to handle a wide variety of emergency situations including tropical cyclones, landslips and flooding, search and rescue, building collapses, forest fires, marine oil pollution, crowd control, and life saving. Another emergency duty involves feeding new refugee arrivals and managing camps for them.

      Volunteers are enrolled into either the Operations Wing or the Administration Wing. Units within the Operations Wing are strategically situated throughout the territory, so that members can respond rapidly to any incidents which may occur in their area. The tactical force unit, comprising the emergency unit, the mountain rescue unit and the liaison unit, is a team of volunteers trained in heavy rescue that can be mobilised for duty at short notice. All of the logistic support units are grouped under the Administration Wing.

      There were no territory-wide emergencies requiring the full mobilisation of the entire service in 1985. However, the CAS volunteers were heavily engaged in forest fire prevention

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duties and other civic duties such as helping to organise charity walks and campaigns, and assisting in crowd control at major events.

The two main training centres of the Civil Aid Services are situated on Hong Kong Island and in Kowloon. They have simulated smoke rooms, facilities for practising rescues from confined spaces, and towers for practising rescues from heights. The 20-hectare training camp at Tsing Lung Tau, in the New Territories, incorporates the old village of Yuen Tun which dates back over 250 years. It was completely rebuilt with genuine old village furniture and farming equipment. Within the camp are facilities for all forms of training. An oriental garden, constructed by the volunteers as a rest garden, was officially opened by Lady Youde, wife of the Governor, in October.

A new Cadet Training Centre in the old Sham Shui Po army camp was opened in July. Training within the Cadet Corps is designed in such a way that it is progressive and cadets entering at the age of 12 to 14 progress through a series of useful and beneficial studies. The cadets are encouraged to participate in the Duke of Edinburgh Award Scheme. In 1985, 10 cadets qualified for Gold Awards, 40 for Silver Awards and 160 for Bronze Awards.

Auxiliary Medical Services

The Auxiliary Medical Services was formed in 1950 with a view to augmenting the emergency services of the Medical and Health Department and those of the Ambulance Service of the Fire Services Department.

Members come from various walks of life, including many from the medical, nursing and para-medical professions. In 1985, the establishment was 5 835 volunteers and 63 permanent staff. Sub-units are established throughout the territory.

During the year, besides being ready for duty in the event of tropical cyclones, members were deployed in hospitals and clinics, with regular ambulances at weekends, in country parks for providing ambulance and first aid coverage, on public beaches for reinforcing the regular lifeguard services, and at first aid posts while major public functions and celebrations were in progress. They also assisted in manning 24 methadone treatment clinics for drug abusers, including day and evening clinics.

      Another duty was manning a medical post established for Vietnamese refugees at a reception centre in Argyle Street, Kowloon. In addition, the permanent staff continued to give first aid training to government officers, especially those in the disciplined services.

16

Communications and The Media

FES

事霸

MATTERS concerning the future of Hong Kong and the further development of representa- tive government were the major issues for the territory's news media in 1985.

Extensive coverage was given to events arising from the signing and subsequent ratification of the Sino-British Agreement on Hong Kong's future, under which the territory will become a Special Administrative Region of China from July 1, 1997. Throughout the year, the media also focused on the further development of representative government in Hong Kong, in particular on the first-ever elections to the Legislative Council in September, the district board elections in March, and the establishment of the Provisional Regional Council in April.

In Hong Kong, the processes of communications and public information play a more important role than in almost any other territory in the world. Much of this activity undoubtedly arises from Hong Kong's geographical situation. Traditionally, the territory has been a trading post in the Far East and over the years has expanded into a manufacturing and financial centre as well. For all these roles sophisticated international communications have been developed.

      Satellite and the latest telecommunication equipment is geared to the community's international needs. As well as serving Hong Kong's own commercial interests, these facilities have attracted news media representatives from many parts of the world. Indeed, no other place of similar size can rival the range and intensity of media activity. News agencies, newspapers with international readerships and overseas television companies and corporations have found it convenient to establish their bureaux and offices here. Regional publications produced in Hong Kong have prospered, reflecting the territory's enhanced position as a centre of industrial and trading expertise.

      Within Hong Kong itself, the extensive news media is made up of many daily news- papers, a range of weekly magazines, two private television companies, one govern- ment radio/television station, one commercial radio station and one radio service for the British Forces. There is a free, critical and outspoken press without legislative controls other than those intended to provide safeguards against libel and pornography. The news media provides an efficient and speedy supply of information to a literate, industrious and healthily inquisitive society.

The news media plays a vital part in the territory's precautionary measures against sudden climatic threats. When typhoons approach or rainstorms spell danger the news media reacts to alert, inform and advise the population.

      Against this background it is not surprising that remarkable advances and innovations have taken place in the information field in recent years. The government has matched this progress by producing and participating in an increasing number of public affairs programmes on television and radio, and by expanding its information services.

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Hong Kong's flourishing free press consists of 66 newspapers and more than 520 periodicals, which have a high readership. The registered newspapers include 45 Chinese- language dailies and five English-language dailies. A number of news agency bulletins - Chinese, English and Japanese are also registered as newspapers. During the year, an English-language weekly was registered to serve the Filipino community.

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      Of the Chinese-language dailies, 36 cover mainly general news, both local and overseas, while others cover solely entertainment, especially television and cinema news, or concentrate on finance. The larger papers include Chinese communities overseas in their distribution networks, and some have editions printed outside Hong Kong, in particular in the United States, Canada, Britain and Australia.

      Hong Kong is the Southeast Asia base for many newspapers, magazines, news agencies and the electronic media. Among the international news agencies with offices in Hong Kong are Associated Press, Reuters, United Press International and Agence France Presse. Newsweek and Time magazines have editions printed in Hong Kong which is also the base for the regional magazines Asiaweek and the Far Eastern Economic Review.

      Several organisations represent and cater for people working in the news media in Hong Kong. The Newspaper Society of Hong Kong represents Chinese and English newspapers. It is empowered to act in matters affecting the interests of its members. The Hong Kong Journalists Association seeks to raise professional standards by recommending better training, pay and conditions in journalism, and advises its members in the event of disputes with employers. The Foreign Correspondents' Club offers its members social facilities and a range of professional activities, including news conferences, briefings and films. The Hong Kong Press Club provides an opportunity for journalists to meet socially.

      Major steps have been taken to expand and improve training in journalism, with the Journalism Training Board of the Vocational Training Council playing an important role. With an allocation of some $200,000 from the council, the board in 1985 conducted eight training courses for working journalists. The most popular were two courses in Putonghua (Mandarin) sponsored by the two polytechnics, law courses conducted by the University of Hong Kong, an economics seminar organised jointly by the board and an American bank, and a journalism symposium conducted by two professors from Concordia University in Montreal, Canada. During the year, the board also conducted its third biennial manpower survey in order to collect up-to-date information on the manpower situation in the mass media, with a view to formulating meaningful training plans.

Sound Broadcasting

There are 10 radio channels in Hong Kong. Five are operated by Radio Television Hong Kong (RTHK), three by the Hong Kong Commercial Broadcasting Company, more popularly known as Commercial Radio (CR), and two by the British Forces Broadcasting Service (BFBS).

      Policy guidelines for RTHK require the publicly financed station to provide balanced and objective broadcasting services to inform, educate and entertain the people of Hong Kong. Its aim is to serve the best interests of the community by providing impartial and balanced news and public affairs programmes reflecting accurately the views of both the government and the public. The Director of Broadcasting is its editor-in-chief.

RTHK now broadcasts a total of 700 hours a week and has a 24-hour service in both Chinese and English. The most recent independent survey showed that the total number of radio listeners was 75 per cent of the population aged nine and above. The station has developed the individual identity of each of its five channels.

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  Printing as an art form: goose quill pens, antique nibs and an etching press are among the instruments used by this young artist who staged an exhibition of Western calligraphy.

A trainee operating a Chinese-language computerised photo-typesetting machine at the Printing Industry Training Centre run by the Vocational Training Council.

This image is unavailable for access via the Network

due to copyright restrictions. To view the image, please contact library staff for a printed copy of the copyright work.

Hong Kong banknotes being printed at the newly established plant of Thomas De La Rue (HK) Ltd in Tai Po Industrial Estate.

SOLNA DISTRIBUTOR 25

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  Hong Kong has a vibrant newspaper industry, with more than 60 daily papers keeping the community well informed of events, both domestic and international.

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Beer cans being labelled by offset printing at a packaging factory which produces more than

1.1 million cans a day.

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Crosfield Electronics.

This computerised electronic equipment provides laser scanner-linked image control which is of great assistance to graphic designers and publishers in preparing colour-separated material prior to printing.

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       Radio 1 of the Chinese service provides news bulletins and summaries on a half-hourly basis between 6 a.m. and 11 p.m. and hourly throughout the night. It also broadcasts financial reports every hour during the day, in addition to traffic reports during rush hours. During the year, major political and social events in the territory were covered extensively, and more civic education programmes were launched.

Radio 2 has acquired popularity as a channel mainly for young people. Although popular music is the salient feature, more magazine programmes have been introduced. During the year, the channel continued to strengthen its early morning and late evening magazines in an attempt to attract an even broader audience. The channel adopts a lively approach to community service, and helped promote major publicity campaigns concern- ing International Youth Year activities, anti-narcotics, industrial safety and voluntary social services. A Youth Scholarship Scheme was also launched.

Radio 3, the station's news and information channel for the English-speaking population, increased its news coverage during the year with the introduction of summaries at 12.30 p.m. and 5.30 p.m. and 'Tonight at Six', a half-hour news magazine highlighting the events of the day. Speech content of the channel was further strengthened and special programmes to mark the 40th anniversary of the end of World War II were produced. In addition to the regular use of stories, comedies and quiz programmes from overseas and those produced locally, more outside broadcasts were made.

Radio 4, the channel for fine music and the arts, covered major music and arts events throughout the year. The bilingual presentation of these programmes was welcomed by listeners. In June, the channel announced plans for the 1986 Young Player of Chinese Instruments Competition, an event sponsored by a major bank. Through co-operation with other cultural organisations, the Urban Council and government departments, it was possible for the channel to broadcast an increased number of concerts and recitals from venues throughout the territory. A further series of concerts was given in the studios of RTHK, featuring local and overseas artists and ensembles.

Radio 5 relays the BBC World Service from 5 p.m. to 2.30 a.m. daily. Outside these hours, it provides an additional FM service of Chinese programmes such as Cantonese opera, provincial music as well as programmes in Putonghua and the Chiu Chow dialect. During the year, it further strengthened its educational and cultural programmes content, with the introduction of a new series on stage drama.

On the engineering side, the government gave approval during the year to rationalise and extend coverage of the VHF radio network. A scheme to provide territory-wide VHF coverage for seven of the existing 10 radio channels was agreed. Detailed planning for implementation is in hand and completion of the project is anticipated in 1987.

An interim scheme to duplicate RTHK's existing Radio 1 AM service into VHF and at the same time extend coverage of both this new service and RTHK's Radio 2 to the New Territories was also approved. The new services were put into operation towards the end of the year.

Commercial Radio operates two Cantonese services and one English-language service, primarily in the AM wave band but simulcasting both Chinese services on FM to Sha Tin, Sheung Shui, Tai Po and Fanling in the New Territories and to the north side of Hong Kong Island. The Chinese services operate for 24 hours a day and the English service for 19. The station has strengthened its appeal as an advertising medium, and its efforts in this field were rewarded by a number of awards in the annual awards presentation held by advertising agencies. The subjects of the award-winning commercials ranged from scuba diving to travel, the latter reflecting the station's growing involvement in promoting travel, especially to off the beaten track destinations such as Kashmir and Nepal.

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       In keeping with radio stations around the world, Commercial Radio's Chinese and English services were active in fund-raising for famine relief in Africa, particularly in Ethiopia, working in conjunction with the Oxfam and World Vision relief agencies. Fund-raising was begun on the English service's morning talk show and the public response was immediate. One of the Chinese services, CRII - and many of its listeners - took part in a '30 Hour Famine' and in the recording of a fund-raising song. The British Don't They Know It's Christmas and the American We Are The World recordings, both specially made to raise funds for famine relief, were played extensively on the station's services. Besides all this, the station continued its active involvement in raising funds for local charitable

purposes.

During the year, CRII, known as the 'Youth Station', consolidated its format and averaged two outside broadcasts a week throughout 1985. In addition, Commercial Radio joined other stations in an inaugural pop song writing contest held under the auspices of the Asian Broadcasting Union.

Commercial Radio maintained its lively coverage of sport, and highlights of the year included coverage by its own commentators of Hong Kong's matches in Peking and Kobe, Japan, as part of a qualifying round for football's 1986 World Cup.

The British Forces Broadcasting Service is part of the Radio Division of the Services Sound and Vision Corporation, a world-wide organisation providing entertainment, information and training films, video, television and radio services for the British Forces, under contract to the Ministry of Defence. BFBS provides two radio services to cater for the special needs of the Gurkha and British Forces serving in Hong Kong.

The Nepali service is broadcast for over 76 hours per week and caters specifically for the Brigade of Gurkhas, providing music and features reflecting daily life in Nepal, Nepalese and world news, news reviews, quiz shows and audience participation phone-in program- mes. The English-language service now broadcasts live a three-hour lunch-time show daily from the new BFBS studio at HMS Tamar. This is in addition to the 115 hours per week of English-language broadcasts from the main Sek Kong studio which provides news from the United Kingdom and a music format familiar to British Forces. About 30 hours of programming per week are provided by the BFBS London Production Centre which keeps listeners in touch with home events and provides specialist programmes by leading British broadcasting personalities. The British Broadcasting Corporation Transcription Services provides high quality drama, comedy and documentary material. Some live outside broadcasts are mounted covering major social and formal military events.

Broadcasting Review Board

Since the existing commercial television and radio licences were due to expire in 1988 and 1989 respectively, the Governor in February 1984 appointed a 16-member Broadcasting Review Board to conduct a review which would assist the government in establishing an overall broadcasting policy for the post 1988 and 1989 period.

The scope of the board's review was wide, covering broadcasting technology, the needs of the public, the economics of the local broadcasting industry, advertising control, the government's role, censorship standard, legislation and the drafting of tender documents.

In view of the popularity and influence of television and radio in the Hong Kong community, the board devoted significant time and resources to inviting representations from the licensees, organisations and persons with an interest in broadcasting. The entire review took 17 months; from March 1984 to August 1985. The board's report was published in September and public comments on its recommendations were invited.

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Television viewing continues to be Hong Kong's prime leisure activity with more than 95 per cent of households owning one television set or more. Two franchised commercial wireless broadcasting stations, Television Broadcasts Limited (TVB) and Asia Television Limited (ATV), transmit an average of 500 hours of programming each week and together provide two English and two Chinese-language services for the community. The UHF 625-line PAL colour system is standard and virtually all transmission is in colour. Both TVB and ATV maintain large well-equipped studios and office complexes using the latest production and transmission technologies.

The television stations are licensed to operate under the provisions of the Television Ordinance which is administered by the Television Authority. The Commissioner for Television and Entertainment Licensing is responsible for the regulation of the stations' licences and the issue and enforcement of the programme, advertising and technical standards required of the licensees. He is advised in these responsibilities by the Television Advisory Board. One of the main roles of the Television and Entertainment Licensing Authority is to monitor regularly the performance of the television stations to ensure that the terms and conditions of their licence requirements are being met.

An important breakthrough has been made in the development of local television technology. The two television stations have launched a joint experiment with the digital multiplex sound system, with the aim of providing stereophonic and dual-sound program- mes to viewers. The experiment is being carried out in conjunction with the British Broadcasting Corporation. The introduction of such a service would give viewers a much wider choice of programme material in that apart from stereo-reception viewers would be able to receive the same programmes in either English or Cantonese.

       Competition between the stations continues to be keen. This competition has brought benefits to the public in the form of more varied and sophisticated entertainment, information and educational programmes. However, station-produced serialised drama remains the major attraction on Chinese services. These are mostly productions of martial arts dramas, soap operas and action adventures. There is also a sprinkling of social dramas. A few joint ventures in drama production with television stations in China have been undertaken.

There has been an appreciable increase in informative and educational/enrichment programmes. Putonghua lessons and keep-fit exercises appear almost every day on both Chinese services, and one of the stations has developed short programmes on etymology. Both stations produced special programmes on the district board elections held early in the year.

Television Home Viewing Groups appointed by the TELA have been in operation since 1982 in each of Hong Kong's 19 districts. These groups, set up with the assistance of district offices and having a total membership of 540, provide the authority with a continuing flow of public opinion on programming and advertising across a broad spectrum of the population. Three Regional Advisory Panels, one each for Hong Kong Island, Kowloon and the New Territories, consisting of representative members drawn from each group, were established in 1983 and have served to keep the authority and members of the Television Advisory Board in close contact with the Home Viewing Groups.

Radio Television Hong Kong, which uses the transmission services of the two commer- cial stations, produced over 14 hours of public affairs programmes each week. Below the Lion Rock, On the Beat, Hong Kong Profile, and Streets of Hong Kong are highly acclaimed dramas, while Commonsense and Police Call remain among the top programmes.

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Policy guidelines for RTHK require its programmes to provide a communicating channel between the government and the public which promotes civic responsibility and identity, serves minority interests and educates and informs. Material produced falls basically into five areas of interest: current affairs, drama, information and community service, variety and games shows, and programmes for children and young people.

RTHK productions are generally popular and have won acclaim both locally and internationally. During the year, RTHK produced further episodes of the drama epic, Miracle of the Orient, depicting the development of Hong Kong since the 1940s. RTHK productions have expanded with greater emphasis on education. Dial a Tutor is a programme to help students with their studies, Children's Newsreel helps in enhancing young people's interest in current affairs while Pre-school, a programme which educates and traces the development and cognitive process of infants under five years old, is targetted at both the pre-school children and their parents.

       RTHK's Educational Television Section and the Education Department have continued their joint efforts in producing educational programmes for schools. The government's Educational Television Service, which utilises the transmission facilities of the commercial stations for eight hours each school day, is watched by around 600 000 children in primary and secondary schools. The programmes are devised and written by specialist Education Department staff who provide schools with programme literature and follow-up work. The programmes are produced by RTHK and are made in colour using film animation, drama and documentary techniques.

Government Information Services

Because it provides the link between the administration and the media and, through the latter, with the people of Hong Kong, the work of the Government Information Services (GIS) inevitably reflected the continuing public concern with issues related to the future. Following the signing of the Sino-British Agreement at the close of 1984, attention focused upon the further development of representative government. The News and Public Relations Divisions of GIS once again bore the brunt of the increased pressure on the department's services.

The News Division disseminates a multiplicity of government information through teleprinter and facsimile networks which are directly linked with leading newspapers, radio and television stations, and news agencies. The facsimile system enables GIS to transmit to the media both photographs and typed or printed messages, which is especially important for communicating in the Chinese language. Telex and international facsimile services enable government offices overseas to receive messages without delay and to communicate directly to the department and, through it, to the rest of the government. The News Division's 24-hour media enquiry service handles more than 20 000 questions every month. During an emergency such as a typhoon, the newsroom becomes a co-ordination centre to distribute up-to-date information to the media, particularly the radio and television stations, to keep the public informed of developments. Apart from this mobilisation of both manpower and equipment in the newsroom, other staff man various key positions within the government's organisation for managing emergencies, contributing to the minute by minute flow of information.

The Public Relations Division has three sub-divisions: media research, departmental units and overseas. The media research sub-division keeps the government fully informed of public opinion as expressed in the information media. It produces the Gist, a daily news sheet in English which summarises news and editorial comment in the major Chinese-

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language papers, and which also reflects opinions voiced on radio and television. Other publications include Opinion, a weekly review of Chinese editorial comment, What the Magazines Say and special reports on subjects of particular interest to the government. During the year, the sub-division continued to pay special attention to media coverage about issues related to the future of Hong Kong.

The departmental units sub-division co-ordinates the operation of the 26 inform- ation and public relations units in government departments. These units issue press releases, arrange press conferences and site visits and answer many media enquiries concerning the activities and aims of their respective departments. Through these efforts they play a major role in maintaining the flow of information and helping to improve relations with the public. The sub-division is also responsible for producing the Hong Kong News Digest, a fortnightly newspaper in Chinese which helps Hong Kong Chinese overseas to maintain contact with Hong Kong.

The overseas public relations sub-division (OPRS) co-ordinates the government's publicity efforts overseas and produces and distributes feature articles and newsclips for radio and television. Assistance is provided for visiting journalists requiring information and interviews with government officers, and a close liaison is maintained with news agencies and overseas journalists based in Hong Kong. In 1985, the unit assisted 480 overseas journalists and 130 other visitors, and distributed 60 features, 26 taped stories for radio, and 126 video items for TV.

The Publicity Division embraces the creative, publishing and promotional resources of the department. Its ambit includes photography and film-making, an extensive photo- graphic library, the staging of exhibitions, the design of books, leaflets and posters, publishing activities and the design and placement of all government advertising. GIS produces a wide variety of publications ranging from leaflets and fact sheets to the Hong Kong Annual Report - which is the best-selling hardback book in the territory - and other full-colour books. Sales of government publications rose by 13.4 per cent to more than $21.2 million in 1985, compared with $18.7 million in 1984. The Publicity Division also plans and carries out all government publicity campaigns. In addition to continuing major campaigns on Anti-narcotics, Crime Prevention, Industrial Safety, Road Safety, Fire Prevention, Gas Safety, Keep Hong Kong Clean, New Traffic Legislation and the Issue of New Identity Cards, two new ones were launched in 1985. One of these was to increase public awareness and understanding of the further development of representative govern- ment and the electoral processes, and the other was to promote the integration into the community of the disabled, particularly those people who formerly have been mentally ill. About 30 smaller publicity programmes were conducted, such as those concerning illegal structures, anti-smoking, and safety in outdoor pursuits. In support of these campaigns, numerous promotional events were organised through mobile exhibitions, live shows, television and radio programmes as well as competitions.

The News and Public Relations Division of the Hong Kong Government Office in London works closely with GIS to provide a press service on Hong Kong matters for the British media, and enquiry and information services for the public about events and developments in Hong Kong.

The news section monitors British parliamentary proceedings and media coverage of Hong Kong affairs, and keeps the Hong Kong Government informed on a daily basis by telex and facsimile transmission. It also publishes a fortnightly newsletter, Dateline Hong Kong, which is distributed among organisations and individuals with a close interest in Hong Kong.

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The public relations section organised a travelling exhibition, entitled 'Hong Kong - Into the Future', which was designed to show how Hong Kong is continuing to invest heavily in the future. The exhibition was mounted at the London headquarters of the Institute of Directors, the Hongkong and Shanghai Bank, the Standard Chartered Bank, and Cathay Pacific Airways, as well as at the London Chamber of Commerce and Industry and the Commonwealth Institute. It was later erected in the public concourses of the airports at Edinburgh, Newcastle-upon-Tyne and Manchester the latter coinciding with the inauguration of British Airways' direct service between Manchester and Hong Kong. An updated version of the exhibition, including new material on the enlarged Legislative Council, was mounted in the House of Commons at the beginning of the new session of Parliament, in November.

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      In common with the London Office, the Hong Kong Government Offices in New York and Brussels were kept busy catering to media interest in Hong Kong.

The New York office handles news and publicity in the United States and Canada. It issues material for use in the media, both print and electronic, answers queries, arranges publicity for important visitors from Hong Kong, and monitors reporting and com- mentary in North America of relevance to Hong Kong. Since its establishment in late 1983, the unit's work has increased considerably, with 1985 being particularly busy, largely through involvement in the public debate on protectionism in trade and the continuing interest shown in the future of Hong Kong and its relevance to the United States.

The Brussels office is responsible, among other things, for the government's publicity efforts in the 12 member states of the European Community except the United Kingdom. The office's information section works closely with GIS both to provide material on Hong Kong matters in response to queries from the European media and to provide briefings for journalists visiting Hong Kong. It also distributes feature articles and news releases to selected media contacts as well as providing a more general enquiry and information service for members of the public, particularly business travellers, tourists and students.

Information Policy

The Secretary for Administrative Services and Information has overall policy responsibility for the government's relations with the media. The main aim is to keep the media informed of the government's policies and thinking, as well as forthcoming events and proposed legislation, thus providing a valuable means of communication with the general public. On this front, the Administrative Services and Information Branch is responsible for co-ordina- ting the work of the Government Information Services, Radio Television Hong Kong and the Television and Entertainment Licensing Authority. Apart from formulating policy on a wide range of information and broadcasting matters, the Secretary for Administrative Services and Information advises the government on the presentation of its policies and on public relations matters generally.

Overseas Public Relations

The Liaison Division of the Administrative Services and Information Branch is res- ponsible for overseas public relations matters. In this it serves as a point of contact between the government's overseas offices and non-government bodies such as the Trade Development Council, the Hong Kong Tourist Association, chambers of commerce and consulates and commissions. An Overseas Public Relations Group comprising government and non-government representatives co-ordinates overseas public relations activities.

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Receiving overseas visitors is another major function of the division. A Visits Office was set up in September 1983 to handle parliamentary visits from the United Kingdom. The role of this office has since been expanded to include the arranging of programmes of visits and briefings for VIP visitors from all over the world. In this task the office maintains close contact with the overseas offices, commissioners and consuls-general.

Film Industry

By the end of 1985, the number of cinemas totalled 104, compared with 95 in the previous year. As the figures show, the number of cinemas has been increasing over the last few years. The new cinemas are generally smaller and located mainly in the New Territories where there has been a rapid growth in population.

       The annual cinema attendance totalled about 58 million, compared with 61 million in 1984. Going to the cinema remains a popular leisure activity, second only to watching television.

The number of locally produced films was 105 (including 13 co-productions), compared with 109 (including five co-productions) in 1984. While imported films continued to be popular, good quality local films remained the favourites with the majority of cinema patrons. The biggest box-office successes for the year included My Lucky Stars, which grossed $30.7 million, Twinkle Twinkle Lucky Star ($28.9 million), Rambo II ($24.6 million), and Heart of the Dragon ($20.3 million). The trend towards making locally produced films in Cantonese rather than Mandarin continued during 1985. Although action films and comedies were dominant, a number of films dealing with local problems also proved to be popular.

All films intended for public exhibition in Hong Kong must be submitted to the Panel of Film Censors which is part of the Television and Entertainment Licensing Authority. Censorship standards are drawn from ascertained community views and a panel compris- ing 90 members of the public assists the film censors in reflecting community views. During the year, 618 films were submitted for censorship (including films intended for cine-clubs and cultural organisations). Of the total number submitted, 465 were approved without excisions, 146 were approved after excisions and seven were banned. These figures do not include films intended for television use.

Printing and Publishing

      Printing in Hong Kong has earned an international reputation for quality and economy. The territory's growth as a leading publishing centre has been such that there are now over 3 100 printing factories, employing around 30 000 people.

The local electronics industry has contributed in large part to the plant and equipment not only of the more sophisticated printing companies but also of publishers who have adopted data and word processing systems for editorial production and stock control. The number of data and word processor systems available exceeds 200.

The printing factories are broadly divided into the following categories: newspaper printing, general printing, and factories dealing with printing-related work such as type- setting and binding.

The readiness to introduce the latest technology - especially computerised equipment - has enabled the industry to become highly specialised. As a result, many orders have been attracted from overseas for such items as books, advertising materials, company annual reports and product catalogues. A number of overseas publishers have set up offices or regional headquarters in the territory and, in all, there are over 200 publishing houses.

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       Books and pamphlets account for over 65 per cent of exports of printed products, with Britain, the United States and Australia being the main customers, although China is becoming an important market. Hong Kong does not manufacture paper and has to import all its requirements.

       Hong Kong's selection as the venue of the 1985 World Print Congress 3 and the associated World Print Expo '85, held in June, attested to its international status. The congress theme was 'Towards the 21st Century', and topics discussed by the delegates from 30 countries ranged from a global view of printing in the near future to financial planning for progress. Expo '85 was a display of the latest printing equipment and techniques.

Another important event in the industry during the year was the move by the government's Printing Department to new premises at Quarry Bay. The premises were opened by the Governor, Sir Edward Youde, on June 28. The department was established in 1952 to meet the printing requirements of the government, and output has grown from 190 tonnes then to around 4 600 tonnes now. The department has over 380 staff.

Postal Services

A milestone in the history of the postal service in Hong Kong was reached in January when the Governor officially opened the territory's 100th post office - located in Butterfly Estate, Tuen Mun. Three more post offices were also opened during the year, and Hong Kong by the year's end had 103 post offices in operation, including three mobile post offices.

      Two mail deliveries are generally provided each weekday in the urban, commercial and industrial areas and one delivery elsewhere in the territory. Despite an increase of over nine per cent in mail traffic handled during the year, the Post Office continued to achieve its target of delivering most local letters no later than one working day after the date of posting and despatching airmail overseas within 24 hours. In the case of airmail postings made at the four main offices - General Post Office, Tsim Sha Tsui and Kowloon Central Post Offices, and the International Mail Centre - the aim is to have mail despatched on the same day if outgoing flights are available.

       In 1985, a total of 564 million letters and parcels - a daily average of 1.55 million - were handled, representing an increase of 9.5 per cent over 1984. Approximately 3 754 tonnes of letter mail and 3 982 tonnes of parcels were despatched abroad by air, an overall increase of 19.2 per cent on 1984.

To meet the needs of Hong Kong's business community, the maximum permissible weight for parcels addressed to most major countries was increased from 10 kg to 20 kg, with effect from January 2. The limits on the maximum size of parcels were also increased. The Speedpost service, introduced in 1973, continued to expand rapidly and is now available to over 360 cities in 40 countries including all major trading partners of Hong Kong such as Australia, Belgium, Canada, China, France, West Germany, Italy, Japan, Singapore, South Korea, Sweden, Taiwan, the United Kingdom and the United States. During the year, 1 109 445 items, representing an increase of 40.2 per cent on 1984, were handled.

       The Intelpost service, introduced in 1982 to the United Kingdom, is now available to 34 major destinations including Argentina, Australia, China, Denmark, West Germany, the Irish Republic, Israel, Japan, South Korea, Portugal, Singapore and the United States. It offers high speed facsimile transmission of high quality black and white re- productions of documents, handwritten material, drawings and personal messages up to A4 size (210 mm × 297 mm). These items can be accepted at the special counters in any of the 23 accepting offices, strategically located, and will be available for delivery within hours

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at the overseas destinations. Facilities are also available to accept for overseas delivery Intelpost items which are transmitted over the local telephone network direct from facsimile machines operated by commercial organisations in Hong Kong.

The Post Office issued five sets of special stamps in 1985. These touched on the history, traditions, and the modern way of life in the territory. The first of the five sets, issued in March, consisted of four stamps which depict four historical buildings in Hong Kong. For the first time in the history of the Hong Kong Post Office, a set of A4 size reproductions of the stamp artwork printed on high quality paper was placed on sale with this special stamp issue. A set of four stamps in se-tenant design depicting the Dragon Boat Festival was issued in June. When joined together these four stamps show a complete dragon boat in action. A miniature sheet highlighting this se-tenant was also released. In August, a set of four stamps depicting the life and times of Her Majesty Queen Elizabeth the Queen Mother was released. This set of stamps formed part of an omnibus series issued in conjunction with 19 other postal administrations. Another set of six stamps featuring six flowers indigenous to the territory was released in September. A set of postcards showing the stamps in enlarged size was also placed on sale with this issue. The last set of special stamps was issued in November. It consisted of four stamps depicting four new buildings in Hong Kong.

A new A4 size pictorial aerogramme priced at $1.10 was introduced in April. The aerogramme features the bauhinia flower, Hong Kong's floral emblem, printed on beige colour paper. In the same month, a convenient folder containing 10 $1.30 stamps was issued for the benefit of both residents and tourists. A special philatelic bureau pictorial handstamp was introduced in July. This handstamp features a traditional sailing junk.

Certain postal fees and charges were revised on September 2 to take into account increased handling costs. The basic letter rate was increased from 40 cents to 50 cents while the minimum airmail postage rates for Zone 1 (Asia) and Zone 2 (all other countries) were increased to $1.30 and $1.70 respectively. This was the first major increase in airmail postage rates in over 30 years.

Telecommunication Services

As a leading financial, commercial and industrial centre in Asia, Hong Kong depends on efficient and reliable telecommunications both within the territory and interna- tionally.

Telecommunication services are provided by two franchised local companies, Hong Kong Telephone Company Limited and Cable and Wireless (Hong Kong) Limited.

The Postmaster General is the Telecommunications Authority and he adminis- ters the Telecommunication Ordinance and the Telephone Ordinance which govern the establishment and operation of all telecommunication services. He also acts as adviser to the government on matters concerning the provision and operation of pub- lic telecommunication services and the technical aspects of radio and television broadcasting.

The Post Office manages the radio frequency spectrum to ensure that it is utilised efficiently, and grants licences, under the Telecommunication Ordinance, for all forms of radio communication within Hong Kong. It maintains surveillance of the radio frequency bands to detect illegal transmissions and interference emanating from sources within and around the territory. It conducts examinations leading to the issue of the Certificate of Competence in Radiotelephony or Radiotelegraphy to radio operating personnel in compliance with the International Radio Regulations. It also conducts inspections of

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ships' radio stations to ensure compliance with the International Convention for the Safety of Life at Sea.

In addition, the Post Office provides advisory and planning services for the communica- tions requirements of government departments, and co-ordinates and regulates the use of all radio communications sites. Major systems planned in 1985 included a computerised mobilising radio network for the Fire Services Department, a facsimile system for the Trade Department and the introduction of a number of electronic PABXs for various government departments.

      The basic public telecommunication services in Hong Kong telephone, telex and telegram - are operated by the two franchised companies on an exclusive basis. Customer premises terminal equipment is provided on a competitive basis but 'permission to connect' is required in respect of each type of equipment. Other telecommunication services may be operated competitively, provided the service has been licensed under the Telecommunica- tion Ordinance.

The internal telephone service is provided by the Hong Kong Telephone Company Limited. With over 2.2 million telephones served by more than 1.7 million lines, the territory has a density of around 41 telephones for every 100 people.

A Public Data Network using a special transmission switching technique, known as packet switching, to provide the public with more advanced data communication facilities was also introduced by the company at the end of 1984. The network helped to introduce 'cashless shopping', as it enabled a pilot service in the electronic transfer of funds to go into operation at selected retail outlets.

Hong Kong's international telephone service is provided jointly by the Hong Kong Telephone Company Limited and Cable and Wireless (HK) Limited. A world-wide operator-connected service is available and International Direct Dialling can be made to more than 130 overseas destinations.

       International telecommunication services, which include public telegram, telex, telephone, television programmes transmission/reception, leased circuits, ship-shore and air-ground communications, are provided by Cable and Wireless (HK) Limited under an exclusive licence granted under the Telecommunication Ordinance. The company also operates the local telex and telegram service. International facilities are provided through land and submarine cables, radio systems and satellite links from the Stanley earth station which operates via satellites over the Indian and Pacific Oceans.

      To further improve Hong Kong's telecommunication facilities for communication with Macau, a new Hong Kong-Macau digital microwave radio system was also brought into operation. The new system has a capacity for data transmission at 34 mega-bits or an equivalent of 480 voice channels.

Other than the basic services provided by the two franchised companies, a number of telecommunication services are operated by private companies under appropriate non- exclusive licences granted by the Telecommunications Authority. Such services as radio paging, mobile radiotelephone, data/facsimile transmission, videotex, electronic mail, community repeater and one-way data message are offered competitively by a number of organisations. Radio paging services are popular with over 220 000 pagers being in service in 1985.

17

Religion and Custom

FOXX

THE leading Chinese religions are Buddhism and Taoism, but the majority of the Chinese population also practise ancestral worshipping as advocated by Confucianism which, though not a religion, provides a comprehensive moral code on the basis of human relations. Offerings are made not only on religious festivals but also on the first and 15th days of the lunar month.

Buddhist monasteries and Taoist temples co-exist with Christian churches, mosques, and Hindu and Sikh temples. All major religious bodies have established schools, which offer a general education besides religious instruction. Admission to these schools, however, is not restricted to believers of the respective religions.

Buddhism and Taoism

Hong Kong has more than 360 Buddhist and Taoist temples, some being centuries old and containing priceless antiques, while others are of more recent construction - some are housed inside multi-storey buildings. Under the Chinese Temples Ordinance, all temples have to be registered. The Chinese Temples Committee manages about 40 public temples and the income, mainly from donations by worshippers, is used for the preservation and restoration of not only public temples but also privately owned temples of historical value. Most of the large temples and monasteries are open to the public.

Ancestral shrines can be found in most households and countless shops have a God Shelf, supporting images of one or more of the hundreds of divinities. With religious observances carried out at home, many people reserve temple-going for festivals and special occasions for example, when observing the traditional rites associated with birth, marriage and death - and at the time of a new or full moon.

Historically, Hong Kong people have always been dependent on the sea, first for fishing and later for trade and the most popular deities are those connected with the sea and the weather. Tin Hau, the Queen of Heaven and Protector of Seafarers, is reputed to be worshipped by a quarter of a million people. There are at least 24 Tin Hau temples in Hong Kong, the first and most famous being in Joss House Bay near Fat Tong Mun. Many of the Tin Hau temples, which were originally built near the sea, are now some distance inland as a result of reclamation.

Other leading deities include Kwun Yum, the Buddhist Goddess of Mercy; Kwan Tai, the God of War and the source of righteousness; Pak Tai, Lord of the North and local patron of Cheung Chau Island; Hung Shing, God of the South Seas and a weather prophet, and Wong Tai Sin, a Taoist deity after whom a district of New Kowloon is named. The temple in honour of Wong Tai Sin, around which a public housing estate has been constructed, is built in traditional Chinese architectural style and is extremely popular with worshippers. Dedicated to the Gods of Literary Attainment and Martial Valour, the Man

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Mo Temple in Hollywood Road on Hong Kong Island, run by the Tung Wah Group of Hospitals, a charitable organisation, is also very popular and well known.

      There are five major festivals in the Chinese calendar, all of which are statutory public holidays. First and foremost is the Lunar New Year, when gifts and visits are exchanged between friends and relatives, and children receive 'lucky' money. The Ching Ming Festival in the spring provides an opportunity to visit ancestral graves. The Dragon Boat Festival is celebrated on the fifth day of the fifth moon in early summer with dragon boat races and by eating cooked rice wrapped in lotus leaves. The Mid-Autumn Festival falls on the 15th day of the eighth moon. Gifts of mooncakes, fruit and wine are exchanged, and adults and children go into the parks and countryside at night carrying colourful lanterns. The Chung Yeung Festival is on the ninth day of the ninth moon, and is celebrated by large crowds climbing various hills in remembrance of an ancient Chinese family's escape from plague and death by fleeing to the top of a mountain. Family graves are also visited on this day.

Christian Community

The Christian community - Roman Catholic and Protestant - is estimated to number almost half a million people, comprising more than 50 denominations and independent groups.

      The Protestant and Roman Catholic churches enjoy a good fellowship. The Roman Catholic Diocese and the Hong Kong Christian Council have a Joint Committee on Development which plans joint action in areas of mutual concern, with official representa- tion serving on each other's committees. Church leaders issue joint pastoral letters and various bodies of both groups co-operate in a number of mission and service projects. All local religious broadcasting in both Chinese and English over Radio Television Hong Kong is planned and produced in association with two ecumenical committees. They serve the station in an advisory capacity. Another illustration of the co-operation is the Hong Kong Oratorio Society, an ecumenical community chorus singing sacred music. It was invited to give an all Beethoven concert in Shanghai at the end of December.

Roman Catholic Community

The Roman Catholic Church has been present in Hong Kong since the territory's early days. The church was established as a Mission Prefecture in 1841 and as an Apostolic Vicariate in 1874. It became a diocese in 1946.

      In 1969, Francis Chen-peng Hsu was installed as the first Chinese Bishop of the Hong Kong diocese, and he was succeeded in 1973 by Peter Wang-kei Lei. The present Bishop, John Baptist Cheng-chung Wu, was consecrated in 1975.

      About 269 000 people, or five per cent of the population, are Catholics. They are served by 350 priests, 84 Brothers, and 755 Sisters. There are 56 parishes and 54 centres for Mass. The majority of the services and other religious activities are conducted in Chinese, with a few churches providing services in English.

The diocese has established its own administrative structure while maintaining tradi- tional links with the Pope and with other Catholic communities around the world. The assistant secretary-general of the Federation of Asian Bishops' Conference has his office in Hong Kong.

       Along with its apostolic work, one of the prime concerns of the diocese has been for the well-being of all the people of Hong Kong. In education, there are 311 Catholic schools and kindergartens which have about 331 000 pupils. There is the Catholic Board of Education

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to assist in this area. The medical and social services include six hospitals, 10 clinics, 16 social centres, 13 hostels, 13 homes for the aged, two homes for the handicapped and many self-help clubs and associations. Caritas is the official social welfare arm of the church in Hong Kong.

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These services are open to all people indeed, 95 per cent of those who have bene- fitted from the wide range of services provided by the diocese are not Catholics.

      To reach people through the media, the diocese publishes two weekly newspapers, Kung Kao Po and The Sunday Examiner. In addition, the Diocesan Audio-Visual Centre produces tapes and films for use in schools and parishes and, overall, the Hong Kong Catholic Social Communications Office acts as an information and public relations channel for the diocese.

      During the year, Bishop Wu made an official visit to China, at the invitation of the Religious Affairs Bureau of the State Council. Later, a delegation from the Chinese Patriotic Catholic Church of Shanghai, led by Auxiliary Bishop Jin Lusian, visited Hong Kong, at the invitation of the Holy Spirit Study Centre in the territory.

Protestant Community

The Protestant community in Hong Kong numbers over 200 000 people. Major traditions represented are Adventist, Alliance, Anglican, Baptist, Church of Christ in China, Lutheran, Methodist, Pentecostal and the Salvation Army as well as many independent and indigenous congregations.

Protestant churches operate 200 kindergartens, 175 primary schools, 120 secondary schools, three post-secondary colleges, three schools for the deaf, several training centres for the mentally handicapped, and 15 theological schools and Bible institutes. Health care is also an important field. There are five major hospitals operated by the Protestant churches. These are augmented by many clinics, community health programmes and other health services including home visits by nurses.

There are two ecumenical bodies which facilitate the co-operative work among the Protestant churches. The oldest of these is the Chinese Christian Churches Union. During the year, it celebrated its 70th anniversary. This was marked by a service of thanksgiving in April at the Methodist Church in Wan Chai. About 200 congregations make up the membership of the Churches Union. The union's work is carried out through de- partments of evangelism, Christian education, charities, information and cemeteries. The Churches Union publishes the newspaper Christian Weekly, which serves all the Protestant congregations.

The second co-operative body is the Hong Kong Christian Council, formed in 1954. The council bases its membership on the major denominations and the ecumenical services bodies. The Christian Council is committed to building closer relationships among all churches in Hong Kong as well as with churches overseas. Its programme is carried out through the Division of Mission and the Division of Service, which operates as Hong Kong Christian Service. Related service agencies include the United Christian Medical Service, the Alice Ho Miu Ling Nethersole Hospital, the Christian Industrial Committee, Christian Family Service Centre and the Tao Fung Shan Ecumenical Centre. The council sponsors the Alternative Tours which are designed to give visitors to Hong Kong an opportunity to see specific ways in which Christians serve the people. In 1985, the council's annual campaign, 'Five Loaves and Two Fishes', raised nearly $1.5 million for the needy in Africa and Asia. The campaign, held for the 11th year, included among its concerns victims of the famine in Ethiopia.

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       During the year, the Chinese YMCA's new Harbour View International House, in Harbour Road on Hong Kong Island, was opened and the Salvation Army dedicated its new headquarters building in Yau Ma Tei. In October, a group of local church leaders visited China as the guests of the Jiangsu Christian Council and the Three Self Movement in the province. The following month, taking account of the Sino-British Agreement on the future of the territory, the Hong Kong Christian Council organised a conference on 'The Mission of the Church in Hong Kong - a Mid-Decade Consultation'.

Muslim Community

There are an estimated 50 000 Muslims in Hong Kong. More than half of them are Chinese with the rest being either locally born non-Chinese or believers from Pakistan, India, Malaysia, Indonesia and Middle Eastern and African countries. Three principal mosques are used daily for prayers. The oldest is the Jamia Mosque in Shelley Street on Hong Kong Island which was built before the turn of the century and rebuilt in 1915. It can accommodate a congregation of 400.

      Also on Hong Kong Island is the Masjid Ammar and Osman Ramju Sadick Islamic Centre. Opened in 1981, this eight-storey centre in Wan Chai houses a mosque on two floors, a community hall, a library, a medical clinic, classrooms and offices. The mosque, which is managed by the Islamic Union of Hong Kong, can accommodate 700 people but when necessary this number can be increased to about 1 500 by using other available space within the centre.

Situated on what is sometimes called the 'Golden Mile' in Nathan Road is the Kowloon Mosque and Islamic Centre which was opened in May 1984. This imposing building, with white marble finishing, is a new landmark in Tsim Sha Tsui. The mosque can accommodate a congregation of about 2 000 and in addition to the three prayer halls there is a community hall, a medical clinic and a library.

       There are two Muslim cemeteries and each has its own mosque. Both cemeteries are on Hong Kong Island, one at Happy Valley and the other at Cape Collinson, Chai Wan.

The co-ordinating body for all Islamic religious affairs is the Incorporated Trustees of the Islamic Community Fund of Hong Kong. A board of trustees, comprising representa- tives of four Muslim organisations, namely, the Islamic Union of Hong Kong, the Pakistan Association, the Indian Muslim Association and the Dawoodi Borah Association, is responsible for the management and maintenance of mosques and cemeteries. The trustees are also responsible for organising the celebration of Muslim festivals and other religious events. Charitable work among the Muslim community, including financial aid for the needy, medical facilities and assisted education, is conducted through various local Muslim organisations.

Hindu Community

      The religious and social activities of the 10 000 members of Hong Kong's Hindu community are centred on the Hindu Temple in Happy Valley. The Hindu Association of Hong Kong is responsible for the upkeep of the temple, which is also used for meditation periods, yoga classes and teaching Hindi to the Indian community. Naming, engagement and marriage ceremonies are performed at the temple according to Hindu customs. Religious music, lectures and recitals are conducted every Sunday morning and Monday evening.

       The Hindu Temple is frequently visited by swamis and learned men from overseas who give spiritual lectures to the community. A number of festivals are observed, the

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more important being the Holi Festival, the Birth of Lord Krishna, Shivaratri, Dussahara and Diwali.

      Various linguistic groups among the Hindus organise additional festivals for other deities such as Hanuman, Devi and Ganesh, and conduct prayer meetings on auspicious occasions.

Sikh Community

The Sikhs - distinguished by their stylised turbans and unshorn hair - first came to Hong Kong from the Punjab in North India as part of the British Armed Forces in the 19th century. Because of their generally strong physique, they also comprised a large segment of the Royal Hong Kong Police Force before World War II.

       Today, members of the community are engaged in a variety of occupations. The centre of their religious and cultural activities is the Sikh Temple in Wan Chai. A special feature of the temple, which was established in 1901, is the provision of free meals and short-term accommodation for overseas visitors of any faith. Religious services, which include hymn singing, readings from the Guru Granth (the Sikh Holy Book) and sermons by the priest, are held every Sunday morning. The temple also houses a library which contains a good selection of books on the Sikh religion and culture, and runs a 'starters' school for Indian children aged between four and six to prepare them for English primary schools in Hong Kong.

       The main holy days and festivals observed are the birthdays of Guru Nanak (founder of the faith), Guru Gobind Singh (the 10th and last Guru) and Baisakhi (birthday of all Sikhs). To meet the demands of a growing congregation, the temple prayer hall has been enlarged.

Jewish Community

Hong Kong's Jewish community - comprising families from various parts of the world - worships on Friday evenings, Saturday mornings and Jewish holidays at the Synagogue 'Ohel Leah' in Robinson Road, Hong Kong Island. The synagogue was built in 1901 on land given by Sir Jacob Sassoon and his family. The site includes a rabbi's residence and a school as well as a recreation club for the 1 000 people in the congregation. There is also a Jewish cemetery, which is located in Happy Valley.

18

Recreation and The Arts

     HONG KONG people today are able to take part in a richer and more diverse range of recreational activities in their leisure time than ever before. Practically every sporting activity has its share of devotees with good opportunities for participation, while the exodus to the countryside and beaches at weekends and on holidays has been given greater impetus through shorter working hours and improved standards of living.

      On the cultural side, Hong Kong is rapidly becoming a leading centre in Southeast Asia. Several large new cultural venues have or are about to open and interest and involve- ment is burgeoning. Hong Kong now holds thousands of events throughout the year, ranging from traditional Cantonese opera and puppet shows to performances of ballet, theatre and orchestral music - often featuring internationally renowned performers. Funds and facilities for these pursuits, as well as further training and coaching opportuni- ties for young sportsmen and students of the arts, have been made available largely by the government, the Urban Council, governing sports bodies, voluntary associations and many private organisations.

      In September, the Academy Block of the Hong Kong Academy for Performing Arts was formally opened by the Governor, Sir Edward Youde, and the teaching programmes which had been conducted in temporary accommodation were able to move to their permanent home. The building, which occupies a site on the Wan Chai waterfront, was financed by a $300 million donation from the Royal Hong Kong Jockey Club; its annual running costs are being met by the government.

The Hong Kong Academy for Performing Arts, which operates under its own ordinance, has been established as an independent organisation whose objects are to foster and pro- vide for training, education and research in the performing arts and related technical fields. Among the public entertainment highlights of 1985 was another spectacular harbour fireworks display held in February to mark the Lunar New Year.

Countryside

Countryside recreation is an accepted part of the way of life for many people in Hong Kong. Country parks and woodlands on the urban fringes are used extensively by city dwellers for morning walking, shadow boxing and jogging, and by students for nature study, while more remote parks are used for hiking, picnicking, barbecuing, cycling, kite flying, orienteering and camping by those seeking a relaxing change of pace. In 1985, 9.3 million visits were made to the country parks. Although the parks are used more in the drier and cooler months, with October to April accounting for 65 per cent of the total visitors, increasing numbers of people now visit the countryside during the summer.

       There are 21 country parks throughout Hong Kong, covering about 40 per cent of the land area. Within these country parks, recreational amenities include picnic and barbecue

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YOUTH

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  Previous page: A fan dance at the official opening of International Youth Year events, held at the Hong Kong Coliseum on January 1. Above: Learning the art of paddling a canoe, at the Tai Mei Tuk Water Sports Centre.

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Pushing an outsize plastic ball at an International Youth Year event.

5000.

Young musicians enjoy a respite during the annual rally of the territory's scout association.

Happy youngsters at the scout rally.

Youthful volunteers regularly assist in community improvement work. Here they are busy at Lung Tin Estate at Tai O, on Lantau Island.

Outdoor pursuits have become increasingly popular with young people like these picnickers at Bride's Pool in Pat Sin Leng Country Park.

Folk dancing in Victoria Park, as part of activities to mark International Youth Year.

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237

places, waymarked walks, shelters, toilets, and information and educational services. Road access is being improved to enable park staff to deal more effectively with fires and litter the most serious problems created by visitors.

During the year, two long distance hiking trails, one on Lantau Island and one on Hong Kong Island, were opened to the public. The first purpose-built visitor centre was opened in Sai Kung Country Park and more are being planned for other parks in the next few years. The Director of Agriculture and Fisheries is the Country Parks Authority and, advised by the Country Parks Board, is responsible for these facilities and for the provision of man- agement and protection services for all lands designated as country parks and special areas.

Urban Council

The Urban Council provides a wide range of recreational and cultural facilities in the urban areas, while the Urban Services Department, as the council's executive arm, is responsible for the management and planning of recreational and cultural facilities. Major recreational facilities include parks, playgrounds, swimming pools and beaches and indoor games halls; cultural facilities include libraries, museums, auditoria and exhibition halls. On April 1, the council's role was further expanded when it assumed responsibility in the urban area for the work of the Recreation and Sports Service (RSS) of the former Recreation and Culture Department.

Urban Council projects completed in 1985 included tennis and squash courts at Morse Park, a new fountain and kiosk in the Zoological and Botanical Gardens, the Sham Shui Po Swimming Pool Complex, and the Shek Ku Lung Road Playground.

       To maximise land use, new or redeveloped Urban Council markets are built as multi-storey complexes with one or more floors constructed exclusively for recreational or cultural use. The facilities so provided include indoor games halls, libraries, auditoria, multi-purpose rooms for rehearsals, training, lectures and community functions, visual arts studios and exhibition areas. Four complexes have been completed, in Aberdeen (two), Ngau Tau Kok and To Kwa Wan.

During the year, eight complexes were under construction in the Western, Wan Chai and Eastern Districts of Hong Kong Island, and in the Kowloon City, Wong Tai Sin, Kwun Tong, Sham Shui Po and Mong Kok Districts of Kowloon. Nineteen similar projects in various districts are under planning. In addition, six new indoor games halls were under construction, together with 13 under various stages of planning, to supplement the existing indoor facilities at Aberdeen, Kai Tak East, Cheung Sha Wan, Morse Park, Boundary Street, Lai Chi Kok, Ngau Tau Kok, and Chun Wah Road, Kwun Tong.

       The Urban Council, through its Sports Promotion Office, works closely with various sports associations and government departments in providing each year sports and recreation programmes for about 0.45 million people. With a provision of $7.7 million in 1985, the council organised and sponsored over 12 114 sports and recreational events, of which 40 specific programmes were organised to mark International Youth Year.

       Through its network of 10 district offices, the RSS promotes community-based recrea- tion and sports programmes covering special courses for housewives and factory workers, outdoor recreational pursuits, and events for the handicapped and disabled. During the year, about 200 000 people took part in 3 274 programmes and activities, including 50 000 people who took part in various fitness and dance programmes held at the City Lions Club Sports Centre and the To Kwa Wan Sports Centre.

In 1985, the council organised 460 free outdoor entertainment programmes in parks, playgrounds, gardens, recreational and community halls and commercial plazas through-

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out the urban areas. The programmes included all-star shows, variety shows, youth popular concerts, popular concerts, orchestral (Chinese and classical) concerts, choral concerts, youth dances, ballet and modern dances, traditional Cantonese, Peking and Chiu Chow operas, puppet performances (rod, glove, string, Cantonese and shadow), classical operatic acrobatics, Cantonese operatic songs and Chinese folk songs and dances. In all, 312 698 attended these free entertainment programmes.

Apart from regular entertainment programmes, the council also organised many territory-wide events. These included the Spring Lantern Festival held at Ko Shan Park in early March, a 'Concert in the Park' in mid-June at Kowloon Park, the Mid-Autumn Carnivals at Victoria Park and Ko Shan Park, and the Christmas Carnival. An intensive 44-day Summer Fun Festival for all ages was launched during the summer holidays. More than 72 072 young people and children took part in various outdoor events including carnivals, launch picnics, family cruises, disco parties, weekend films and visits to Kadoorie Farm. A total of 339 662 attended these territory-wide carnivals, including the Summer Fun Festival and participatory programmes.

Reorganisation of the Recreation and Sports Service

Under a government reorganisation which took effect on April 1, the district offices and recreation and sports facilities of the Recreation and Sports Service (RSS) were transferred to the Urban Council in the urban area, and to the Regional Services Department in the New Territories. The two bodies were thus able to promote recreation and sport in their regions more effectively.

      Certain sections of the former Recreation and Sports Service remained with the government, as the Recreation and Sports Service Division of the newly formed Municipal Services Branch of the Government Secretariat. The work of these sections continued to include liaising with other government departments and assisting national sports associa- tions and other outside organisations in order to promote interest in recreation and sports activities generally, and to improve standards at the higher levels of competitive sport.

      The Recreation and Sports Service Division has also been concerned with co-ordinating and organising recreation and sports activities for 'special groups' - the disabled and the underprivileged. In 1985, 109 projects were organised for the special groups, involving 5 724 participants.

The Secretariat of the Council for Recreation and Sport, following the reorganisation, was also housed in the Recreation and Sports Service Division of the Municipal Services Branch. As the government's principal advisory body on recreation and sport, the council advised on the disbursement of $4.3 million of government funds to sports associations, chiefly for competition and pre-competition training. The council also advised on the disbursement of certain independent funds, earmarked for youth recreation projects - primarily for capital works items and the purchase of specialised equipment. In 1985, $5.5 million was allocated for this purpose.

Regional Services Department

The Regional Services Department (RSD) was formed on April 1, by merging the former New Territories Services Department and the component units of the former Recreation and Culture Department and Cultural Services Department operating in the New Territories.

With the formation of the new department, the promotion of recreation, sports and cultural activities and the management of venues such as parks, swimming pools, beaches,

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      sports grounds, civic centres, libraries and museums in the non-urban areas became the responsibilities of the RSD.

       In 1985, 70 640 people from various sectors of the community took part in 1746 recreation and sports programmes organised by the Regional Services Department. In addition, 725 similar projects were jointly organised with other government departments, and outside organisations. During the same period, some 941 community events of different sorts were jointly organised by the RSD and various district boards to give local residents a greater sense of district identity.

Outdoor pursuits still remain the most popular form of recreation. In 1985, a total of 65 108 day-campers and 75 999 overnight-campers took part in activities organised by the RSD at the Lady MacLehose Holiday Village, the Sai Kung Outdoor Recreation Centre, the Tai Mei Tuk Water Sports Centre and the Chong Hing Water Sports Centre.

      The Regional Services Department also manages 250 hectares of open space in the non-urban areas where recreation and sports facilities are located.

       In 1985, the department took over the management of more than 35 new facilities, notably the Tuen Mun Town Park, Tsang Tai Uk Recreation Ground and the extensive river-side promenades in Sha Tin. Many more recreation and sports facilities are being con- structed in the non-urban areas, including major parks in all the main population centres.

Beaches and Swimming Pools

      Swimming is by far Hong Kong's most popular form of summer recreation. During the year, an estimated 18 million people visited the bathing beaches and 4.9 million used the public swimming pools.

       There are 40 gazetted bathing beaches: 12 on Hong Kong Island, managed by the Urban Council, and 28 in the New Territories managed by the Regional Services Department. The beaches are manned by lifeguards and have changing rooms, toilets, first-aid posts, lookout towers and other facilities.

       On July 20, a cargo vessel went aground on Round Island resulting in an oil spillage which forced the closure of 11 beaches on Hong Kong Island for several days.

       A new swimming pool complex in Sham Shui Po Park was completed, bringing to 13 the total number of complexes managed by the Urban Council - six on Hong Kong Island and seven in Kowloon. In addition, the Regional Services Department manages six swimming pool complexes. A further major swimming pool complex under construction in Tuen Mun is expected to be opened in 1986. All competition pools in the complexes are built to international standards.

       There are 16 public swimming pool projects under planning, one on Hong Kong Island, five in Kowloon and 10 in the non-urban areas. The Urban Council and the Regional Services Department regularly organise learn-to-swim classes to promote water safety. During the year, 476 swimming classes and training programmes were held, attracting 13 294 participants.

Summer Youth Programme

The primary aim of the Summer Youth Programme is to provide recreational outlets for children and youth between the ages of six and 25 during the hot summer months when schools are not in session. The programme includes recreational, cultural, sporting, development and entertainment events which provide opportunities for young people to seek fun in recreational and entertainment programmes, to learn new skills, to participate in healthy competition and to engage in community service projects.

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      The 1985 Summer Youth Programme adopted the International Youth Year themes of 'Participation, Development, Peace'. More than 9 000 events were held between June and September and drew over 650 000 participants. About $13 million was spent on the programme, of which $5.25 million was donated by the Royal Hong Kong Jockey Club. The balance came from the government, Urban Council, private donations and fees from participants. The Royal Hong Kong Jockey Club also donated $1.9 million for setting up permanent recreational facilities for young people. The three projects selected were the Caritas Siu Tong Camp, the Tai Tam Camp of the Scout Association and the Tuen Mun Camp of the Hong Kong Girl Guides. In addition, the club offered three scholarships for outstanding youth volunteers of the 1985 Summer Youth Programme to attend an 18-day course on board the Outward Bound vessel Ji Fung.

       For the second year, the Summer Youth Programme was co-ordinated by the City and New Territories Administration, with a three-tier executive operation. The Summer Youth Programme Policy Committee provides policy guidelines for the planning of activities; the Summer Youth Programme Central Co-ordinating Committee implements the decisions of the policy committee and appropriates funds for the Summer Youth Programme; and District Co-ordinating Committees were formed in the territory's districts to plan, imple- ment and allocate funds for district activities.

Youth Hostels

The Hong Kong Youth Hostels Association is a charitable organisation providing outdoor leisure opportunities for young people. The number of annual members continued to grow in 1985, reaching around 31 000, with members being mainly in the 17 to 24 age group.

      The association runs a number of hostels. The redevelopment of the Pak Sha O hostel was completed early in the year at a cost of over $2.4 million. The hostel, with ac- commodation for over 100 members, is situated in one of the most attractive areas of the Sai Kung Country Park, and quickly proved popular. The association operates a second hostel in the country park, Bradbury Hall near Chek Keng, and is considering the prospects of building a third, at Sai Wan Tsui.

      Running costs are covered by membership fees and overnight charges for use of the hostels. Capital expenditure is met by the association's own fund-raising activities and by grants from charitable institutions. Hostel sites are provided by the government.

Outward Bound School

The Hong Kong Outward Bound School is a private registered charity and part of an international network of 34 schools. It provides year round stress-challenge personal development programmes. These programmes last from seven to 18 days. They take place on the school's training ship, the brigantine Ji Fung. The ship accommodates 40 trainees and undertakes voyages as far afield as the Philippines, Hainan and Japan. The remainder of the courses operate from a residential base on the Sai Kung peninsula. This base has a capacity for up to 75 trainees per month.

      The purpose of each course is to provide for the individual a carefully structured but demanding physical and mental experience which combined with careful counselling, is aimed at improving self confidence, personal awareness of strengths and weaknesses, improving leadership, communication and decision making skills.

      Throughout the year the school operates 40 courses for adults. The majority of places on these courses are taken by corporations and businesses who use Outward Bound as part of their investment in staff development. The school also ran 42 team building courses for

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corporate work teams, 19 children's adventure courses, eight special outdoor skills courses and 18 courses for the disabled, who were all able to attend free of charge.

Financing is provided through tuition income, charitable donations, and a government subvention which enabled the participation of young people who were unable to afford the full course fee. Donations are used to fund a strong tuition assistance programme, new capital and major maintenance projects. During the year, more than 30 per cent of all private participants received a tuition grant. In total, the school operated 127 courses for 2 812 people and 19 402 trainee programme days.

Adventure Ship

The Adventure Ship project began in 1977 with the acquisition of a large Chinese junk named the Huan. After conversion from its original design as a passenger vessel, it became a sail training ship which can carry 60 young people. Adventure Ship Ltd was formed as a registered charity in 1978 with the aim of providing 'skill and character development with sea adventures' for underprivileged young people in Hong Kong. The various modifica- tions made to the 90-foot Huan also enable handicapped groups to use the vessel.

Groups of young people join the ship for trips of from one to five days. In 1985, it carried over 5 000 young people on trips in Hong Kong waters. In November, the Huan took a party of young people from various youth groups on a two-week trip to the ports of Xiamen and Shantou in southern China.

Ocean Park

Ocean Park, a large oceanarium and fun park situated on the south side of Hong Kong Island, has attracted more than three million visitors since a major redevelopment programme was completed in early 1984. The park comprises headland and lowland areas, linked by a cable car system, and the headland now also has a second entrance by means of the world's longest outdoor escalator.

       Among the many attractions on the headland are six 'thrill rides', including one of the longest and fastest roller coasters in the world. Besides these, there is the Ocean Theatre, which has a killer whale, dolphins, sealions and high divers. In April, two members of an American team performing at the theatre set men's and women's world records in high diving. Other features of the headland include the Wave Cove, with sealions, penguins and pelicans; and the Atoll Reef, the world's largest aquarium.

       The lowland features Water World, the first water play park of its kind in Asia, which provides visitors with a variety of water activities. In addition, the lowland has a children's zoo, a dolphin feeding pool, a Golden Pagoda housing over 100 species of goldfish, and a garden theatre. In February, a new exhibition, Cine 2000, opened at the lowland area, bringing to Hong Kong a new and exciting concept in cinema entertainment.

       Early in the year, two giant pandas from China were on display at Ocean Park, and the park subsequently donated $624,000 to the China Wildlife Conservation Association towards its pioneering work in preserving pandas.

Indoor Stadia (Queen Elizabeth Stadium and Hong Kong Coliseum)

The Queen Elizabeth Stadium (QES) and the Hong Kong Coliseum (HKC), opened in 1980 and 1983 respectively, are the two major multi-purpose indoor sports and entertainment complexes in Hong Kong. Managed by the Urban Council, the two fully air-conditioned indoor stadia are equipped with the latest electronic scoring, sound and lighting systems and a wide range of sports and stage facilities. Their arenas (3 500 seats for the QES and

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12 500 seats for the HKC) are popular venues for local and international sports events, community functions as well as entertainment and cultural programmes. As a special feature, the HKC is equipped with a four-sided television screen, hung centrally, which displays larger-than-life images for close-up, slow motion and replay.

Activities in the two arenas during the year included performances by top artists, family entertainment shows and sports events. In total, around 1 418 672 people attended shows and events at these two arenas.

      Other facilities at the QES include three gymnasia, three committee rooms, a multi- purpose hall, three squash courts and two table tennis play areas. The 13-storey stadium is also the home for offices of the Amateur Sports Federation and Olympic Committee of Hong Kong and 23 of its affiliated national sports associations in its top three floors. This close proximity of the national sports bodies not only ensures easy access to practice venues but also facilitates the co-ordination and promotion of territory-wide sports activities.

Jubilee Sports Centre

The Jubilee Sports Centre, a 16 hectare modern sports complex at Sha Tin, has become increasingly popular as a venue for international groups. Some have used it as a training venue en route to major tournaments, while others have stayed at the centre specifically to work together with Hong Kong squads and the centre's coaches. The centre has played host to many international workshops and courses and accommodated a number of teams during the year. Major events and courses are organised in conjunction with the sports' governing bodies. The combination of world standard facilities and the centre's team of expert coaches has helped achieve many outstanding results.

      Innovative facilities at the centre include Hong Kong's first covered track for all-weather sprint and hurdle training, the first cycle velodrome and an ozone treated swimming pool. Additionally, outdoors there are three grass soccer pitches, an eight-lane Olympic track, a tennis range, a jogging trail, an artificial turf training area, a hockey pitch and an area for baseball and softball. Indoors there are squash courts, a gymnasium, dance studio, a weight and strength training room, and halls for a variety of sports. The centre, which provides residential accommodation for about 100 people, is managed by an independent board; its annual operating expenses are subvented by the Royal Hong Kong Jockey Club.

City Hall

The City Hall, opened in 1962 and with an area of 11 000 square metres, is Hong Kong's cultural beacon. It remains one of the world's most heavily used establishments for the performing and visual arts.

      The City Hall complex includes the High Block and the Low Block, connected by a memorial garden. The Low Block houses a 1 488-seat Concert Hall, a 467-seat Theatre, an Exhibition Hall and both Chinese and Western restaurants. The High Block accommodates an Exhibition Gallery, a 116-seat Recital Hall, two committee rooms, a Marriage Registry, the Hong Kong Museum of Art and the City Hall junior, adult and reference libraries together with a popular music listening library.

This civic centre of major cultural and entertainment presentations is the main venue for the Hong Kong Arts Festival, the Festival of Asian Arts and the Hong Kong International Film Festival. It is also the prime venue of the Urban Council's performing companies and various cultural organisations.

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       In 1985, 531 700 people attended 1 056 performances at the Concert Hall, the Theatre and the Recital Hall. A total of 117 exhibitions were held at the Exhibition Hall and the Exhibition Gallery.

Town Halls

There are four civic centres under the management of the Regional Services Department. These are the Tsuen Wan Town Hall, Lut Sau Hall in Yuen Long, North District Town Hall located south of Sheung Shui and Tai Po Civic Centre. The facilities of these civic centres can be hired at reasonable rates. The Tsuen Wan Town Hall, the first multi-purpose cultural complex in the non-urban areas, has, among other things, a 1 424-seat auditorium, an exhibition gallery and a cultural activities hall. A total of 445 presentations and exhibitions were organised by the Regional Services Department at the four civic centres, attracting more than 256 710 people.

Hong Kong Cultural Centre

The Hong Kong Cultural Centre is being jointly built by the government and the Urban Council on a choice site in Tsim Sha Tsui at the tip of the Kowloon peninsula. It will comprise a 2 250-seat Concert Hall, a 1 860-seat Grand Theatre, a 300-500 seat Studio Theatre, an arts library, a restaurant block and a garden. Construction work is expected to be completed in 1988-9.

Aberdeen Cultural Centre

The Aberdeen Cultural Centre, on the fifth floor of the Urban Council Aberdeen Complex, is basically intended to be a district cultural facility. It has a 200-seat Cultural Activities Hall, an Exhibition Hall which also serves as a rehearsal room, a Conference Room, two music prac- tice rooms and ancillary facilities which are suitable for a wide variety of small-scale cultural performances and community activities such as recital, dance, drama, chamber music, mime shows, rehearsals, exhibitions, lectures, meetings, receptions and other functions.

The Cultural Centre is available for hire by the public and a total of 196 activities were held in 1985.

Community Arts Centres

In order to maximise the use of land, cultural facilities are to be provided on upper floors of a number of the Urban Council's market complexes to achieve an even geographical spread of cultural centres in urban areas. A community arts centre will normally comprise a small auditorium for performances, rehearsal and practice facilities, an exhibition hall and a visual arts studio. Two such centres are under construction in the Ngau Chi Wan Complex and the Western Complex, and are scheduled for completion in late 1986 and early 1988 respectively.

Hong Kong Arts Centre

Opened in October 1977, the Hong Kong Arts Centre is the home of an independent non- profit making organisation which presents multi-cultural arts events, including music, drama, dance, film and the visual arts. In 1985, the Shouson Theatre, Recital Hall and Studio Theatre were used for 5 600 hours and the Pao Sui Loong Galleries held 69 exhibitions. The rehearsal rooms, art and crafts studios, music practice rooms and other areas were used for 8 168 hours.

Main events of the year included a sponsored Children's Festival, a sponsored Music Series and exhibitions such as 'Contemporary British Theatre Design' and 'The Art of

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Chang Dai-Chien and Ragence Lam - Fashion Design (1973-1985)'. Another highlight was 'A Theatre Season of Contemporary Chinese Literary Masterpieces' in September and October. Film programmes featuring celebrated film-makers, the Chinese Film Special in May, and a Japanese Film Festival in August also enjoyed popular support. Classes on crafts and ceramics, Western and Chinese painting, photography and children's art were also conducted.

Ko Shan Theatre

Opened in March 1983 and situated inside Ko Shan Road Park in Hung Hom, the Urban Council's Ko Shan Theatre has 3 000 seats, of which 1 000 are under cover and 2 000 in the open air. This first purpose-built semi-open-air theatre is a regional centre available for hire by the public.

      The Ko Shan Theatre is also a venue for the Hong Kong International Film Festival and the Festival of Asian Arts. Community activities and a number of other Urban Council presentations were held during the year. In all, about 87 000 people attended 115 per- formances in the theatre.

Council for the Performing Arts

The establishment of the Council for the Performing Arts was approved by the Executive Council in 1981 to advise the government on the development and needs of the performing arts in Hong Kong. Members were appointed to the council in February 1982. It has currently 15 unofficial and six official members.

      Six committees service the main council in music, dance, drama, technical arts, business sponsorship and public relations, and finance. Each committee is chaired by an unofficial member of the council and to ensure that the council is advised by those actively involved in the performing arts in Hong Kong, it includes, as co-opted members, specialists and professionals in the particular fields.

From April 1, funds for the promotion of performing arts in Hong Kong were disbursed on the advice of the council from a specially designated block vote from government funds. New forms for applicants applying for grants from the block vote were devised in consultation with council members. The funds are given in the form of grants, namely, the general support grant, project grant, capital grant and grant to individuals. The main purpose of the grants is to encourage and foster artistic excellence in the performing arts field.

      The council awarded general support grants to the Hong Kong Arts Festival Society, the Hong Kong Philharmonic Society, the Hong Kong Conservatory of Music, the Hong Kong Academy of Ballet, the Chung Ying Theatre Company and the City Contemporary Dance Company.

Culture Division

The Culture Division of the Municipal Services Branch is responsible for formulating and co-ordinating policies and forward planning in all aspects of culture, entertainment, libraries and museums of a 'national' nature. It is responsible for the enforcement of the Books Registration Ordinance and the Antiquities and Monuments Ordinance and provides secretariat service to the Antiquities Advisory Board.

      The division administers, on the advice of the Council for the Performing Arts, the government's financial support to various performing arts bodies and provides secretariat service to the Council for the Performing Arts and its six committees.

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The opening of the academy's Academy Block in September enabled full-time courses to begin there. The administration had moved into the building in July.

      Altogether, 39 dance students and 33 music students had successfully completed the first one-year foundation course in the academy's temporary premises at CC Block, Victoria Barracks, and at the Hong Kong Conservatory of Music in the Hong Kong Arts Centre, and they began a three-year diploma course in September.

      Over 2 000 applications for admission in September were received by the four Schools of Dance, Drama, Music and Technical Arts, following the publication of the academy's first comprehensive prospectus in May. After extensive selection procedures, a total of 145 students were enrolled in the academy: 35 in dance, 30 in drama, 50 in music and 30 in technical arts.

During the year, students in the part-time Junior Studentship Scheme for Dance and Music made excellent progress, thus laying a sound foundation for future academy intakes. The first part-time courses were offered during 1985 in acting, mime, dance and opera. They elicited an enthusiastic response from a wide spectrum of the community. The facili- ties of the academy building will allow an expansion of this programme in the future.

       For the second year, the academy organised 'Hong Kong Summer Dance,' a summer school, in collaboration with the local dance community. From July 22, three weeks of classes in classical Chinese dance, national dance, ballet and modern dance were offered to dance students, teachers and enthusiasts.

To mark International Youth Year, the academy co-organised the 'Youth Music Per- former Award' with a television company. In June, nominations were made by four participating tertiary institutions: Baptist College, Chinese University of Hong Kong, University of Hong Kong, and the Hong Kong Academy for Performing Arts incor- porating the Hong Kong Conservatory of Music. The final competition was held on July 4, before a panel of the heads of music of the four institutions. An academy foundation-year student won the award and a scholarship of $20,000.

Twenty-five full-time students and juniors from the School of Music were invited to perform in two concerts of Chinese and Western music in July, as part of the Hong Kong International Youth Arts Festival organised by the Urban Council.

Hong Kong Philharmonic Orchestra

The first half of 1985 coincided with the celebrations marking the 10th anniversary of the Hong Kong Philharmonic as a professional orchestra. The anniversary concert season, which featured more than two dozen guest artists, came to a rousing close in mid-June with three performances of Beethoven's Ninth Symphony. The guest artists included Rudolf Firkusny and Earl Wild, both pianists, and double bass virtuoso Garry Karr, from the United States, and another internationally renowned pianist, Fou Ts'ong. During the season, the orchestra, which received financial support from the government, presented 122 concerts, an increase of 16 per cent over the previous year. For the first time, total audiences numbered more than 250 000 and ticket sales revenue increased by 65 per cent to $5.3 million.

The 1985-6 concert season opened in October with Kenneth Schermerhorn commencing his second season as music director. The orchestra's main activities continued to be subscription concerts in the City Hall, Tsuen Wan Town Hall and the Academic Community Hall, commercial gramophone recordings, popular concerts and two series of education concerts for school children.

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      No overseas touring was undertaken in 1985, but plans were advanced for two overseas tours to take place during 1986.

Hong Kong Chinese Orchestra

The Hong Kong Chinese Orchestra is a professional Chinese music orchestra formed by the Urban Council in 1977. The orchestra has been innovative in introducing new musical works by commissioning local and overseas composers to undertake compositions and arrangements. It combines Western orchestration with Chinese music and instruments and, to encourage different styles of musical interpretation, local and overseas guest conductors are invited to appear with the orchestra. During the year, the orchestra gave 71 concerts to a total audience of 80 350. Apart from regular concerts at the City Hall and New Territories town halls, the orchestra also toured schools and took part in district festivals to promote Chinese music.

Hong Kong Repertory Theatre

The Hong Kong Repertory Theatre, a professional drama company set up by the Urban Council in 1977, continued to gain popularity with its Cantonese productions and regularly played to near capacity audiences at the council's various venues. Its 218 performances during the year attracted 69 694 people. In addition to staging seven major productions, the company performed at schools and district community centres. In June, the company was invited to perform in Canton. This was great success in terms of audience response and cultural exchange. The company also organised the annual Drama Festival in July and August.

Chung Ying Theatre Company

The Chung Ying Theatre Company, a government-subvented professional drama company whose prime role is 'theatre in education' continued to develop an audience throughout the territory, not only in schools but also in community centres. The company presents productions in Cantonese and English, both separately and bilingually. Chung Ying added four new productions to its existing repertoire: City of Cats for 'A Seasons of Chinese Plays' in the Arts Centre, Fantastic Fairground for the Children's Arts Festival, The Dragon's Disciples (a children's play) and I am Hong Kong - which was particularly successful with adult audiences. These last two productions were presented in their English versions at a festival in Adelaide, Australia, in May where they received public acclaim and favourable reviews by critics.

Hong Kong Academy of Ballet

The Academy of Ballet's school is in the final stage of integration into the Academy for Performing Arts. This will be completed in June 1986.

      The company continued to give professional performances and presented several major productions in 1985. In October it presented three of Fokine's ballets produced by Nicholas Beriozoff for the Festival of Asian Arts; and in December it presented the full-length Nutcracker. These productions also involved the academy's own students and those of the Academy for Performing Arts.

      The company made its first overseas tour, to Taiwan in February, at the invitation of the Lions Club of Taipei, and Nutcracker was performed to four full houses at the Dr Sun Yat Sen Memorial Hall.

      The company also took part in eight local districts' arts festival and cultural pre- sentations during the year, and vigorously pursued its schools educational programme,

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increasing its visits to schools and adding to this programme a number of performances in public housing estates.

Hong Kong Dance Company

Founded in 1981 by the Urban Council, the professional Hong Kong Dance Company continued as a thriving and energetic force. It continued to present traditional and folk dances as well as newly choreographed pieces on Chinese and Hong Kong themes. In 1985, the company gave a total of 52 performances, some of which were free performances at schools and district arts festivals. The total attendance was over 42 089. A highlight was the premiere of a new production of Chinese Historic Myths, which received acclaim and favourable review by critics. Upon request, a re-run of the production was held four months later, again drawing a capacity audience.

City Contemporary Dance Company

Overseas touring continued to be one of the City Contemporary Dance Company's major activities in 1985, with nine performances being given in China and Singapore. Locally, the company presented 25 school programmes and 34 performances which included outreach programmes in the new towns. Over the year, the company worked with artists from Britain, Italy, New Zealand and the United States, demonstrating its zeal for new ideas and challenges.

Music Office

The Music Office's regular annual activities continued to be held in 1985. The Instrumental Music Training Scheme, which provides instrumental music training at nominal fees of $10 and $20 per month to young people aged six to 23, continued to attract many new trainees. Weekly classes in both Western and Chinese music were held for over 3 800 students in 700 classes at the Music Office's eight music centres throughout Hong Kong. Aural and theory training classes were again organised to supplement instrumental tuition, and special training was provided for 30 talented and outstanding young musicians. Trainees, on reaching an acceptable standard, are encouraged to join one of the many orchestras and bands managed by the Music Office, which in 1985 included one youth symphony orchestra, five youth string orchestras, five youth Chinese orchestras, six youth symphonic bands, and one children's symphonic band. In addition, the Music Office also managed two choirs. Members attended weekly rehearsals and gave many public performances during the year. Besides training by the Music Office's full-time and part-time instructors, the trainees also received tuition from visiting musicians from overseas who conducted master classes and seminars.

      An integral part of the training provided by the Music Office is touring overseas with a view to youth cultural and musical exchange, and in August a delegation comprising 60 youth orchestral members and 10 officials visited China for 10 days. The 49-member Hong Kong Youth Symphony Orchestra and the 11-member Youth Chinese Music Ensemble gave public performances in Shanghai and Peking. The visit to China was the first of its kind, and through this visit Hong Kong's youth orchestral members were able to demonstrate their achievements to a much wider audience. The performances were well received.

      'Music for the Millions' concerts by the Music Office Instructors' Orchestras, youth orchestras, bands and ensembles continued to be held in schools, playgrounds and com- munity halls. In all, 382 concerts were staged, with the audiences totalling 221 511 people.

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The Summer Youth Music Camp was held at the Pọ Leung Kuk Pak Tam Chung Holiday Camp for the second successive year. Around 1 000 young musicians benefitted from the expert tuition provided by nine musicians from China, Israel and the United Kingdom. The third Youth Chinese Music Festival was held in November and, in December, a 68-member youth symphonic band from Japan joined with local participants in the 1985 Hong Kong Youth Band Festival.

Hong Kong Conservatory of Music

The integration of the Hong Kong Conservatory of Music with the Hong Kong Academy for Performing Arts went further forward in 1985, with the work of the conservatory becoming readily identified with that of the academy's School of Music. Orchestra and chamber music concerts were sponsored jointly.

Two conservatory students performed in the 1985 Hong Kong Arts Festival's Serenade- at-Six series which was broadcast on RTHK Radio 3, and another student came third in the Hong Kong Young String Player of the Year competition, organised by RTHK Radio 4. Senior students from the conservatory were featured alongside foundation and junior students of the academy in two concerts in the Urban Council's International Youth Arts Festival.

Nine candidates obtained the conservatory diploma, one with high distinction and three with distinction. In addition, four graduates won overseas scholarships: three to the United States and one to the Royal College of Music in London.

Hong Kong Jockey Club Music Fund

Established in December 1979 with a donation of $10 million from the Royal Hong Kong Jockey Club, the Hong Kong Jockey Club Music Fund is a non-statutory trust fund for the promotion and development of music, dance and other related activities. A board of trustees of nine members, chaired by the Commissioner for Recreation and Culture, administers the fund. By the end of 1985, grants and scholarships totalling $6.9 million had been paid from the fund: 98 scholarships have enabled young Hong Kong people to study music and dance at home or abroad, and 744 grants have been given for related purposes such as the purchase of musical instruments and the staging of special events. In considering applications for grants, the fund placed emphasis on quality and identified particularly deserving cases for full or substantive support, so as to enable applicant bodies to start now on worthwhile projects and therefore have more incentive to promote music and dance.

Hong Kong Chorus

The Hong Kong Chorus was established by the Urban Council in 1982 and its varied repertoire includes both Chinese and Western oratorios, operatic works and popular show tunes. During the year, the chorus gave 32 concerts which were attended by 36 483 people. Apart from its own regular concert series, the chorus took part in the Hong Kong Philharmonic Orchestra concerts and provided choral support to the Urban Council's opera productions Aida and Faust, which featured singers from the Metropolitan Opera of New York.

Festival of Asian Arts

The Festival of Asian Arts, one of the most important cultural events organised by the Urban Council, entered its 10th year in the international cultural calendar. The 17-day

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festival was held from October 18 to November 3 and 10 overseas groups from China, India, Indonesia, Japan, Korea, Malaysia, the Middle East, the Philippines and Thailand - were invited to take part. Local performers also played a significant part in the festival.

       A total of 52 indoor performances were presented at the City Hall, the Ko Shan Theatre, the Space Museum Lecture Hall and the Hong Kong Coliseum, and 20 free performances were staged mostly in parks and playgrounds. The indoor and outdoor programmes attracted 50 825 and 26 540 people respectively.

       In addition, 23 lectures and demonstrations by visiting and local artists were organised during the festival to promote appreciation and understanding of various art forms. Four museum exhibitions were held to coincide with the festival.

Hong Kong Arts Festival

The 1985 Hong Kong International Arts Festival was the most successful ever with box-office sales reaching close to 95 per cent of capacity. The Arts Festival is supported by the Urban Council, the Council for the Performing Arts and the Royal Hong Kong Jockey Club.

       There was a strong emphasis on theatre in the programme with plays in three languages being performed by the Actors Theatre of Louisville, from the United States, the People's Art Theatre from Peking, the Urban Council's Hong Kong Repertory Theatre and the Seals Theatre Company of Hong Kong. Mime theatre, ever popular in Hong Kong, was presented by the Trestle Theatre from Britain.

       Western opera, in the form of a festival production of The Barber of Seville was matched by a Chinese Opera from the Jing'an Shaoxing Opera Troupe of Shanghai, while choral and orchestral concerts featured the Montreal Symphony Orchestra, the German Bach Ensemble, the Hong Kong Philharmonic and the Hong Kong Chinese Orchestra. Chamber music and recitals by the British-based Chilingirian Quartet, the American guitarist Eliot Fisk and the British harpsichordist George Malcolm completed the traditional musical offerings. Less conventional were performances by the British-born comedienne Anna Russell, Canadian folk singers Kate and Anna McGarrigle, the Argentinian Cedron Tango Quartet and the Louisiana Repertory Jazz Ensemble.

Hong Kong Festival Fringe

The shows that made up Fringe '85 were numerous and varied, including the Arts Fair, the Fringe 'On Campus', the Marathon Arts Relay, 56 shows, 42 exhibitions, 60 street performances and six workshops. An estimated 150 000 people attended these events.

       The Fringe, which is given financial assistance by the Urban Council and the Arts Festival Society, is an open arts festival that takes place at the same time as the annual Hong Kong Arts Festival. All the artists present their shows at the Fringe with their own resources. The Fringe, as an organisation, does not select or set any standard for the works presented at the Fringe Club. The Fringe provides throughout the year a venue for aspiring performers to gain stage experience as well as for informal training in traditional art forms. The premises are made available rent-free by the government.

Arts Festivals and Entertainment Programmes in Non-Urban Areas

The Seventh Tsuen Wan Arts Festival, jointly organised by the Tsuen Wan District Board, the Tsuen Wan Culture and Recreation Co-ordinating Association and the Cultural Services Department (before the formation of the Regional Services Department), was held from February 10 to March 14. The Fifth Yuen Long Arts Festival, jointly organised by the

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Yuen Long District Board, the Yuen Long District Arts Committee and the Cultural Services Department, ran for 18 days from February 28 to March 17. District festivals, featuring a variety of programmes ranging from arts to recreation and sports, were also organised in Tuen Mun, North District and Tai Po by the district boards concerned and government departments. The Second New Territories Arts Parade, organised in associa- tion with the arts associations of six districts, was also held in 1985.

      During the year, a total of 369 entertainment programmes were organised by the Regional Services Department at some 84 different venues in the nine districts, attracting 214 000 people. In celebration of the Mid-Autumn Festival, lantern carnivals were organised in Tsuen Wan, Kwai Chung, Sha Tin and Tuen Mun. They were attended by more than 67 600 people.

Hong Kong International Film Festival

The Hong Kong International Film Festival, organised by the Urban Council, has gained increasing recognition and importance internationally in terms of its programmes and organisation. This is also reflected by the growing number of overseas film directors, producers and journalists attending the festival each year.

      The ninth festival was held from March 29 to April 13 and 133 feature films from 32 territories, including Hong Kong, drew audiences totalling 94 224 people to 270 screenings. In addition, 27 000 people attended the posters and stills exhibition, seminars and discussion sessions held during the festival.

      Two special retrospective programmes were featured, namely 'Discovering Asian Masters: Fei Mu (China), Gerardo do Leon (Philippines), Ritwik Ghatak (India) and Yamanaka Sadao (Japan)' and 'Auteurs in 50's Hollywood - Nicholas Ray and Douglas Sirk'. A programme on "The Traditions of Hong Kong Comedy' was also presented in the festival's continuous effort to trace and study the history of the local film industry. The festival opened with Wim Wender's Paris, Texas and closed with Francesco Rosi's Carmen.

Hong Kong International Youth Arts Festival

The Hong Kong International Youth Arts Festival was presented by the Urban Council in support of International Youth Year. The festival aimed at providing cultural programmes and entertainment to young people and promoting international friendship and under- standing among those participating.

      Seven groups from China, Britain, Japan, West Germany and the United States were invited to take part. Together with young artists of Hong Kong, they gave 20 performances at the City Hall and the Hong Kong Coliseum. Six free performances were also given at shopping arcades.

       The festival offered a balanced programme of music, dance and theatre. It attracted a total audience of 24 033. Programmes presented for the first time in Hong Kong included a grand concert by 3 000 melodion players and a Hong Kong young choreographers' competition.

Libraries

Since April, library services to the community have been provided under the aegis of the Urban Council in the urban area and the Regional Services Department in the non-urban areas.

      With the completion of four new static libraries in the non-urban areas and two in the urban area, all of the 19 districts in Hong Kong are now served by at least one library, with a total of 43 district libraries and four mobile libraries throughout the territory. In addition,

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a new central library for the urban area, located in Kowloon, was opened in 1985; construction of a central library at Sha Tin is well advanced, and plans are in hand for a further central library at Tuen Mun.

      Apart from providing the usual library services, the libraries throughout the territory regularly organise extension activities for different age groups. These activities range from story-telling to interest clubs, subject talks, mini cultural presentations and music apprecia- tion. A block loan service for books and audio cassettes is offered by the libraries in the non-urban areas to village schools and organisations as well as to penal institutions. Study room facilities are available in 16 libraries throughout the territory and similar facilities will be provided in the new district libraries under planning.

      During the year, 439 011 new books were acquired by the libraries in Hong Kong, bringing the total stock to 2.26 million volumes. The library stock also included 1 080 titles of newspapers and periodicals, 5 215 reels of microfilms, 62 787 audio cassettes, 5 518 video cassettes and 24 084 gramophone records. Some 148 137 people joined the libraries as new members, bringing the total membership to 1 601 125. A total of 10.26 million books were issued for home reading and a further 7.03 million were read in the libraries. About 1 878 419 people participated in the extension activities organised by the libraries.

Hong Kong Museum of History

The most significant event of the year was the 'Dinosaurs in China' Exhibition which attracted nearly 720 000 visitors over 80 days. The exhibition, the first of its kind in Hong Kong, was a joint venture between the Urban Council and the Institute of Vertebrate Palaeontology and Palaeoanthropology, Academia Sinica, Peking, and featured a wide range of dinosaurs and their relatives which inhabited various parts of China some 200 million years ago.

      This exceptionally popular exhibition aroused much interest, particularly among school children, and a painting competition, 'The World of Dinosaurs', was organised jointly by the council and the Community Youth Club of the Education Department as a contribu- tion to International Youth Year to further encourage interest in these ancient creatures, and stimulate the imagination of young people. There were over 2 700 entries from about 150 schools, and the 240 award-winning paintings were put on display in June.

Another contribution by the museum to International Youth Year was the 'History in the Making' Photography Competition at the beginning of the year. This was designed to promote public awareness, particularly among the younger members of the community, of the rapid changes in the scenery and environment of Hong Kong, and to achieve a better understanding of the place in which they live, with a view to developing their sense of belonging. The 15 award-winning entries, together with 93 other noteworthy entries, were put on display during the summer.

      The museum's regular educational and extension services, covering organised school visits to the museum and small travelling exhibitions on subjects of local history, ethnography and archaeology to primary and secondary schools were intensified during the year. A total of 560 organised school visits, comprising 72 330 students, were made to the museum.

      Progress continued to be made in the collection of ethnographic and historic materials, and on the special projects which seek to record different facets of the local cultural heritage. During the year, a new project on local puppet theatres was commissioned.

      Pending provision of a permanent museum, the museum continued to pursue further expansion of its various services, and was planning a Folk Museum at Chai Wan, based on

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a 200-year-old traditional Hakka house known as the Law Uk. When completed at the end of 1987, the Folk Museum would become the second branch museum of the Museum of History, the first being the Han Tomb preserved in situ at Lei Cheng Uk. This itself continued to attract visitors and organised school parties, and recorded a total attendance of 46 097.

Hong Kong Space Museum

The Hong Kong Space Museum, run by the Urban Council, continued to organise a wide range of educational and entertaining programmes which were enjoyed by 443 000 visitors during the year. New attractions were added to the exhibition halls, and the museum's new Sky Show retold the story of Halley's Comet. To foster interest in astronomy, particularly among young people, the museum organised various extension activities, including astronomy classes, film shows and an astronomy quiz competition. The museum also produced four new publications in connection with its various programmes.

The Combined Museum Project

     The Science Museum was given the final go-ahead in 1985 when the Urban Council decided to finance the construction of a combined Museum of Science and History on the designated Chatham Road East site in a phased programme of development. The initial phase will be the construction of a museum, covering a broad spectrum of science, with a gross area of 13 500 square metres. This will be followed by future development on the same site for the expansion of the Science Museum and construction of a permanent Museum of History.

      The year saw further support from the community for the Science Museum when donations in cash and in kind continued to be forthcoming. Leading figures in the academic institutions also offered their assistance in formulating story lines for exhibition themes for the future museum.

Extension activities and science exhibitions continued to be organised by the Science Museum Planning Office. The well-established Popular Science Lectures attracted a total attendance of about 3 000 and the exhibition on '100 Years of Electrical Progress' attracted an attendance of more than 5 000 during a three-day period.

Hong Kong Museum of Art

In 1985, the Hong Kong Museum of Art staged 14 exhibitions covering a wide variety of art forms. Three of these featured Hong Kong contemporary art, and demonstrated the art achievement of local artists in various media. During the Contemporary Hong Kong Art Biennial, Urban Council Fine Arts Awards were presented to the most prominent artists in the fields of painting, sculpture, print-making, ceramics, calligraphy and mixed media. The other particularly noteworthy exhibition of local art was that on poster design to mark International Youth Year. Four overseas exhibitions of various art forms, including Portuguese tiles, Australia ceramics, Japanese crafts, and children's art from Kagoshima. were held with the assistance and co-operation of the governments of Portugal, Australia and Japan. To further stimulate public interest in Chinese fine art and antiquities, four exhibitions were organised on different aspects, including 'An Anthology of Chinese Art' which was jointly presented with the Min Chiu Society, a notable society of art lovers and collectors in Hong Kong.

      At the Flagstaff House Museum of Tea Ware, two exhibitions on tea drinking and Yixing tea wares were staged.

RECREATION AND THE ARTS

253

       The exhibitions attracted 348 500 visitors, including 7994 students in 149 school parties. A number of exhibition catalogues were published to coincide with the major exhibitions. Of these 'The Wonders of Potter's Palette: Qing Ceramics from the Collection of the Hong Kong Museum of Art', and 'George Chinnery - His Pupils and His Influence', were particularly noteworthy publications.

      To enhance the appreciation of art, 20 lectures on the technique and appreciation of ceramics, Chinese tea wares, Chinese seal engraving, print-making, and Western painting and photography were organised. Other educational and extension activities, including mini travelling exhibitions, film shows, guided tours and talks for teachers and students, were held.

       During the year, the museum received a donation of 200 items of carved bamboo from the late Dr Ip Yee, thus making the museum's collection of Chinese bamboo carving one of the most significant in the world.

Museums in the Non-Urban Areas

Following its formation on April 1, the Regional Services Department took over from the former Cultural Services Department the planning, design and management of museums in the non-urban areas. During the year, the Sheung Yiu Folk Museum in Sai Kung attracted 67 700 visitors. The Hong Kong Railway Museum at the old Tai Po Market Station was completed towards the end of the year, while detailed design continued for the Sam Tung Uk Folk Museum in Tsuen Wan.

Antiquities and Monuments Office

      During the year, the Antiquities and Monuments Office, which now comes under the new Municipal Services Branch of the Government Secretariat, continued its active recording, research, preservation and restoration programme covering a wide range of items of historical and archaeological interest, under the guidance of the Antiquities Advisory Board. Of particular note was the completion of the two restoration projects: the Man Shek Tong which is the Liu Clan's Ancestral Hall at Sheung Shui, and the Man Mo Temple at Tai Po Market. Both projects were undertaken by the owners themselves with a financial contribution from the government, representing the first-ever joint effort projects between government and the local community in the cause of preserving Hong Kong's heritage.

       The Fan Lau Fort on southwestern Lantau, which had been closed to the public for safety reasons, was reopened in the summer after satisfactory completion of necessary repairs with a donation from the Royal Hong Kong Jockey Club. Restoration and protection works were also carried out on the rock carvings at Shek Pik and on Cheung Chau, and the gas lamps at the Duddell Street Steps were also re-lit during the year. The office embarked on active planning for the restoration of the Tai Fu Tai at San Tin, the Kun Ting Study Hall at Ping Shan, an old house at Hoi Pa Village in Tsuen Wan and a number of other items. In addition, the survey of traditional villages in the New Territories by students from the universities continued during the summer months, and was focused on the Ha Tsuen area.

The three-year territory-wide archaeological survey to assess Hong Kong's archaeolog- ical resources came to a satisfactory conclusion during the year. The recommendations and findings of the survey are now being carefully examined.

19

The Environment

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THE government's environmental protection programme has been developed progressively since 1977, when consultants reported on what should be done to protect the environment. Achievements in the eight years since then include: the enactment of three major ordinances and other subsidiary legislation; the establishment, staffing and equipping of the Environ- mental Protection Agency; establishment or strengthening of control units within various government departments; and the introduction of comprehensive environmental pollution monitoring programmes. In addition, there has been the continued implementation of a multi-billion dollar programme of public works to provide for the treatment and disposal of sewage and municipal solid wastes and for improving emission control of municipal incinerators, the incorporation of environmental considerations into the planning process, as well as the use of environmental impact assessment for major development projects.

Framework for Pollution Control

The task of formulating policy for the control of pollution is the responsibility of the Secretary for Health and Welfare. The secretary is supported in this task by the Envi- ronmental Protection Agency (EPA), which was set up in early 1981 to assume a central role in formulating and co-ordinating the implementation of the government's policies in this field, and to provide a source of expertise and scientific data on all aspects of pollution control and environmental planning. The work of the EPA involves assistance in formulating new legislation, establishing environmental quality objectives, monitoring long-term pollution trends, developing pollution control programmes, assessing and advising on the impact of major new developments, and providing assistance with en- vironmental planning aspects of government projects.

Various pollution control functions, such as the enforcement of legislation, issuing of licences, and the surveillance and control of individual discharges and emissions, are now carried out by the Air Pollution Control Division in the Labour Department, the Pollution Control (Liquid and Solid Wastes) Division in the Engineering Development Department, the Noise and Vibration Control Section in the Municipal Services Branch, the Agricultural Waste Control Division in the Agriculture and Fisheries Department, and the Pollution Control Unit in the Marine Department. Certain other control activities are undertaken as part of various government programmes, such as the granting of construction noise permits by the Director of Engineering Development or the control of vehicle emissions by the Royal Hong Kong Police Force. In order to make the best use of the resources employed on pollution control and to ensure that the government's policy can be carried out effectively, it has been decided that pollution control functions should be rationalised and centralised with the EPA assuming an operational and executive role. The necessary changes to give effect to this decision will take place on April 1, 1986.

THE ENVIRONMENT

Environmental Pollution Control Programme

255

The government's environmental protection programme covers air and water pollution, noise control and waste management. It includes the following main elements: planning and environmental impact assessment aimed at pre-empting future problems; legislation to provide a statutory framework for planning as well as for routine control of emissions; a programme for the provision and operation of public sector environmental control and waste disposal facilities such as sewage treatment works and incinerators; and monitoring of environmental quality to check the effectiveness of existing measures and the need for

new ones.

       Another further important element in the programme is consultation with those likely to be affected by existing measures and new proposals. Representatives of various industrial and commercial associations and of conservancy groups take part in consultations, largely through advisory committees.

Planning and Environmental Impact Assessment

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Consideration given to environmental requirements during the earliest planning stages of new developments provides both a challenge and an opportunity to avert future en- vironmental pollution problems. It has become routine that plans - including outline development and zoning plans, master development and regional strategic planning studies receive detailed scrutiny by the EPA. Major individual development proposals are often subject to careful environmental impact assessment to assist in the decision-making process. New town developments underway at Junk Bay and planned at Tin Shui Wai, the coal-fired power stations at Tap Shek Kok and on Lamma Island, and various plants and installations on Tsing Yi Island have all been subject to this procedure.

Optical modelling techniques continue to be used to assist in determining optimum building orientations so as to minimise the impact of existing noise sources, such as roads, on new housing estates. These techniques have been used successfully for proposed housing estates at Junk Bay and are currently being developed further by the EPA, using acoustical physical scale modelling, to provide more quantitative advice for town planners.

A major development has been the inclusion of an 'Environment' chapter in the Hong Kong Planning Standards and Guidelines - a government document used to guide the preparation of statutory and non-statutory land use plans, as well as the planning of major development projects. Planners now have available to them comprehensive guidelines on environmental matters which they can use in considering future planning and development activities.

Legislation and Control

The main legislative framework in environmental pollution control consists of the Waste Disposal and the Water Pollution Control Ordinances, which became law in 1980, and the Air Pollution Control Ordinance, which came into force in 1983. To complete this legislative framework, a Noise Control Bill is being drafted and has reached an advanced stage. It is hoped that the Noise Control Bill will be presented to the legislature in 1986. The control of other aspects of pollution is provided for under various ordinances and regulations, such as the Shipping and Port Control Ordinance, the Public Health and Urban Services Ordinance, and the Road Traffic Ordinance.

       The Labour Department's Air Pollution Control Division administers the Air Pollution Control Ordinance and subsidiary regulations which provide for the control of aerial

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THE ENVIRONMENT

emission from furnaces, engines, ovens or industrial plant. During the year, the division inspected 8 355 premises and gave advice to industry on matters concerning statutory requirements, design and installation of air pollution control equipment and measures to prevent contravention of the ordinance. It compiled emission inventories of air pollutants in selected districts for use in planning air control zones, and processed 359 sets of plans and specifications for installation or alteration of chimneys and related combustion equipment. It also received and investigated 1 335 complaints about air pollution, the majority of which were satisfactorily resolved through advice to industry without the need to resort to enforcement action. Some 210 prosecutions were initiated under the Air Pollution Control Ordinance during the year: eight for failure to comply with notices to abate air pollutant nuisance, modify or repair plant and chimneys, furnish information, or stop using an unsuitable fuel; 140 for emitting excessive dark smoke; and 62 for unauthorised installation of furnaces, ovens or chimneys. These resulted in 207 convictions and fines ranging from $200 to $10,000.

Emissions from mobile sources make a significant contribution to air pollution in Hong Kong, and new road vehicles imported into the territory must meet specified European or equivalent regulations on emission controls. Control of excessive smoke emissions from diesel engined vehicles is carried out by the police and the Transport Department under the Road Traffic (Construction and Maintenance of Vehicles) Regulations. During the year, 107 summonses were taken out for the offence of excessive smoke emission, with an average fine of $219. Also, 1 306 fixed penalty tickets of $200 were issued.

      Regulations to give effect to the Water Pollution Control Ordinance were to be put before the Governor in Council early in 1986, following extensive consultation with the public and those likely to be directly affected. The views of industry and conservationists on these regulations were sought in many meetings, discussions and visits. If approved, the regulations would come into force in the Tolo Harbour and Channel Water Control Zone, the first zone declared, on a 'first appointed day' set for mid-year. A mathematical model developed for the zone was in use to aid practical planning decisions, and investigations into two further likely control zones, Junk Bay and Port Shelter, continued.

Pending the introduction of the Noise Control Ordinance, construction noise is con- trolled under the Summary Offences Ordinance. The use of construction equipment on public holidays, and between 7 p.m. and 7 a.m. on other days, may be specifically permitted by the Director of Engineering Development. During the year, 2 260 such permits were issued, with appropriate conditions attached. Noise from ventilating and air-conditioning systems is controlled under the Public Health and Urban Services Ordinance; the authorities are the Urban Council in the urban area and the Director of Regional Services in the New Territories. A total of 502 complaints were received and investigated during the year, leading to the issue of 158 abatement notices and six prosecutions.

Plans have advanced for bringing into operation the provisions of the Waste Disposal Ordinance concerning agricultural wastes as well as toxic, hazardous and difficult wastes. The implementation of agricultural waste control measures will be phased so that areas of highest priority will be brought under control first. In order to implement effectively the toxic, hazardous and difficult waste control measures, it will be necessary to provide specialised treatment facilities for these wastes. Expressions of interest have been sought from private specialist waste disposal firms for the design, construction and operation of such facilities on behalf of the government. The response has been en- couraging and detailed planning, for both the control measures and the facilities, is in progress.

THE ENVIRONMENT

Construction and Operation of Facilities

257

Over the years, the government has made major investments in facilities for the collection, treatment and disposal of wastes. This programme continued in 1985. A major feature is the provision and operation of sewage treatment works, throughout the territory, by the Engineering Development Department and the Electrical and Mechanical Services Depart- ment. The overall intention in the planning and design of these sewage treatment works is to match discharges to the assimilative capacity of receiving waters. The principal sewage treatment works providing biological treatment are in Sha Tin, Tai Po, Shek Wu Hui and Yuen Long, with five smaller plants at Hei Ling Chau, Shek Pik, Tung Tau, Stanley Fort and Ah Kung Kok. Primary treatment to remove solid material is employed at Repulse Bay and Deep Water Bay, and screening plants are provided at other locations. In the current 10-year sewage treatment and disposal programme, priority is given to extensions of the existing works in Sha Tin, Tai Po, Shek Wu Hui and Yuen Long, in order to cope with increases in the population in these areas.

      Principal achievements in the provision of municipal sewage treatment and disposal facilities during the year have been the completion of the Yuen Long sewage treatment works Stage I and the Shek Wu Hui works. Other works under construction include: Chai Wan screening plant, to be connected to an existing submarine outfall; Kwun Tong screening plant, for which the associated submarine outfall has been completed; Kowloon East submarine outfall, which is completed but awaits the completion of an associated pumping station before commissioning; Junk Bay sewage treatment works Stage I and submarine outfall; Mui Wo sewage treatment works and submarine outfall; Cheung Chau sewage treatment works Stage I and submarine outfall; Sha Tin sewage treatment works Stage II; and Tai Po sewage treatment works Stages II and IVA. The total estimated project cost of the works under construction is $1,251 million.

Work to intercept dry weather flow in the Kai Tak nullah continued throughout the year. Dredging of organic sediment in the channel of Kowloon Bay Typhoon Shelter adjacent to the airport runway was completed. A start was made on implementing a scheme for oxygen injection into the water at the southern end of the nullah.

      To improve the water quality of the Tuen Mun nullah and typhoon shelter, the dry weather flow in upper Tuen Mun nullah has been intercepted and is now discharged at the Pillar Point sewage outfall.

       On average, over 6 500 tonnes of domestic, commercial and industrial wastes were collected and disposed of daily. The three municipal incineration plants in Kennedy Town, Lai Chi Kok and Kwai Chung, as well as the refuse composting plant at Chai Wan, all operated by the Electrical and Mechanical Services Department, processed 2 400 tonnes of the domestic and commercial waste collected daily by the Urban Services Department, Regional Services Department and private contractors. The remainder, as well as the in- cinerator and compost plant residues, was disposed of at controlled tips operated by the Engineering Development Department.

      Following satisfactory trials in controlling emission of particles from the Kennedy Town incinerator, a contract was awarded for installing electrostatic precipitators in the plant's two remaining flue gas streams. This installation is expected to be com- pleted in May 1986 and, when operational, should greatly reduce particulate emissions from this incinerator. Also, as an alternative to the installation of electrostatic precipita- tors, consideration is being given to replacing the Lai Chi Kok incinerator by a new refuse transfer loading station to be supported by a high capacity controlled tip in the New Territories.

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THE ENVIRONMENT

During the year, work continued on the preparation of the Jordan Valley controlled tip, which will replace the Ma Yau Tong controlled tip. Detailed design work was completed and preparatory work is programmed to begin in April 1986 for the Junk Bay Stage II controlled tip. The restored land which becomes available following the completion of a controlled tip is assigned for recreational purposes or some other acceptable uses.

In outlying areas, waste collection and disposal arrangements are being upgraded. All refuse collected on Cheung Chau, Peng Chau and Lamma Island and from Mui Wo on Lantau Island is carried by barge to the mainland for disposal; this extended scheme has been implemented by the Regional Services Department, since April. Further progress has been made with the programme to replace small village refuse incinerators - which are a source of environmental nuisance with centralised purpose-designed modular incinera- tors. Where vehicle collection services are impracticable, existing small village incinerators are being replaced by properly designed units. The modular incinerators and new village incinerators are designed by the Electrical and Mechanical Services Department.

In 1985, following a number of enquiries about privately operated waste disposal facilities, an open invitation was issued so that firms could register their interest in pro- viding and operating new waste transportation and disposal schemes on behalf of the government. An encouraging response resulted from this exercise, and the concept of increased private sector involvement in waste disposal is being actively pursued.

     Hong Kong is a party to a number of international maritime conventions concerned with oil and other forms of pollution. The Pollution Control Unit of the Marine Department is responsible for dealing with offshore oil pollution, control of marine dumping activities and surveillance of oil transfer to and from ships. It is also responsible for the collection of floating refuse. Since the unit was set up, many polluters have been successfully prosecuted. The maximum penalty on conviction is a fine of $200,000. Costs incurred in clearing or dispersing oil pollution are recoverable from offenders.

     To combat oil pollution, the unit has a purpose-built pollution control vessel, stocks of low toxicity chemical dispersants, and more than 2 400 metres of large and medium-size oil containment booms. In an emergency, a substantial inventory of oil pollution equipment held by the government and oil companies can be deployed at short notice. The facilities and equipment proved effective in dealing with the worst marine oil spillage in Hong Kong waters since 1977. On July 20, the Brazilian cargo vessel Frota Durban ran aground near the southern entrance to East Lamma Channel and caused extensive oil pollution to the 11 beaches on the southern side of Hong Kong Island. In this emergency situation, the Marine Department, with the support of the other departments concerned, was able to have the pollution substantially cleaned up within three days.

      Remedial works have been carried out during the year to remove or divert pollution outfalls from some of Hong Kong's most popular beaches. These include Repulse Bay, Shek O, Stanley Main Beach and Tung Wan on Cheung Chau. A complementary programme, mainly concerned with the interception of domestic waste, is being planned. Further works have also been planned or implemented at other beaches, including Castle Peak Beach, which is at present regarded as unsuitable for swimming because of the poor quality of the water. This area is to be developed into a residential, commercial and recrea- tional complex. All existing stormwater drains which now carry faecal pollution to the beach will be removed, and disinfection of the seawater in the area is to be provided.

Booms to prevent marine refuse floating into bathing areas were installed at Repulse Bay, Deep Water Bay, Stanley Main Beach and Silverstrand Beach during the year, following a successful trial at Repulse Bay in 1984.

THE ENVIRONMENT

Monitoring and Investigation

259

It is important that public and private sector resources for controlling pollution are used effectively and efficiently; to achieve this it is essential to identify the nature and extent of the problems. This requirement, together with the need to check on the effectiveness of newly introduced control measures and to recognise new adverse trends, has led to various monitoring schemes and investigational projects.

The government's network of six multi-pollutant air quality monitoring stations con- tinues in operation and over 20 million measurements were taken, analysed and reported during the year. Results from the network demonstrate that the urban levels of sulphur and nitrogen oxides, which are emitted as a result of fuel combustion from stationary sources and motor vehicles, are generally low. As would be expected, the highest con- centrations were observed in industrial areas such as Kwun Tong or Kwai Chung. Levels of these pollutants in 1985 declined somewhat when compared with 1984 values. Monitoring of acid rain commenced at selected urban and rural locations during the year.

Particulate levels remained relatively high throughout the territory, notably during dry winter months. The high particulate levels observed in Junk Bay during the year show that the problem is not confined to urban areas. Preliminary measurements of respirable particulate matter indicate that these fine size fractions represent a major proportion of atmospheric particulates in the urban areas.

As in previous years, there was little indication of photochemical smog occurring at monitoring stations on Hong Kong Island or in Kowloon. A number of aerial ozone sampling exercises were carried out, using aircraft of the Royal Hong Kong Auxiliary Air Force. Concentrations measured were not in general excessive; however, the presence of photochemically generated pollutants was detected on some flights.

Investigations of photochemical pollution in rural areas are to be followed up by the EPA, using a new mobile air quality monitoring laboratory. This facility has been provided in order to expand monitoring to areas not covered by the present network of fixed stations and to provide added flexibility in air monitoring capabilities. In addition to rural ozone monitoring, the laboratory will be used for monitoring vehicle pollution and for special short-term investigations at specific locations.

Major surveys have been undertaken on the impact of industrial noise on residential premises, the economic impact of proposed industrial noise controls and the back- ground noise of various land configurations. These surveys have produced a large amount of information for the development and implementation of industrial noise control legislation.

       Extensive monitoring of solid and semi-solid wastes have been carried out to assist the planning of future collection and disposal facilities. It is estimated that general waste will increase from the present level of over 6 000 tonnes a day to as much as 9 000 tonnes a day by the end of the decade. The most recent survey shows that in 1984 the main components of municipal wastes were paper (22 per cent by weight), putrescibles (33 per cent), plastics (18 per cent) and rags and cotton (5 per cent), whereas industrial waste comprised mainly paper (20 per cent), plastics (18 per cent), rags and cotton (23 per cent), glass (10 per cent) and wood (8 per cent). The quantities of waste recycled increased in 1985; the recycled quantities of paper, board and aluminium alone were 25 per cent of the wastes delivered to the incinerators and controlled tips, and this helped significantly to reduce the amount of wastes requiring disposal.

A growing awareness among industrialists concerning the proper disposal of toxic, hazardous and difficult wastes was reflected in the number of occasions on which advice

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THE ENVIRONMENT

was sought from the EPA and the Engineering Development Department on the most suitable disposal method to be employed for these wastes. About 150 disposal applications were dealt with by the Engineering Development Department in 1985 under the interim disposal arrangements.

Monitoring of water quality in the coastal regions continued throughout the year. The general monitoring programme of the Pollution Control (Liquid and Solid Wastes) Division of the Engineering Development Department, which covers offshore and near- shore sites as well as the quality of effluents from sewage outfalls and treatment works around the territory, provided not only useful base-line data for monitoring and surveil- lance purposes but valuable input into the planning of sewage treatment facilities as well. Information on beach water quality was collected both by the Engineering Development Department and by the Urban Services and Regional Services Departments; all gazetted and some non-gazetted bathing beaches were included. The EPA continued its intensive monitoring of water quality in Tolo Harbour and Channel, Port Shelter, Junk Bay and many of the territory's streams. The monitoring r