Hong Kong Yearbook - Annual Report for the Year 1990

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書館

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URBAN COUNCIL PIBLJE PRAKIES REFERENCE LIBKAKI

A

HONG KONG 1991

A REVIEW OF 1990

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市政局公共圖書館 UCPL

3 3288 00219592 5

UDRAM COUNCIL PUBLIC !!BRARIES

Acc. No. 1034618

Class.

tk.951.25

Author

HON

HONG KONG 1991

HKC

Government Information Services

Editor:

David Roberts,

Designer:

Magdy Yiu,

Government Information Services

Photography: Augustine K. C. Chu,

Special Contributor:

Statistical Sources:

Stone Chiang and Daniel Wong, Government Information Services

Photograph of Prime Minister John Major courtesy of Agence France Presse, submarine optical fibre cable courtesy of Hongkong Telecom International Limited and Hong Kong's first lamp-post courtesy of Hongkong Electric Company Limited

Mr Denis Bray, CMG, CVO, JP (Chapter 1)

Census and Statistics Department

The Editor acknowledges all contributors and sources

Copyright reserved

Code No.: F30019100E0 (ISBN 962-02-0097-7)

Price: HK$45.00

US$10.00

UK £6.50

Cover: Giant dragon lanterns, over 36 metres long, featured in the celebrations marking 100 years of electricity in Hong Kong.

Frontispiece: The new Standard Chartered Bank building adds to the skyline in the financial district.

CONTENTS

Chapter

Page

CALENDAR OF EVENTS IN 1990

1

1

SHAPING UP FOR THE 21ST CENTURY

4

2

CONSTITUTION AND ADMINISTRATION

22

3

THE LEGAL SYSTEM

42

4

IMPLEMENTATION OF THE SINO-BRITISH JOINT DECLARATION

51

5

THE ECONOMY

54

6

FINANCIAL AND MONETARY AFFAIRS

68

7

INDUSTRY AND TRADE

82

8

EMPLOYMENT

107

9

PRIMARY PRODUCTION

119

10

EDUCATION

126

11

HEALTH

160

12

SOCIAL WELFARE

180

13

HOUSING

192

14

LAND, PUBLIC WORKS AND UTILITIES

207

15

TRANSPORT

236

16

PUBLIC ORDER

255

17

TRAVEL AND TOURISM

288

18

THE ARMED SERVICES

292

19

COMMUNICATIONS AND THE MEDIA

296

20

RELIGION AND CUSTOM

312

21

RECREATION, SPORTS AND THE ARTS

317

22

THE ENVIRONMENT

346

23

POPULATION AND IMMIGRATION

373

24

HISTORY

381

APPENDICES

391

INDEX

459

ILLUSTRATIONS

Frontispiece

Events

Environment

Foreign Investment

Communications

Education

Outstanding Women

Electricity

Maritime Hong Kong

Islands and the New Territories

Leisure

END-PAPER MAPS

Front:

The Territory of Hong Kong

Back:

Environmental Protection in Hong Kong

Between pages

4-5

28-29

60-61

92-93

140-141

188-189

220-221

252-253

284-285

332-333

APPENDICES

1

2-5

Appendix

UNITS OF MEASUREMENT

CONSTITUTION AND ADMINISTRATION

Page

394

399

6

OVERSEAS REPRESENTATION

404

7-11

THE ECONOMY

408

12-14

FINANCIAL AND MONETARY AFFAIRS

417

15-16

INDUSTRY AND TRADE

422

17-20

EMPLOYMENT

427

21-23

PRIMARY PRODUCTION

432

24-27

EDUCATION

434

28-31

HEALTH

436

32

SOCIAL WELFARE

439

33

HOUSING

443

34-36

LAND, PUBLIC WORKS AND UTILITIES

444

37-38

TRANSPORT

447

39-42

PUBLIC ORDER

450

43

COMMUNICATIONS AND THE MEDIA

455

44

RECREATION, SPORTS AND THE ARTS.

456

45

THE ENVIRONMENT

457

46

HISTORY

458

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 an 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.

CALENDAR OF EVENTS

IN 1990

10.1.90

13.1.90

17.1.90

7.3.90

16.3.90

17.3.90

21.3.90

1.4.90

4.4.90

7.4.90

19.4.90

Governor Sir David Wilson leaves for Beijing for discussions with Chinese Prime Minister Li Peng and other officials on matters affecting Hong Kong.

Foreign Secretary Douglas Hurd starts a four-day visit, his first since taking office.

A White Paper on transport policy in Hong Kong for the next decade is tabled in the Legislative Council.

The Governor flies to London for regular consultations with United Kingdom Ministers and officials.

Financial Secretary Sir Piers Jacobs presents the 1990-91 Budget in the Legislative Council.

A draft Bill of Rights bill, to give effect to the provisions of the international covenant on civil and political rights, is gazetted for public consultation.

Plans are announced for a $3.6 billion project to expand Kai Tak International Airport and to improve its internal and connecting road network.

Chief Secretary Sir David Ford announces details of an expanded Legislative Council in 1991, moving towards a more directly- representative system of government with more elected members.

Legislation to implement separate taxation for married couples comes into effect.

Director of Administration Donald Tsang announces details of the British nationality scheme as the bill is tabled in the House of Commons. Promulgation of the Basic Law by China's National People's Congress. The Minister of State with special responsibility for Hong Kong, Mr Francis Maude, arrives for a five-day visit.

The Governor opens the Shing Mun Tunnel which forms part of Route Five linking Sha Tin and Tsuen Wan.

1

2

CALENDAR OF EVENTS IN 1990

24.4.90

4.5.90

18.5.90

24.5.90

8.6.90

16.6.90

24.6.90

26.6.90

10.7.90

13.7.90

23.7.90

7.8.90

8.8.90

15.8.9

20.8.90

15.9.90

18.9.90

22.9.90

The Sino-British Joint Liaison Group begins its 15th meeting in Beijing.

The government invites detailed proposals for the setting up and operation of a second commercial radio service in Hong Kong. The Governor leaves for a visit to the United States and Canada during which he meets the Canadian Prime Minister, Mr Brian Mulroney.

The Governor welcomes the decision by President Bush to maintain China's Most Favoured Nation status.

The Hong Kong Council for Academic Accreditation comes into operation.

Dame Lydia Dunn is honoured with a peerage in the Queen's Birthday Honours List.

The Financial Secretary leaves for a visit to Tokyo and Seoul to foster understanding between Hong Kong and its trading partners.

The Governor leaves for a visit to London during which he briefs the Prime Minister, Mrs Margaret Thatcher, on Hong Kong issues.

A Hong Kong-Guangdong environmental protection liaison group is formed to enhance co-operation on environmental matters.

The government announces an expanded scheme for importation of labour.

Foreign Office Minister Francis Maude arrives in Hong Kong en route to visit China.

The government announces that an Order in Council freezing Kuwaiti assets in Hong Kong has come into effect.

Hong Kong implements trade and economic sanctions against Iraq and Kuwait following the passing of a mandatory United Nations Security Council resolution imposing such sanctions.

The government awards a $203 million contract for the dredging of Yau Ma Tei Anchorage and Kellett Bank, the first works contract related to the new airport.

Hong Kong signs a new Air Service Agreement with France.

The new Minister of State with special responsibility for Hong Kong, Lord Caithness, arrives for a six-day visit.

The draft White Paper, 'Social Welfare Into the 1990s and Beyond', is released for public consultation.

The United Kingdom, Vietnam and Hong Kong reach agreement on a scheme, to be carried out by the United Nations High Commission for Refugees, repatriating to Vietnam those boat people who, while not volunteering to return, are not opposed to going back.

CALENDAR OF EVENTS IN 1990

24.9.90

25.9.90

1.10.90

5.10.90

10.10.90

14.10.90

5.11.90

11.11.90

22.11.90

27.11.90

1.12.90

3.12.90

4.12.90

10.12.90

11.12.90

17.12.90

19.12.90

The government announces a decision to allow Chinese nationals, who have lived outside China, Macau and Hong Kong for at least two years, to come to Hong Kong for employment provided they possess skills not- readily available here.

The Sino-British Joint Liaison Group starts its 16th meeting in London.

The age of majority is lowered from 21 to 18 for most purposes. The government announces that it will finance the construction of the Lantau Fixed Crossing leading to the new Chek Lap Kok airport.

The Governor delivers his policy speech at the opening of the new Legislative Council session.

Chinese experts arrive for talks with Hong Kong officials on the new airport and related projects.

The Governor leaves for visits to Rome, Paris and Brussels to strengthen ties with the European Community.

Princess Alexandra starts a four-day visit to Hong Kong.

The Chief Secretary leaves for visits to the United States and Canada to promote Hong Kong as a major international business centre. Education Commission Report No. 4 is released for public consultation, covering such issues as curriculum development, assessment systems, and language in education.

The Governor leaves for a five-day visit to Japan to boost bilateral trade.

A three-month application period commences for British citizenship under the British Nationality (Hong Kong) Act.

The Hospital Authority is set up to take over management of all public hospitals.

The new autonomous Hong Kong Shipping Register comes on-stream. The Governor leaves for a four-day visit to London for discussions with the new Prime Minister, Mr John Major, and other senior officials. The Chief Secretary leaves for China for a five-day visit to Guangdong and Guangxi to discuss Hong Kong's developing economic and financial ties with the southern provinces.

The Sino-British Joint Liaison Group starts its 17th meeting in Hong Kong.

The Hongkong and Shanghai Banking Corporation announces its intended re-organisation under a British-based holding company.

The Executive Council decides to issue HutchVision HK Limited a 12-year non-exclusive licence to uplink TV signals to the Asiasat I satellite to provide pan-Asia satellite TV services.

3

1

SHAPING UP FOR THE 21ST CENTU

FOR a place that is so consumed with the present it is astonishing to see so much about the future in the media. When we pause to think, we do think about the future in the sense of our political future. Some will think about the long-term infrastructure plans. After a pause for speculation most of us will drop the subject, usually because some more pressing problem is thrust on us - a matter that has to be dealt with immediately - by fax.

-

Few of our day-to-day decisions depend on how we see things 10 years or more hence. This applies as much to government activity as to private business and personal affairs yet the change of sovereignty to take place in 1997 does mean that in Hong Kong we do think and talk more about how we see things in the future.

   The future is based on the present and rooted in the past. Change is ceaseless but not random. If I describe Hong Kong as a place with a small urban community, mostly on the Island, round part of the harbour, a large rural hinterland where some of the best rice in China is grown, a population of two million, a place where bare feet are common in Central, where only the smartest offices and none of the homes have air-conditioning, where there are practically no teenagers or old people, where primary schooling is a privilege, where tuberculosis is the biggest killer and lepers have to be isolated, where a large part of the population lives in flimsy wooden shacks that burn down leaving thousands homeless, where night-soil ladies clear most of the lavatories, I might be accused of fantasising on the dim distant past. In fact this was Hong Kong as I found it when I came to work here at the beginning of the second half of the twentieth century.

   In less than fifty years the city has been rebuilt, has spread right round the harbour and into new towns, the rice fields that are not new towns have become a rural squalor of workshops, houses, market gardens, car and container dumps, or they have been abandoned, the population is five and a half million, rapidly ageing and with a dwindling proportion of children, bare feet are only found on the beach, half the housing estate homes have an air-conditioner, the education debate is over curriculum as we aim to make a degree course available for six out of 10 students completing sixth form, leprosy gone and tuberculosis rapidly going, life expectancy at birth is higher than in Britain or America, the last of the urban squatters, now in solid but not elegant structures, will soon be gone - and everyone can flush the loo.

   In the light of this perspective it takes some really perverse determination to be gloomy about the future.

+4

港公

x

The Governor, Sir David Wilson, travelled extensively during 1990, fostering greater awareness and

appreciation of Hong Kong and strengthening its overseas relationships.

Below: The Governor and Senior Executive Councillor

Baroness Dunn after talks with Britain's new Prime Minister,

Mr John Major, in London in December.

共圖

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.

Left: The Governor met Mr Toshiki Kaifu, Japanese Prime Minister,

in Tokyo in November.

Below: In October, Sir David talked with Italian Prime Minister Giulio Andreotti

during a visit to Rome.

Left: Her Royal Highness Princess Alexandra reviewed the Royal Hong Kong Police Force Guard of Honour at the official opening of new police headquarters in Arsenal Street.

Below: The Princess admired exhibits in the new Science Museum after officiating at the dedication ceremony.

Opposite: Government officials briefed business leaders on the Port and Airport Development Strategy at a seminar held in the Convention and Exhibition Centre in Wan Chai.

Below (bottom): A visiting team of Chinese experts examined plans of the proposed new airport at Chek Lap Kok.

Overleaf: A traditional dragon dance celebrated the opening of Terminal 7 at the vast container port of Kwai Chung.

* AIRPORT * 401

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13

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PORTAMER! LUI

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SHAPING UP FOR THE 21ST CENTURY

Politics

More has been written about the political future than the future of any other aspect of Hong Kong life. In December 1984, the Prime Ministers of Britain and China signed a Joint Declaration on the future of Hong Kong so that, at least, is clear. Or is it? The problem facing the negotiators from 1982 to 1984 was to set down in a small pamphlet a whole way of life, to do it in such a form as to encapsulate what we in Hong Kong think is our way of life and what the negotiators in Beijing thought would be acceptable when Hong Kong becomes a Special Administrative Region of China.

      It was an impossible task. The object was to preserve the system while recognising the change in sovereignty. Of course there were gaps and areas of vagueness. Some of these have been filled out in subsequent discussions. Many remain, but much work has been done and a Basic Law for the constitution was promulgated in Beijing on April 4, 1990.

       It was also announced on March 21, 1990, in Hong Kong that in the autumn of 1991 there will, for the first time, be elections on a universal franchise for eighteen members of the Legislative Council.

       Exactly what will happen between 1991 and 1997 in the constitutional field is still imprecise but within limits the way ahead is fairly clear.

      What will happen in the field of politics is much less clear as manoeuvring starts in anticipation of the forthcoming elections. In addition to the eighteen Legislative Council Members to be elected by the population at large, twenty-one members will be elected by smaller electorates defined by calling - doctors, lawyers, merchants and the rest. Seventeen members will be appointed by the Governor when the elections are over. A Deputy President will be appointed by the Governor to preside over some of the council's meetings.

       The executive, that is the Governor and his Executive Council and the Civil Service, will remain unchanged in structure though the Governor will still have to appoint his advisers, while retirements and postings will bring new faces to new places in the Civil Service. Only the three ex-officio civil service members of the Legislative Council will remain on the council in 1991.

      There is obvious scope for conflict. Will the Legislative Council vote the money and pass the laws that the executive asks it to? Will it be able to exercise influence, even without authority, on the actions of the executive?

      The nature of political leadership will start to change in 1991. In the past authority descended from above, from the sovereign's appointment of a governor through his appointment of councillors and advisers on countless committees. Appointments were of people who had made their mark, who had demonstrated leadership and ability in one field or another. Now there is an inevitable movement of authority to those who command support from below rather than appointment from above. This movement will be given impetus with the new Legislative Council.

      While squabbling and posturing in high places makes exciting reading in the papers it has generally been regarded with distaste by the public at large. It seems unlikely that there will be such an insensitivity to this distaste that necessary business will be frustrated. A rather negative comfort maybe but not a very low bottom line.

We may expect some more colourful language and some irreverence but perhaps too we shall see the emergence of leaders who earn respect as much for their wisdom as for their eloquence. Whoever can command the support of as mixed a company as the 1991

5

SHAPING UP FOR THE 21ST CENTURY

6

  Legislative Council is likely to be, will be someone to be reckoned with. The opportunity for leadership will be there. The challenge will be to seize it.

   The constitution is unlikely to remain unchanged far into the next century. Nominations to Legislative Council will go before then.

   The functional constituencies bring to the Legislative Council a variety of experience in all principal areas of social life. They could last for a long time - the University seats in the British parliament were only abolished in post-war years. The downside risk is that they could destroy themselves if their representatives become so narrowly obsessed with the need to maintain the support of their electors, that they neglect the common good.

   The importance of the directly-elected members will be their concern for the geo- graphical districts from which they come. Hong Kong is no longer a single city but a number of urban concentrations, few of which have developed much in the way of in- dividual identities.

Events in the Legislative Council will shape the nature of the appeal that members will have to make to their constituents. The Legislative Council is not required to form a government, to propose taxation or expenditure. These are the duties that force the creation of party discipline. Without them it does not seem to me that a party type of discipline will develop very quickly. If it becomes the practice to form voting groups with some of the discipline of political parties then this pattern will spread to the constituencies where organisations loyal to the groups will have to generate voting support. If group discipline is less important, as I expect it will be, then the party type of organisation will be less necessary and performance will be judged more by individual merit.

   The powers to propose taxation and expenditure will remain with the government - that is the Governor in Council on the basis of proposals made by the civil service. This is a structure that looks as though it will last well into the next century. It places great power in the hands of the Governor now and the Chief Executive in the future. Appointments to the Executive Council are now made by London on the recommendation of the Governor and in future will be by the Chief Executive. The relations between Executive and Legislative Councils have been good in the past though it has not been unknown for an Executive Councillor to speak in Legislative Council against a policy endorsed by Executive Council. Nowhere will the Governor's and the Chief Executive's skill be more severely tested by appointment, and subsequent advocacy, than in maintaining the understanding between these two bodies which is essential for progress.

   People have traditionally listened carefully to the Governor and will no doubt also listen to the future Chief Executive. An area in which we may detect a change will be in the press though I hope it will not lose any of the vehemence with which it lambasts - and sometimes praises - local bigwigs. We have lived for years with a press that can be highly critical of affairs here and have survived without too much of a bruising.

-

   The Special Administrative Region's foreign relations will be conducted by the central government in Beijing although Hong Kong will retain full autonomy in external commercial relations. Britain will be a foreign country with a consulate in Hong Kong looking after British interests. While the consulate will handle all immigration matters now handled by the Hong Kong Immigration Department for Britain, one of the consulate's main functions will be promote trade, as is done now by the British Trade Commission.

   The change of sovereignty means, for us, a change in the metropolitan power. In the past we have managed without much assistance from the metropolis and no doubt can do so

SHAPING UP FOR THE 21ST CENTURY

in the future. In the future, just as at present, we cannot expect the metropolis to be indifferent to our decisions or intentions.

      What we do have is a track record of stability and prosperity. Since it is the expressed desire of both present and future metropolitan powers that this should continue, it is not unreasonable to expect that the Hong Kong Special Administrative Region enjoying a '. .. high degree of autonomy . . .' under the Basic Law will be any more oppressed than under the command to the Governor in Letters Patent to do ... all things... according to Our Sign Manual and Signet, and according to such Instructions as may from time to time be given to him . . .'. In both cases these ultimate statements of authority are qualified by further constitutional restraints. It is not lack of paper that makes us speculate on our political future but the unpredictable nature of the future itself.

The People

What is more predictable is the nature of the population that will live here. One of the few long-term projections, carried to the next century, is the population projection for the year 2006.

      At present there are almost one and a half times as many babies under one year old as there are people aged 60. By 2006 the number in both groups will be about the same. Thereafter the number aged 60 will increase very rapidly so that over the following 10 years the number will probably almost double.

Over the next fifteen years, the population will age. This will bring about an economically more active population which will increase faster than the dependent population. By 2006 people in the age range of 15 to 64 will increase from 69 per cent of the population to 72 per cent. Within the shrinking dependent population, the number of youngsters will diminish rapidly but will be partly offset by a growing number of old people. Youngsters aged below 15 will make up only 16 per cent of the population by 2006, a substantial reduction from the 22 per cent now. On the other hand, the proportion of old people aged 65 and above will rise from nine per cent to 12 per cent of the population.

The White Paper on Social Welfare is well seized of the onset of an increasingly elderly population and deals with the provision for those who will need help. What, then, for the healthy elderly?

There will be a requirement for some initiative to create opportunities for these people to do useful work. Not all of us over 60 will want to spend all our time in social centres for the elderly. Employers feeling the pinch of a labour shortage may create new opportunities but this is an area which the government, the largest employer with the greatest variety of employment, should pioneer. There is already a shortage of labour and it is not too soon to develop new ideas on filling some of the job vacancies with people past the retirement age but prepared to do some work. We may work a little more slowly and get tired a little more quickly, but it would be improvident to fail to provide opportunities for useful work.

Migration into and out of Hong Kong has always been a significant element affecting the growth of the population. The 1987 population study projected a net annual increase in population due to migration of around 14 000. Today when anyone talks about migration it is usually in terms of the 'brain drain' - the emigration of gifted people leaving Hong Kong before the changes they fear in 1997. From time to time surveys are published forecasting that we shall soon be bereft of whole professions. Of course this will not happen

-

7

SHAPING UP FOR THE 21ST CENTURY

8

though there is no denying that a good many people of greater than average ability are leaving Hong Kong. This is a real loss though not all the consequences are adverse. Positions left empty are being filled by people promoted before they had reason to expect it. What these young people lack in experience they make up for by energy and the thrill of unexpected responsibilities. These newly promoted will be much less likely to leave, for they will feel themselves lucky to be where they are. The really able are not leaving because they have too much to lose here. There is still a long way to go before serious damage will be done to the community by the loss of those leaving.

   One group of immigrants that will have departed before the end of the decade is the last of the Vietnamese refugees. Although the Vietnam war was so close by, all Hong Kong was to do was provide rest and recreation for forces on the South Vietnamese side. The war's aftermath has been more traumatic. The first of the refugees arrived in May 1975, nearly 4 000 having been picked up at sea by one ship. Those who followed in the late 1970s were the result of a programme of racial persecution of the Chinese who fled in unseaworthy boats. Many were lost at sea. In 1979, over 66 000 arrived in the first seven months of the year. There was world sympathy for these people and resettlement went well. As time passed the numbers arriving declined and so did the rate of resettlement. There was a resurgence of arrivals in 1988 and 1989 when over 50 000 arrived but this time most were people leaving a poverty stricken country to seek a better life. Many came most of the way by bus. It has been a long struggle to gain acceptance of the new nature of this influx which is no different from the pressure of illegal immigration from China. This recognition does seem to be gaining acceptance and as Vietnam moves towards normal relations with the rest of the world the problem will pass. However, Hong Kong will still need to maintain its present vigilance for illegal immigration from the whole region.

The Place We Live In

  By the next century the new airport and all its infrastructure will be in place. The present arguments will be history just as are those that preceded the building of the Mass Transit Railway (MTR) and, before that, the first cross-harbour tunnel. And believe me there were furious arguments about those works. The establishment - government and business - was against the tunnel. Let all those people from Kowloon over to the Island on a race day! In any case it would not pay. For a time it looked as if there would only be one tube. Private enterprise, eventually with government support, won the day - thank goodness. The MTR debate was more like the debate about the Chek Lap Kok airport. It was going to be far too expensive, it would be a burden on the tax-payer, it could not be built - how could you dig up the whole of Nathan Road? Well it was built, and fast, and although the MTR is the biggest borrower in Hong Kong, people continue to lend money to it, with confidence.

   The exciting challenge for the next century is what happens when airport height restrictions have gone from Kowloon and there is no longer any obstacle to filling in the stinking bay between Hung Hom and Yau Tong, absorbing the old airport. There will then exist an opportunity to double the size of Kowloon and build to the sky.

   Population will increase over the 20 years from 1986 by 18 per cent and it will slow down. Doubling the area of Kowloon will produce much more space than that. We often produce statistics to show how prosperous we are but we do not often point out that most of us live in a one room flat. Space is short and the price of accommodation is high. With more space this can be alleviated. The buildings in Kowloon will age. The wit of the

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authorities should be bent to devising incentives for the developers to replace the old buildings with something that gives everybody more room and at the same time exploits the vast new areas of development for a city with space as well as wealth. Clearly, we must avoid going overboard in our desire to make the fullest use of new opportunities to restructure our city. There has to be a comprehensive framework to mould develop- ment into forms that satisfy both commercial expectations and community aspirations. To that end a comprehensive development strategy known as Metroplan has been produced to create a land use/transport/environmental guide for public and private sector investment.

People are already getting more room to live in. Hong Kong is often described as a prime example of the success of private enterprise where the government keeps out of business. Yet half the people live in state-owned property.

The government went into housing with the utmost reluctance. As a young man I was involved with relief measures after squatter fires when thousands of people were left homeless. I had to manage the screening of squatters cleared for development when all they were offered as resettlement was four pegs in the ground marking a plot where they could build. Gradually a little government money was found to do some site formation, to provide stand pipes, to pave paths, to do a good deal but not to provide housing. It was not until a meeting at six o'clock in the morning of Boxing Day in 1953 that Sir Alexander Grantham took the decision to put the government into housing. Until then this initiative had been resisted because the pre-war experience, which weighed so heavily with the unofficial Members of Executive Council, had been that welfare in Hong Kong attracted people from Kwangtung in overwhelming numbers so it was better not to have too much of it. The Shek Kip Mei fire on Christmas night, which burned down the homes of 53 000 people, made drastic action necessary. It was not the first squatter fire, nor the last, but it was the biggest. Previous relief measures, including well meaning private funding of fireproof huts, were simply not on a scale that could do any good.

The resettlement programme of the fifties was not a housing programme for the poor. It was a means to clear land for development. You could not apply for a resettlement flat. You were offered one if your hut was about to be pulled down. What you were offered was a concrete box allowing 24 square feet a head, in a seven storey structure with no lifts, no windows but wooden shutters, no water, but access to communal kitchens and bathrooms. If this sounds dreadful, it was, but such was the alternative that people fought to get into the new blocks where you had your own place legally - and it would not burn down.

      Once into housing, policy evolved through the first Housing Authority, through Government Low Cost Housing to the present Authority which embraced everything that had gone before and has launched new initiatives in the Home Ownership Scheme and Private Sector Participation. The last of the old resettlement blocks are coming down. The new estates have three rooms as well as kitchens and bathrooms. The estates have a full range of community and commercial facilities, are quiet and relatively crime free.

      Home ownership, now at 40 per cent will increase to 60 per cent by the turn of the century. A substantial portion of this will still be in public housing as more flats are sold to tenants. Management in the public estates is increasingly sophisticated with concern for the elderly, the environment and the continually improving standard of new accommodation.

      The strength of the government's intervention in the housing market has not eliminated private enterprise. There too the scale has increased with great new estates on large tracts

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of land that were originally acquired for completely different purposes, as well as on sites that have been sold for large-scale development.

The Housing Authority has a momentum that will not be exhausted at the end of the century. It will continually want to update and improve on its older estates. It has no ambition to take over everything from private enterprise yet it operates on a scale that can keep private enterprise on its toes. The new Land Development Corporation gives some hope that slum areas will not be allowed to spread because of the problems facing private enterprise in redevelopment.

These three engines of development - the Housing Authority, private enterprise and the Land Development Corporation - operate in an environment created by the city planners. The first two have a track record and the third holds promise. There is no doubt that new urban landscapes of increasingly pleasing aspect can be created.

It is less certain that old areas can be renewed with the same success. The slums on either side of the elevated highway between the Kai Tak and the Cross Harbour Tunnel are not the only decaying buildings that do not seem to yield to new development. New initiatives need to be found to make possible the demolition of such slums and their replacement by something that will be acceptable in the next century. The rebuilding of Hong Kong that took place in post-war years was fuelled by the returns to be gained by producing extra accommodation on underdeveloped sites. As those buildings decay in the next century the authorities will not be looking for even greater densities of occupation on sites. Incen- tives will have to be devised to stimulate the building of more spacious places to live and work in.

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   An essential requirement for growth is the ability to move around. Transport is an area of planning that is more advanced than many and this too is a story of change. In the early sixties there was no knowledge of movement in Hong Kong. Roads engineers mended roads but built few new ones. The police managed traffic literally. For years the only traffic lights in Hong Kong were at the junction of Des Voeux Road and Pedder Street. Bus companies ran things on their own and made so much money that the government was able to charge a purchase tax of 25 per cent on every bus ticket as a royalty. The buses were packed out from dawn to late at night and had to carry not only conductors to collect the fares, but strong men at the entrances to pull shut the gates and fight off excess passengers. In 1961, a committee was set up to look at public transport. I was made secretary of it not because I knew anything about transport but then an administrative officer could turn his hand to anything couldn't he? From the outset emphasis was given to finding out what was happening and what the future would hold. First there was a public transport survey, then a plan, then it became clear that roads alone would not be enough. The MTR followed and all the time the authorities were looking ahead more comprehensively. The latest comprehensive transport study was published in 1989 and takes us up to 2001 with a look even further ahead.

   Nor is all this surveying and planning just a paper exercise. Building is winning. Road speeds are actually increasing and public transport improving in comfort. The look to the future is incorporated in the airport studies with a network of new roads and tunnels aimed not only at maintaining easy movement in Hong Kong but at the growing working and recreational travel to China. In the early years of the next decade new roads will connect Lantau port to western Hong Kong Island and a completely new Route 3 will connect our city with the delta region through Shenzhen.

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In spite of all this road building, the study warns that there will have to be curbs on the rate of increase in the less efficient forms of transport - cars and small goods vehicles. No decision has been taken on the best way to do this. Charging for road use is an obvious option. Somehow a sensible way must be found to distribute this scarce resource in the same way that other scarce resources are distributed. In our economy this means charging a price. It is already done for tunnels and parking. Many places charge for using fast roads. The biggest obstacle is the clumsy way of collecting the payments and technology will overcome this problem before long.

For years we have taken our utilities - electricity, gas, water and telephones - for granted. It was not always so. Only water is a utility operated by the goverment and the old timers will remember water shortages more vividly than difficulty with other utilities. Electricity and gas probably have the best performance, though the reluctance to provide rural electrification nearly led to the nationalisation of the electricity companies on the recommendation of a high powered commission. Fortunately their recommendations were set aside and we have never had to suffer brownouts or other rationing of electricity. Water was always scarce and supplies depended very heavily on the rain that fell each year. On two occasions the taps were turned off except for four hours once every four days. Lesser restrictions were common. It was supplies from China, and our increasing confidence in their reliability, that changed the picture. Now nobody even bothers to economise. In the plethora of communication facilities we are urged to buy today we forget that at one time you had to queue to get a phone at all. All these utilities have plans that take us far into the future and, in the light of past performance, we can expect to continue to take them for granted.

For too long we have put off measures to preserve and improve the environment. Clear Water Bay was once just that where you could see your anchor on the bottom. Today you can barely see the keel of your boat. Tolo Harbour once had a fine and varied collection of coral round Centre Island and the shores of Plover Cove. Yet not all changes have been for the worse. When firewood and grass were the fuel for cooking, the hills were bare and a haze of smoke hung over the town at meal-time. Kerosene, electricity and gas have ended the demand for firewood. The villages in the more remote areas, where farmers burned the hills so that the ash would wash down and fertilise their fields, are now deserted and the scrub is turning into jungle.

Some significant steps are now being taken to reverse the damage done to the en- vironment. The greatest of these is a start on the collection and treatment of the sew- age of the millions who live round the harbour. This is now discharged straight into it. The sewage works have been started on Stonecutters Island and by the next decade will carry treated sewage way out into the China Sea. Air pollution has been dramatically cut by stopping the use of high-sulphur fuel and unleaded petrol is soon to be introduced. A plant is to be built to dispose of toxic wastes. Some progress is being made in cutting down noise. Getting rid of rubbish used to be done in the crudest way. My first encounter with this was a refuse dump in what is now Kwai Chung and was then an inlet called Gin Drinker's Bay. Here a wall had been built from the mainland to an island and town refuse was simply dumped from barges over the wall. It was the foulest place I have ever seen and men worked there day in day out. Today refuse is dumped at tips and covered up straightaway. Those smooth grassy slopes in Junk Bay are on top of the first properly managed dump.

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   Big money and tough law is now directed at improving the environment. The loss of industrial production from cleaning up is generally accepted. The stricter regulations will add to the increasing cost of labour as an incentive to move certain industrial processes to China. Even so we cannot look to the future with complacency. No sooner is one form of pollution identified and dealt with than another springs up out of what seemed to be an innocent activity. Hong Kong will become increasingly involved with environmental control in China because borders are not relevant in this context. Regional and worldwide measures will probably have to be taken to combat new threats.

   If there is one lesson that has been brought home in the last twenty years it is that pollution prevention is a great deal easier than pollution cure. Even so it will require a brave government to listen to the scientists before the mess they warn about suffocates us.

Earning a Living

To say that there will be new opportunities for the development of a more pleasing city is not to say that the means will automatically be available. The average growth over the last thirty years has been between eight per cent and nine per cent, dipping below six per cent on only three occasions in 1967, 1974 and 1984 before the present slow-down.

   There is nothing automatic about growth. It is not a thing that a government can do much about, except stop it, and in Hong Kong we are very much exposed to external influences. These external influences have been of fundamental importance in the way the economy has changed and will no doubt go on being so. Established as a entrepôt, Hong Kong lived by trade until the United Nations embargo on trade with China in 1950 put a stop to our principal means of earning a living. Stimulated by the Shanghai industrialists, who fled from China in 1949, industry grew up and flourished. In the seventies, financial services came to be more important. The recession at the beginning of the eighties was offset by the re-opening of China and a new start for our traditional role as entrepôt. In recent years, a shortage of labour in Hong Kong and the open door policy in China has led to the industrialists moving many of their operations into southern China.

   The long period of isolation of Hong Kong from China from 1949 to about 1976 was quite extraordinary. During this time of isolation Hong Kong might almost have been a Pacific island, miles from China, except for the exports of food and agricultural products that China sent out. Nothing went in except money which constituted a large proportion of China's foreign exchange earnings. Until the late seventies the only way into China from Hong Kong was to walk across the railway bridge at Lo Wu. There were no road, rail, air or sea communications for passengers. It is reflection of priorities on both sides that the first direct flight from China to Hong Kong was a chartered cargo plane. It was loaded with Shanghai crabs.

The isolation extended to the movement of people. The controls on movement were in China itself so that it was not easy to get anywhere near the border area. With the relaxation of controls on movement in China and, at that time, our policy of not sending back illegal immigrants found in the city, more and more came in. Between 1978 and 1980 nearly 400 000 people (both legal and illegal immigrants) did so. Then the door was closed more firmly than it has ever been before.

   The end of the isolation has sprung from China's open door policy. Take a large, poor labour force, place it alongside a rich industrial settlement and interaction is inevitable once the two groups can communicate - especially when they all speak Cantonese. The

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present trend is to move labour-intensive operations from Hong Kong into China and, to a less extent, to Thailand, Malaysia and Indonesia. Not all of the less interesting and lowly paid work can be transferred to China. In particular the construction industry cannot move to China, because the buildings have to be here, nor can the hotel business nor domestic service. The demand for domestic service has been satisfied by allowing Filipina girls to come on contract. The demand for additional labour by the construction industry is being resisted by the unions and the authorities but this resistance is being eroded and will have to be modified to allow public works to be done on time. Hotels just pay more. Other countries take in foreign workers when wages go through the roof but Hong Kong has been reluctant to do so and this has resulted in a bigger slice of the cake for labourers.

The move of manufacturing industry into the delta area is creating new wealth. This is not the wealth dreamt of by traders hoping to sell oil for the lamps of China. It is wealth created by making things that people in richer countries want to buy. Part of the operation stays in Hong Kong. Design, programming, marketing, finance and some quality control are often retained in Hong Kong when processing is moved to China. In time more of these supporting services will also move and original enterprises will spring up.

      This must lead to a more relaxed relationship across the border. At present a free release of Hong Kong's vehicles into China and China's people into Hong Kong would cause great problems. The Chinese government has said in the Joint Declaration that entry into Hong Kong shall continue to be regulated. Such controls will always be necessary, but as the relationship develops there will inevitably be more contacts between people on either side of the border.

      Five years ago employment in the manufacturing industry was almost twice that in trade, restaurants and hotels. In 1990, those service industries employed slightly more than the manufacturing industry. In the same period employment in financial and business related services, though at a level of about one third of the two bigger areas of employ- ment, has grown by over 50 per cent.

The growth in finance related services is significant. Hong Kong is developing into the hub financial centre for Asia. The national capital of China will be at Beijing but financial services, stock and commodity exchanges, media headquarters, advertising and other business services now in Hong Kong would come to serve not only the region but also China. On average, some 59 regional headquarters have been established in Hong Kong per annum between 1985-9. These, in turn, attract more even from Japan. There were more foreign exchange dealers here at the end of 1989 than a year before. All the big American names are here and some 45 Japanese securities firms have operations in Hong Kong. This new development has followed the lifting of the moratorium on foreign banks in Hong Kong 10 years ago in time to take advantage of the growth of international financial services. These have followed deregulation and the removal of exchange controls elsewhere and the explosion of information technology and telecommunications. Physical commu- nications here are better than Tokyo. Work on our airport moves ahead while in Tokyo the farmers are preventing an expansion. Rents here are high - third in the world after Tokyo and London - but they are half those of Tokyo. There is a large expatriate com- munity of many nationalities which attracts more of these nationalities who all use English for much of their business. The press feels free to praise and damn what it wants. This is an important tonic not only for the government and politicians but also for business. The atmosphere of regulation here is less stifling than in Singapore. Telecommunications,

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both internal and external, are excellent. A recent decision of the Privy Council has confirmed that income earned in the region is not liable to Hong Kong tax. The use of English and the common law in business is well understood.

These regional headquarters are not set up in Hong Kong to take advantage of our position as a gateway to China but to conduct business in the region. And the region is the Pacific Rim, the fastest growing economy in the world. It is not easy to express growth in simple terms but growth does need communication. It is estimated that by the year 2000 Asia, excluding Japan, will constitute a market for telecommunication equipment larger than either the USA or the EEC. Asia starts from a low base. In the EEC there are 90 telephones for every 100 of the population. In China there are two per 100, due to grow to four, and there are a good many hundreds of population in China.

This is a particularly difficult time to examine the tea leaves of world economics and forecast anything ten or twenty years ahead. The Gulf crisis may escalate dramatically between the time of writing and reading. The fate of GATT hangs in the balance. Eastern Europe is in economic revolution and Russia near disaster.

   By comparison Asia is a tranquil hive of activity. The Koreas are speaking to each other, indirect China-Taiwan trade and travel is flourishing and even Vietnam is slightly less stony faced. The countries of the Pacific Rim have a voracious appetite for growth- making trade.

The prospects for long-term sustained growth in Hong Kong are based on firm foundations. Our own internal economy is moving from an industrial based one towards a service based one. We are immersed in the rapid growth of the Pearl River delta where some two million people are working in Hong Kong-owned factories. Investment is being increasingly attracted from Japan as well as Taiwan which is fast developing its trade with both Hong Kong and, indirectly, with south China. Business conditions are now attracting firms to establish their regional headquarters here. The development of telecommunica- tions, the port and airport, are set on a course of long-term expansion capable of absorbing the great increases in demands to be made on them.

Ships, Planes and Trade

In accordance with the Joint Declaration, Hong Kong has now set up its own shipping register and its name will change into 'Hong Kong, China' after 1997. The register has been created with the support of Hong Kong shipowners who are experienced operators in this field. If this is the sort of thing they like, it will attract other shipowners so that ships registered in Hong Kong, China will become familiar in ports all over the world, as befits a major world port.

Hong Kong is a regional port of great significance. It is an accident of nature that deep water ports are rare on the China coast but not an accident that the port of Hong Kong has been developed into such an efficient operation. Hong Kong has also been able to act as middleman in the trade between China and Taiwan.

The Port and Airport Development Study has identified ways in which cargo handling facilities can be expanded for many years. The airport is an ungainly project. It cannot be built alone. It is no use unless you can get there and this means a bridge bigger than the Golden Gate Bridge in San Francisco as well as masses of supporting roads. The port is different because it need only be built bit by bit. The planning exercise shows where the bits

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     should go. They will not go there until the industry wants them and will pay for them - bit by bit.

       By the early years of the next century the development of Stonecutters Island and Tsing Yi for container operation will be nearing completion and it will be necessary to start on the facilities on Lantau. This will mean a major adjustment to container handling for, in effect, there will be two container ports, splitting the marine and land traffic between the two.

       The part of the Joint Declaration dealing with civil aviation is more complicated. Air services agreements are deals between governments who give nothing away unless they get something in exchange. In the past London handled our agreements, swapping favours in Hong Kong for rights in foreign countries for British or Hong Kong aircraft. In the future, agreements on routes between China and Hong Kong, or transiting Hong Kong to or from the mainland of China will be handled in Beijing in consultation with the Hong Kong Special Administration Region Government. Agreements for other services may continue to be negotiated by Hong Kong direct with foreign governments subject to specific authorisations from Beijing.

       Hong Kong's strategic position in the Asian region should mean that we shall be able to get reasonable deals for our aircraft when granting them landing rights here. Hong Kong will have many attractions.

       The airport is sure to come as a relief to people who will, by then, have had to put up with a crowded Kai Tak for some time. Chek Lap Kok will be spanking new, at least for the first few years of the next century, with all the latest gadgets for handling aircraft and passengers safely and speedily. They may even find a quick way of getting the luggage out of the planes.

       Because both the airport and most of the new road and rail links that will be built to it will be on land that does not exist now, the new systems will be built with the aim of carrying speedy transport. The airport will be less than half an hour's travel from Central and not much more to Shenzhen. High speed ferry transport direct to ports in the delta will be convenient for many. Air cargo from both Hong Kong and the delta will also be handled in new facilities. Air cargo now constitutes more than 20 per cent by value of all exports, split almost half and half between domestic exports and re-exports.

       Trade not only means agreements on ships and air services but also on the movement of the goods themselves. One part of Hong Kong industry that cannot move to China is the textile industry because world trade in textiles is so tightly tied up by international agreements that if the factories move to China they could no longer sell to their customers.

       At one time these trade deals were negotiated for us by London but they became so arcane that for years Hong Kong has done its own negotiating bilaterally with its trading partners and multilaterally in the General Agreement on Tariffs and Trade as 'the United Kingdom speaking for Hong Kong'. Both Britain and China, when they thought about it, agreed that it would be sensible for Hong Kong, being a separate customs territory, to become a member of the General Agreement of Tariffs and Trade itself. This was accomplished in 1986.

       What is tiny Hong Kong doing on such an august world body? We are in fact a giant in textiles, toys, watches and clocks. (It is actually garments that we export: we are an enormous net importer of fabrics.) We have come to be accepted as the leader of the world's textile producers. This is only partly due to the enormous volume of the clothing

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we make. It is also because in this world of complicated negotiations on trade restrictions, our negotiators have established a reputation for ability that exceeds that of the enemy in technical competence and integrity.

   I would like to say that the next century will see an end to restrictions on free trade. Our textile industry would not, because they have secure markets sewn up under restrictive agreements. Alas there is no danger that real free trade will burst upon us. The rich. countries of the world are so beholden to their minute agricultural sectors that they cannot bring themselves to let their people eat cheap food produced by poor countries who have nothing else to sell. Until common sense succeeds here, their less important lunacy of insisting that their people dress in expensive clothes that they make themselves, instead of the sort of thing that China could churn out at a fraction of the price, will remain under the carpet.

   This being so let us be thankful for the skill of our negotiators and the ingenuity of our industrialists who take every advantage of every loophole that these idiotic agree- ments offer.

Learning

Long-term sustained economic growth will need more investment in education.

   Our education system has come a long way. The flood of post-war immigrants did not include children, though the new arrivals lost no time in producing them. A great many children had no education at all. Welfare organisations set up 'clubs' which were not allowed to be called schools though a modicum of education was included. It was not until 1971 that there was a school place for all children of primary school age. The limited number of secondary school places were allocated after a competitive exam children took at the age of 11. Many children never got beyond primary schooling. There was a hiatus for these children because they were not allowed to work before they were 14. Juvenile crime was attributed to the gap but this turned out to be nonsense as the number of secondary school places increased and juvenile crime remained a problem. You could see change in education coming through. In the early seventies the police were delighted to find that many of their recruits had some secondary education. In 1978, it was at last possible to offer a school place for three years of secondary education to all children who wanted it.

   Priority during the next 10 years was to get all the school places needed to ensure that everybody could stay at school until they were 15. Now 80 per cent of the 15 and 16 year age groups are in full-time education. As a short-term measure places were bought in private schools of less than satisfactory standards. By building 200 schools in 11 years it is now possible do without these bought places and private schools are being encouraged to upgrade with the assistance of a subsidy scheme.

University, polytechnic and a variety of post secondary education and training was not neglected though not of top priority. With the supply of places at secondary level at last adequate it was time to put a real push into the universities. Most people were so dazzled by the plans for the airport and infrastructure announced in 1989 that they did not notice that the Governor also said that the number of first degree places was to be doubled by 1995. This will mean enough places for six out of ten Secondary 7 leavers.

   Now that there are enough secondary school places, the time has come to see whether improvements can be made in the education provided and the Education Commission is doing that. In November 1990, the Education Commission published a report dealing

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with curriculum innovation and development, improved counselling services, target-related assessment and improved language in education policy in secondary schools. This en- courages a new look at the way the effectiveness of education is assessed. It will also lead to a much greater variety of sixth form experience suitable not only for the academically able but for others who can benefit from different learning procedures.

When we were going through our own education it seemed that the whole knowledge of the human race must be found in the minds of our teachers. It comes as a shock to dis- cover how much change is constantly found to be necessary in the way young minds are nurtured. In Hong Kong, we have so far simply been catching up with what has become routine in wealthier countries. We have been going for the places in schools of a traditional sort. By the turn of the century most of the places of one sort or another for education will be there. Thereafter attention will be concentrated on devising more and more effective ways of training the great variety of the minds of the young in a great variety of skills. This will give them a more rewarding adult life and equip them to face a more complex world with confidence.

       Nor can education be confined to the young. The Open Learning Institute will be able to expand on a basis of an education that was terminated before it was completed. The enormous demand that has been found, both there and in extra-mural courses provided by other tertiary institutions, is a remarkable demonstration of the anxiety of people to improve their skills.

In 1990, there are still a good many adults who either had no education at all, or very little of it. Young immigrants who arrived in 1978-80 were brought up in cultural revolution China when all schools were closed. Those who missed schooling here, before the seventies, mostly women, are still around. Adult illiteracy is not a matter that has aroused public interest but certainly a 1980 survey showed that it was not a negligible problem. The Adult Education Centres run by the Education Department may be filling in some of these gaps but there is a need for a proper assessment of this problem and a solution to it. If today's youngsters are to be trained to live in a complex world the same needs to be done to fill some of the gaps left by past shortages.

       The scope for such initiatives in the next century, not only for forms of higher educa- tion, but also for less ambitious work, will be enormous. The speed of the advent of new knowledge will mean that few will be able to afford to stop learning just because they have left school. Even in the present century a pensioner like me has to get down to study to be able to do anything with a computer.

Playing

      It was not until the mid-seventies that many people were well enough off to enjoy much leisure. Before that, if a man had a job that did not take all his waking hours, he looked for another in addition. Overtime was popular, as was week-end work, because of the extra income. As wages increased some of the increased wealth has been taken in leisure while additional income was forgone. The advent of leisure brought much greater government interest in recreation and the arts. Government organisations were set up to stimulate recreation and develop first music and then all performing arts. Visual arts are less well provided for.

       There is no doubt that there will be an increase of leisure with increasing income. Some of this time will be given to learning but a good deal will be given to recreation and sport

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and to art. These are areas that can help to build the identity of the Special Administrative Region. Success in sport and a cultural identity are great contributors to community pride. They also involve activities that take many young people abroad and widen their perceptions of the world at large - and often give them a better appreciation of things at home.

With increasing leisure will come the ability to pay for new recreational and cultural activities. Much of the present organisation depends heavily on voluntary work. As the activities become more sophisticated there will be an increased demand for full-time trained staff to plan and run them. More people will want to take holidays away from home and there is scope for expansion of the small number of camps into holiday resorts.

   For many years the Urban Council has built recreational facilities and the new towns were equipped with them from the start. Some of the institutions needed for upgrading performance are already in place. The Jubilee Sports Centre, the Academy for Performing Arts and town halls in the new towns were built in this first flush of mass interest in leisure activities. Much more will be done in the future to stimulate more local participation.

   The speed of development of entertainment media makes it impossible to say anything very meaningful about the way it will go in the long term. I am not sure why Hong Kong has only two radio and two television stations while Hawaii, an island community of a million people, can tune into 32 radio stations and 60 television channels. We are making a great meal over increasing access to television and one more licence will be given for radio. This can be only a beginning.

   The increase in leisure will have one of the most profound effects on the quality of life. I say this because of my experience in moving from our five and a half day working week to a five day week when I worked for a time in London. A two day weekend every week, sometimes extended with a public holiday, really opens up the opportunities for activity not concentrated on work. Such indolence may be unheard of in Hong Kong now but it will not be many years into the next century before this is commonplace.

Staying Well

The basic health statistics of Hong Kong are quite outstanding. Life expectancy at birth is now 74 years for men and 80 for women, infant mortality is 6* per thousand live births. These figures are better than those of Britain or America. Infant mortality statistics are a good indicator of general health. In 1950, out of every 1000 babies born live, 100 died before they were one year old. In 1960, infant mortality was 42, in 1970 20, in 1980 12 and in 1990 it was down to 6*. I have watched these figures improve over the years as we used to be attacked by politicians from abroad who would criticise social conditions in Hong Kong. To have cut infant mortality by half every 10 years until it is now one sixteenth of the figure it stood at forty years ago is a measure of the remarkable improvement in the general health of the population. This has been achieved partly by great strides that have been made in medical knowledge but also through the improved standard of living generally.

Part of the success is due to a hospital building programme that has produced over 22 000 hospital beds. The management of these hospitals is to be placed under the new Hospital Authority. With better primary health care there is less need for hospitalisation and it is hoped that improvements in productivity will be achieved as the Hospital

* Provisional figure.

SHAPING UP FOR THE 21ST CENTURY

      Authority is able to introduce reforms in management. Hospice care for the terminally ill is the new form of care advocated by voluntary agencies, but the units that already exist are financed by charitable donations. However, the costs will soon move the service beyond the scope of private fund raising.

       In one respect medical thinking seems to be going backwards. In the early post-war years a great battle was fought to eliminate the practice of Chinese medicine in the Tung Wah Hospitals. Chinese medicine is still widely practised and patronised. It is not going away so it is now being studied more objectively with a view to separating genuine practitioners from the quacks. No doubt more will be done in the field of other health care services so that in the future the various disciplines will treat each other with more understanding than is sometimes displayed today.

At the same time research in wealthier countries is producing more and more expensive procedures whose efficacy is being questioned. 'America devotes nearly 12 per cent of its GNP to its high technology medicine, more than any other developed country. Yet, overall, Americans die younger, lose more babies and are at least as likely to suffer from chronic diseases.' says a recent review of American medicine in The Economist*. In Hong Kong we have boldly declared, in the Hospital Authority Ordinance, that 'no person should be prevented, through lack of means, from obtaining adequate medical treatment.' Owing to the rising costs of medical and health care, insurance will have to play a bigger part than it does today, but the form of insurance, and the way the risk is spread will need considerable ingenuity from the government and industry. The government has set its face against compulsory contributions to a provident fund, yet there will be a need for more funds to be set aside for old age. It could be that insurance for old age will find a bigger place in Hong Kong than it has in the past.

There is no easy solution to the provision of health care for an ageing population nor is there an obvious model from the advanced countries that we should follow.

In social welfare a new White Paper has recently stated government policies for the future and is aimed at ensuring that help reaches those in need regardless of wealth. Social problems are as likely to be found in families of means as in poor ones. Social security will continue to be financed directly by the government but many other services will be provided by the voluntary agencies. Present methods of financing these services through government grants are bureaucratic so it is hoped that some less rigid method can be devised through the contracting for services.

There will continue to be scope for privately financed welfare. In any caring community there will always be those who see a need that is not being met. It is right that they will continue to seek support from private citizens and corporations.

Catastrophe

I have no doubt that many will say that this review is too benign, that it fails to take into account the real risks that a change in sovereignty will bring great changes in life.

It is true that we live in an area that has had its share of catastrophes. In 1938, as a child, I was lucky to get onto a river boat in Canton before the captain cut all the mooring ropes of the surrounding sampans and set off to avoid being swamped by refugees fleeing from war. For nearly four years Hong Kong was occupied by a Japanese force which brought

* The Economist October 20, 1990.

19

SHAPING UP FOR THE 21ST CENTURY

20

the place to desperate poverty. As a young man I was among those who took turns to sleep in the office of the Defence Secretary waiting for a call from the border to say that an invasion had started. The North Korea had almost pushed the United Nations army into the sea and there were five divisions of troops just north of our border. In 1956, triad and Nationalist inspired riots brought the place to a standstill. In 1967, an overflow of the cultural revolution sparked riots, strikes, bombs, assassination and an armed raid over the border. And I have not forgotten that I was in the vast crowds in Happy Valley on June 4, 1989.

Catastrophe is certainly unpredictable and nobody can say that there will never be another. Events in China will have repercussions here as they always have done. But I think it is possible to set aside some of the sillier fears.

A common fear is that after 1997 the place will be run by people who have no idea how a capitalist laissez faire economy works. The government now leaves people to get on with their lives. Will it continue to do so? The whole point of the Joint Declaration, each word of which was wrestled with over a period of months, is to transfer sovereignty but not to change the system. 'One country two systems' is shorthand for a very complex set of relations which are set down in detail in the Joint Declaration. With a seniority list of the Civil Service, where everybody's date of birth is recorded, with a little imagination you can get a pretty good idea of who will be around and taking decisions six years hence. You may not know them well but a good many are old friends of mine. Like the rest of us they are getting older but I have been impressed by the confidence they have acquired with experience. Devoted capitalists all, I have noticed that they have a stronger belief in the merits of privatisation than was common in my time. This is bound to be healthy.

   What if they leave? Some may do so. The standard of young men and women that have joined the Administrative Service is extremely high. They are just the sort of people that will be only too glad to see the back of anyone senior to themselves because they know they can do better than their bosses. At one time, in the late sixties, as a result of a curious recruitment policy, the age of promotion to the Staff Grade, that is the boss class, was in the early thirties and dropping. It was a crazy situation and the trend was reversed but the place did not fall apart in the late sixties.

I do not personally know the rest of the civil service so well though the senior people that I do know are of the same calibre. One thing one can be sure about is that the people who actually do the work of running the government will be sound and not easily driven into silly policies. The safeguard built into the Joint Declaration is that the Public Services Commission will continue to scrutinise appointments and promotions.

The politicians might seem to be more of a gamble. This is not a calling that has much of a history in Hong Kong so it is difficult to say much about how they will turn out. Their seat of power will be the Legislative Council. Here they will be required to pass or stop legislation, vote on taxes and on expenditure. They will operate in public. They will have to be elected from time to time. It is on this last safeguard, which we call democracy, that all depends. In other words we are asking ourselves if the ordinary people of Hong Kong, and of the functional constituencies, have enough sense to recognise a fool or a rogue when they see one.

I worked in the New Territories in the days when the community was largely engaged in farming and had been settled there for two to six hundred years. There were new immigrants who did not have much say, but the bulk of the population was of this old

SHAPING UP FOR THE 21ST CENTURY

settled society that governments had never taken much notice of. They ran the place themselves. I had a staff of 18 in a District that covered the eastern New Territories from the Kowloon hills to the border. The people had to look after themselves and they did. Disputes were settled by the elders, they ran schools and clinics, they undertook public works, and provided relief after local disasters. Cheung Chau provided its own streets, drains and street lighting. The well-to-do were expected to contribute but there were rudimentary systems of tax. Silvermine Bay had a toll on a pontoon bridge. Tai Po had a purchase tax, called the public weighing scale, on everything sold in the market - the job of tax collector was put out to tender which saved collection costs. They had a highly democratic form of administration in which the heads of households elected Village Representatives who constituted the Rural Committee. I do not want to idealise the society for there were bad men as well as good, but their leaders were responsible people, used to taking tough decisions, knowing that what they did was in the public view. There were very few leaders who let their people down.

      If this was the experience with a simple agricultural community how can we think that idiots will command support in any form of election in the now much better educated, more sophisticated urban community that Hong Kong has become?

This leaves the Chief Executive and the Executive Council. These are key appointments. The Chief Executive must be no less than 40 years old and have resided in Hong Kong for a continuous period of 20 years. He is to be appointed by the Central People's Government after being recommended by a Selection Committee. The first such committee will consist of 400 members appointed by a Preparatory Committee in turn established by the National People's Congress. This Preparatory Committee is to be ... composed entirely of permanent residents of Hong Kong and must be broadly representative.' Although the Selection Committee is to recommend the candidate after either consultations or elections or both, I should be surprised if 400 good men and women of Hong Kong could reach an agreement without a vote. In turn the Chief Executive appoints members of the Executive Council and all the other advisory bodies and commissions.

      In some respects, however, the Chief Executive will be faced with problems of management similar to those the Governor faces now. There have been times in the past when the government in London has not really liked the free-wheeling private enterprise of Hong Kong. There will no doubt be times in the future when people in Beijing do not really like everything going on in Hong Kong. But then, as now, the individual responsible for the administration of Hong Kong will have to strike a balance between upholding Hong Kong's autonomy and the need to live harmoniously with the metropolitan power. The systems set up will provide a safeguard against the arbitrary use of powers. In the future, as in the past, the Chief Executive will occasionally have a tough time reconciling all these pressures. That is what he is paid for.

Hong Kong Will Be What We Make Of It - Neither More Nor Less

None of the agreements or constitutional documents will reassure the convinced sceptic. No confirmed optimist can produce impeccable arguments for his cheerfulness. What one can say is that past performance does give reasonable assurance that the systems of Hong Kong are sufficiently robust to take a battering or make the most of plain sailing. We may feel that we shall be more on our own than ever before, but in reality Hong Kong has been made by Hong Kong people and will stand or fall by our own doing.

21

CONSTITUTION AND

ADMINISTRATION_________

22

  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 Question 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.

   The Governor has the ultimate direction of the administration of Hong Kong. He is advised on the development of policy and other matters by an Executive Council. Legislation is enacted and funds provided by the Legislative Council, the members of which also debate policy and question the administration. There are two municipal councils, the Urban Council and the Regional Council, which have a statutory res- ponsibility to provide public health, cultural and recreational services in the areas for which they are responsible. In addition, 19 District Boards cover the territory. They advise on the implementation of policies at district level and provide an effective forum for public consultation.

In 1987, the government published a Green Paper which sought the views of the community on whether the system of representative government should be further developed and, if so, in what manner. The White Paper, published in February 1988, charted the course of political development up to 1991 and contained a number of major decisions in relation to elections to the Legislative Council (including, in particular, the introduction for the first time of 10 directly-elected seats in 1991); the composition of the Legislative Council; the presidency of the Legislative Council; the role and composition of the two Municipal Councils and the District Boards; the links between the three tiers of representative government, and various practical electoral arrangements.

Since publication of the White Paper, public opinion has changed and there is now a widely-held view in the community that there should be a somewhat faster rate of political development in 1991 than previously envisaged and, in particular, that the number of directly-elected seats in the Legislative Council should be increased.

   In the light of this, the government reviewed reactions to the White Paper in the second half of 1989 and early 1990. This culminated in the announcement, in March 1990, that the Legislative Council would be re-constituted in 1991 to include 18 directly-elected members from geographical constituencies and 21 indirectly-elected members from functional constituencies. The number of appointed members would be reduced to 17 and the seven

CONSTITUTION AND ADMINISTRATION

official members would be removed from the council. In addition, a deputy president would be appointed to the council to preside over some of its meetings. Taken together, these changes would produce a council of 60 members with an elected majority.

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 of the British Forces stationed in Hong Kong. As head of the government he presides at meetings of both the Executive Council and Legislative Council. The Governor is in close touch with the administration of the territory and exerts a major influence over the direction of policy. The present Governor, Sir David Wilson, assumed office on April 9, 1987, and is the 27th incumbent.

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 written constitution of Hong Kong. However, there are various well-established practices which determine the way in which these constitutional arrangements are applied. For instance, although from the constitutional instruments described above Her Majesty's government would appear to exercise substantial control over the way in which Hong Kong is run, in practice the territory largely controls its own affairs and determines its own policies. Similarly the Governor, by convention, rarely exercises the full extent of his powers: Hong Kong is governed by consent and through consultation with the community.

      The Letters Patent create the office of Governor and Commander-in-Chief of Hong Kong and require him to observe 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 Legisla- tive 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 against its advice (a right not exercised in recent times). 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.

Central Government

Executive Council

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 with the approval of the Secretary of State. As at October 1, 1990, there are 11 appointed members, including one official member. Appointed members hold office for fixed periods.

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CONSTITUTION AND ADMINISTRATION

   The Executive Council plays a role somewhat similar to that fulfilled by the cabinet in a Westminster-style system. The council normally meets once a week, in camera, and its proceedings are confidential although many of its decisions are made public. The Governor is required by the Royal Instructions to consult the council on all important matters of policy. Subject to certain procedures being followed, the Royal Instructions allow the Governor to act against the advice of the council and to refuse a member's request that a specific matter be put before the council. However, there is no instance in recent times of the Governor having done this. In practice, decisions are arrived at by consensus rather than by division. The depth of experience and the range of community interests represented by council members means that they are able to subject government policy to a rigorous examination before implementation. In this way potential problems can be identified and ironed-out, and legislation to enact policy tailored to reflect public aspirations and concerns before introduction to the legislature. The Governor in Council, that is the Governor acting in consultation with the Executive Council, is Hong Kong's central and most important executive authority.

   In addition to policy matters, the Governor in Council decides appeals, petitions and objections under those ordinances which confer a statutory right of appeal. The council also considers all principal legislation before it is introduced into the Legislative Council, and is responsible for making subsidiary legislation under numerous ordinances. The 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.

Legislative Council

  The Legislative Council is constituted by virtue of the Letters Patent. 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 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, 20 appointed members and 26 elected members.

   The official and appointed members are appointed by the Governor with the approval of the Secretary of State. Elected members are elected by nine functional constituencies and by an electoral college comprising the members of the district boards, the Urban Council and the Regional Council.

   Each functional constituency represents an occupational or professional group: commercial; industrial; labour; social services; medical and health care; finance and accountancy; teaching; legal, and engineering and associated professions. Of these, the commercial, industrial, finance and accountancy, labour and medical and health care functional constituencies elect two members each, while the other four elect one member each.

   For the electoral college, the 19 district boards are grouped into 10 geographical constituencies, each consisting of one to four district boards. The members of the Urban Council and the Regional Council form two additional constituencies.

CONSTITUTION AND ADMINISTRATION

Elections are normally held at three-year intervals. The Governor has power to dissolve the council; on dissolution all elected members vacate their seats and an election must be held within three months. A by-election is held should a casual vacancy arise.

The Legislative Council meets in public once a week, but takes a recess of about two months in August and September. Proceedings are bilingual; members may address the council in Chinese and English, and simultaneous interpretation is provided.

      Legislation is enacted in the form of bills, which go through three readings and a committee stage. Most business, including bills, is transacted by way of motions, which are 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 members vote individually. 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 April during the second reading of the annual Appropriation Bill.

      Members may also question the government on policy issues for which the government is responsible, either seeking information on such issues or asking for official action on them. Members may request either oral or written answers to the questions asked, 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 official member of the council and all members other than official members. 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 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. Both the special and regular meetings are held in public. The Finance Committee has two sub-committees: the Establishment Sub-Committee and the Public Works Sub-Committee.

The Establishment Sub-Committee consists of 27 members of the Legislative Council, one of whom is the chairman, plus the Secretary for the Civil Service and the Secretary for the Treasury, who are the only public servants on the sub-committee. It examines in detail proposals for directorate posts, the creation of new ranks and changes in salary scales, and makes recommendations on them to the Finance Committee. It also considers reports on

25

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CONSTITUTION AND ADMINISTRATION

value-for-money studies which have staffing implications and reports to the Finance Committee on changes in departmental establishments and on the size and cost of the Public Service.

The Public Works Sub-Committee consists of 24 members of the Legislative Council, the Financial Secretary (Chairman), the Secretary for Planning, Environment and Lands and the Secretary for Works. It examines the priority and reviews the progress of capital works projects in the Public Works Programme, and makes recommendations to the Finance Committee on the upgrading of projects to Category A of the programme which indicates their readiness for commencement, and on changes to the scope and approved estimates of projects already in that category.

Public Accounts Committee

The Public Accounts Committee, established by resolution of the Legislative Council in 1978, is a standing committee consisting of chairman and six members, none of whom is an official member of the council. Their main function is to examine and report on the findings of the Director of Audit's Reports on the audit of the government's annual statements of account prepared by the Director of Accounting Services, on any matters relating to the performance of the Director of Audit's duties and the exercise of his powers under the Audit Ordinance, and on any matters relating to value-for-money audits carried out by the Director of Audit. Value-for-money audits are carried out under a set of guidelines tabled in the Legislative Council by the chairman of the Public Accounts Committee in November 1986. These guidelines were agreed between the committee and the Director of Audit and have been accepted by the government.

The committee's prime concern is to see that public expenditure has not been incurred for purposes other than those for which the funds were granted, that full value has been obtained for the sums expended, and that the government has not been faulty or negligent in its conduct of financial affairs.

   The Director of Audit submits two reports to the Governor as President of the Legislative Council during the course of the year: the first, tabled in April, relates to value-for-money audits; the second, tabled in November, relates to the audit of government's annual statements of account and also value-for-money audits. Following the tabling of the report, the committee holds public hearings and controlling officers for different heads of public expenditure give evidence. The committee's report based on these hearings is laid on the table of the Legislative Council within three months of the laying of the Director of Audit's report to which it relates. The government's response to the committee's reports is contained in the government minute, which describes the measures taken to give effect to the committee's recommendations or reasons why these recom- mendations cannot be accepted. The government minute is also laid on the table of the Legislative Council within three months of the laying of the Public Accounts Com- mittee's report.

Select Committees

The Legislative Council may appoint select committees to consider matters or bills in depth. The purpose is to enable small groups of members to examine complex problems, usually by the taking of evidence, and to report their findings and recommendations to the council. In the last three years, however, no select committee has been formed.

CONSTITUTION AND ADMINISTRATION

OMELCO

OMELCO stands for Office of the Members (other than official members) of the Executive and Legislative Councils.

      Members play a significant role in the administration of Hong Kong. They advise on formulation of and change to government policy; scrutinise, process and enact legislation; consider complaints from members of the public; control public expenditure, and monitor the effectiveness of public administration.

      Through their work, members are involved in the major public issues. They study and comment on bills and major policy initiatives proposed by the government, taking into account the views of the public through members' contacts with various constituencies and district boards, as well as representations received from members of the community. Important issues which require the attention and endorsement of all members are discussed at fortnightly in-house meetings. There are 16 standing panels formed by members, which regularly monitor the policy and progress of work in different areas of activity. These include: community and New Territories affairs; constitutional development; recreation and culture; economic services and public utilities; education; environmental affairs; finance, taxation and monetary affairs; health services; housing; lands and works; man- power; public service; security; trade and industry; transport, and welfare services. Besides meeting among themselves, panel members hold sessions with senior government officials and interest groups to hear their views.

      In addition to these standing panels, a number of special groups were set up in 1989 with the aim of ensuring a safe and secure future for the people of Hong Kong and of boosting confidence in the territory. These include the Working Group on Nationality whose task is to urge Britain to restore to British subjects in Hong Kong the right of abode in the United Kingdom, and the steering group to promote and strengthen Hong Kong as an inter- national city.

      Members of the Legislative Council (other than official members) also formed a number of ad hoc groups during 1990 to study the important issues of the Bill of Rights Bill 1990; Chinese illegal immigrant workers in Hong Kong, and the financial implications of the government's plans to build a replacement airport and related infrastructural projects.

      Members also maintain regular informal contact with district boards. They keep in close touch with what is happening throughout the territory by frequent visits to government departments and places of public concern, such as centres for Vietnamese boat people. They obtain the latest information on development plans and the problems people face, and it is as a result of these contacts that many of the questions in the Legislative Council are raised.

      In April 1990, OMELCO established a London Office to assist members in establishing and developing closer links with officials, Members of Parliament, peers, organisations and individuals with an interest in Hong Kong, as well as the British media. The office advises OMELCO members on issues of interest in the United Kingdom.

OMELCO is also a channel through which the public may express grievances. Members deal with public representatives on government policy, appeals and complaints. Following the establishment in 1989 of an ombudsman, formally known as the Commisisoner for Administrative Complaints, complaints against government departments alleging mal- administration may be referred, if the complainant so requests, by a non-official member of the Legislative Council to the Commissioner for action.

27

CONSTITUTION AND ADMINISTRATION

28

Urban Council

The Urban Council is a statutory council with responsibilities for the provision of municipal services to almost 3.6 million people in the urban areas. As such, the Urban Council has considerable executive authority and is charged with full responsibility for a wide range of municipal functions. These functions include street cleansing, refuse collection, control of environmental hygiene, and ensuring the hygienic handling and preparation of food in restaurants, shops, abattoirs and other places.

   The Urban Council is also the authority for the control of hawkers and street-traders, although some of this devolves on the police as the council does not have the manpower or finance to shoulder the whole burden. An inter-departmental working party reviewing hawker control measures has submitted a report to the government with recommendations for improvement.

   Within the urban area, the council also provides and manages all public recreation and sporting facilities such as swimming pools, parks, playgrounds, indoor and outdoor stadia, tennis courts, football grounds, squash courts and basketball courts, and promotes a large number of sports at district level.

The council manages museums, public libraries and several major cultural venues and multi-purpose facilities, including the City Hall, Queen Elizabeth Stadium and the Hong Kong Coliseum. It is currently involved in the construction of a major Science Museum and a new Museum of Art which are due to be opened in 1991. The Hong Kong Cultural Centre, opened in November 1989, contains a new 2 100-seat concert hall, a theatre seating 1700 and a studio theatre accommodating about 500 persons. The council promotes cultural performances and runs a comprehensive programme of public entertainment throughout the urban areas.

The council consists of 40 members, 15 elected from district constituencies, 15 appointed by the Governor and 10 representative members from the urban district boards. The size of the council was increased from 30 to 40 members in 1989 with the addition of 10 representative members from the urban district boards. It meets in public once a month when it passes by-laws and deals with finances, formal motions and questions on its activities. The routine business of the Urban Council is conducted by the Standing Committee of the whole council, supported by 11 select committees and 18 working groups or sub-committees.

   The Liquor Licensing Board and the Libraries Select Committee as well as the Keep Hong Kong Clean Committee have also opened their meetings to the public.

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

   The council is financially autonomous and during 1989-90 it spent about $3,700 million on council-controlled activities and projects. It is financed by a share of the rates which forms the main part of its income, with the balance coming from various licence fees and other charges.

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 variety of matters. Although the majority of matters raised lie outside the council's jurisdiction, councillors are often able to assist and obtain redress for the public, where appropriate, from the various government departments and public bodies.

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First page of colour section: The Governor, Sir David Wilson, stresses the importance of environmental protection at the opening ceremony for World Environment Day, June 5.

Both pages: Fighting against pollution, the "Dragon of

Cleanliness" teaches children about littering; new refuse trucks are prepared for battle; monitoring Hong Kong's air quality.

2

Both pages: Environmental awareness is encouraging greater use of recycled paper products and pressure is growing for plastic, glass and metal items to be re-used.

A

U

BI

Above: Mai Po Marshes, a restricted area under the Wild Animals Protection Ordinance, is a haven for wildlife where more than 250 species of birds have been observed.

Overleaf: Growing interest in organic farming reflects increasing environmental awareness.

CONSTITUTION AND ADMINISTRATION

Regional Council

The Regional Council is the statutory municipal authority for the New Territories where more than two million people live. Like its sister council in the urban area, the Regional Council is responsible for all matters concerning environmental hygiene, public health, sanitation, liquor licensing and the provision of recreation, sports and cultural facilities and services within its jurisdiction.

      The Regional Council consists of 36 members. Twelve are elected directly, nine are elected as representatives of the nine district boards within the Regional Council area and 12 are appointed by the Governor. The remaining three are ex-officio members, being the chairman and two vice-chairmen of the Heung Yee Kuk. The chairman and vice-chairman of the council are elected by members among themselves.

      The council's policies are implemented by its executive arm, the Regional Services Department, which has a staff of over 9 000.

The council is financially autonomous. Its main source of revenue comes from rates collected in the council area which in 1989-90 provided about 69 per cent of total revenue, with the remainder being fees and charges, investment income and government grant. A grant of $273.6 million received in 1989-90 was the second of three equal annual in- stalments of a total grant of $820.8 million payable by government effective from 1988-9 to enable the council to fund its own capital works programme. In 1989-90, total revenue amounted to $1,983.9 million while total expenditure amounted to $1,205.2 million.

      The council meets monthly to deal with policy issues, formal motions and members' questions on its activities. The council has set up four functional select committees, nine geographically-based district committees and a Liquor Licensing Board. The four select committees deal with finance and administration, capital works, environmental hygiene, and recreation and culture, while the district committees deal with and monitor the provision of services and advise on the management of council facilities in individual districts. The select committees meet monthly, the district committees meet bi-monthly and the Liquor Licensing Board meets quarterly. All meetings of the council, its select committees, district committees, as well as the Liquor Licensing Board, are open to the public.

The Regional Council maintains close liaison with the district boards in the New Territories and Heung Yee Kuk to ensure that local aspirations and views are taken into account in its deliberations. Four members from district boards as well as other personalities are co-opted to each of the district committees of the council, thus providing an opportunity for the views of district representatives to be taken into account in the planning and provision of services and facilities.

The council elects a member to the Legislative Council. In addition, it is represented on a number of organisations whose work is closely related to that of the council. These organisations include the Council for the Performing Arts, the Council for Recreation and Sport, the Hong Kong Arts Centre, the Chung Ying Theatre, the Antiquities Advisory Board, the Advisory Board of the Institute for Research and Consultancy of the City Polytechnic of Hong Kong, and the Hygiene Services Advisory Committee.

District Administration

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

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  There are 19 district boards throughout the territory. Each board consists of appointed non-government members, elected members from the respective constituencies and, in the case of the New Territories, rural committee chairmen. The elected members are in the majority. For the present term of the district boards (1988-1991), there are altogether 264 elected and 141 appointed members.

  During the year, the district board electoral boundaries were revised, based mainly on physical development and the growth, movement and geographical spread of the population. For the district board elections which will be held in March 1991, there will be an increase of 53 constituencies, making a total of 210 constituencies with 274 elected and 140 appointed members.

The functions of the district boards are basically to advise the government on a wide range of matters affecting the well-being of the people living and working in the districts. Through the advice they make important contributions to the management of district affairs. They also help monitor the work of government departments at the district level. In addition, they are often invited to give views on important territory-wide issues, such as the Metroplan proposal, the inception of the Hospital Authority, the Bill of Rights, trans- port policy and the reform on Social Welfare Services. Where funds are available, they undertake minor environmental improvement projects and help organise and sponsor activities to promote recreation and culture. In 1990-91, $56.9 million was provided for these purposes.

Each district board operates a 'meet-the-public' scheme under which district residents may, by appointment, meet the board members face-to-face to express their views on any district problems and suggest ways for improvement. The scheme has been well received by the general public and proved effective in providing a direct channel for collecting public views on local issues and reflecting them to the government.

In each district there is a district management committee, chaired by the district officer, comprising representatives of departments providing essential services in the district. It serves as a forum for inter-departmental consultation on district matters and co-ordinates the provision of public services and facilities. The committee works closely with the district board and, as far as possible, follows the advice given by the board.

  The 71 Public Enquiry Centres in the 19 District Offices and their sub-offices handled over 17.6 million cases during the year. These centres provide a wide range of free services to members of the public, including answering general enquiries on government services, distributing government forms and information materials, administering oaths and declarations, referring cases under the Meet-the-Public Scheme, Free Legal Advice Scheme and Rent Officer Scheme.

Area Committees and mutual aid committees have become an important component of the district administration scheme. They were set up in the early 1970s throughout the territory in support of the Keep Hong Kong Clean Campaign and Fight Violent Crime Campaign. Each area committee serves a population of about 40 000 to 50 000, and members are appointed from a wide spectrum of the community. Mutual aid committees are building-based resident organisations established to improve the security, cleanliness and general management of largely multi-storey buildings. At present, there are 127 area committees and 4 324 mutual aid committees. They provide an extensive and effective network of communication between the government and the people at the local grass- root level.

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Links Between the Representative Institutions

The Urban Council and the Regional Council are closely linked to the district boards. Each district board in the urban area has a representative member on the Urban Council. In addition to a similar arrangement between the Regional Council and the district boards in the New Territories, members of the latter are also included in the district committees under the Regional Council. Through these channels, the district boards are consulted on a wide range of council matters affecting their areas.

      New Territories district boards maintain a close relationship with the Heung Yee Kuk (a statutory advisory body which represents the indigenous population of the New Ter- ritories). Seats are reserved on the district boards for rural committee chairmen who are also ex-officio members of the Heung Yee Kuk's executive committee.

      The Regional Council also has a formal link with the Heung Yee Kuk, through the ex-officio membership of the chairman and the two vice-chairmen on the council. Moreover, three of its appointed members have also been chosen from members of the Heung Yee Kuk to ensure a strong relationship with the traditional inhabitants of the New Territories.

The Urban Council and Regional Council, which cover much the same fields in their respective areas, have, during the year, held liaison meetings and have also instituted joint ventures. In particular the Keep Hong Kong Clean Committee now encompasses both councils. The annual Flower Show is also a responsibility of both councils and is held in each council's area in alternate years.

      At present the district boards are grouped into 10 electoral college constituencies, each returning one member to the Legislative Council. The Urban Council and Regional Council separately form electoral college constituencies, also returning one member each to the Legislative Council.

      Starting from the 1991-2 Legislative Council session, the two municipal councils will become functional constituencies, each returning one member to the Legislative Council, while the 10 electoral college constituencies at the district level will be replaced by nine geographical constituencies, each of which will return two members to the Legislative Council through direct elections.

Electoral System for the Urban Council, Regional Council and District Boards Elections to the Urban Council, Regional Council and district boards are on a geo- graphical constituency basis and through a broad franchise. Practically everyone who is 21 years of age or over and who is a Hong Kong permanent resident, 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 is conducted on a voluntary basis annually in August and September although applications for registration can be made at any time of the year.

      A major registration exercise was conducted in 1990 resulting in the addition of 257 876 new electors to the electoral roll. At the end of year, the electoral roll carried 1 855 443 names, representing 50.2 per cent of an estimated total potential electorate of 3.69 million. Of these electors, 1 124 292 are entitled to vote at the Urban Council elections and also at the district board elections in the Urban Council area. The remaining 731 151 are entitled to vote at Regional Council elections and at the district board elections in the Regional Council area.

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During the year, district board electoral boundaries were revised, with over 40 double- seat constituencies split into single-seat constituencies. For the district board elections to be held in March 1991, there will be 210 constituencies, comprising 108 constituencies in the 10 districts in the Urban Council area and 102 constituencies in the nine districts in the Regional Council area. The total number of elected district board members will increase from 264 to 274.

For Urban Council elections, the number of constituencies remains at 15, each being a single-seat constituency made up of a number of district board constituencies in the Urban Council area. The Regional Council has 12 single-seat constituencies, each made up of a number of district board constituencies in the Regional Council area. There are altogether 15 elected Urban Councillors and 12 elected Regional Councillors. The next elections to these two councils are due in May 1991.

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 his nomination is supported by 10 electors in that constituency. Election is by simple majority.

Electoral System for the Legislative Council

The system for indirect election to the Legislative Council, first introduced in 1985, involves an electoral college and nine functional constituencies. The electoral college comprises two special constituencies, that is, the Urban Council and the Regional Council, and 10 district board constituencies, each returning one member to the Legislative Council. The functional constituencies, covering the commercial, industrial, labour, social services, medical and health care, finance and accountancy, teaching, legal and engineering and associated professions sectors, return a total of 14 members.

The franchise for Legislative Council elections is as follows: for the electoral college, an elector must be a member of the Urban Council, the Regional Council or a district board making up the respective district board constituencies; for functional constituencies, an elector who is an individual must have been registered under the Electoral Provisions Ordinance for the Urban Council, Regional Council and district board elections and be a member of an organisation forming part of the relevant constituency. No person may be registered in more than one functional constituency even if he is eligible. An elector who is not an individual must nominate a person not already an elector in his own right in the same constituency to be its authorised representative to vote at an election. That person may not be the authorised representative of another elector in the same or any other constituency. However, if eligible, a person may be registered to vote both in the electoral college and in the functional constituency to which he belongs apart from voting as an authorised representative. For 1990, the number of electors registered in the electoral college and the functional constituencies stands at 464 and 58 540 respectively, compared to the corresponding potential electorate of 466 and 103 931 respectively.

The qualifications for candidature are simple: for an electoral constituency, any person who is an elector registered under the Electoral Provisions Ordinance (and not necessarily 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 person who is an elector registered under

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the Electoral Provisions Ordinance, has been resident in Hong Kong for the preceding 10 or more years and has a substantial connection with the relevant functional constituency may be nominated if supported by 10 electors in the constituency concerned.

      A preferential elimination voting system is adopted for both electoral college con- stituencies and functional constituencies.

       For the next term in 1991, the 10 single-seat electoral college constituencies at the district level will be abolished and a new system for direct elections to return 18 members from nine double-seat geographical constituencies will be introduced. The number of functional constituency seats will increase from 14 to 21, including one seat for each of the two municipal councils which will become functional constituencies. Legislative provisions for the conduct of these elections in September 1991 were introduced before the end of the year.

Advisory Committees

The network of government boards and committees is a distinctive feature of the system of government 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 and quasi-government bodies. 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 Board); 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 Labour Advisory Board), 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 Hong Kong Examinations Authority).

       Government officials and members of the public are represented on these committees. About 5 400 members of the public are appointed to serve on a total of 441 boards and committees, and some serve on more than one of these advisory bodies. These members are appointed in view of their specialist knowledge or expertise, or their record or interest in contributing to community service. Increasing importance has been attached to the contribution they make to the formulation and execution of government policies and, in order to utilise their potential to the full, the composition and effectiveness of these bodies are regularly monitored. Where appropriate, the government broadens the cross-section of representation and encourages an inflow of new ideas through a reasonable turnover of membership.

The Administration

Role of the Chief Secretary

The Chief Secretary advises the Governor on matters of policy, and is principally responsible for its implementation. He is head of the Public Service. The Chief Secretary, together with the Financial Secretary and the Attorney General, are the Governor's principal advisers.

The Chief Secretary exercises direction primarily as head of the Government Secretariat, the central organisation comprising the secretaries of the policy branches and resource branches and their staff. Since 1902, when the office of the Lieutenant-Governor lapsed, the Chief Secretary (or his predecessor, the Colonial Secretary) has deputised for the Governor

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during his absence. He is the Senior Official Member of the Executive and Legislative Councils and 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 Official 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, Works and Economic Services Branches of the Government Secretariat.

  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 delivers a major 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 executive duties, such as setting levels of certain charges and remunerations, and overseeing the accounts of certain trust funds and statutory bodies.

Role of the Central Policy Unit

The Central Policy Unit (CPU) was established in April 1989. Although the CPU forms part of the Government Secretariat it is not a policy branch with responsibility for a defined programme area of its own. Its role is to undertake in-depth examinations of complex policy issues, to analyse options, and to recommend solutions. These issues are assigned to it by the Governor, Chief Secretary and Financial Secretary and are specified on a case-by-case basis. They are mostly issues of a long-term, strategic nature, or issues which cut across, or fall between, the boundaries of several policy branches of government departments. The CPU is not involved in the day-to-day development of policy nor its implementation.

The Structure of the Administration

The Administration of the Hong Kong Government is organised into branches and departments. The branches, each headed by a secretary, collectively form the Government Secretariat. The structure of the Government Secretariat was re-organised in 1989 in order to rationalise and redistribute the portfolios of policy secretaries, the object being to achieve a reasonable balance between their workloads, reflect more closely the main policy objectives of the government and to improve the policy formulation and resource management generally. There are currently 12 policy branches, and two resource branches concerned with finance and the Public Service.

The policy branches whose secretaries report directly to the Chief Secretary are: City and New Territories Administration (headed by the Secretary for Home Affairs); Constitutional Affairs (which has merged with the former General Duties Branch); Education and Manpower; Health and Welfare; Planning, Environmental and Lands; Recreation and Culture; Security, and Transport. The Civil Service Branch, a resource

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branch, also comes under the aegis of the Chief Secretary. The policy branches whose secretaries report directly to the Financial Secretary are: Economic Services, Monetary Affairs, Trade and Industry, and Works. The Finance Branch, a resource branch, is also responsible to the Financial Secretary. The head of the Finance Branch is the Secretary for the Treasury (previously known as the Deputy Financial Secretary).

      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 63 departments and agencies in this structure.

To assist in the co-ordination of government policy, there have been established, under the umbrella of the Chief Secretary's Committee, eight policy groups which bring together branch secretaries in related programme areas. The six which are chaired by the Chief Secretary are Community Affairs; Constitutional Affairs; Lands, Works, Transport, Hous- ing and Environmental Protection; Public Services; Social Services, and Public Relations. The Finance group is chaired by the Financial Secretary and the Legal Policy group by the Attorney General.

Office of the Commissioner for Administrative Complaints

The Commissioner for Administrative Complaints is an independent authority establish- ed under the Commissioner for Administrative Complaints Ordinance to provide, for ordinary citizens, some means whereby an independent person outside the public service can investigate, and report on, grievances arising from administrative decisions, acts, recommendations or omissions. The commissioner has jurisdiction over all government departments except the Royal Hong Kong Police Force and the Independent Commission Against Corruption. However, he is an ex-officio member of both the Police Complaints Committee and the Independent Commission Against Corruption Complaints Committee, which oversee investigations into complaints made against members of the Royal Hong Kong Police Force and the Independent Commission Against Corruption.

       The establishment of the commissioner is designed to supplement and strengthen existing channels for the redress of grievances, but not to replace them.

       The commissioner's office came into operation in March 1989. As required by law, the commissioner has to make a general report to the Governor on the exercise of his functions under the Commissioner for Administrative Complaints Ordinance not later than the last day of June in each year. His second report was tabled in the Legislative Council on July 25, 1990, and received considerable media coverage.

      In September 1990, a staffing review of the office was carried out to determine both the method of filling the posts and the staffing levels in the longer term. The review concluded that the practice of filling the majority of posts by secondment from the civil service should continue and that there should be some adjustments to the establishment of the two sections within the office, namely, the Screening and Investigation Section and the Admin- istration Section. Action was taken in 1990 to implement the recommendations that the review had put forward.

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  In January 1990, the government took up the commissioner's request for a review of the Commissioner for Administrative Complaints Ordinance. Two major issues were addressed in this review, namely, the present referral system whereby maladministration complaints may only be referred to the commissioner by non-official members of the Legislative Council and the commissioner's jurisdiction over public bodies.

  The government concluded that, given that 18 members would be elected directly for the first time to the Legislative Council from geographical constituencies in September 1991, the effect of this development on the existing referral system should be carefully assessed before giving further consideration to changing the system of access to the commissioner and the resource implications of any extended system. This course of action was also prudent in the prevailing budgetary climate. The government planned, however, to review the existing access system in mid-1992 when the newly-constituted Legislative Council would have operated for some time.

  On the question of the commissioner's jurisdiction over public bodies, the government's conclusion was that in principle major functions which were hitherto performed by the government, such as hospital services, should remain within the commissioner's jurisdiction upon their privatisation or corporatisation. The government was prepared to consider on a case-by-case basis the extension of the commissioner's jurisdiction to existing statu- tory bodies:

  Between January 1 and December 31, 1990, a total of 165 complaints were received by the office. Together with 52 cases carried over from the previous year, there were in all 217 cases for disposal. During the year, 165 cases were completed. Of these, 105 were investigated, and five (4.8 per cent) were found to be substantiated in whole and 46 (43.8 per cent) in part. In 54 cases (51.4 per cent), the complaints were found to be unsubstantiated. Recommendations for remedial action were made in 63 instances and accepted by departments in 61 cases. During the same period, 145 enquiries were also received, some of which could lead to formal complaints being lodged to the office at a later date.

Office of the Director of Audit

The necessity for an audit presence was recognised in the very early days of Hong Kong and the Audit Department is in fact one of the oldest departments, an Auditor-General having been first appointed in 1844, only three years after the cession of the territory.

  Presently, the audit of the accounts of the Hong Kong Government is carried out under the terms of the Audit Ordinance enacted in 1971, which provides for the appointment, security of tenure, duties and powers of the Director of Audit, for the submission of annual statements by the Director of Accounting Services, for the examination and audit of those statements by the Director of Audit, and for the submission of the latter's report thereon to the Governor as President of the Legislative Council. Certain specific duties relating to the examination, audit, reporting and certification of the government's accounts, are prescribed in the ordinance and wide powers are given to the director regarding his access to books, documents and records, and the explanations which he may require. Moreover, as in the performance of his duties and the exercise of his powers the director is not subject to the direction or control of any other person or authority, considerable discretion is given to him in the conduct of his inquiries and he is free to report publicly as he sees fit. Therefore, the director functions independently of the Administration.

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      The audit of all the government's accounts is carried out by the Director of Audit and his staff. He also audits the accounts of the Urban Council, the Regional Council, the Vocational Training 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.

Government auditing practised in Hong Kong falls into two main categories, res- pectively termed 'regularity' audit and 'value-for-money' audit. The regularity audit, which is intended to provide an overall assurance of the general accuracy and propriety of the government's financial and accounting transactions, is carried out by means of selective test checks and reviews designed to indicate possible areas of weakness. The audit is designed to ensure as far as reasonably possible that the accounts are accurate and correct, although, with the considerable volume and variety of government revenue and ex- penditure, it cannot hope to disclose every accounting error or financial irregularity. Value-for-money audit is carried out according to guidelines tabled in the Legislative Council by the chairman of the Public Accounts Committee on November 19, 1986. The audit is intended to ascertain that prudence and economy have been exercised in the management of public funds and that good value has been obtained for expenditure which has been incurred. This involves going beyond the normal accounting records. In line with contemporary developments in both government and commercial auditing elsewhere, it is also becoming increasingly relevant to ascertain whether efficient and economical practices are being followed in pursuing prescribed goals and whether these goals are being achieved. The Director of Audit's report, after it has been submitted to the Governor as President of the Legislative Council and laid before the council, is considered by the Public Accounts Committee. Since 1988, in response to a recommendation made by the Public Accounts Committee, the director submits two reports a year. In 1990, the first report was tabled on April 25, covering the results of value-for-money audits completed, and the second report on November 11, covering the audit certification of the government's accounts for the preceding financial year as well as the results of value-for-money audits completed.

      The director's reports on the accounts of other public bodies are submitted to the relevant authority in accordance with the legislation governing the operation of these bodies.

Foreign Relations

The Role of the British Government

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 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 have not been issued in living memory, and Hong Kong conducts its affairs with a high degree of autonomy in all domestic matters.

      The relationship between London and Hong Kong is also essentially one of co- operation. For example, one important task regularly 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.

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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 conventions 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 enjoys a considerable degree of autonomy, and full autonomy regarding trade matters. It is a contracting party to the General Agreement on Tariffs and Trade in its own right.

The Role of Political Adviser

The Political Adviser is a senior member of the British Diplomatic Service, seconded to the Hong Kong Government principally to advise the Governor and the Chief Secretary on matters concerning Hong Kong's relations with China. His office is part of the Hong Kong Government. Following extensive involvement in the Sino-British negotiations which culminated in the Joint Declaration, the Political Adviser's office, in conjunction with the Constitutional Affairs Branch, is closely involved in the work of implementing the Joint Declaration. In addition, 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 Econ- omic 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. The Political Adviser's office is also one of the channels of communication between the Hong Kong Government and foreign and Commonwealth missions in Hong Kong. These missions do, however, deal directly with the relevant departments of the Hong Kong Government over most day-to-day matters.

Public Service

The Public Service provides the staff for all government departments and other units of the Administration. With Hong Kong's centralised form of government, the Public Service operates a wide range of services which in many countries would be administered by other public authorities. These include 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 Lands and Works group of departments (23 155 staff), the Municipal Services group of departments (27 954), the Education Department (6 936), Fire Services Department (7 752), and the Royal Hong Kong Police Force (33 206) account for 53 per cent of the establishment of the whole Public Service. At April 1, 1990, the total strength of the service was 188 393, over 98 per cent of this number being local officers. The service is structured into some 437 grades or job categories in the administrative, professional, technical and manual fields, with 1 209 ranks or job levels.

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

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Recruitment and promotions to the middle and senior ranks of the Public 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 serving as members.

The government is advised on matters relating to pay and conditions of service by four independent bodies. The Standing Committee on Directorate Salaries and Conditions of Service advises on matters affecting directorate officers (the 1 000 or so most senior public servants). The committee's recommendations for a restructuring of the directorate pay scale, which were made in its 10th Report published in June 1989, were approved by the government in March 1990.

      The Standing Committee on Judicial Salaries and Conditions of Service advises on matters affecting judicial officers. The committee's recommendations for a restructuring of the judicial officers salary scale were approved by the government in March 1990.

The Standing Committee on Disciplined Services Salaries and Conditions of Service advises on the salaries and conditions of service of the disciplined services. Since its establishment in February 1989, the committee has considered 70 submissions from the disciplined services and the Administration. The committee's recommendations on pay for the rank-and-file and the officer ranks were accepted by the government in September and December 1990.

      The Standing Commission on Civil Service Salaries and Conditions of Service advises on matters affecting all other public servants. In March 1989, the commission started an overall review of the salary structure of all grades under its purview. It published the first and second reports on the review in October 1989 and March 1990 respectively. The government has accepted the recommendations in these reports concerning the principles and practices governing civil service pay and the salary structure of some 126 individual grades. In December, the commission submitted its final report covering the remaining 216 grades. These recommendations are being considered by the government.

A new civil service housing package was introduced in October 1990, after consultation with staff and the advisory bodies on civil service salaries and conditions of service. The objectives of the new housing package are to make more effective use of the resources provided for civil service housing benefits and to encourage home ownership among public servants. The new housing package comprises a new Home Financing Scheme, a new Accommodation Allowance Scheme and an improved Home Purchase Scheme.

The government fully recognises the value of good staff relations in the public service. Apart from providing a wide range of welfare and recreational facilities to staff, much effort is devoted to the promotion of effective staff consultation. In addition to the two service-wide central consultative councils (the Senior Civil Service Council and the Model Scale 1 Staff Consultative Council) and the Police Force Council, a Disciplined Services Consultative Council was established in February 1990 for members of the disciplined services other than the police force. These councils together with departmental consultative committees for staff in all departments constitute the formal consultative machinery. Outside these councils and committees, individual members of the public service or staff associations have ready access to their heads of department or grade as well as the Civil Service Branch. Recommendations made in a 1989 report by the Standing Commission on Civil Service Salaries and Conditions of Service on further improvements to the consultative machinery in the public service are being implemented.

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Continued efforts were made in 1990 to increase productivity and to improve the quality of service to the public. Further value-for-money studies and work improvement studies were carried out in various departments. These studies brought about not only im- provements in the quality of service, but also more effective deployment of staff and significant savings in resources.

The quality of service is also maintained by way of a disciplinary code which applies to all public servants. It provides sanctions against misconduct and sub-standard performance where other staff management measures fail, while safeguarding the interests and rights of individual public servants.

The government is developing its use of manpower planning techniques and practices in order to ensure that the public service possesses the right mix of officers in terms of numbers, experience, qualifications and skills to achieve its objectives and goals. Particular care and attention is paid to the selection and grooming of senior government officials.

Civil Service Training

The government attaches great importance to the training of public servants in order to increase efficiency and effectiveness and to help them meet new challenges. Induction and refresher training is provided by many departments to equip staff with the skills to carry out their duties properly. To meet common departmental needs, the Civil Service Training Centre conducts a wide range of management, language and computer courses and co- ordinates the training undertaken by public servants at local and overseas institutes. As the central training agency, it also provides advice and assistance to departments.

An important component of the training and development offered to senior public servants is the well established three-month programme run by the Senior Staff Course Centre. The centre emphasises 'learning from doing' and participants undertake almost 100 significant projects with policy implications each year. Study tours to other countries in the region provide valuable broadening experience and foster much goodwill with host governments. Interchange of experience with invited private sector participants has also proved to be a beneficial feature of the programme.

Government Records Service

The Government Records Service was created on September 1, 1989, combining the former Government Records Co-ordination Unit with the Public Records Office to provide a more effective administrative structure for the broad management of government records, including provision of records services and advice to branches and departments.

The Records Management Office and the Public Records Office in the Government Records Service are responsible for carrying out two different but related programmes to take care of the management needs of government records; a records management programme to handle records at their current and non-current stages and an archives administration programme to look after the preservation and use of permanent records.

The record is the basic unit of administration and its appropriate management will have a significant impact on the efficiency of government affairs. It is the responsibility of the Records Management Office to oversee and develop a comprehensive system concerned with everything that happens to records from their productive 'life' as a means of accom- plishing the government agency's functions to their 'death' or destruction as non-current records when all useful purposes have been served. The system will fulfil the government's

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aim to have fewer records to store, better records to use and more economical record management costs to finance.

      In September 1990, the government launched a pilot scheme to initiate records management programmes in five departments: Buildings and Lands Department; Housing Department; Immigration Department; Inland Revenue Department, and Social Welfare Department. It is expected that programmes will eventually extend to all government departments.

      The Public Records Office is now one of the largest local sources of information for historical and other studies relating to Hong Kong. It constitutes the memory of the government for reference to legal, administrative and financial precedent.

Government Property Agency

Following re-organisation of the system of managing the government estate, the Govern- ment Property Agency was established on April 1, 1990, to administer all government property matters. The agency was formed by the amalgamation of the Property Division of the Government Secretariat's Finance Branch, the Leasing Division of Rating and Valuation Department and part of the Property Management Section of Buildings and Lands Department.

The agency's objective is to administer efficiently and cost-effectively all government owned and leased offices, quarters and specialist accommodation, and to develop and implement a comprehensive property plan for the economic use of government properties.

      In its first year of operation, the agency will give priority to preparing a comprehensive estate plan to facilitate the identification of sites suitable for redevelopment or disposal; the introduction of appropriate commercial activities in government properties; the form- ulation of measures to improve the design and management of government properties; the examination of the spatial and locational needs of government departments with a view to optimising their use of accommodation, and promoting among government departments awareness of the cost of the accommodation they occupy and the need to optimise use of this valuable resource.

Language

     The official languages of Hong Kong are English and Chinese. This is enshrined in the Official Languages Ordinance enacted in 1974. Both languages are accorded equal status and enjoy equality of use in all manner of communications between government departments and members of the public. Correspondence in Chinese is replied to by departments either in Chinese or in English accompanied by a Chinese text. Major reports and publications of public interest issued by the government are available in both languages. In spoken language, Cantonese (the Guangzhou dialect) is most common among the local Chinese population while Putonghua (Mandarin) has gained popularity as closer ties with China are being developed. English continues to be used not only by the expatriate community but also a wide cross-section of the local community involved in commercial, financial and professional circles. Since 1972, simultaneous interpretation has been provided at meetings of the Legislative Council, Urban Council, Regional Council, District Boards and other government boards and committees where English and Cantonese are used. A Bilingual Laws Advisory Committee was set up in October 1988 and the first bilingual legislation enacted in April 1989.

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3

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, the ordinance applies some English Acts to Hong Kong, such as the Justices of the Peace Act of 1361 and the Distress for Rent Act of 1689.

  On occasions, English laws are applied to Hong Kong either directly or 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 Outer Space Act 1986 (Hong Kong) Order 1990 is an Order in Council implementing in Hong Kong a treaty to which the United Kingdom is a party.

  In order to ensure that by 1997 Hong Kong possesses a comprehensive body of law which owes its authority to the Legislature of Hong Kong, it will be necessary to replace such English laws by local legislation on the same topics. A legislative programme has therefore been adopted by the Hong Kong Government to disapply English laws apply- ing to Hong Kong and to replace them by Hong Kong ordinances. The Hong Kong Act 1985 provides for the Hong Kong legislature to exercise the necessary powers to replace English laws in specified fields with Hong Kong ordinances, and the Hong Kong (Leg- islative Powers) Order 1986 specified the fields of civil aviation, merchant shipping and admiralty jurisdiction.

  A further order was made in 1989 conferring similar powers in order to enable legislation to be enacted to give effect to those international agreements which are applicable to Hong Kong.

The Governor, acting with the advice and consent of the Legislative Council, has plenary powers to enact ordinances for the peace, order and good government of Hong Kong and most of the legislation applicable in Hong Kong is, and has been since its earliest days, enacted in this form or as subsidiary legislation made under an ordinance. Such legislation is usually initiated by one of the branches of the Government Secretariat.

THE LEGAL SYSTEM

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 Government 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.

The laws of Hong Kong are published in a 32-volume loose booklet compilation known as The Laws of Hong Kong. This is brought up to date annually.

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

The Attorney General's Chambers has assumed responsibility for drafting new laws in both Chinese and English and translating existing laws into Chinese. The Chinese text will be an authentic version of the laws that the courts can look to, with the English text, in ascertaining the meaning of an enactment. The first piece of bilingual new legislation was enacted on April 13, 1989. Since then, all new principal legislation has been enacted bilingually. On the translation of existing laws, a committee known as the Bilingual Laws Advisory Committee was set up by government in October 1988 to advise on the publication of Chinese texts of existing ordinances. The committee examines the Chinese texts prepared by the Law Drafting Division of the Attorney General's Chambers and recommends the Governor in Council to declare these texts an authentic version of the laws. Some 520 public ordinances will have to be translated in the years to come.

Bill of Rights

In Hong Kong the basic social and political freedoms that people enjoy have always been taken for granted. These are backed up by many different provisions of statutory and common law. In addition, the International Covenants on Civil and Political Rights and on Economic, Social and Cultural Rights have been extended to Hong Kong since 1976. And their continued application beyond 1997 is guaranteed in the Joint Declaration.

In view of the strong support in the community for these freedoms to be embodied in a Bill of Rights, the government introduced the Hong Kong Bill of Rights Bill 1990 into the Legislative Council in July 1990. The bill gives effect in local law to the relevant provisions of the International Covenant on Civil and Political Rights, as applied to Hong Kong. This means that if anyone believes that their civil or political rights, as defined in the covenant, have been violated they will be able to seek redress in the courts. Meanwhile, a com- prehensive review of all existing laws is underway to remove any areas of doubt about their compatibility with the bill. This review will take some time to complete, and to avoid unnecessary uncertainties, provision has been made in the bill for a limited period after its enactment during which existing laws cannot be challenged under the bill.

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THE LEGAL SYSTEM

44

   The provisions of the other International Covenant, on Economic, Social and Cultural Rights, are different in nature. They are in the form of objectives to be achieved pro- gressively and, generally speaking, are not rights which individuals could easily enforce in the courts. For these reasons they are not well suited for inclusion in a Bill of Rights designed to give people the right of direct action in the courts. The government is fully committed to the objectives of the covenant and seeks to implement them through existing legislation and policies.

Judiciary

The Chief Justice of Hong Kong is head of the Judiciary. He is assisted in his admin- istrative duties by the Registrar, seven Deputy Registrars and one Assistant Registrar of the Supreme Court. The Assistant Registrar is designated Chief Magistrate.

The Judiciary operates on the principle, fundamental to the common law system, of complete independence from the executive and legislative branches of government. This applies equally whether a dispute is between the government and an individual, or whether it involves only private citizens or corporate bodies.

   The most senior court in Hong Kong is the Supreme Court, comprising the Court of Appeal and the High Court. Sitting in the Supreme Court in addition to the Chief Justice are nine Justices of Appeal and 20 High Court Judges. The Registrar and Deputy Registrars also have jurisdiction as Masters of the Supreme Court in civil trials in the High Court. The jurisdiction of the High Court is unlimited in both civil and criminal matters, and the Court of Appeal is the highest court in Hong Kong. The Court of Appeal hears both civil and criminal appeals from the High Court and from the District Court. Further appeal lies to the Judicial Committee of the Privy Council in London; however this is infrequent as leave to appeal is granted only on stringent conditions.

   High Court Judges usually sit alone when trying civil matters, although there is a rarely-used provision for jury trials in certain cases including defamation. For criminal trials they sit with a jury of seven, or nine on special direction of the judge. The issue of guilt is determined by the jury, which must have a majority of at least five to two, except with charges attracting a death sentence when unanimity is required.

   The District Court has both civil and criminal jurisdiction. Its civil jurisdiction is limited to disputes of a value up to $120,000, and its criminal jurisdiction up to seven years' imprisonment. Its judges sit without a jury and may try the more serious cases, save principally for murder, manslaughter and rape, which are reserved to the High Court. There are 31 Judges of the District Court; the majority sit in a large central court, with two smaller courts serving the outlying districts of the territory.

The Magistrates' Courts try annually some 90 per cent of all the cases heard in the territory. There are 60 professional magistrates sitting in 10 magistracies, two of which are on Hong Kong Island, four in Kowloon and four in the New Territories.

   Magistrates have a purely criminal jurisdiction covering a wide range of offences. Professional magistrates are generally restricted in sentence to two years' imprisonment and $10,000 fine, however a number of statutes allow increased sentences. Professional magistrates also try cases in the Juvenile Court, which has jurisdiction in charges against children and young persons up to 16 years, except in cases involving homicide.

   In addition to the professional magistrates, there are 10 Special Magistrates who are not legally qualified. They handle routine cases, such as littering and minor traffic offences, and

THE LEGAL SYSTEM

their powers of sentence are limited to fining up to $20,000. They are all Cantonese speaking and conduct their cases in that language.

      In addition to the principal courts of civil and criminal jurisdiction, there are five specialised tribunals. The Coroner's Court handles enquiries into unusual circumstances causing death; the Small Claims Tribunal hears civil claims up to a limit of $15,000; the Labour Tribunal hears individual civil claims arising from contracts of employment, and the Lands Tribunal has jurisdiction in matters of rating and valuation and in assessing compensation when land is resumed by government or reduced in value by development. Finally, the Obscene Articles Tribunal has jurisdiction to determine whether or not an article is obscene and to classify it into statutory categories of acceptability or otherwise.

      The Small Claims and Labour Tribunals provide the public with inexpensive recourse to litigation, as their proceedings are informally conducted and professional representation is not permitted.

The official language of the court is English in the Court of Appeal, the High Court and the District Court; in the other courts and tribunals the court may use Chinese. Whichever language is used, a party or witness in any court in Hong Kong may use Chinese or English or any other language permitted by the court.

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 and a member of both the Judicial Services Commission and Operations Review and Complaints Com- mittees of the Independent Commission Against Corruption.

      The Attorney General is chairman of the Legal Affairs Policy Group, one of several policy bodies established under the umbrella of the Chief Secretary's Committee to bring together branch secretaries in related programme areas. The group plays an important co-ordinating role in legal policy matters and decision-making, including allocation of responsibility for further legislative initiatives which have a substantial legal policy content. Often, the group will call upon the Attorney General to take responsibility as sponsor and spokesman for legislative proposals to be submitted to the Executive and Legislative Councils.

All government departments requiring legal advice receive it from the Attorney General. He is the representative of the Crown in all of the actions brought by or against the Crown. He is also responsible for the drafting of all legislation and for the conduct of all prosecutions.

The Attorney General's Chambers are divided into six divisions, five of which are 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 legal advice in civil matters and conducting all civil litigation involving the Crown. The Prosecutions Division is headed by the Crown Prosecutor who has the conduct of criminal proceedings. 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 Legal Policy Division which includes the Law Reform Commission Secretariat and he has responsibilities for counsel with the Urban Council, the Regional Council and certain departments of government. The International Law Division is headed by the Law

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THE LEGAL SYSTEM

46

Officer (International Law) and deals with all external legal matters arising out of the Sino-British Joint Declaration. The Chambers Manager heads the Administration Division which deals with all administrative matters concerning the Attorney General's Chambers as a whole. He is also the controlling officer.

A unit known as the Localisation of Laws Unit has been established in the Attorney General's Chambers to co-ordinate and speed up work in the area of localisation of United Kingdom legislation which now applies to Hong Kong. In conjunction with the Con- stitutional Affairs Branch and the International Law and Civil Divisions of the Attorney General's Chambers, the unit studies all United Kingdom laws which apply to Hong Kong and consults with policy branches on whether the law in question will be needed in future. Where appropriate, drafting instructions will be prepared with a view to local legislation being enacted which will reproduce that law in a form in which it can survive after 1997.

  Legislation has already been enacted to localise laws in the fields of admiralty juris- diction, marine pollution and merchant shipping. The target date for the completion of the Localisation of Laws programmes is 1994.

  The Attorney General 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 proceedings.

  Most 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, or give rise to difficult points of law, advice is sought from the Prosecutions Division. The advice of the Attorney General's Chambers must be sought in the case of serious offences which are to be heard in the District Court or the Supreme Court.

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.

Since its establishment in 1980, the commission has published 19 reports covering subjects as diverse as Commercial Arbitration, Homosexuality, Bail, and Competence and Compellability of Spouses in Criminal Proceedings. The recommendations in seven of those reports have been implemented by the government either in whole or in part and others are still under consideration.

The commission is currently considering references on Evidence in Civil Action, Arrest and Detention, Copyright, Fraud, Privacy, Codification of the Criminal Law, Illegitimacy, Grounds for Divorce, and Guardianship and Custody.

Registrar General

The Registrar General, a statutory office established by the Registrar General (Establish- ment) Ordinance, combines the statutory offices of Land Officer, Registrar of Companies, Official Receiver, Official Trustee and Official Solicitor. The Registrar General's De- partment is divided into three main divisions. The Land Division operates the Land Registry under the provisions of the Land Registration Ordinance and also provides a

THE LEGAL SYSTEM

conveyancing and legal advisory service to the government in all its land transactions. The Companies Division comprises the Companies Registry and the Money Lenders Registry. The Companies Registry administers the provisions of the Companies Ordinance, while the Money Lenders Registry regulates money lenders under the Money Lenders Ordinance. The Insolvency Division provides an insolvency service to the private sector as trustee in bankruptcy and liquidator in companies winding-up.

The Registrar General is also an ex-officio member of the Standing Committee on Company Law Reform, and represents the Financial Secretary as an ex-officio member of the Council of the Hong Kong Society of Accountants.

Director of Intellectual Property

The Director of Intellectual Property was established on July 2, 1990, as a statutory office by the Director of Intellectual Property (Establishment) Ordinance, to take over from the Registrar General the statutory offices of Registrar of Trade Marks and Registrar of Patents. The Intellectual Property Department includes the Trade Marks and Patents Registries which provide and administer a system of trade mark and patents registration and protection under the provisions of the Trade Marks Ordinance and Registration of Patents Ordinance. In addition, the department is responsible for other forms of in- tellectual property protection and will serve as a focal point for further development of Hong Kong's intellectual property regime.

Legal Aid

A comprehensive system of legal aid has been developed in Hong Kong over the years to ensure that justice is made available to as many persons as possible who are unable to bear the cost of protecting their lawful rights or their freedom. It is administered by the Legal Aid Department and provides legal representation in both civil and criminal cases which are heard in District Courts, the High Court, Court of Appeal and appeals to the Judicial Committee of the Privy Council in London. Such aid is available to any person in Hong Kong, resident or non-resident, who is able to satisfy the Director of Legal Aid on financial eligibility and justification for legal action. In addition, the Law Society of Hong Kong operates the Law Society Legal Advice and Duty Lawyer Schemes which provide free legal advice and free legal representation to defendants in certain criminal cases heard in the Magistrates' Courts and Juvenile Courts of Hong Kong, which are areas not covered by the Legal Aid Department. All aspects of legal welfare are funded by the Hong Kong Government.

Civil Legal Aid

The financial limits in both civil and criminal cases undertaken by the Legal Aid Department are the same. At present, persons who have a disposable monthly income of not more than $2,200, and a disposable capital of not more than $15,000, are financially eligible. Disposable income and capital are arrived at after 'allowances', including rent, 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. 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 and in recovering the judgement debt thereafter.

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THE LEGAL SYSTEM

A wide range of civil legal proceedings is available under legal aid, including proceedings in the District Courts, High Court, Court of Appeal and Appeals to the Judicial Com- mittee of the Privy Council in London.

Traffic accident claims, landlord and tenant disputes, claims in respect of industrial accidents and employees' compensation, immigration matters, breach of contract, pro- fessional negligence and every branch of family law are included in the civil aid scheme. Admiralty, bankruptcy and companies winding-up proceedings are also undertaken, the majority of which deal among other things with employees' wages and severance pay. The Legal Aid Department maintains its own litigation units undertaking personal injury litigation, family law and workers' wage claims, together with various sections specialising in enforcement of judgements for damages and legal costs, application for the grant of letters of administration in fatal cases and preparation of itemised bills of costs, all of which provide a support service for those cases assigned to private practitioners and in-house lawyers.

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

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 1990-91 was $63 million in civil cases. In 1990, 16 631 applications were received and 5 687 granted. A sum of $130 million was recovered for the aided persons. If a legally-aided person in civil litigation is successful and legal costs are recovered in the proceedings, any contribution he may have paid may be refunded to him. In unsuccessful litigation, the liability for costs of a legally-aided person is limited to the amount of contribution, if any, paid by him.

   There is a progressive rise in the divorce rate in Hong Kong and an independent counselling agency is provided by the Hong Kong Catholic Marriage Advisory Council whereby applicants for legal aid in matrimonial cases may have counselling with a view to reconciliation or conciliation. This scheme, funded by the Royal Hong Kong Jockey Club, is in operation in the Legal Aid Department's Kowloon Branch Office.

In October 1984, the Supplementary Legal Aid Scheme was established. This scheme provides legal assistance to those persons whose financial resources exceed the financial capacity limits which are set under the existing civil aid scheme, but are not sufficient to meet the high costs of conducting litigation on a private basis. It is available for claims in the High Court and for certain claims in the District Court for damages for death and personal injuries.

This supplementary scheme enables an applicant with financial resources exceeding $120,000 per annum but not exceeding $280,000 to apply.

   A successful litigant under the supplementary scheme pays back a proportion of the damages he recovers into the scheme's fund to assist litigants in future litigation. The scheme was initially funded with an interest-bearing loan from the Government Lotteries Fund and is administered by the Director of Legal Aid. The percentage deducted from damages ranges from 10 per cent to 12.5 per cent depending on the amount recovered and whether the case is settled prior to the trial of the action.

The total estimated expenditure in 1990-91 was $2 million. During 1990, 128 applica- tions were received of which 81 were granted.

THE LEGAL SYSTEM

Legal Aid in Criminal Cases

     Legal aid as provided by the Legal Aid Department is also available for criminal proceedings in the District Courts, High Court, Court of Appeal and the Judicial Committee of the Privy Council, for representation at proceedings in the Magistrates' Courts where the prosecution is seeking committal of a defendant to the High Court for trial and for assistance in preparing petitions for clemency to the Governor in Council. The majority of accused persons in proceedings in these courts are legally-aided.

For High Court criminal trials, legal aid is invariably given, subject to financial eligibility, because of the costs involved, the severity of the charge and the gravity of possible sentence. It can also be given to conduct pleas in mitigation of sentence. For appeals against conviction for murder, whether or not there are grounds of appeal, the granting of legal aid is mandatory so as to ensure that all relevant matters are placed before the court by the appellant's legal representative. For all other criminal appeals, including appeals from decisions of the magistrates, legal aid will be given subject to financial eligibility only if the Director of Legal Aid is satisfied there are arguable grounds of appeal. A person refused legal aid in 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 for 1990-91 was $77 million in criminal cases. During 1990, 5 234 applications were received and a total of 2 748 were granted.

The department has its headquarters at Queensway Government Offices on Hong Kong Island and a branch office in Kowloon. The establishment comprises 388 persons of whom 59 are professional lawyers and 119 are law clerks who are para-legal personnel. Training for law clerks is provided by the professional officers. From time to time, officers at all levels attend job-related training courses provided by the Civil Service Training Division. The department also participates in the training programme for articled clerks whose articles are with members of the other legal service departments.

Legal Advice and Duty Lawyer Schemes

The Law Society Legal Advice and Duty Lawyer Schemes administered by the Law Society with the full support of the Bar Association comprise three schemes providing free legal representation, legal advice and legal information for people in Hong Kong. The day to day operation of the schemes is overseen by a management and administration committee, members of which are representatives nominated by the Law Society and the Bar Asso- ciation. The committee meets once a month. The government funds the entire operation of the schemes and the subvention in 1990-91 was over $25 million.

The Duty Lawyer Scheme provides free legal representation to those who are charged with one of nine specified offences and are brought before the magistrates' courts. The nine specified offences are membership of a triad society, loitering, unlawful possession, going 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 addition, the Duty Lawyer service is available to all juvenile offenders, whether they are appearing before a Juvenile or Magistrates' Court, except those charged with extremely minor offences. There are 587 remunerated lawyers (barristers and solicitors) on the Duty Lawyer Panel. In 1990, 13 104 defendants facing 19 203 charges received preliminary advice and representation at trial.

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THE LEGAL SYSTEM

  The Legal Advice Scheme provides free advice to people who cannot afford to consult private lawyers. The scheme operates eight advice centres at Sha Tin, Tsuen Wan, Wan Chai, Eastern, Yau Ma Tei, Kwun Tong, Mong Kok and Wong Tai Sin District Offices. Each centre opens once a week in the evening. Members of the public can make appointments to see the volunteer lawyers through one of the 120 referral agencies which include all District Offices, Caritas Services Centres and many other volunteer agencies. Generally, clients can see a lawyer within 14 days. However, in genuinely urgent cases, early appointments can be arranged. There are 359 lawyers (barristers and solicitors) on the Advice Lawyer Panel. Some 3 702 people are advised each year.

The Tel-law Scheme was introduced in March 1984. It provides taped legal information by telephone. Each taped message lasts 2.5 minutes and is available in both English and Chinese. There are over 65 tapes available. The main purpose of the service is to provide basic information on the legal aspects of everyday problems, and to encourage people who have such problems to use the Free Legal Advice Scheme. The tapes are updated as necessary, and cover matrimonial, landlord and tenant, criminal, financial, employment and some administrative law. Tapes are added when new subject is identified as being of interest to the public. During the year, Tel-law handled 50 328 calls.

IMPLEMENTATION

OF THE SINO-BRITISH

JOINT

DECLARATION

DISCUSSIONS on the implementation of the Sino-British Joint Declaration on the Question of Hong Kong continued. Good progress has been made in the work of both the Sino- British Joint Liaison Group (JLG) and the Sino-British Land Commission. The year was also marked by the promulgation in April of the Basic Law for the Hong Kong Special Administrative Region (HKSAR) of the People's Republic of China.

The Sino-British Joint Liaison Group

The Joint Liaison Group was established in accordance with the provisions of Annex II to the Joint Declaration. Its functions are to conduct consultations on the implementation of the Joint Declaration, to discuss matters relating to the smooth transfer of government in 1997, and to exchange information and conduct consultations on such subjects as may be agreed by the two sides. As the JLG is an organ for liaison, and not an organ of power, it plays no part in the administration of Hong Kong.

      The JLG comprises a senior representative and four other members on each side. Supporting staff and experts also attend meetings as appropriate. In accordance with the provisions in Annex II to the Joint Declaration, the JLG has taken Hong Kong as its principal base since July 1, 1988. Both sides have established their offices here and their respective senior representatives are now resident in Hong Kong. This has facilitated closer liaison which has led to more rapid progress on many issues. The JLG will, never- theless, continue to hold plenary sessions at least once every year in Beijing, London and Hong Kong.

During the year, three plenary sessions were held and expert talks on a number of items also took place. Progress in several important areas has been possible due to the desire by both sides to work closely together to find solutions which are in the best overall interests of Hong Kong and its future.

Defence and Public Order

Both in the JLG itself and in talks at expert level between JLG meetings, discussions on the implementation of the Joint Declaration in respect of defence and the maintenance of public order were carried out. Information and views on a wide range of practical matters relating to this issue were exchanged. Such exchanges are necessary for developing an understanding between the two sides to pave the way for a smooth transfer of defence responsibilities from Britain to China in 1997.

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52

Court of Final Appeal

The Joint Declaration provides for the establishment of a Court of Final Appeal in the Hong Kong Special Administrative Region. During 1990, the two sides continued their discussions on the detailed arrangements for setting up such a court in Hong Kong before 1997.

Localisation of Laws

A large number of United Kingdom enactments currently apply to Hong Kong. These will cease to have legal effect in Hong Kong after 1997. It will, therefore, be necessary to 'localise' them before 1997, that is, replace them by legislation enacted in Hong Kong which will survive 1997. At the eighth meeting of the JLG held in November 1987, the two sides agreed on the general principles for consultation on the localisation of United Kingdom enactments, since when considerable progress has been made. The first piece of localised legislation, the Supreme Court (Amendment) Ordinance dealing with Admiralty Jurisdiction in respect of civil proceedings, was enacted in February 1989. Four sets of Merchant Shipping (Safety) Regulations were localised in May 1989, two bills relating to merchant shipping were passed in May 1990 and a bill dealing with Admiralty Jurisdiction in criminal cases was passed in November 1990.

Air Service Agreements

In August 1990, Hong Kong signed a new Air Service Agreement (ASA) with France, separate from that between the latter and the United Kingdom. This brings to five the number of ASAS concluded so far by Hong Kong. The other four are ASAs with the Netherlands, Switzerland, Canada and Brunei respectively. Negotiations with a number of other aviation partners are at an advanced stage.

Sub-group on International Rights and Obligations

The Sub-group on International Rights and Obligations, set up by the Joint Liaison Group, was formally established in July 1986 to examine and discuss matters relating to the continued application of international rights and obligations affecting Hong Kong and to report its conclusions to the JLG. The sub-group, which is based in Hong Kong, consists of three experts on each side, supplemented as necessary by other experts and supporting staff.

  The considerable number of treaties and international obligations relevant to Hong Kong which the sub-group will have to examine individually indicates that its work will take a number of years to complete. So far the sub-group has held nine meetings and has made good progress. In 1990, expert exchanges in the sub-group led to agreement between the two sides at the JLG on Hong Kong's continued participation after 1997 in the International Telecommunications Satellite Organisation and International Maritime Satellite Organisation. The JLG has now reached agreement on Hong Kong's continued participation in 26 international organisations. The sub-group has also begun discussions on the continued application after 1997 of multilateral treaties currently applying to Hong Kong.

Land Commission

The Sino-British Land Commission was established in 1985 in accordance with Annex IIJ to the Joint Declaration. Its function is to conduct consultations on the implementation of

IMPLEMENTATION OF THE SINO-BRITISH JOINT DECLARATION

the provisions of Annex III on land leases and other related matters. The commission is composed of three officials on each side and meetings are held in Hong Kong.

      During 1990, the Land Commission held three formal meetings. Agreement was reached on the 1990-91 Land Disposal Programme to make available about 134 hectares of land, including 50 hectares for Container Terminal No. 8, during the financial year. In addition, the commission agreed that a further five hectares of land could be released in the course of the year, should there be a demand for it.

      Under the terms of paragraph 6 of Annex III to the Joint Declaration, premium income obtained by the Hong Kong Government from land transactions is, after deduction of the cost of land production, to be shared equally between the Hong Kong Government and the future Hong Kong Special Administrative Region Government. The average cost of land production is adjusted by the commission annually, and for the 1990-91 financial year the agreed figure was $2,170 per square metre. The Hong Kong Government's share of premium income is put into the Capital Works Reserve Fund for financing public works and land development. The future SAR Government's share is held in a trust fund, called the Hong Kong Special Administrative Region Government Land Fund, established by the Chinese side of the Land Commission. The fund is managed under the direction and advice of an investment committee, which includes among its members prominent bankers in Hong Kong, as well as a monetary expert from the Hong Kong Government. Over $19,629 million, representing the future SAR Government's share of premium income for the period May 27, 1985 to September 30, 1990, has been transferred to the fund.

The Basic Law

The Joint Declaration provides that the basic policies of the People's Republic of China regarding Hong Kong will be stipulated in a Basic Law of the Hong Kong Special Administrative Region by the Chinese National People's Congress (NPC). After delibera- tion and consultation extending over five years, the Basic Law was promulgated in April 1990 by the NPC, together with the designs for the flag and emblem of the HKSAR. The Basic Law will be the constitutional document for the HKSAR. It ensures that the HKSAR will enjoy a high degree of autonomy, and guarantees the continuation of the existing systems and way of life.

       The drafting of the Basic Law was undertaken by the Basic Law Drafting Committee (BLDC), appointed by the Chinese Government in 1985 and comprising both mainland and Hong Kong members. The Basic Law Consultative Committee (BLCC) of exclu- sive Hong Kong membership was tasked with canvassing views on the document in Hong Kong.

The first draft of the Basic Law was published in April 1988 for a five-month consultation exercise conducted by the BLCC. The second draft, reflecting many of the views expressed during the first consultation period, was published in February 1989. Consultation on the second draft ended in October 1989.

The five Special Groups of the BLDC met in December 1989 to draw up the final draft in the light of the outcome of the second consultation round. The final draft was endorsed by the BLDC in its last plenary session in February 1990 and submitted for enactment to the NPC in April 1990.

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5

THE ECONOMY

OVERALL growth of the Hong Kong economy remained modest in 1990, continuing the cyclical slow-down in 1989. This was mainly attributable to more moderate overseas demand for Hong Kong's products and constraints on the supply side following rapid growth during the period 1986 to 1988. While there was an improvement in economic activity in the latter part of 1990, the outbreak of the Gulf crisis in August gave rise to some uncertainty in the economic environment. Moreover, the higher prices of oil products added to the local inflationary pressures.

The performance of domestic exports was weak during most of 1990. Signs of pick-up, however, emerged in the fourth quarter, recording an increase of about six per cent over a year earlier. This was able to offset the decrease in domestic exports by three per cent in the first three quarters of 1990, so that for the year as a whole, domestic exports showed virtually no change in real terms. In 1989, there was zero growth in domestic exports. Re-exports, on the other hand, continued to be robust, with increases in real terms of 10 per cent in the first half and 22 per cent in the second half of 1990. The corresponding growth rate for 1989 as a whole was 19 per cent. Domestic demand, including consumption and investment, improved in the second half of 1990, following a sluggish performance in the first half. Reflecting these developments, the gross domestic product (GDP) grew by 2.4 per cent in real terms in 1990. The corresponding growth rates in 1988 and 1989 were 7.9 per cent and 2.3 per cent. J

The labour market remained generally tight during 1990, even though the un- employment and underemployment rates were, on average, marginally higher in 1990 than in 1989. The situation was somewhat tighter in the fourth quarter, when the seasonally adjusted unemployment rate and the underemployment rate were 1.4 per cent and 0.8 per cent respectively. The corresponding figures for the fourth quarter of 1989 were 1.3 per cent and 0.8 per cent.

Labour resources continued to shift from manufacturing to services, in line with the development of Hong Kong into a more service-oriented economy. Reflecting this, employment in the manufacturing sector continued to decrease, while employment in the service sectors showed a further increase in 1990.

Labour incomes continued to rise. Payroll per person engaged in the various major economic sectors rose further both in money terms and in real terms. Taking the first three quarters of 1990 together, the number of vacancies in most sectors was smaller than in the same period in 1989.

THE ECONOMY

The rate of consumer price inflation remained high in 1990. The Consumer Price Index (A) was on average 9.8 per cent higher in 1990 than in 1989. The corresponding rate of increase in this Index was 7.5 per cent in 1988 and 10.1 per cent in 1989. The additional inflationary pressures arising from the oil price hike since August became more apparent towards the end of the year.

Statistical data is at Appendices 7-11.

Structure and Development of the Economy

Because of limited natural resources, Hong Kong has to depend on imports for virtually all its requirements, including food and other consumer goods, raw materials, capital goods, fuel and even water. It must, therefore, export on a sufficient scale to generate 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 1990 the total value of visible trade (comprising domestic exports, re-exports and imports) amounted to 235 per cent of the GDP. If the value of imports and exports of services is also included, this ratio becomes 268 per cent. Between 1980 and 1990, Hong Kong's domestic exports grew at an average annual rate of eight per cent in real terms, which was roughly twice the growth rate of world trade. The corresponding average annual increase was 23 per cent for re-exports and 13 per cent for imports. With a gross value of $1,285 billion in overall visible trade in 1990, Hong Kong ranks high among the world's trading economies.

Contributions of the Various Economic Sectors

The relative importance of the various economic sectors can be assessed in terms of their contributions to the GDP and to total employment.

Primary production (comprising agriculture and fishery, mining and quarrying) is small in terms of its contributions to employment and to the GDP.

Within secondary production (comprising manufacturing; the supply of electricity, gas and water; and construction), manufacturing accounts for the largest share in terms of both the GDP and employment. The contribution of the manufacturing sector to the GDP declined steadily from 31 per cent in 1970 to 21 per cent in 1982. It then increased to 23 per cent in 1983, and to 24 per cent in 1984, before stabilising at around 22 per cent during the period 1985 to 1987. However, it fell to 20 per cent in 1988, and further to about 18 per cent in 1989, reflecting partly the slow-down in export growth and partly the continued expansion of the service sectors. The share of the construction sector in the GDP increased from four per cent in 1970 to eight per cent in 1981. It then declined to seven per cent in 1982 and six per cent in 1983, before settling at about five per cent during the period 1984 to 1989.

The contribution of the tertiary services sectors as a whole (comprising the wholesale, retail and import/export trades, restaurants and hotels; transport, storage and commu- nications; finance, insurance, real estate and business services; and community, social and personal services) to the GDP increased from 60 per cent in 1970 to 65 per cent in 1982. It fell to around 62 to 64 per cent during the period 1983 to 1986, before rising to 67 per cent in 1988 and 1989.

      With regard to employment, the most notable change since the early 1970s is that, whereas the manufacturing sector still takes up a significant proportion of the employed workforce, its share has been on a continuous decline, from 47 per cent in 1971 to 41 per

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cent in 1981, and further to 28 per cent in 1990. On the other hand, the share of the tertiary service sectors as a whole in total employment increased from 41 per cent in 1971 to 47 per cent in 1981, and further to 62 per cent in 1990.

The Manufacturing Sector

Although Hong Kong's domestic exports are still concentrated in a number of major product groups, there has been continuous upgrading of quality and diversification of items within these groups. The pressure of protectionism and growing competition from other economies have resulted in local manufacturers intensifying their efforts to diversify, in respect not only of products but also of markets. It is estimated that about 80 per cent of Hong Kong's manufacturing output is eventually exported.

Manufacturing firms in Hong Kong must be flexible and adaptable in order to cope with the frequent changes in demand patterns and to maintain their external competitiveness. The existence of a large number of small establishments providing an extensive local sub-contracting system has greatly facilitated the necessary shifts in production and has helped to increase the flexibility of the manufacturing sector. Moreover, increasing use has been made of the outward processing facilities in China for handling the relatively labour-intensive production processes. Because of the limited amount of usable land, Hong Kong's manufacturing industries are generally those which can operate successfully in multi-storey factory buildings. This, in practice, implies concentration in the production of light manufactures.

  Over the past 30 years, many industries have emerged and grown, the most notable being plastics and electronics. The textiles and clothing industries remain prominent, however. Other developing industries include fabricated metal products, electrical appliances, watches and clocks, toys, jewellery, and printing and publishing.

During the period 1973 to 1988, value of net output by the manufacturing sector grew at an average annual rate of 16 per cent, while manufacturing employment grew at an average annual rate of only one per cent. There was a significant secular improvement in labour productivity, even though part of the increase in the value of net output was accounted for by increased prices.

Within the manufacturing sector, the most significant change occurred in the textiles industry. The share of this industry in the net output of manufacturing declined from 27 per cent in 1973 to 16 per cent in 1988, and its share in manufacturing employment from 21 per cent to 14 per cent. Offsetting this decline was the expansion of the clothing, electrical appliances and electronics, and watches and clocks industries. Between 1973 and 1988, their shares in the net output of manufacturing increased from 20 per cent to 21 per cent, from nine per cent to 15 per cent, and from one per cent to four per cent respectively, while their shares in manufacturing employment increased from 26 per cent to 29 per cent, from 11 per cent to 14 per cent, and from one per cent to three per cent respectively.

Domestic exports in 1990 consisted principally of wearing apparel and clothing accessories (32 per cent of the total value), electronics (26 per cent), watches and clocks (eight per cent), textiles (seven per cent), plastic products (four per cent), metal products (two per cent) and electrical household appliances (one per cent). In terms of the share in the total value of domestic exports, the most significant change over the past 10 years was the decline in the relative importance of clothing, from 36 per cent in 1979 to 32 per cent in 1990. This decline was offset by increases in the relative importance of such commodities as

THE ECONOMY

telecommunications and sound recording and reproducing equipment, electrical machinery and appliances, and office machines and data processing equipment. The combined share of these three commodity groups in the total value of domestic exports rose from 16 per cent in 1979 to 22 per cent in 1990.

      Market diversification is the combined result of the initiatives taken by local manufacturers and exporters, and promotion efforts financed by the government. Since the late 1950s, the United States has been the largest market for Hong Kong's domestic exports, in place of the United Kingdom. Gradually, the share of domestic exports going to such countries as Germany, Japan, Canada and Australia, and to the South-east Asian economies has also increased. In recent years, China has become the second-largest market for Hong Kong's domestic exports. In addition, Hong Kong has diversified into other new markets, including countries in the Middle East, Eastern Europe, Latin America and Africa.

The Service Sectors

Over the past decades, the rapid growth in external trade has not only enabled Hong Kong to build up a strong manufacturing base, it has also provided the underlying conditions for the service sectors to flourish and diversify. Of particular note was the rapid growth and development in finance and business services, including banking, insurance, real estate and a wide range of other professional services.

The significance of entrepôt trade re-emerged in the late 1970s as China adopted open-door economic policies to facilitate its modernisation programmes. Rapid economic growth in the Asia-Pacific region over the past decade provided an added stimulus. Hong Kong, helped by its strategic location and well-established transport and communications network, was in a favourable position to take advantage of these opportunities. Trading and other economic links between Hong Kong and the region generally, and China in particular, increased rapidly.

Over the years, Hong Kong has developed an efficient wholesale and retail network to cater for the growing consumption needs of a more affluent population. Supermarkets, large department stores and modern shopping centres have become increasingly popular. The rapid growth in tourism has reinforced this development. Restaurants and hotels have also experienced a substantial increase in business. Furthermore, with increased household incomes, there has been a growing demand for services of a better quality to meet the rising standard of living. Thus services in the community, social and recreational fields have also grown substantially.

Analysed by sectors, the contribution of the wholesale, retail and import/export trades, restaurants and hotels to the GDP varied between 19 and 21 per cent in 1970 to 1983, before rising to 24 per cent in 1989. The contribution of the transport, storage and communications sector to the GDP was stable at around seven to eight per cent, before rising to nine per cent in 1987 to 1989. The contribution of the finance, insurance, real estate and business services sector to the GDP experienced considerable fluctuation, however. It rose from 15 per cent in 1970 to 24 per cent in 1981, but fell to 16 per cent in 1984, mainly reflecting the slump in the property market. The contribution of this sector to the GDP then rose steadily, to 20 per cent in 1989.

      Within the service sectors, the most notable increase in employment was in the wholesale, retail and import/export trades, restaurants and hotels sector, with its share in

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the total employed workforce rising from 16 per cent in 1971 to 19 per cent in 1981 and further to 26 per cent in 1990. This was followed by finance, insurance, real estate and business services, with its employment share rising from three per cent in 1971 to five per cent in 1981 and further to eight per cent in 1990.

  Between 1980 and 1990, exports of services rose at an average annual rate of 10 per cent in real terms, while imports of services recorded a corresponding increase of 12 per cent. The major components of Hong Kong's trade in services are shipping, civil aviation, tourism and various financial services. The shares of transportation services in total exports and total imports of services were 45 and 35 per cent respectively in 1989. Travel services accounted for 39 per cent of the total value of exports of services and 44 per cent of the total value of imports of services. The corresponding shares for financial and banking services were seven per cent and four per cent respectively.

Increasing Economic Links between Hong Kong and China

 Since the adoption of open-door policies by China in late 1978, Hong Kong's economic relations with China have undergone rapid growth and development.

  Hong Kong and China are now each other's largest trading partner. În 1990, the total value of visible trade between Hong Kong and China amounted to $395 billion, representing an increase of 15 per cent over 1989. This growth rate was, however, significantly lower than the average annual increase of 35 per cent between 1979 and 1989. The slow-down in trade growth in 1990 was at least partly related to China's austerity programme.

  Apart from being the second largest market for Hong Kong's domestic exports (accounting for 21 per cent of the total) and the largest supplier of imports into Hong Kong (accounting for 37 per cent of the total), China is particularly important in Hong Kong's re-export trade. China is the largest market for, as well as the largest supplier of, Hong Kong's re-exports. More than 80 per cent of the goods re-exported through Hong Kong are destined for, or originated from China.

  In addition to trading in goods, Hong Kong also serves as an important services centre for China generally and South China in particular, including the provision of infrastructural facilities such as the port and airport, and institutional support such as financial and related business services. This is evidenced, among other things, by the increasing importance of Hong Kong as a centre for entrepôt, transhipment and other supporting activities involving China.

  Hong Kong has always been a convenient gateway to China for business and tourism. In 1990, 17 million trips to China were made by Hong Kong residents, and another 1.2 million trips to China were made by foreign visitors through Hong Kong. These represented increases of 10 per cent and 18 per cent respectively over 1989.

Besides visible and invisible trade, Hong Kong is also the most important source of external investment in China, accounting for about two-thirds of the total. While Hong Kong's direct investment in China has been concentrated in light manufacturing industries, investment in hotels and tourist-related facilities and in infrastructure has also been undertaken. As can be expected, Guangdong occupies a highly important position in this respect. It has been estimated that, in Guangdong Province alone, between 1.5 and two million people are working for Hong Kong companies either through joint ventures or in tasks commissioned by Hong Kong companies in the form of outward processing

THE ECONOMY

    arrangements and compensation trade. Thus, besides constituting an important source of demand for goods and services produced by Hong Kong, China is equally important as a source of supply of goods and productive capacity to Hong Kong.

On the other hand, China has also invested heavily in Hong Kong, particularly since 1978. Its investment in Hong Kong ranges from traditional activities like banking, import/export, wholesale/retail, and transportation and warehousing to newer areas like property development, financial services, manufacturing and infrastructural projects.

     Increasing financial links between Hong Kong and China are reflected by the rapid growth in financial transactions with China. While the Bank of China Group is the second-largest banking group in Hong Kong, after the Hongkong Bank Group, the latter group is the best-represented foreign bank in China, followed by the Standard Chartered Bank.

Hong Kong is a major funding centre for China. Most of China's fund-raising activities in Hong Kong have taken the form of syndicated loans. Although in some cases Hong Kong is not the direct source of funds, it serves as a window through which China can have access to external borrowing. These loans are mostly for financing China's own economic development, but some of them are used by PRC-interest companies in Hong Kong to finance their investment activities in Hong Kong or abroad. In addition to syndicated loans, PRC-interest banks and other enterprises have been making greater use of negotiable certificates of deposit (from banks only), bonds, commercial paper, and share issuance (through shell companies acquired for the purpose) to raise funds.

     The prospects for further development of economic links between Hong Kong and China continue to be good, given the firm foundation established over the years and the continuation of open-door policies and economic reforms in China.

The Economy in 1990

Overall growth of the economy remained modest in 1990. The performance of domestic exports was weak, but there was a noticeable pick-up in the fourth quarter. Re-exports were robust throughout 1990, providing the main impetus to overall export growth. In the domestic sector, both consumption and investment demand improved in the second half of 1990, following a sluggish performance in the first half.

     Notwithstanding the slow-down in growth since mid-1989, the economy was still facing capacity constraints following the rapid growth in 1986 to 1988. The labour market remained generally tight in 1990. Taking the first three quarters of 1990 together, the number of vacancies in most sectors was, however, smaller than in the same period in 1989. The rate of inflation was high in 1990. Apart from the inflationary pressures which were domestically generated, higher prices of oil products arising from the Gulf crisis added to these pressures since early August.

     According to preliminary estimates, the growth rate in real terms of the GDP was 2.4 per cent in 1990, following increases of 7.9 per cent in 1988 and 2.3 per cent in 1989.

External Trade

The value of domestic exports rose by one per cent in 1990 over 1989. After discounting for an estimated one per cent increase in prices, domestic exports showed virtually no change in real terms. This compared with an increase of three per cent in value terms or zero growth in real terms in 1989. On a year-on-year comparison, domestic exports fell by five per cent, two per cent and two per cent respectively in real terms in the first three quarters

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of 1990, before recovering to an increase of about six per cent in the fourth quarter. The performance of domestic exports should, however, be viewed against the continued rapid increase in re-exports of China origin. A significant part of these re-exports were in fact products of outward processing arrangements made between Hong Kong companies and manufacturing entities in China.

Domestic exports to the various major markets showed a mixed trend in 1990. Compared with 1989, domestic exports to China rose by eight per cent in real terms. Over 70 per cent of these domestic exports were related to outward processing arrangements commissioned by Hong Kong manufacturers. Domestic exports to Germany rose by eleven per cent in real terms, supported by the robust economic performance in this market. However, following several years of rapid growth, domestic exports to Japan fell by eight per cent in real terms. Domestic exports to the United States and the United Kingdom also declined, by 10 per cent and nine per cent respectively in real terms. Slow economic growth and slack domestic demand in these two markets led to the decreases. While the United States remained the largest market for Hong Kong's domestic exports, its share continued to fall, to 29 per cent in 1990, from 33 per cent in 1988 and 32 per cent in 1989.

Analysed by major product categories, domestic exports of clothing and textiles in 1990 fell in real terms by one per cent and two per cent respectively from 1989. Their shares in the total value of domestic exports in 1990 were 32 per cent and seven per cent respectively. Domestic exports of radios showed the largest decline (by 30 per cent in real terms), followed by domestic exports of electrical appliances (by 22 per cent) and of metal manufactures (by 16 per cent). On the other hand, domestic exports of electronic components and of watches and clocks grew in real terms by 18 per cent and 12 per cent respectively.

In 1990, re-exports showed a marked increase over 1989, by 20 per cent in value terms or about 16 per cent in real terms. This compared with an increase of 26 per cent in value terms, or 19 per cent in real terms, recorded in 1989.

China remained the largest source of, as well as the largest market for, Hong Kong's re-exports. Re-exports of China origin continued to rise rapidly in 1990. Re-exports to China rebounded significantly in the second half of the year, following a decline in the first half. Meanwhile, re-exports not related to China also grew significantly. The other major re-export markets were the United States, Japan, Germany, Taiwan and the Republic of Korea. The major suppliers of Hong Kong's re-exports, apart from China, were Japan, Taiwan, the United States and the Republic of Korea.

Analysed by end-use categories, Hong Kong's re-exports comprised mostly raw materials and semi-manufactures, and consumer goods, which represented 31 per cent and 53 per cent respectively of the total value of re-exports in 1990. Re-exports of footwear, textile fabrics, electrical machinery and appliances, clothing and radios showed more rapid increases than re-exports of other commodity items.

Imports grew by 14 per cent in value terms or by about 11 per cent in real terms in 1990, compared with corresponding increases of 13 per cent and nine per cent in 1989. The major sources of Hong Kong's imports were China, Japan, Taiwan, the United States, the Republic of Korea and Singapore. A large part of the growth in imports was attributable to the continued surge in re-export trade.

As regards retained imports, there was an increase of about seven per cent in real terms in 1990, with a decline of three per cent in the first half of the year and an increase of about

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THE ECONOMY

     16 per cent in the second half. Retained imports of foodstuffs, fuels, capital goods, and raw materials and semi-manufactures grew by about nine per cent, two per cent, five per cent and 13 per cent respectively in real terms in 1990 over 1989. Increases in the latter two categories were concentrated in the second half of the year. Reflecting slack consumer spending, retained imports of consumer goods fell by about six per cent in real terms. There was, however, a revival in these retained imports in the fourth quarter, indicating that the setback in consumer spending has largely bottomed out.

      As the value of total exports (domestic exports plus re-exports) was smaller than that of imports, a visible trade deficit of $2,656 million, equivalent to 0.4 per cent of the total value of imports, was recorded in 1990. If an estimate of the imports of gold for industrial and commercial use was included, the deficit would have been $5,326 million. This compared with a surplus of $7,728 million (or $5,221 million after a similar adjustment for gold imports) recorded in 1989. As the prices of imports increased at a slower rate than those of total exports in 1990, there was a small improvement in the terms of trade.

Domestic Demand

     Domestic demand grew by six per cent in real terms in 1990, following virtually zero growth in 1989. The growth rate in real terms of private consumption expenditure was four per cent in 1990, having increased by three per cent in 1989. Government consumption expenditure showed a higher growth rate, by eight per cent in real terms in 1990. The corresponding growth rate in 1989 was six per cent. Investment demand, measured in terms of gross domestic fixed capital formation, grew by six per cent in real terms in 1990, having increased by one per cent in 1989. Among its main components, expenditure on building and construction rose by eight per cent in real terms in 1990, while expenditure on plant and machinery was four per cent higher.

The Labour Market

     The labour market remained generally tight, although the demand for labour in some sectors, like manufacturing and construction, was less intense in 1990 than in 1989. The unemployment and underemployment rates were still low by historical standards, although they were, on average, marginally higher in 1990 than in 1989. However, there was some tightening in the labour market situation in the fourth quarter. The seasonally adjusted unemployment rate was 1.4 per cent and the underemployment rate was 0.8 per cent. They were, respectively, 0.3 and 0.2 of a percentage point lower than in the preceding quarter.

Between September 1989 and September 1990, manufacturing employment decreased by nine per cent to 730 200, while employment in the service sectors as a whole increased by eight per cent to 2.7 million. Labour resources thus continued to shift from manufacturing to services. Among the service sectors, employment in finance, insurance, real estate and business services increased by ten per cent; in the wholesale, retail and import/export trades by eight per cent; in restaurants and hotels by six per cent; and in water transport, air transport and services allied to transport by six per cent in September 1990 over a year earlier. Employment on building and construction (including civil engineering) sites increased by five per cent. For the building and construction industry as a whole, employment (covering both site workers and non-site workers) showed little change. In line with the weak performance of domestic exports, vacancies in manufacturing decreased by 18 per cent from September 1989 to 36 200 in September 1990. Vacancies in the service sectors as a whole also declined by five per cent to 51 200.

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Local manufacturing output, as measured by the index of industrial production, decreased by two per cent in the first three quarters of 1990 from the same period in 1989. This compared with an increase of one per cent in 1989 over 1988. The rate of decline in manufacturing output was smaller than in manufacturing employment. Thus there was still an improvement in labour productivity in the manufacturing sector. This was attributable partly to the marked increase in investment in plant and machinery over the past few years, and partly to relocation of the more labour-intensive production processes to China.

   The generally tight conditions in the labour market boosted labour incomes. Com- paring September 1990 with September 1989, earnings in the manufacturing sector and in most of the service sectors, in terms of payroll per person engaged, showed further in- creases both in money terms and in real terms. Among the various sectors, earnings in the wholesale, retail and import/export trades rose by 21 per cent in money terms or 11 per cent in real terms; those in finance, insurance, real estate and business services, in the manufacturing sector, and in transport, storage and communications by 13 per cent in money terms or three per cent in real terms, and those in restaurants and hotels by 12 per cent in money terms or two per cent in real terms. In the building and construction sector, wage rates continued to increase significantly in 1990, albeit at a less rapid rate than in 1989. The increase averaged about 16 per cent in money terms, or six per cent in real terms, over a year earlier.

The Property Market

Having revived considerably since late July 1989, the property market showed some consolidation in the first half of 1990 before picking up again in the second half. Performance of the various sub-sectors was mixed, however. There was a strong underlying demand for small to medium-sized residential flats. Response to the pre-completion sales of flats in this size range was generally favourable. As a result, prices and rentals for these increased significantly during 1990. Demand for large flats was generally moderate, but in some areas it picked up in the latter part of the year. Demand for shopping space held up well in 1990, with prices and rentals in the more popular locations showing some increases. As regards office space, there was a downward adjustment in prices and rentals, largely due to an abundant supply from new developments. This adjustment was larger for office accommodation in secondary locations. The market for industrial premises was relatively quiet during the year, in line with the slow-down in manufacturing production, and prices and rentals remained generally soft.

Response to the various government land auctions conducted in 1990 was generally in line with market expectations. Developers appeared to be more cautious about investing in industrial sites, but were still optimistic in regard to residential sites.

Inflation

The rate of consumer price inflation, as measured by the Consumer Price Index (A), rose by an average of 9.8 per cent in 1990. This compared with an increase of 10.1 per cent in 1989. Most of the inflationary pressures were domestically generated, as evidenced among other things by the significant increases in wages and salaries during the year. There were some easing in the inflation rate up to the second quarter of the year, in line with the slow economic growth, but the oil price hike since August and pick-up in economic activity gave rise to additional inflationary pressures. As a result, the inflation rate edged up again towards end-1990.

THE ECONOMY

Among the various components of the CPI(A), the prices of alcoholic drinks and tobacco, transport and vehicles, services, and fuel and light recorded faster increases than the others. For these four components, the rates of increase were 17 per cent, 13 per cent, 13 per cent and 11 per cent respectively in 1990 over 1989. Taken together, they accounted for 32 per cent of the overall increase in the CPI(A).

Economic Policy and Public Finances

Economic Policy

     Economic policy in Hong Kong is to a large extent dictated, and constrained, by the special circumstances of the economy. Owing to its small and open nature, the economy is vulnerable to external factors, and government actions designed to offset unfavour- able external influences are of limited effectiveness. Moreover, the government considers that, except where social considerations are overriding, the allocation of resources in the economy is best left to market forces with minimal government intervention in the private sector.

This basically free-enterprise, market-disciplined system has contributed to Hong Kong's economic success. The relatively simple tax structure with low tax rates by world standards provides a good incentive for workers to work and for entrepreneurs to invest. Both workers and entrepreneurs are highly motivated. The primary role of the government is to provide the necessary infrastructure and a sound legal and administrative framework conducive to economic growth and prosperity.

Structure of Government Accounts

     In accounting terms, the public sector is taken to include the Hong Kong Government itself, the Housing Authority and Urban and Regional Councils. Government grants and subventions to institutions in the private or quasi-public sectors are included but expenditure by organisations in which the government has only equity, such as the Mass Transit Railway and Kowloon-Canton Railway Corporations, is not included.

The government controls its finances through a series of fund accounts. The General Revenue Account is the main account for day-to-day departmental expenditure and revenue collection. Four other funds exist mainly to finance capital investment and expenditure and to make loans. They are the Capital Works Reserve Fund, Capital Investment Fund, Loan Fund and Lotteries Fund. The Capital Investment Fund and the Loan Fund were established on April 1, 1990, for purposes of financing government's capital investments and loan schemes and, in this connection, assuming the functions of the Development Loan Fund, Mass Transit Fund and Student Loan Fund which were closed on the same date in accordance with the Resolutions passed by the Legislative Council under Section 29 of the Public Finance Ordinance.

The Capital Works Reserve Fund finances the Public Works Programme, land acquisitions, capital subventions, and major systems and equipment items. On May 27, 1985, when the Sino-British Joint Declaration came into effect, the fund was restructured to enable the premium income obtained from land transactions to be accounted for in accordance with the arrangements in Annex III to the Joint Declaration. The income of the fund is derived mainly from premia and transfers from the General Revenue Account.

The Capital Investment Fund is used to finance the government's capital investments in public bodies which are not part of the government structure itself, such as equity injection

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in the Mass Transit Railway Corporation and capital investment in the Hong Kong Housing Authority. Its income is derived mainly from interest and dividends on in- vestments, disposal of investments, repayments of loans, and transfers from the General Revenue Account.

   The Loan Fund is used to finance schemes of government loans such as student loans and housing loans. Transfers are made from the General Revenue Account to enable the fund to meet its commitments. The other main sources of income are interest and dividends on loans and investments and loan repayments.

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

Management of the Budget

The government manages its finances against the background of a rolling five-year Medium Range Forecast of expenditure and revenue. This models the consolidated financial position of the General Revenue Account and of all the funds except the Lotteries Fund.

The most important principle underlying the government's management of public expenditure is that the growth rate of public sector expenditure should over a period be close to that of gross domestic product.

The Budget presented by the Financial Secretary to the Legislative Council each year is developed against the background of the Medium Range Forecast to ensure that full regard is given to these principles and to longer-term trends in the economy.

Public Sector Expenditure

  Consolidated public sector expenditure in 1989-90 was $81.9 billion. The government itself accounted for $67.8 billion excluding grants to the two municipal councils, equity injections in the Mass Transit Railway Corporation and the Housing Authority, and debt repayments. The growth rate of consolidated public sector expenditure over the preceding year was 26.5 per cent in nominal terms or 10.8 per cent in real terms. Some $25.9 billion or 31.6 per cent of the consolidated public sector expenditure in 1989-90 was of a capital nature. An analysis of expenditure by function is at Appendix 8.

The growth rate of consolidated public sector expenditure is compared with the rate of economic growth at Appendix 9. Consolidated public sector expenditure has been around 15 to 16 per cent of the gross domestic product since 1985-6.

Total government revenue in 1989-90 was $82.4 billion. The consolidated surplus of $11.1 billion, comprised $4.7 billion on the General Revenue Account and $6.4 billion in the other funds. Details of revenue by source and of expenditure by component for 1989-90 and the original estimates for 1990-91 are at Appendix 10.

The draft Estimates of Expenditure on the General Revenue Account are presented by the Financial Secretary to the Legislative Council when he delivers his annual Budget Speech. In the Appropriation Bill introduced into the Legislative Council at the same time, the administration seeks appropriation of the total estimated expenditure on the General Revenue Account.

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

THE ECONOMY

With the exception of only four years (1974-5, 1982-3, 1983-4 and 1984-5) in the past 20 years, the General Revenue Account has shown à surplus of income over expenditure at the end of each year. The accumulated net surpluses on the General Revenue Account form the government's fiscal reserves. These secure the government's contingent liabilities and ensure that it is able to cope with any short-term fluctuations in expenditure relative to

revenue.

The Urban Council and Regional Council, which operate through the Urban Services Department and Regional Services Department respectively, are financially autonomous. They draw up their own budgets and expenditure priorities. The expenditures of the two councils are financed mainly from a fixed percentage of the rates from property in the Urban Council area (Hong Kong, Kowloon and New Kowloon) and in the Regional Council area (New Territories). Additional income derives from fees and charges for the services the councils provide.

The government has agreed to provide a grant of $273.6 million per annum to the Regional Council for three years from 1988-9 to 1990-91 to enable the council to finance all new projects in its capital works programme.

The Housing Authority, operating through the Housing Department, is also financially autonomous. Its income is derived mainly from rents. If the authority's cash flow is inadequate to meet the construction costs of new estates, it may request an injection of capital by the government. The authority is provided with land on concessionary terms for the construction of public rental housing. Part of the authority's recurrent expenditure, for such activities as clearances and squatter control, is financed from the General Revenue Account. The authority is also responsible for carrying out a programme of squatter area improvements which are funded from the Capital Works Reserve Fund.

Revenue Sources

Duties are levied on six groups of commodities - hydrocarbon oils, alcoholic liquor, methyl alcohol, tobacco, non-alcoholic beverages and cosmetics. The Customs and Excise Department is responsible for collecting and protecting duty revenue. The Dutiable Commodities Ordinance imposes controls on the import, export, manufacture, sale and storage of dutiable items. In 1989-90, $4,628 million was collected in duties, compared with $4,173 million in 1988-9.

     Specific duty rates on alcoholic liquors range from $1.60 a litre on cider and perry to $57 a litre on brandy. In addition, duty is payable at the rate of 35 per cent of the c.i.f. value of spirits, champagne and other sparkling wines, and 20 per cent of the c.i.f. value of wines. On tobacco, duties range from $60 a kilogram on Chinese-prepared tobacco to $240 per 1 000 cigarettes. On motor and aircraft fuels the duty is $3.58 a litre, and on diesel oil for road vehicles it is $1.78 a litre. Duty is levied on methyl alcohol at a rate of $5.39 a litre, and on non-alcoholic beverages at $60 a hectolitre. On cosmetics there is a duty at 25 per cent of the c.i.f. price of imported products and the wholesale price of locally-manufactured products.

More details on Revenue from Duties are at Appendix 11.

      Rates are a tax on the occupation of landed property. They are charged at a percentage of the rateable value of property, which is an estimate of the annual rent at which the property might reasonably be expected to let. The percentage charge is fixed annually by the Legislative Council. For 1990-91, the charge is seven and a half per cent.

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66

   In both the Urban Council and Regional Council areas, part of the rates charged is paid to the respective councils, the remainder being credited to the General Revenue Account. In 1989-90, the total net revenue from rates amounted to $5,377 million while the number of assessments increased from 1.04 million to over 1.1 million.

The current lists of rateable values, based on rental values as at October 1, 1986, came into force on April 1, 1988. With the commitment to conducting revaluations on three-year cycles, new valuation lists are scheduled to take effect on April 1, 1991. Between general revaluations, the lists are regularly updated when new premises are built and existing premises are altered or demolished.

   Rates are payable quarterly, in advance. Exemptions are few although the government generally provides financial assistance towards payment of rates to non-profit-making educational, charitable and welfare organisations if their premises are being run in accordance with approved guidelines. No refund of rates is allowed for vacant domestic properties but half the rates paid may be refunded in the case of unoccupied non-domestic properties.

   The Inland Revenue Department is responsible for the collection of betting duty, entertainments tax, estate duty, hotel accommodation tax, stamp duty, and earnings and profits tax.

   Betting duty is imposed on bets and on the proceeds of Mark Six lotteries. The rate of duty is 10.5 per cent or 17 per cent of the amount of the bet, depending on the type of bet placed, and 30 per cent on the proceeds of lotteries.

   Entertainments tax is imposed on prices of admission to cinemas and to race meetings at rates which vary with the admission prices. These average about nine per cent in the case of cinemas and 28 per cent in the case of race meetings.

   Estate duty is imposed on estates in Hong Kong. The rates of duty charged range from a minimum of six per cent on estates valued between $4 million and $4.5 million to a maximum of 18 per cent on estates valued in excess of $5 million. Estates valued at $4 million or less 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 are levied under the Inland Revenue Ordinance. In Hong Kong, persons liable to tax may be assessed on three separate and distinct sources of income, namely business profits, salaries, and income from property.

   Profits tax is charged only on net profits arising in Hong Kong, or derived from a trade, profession or business carried on in Hong Kong. Profits of unincorporated businesses are currently taxed at 15 per cent and profits of corporations are taxed at 16.5 per cent. Tax is payable on the actual profits for the year of assessment. Tax is paid initially on the basis of profits made in the year preceding the year of assessment and is subsequently adjusted according to profits actually made in the assessment year. Generally, all expenses incurred in the production of assessable profits are deductible. There is no withholding tax on dividends paid by corporations and dividends received from corporations are exempt from profits tax.

   Salaries tax is charged on emoluments arising in or derived from Hong Kong. The basis of assessment and method of payment are similar to the system for profits tax. Tax payable

THE ECONOMY

      is calculated on a sliding scale which progresses from two per cent to 21 per cent on the first seven segments of net income (that is, income after deduction of allowances) of $10,000 each and then to 25 per cent on the remaining net income. No one, however, pays more than 15 per cent of their total income. Earnings of husband and wife are reported and assessed separately. However, where either spouse has allowances that exceed his or her income, or when separate assessments result in an increase in salaries tax payable by the couple, they may elect to be assessed jointly.

       The owner of land or buildings in Hong Kong is charged property tax at the standard rate of 15 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 the profits tax and salaries tax applies. 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.

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 $900. Exemption from payment is granted where the business is small. 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, payable to the Protection of Wages on Insolvency Fund, is imposed on each business registration certificate issued to a business or its branch.

Science and Technology

As Hong Kong's industry, economy and society become more complex and sophisticated, there is a need to pay greater attention to the part that modern science and technology can play in furthering development. The government believes that the ability to adopt technological advances and new applications is critical to the prosperity of an international trading city such as Hong Kong.

To ensure that Hong Kong keeps up to date with rapid technological changes and that the best advice is obtained in this area, a Committee on Science and Technology has been appointed by the Governor. Its purpose is to seek out and develop new scientific and technological ideas which are of direct relevance or potential long-term benefit to Hong Kong. The committee's members are from the academic and business sectors as well as from government departments whose work involves a significant scientific and techno- logical content.

       The main emphasis of the committee's work has been on information technology and biotechnology. It has commissioned consultancy studies on Hong Kong's need for supercomputing facilities and the potential for a biotechnology industry in the territory and will soon be making recommendations to the Administration. The committee is also conducting a comparative study of the science and technology infrastructure in Hong Kong and neighbouring countries. The committee is concerned with the safe use of technology and has published a draft code of practice on laser safety. It is now reviewing controls on toxic substances, in particular in household products. It has plans for an International Technology Fair to strengthen Hong Kong's image in technology and is also concerned with stimulating interest in science and technology among young people.

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HONG KONG's financial sector comprises an integrated network of institutions and markets which, under various forms of regulation, provide a wide range of products and services to local and international customers and investors.

Financial Institutions

Since 1981, Hong Kong has maintained a three-tier system of deposit-taking institu- tions. Following legislation in January 1990, the categories of licensed and registered deposit-taking company have been replaced by restricted licence bank and deposit-taking company respectively. The changes were primarily designed to improve the status of licensed deposit-taking companies. The third category of authorised institution, that of licensed bank, has remained unchanged.

Restricted licence banks have a greater scope in the use of business descriptions than the licensed deposit-taking companies which they have replaced. They are able to use the word 'bank' in describing their business in promotional literature and advertisements but this must be qualified by adjectives such as 'restricted licence', 'merchant', or 'investment'. To avoid confusion with licensed banks, descriptions such as 'retail' or 'commercial' are not allowed. Overseas banks seeking authorisation as restricted licence banks may operate in branch or subsidiary form. If in branch form, they may use their registered name even if it includes the word 'bank' or a derivative, but in this case it must be qualified prominently by the words 'restricted licence bank' in immediate conjunction.

Banking licences are granted at the discretion of the Governor in Council, in accordance with the provisions of the Banking Ordinance. At present, in order to be considered for a banking licence, a local company (that is, a company incorporated in Hong Kong and predominantly beneficially owned by Hong Kong interests) must have a paid-up capital of at least $150 million, must 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 at least $2,500 million of assets. A bank incorporated outside Hong Kong wishing to apply for a banking licence is required to satisfy a separate set of criteria: it must have total assets (net of contra items) of at least US$14,000 million (unless it is of exceptionally high standing and unless banks from its country of incorporation are under-represented in Hong Kong), and its country of incorporation must exercise an adequate form of prudential supervision over banks and offer some acceptable form of reciprocity to banks from Hong Kong.

FINANCIAL AND MONETARY AFFAIRS

At the end of 1990, there were 166 licensed banks in Hong Kong, 30 of which were locally incorporated. They maintained a total of 1 399 offices in Hong Kong. In addition, there were 151 representative offices of foreign banks. The total deposit liabilities of all licensed banks to customers at the end of the year was $1,155 billion.

Only licensed banks may operate current or savings accounts. They may accept deposits of any size and any maturity from the public. The interest rate rules of the Hong Kong Association of Banks (of which all licensed banks are required, under their licensing conditions, 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 with a term to maturity of less than three months, for which banks may compete freely.

      Restricted licence bank status is granted at the discretion of the Financial Secretary. Companies are required to have a minimum issued and paid-up capital of $100 million, and to meet certain criteria regarding ownership, general standing and quality of management. If incorporated overseas, the applicants must also be subject to adequate supervision. 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 1990, there were 46 restricted licence banks and their total deposit liability to customers was $44 billion.

The authority to register deposit-taking companies rests with the Commissioner of Banking. 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, are more than 50 per cent owned by banks in Hong Kong or elsewhere. Deposit-taking companies are required to have a minimum paid-up capital of $25 million. They are restricted to taking deposits of not less than $100,000 with a term to maturity of at least three months. At the end of 1990, there were 191 deposit-taking companies, and their total deposit liability to customers was $32 billion.

       Apart from deposit-taking, conventional lending and foreign exchange dealing, banks and deposit-taking companies in Hong Kong are increasingly diversifying into other financial services, including securities business, fund management and the provision of investment advice.

      - Dealers in securities, investment advisers, commodity dealers and commodity-trading advisers and their representatives are required to be registered with the Securities and Futures Commission. To obtain registration, they must comply with the requirements (including the 'fit and proper' test) stipulated in the Securities Ordinance, the Commodities Trading Ordinance and the Securities and Futures Commission Ordinance. At the end of 1990, there were 8 415 registered persons. Of the 246 registered corporate securities dealers, 113 were from overseas. Of the 97 commodities dealers, 39 were from overseas.

       Only members of the Stock Exchange of Hong Kong Limited are permitted to trade on the Stock Exchange. At the end of 1990, the Stock Exchange had 688 corporate and individual members. Only shareholders who have applied for and been granted membership of the Hong Kong Futures Exchange Limited can trade on the Futures Exchange. At the end of 1990, the Futures Exchange had 77 members.

      Under the Insurance Companies Ordinance, insurance companies are authorised by the Insurance Authority to transact business in Hong Kong. At the end of 1990, there were 262 authorised insurance companies. Of these, 130 were overseas companies from 28 countries.

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Financial Markets

Hong Kong has a mature and active foreign exchange market, which forms an integral part of the corresponding global market. The link with other major overseas centres enables foreign exchange dealing to continue 24 hours a day around the globe. With an average daily turnover of about US$49 billion early in 1989, Hong Kong is among the largest markets in Asia, along with Tokyo and Singapore. Besides the Hong Kong dollar, most major currencies are actively traded in Hong Kong, including the US dollar, Deutschemark, Yen, Sterling, Swiss franc, Australian dollar and Canadian dollar. As a market in foreign exchange, Hong Kong is favoured by a host of factors such as a favourable time zone location, a large volume of trade and other external transactions, the presence of a large number of international banks with experience in foreign exchange transactions, the absence of exchange controls and a highly advanced telecommunica- tions system.

Equally well-established and active is the interbank money market, in which wholesale Hong Kong dollar deposits and foreign currency deposits (mainly in US dollars) are traded both among authorised institutions in Hong Kong, and between local and overseas institutions. This market is mainly for short-term money - with maturities ranging from overnight to six months for Hong Kong dollars and to 12 months for US dollars. The traditional lenders of Hong Kong dollars in the market tend to be the local banks, while the major borrowers are those foreign banks without a strong Hong Kong dollar deposit base.

    As an indication of the size of the market, at the end of 1990, interbank liabilities accounted for 37 per cent of the total Hong Kong dollar liabilities of the banking sector; the corresponding share for foreign currency interbank liabilities was 78 per cent.

   The capital market is an important source of finance for corporate borrowers. The two main types of negotiable debt instrument traded in the market are certificates of deposit issued by authorised institutions and commercial paper issued by other private sector companies. This market experienced a rapid expansion in the mid-1980s, gaining momentum from the global trend of securitisation of debt, the importation of innovative financial products (particularly interest rate swaps) and declines in interest rates during most of that period. Although the majority of issuers are locally-based institutions, a number of non-resident institutions have also tapped funds from Hong Kong's capital market. A notable example is the three issues of Hong Kong dollar bonds launched by the World Bank in 1989 and 1990. The launching of Exchange Fund Bills in March added a new dimension to the local capital market. The bills are available in minimum denominations of HK$500,000 and are issued on a discount basis by tender. Tenders are open to recognised dealers selected from institutions authorised under the Banking Ordinance. To promote secondary market activity, market makers have been appointed from among the recognised dealers. All 91-day bills are issued weekly and, starting in October, 182-day bills are issued fortnightly. At the end of 1990, outstanding issues of 91-day bills amounted to $6.2 billion and of 182-day bills to $1.3 billion.

The stock market provides another important source of capital for local enterprises. It attracts both local and overseas investors. At the end of 1990, 299 public companies, with a total market capitalisation of $650 billion, were listed on the Hong Kong Stock Exchange. This has made it the third largest stock market in Asia, after Japan and South Korea.

FINANCIAL AND MONETARY AFFAIRS

      The Hong Kong Futures Exchange offers contracts in sugar, soyabeans, gold, Hang Seng Index futures and interest rate futures. Trading in interest rate futures contracts commenced in February. These contracts provide a new hedging instrument against in- terest rate risk for three-month Hong Kong interbank offered rate.

       The Chinese Gold and Silver Exchange Society operates one of the largest gold bullion markets in the world. Gold traded through the society is of 99 per cent fineness, weighed in taels (one tael equals approximately 1.2 troy ounces) and quoted in Hong Kong dollars. Prices follow closely those in the other major gold markets in London, Zurich and New York.

      There is another active gold market in Hong Kong, in which the main participants are banks, major international bullion houses and gold trading companies. It is commonly known as the loco-London gold market, with prices quoted in US dollars per troy ounce of gold of 99.95 per cent fineness and with delivery in London. Trading in this market has expanded in recent years.

Regulation of the Financial Sector

The government has consistently worked towards providing a favourable environment in the financial sector, with sufficient regulation to ensure, as far as possible, sound business standards and confidence in the institutional framework, but without unnecessary im- pediments of a bureaucratic or fiscal nature.

       The authority for the prudential supervision of banks, restricted licence banks and deposit-taking companies, collectively called authorised institutions, is vested in the Commissioner of Banking. His authority is derived from the Banking Ordinance which replaced earlier Banking and Deposit-taking Companies Ordinances in 1986. The pro- visions of the ordinance relate to the regulation of banking business, particularly the business of taking deposits, and the supervision of authorised institutions, so as to provide a measure of protection to depositors and to promote the general stability and effective operation of the banking system.

       The Commissioner's Office obtains regular returns from and sends examination teams to the authorised institutions, including overseas branches of Hong Kong incorporated authorised institutions. 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 worldwide supervision of banking groups based in Hong Kong, are accepted and practised.

       The Securities and Futures Commission, which was established in May 1989 in response to the weaknesses in Hong Kong's financial markets at the time of the October 1987 world stock market crash, exercises prudential supervision of the securities, financial investment and commodities futures industry in Hong Kong. It administers the Securities and Futures Commission Ordinance, the Securities Ordinance, the Protection of Investors Ordinance, the Commodities Trading Ordinance, the Stock Exchanges Unification Ordinance, the Securities (Disclosure of Interests) Ordinance and the Securities (Insider Dealing) Ordinance.

       The Securities Ordinance and the Stock Exchanges Unification Ordinance, together with the Securities and Futures Commission Ordinance, provide a framework within which dealings in securities are conducted and the Stock Exchange operates, enabling trading in securities to be regulated. They require the registration of dealers, dealing partnerships,

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investment advisers and other intermediaries and provide for the investigation of suspected malpractice and the maintenance of a compensation fund to compensate clients of de- faulting brokers.

   The Protection of Investors Ordinance prohibits the use of fraudulent or reckless means to induce investors to buy or sell securities, or to induce them to take part in any investment arrangement in respect of property other than securities (the latter being controlled by the Securities Ordinance). It regulates the issue of publications related to such investments by prohibiting any advertisement inviting investors to invest without the advertisement first being submitted to the commission for authorisation.

The Commodities Trading Ordinance, together with the Securities and Futures Com- mission Ordinance, provides a regulatory framework within which the Futures Exchange operates and dealers, commodity trading advisers and representatives conduct their busi- ness. It includes provisions for the registration of dealers and their representatives and the maintenance of a compensation fund to compensate clients of defaulting commodity dealers.

The Office of the Commissioner of Insurance exercises prudential supervision of the insurance industry in Hong Kong. It administers the Insurance Companies Ordinance which brings all classes of insurance business under a comprehensive system of regulation and control by the Commissioner of Insurance (Insurance Authority). Conducting in- surance business in or from Hong Kong is restricted to authorised companies, to Lloyd's, and to certain underwriters approved by the Governor in Council. All new applications for authorisation are subject to careful scrutiny by the Insurance Authority to ensure that only insurers of good repute who meet all the criteria of the ordinance are admitted. The ordinance stipulates minimum share capital and solvency requirements for all authorised insurers and requires them to submit financial statements and other relevant information to the authority annually. It provides that any person who is not considered by the authority to be a fit and proper person to be associated with an authorised insurance company cannot acquire a position of influence in relation to such company. It also empowers the authority to intervene in the conduct of the business of insurance companies in certain circumstances. Where the authority has cause for concern, it may take remedial or precautionary measures to safeguard the interests of policy holders and claimants, in- cluding the limitation of premium income, the restriction of new business, the placing of assets in custody and petitioning for winding-up the company involved.

Self-regulatory measures to strengthen discipline in the insurance market have been formulated by the insurance industry after consultation with the government. The measures comprise the adoption by the insurance industry in 1989 of two Statements of Insurance Practice governing the writing of insurance contracts for long term and general insurance business, and the establishment in February 1990 of an Insurance Claims Complaints Bureau which provides an independent avenue for resolving claims disputes arising from personal insurance policies. Proposals for the self-regulation of insurance intermediaries (i.e. agents and brokers) are also under consideration. The self-regulatory system will benefit Hong Kong as a developing international insurance centre.

The Securities and Futures Commission

The Securities and Futures Commission (SFC) was established on May 1, 1989, following enactment of the Securities and Futures Commission Ordinance. The enactment of the

FINANCIAL AND MONETARY AFFAIRS

ordinance represented a first, important phase in the overhaul of securities legislation in Hong Kong and the implementation of some of the major recommendations made by the Securities Review Committee in May 1988.

        The ordinance transfers the functions of the former Securities Commission, the Commodities Trading Commission and the Office of the Commissioner for Securities and Commodities Trading to the SFC. It provides a general regulatory framework for the securities and futures industries, leaving certain elements to be provided by regulations, administrative procedures and guidelines developed by the commission. In its first year of operation, the SFC has taken steps to develop a detailed framework of securities regulation that brings Hong Kong in line with internationally-accepted standards of market reg- ulation and practice.

      The SFC was established as an autonomous statutory body outside the civil service. It has 10 directors, half executive and half non-executive. The Governor appoints the directors and may give policy directions to the commission. Each year the commission must present the Financial Secretary with a report and an audited statement of its accounts, which are laid before the Legislative Council.

      The SFC seeks advice on policy matters from its Advisory Committee, whose 12 independent members are appointed by the Governor and are broadly representative of market participants and relevant professions. Decisions of the SFC relating to matters concerning the registration of persons and intervention in their business are subject to appeal to the Securities and Futures Appeals Panel which is also appointed by the Governor.

       The SFC is funded largely by the market and partly by the government. Market contribution is in the form of fees and charges for specific services and functions performed (on a cost recovery basis), plus a statutory levy on transactions recorded on the Stock and Futures Exchanges. The annual budget is estimated at about $160 million. As of December 31, 1990, the SFC had a total of 232 staff members.

      The SFC has taken a lead in a comprehensive overhaul of securities and futures legislation. As part of this exercise, it has issued revised versions of the Code on Unit Trusts and Mutual Funds and the Code on Takeovers and Mergers for public con- sultation. A new Code on Investment-linked Assurance and Pooled Retirement Funds has also been issued, while the new Code on Immigration-linked Investment Schemes has been brought into effect. The SFC has also issued the Fit and Proper Criteria, which sets out guidelines indicating the manner in which the SFC administers the 'fit and proper' test applied to entities seeking registration as securities and futures brokers, dealers and advisers.

      A significant accomplishment during the year was the development of a more efficient, streamlined system for the authorisation of unit trusts and mutual funds. This improved system allowed the commission to clear the backlog of unit trusts for authorisation that existed prior to May 1989 and to reduce the authorisation time for such products from in excess of 12 months to an average of 22 days.

      The SFC has been encouraging the development of more efficient equity trading systems and a greater variety of securities and futures products. It has been working closely with the Hong Kong Securities Clearing Company in order to implement the proposed new, automated book-entry central clearing and settlement system, which should improve settlement efficiency, enhance risk management capability, save money and increase trading

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capacity. The SFC also worked with the Futures Exchange in the development of its new interest-rate contract based on the Hong Kong Interbank Offered Rate.

The SFC and the Stock Exchange have jointly recommended that listed companies be allowed to repurchase their own shares, and have established a regulatory framework to govern such purchases. They have also taken steps to develop the necessary systems for introducing short-selling, stock borrowing and lending, as well as new financial products such as traded options.

Two important components of the overhaul of Hong Kong's securities legislation are the Securities (Insider Dealing) Ordinance (1990) and the Securities (Disclosure of Interests) Ordinance. The Insider Dealing Bill was introduced in the Legislative Council in June 1989 and was passed on July 25, 1990. The ordinance provides much stiffer penalties for insider dealing than those previously applicable. The Securities (Disclosure of Interests) Ordinance was enacted in 1988 and will be brought into effect when decisions have been made concerning certain amendments at present under consideration. The ordinance requires that company shareholders with 10 per cent or more of the voting shares of a listed company disclose their interests and dealings publicly and that directors and executives disclose certain dealings.

Hong Kong as an International Financial Centre

The favourable geographical position of Hong Kong, which provides a bridge in the time gap between North America and Europe, together with strong links with China and other economies in the South-east Asian region as well as excellent communications with the rest of the world, have helped Hong Kong to develop into an important international financial centre. The absence of any restrictions on capital flows in and out the territory has also contributed to this.

   Foreign banks in Hong Kong tend to be the premier banks in their countries of incorporation and this is illustrated by the fact that 84 of the top 100 banks in the world in 1990 have operations in the territory. In addition, many merchant banks or investment banks of world standing operate in Hong Kong. A substantial proportion of the transactions in the banking sector are international in nature; over 50 per cent of the sector's aggregate assets and liabilities are external, spreading over more than 100 countries. The financial markets, particularly in foreign exchange and gold, form an integral part of the corresponding global markets. Moreover, Hong Kong serves as an important centre for the intermediation of international flows of savings and investment, particularly through the syndication of loans and international fund management. International investors play a significant and increasing role in Hong Kong, and Hong Kong's investment overseas is also believed to be considerable.

The Financial Scene

  The linked exchange rate system and various measures adopted in recent years to strengthen monetary management have ensured a stable monetary environment for Hong Kong. Operating within the overriding constraint of maintaining exchange rate stability, the strategy underlying money market operations during most of 1990 was to maintain tightness in the interbank market to help restrain inflationary pressures. The higher local interest rates that were obtained had some favourable effects in curbing loan demand and stimulating Hong Kong dollar savings.

FINANCIAL AND MONETARY AFFAIRS

The outbreak of the Gulf crisis in August led to substantial volatility in stock markets worldwide, and Hong Kong was not immune. But the extent of the fall experienced in the local bourse was smaller than that in many stock markets overseas. Joining the international move to impose sanctions on Iraq, the Hong Kong government announced a freeze on Iraqi and Kuwaiti assets early in August.

      The exchange rate of the Hong Kong dollar remained stable against the US dollar during 1990, moving within a narrow range of HK$7.753 and HK$7.816 to US$1. Reflecting the movements of the US dollar against other major foreign currencies, the overall exchange value of the Hong Kong dollar, as measured by the effective exchange rate index, strengthened from 109.3 at the end of 1989 to around 111.3 in early April, but then eased to 105.0 in early November. On November 17, the Renminbi was devalued by 9.27 per cent against the Hong Kong dollar, leading to an increase of around 2.8 points in the effective exchange rate index. Along with a slight rebound of the US dollar in December, the index showed some further increase during the month and ended the year at 109.3.

       Under the linked exchange rate system, the movements of Hong Kong dollar interest rates generally follow those of US dollar interest rates. But to the extent that exchange rate stability would not be adversely affected, local money market conditions were deliberately kept tight to assist in alleviating the inflationary pressures. Under the influence of this tight monetary policy, local interbank interest rates edged up gradually in the early part of 1990, with the three-month rate rising from 8 9/16 per cent at the end of 1989 to 9 3/16 per cent at the end of March. Initiated by two small reductions in interbank liquidity (as mea- sured by the balance which The Hongkong and Shanghai Banking Corporation Limited maintains with the Exchange Fund) in March, and following two upward adjustments in the deposit rates set by the Hong Kong Association of Banks, local interbank interest rates firmed up more significantly early in April. The three-month rate rose to 9 11/16 per cent on April 2, 1 3/16 percentage points above the corresponding US dollar interest rate. The uptrend in local interest rates continued into early May, with the three-month rate reaching a high of 10 1/16 per cent on May 1-2. However, in response to some easing in the US dollar interest rates local interbank interest rates began to soften from May. The interest rate gap, which was maintained at around one percentage point from early April, showed signs of narrowing from the middle of June. By mid-August, the interest rate gap was completely closed. Thereafter, local interbank rates fluctuated closely with US dollar interest rates, with the three-month rate closing the year at 7 15/16 per cent. Along with the decline in local interbank interest rates, the deposit rates set by the Hong Kong Association of Banks were adjusted downwards twice, in August and in October.

       While the general thrust of monetary policy was to continue the firm grip on interbank liquidity, the government refrained from reducing the balance in the second half of 1990, save for a small reduction early in July. This was to prevent a further strengthening of the Hong Kong dollar, which had stayed at a level marginally above the linked rate from early April. Besides, there were indications that the growth in domestic loan demand was slowing down significantly, partly as a result of the earlier increase in local interest rates and partly because of the moderation in general economic activity.

       For 1990 as a whole, total loans for use in Hong Kong (including those for trade financing) grew by 16.9 per cent. This represented a marked deceleration when set against a growth rate of 25.2 per cent in 1989. With the exception of residential mortgage loans and

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loans to wholesale and retail trade, all other major categories of loans recorded slower growth rates in 1990 than in 1989. Loans for use outside Hong Kong increased sub- stantially by 74.7 per cent during 1990, following a growth of 32.5 per cent in 1989. Contributing to this increase was the strong growth in Euro-yen loans booked in Hong Kong. During the year, loans to some other economies in the region, such as Thailand, probably also experienced some increases. The growth in loans to China, on the other hand, appeared to have slackened. Taken as a whole, total loans and advances extended by authorised institutions increased by 40.6 per cent during 1990, compared with a growth rate of 32.2 per cent during 1989.

In part reflecting the higher local interest rates (relative to US dollar interest rates) during most of the first seven months of 1990, the growth in Hong Kong dollar deposits (adjusted to include swap deposits) picked up considerably from the second quarter. Although deposit growth became more sluggish during the fourth quarter, the annual increase, at 15.4 per cent was still higher than the growth rate of nominal gross domestic product. Foreign currency deposits rose by 27.7 per cent in 1990, after an increase of 22.4 per cent in 1989. Of these, US dollar and non-US dollar foreign currency deposits grew by 12.6 per cent and 41.1 per cent respectively during 1990. A considerable proportion of the increase in foreign currency deposits was believed to be attributable to offshore deposits, given the role of Hong Kong as an international financial centre. Taken together, total customer deposits (in all currencies) grew by 22.2 per cent during 1990, higher than the growth rate of 19.2 per cent during 1989. The relative share of Hong Kong dollar deposits to total deposits stood at 42.2 per cent at end-1990, compared with 44.7 per cent at end-1989.

The rising trend in the Hong Kong dollar loan to deposit ratio observed in the last two years continued into the early part of 1990. This phenomenon reflected a diversification in the sources of funds for the rapid increase in Hong Kong dollar loans. One such source was the increased Hong Kong dollar liabilities to overseas banks. With a marked deceleration in credit expansion during the year and with the picking up in Hong Kong dollar deposits between May and August, the Hong Kong dollar loan to deposit ratio fell from a peak of 121.8 per cent at end-April to 111.8 per cent at end-August before edging up again to 116.7 per cent at end-year. At end-1989, the ratio was 116.5 per cent.

Turning to the financial markets, the local capital market was invigorated with the launch of the Exchange Fund bills programme in March. The three-month bills issued during the year were oversubscribed by 1.33 to 5.71 times. To further develop the market, six-month bills began to be issued in late October. Trading of the bills in the secondary market has picked up significantly since June, helped by the quoting of two-way prices by market makers. Moreover, as market makers are allowed to go short for individual issues of the bills (provided that the overall position is not short), there has been active trading of bills of different maturities to reflect market expectations of interest rate movements. From June to December, the average daily turnover in the bills (including the three-month and six-month bills) was around $1.9 billion.

A total of 82 new issues of negotiable certificates of deposit were launched during 1990. The total funds raised amounted to around $50.4 billion, which was significantly higher than the $10 billion raised in 1989. The issue of a handful of large-sized foreign- currency-denominated negotiable certificates of deposit by non-resident banks accounted for part of this increase. In respect of the new issues of Hong Kong dollar-denominated

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     negotiable certificates of deposit, 48 issues were arranged on fixed-rate terms and the remaining 13 issues on floating-rate terms. The latter generally assumed a longer maturity, ranging from five to ten years. At the end of 1990, the value of all outstanding Hong Kong dollar-denominated negotiable certificates of deposit amounted to $28 billion, compared to $26 billion at end-1989. Of these $28 billion, 47 per cent were held outside the local banking sector.

      Of the nine new issues of commercial paper reported to the Securities and Futures Commission during 1990, eight were denominated in Hong Kong dollars. Following a successful issue in May 1989, the World Bank launched a second issue of Hong Kong dollar bonds in February and a third issue in December 1990. The total issue size was $500 million and $600 million, respectively.

In the local stock market, share prices continued their uptrend in the first seven months of 1990, with the Hang Seng Index achieving a larger gain than many share indices overseas. Institutional investors were reported to have stepped up their activity in the Hong Kong market in view of the lacklustre performance of the other bourses in the region. Some of the Hong Kong stocks were viewed as good buys, as their prices were com- paratively low after the oversold situation in mid-1989. From 2837 at end-1989, the Hang Seng Index rose steadily to 3 560 on July 23, the highest level recorded after the October 1987 crash. However, the outbreak of the Gulf crisis in August reversed the bullish sentiment and the Hang Seng Index declined to 2 761 at end-September, before recover- ing to 3025 at the end of the year. Cushioned by the generally favourable market fundamentals, the extent of the decline experienced in the local stock market was smaller than those in many bourses overseas.

Turnover in the local stock market picked up considerably during the first seven months of 1990, along with rising share prices. Reflecting the cautious sentiment brought about by the Gulf crisis, turnover became more moderate from August. For 1990 as a whole, the average daily turnover stood at $1.2 billion, the same as the level recorded in 1989. The total volume of funds raised in the local stock market amounted to $9.7 billion in 1990, compared with $8.5 billion raised in 1989. Most of these funds were tapped through right issues (55 per cent) or private placements (27 per cent). The 13 new share issues together accounted for 18 per cent of the funds raised.

Trading in Hang Seng Index futures became more active in the latter part of 1990, particularly in the month of August. This probably reflected the increasing use of futures contracts as an instrument for hedging against volatility in the stock market. But for 1990 as a whole, the average daily turnover, at 951 contracts, was marginally lower than the 959 contracts in 1989. With a view to boosting activity in the Hang Seng Index futures market, trading cost was cut through a reduction in levy from mid-October. The Futures Exchange also reached an agreement with the Stock Exchange to allow members of the latter exchange to acquire membership at a reduced cost.

A new type of financial futures contract based on three-month Hong Kong dollar interbank offered rate (HIBOR) commenced trading in the Futures Exchange on February 7, 1990. Daily turnover was maintained at above 1 000 contracts during the first month of trading. But the market became rather quiet after mid-March, when the grace period during which statutory levies were waived terminated. From April to December, the average daily turnover dropped to 126 contracts. The moderate trading was to some extent related to the relative stability in interest rates. During the year, the three-month HIBOR

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moved within a rather narrow range of 7.75 per cent and 10.06 per cent. Besides, some authorised institutions appeared to have a preference for the more conventional hedging instruments such as forward rate agreement.

   Trading in commodity futures remained moderate in 1990. Total turnover in soyabeans, sugar and gold futures amounted to 105 993 lots (30 000 kg each), 109 145 lots (112 000 lb each) and 992 lots (100 troy ounces each) respectively.

The prices of loco-London gold eased from US$403 per troy ounce at the end of 1989 to a low of US$347 in mid-June. Due to the Gulf crisis the price of gold was driven up to a high of US$406 in late September. At the end of the year, it closed at US$392 per troy ounce. The gold price on the Chinese Gold and Silver Exchange Society showed similar movements and fluctuated between $3,234 and $3,902 per tael during the year. Turnover on the latter exchange totalled 47 million taels in 1990, compared with 51 million taels in 1989.

The number of unit trusts and mutual funds approved by the Securities and Futures Commission rose from 787 at end-1989 to 936 at end-1990. Enhanced efficiency in processing applications was a positive factor in encouraging international financial institutions to set up funds in Hong Kong. Along with the increase in number, there was a diversification of funds into different investment products and into different geographical markets. An interesting example was a new fund for investing in East Europe.

In line with the move by the international community to impose a freeze on certain assets of Kuwait and Iraq, the Hong Kong (Control of Gold, Securities, Payments and Credits: Kuwait and Republic of Iraq) Order 1990 was made on August 6. Except with permission granted by or on behalf of the Financial Secretary, no direction given by or on behalf of the governments or residents of Iraq or Kuwait may be carried out insofar as the direction requires a person in Hong Kong to make any payment or to part with any gold or securities. In general, this freeze has not created much disturbance to the operation of financial institutions in Hong Kong.

Monetary Policy

  Unlike most major economies, Hong Kong has no central bank. Most of the functions which might be performed by one such as prudential supervision of financial institutions, managing official foreign exchange reserves, undertaking certain types of market opera- tions, holding the backing to the note issue and providing central banking services to the government - are carried out by different government offices within the Monetary Affairs Branch of the Government Secretariat.

   There is a linked exchange-rate system, which was introduced on October 17, 1983, after a period of much instability in the exchange rate of the Hong Kong dollar. In the system, certificates of indebtedness (CIs) issued by the Exchange Fund, which the two note-issuing banks are required to hold as cover for the issue of Hong Kong dollar notes, are issued and redeemed against payments in US dollars at a fixed exchange rate of HK$7.80 US$1. In practice, therefore, any increase in note circulation is matched by a US dollar payment to the Exchange Fund, and any decrease in note circulation is matched by a US dollar payment from the Exchange Fund. The two note-issuing banks in turn extend this fixed exchange rate to their note transactions with all other banks in Hong Kong. In the foreign exchange market, the exchange rate of the Hong Kong dollar continues to be determined by forces of supply and demand. However, the interplay of arbitrage and competition

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between banks ensures that the market exchange rate stays close to the rate of HK$7.80 to US$1 fixed for the CIS.

      With the adoption of the linked rate system, the exchange rate is no longer a variable in the economy's adjustment process. Interest rates, the money supply and the level of economic activity over time adjust automatically to balance of payments pressures. If there is an outflow of money, caused for example by a tendency for the balance of payments to be in deficit, there will be a contraction in the money supply and higher interest rates. These will, on the one hand, induce an inflow of funds to offset the original outflow arising from the balance of payments deficit and, on the other hand, reduce domestic demand, restrain imports and enhance export competitiveness, and thereby also contribute to restoring the external balance. Alternatively, if there is an inflow of money, caused for example by a tendency for the balance of payments to be in surplus, there will be an expansion in the money supply and lower interest rates. These will, on the one hand, induce an outflow of funds and, on the other hand, increase domestic demand and imports, and erode export competitiveness, again restoring the external imbalance.

       When there is a tendency for the Hong Kong dollar to weaken relative to the US dollar, Hong Kong dollar interest rates will rise relative to US dollar interest rates. They may rise to a level where the interest rate gap between the Hong Kong dollar and the US dollar is large enough to stem or reverse the outflow from the Hong Kong dollar. Similarly, when there is a tendency for the Hong Kong dollar to strengthen relative to the US dollar, Hong Kong dollar interest rates will fall relative to US dollar interest rates. They may fall to a level where the interest rate gap between the Hong Kong dollar and the US dollar is large enough to stem or reverse the inflow into the Hong Kong dollar. From the monetary policy point of view, it is sometimes desirable to expedite this adjustment process in order that the economy is not unduly disrupted by speculative flows of funds aimed at manipulating the value of the Hong Kong dollar. So that the interest rate gap is large enough to produce the corrective inflows or outflows, there should therefore ideally be no limit on how low or high interest rates can move.

       The lower limit for interest rates was eliminated when the Hong Kong Association of Banks, after consultation with the Financial Secretary, introduced in January 1988 revised interest rate rules whereby banks may impose deposit charges ('negative interest rates') on large Hong Kong dollar credit balances maintained by their customers, if the need arises. The purpose of the revised rules was to deter persistent speculation on a revaluation of the Hong Kong dollar which emerged in late 1987 and continued early in 1988. In practice, however, there has been no need to impose the deposit charges, as the mere threat of their imposition has been effective in deterring speculation.

       The upper limit for interest rates was removed in July 1988 when the Money Lenders Ordinance was amended to exempt all institutions authorised under the Banking Ordin- ance from the restriction in the ordinance on lending money at an effective interest rate exceeding 60 per cent per annum.

       To enable the government, through the use of the Exchange Fund, to exercise more effective influence over liquidity and interest rates in the interbank market and thus to assist it to maintain exchange rate stability within the framework of the linked exchange rate system, Accounting Arrangements were entered into in mid-July 1988 between the Exchange Fund and The Hongkong and Shanghai Banking Corporation Limited (HSBC) as the Management Bank of the Clearing House of the Hong Kong Association of Banks.

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Under these arrangements, HSBC maintains a Hong Kong dollar account with the Exchange Fund. The government uses the account, at its discretion, to effect settlement of its Hong Kong dollar transactions with HSBC or with other banks. HSBC is required to ensure that the net clearing balance (NCB) of the rest of the banking system does not exceed its balance in the account and that the NCB is not in debit. Otherwise it will have to pay interest to the Exchange Fund.

Consequently, the Exchange Fund effectively became the ultimate provider of liquidity in the interbank market, a role which until mid-July 1988 was performed by HSBC. Through its borrowing Hong Kong dollars in the interbank market, or selling foreign currencies for Hong Kong dollars in the foreign exchange market, the fund is able to reduce the supply of Hong Kong dollars and hence raise interest rates in the interbank market, thereby offsetting a weakening of the exchange rate of the Hong Kong dollar against the US dollar. Similarly, it may increase interbank liquidity and lower interest rates by taking action in the opposite direction, thereby offsetting a strengthening of the exchange rate.

   As well as these accounting arrangements between the fund and HSBC, the Treasury maintains a Hong Kong dollar account with the fund where money transferred from the General Revenue to the fund in return for interest bearing 'debt certificates' is accounted for. Through the issuance and redemption of debt certificates, the Exchange Fund has an additional tool to affect interbank liquidity.

Under these accounting arrangements, the government can also influence monetary conditions in the interbank market through its buying or selling of Hong Kong dollar financial assets of acceptable quality. For this purpose, the government has developed a programme for the issue of short-term paper for the account of the Exchange Fund (the so-called Exchange Fund bills). The bills are designed to complement the accounting arrangements by providing the Exchange Fund with an additional instrument for con- ducting money market operations.

The Exchange Fund

The Hong Kong Government's Exchange Fund was established by the Currency Ordinance of 1935 (later renamed the Exchange Fund Ordinance). Since its inception, the fund has held the backing to the note issue. In 1976, its role 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 foreign currency assets held in the government's General Revenue Account, being transferred to the fund. In both cases, the transfer was 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 debt certificates held by the Coinage Security Fund redeemed.

In 1976, the government began to transfer the fiscal reserves of its General Revenue Account (apart from the working balances) to the fund, against the issue of interest- bearing debt certificates. This arrangement was introduced for the safety, economy and advantage of these monies so as to avoid fiscal reserves having to bear the exchange risk arising from investments in foreign currency assets and to centralise the management of the government's financial assets. The fiscal reserves are not permanently appropriated for the use of the Exchange Fund. They are repaid to the General Revenue Account when they are required to be drawn from to meet the obligations of the general revenue.

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      Thus, the bulk of the government's financial assets are now with the fund, which holds its assets mainly in the form of bank deposits in certain foreign currencies and in Hong Kong dollars, and of marketable interest-bearing instruments in foreign currencies. The principal activity of the fund on a day-to-day basis is management of these assets. Its statutory role as defined in the Exchange Fund Ordinance is to influence the exchange value of the Hong Kong dollar and it intervenes when necessary in the local money market or foreign currency markets to maintain stability. The fund is managed by the Monetary Affairs Branch of the Government Secretariat under the direction of the Financial Secretary, who is advised by a committee comprising prominent members of the banking and financial community.

      Another function related to the Exchange Fund is the supply of notes and coins to the banking system. Apart from a very small fiduciary issue, which is backed by gilt-edged securities, currency notes in everyday circulation (currently of $10, $20, $50, $100, $500 and $1,000 denominations) may only be issued by The Hongkong and Shanghai Banking Corporation Limited and Standard Chartered Bank, against holdings of certificates of indebtedness issued by the fund.

These non-interest-bearing liabilities of the fund are issued or redeemed as the amount of notes in circulation rises or falls. The fund bears the costs of maintaining the note issue (apart from the proportion of the costs relating 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 and 10 cents denominations, and currency notes of one-cent denomination, are issued by the govern- ment. The total currency in circulation at the end of 1990, with details of its composition, is shown at Appendix 13.

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DOMESTIC exports slowed down with an increase of one per cent in 1990 as a result of slackening demand in some of Hong Kong's major markets and the general slowdown of the world economy. However, Hong Kong is rapidly developing into a service and sourcing centre for the region, as evidenced by a 20 per cent growth in re-exports.

Manufacturing industries remained an important component of the Hong Kong economy, accounting for 18.3 per cent of the gross domestic product in 1989. In 1990, the manufacturing sector employed 762 300 persons, or 28 per cent of total employment. It is estimated that up to 90 per cent of Hong Kong's manufacturing output is eventually exported.

   Overall, the major factors that contributed to Hong Kong's success as a leading manufacturing and commercial centre continued to work well. Among these were a simple tax structure and low tax rate, a versatile and industrious workforce, an aggressive and innovative managerial class, efficient transport facilities, a fine harbour, excellent international communications and the government's firm commitment to free trade and free enterprise.

   The lack of natural resources and the limited supply of land for industrial use have generally constrained diversification into capital and land-intensive industries. Light manufacturing industries, producing mainly consumer goods, predominate. Textiles, clothing, electronics, watches and clocks, and plastics are the major industries. These industries together accounted for 73 per cent of total domestic exports in 1990 and 65 per cent of Hong Kong's total manufacturing employment.

Clothing

'The clothing industry is the largest single sector and the largest export-earner in the manufacturing sector, The industry employed some 251 409 workers or about 34 per cent of the total manufacturing employment. In 1990, domestic exports of clothing were $72,165 million, accounting for 32 per cent of Hong Kong's total domestic exports.

Hong Kong has been one of the world's leading suppliers of clothing. The clothing industry continued to develop in response to the demand for high-quality and fashion goods, and is now producing a great variety of clothing items ranging from high fashionwear to simple clothing accessories. The industry faces keen competition in its export markets, and automation and mechanisation are becoming increasingly important. Many knitted garment manufacturers have installed computer-aided design equipment and

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     automatic and computer-aided knitting machinery. In the manufacture of other garments, computer-aided pattern grading and marker-making machines, plotters and automatic cutters are often found in the larger factories.

Textiles

     The textiles industry employed 68 975 persons, or nine per cent of total manufacturing employment! Domestic exports of textiles products in 1990 were valued at $16,906 million.

      The spinning and weaving industries produce mainly cotton yarns and fabrics for local users. The spinning sector operated 309 000 spindles producing about 204 million kilo- grams of yarns of all fibres in 1990. The weaving sector operated some 14 000 looms and produced about 818 million square metres of woven fabrics of various fibres and blends in 1990. More shuttleless looms, including multi-gripper, rapier and air jet looms, were used to replace conventional looms.

The knitting sector produces mainly cotton fabrics for local consumption, but other fabrics like wool/acrylic and nylon/acrylic blends are also manufactured. In recent years, the knitting sector has invested heavily in modern machinery, including flat-bed and circular knitting machines, which is often used in conjunction with computer-aided design equipment. The knitting sector exported 92 million kilograms of knitted fabrics in 1990, of which 22 per cent was of man-made fibres or blended cotton man-made fibres, and 72 per cent was of cotton.\

The textiles-finishing sector provides valuable support to the spinning, weaving and knitting sectors. Finishing processes include bleaching, dyeing, yarn texturising, multi- colour rolling, rotary and screen printing, sanforising, stone-wash, acid-wash, permanent press, polymerising, shearing, napping, sizing, glazing and schreinering. According to industry estimates, Hong Kong's bleaching, dyeing, printing and finishing factories are able to meet 70 per cent of the local clothing industry's requirements for textile fabrics.

Electronics

The industry employed 85 468 persons, accounting for 12 per cent of total manufacturing employment.Second largest export-earner, the electronics industry exported $58,467 million in 1990, an increase of five per cent over 1989. Major export items included audio systems, television sets, calculators, electronic toys and games, telephones, modems, photo- copying machines, micro-computers and computer peripherals, computer-aided design and testing equipment, printed circuit boards, liquid crystal displays, quartz crystals, semi- conductor devices and facsimile machines.]

Hong Kong is well-known for its great adaptability and quick response to changes in external demand. The industry has been competing in the international market as an assembly centre for electronic consumer products. Besides, there is much scope for further development to move up-market towards manufacture of more sophisticated products with higher technology and better quality, notably upper-end consumer electronics, telecom- munication equipment, data processing equipment, and computer-related items.

Watches and Clocks

Hong Kong is the world's largest exporter of watches and is also an important clock producer. The watches and clocks industry is the third largest export-earner and employ- ed 27 154 persons, representing four per cent of the total manufacturing employment.

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Domestic exports of watches and clocks were valued at $19,133 million in 1990, compared with $17,075 million in 1989.

The industry produces a wide variety of mechanical and electronic watches and clocks, dials, metal watch bands and cases. The success of the industry is to a large extent attributable to its ability to respond quickly to ever-changing market demand and con- sumer taste by producing reasonably-priced products of fashionable design.

Plastics

The plastics industry employed 53 137 persons or seven per cent of the total manufacturing employment. 'Domestic exports in 1990 amounted to $8,189 million, compared with $9,911 million in 1989. Plastic household articles and plastic toys together accounted for 40 per cent of domestic exports of plastic products in 1990. Other major export items included travel goods, handbags, footwear and plastic flowers. J

Other Industries

Other important light industries produce electrical appliances, metal products, jewellery, printing, photographic and optical goods, footwear and travel goods.

The linkage industry converts imported raw materials into semi-manufactures, com- ponents, parts, sub-assemblies and machines for sale to other manufactures either for assembly into finished products or for use in the production process. The production of high-quality parts and components improves the quality of Hong Kong's finished products. The growth of the linkage industry has assisted Hong Kong's manufacturing sector to transform from the simple assembly of imported parts and components into production of more sophisticated and higher quality products.

The manufacture of industrial machinery provides support to many other local manufacturing industries and contributes to Hong Kong's export trade. Of prime importance are blow-moulding, injection-moulding and extrusion machines; metal- processing machinery such as power presses, lathes, shapers, drilling machines and polish- ing machines; printing presses; textile knitting and warping machines, and electroplating equipment. About 65 per cent of industrial machinery produced is sold for local use. 1

Hong Kong's 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 and service oil rigs.

The aircraft engineering industry has a high international reputation and provides extensive maintenance and repair services. Facilities are available for the complete over- haul of airframes and engines for many types of aircraft.

Industry Development Board

The Industry Development Board, chaired by the Financial Secretary, is the government's advisory body on all major industry-related matters. Members of the board include prominent industrialists, government officials and representatives from the tertiary educa- tion sector and other trade and industry organisations.

Industrial Policies

The government's industrial policies aim at maintaining an infrastructure which enables manufacturing businesses to function efficiently, and providing services which enable

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industry to become more competitive through productivity growth, quality improvement and product innovation. The government encourages technology transfer through an in- ward investment promotion programme.

Industry Department

The Industry Department is responsible for the implementation of the government's industrial policies. It aims at improving the competitiveness of Hong Kong's manufac- turing industries by providing developmental and infrastructural support and promoting inward investment where this introduces new or improved products, designs, processes and management techniques into Hong Kong.

The department carries out techno-economic and market research studies on the major industries, and smaller-scale studies of other selected industries, to enable the government to assess where its support is needed. It also monitors the adequacy of Hong Kong's infrastructure, particularly the availability of land and trained manpower.

A range of quality support services has been established by the department to assist manufacturers in upgrading the quality of their products. The department's Standards and Calibration Laboratory, which has been accredited by the National Measurement Accreditation Service (NAMAS) of the United Kingdom, acts as the repository of Hong Kong's official measurement standards and provides a calibration service to manufacturers to enable them to meet measurement standards required for their products. The laboratory has measurement capabilities for a wide range of electrical frequencies, temperature and mechanical measurements. This capability is being expanded to include force, pressure, humidity and volume standards. A new laboratory is under construction and will provide a force calibration service for the construction industry by 1991.

        The Product Standards Information Bureau advises manufacturers on national and international documented standards, product regulations and legislation in Hong Kong's major overseas markets. To improve the storage and retrieval of product standards information, a computer-based system linked to overseas data bases has been established.

The department also operates the Hong Kong Laboratory Accreditation Scheme (HOKLAS) to upgrade the standard of testing and management of Hong Kong laboratories. HOKLAS identifies and accredits competent testing laboratories and has accredited 33 laboratories in various fields of testing. Further to the mutual recognition agreement signed with NAMAS in 1989, HOKLAS concluded in April 1990 similar agreements with the National Association of Testing Authorities of Australia and the American Association for Laboratory Accreditation of the United States. Under these agreements, endorsed test certificates issued by accredited laboratories and accompanying exports would be accepted in one another's territory without resorting to further testing.

To raise the level of quality awareness among local manufacturers, the department launched an ongoing Quality Awareness campaign in March 1990. The core of the campaign message is that Hong Kong needs 'quality' and 'quality' is profitable. The campaign message is being disseminated by a series of quality management seminars, workshops and a wide range of promotional and informative literature.

The Quality Awareness campaign is in fact part of a wider Quality Improvement Programme being implemented by the department to promote the increased adoption of quality assurance in manufacturing. Other components of the programme include strengthening the existing quality services and developing a quality management certifica-

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tion scheme. Under the certification scheme, government recognition will be conferred on companies which adopt quality management systems conforming with the international criteria ISO 9000. An independent subvented organisation, the Hong Kong Quality Assurance Agency was established to undertake the assessment work and to make recom- mendations to the government for the award of certification. Assessment of the initial group of factories will commence early in 1991.

On the advice of the Industry Development Board, the government gave approval in February 1990 for the establishment of a technology centre in Hong Kong to encourage the growth of technology-based firms. For this purpose, a site of 5 600 square metres at Yau Yat Tsuen was granted to the technology centre at nominal premium, and a grant of $250 million plus a loan of $188 million was approved to meet its construction and operating costs. The technology centre, to be known as the Hong Kong Industrial Technology Centre, will be established as a statutory corporation by the ordinance. Pending the enactment of the necessary legislation to establish the corporation, a Provisional Hong Kong Industrial Technology Centre Company Limited was formed in May 1990 to start planning and development of the technology centre. The technology centre will provide accommodation and services for established and fledgling technology- based companies. It will provide some services in 1991 and will be fully operational by 1993.

Competition in the 1990s will require Hong Kong to move progressively into more knowledge-based and capital-intensive manufacturing. The demand for trained manpower will become focused on developing the skills needed to apply technologies associated with productivity growth, quality management and creativity in design. In response to these new training requirements, the Industry Department has been actively involved in the implementation of a proposal which calls for the establishment of a new technologies training scheme, under which employers will be able to obtain financial assistance to send their technologists and managers for training in those new technologies which are strategically important for industrial and economic development. Training will take the form of overseas and local training courses as well as overseas working attachments. The scheme will be administered by the Vocational Training Council, with the Industry Department and the Hong Kong Productivity Council jointly providing a placement assistance service. The scheme will begin in 1991.

During the year, the department was actively involved in the implementation of environmental measures outlined in the White Paper on Pollution in Hong Kong. Issues of particular note were a consultancy study on a proposed chemical waste treatment facility, the Low Sulphur Fuel Oil Bill, a proposal to introduce unleaded petrol and the Water Pollution Control (Amendment) Bill. The department's primary role has been to facilitate contacts between government and the manufacturing industry. Using its knowledge of industry, the department has provided advice to the government on the measures proposed. At the same time, it has taken every opportunity to liaise closely with the various industrial organisations concerned to ensure that the manufacturers are aware of govern- ment's proposals.

In connection with the proposed Water Pollution Control Bill, a survey that was carried out by the department revealed that there is a significant demand from heavy water-using industries, including the textiles finishing and electroplating industries, for special accommodation which can provide the necessary infrastructure to enable manufacturers to

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meet the new environmental standards that are being proposed. Consideration is therefore being given to the feasibility of developing a special industrial estate for such purposes.

Additional land and accommodation was made available for industry. The government put up for sale by auction or tender 10 pieces of industrial land with a total area of 30 694 square metres, and about 600 000 square metres of flatted factory space were completed by private developers. The department also successfully steered the Hong Kong Industrial Estates Corporation's proposal for a third industrial estate through the various stages of approval by government. The construction contract for the new estate in Tseung Kwan O will be let early in 1991. In addition, to assist those industries requiring waterfront access, consultants have been appointed by the Project Manager, Tuen Mun, to study the feasi- bility of developing a site at Tuen Mun West. Preliminary findings of the study indicate that the proposed development could provide about 55 hectares of industrial sites.

There has been a significant growth of interest in recent years in investment by the large multinational chemical industries. A study on the development potential of the chemical processing industry in Hong Kong will be conducted to identify the necessary infra- structure to facilitate the industry's growth in Hong Kong. The study is expected to be completed in 1991.

      Recently, the Industrial Technology Committee of the Industry Development Board endorsed a proposal that a Science Park would be a logical addition to the technology infrastructure in Hong Kong. Action is now being taken by the department to acquire the necessary funds to undertake a full feasibility study.

      In April 1989, a permanent Industrial Extension Service was launched by the department to publicise the range of industrial support services available in Hong Kong in order to encourage manufacturers to make full use of them. Between April 4, 1989 and December 31, 1990, 658 factories were visited, resulting in 272 referrals being made to a variety of organisations and government departments.

In 1989, a major annual award scheme, The Governor's Award for Industry, was introduced to encourage originality, productivity and quality in Hong Kong's manu- facturing industries. In 1990, the Governor's Award was broadened to include new awards for productivity and quality, as well as the existing awards for product design and machinery and equipment design. Once again the response from manufacturers was excellent and the standard of entries very high. The leading organisers for the Governor's Award are the Federation of Hong Kong Industries, Chinese Manufacturers' Association of Hong Kong, Hong Kong Productivity Council and Industry Department.

Through Industrial Promotion Units of the Hong Kong economic and trade offices in New York, San Francisco, Tokyo, London and Brussels, and its own 'One-Stop' unit in Hong Kong, the Inward Investment Division of the department assisted overseas in- vestors in setting up manufacturing businesses in the territory. At the end of 1989, total overseas investment amounted to $29,734 million, compared with $26,172 million in the preceding year.

Many of these investments are from world leaders in their respective fields and have contributed significantly to upgrading the level of technology and expertise of the local manufacturing sector. All projects completed in 1990 were of a technology level comparable with or superior to that of the best Hong Kong companies. Notable examples included the manufacture of organic photo-conductive drums for photocopiers and the recycling of lubricating oil.

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Hong Kong Productivity Council

The Hong Kong Productivity Council (HKPC) was established by statute in 1967 to promote increased productivity of industry in Hong Kong. It is financed by an annual government subvention and by fees earned from its services. The council consists of a chairman and 22 members appointed by the Governor. Its membership is drawn from the management, labour, academic and professional fields and from related government departments.

HKPC has about 500 staff members with expertise in a wide range of disciplines. It provides a variety of training programmes, industrial and management consultancies and technical support services, using resources available in its 10 operational divisions: Computer Services, Electronics Services, Engineering Services, Chemical and Metallurgy, Manufacturing Engineering, Textiles and Apparel, Industrial Consultancy, Training, En- vironmental Management and Information Services.

Its facilities include two training centres (in Mong Kok and Central District); electronics data processing facilities; microprocessor application, industrial chemistry, metal finishing, heat treatment, die casting and environmental control laboratories; a computer-aided design service centre and computer-aided manufacturing workshop; a technical reference library, and an on-line information retrieval service.

In 1990, satisfactory progress was made in implementing the second-year plan of productivity-enhancement services endorsed by the Industry Development Board. The surface mount technology laboratory, radio frequency and digital communication lab- oratory and photo-chemical machining laboratory commenced operation with steady demand from industry for consultancy and practical training services. Installation and commissioning of the sheet metal processing laboratory were completed during the year.

There was sustained demand from industries for HKPC's consultancy and technical support services. In 1989-90, HKPC undertook over 1 000 consultancy projects, including feasibility studies, production management, new plant projects, environmental manage- ment, quality management, product development and industrial automation services.

HKPC organised some 517 training programmes for 13 220 participants, covering management and supervisory techniques, advanced programming and electronic data processing, and a range of technology programmes for various industries. There was sustained demand for in-plant courses and 77 programmes were organised during the year to meet the specific training needs of individual companies.

HKPC also ran exhibitions on automation technology, computer software and clothing technology. Ten overseas study missions were organised for local industrialists to gain first-hand information on the latest technology in various areas, including hot metal working, textiles dyeing and finishing, garment manufacturing automation, clothing manufacturing, electroplating, dies and moulds manufacturing, environmental manage- ment, tape automated bonding and on such management techniques as Total Quality Control and Just-In-Time.

In line with its long-term policy to corporatise and eventually privatise industry support activities, HKPC established in 1990 three wholly-owned subsidiary limited liability companies respectively engaged in the business of industrial design, provision of heat treatment services and demonstration of advanced clothing manufacturing technologies.

Construction of the council's new headquarters in Kowloon Tong was completed in late 1990.

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      HKPC is the government's agent for all matters concerning the Asian Productivity Organisation (APO). During the year, under the sponsorship of the APO, HKPC held two seminars on total quality and urban transport management.

Hong Kong Industrial Estates Corporation

The majority of Hong Kong's factories are accommodated in high-rise multi-storey industrial buildings. However, for industrial processes which are land and capital intensive, requiring heavy floor loadings, high ceilings or other specific features, the Hong Kong Industrial Estates Corporation offers an alternative. It can provide sites on its industrial estates to industries with a relatively high level of technology that cannot operate effectively in ordinary multi-storey factory buildings. Applicants are then able to design and construct factory premises to meet their own specific requirements.

      The corporation manages two industrial estates, in Tai Po and Yuen Long, and is developing a third estate in Tseung Kwan O through reclamation from the sea. Engineering design is already under way for the latter which will provide about 70 hectares of net usable land. Sites on this third estate are scheduled to be available in 1993.

About 120 sites on Tai Po and Yuen Long estates have been granted to applicants. The land premiums, based on cost, are $1,350 per square metre for Tai Po and $1,200 per square metre for Yuen Long. The Tai Po Industrial Estate, which has a total of 71 hectares of land, is nearly full, with only five hectares left, of which three hectares along the seafront are reserved for high-technology industries. The Yuen Long Industrial Estate provides 67 hectares of land, of which more than half has been granted.

      All three industrial estates are situated near new towns with populations ranging up to 400 000. This enables managers on the estates to tap a ready supply of manpower. The estates are fully serviced with roads, drains and sewers, electricity and water. They have good transport links to the urban area, the container terminal, the airport and the border with China. Companies on the estates and prospective applicants are expected to adopt modern environmental protection measures, and the corporation works closely with the Environmental Protection Department in offering advice to interested applicants.

      The corporation's estates are held under leases from the Hong Kong Government. In accordance with the Joint Declaration signed by the British and Chinese Governments, the leases have been extended from 1997 to 2047. The separate documentation necessary was signed by the Hong Kong Government and the corporation and became effective on May 4, 1990. The corporation is now starting the process of extending the term of the sub-leases granted to over 100 companies on the two estates case by case. All new sub-leases will now be granted up to 2047. These actions should remove uncertainty over the expiry of the leases in 1997 and help to instill confidence in potential investors. Plans can now be made by investors up to the middle of the next century.

"External Trade

Hong Kong is among the top 11 traders in the world. Overall, its trade is normally in balance and in 1990 it showed a small deficit. Its largest trading partner is China, followed by the United States and Japan. Its external trade was generally buoyant in 1990. Total merchandise trade amounted to $1,282,405 million, an increase of 13 per cent over 1989. Imports rose by 14 per cent to $642,530 million and re-exports by 20 per cent to $413,999 million while domestic exports increased by one per cent to $225,875 million. Domestic

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exports and re-exports together, valued at $639,874 million, registered an increase of 12 per cent.

Appendices 15 and 16 provide summary statistics of external trade.

Imports

Hong Kong is almost entirely dependent on imported resources to meet the needs of its population of 5.86 million and its diverse industries. In 1990, imports of raw materials and semi-manufactured goods totalled $248,690 million, representing 39 per cent of total imports. The principal items imported were transistors, diodes, semi-conductors and integ- rated circuits ($28,856 million); fabrics of man-made fibres ($27,450 million); plastic moulding materials ($20,176 million); watch and clock movements, cases and parts ($13,834 million); iron and steel ($11,559 million); and woven cotton fabrics ($11,493 million).

Consumer goods, valued at $247,748 million, constituted 39 per cent of total imports. The major consumer goods imported were: clothing ($54,563 million); radios, television receivers, gramophones, records, amplifiers and tape recorders ($32,387 million); baby carriages, toys, games and sporting goods ($17,585 million); footwear ($13,058 million); diamonds ($12,967 million); travel goods, handbags and similar containers ($12,673 million) and watches ($12,272 million).

Imports of capital goods amounted to $94,560 million, or 15 per cent of total imports. Imported capital goods consisted mainly of electrical machinery ($16,011 million), office machines ($10,072 million), transport equipment ($9,744 million), electronic components and parts for computers ($6,895 million) as well as parts for electric power machinery ($4,427 million).

Imports of foodstuffs were valued at $36,991 million, representing six per cent of total imports. The principal imported food items were fish and fish preparations ($8,264 million), fruit ($5,014 million), meat and meat preparations ($4,547 million) and vegetables ($3,896 million).

   Mineral fuels, lubricants and related materials, worth some $14,542 million were im- ported in 1990, representing two per cent of total imports.

China and Japan were principal suppliers of imports, providing 37 per cent and 16 per cent respectively of the total. China alone supplied 36 per cent of Hong Kong's imported foodstuffs. Taiwan ranked third, providing nine per cent, followed by the United States, the Republic of Korea, Singapore, Germany and the United Kingdom.

Exports

Clothing remained the largest component of domestic exports, valued at $72,165 million or 32 per cent of the total. Exports of miscellaneous manufactured articles consisting mainly of plastic toys and dolls, jewellery, goldsmiths' and silversmiths' wares and plastic articles were valued at $26,014 million, representing 12 per cent of domestic exports. Photographic apparatus, equipment, supplies and optical goods, watches and clocks were valued at $21,497 million (10 per cent of the total). Electrical machinery, apparatus and appliances consisting mainly of household-type appliances, transistors and diodes amounted to $17,293 million or eight per cent of the total. Domestic exports of textiles valued at $16,906 million, contributed another seven per cent to the total. Other important exports included telecommunications and sound recording and reproducing apparatus and equipment

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     (seven per cent) as well as office machines and automatic data-processing equipment (seven 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 1990, 50 per cent of all domestic exports went to the United States and the European Economic Community. The largest market was the United States ($66,370 million or 29 per cent of the total), China ($47,470 million or 21 per cent), Germany ($17,991 million or eight per cent) and the United Kingdom ($13,496 million or six per cent). Domestic exports to Japan and Singapore increased to $12,079 million and $7,796 million respectively. Other important markets were Taiwan, Canada, the Netherlands and France.

Re-exports

     Re-exports showed a very significant increase in 1990, accounting for 65 per cent of the combined total of domestic exports and re-exports. Principal commodities re-exported were: textiles ($47,143 million); miscellaneous manufactured articles ($56,185 million); clothing ($47,822 million); electrical machinery, apparatus and appliances ($37,228 million); telecommunications and sound recording and reproducing apparatus and equipment ($36,366 million) as well as travel goods, handbags and similar containers ($15,202 million). The main origins of these re-exports were China, Japan, Taiwan, the United States and the Republic of Korea. Largest re-export markets were China, the United States, Japan, Germany and Taiwan.

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-General of Trade. Secondly, they help Hong Kong to control, on health, safety or security grounds, exports and imports of a few non-textiles products such as strategic commodities, reserved commodities, pharmaceuticals, agri- cultural pesticides and ozone-depleting substances.

      In concert with other measures to curb smuggling by high-powered speedboats, the government enacted the Export (Television Sets and Video Cassette Recorders) Reg- ulations 1990 in June whereby the exports of television sets and video cassette recorders on a vessel of less than 250 tons net register are subject to export licensing control. In addition, export licensing control on a number of chemicals was introduced in February 1990 to prevent proliferation of chemical weapons.

Hong Kong maintains a certification of origin system which enables it to establish the origin of the goods which Hong Kong exports and to meet the requirements of the importing authorities. The Trade Department administers this system and issues certificates of origin where required. Other certificate-issuing organisations which have government approval are the Hong Kong General Chamber of Commerce, the Indian Chamber of Commerce, the Federation of Hong Kong Industries, the Chinese Manufacturers' Asso- ciation of Hong Kong and the Chinese General Chamber of Commerce.

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External Commercial Relations

Hong Kong possesses full autonomy in the conduct of its external commercial relations. The Governor has been formally entrusted with executive authority to conduct external relations on behalf of Hong Kong, namely to conclude and implement trade agreements, whether bilateral or multilateral, with states, regions and international organisations and to conduct all other aspects of external commercial relations. Hong Kong is a separate contracting party to 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. GATT 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.

   The Hong Kong Government pursues a free trade policy. Hong Kong is one of the best examples of GATT principles in action and the success of the policy is evidenced by the steady rise in the value and sophistication of Hong Kong's exports in recent years. Within the context of this free trade policy Hong Kong's commercial relations are designed to ensure that Hong Kong's trading rights in overseas markets are protected and that its international obligations are fulfilled. The most important of these rights and obligations are contained in the GATT and the MFA.

GATT

Hong Kong is the world's 11th largest trading entity. It has for a long time participated in the activities of the GATT. Prior to April 23, 1986, Hong Kong participated in the activities of the GATT as a British dependent territory. Since that date, however, Hong Kong has become a separate contracting party to the GATT. This status underlines Hong Kong's autonomy in the conduct of its external commercial relations and will transcend beyond 1997.

   Given the externally-oriented and open nature of its economy, Hong Kong contributes to, and relies on, the healthy functioning of a multilateral trading system. Hong Kong has therefore always been a staunch supporter of GATT and the free trade principles it espouses. During the year, Hong Kong continued to participate actively in the final phase of the GATT Uruguay Round of multilateral trade negotiations which was launched in 1986 to strengthen the GATT rules and disciplines, to reverse protectionism and to further liberalise world trade. In December, Hong Kong participated at the Ministerial Meeting held in Brussels with a view to concluding the Uruguay Round. The Hong Kong delegation played a full and constructive part in many areas including textiles, anti-dumping and services, and useful work was done. However, the negotiations as a whole could not progress primarily because of a deadlock on agriculture. As a result, the meeting was concluded with a decision to extend the Round for a brief period.

   Hong Kong worked closely with exporters of textiles and garments under the International Textiles and Clothing Bureau to press for the phasing out of MFA restrictions and integration of the sector into the GATT. In May, Hong Kong played host to Session XII of the bureau at which senior government officials from some 20 member countries exchanged views on the progress of the Uruguay Round negotiations on textiles and clothing. Hong Kong is also an active participant in the Asia Pacific Regional Consultative Group on the Uruguay Round of Multilateral Trade Negotiations which

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Over the years, delivering the mails has been streamlined and automated to such a degree that most local letters are delivered no later than one working day after posting and overseas mail is despatched within 24 hours.

Previous page: Television is the prime communications medium with over 98 per cent of households owning one set

or more.

Below: The mails arriving at Kai Tak Airport in the 1950s. Oppositive: Loading today's Speedpost mail for overseas destinations.

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Since 1910, the KCR has been the main transportation link between Hong Kong and mainland China. Steam trains finally gave way to diesel power in 1962 and in 1982 electricity took over.

Below: In the 1920s, a steam train pulls out of Kowloon Terminus. Opposite: KCR's air-conditioned electric trains carry more than half a million passengers every day.

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aims to explore areas of common interest among group members and to strengthen the negotiating position of countries in the region in the Uruguay Round negotiations. In September, Hong Kong hosted the Eighth Regional Consultative Meeting at which participants discussed the difficult issues which had a bearing on the final package of the qutcome of the Uruguay Round.

Hong Kong's trade policies and practices were reviewed, for the first time, by the GATT Council on July 31, and August 1, 1990, under the GATT Trade Policy Review Mechanism. The mechanism, which was launched in December 1989, aims to enhance the functioning of the multilateral trading system by achieving greater transparency in the understanding of trade policies and practices of contracting parties to the GATT. During the review on Hong Kong, there was unanimous appreciation of Hong Kong's free trade policy. The chairman of the GATT Council also praised Hong Kong's open trade policy

Textiles

     Bilateral agreements negotiated under the MFA govern Hong Kong's textiles exports to Austria, Canada, the European Economic Community (EEC), Finland, Norway, Sweden and the United States.

      The bilateral textiles agreement with Norway expired in June 1990. Consultations in March and May 1990 led to a new two-year Hong Kong/Norway Textiles Agreement (July 1, 1990 to June 30, 1992) with considerable improvement in growth and flexibility provisions. The number of categories under restraint has also been reduced from eight to seven in the first year and to five from July 1, 1991.

      Four rounds of consultations between Hong Kong and the EEC were held in 1990 to address problems arising from changes of certain classification practices and also adjust- ments on textiles quotas for exports to the Federal Republic of Germany to take account of the unification of Germany with effect from October 3, 1990.

Non-textiles Issues

In 1990, no new anti-dumping action was initiated in the EEC against Hong Kong companies and the investigations in respect of the six outstanding cases were completed except the proceeding concerning small screen colour television receivers. The three cases against denim, tungsten ores and silicon metals were terminated without imposition of any anti-dumping duties. The case against photo albums was terminated after the major photo album manufacturer in Hong Kong entered into a price undertaking agreement with the EEC Commission. A provisional anti-dumping duty of 2.4 per cent was imposed as from November 14, 1990, in respect of audio cassette tapes.

In response to a petition from their knitwear manufacturers, the United States authorities initiated in 1989 an anti-dumping investigation into man-made fibre sweaters from Hong Kong. The investigation was completed in September 1990 and the United States authorities determined that man-made fibre sweaters from Hong Kong were being sold in the US at less than fair value and such imports materially injured the American industry. In most cases, an additional tariff of 5.86 per cent was imposed on imports of man-made fibre sweaters from Hong Kong.

In May 1990, the Mexican Ministry of Commerce and Industrial Development initiated an investigation in response to a petition from Mexican manufacturers alleging that Hong Kong denim was being dumped in Mexico.

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In all these cases the Hong Kong Government worked closely with the industries alleged to have dumped to ensure that each was given a fair chance to present its case fully and accurately to the investigating authorities and to see that the principles and provisions of the GATT Anti-Dumping Code were adhered to.

Hong Kong made a representation to the EEC Commission in September 1990 on the EEC's review of its Generalised System of Preferences (GSP) for the 1990s. Under the scheme for 1991, no new exclusion from GSP benefits was applied on Hong Kong products.

Participation in International Organisations

 The Hong Kong Committee for Pacific Economic Co-operation (HKCPEC) was inaugurated on March 19, 1990, with the objective of advising on Hong Kong's participation in, and co-ordinating the territory's input to, the Pacific Economic Co-operation Conference (PECC). In keeping with the tripartite formula of the PECC, the committee comprises government officials, business leaders and the academia. The Trade Department provides the secretariat for the committee. In April, HKCPEC lodged a formal application to join the PECC as a full member and this was approved by the PECC Standing Committee in September. Hong Kong's admission will be formalised at the eighth general meeting of the PECC to be held in Singapore in May 1991. Since its formation, HKCPEC has taken an active part in the PECC process. A delegation attended a workshop held in Honolulu in July under the PECC Task Force on Transportation, Telecommunications and Tourism. Hong Kong also participated actively in the PECC Trade Policy Forum held in Kuala Lumpur in August to review developments in the Uruguay Round of multilateral trade negotiations. Two government officials took part in the Pacific Economic Outlook - Structural Issue Part Meeting of All PECC Economies in Kyoto in October. In November, a delegation attended the International Symposium Towards a New Era: Pacific Co-operation in Science and Technology held in Seoul under the PECC Science and Technology Task Force.

A HKCPEC delegation conducted a goodwill visit to the PECC committees in Indonesia, Malaysia, Singapore, Thailand and South Korea during the year to foster relations. As part of the Asian-Pacific economy and an important regional service centre, Hong Kong has a role to play and a contribution to make in regional economic co-operation. Hong Kong's trade links with the region have been expanding; in 1990 some 60 per cent of Hong Kong's total external trade was accounted for by intra-regional trade.

During the year, Hong Kong continued to play an active part in the informal dialogue initiated by the Organisation for Economic Co-operation and Development (OECD) with the dynamic Asian economies (Hong Kong, Singapore, South Korea, Taiwan, Thailand and Malaysia). Hong Kong participated in all four workshops held for this purpose between February and April in Paris, Seoul and Tokyo. The topics discussed covered trade, investment and technology; financial markets; macroeconomic linkages and inter- national adjustment, and the international trading environment.

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

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and export licensing and origin certification. On matters of policy affecting trade, the Director-General 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 which 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 collection and dissemination of information on developments which may affect Hong Kong's external trade, especially those relating to trade policies and measures adopted in Hong Kong's major markets. The distribution of work among these three divisions is by geographical area. One of these divisions also takes on the additional responsibilities for Asia-Pacific regional economic co-operation as well as the computerisation of the department's licensing systems. The fourth division deals with the multilateral aspects of Hong Kong's external commercial relations, such as its participation in the GATT and in the negotiation of the Multi-Fibre Arrangement. The fifth division is responsible for the textiles export control system, common services, origin certification, the import and export licensing of commodities other than textiles, and a rice control scheme._

      On August 28, 1990, the department moved from rented premises in Ocean Centre to permanent accommodation at the Trade Department Tower in Mong Kok. As a result the department was able to introduce a number of improvements to its service, including the provision of instant service for export licences for textile products to the non-restrained markets.

       The department's work is assisted by the Hong Kong Government Office in London and Hong Kong Economic and Trade Offices in Brussels, Geneva, New York, Washington, San Francisco and Tokyo. Details are at Appendix 6. 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.

Hong Kong Government Offices Overseas

The Hong Kong Government maintains offices in Geneva, Brussels, London, Washington, New York, San Francisco and Tokyo, mainly to safeguard and advance Hong Kong's economic and commercial interests overseas.

The Geneva Office represents Hong Kong in the General Agreement on Tariffs and Trade (GATT). The office keeps under review developments arising from the deliberations in the GATT and other international organisations in Geneva and has been closely involved in the Uruguay Round of multilateral trade negotiations. The Brussels Office represents Hong Kong's economic and related interests concerning the European Community and the governments of member states (other than the United Kingdom). Hong Kong's commercial relations with the United Kingdom, Austria and the Nordic countries (Finland, Sweden and Norway) are handled through the London Office. The Washington, New York and San Francisco offices closely monitor economic and trade developments, proposed legislation and other matters in the United States of America and Canada that might affect Hong Kong's economic interest in general and bilateral trade with these two countries in particular. The Tokyo Office conducts similar activities in Japan, looking after Hong Kong's commercial, economic and public relations interests.

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The Brussels, London, New York, San Francisco and Tokyo Offices also contain In- dustrial Promotion Units which promote direct investment in manufacturing. In North America these efforts were strengthened by the appointment early in 1990 of a directorate level co-ordinator to oversee and supervise all industrial investment promotional activities. With the exception of Geneva, all offices act as a point of direct contact between Hong Kong and the host country, and the local media and organisations with an interest in Hong Kong. They keep under review the commercial, economic and industrial developments and official thinking on international trade policies and advise the Hong Kong Government on the likely repercussions of such developments. The Washington, New York and San Francisco offices also assist with the recruitment in the United States and Canada of administrative officers for Hong Kong. The London Office provides assistance to Hong Kong people in the United Kingdom, including Hong Kong students, and supervises the recruitment and training of Hong Kong public servants in the United Kingdom. The Marine Adviser based in London is Hong Kong's permanent representative to the International Maritime Organisation (IMO). His role is to ensure that Hong Kong's independent shipping policies are developed and promoted at the IMO and other international organisations. He acts as a focus in London for all technical, legal and general maritime matters pertaining to Hong Kong, particularly the autonomous Hong Kong Shipping Register which came into operation on December 3, 1990. Details of representation overseas are at Appendix 6.

Customs and Excise Department

The Trade Controls Branch of the Customs and Excise Department is responsible for the enforcement of Hong Kong's ordinances and regulations relating to trade controls such as origin certification, import and export licensing of textiles and strategic commodities, reserved commodities control, verification and assessment of trade declarations, consumer protection, and weights and measures.

   During the year, a high level of enforcement was maintained in upholding the integrity of Hong Kong's certification and licensing systems and fulfilling obligations under international trade agreements. In particular, action was stepped up against textile origin fraud by increasing the number of textile consignment inspections. As a result of the extension of reward schemes to include information on origin abuses of textiles which are subject to export quota restraint, there was a significant increase in the number of textile origin fraud cases detected.

   The branch stepped up its efforts on consumer protection, particularly the Weights and Measures Ordinance. Resulting from wide publicity, there was a sharp increase in the number of complaints received and investigation into the complaints resulted in many convictions.

In addition, preparatory work was completed for the introduction of safety controls on toys and children's products in 1991.

Government Supplies Department

The Government Supplies Department is the government's central organisation for procurement and distribution of supplies required by 55 government departments and nine agencies.

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Since 1979, the department has represented the Hong Kong Government as an entity in he Agreement on Government Procurement of the General Agreement on Tariffs and Trade (GATT). Under the agreement, except for special requirements, all purchases exceeding Special Drawing Rights 130 000 ($1,338,000 in 1990) are widely advertised and open to competitive bidding among domestic and foreign suppliers on a non- discriminatory basis. All purchases, ranging from simple office sundries to complex computer systems, are made entirely on the basis of best value for money, regardless of the source of supply. Due to the open procurement policy, goods and services are purchased from over 40 countries and some 4 000 registered local and overseas suppliers.

      To ensure continuity of supply, the department maintains goods which are generally required by other departments in its main stores in Hong Kong and Kowloon and five sub-stores specially established to serve the engineering workshops. It also seconds supplies staff to other departments to ensure a professional approach to acquisition and main- tenance of supply.

In 1989-90, the department placed orders to a total value of $2,672 million. The major sources of supply are the United States, United Kingdom, China and Japan. Major items of purchase include helicopters, computer systems and pharmaceuticals.

Hong Kong Trade Development Council

The Hong Kong Trade Development Council (HKTDC) is a statutory body responsible for promoting and developing Hong Kong's overseas trade and publicising the oppor- tunities and advantages of Hong Kong as a trading partner.

      The chairman is appointed by the Governor and the 19 other members include representatives of major trade associations, leading businessmen and industrialists, and two senior government officials.

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The council was established in 1966 and has built up a network of 32 offices throughout the world, in addition to the head office in Hong Kong, a branch office in Kwun Tong and TDC Datashops in Tsuen Wan, Mong Kok and Central.

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 48 000 Hong Kong manufacturers and exporters registered in the Trade Enquiries Service computer. Furthermore, local businessmen can find markets for their goods through 177 000 overseas importers and buyers registered with the council.

The computerised Trade Enquiries Service of the council processed more than 270 000 overseas and local trade enquiries in 1990. The Research Department continued to publish special market surveys and detailed product reports, specifying opportunities in overseas markets for Hong Kong exports.

      Council staff carried out an extensive trade promotion programme in 1990, organising more than 85 major international projects. In the United States, these included the Winter Consumer Electronics Show in Las Vegas and the Summer Consumer Electronics Show in Chicago, the American International Toy Fair in New York, the International Housewares Exposition in Chicago and the New York International Gift Fair.

      In Europe, the council participated in many fairs, including the International Toy Fair in Nuremburg, Frankfurt International Autumn Fair, Hanover Industry Fair, SONIMAG in

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Barcelona, CeBIT in Hanover and MIDO in Milan, as well as the Swiss Industries Fair in Basle and The London Pret.

This year saw the opening of TDC offices in Seoul and Bangkok.

A variety of Hong Kong business groups under the auspices of the council visited the United States, Europe, China, the Middle East and Japan to enhance old trade contacts or establish new ones. The council also received more than 400 inward missions from all over the world.

   In Hong Kong, the council staged Hong Kong Fashion Week, Hong Kong International Toys and Games Fair, Hong Kong International Electronics Fair, the Hong Kong International Jewellery Show, Hong Kong International Watch and Clock Fair, Hong Kong International Gifts and Houseware Fair and Hong Kong Showcase '90. In addition, the council added the Hong Kong Book Fair, the Hong Kong International Food Fair, Leisure and Hobby Expo '90 and the Hong Kong International Audio & Visual Show '91 to its ever-expanding schedule of TDC-organised events, and staged some two dozen seminars. It also participated in the Leather International Fair, World Print Pack Expo '90, Hong Kong Industrial Trade Fair and Hong Kong International Industrial Materials Fair.

In the store and mall promotions programme, the TDC joined forces with Galaries Lafayette in Paris, the Woodfield Mall in Chicago and the Century City Mall in Los Angeles, House of Fraser in London, Hyundai in Seoul, Metro in Singapore, Number 1 in Shanghai, Zeiyu in Tokyo and Osaka, Iwataya Isetan in Kumamoto and Iwataya in Fukuoka.

   The council, one of Hong Kong's biggest publishers of trade publications, started a new biannual publication this year, Hong Kong Garments and Accessories, its tenth magazine. The TDC publishes Hong Kong Enterprise, a monthly general products magazine; the annuals Hong Kong Toys, published each January to coincide with the Hong Kong International Toys and Games Fair, Hong Kong Jewellery Annual, Hong Kong Watches and Clocks, Hong Kong Household and Hong Kong Gifts and Premiums; the biannuals, Hong Kong Electronics; the prize-winning Hong Kong Apparel which alternates with the newest magazine, Hong Kong Garments and Accessories, and Hong Kong Trader, a monthly newspaper (sent airmail) giving news and views of the territory. A Japanese-language magazine, Hong Kong Collection featuring general products, is also published each quarter. A guidebook, Hong Kong For The Business Visitor, is published in eight languages (English, Chinese, French, German, Italian, Spanish, Dutch and Japanese).

   The council's Overseas Associations Section administers the Hong Kong-United States Economic Co-operation Committee. The 13th plenary session of the Hong Kong- Japan/Japan-Hong Kong Business Co-operation Committee was held in Hong Kong in November. This section also monitors the activities of overseas associations - the Netherlands, the United Kingdom, Italy, Finland, Denmark, Belgium, France and Australia.

Hong Kong Export Credit Insurance Corporation

The Hong Kong Export Credit Insurance Corporation (ECIC), the statutory corporation providing insurance protection to exporters against the risk of non-payment by overseas buyers, continued to enjoy higher revenues despite a slowdown in Hong Kong's export performance in 1990.

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      A softening of demand and concern about defaults in the United States, the ECIC's major insured market, coupled with uncertainty arising from events in the Middle East and Eastern Europe encouraged more Hong Kong exporters to seek the assistance and advice of the ECIC.

      During 1990, the ECIC registered total insured business of $13,359 million and premium income of $79 million, an increase of 16 per cent and 16 per cent respectively over 1989. Against these, it paid out $32 million in claims, an increase of 19 per cent. ECIC's major insured markets are the OECD countries which account for about 90 per cent of the total insured trade.

      To meet the expanding needs of the exporting community, the corporation continued to improve its services and to intensify its marketing efforts. During the year, the ECIC upgraded its computer system and streamlined procedures to enhance efficiency and productivity.

The corporation's paid-up capital of $20 million is provided by the government, which guarantees the payment of all moneys due by the corporation. The maximum contingent liability arising from its insurance and guarantees operations which may be assumed by the corporation is $6,000 million. It is autonomous in its day-to-day operations and is run on a commercial basis. It is assisted by a 12-member Advisory Board comprising prominent members of the private business sector and representatives from the government.

       The ECIC's activities fall into three main categories. The most tangible is the protection provided by the corporation to indemnify policyholders up to 90 per cent of their losses. The cover is available for domestic exports and re-exports transacted on all kinds of short-term credits and payment methods including documents against payment, documents against acceptance and open account up to a maximum credit period of 180 days. Shipments from third countries direct to overseas buyers are covered. Cover is also available to protect exporters against buyers' insolvency during manufacturing, against non-payment due to war and civil disturbance, or against confiscation and non- repatriation of raw materials, work-in-progress and finished products where goods are manufactured outside Hong Kong. For exports of capital goods and services sold on medium or long-term credits, the corporation can provide tailor-made insurance policies.

       The second main function is to provide credit advisory services for its policyholders. The corporation's computerised databank contains the names of more than 60 000 overseas buyers. A policyholder may apply to the corporation for the issue of a revolving credit limit in respect of an overseas buyer. Before issuing the limit, it will have investigated the prospective buyer's creditworthiness, the market trading environment and the terms of payment of the proposed trade. The credit limit thus represents the extent of credit the ECIC considers prudent for the policyholder to offer the overseas buyer.

Third, when a policyholder experiences payment problems, the ECIC provides a risk management service. A policyholder is advised on possible courses of action either to prevent or minimise any loss. During 1990, the ECIC noted with satisfaction the workings of the arbitration system for settling claims in China, but was concerned that more United States corporations were seeking protection from creditors under Chapter 11 of the US Bankruptcy Code.

In February 1990, the corporation hosted the general meeting of the International Union of Credit and Investment Insurers (the Berne Union). The meeting was attended by 90 delegates of 36 member organisations from 30 countries. In its day-to-day activities, the ECIC exchanges views on overseas buyers and markets with these organisations.

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Other Trade and Industrial Organisations

Hong Kong has a number of major trade and industrial organisations which provide services to their members and represent their views to the government, either of their own accord or in response to government consultation.

The Hong Kong General Chamber of Commerce is the oldest internationally-recognised trade association in Hong Kong. Established in 1861, it now has a membership of some 2 700 companies representing all branches of commerce and industry, including exporters and importers, a wide section of the manufacturing industry, transport, utilities, banking, insurance and commercial and professional services. The chamber was formed to promote trade and industry, to act as a focus of local business opinion and to make that opinion known when necessary. It organises trade and industrial investment promotion groups, goodwill missions and handles trade enquiries. It receives official and trade delegations as well as individual businessmen from overseas, and extends to them appropriate assistance. It is authorised by the government to issue certificates of origin. Although an independent organisation, the chamber is represented on a variety of official advisory committees and other local organisations. It is a member of the International Chamber of Commerce and sponsors the Hong Kong Committee of the Pacific Basin Economic Council. The Hong Kong Coalition of Service Industries is an autonomous organisation within the chamber.

The Chinese Manufacturers' Association of Hong Kong (CMA), established in 1934, is a non-profit-making chamber of commerce and industry. It has a membership of over 3 600 industrial and trade establishments, and is authorised by the government to issue certificates of origin. It also handles trade enquiries, organises missions, fairs and ex- hibitions, and is active in encouraging product development and quality improvement. The CMA Testing and Certification Laboratories provide technical back-up services, including product testing, certification, inspection and technical consultancy services. The CMA also operates two prevocational schools to provide technical education and training for more than 2 200 students. Since 1964, it has awarded scholarships annually to outstanding students studying in universities, polytechnics and technical institutes through the CMA and Donors' Scholarships Scheme. Since 1989, it has organised the award com- petition in the machinery and equipment design category of the Governor's Award for Industry, to emphasise the importance of machinery and equipment design in Hong Kong's industrial development.

The Federation of Hong Kong Industries is a statutory body, established by the government in 1960 to promote and protect the interests of Hong Kong's manufacturing industry. It offers a wide range of services, covering certificates of origin, the Hong Kong Quality Mark Scheme, a custom-built multi-risks insurance policy, consultancy work on quality assurance, trade enquiries and economic research.

Since 1989, the federation has run the award competition in the consumer product design category in the Governor's Award for Industry. The third Young Industrialist Awards of Hong Kong were presented in October 1990 in honour of young industrialists for their professional endeavors and commitment to the manufacturing industry.

With a membership spanning all industrial sectors, the federation services the Hong Kong Toys Council, Chemical and Pharmaceutical Industries Council, Transport Services Council, Hong Kong Electronics Industry Council, Hong Kong Plastics Industry Council and the Mould and Die Council.

INDUSTRY AND TRADE

       Established in 1900, the Chinese General Chamber of Commerce is an association of local Chinese firms, businessmen and professionals. It has a membership of over 6000, representing a wide spectrum of trade as well as industry. It provides a variety of services including certification of origin, organisation of seminars, exhibitions, trade missions and other trade promotional activities. It maintains close links with trade organisations in Hong Kong and China. Since 1957, it has been authorised by the Chinese Export Commodities Fair authorities to issue invitations on their behalf to local Chinese firms. It has been operating courses for senior government officials to China since 1982. These courses are designed to enable participants to better understand the various aspects of Hong Kong's economy.

      Incorporated in 1981, the Hong Kong Trade Facilitation Council was set up to facilitate international trade procedures and the documentation and information flows associated with them. Its members include representatives of government, trade and industrial organisations and private sector companies. In recent years, the emphasis in trade facilitation work has shifted from paper to the transmission of trade data by electronic means. More recently, in conjunction with the Hong Kong General Chamber of Commerce, it was instrumental in establishing the Hong Kong Article Numbering Association Limited, which is the recognised Hong Kong authority for the issue of bar codes for product identification. \

       The Hong Kong Management Association was established in 1960 with the aim of improving the effectiveness and efficiency of management in Hong Kong. It runs management training courses, provides management consultancy services, publishes a bimonthly journal, The Hong Kong Manager, offers library information and translation services, and organises seminars, forums and inter-firm competitions.

The Hong Kong Exporters' Association was formed in 1955. It has a membership of 250 export and manufacturing companies. Its members together account for about a third of Hong Kong's total domestic exports. The association's objectives are to protect and to promote the interests of its members; to disseminate trade information; and to act as a representative body to voice members' concerns and to assist in solving any trade problems which they may encounter.

Consumer Council

The Consumer Council is a statutory body responsible for protecting and promoting the interests of consumers of goods and services. Its chairman, vice-chairman and 20 other members are all appointed by the Governor from various walks of life, representing a considerable diversity of consumer interests.

Established in 1974, the council provides a comprehensive consumer protection service including consumer representation and legislation, advice and complaints, research and testing, and information and publications. It maintains close co-operation with the govern- ment through the Trade and Industry Branch and is represented on many committees dealing with a wide range of consumer issues and concerns.

The scope of the council's functions received a welcome boost following the acceptance by government of a number of proposals contained in a review report of its activities. Significantly, the Consumer Council Ordinance will be amended to properly reflect the work of the council in property transaction matters. The statute will also be tightened to effectively prohibit the unlawful use of the council's name and its information for

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102

commercial advertising purposes. It has also initiated a study on the feasibility of in- troducing consumer representative action in order to bring legal proceedings in cases where a large number of consumers suffer but have difficulty pursuing their grievances individually due to malpractices on the part of traders. The council intends to secure better consumer representation and consultation in the area of public utilities.

The buoyant property market in Hong Kong, especially in the sale of uncompleted units, has given rise to recurring consumer complaints over the years. A special committee on property transaction was convened by the council with representatives from relevant professional bodies and government departments. It focuses on four major areas of consumer concern, namely, the disclosure of accurate and adequate sales information, liability for buildings defects, separate legal representation in conveyancing and the operation of estate agents. A package of new measures to protect genuine buyers on the one hand, and to curb excessive speculative activities on the other, was drawn up by the end of the year. To ensure its successful implementation, the council will continue to seek the full support of estate developers as well as the authorities concerned.

Rising oil prices brought on by the Middle East crisis were a matter of considerable concern to the public, particularly motorists and transport operators. The situation was closely monitored by the council's working group on oil prices whose task it is to ensure that any change in the local retail oil price is in line with that in the international market.

Steady progress was achieved in the field of consumer protection legislation. Included in the pipeline for introduction were: the Gas Safety Bill, the Electricity Bill and proposals to ensure the safety of toys and children's products and to control hazardous household goods and domestic pesticides. Amendments were also recommended to the laws of sale of goods and supply of services. A government working party is re-examining a previous proposal of the council for the enactment of a general consumer product safety legislation. The Control of Exemption Clauses Ordinance came into effect on December 1 following a year-long transitional period for businesses to adapt to the new contractual obligations.

During the year, the council received at its 15 consumer advice centres throughout Hong Kong 8716 complaints and 120 813 enquiries for advice and information on a diverse range of goods and services. Negotiation and persuasion continued to be the main tactics in bringing about satisfactory settlement of the majority of complaints and where judicial arbitration was considered more appropriate, consumers were advised and assisted to pursue their cases with the Small Claims Tribunal. Publicity sanction was imposed on five shops which were subjects of repeated consumer complaints for dishonest business practices. The shops named by the council were a beauty centre, three insurance consultant firms and a removal service company.

  The council's ongoing testing and research programme provides the much needed unbiased information for the consumer to make a rational choice. Equally important is its role in initiating the process for legislative measures, especially in the protection of the health and safety of consumers. Increasingly, the council endeavoured to include tests on new and sophisticated consumer products and took part in international joint tests on such products as photographic equipment, colour film and motor cars. Regular surveys were also carried out to evaluate such goods and services as household electrical appliances, banking, consumer credit, travel agents and video rental.

The council's Chinese-language monthly magazine Choice continued to enjoy a high circulation averaging more than 37 000 copies per issue - about half by subscription and

INDUSTRY AND TRADE

half by retail sale at newsstands, supermarkets and convenience stores. The annual Choice Buying Guide, now in its third year, was much in demand by English readers. The year marked the launching of the council's new venture in book publishing - a 160-page book dealing with the subject of home purchasing was published and met with immediate success. On consumer education, the council was active in enlisting the support of the mass media, schools and community groups to arouse the awareness of the public of their rights

as consumers.

The Consumer Council of Hong Kong is a Council Member of the International Organisation of Consumers Unions and maintains strong ties with other similar councils.

Trade in Endangered Species

In Hong Kong, the importation, exportation and possession of endangered species of animals and plants, including parts and derivatives, are 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). The licensing policy follows closely the principles of the convention. Commercial trade in highly-endangered species is prohibited and trade in less-endangered species is subject to strict licensing requirements.

       The CITES conference decided in October 1989 that the African elephant should be uplisted from Appendix II to Appendix I, with a view to the prohibition of all interna- tional trade in elephant ivory. The conference rejected a proposal to allow trade in exist- ing ivory stocks despite arguments put forward by Hong Kong that the continued trade of the territory's legal, finite and strictly-controlled ivory stocks would not pose a threat to the survival of the elephants in Africa and that an indiscriminate trade ban would be unfair to traders who had acquired stocks in strict compliance with the CITES requirements.

In order to allow time for the orderly disposal of the legally-acquired ivory stocks in Hong Kong and for the ivory workers to be retrained and to find alternative employment, the United Kingdom Government entered a six-month reservation on Hong Kong's behalf to enable the export of CITES-approved ivory stocks to non-CITES parties or to parties with an appropriate reservation.

       The Local Employment Service of the Labour Department opened a special register to assist ivory workers wishing to take up alternative employment. The Vocational Training Council assisted displaced carvers to enrol in existing training courses and also organised special retraining courses for them.

      The Animals and Plants (Protection of Endangered Species) Ordinance was amended in July 1990 to prohibit commercial import and export of ivory. The schedules of the ordinance were amended to keep them in line with the updated CITES Appendices I and II species lists. The amendments placed more species under control.

      The ordinance is administered by the Agriculture and Fisheries Department and is enforced by officers of the department and the Customs and Excise Department through checking at entry points, markets, shops and restaurants, as well as inspection of endangered species shipments. All suspected offences are thoroughly investigated and prosecutions follow if there is evidence of a breach of the ordinance. During 1990, there were 384 seizures and 216 prosecutions under the ordinance.

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Metrication

The government's metrication policy is to facilitate progressive adoption of the International System of Units (SI) in those areas for which it is responsible, and to encourage 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, management 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. Considerable progress has been made in the adoption of metric units in the private sector.

   During the year, the committee continued to direct its activities towards the metrication of the retail trade sector. A publicity campaign was mounted to encourage the use of metric units in the sale of vegetables and fruit by means of television announcements and the distribution of posters and conversion cards.

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Trade Marks and Patents

The Intellectual Property Department was set up on July 2, 1990, to take over the Trade Marks and Patents Registries and ultimately to be responsible for all intellectual property matters. The Trade Marks Registry is a registry of original registration. Trade Marks are registered under the Trade Marks Ordinance, the provisions of which are similar to trade marks legislation in the United Kingdom. The procedure in applying for registration is laid down in the Trade Marks Rules, and the prescribed forms may be obtained free from the Trade Marks Registry, Intellectual Property Department. Every mark, even if already registered in the United Kingdom or any other country, must satisfy all the requirements of the Trade Marks Ordinance before it may be accepted for registration. During 1990, 10 530 applications were received and 4 385, including many made in previous years, were accepted and allowed to be advertised. A total of 4 020 marks were registered in 1990, compared with 4 060 in 1989. The principal places of origin were:

United States

Hong Kong

Japan

France

United Kingdom

883

749

398

340

298

West Germany Italy Switzerland Taiwan

The Netherlands

The total number of marks on the register at December 31, 1990 was 56 942.

248

236

163

145

88

Unlike the Trade Marks Registry, the Patents Registry which also forms part of the Intellectual Property Department, is not a registry of original registration. 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.

   A total of 1 095 patents were registered in this way during the year, compared with 1 030 in 1989. 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

INDUSTRY AND TRADE

     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.

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 was largely based on the Companies Act 1929, formerly in force in Britain but now replaced by various statutes culminating in the Companies Act 1985. 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 prospectuses, 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. The ordinance is subject to continual revision and improvement on the advice of the Standing Committee on Company Law Reform which was set up in 1984. The primary task of the committee is to ensure that Hong Kong's company law meets the most up-to-date needs of government and business. Further amendments to the ordinance were made by various Companies (Amendment) Ordinances between February 20, 1987 and July 27, 1990.

      On incorporation, a company pays a registration fee of $1,000 plus $6 for every $1,000 of nominal capital. In 1990, 26 147 new companies were incorporated, 5 527 less than in 1989. The nominal capital of new companies registered totalled $3,163 million. Of the new companies, 89 had a nominal share capital of $5 million or more. During the year, 8 081 companies increased their nominal capital by amounts totalling $33,122 million on which fees were paid at the same rate of $6 per $1,000. At the end of 1990, there were 265 452 local companies on the register, compared with 242 709 in 1989.

Companies incorporated overseas are required to register certain documents with the registry within one month of establishing a place of business in Hong Kong.

      A registration fee of $500 and some incidental filing fees are payable in such cases. During the year, 350 of these companies were registered and 179 ceased to operate. At the end of the year, 2 635 companies were registered from 68 countries, including 624 from the United States, 349 from the United Kingdom and 293 from Japan.

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

Money Lenders

Under the Money Lenders Ordinance, which came into force in December 1980 and was amended in July 1988, anyone wishing to carry on business as a money lender must apply to a Licensing Court for a licence.

      Any application for a licence is in the first instance 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, 483 applications

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were received and 457 licences were granted. At the end of 1990, there were 474 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. With certain exceptions (primarily authorised institutions under the Banking Ordinance), 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. Agreement for the repayment of any such loan or any security given in respect of such loan shall be unenforceable.

Bankruptcies and Compulsory Winding-up

The Official Receiver's Office of the Registrar General's Department administers estates of personal bankrupts and companies ordered to be compulsorily wound up by the Court.

   Once a Receiving Order is made against the property of a personal bankrupt, or a Winding-Up Order by the court is made against a company, the Registrar General, who is also the Official Receiver, becomes the interim receiver or provisional liquidator respectively. In estates where the assets are less than $200,000, the Official Receiver applies to the court for a summary procedure order and is appointed as trustee or liquidator. In other cases a meeting of creditors in bankruptcy, or of creditors and contributories in compulsory liquidations, is held to decide whether the Official Receiver or another person from the private sector be appointed as trustee or liquidator. As in the past years, the Official Receiver was appointed trustee or liquidator in most cases.

During the year the court made 209 Receiving Orders and 286 Winding-Up Orders, which is an increase of 47.7 per cent over the previous year. The assets realised by the Official Receiver during 1990 amounted to $212.6 million and $54.8 million dividends were paid to creditors in 253 insolvency cases.

Official Trustee, Judicial Trustee and Official Solicitor

The Registrar General also exercises the powers and performs the duties conferred or imposed upon the Official Trustee, the Judicial Trustee and the Official Solicitor. At the end of the year, the total funds administered by the Official Trustee under 13 trusts amounted to $1.2 million. The Official Solicitor agreed to act in nine cases.

   It has now been decided that these functions of the Registrar General would more appropriately be transferred to the Legal Aid Department. Preparation of necessary legislative amendments to effect this transfer has already begun. The transfer should take place in 1991.

8

EMPLOYMENT

HONG KONG'S labour market remained very tight during the year as a result of a high level of economic activity. The problem of the brain drain, resulting from the emigration of professionals and experienced personnel, continued to cause concern. Employers were adopting new approaches to tackle the problem of staff recruitment and retention. Higher wages were offered, particularly in the construction industry and service sector. A scheme was approved by the government to import a limited number of foreign workers to help ease the tight labour market situation.

Unemployment for the third quarter of 1990 was 1.7 per cent, and underemployment was one per cent.

The average wage rates for all employees, including wage earners and salaried employees up to the supervisory level, increased by 12.6 per cent in money terms between September 1989 and September 1990. Taking into account rises in consumer prices, wage rates for all employees increased in real terms by 2.6 per cent. The overall average daily wage rate for workers in September 1990 was $189. While the size of wage increase in real terms was small, the increase in average earnings was more significant. For example, between September 1989 and September 1990, average earnings for persons engaged in the manufacturing sector, in terms of payroll per person engaged, rose by 13.1 per cent in money terms, or by 3.1 per cent in real terms.

Hong Kong's dynamic workforce totals 2.8 million, of which 64 per cent are males and 36 per cent females, as recorded by the July-September 1990 General Household Survey. Of the total workforce, 28 per cent was engaged in manufacturing, 26.1 per cent in wholesale and retail trades, restaurants and hotels, 18.8 per cent in community, social and personal services, 9.9 per cent in transport, storage and communications, 8.4 per cent in construction, and 7.3 per cent in the financing, insurance, real estate and business services.

      A survey of Employment, Vacancies and Payroll in the Manufacturing Sector conducted in September revealed that 730 217 people were engaged in 49 087 establishments. The survey covered working proprietors and partners, employees receiving pay and unpaid family workers affiliated to business organisations, but excluded out-workers. Some 324 283 people, the largest portion of the manufacturing workforce, were engaged in the textile and wearing apparel industries. The electronics and plastics industries were the next two largest employers.

      Details of the distribution of manufacturing establishments and of the number of people engaged in them are at Appendices 17 and 18.

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Labour Legislation

To further improve the standards of safety, health and welfare for the workforce, nine items of labour legislation were enacted in 1990. This brings the total number of items of labour legislation enacted in the past 10 years to 134 under a 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 more significant items of labour legislation enacted during the year included amendments to the Employment Ordinance which removed the distinction between manual and non-manual employees, an increase in the number of days of paid annual leave and amendments to the Factories and Industrial Undertakings Ordinance to extend its coverage to the catering trade.

   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 declarations 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 1990, Hong Kong has applied a total of 47 conventions, of which 29 were applied in full and 18 with modification. This compares favourably with other member nations in the region.

During the year, there were 3 249 prosecutions for breaches of ordinances and regula- tions administered by the Labour Department. Fines totalling $13,213,150 were imposed on offenders.

Wages and Conditions of Work

Wage 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.

   Wage rates in the manufacturing sector continued to increase in money terms during the year, while unemployment and underemployment remained at a low level due to continued expansion of the service sector of the economy. After allowing for rises in consumer prices, the wage rates for all employees and workers increased in real terms by 2.3 per cent and 2.2 per cent respectively between September 1989 and September 1990.

In September, 75 per cent of semi-skilled and unskilled workers in manufacturing industries received a daily wage, including fringe benefits, of $142 or more, and 25 per cent received $216 or more. The overall average daily wage was $184.

   The Employment Ordinance provides for benefits including statutory holidays, annual leave, rest days, maternity leave, sickness allowance, severance payment, long service payment and other entitlements for employees. Besides giving entitlements under the Employment Ordinance, some employers provide workers with various kinds of fringe benefits which include subsidised meals or food allowances, attendance bonuses, free medical treatment and free or subsidised transport. Many employees also enjoy a year-end bonus of one month's pay or more under their employment contracts, usually paid just

EMPLOYMENT

     before the Lunar New Year. In recent years, an increasing number of employers have introduced provident fund schemes to provide improved long-term security for their employees.

      A number of significant amendments to the Employment Ordinance were made during the year to improve employees' benefits. The Employment (Amendment) Ordinance 1990 came into effect on June 8. It removed the distinction between manual and non-manual employees, and as a result, extended the ordinance to cover all employees irrespective of their monthly wages. It changed the definition of 'continuous contract of employment' to mean employment with the same employer for at least 18 hours per week for four consecutive weeks or more. This new definition has brought more regular part-time em- ployees under the protection of the Employment Ordinance. The term of 'lay-off' was redefined so that if non-provision of work by an employer exceeds half the total number of normal working days in four consecutive weeks or one-third of the total number of normal working days in 26 consecutive weeks, the employee will be taken to be laid off and will therefore be entitled to severance payment.

      The Employment (Amendment) (No. 2) Ordinance 1990 came into operation on July 13. It increased the paid annual leave entitlement of employees with longer service from seven days to ten days. This entitlement will be further increased by stages until it reaches a maximum of 14 days in five years' time.

      The Employment of Children Regulations, made under the Employment Ordinance, prohibit the employment of children under 15 in any industrial undertakings. Children aged 13 and 14 may be employed in non-industrial establishments, subject to stringent conditions which aim to ensure a minimum of nine years' education and to protect their health, safety and welfare.

      Under the Women and Young Persons (Industry) Regulations, young persons aged between 15 and 17 as well as women are permitted to work eight hours a day and six days a week in industry. However, by agreement between the employer and the women or young persons concerned, their working hours may exceed eight on one or more days in any week or 48 in a week, provided that the total number of hours worked (excluding overtime) does not exceed 96 hours in any two consecutive weeks, but maximum working hours a day (including overtime) remain at 10. Women and young persons must be given a break of at least 30 minutes after five hours continuous work.

In industry, overtime employment for women is restricted to two hours a day and 200 hours a year, while persons under the age of 18 are not permitted to work overtime. The Commissioner for Labour may, under special circumstances, increase the hours of overtime employment allowed for an industrial undertaking. As a general rule, overtime employment for women is reckoned by reference to an industrial undertaking. However, an employer may, subject to compliance with conditions imposed by the Commissioner for Labour, choose to calculate overtime by reference to different parts of his undertaking, or to different sets of women in different processes, or to the individual woman.

Women are usually not allowed to work after 11 pm and before 6 am, while persons under the age of 18 are prohibited from working between 7 pm and 7 am. Permission has been given by the Commissioner for Labour to some large factories - mostly those engaged in cotton-spinning - to employ women at night, subject to a number of stringent conditions. Women and young persons must not be employed on more than six days in any week. The regulations also prohibit them from working underground and provide that,

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110

except with the written permission of the Commissioner for Labour, no person shall employ any female person of whatever age or any male person under 16 years of age in a dangerous trade.

In 1990, the Labour Inspectorate of the Women and Young Persons Division made 221 148 day and night inspections of both industrial and non-industrial establishments and conducted six special campaigns against the employment of children and illegal immigrants, covering 21 818 establishments. During the year, 63 cases of child employment involving 63 children were brought before the courts.

A special team of labour inspectors is responsible for monitoring employers' compliance with the provisions of the Employment Ordinance concerning rest days, statutory holidays, paid annual leave, sickness allowance, maternity leave pay and the keeping and main- tenance of records relating to statutory benefits.

In addition, the general enquiry telephone service provides information to the public in the form of pre-recorded tapes in both English and Chinese. The tapes cover 29 topics under the Employment Ordinance, Protection of Wages on Insolvency Ordinance, Em- ployees' Compensation Ordinance and matters relating to employment of foreign domestic helpers.

Controls on Illegal Employment

Employers are prohibited, under the Immigration Ordinance, from employing persons who have no valid proof of identity and Vietnamese refugees who are not permitted to obtain employment.

The Immigration Ordinance also requires all employees to produce proof of identity for inspection and employers to maintain up-to-date records of their employees. These requirements are intended to stop the flow of illegal immigrants into Hong Kong. Labour inspectors and senior labour inspectors of the Labour Department are empowered by the Immigration Ordinance to enter places of employment to inspect the identities and records of employees. They are also empowered to seize and remove records of employees to provide evidence in the courts and to require the production of employees records by an employer.

During the year, 215 employees failed to produce valid proof of identity for inspection by labour inspectors at their places of employment. All the employees in question were subsequently referred to the Immigration Department or the Police for further investigation.

Long Service Payment

Since 1986, employers have been required under the Employment Ordinance to make long service payment to their employees who have worked continuously for a specified number of years, ranging from five to 10, and who are dismissed other than by way of summary dismissal or redundancy. The amount of long service payment is calculated at the rate of two-thirds of a month's wages for each year of service, but the rate is reduced if the employee is aged below 40.

   Since July 1988, the long service payment scheme has been extended to cover eligible employees who resign on grounds of ill-health or who retire at the age of 65 or above after at least 10 years' service. Long service payment is also payable to the families of eligible employees who die in service.

EMPLOYMENT

Trade Unions

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

       During the year, 23 new unions were registered. At the end of the year, there were 494 unions, comprising 452 employees' unions with about 439 500 members, 29 employers' associations with some 2900 members, and 13 mixed organisations of employees and employers with about 17 400 members.

The majority of employees' unions are affiliated to one or the other of the three local societies registered under the Societies Ordinance - the Hong Kong Federation of Trade Unions, the Hong Kong and Kowloon Trades Union Council and the Hong Kong Confederation of Trade Unions. The Hong Kong Federation of Trade Unions has 82 affiliated unions with about 174 500 members. The Hong Kong and Kowloon Trades Union Council has 70 affiliated unions with a membership of about 31 000. The Hong Kong Confederation of Trade Unions which was registered in February 1990 has 21 affiliated unions with about 62 300 members. The remaining 279 employees' unions have a total membership of about 171 700.

Labour Administration and Services

The Labour Department has an establishment of 1 430. It has 14 branch offices through- out the territory to 'serve employers and employees on a local basis. The Commissioner for Labour is the principal adviser to the government on labour affairs.

The department initiates proposals for labour legislation and ensures that Hong Kong's obligations under international labour conventions are observed. Other major activities of the department include enforcement of legislation regulating employment conditions; providing employment assistance; promoting good labour relations; providing assistance to employees injured at work and persons suffering from occupational diseases in obtaining compensation; protecting and promoting the safety and health of workers, and admin- istering legislation on explosives, prospecting, quarrying and mining.

With effect from March 1, 1991, the responsibility for administering legislation on explosives, prospecting, quarrying and mining has been transferred to the Civil Engineer- ing Services Department. On the same date, the Commissioner for Labour ceased to be concurrently the Commissioner of Mines.

Labour Relations

In 1990, the Labour Relations Service of the Labour Department conciliated in 168 trade disputes which involved 15 work stoppages, with a loss of 3 495 working days. The service also dealt with 16 610 claims for wages in lieu of notice, wages in arrears, annual leave pay, holiday pay, end-of-year payment, severance payment, long service payment and others.

       The Labour Relations Ordinance provides the machinery for special conciliation, voluntary arbitration and boards of enquiry for settling trade disputes that cannot be resolved through ordinary conciliation.

       The Labour Relations Service's Promotion Unit endeavours to promote harmonious labour-management relations in the private sector through a variety of activities such as promotional visits to individual establishments in major economic sectors, employ- ers' associations and employees' trade unions; organising training courses, seminars,

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conferences and exhibitions, and publishing newsletters, information leaflets and pamphlets on a wide range of labour legislation and labour relations matters.

   To meet the increasing demands at district level, an establishment of four labour officers with supporting staff was created in 1989 to liaise with district boards and their committees and individual establishments in the districts. Promotional activities at district level ex- panded considerably during the year, including talks on labour legislation, audio-visual shows, training courses, seminars and exhibitions.

Protection of Wages on Insolvency Fund

Employees who are owed wages by their insolvent employers may apply to the Protection of Wages on Insolvency Fund for ex-gratia payment. The fund covers wages not exceed- ing $8,000 for services rendered during a period of four months preceding the date of application. It also covers seven days' wages in lieu of notice, up to $2,000 and severance payment up to $4,000.

During the year, the fund received 6 206 applications and paid out a total of $23.07 million, involving 4 223 of the applications.

The Labour Tribunal

The Labour Tribunal, which is part of the judiciary, is intended to provide a quick, inexpensive and informal method of adjudicating certain types of disputes between employees and employers, with minimum formality.

In 1990, the tribunal heard 3 942 cases involving employees as claimants, and a further 576 cases initiated by employers. More than $38 million was awarded by the presiding officers. Of these cases, 93 per cent were referred by the Labour Relations Service after unsuccessful conciliation attempts.

Finding Employment

The Employment Services Division of the Labour Department consists of the Local Em- ployment Service, Central Recruitment Unit and Higher Education Employment Service.

The Local Employment Service provides free placement services to help employers recruit staff and job-seekers to find suitable employment. It operates from 13 offices which are linked by a facsimile system for the rapid exchange of vacancy information. It provides co-ordinated services to private companies with territory-wide recruitment needs. The Central Recruitment Unit is a central agency for the recruitment of non-pensionable staff, such as artisans, motor drivers and workmen in all government departments. To help alleviate the labour shortage, the Local Employment Service intensified its publicity efforts through the mass media and set up registration counters in special exhibitions to encourage more people to use the free employment service.

   The Higher Education Employment Service provides free employment assistance to job-seekers who possess university, post-secondary or professional qualifications. It has computerised its operation to provide job-matching and produce promotional materials. Vacancy information is disseminated regularly to universities abroad for the benefit of Hong Kong overseas students.

The Selective Placement Division provides a free employment counselling and placement service for the physically disabled, mentally retarded and ex-mentally ill persons seeking open employment. During the year, the division launched a series of activities to publicise

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its work and to promote the employability of the disabled. A ceremony was held in November to give recognition to employers who took on the largest number of disabled employees or who made special efforts to facilitate the employment of the disabled in the preceding 12 months. Disabled employees who gave outstanding performances during the year were commended on that occasion. A seven-day exhibition on Employment Opportunities of the Disabled was organised in the same month to show the public the working potential of disabled persons, and the training facilities and technical aids avail- able to them.

Careers Guidance

The Careers Advisory Service of the Labour Department provides careers information and guidance to help young people choose a career best suited to their interests, talents and abilities. Its activities include giving careers talks, organising careers days, quizzes, exhibitions and seminars, and visits to commercial and industrial establishments to give students a better insight into the world of work.

To promote careers education, the service organises annually a one-year part-time certificate course for careers teachers in conjunction with the Education Department and the University of Hong Kong. The service has also published a Concise Guide to a Careers Programme for teachers, to assist them in planning programmes for their students.

The service also produces careers pamphlets, job sheets and a monthly newsletter. With a donation from the Royal Hong Kong Jockey Club and funds raised by the Labour Advisory Board Committee on Employment Services, the service has produced a series of 12 careers education films for public viewing. The films were also telecast in the summer.

The service now operates four careers information centres, each equipped with a reference library, an audio-visual unit with sound-on-slides, cassette tapes and videos, and an enquiry service on employment and training opportunities. In 1990, the centres received 27 025 visitors while the service handled 35 044 consultations.

Foreign Workers

The Immigration Department is responsible for controlling the entry of foreign workers for employment in Hong Kong. Generally speaking, foreigners who have special skills or experience not readily available in Hong Kong are allowed entry. Those who are able to contribute substantially to the economic well-being of Hong Kong, such as bankers and entrepreneurs and other persons whose activities are likely to stimulate local employment, are also considered for entry. In all cases, normal immigration requirements must be met. The Immigration Department considers special cases in consultation with the Labour Department and other expert departments.

      During the year, 11913 professionals and other persons with technical expertise or administrative and managerial skills from over 30 countries were admitted for em- ployment.

Subsequent to the introduction of a special scheme in May 1989 to provide for the importation of 3 000 skilled workers on contracts not exceeding two years, a review was conducted during the year which indicated a persistence in the general shortage of labour in the local market and a need to continue with the scheme. It was decided in May 1990 to allow employers to recruit from outside Hong Kong up to 2700 skilled workers at the

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technician, craftsman and supervisory levels, 10 000 workers at the experienced operative level and initially 2 000 construction workers to facilitate the construction of the new airport and related projects.

Since the new scheme was announced in July 1990, 4 524 applications involving 57 558 workers were received. After vetting 12 389 workers were found eligible for entry under the scheme.

Foreign Domestic Helpers

  The entry of foreign domestic helpers is subject to the condition that the employer is a bona fide resident of Hong Kong who can provide suitable accommodation to the helper and who is willing to undertake his or her maintenance in Hong Kong and repatriation to the country of origin. The demand for foreign domestic helpers has increased steadily. In 1990, there were 70 335 foreign domestic helpers in Hong Kong, compared with 57 971 in 1989, representing an increase of 21.3 per cent. About 90.5 per cent of these domestic helpers are citizens of the Philippines.

Attestation of Employment Contracts for Foreign Domestic Helpers

  For the purpose of controlling and protecting the employment conditions of foreign domestic helpers in Hong Kong, the Foreign Domestic Helpers Service of the Labour Department attested to 53 740 employment contracts in 1990.

Frequently consulted by the public on application procedures for the employment of foreign domestic helpers and interpretation on the terms of employment contracts, the service handled 37 400 telephone enquiries, 746 written enquiries and 1 243 consultations in person in 1990. It also conciliated in 729 disputes arising from the employment of foreign domestic helpers.

Employment Agencies

The Employment Agencies Administration of the Labour Department is responsible for administering Part XII of the Employment Ordinance and the Employment Agency Regulations in controlling the licensing and operation of employment agencies in Hong Kong. An amendment to the Employment Ordinance in June 1990 brought all employment agencies, including 'headhunting' companies under control. Subsequently, the licences issued in the year were increased to 710.

Employment Outside Hong Kong

The External Employment Service is responsible for enforcing the Contracts for Em- ployment Outside Hong Kong Ordinance. Under the ordinance, all such contracts must be attested by the Commissioner for Labour before a manual worker leaves Hong Kong. Any breach of the ordinance by an employer or his agent is liable to a fine of $50,000 on conviction. During the year, the service attested 205 new contracts under the ordinance.

Industrial Safety

The Factory Inspectorate of the Labour Department is responsible for enforcing the Factories and Industrial Undertakings Ordinance and its subsidiary regulations. These regulations provide for the safety and health of workers in factories, building and engineering construction sites and other industrial undertakings. Advice and assistance are

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given to managements on various safety and health aspects, including the adoption of safe working practices and layout of new factories to achieve a better working environment. The inspectorate also investigates industrial accidents and dangerous occurrences.

       The Factories and Industrial Undertakings (Amendment) Ordinance 1989 came into operation in December 1990. It imposes a general responsibility on employers and employees for safety and health at work and introduces custodial sentences for serious offences.

      During the year, the Safety Programme Promotion Unit helped industry develop a system of self-regulation for the promotion of in-plant safety and health. The unit assisted management and workers to assess the hazards at work and to develop and improve their in-plant safety and health programmes. Guidance materials were published regularly to explain the principles and technical aspects of self-regulation. The unit also assisted in organising seminars, safety training courses and other activities. A three-day Symposium on Safety and Health Management - Safety Programme Promotion was held in May.

      The Factory Inspectorate placed emphasis on the regulatory activities in high-risk areas of factories and construction sites. Special enforcement campaigns were launched in the year to promote machinery safety, fire prevention and construction safety. During these campaigns, 17 769 factories and 630 construction sites were inspected, and 870 summonses taken out.

Throughout the year, courses were conducted in the Factory Inspectorate's Industrial Safety Training Centre for workers, supervisors and managers from various industries. Safety talks were organised for teachers and students of technical institutes, while special talks were arranged with the Education Department as part of the summer job safety promotion activities. The centre also gave talks on safety management to the medical and engineering students of the University of Hong Kong and business students in post-secondary institutions. In collaboration with the Hong Kong Polytechnic, the centre continued to organise two evening courses leading to the award of a Certificate of Proficiency in Industrial Safety, and one evening course leading to the award of a Certi- ficate of Proficiency in Advanced Industrial Safety. The Construction Industry Training Authority was also assisted in running training courses for safety officers and supervisors.

The Factory Inspectorate, in conjunction with the Information Services Department, continued its publicity programme for the promotion of industrial safety and health through the mass media and other means. Three large-scale symposia on safety and health management were held in January, November and December respectively on the subjects of general duties of employers and employees at work, safety education and information, and Japanese experience in industrial safety. Three industrial safety exhibitions, two held in March and one in September, were organised to depict respectively the new legislation on employers' and employees' general duties for safety and health at work, machinery safety and industrial safety equipment.

In the second half of the year, a Site Safety Award Scheme was organised jointly by the Factory Inspectorate, Housing Department and Hong Kong Construction Industry Employees General Union to promote safety and health on construction sites of the Hong Kong Housing Authority.

       The Pressure Equipment Division of the Labour Department administers the Boilers and Pressure Vessels Ordinance and the Gasholders Examination Ordinance to ensure the safe use and operation of all equipment covered by the two ordinances.

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URBAN COUNCIL PUBLIC LIBRARIES

REFERENCE LIBRARY

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  The Boilers and Pressure Vessels Ordinance stipulates that boilers including thermal oil heaters, steam receivers, steam containers, air receivers and pressurised cement tanks mounted on trucks or trailers must be approved and registered with the division and must be examined periodically by qualified engineers. The division monitors the operation of pressure equipment through spot checks to ensure compliance with statutory requirements and investigates accidents involving pressure equipment.

  To advise the Boilers and Pressure Vessels Authority on the effective control of pres- sure equipment, a Pressure Equipment Advisory Committee was established in June. The committee comprises representatives from pressure equipment users, local manufacturers, inspection bodies, academic institutions, boilers and pressure vessel inspectors' asso- ciations, workers, the Labour Department, Industry Department and Electrical and Mechanical Services Department.

Under the Gasholders Examination Ordinance, the division approves the design of gasholders and carries out inspection during fabrication and repairs, and subsequently conducts annual inspections.

Occupational Health and Hygiene

The Occupational Health Division of the Labour Department works to maintain and improve the physical and mental well-being of workers and to protect them against health hazards arising from employment. It provides an advisory service to government and the public on matters concerning the health of workers and the hygiene of the workplace and complements the Factory Inspectorate Division in supervising health standards and practices in industry.

During the year, the division took part in a number of seminars and exhibitions to promote occupational health. It also published a series of booklets and codes of practice on the prevention of occupational diseases. A video on silicosis and its prevention, sponsored by the Pneumoconiosis Compensation Fund Board, was also produced. Occupational health promotion and education activities were carried out by nursing officers to alert employers and employees to occupational hazards in the workplace.

A major 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 a number of epidemiological studies on health and hygiene conditions have been completed. Programmes to monitor various chemicals, dusts and other occupational health hazards were also carried out.

The division carries out medical examinations of personnel exposed to ionising radia- tion, users of compressed-air breathing apparatus, and government employees working in compressed air or engaged in diving or pest control. It also deals with cases of silicosis under the Pneumoconiosis (Compensation) Ordinance. The division's registered 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.

Occupational Safety and Health Council

The Occupational Safety and Health Council, established by statute in 1988, is financed mainly by a levy on employees' compensation insurance premiums. The council is made up of a chairman, a vice-chairman and 18 members appointed by the Governor. Its

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membership is drawn from employers and employees, academic and professional fields, and from the government.

The council aims to promote a safer and healthier working environment through education and training, promotion of the use of modern technology, dissemination of technical knowledge, provision of consultancy services, and encouragement of co- operation and communication among government and non-government bodies having such common goals.

Under the council are five functional committees and eight industry-based safety and health committees. The five functional committees deal with publicity, staffing, finance, research and general matters. The eight industry-based committees cover the construction, textiles, plastics, shipbuilding and shiprepairing, metalware, electronics, catering, transport and physical distribution industries.

       The council and its committees are serviced by its own staff which has an establishment of 22. During the year, it organised a variety of promotional and educational activities, conducted consultancy and testing services, as well as sponsored research projects, to enhance public awareness of the importance of occupational safety and health.

Employees' Compensation

The Labour Department administers the Employees' Compensation Ordinance and the Pneumoconiosis (Compensation) Ordinance. The department ensures that injured em- ployees and dependants of deceased employees covered by the Employees' Compensa- tion Ordinance obtain compensation from their employers in respect of injuries or deaths caused by accidents arising out of and in the course of employment, or by occupational diseases. It also ensures that persons covered by the Pneumoconiosis (Compensation) Ordinance obtain compensation as soon as possible from the Pneumoconiosis Com- pensation Fund which is financed by a levy imposed on the construction and quarry industries.

      Under the two-tier Employees' Compensation Assessment Board system, employees with work-related injuries which are likely to result in permanent incapacity are assessed by the boards at eight major hospitals in Hong Kong. In 1990, Ordinary Assessment Boards convened 548 sessions and completed assessment of 18 731 cases referred to them by the Commissioner for Labour and 1 286 review cases. One Special Assessment Board was convened and completed assessment of one case referred to them by the Ordinary Assessment Board.

      The compensation level under the Employees' Compensation Ordinance and the Pneu- moconiosis (Compensation) Ordinance was increased by about 23 per cent with effect from January 1, 1990, to take into account changes in wage levels since the last revision in 1988. The Pneumoconiosis (Compensation) Regulations were also amended to set the minimum amount to be considered as monthly earnings at $1,040.

      The Employees' Compensation Insurance Levies Ordinance was enacted in May 1990. This imposes a two per cent levy on the gross premium of every employees' compensation insurance policy issued by an insurer on or after July 1, 1990. The levy is used for funding the Occupational Safety and Health Council and the proposed Employees' Compensation

Assistance Scheme.

      In 1990, 119 pneumoconiosis cases were awarded compensation amounting to $16,892,288. The Pneumoconiosis Compensation Fund Board allocated $2 million to

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finance research, educational and publicity programmes to promote awareness of pneu- moconiosis and to prevent the disease.

Labour Advisory Board

The Labour Advisory Board advises the Commissioner for Labour on matters affecting labour, including legislation and recommendations of the International Labour Organ- isation. It has played an active part in the formulation of labour policies and has given advice on all major items of labour legislation.

The Commissioner for Labour or his deputy is the ex-officio chairman of the board. There are 12 members, six representing employers and six representing employees. Of the employers' representatives, five are nominated by five major employer associations and one appointed ad personam. Five of the employees' representatives are elected by registered employees' trade unions and one appointed ad personam. All 12 members are appointed by the Governor. To cope with the increasing range and complexity of work and to encourage greater participation by employers and employees, committees have been set up on special subject areas such as employment services, the implementation of international labour standards, industrial safety and health, labour relations and employees' compensation. A number of employers and employees are co-opted to serve on these committees.

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PRIMARY PRODUCTION

     EVERY day in Hong Kong, people consume about 1 010 tonnes of rice, 1 090 tonnes of veget- ables, 9300 pigs, 460 head of cattle, 300 tonnes of poultry, 460 tonnes of fish and 1 320 tonnes of fruit. Based on these figures, Hong Kong people, according to the United Nations Food and Agriculture Organisation, are among the world's highest consumers of protein.

Hong Kong farmers work on a very small agricultural base and only about two per cent of the work force is engaged in primary production - agriculture and fisheries. In terms of quantity, local farmers produce about 33 per cent of fresh vegetables, 37 per cent of live poultry, 16 per cent of live pigs, and 15 per cent of freshwater fish consumed. The fishing fleet of some 4 900 vessels supplies about 80 per cent of all live and fresh marine fish eaten.

Foodstuffs account for about 6.1 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 in highly-perishable foodstuffs. The locally-produced foods are generally of a higher quality than the same type of imported foods and thus fetch higher prices in the markets. They help to satisfy the local preference for fresh, rather than frozen or chilled, food.

Agricultural Industry

In Hong Kong, only about eight per cent of the total land area is suitable for crop farming, so agriculture will continue to be directed towards the production of high quality fresh foods through intensive land use.

Common crops are vegetables and flowers although a small quantity of fruit and other high yield crops is also grown. Rice production has given way to intensive vegetable production and has become insignificant. The area of land under vegetables and flowers was about 2 090 hectares in 1990. The value of crop production was about $428 million. Vegetable and flower production accounted for about 69 per cent and 26 per cent of the total value and stood at $294 million and $112 million respectively.

The main vegetable crops are white cabbage, flowering cabbage, lettuce, kale, radish, watercress, leaf mustard, spring onion and chives. They are grown 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 corn, sweet pepper, cabbage, celery, head lettuce, cauliflower and carrot is grown in winter. Straw mushrooms are also pro- duced, using industrial cotton waste as the growing medium.

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Among the common types of flowers, gladioli and chrysanthemums are grown through- out the year, while dahlias, roses, asters, snapdragons and carnations are produced in winter, and 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.

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 in 1990 amounted to $312 million. However, the production of local pigs is expected to decline in the long run as a result of the implementation of the Livestock Waste Control Scheme by the government.

The production value of poultry, including chickens, ducks, pigeons and quails, amount- ed to $627 million. Local chicken production was about 14 million birds, representing 34 per cent of total consumption.

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

Fishing Industry

Marine fish constitute one of Hong Kong's most important primary products. In 1990, total production from the two major sectors of marine capture and culture fisheries was estimated at about 227 670 tonnes with a wholesale value of $2,377 million. This represented a decrease of six per cent in weight and no change in value compared with 1989. The marine capture sector was more important in weight terms, contributing 96 per cent towards total pro- duction while the remaining four per cent came from the culture sector.

   The Hong Kong fishing fleet comprises about 4 900 vessels of which 4 300 are mechanis- ed. It is manned by some 23 400 fishermen and plays a vital role in marine capture fisheries, exploiting over 150 species of commercially important food fish and supplying over 50 per cent of all marine produce consumed locally. In terms of landed weight, golden thread, lizard-fishes, bigeyes, croakers, yellow belly and squid are the most important.

The fleet employs trawling, lining, gill-netting and purse-seining as the major types of fishing methods. About 60 per cent of the vessels are between 10 and 34 metres in length comprising mainly trawlers, liners and gill netters that operate offshore over a wide sector of the continental shelf extending between the Gulf of Tonkin and the East China Sea. The remaining 40 per cent of the vessels are less than 10 metres long, consisting primarily of small gill netters, hand liners and purse seiners which operate in shallow coastal waters.

Trawling is the most important type of fishing, accounting for 74 per cent or 161 000 tonnes of marine fish landed in 1990. The total landed catch of live and fresh marine fish available for local consumption amounted to 89 850 tonnes with an estimated wholesale value of $972 million.

Pond fish farming is one of the most important culture activities. Fish ponds under active cultivation and covering 1 380 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 6 130 tonnes, or 15 per cent of the local consumption of freshwater fish.

PRIMARY PRODUCTION

Marine fish culture has developed considerably in the past decade. Young fish captured from their natural environment as well as imported fish fingerings are reared in cages suspended from rafts in sheltered bays throughout Hong Kong, particularly in the eastern New Territories. Common cultured species are grouper, seabream and snapper. Under the Marine Fish Culture Ordinance, all marine fish culture operations are required to be conducted within designated fish culture zones under licences issued by the Director of Agriculture and Fisheries. The degazetting of the fish culture zone in Tai A Chau, because of the building of a detention centre for Vietnamese boat people, decreases the number of designated zones to 27. By year-end, 1 739 licences were issued. Live marine fish supplied by this activity amounted to 3 321 tonnes valued at $189 million.

Agriculture and Fisheries Department

The Agriculture and Fisheries Department encourages the productive use of agricultural land in the rural areas. Among major on-going programmes are the agricultural land rehabilitation scheme and projects for irrigation maintenance and development. Further- more, 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 health and husbandry, and fisheries. Experiments are conducted to improve the quality and yield of vegetables, flowers and fruit.

      The department advises farmers on disease prevention and control, and on modern methods of animal production. It also supplies good quality seeds and breeding stocks of pigs and poultry.

A wide spectrum of studies on marine resources, aquaculture and the environmental impact of development activities on fisheries is conducted with a view to developing and promoting the local fishery industry. In marine resources, emphasis is placed on optimising production from currently-exploited fisheries resources and exploring the development potential of under-exploited or hitherto unexploited new resources. In this context, the department is actively studying the use of a new trapping technique to exploit the prawns found in waters south of Hong Kong at depths between 500 to 1000 metres and the marketing of this deep-sea product.

Aquaculture studies are directed towards the development of more efficient culture systems and improved husbandry techniques to increase productivity of the marine and pond fish culture sectors. A hardy, fast-growing pond fish, Colossoma brachypomum, was introduced to the industry as the result of studies carried out at the Au Tau pond fish station. In addition, efforts are channelled into testing the feasibility of deep-sea cage culture with a view to removing the restriction of marine fish culture industry to the very sheltered coastal waters. Hydrographic investigations are designed to supply en- vironmental information for an assortment of biological programmes to facilitate proper management of the fish culture zones. Studies of the marine environment are conducted to assess the impact of pollution, including red tides, on fisheries, particularly mariculture, in order to prevent pollution and 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. The department also organises and finances vocational and technical training for those directly and indirectly

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involved in primary production. In addition, it is responsible for the registration and supervision of co-operative societies and credit unions.

Consumer demand and local primary production are monitored for development plan- ning purposes. Statistics on 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 pro- ductivity standards and to identify areas for improvement.

Agricultural Development

Owing to the shortage and rising costs of farm labour and land in Hong Kong, the main development in the agricultural industry in recent years has been the introduction of labour-saving devices and intensive production practices. Farmers use pre-emergence herbicides for weed control in market garden crops and there is widespread use of small farm machines and sprinkler irrigation.

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 in- tegrated pest control and safe use of pesticides.

   The cultivation of edible mushrooms gives good return on marginal land. New strains, high quality spawn and technical advice based on experimental results, are made avail- able to growers. The mass seedling production technique for the cultivation of high value western vegetables has become an active development programme in the year.

   Exotic and improved local breeds of pigs and chickens are readily accepted by livestock farmers due to their superior performance. Sporadic outbreaks of foot-and-mouth disease in pigs and Newcastle disease in poultry still occur but are kept under control by vac- cination.

To help farmers comply with the Livestock Waste Control Scheme requirements, the Agriculture and Fisheries Department has introduced the rearing of pigs on sawdust litter, an innovative non-polluting and cost-effective pig husbandry technique. This simple method involves a special bedding material comprising sawdust and bacterial products in the pig shed to decompose the pig manure in situ.

Parallel to the development of the pig-on-litter method, studies were conducted on the recycling of the sawdust litter for horticultural and landscaping use. Results so far are promising and indicate that sawdust litter is readily usable and a good soil conditioner.

Loans are available to the agricultural industry through three main funds: the Kadoorie Agricultural Aid Loan Fund, the J.E. Joseph Trust Fund and the Vegetable Marketing Organisation Loan Fund. These funds are administered by the Agriculture and Fisheries Department. By December 31, 1990, loans issued since the inception of these three funds had reached $282.9 million. Of this, $275.3 million has been repaid.

   There were 67 co-operative societies and two federations among the farming community with a total membership of some 11 790 farmers. These societies help to promote agri- culture and 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

PRIMARY PRODUCTION

accounts, inspection and enquiry, general supervision of operations, and such matters as mediation in disputes and dissolution of co-operative societies when necessary.

Agricultural extension officers are posted by the department throughout the New Territories to deal with farming problems and to liaise with co-operative societies and rural associations. Technical assistance, agricultural loans and related services are made avail- able to farmers to promote better farming results. Visits were also arranged for farmers to see government experimental farms and farming projects.

Fisheries Development

     Fisheries development work involves modernising fishing craft and introducing more efficient fishing gear and navigational aids. A free advisory service on fishing vessel hull design, fishing methods and fishing equipment is available to fishermen while tests and demonstrations are conducted to assess the suitability of new fishing gear and methods. Training classes in navigation, engineering radiotelephony, proper use of ancillary equip- ment such as radar and weather facsimile, and seminars on safety on board fishing vessels at sea are regularly organised in the main fishing ports.

Following the successful completion of a two-year study on the operation of steel-hulled fishing vessels, this type of vessel has been licensed since May 1989. Since then, the department has been providing a new advisory service to assist local fishermen interested in building these new and more efficient fishing vessels. In addition, the first sea-fishing endorsement course to train and qualify fishermen to operate steel-hulled vessels was organised by the department in September 1989. In 1990, five such training courses were conducted and a total of 41 fishermen trained.

Education is provided for the children of fishermen at eight schools run by the Fish Marketing Organisation. At the end of 1990, more than 1 300 children were attending these schools. A further 11 were attending other schools on scholarships, grants and loans awarded by the organisation.

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

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 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 1990, the fund capital was $23 million.

The Agriculture and Fisheries Department administers another revolving loan fund, financed by the Co-operative for American Relief Everywhere (CARE).

By December 31, loans issued since the inception of these four funds totalled $215 million of which $185 million has been repaid.

At the end of the year, 2 086 fishermen were members of co-operative societies and there were 70 societies and four federations supported by fisherfolk.

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Marketing

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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. This year, 52 per cent of the total quantity of locally-produced vegetables, and 67 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, 58 130 tonnes of local vegetables valued at $136 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 control of the landing, transport, wholesale marketing, and 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 eight schools for fishermen's children, and scholarships for secondary and tertiary education.

   In 1990, the wholesale fish markets handled 67 600 tonnes of marine fish, crustacea and molluscs which were sold for $589 million. This included 3 400 tonnes of imported marine fish sold through these markets.

The wholesale marketing of imported vegetables, fruit, poultry, eggs, freshwater fish and crustacea takes place at various wholesale markets located in different parts of Hong Kong Island, Kowloon and the New Territories. Facilities provided in some of these mar- kets have already become dilapidated, congested and unable to cope with the increasing throughput.

   Marketing activities have spilled onto areas adjacent to these markets, causing obstruc- tion, traffic congestion and environmental problems. To improve the situation, a long- term programme has been devised to replace the outdated markets by establishing large modern wholesale market complexes on Hong Kong Island and in Kowloon to centralise the wholesale marketing of fresh foodstuffs. At the end of 1990, 70 per cent of the work to accommodate the existing Hong Kong Island fruit, freshwater fish and egg traders in the Hong Kong complex had been completed. Progress in the planning of the Kowloon complex has been delayed due to the various airport-related projects at the West Kowloon reclamation. In the interim, the government continues to operate a number of temporary wholesale markets - at Western District on Hong Kong Island for fruit and poultry, at North District in the New Territories for agricultural products and at Cheung Sha Wan in Kowloon for imported vegetables, freshwater fish and poultry. The plan to relocate the three existing temporary wholesale markets at Cheung Sha Wan was shelved during the

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year following the government's decision to reclaim more land there. Plans are now in hand to reprovision these three markets on an interim basis on the proposed West Kowloon Reclamation.

      The Engineering Division of the Agriculture and Fisheries Department undertakes the demolition of disused, polluted agricultural weirs, carries out the cleansing and desilting of polluted irrigation weir sites together with the operation and maintenance of departmental farm waste treatment facilities.

Mining

     The Mines Division of the Labour Department, the administration of which was trans- ferred to the Civil Engineering Services Department in 1990, enforces legislation and safety regulations relating to mining, quarrying and explosives. It processes mining and prospecting applications and inspects mining and prospecting areas, stone quarries, blasting sites and explosives stores. The mining lease for the extraction of feldspar and kaolin expired at the middle of 1990 and the ex-lessee has since applied for a mining licence.

      The division also controls the possession, conveyance, storage, manufacture and use of explosives in Hong Kong, including the delivery of explosives from government depots to blasting sites, and issues shot-firers' blasting certificates. In addition, it manages govern- ment explosives depots which provide bulk storage facilities for imported as well as locally-manufactured explosives.

      Site formation projects and stone quarries were the largest users of explosives in 1990 when the overall consumption of explosives in the territory decreased by 16.8 per cent due to the slowdown in the construction industry in early 1990. Total consumption was 4 220 tonnes.

Storage space was provided for imported fireworks for the Lunar New Year fireworks display in January. The division continued to provide transit storage facilities for explo- sives and temporary storage for confiscated fireworks awaiting destruction.

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WITHIN the Government Secretariat, policy responsibility for education matters rests with the Secretary for Education and Manpower. A number of bodies are, however, in- volved in an executive or advisory capacity in the administration and development of the educational system.

Education Commission

The Education Commission, established in April 1984, is the government's highest advisory body on education. Its overall objective is to provide the Governor with advice on the development of the educational system, in the light of the needs of the community.

   The terms of reference of the commission are: to define overall educational objectives; to formulate policy and recommend priorities for implementation having regard to the resources available; to co-ordinate and monitor the planning and development of educa- tion at all levels, and to initiate educational research.

   The commission is composed of 14 members. Twelve of these, including the chairman, are non-government members appointed with a view to ensuring that a broad range of personal and professional experience is brought to bear on the issues before the com- mission. The ex-officio members are the chairmen of the Board of Education, the University and Polytechnic Grants Committee and the Vocational Training Council. The two remaining members of the Education Commission are government officials - the Secretary for Education and Manpower (who is vice-chairman), and the Director of Education.

   In November 1990, the commission published its fourth report which dealt with the curriculum and behavioural problems in schools. The report contained recommendations on a wide range of issues. On the curriculum, the commission made several recom- ̈ mendations as to how it might be improved. The most important of these related to curriculum development where the commission recommended that for the effective and innovative development of curriculum, a full-time professional body namely, the Curriculum Development Institute, be created within the Education Department. To assist students with behavioural problems, the commission recommended improvement to counselling and guidance in schools. It recommended, too, the improvement of remedial teaching and the provision of alternative curricula, in both mainstream and special purpose schools, to help those who have learning difficulties, those who are gifted or unmotivated, and those who have severe learning problems. The commission also recommended the

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introduction of a framework of attainment targets and related assessments aimed at improving the teaching and learning in schools as well as providing for more effective monitoring and assessment of learning outcomes. On language in education, the com- mission recommended that a framework for language reforms be adopted. This would provide for the grouping of students in terms of their ability to learn in Chinese or English as determined through objective assessments, and for secondary schools to adopt a clear medium of instruction to suit the needs of their students. Finally, the commission recom- mended an implementation programme for the introduction of uni-sessional schooling at Primary 5 and Primary 6 and the abolition of corporal punishment in schools.

      The commission is now working on its fifth report which will deal with the teaching profession and expects to publish it by end-1991. In this report they will examine issues like teacher training, teacher morale and the Colleges of Education.

Board of Education

The Board of Education is a statutory advisory body appointed by the Governor in accordance with Section 7(1) of the Education Ordinance, Chapter 279 of the Laws of Hong Kong. Although the board is an advisory body without executive functions, it plays a key role in formulating and planning education policy for the school sector.

      There are 17 board members. Fifteen are non-officials (including the chairman) who are experienced educators or prominent members of the community. The two official members are the Director of Education (vice-chairman) and the Deputy Secretary for Education and Manpower. The board is serviced by the Education Department.

University and Polytechnic Grants Committee

The University and Polytechnic Grants Committee (UPGC) is appointed by the Governor to advise the government on the development of, and funding requirements for, higher education in Hong Kong and to administer government grants for the tertiary institutions.

      The UPGC is an advisory committee comprising 10 distinguished overseas academics, four eminent Hong Kong-based academics and six prominent local professionals and industrialists. There is no government representation, but the committee is serviced by a small secretariat staffed by civil servants.

      In October, the UPGC commemorated its 25th anniversary and was pleased to note the significant growth in the tertiary education sector since its establishment (as the then University Grants Committee) in 1965. Over this period student numbers (in full-time equivalent terms) have increased tenfold from 4 100 (in two universities) to 41 000. There are at present five institutions funded through the UPGC: 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. In 1991, the committee will assume responsibility for the Hong Kong University of Science and Technology and the Lingnan College as well.

In June, the UPGC submitted its recommendations to government on the imple- mentation of the government's ambitious expansion plans for tertiary education which envisage the doubling of first-year first-degree places by 1994-5, thereby providing places for over 18 per cent of the relevant age group. The implementation strategy, which was endorsed a month later, provides for a phased build-up of the additional student numbers starting in 1991-2 in the, by then, seven UPGC-funded institutions.

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Since this is to be achieved in part by an increase in the percentage of degree-level places offered at the two polytechnics, from 40 per cent to 65 per cent, some of their existing and planned sub-degree courses will be transferred to technical institutes operated by the Vocational Training Council.

The UPGC noted that the achievement of the expansion targets will require the tertiary sector to grow at 10 per cent overall per annum, which is high both in absolute terms and by comparison with what has been achieved anywhere else in the world. The committee considers that retention and recruitment of academic staff of the right calibre will be the most critical factor in achieving this dramatic growth rate. While accepting that most of these staff will have to come from overseas to meet the short-term needs, the committee also considers it important for Hong Kong to train its own academic staff through the provision of postgraduate research programmes, to meet the longer-term requirements of the tertiary sector. With this in view, the UPGC's expansion strategy provides for a gradual increase of postgraduate research places, from around 900 in 1990-91 to more than 2000 in 1994-5. The committee was therefore pleased to gain government approval in August of its proposals to increase funding for research and to establish a Research Grants Council (RGC).

During the year, the committee continued its work on the implementation of the government's decisions on the revised structure of tertiary education, which required all tertiary institutions to conform with a three-year first degree curriculum based on post- Secondary 7 entry. To facilitate the implementation of the revised structure, a joint admissions scheme for the first-degree curriculum was introduced, in an interim form, in September. The committee is liaising further with the institutions on the final form of the scheme, to be introduced at a later date.

Vocational Training Council

The Vocational Training Council was set up in 1982 and comprises 22 members appointed by the Governor. Four are official members: the Secretary for Economic Services; the Director of Education; the Commissioner for Labour, and the Director of Technical Education and Industrial Training. The council's role is to advise the Governor on mea- sures 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 to maintain and improve Hong Kong's industry, commerce and services, and also to establish, operate and maintain technical institutes and training centres.

Under the council are 20 training boards and seven general committees. The training boards cover all major economic sectors: accountancy; advertising, public relations and publishing; automobile; banking; building and civil engineering; clothing; electrical; electronics; hotel, catering and tourism; insurance; jewellery; journalism; machine shop and metal working; merchant navy; plastics; printing; shipbuilding, ship repair and off- shore engineering; textile; transport and physical distribution, and wholesale/retail and import/export trades. The seven general committees, which are concerned with areas of training relevant to more than one sector of the economy, deal with apprenticeship and trade testing; electronic data processing training; management and supervisory training; precision tooling training; technical education; training of technologists, and translation.

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       The training boards and general committees assess the future manpower needs of the economic sectors and recommend measures to meet these needs, prepare and disseminate training materials such as job specifications, training programmes and trade test guidelines and carry out other duties, such as operating and maintaining training centres or training schemes. During 1990, manpower surveys were conducted in the following 11 sectors: accountancy; banking; electronics; furniture; handbag and footwear; machine shop and metal working; merchant navy; printing; shipbuilding and ship repairs; tourism, and wholesale/retail and import/export. The training boards and general committees continued to prepare or update job specifications, training programmes, trade test guidelines, training curricula and glossaries of common technical terms.

       The council and its training boards and committees are serviced partly by its own staff and partly by staff of the Technical Education and Industrial Training Department.

Education Department

The Director of Education is responsible under the terms of the Education Ordinance for general supervision of education in Hong Kong at kindergarten, primary and secondary levels. He also supervises institutions registered under the Post Secondary Colleges Ordinance.

      He directly controls all government schools, the Colleges of Education (including the Hong Kong Technical Teachers' College) and the Institute of Language in Education. All other schools, with minor exceptions, are required to be registered under the Education Ordinance and to comply with its requirements. All schools are regularly inspected by the Education Department and those receiving financial assistance from the government under codes of aid are in addition subject to the provisions of these codes. The codes deal with matters like general administration, grants, staffing and conditions of service.

       The department plays a major role in educational planning and development to ensure that approved policy objectives are achieved. Through its Advisory Inspectorate, it advises schools on teaching methods and plays an important part in curriculum development. The department's work includes the provision of educational television, implementation of the school building programme, allocation of school places, and educational research.

       There are 17 educational districts, each headed by a Senior Education Officer who supervises the administration of schools within the district, provides advice and assistance to schools, teachers, parents and students, and acts as a channel of communication between them and the department. These officers also attend district board meetings to assist in discussions on educational matters.

Expenditure

The annual estimate of expenditure for educational services in the financial year beginning April 1990 provided for $1,558 million in capital expenditure for educational projects and $13,888 million in recurrent expenditure, representing 15 per cent of the total budget.

Kindergartens

     Pre-school education for the 3-to-5 age group is provided in privately-run kindergartens. As at September 1990, 196466 children were enrolled in 785 kindergartens, of which an increasing number are run on a non-profit-making basis. Such kindergartens are eligible for rent and rates rebates, and may be allocated premises in public housing estates.

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In August, a new fee remission scheme was introduced for needy parents who have children attending kindergartens. Eligible applicants may receive assistance in amounts ranging from 25 to 100 per cent of the weighted average of the fees charged by non- profit-making kindergartens.

Officers of the department inspect kindergartens and offer professional advice to school managers, teachers, parents and the public. For basic professional training, a two-year, part-time day-release course leading to Qualified Kindergarten Teacher status and a 12-week, part-time evening course leading to Qualified Assistant Kindergarten Teacher status are conducted by the Grantham College of Education. An identical part-time day- release course leading to Qualified Assistant Kindergarten Teacher status is conducted by the Kindergarten Section of the Advisory Inspectorate of the department. To facilitate attendance by teachers, regional training centres are now in use and more centres are being planned for the coming year at other convenient locations.

The department's Kindergarten Section also organises seminars, workshops and ex- hibitions to help heads and teachers raise their professional standards. During the year a series of curriculum development materials was produced to help teachers in planning educational activities. A booklet for parents was also compiled for issue in 1990.

Primary Education

Free primary education has been provided in all government schools and in nearly all aided schools since September 1971. In the few aided primary schools where fees are charged, the fees may be remitted in cases of hardship. Some parents continue to send their children to the 78 private schools, although places are available in the public sector.

   In September, primary school enrolment totalled 524919 and enrolment in primary- level evening schools for adults totalled 1801. During the year, seven new schools were completed, providing 14 400 primary places. Six of these schools are located in developing new towns to cater for the needs of the growing population. The other is located in a public housing estate in Kwun Tong, which has recently been redeveloped.

Most primary schools operate on a bisessional basis, with children attending either a morning or an afternoon session. In October 1989, the government announced its intention to convert all Primary 5 and 6 to whole-day operation.

   The Primary One Admission Scheme was introduced in 1983 to monitor admission to Primary 1 in government and aided schools. Of the 72 324 children who took part this year, 44991 or 62.2 per cent were allocated places in schools of their parents' choice. The remainder were allocated places in schools in their own districts, parental preference having been taken into account.

Primary 6 leavers are allocated secondary school places in the public sector through the Secondary School Places Allocation (SSPA) System, based on internal school assessments scaled by a centrally-administered Academic Aptitude Test, and on parental choice. During the year, 84044 Primary 6 students participated in the SSPA and were allocated places in public sector schools. Half were allocated to the school of their first choice.

Secondary Education

In 1978, free education was extended to junior secondary classes. For senior secondary education leading to the Hong Kong Certificate of Education Examination, the policy target is to provide, by 1991, subsidised Secondary 4 places for about 85 per cent of the

EDUCATION

      15-year-old population. Places for a further 10 per cent of the age group are to be provided on full-time craft courses in technical institutes. The policy target for sixth form education is to provide one public sector Secondary 6 place for every three public sector Secondary 4 places two years earlier.

       To meet these targets, new secondary schools are built and places are bought from private schools. During the year, nine new secondary schools were completed, providing 10 280 places. Another 54 schools will be completed between 1991 and 1995 to meet the increasing demand and to reprovision schools from areas of surplus to areas of shortfall. A new standard design of school building, providing improved facilities and accommodation, was introduced in 1989.

      To supplement the supply of government and aided secondary school places, the government buys places from those private schools which have a satisfactory standard. Starting from September 1990, places bought have been extended from junior secondary to Secondary 4 and will be extended to Secondary 6 from 1992.

      Following advice in the Education Commission's Report No. 3, a direct subsidy scheme (DSS) is to be introduced in 1991. The aim is to create a strong private school sector subsidised by government, in order to improve the quality and diversity of education available. It will introduce an element of differentiation to the otherwise uniform school system to give parents more choice. Under the scheme any secondary school not run by the government and meeting specified standards will receive a public subsidy for each student enrolled. It will be free to set its own curriculum, entrance requirements and fee levels, with minimum government control. It was also announced that the bought place scheme (BPS) would come to an end in the year 2000, and that schools in the BPS would be helped before then to raise their standards as close as possible to those of an aided school. A Private Schools Review Committee was set up in November 1989 to advise on the implementation of these changes. The committee met 15 times during the year.

       A BPS contract was drawn up with the aim of progressively raising the standards of the existing BPS schools with effect from September 1990. The contract specified various areas of improvement to the schools including whole day operation, class structure, teacher training and school facilities. The contract would expire in August 2001 unless either party gave to the other five years written notice of termination. A total of 17 private independent schools in the BPS entered into contract with the government.

       The details of the DSS were finalised and announced in May 1990. A capital assistance loan scheme was also devised to enable non-profit-making DSS schools to use the loan for redeveloping school buildings, for major structural repairs and, in the case of international schools joining the DSS, for expansion of facilities to meet additional demand.

The Junior Secondary Education Assessment (JSEA) System allocates suitable Second- ary 3 leavers to subsidised Secondary 4 places and to full-time post-Secondary 3 craft courses. Of the 78 289 students who participated this year, 63469 (81.1 per cent) and 5950 (7.6 per cent) were allocated Secondary 4 places and post-Secondary 3 craft course places respectively. Of those allocated Secondary 4 places, 52935 (83.4 per cent) were able to continue studying in their own schools.

       There are three main types of secondary school in Hong Kong: grammar, technical and prevocational.

       In 1990, there were 386 grammar schools with a total enrolment of 391 567. These offer a five-year secondary course in a broad range of academic, cultural and practical subjects

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leading to the Hong Kong Certificate of Education Examination (HKCEE). Most offer, in addition, a two-year sixth form course leading to the Hong Kong Advanced Level Examination (HKALE), a few offer a one-year sixth form leading to the Hong Kong Higher Level Examination, and some do not have sixth forms.

  There were 22 technical schools with a total enrolment of 21 581. They prepare students for the HKCEE with emphasis on technical and commercial subjects. Qualified candidates can continue their studies in the sixth form or in technical institutes.

There were 22 prevocational schools with a total enrolment of 18233. These offer an alternative form of secondary education suited to students with an aptitude for practical and technical subjects. They provide a solid foundation of general knowledge and a broad introduction to technical and practical education upon which future vocational training may be based. The curriculum in Secondary 1 to 3 is made up of about 40 per cent technical and practical subjects and 60 per cent general subjects. The technical and practical content is reduced to about 30 per cent in Secondary 4 and 5. Students completing Secondary 3 in a prevocational school may enter approved apprenticeship schemes or continue their studies to Secondary 5 and subsequently take the HKCEE. Qualified candidates can continue their studies in polytechnics or technical institutes. In 1992, some prevocational schools will provide sixth form classes, to prepare students for technical or other studies in the polytechnics, universities or other tertiary institutions.

  A working group on sixth form education, comprising principals from all types of secondary schools, representatives of tertiary institutions and the Hong Kong Exam- inations Authority (HKEA) and government officials, was set up to advise the Secretary for Education and Manpower on the implementation of the new policy on the sixth form which was announced in 1988. Major changes were recommended to take effect in 1992: the abolition of the Higher Level Examination; the introduction of Advanced Level subjects in the medium of Chinese; the adoption of a uniform two-year sixth form course in all types of secondary school, and the introduction of new courses leading to an Advanced Supplementary Examination. During the year, syllabus outlines for 15 Advanced Supplementary and two new Advanced Level subjects were drafted.

Special Education

Special education continued to develop in line with the objectives of the 1977 White Paper on Rehabilitation and the subsequent annual reviews of the Rehabilitation Programme Plan. Altogether, 15 186 special places for handicapped children were provided in 1990.

There were 71 special schools providing 8986 places for the more severely handicapped, including the blind, the deaf, the physically handicapped, the mentally handicapped, the maladjusted and socially deprived and those with learning difficulties. There were 936 residential places provided in boarding sections of 16 special schools. In addition, there were 418 special education classes in ordinary schools providing 6200 places for the partially sighted, the partially hearing and students with learning difficulties.

  In 1990, 27 special schools were equipped with microcomputers for teaching computer literacy and computer studies. Where necessary, adaptive equipment was also provided to help handicapped students to use computers as communication and rehabilitation aids.

  An integrated programme to provide remedial support for mildly handicapped children in non-profit-making kindergartens was implemented in 1988 and extended to 16 kinder- gartens in 1990.

EDUCATION

      Intensive remedial services were provided by the Special Education Section of the Education Department for students in ordinary classes with learning difficulties, adjust- ment problems and mild physical handicaps. These services included remedial support outside school hours in resource teaching centres and adjustment units, a peripatetic teaching service during or outside school hours and advisory service to schools.

       Screening and assessment services were provided to identify special educational needs among school-age children so that remedial action could be taken as early as possible. Primary 1 students were screened under the Combined Screening Programme with screen- ing tests for hearing and vision. The programme also provided checklists and guides for teachers to detect children with speech problems and learning difficulties. Students requiring further assessment were given audiological, speech, psychological or educational assessments while those in need of remedial services such as speech and auditory training, speech therapy and counselling were given such services at Special Education Services Centres. The government also operated a laboratory to provide ear moulds to students with hearing aids.

      The Centralised Braille Production Centre, established in 1986 and operated by the Hong Kong Society for the Blind under government subvention, produced braille reading material, including textbooks, and carried out research to improve braille production in both English and Chinese.

       The two-year in-service courses of training for teachers of children with special educa- tional needs continued to be operated by the Sir Robert Black College of Education. Short courses, seminars and workshops were frequently held by the Special Education Section to enhance the professional knowledge of staff in the special education field.

Post-Secondary Education

There are two approved post-secondary colleges registered under the Post Secondary Colleges Ordinance (Chapter 320). They are the Hong Kong Shue Yan College and Lingnan College. The Hong Kong Shue Yan College, registered in January 1976, has three faculties - Arts, Social Science and Business, with 13 departments offering day and evening courses to 3 498 students. It operates a four-year diploma programme without government financial assistance. However, the students are eligible to apply for government loans. The maximum amount was $10,300 in 1990-91.

       Lingnan College, registered in October 1978, has three faculties - Arts, Business and Social Science - with eight departments and a general education division which provides 13 study programmes. The total enrolment in the various courses is 1232. Following an institutional review by the Council for National Academic Awards, an integrated three-year Honours Diploma course was introduced in September 1988. This has attracted greater government financial assistance. Financial assistance is also available to students on the integrated three-year course. In 1990-91, the maximum level for grants was revised to $4,700, and for government loans to $5,600.

University of Hong Kong

The University of Hong Kong, situated on the slopes above the Western District of Hong Kong Island, is the oldest tertiary education institution in Hong Kong. Established in 1911 and originally housed in just one building, the university has grown to its present size of 9256 students, and now occupies two additional sites: the Faculty of Medicine in Pok Fu

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Lam, adjacent to its teaching hospital, Queen Mary Hospital, and the Faculty of Dentistry in the Prince Philip Dental Hospital at Sai Ying Pun.

  The structure of the degrees and the governance of the university are based mainly on the British system. The university has nine faculties: Arts, Architecture, Dentistry, Education, Engineering, Law, Medicine, Science and Social Sciences. Each faculty teaches both undergraduate and postgraduate courses.

Most undergraduate courses are of three years' duration. Exceptions are the curricula for the Bachelor of Architecture, Bachelor of Dental Surgery, Bachelor of Medicine and Bachelor of Surgery degrees, all lasting for five years, and the Bachelor of Science in Speech and Hearing Sciences, which lasts four years. All courses, apart from some in the Department of Chinese, are taught and examined in English. A total of 15 676 candidates competed for 1979 first-year places in the university's 1990 admission exercise.

The university offers three kinds of higher degree, two of which, the Master of Philosophy and the Doctor of Philosophy, are awarded on the basis of original research. Another Master's degree is obtainable by coursework. In 1990, higher degree enrolment constituted about 17 per cent of total student registration. A number of postgraduate diploma and certificate courses are also offered.

   Research at the university is active and ongoing, with almost every member of the academic staff engaged in research of some nature. Financial resources for the support of research are provided by the government, private benefactions and private companies. The government, through the University and Polytechnic Grants Committee, has allocated in the 1988-91 triennium to the university nearly 40 per cent of its earmarked research grant open to bids from the five publicly funded tertiary institutions. This amounted to a total of $31.33 million. Research is considered a vital function of the university, and projects undertaken in co-operation with the commercial and industrial sectors of the community, and collaborative research and exchange at international level, are encouraged and sup- ported as far as possible. An Industrial Liaison Office was inaugurated in May 1990 to foster links between the university and industry on a more systematic basis, in order to facilitate the provision of consultative services based on research by the university's academic staff to meet industry's needs. The university also has a number of specialist centres, many of which undertake interdisciplinary studies. The Swire Marine Laboratory at Cape d'Aguilar on the Hong Kong Island, funded with a $12 million donation, was opened formally in November 1990 to become the first centre in the South China Sea region providing facilities for studies in marine biology, particularly in the context of environmental problems in this part of the world. Other research centres include: the Institute of Molecular Biology, the first of its kind in Hong Kong, which provides the territory with the necessary basic and back-up research for its own biotechnology industry; the Centre of Asian Studies, which serves as a focal point for research on China, Hong Kong, East Asia and South-east Asia, the Centre of Urban Studies and Urban Planning; the Kadoorie Agricultural Research Centre, and the Social Sciences Research Centre. In February 1990, the University of Hong Kong Business School and the Poon Kam Kai Institute of Management were set up with a $54 million donation by business- men in Britain and Hong Kong, to enhance management education at the university through degree and executive training programmes, with the objective of developing an internationally-recognised school for research and teaching for executives who are engaged in business with Asian countries.

EDUCATION

Close links are maintained with universities abroad, through individuals and de- partments, as well as through the Association of Commonwealth Universities and the Association of South-east Asian Institutes of Higher Learning. Academic staff are recruited by international advertisement.

Degrees awarded by the University are recognised internationally, and for the pro- fessional disciplines, specialists from major bodies in the United Kingdom and other countries are invited regularly to review and advise on academic developments. Qualifica- tions for graduates have become prerequisites for admission to professional practice in fields such as architecture, dentistry, engineering, law, medicine, psychology, social work, quantity surveying and urban planning.

New academic developments are undertaken in close consultation with the University and Polytechnic Grants Committee, as well as relevant government departments and other agencies, such as the Education and Manpower Branch of the Government Secretariat, the Environmental Protection Department, the Social Welfare Department, and the Industry Development Board. Close contact enables the university to plan new initiatives in direct response to specific community and manpower needs. Two new interdisciplinary programmes, one in environmental life science leading to the Bachelor of Science degree and another in Japanese Studies leading to the Bachelor of Arts degree, were introduced in the 1990-91 academic year. In response to the government's proposal of accelerated expansion for tertiary education, announced in October 1989, the university has planned to offer a range of new undergraduate and postgraduate programmes in the 1990s for its student population which is expected to grow to 11 500 by the middle of the decade.

To keep pace with academic developments and increasing student numbers, the university is undergoing substantial physical redevelopment. Following the 1989 opening of the K K Leung Building, a 20-storey academic building on the main estate, an extension to the main library is due for completion by the end of 1990.

Accommodation is currently provided by the university for about 25 per cent of its undergraduate students. There are seven residential halls and two non-residential halls. Two additional 400-place halls of residence are planned, and a 150-place hall for 'on- call' clinical students is also to be built. A number of postgraduate students and academic visitors to the university can be accommodated at the Robert Black College on the main estate. Three student amenities centres provide study, recreational and restaurant facilities for those students who are unable to obtain a place in a hall of residence.

The University Main Library, with its collection of over a million printed volumes, is one of the best equipped in South-east Asia, and includes a unique and invaluable collection of Chinese works. There are other specialist libraries located in the Faculties of Dentistry, Education, Law, Medicine and in the Department of Music. The university also has its own publisher and bindery. The Fung Ping Shan Museum situated in Bonham Road, is a university museum open to the public on weekdays. The museum's collections are chiefly Chinese paintings, ceramics and bronzes dating back to the third millenium BC.

Apart from the regular student enrolment, the university offers about 1 500 courses to some further 36 000 students each year through its Department of Extra-Mural Studies. The department teaches numerous courses in a wide range of disciplines, some of which are at the Certificate/Diploma level. It also offers programmes leading to degree, post- graduate and professional qualifications. Most students attend courses at the end of the working day at the Extra-Mural Studies Town Centre or the university campus.

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Graduate Teachers

The training of graduate teachers for secondary schools is undertaken by the Faculty of Education at the University of Hong Kong and the School of Education of the Chinese University of Hong Kong.

In the University of Hong Kong, more than 700 students were enrolled in the Post- graduate Certificate in Education programme, both full-time and part-time, in 1989- 90. For further professional and academic development of teachers, the faculty offered Advanced Diploma and MEd programmes by coursework and dissertation in a variety of curriculum areas. The Advanced Diploma electives offered were Curriculum Studies, Guidance and Counselling, Psychology of Classroom Learning and Religious and Moral Education, and in the MEd, the electives were Curriculum Studies, Early Childhood Education, Special Education Needs, and Education and National Development. Partly as a result of the numbers of students who have graduated from the Masters programme over the 11 years since it was instituted, the numbers of applications for research degrees (MPhil and PhD) in education continued to rise. There were 23 enrolments in 1989-90, and the faculty intends to increase the numbers of places available for study at this level in the next few years.

As well as its regular formal teaching programme, the Faculty of Education provides a wide range of In-service Teacher Education Programme courses of varying length, aiming to cater for a wide diversity of needs in the education community. Fifty-two courses were taken by 1 150 students in 1989-90.

Education Research

Members of the Faculty of Education at Hong Kong University are engaged in over 50 research projects in education, ranging from pre-primary to tertiary level and from broad issues of educational planning and curriculum development to studies of particular learning contexts. The faculty has continued its active co-operation in research with the Education Department, and is gradually extending its work with colleagues in China.

The Chinese University of Hong Kong

The Chinese University of Hong Kong was inaugurated in 1963 as a federal university and a self-governing corporation which draws its income mainly from government grants. The campus occupies 134 hectares of land near Sha Tin.

   The university comprises three original colleges - New Asia College (founded in 1949), Chung Chi College (1951) and United College (1956). A fourth college, Shaw College, named after its donor Sir Run Run Shaw, became operational in 1988 at the north-west part of the campus.

   For two decades after its inception, the university adopted a curriculum structure based on a combination of the credit unit system and degree examination system. Students admitted to the undergraduate programme after six years of secondary education were granted a Bachelor's degree upon completion of a number of course credits and the passing of a degree examination assessed by external examiners from home and abroad.

The university started a comprehensive curriculum review in 1983 which resulted in the adoption of a new curriculum structure for its undergraduate studies, based solely on the credit unit system. The new curriculum is applicable to students admitted in 1986-7 and thereafter. Under this new structure, general education is strengthened, language standards

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are emphasised, minor programmes become optional and degree examinations are replaced by course examinations with the external examiner system retained.

In 1990-91, the university offered full-time undergraduate students 33 major sub- jects and 31 minor subjects through its 49 departments grouped under five faculties, namely, Arts, Business Administration, Science, Social Science and Medicine. The first four faculties offer four-year programmes, leading to Bachelor's degrees. The Faculty of Medicine runs a five-year programme with two years of pre-clinical studies and three years of clinical studies. Clinical teaching is conducted mainly in the university's teaching hospital - the Prince of Wales Hospital in Sha Tin. The degrees of MB ChB conferred by the university are recognised by the General Medical Council of the United Kingdom and the Medical Council of Hong Kong for the purposes of provisional and full registration of medical practitioners. An intercalated degree programme in medical sciences has been introduced in 1989-90 to give those medical students who have an affinity for medical research the opportunity to develop that interest. The university emphasises bilingualism. Students have to be proficient in both Chinese and English on admission.

At postgraduate level, there are 63 academic and professional programmes leading to the degrees of Doctor of Medicine, Doctor of Science, Doctor of Philosophy, Master of Phil- osophy, Master of Business Administration, Master of Social Work, Master of Divinity, Master of Science, Master of Arts, Master of Arts in Education, Master of Education and Master of Social Science, as well as diplomas in Education and Social Work.

      Part-time degree programmes leading to Bachelor's degrees in Biology and Chemistry, Business Administration, Chinese and English, Mathematics and Statistics, Music, Phys- ical Education, Primary Education and Social Work, and Master's degrees in Translation, Chinese Language and Literature, Business Administration, Clinical Biochemistry, and Social Work as well as professional diplomas in both Education and Social Work are offered to working adults.

Expansion in the fields of Education, Medicine, Engineering and Computer Science is expected in the coming years. Plans are also in hand to establish Architecture, Japanese Studies, Nursing and Pharmacy Studies in the near future.

The university is strongly committed to research and related academic activities. In addition to research work conducted in the teaching departments, a number of research institutes have been established to co-ordinate research work in selected areas. Besides the Research Institutes of Chinese Studies, Social Studies and Science and Technology, there is the Hong Kong Institute of Biotechnology. In 1988-9 the university took over the Universities Service Centre which provides office accommodation, library facilities and professional assistance to scholars conducting studies on contemporary China. The Asia- Pacific Institute of Business was established in 1990 to promote and facilitate interaction among academics and between the academics and business community. The Hong Kong Institute of Asia-Pacific Studies, also established in the same year, in place of the In- stitute of Social Studies, is aimed at promoting multi-disciplinary social science research on social, political and economic development in Hong Kong and the region.

Competition for university places is intense. Of the 23 000 candidates who sat the various public examinations held in 1990, approximately 1820 were admitted to first-year studies. Enrolment as of September 1990 totalled 9237, comprising 6675 full-time and 912 part- time undergraduate students and 480 full-time and 1 170 part-time postgraduate students. Almost all students are local, and about half are given hostel places.

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   In 1989-90, the Department of Extramural Studies offered more than 2000 courses with a total enrolment of 53 750. In addition to general courses and those leading to the award of diplomas and certificates, the department provided correspondence courses, courses on radio and television and self-learning courses packaged in the form of audio tapes, programmed texts and resource materials. Apart from running courses in China, the department collaborates with universities and institutions of higher learning in Canada and Australia in offering joint courses in a variety of subjects and at different levels. The distance education programme has expanded rapidly with the support of Radio Television Hong Kong. Cable television, which will come into operation in the near future, will be harnessed to further develop distance education.

With an increasing growth rate in the number of students and new programmes, an extensive development proposal has been planned for the university's physical plants. Projects under construction are the Leung Kau Kui Building (teaching facilities) and Chan Kwan Tung Inter-University Hall at Central Campus, Hui Yeung Shing Building (teaching facilities), and the extension to the Elisabeth Luce Moore Library at Chung Chi Campus, the Hong Kong Institute of Biotechnology (research facilities), Shaw College Lecture Theatre, a new telecommunication system, air-conditioning of University Gymnasium, floodlighting of University Stadium and improvement and extension to electricity and water supply distribution systems. The Third Student Hostel at Shaw College and Phase I Redevelopment of Hostel at Chung Chi Campus are at tendering stage.

Other capital projects on teaching, amenities, sports and domestic facilities include the extension to the University Central Library, phases I and II of Engineering Building Complex, redevelopment of Teaching Buildings of Chung Chi Campus phases II and III, a new Inter-University Hall (Block II), a squash centre, extension to Chien Mu Library at New Asia Campus, and a variety of engineering services and redevelopment programmes.

The library system consists of the University Library, the Medical Library, and three branch libraries in the colleges. The total collection in 1990 was 1 037 400 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 governments and individual institutions. It is a member of the Association of Common- wealth Universities, International Association of Universities, and the Association of South-east Asian Institutions of Higher Learning. The university has also been closely associated with the Committee for International Co-operation in Higher Education in the United Kingdom.

The Hong Kong University of Science and Technology

The Hong Kong University of Science and Technology (HKUST) is the third and newest publicly-funded university in Hong Kong. Incorporated by statute in April 1988, its cur- ricula and research programmes will emphasise science, engineering, technology, business and management studies, with the specific mandated goals of educating men and women to contribute to the territory's economic well-being, and of promoting economic devel- opment and entrepreneurship in the Asia-Pacific region. HKUST will open for classes in October 1991 with an enrolment of 700, gradually expanding to 7000 by 1996.

For HKUST, 1990 has been a year of intense activity as construction of the campus progresses, as teaching and administrative staff are recruited, and as academic curricula and research programmes are developed.

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      Located on a 60-hectare site on Clear Water Bay Peninsula, the university campus is being built as a turnkey project managed by The Royal Hong Kong Jockey Club. Phase I of the project will be completed in June 1991; Phase II in 1993. By August 1990, construction of all buildings was proceeding within schedule, and by July 1991, HKUST should be relocated from its temporary offices in the World Shipping Centre, Tsim Sha Tsui, to the new campus.

The founding Vice-Chancellor and President of the University, Professor Chia-Wei Woo, took up his post in September 1988. All three Pro-Vice-Chancellors have been recruited and each of the senior administrative positions has been filled. Deans for the Schools of Engineering and of Humanities and Social Science have taken up their posts at the university.

For the School of Business and Management, senior academics from the Anderson Graduate School of Management of UCLA (University of California, Los Angeles) and other leading business schools in California are being seconded to help set up the school's departments.

      HKUST will comprise three Schools - of Science, of Engineering, and of Business and Management - offering undergraduate and postgraduate degree programmes, and a fourth School of Humanities and Social Science which will offer classes to all students but award only postgraduate degrees.

The academic year will comprise two semesters of 15 weeks each, separated by a Winter Session of 4-6 weeks which students may use as they see fit - for enrichment, remedial work, independent study, internships or research. Curricula will be organised in a credit-based modular structure which will lead to a baccalaureate after three years of full-time study. All students should be bilingual; the language of instruction will be English.

      The first prospectuses, for both undergraduate and graduate programmes, have been published. Most departments will be accepting students for the inaugural semester in 1991. In the School of Science, all five departments of biochemistry, biology, chemistry, mathematics and physics will accept undergraduate and postgraduate students in 1991. The School of Engineering will ultimately comprise six departments. In 1991, the two departments of computer science and electrical and electronic engineering will accept undergraduate and postgraduate students, while the departments of mechanical engineer- ing and civil and structural engineering will accept only postgraduate students. The School of Business and Management will also ultimately comprise six departments, of which three - accounting, finance, economics - will accept undergraduate and postgraduate students in 1991. The School of Humanities and Social Science, comprising two divisions as named in its title, will accept postgraduate students in 1991.

The three remaining departments in the School of Business and Management are expected to be operational by 1992, with the two remaining engineering departments in place by 1993.

       Commensurate with its commitment to promoting technological applications in industry and commerce in Hong Kong and the Asia-Pacific region, HKUST will encompass a number of interdisciplinary research institutes, funded mainly from external resources. As of August 1990, the Biotechnology Research Institute has been funded and inaugurated, and an information technology institute has been funded. Proposals for funding other institutes are under consideration.

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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 development.

Since then, student and staff numbers have increased greatly. At the beginning of the academic year 1990-91, 10200 students were enrolled on full-time and sandwich courses, 15 300 on part-time courses and 700 on a distance-learning course. In mid-1990, the polytechnic had a total staff of 2 562, comprising 905 teaching, 269 senior administrative and 1 388 technical, clerical and ancillary staff.

The polytechnic has 25 teaching units grouped under six divisions. These are the Division of Applied Science and Textiles (Departments of Applied Biology and Chemical Technology, Applied Mathematics, Applied Physics, and Institute of Textiles and Cloth- ing); the Division of Business and Information Systems (Departments of Accountancy, Business Studies, Computing, Hospitality Management, and Management); the Division of Communication (Departments of Chinese, Translation and Interpretation, English, and Swire School of Design); the Division of Construction and Land Use (Departments of Building and Surveying, Building Services Engineering, Civil and Structural Engineering, and Centre of Land and Engineering Surveying); the Division of Engineering (Depart- ments of Electrical Engineering, Electronic Engineering, Manufacturing Engineering, Mechanical and Marine Engineering, and Nautical Studies), and the Division of Health and Social Studies (Departments of Applied Social Studies, Diagnostic Sciences, Health Sciences and Rehabilitation Sciences).

A wide range of courses is offered to meet the demands of commerce, industry and the community. For 1990-91, 188 courses were offered in different modes of attendance, namely full-time, sandwich, part-time and distance learning. Successful completion of these courses leads to the awards of first and higher degrees post-graduate diploma, associateship, professional diploma, higher diploma, diploma, post-registration diploma, post-registration certificate, endorsement certificate, higher certificate, certificate and cer- tificate of proficiency.

  Degree courses accepting first-year intakes in the 1990-91 academic year include: BA (Hons) in Accountancy; BA(Hons) in Business Studies; BA in Clothing Studies; BA(Hons) in Computing Studies; BA(Hons) in Fashion Design; BA in Graphic Design; BA in Hospitality Management; BA in Interior Design; BA(Hons) in Industrial Design; BA in Language and Communication; BA(Hons) in Marketing; BA(Hons) in Photographic Design; BA(Hons) in Textile and Clothing Marketing; BA(Hons) in Translation and Chinese; BEng(Hons) in Building Services Engineering; BEng(Hons) in Civil Engineer- ing; BEng(Hons) in Electrical Engineering; BEng(Hons) in Electronic Engineering; BEng (Hons) in Manufacturing Engineering; BEng(Hons) in Mechanical Engineering; BSc in Building Technology and Management; BSc in Building Surveying; BSc(Hons) in Engineering Physics; BSc in Land Management; BSc in Nursing; BSc(Hons) in Optometry; BSc in Quantity Surveying; BSc(Hons) in Textiles, and Bachelor of Social Work (Hons). The BEng(Hons) course in Electronic Engineering was offered in both the sandwich mode and part-time mode, while the Bachelor of Social Work (Hons) course was offered in both the full-time mode and part-time mode.

In the 1990-91 academic year, the polytechnic offered eight part-time postgraduate courses leading to the award of Master's degrees in Civil Engineering, Business

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Previous page: Computers play an increasingly important role in the classroom.

Above: Acting-Governor Sir David Ford officiating at the Hong Kong University graduation ceremony.

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Previous pages: International tennis star Michael Chang gives a masterclass before an admiring audience at the Jubilee Sports Centre.

Opposite: Studying the warp and weft of textiles at Hong Kong Polytechnic.

Below: The Polytechnic campus at Hung Hom, Kowloon. Overleaf: Hands-on learning is a pleasure for young potters studying the art of ceramics.

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Administration and Information Systems, and postgraduate diplomas in Information Technology, Management Studies, Mental Health and Precision Engineering.

       The polytechnic continued to register candidates for the degree of Master of Philosophy by research. Commencing 1989-90, the polytechnic also registered candidates for the Degree of Doctor of Philosophy. Holders of an appropriate Master's degree may apply for direct registration for the degree of Doctor of Philosophy. The period of registration for research degree candidates is normally two years on a full-time or three years on a part-time basis.

The polytechnic recognises the importance of providing a service to support business, industry and the community through its existing resources. Under the umbrella of the Business and Technology Centre formed by donations from private companies, several other new centres in precision engineering, quality and reliability, industrial automa- tion, and China-Hong Kong business and technology development are currently being developed.

       Collaborative research activities have also been stimulated by the introduction of the territory's first Teaching-Company Scheme which provides high quality graduates working in companies under both polytechnic and company supervision.

Exchange with institutions outside Hong Kong continued to thrive, especially in China after an official polytechnic delegation visit to Beijing and Nanjing in May.

      In response to the training and retraining demands of business, industry and the professions, the polytechnic offers a range of self-financing programmes of professional and continuing education courses, some of which lead to academic awards. "Tailor-made' courses were commissioned by over 40 private and public sector organisations for their employees in 1989-90. A total of 11 854 students enrolled in 302 continuing education

courses.

Through the Student Affairs Unit, the polytechnic offered to its full-time students a good range of extra-curricular education programmes which can be taken on a voluntary basis. These included structured programmes on physical education, inter-personal and communication skills, understanding of man-society and man-environment relationships, arts and culture, and introduction to the basic sciences. Campus life was significantly enriched with the availability of more amenities provided under the Phases IIIA and B developments.

      The polytechnic took further steps to strengthen the development and co-ordination of research activities through the appointment of several readers within the institution. The total research grant in 1989-90 was $16.08 million, which was used to support 87 new research projects and 77 on-going projects.

      The polytechnic also gave high priority to staff development. The funding of staff development programmes in 1989-90 increased by 19.23 per cent over the previous year.

      Each year, the polytechnic receives donations in the form of grants, equipment, schol- arships and bursaries for students from organisations, firms, professional associations and individuals. In 1989-90, donations of $2.98 million were received from the private sector in the form of scholarships and bursaries.

       The polytechnic library has a seating capacity for over 2000 and special facilities for disabled persons. Its collection has grown to over 600 000 items with over 8 500 serial titles. A comprehensive, modern collection of audio-visual materials is held including interactive videos, laser discs, computer software and compact discs. A range of Compact Disc-Read

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Only Memory (CD-ROM) databases is widely used by students and staff. Integrated library software has now replaced the library's in-house system.

Situated on a nine-hectare campus partly on reclaimed land in Hung Hom, Kowloon, the Hong Kong Polytechnic continues to be in the midst of an extensive building develop- ment programme on the northern half of its site.

The Phase IIIB project which was completed in August 1990 is the first major new building on the North Campus. It houses specialist and general teaching rooms, research space, staff offices, a new central store for the Finance Office and new workshops for the Estates Office. It incorporates the New Amenities Building which has a fully air- conditioned indoor sports hall suitable for examinations and large conferences, additional student and staff dining facilities and an enhanced staff club. The permanent home for the Jockey Club Rehabilitation Engineering Centre and Rehabaid Centre is also incorporated in the development.

The next major development, which is to dovetail with Phase IIIB, is the Industrial Centre/Phase IVA project which started in December 1989 and is scheduled for comple- tion early in 1992. It will house the expanded industrial training facilities for students of the Hong Kong Polytechnic and the City Polytechnic of Hong Kong and provide additional research, laboratory, teaching and office space for the Hong Kong Polytechnic. The Plastics Technology Centre and four large lecture theatres will also be incorporated in this development. Together with a proposed Phase V, these projects are all part of poly- technic's master-plan for the North Campus.

City Polytechnic of Hong Kong

The City Polytechnic of Hong Kong entered a new era with the opening of its permanent campus on January 15, 1990, six years after the institution's formal establishment in January 1984.

The polytechnic maintained its track-record in the competitive bidding for earmarked research grant support from the University and Polytechnic Grants Committee (UPGC). Of the 16 projects submitted for 1990-91 funding 11 were successful, with funds of HK$5.780 million being acquired.

The UPGC approved the introduction of the PhD degree and the first intake took place in October 1990. The MPhil research degree programme drew an application-to-place ratio of 10 to one and expanded rapidly when the UPGC approved the doubling of the student quota to 24 for 1989-90, rising to 40 for 1990-91. In order to provide financial support for research students the polytechnic set up a Research Studentship Scheme.

In May, the polytechnic and a US computer manufacturer jointly established a research and development centre at the polytechnic. The company invested $4 million to provide a product development facility utilising the computing expertise of polytechnic staff.

In July, under the aegis of its Institute for Research and Consultancy the polytechnic launched a two-way staff exchange programme with government departments, public bodies and commercial enterprises, aimed at strengthening links and making the poly- technic's resources available to these sectors.

During the year, the polytechnic made four submissions to the UPGC on its academic development proposals for the 1991-4 triennium. It proposed that the maximum size of the institution should be limited to 10000 full-time equivalent students, all of whom would be undertaking first degree level work or above. The UPGC subsequently recommended

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a growth to 11700, with 35 per cent undertaking sub-degree work. The polytechnic is establishing a separate academic division for this work, to be known as the College of Higher Vocational Studies.

A new academic structure was introduced in October, establishing three faculties headed by appointed Deans. The Faculties of Science and Technology, Business, and Humanities and Social Sciences will provide a forum for cognate departments to discuss issues of common interest, for the devolution of decision-making and for wider involvement of academic staff in the consideration of the institution's policies.

During a year which saw the last validation visit by the UK Council for National Academic Awards, the Academic Board approved changes which will simplify and enhance the internal process of course development and review. The board also initiated a fundamental review of the polytechnic's approach to course design and set up a working group to study the impact of the introduction of Advanced Level Examinations in Chinese on the polytechnic's general entrance requirements, English Language requirements and policy on the medium of instruction.

In October, a new Department of Information Science admitted its first students, developing out of the Department of Computer Studies which was renamed the De- partment of Computer Science. A number of new courses were introduced, namely, a Master of Arts in Information Systems, Bachelor's courses in Accountancy, Applied Linguistics and International Business Studies, and Postgraduate Certificates in Computer Science and Hong Kong Law. At the end of the year nearly 11 000 students were enrolled on a total of 48 courses.

The polytechnic council is keenly aware of the importance of attracting and retaining staff, and of improving the conditions of service in order to achieve this. A report pro- posing parity of salaries with staff in the universities was submitted to the Secretary for Education and Manpower in February. Modifications were made to certain other conditions of service, including vacation leave, overseas education allowances and school passages; the salary scales for Readers and research staff were revised, as was the career structure for personal secretaries and clerical officers. The council also created Associate Headship posts and Visiting Professorships.

Hong Kong Baptist College

The Hong Kong Baptist College was founded in 1956 by the Baptist Convention of Hong Kong. Since 1983, the college has been fully funded by the government, and is a fully autonomous institution governed by its own ordinance. The college became a degree-granting institution in 1986, and as from 1989, all students are admitted to degree and higher degree courses. The governance structure is in line with internationally-accepted practice, with its statutory governing bodies being composed predominantly of members independently appointed by the Governor from sectors of commerce, industry and education, together with members nominated by the Baptist Convention of Hong Kong.

The college seeks to provide to its students, through its curriculum and its Christian ethos, an educational experience that is holistic and general in nature, yet engaged in real-world concerns and professional endeavours. This educational philosophy, which attests to the value of students as individuals, is the basis for the college's aim of 'whole- person education', and is expressed in the curriculum by the inclusion of elements which stimulate introspection and character development. To ensure that the academic

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standard is on a par with those of local and international universities, all the degree courses of the college are academically accredited by the United Kingdom Council for National Academic Awards (CNAA) and with effect from July 1990 by the Hong Kong Council for Academic Accreditation (HKCAA). External examiners are appointed to all courses to ensure maintenance of academic standards.

The year witnessed the introduction of two new degree courses, namely, BA(Hons) in Humanities and BA(Hons) in Translation. A new option in Human Resources Manage- ment is also added to the existing BBA(Hons) course. Moreover, the Master of Philos- ophy (MPhil) programme by research has been expanded to cover not only the Science areas, but also disciplines in Arts, Business and Social Sciences.

   Altogether, there are 10 undergraduate and one postgraduate degree courses offered by the college. These include: BA(Hons) (with majors in Chinese Language and Literature, English Language and Literature, Geography, History, Religious Studies, Sociology); BA(Hons) in Humanities; BA(Hons) in Music; BA(Hons) in Translation; BBA(Hons) (with options in Accountancy, Applied Economics, China Business Studies, Finance, Human Resources Management, Marketing, Office Management); BSc(Hons) in Com- bined Sciences (with majors in Applied Biology, Applied Chemistry, Applied Physics, Mathematical Science); BSc(Hons) in Computing Studies; BSocSc(Hons) in China Studies (with options in Economics, Geography, History, Sociology); BSocSc(Hons) in Communication (with options in Film and Video, Journalism, Public Relations and Advertising); BSW in Social Work, and MPhil by research.

These courses are offered through 21 academic departments grouped under three faculties and one school, namely, the Faculty of Arts (Departments of Chinese Language and Literature, English Language and Literature, Music and Fine Arts, Religion and Philosophy, and Language Centre); Faculty of Science (Departments of Biology, Chem- istry, Computing Studies, Mathematics, Physics); Faculty of Social Sciences (Departments of Communication, Education Studies, Geography, History, Social Work, Sociology), and School of Business (Departments of Accountancy and Law, Economics, Finance and Decision Sciences, Management, Marketing). All undergraduate courses require three years of full-time study, and students are admitted on the results of the Hong Kong Advanced Level Examination (HKALE). There is always a high demand for places, and for 1990-91, there were nine qualified applicants to every place available.

In October 1990, the total full-time student enrolment was 3 301, with a breakdown of: Arts 618, Business 930, Science 732, and Social Sciences 1021. This total included 3 191 students enrolled in the undergraduate degree programme, 20 students in the MPhil programme, 23 in the Honours Diploma in Music course which will be phased out by August 1991, and 67 in the special two-year Pre-music course which prepares them to sit for the Advanced Level Examination in music. The academic staff strength stood at 242 and all of them possess higher degrees. Senior academic and administrative staff are recruited through international advertisement.

Apart from the full-time student enrolment, the college also offers 400 cultural, vocational and professional courses to some 40 000 students each year through its School of Continuing Education to meet the needs of people in employment. These courses are mostly part-time and offered in the evening at the campus and off-campus centres.

Research activities continued to grow significantly during the year, with the funding allocated as direct support to research projects reaching $3.85 million, an increase of 13

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per cent over the previous year. Two research centres were established, namely, Centre for Surface Analysis and Research, and Research Centre on Waste Recycling and En- vironmental Treatment. A centre for East-West Studies is being planned. Together with the Business Research Centre, they help to enhance the development and co-ordination of research activities.

      Academic exchange activities with institutions overseas and in China also continued to grow, and the latter is milestoned by the establishment of the Wei Lun Academic Exchange Centre in Qinghua University in Beijing, which was officially opened in late August. The centre is a joint venture of the college and the Qinghua University, and every year provides accommodation and teaching facilities for some 100 students enrolled in the BSocSc(Hons) in China Studies course who are required to take a five-week summer programme in Beijing.

      The college's main library has a unique integrated computer system covering all the major library services, and its collection has increased to 317000 during the year. Addi- tionally, there is a rare collection of special research materials on contemporary China between 1949 and 1976, which includes some 10000 newspaper and periodical clippings. Various kinds of audio-visual materials including slides, laser discs, and micro-computer software are also available.

The year saw the completion on schedule of the campus redevelopment project on the Waterloo Road site. All new buildings, including the Wai Hang Sports Centre at Kam Shing Road, have been put into use, and refurbishment of the old buildings was completed in October.

      Approval was obtained from government to expand the student population in phases to reach 4000 in the year 1994-5. Work is already underway for the development of a second campus at a neighbouring site on Renfrew Road.

Hong Kong Council for Academic Accreditation

Following the enactment of the Hong Kong Council for Academic Accreditation Ordin- ance early in 1990, the Hong Kong Council for Academic Accreditation was established formally in June. This marked the culmination of two years of active planning and preparation by the Provisional Council.

      The HKCAA was set up to carry out academic accreditation of non-university tertiary institutions in Hong Kong to ensure that the standards of degrees they awarded were comparable to those of internationally-recognised degrees. Upon its formation, the council started to take over work undertaken previously by the United Kingdom Council for National Academic Awards for the University and Polytechnic Grants Committee. In addition, it provided accreditation services to a number of other non-UPGC-funded institutions.

      The Hong Kong Council for Academic Accreditation is made up of seven overseas academics, seven Hong Kong academics and seven local non-academics. There are panels which are made up of mainly subject specialists which carry out specific exercises and report to the full council.

       The establishment of the HKCAA is a welcome addition to the education infrastructure in Hong Kong. At a time when the tertiary sector is embarking on a new phase of rapid expansion, the council should play an important role in ensuring that good standards are maintained.

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Open Education

The Open Learning Institute of Hong Kong (OLI) was formally established in June 1989 as the seventh degree-granting institution in Hong Kong, following an active period of planning and the enactment of legislation. This was followed by a visit from the United Kingdom Council for National Academic Awards to help establish the academic standard of the institute and its programmes.

Enrolment of students commenced in August 1989 and the public response turned out to be overwhelming. Over 200 000 application forms were distributed and 60 000 actually applied for entry. Consistent with the concept of open access, the applicants were selected on a random basis after the OLI provided careful counselling on the nature and the vigorous demands of studying open learning courses. In September 1989, about 4000 students were enrolled on various foundation courses leading to degree awards. The OLI was firmly committed to expanding its capacity to offer high-quality academic programmes to satisfy the public demand for higher education. Second and third enrolments followed in April and September 1990 enlisting a further 11 000 students.

The institute offers a second chance for those who have been unable to go on to further education after leaving school, as well as opportunities for workers and managers to update their qualifications and for personal development. It offers degree programmes through three Schools: Science and Technology, Business and Administration, and Arts and Social Science.

  The institute adopts a multi-media approach to instruction, broadcasting many high- quality programmes on public television. Its regulations give great freedom to adults in employment who may study in ways, at times and at rates that suit the demands of work and family. Apart from printed texts supplemented by audio-visual materials, it provides. extensive tutorial support through its headquarters at Trade Department Tower in Mong Kok and at a regional study centre in Wan Chai.

Student Finance

The Student Financial Assistance Agency was established on August 1, 1990, to take over administration of all financial assistance and scholarship schemes previously undertaken by the Education and Manpower Branch and Education Department for students at all levels of study. These schemes include: the Local Student Finance Scheme which provides grants and loans to students attending local tertiary institutions; joint-funding arrangement between the governments of the United Kingdom and Hong Kong to assist local students to pursue tertiary education in the United Kingdom; grants and loans to students of the Colleges of Education, Shue Yan College and Lingnan College; subsidies for local travel; disbursements for textbook assistance and fee remission, the Sir Edward Youde Memorial Fund Scholarship and Awards Schemes, and various other scholarships aimed at reward- ing outstanding achievement and academic excellence.

Local Student Finance Scheme

 Full-time students who are attending local tertiary institutions are eligible, on the basis of evident need, for grants to cover their faculty expenses, tuition fees and student union fees, and for loans to meet their living expenses. During the year 8856 students received loans totalling $90.1 million, and 7064 of these students also received grants totalling $46.8 million.

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UK/HK Governments Joint-Funding Scheme

Under the joint-funding arrangement between the governments of the United Kingdom and Hong Kong, grants are made on the basis of need to full-time students who are attending first degree or Higher Diploma courses in the United Kingdom, to meet the difference between the home fees and overseas student fees. During the year, grants totalling £4 million and loans totalling $21 million were paid to 1 701 students.

UK-HK Scholarships

The scope of the UK/HK Governments Joint-Funding Scheme was expanded in 1988 to include a number of UK-HK scholarships awarded on merit. The aim of the scholarships is to provide further educational opportunities at the tertiary level in the United Kingdom for outstanding local students.

The scholarship fund is made up of a total of £250,000, contributed equally by the United Kingdom Government and the Jockey Club on behalf of the Hong Kong Government.

For the 1990-91 academic year, nine scholarships were awarded.

Sir Edward Youde Memorial Fund

The Sir Edward Youde Memorial Fund was established on April 1, 1987, to manage public donations received in memory of the late Governor Sir Edward Youde who passed away in service in December 1986. The assets of the fund stood at over $94 million on March 31, 1990.

       In accordance with Lady Youde's wishes, it has been provided in the Sir Edward Youde Memorial Fund Ordinance that the income of the fund is to be used for promoting the education and learning of the people of Hong Kong and for the encouragement of research activities.

       In the 1990-91 academic year, eight students were awarded fellowships and scholar- ships to finance their postgraduate or undergraduate studies overseas. For local studies, 36 fellowships were awarded to postgraduate research students and 70 scholarships to undergraduate, diploma and certificate students. Four students who excelled in local public examinations, eight disabled students in tertiary institutions, and 567 senior secondary students nominated by the heads of their schools also received awards from the fund.

The value of all awards made in the 1990-91 academic year was about $3.8 million.

Student Travel Allowance Scheme

The Student Travel Allowance Scheme provides assistance to students to meet part of their travelling expenses between their residences and schools. All full-time students between the ages of 12 and 25 who have not yet completed their first degree are eligible to apply. During the year, 366 936 students received the allowance, totalling $209.37 million.

School Textbooks Assistance Scheme

Introduced in 1982, the School Textbooks Assistance Scheme is aimed at offering assistance to needy students studying at primary or junior secondary levels in government aided schools and private secondary schools with bought places, for the purpose of pur- chasing school textbooks. During the year, 89 532 students were provided with assistance, totalling $19.05 million.

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Fee Remission Scheme

The Fee Remission Scheme is aimed at enabling students to continue their senior secondary education without placing an undue financial burden on their parents. In 1989-90, 36673 students received assistance under this scheme.

Technical Education

Eight technical institutes are operated by the Vocational Training Council and they provide a total of 340 courses at craft (or post Secondary 3) and technician (or post Secondary 5) levels with full-time, block-release, part-time day-release and part-time evening attendance. All full-time courses are of either one or two years duration. Most part-time courses require attendance of two to three years. Numerous short courses are also offered and these are mainly designed to update the knowledge and skills of people in employment.

The main disciplines covered by the institutes include: applied science, environmental studies, chemical technology, food technology, clothing, commercial studies, accountancy, computing studies, construction, design, electrical engineering, electronic engineering, general studies, child care, hairdressing, hotel-keeping and tourism studies, industrial technology, marine engineering and fabrication, mechanical engineering, motor vehicle engineering, printing and textiles. Most technician level courses have been validated by the United Kingdom Business and Technician Education Council (BTEC) and students attending these courses are able to register for the BTEC awards.

The demand for places on most courses remained high. Enrolments for the 1990-91 academic year totalled 12 300 full-time, 15 600 part-time day and 29 600 part-time evening students. To cater for the very large enrolment, many evening classes had to be conducted in rented school premises.

   A number of new courses were offered including: Diploma in Company Secretaryship and Administration; Certificate for Accounting Technicians; Certificate in Air Freight Forwarding; Certificate in Office Computing; Certificate in the Use of Office Computing Software; Certificate in Building Studies (Architectural); Certificate in Building Measure- ment; Certificate for Electrical Installation Technicians; Certificate in Outbound Travel Operations, and Certificate for Watchkeeping Engineering Officers.

In September 1990, the number of full-time teaching staff in the technical institutes was about 870 and there were some 800 supporting staff and 2 230 part-time lecturers.

Some 6150 full-time, 3640 part-time day-release and 9670 part-time evening students completed their courses of study in July 1990. An employment survey of graduates from full-time courses again showed that they had little difficulty in finding employment in their respective disciplines after completing their studies.

Industrial Training

Industrial training is promoted and co-ordinated by the Vocational Training Council.

The council administers and operates a number of industry-wide training schemes for the major industries and assists individual employers in setting up or improving their own staff training schemes. Young persons wishing to obtain organised training may approach the council for assistance.

In 1990, the council continued to operate 16 training centres for training manpower for the automobile, banking, electrical, electronic data processing, electronics, gas, hotel,

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insurance, jewellery, machine shop and metalworking, plastics, precision tooling, printing, shipping, textile and welding industries. Two new training centres were set up, one for the wholesale/retail and import/export trades, and the other for the design of application specific integrated circuits. Altogether, the centres provide off-the-job basic or upgrading training for over 31000 trainees a year on a full-time or part-time basis, at skill levels ranging from the operative to the technologist.

      The Engineering Graduate Training Scheme aims at bringing about adequate practical training opportunities for engineering graduates and engineering students in sandwich courses to enable them to complete their overall training as engineers and satisfy the training requirements of the Hong Kong Institution of Engineers as well as other rec- ognised institutions for professional status. In 1990, 60 engineering firms took part in the scheme and provided 460 training places.

      The council's Management Development Centre is responsible for research, develop- ment, collaboration and promotion of management training. Its programmes and projects include work with owner-managers and entrepreneurial firms, the creation of learning materials, and activities with management teachers, trainers and business executives. Technicians and craftsmen in the industrial sectors and supervisory and clerical personnel in the commercial sectors are effectively trained through apprenticeship schemes and traineeship schemes. To upgrade or update the workforce, the council's training boards organised subsidised training courses for in-service works in conjunction with education and training institutions.

       Four training boards: automobile, electrical, machine shop and metal working, and printing continued to offer a voluntary trade test scheme for specific trades in these sectors. In 1990, two other training boards, building and civil engineering, and plastics, started to introduce the voluntary trade test scheme. Tests were offered for trades including vehicle mechanic, electrician, mechanical fitter, typesetter, bricklayer, and mould and die maker. Serving workers in these trades were invited to apply for tests and the response was good, particularly in the vehicle mechanic and electrician trades.

Training Authorities

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 their industries. The former is financed by a levy based on the export value of clothing and footwear items while the latter is financed by a levy based on the value of construction works exceeding $1 million. There are three training centres for construction trades and two for training in clothing and footwear manufacture.

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. The appren- ticeship period of the designated trades is normally three or four years. However, the

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period may be shortened by any period not exceeding one year if the apprentice has obtained relevant special qualification before entering into an apprenticeship.

  The Apprenticeship Section of the Technical Education and Industrial Training De- partment 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 technical institutes.

  To enforce the ordinance, inspectors of the Apprenticeship Section conduct inspections and visits at regular intervals to apprentices and establishments covered by the ordinance. Apprenticeship contracts registered in 1990 totalled 5280, of which 960 were for non- designated trades. These contracts covered 4620 craft apprentices and 660 technician apprentices. By the end of the year, 10900 apprentices were being trained in accordance with the ordinance.

Vocational Training for the Disabled

 The Technical Education and Industrial Training Department provides vocational training for disabled persons. It operates three government skills centres for the disabled including the new Tuen Mun Skills Centre for the Disabled and administers another three centres operated by voluntary agencies. The total capacity of these six centres is 772 training places, of which 288 are provided with residential facilities. These skills centres offer two broad groups of courses. The first and major group prepares disabled persons for open employment while the second group prepares them for mainstream technical education and industrial training.

In addition to this training the department also provides three main support services for disabled students/trainees in the skills centres, technical institutes and industrial training

centres.

  First, the Vocational Assessment Service assesses a disabled person's potential and provides guidance in the selection of a suitable vocational training course. The assessments are based on internationally-recognised test batteries, in addition to work samples which are designed to meet local industrial requirements. The main vocational assessment pro- grammes offered are a five-day version for all mildly mentally-disabled school leavers and an eight-week version for the more complex assessment cases.

  Second, the Technical Aids and Resource Centre designs and makes technical aids for disabled trainees, students or workers. The aim is to improve their training attainments, employment prospects and productivity. The centre also produces audio-visual training packages.

  Third, the Inspectorate Unit gives advice to skills centres on administration, curriculum development, instructional methods and training standards. It also provides guidance and academic counselling to disabled students/trainees in the technical institutes and industrial training centres.

  The department's annual employment survey of disabled students/trainees completing full-time courses in technical institutes and skills centres showed that over 85 per cent of these leavers either obtained open employment or entered mainstream technical education.

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Teacher Preparation

     Four Colleges of Education - Grantham, Northcote, Sir Robert Black and the Hong Kong Technical Teachers' College - train non-graduate teachers for primary and second- ary schools.

      All four colleges are directly financed and staffed by the government and administered by the Education Department.

The three general colleges of education conduct initial full-time teacher education courses lasting two years for students with HKALE qualifications, and three years for students with HKCEE qualifications. Part-time in-service training courses of two or three years' duration are also offered to serving kindergarten, primary and secondary school teachers and to teachers of students with special educational needs. Retraining courses lasting five or seven weeks are offered to teachers in primary and secondary schools, and part-time courses of 12 weeks to serving assistant kindergarten teachers.

The Hong Kong Technical Teachers' College provides courses for future teachers of technical subjects in secondary and prevocational schools. A three-year full-time course is open to secondary school leavers who have studied technical or commercial subjects. The college also offers in-service courses for teachers and lecturers in the technical institutes as well as a variety of short courses for instructors working with handicapped children, and for supervisors and instructors employed in industry.

The four colleges also offer a one-year full-time Advanced Course of Teacher Education in cultural, practical and technical subjects.

There were 1233 students in the three-year full-time course, 1361 students in the two-year full-time course, 63 students in the Advanced Course of Teacher Education and a total of 2 323 students in the in-service training and retraining courses.

      Financial assistance in the form of loans and maintenance grants is provided by the government for eligible students who are enrolled in full-time courses at the four colleges.

Adult Education

The Adult Education Section of the Education Department provides formal and non- formal education in the evening through a number of courses and activities, and assists voluntary organisations through a subvention scheme.

       Formal courses cover remedial education, second chance education and education for personal development at levels ranging from primary to post-secondary. Some courses are jointly operated with other government departments. Various teachers' courses provide opportunities for serving teachers to refresh their knowledge and skills in a variety of cultural subjects. Over 20 000 people enrolled in formal courses during the year.

      Non-formal education courses cover a variety of cultural, social, recreational and educational activities to stimulate social awareness, cultivate creativity and develop in- dividual talents and skills. Nineteen Adult Education and Recreation Centres operate in various administrative districts. Numerous activities are organised with other govern- ment departments and voluntary organisations. About 28 000 people participated in these courses and activities.

      Subvented courses run by voluntary agencies supplement and complement those operated by the department. In 1990-91, government subsidies were granted to 285 projects operated by 66 organisations.

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Language in Education

To encourage secondary schools to increase the use of Chinese as the language of in- struction, additional teachers of English and other resources have been provided since September 1988 to secondary schools which made greater use of Chinese, so as to avert any consequential drop in the standard of English due to reduced exposure. In 1990, a further 13 schools increased their use of Chinese as the medium of instruction.

  The Expatriate English Language Teacher pilot scheme was completed in mid-1989. The final evaluation revealed that the scheme had had a significant effect in several areas of English language learning. Meanwhile, to maintain continuity, a modified scheme came into operation in schools with vacancies for English teachers. In its second year, 23 expatriate teachers were teaching in six aided secondary schools and eight government secondary schools. A more permanent scheme to help secondary schools recruit expatriate English language teachers will start in 1991.

  The Chinese Textbooks Committee (CTC) continued its work in support of the policy of encouraging schools to adopt Chinese as the medium of instruction. The Incentive Award Scheme, which was implemented to encourage the production of good quality Chinese textbooks in a wide range of subjects, proceeded smoothly. Following the production of Chinese textbooks for general subjects, Phase 2 of the scheme was implemented to en- courage the production of Chinese textbooks for eight practical and technical subjects at secondary level. Editorial assistance work, provided by the Advisory Inspectorate to the participating publishers, was completed in March 1990 and the textbooks should be ready for use by September 1991.

Institute of Language in Education

The Institute of Language in Education was founded in September 1982 as a 'centre of excellence' for all matters relating to language learning and teaching in Hong Kong schools.

During the year, the institute continued to organise full-time, in-service retraining courses for experienced non-graduate primary and secondary school teachers of English. New courses for graduate secondary school teachers of English and Chinese were con- ducted from September 1990. Altogether 1035 teachers attended courses at the institute during the year. Secondary school teachers of English who had successfully completed full-time courses in 1988 and 1989 were offered the opportunity to participate in a three- week residential course run by the institute at the University of Hong Kong, followed by a four-week course in one of several selected language teaching centres in the United King- dom. In addition to the full-time retraining courses, part-time programmes in Methods of Teaching Putonghua and Putonghua Proficiency were arranged for 493 practising teachers. Also courses on the use of Chinese for the teaching of specific subjects in Chinese were run for 32 teachers.

In December, the institute organised its sixth International Conference, which focused on the planning, managing and implementation of language teaching and training pro- grammes. Local and overseas language specialists from 22 countries attended the event. In the area of research and development, the institute completed enquiries into the applica- tion of questioning in the teaching of reading, the curriculum requirements of primary school teachers of Chinese and streaming at the primary school level. In May 1990, the Hongkong Bank Foundation announced that it would donate $20 million to the

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government for a Language Development Fund to be managed by the institute. The fund will support a programme of carefully selected projects of practical value to language teachers, teacher trainers and educational planners. Projects administered and financed by the fund will also address problems of effective communication in the business sector and will feed information back into the education system on the language needs of the workplace. The programme, launched by the institute in September 1990, includes proj- ects to devise performance targets, graded levels of attainment and criterion-referenced assessments for the strengthening of English language learning at primary and secondary levels. It also includes projects to establish the levels of language proficiency required by employers of students leaving school at the end of the fifth year of secondary education.

      In addition to journal articles by members of staff, the institute published two issues of its professional journal (ILEJ), three teachers' handbooks and two volumes of selected conference proceedings.

Educational Research

     Research in education is undertaken by the department's Educational Research Establish- ment (ERE). In the year under review, the ERE conducted research into various aspects of educational programmes and new educational policies. These included effects of the change of medium of instruction in secondary schools, continuity of teaching practices between lower primary classes (Primary 1-3) adopting the Activity Approach and upper primary classes (Primary 4-6) adopting non-Activity Approach, and correlation of the Hong Kong Certificate of Education Examination with Higher Level and Advanced Level Examinations.

      Furthermore, the ERE constructed test papers of the Hong Kong Attainment Tests (Primary) Series 4 for Primary 4 on the three basic subjects of Chinese, English and Mathematics. Work is in progress to construct the Chinese, English and Mathematics tests of the Hong Kong Attainment Tests (Primary) Series 4 for Primary 5. The tests are designed for use by primary schools to assess pupils' achievement against a set of explicit graded targets in the three basic subjects, so as to better diagnose their strengths and weaknesses to facilitate streaming, guidance, counselling and remedial teaching.

Advisory Inspectorate

The main function of the department's Advisory Inspectorate is to monitor and improve the quality of teaching. This involves regular school inspections to advise on curriculum matters, teaching methods and utilisation of resources. The quality of teaching is also improved through the provision of in-service training courses, seminars and workshops for teachers. The Advisory Inspectorate is responsible for curriculum development as well as evaluation of textbooks and instructional materials. To support curriculum development in schools, the inspectorate publishes reference materials in the form of syllabuses, curriculum guidelines, handbooks, newsletters and bulletins; operates different teaching and resource centres and a field study centre, and provides a number of supporting services to schools such as audio-visual aids, educational television, and a school library service. It is also responsible for the promotion of extra-curricular activities in schools through centrally-organised activities such as the Community Youth Club Scheme and the Duke of Edinburgh Award Scheme.

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  The Curriculum Development Council (CDC), which is serviced by the Advisory Inspectorate, continued to advise on curriculum innovations at pre-primary, primary and secondary levels as well as on special education. The general aims of education were re-examined and the school curriculum, at different levels of education, was reviewed with the aim of formulating new curriculum guides for teachers' reference. The feasibility of introducing new subjects in the secondary school curriculum was examined with a view to broadening it to cater for pupils of a wider ability range. Meanwhile, the revision of the syllabuses for Putonghua and Chinese Language at the primary level, Social Studies at the junior secondary level, and Economics at the senior secondary level was completed. A syllabus for Light Metalwork and Finishing for prevocational schools was also produced. Various subject committees were set up by the CDC to work on the development of the Advanced and Advanced Supplementary level syllabuses. The four curriculum research projects initiated by the CDC and undertaken by the Educational Research Establishment and the Advisory Inspectorate progressed smoothly.

  With ongoing support from the CDC and the Advisory Inspectorate, 253 primary schools have adopted a more child-centred and less formal teaching method known as the Activity Approach.

The school-based Curriculum Project Scheme, launched in September 1988, provides grants for the development of curriculum projects catering for the specific needs of pupils in individual schools. Under the scheme, 53 curriculum projects were completed and 61 were being undertaken by educationalists including teachers, school heads, and lecturers at the colleges of education and the school/faculty of education of the universities.

Civic and Moral Education

To facilitate the strengthening of civic education, a survey on the Implementation of Civic Education in Schools was conducted in March. Findings derived from the survey are to serve as a basis for planning future programmes on civic education in schools. Twenty-one primary schools and 30 secondary schools participated in the year's Inter-school Civic Education Project Competition, the theme of which was Build Hong Kong for the Future. Teaching materials on The Political Institutions of the People's Republic of China and its Special Economic Zones; Proper Attitudes and Good Behaviour in Public Places, and a jigsaw game on Environmental Protection were published and issued to schools during the year.

To enhance distribution of information as well as exchange of ideas and experience on the promotion of moral education in schools, Moral Education Reference Materials; Religious and Ethical Education Resource Centre Catalogue 1990, and a teaching kit In Search of Values were issued to schools in 1990. An exhibition on Moral Education with the theme Being and Becoming was held from July 18 to 20, 1990.

Environmental Education

 Environmental education is promoted through the teaching of relevant subjects like Social Studies and Science in primary schools, and Social Studies, Integrated Science, Economic and Public Affairs, Geography, Biology, Physics and Chemistry in secondary schools, making use of the themes and topics on environmental education which are already clearly set out in the syllabuses of these subjects. It is further supplemented by various extra- curricular activities through the informal curriculum.

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To help schools strengthen environmental education through a cross-disciplinary approach, a working group was set up in September 1989 by the Curriculum Development Council for the preparation of a set of guidelines.

      In addition, schools are encouraged to take part in activities organised by government departments or voluntary agencies for the promotion of environmental education. Examples of these activities in the 1989-90 academic year included the Primary School Garden Plot Competition, the School Environmental Awards Scheme 1990, and the guided visits for secondary school students to the Mai Po Marshes.

Sex and AIDS Education

Since the issue of the Guidelines on Sex Education in Secondary Schools in 1986, about 68 per cent of secondary schools have either set up a Sex Education Co-ordinating Committee or appointed a teacher or group of teachers to co-ordinate sex education in their schools. In-service training courses on sex education were organised for teachers. In December, a teaching kit on Sexual Attitudes and Values was distributed to all secondary schools. The Sex Education News, a publication for the dissemination of news and information on school sex education activities, teacher training and teaching resources, as well as for the exchange of views among teachers, was introduced during the year.

A booklet entitled How Much Do You Know About AIDS? to help students achieve a basic understanding of the AIDS issue was distributed to schools early in 1990. To support World AIDS Day on December 1, a poster design competition was organised.

Teaching of Putonghua

During the year, Putonghua was offered as an optional subject in 473 primary schools and 133 secondary schools. To strengthen the teaching of Putonghua, grants are provided for the purchase of teaching aids, reference books and tapes to public-sector schools offering the subject. For secondary schools which cannot offer Putonghua due to timetabling difficulties or lack of teaching staff, a recurrent grant is provided for the employment of part-time instructors to run a Putonghua Special Programme for junior secondary pupils after school hours.

Computer Education

Computer Studies is taught in Secondary 4 and 5 as a HKCEE subject. Following the successful completion of a pilot project, Computer Literacy designed for Secondary 1 to 3 pupils was extended to interested schools. Altogether there were 100 public sector schools teaching the subject.

      Beginning in 1989, handicapped children were given the chance to learn through com- puters. Twenty-seven special schools joined the Computer Education in Special Schools Project which aimed to enable students with special needs to utilise the equipment provided as communication and rehabilitation aids. The project is to be made available to all special schools in 1991.

Physical Education

The Physical Education Section plays an important role in advising physical education teachers and organising refresher courses and seminars. As physical education is to be available as an HKCEE subject in 1991, the section is also providing support to secondary schools preparing students for the 1991 examination.

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  In sports promotion, training courses and competitions in various sports were organised for secondary and primary students. Training schemes were conducted to identify and develop potential athletes in schools. A systematic dance training scheme was held to provide in-depth training programmes for selected dancers in schools. Outdoor education camps aiming to provide students with experience of living in a natural outdoor environ- ment are organised annually.

The section continued to administer the annual Summer Youth Programme for Schools. With funds totalling $4.2 million, including a donation of $1.61 million from the Royal Hong Kong Jockey Club, the 1990 programme attracted over 31 500 students and teachers in 3 000 events.

Music Education

The year's in-service training programme for music teachers concentrated on the intro- duction of new methods and the use of microtechnology in music classes.

Nine sets of music textbooks written in line with the Revised Primary Music Syllabus were reviewed. School-based curriculum projects on the Adaptation of the Kodaly Choral Method were carried out in primary and secondary schools. The Education Department continued to operate the Centralised Scheme of Music Training, which linked music education in schools with that of the tertiary institutions.

Teaching and Resource Centres

The Advisory Inspectorate operates teaching and resource centres for Chinese, English, Mathematics, Science, Social Subjects, Cultural Crafts, Computer Education, Technical Subjects, Civic Education, Religious/Ethical/Moral Education, Sex Education, Activity Approach and Kindergarten. It also operates a Field Studies Centre, which is open to Secondary 6 and 7 students and teachers.

The Visual Education Section's Audio Visual Resources Library provides a wide range of audio-visual aids on free loan to schools. Its Media Production Services Unit is open to help teachers produce their own teaching aids.

The Hong Kong Teachers' Centre

The aim of this multi-purpose centre is to promote continuous professional development and a greater sense of unity and professionalism among teachers. An Advisory Manage- ment Committee was formed with wide representation from teacher organisations and individual teachers in schools. The committee, together with its standing committee, working groups and sub-committees, successfully organised the first series of professional development activities for teachers. It also published a quarterly News Bulletin for dis- tribution to all kindergarten, primary school and secondary school teachers.

School Library Services

 School library services expanded with the employment of more school librarians in secondary schools. In the school year 1989-90, 346 schools were provided with either one full-time or one half-time school librarian. This year the Reading Award Scheme for secondary school students was extended to Secondary 5. A total of 209 schools with 30 000 students participated in this scheme. In primary schools, the class library scheme continued to operate smoothly. A Reading Award Scheme for Primary 5 and 6 was successfully

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organised for the first time. A number of training courses and workshops/seminars were organised for school librarians and class library teachers.

Community Youth Club

The Community Youth Club (CYC) was first established in 1977 as part of the Education Department's effort to build a strong community spirit among schoolchildren through organised activities. Its aims are summed up in its motto 'Learn, be concerned and serve'. About 280 000 members from 1002 primary and secondary schools took part in its activities. Up to the current year, 33 128 members have acquired awards of different levels under the CYC Merit Award Scheme. Nineteen outstanding members from primary schools and 22 outstanding members from secondary schools visited Singapore and Japan respectively during the summer holiday.

The Duke of Edinburgh's Award Scheme

Of the scheme's 20 Operating Authorities in Hong Kong, that of the Education Department is the largest with 27446 members from 177 participating schools. Over 144 training courses of various kinds at bronze, silver and gold levels were organised throughout the year to cope with the increasing demand.

The Sister Schools Scheme

The Sister Schools Scheme was first started in 1981 under the auspices of the Lions Club International District 303. Ordinary schools and special schools are matched to promote social interaction and enduring friendship among students. In 1990, 42 special schools and 50 ordinary schools were made sister schools and approximately 20 000 pupils benefited from activities sponsored by the scheme.

Educational Television

Viewing of educational television (ETV) programmes has become a normal part of school life for pupils of Primary 3 to 6 and Secondary 1 to 3. ETV programmes are produced jointly by the department's Educational Television Section and Radio Television Hong Kong, serving as a useful audio-visual supplement to classroom teaching. They are trans- mitted to schools through the two local commercial television stations.

      In the 1989-90 academic year, 864 syllabus-based ETV programmes, comprising 312 secondary programmes on Chinese Language, English Language, Mathematics, Social Studies, and Science, and 552 primary programmes on these five subjects and Health Education, were broadcast to schools.

Special programmes on curriculum-related topics are produced from time to time. In 1989-90, two special series of Chinese Language programmes, incorporating elements of Civic Education and Moral Education respectively, were telecast for Secondary 1 students. To keep prospective Secondary 3 leavers informed of the various training opportunities provided in technical institutes and industrial training centres in Hong Kong, two special programmes were transmitted to secondary schools.

      For reception of ETV programmes, all government, aided and private secondary schools with bought places, are provided with television equipment including colour television receivers and video-cassette recorders. In the financial year ending March 1990, $2.9 million was spent on the provision of television equipment to schools.

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Hong Kong Examinations Authority

The Hong Kong Examinations Authority was established as an independent statutory body in 1977. It is self-financing and non-profit-making. In 1990, 136 500 candidates entered for the HKCEE, 4800 for the HKHLE and 17900 for the HKALE. In 1992, the HKHLE will be conducted for the last time and the HKALE will become bilingual (it is currently English only). In 1994, a new bilingual Advanced Supplementary Level Examination will be introduced.

The authority also offers proficiency examinations in Putonghua and English Language Speaking Skills. Basic Proficiency Tests in English Language, Chinese Language and Mathematics were conducted for the first time in 1990 and are open to persons who have reached the age of 17 years or who are studying in Secondary 5.

   The authority conducts a large number of examinations on behalf of overseas examining bodies. The total number of candidates sitting for these examinations was 242 800 with the largest examinations being the London Chamber of Commerce (68 800 candidates), Test of English as a Foreign Language (40 600 candidates) and the Associated Board of the Royal Schools of Music (39 600 candidates). The great variety of overseas examinations enable students to acquire academic and professional qualifications and, in some cases, qualifications relating to practical skills.

Hong Kong Students in Britain

The Students Division of the Hong Kong Government Office in London is responsible for promoting the interests of Hong Kong students in the United Kingdom. It maintains close liaison with universities, polytechnics and colleges, and also with official and unofficial bodies including government departments which are concerned with the welfare of overseas students.

   The division monitors developments in education in the United Kingdom, works closely with the Hong Kong Education Department, and the Student Finance Section of the Education and Manpower Branch, Government Secretariat, in administering the United Kingdom-Hong Kong Joint-Funding Scheme in Britain. It also maintains close contact with the Hong Kong student community through college-based student societies.

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.

During the calendar year 1990, 4 344 students went to Britain, 5681 to Canada, 5 840 to the United States and 5 258 to Australia.

The British Council

The British Council in Hong Kong aims to promote an enduring understanding of Britain, its language, its education and its culture, and to strengthen links with Britain in these areas up to and after 1997.

English language teaching is the major programme of the council in Hong Kong and over 30000 residents attended courses at the English Language Centre in 1989-90. In addition, a summer school for over 6000 secondary school students was held. Language improvement courses were provided for 225 primary English teachers.

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Specially-tailored English courses were run at a number of Hong Kong's major business organisations, and, in conjunction with Radio Television Hong Kong, the council provided radio courses for schools and for business-letter writing. Teacher training courses were run during the year, including one Royal Society of Arts diploma and two Royal Society of Arts certificate courses for teaching English as a foreign language.

       The council also works with Hong Kong University and the Chinese University in the promotion and teaching of English. It sponsors conferences, workshops and seminars in the teaching of English and also jointly sponsors scholarships for top students, business executives and journalists.

Academic links in collaborative research, staff development, and curriculum design and development were increased between tertiary institutions in Britain and Hong Kong, in areas such as public and social administration, textiles design and manufacture and accountancy. The council sent representatives of various professions to Britain for courses and familiarisation visits, and four Fellowships were awarded for one year's full-time study including one to a blind student of public and social administration.

Through its arts programme, the council seeks to further understanding and apprecia- tion of British arts in Hong Kong and to develop closer links with local arts organisa- tions. It organised, sponsored and co-sponsored many arts events, especially in the areas of visual and performing arts. Besides bringing over British artists such as the Trestle Theatre Company, Coombs and Scott Piano Duo and Rob Ward, it also sponsored a local dance company, Zuni Icosahedron, to participate in the Turning World Festival which is an international event organised by the Place Theatre in London.

The council's library represents all aspects of British life and culture, although the emphasis is on English language teaching and teacher training. There is a film and video library covering a wide range of topics. A collection of British classical and popular music on compact disc is also available for loan. Information services have been expanded further and facilities have been added to the installed CD-ROM. The Asian Voices in English conference, and the Reading is Fun book exhibition were organised by the library. Library membership is open to all Hong Kong residents.

The Education Counselling and Promotion Service provides free and impartial advice to students on the educational opportunities available in Britain. In 1989-90, 12000 students visited the service to seek information about studying in British universities, polytechnics and colleges. In addition, a series of co-ordinated and individual visits by British insti- tutions to Hong Kong was organised, providing further information for students and facilitating discussion on areas of co-operation and collaboration with their Hong Kong counterparts.

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THE Department of Health and the Hospital Services Department work closely together to provide a complementary programme of preventive, promotive, curative and rehabilitative services. They are advised by the Medical Development Advisory Committee.

   The Department of Health is the health authority and adviser to the government on all matters related to health. It operates a wide range of services to promote health and prevent diseases. These include personal health services like out-patient clinics, family health and family planning, health education and community health, territory-wide health services like tuberculosis and chest health, social hygiene, child assessment, dental health, occupational health, disease surveillance, public health and special preventive programmes, environmental health, port health, radiation health, drug addiction treatment, as well as pharmaceutical services. Through collaboration with the private sector and teaching institutions, the department strives to provide a comprehensive range of primary health care services to the local community.

The Hospital Services Department is responsible for carrying out government policies on hospital and rehabilitative services and advising the government, through the Health and Welfare Branch, on the operational implications of these policies. The department operates a range of regional, district and convalescent hospitals, specialist out-patient clinics and day hospitals, providing a comprehensive range of medical treatment and rehabilitation services to patients. Rehabilitation services are multi-disciplinary, including physiotherapy, occupational therapy, prosthetic-orthotic services, psychological services, speech therapy and community nursing.

In 1987, the government decided to integrate government and government-assisted hospitals under an independent statutory Hospital Authority, with the aim of improving the quality and efficiency of public hospital services by optimising the use of resources and facilitating management reforms. The Provisional Hospital Authority was set up in October 1988 under the chairmanship of Sir S. Y. Chung. Its report with recommendations on the establishment of the Hospital Authority was submitted to government in December 1989 and published in April 1990. The Hospital Authority Bill was passed in the Legislative Council in July 1990 and the Hospital Authority was formally established on December 1, 1990. It is intended that the authority will take over the management and control of all public hospitals early in 1991.

The two departments continued to make progress on an extensive development programme which included the planning of additional public hospitals as well as additional

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     general out-patient clinics and specialist out-patient services. The Tuen Mun Hospital opened in March 1990, with services being introduced in five phases to provide 1 600 beds for the West New Territories region. It is expected to be fully operational in 1992.

For the 1990-91 financial year, the allocation of funds to the government medical and health services amounts to $4,854 million. In addition, subventions totalling $2,076 million were provided for non-government medical institutions and organisations. Capital ex- penditure on new hospitals and other buildings, including equipment and furniture, was about $1,639 million, including $477 million for the subvented sector.

Health of the Community

The general level of health of the population remains good, largely due to anti-epidemic and disease-surveillance measures, the comprehensive range of preventive, promotive and personal health services, and a comparatively high standard of living. This is reflected in the highly-satisfactory health indices. Infant mortality has remained below seven per 1 000 live births and the average life expectancy is 80 for females and 74 for males.

       The leading causes of death today are cancer, heart disease and cerebrovascular diseases. The low infant mortality rate is attributed mainly to the provision of comprehensive family health care and neo-natal care facilities as well as improvements in environmental and socio-economic conditions and the health infrastructure.

(Statistics are given in Appendices 28 and 29.)

      The incidence of AIDS (Acquired Immune Deficiency Syndrome) has slightly increased. During 1990, 12 cases were reported, bringing the total number on record from 32 to 44, of which 30 have died.

       In March 1990, the government upgraded the Expert Committee on AIDS to an Advisory Council on AIDS by further enhancing involvement and participation from the community, non-governmental organisations and the private sector. This is in agreement with the Resolution of the 42nd World Health Assembly (1989). The council is tasked with consolidating the AIDS programme in Hong Kong to ensure substained capability in the coming decade through better linkages with other social programmes and through better management and evaluation of the existing programme. Another target of the council is to strengthen the AIDS programme through education, greater community involvement in preventive efforts and more comprehensive surveillance of HIV infection. Moreover, the council has introduced innovative ideas including a more flexible approach to reach the high-risk groups effectively through involvement of non-government organisations and the private sector.

      The Committee on Education and Publicity on AIDS and the Scientific Working Group on AIDS under the Advisory Council on AIDS are expanded to have more community involvement and participation. These two committees continue to work on the education and publicity programmes and the technical aspects in the preventive programmes such as HIV surveillance, studies on epidemiology of AIDS in Hong Kong and various scientific research projects.

      The AIDS Counselling and Health Education Service continues to provide counselling and medical consultation for persons who are at risk of contracting AIDS. Health talks are also arranged for various groups like students, prison inmates and intravenous drug abusers. Members of the public may use a special telephone hotline to obtain advice in confidence. Blood tests may be arranged under conditions of complete anonymity.

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The Surveillance Programme, which started in 1985, provides baseline information on the prevalence of infection by AIDS virus among the various groups of individuals at risk, like sexually promiscuous people, multi-transfused patients and intravenous drug abusers.

Mass screening of all donated blood for antibodies to AIDS virus has been carried out by the Hong Kong Red Cross Blood Transfusion Service since 1985. This ensures the safety of blood used in transfusion and prevents the possible transmission of AIDS through this route.

Concerning cholera, there were five cases reported in the year among the general population. Of these, two were local cases. Prompt control measures were instituted and there was no spread to the local community.

  In the early part of the year, there was an upsurge of viral hepatitis cases, particularly hepatitis A, consistent with the seasonal pattern. Detailed epidemiological investigations did not reveal any common source of infection.

Tuberculosis remains a disease of public health importance in Hong Kong. There were 6 510 notifications during the year, representing a notification rate of 112 per 100 000. There is continued diligence and a dynamic programme against this disease. The local BCG immunisation scheme effectively covers some 99 per cent of the newborn. Booster doses are given to primary school children and to new immigrant children after an initial Mantoux test. A total of 382 deaths resulting from tuberculosis was recorded in 1990, representing a death rate of 6.59 per 100 000. Corresponding figures recorded in 1989 were 403 and 6.99 respectively.

Immunisation programmes against common childhood infections are carried out at maternal and child health centres as well as in schools. Primary 1 and 6 schoolchildren receive booster vaccination against diphtheria, tetanus and poliomyelitis. In addition, girls in Primary 6 are given rubella vaccination. The coverage is consistently over 98 per cent.

In order to combat hepatitis B infection, one of the major public health problems in Hong Kong, the Department of Health has formulated and implemented cost-effective preventive and control measures. The Hepatitis B Vaccination Programme was first introduced in 1984 for health care workers and babies born to carrier mothers. It was extended in November 1988 to cover all newborn babies. The programme is well accepted by the community and the coverage rate for the first dose at birth is over 99 per cent. Health education is also an important preventive measure.

  To increase the protection of the at-risk group, namely women of child-bearing age, rubella vaccination is made available to nurses, teachers and social workers and other female staff in the government service. The vaccination is also provided to women attending maternal and child health centres.

  Starting from 1990, the Department of Health has introduced the mumps, measles and rubella (MMR) vaccine for infants when one year old. Apart from providing additional protection against mumps, the introduction of MMR vaccine would enhance the rubella vaccination programme and help to prevent the disabling condition of congenital rubella syndrome. Children in Hong Kong are therefore being protected from nine common childhood infectious diseases namely, tuberculosis, diphtheria, pertussis, poliomyelitis, tetanus, hepatitis B, measles, mumps and rubella.

All babies born in Hong Kong are being covered in the Combined Neonatal Screening Programme for congenital hypothyroidism and glucose-6-phosphate-dehydrogenase de- ficiency. The programme was first introduced in 1983. It facilitates early diagnosis and

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     treatment of these conditions which may lead to disability. Parents of children identified through the screening programme are advised on the treatment and management needs of their children.

Rabies Control

     Rabies control is carried out by the Agriculture and Fisheries Department. Hong Kong regained its rabies-free status in July 1989 following a period of two years during which no case of indigenously acquired rabies in human or animal had occurred. Notwithstanding the situation, strict control measures remained in force throughout the year: these included import control and quarantine of imported animals, compulsory licensing and inoculation of dogs against the disease, intensive apprehension and elimination of stray dogs, thorough observation of biter animals for rabies infection and close surveillance of the closed areas at the border.

Hospitals and Development Programmes

     Hospitals in Hong Kong - both public and private - provide a total of 25 286 beds, representing 4.4 beds per thousand population. They provide hospital services at low-cost which are easily accessible to the people of Hong Kong. In 1990, more than 645 400 patients were treated at the 35 public hospitals. There were 9 837 000 attendances in the specialist clinics.

       Cases of acute illness and accident casualties are taken to the accident and emergency departments, which are attached to major hospitals. Such emergency treatment is provided free of charge. In 1990, there were 1 100 000 attendances in the public sector, averaging 3 057 attendances per day.

      During the year, the demand for hospital services remained high, as reflected by the consistently large number of attendances at out-patient and specialist clinics, accident and emergency departments, and the number of hospital admissions. In addition, both departments provided medical care to Vietnamese boat people. In the latter half of 1990, there were 7 300 attendances at accident and emergency departments by boat people, and 7 200 admissions with a total of 43 800 bed days occupied.

      Work on the Hospital Services Department's development programme has been progressing satisfactorily with the opening of Tuen Mun Hospital and the completion of Sha Tin Cheshire Home and Sha Tin Infirmary and Convalescent Hospital in 1990. Construction work is continuing on the 1 600-bed Pamela Youde Hospital in Chai Wan, which is scheduled for completion in 1992.

      At Queen Mary Hospital, construction of the Phase II extension block has been completed and the new psychiatric and paediatric wards were opened in 1990. The first bone marrow transplant unit in Hong Kong commenced operation in May 1990. There will be a total net addition of 510 beds upon completion of the whole extension project by 1994.

       Extensive redevelopment of the Ruttonjee Sanatorium in Wan Chai from an institution for chest and tuberculosis patients into a general acute hospital with 614 beds was completed in 1990.

      Other important projects which are well underway include improvement and extension of the Queen Elizabeth Hospital in Yau Ma Tei, the Yan Chai Hospital in Tsuen Wan and the Tung Wah Eastern Hospital in Causeway Bay.

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  Projects in the pipeline include further extensions to the United Christian Hospital and Pok Oi Hospital, and other major reprovisioning projects. The development programme includes plans for the construction of an additional 1 990 infirmary beds in projects such as the Tsuen Wan and Tai Po Infirmary and Convalescent Hospitals and the Wong Chuk Hang Complex for the Elderly.

Clinics

 General out-patient services form a vital part of the health care system. The government now operates 55 general out-patient clinics. Evening, Sunday and public holiday sessions continue at clinics in the more densely-populated areas as part of the overall measures to meet the demand for out-patient services. Total attendance at government out-patient clinics was 15 million. The medical development programme includes 13 additional clinic and polyclinic projects throughout the territory.

  Mobile dispensaries and floating clinics provide the necessary medical services to the more remote areas of the New Territories and outlying islands. Other inaccessible areas are visited regularly by the 'flying doctor' service, with the assistance of the Auxiliary Air Force.

  At the end of the year, 94 clinics operated by charity organisations were registered under the Medical Clinics Ordinance. At the same time, 164 were registered as exempted clinics. Registered medical practitioners of the Estate Doctors' Association set up clinics in housing estates to provide a low-cost service for residents. Private medical practitioners continued to attend to the majority of out-patients.

Family Health

The Family Health Services of the Department of Health operate 45 maternal and child health centres, providing a comprehensive health programme for women of child-bearing age and children aged up to five years. Ante-natal and post-natal medical consultation as well as family planning services are offered to women. Immunisation programmes are carried out against tuberculosis, diphtheria, whooping cough, tetanus, poliomyelitis, measles, mumps, rubella and viral hepatitis B. During the year, over 90 per cent of new- born babies attended the maternal and child health centres.

  Under the Comprehensive Observation Scheme, children are assessed at different ages for the detection of early developmental abnormalities. If necessary, they are referred to specialist clinics or to child assessment centres for further examination.

  At present, there are four child assessment centres (three government centres and one government-assisted centre). These centres adopt a multi-disciplinary approach which ensures early rehabilitation for the child. Four more centres have been included in the Department of Health's development programme.

  Health education is an essential component of the Family Health Services. In addition to health talks and counselling on child care at centres, health education for expectant mothers is extended to government hospitals, with emphasis on the promotion of breast- feeding. A telephone service is available to answer enquiries from the public.

  The government-subvented Family Planning Association of Hong Kong runs 29 birth control clinics, providing such services as pre-marital counselling, contraception, sterilisation, vasectomy and advice on sub-fertility. There is also emphasis on health education and publicity on family planning and sex education.

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School Health

The School Medical Service Scheme is operated by an independent School Medical Service Board. Participation is voluntary and all children from Primary 1 to Form 3 of the participating schools can join the scheme by paying a token fee of $15 a year. As at December 31, 1990, more than 352 800 children from 1 116 schools have participated - representing about 45 per cent of the eligible school population - and about 540 general medical practitioners have enlisted. Starting from November 1, 1990, each child has to pay $12 for each consultation made at the chosen medical practitioner's office. The government contributes $105 a year for each pupil enrolled and it also bears the administrative cost.

       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 regular inspections of schools to advise on matters concerning the health of children and organise health education activities and immunisation campaigns.

Port Health

The Port Health Service is the control authority to prevent the introduction of quaran- tinable diseases into Hong Kong via air, land, rail or sea and to enforce the measures stipulated under the Quarantine and Prevention of Disease Ordinance and the Inter- national Health Regulations.

A 24-hour health clearance service is provided for all incoming vessels, including those ferrying refugees, and radio pratiques are granted to ships. The service provides vaccination facilities and issues international vaccination certificates. It also inspects and supervises the eradication of rats from ships on international voyages and ensures adequate standards of hygiene and sanitation on board vessels or aircraft. It provides medical assistance to ships and planes within the territory and transmits medical advice to vessels at sea.

The food catering service for international airlines is kept under close surveillance by health staff to ensure that the food and water supplied to flight kitchens is clean and safe. The hygiene and sanitation of the airport is also under the strict scrutiny of health staff.

       The service regularly exchanges epidemiological information with the World Health Organisation in Geneva and its Western Pacific Regional Office in Manila, as well as with neighbouring countries.

Review of Primary Health Care

In August 1989, the Working Party on Primary Health Care was set up to conduct a comprehensive review of Hong Kong's primary health care services. The working party reviewed the provision of the general out-patient service, maternal and child health care including family planning, the school medical service, health education and immunisation and other forms of preventive programmes. It examined the respective roles of government and private sector in the provision of primary health care to the community and suggested arrangements to strengthen the co-ordination between the out-patient clinics and the hospitals. The working party submitted its report to government at the end of 1990.

Dental Services

The School Dental Care Service aims at promoting dental health among schoolchildren. Services provided include regular dental examination, treatment and oral health education.

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Since 1987, the programme has been extended to all primary school children. In 1990, 400 921 participated, representing 74 per cent of the primary school population.

  An Oral Health Education Unit has been established by the Department of Health to organise oral health education activities for the community.

  The Government Dental Service provides dental care for all monthly-paid government servants, their dependants and pensioners, 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.

Services for the Mentally Ill and Mentally Handicapped

 Medical Services for the mentally ill include treatment in hospitals, out-patient clinics and day hospitals. The Mental Health Service of the Hospital Services Department, in conjunction with other local academic and voluntary bodies, provides a comprehensive psychiatric service for the territory as a whole. A great deal of emphasis is put on in- tegrating rehabilitation with medical treatment.

At the end of 1990, 3 486 beds were provided in psychiatric hospitals, and 645 beds in psychiatric units of general hospitals. In line with the universal trend for the latter type of provision, 2 120 additional beds are being planned for the mentally ill in various hospitals.

  Psychiatric patients are treated, as far as possible, in the community. The Community Work and Aftercare Units of the psychiatric hospitals provide multi-disciplinary assistance to patients discharged from these hospitals. Domiciliary occupational therapy and com- munity psychiatric nursing services in particular aim to provide treatment programmes and continuity of care for discharged mental patients in their home setting, thereby assisting them in social readjustment and educating patients as well as their families in mental health. There are now seven Community Psychiatric Nursing Centres and four more have been planned. Other complementary rehabilitative services include day centres, halfway houses, long-stay care homes, vocational training, selective placement and social clubs offered by various government departments and voluntary agencies.

  Severely mentally-handicapped persons requiring medical treatment and intensive nurs- ing are cared for at the 200-bed Siu Lam Hospital and at the 300-bed unit in the Caritas Medical Centre. A further 700 beds in this category have been included in the Medical Development Programme to meet the continuing need.

Special Services

The Pathology Service provides both clinical and public health laboratory services for government hospitals and clinics, and a consultancy service for the subvented sector. It also administers hospital mortuaries and blood banks.

  The Forensic Pathology Service with its fully-established forensic laboratory works closely with the Royal Hong Kong Police Force on the medical aspects of criminology and other medico-legal work. It also performs investigations in all homicides and coroners' cases. The public mortuaries are under the administration of the service.

  The Virus Unit is the central laboratory for the diagnosis and surveillance of viral infections including AIDS. It provides laboratory support for the screening, assessment and guidance of vaccination programmes against viral diseases. Moreover, its Institute of Immunology undertakes the monitoring and quality control of biological products, including vaccines for use in the local health services.

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      A Central Neonatal Screening Laboratory was established in 1984. Its main function is to co-ordinate the laboratory activities of the territory-wide neonatal screening programme on congenital hypothyroidism and glucose-6-phosphate-dehydrogenase deficiency.

       The Institute of Radiology and Oncology comprises three major divisions, the Diagnos- tic Radiology Division, the Radiotherapy and Oncology Division and the Medical Physics Division. The Diagnostic Radiology Division provides a diagnostic organ-imaging service. The Radiotherapy and Oncology Division provides comprehensive radiotherapy pro- grammes and a chemotherapy service for cancer patients. It also operates a cancer registry covering the whole territory. The Medical Physics Division provides radiation physics, clinical physics and radiation protection services. It also looks after the procurement and contract maintenance of radiological and related equipment.

       Regular visits are made by the staff of the Radiation Health Unit to medical, commercial and industrial premises to inspect the working conditions of radiation workers. The unit also issues radiation licences to the proprietors in accordance with the Radiation Ordin- ance and Regulations. It assists in the Background Radiation Monitoring Programme organised by the Royal Observatory to establish an accurate baseline of the background radiation levels in Hong Kong.

      The Pharmaceutical Service of the Department of Health is made up of two divisions, with a total establishment of 312, including 27 pharmacists. The first division provides pharmaceutical service to all government clinics. The second division deals with the inspection and licensing of pharmaceutical manufacturers and dealers and the registration and import-export control of pharmaceutical products and medicines. Action is taken against the illegal sale and distribution of pharmaceutical products and medicines, and in 1990, there were 56 prosecutions. In the Hospital Services Department, there were 62 pharmacists to look after the pharmaceutical needs of government hospitals.

Community Nursing Service

The Community Nursing Service provides domiciliary and rehabilitation nursing care and treatment to the sick, the elderly infirm and the disabled in their own homes.

       Jointly operated by eight agencies, including the Hospital Services Department, the service functioned from a network of 49 hospital stations and satellite centres. During the year, 11 950 patients were served and more than 238 400 home visits were made.

Health Education

The Central Health Education Unit of the Department of Health is responsible for the planning, organisation, co-ordination and promotion of health education activities. In 1990, the unit was actively involved in a number of campaigns including those on envi- ronmental health, home safety, exercise and health, prevention of communicable diseases such as viral hepatitis and malaria, immunisation, organ donation, nutrition, adolescent health and mental health.

The theme of the major health education campaign for 1990 was Our Planet, Our Health. Think Globally, Act Locally. A series of programmes including workshops, a 24-hour pre-recorded telephone information service, essay competition, photography competition, health columns and media interviews were arranged. A carnival-cum- exhibition on the theme of environment and health was held at Southorn Playground in November and attracted a large attendance.

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The Central Health Education Unit and the AIDS Counselling and Health Education Service of the department worked in close collaboration with both government and non- government organisations in the promotion of education on AIDS. The Committee on Health Education and Publicity on AIDS launched a number of programmes including an exhibition at City Hall, a youth concert at Victoria Park, a poster design competition, a youth camp and seminars for doctors, nurses, drug addicts and women's groups in December in support of the 3rd World AIDS Day.

A women's correspondence course on Nutrition and Health was jointly organised by Radio Television Hong Kong and the Central Health Education unit. The 13-episode pro- gramme was broadcast on radio twice a week and over 300 women completed the course.

The 3rd Teachers' Training Project on Health Education, a joint venture with Education Department in June, provided training for 44 secondary school teachers.

The 11th Young Health Leaders' Training Course was held in July. It consisted of lectures, games, group discussions and slide shows and aimed to train secondary school students in health education and leadership skills. The Oral Health Education Unit and the AIDS Counselling and Health Education Service of the Department of Health, the Education Department and the Environmental Protection Department assisted in the organisation of this project from which 247 students from 44 schools graduated.

   Other activities included health talks and workshops for schools and voluntary agencies. Health education materials like pamphlets, posters, booklets, cassettes, slides and video tapes were produced and were available for free-loan. Advice and counselling was provided for organisations interested in promoting health education.

   Close liaison was maintained with medical professionals, other government departments, non-government organisations and the media for the smooth implementation of health education campaigns. The Central Health Education Unit participated in television and radio programmes and press interviews.

Increased community concern for health was reflected by the popularity of the various health education programmes offered.

Smoking and Health

To protect members of the public from the health hazards of smoking, government's anti- smoking policy was reviewed during the year. This has resulted in a package of proposals to further prohibit smoking in public places, to restrict the tar content in cigarettes and to convey stronger health warnings to the public. Amendments to the Smoking (Public Health) Ordinance are being sought to implement these measures.

The Council on Smoking and Health is a statutory body established in 1987 to acquire and disseminate information on the health hazards of using tobacco products and to advise government on matters related to tobacco and health. During the year, the council conducted publicity campaigns with particular emphasis on discouraging young people from smoking. A large-scale Youth Project with the aim of promoting a happy and healthy lifestyle among young people without addiction to smoking was launched towards the end of the year.

Traditional Chinese Medicine

  In August 1989, the Secretary for Health and Welfare appointed a working party to look into the use and practice of traditional Chinese medicine in Hong Kong. The working

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     party's terms of reference have been formulated having regard to the government's policy in the last 150 years of respecting the practice of traditional Chinese medicine. During the year, the working party commissioned surveys and consulted widely on the present practice of the principal forms of traditional Chinese medicine in Hong Kong and the forms of training given to practitioners. In May 1990, a Professional Consultative Committee comprising members of the working party and members engaged in the practice of tradi- tional Chinese medicine was formed to strengthen communication and to ensure an adequate exchange of views between members of the trade and the working party. The working party will identify whether there is any widespread abuse of traditional Chinese medicine which poses a significant risk to health and will advise on measures that should be taken to promote the good practice of traditional Chinese medicine.

Medical Charges

     Medical charges remained low, reflecting a substantial subsidy from public funds. Patients in the general wards of government hospitals are charged $34 a day and the fee covers everything from meals, medicine and investigation tests, to surgery or any other treatment required. The charge may be reduced or waived in cases of hardship certified by a medical social worker. A limited number of private beds are provided at major government hos- pitals with higher maintenance and treatment charges.

      The charge for consultation at general out-patient clinics is $18, while that for specialist clinics is $28. Charges for physiotherapy, occupational therapy and child assessment are $28. Attendance at geriatric or psychiatric day centres and home visits by community nurses cost $27. These fees may also be waived if warranted.

      The charge for injections and dressings in general out-patient clinics is $7, while charges for visits to family planning clinics and methadone clinics remain at $1.

Free medical services continued to be offered at maternal and child health centres, tuber- culosis and chest clinics, social hygiene clinics and accident and emergency departments.

Training of Medical and Health Personnel

The basic training of doctors is provided by the University of Hong Kong and the Chinese University of Hong Kong. Graduates of the two medical schools are awarded degrees recognised by the General Medical Council of Great Britain. The medical student intake at the University of Hong Kong remained at 151 in 1990. During the year, the Chinese University of Hong Kong took in its 10th group of 162 students.

      Under the licentiate scheme of the Hong Kong Medical Council, 26 externally-trained doctors passed the local licentiate examination in 1990. After satisfactory completion of an externship programme in public hospitals, they will become registered medical practitioners.

      In 1989, the government decided to establish a statutory Hong Kong Academy of Medicine to be responsible for organising and supervising post-graduate and continuing medical education in Hong Kong. The purpose of the academy is to enhance clinical competence and thereby improve medical services. The academy will set standards, define the contents and duration of training courses and accredit specialist qualifications. It would have as its main objective the advancement and promotion of the science and practice of medicine. A preparatory committee was set up in March 1990 to make preparations for the formation of the academy.

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  The Prince Philip Dental Hospital produced 58 dentists in 1990. The training of dental therapists is provided at the Tang Shiu Kin Dental Therapists Training School.

  The basic training for general nurses is conducted at government, government-assisted and private hospitals. There are now nine schools for training students to be registered nurses and 11 for training pupils to be enrolled nurses with an average annual intake capacity of about 1 180 and 580 respectively. An additional student nurse training school and one more pupil nurse training school are planned over the next decade. The annual intake capacity is to be increased from 1 180 to 1 410 for general student nurses and from 580 to 670 for general pupil nurses.

  The training of psychiatric student nurses is conducted at Kwai Chung Hospital and Castle Peak Hospital and training of psychiatric pupil nurses at Castle Peak Hospital. The average intake capacity for psychiatric student nurses is 170 and for pupil nurses is 80. Three more training schools for psychiatric nurses have been planned for the next decade to meet the rising demand for nursing care in the Mental Health Service.

  The need for continuing training and education for nurses is recognised. The post-basic school for the Nursing Training Unit provides post-registration courses in midwifery, health nursing and community nursing on a regular basis.

  The departments of Diagnostic Sciences, Rehabilitation Sciences and Health Sciences of the Hong Kong Polytechnic provide training for para-medical and para-dental staff, including radiographers, optometrists, physiotherapists, occupational therapists, medical laboratory technicians and dental technicians. There are opportunities for overseas training in specialised areas for medical, nursing, para-medical and para-dental staff. The Chai Wan Technical Institute of the Technical Education and Industrial Training Department provides training for dispensers which is complemented by in-service departmental train- ing. There is also in-service training for prosthetists, mould laboratory technicians and therapeutic radiographers in the respective units of the government institutions.

Government Laboratory

The Government Laboratory offers a comprehensive range of analytical and consultative services to government departments and other public institutions to assist them in the implementation of various government programmes.

  During the year, a wide range of food samples including fresh produce and cooked, processed and preserved foods was examined mainly for compliance with health standards laid down in the Public Health and Municipal Services Ordinance. Regular checks were maintained on various food additives such as preservatives, artificial sweeteners, colouring matter and contaminants including heavy metals and pesticide and hormone residues, to ensure the safety of food consumed by the public.

  Close monitoring was carried out on the quality of medicinal preparations obtainable over-the-counter and those used in government hospitals and clinics, to protect the public from sub-standard drugs. Samples of Chinese herbal proprietary products were checked for the presence of synthetic drugs and toxic metals.

  The laboratory undertook a comprehensive range of environmental testing work to provide data on the quality of the local environment, in order to monitor the effectiveness of existing control measures and to provide a basis for the development of new policies and strategies. With the progress of existing government programmes to control pollution, the

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number of tests on air, water, soil and waste samples conducted reached a record level. For this reason, the laboratory invested substantially in laboratory automation facilities to achieve cost efficiency.

      Apart from the identification and classification of dangerous goods, the laboratory con- tinued to maintain a round-the-clock emergency service for incidents concerning chemical spills and toxic atmosphere.

The provision of analytical services for the assessment of revenue on dutiable com- modities such as wines and spirits, non-alcoholic beverages and tobacco products is one of the functions of the laboratory, and the determination of tar and nicotine contents in cigarettes in the local market continued to be an important area of its work.

Drug Abuse and Trafficking

The government's policy is to stop the illicit trafficking of drugs into and through Hong Kong, to develop a comprehensive treatment and rehabilitation programme for drug addicts and to dissuade people, particularly young people, from experimenting with drugs, so as to eradicate drug abuse from the community.

The exact number of addicts is not known. However, the government's computerised Central Registry of Drug Abuse and other linked indicators suggest that at the end of 1990 there were about 39 000 'active' addicts, which was 0.8 per cent of the population aged 11 and above.

       Data collected by the registry, based on 441 000 reports on 65 000 persons, indicate that 90 per cent of drug abusers are male and 10 per cent female, 69 per cent of the 'active' addicts were over 30 years old at the end of 1990, 25 per cent were in the 21 to 30 bracket and six per cent were aged under 21. The most common drug of abuse is heroin, which was used by 94 per cent of the persons reported to the registry in 1990. However, more young people have been abusing cannabis and other psychotropic substances in recent years.

      A large-scale survey covering some 110 000 students was conducted in October and November 1990 to assess the extent of abuse of psychotropic substances by students of secondary schools and technical institutes. The survey results are being processed and analysed, and the findings will be available in mid-1991.

Overall Strategy and Co-ordination

The government has a comprehensive anti-drug programme which has achieved consider- able success. The programme adopts a four-pronged approach, namely law enforcement, treatment and rehabilitation, preventive education and publicity, and international co- operation. Effective law enforcement induces addicts to seek treatment voluntarily as a result of short supply of drugs. Treatment and rehabilitation are undertaken by govern- ment and a number of voluntary agencies which offer a wide range of facilities to meet the different needs of drug abusers. The effectiveness of these treatment programmes reduces the demand for illicit drugs. At the same time, the government places great emphasis on preventive education and publicity to heighten public awareness of the drug problem and to promote the advantages of a drug-free lifestyle. Co-operation at the international level, through exchange of information and experience, enhances the effectiveness of efforts in these three areas.

These efforts are co-ordinated by the Action Committee Against Narcotics (ACAN), a non-statutory body which includes both non-official and government members. The

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committee is the government's advisory body on all anti-drugs policies and actions undertaken by government and non-government agencies. It is serviced by the Narcotics Division, which is headed by the Commissioner for Narcotics.

Legislation and Law Enforcement

The Police Force and the Customs and Excise Department seized some 70 kilograms of No. 3 heroin, 150 kilograms of No. 4 heroin and 2 600 kilograms of cannabis during the year. This included two large seizures of cannabis by the police. The first was a seizure of 980 kilograms in Aberdeen in July and the second a record seizure of 1 400 kilograms in Tuen Mun in October. Following joint operations with overseas law enforcement agencies, a number of international drug trafficking syndicates were neutralised with substantial quantities of drugs seized and ringleaders arrested locally and abroad. In 1990, police and customs action resulted in about 8 000 arrests for drug offences.

  In view of the increasing number of young persons abusing psychotropic substances, three psychotropic drugs which are most liable to abuse, namely Flunitrazepam, Triazolam and Brotizolam, were included in the First Schedule to the Dangerous Drugs Ordinance to subject them to stricter controls.

  During the year, negotiations were conducted with a number of foreign jurisdictions with a view to enhancing international co-operation, particularly as regards the tracing and confiscation of the proceeds of drug trafficking.

Treatment and Rehabilitation

 The voluntary methadone treatment programme operated by the Department of Health provides both maintenance and detoxification for out-patients. Methadone maintenance is designed to reduce or eliminate an addict's reliance on heroin or other opiate drugs, while the detoxification programme aims to eliminate dependence on any drug. The programme has proved to be very effective in serving both addicts and the community. There are 25 methadone clinics.

  The largest voluntary in-patient treatment programme is run by the Society for the Aid and Rehabilitation of Drug Abusers (SARDA) which operates an in-patient treatment centre for up to 380 men on the island of Shek Kwu Chau, and one for up to 40 women at Sha Tin. Linked to these centres are three intake units, five regional social service centres, six halfway houses, an employment placement office and a clinic which provides pre-admission medical examination and methadone treatment, urine analysis and post- discharge medical care.

  A compulsory treatment programme is operated by the Correctional Services Depart- ment under the Drug Addiction Treatment Centres Ordinance. The department runs two addiction treatment centres, one for up to 938 males on the island of Hei Ling Chau and the other for 100 females at Tai Lam Chung. These treatment programmes range from two to 12 months, the actual period being determined by the inmate's progress and the likelihood of continued abstinence from drugs following release. All persons discharged are given one year of statutory after-care.

  In 1990, the two voluntary treatment programmes and the Correctional Services Department's compulsory treatment programme admitted 14 000 addicts. On average, 14 100 addicts and ex-addicts were receiving some form of treatment, rehabilitation or after-care every day.

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      The pilot counselling centre, PS33, set up in Tsim Sha Tsui in April 1988 to provide counselling and telephone advice for psychotropic substance abusers, handled 60 cases and 1 500 telephone and drop-in enquiries during the year. PS33 is operated by the Hong Kong Christian Service with financial support from the Lotteries Fund.

Preventive Education and Publicity

The government and the community continued their efforts in promoting anti-narcotics preventive education and publicity. Main theme of the publicity campaign in 1990 was to encourage people to adopt a healthy lifestyle and say 'no' to all drugs.

Seven district campaigns were held involving the community through carnivals, variety shows, beach concerts, seminars, exhibitions and visits to treatment and rehabilitation centres.

      The Narcotics Division's school talks team gave 205 drug education talks to 75 000 students in 106 secondary schools and technical institutes throughout the territory. It also organised talks for juvenile offenders at the boys' and girls' homes operated by the Social Welfare Department.

       Drug education was provided for Vietnamese refugees and boat people, including printed materials in Vietnamese.

      For the 10th year, the Youth Against Drugs Scheme provided encouragement and financial support to young people who wished to participate directly in the planning and implementation of anti-narcotics projects. The 68-member ACAN Youth Volunteer Group took part in district campaigns and organised a number of community involvement projects. The ACAN Youth Advisory Group, comprising a cross-section of young people, continued to give advice on educational and publicity materials and activities.

The ACAN Drug Abuse Telephone Enquiry Service received 1030 enquiries, the majority seeking information on treatment facilities.

International Action

      Hong Kong continued to play an active international role, maintaining close links with the United Nations, inter-governmental agencies such as the Colombo Plan Bureau, In- terpol and the Customs Co-operation Council, as well as with individual governments. Hong Kong took part in 16 regional and international meetings and seminars concerned with anti-drug policies, law enforcement, treatment and rehabilitation, and preventive education.

      The techniques and methods employed in Hong Kong have made it an important venue for training anti-narcotics personnel from overseas. During the year, 147 people from 15 countries and international bodies 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. Hong Kong Narcotics Bureau and Customs Officers travelled overseas as lecturers or consultants on training courses related to anti- narcotics work.

Environmental Hygiene

The work of the Urban Services Department and the Regional Services Department includes street cleaning, collection and removal of nightsoil, cleansing of gullies, manage- ment of public toilets and bathhouses, pest control and services for the dead.

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  A regular workforce of about 8 858 is employed in cleansing duties, employing a fleet of 555 specialised vehicles which include refuse collection vehicles, street washers, mechanical sweepers, nightsoil collectors and gully emptiers.

Streets are swept, either manually or mechanically, from four to eight times a day for busy thoroughfares to once every second day for village lanes. Streets and lanes are also hosed down where local conditions warrant. Hawker areas and refuse collection points are washed regularly.

About 4 724 tonnes of refuse and junk are collected daily, including 75 tonnes removed by a contractual barging service from outlying islands for disposal at sites on the mainland. Since May 1990, the Regional Council has introduced a daily junk collection service to public housing estates. A nightsoil collection service is also provided daily in those areas without a water-borne sewage and disposal system. These services are free.

Following a comprehensive review conducted during the year, the Regional Council will upgrade its 734 refuse collection points and 1 235 bin sites. Metal-sheet and wooden enclosures will be replaced with fibreglass structures, while sites which abut trunk roads or cause nuisance will be upgraded into permanent village-type refuse collection points. Meanwhile, more attractive rectangular-shaped rubbish bins have been replacing the cylindrical metal ones at refuse collection points, in government buildings and in housing developments.

The two departments are continuing to contract-out selective cleansing services to private contractors to reduce the involvement of direct departmental labour and to enhance cost-effectiveness. In the urban area, contracts cover more than 280 public toilets and bathhouses, two squatter villages and six cargo-working areas. In the New Territories, cleansing services have been contracted-out for some years in Luen Wo Hui and Shek Wu Hui in North District. Contracts have also been awarded for village cleansing in Ap Chau in Sha Tau Kok and Tai Long Wan Tsuen on Lantau. The performance of private contractors has been found to be highly satisfactory and contracting-out will be extended to other suitable localities in the future.

During the year, the Keep Hong Kong Clean campaign, co-ordinated by a joint Urban Council-Regional Council Steering Committee, launched a seven-phase clean-up programme. This covered the environment, water, roads, schools, homes, squatter areas and villages, as well as the countryside. The campaign focused on community involvement, education and publicity through television and posters. Special emphasis was placed on penalising litter offenders, since enforcement of the law remained a major weapon against litterbugs, with 45 292 people being fined a total of $11.8 million for littering offences during the year.

To further involve the community in the campaign, the two councils engaged a public relations firm and an advertising agency to generate new ideas for a campaign strategy. A positive role model, the Dragon of Cleanliness, was introduced.

In order to evaluate the effectiveness of the campaign since its start in 1972, the Steering Committee also appointed a research company to survey and analyse public awareness. The findings will be used to formulate future campaign strategies.

Controls

To maintain and improve standards of hygiene, staff of the two departments serving the municipal councils regularly inspect licensed and permitted premises, common parts of

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buildings, squatter areas, construction sites and undeveloped land throughout the territory to enforce the Public Health and Municipal Services Ordinance and its subsidiary legisla- tion. They also respond to complaints about poor sanitation and vermin infestation and work closely with the Department of Health in the investigation and control of food- poisoning outbreaks and infectious diseases.

      To protect public health, the Urban Council has adopted a review system to identify food business establishments which pose fire, health or environmental risks and now requires that they comply with current standards before their licenses or permits can be renewed. To deter indiscriminate offenders, the council has also introduced a Demerit Points System, whereby the accumulation of 15 points for convictions within a 12-month period forms the basis for suspension or cancellation of a food premises' license or permit.

      Unlicensed food premises in the Regional Council area which have failed to apply for a licence or have not complied with the requirements specified have been the target for more stringent control, with prosecutions being increased in frequency from monthly to weekly. This has had the effect of dramatically reducing the number of unlicensed food businesses by 74 per cent, from 634 in February 1987 to 162 in June 1990.

For the prevention of vector-borne diseases, pest control staff of the Urban Services Department and Regional Services Department continued with integrated programmes to control rodents, mosquitoes, flies and other public health pests. Measures taken includ- ed environmental improvement, eradication of breeding places, health education and law enforcement. Special surveillance was maintained to prevent outbreaks of malaria in Vietnamese boat people detention centres. Technical support was provided by the Pest Control Advisory Section of the Department of Health.

Environmental Health Education

Under the auspices of the two Municipal Councils, the Health Education Unit of the Department of Health organised a number of programmes in 1990 to promote envi- ronmental health. The Look After Our Home Environment publicity campaign aimed at encouraging the public to take positive steps to keep the living environment clean, while the annual Food Hygiene Campaign highlighted the important relationship between the environment and food preparation with its theme Clean Place, Safe Food. Territory- wide publicity campaigns were also directed at the prevention of rodent infestation and nuisances caused by mosquitoes and dripping air-conditioners. Environmental health information was also disseminated by the unit's resource centre and through talks, mobile van broadcasting and a telephone hotline.

In conjunction with the Education Department, the unit sought to raise health con- sciousness among students with an Inter-School Health Education Project and Painting Competition early in the year and Inter-School Health Education Speech and Song Contests at the close of the year.

Food

The health inspectorate, backed by hygiene consultancy, controls food for sale, both imported and locally produced. With laboratory resources and assisted by a scientific advisory arm, the inspectorate ensures that the consumer is able to buy good whole- some food, which is unadulterated, uncontaminated, properly described and of nutritious quality.

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  Food samples are taken regularly for chemical analyses, bacteriological examinations and toxicity tests to ascertain their wholesomeness for human consumption. Field tests for pesticide residues are also performed on imported vegetables at the points of entry into Hong Kong. Following the Chernobyl reactor accident in 1986, imported food commodities, especially those from Europe, have continued to be closely monitored for possible radioactive contamination.

  The growing number of food establishments and the quantities and variety of food items available on the local market have increased the importance of law enforcement. Parallel to this is the increasing demand for services for health certification of foods for export and re-export to foreign countries.

  The review of food legislation has been an on-going exercise with a view to ensuring that laws made are consistent with international standards, guidelines and recommendations based on scientific evidence. This is important in order to provide a high standard of public health protection and, at the same time, facilitate international trade in foods.

On the international scene, Hong Kong maintains close ties with the World Health Organisation, the Food and Agriculture Organisation of the United Nations and other international authoritative bodies on foods. As the bulk of the local food supply comes from the mainland, Hong Kong has been working hand in hand with the Chinese authorities to promote food safety and food hygiene.

Markets

The Urban Council operates 60 retail markets in the urban areas. A total of 9 294 stalls are provided in these markets offering a choice of commodities ranging from fresh food to household items.

Old and outdated markets have been gradually replaced by multi-purpose complexes with new markets and cooked food centres accommodated on the lower floors. On the upper floors, these complexes provide a variety of amenities for indoor sports activities, cultural and recreational pursuits. There are 13 such multi-purpose complexes in the Urban Council areas.

New markets with cooked food centres are built to meet consumer demand in the areas where they are situated and not just to meet hawker resiting commitments. This approach, together with improvements in design, has been adopted in planning and building in order to provide more viable markets with better environments for stall-holders and customers.

  The commissioning of the Kimberly Street Market in the Yau Tsim District in February 1991 will mark the beginning of a new era of modern, high-class market provision that reflects the prosperity of Hong Kong. The market is in a modern hotel building with air-conditioning and relatively large market stalls, offering a wide range of commodities to the public in a hygienic and comfortable shopping environment.

The Regional Council is responsible for the management of public markets within its region. Two new markets, located at Yeung Uk Road and at Tsuen King Wai in Tsuen Wan, were completed and commissioned in May 1990. Two other market projects, at Plover Cove Road, Tai Po, and Hop Yick Road, Yuen Long, were completed and commissioned at the end of 1990. The council now manages a total of 44 markets, ac- commodating 5 067 stalls and 362 cooked food stalls. Another new market project with 240 stalls and 16 cooked food stalls is under construction at Cheung Chau and is expected to be completed in mid-1991.

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Hawkers

The Urban Council is responsible for the licensing of street hawkers in the urban areas and its general duties teams enforce hawker control legislation. By end-December 1990, 14 100 hawker licences had been issued, 1 100 less than in 1989. The decrease was partly due to efforts by the council to move on-street hawkers into newly-completed markets. The completion of the Kwun Chung Market in 1990 made it possible to resite 100 on- street licensed hawkers in the vicinity. Moreover, a new scheme was introduced from the beginning of the year for itinerant hawkers to surrender their licences, on a voluntary basis, in exchange for an ex-gratia payment or a fixed-pitch hawker licence or a market mini-stall tenancy. By the end of the year, 940 licences were returned under this scheme.

       Following the recommendations of the Urban Council's Working Party on Hawker and Related Policies, efforts have been made to relax the issue of hawker licences. During the first phase of the licensing exercise, about 210 fixed-pitch newspaper hawker licences were issued. The issue of other classes of licences will depend on the availability of suitable sites identified to be viable and publicly acceptable.

      Despite the unpleasant and difficult nature of hawker control work, the general duties teams continue to make sustained efforts to keep illegal hawking activities under reason- able control. In 1990, there were 9 300 court convictions against hawker offences.

       The management and control of hawkers in the Regional Council area is the respon- sibility of the council. In 1990, there were 2 613 licensed hawkers in the area, a drop of 235 compared with 1989. There were an estimated 1 626 unlicensed hawkers.

Through the deployment of general duties teams, with a total staff of 725, the Regional Services Department maintains control over hawking activities. Although there are still some illegal hawking blackspots in the new towns, the problem is generally contained, and the number of licensed hawkers is gradually declining as more are given sites in the new markets.

       The council has a firm policy of not issuing any new hawker licences, except Fixed Pitch (Newspaper) Hawker Licences.

Abattoirs

For many years, the Urban Council operated two abattoirs, one at Kennedy Town on Hong Kong Island and the other at Cheung Sha Wan in Kowloon, to provide slaughtering services in the urban areas.

      In 1987, the council decided to privatise the slaughtering services provided by the two abattoirs on condition that it would continue to operate a meat inspection service after privatisation. The scheme involves the handing over of the Kennedy Town Abattoir to a private company during the first phase, and the closure of the Cheung Sha Wan Abattoir upon the completion of a replacement private slaughterhouse in Sheung Shui in the second phase.

      After lengthy negotiations with the parties concerned, the Kennedy Town Abattoir was successfully leased out by the Urban Services Department in mid-November. Meanwhile, the Cheung Sha Wan Abattoir will continue to be operated by the council as negotiations are still in progress.

       During the year 2017 000 pigs, 109 000 cattle and 12 000 goats were slaughtered in these two abattoirs which together supplied about 63 per cent of the local demand for fresh meat.

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  Slaughtering services in the Regional Council area are provided by two licensed pri- vate slaughterhouses in Kwai Chung and Yuen Long districts. They handled a total of 1 172 984 pigs, 56 507 head of cattle and 7 273 goats during the year. The slaughterhouse at Kwai Chung, which can slaughter up to 3 000 pigs a day, also helps to meet demand in Kowloon. To meet long-term demand, a site at Sheung Shui has been reserved for the construction of a private slaughterhouse with a possible throughput capacity of 3 900 pigs and 240 cattle. In addition, a small slaughterhouse is under construction at Cheung Chau, commissioning of which is expected in mid-1991.

All animals slaughtered in these abattoirs and slaughterhouses are inspected by qualified health inspectors of the Urban Services and Regional Services Departments.

Cemeteries and Crematoria

It is government policy to encourage cremation rather than burial for the disposal of the dead. During the year, over 72 per cent of the dead were cremated in the territory. Human remains buried in public cemeteries are subject to exhumation after six years when the exhumed remains are either cremated or re-interred in an urn cemetery.

The Urban Council operates one public funeral hall in Kowloon which provides free funeral services for the needy. Two service halls at the Hung Hom Public Funeral Parlour are provided free of charge for public use as 'farewell pavilions'.

In Urban Council areas, there are five public cemeteries, two public crematoria and 18 private cemeteries. There are also two war cemeteries which are under the management of the Commonwealth War Graves Commission.

The Regional Council manages three public crematoria, at Kwai Chung, Fu Shan and Wo Hop Shek. The first two are used for the cremation of dead bodies and the third solely for the cremation of exhumed skeletal remains. In 1990, 20 706 bodies and 8 588 skeletal cremations were handled. By the end of 1990, two more public crematoria were completed, one at Cheung Chau and the other at Wo Hop Shek. These two new crematoria will cater for the cremation of dead bodies and exhumed skeletal remains. Niches are provided at columbaria built adjacent to all crematoria. A new columbarium with 500 niches was completed on Lamma Island in November. By the end of 1990, the Regional Council provided and managed 34 422 niches. It also manages six public cemeteries, four at Wo Hop Shek, Tai O, Cheung Chau, Mui Wo, and two at Sandy Ridge. They comprise a total of 60 272 coffin grave sites and 185 391 urn grave sites. The council also oversees nine private cemeteries in the Regional Council area.

Auxiliary Medical Services

The Auxiliary Medical Services (AMS) is a disciplined, medical civil defence corps established and funded by the government since 1950. It consists of an establishment of 5 835 volunteers from all walks of life, such as doctors, nurses, paramedical personnel, civil servants and others engaged in the private sector. With the exception of members from the medical and nursing professions, layman volunteers are offered training in first-aid, footdrill, casualty evacuation, home nursing, life saving, ambulance manning, clinical and hospital ward attachment, leadership development and management techniques to enhance their operational efficiency and effectiveness in serving the community in times of need.

The role of AMS is to reinforce the regular services of the Health Services and Hospital Services Departments and the Ambulance Service during natural disasters and emergencies

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such as typhoons, rainstorms, landslides, aircraft crashes, large-scale fires, major epid- emics, civil disturbance, influx of illegal immigrants or refugees. When mobilisation is required in any crisis, AMS members would be deployed and supplied with emergency medical resources to provide first-aid treatment for the injured at the scene, to convey casualties to hospitals, to provide nursing care to patients at both acute and convalescent hospitals and to work in collaboration with other rescue forces.

Throughout the year, volunteer members provided supplementary medical services to government departments and outside agencies for life-guard duties, ambulance depot manning, clinical services in methadone centres and refugee camps, and first-aid coverage at country parks, cycling tracks, school activities and major public functions such as fireworks displays, Community Chest Walks, charity shows, local festivals and sports meetings. AMS continued to perform essential clinical duties round-the-clock at nine sick bays/medical clinics in six Vietnamese Boat People Centres. More than 683 000 man-hours. were committed to operational tasks in the year.

Another responsibility of the AMS is the provision of first-aid training to civil servants. In 1990, a total of 3 383 government servants completed the basic first-aid certificate course.

During the year, a new edition of the First Aid Manual Emergency Care Hand Book was published for first-aiders' reference and the emergency medical supplies scales were revised and updated. The foundation stone of the new AMS administrative and operational base in Ho Man Tin was laid by the Governor, the target completion date being early 1991.

Consideration is being given to establishing the AMS Cadet Corps in secondary schools to promote health and civic education by training students between 12 and 16 years old to provide first aid service for school activities.

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THE Director of Social Welfare is responsible for carrying out government policies on social security and social welfare, based on the objectives set out in three White Papers - Integrating the Disabled into the Community: A United Effort (1977), Social Welfare into the 1980s (1979), and Primary Education and Pre-primary Services (1981).

  The government is advised on social welfare policy by two committees the Social Welfare Advisory Committee, covering the whole area of social welfare, and the Rehabilitation Development Co-ordinating Committee, on matters of rehabilitation. Members of these committees are appointed by the Governor, with non-officials as chairmen.

  In the provision of welfare services, the Social Welfare Department maintains a close working partnership with non-governmental welfare agencies, most of which are affiliated to the Hong Kong Council of Social Service (See Appendix 32A).

  At the end of 1990, the standard cost subvention system was extended to a total of 21 services. Funds will be made available for the extension of the standard cost subvention system to three more services early in 1991.

  In the constant drive to provide more and better welfare services to meet the changing needs of the community, the government increased spending on social welfare in 1990-91 by 20 per cent to $4,946 million.

  To ensure that social welfare policies continue to meet the needs of Hong Kong into the 1990s, the Governor announced in October 1989 a review of social welfare services, to be conducted in conjunction with the subvented welfare sector. A working party was subsequently set up under the chairmanship of the Secretary for Health and Welfare. It was charged with reviewing the various programme areas in the social welfare field and with drafting a White Paper to set out proposals for the way forward. The review covered those services which fall within the policy purview of the Secretary for Health and Welfare, excluding rehabilitation services which have been developed under a separate White Paper and are subject to a different consultative network.

  The working party started its deliberations in mid-January 1990. A draft White Paper was issued early in September for public consultation. At the end of a three-month consultative period, the working party assessed public comments and adjusted its recom- mendations accordingly.

  The advice of the Social Welfare Advisory Committee will be sought on the draft White Paper. The draft will be submitted to the Governor in Council, before being tabled in the

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Legislative Council and subsequently published as a White Paper early in 1991, setting out government's policies for the future development of social welfare services for the 1990s and beyond.

To expedite provision of care-and-attention places for the elderly to cope with the increasing demand, efforts have been made to establish care-and-attention units in homes for the aged in public housing estates, in addition to erecting purpose-built care and attention homes. The first of its kind which has a capacity of 45 care-and-attention places and 80 home places commenced operation in August 1990. This is in line with the concept of providing a spectrum of services to minimise the need to transfer elderly persons to other institutions when their health condition deteriorates.

To improve the service quality, physiotherapy service is now provided in care-and- attention homes and day care centres for the elderly.

In the area of services for young offenders, to bring the level of pre-vocational training closer to that provided by pre-vocational schools, the syllabi of the pre-vocational classes of the department's correctional institutions have been reviewed and improved. Links with the Vocational Training Council have been strengthened. A growing number of discharged trainees go on to vocational courses managed by the Council and the Department of Technical Education and Industrial Training. Subsequent to employing qualified teachers to run academic classes in the institutions, 13 residents joined the Secondary School Places Allocation System and were allocated places for the first time in 1990.

Apart from expanding existing services to meet the demand for various social rehabilita- tion services, emphasis has been placed on finding new methods to improve employment opportunities for the disabled and additional resources to improve the quality of services.

Proposals for amendments to the Protection of Women and Juveniles Ordinance were concluded. These proposals would effect improvements by removing obsolete provisions and making significant changes in a number of areas for better protection of the child's well-being. The Working Group on Child Abuse continued its work in reviewing measures to combat child abuse and neglect with particular reference to inter-disciplinary collabora- tion and co-operation.

       The Housing Department is entrusted with the fitting-out works for welfare premises in Public Housing Estates under a rolling programme. The number of services with standard layout plans which are covered by this programme has been increased to seven, includ- ing day nurseries, children and youth centres, social centres, hostels for the elderly, halfway houses for discharged mental patients and homes for the aged with care-and- attention units.

       During the year, five new day nurseries, three new homes/hostels for the aged, five homes cum care-and-attention units, one care-and-attention home, two day-care, two multi-service and 18 social centres for the elderly, two group work units and 13 children and youth centres were established.

        Provision of these additional services and the increase in the social security caseload were reflected in increased recurrent expenditure.

Community Chest

The Community Chest, which organises and co-ordinates funding-raising activities for its member agencies, raised $88.2 million in 1989-90, compared with $71 million in 1988-9. (See Appendix 32B).

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Social Security

Social security is a major social welfare programme aimed at meeting the needs of those vulnerable groups in the community requiring financial assistance. The Public Assistance and Special Needs Allowance Schemes are the key elements in the entirely non-contributory social security system. They are supplemented by three other schemes: Criminal and Law Enforcement Injuries Compensation Scheme, Traffic Accident Victims Assistance Scheme and Emergency Relief. The social security programme provides an effective 'safety net' for those who need assistance.

  The Public Assistance Scheme, which is means-tested, provides cash assistance to those in need. It is designed to raise the income of needy individuals and families to a level where essential requirements are met. Persons who have resided in Hong Kong for not less than one year may be eligible if they can provide documentary proof that their income and other resources are below the prescribed levels. An able-bodied unemployed person aged 15 to 59 who is available for work is, in addition, required to register with the Labour Department for job placement in order to qualify for assistance. The Director of Social Welfare is vested with discretionary power to waive the one-year residence requirement in cases of genuine hardship.

  The rates of assistance were increased across the board by 10 per cent in April 1990 to keep pace with inflation. The current monthly basic allowances are $685 for a single person, $515 for each of the first two eligible members of family, $505 for each of the next two eligible members and $495 for each additional eligible member. Separate allowances are paid to cover the cost of accommodation.

  A monthly old-age supplement of $343 is given to those aged 60 to 69, and $393 to those aged 70 and over, who are not receiving a disability supplement or a special needs allowance under a separate scheme. A disability supplement of $343 per month is payable to those who are certified to be partially disabled with at least 50 per cent loss of earning capacity and who are not in receipt of an old-age supplement or a special needs allowance. Those who have received public assistance continuously for 12 months are given an annual long-term supplement to enable them to meet the cost of replacing household wares and durable goods: $870 for a single person; $1,740 for a family with two to four members; and $2,610 for a family with five or more members. In addition, special grants are given, where necessary, to meet other needs in particular circumstances. To encourage self-help, an individual's monthly earnings of up to $515 may be disregarded in the calculation of assistance payable.

  At the end of 1990, the number of public assistance cases was 68 500, compared with 66 000 in 1989. The majority of recipients are the elderly, the disabled and single parent families. Expenditure on public assistance in the 1989-90 financial year amounted to $854.8 million, representing an increase of 9.7 per cent over the previous year.

  The Special Needs Allowance Scheme provides flat-rate allowances for the severely disabled and the elderly. Any person, regardless of age and financial means, who is certified to be severely disabled and who has resided continuously in Hong Kong for at least one year immediately before application, is eligible for a disability allowance. To be eligible for an old-age allowance, a person must have resided continuously in Hong Kong for at least five years prior to attaining the qualifying age.

  On April 1, 1990, the higher disability allowance, which is twice the normal rate, was extended to all severely disabled persons who require constant attendance from others in

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their daily life but are not receiving such care in

                              government or subvented institution. The current monthly rate for the disability allowance is $685 and, for the higher disability allowance, $1,370.

Old-age allowance is non-means-tested for those aged 70 and above, and they are entitled to a current rate of $393 per month. For those below the age of 70, monthly payments are at a lower rate of $343, subject to a declaration that income and assets do not exceed the prescribed levels. The minimum qualifying age for an old-age allowance was lowered to 66 on April 1. This will be further lowered to 65 in 1991.

      The number of people receiving disability and old-age allowances at the end of the year was 444 400, compared with 401 300 at the end of 1989. Expenditure on special needs allowances in the 1989-90 financial year was $1,772 million, representing an increase of 29 per cent over the previous year.

The Criminal and Law Enforcement Injuries Compensation Scheme provides cash assistance to people who are injured in crimes of violence or in helping to prevent crime in Hong Kong. It also extends compensation to those injured by law enforcement officers using weapons in the execution of their duties. Payments are made to their surviving dependent family members in the case of persons killed in any one of these circumstances.

This scheme, which is non-means-tested and non-contributory, is administered by the Criminal Injuries Compensation Board and the Law Enforcement Injuries Compensation Board. Both boards consist of the same chairman and members who are appointed by the Governor, from outside the civil service. During the year, total payments amounted to $6.6 million, compared with $5.7 million in the previous year. The payment rates are reviewed regularly to keep pace with inflation.

The Traffic Accident Victims Assistance Scheme is a no-fault, non-means-tested scheme. It provides cash payments to victims of traffic accidents or, in the case of death, their dependants. For a person to be eligible, the traffic accident must be one as defined under the Traffic Accident Victims (Assistance Fund) Ordinance (Cap 229) and must have been reported to the police. The application must be lodged within six months of the accident. In the case of injury not causing death, the victim must have required no less than three days' sick leave supported by a medical certificate. Payments are not made for damage to property. The scheme does not affect the applicant's right to claim legal damages or compensation from other sources in respect of the same accident. In the case of a successful claim, the applicant is required to refund either the payment he has received from the scheme or the amount of damages or compensation received, whichever is the less.

During the year, 6030 applications were received and 5 550 were approved for assistance, with payments of $52 million compared with $48 million in 1989.

      The rates of assistance are revised regularly to take account of the rise in the cost of living.

Emergency relief is provided to victims of natural or other disasters in the form of material aid, such as hot meals, eating utensils and other essential articles. Grants from the Emergency Relief Fund are also paid to disaster victims or their dependants to relieve hardship arising from personal injury or death. The payment rates under this fund are also revised regularly.

During the year, emergency relief was given to 2 410 registered victims on 90 occasions. The Social Welfare Department also assisted in providing hot meals to refugees and boat people from Vietnam.

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To prevent abuse of the various schemes, a special team investigates cases of suspected fraud or difficulties encountered in recovery of overpayment. During the year, the team completed investigations into 355 cases.

Social Security Appeal Board

The Social Security Appeal Board is an independent body comprising non-official members appointed by the Governor. It considers appeals from individuals against decisions by the Social Welfare Department concerning public assistance, special needs allowance and traffic accident victims assistance payments. During the year, 84 appeals were heard by the board. Of these, one was related to public assistance, 82 to special needs allowance, 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 are to put into effect the directions of the courts on the treatment of offenders through social work methods. The overall aim is to rehabilitate offenders through probation supervision, the Community Service Orders Scheme, 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. Community participation in the rehabilitation of offenders has been promoted through the Volunteer Scheme for Probationers in which volunteers from many walks of life are selected to provide probationers with personal and moral support, as well as direct services such as tutoring and guidance on the use of leisure time.

The Community Service Orders Scheme which started in January 1987 is another community-based treatment with punitive and rehabilitative aims. It requires an offender of or over the age of 14 and convicted of an offence punishable by imprisonment, to perform unpaid work of benefit to the community and to receive counselling and guidance from a probation officer. The scheme has been successfully implemented at three magistracies and will be extended to the remaining seven magistracies once resources are available.

   In April 1987, a Young Offender Assessment Panel was set up jointly by the Social Welfare Department and the Correctional Services Department. The panel comprises professional staff from the two departments and provides magistrates with a co-ordinated view on the most appropriate programme of rehabilitation for convicted young offenders aged between 14 and 25. Its services were extended to all magistracies in the year.

   The Social Welfare Department operates seven residential institutions with a total capacity of 712 places, each with a slightly different training programme to cater for the needs of the residents. Educational, pre-vocational and character training are provided to assist juvenile offenders to return to the community as law-abiding citizens. The Begonia Road Boys' Home and Ma Tau Wei Girls' Home are combined remand-and-probation institutions for juvenile offenders and youths in need of statutory care and protection. The establishment of Pui Chi Boys' Home in 1984 helped to alleviate overcrowding in the probation section of the Begonia Road Boys' Home by catering for a younger age group of under 14. Similarly, the Pui Yin Juvenile Home, in operation since February 1986, has contributed to improving conditions at the remand sections of the Begonia Road Boys' Home and Ma Tau Wei Girls' Home. The Castle Peak Boys' Home is a reformatory school

SOCIAL WELFARE

for boys aged 14 to under 16 on admission, while the O Pui Shan Boys' Home is a similar institution for those aged under 14 on admission. Since April 1989, these two boys' homes have undertaken aftercare services to enhance the co-ordination and continuity of their treatment programmes. The Kwun Tong Hostel is a probation hostel for young men aged between 16 and 21.

      While a new girls' home is being built in Tuen Mun, plans are in hand to improve residential and training facilities, including the conversion of a youth centre and hostel into a probation home for girls, building a new workshop block at O Pui Shan Boys' Home and the relocation of the Castle Peak Boys' Home and Begonia Road Boys' Home to Sha Tin and Ngau Chi Wan respectively. Following a review of the educational programmes in these institutions, the department has recruited qualified teachers to run academic teaching classes. New teaching materials have been designed to suit the needs and interests of the trainees. These new arrangements have brought about improvements although there have been problems in the recruitment and retention of teachers.

In addition to the work carried out by the Social Welfare Department, several subvented welfare agencies also provide services to help young offenders and young people with behavioural problems to reintegrate into the community.

Family Welfare

     The Social Welfare Department and a number of subvented welfare agencies provide a variety of family and child care services with the overall objective of preserving and strengthening the family as a unit through helping individuals and families to solve their problems or to avoid them altogether.

      The department operates à network of 31 family services centres and the subvented welfare sector operates 23 such centres. The major services provided in family services centres include: family casework and counselling; care and protection of children and young people aged under 21, and referrals for schooling, housing, employment and financial assistance.

      The Wai On Home, run by the department and Harmony House, run by the non- governmental sector together provide short-term accommodation with 80 places for women and children who may be victims of domestic violence and for young girls at risk.

      The department continues to tackle the problem of street sleeping. A temporary shelter and a day relief centre have been allocated social welfare subvention to provide temporary accommodation and relief services for street sleepers. In response to the recommendations of an inter-departmental co-ordinating committee on street sleepers set up under the auspices of the Health and Welfare Branch, a grant of $2.3 million from the Hong Kong Jockey Club Charities (Limited) will be used to set up a second urban hostel to provide more permanent accommodation for the homeless, including street sleepers.

      The department provides a wide range of child welfare services. The Child Protection Services Unit caters for abused children. The Adoption Unit is responsible for local and overseas adoption of orphans, abandoned babies and children freed for adoption. The Central Foster Care Unit promotes foster care services in Hong Kong. Furthermore, the Child Custody Service Unit carries out statutory duties in respect of supervision or care arising from custody and guardianship matters handled in Family Courts or the High Court. The Chuk Yuen Children's Reception Centre and the Sha Kok Children's Home provide for the temporary care of children aged up to eight.

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In addition to the work carried out by the Social Welfare Department, subvented welfare agencies also provide residential child care services in children's homes, homes and hostels for boys and girls, foster care and small group homes.

   Child care centres are available for children under the age of six. Such centres must comply with the standards laid down in the Child Care Centres Ordinance and Regula- tions. They are subject to registration and inspection. At the end of the year, there were 31 828 places in day child care centres and 632 places in residential child care centres. New modes of child care services are being tried out as experimental projects to meet the changing needs of families. Families with low incomes and who have a social need for children to attend a child care centre may apply to the Social Welfare Department for assistance in meeting nursery fees. A total of 7 800 children were receiving fee assistance at the end of the year. In September 1990, an improvement was introduced to the Fee Assistance Scheme whereby a larger number of low-income families can benefit from a greater subsidy.

Family life education aims to improve the quality of family life through the promotion of interpersonal relationships and social consciousness which may help to prevent family breakdowns and social problems. The 1990 Family Life Education Publicity Campaign with the theme Responsible Parenthood and Child Care was targetted at teenagers and their parents. A wide variety of publicity media, including TV, radio, posters, booklets on communication between parents and children, and a territory-wide lyric writing contest were organised. In support of the centralised publicity campaign, promotional and educational activities were organised by social workers at the district level. The Family Life Education Resource Centre plays a significant role in supporting social workers in promotional and educational work by providing audio-visual equipment and resource materials.

   Upon completion of the demand study on home help service in late 1990, the findings were used as a basis for future development of the service. The family-aide service was launched in four family services centres in December to develop clients' home management skills and child care techniques and to help families attain self-reliance.

Medical Social Service

To assist patients and their families to deal with personal and family problems arising through illness and disabilities, medical social service is provided by social workers stationed in 105 medical social service units in government hospitals and clinics. With the implementation of new provisions in the Mental Health Ordinance, on December 29, 1989, medical social workers in the psychiatric service took up new statutory duties which include the supervision of conditionally-discharged patients, guardianship cases and cases put to the Mental Health Review Tribunal. To cope with these new duties and to ensure effective delivery of service, additional posts have been created.

Care of the Elderly

  The 1979 White Paper laid down 'Care in the Community and by the Community' as the guiding principle for the planning and development of services for the elderly. A wide range of community support services is provided to help families look after their elderly members and to enable old people to live in the community for as long as possible. Such community services include home help, canteen services, community education, day care, and social

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;

and recreational activities. At the end of 1990, there were 60 home help teams, 124 social centres, 17 multi-service centres and nine day care centres. Thirty-seven respite care places for the elderly were also available in homes for the elderly. Housing assistance, including compassionate rehousing and priority allocation of public housing, continues to be available for those eligible.

       Additional residential facilities were provided for those who, for health or other reasons, are unable to look after themselves and who have no relatives or friends to assist them. At the end of the year, there were 6 828 places in hostels/homes for the elderly and 3 163 places in care and attention homes.

      In addition, sheltered housing is provided in private housing flats as well as in public housing estates for 3 485 elderly people who are capable of living independently.

      To make the maximum use of places available in these homes and sheltered housing, new admission arrangements including the establishment of a Central Pool system and a Placement Office of the Elderly, were introduced during the year.

      In order to encourage and assist private homes for the elderly to reach the standards required for registration under the Voluntary Registration Scheme, the Registration Office of Private Homes for the Elderly continued to give advice and assistance to these homes, including an offer to buy places from registered homes under the experimental Bought Place Scheme.

Services for Young People

Helping young people to become mature and responsible members of society is the main objective of this programme. A wide range of services is designed for young people aged from six to 24 to foster the development of their personality, character, social aptitude, sense of civic responsibility, ability to use their leisure time constructively and to enable those with adjustment problems to direct their energies towards positive goals in society.

       At district level, apart from providing group work activities in community centres, the department promotes and co-ordinates youth programmes and encourages the establish- ment of self-programming and volunteer groups through its youth offices. Since 1974, the department has been running the Opportunity for Youth Scheme. Every year, young people are helped with funds to implement a variety of community service projects to meet specific social needs. Awards are given for outstanding projects to recognise the contributions of the participants.

       Children and youth centres, operated mainly by subvented welfare agencies, serve as focal points for a variety of programmes and activities for the personal growth and social development of young people. In 1990, one children centre, one youth centre and 11 combined children and youth centres were opened, making a total of 199 units of children centres and 203 units of youth centres.

       Outreaching social work attempts to cater to groups of young people at risk who do not normally participate in organised youth activities. With the addition of two new teams in 1990, there are totally 24 outreaching social work teams serving in priority areas with large youth populations, high population density and high juvenile crime rates. The review completed in the year has recommended further improvements and expansion of the service.

       School social work service is provided by social workers in secondary schools while a guidance service for primary school students is provided by student guidance officers.

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These services help students with personal behavioural or family-related problems in adjusting to school life. A comprehensive review of the service conducted during the year has indicated the direction for future development.

Uniformed organisations offer young people opportunities for joining organised activities and training programmes to help them develop character and leadership so that they can eventually become responsible, self-reliant and caring members of the community. There are eight subvented welfare organisations, with over 86 000 members operating a wide range of activities with different emphasis for different target groups of young people. The Duke of Edinburgh's Award Scheme offers a comprehensive programme focusing on the development of the potential of young people, and this has attracted a membership of 40 000.

Rehabilitation of the Disabled

The objective of rehabilitation services in Hong Kong is to integrate the disabled into the community. Services provided by government departments and welfare agencies are aimed at enabling disabled people to fully develop their physical, mental and social capabilities. These services are co-ordinated by the Commissioner for Rehabilitation, who also conducts regular reviews of the Rehabilitation Programme Plan, which projects the requirements for and identifies the shortfalls in rehabilitation services for the following 10 years.

The Department of Health is responsible for preventing disabilities by promoting health education and improving immunisation programmes against various communicable diseases, and providing screening services for early identification of disabilities. The Hospital Services Department is responsible for providing medical rehabilitation services. The Social Welfare Department is responsible for the planning and development of a wide range of 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 is responsible for co-ordinating vocational training for disabled young people and adults. The Labour Department is responsible for job placements for the hearing impaired, the visually impaired, the physically handicapped, the mentally handicapped and for discharged mental patients. The Transport Department subvents a Rehabus service for disabled persons who cannot use public transport.

By the end of the year, the Social Welfare Department and subvented welfare agencies provided a total of 592 integrated programme places, 855 special child care centre places (including 54 residential places) and 785 early education and training centre places for pre- school disabled children. For disabled adults, there were 1 298 day activity centre places to provide day care, daily living skills and work training for the mentally handicapped, 3 303 sheltered workshop places to provide employment for disabled persons who are unable to compete in the open job market, and 2012 hostel places for those disabled persons who can neither live independently nor be adequately cared for by their families, or who live in areas too remote from their places of training or employment. In addition, 200 long stay care home places, 757 halfway house places and 110 activity centre places were provided for discharged mental patients and 21 social and recreational centres were provided for all categories of disabled persons.

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SOCIAL WELFARE

Aimed at creating more employment opportunities for disabled persons, the pilot supported-employment scheme introduced by the Social Welfare Department became fully operative during the year. The scheme consists of a mobile crew comprising several disabled persons supervised by one non-handicapped person and takes up contracted cleaning jobs. Additional teams as well as other service models were being developed.

In order to improve the quality of services, two central support services were in operation to provide all rehabilitation day centres and hostels with professional back- up from clinical psychologists, occupational therapists and physiotherapists. Other new services introduced include the respite service which provides short-term relief to families with mentally handicapped persons, and the fourth home-based training team which was an interim measure to help train mentally handicapped persons awaiting placement.

The Queen Elizabeth Foundation for the Mentally Handicapped was set up in August 1988. Its purpose is to further the welfare, education and training of the mentally handi- capped and to promote their employment prospects. The management and use of the foundation's funds are determined by a council consisting of prominent members of the community appointed by the Governor. During the year, the foundation allocated $3.8 million in the form of grants or sponsorships to 23 voluntary agencies and four government departments enabling them to undertake projects for the benefit of mentally handicapped persons. The fund stood at $95 million on March 31, 1990.

Staff Development

Training of professional social workers is provided by the universities, polytechnics and post-secondary colleges. The Social Welfare Department and subvented welfare agencies assist in the provision of practical work placements for social work students from these institutions. The department, through its Lady Trench Training Centre, provides various types of in-service training programmes such as orientation courses for newly-recruited staff, basic social work training for non-professional grade staff, induction training for staff transferred to a new service area and staff development programmes to provide knowledge and skills in helping staff handle the increasingly complicated social problems.

During the year, the Training Centre organised 170 programmes, seminars and work- shops for 5 353 participants compared with 190 in 1989. It also operates a child care centre for 100 children aged between two and six years which serves as a training ground for child care centre workers.

To equip staff with updated and specialised skills in the various fields of professional practice, the department sponsors experienced staff to attend advanced local and overseas training courses and international conferences. During the year, 172 staff attended 40 such courses and conferences.

The Social Work Training Fund continues to provide financial assistance for individuals to pursue social work training in Hong Kong or overseas. In 1989, a total of 51 applicants were awarded either full or partial grants. It also provides funding support for other purposes, such as financing overseas experts to provide training and consultation, and the printing of resource training materials for social workers in Hong Kong.

Research and Statistics

The Research and Statistics Section provides a support service to the department by preparing estimates, conducting surveys, and developing and maintaining data systems.

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Eight surveys were carried out during the year. In conjunction with the Hong Kong Council of Social Service, the section is responsible for the operation of the Social Welfare Manpower Planning System. This system collates information on individual social work personnel and on the demand for and supply of trained social workers in order to facilitate overall manpower planning in the welfare sector. The Research and Statistics Section also runs six other data systems, these being the Integrated Law and Order Statistical System on offenders under the charge of the department, the Street Sleepers Registry, the Planned Welfare Projects Registry, and three central referral systems for placement in institutions for the elderly, the disabled adults and disabled pre-schoolers. In addition, the section is a source of statistical support in connection with the preparation of the White Paper.

Subvention and Evaluation

Financial assistance is given to enable 159 non-profit-making welfare agencies to provide social welfare services in accordance with government policies. Financial assistance for capital and special expenditure is usually provided through the Lotteries Fund.

The Evaluation Unit 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 the agencies which are in turn required to submit service statistics to the department at specified intervals. Where appropriate, findings are submitted to the Subventions and Lotteries Fund Advisory Committee which advises on the allocation of subventions and Lotteries Fund grants to agencies providing social welfare and rehabilita- tion services. During the year the department conducted eight in-depth evaluations of experimental projects and services operated by voluntary agencies.

Community Building

Community building efforts involve the provision of purpose-built facilities for group and community activities, the formation of citizens' organisations and the encouragement of community participation in the administration of public affairs, solving community problems, promoting social stability and improving the quality of life in general.

The community building programme, co-ordinated by the Community Building Policy Committee, serves to foster among the people of Hong Kong a sense of belonging, mutual care and civic responsibility as society undergoes rapid socio-economic changes.

A number of government departments and voluntary organisations contribute towards the programme, the City and New Territories Administration and the Social Welfare Department being the two departments principally responsible for implementing this programme. The City and New Territories Administration, through its network of district offices, is primarily concerned with promoting mutual care and community spirit through various local organisations, such as area committees, mutual aid committees, rural committees, kaifong welfare associations, women's organisations, and local arts and sports associations. Community centres, managed by the City and New Territories Administration, are provided throughout the territory to serve as a base for community building work.

The Social Welfare Department 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.

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Commission on Youth

The Commission on Youth was established in February 1990, with members appointed by the Governor. The commission's main objectives were to advise the Governor on matters pertaining to youth, to initiate research, to promote co-operation and co-ordination in the provision of youth services, and to serve as a focal liaison point with other international youth organisations for exchange programmes.

The commission's first task was to investigate the impact of Hong Kong's future on the development of young people and to recommend to government how Hong Kong's youth should be better equipped to adapt to political, social and economic changes in the years ahead. To gain a deeper understanding of factors which influence the thinking and behaviour of young people, the commission undertook a number of research projects, probing the attitudes and expectations of youth towards the future, their participation in community affairs and the influence of the mass media.

The government requires the commission to develop a Charter for Youth which would set out the rights and obligations of young people in Hong Kong. International develop- ments and Hong Kong's unique social, economic and political circumstances will be taken into consideration in drafting the charter.

Committee on the Promotion of Civic Education

In 1986, the government set up the Committee on the Promotion of Civic Education to encourage all sectors of the community to actively promote civic awareness and responsibility.

       Made up largely of non-government members, the committee advises the government and community organisations on the objectives and scope of civic education. It en- courages, through sponsorship, community effort in organising civic education activities among different age groups.

The committee sponsored 30 projects in 1990 with an allocation of over $900,000. In view of the elections to the three-tier political structure of Hong Kong in 1991, an ex- hibition entitled Free Choice was held to encourage greater understanding of the meaning and rationale of elections.

       A new promotional announcement carrying the message 'Get involved - it's your Hong Kong' was shown on television. Other promotional activities launched by the committee included two seminars and a number of projects to encourage people's participation in political and community affairs. The work of the committee has received strong support from district organisations, in particular district boards.

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HONG KONG'S public housing programme took on a new dimension with plans by the Housing Authority to extend the government's Long Term Housing Strategy by 10 years into 2011, to ensure that the continuing demand for homes will be met following the completion of the current programme.

Construction within the current programme continued at a high rate, with over 53 000 flats being completed in 1990; and with greater emphasis being placed on quality, design and comfort. Nearly three million people, more than half the population, now live in public housing, about 83 per cent in rented flats and the rest in their own homes.

Rents charged remain comparatively low, at $28.1 per square metre for the newest urban estates or about one-quarter to one-third of market rates. There is increasing interest in the schemes offered by the authority to purchase flats.

The government provides capital assistance and land for the authority to implement the Long Term Housing Strategy programme.

About 133 000 flats were in various stages of construction during the year, and some $7.4 billion was spent on development and maintenance on public housing projects.

In the next five years, $35 billion will be spent on new construction work.

During the year the authority embarked on a number of major policy initiatives in- cluding an examination of the housing needs of the 'sandwich class' and the possibility of selling some suitable rental public housing flats to sitting tenants.

It also formed an ad-hoc committee to review rent policy and allocation standards for public rental housing.

The private non-profit-making Hong Kong Housing Society continued to supplement the provision of public housing through its rental and rural public housing projects, urban renewal scheme and flats-for-sale scheme.

Private sector housing production reached 27 400 units.

Details of housing and persons accommodated are given at Appendix 33.

Housing Authority

Established under the Housing Ordinance, the Hong Kong Housing Authority is a statu- tory body responsible for co-ordinating all aspects of public housing.

The authority advises the Governor on all housing policy matters and, through its executive arm (the Housing Department), plans and builds public housing estates, Home Ownership Scheme courts and temporary housing areas for various categories of people.

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It also manages public housing estates, Home Ownership Scheme courts, temporary housing areas, cottage areas, transit centres, flatted factories and the ancillary commercial facilities throughout the territory, and administers the Private Sector Participation Scheme and the Home Purchase Loan Scheme. On behalf of the government, the authority clears land, prevents and controls squatting, and plans and co-ordinates improvements to squat-

ter areas.

The authority meets every three months to review the work of its eight standing com- mittees which have delegated powers to deal with matters concerning establishment and finance, building, management and operations, home ownership, development, commercial properties, complaints and tenancy appeals. It also meets whenever there are important issues which require special attention.

In addition to the eight standing committees, the Special Committee on Clearance of Kowloon Walled City, an ad hoc committee established in January 1987, continues to perform its functions. Four other ad hoc committees have been formed to examine the housing needs of the 'sandwich class', to review the contribution of the private housing sector, to review domestic rent policy and allocation standards and to examine the feasibility of selling suitable public rental flats to sitting tenants.

The authority is chaired by a non-official, supported by 20 other non-official members and four official members whose responsibilities have a bearing on housing matters. All members are appointed by the Governor. There are also 31 committee members, who sit on one or more of the committees. Many of the members of the authority and committees also serve the community as Legislative, Urban or Regional councillors, or as members of the New Territories Heung Yee Kuk, district boards, area committees and mutual aid committees. Together, they have a broad range of experience and representation in community service and professional knowledge in certain areas of activity, and are able to apply a critical and conscientious perspective in determining public housing policies.

The authority is responsible for its own finance and management. Under an arrangement with the government which came into effect on April 1, 1988, government continues to ensure the availability of funds required for the housing programmes as set out in the Long Term Housing Strategy. For its part, the authority will continue to pursue financial efficiency in providing accommodation at affordable rents and prices.

On March 31, 1990, the government's capital investment and contribution to housing stood at about $80.9 billion, which comprised permanent capital of $18.6 billion, con- tribution to domestic housing of $54 billion and non-domestic equity of $8.3 billion.

In the 1989-90 financial year, recurrent expenditure on the authority's domestic rental properties, covering mostly management and maintenance costs, totalled $4,381.3 million, while income from domestic rents was $3,639.2 million, resulting in a deficit of $742.1 million. This deficit was mainly because the low rents in old estates were insufficient to cover management expenses and the high cost of maintenance and improvements. The authority was partly able to offset this deficit from income derived from its non-domestic properties which, in the same period, generated a surplus of $289.2 million after charging amortisation and paying interest on permanent government capital and 50 per cent dividends to the government.

The authority spent $7,191 million on its capital programmes, of which $4,991 million (69.4 per cent) was financed by the authority, while the balance of $2,200 million (30.6 per cent) came from the government through supplementary injection of capital.

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Construction

Over 53 000 flats were produced by the Housing Authority in 1990, close to the record set in 1989.

Though the labour shortage continued to be a problem affecting the local construction industry, the authority is confident that its target production of 159 000 flats set for the remaining years of the first development period of the Long Term Housing Strategy will be achieved by early 1991. Overall, the authority is committed to producing another 400 000 flats in the second and third five-year development period ending in the year 2001. Plans are being drawn up to extend this to 2011, so that demands for public housing which are bound to arise will be met in the years ahead.

Good progress was made in various measures introduced to improve quality in con- struction work:

The authority's own lists of building contractors were promulgated in April 1990, with 18 firms enlisted for large and medium-size contracts and 35 firms for smaller contracts. All firms on the lists are given a three-year period to achieve total quality management (ISO 9000) accreditation by March 1993.

Meanwhile, a Performance Assessment Scoring System (PASS) is being developed, enabling the authority to judge individual contractor's performance more systemat- ically. The system will also be used for the selection of contractors to tender for building and maintenance works, and will thus give them incentive to improve the quality of their performance.

Provisions have been included in the authority's standard building contract conditions making it mandatory for contractors to allow workmen their days off on Sundays and public holidays. These provisions, coupled with other incentives being encouraged by the authority to improve site safety, hygiene and working conditions, should have a long-term effect of attracting more workers to the local construction industry.

- The initial selection of firms capable of supplying the major components for the standard Harmony blocks has been completed. These components will be manufac- tured off-site under strict quality control. The shortlisted firms will also be required to obtain ISO 9000 accreditation within a given time scale. Technical studies for the use of precast facade panels are being actively pursued with a view to further reducing the reliance on on-site labour and improving the quality of external finishes and window installation. The authority is keen to introduce the use of this precasting method on an incremental basis with effect from early 1991.

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Consultants have been engaged to assist the authority in its ongoing quality drive. Apart from those actively engaged in assessing the firms for the building components, others will be advising contractors on measures to be taken to achieve ISO 9000 accreditation. A separate consultancy will also be arranged to assist the authority's Construction Branch in obtaining ISO 9000 accreditation before March 1993.

Urban Housing

On Hong Kong Island, Stage I site formation at Shau Kei Wan East has been completed while Stage II is progressing. The Shau Kei Wan West site formation will be completed in 1992. Building works at both these sites, when completed, will provide 7 168 rental and 3 648 rental/HOS flats. In Chai Wan, finishing work is progressing in Fung Wah Estate, with an output of 608 HOS and 1 218 rental flats upon completion early in 1991. Wah

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Kwai Estate Phase 1 at Kellett Bay, which provides 1836 rental flats, has been sub- stantially completed.

Other phases of this estate, providing 1 428 rental and 1 402 HOS flats, are under construction. Site formation works for Ma Hang Village Redevelopment Phase 1 in Stanley is now underway and will provide formed land for construction of 1 004 rental flats in 1991.

       At Siu Sai Wan, 2 304 rental and 660 HOS flats have been completed in Phase 1, and 1 074 rental flats have been completed in Phase 2. Another 2011 rental and 1 216 rental/ HOS flats are under construction in Phase 3.

       In Kowloon Central, 1 410 rental flats have been completed in Wang Tau Hom Phases 6 and 8, 576 rental flats in Tung Tau Phase 6 and 2 406 rental flats in Lower Wong Tai Sin Phase 8. All these form part of redevelopment of the old estates in Kowloon Central, remaining construction work for which should be completed in 1992. Further east at Kwun Tong, Tsui Ping Estate Phases 4 and 7 have been completed, and the 2 673 and 1 428 rental flats in these two phases will be used primarily to reprovision the tenants affected by the redevelopment old estate at Tsui Ping Road.

Progress of building work for all three phases of Fung Tak Estate at Diamond Hill was satisfactory, and 3 878 and 1 870 rental flats will be available for intake in 1991 and 1992 respectively. In Lam Tin, construction of 2410 HOS flats is on schedule and will be completed in late 1992. Another 4 273 rental flats are under construction and are scheduled to be completed in 1992 and 1993. Tak Tin Estate, with 3 878 rental flats, has been sub- stantially completed.

Housing in New Towns, Rural Townships and Outlying Islands

In Sha Tin, Phase 3 of Kwong Yuen Estate has produced 1 224 rental flats. At the nearby Kwong Lam Court and Hong Lam Court, 1 836 and 1 050 HOS flats have been completed. In Ma On Shan 700 HOS flats have been handed over to the purchasers, while another 4 900 HOS flats and 3 424 rental flats are under different stages of construction.

Phases 1 and 2 of Cheung Hang Estate, one of the housing projects in Tsing Yi Area 10, have been completed and have added 2 856 rental flats to the housing stock. In Kwai Fong, 918 rental flats have been completed. Elsewhere in Kwai Chung the redevelopment of Kwai Shing, Kwai Hing and Kwai Fong Estates is being vigorously pursued.

Construction of 2 043 rental flats at Kwai Chung Area 9H has also been started. In Tai Wo Hau Estate, the Phase 4 redevelopment is going on. The 2 043 rental flats in this phase are scheduled for completion in 1993. Site formation work at Shek Yam East is progressing satisfactorily, and building works for the 2 043 flats on this site will begin in 1993.

All the projects in Tuen Mun New Town will soon be completed. In Leung King Phase 3, Tin King Phases 4 and 5, and San Wai Court, 6 752 rental flats and 2 828 HOS flats were completed during the year. The HOS development at Tuen Mun Area 14, with 4 200 flats and scheduled for completion by early 1994 will be the last major housing project in this

new town.

In Tai Po and Fanling, 5 340 rental flats have been completed in Wah Ming Estate Phases 1 and 2, and 612 HOS flats in On Shing Court (Tin Ping Estate Phase 3) this year. Progress of other housing projects, including four phases of Fu Heng at Area 8 and two phases of Wan Tau Tong at Area 6 has been satisfactory. A total of 12 537 rental flats and 700 HOS flats will be provided upon completion in 1991 and 1992.

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Several piling contracts were completed in Tin Shui Wai, including Tin Yiu Phases 2 and 3 and Tin Shui Phases 2 and 4. The former phases are designed to provide 4 494 rental flats, and the latter 4 397 rental flats. In all, 10 593 rental and 1824 rental/HOS flats have been planned for this new town in 1992, and 5 749 rental and 1 216 rental/HOS flats in 1993.

In Tseung Kwan O, King Lam Phases 1, 2 and 3 were completed, producing a total of 3 643 rental flats; King Lam Phase 4, with 1 517 rental flats, is still under construction. Another 2 566 HOS flats have been completed in Yan Ming Court and Ho Ming Court. Construction works in Hau Tak Estate Phases 1 and 2 have just begun, and 2 692 rental flats will be produced in these two phases upon completion in 1993.

For the outlying islands, the proposed rural public housing projects at Cheung Chau and Peng Chau are in their planning stage. Piling work for Lung Tin Phase 2 has already started.

Redevelopment

In 1972, a redevelopment programme was launched to improve the living environment of some 84 000 families in the 12 Mark I and II estates, comprising 240 blocks, which had been built between 1954 and 1964 to house victims of natural disasters and squatters displaced by development clearances.

   These estates provided only basic accommodation with community and social facilities which were not up to the present standard.

   In 1983, the government decided to step up the redevelopment programme, so that by 1990-91 the living conditions of all the remaining Mark I-II estate tenants could be improved.

   During 1990, 42 old blocks were evacuated to make way for new buildings, leaving 18 Mark I-II blocks to be redeveloped by 1991.

   The government's Long Term Housing Strategy envisaged the need to extend the redeve- lopment programme from Mark I-II estates to all Mark III-VI and former government low-cost housing estates, to improve the living environment in these estates. The current five-year rolling redevelopment programme for 1990-91 to 1994-95, involving 231 blocks accommodating 65 000 families, was made public in May. The affected tenants will be formally notified 18 to 24 months before the clearance dates.

Maintenance

During the year, the authority was responsible for maintaining 144 rental estates and 57 Home Ownership Scheme courts, and other properties, such as temporary housing areas and communal facilities.

   With some 4 500 buildings in its care, more than half of them over 15 years old, the authority spent $1,000 million on maintenance and improvement works, representing 20 per cent of the estate working account expenditure. In planning the maintenance programmes, it takes into account the life expectancy of a building, so as to maximise cost effectiveness.

   As the objective of maintaining the properties in a safe, habitable and serviceable condition has been largely achieved, the authority has been placing greater emphasis on improving the environment and communal facilities. About 19 per cent of the maintenance budget for the year was allocated to improvement programmes.

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In its continuous efforts to promote communication with tenants, the authority engaged an independent research agent to conduct a survey of tenants' opinions and expectations on maintenance. The results of the survey indicated that they were, generally, satisfied with the services provided in most areas.

       As part of its drive for quality, the authority has developed a comprehensive system for classifying and controlling materials used in structural repairs, and is maintaining a close link with international research and standards organisations.

      A major programme for strengthening buildings will soon be completed, and many of the methods adopted are innovative and have attracted international technical interest.

       The condition of older structures continues to be monitored by means of regular, routine inspection and investigations, and further repairs and strengthening continue to be carried out as required.

The authority has made lift modernisation and replacement of lifts one of its priorities, aiming at 50 lifts a year. The first project was completed at Ma Tau Wai Estate. This programme of upgrading the standard of lift services, reducing the average waiting time, increasing the number of stops and providing faster lifts to the old estates will continue in old estates not scheduled for redevelopment. In the regular and routine servicing of existing lifts, the authority has successfully kept the breakdown rate at less than 0.7 times per lift per month.

Completion of rewiring and reinforcement of estate blocks built before 1973 has allowed the unrestricted use of electrical appliances, such as air conditioners, in 153 000 homes. In July work began on a six-year scheme to rewire and reinforce the supply of electricity to 120 post-1973 blocks at a cost of $330 million.

A feasibility study was started on the use of a Central Control and Monitoring System (CCMS) to supervise the operating conditions of a wide variety of essential plant, equip- ment and installations. This will improve the response time in attending to breakdowns. The proposed CCMS is a computer-based on-line system capable of monitoring the operating status of various building services installations. It consists of a master station and a number of remote out-stations strategically located to collect status and alarm signals from installations. All information will be sent to district and regional maintenance offices for follow-up action. Meanwhile, a pilot project is being carried out to try out the fault detection logic and the system response before full scale implementation.

Control of Asbestos Materials

      Since 1984, the authority has ceased using materials containing asbestos in the construction of buildings and has had an established policy for the control of asbestos materials already present in buildings.

      During the year, the second phase of the abatement programme, dealing with works on the higher priority lists was completed, and the third phase, covering estate schools began. Three contracts were signed on air monitoring and bulk sampling, totalling $9 million and an asbestos management manual was produced under the authority's Asbestos Management Consultancy to form the basis of future abatement strategy and the estab- lishment of technical guidelines.

      To improve the safety of all existing playground equipment in estates, a contract was signed for the installation of safety surfaces, and some $15.2 million will be spent on play- ground equipment in the next two years.

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The authority has contributed many welfare amenities over the years including 10 Hostels for the Elderly at a cost of over $20 million and an ongoing estate schools extension programme encompassing nearly 40 schools at an average cost of $1 million per school.

Home Ownership Scheme

The Home Ownership Scheme was established in the late 1970s to help lower-middle- income families and public housing tenants to become home owners by providing flats for sale at prices below market value.

Before April 1988, the Housing Authority acted on the government's behalf in admin- istering the HOS, using government funds. After re-organisation, the authority took over the responsibility for the scheme.

Private sector applicants for HOS flats may not own domestic property and are subject to a household income limit of $11,500 per month. These restrictions, however, do not apply to public rental estate tenants. The income restriction is also not applicable to residents of temporary housing areas and cottage areas managed by the authority, households displaced by clearance of squatter areas for development, natural disaster victims and junior civil servants.

   Since the scheme started in 1978, a total of 136 000 flats, including 44 000 produced under the complementary PSPS, have been sold to eligible families. About 45 per cent of these families were public housing tenants who were required to surrender their rental flats to the authority on obtaining HOS flats. Since the beginning of 1985, 8 500 flats have been sold to prospective public housing tenants, who were, in return, required to forego their rights to rental accommodation.

   In order to encourage public housing tenants to become home owners and therefore give up their rental accommodation for families who are in greater need of public housing, public housing tenants are accorded higher priority than private sector applicants in selecting HOS flats. This incentive is also extended to prospective public housing tenants, so that the rental flats which would have been allocated to them can be let to applicants in greater need.

   The authority ensures the provision of adequate mortgage funding from financial institutions for the purchase of HOS and PSPS flats. In return for the authority's indemnity for an institution's loss in case of default, purchasers are able to enjoy favourable mortgage terms provided by over 50 financial institutions. Public sector priority status purchasers are able to borrow up to 95 per cent of the purchase price and private sector purchasers up to 90 per cent, with repayment periods of up to 20 years.

   Implementation of the Long Term Housing Strategy has required an increase in production of HOS/PSPS flats from the previous level of 10 000 flats a year to around 17 500 flats a year for the period 1989 to 1994. Of these, about 30 per cent of annual production will be upgraded flats in blocks originally intended for rental housing estates, thus providing a wider choice of flat sizes, standards, locations and prices.

   During 1990, a total of 17 182 flats were sold, starting in January with 5 867 flats in Phase 11C. Applications were invited for a further 5 831 flats in Phase 12A in April, and over 55 800 applications were received.

In August another 5 484 flats were put up for sale, and in December more HOS/PSPS flats were offered.

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The prices and sizes of flats sold covered a wide range, with prices from $176,000 for a 35-square metre flat at Siu Kwai Court, Tuen Mun, to $707,300 for a large flat of 55 square metres at Tsui Chuk Garden, Stage III, Chuk Yuen.

Home Purchase Loan Scheme

The Home Purchase Loan Scheme, administered by the Housing Authority, forms an integral part of the Long Term Housing Strategy. The purpose of the scheme is to promote home purchase by assisting lower-middle-income families to buy flats of their own in the private sector. Eligible applicants are offered interest-free loans, repayable up to 20 years, to help overcome the problems of initial financing faced by many families wishing to buy their own homes.

On April 1, 1990, the authority revised the Home Ownership Scheme Income Limit to $11,500 which was also applied to the Home Purchase Loan Scheme. The authority also revised the amount of loan from $110,000 to $130,000 which became effective from August 1, 1990.

Since the second year of implementation of the scheme, a more flexible approach has been adopted regarding the application period whereby applications remained open throughout the year. A total of 4 156 applications were received, of which 2 087 (50 per cent) were from public housing applicants, and 2 069 from the private sector. Altogether 2 240 applicants were found eligible. A total of 1 477 loans were granted. As a result, 607 loan recipients had served notice-to-quit, their public housing units being recovered for re-allocation to other families.

Allocation

The Housing Authority owns and manages some 630 000 rental flats in 144 housing estates. These flats are of different sizes, amenities and rent levels to meet the wide-ranging requirements of families in need of public housing.

During the year, 35 600 new flats and 8 800 vacated flats were let to the various categories of eligible applicants. The biggest share went to Waiting List applicants (32 per cent), followed by tenants involved in the redevelopment of the older blocks and in the comprehensive redevelopment programme (30 per cent), and families affected by development clearances (21 per cent). Junior civil servants, victims of fires and natural disasters, occupants of huts and other structures in dangerous locations, compassionate cases recommended by the Social Welfare Department, those families affected by the Kowloon Walled City clearance and applicants from temporary housing areas took up the remainder of the flats.

      The Public Housing Waiting List and allocation of rental flats have been computerised, with information on nearly three million applicants and tenants being stored in the Hous- ing Applications and Tenancies Management Information System. The system enables housing allocation and duplication checks to be carried out effectively and produces useful statistical information.

      During the year, 14 200 flats, mainly in Tuen Mun, Sha Tin, Tsuen Wan, Tseung Kwan O (Junk Bay) and Tai Po, were allocated to successful Waiting List applicants. Waiting time varied from eight years for estates in Sha Tin to three years for those in Tuen Mun.

      Applications for public rental housing through the authority's Waiting List were considered in the order of registration and in accordance with the choice of districts

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indicated by applicants. Accommodation was offered to those who, on investigation, were found eligible in respect of their family income and residence in Hong Kong. The income limits range from $4,600 for a family of two to $10,900 for a family of 10 or more. The number of 'live' applications at the end of the year stood at 133 500. In addition, there were 26 600 applications on the Single Persons Waiting List which was established in January 1985. The income limit for single persons is $3,100.

The authority provides a priority scheme under which elderly couples or single elderly persons applying in groups of two or more will be allocated public housing within two years. So far, 6 800 flats have been allocated to this category.

The authority also provides an incentive scheme under which families with elderly parents are allocated housing two years ahead of their normal waiting time. So far, 5 510 families have benefited from this scheme.

   In 1986, the authority introduced a sheltered housing scheme with a warden service for able-bodied elderly people. In 1990, the scheme's second sheltered housing project was opened at Tai Wo Estate in Tai Po and Kwong Yuen Estate in Sha Tin, where 276 units were allocated to applicants attaining 60 years of age who were eligible under the com- pulsory rehousing categories, and to qualified elderly applicants from the Single Persons Waiting List and the Elderly Persons Priority Scheme.

Rent Policy for Public Housing

With heavy government subsidies in the form of free land and low-interest loans, rents for domestic premises in public housing estates have been maintained at low levels, despite increasing operating and maintenance costs.

   On the recommendation of the Domestic Rent Policy Review Committee in December 1986, domestic rents for new public housing estates are set so as not to exceed a median rent-income ratio of 15 per cent. Rents at present stand at $28.1 per square metre for the newest urban estates, but are less for others of lower estate values. These rent levels represent about one-third to one-quarter of current market rents.

   Rents are reviewed on a biennial basis and adjusted to take account of increases in rates, maintenance and other costs, estate values in terms of location, facilities and services provided, as well as tenants' ability to pay. On average, public housing tenants pay seven per cent of their income as rent. Owing to the very low rents in old estates where maintenance and improvement costs are high, there is an overall deficit in the Housing Authority's estate working account for domestic properties.

   During the year an ad hoc committee was formed to review the domestic rent policy and allocation standard. Its report will be published for public consultation and its recommendations will be considered by the Housing Authority for implementation.

Management

The Chairman of the Housing Authority regularly pays inspection and goodwill visits to housing estates and HOS courts, meeting community representatives.

   Such visits are also made by members of the authority and the Management and Operations Committees, accompanied by senior officers of residents' associations for in- formal exchanges of views on the management of the estates and HOS courts. At estate level, the housing manager also holds meetings with mutual aid committee and residents' association office bearers.

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      The Housing Subsidy Policy has been implemented since 1987 with an aim to reduce housing subsidies to public housing tenants who are no longer in need. Tenants who have been living in public housing for 10 or more years and whose household incomes exceed the Subsidy Income Limit (twice Waiting List Income Limit) are required to pay double net rent. The policy has been generally well-received by the public as reflected by the smooth implementation of the policy during the past three years.

In the first year of implementation of the policy, 18 per cent of the 41 000 affected households with 23 or more years' residence in public housing estates had to pay double net rent. In the second year, 24 per cent of the 62 000 affected households with 19 to 22 years' residence in public housing were required to pay double net rent. In the third year, 32 per cent of the 58 000 households with 14 to 18 years' residence in public housing estates were required to pay double rent.

       The current year involved 59 000 households, whose tenancies commenced between April 1, 1973 and March 31, 1979. In addition 39 000 households who have been allowed to continue paying their existing rent two years ago are also due for biennial income review. If their household incomes are found to exceed the Subsidy Income Limit, they will be required to pay double rent as from April 1991.

      Seventeen HOS courts are currently managed by private property management agents appointed by the Housing Authority. As far as possible, all new HOS courts will be selected for agency management. Under the agency management scheme, the Housing Authority remains ultimately responsible for the management standard and policy.

       Under the Housing (Traffic) By-laws, the authority is empowered to impose charges for impounding, removing and storing vehicles illegally parked in housing estates. The estate roads in 124 rental estates, nine factory estates, 38 HOS courts and 28 THAs are now put under the authority's control.

      A three-year trial scheme for privatising the management of carparks in 28 selected rental estates covering 7 700 parking spaces has been in effect since November 1987. Arrangements are being made to test an alternative scheme.

      Staff of the Housing Management Branch were required to work irregular hours to keep hawking activities within housing estates under control. As a result of the efforts of the Major Operations Unit, there were 60 arrests and seizures in the estates during the year. Staff at estate level carried out 7 400 cases of seizures and 310 prosecutions to deter illegal hawking.

Welfare Services

Some 800 premises in estates and HOS courts are let for the provision of welfare and community services. They are charged at a concessionary rent of $19 per square metre per month, exclusive of rates. In addition, offices are let at full market rents to District Board and OMELCO members, and Urban and Regional Councillors.

A working group on Housing for the Elderly has been set up to determine how the government policy statement on services for elderly persons and the housing policy statement could best be aligned to ensure a more integrated approach in achieving their respective objectives. In June 1989, a report was produced by the working group recom- mending new housing schemes to enable elderly persons to live with or near their younger kinfolk and better standards of elderly support services, which was subsequently endorsed by the Hong Kong Housing Authority.

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Nineteen District Work Groups, each comprising senior district staff of the Social Welfare Department, City and New Territories Administration, Housing Department and a representative from the Hong Kong Council of Social Service have been formed to work out action plans for the respective districts.

Letting of Commercial Properties

The Housing Authority manages 1.26 million square metres of commercial space for shops, market stalls, banks, restaurants and flatted factory units, of which 54 000 square metres was completed in 1990.

The commercial space is let under some 28 000 separate tenancies. Rental income during the year amounted to $1,624 million.

The stock includes 5 679 'graded' shop tenancies in former resettlement estates. These shops were initially let at very low rents and current rents are, in most cases, less than one-third of market levels despite moderate biennial increases since 1976. Rents for other commercial premises are fixed at market levels, in keeping with the authority's policy not to subsidise commercial operators. The majority of commercial premises continue to be let by rental tender but the letting of selected premises by negotiation has enabled the authority to attract well-known retailers and reduce vacancies.

Under the Commercial Properties Committee, research and design were emphasised to ensure that new shopping centres are best suited to the needs of tenants and local residents, and existing centres were upgraded where necessary. Improvement works were carried out to upgrade 11 shopping centres in 1990, and promotional activities were held in more than 70 centres to sustain and enhance their competitiveness.

   The experimental letting of an entire market to a single operator proved very popular with residents and two other new markets have been selected for letting in the same way. To further enhance the general image of the authority's shopping centres and to attract high-quality retailers, a video documentary has been produced with active participation from major tenants.

   Six-monthly reviews of the rents of tenants affected by the Comprehensive Re- development Programme continue to be made to ensure that such tenants are not being asked to pay rents in excess of market value. Tenants required to vacate their premises to facilitate redevelopment receive an ex-gratia payment. In some cases, alternative premises are offered through restricted tender and a three-month rent-free period is granted to the successful tenderer. As an alternative to reprovisioning, such commercial tenants can now choose to relinquish the opportunity for reprovisioning and opt for a lump sum payment of $24,000 to assist the relocation of their business.

Temporary Housing

Temporary Housing Areas (THAs) are built for people who are not immediately eligible for permanent public housing but who are displaced by development clearances or made homeless by fires or natural disasters and who have been in Hong Kong for less than seven years.

At the end of the year, there were 77 THAs with a total capacity of 149 000 person spaces. During the year, temporary housing spaces for 15 000 people were completed against a loss of 12 000 spaces mainly through the development of existing sites. In the same period, 10 000 people mostly affected by development clearances were allocated units in THAS

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while 25 000 people moved out mainly to permanent public housing through the general Waiting List, or clearances of THAS.

      Residents of THAs have priority in the purchase of HOS flats or may be granted an interest free loan of $130,000 to buy a flat in the private sector under the Home Purchase Loan Scheme.

Transit Centres

Transit Centres provide short-term emergency accommodation for people rendered homeless mainly by fires or natural disasters, until they are rehoused either in permanent or temporary accommodation depending on eligibility. There were eight transit centres throughout the territory with a total capacity for 1 500 people.

Cottage Areas

      There were six remaining cottage areas throughout the territory providing accommoda- tion for a total of 10 000 people. The largest, Tiu Keng Leng at Tseung Kwan O, houses 5 500 people.

Squatter Control

     In the basis of a 1982 survey of illegal structures on government land and private agri- cultural land, good control was maintained over the year by means of daily patrols and hut-to-hut checks.

      New illegal structures demolished were mainly canopies and storages, and over half of them were discovered and demolished before they were even completed.

      Clearance and rehousing through various means kept the squatter population at 300 000 at the end of the year, with 65 000 persons in the urban area and 235 000 persons in the New Territories.

Squatter Area Improvements

The squatter area improvement programme, aimed at providing basic services and safety facilities in major and needy squatter areas not yet scheduled for clearance, was in its final year of operation. Services and facilities provided include drainage, footpaths, toilets, refuse bin sites, public lights, metered water supply, fire mains and hydrants, and minor slope stabilisation work.

      During the year, 17 projects in 16 squatter areas were completed. Overall, about 139 000 persons in 99 squatter areas have benefited from 118 projects under the whole squatter area improvement programme over a period of seven years. Total costs incurred in these projects amounted to $182 million.

      The Housing Authority will continue to maintain and repair the services and facilities provided under the programme. It will also be responsible for payment of electricity charges for the public lights.

Clearance

During the year, 330 hectares of land were cleared for development. Around 16 000 people affected were given permanent rehousing and 6 000 given temporary rehousing. Some 600 industrial, commercial and agricultural undertakings affected by clearances were awarded ex-gratia allowances.

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   A total of 2 300 people who became homeless as a result of fires and landslips were provided with either permanent or temporary accommodation.

Kowloon Walled City Clearance

Since the government announced its decision on January 14, 1987, to clear the Walled City, the work has progressed to its fourth and final phase. At the end of 1990, 22 930 residents had been rehoused and operators of 484 commercial undertakings accepted compensation. Total compensation paid to date in $1.9 billion.

The Kowloon Walled City covers 2.7 hectares and encompasses some 30 000 people and 870 commercial undertakings. The clearance is being undertaken in four phases by the Special Duties Office and is expected to be completed in mid-1992.

After clearance, the site will be developed by the Urban Council into a public park with related community facilities.

Private Buildings Management

Private housing provides homes for about half the population. Most of the residential buildings are high-rise blocks in multiple ownership. Many flats are not owner-occupied. The nature of the ownership of these buildings, combined with various other factors, has resulted in a situation over the years where the management of some private properties has deteriorated.

   The management of private buildings is the responsibility of the property owners them- selves. The government, however, realises the importance of proper management and the consequences of consistent neglect. It has, therefore, been taking steps to provide a better legal and administrative framework to enable the flat owners to manage their properties more effectively.

Work is in hand to extensively amend the Multi-storey Buildings (Owners Incorpora- tion) Ordinance to achieve two objectives. One is to make it easier for the co-owners of a building to form an owners' corporation. Such a corporation acts in the interests of individual owners regarding their rights, power, duties and liabilities in relation to the common parts or areas of a building. Although the formation of an owners' corporation does not guarantee good management of a building, experience shows that management standards in buildings which have owners' corporations have generally been better than those in buildings with no comparable management bodies.

The other objective is to provide a statutory code of fair Deed of Mutual Covenant (DMC) clauses. The code will seek to achieve a better balance of interests between the developers and flat owners. It will be provided that to the extent that existing DMC provisions contravene the code they are to be superseded, and that to the extent that they omit obligations spelt out in the code, they are to be supplemented accordingly.

   To tackle the problems at the grass-roots level as well as to provide front-line assistance and advice, the City and New Territories Administration has set up Building Management Co-ordination Teams in 10 districts. Their main duties are to help flat owners improve problematic buildings and to offer advice to owners' corporations, mutual aid committees and other building management bodies. Apart from liaising with relevant departments to orchestrate measures to improve target buildings, these teams of professional housing managers and officers also work towards increasing public awareness in building manage- ment matters through various promotional and publicity activities.

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To supplement the government's efforts, an Advisory Committee on Private Building Management was established on November 1, 1988. It consists of a majority of non- officials who have experience and expertise in the field of building management. It has to keep under review the effectiveness of existing policies on the management of private buildings and to recommend appropriate measures to improve the management of such buildings.

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 under constant review to improve its workings and to achieve the objective, recommended in 1981 by a Committee of Review and endorsed by the govern- ment, 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 exempted. 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 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 November 1990 when the legislation was amended to provide for permitted rents to be 48 times (previously 43 times) the standard rent (i.e. the rent payable in respect of the unfurnished premises on or most recently before December 25, 1941). 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

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compensation 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 to tenancies of premises having a rateable value of or above $30,000 as at June 10, 1983.

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. 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 70 per cent of the prevailing market rent, the permitted increase will be an amount necessary to bring the current rent up to 70 per cent of the prevailing market rent. Both landlord and tenant are at liberty to apply to the com- missioner 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 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 regulates 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 enabling tenancies to be transferred, under certain statutory conditions, from the ambit of Part II to Part IV.

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LAND, PUBLIC WORKS AND UTILITIES

THE primary objectives of the Hong Kong Government's lands and works policies are to ensure an adequate supply of land to meet the short-term and long-term needs of both the public and private sectors, to optimise the use of land within the framework of land use zoning and development strategies and to ensure co-ordinated development in infra- structure and buildings.

-

      Policy responsibility for land, public works and private development rests with two separate policy branches the Planning, Environment and Lands Branch and the Works Branch, each headed by a Secretary. Both secretaries are members of the Land Devel- opment Policy Committee, which is chaired by the Chief Secretary, and is responsible for overseeing all aspects of the physical development of the territory and for giving broad approval to all major proposals affecting the development or planned use of land.

      The Secretary for Planning, Environment and Lands is the Chairman of the Devel- opment Progress Committee, which is responsible for monitoring the general progress of the physical development of the territory as well as considering and approving detailed planning briefs, layouts and development plans. He is also Chairman of the Town Plan- ning Board.

      In addition to his policy functions, the Secretary for Planning, Environment and Lands oversees the operation of the Buildings and Lands Department, Environmental Protection Department, Planning Department, Territory Development Department, Civil Engineering Services Department, Drainage Services Department and the Land Office of the Registrar General's Department.

      The Secretary for Works oversees the operation of the works departments, namely Architectural Services, Civil Engineering Services, Drainage Services, Electrical and Mechanical Services, Territory Development and Water Supplies Department.

      The Governor, on October 11, 1989, announced a massive port and airport development project in his annual policy speech at the Legislative Council. A new Airport Works Division was set up in April 1990 under the Secretary for Works to co-ordinate this development.

Planning

Planning Department was formed on January 1, 1990, following the creation of the Planning, Environment and Lands Branch (PELB) on September 1, 1989. Headed by the Director of Planning, the Planning Department is one of the departments which takes

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policy directives from PELB. Since its formation, the department has taken over the full responsibility for planning previously shared by the Territory Development Department, the then Town Planning Office and the then Strategic Planning Unit. The new arrangement is intended to achieve greater integration of all planning functions and activities.

  The department comprises three functional units, the Ordinance Review and Technical Administration Division, the Territorial and Sub-Regional Planning Branch and the Dis- trict Planning Branch. The planning work is diverse, complex and interrelated. It covers primarily the following:

- Review of the Town Planning Ordinance, the Territorial Development Strategy, the non-metropolitan Development Strategies and the Hong Kong Planning Standards and Guidelines;

Follow-up work on the Metroplan, the Rural Planning and Improvement Strategy, the Study of the Use of Underground Space, and the Port and Airport Development Strategy;

Planning Studies likely to involve consultancy management including the secondment of multi-disciplinary professionals;

Urban renewal, forward planning for the districts and development control.

Review of Town Planning Ordinance

The Town Planning Ordinance was enacted in 1939. Except for a few minor and piecemeal amendments in the past twenty years, there has been virtually no change in Hong Kong's town planning legislation. The ordinance is now considered to be inadequate in providing the necessary degree of guidance and control for planning and development in Hong Kong. As directed by the Executive Council, a comprehensive review of the Town Planning Ordinance began in September 1987. An Advisory Group set up in 1988 spent a year studying the problems in the planning system and the inadequacies of the ordinance in coping with the problems. The recommendations formulated by the group are under study by the Planning, Environment and Lands Branch. A consultative document will be published early in 1991 to seek public views on the provisions of the new legislation.

Meanwhile, interim amendments to the ordinance are introduced to tackle problems which have been identified by government as urgent and requiring immediate action. In July 1990, the Executive Council approved the introduction of the Town Planning (Amendment) Bill 1990 into the Legislative Council. The bill proposes, inter alia, to extend the jurisdiction of the ordinance to cover the whole territory and to provide means for enforcement against unauthorised development. After public consultation, the bill was introduced into the Legislative Council in November 1990.

Metroplan

more

The Metroplan Study aims to provide a planning framework for comprehensive re- structuring of urban areas around Victoria Harbour over the long term to create acceptable urban environment. Redevelopment sites, reclamation and the terracing of hill slopes are intended as 'solution spaces' for the formulation of alternative Metro- plan options. This study has reached an advanced stage involving the production of a Landscape Strategy for the Urban Fringe and Coastal Areas as a guide for landscape conservation and enhancement. Also, a digest of Metroplan initial options has been produced for public consultation. Apart from useful submissions mainly from professional

LAND, PUBLIC WORKS AND UTILITIES

      and interested bodies, a seminar was organised to gauge opinions on the future role and location of commercial and industrial activities. The public comments received provide very useful inputs to the final phase of work on Metroplan which will involve, inter alia, the formulation of more specific land use transport proposals and various development guidelines. This work will take account of the results emerging from feasibility studies for major reclamation projects at Central/Wan Chai, West Kowloon and Green Island. The target completion date for the whole study is early 1991.

Territorial Development Strategy

The Territorial Development Strategy provides a broad long-term land use/transport/ environmental framework for the planning and development of the territory. The strategy aims to facilitate the territory to continue its growth as a regional and international city. A comprehensive review of the strategy has commenced to assess the implications of the proposed port and airport development and the current policies on the environment and transport. The changing role of the territory in the context of recent developments in the Pearl River Delta region will also be taken into consideration in the review. On completion of the review, the strategy will lay down the framework for infrastructure provision to satisfy long-term development needs, especially in the distribution of population, employ- ment and economic activities. Sectoral land use policies for housing, industry and offices will be formulated to provide guidelines for future development.

Sub-regional Plan

Since the decision on the replacement airport in Chek Lap Kok and port expansion made in October 1989, the review of the Non-metropolitan Development Strategies (formerly known as Sub-regional Planning Statements) has commenced. The review of the North- West New Territories and South-West New Territories Development Strategies started in early and mid 1990 respectively. It is anticipated that these review studies would each take 18 months to complete. They will comprehensively review the development pressures and opportunities emanating from the Port and Airport Development Strategy and other strategic studies currently being undertaken, as well as the recommendations of the Rural Planning and Improvement Strategy. Each development strategy will comprise a land use/transport/environment plan, with a target design year of 2011 to guide future developments, and will provide a framework for preparation of district plans.

District Planning

Most developments and projects are implemented at district level. Two types of plans, statutory and departmental, are prepared at this level. Their purposes are to regulate and guide types of land use, building volume and development characteristics of individual sites to meet the demand of the territory's growing population, and to ensure adequate provision of community facilities and public utility services.

       Statutory outline zoning plans for various districts of the main urban areas are prepared under the provisions of the Town Planning Ordinance at the direction of the Town Plan- ning Board (TPB).

       The Metroplan area is now covered by a total of 40 outline zoning plans. They indicate the proposed broad land use patterns and major road systems of particular districts and serve as development guides to public and private investments. They have statutory effect

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once exhibited for public inspection. Any plans related to building works submitted under the Buildings Ordinance may be disapproved by the Building Authority if they contravene a statutory outline zoning plan.

In 1990, the TPB exhibited 18 statutory outline zoning plans for different districts. In general, areas are zoned for residential, commercial, industrial, government/institution/ community, open space or other specified uses on outline zoning plans. Attached to and forming part of each plan are notes setting out the types of land use which are permitted as of right in a particular zone or which may be permitted with or without conditions on application to the TPB. This permissive system allows for greater flexibility in land use planning to meet community needs. The ordinance also allows an unsuccessful applicant the right to request TPB to review its decision. During the year, the TPB considered 266 applications for planning permission and 39 applications for review, as compared with 282 and 33 respectively in 1989.

An area may be designated a 'Comprehensive Development Area' on a statutory out- line zoning plan. This is intended to promote development in a comprehensive manner, often including the provision of a range of related community facilities and open space. Developments within these areas must have planning permission from the TPB and applications for planning permission should include a master layout plan. During the year, 19 applications for approval of master layout plans were considered by the TPB. In order to improve the environment and not overtax existing infrastructure, additional controls on building intensity and types of land use have also been introduced in some districts.

As a result of a structural change of the industrial sector, characterised by a move towards high-technology and high-quality products and increasing relocation of the more labour-intensive parts of the industrial process overseas, there is an increased demand among industrial firms for more floor space to be set aside for management, admin- istration, design and quality control, in addition to the more conventional storage and other industrial activities which cannot be accommodated in normal commercial/office buildings. To cater for this demand, the TPB has approved the introduction of a new composite industrial office building concept to provide accommodation which can be flexibly used for both industrial and office purposes. Within these dual-purpose industrial- office buildings, there would be no limit on the size of offices to be permitted provided that the offices are ancillary and related to industrial operations in the building. Initial response from the private sector has been encouraging. During the year, 21 applications for such dual-purpose buildings have been submitted, of which seven were approved by the TPB, including conversions of existing industrial buildings.

Meanwhile, outline development and layout plans are also prepared at district level. They are departmental plans prepared within the framework of the statutory outline zoning plans to show the land use and road framework in greater detail. For those areas not yet covered by outline zoning plans, they are prepared as a guide for land formation, implementation of public work projects as well as subsequent land sales and allocations.

Other than the preparation of statutory outline zoning plans and departmental outline development plans, the District Planning Offices of the main urban area have also carried out and/or provided inputs to a number of studies in 1990, including, inter alia, the Central/Wan Chai and West Kowloon Reclamation Feasibility Studies. They provide the essential bases for the forward planning of these future development areas.

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Rural Planning and Improvement Strategy

The Rural Planning and Improvement Strategy (RPIS) aims at improving the conditions and the general environment of the rural areas in the New Territories through the formulation of a planning and administrative framework to guide development and the provision of essential infrastructure and amenities. The strategy was approved by the Executive Council in March 1989.

A major stream of follow-up work related to RPIS is the revision and up-dating of the sub-regional development strategies to address the land use problems and re-examine the long-term needs and development potential of each sub-region, giving priority to the North-western and South-western New Territories in 1990. They would provide guidance for detailed planning and works programming at district and local levels.

Other policy level follow-up tasks include the monitoring and review of development management guidelines for the rural areas of the New Territories, the undertaking of studies and forward planning on sites for open storage uses and village expansion, review of the rural upgrading concept in the context of the management of urban transition areas, rural activity areas, recreation priority areas and countryside conservation areas in relation to the review of the sub-regional development strategies. Various options and institutional mechanisms for the development or redevelopment and management of these areas are being formulated in relation to statutory planning and other administrative controls in the rural areas. These studies and reviews also take into account the extent of urban development pressures as well as future housing, industrial and port-related uses arising from the Long-Term Housing Strategy, the Port and Airport Development Strategy and other major strategic studies affecting these areas.

       District level RPIS activities include the preparation and processing of village and other layout plans to provide guidance for the early implementation of village improvement schemes, as well as infrastructural and other works under the RPIS programme. Relevant development works items are initially included into district-based RPIS programmes co- ordinated and monitored by the district Rural Development Working Groups.

The overall policy and development management aspects of RPIS are monitored by the RPIS Monitoring Group, while the Rural Development Steering Committee oversees and monitors progress on the implementation of Rural Development Programmes.

SPUN

Metroplan has also generated some ancillary studies including the study of the use of underground space (SPUN). In the high-density, congested metropolitan area it is very difficult to find suitable sites for essential facilities such as sewage treatment plants and refuse transfer stations. Further reclamation or construction of hillside platforms for more space are inherently problematic from an environmental point of view. The SPUN study which has been completed is a preliminary assessment of six rock caverns in the Metroplan area. A set of administrative/statutory procedures for the planning and implementation of underground rock cavern developments is being prepared. A number of detailed studies for potential government projects are now in progress.

Planning Standards and Studies

The Hong Kong Planning Standards and Guidelines provide a basis for the designation of land for various uses such as community, recreational, commercial and industrial facilities,

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the density of different types of residential developments and environmental, locational and site requirements, all of which need to be considered in the preparation of town plans and planning briefs. The document is constantly under review to take account of changes in government policies, demographic characteristics and social and economic trends. Changes to the standards and guidelines are approved by the Land Development Policy Com- mittee. Major revisions during the year include chapters on transport facilities and the environment.

Surveys on land and floor uses covering the whole territory are carried out or updated to provide input for the preparation of town plans and planning studies. During the year land use surveys were completed for Tsim Sha Tsui, Yau Ma Tei, Sha Tin Town Centre and Tong Yan San Tsuen in Yuen Long. Special studies were conducted on banks in industrial areas, underground development guidelines and the revision of the Tertiary Planning Unit/Street Block system. The forecast of future land supply and land requirements and the office and industrial building records were also updated.

Land Administration and Supply

The Lands Administration Office of the Buildings and Lands Department co-ordinates all aspects of land administration throughout the territory.

The first priority in land supply is to make sufficient land available 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. Land for the Home Ownership Scheme is granted at normal premium. 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 nominal premium, to non-profit-making charitable in- stitutions which operate schools, hospitals, social welfare and other community services in accordance with the government's policy objectives.

  Most government land available for private sector commercial, industrial or residential development is sold by public auction or tender. Regular auctions are held and a pro- visional land sales forecast is published at regular intervals. In the New Territories, however, where much of the land required for development has to be acquired by the government, a high proportion is disposed of by tenders restricted to holders of Land Exchange Entitlements (Letters A/B). Since 1983, when Letters A/B were last issued, the amount of entitlements outstanding has decreased from 3.43 million square metres to 0.74 million square metres.

  Leases for certain special purposes, which are unsuitable for disposal by public auction because of particular site requirements or other factors, are also offered for sale by public tender. Special purposes include capital-intensive industries which introduce new technol- ogy and cannot be adequately accommodated in conventional multi-storey flatted factory buildings. These sales are initiated only in response to formal applications and, in certain circumstances, may be concluded by direct private treaty.

Land usage statistics are at Appendix 35.

Land Acquisition

When private property needed for the implementation of public works projects cannot be acquired by negotiation, the use of compulsory powers becomes necessary. Property

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may then be acquired under either the Crown Lands Resumption Ordinance, the Land Acquisition (Possessory Title) Ordinance, the Mass Transit Railway (Land Resumption and Related Provisions) Ordinance, or through the Roads (Works, Use and Compen- sation) Ordinance. These ordinances provide for payment of compensation based on the value of property at the date of acquisition. If agreement cannot be reached on the amount payable, either party can refer the claim to the Lands Tribunal for adjudication.

Where land is acquired in the New Territories, a system of ex-gratia payments applies, with enhanced rates for land situated within the new town development areas and pro- gressively lower rates for land situated outside these areas. In the case of building land, an ex-gratia payment is offered in addition to the statutory compensation. A system of ex-gratia payments also applies in the case of old scheduled lots acquired in the urban area. During 1990, about 0.4 million square metres of private land were acquired in the New Territories to carry out various public works projects. The total land acquisition and clearance costs involved amounted to about $0.75 billion. These projects included the Junk Bay Landfill Stage I Phases V and VI; the Yuen Long-Tuen Mun Eastern Corridor and Yuen Long West Link; the Tolo Harbour Effluent Export Scheme (access shaft site at Fa Sam Hang in Sha Tin), and the construction of pylons to carry 400KV overhead transmission lines from Tai Po to Sha Tau Kok and from Yuen Long to Ta Kwu Ling.

      In the urban areas of Hong Kong Island and Kowloon, about $1.0 billion was paid in compensation for land and buildings acquired during the year for public works projects, either under compulsory powers or by agreement. These projects included the Tate's Cairn Tunnel and Approaches; the Lung Cheung Road and Hammer Hill Road Grade Separat- ed Interchanges; the Fung Tak Road Extension; the Wyndham Street and Connaught Road Improvement; the Hillside Escalator Link between Central and Mid-levels, and the Kowloon Walled City Clearance.

Land Disposal

All land in Hong Kong is held by the government which sells or grants leasehold interests. Such grants and leases are now made in accordance with the terms set out in Annex III to the Sino-British Joint Declaration. The total amount of new land to be granted is limited to 50 hectares a year, excluding land to be granted to the Hong Kong Housing Authority for public rental housing, although the Land Commission may increase this limit. Premium income obtained from land transactions is shared equally, after deduction of the average cost of land production, between the Hong Kong Government and the future Hong Kong Special Administrative Region Government.

      Normal land grants and leases 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.

Land Sales

The property market was stable in 1990, both in the sales and rental fields, although performance in the various sectors was mixed. The market for small to medium sized flats was very active; the luxury residential market less so. Because supply increased considerably, the office market remained soft. For the same reason, little improvement occurred in the shopping sector although prime locations were much in demand as always. The industrial sector remained weak apart from storage space in well located areas.

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Notable land transactions in 1990 included grants for public utility, industrial and educational uses: a 5-hectare site on north-east Lantau for the construction of a power station; a 2-hectare site for the expansion of the Tai Po Industrial Estate; a 2-hectare site in Tuen Mun for the construction of a Light Rail Terminus with development above, and a 6.2-hectare site in Tsing Yi for the expansion of technical education facilities.

Two private treaty grants were made in the urban area: for the development of an underground carpark at Admiralty and an underground carpark-cum-shopping-centre in Tsim Sha Tsui.

   Four sites with a total area of 5.77 hectares were sold under the Private Sector Participation Scheme. A total of 5 020 flats will be provided. Fifteen sites were also granted to the Hong Kong Housing Authority for the development of Home Ownership Scheme projects. These included a 1.5-hectare site at Ma On Shan and a 1.5-hectare site in Lam Tin South.

In the New Territories, five sites with a total area of 3.5 hectares were offered by Letter A/B tenders. These included a 1.27-hectare site for commercial/residential development and a 8 463-square metre site for commercial use, both in Sha Tin.

Land Registration

The Land Registration Ordinance provides for registration of all instruments affecting land in the Land Office, one of the two major sections of the Land Division of the Registrar General's Department. Registration is by means of a memorial form containing the essential particulars of the instrument which are then placed on a register card relating to the particular piece of land or individual premises affected such as residential flats, shops and commercial and industrial premises. The register cards provide a complete picture of the title to each property from the grant of the government lease. They are available for search by the public in photostat form on payment of a small fee. The memorials and a complete copy of each registered instrument are kept and are also available for search in microfilm form by the public on payment of a fee.

The ordinance also provides that all instruments registered under it shall have priority according to their respective dates of registration, unless they are registered within one month of execution, in which case priority relates back to the date of the instrument. For charging orders made by the court and pending court actions, priority runs from the day following the date of registration. The ordinance further provides that unregistered instruments, other than bona fide leases at a rack rent for a 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. Approval in principle was given by the government during the year to investigate the merits of changing the present system of land registration to one of title registration. A working party chaired by the Registrar General comprising prominent members of the legal profession has been set up to study how the new system may be introduced.

The records of transactions affecting land on Hong Kong Island, Kowloon, New Kowloon and some of the urban areas of the New Territories are kept at the Land Office, Victoria. Those relating to transactions affecting land in the remainder of the New Territories are kept in the appropriate District Land Offices in the New Territories. Before any land transaction is completed a land search to ascertain property ownership should

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always be made. During the year, 2 604 294 such public land searches were made and 673 400 instruments registered throughout the territory, compared with 2 470 614 and 602 529 respectively in 1989. At the end of the year, there were 1 320 271 property owners, an increase of 107 271 over the previous year.

       Work on the computerisation of information on the Victoria Land Office register cards, with a view to introducing a computerised land registration system, continued during the year. Conversion to computerised data began in November 1986 and this exercise is expected to be completed by September 1991. The existing computer will be replaced by a more powerful one early in 1991 to provide for greater capacity and possible extension of a computerised registration system to the New Territories.

      The Conveyancing and Legal Advisory Section of the Land Division provides pro- fessional legal services to the government for all government land transactions and associated matters. It is responsible for the issue, renewal, variation and termination of government leases as well as the drafting, completion and registration of conditions of sale, grants and exchanges of government lands, 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 the extension of non-renewable government leases, the purchase and sale of government accommodation in private developments, mortgages to secure interest-free loans to private schools, the purchase of properties for government staff quarters and group housing schemes for the elderly.

Land Registration statistics are at Appendix 34.

Survey and Mapping

The Survey and Mapping Office is responsible for defining and recording land boundaries of all existing and new land developments, providing and maintaining the territory-wide survey control system, mapping the territory at various scales for land administration, engineering and government purposes, managing land information and preserving the territory's land records.

Geodetic control systems, which are horizontal and vertical control networks covering the whole territory, have been established and maintained to a high degree of accuracy. These systems provide the necessary origin and control points for cadastral (property boundary), topographical mapping, engineering and other surveys.

      Cadastral surveying is an important function of the office, serving both the public and the government by defining property boundaries. The office maintains a comprehen- sive graphical record of all leasehold and government land boundaries in the territory. Landowners may apply to re-establish private lot boundaries for redevelopment purposes for a fee.

      The wide range of mapping coverage maintained by the office has always provided an important support service in the administration, planning and development of Hong Kong. The most definitive series of maps and the foundation of all other mapping is the large scale (1:1 000) basic topographical series (3 000 sheets). Smaller scale coverage starts at 1:5 000 (160 sheets) followed by coloured maps at scales 1:20 000 (16 sheets), 1:50 000 (two sheets), and down to single sheet coverage at 1:100 000 and 1:200 000. Two monochrome street map series at 1:10 000 and 1:15 000 of the urban areas in Hong Kong, Kowloon and

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parts of the New Territories are produced for special uses and as a base for the popular guide-book Hong Kong Guide - Streets and Places. Demand for leisure maps, in the form of the Countryside Series (six sheets) and the Tourist Guide, has been strong and the design and contents are continually under review to make subsequent editions more attractive and informative to users. Two newly-designed sheets, covering the central and north-west New Territories, were published in 1990 and another new sheet for Lantau Island is under preparation.

Maps are obtainable from conveniently located outlets throughout the territory. A new map sales office opened in central Kowloon in 1990 and should help increase annual map sales from the current level of 380 000 copies per annum.

The Survey and Mapping Office provides extensive cartographic and reprographic services for other government departments. These include full-colour mapping for the geological series, base maps for weather forecasting, aeronautical charts, electoral bound- ary maps, pollution control plans and photo-reproduction and plan copying of all types by the Reprographic Unit. The unit also provides essential back-up for in-house map production and other cartographic activities.

Following the installation of a computerised system at the Land Information Centre in Murray Building, conversion of large-scale mapping, land parcel boundaries and land use zoning data began early in 1990. The system was in operation for the first urban district in late 1990 and the whole project is expected to be completed by mid-1993.

The new system will speed up the updating, processing and retrieval of land data and automate the production of cadastral plans and maps at various scales. In view of its land information and data analysis capability, the land information system will be a powerful tool to assist decision-making in land administration and planning. When the system is fully established, it will provide basic land information and a unique geographic reference system to both the public and private sectors in Hong Kong. As more user organisations introduce their own compatible systems, an integrated network will develop.

The Photogrammetric Survey Section continues to provide aerial photographs and photogrammetric mapping as well as data and information for engineering design work, volumetric calculations for quarry and controlled tipping operations, environmental studies and town planning work. The Air Survey Unit is also on call for quick response photography in emergency operations such as storms, flooding and landslips.

A consultancy study of the surveying and mapping industry in Hong Kong was com- missioned by the Buildings and Lands Department in October 1990 and will be completed early in 1991. The findings of the study are expected to have a major impact on the future development of land and hydrographic survey and mapping and charting services in Hong Kong and on the land and engineering survey professions in both the public and the private sectors.

Fill Management

In excess of 240 million cubic metres of marine sand will be required for reclamations over the next five years, with another 120 million cubic metres over the following ten years. The largest annual demand is likely to occur during the three years from 1992 to 1994, when the new airport and related developments are under construction. Land formation using dredged sand can be achieved quickly and this is important for the territory's ambitious programme of reclamations. For example, in excess of one million cubic metres of sand

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have been dredged and placed in a week which is equivalent to about four hectares of new land per week. These modern dredging techniques have been used to form land for the new container terminals.

During 1990, the Fill Management Committee consolidated its role of managing and co-ordinating the use of fill resources for future development. The major tasks of the committee are to identify the demand for fill materials for all government, quasi- government and major private projects, to provide the sources of marine-based fill to meet future needs and to decide on reservation, allocation and utilisation of fill resources in relation to development priorities. In order to undertake these duties the committee's secretariat, located in the Geotechnical Control Office of the Civil Engineering Services Department, maintains a comprehensive database of all known data on fill sources. An investigation of sea bed materials carried out by the office has located vast-volume potential sources of fill. An associated study during the year showed the feasibility of anchoring ships on a sea bed formed by backfilling a marine borrow pit with marine mud.

New Towns and Rural Townships

The initial 10-year housing programme aimed to provide proper living conditions for 1.8 million people. To meet this objective, new town development programmes were drawn up in 1974 to co-ordinate planning and construction activities for the provision of land infrastructure and a full range of social, educational and recreational facilities in the New Territories. Since then, the programmes have been substantially increased and extended into the 1990s. The present population design capacity of the eight new towns at Sha Tin, Tai Po, Fanling, Yuen Long, Tin Shui Wai, Tuen Mun, Tsuen Wan and Tseung Kwan O and rural townships is 3.65 million. At present, nearly 2.2 million people are living in the new towns.

      The New Territories Development Department was created in 1973 to plan and imple- ment the new town development programmes. Since 1986, the department has extended its role to cover further development in the urban areas and its title has been changed to Territory Development Department.

      The department is constituted on a multi-disciplinary basis and includes professional officers with expertise in civil engineering, architecture, landscaping and quantity survey- ing. They work closely with the Housing Department, Planning Department, City and New Territories Administration, Urban Services Department, Regional Services Depart- ment and other government departments to ensure that development objectives are met economically, efficiently and in accordance with the development programmes.

      In addition to participation by other works departments and consultants, the private sector has also been actively taking part in the development of comprehensive housing schemes within the new towns and rural townships.

Tsuen Wan and Kwai Tsing

Tsuen Wan New Town extends over the areas of Tsuen Wan, Kwai Chung and Tsing Yi Island. Its combined population of some 730 000 people is expected to reach its peak shortly and thereafter level off.

Tsing Yi Island has reached an advanced stage of development: Phases I and II of Cheung Hang Estate, which is the last new public housing on the island, have been

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completed, providing homes for 11 000 people, while Phase III, scheduled for completion early in 1994, will accommodate a further 5 000 people. In Kwai Tsing, site formation works are underway on two public housing estates which are designed to accommodate around 30 000 people.

The Kwai Chung Container Terminal is within the new town boundary. This year saw the opening of the first berth of Terminal 7 while the feasibility study for Terminal 8 at Stonecutters Island was completed. Works there are planned to start in mid-1991. A site at south-east Tsing Yi is being studied for Terminal 9.

  Some significant highway projects have been completed. These include the new Route 5 highway from Sha Tin and north-south flyover at the Kwai Chung Road/Castle Peak Road junction. Major road improvement works to Kwai Chung Road, Texaco and Kwan Mun Hau Street progressed satisfactorily.

Major community facilities completed during the year include a district open space along the Tsuen Wan waterfront and the Tak Wah Street Park with water features, providing further leisure areas to the public in Tsuen Wan town centre. The coming opening of Tso Kung Tam outdoor recreation centre will provide dormitories for overnight campers in addition to recreational facilities.

Sha Tin

The development of Sha Tin has reached a relatively advanced stage with much of the remaining works being concentrated in Ma On Shan. Works carried out during 1990 were aimed at complementing and enhancing the infrastructure and providing community facilities to cater for a population which will increase to around 700 000 at full devel- opment at the end of the 1990s.

With the opening of Route 5 in April 1990, travelling time between Sha Tin and Tsuen Wan has been reduced to about 10 minutes while traffic congestion on Lion Rock Tunnel Road and Tai Po Road has been considerably relieved. Works are progressing well on the Sha Tin approaches to Tate's Cairn Tunnel which will provide a road link to East Kowloon by mid-1991.

  In Ma On Shan all major reclamation works have been completed and construction of the future town centre is in hand. Modification of the Sha Tin Sewage Treatment Works, aimed at improving water quality in Tolo Harbour, is expected to be completed in mid-1991.

Tuen Mun

Tuen Mun is developed mainly on land reclaimed from Castle Peak Bay and on platforms formed in the valley between Castle Peak and the Tai Lam Hills. In 1990, about 18 hectares of land were reclaimed for residential and industrial development, including a public cargo-handling area.

The present population of Tuen Mun is about 364 000 of which about 271 000 live in public rental housing estates and home ownership and private sector participation schemes. By the mid-1990s, an additional 60 000 people will be accommodated in home ownership and private sector participation schemes. Together with some high-density pri- vate housing developments in the town centre and suburban type developments along the south-east coast they will provide homes for a population which will exceed 500 000 by the mid-1990s.

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      The first stages of a regional hospital providing 1 606 beds were completed and opened to the public in spring 1990; the last stage is scheduled to open in spring 1992.

The final stages of the town park and the promenade to the east of the river channel were completed in autumn 1990.

The marina to the south east of the town is nearing completion. This development consists of residential buildings, hotels, shops and recreational facilities including berths for 300 boats.

      Existing industrial areas provide floorspace for about 2 100 companies and jobs for 36 000 workers, mainly in the plastics, garment, metal, electronics and textile industries. Over 60 per cent of workers in these factories live in Tuen Mun.

       Extension of the Light Rail Transit system, which forms the backbone of the transport service within the town and to Yuen Long, is in hand, formation of the reserve for three regional links having been completed in November 1990. A feasibility study for the Long Ping Link in Yuen Long was completed in December 1990.

      Owing to its relative isolation from the urban areas and the opportunities for provision of deep water facilities and good infrastructural support, Tuen Mun West was considered in the Port and Airport Development Strategy to offer a conducive environment for the development of special industries. In addition, the location of a cargo working area in Tuen Mun West serving river trade between Mainland China and Hong Kong will minimise marine traffic which otherwise would pass through Ma Wan Channel. A feasibility study for reclaiming land for the development of special industries and a river trade terminal in Area 38 was completed in 1990.

Tai Po

Tai Po is situated at the head of the north-western arm of Tolo Harbour, about 20 kilometres north of Kowloon. It is well served by the Tolo Highway and the electrified Kowloon-Canton Railway with two railway stations. Vehicular access from Sha Tin and Kowloon has been further enhanced by the opening of Yuen Sin Road which provides a fast direct link from Tolo Highway.

The population of Tai Po is at present about 197 000 and is expected to reach 306 000 by the end of the 1990s, of which 168 000 will be accommodated in the public housing sector. Tai Wo Estate is complete and has taken in residents.

Both the Lam Tsuen River and Tai Po River training schemes have been completed after a decade of construction work. Besides providing effective channels for the discharge of surface water, the schemes have also improved flood control, environment and amenities in the vicinity of both rivers.

       A total of 17 hectares of land was formed and serviced for various uses in 1990, while community facilities, such as a swimming pool complex and a central market were com- pleted to serve the increasing population.

The development of recreational facilities in Tai Po has been designed to satisfy both local and regional demand, and is considerably enhanced by the area's attractive scenic setting. The strategy in providing these facilities has been to link them by footpaths and cycleways, a strategy best exemplified in the cycleway linking Tai Po and Sha Tin along the Tolo Highway, which has proved extremely popular, especially at weekends and during holidays. Another major cycleway along Ting Kok Road leading to Tai Mei Tuk will be completed in mid-1991.

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Fanling/Sheung Shui

Despite the fact that Fanling/Sheung Shui is only four kilometres from China, it is well linked to the urban areas and other parts of the territory by the electrified Kowloon- Canton Railway and the New Territories Circular Road.

Fanling/Sheung Shui, which is being rapidly developed, has a present population of almost 126 000 and is expected to reach 250 000 by the end of the 1990s. A total of 14.5 hectares of land was formed and serviced for various uses in 1990.

On Lok Tsuen, the major industrial area and other industrial sites on the western fringe are being developed to keep pace with the growth in population.

A landscaped town park with active and passive recreational facilities was completed and a sports complex, swimming complex and indoor recreation centre were all started in 1990.

At Sha Tau Kok, a small township with a population of 3 700 on the border with China, work is in progress to upgrade and improve services, community facilities and the environment. About 2 200 residents from the Yim Liu Ha squatter community were rehoused in the rural public housing estate in 1990.

Yuen Long, Tin Shui Wai and the North-Western New Territories

Development of Yuen Long from its former market town status into a thriving new town community began early in the 1970s. Its population, which stood at 130 000 in 1990, is expected to grow to 140 000 at full development by the end of the 1990s.

Work started on the environmental improvement of the Yuen Long nullahs in July 1990 and is due to be completed in 1992.

Yuen Long Town Park, which was completed at the end of 1990, features extensive areas of woodland, an ornamental lake with a water cascade, a pagoda and aviary.

Yuen Long Industrial Estate provides 67 hectares of serviced industrial land of which about half has been leased.

Reclamation for Tin Shui Wai was completed in July 1990. Construction of the Light Rail Transit reserve for the Tin Shui Wai extension and two public housing estates was started in 1989; on completion in 1992 and 1993 the latter will accommodate some 70 000 people. After completion of private housing by the end of 1997 the new town population is expected to reach 135 000.

To provide access to Tin Shui Wai a new road linking Yuen Long to the south east of the new town is under construction while another between the Yuen Long-Tuen Mun Eastern Corridor and the western end of Tin Shui Wai is being designed.

Flood protection works for a number of villages in the low-lying areas surrounding Tin Shui Wai are completed and in operation. A comprehensive village flood protection study for nearly 200 villages in the North-Western New Territories has been completed and a programme for implementation is being prepared.

To cope with development in Yuen Long, Tin Shui Wai and the Tuen Mun-Yuen Long Corridor, construction of the North West New Territories Sewage Treatment and Disposal Scheme began in 1989. The treated effluent will be conveyed through a 9-kilometre tunnel underneath Castle Peak and a 2.6-kilometre submarine outfall for dispersion into the deep sea at Urmston Road.

In the Tuen Mun-Yuen Long Corridor, construction of the infrastructure for a commercial/residential development at Hung Shui Kiu is in progress.

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In 1890, the first electric light flickered to life in Hong Kong. Celebrating the centenary, a pageant of brilliant illuminations - The Electric Light Show - was staged in October 1990 by the Hongkong Electric Company Limited.

Below: Hong Kong's first lamp-post, dating from 1890. Opposite: A display of various street lights used over the years.

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.

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Previous page: Unloading coal at Lamma power station.

Above: Keeping Hong Kong switched on.

Overleaf: Giant turbines dwarf their minders in the China Light & Power Company's power station at Castle Peak.

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LAND, PUBLIC WORKS AND UTILITIES

Tseung Kwan O and Sai Kung

Phases 1 and 2 of Tseung Kwan O (Junk Bay New Town), which will provide homes for 300 000 people, are progressing well. At present public rental estates, home ownership schemes and private sector participation schemes provide homes for 80 000 people. Further public rental housing estates and housing schemes are under construction.

About 230 hectares of land has been formed so far, mainly for public housing and government facilities.

      The Tseung Kwan O Tunnel which is a major link between the new town and the urban area was completed and opened to traffic in November 1990.

      The preparation work for building the Third Industrial Estate to the south east of the new town is in progress. Detailed studies on the provision of a site for industries and associated developments requiring access to deep water and on the possible development of multi-purpose terminals at Tseung Kwan O are planned to start soon.

      To the north east of the new town, construction of the northern access to the University of Science and Technology is in progress. At Sai Kung, reclamation of Sai Kung Creek for a rural public housing estate is about to start.

Islands District

Projects to improve the living environment and facilities for both residents and visitors to the Islands District progressed well during 1990.

      Drainage improvement works proceeded in Tai O, while the Cheung Chau study on road and drainage improvement works was completed with the recommended works scheduled to start in 1991.

      During the year construction of Lung Tin Phase 2 rural public housing project started at Tai O and a government building at Mui Wo and Regional Council Complex in Cheung Chau were completed.

      A study of the development of north Lantau to provide supporting communities in Tung Chung and Tai Ho for Chek Lap Kok airport was started in August 1990 and is due to be finished by the end of 1991. Construction of housing for 20 000 is planned to start in 1992-3 in order to be completed prior to the opening of the new airport early in 1997.

Urban Development Areas

Six development areas at Aldrich Bay, Siu Sai Wan, Hung Hom Bay, West Kowloon, Central/Wan Chai and Green Island, all involving reclamations in Victoria Harbour, are either being studied or under construction to meet forecast development needs in the 1990s and beyond.

      The Aldrich Bay Reclamation will produce about 18 hectares of land. The first phase of work involving reprovisioning of the typhoon shelter is being carried out in conjunction with site formation work in the Shau Kei Wan foothills.

      The Siu Sai Wan Development will include about 56 hectares of land for industrial, residential, public housing, government/institution/community and other uses. Land forma- tion is substantially completed.

Out of a total of 36 hectares of land to be formed at Hung Hom Bay, 14 hectares has been reclaimed with the remaining due for completion in 1994. The future uses on this reclamation will include residential, office, hotel, open space, transport interchange facilities and a marginal expansion of the Kowloon-Canton Railway freight yard.

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The West Kowloon Reclamation feasibility study was completed in mid-1990. The project plans to reclaim and service about 330 hectares of land. Construction works are planned to start towards the end of 1990 and will take nearly 10 years to complete, although it is planned to finish most of the reclamation stages by the end of 1994 to enable the construction of the strategic transport links which will serve the new airport at Chek Lap Kok.

Detailed design work on the initial phase of the Central and Wan Chai Reclamation is in progress. This work also includes specific investigations into urban design parameters, storm water drainage and north-south road links. The first phase will provide land, when required, for the Central terminus of the Airport Railway in addition to land for commer- cial and open space uses.

  The long-term effects of the various proposed reclamations on the hydraulic and water quality in the harbour will continue to be assessed by model studies.

Urban Renewal

Many parts of the main urban areas were developed decades ago. Urban renewal is a positive effort in upgrading the environmental quality and living conditions of the old urban areas. Implementation of urban renewal projects, however, requires concerted efforts of many government departments, quasi-government development agencies and the private sector developers.

With the enactment of the Land Development Corporation Ordinance, the Land Devel- opment Corporation (LDC) was established in January 1988. The LDC could initiate and facilitate urban renewal by negotiating the surrender of existing properties and assembly of land for comprehensive development in areas where problems of obsolete street lay- out, dilapidated buildings and poor living conditions persist. The Co-ordinating Urban Renewal Section of the Planning Department is the main contact point between the LDC and government in the processing of LDC projects.

  During the year, the LDC submitted eight development projects to the Town Planning Board for approval. Three development projects in Mong Kok, Wan Chai and Western were approved and two development schemes in Central were gazetted for public inspec- tion under the Town Planning Ordinance. These schemes envisage the amalgamation of small lots for comprehensive redevelopment in order to achieve better rationalisation of land use, as well as to improve the environmental quality and the provision of open space and community facilities. The proposal by the Land Development Corporation to conserve and rehabilitate the Western Market was approved by the Executive Council and the market building has since been declared a monument under the Antiquities and Monument Ordinance.

As a continued effort in providing a framework for urban renewal, the LDC has com- missioned various consultancy studies to identify urban redevelopment opportunities as well as detailed 'studies to facilitate the formulation of urban redevelopment projects in other main urban areas such as Wan Chai and Hung Hom. The LDC has also provided funds for a consultancy study on urban renewal in Tai Kok Tsui which was managed by the Planning Department.

As regards the Urban Improvement Scheme carried out by the Housing Society, a total of 1 665 flats are expected to be completed in 1991 in three Urban Improvement projects located at Yuk Ming Street, Lok Ku Road and the 'Six Streets' in Yau Ma Tei.

LAND, PUBLIC WORKS AND UTILITIES

New Airport

In July 1989, the Executive Council approved the Port and Airport Development Strategy (PADS) providing for the development of a replacement airport at Chek Lap Kok, located on the northern coast of Lantau Island. The existing airport at Kai Tak will not be capable of the further expansion required to meet the predicted increased demand beyond the mid- 1990s. A new airport masterplan and detailed civil engineering and planning studies are being carried out. The final design and construction of the new airport and associated infrastructure will then follow with a view to commissioning the first runway early in 1997.

In parallel with the above, other detailed studies for airport-related projects are now underway, including the airport support community at Tung Chung and road and rail links to the new airport including the Lantau Fixed Crossing, the West Kowloon Expressway and the Western Harbour Crossing.

      The provision of these key economic infrastructure facilities will generate considerable opportunities for private participation and investment.

Port Development

The Port and Airport Development Strategy provides for large-scale port development in the territory, including as a first priority the development of Container Terminals 8 and 9 on reclamation at Stonecutters Island and south-east Tsing Yi, respectively.

      The longer-term port development will cater for the extension of the existing harbour to the west, the construction of a port peninsula at Tsing Chau Tsai located on north- east Lantau, and the provision of river-trade multi-purpose terminals and deep waterfront industries at other locations.

Preparative studies and detailed investigations for the above including the Ma Wan Channel improvement and the marine fill and disposal strategy, are presently being carried out.

Building Development - Private Sector

In 1990, building work in the territory continued apace. The number of occupation permits issued for completed buildings was 419, compared with 510 in 1989. The amount of usable floor area provided was 2.8 million square metres and the total cost of new building works was $16,278 million.

The diversity of building development in the territory was amply demonstrated by the completion of the tallest statue of Buddha in the Far East, which stands 80 metres high at the Po Lin Monastery on Lantau Island, and the continuing expansion of the Kwai Chung Container Port. Reclamation for Terminal 7, which will be capable of berthing three container ships simultaneously, was completed. The construction of the largest commercial building in Asia - a freight station of some 70 000 square metres - was in progress at Terminal 4.

       The Buildings Ordinance Office not only controls the construction of private buildings but also monitors them after completion to ensure they remain in a safe and healthy condition.

       Deterioration of reinforced-concrete buildings in urban Hong Kong, especially those constructed in the immediate post-war years, has long been recognised as a problem requiring greater attention because of the possible risks to life and limb. In May 1990, the Buildings Ordinance Office completed the first phase of an extensive inspection

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programme which started in October 1989. Within the eight-month period, 55 000 buildings were inspected externally. While most were found to be in satisfactory condition, 16 700 showed signs of deterioration to the extent that they will require a full internal survey within five years. The condition of another 207 buildings was serious enough to require immediate action and several were beyond repair and had to be closed and demolished immediately.

Strenuous efforts to deal with the problem of unauthorised building works continued. With due regard to the views of District Boards, action was being taken in buildings en bloc and sometimes on an area or district basis, rather than simply against individual unauthorised structures. This approach also ensures that the problem of on-going building maintenance is addressed.

  Amendments were made to the Buildings Ordinance during the year to improve the geotechnical control of building works in the north-western New Territories, which have recently been found to be underlain by marble caverns.

  Furthermore, in order to cope with the latest developments in the building industry, the Building (Construction) Regulations have been completely overhauled, and a number of associated Codes of Practice have been issued, to cater for the most up-to-date design and technological standards.

Building Development - Public Sector

The Architectural Services Department undertakes government building projects as well as those of the Urban and Regional Councils and the British Forces.

  During 1989-90, the department completed 69 building contracts under various pro- grammes. There were over 140 ongoing building contracts in the year and the total capital expenditure including minor works, was $2,703 million. In addition to this the Property Services Branch (formerly called the Maintenance Branch) of the department spent $850 million in providing routine maintenance and minor alteration works to over 6000 government, Urban and Regional Councils' and British Forces' buildings. The branch was also involved in providing emergency accommodation to cater for the influx of Vietnamese boat people at a cost of $330 million. The overall expenditure of $3,883 million shows an increase of 23 per cent over the 1988-9 expenditure of $3,158 million.

  Tendering on all types of projects continued to be very active and competitive. During the 12-month period to March 1990, tender prices increased by about six per cent while over the same period labour and basic material costs rose by 17 per cent and three per cent respectively. The rise in tender prices was moderate when compared with the combined effect of increases in labour and material costs, probably due to the competitiveness of the market. The increase in labour cost was not so severe as that in the preceding year (26 per cent). The labour shortage problem appeared to have slightly eased.

Provision of parks and recreational areas plays an important part in the construc- tion programme for the Urban Council. The completion of the recreational development at Aberdeen waterfront and the Hoi Bun Road Park in May and July 1990 respectively has increased the leisure facilities in Aberdeen and Kwun Tong districts. A major Urban Council project which was completed last year is the Museum of Science and Technology at Tsim Sha Tsui. The new museum provides exhibition areas, a piazza, lecture hall, classroom and laboratory. The Kowloon Public Pier and the piazza adjacent to the Hong Kong Cultural Centre were also completed and opened to the public. On the same site, the

LAND, PUBLIC WORKS AND UTILITIES

Hong Kong Museum of Art, which has six exhibition galleries, is nearing completion. Construction of other Urban Council projects which commenced this year included the Chai Wan Park, Hollywood Road Park and Electric Road Market. These projects are expected to be completed in approximately two years' time.

      Sports facilities continued to be expanded throughout the districts. The Mong Kok Stadium has been redesigned and the old facilities are being renovated to make the venue suitable for both soccer and rugby matches at an international standard. The improve- ment of the illumination level and quality of the lighting to a standard suitable for direct broadcasting on television; the installation of a large digital electronic scoreboard and an automatic irrigation system for the pitch areas are scheduled for completion in 1991. The construction of the spectator stands for 9 000 seats with covers and associated services buildings will follow.

       Construction of the new Regional Council Chamber and Regional Services Department Headquarters in Sha Tin is in progress. The project is due to be completed in mid-1991. During the year, the Sai Kung Outdoor Recreation Centre was completed.

      Medical and Health projects represented a major part of the programme this year. The new 700-bed Sha Tin Convalescent and Infirmary Hospital as well as its associated staff quarters are just completed. Extension work to Tang Shiu Kin Hospital and the final phase of Stage II extension work of Queen Mary Hospital are also finished. The residual improve- ment and upgrading works of Queen Mary Hospital are planned for completion in 1994.

      Work at the Pamela Youde Hospital in Chai Wan is progressing well, while works for the associated nurses training school and staff quarters commenced in May this year. The entire complex is scheduled for completion in 1992. Other hospital projects under construction include the extension and improvement works to Tsan Yuk Hospital and Queen Elizabeth Hospital which are progressing well and will be completed in 1991. Super- structure construction of Siu Lam Hospital extension commenced during the year and is due for completion in 1994. Detailed designs are being prepared for two convalescent hospitals, one will be located in Tai Po and the other in Tsuen Wan.

      The Yuen Long Second Clinic and Clinic in Area 22, Tseung Kwan O were completed in the year. Public clinics under construction, which will be completed in 1991, are Ap Lei Chau Clinic, an Urban Clinic in area 14D in Sha Tin and Tsing Yi Clinic.

      A headquarters building with training facilities is being built at Ho Man Tin for the Auxiliary Medical Services. The project is scheduled for completion in 1991.

      Several government office buildings were completed this year which include the 49- storey Wanchai Tower II; the Mong Kok government offices with a total office area of 10 000 square metres on the podium of the KCRC Mong Kok Station; and the Eastern Magistracy and government offices with a total office area of 25 000 square metres. Other office buildings under construction are the Wanchai Tower III, Phase I of which is sched- uled for completion at end of 1991 to accommodate the Inland Revenue Department; the government offices and ambulance depot at Ho Man Tin, scheduled for completion in 1992 with 22 300 square metres of office space, and the Tsuen Wan Central Public Library and government offices complex, also scheduled for completion in 1992 with 31 500 square metres of office space.

      For the disciplined services, the projects completed this year are the Wan Chai Police Headquarters Phase I, new depot for the Police Tactical Unit Phase I in the New Ter- ritories, 144 departmental quarters at Chai Wan, Marine Police base at Tai Lam Chung,

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and the divisional police stations at Hung Hom and Tai Hing. Two sub-divisional fire stations and one ambulance depot were commissioned at various locations in the New Territories. Other works for the Correctional Services, Fire Services and the Police Force are progressing well.

  On the social welfare side, a skills centre for the disabled in Tuen Mun with 300 places for handicapped students, was completed in the middle of the year. A combined hostel and sheltered workshop in Razor Hill with 100 places, and a girls' house in Tuen Mun with 120 places, are both under construction, and will be completed in 1991. The piling work of a neighbourhood community centre in Sha Tin has commenced, and the whole project will be completed in 1992.

  Government's continued commitment on the education matters is reflected by the com- pletion of two primary schools and seven secondary schools located in Sha Tin, Ma On Shan, Tuen Mun, and Tseung Kwan O. Another two primary schools and 11 secondary schools are under construction, and will be completed in 1991. Twenty-three aided and three government schools affected by traffic noise received noise abatement treatment this year. This programme will continue in 1991.

  In parallel with planning of the new airport, improvement to the Hong Kong Inter- national Airport is still continuing. Completion of the new extension to the passenger terminal in 1988, enabled the refurbishment of the whole terminal building to commence in April this year. This includes the upgrading of facilities, such as fire services and air conditioning installations, and the addition of new escalators. The first phase has been completed and the whole of the work will be completed in mid-1992. Three additional floors of office space as well as the new 'Commercially Important Persons Accom- modation' are being added to the existing terminal building. To meet the demand for carparking space, the extension of the multi-storey carpark is under construction. The construction of the new aircraft recovery and salvage equipment depot commenced this year and will be completed in May 1991. In order to facilitate the expansion of the south apron of the airport, the existing Royal Hong Kong Auxiliary Air Force building will be relocated. The construction for the new building will be completed early in 1992.

  The services provided by the property services wing of the Architectural Services Department continue to grow. In view of the expanded range of services, the Maintenance Branch is now redesignated the Property Services Branch (APB). Another major event has been the development of an extensive computer system which is to be commissioned in 1992. This is part of the development of the Departmental Information Technology system. On the project side, apart from the normal works of maintenance, alteration, cleaning and security, nine centres were constructed and fitted-out in the year to house Vietnamese boat people. The branch has also completed 197 fitting-out projects for 41 500 square metres of floor area and has refurbished 85 older buildings. The former fire station at Belcher Street was converted into an elderly people's home. In the quality control of roofing works infra red scanning has been adopted to pinpoint failure in membranes which would not be visible to the naked eye. This provision has raised contractors' performance levels and saved time in locating roof leakages.

The Antiquities Unit of Architectural Services Department Property Services Branch was very active and carried out work worth approximately $16 million to a total of 28 different historic buildings and monuments throughout the territory. This ranged from rebuilding a section of wall of the Ching dynasty at the Tung Chung Fort to repairing

LAND, PUBLIC WORKS AND UTILITIES

World War II bomb damage to the granite facade of the Legislative Council Building in Central.

Major projects completed included the restoration of Kun Ting Study Hall at Ping Shan. This traditional style building was constructed around 1840 by a prosperous village elder named Tang Kun-ting as a centre to study for the Imperial Civil Service Examinations and martial arts. Due to the building's architectural importance and its rare link with the past it was gazetted an Historic Monument in 1990. The building was designed in a two-hall style with adjoining wings all containing superb timber carvings as well as panels and murals.

       Restoration and fitting-out was undertaken to the Old Kai Fong Association building in Tsim Sha Tsui to provide the headquarters for the Antiquities and Monuments Office. The red-brick building was originally constructed as the Kowloon English School in 1902. The old School Assembly Hall in the building will be used for public audio/visual exhibitions showing aspects of conservation in Hong Kong.

The Royal Observatory, one of the finest examples of Colonial-style architecture in the region and a Declared Monument, also benefited from a major restoration and re- furbishment exercise.

The Architectural Services Department through its Subvented Projects Division, con- tinued to provide advice to other government departments which provide subvention to private organisations for building, repair and maintenance works. The combined govern- ment commitments on subvented projects via the Capital Works Reserve Fund and the Lotteries Fund exceeds $8,900 million and expenditure is expected to be in excess of $1,500 million during the year. These sums exclude private funding.

Drainage Services

The Drainage Services Department was formed on September 1, 1989, by combining into one department those sections of the Civil Engineering Services Department and the Electrical and Mechanical Services Department which were dealing with sewerage, sewage treatment, or storm-water drainage. It is a multi-disciplinary department which includes civil engineers, electrical and mechanical engineers, chemists, land surveyors, quantity surveyors and related technical grades, which can provide a more concentrated and efficient approach in resolving the problems of water pollution due to sewage and of flooding. These problems have become more serious in recent years due to the growth in population and in urbanisation in the territory and, in respect of flooding, due to development in the flood plains of the North and North-west New Territories.

The responsibility of the Drainage Services Department is basically the disposal of foul water and rain water. The disposal of foul water, that is domestic sewage and trade and industrial effluent, is based on standards, strategies and programmes drawn up by the Environmental Protection Department. From a programme implementation point of view projects can be divided into three categories: 'existing schemes' which are sewerage or sewage treatment projects which have been in the public works programme since before the new strategy evolved and which are compatible with the new strategy for the treatment and disposal of sewage to satisfy new water quality standards; 'sewerage masterplan schemes' which are sewerage rehabilitation and improvement projects resulting from recent studies, and the 'strategic network schemes' which are schemes to collect all the sewage from Hong Kong, Kowloon, and Tsuen Wan/Kwai Chung, into a deep tunnel intercepting sewer system which will discharge, after treatment on Stonecutters Island, through a long sea

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 outfall into the Dangan Channel. Under 'existing schemes' four sewage screening plants with submarine outfalls at To Kwa Wan, Wan Chai East, North Point and Shau Kei Wan were completed thus providing treatment for sewage from a population of 1.2 million around the eastern half of Victoria Harbour. This should have a significant beneficial effect on its water quality. Making resolute progress towards completion by 1992 is the largest 'existing project', the North West Kowloon Sewage Treatment and Disposal Scheme. This scheme will collect, treat and discharge sewage from a population of 1.1 million in Sham Shui Po, Mong Kok and Yau Ma Tei. All the construction contracts have been awarded. The second largest project in this category is the scheme to 'export' the sewage effluent from the Sha Tin and Tai Po Sewage treatment works and discharge it into Victoria Harbour. The first contract in this scheme which is for the construction of a 3.2 metre- diameter, 7.5 kilometre long sewer tunnel under Tsz Wan Shan was awarded in July. This is the first government project in which it is proposed to use a tunnel boring machine. Under the 'sewerage masterplan scheme' the first contract for sewer refurbishment in the Southern District of Hong Kong Island was awarded towards the end of the year and detailed design was being carried out on sewerage improvements in East Kowloon. Under the 'strategic network schemes' detailed engineering feasibility studies were commenced in June.

  With the commissioning of each additional item of infrastructure there is a consequential increased commitment in operations and maintenance. By the end of the year, throughout the territory, some one million cubic metres per day of sewage were receiving grit removal and screening and another 250 000 cubic metres were receiving full biological treatment, and a 1 400 cubic metre-capacity purpose-designed vessel was built as part of a five-year contract for dumping at sea the sludges from the Sha Tin and Tai Po sewage treatment works and the Sha Tin water treatment works. Plans were made to carefully monitor the environmental effect of such dumping.

Following a number of floods in recent years a territory-wide study was carried out by consultants to review rainfall stream flow and flooding predictions, and the measures which government was taking to reduce the extent and risk of flooding. This study was completed during the year and confirmed the appropriateness of most of the measures which government either had taken or was proposing to take and it made a number of recommendations both for structural and non-structural measures. Foremost among the latter was the need to draw up basin management plans. Therefore towards the end of the year work started on drawing up basin management plans for the river basins in the North and North-west New Territories and to examine at a more detailed level what local flood mitigation measures can be taken. In addition, pamphlets giving advice on flooding situations were widely distributed through the district administration to people living in flood-prone areas. Among structural measures which government has already put in hand are the construction of main drainage channels in the northern flood plains and local works to protect low-lying villages which are difficult to drain. Construction of 6.5 kilometres of channels for the Tin Shui Wai hinterland was 50 per cent complete at the end of the year and design was in hand for another 14 kilometres of channels in Yuen Long, Kam Tin and Ngau Tam Mei with a view to starting work on-site in 1991. Four flood pumping stations together with earth embankments and other ancillary flood protection works were also completed near the villages of Kiu Tau Wai, Sik Kong Tsuen, Sik Kong Wai and Sheung Shui, and more than 120 flap gates were installed in various channels at problem locations.

LAND, PUBLIC WORKS AND UTILITIES

Geotechnical Control

The Geotechnical Control Office (GCO) of the Civil Engineering Services Department was established after the landslip disasters of the 1970s, and the control of geotechnical aspects of construction works in the interest of public safety continues to be its foremost duty. Checks were made on 6009 design proposals in 1990. Prior approval systems were introduced for prestressed ground anchors and reinforced fill structures which will reduce the work involved in approvals for individual projects in the future. Landslip preventive work was carried out on 36 slopes and stabilisation work completed on four networks of disused air-raid precaution tunnels, requiring the expenditure of $100 million in the Landslip Preventive Measures Programme.

In addition, the office designed and is undertaking work for improvement of the stability and reduction of environmental hazards of the old sanitary landfill at Sai Tso Wan. This work to improve stability and control landfill gas migration is the first of its kind in Hong Kong.

The presence of cavernous marble beneath sites in the North-west New Territories has posed problems for development. Geological mapping to identify buried marble has been completed and ten 1:5 000 scale geological maps were published for the areas around Yuen Long. New legislation was enacted in July 1990 to empower the Building Authority with additional geotechnical controls to ensure safe development in the area.

The Geotechnical Control Office operates the Landslip Warning System and a 24-hour emergency service to provide advice on landslips. During the year, site investigation worth $58 million was carried out on land and offshore by the office. The Geotechnical Information Unit (GIU), which houses the largest collection of data on ground conditions in Hong Kong, serves as an important reference centre for geotechnical information. The GIU received more than 1 125 enquiries during the year.

The Hong Kong Geological Survey continues to publish 1:20 000 scale geological maps and memoirs for the land and marine areas of the territory. During 1990, geological maps for Sai Kung and the Waglan Island area were published, together with a geological memoir for Sai Kung and Clear Water Bay. New geological maps at a scale of 1:20 000 are now available for more than 70 per cent of the territory. Large scale (1:5.000) geological survey work was commenced in the Ma On Shan district and in the development areas of North Lantau. The Ma On Shan mapping followed confirmation of buried marble deposits beneath an area of new reclamation.

The office's work on the use of underground space continued in 1990, with detailed feasibility studies being completed for a government warehouse at Siu Sai Wan, and for a refuse transfer station at Mount Davis. A number of preliminary engineering geological studies for cavern usage were also completed, and arrangements were established for in- cluding underground space in the government town planning system.

A new Marine Geotechnology Section was formed to provide advice and to carry out research and development work on the marine geotechnical aspects of Port and Airport Development Strategy projects. The section completed a study on gas in marine sediments during 1990, and the office carried out a comprehensive technical investigation for the possible extension area for the new airport covering fill supply and mud disposal and potential use of underground space at Chek Lap Kok.

During 1990, Hong Kong's construction industry consumed some 19 million tonnes of crushed rock aggregates and natural sand, of which about 50 per cent was imported from

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China. The bulk of internal production came from seven contract quarries supervised by the Geotechnical Control Office.

The Public Works Central Laboratory was relocated to its new premises in Kowloon Bay in July, and a new 2 000 KN Universal Testing Machine was installed in September. The seven Public Works Laboratories carried out some 336 000 tests on construction materials, including soil and rock, concrete, reinforcing steel, timber, aggregates and bit- uminous products.

Water Supplies

Water from China

The supply of water from China is now the major single source of supply for Hong Kong and it is from this source that all future increases in demand will be met. This dates back to 1960 when a scheme was first formulated for receiving a piped supply of 22.7 million cubic metres a year. Today, the annual supply from China has increased to over 500 million cubic metres and this will continue to increase in stages to 660 million cubic metres by 1994-5. The concept of seeking a supply from China and steps taken by the Water Supplies Department of Hong Kong to realise such a goal have brought about radical changes to the history of water supplies in Hong Kong.

Following agreement reached with the Chinese Authority in December 1989 to increase the China water supply up to a maximum of 1 100 million cubic metres per year to cope with anticipated water demands of Hong Kong beyond 1994, a conceptual plan was finalised for the works to be constructed in stages to receive and distribute the additional supply, and consulting engineers were engaged to carry out detailed planning and design with a view to completing the Stage I works by end-1994. The Stage I works include some 22 kilometres of large-diameter transmission pipelines, new pumping stations at Muk Wu, Tai Po Tau, Au Tau and Sai O and uprating of an existing pumping station at Tai Mei Tuk.

Water Works

Full supply was maintained throughout the year. At the beginning of 1990, there were 243 million cubic metres of water in storage, compared with 230 million cubic metres at the start of 1989. The combined storage of Hong Kong's largest reservoirs, High Island and Plover Cove, was 200 million cubic metres. Rainfall for the year was 2047 millimetres compared with the average of 2 225 millimetres. Water piped from China during the year totalled 590 million cubic metres. The salinity of water at High Island remained at about 20 milligrams per litre while at Plover Cove it varied from 51 milligrams per litre at the beginning of the year to 54 milligrams per litre at the end of the year.

A peak consumption of 2.66 million cubic metres per day was experienced, compared with the 1989 peak of 2.63 million cubic metres. The average daily consumption through- out the year was 2.39 million cubic metres, an increase of three per cent over the 1989 average of 2.32 million cubic metres. The consumption of potable water totalled 873 million cubic metres compared with 845 million cubic metres in 1989. In addition, 119 million cubic metres of salt water for flushing was supplied, compared with 112 million cubic metres in 1989.

With reliable supplies available from China, it was decided by the Executive Council in July 1989 to dispose of the Lok On Pai Desalting Plant. Tender for the disposal of the

LAND, PUBLIC WORKS AND UTILITIES

     plant was awarded in August 1990 and dismantling is expected to be completed by about the middle of 1991.

Planning studies were completed for the improvement of fresh water supplies to Ap Lei Chau, the western mid-levels of Hong Kong Island, Kowloon East, Tuen Mun and Yuen Long. Major studies in hand include the increase in water treatment works capacity for the whole territory by providing new treatment works at Ma On Shan, Pak Ngau Shek, Ngau Tam Mei and Siu Ho Wan and the improvement of system capacity to meet the demand generated from developments in Tseung Kwan O, the Metropolitan eastern area, the central and western areas of Hong Kong Island and Tuen Mun.

      A North Lantau Division was established to undertake the planning, design and con- struction of water treatment, transfer and distribution facilities to supply water to the new airport and other developments in north Lantau associated with the Port and Airport Development Strategy.

During the year, a new Centralised Mechanical and Electrical Workshop at Lung Cheung Road was completed and commissioned. The new workshop accommodates all the facilities previously provided at Bullock Lane and Argyle Street Workshops, Yau Tong Meter Workshop and the temporary electric motor workshop at Lok On Pai. The Stage II works of Pak Kong Treatment Works commenced and the works for the treatment and disposal of sludge from the Sha Tin Water Treatment Works also started. The construction work at Au Tau Treatment Works continued.

      Major design works in progress include a new treatment works at Sham Tseng, extensions of Yau Kom Tau treatment works and Sheung Shui treatment works, and a temporary treatment works near Tung Chung for supply to North Lantau construction sites. Design of additional service reservoirs and pumping stations at Tuen Mun, Ma On Shan, Tseung Kwan O, Shau Kei Wan and Repulse Bay continued. Design works are also in hand for implementing sea water flushing supply systems in Sha Tin, Ma On Shan and Tai Po.

The distribution system was continuously extended and enlarged to meet urban and rural demands in the territory. Expansion of the distribution network to supply remote villages in the New Territories continued.

       Several mechanical and electrical installations were commissioned during the year. These included Eastern Pumping Station Extension, Ngau Chi Wan High Level Pumping Station, So Kwun Tan Pumping Station, Tai Po East High Level Pumping Station, Tseung Kwan O High Level No. 1 Pumping Station, Wan Chai Salt Water Pumping Station and an irrigation supply pumphouse at Wai Tau Tsuen. The pumping plants at Peng Chau Pumping Station, Shek Pik Valve Tower and Shun Lee Tsuen Pumping Station were uprated to improve water supply to the areas. The four radiation screening centres at Sha Tin, Sheung Shui, Pak Kong and Hong Kong Island Eastern Filters for monitoring of water supplies as a consequence of the Daya Bay Nuclear Power Station were also commissioned.

       The new regional office for Hong Kong and Island Region at North Point was completed and commissioned while the old office in Wan Chai was demolished. The design proposal for the regional office for the Mainland South East Region was finalised by Architectural Services Department and detailed design was put in hand.

      With 1.8 million consumer accounts in the territory increasing at a rate of around four per cent per annum, major improvements to computer systems continued to facilitate

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retrieval and updating of account information to handle consumer's enquiries and applications for services. Applications for change of consumership can now be processed efficiently over the counter. Such enhancements were complemented by increased counter facilities at the new Wan Chai Consumer Enquiry Centre designed with a view to providing cordial and efficient service to consumers.

   The telephone enquiry service was upgraded to an automatic call distribution system which allowed call-queuing with telephone lines increased from 12 to 25. Service after office hours was extended by way of pre-recorded information on popular water account topics.

   The auto-pay service was widely promoted and eight per cent of the consumers are now using this.

Electricity

Electricity supply is currently provided by two commercial companies - The Hongkong Electric Company Limited (HEC), which supplies Hong Kong Island and the neighbouring islands of Ap Lei Chau and Lamma, and China Light and Power Company Limited (CLP), which supplies the whole of Kowloon and the New Territories, including Lantau and a number of outlying islands.

   The two supply companies are investor-owned and do not operate on a franchise basis. The government monitors the financial arrangements of the companies through schemes of control. The schemes require each company to submit to the government for approval a Financing Plan setting out the financial consequences over a period of at least five years of the companies' planned activities, including the forecast tariff levels.

   The government's arrangements for monitoring the operations of the power companies were reviewed by a firm of independent professional consultants in 1983. The consultancy report, published in March 1985, confirmed that the monitoring arrangements in the past had been adequate and appropriate. Nevertheless, the consultants also offered a number of recommendations on how the operational aspects of the monitoring process could be improved. A special working party responsible to the Secretary for Economic Services was set up to develop the recommendations. The working party's report was submitted to the Executive Council and the consultants' recommendations have since been implemented.

In Kowloon and the New Territories, electricity is supplied by CLP's three affiliated generating companies - Peninsula Electric Power Company Limited (PEPCO), Kowloon Electricity Supply Company Limited (KESCO) and Castle Peak Power Company Limited (CAPCO). CLP has a 40 per cent stake in each of these affiliated companies, with the remaining 60 per cent being owned by Exxon.

PEPCO, KESCO and CAPCO have operating service agreements with CLP under which CLP constructs, commissions, operates and maintains the electricity generating facilities for these companies. The generating facilities include Tsing Yi 'A' (720 MW) and Tsing Yi 'B' (800 MW) which are owned by PEPCO; Hok Un (264 MW) and Castle Peak 'A' (1 640 MW) which are owned by KESCO; and the Castle Peak 'B' (2 708 MW) which is owned by CAPCO. The total installed capacity at the end of 1990 was 6 132 MW.

CLP's transmission system operates at 400 kV, 132 kV and 66 kV, and 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.

To serve its consumers, CLP has more than 158 primary and over 6 048 secondary sub- stations in its transmission and distribution network. An extra high voltage transmission

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system at 400 kV to transmit power from the Castle Peak Stations to the various load centres was completed in 1986. This 400 kV network comprises two transmission rings. One ring, a primary ring encircling the New Territories, consists of 90 kilometres of double circuit overhead lines and four extra high voltage substations at Lei Muk Shue, Tsz Wan Shan, Tai Po and Yuen Long. The other ring consists of 22 kilometres of cable circuits linking the major substations at Tsz Wan Shan, Tai Wan and Lai Chi Kok.

For the HEC's supply areas, electricity is completely supplied from the Lamma Power Station. At the end of 1990, with two additional 125 MW gas turbines, the total installed capacity at the Lamma Power Station was 2 255 MW which consists of three 250 MW and two 350 MW dual coal/oil fired units, six 125 MW and one 55 MW gas turbines. There are plans to add a further 350 MW unit to Lamma in the early 1990s.

       HEC's transmission system operates at 275 kV, 132 kV and 66 kV and distribution is effected mainly at 11 kV and 346 volts. With the exception of a small proportion of 132 kV overhead transmission lines, all supplies are transmitted and distributed by underground or by submarine cables. The supply is 50 hertz, 200 volts single phase and 346 volts three phase. Supplies at high voltage are also made available to consumers.

The transmission systems of CLP and HEC are interconnected by a cross-harbour link, thereby achieving cost savings to consumers through economic energy transfers between the two systems and a reduction in spinning reserve requirements. The interconnection, commissioned in 1981, now has a capacity of 480 MVA, with provision to increase it to 720 MVA, if required.

      CLP's system is also interconnected with that of Guangdong General Power Company of China and about four million units of electricity are transmitted to Guangdong Province each day. This interconnection results in better utilisation of the company's generating plant during periods of low demand. Also, CLP has signed a contract with the China Merchants Steam Navigation Company Limited for the supply of electricity for a period of 10 years to the industrial zone of She Kou and the adjacent Che Wan area, both in Guangdong Province, China. The arrangement, which affords She Kou a reliable electricity supply without subsidy from Hong Kong consumers, is illustrative of the close co- operation on energy matters which has developed on both sides of the border.

       On January 18, 1985, the Hong Kong Nuclear Investment Company (a wholly-owned subsidiary of CLP) and the Guangdong Nuclear Investment Company (wholly owned by the Chinese Ministry of Nuclear Industry) signed the Joint Venture Contract for the formation of the Guangdong Nuclear Power Joint Venture Company, to construct and operate a nuclear power station at Daya Bay in Guangdong Province.

      The Daya Bay Nuclear Power Station will comprise two 900 MW pressurised water reactors which are scheduled for commissioning in 1992 and 1993. About 70 per cent of the power from the station will be purchased by CLP to meet part of the longer-term demand for electricity in its area of supply.

       In May 1990, the government decided that the electricity supply voltage in Hong Kong should be upgraded from 200 volts single phase and 346 volts three phase to 220 volts single phase and 380 volts three phase, and that a Supply Voltage Advisory Committee be set up to advise on the implementation of voltage upgrading in the territory. The voltage upgrading is planned to be carried out in three phases and completed within seven years. Phase I conversion will cover existing installations in government buildings and will be completed within about 18 months. Phase II will cover Housing Authority buildings and is

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estimated to take about two years to complete. Lastly, Phase III will cover private sector buildings and will take about three years to complete.

Main electricity statistics and sales figures are at Appendix 36.

Gas

  Gas is widely used throughout the territory for domestic, commercial and industrial purposes. Two main types of fuel gas are available: Towngas, distributed by Hong Kong and China Gas Company Limited (HKCG); and Liquefied Petroleum Gas (LPG), supplied by major oil companies based in Hong Kong namely Shell, Mobil, Esso, Caltex, Hong Kong Oil, China Resources and British Petroleum. Towngas is mainly supplied as a manu- factured gas, but for some customers substitute natural gas (SNG) is supplied under the Towngas trademark. The constituents of LPG are butane and propane mixed in approximate proportions of 75 and 25 per cent respectively.

   The total number of fuel gas customers in Hong Kong is around 1.7 million. In 1990, Towngas had 66 per cent of the total fuel gas sold in energy terms and LPG 34 per cent.

   HKCG manufactures Towngas at two works, one located at Ma Tau Kok and the other in the Tai Po Industrial Estate. Both use naphtha as a feedstock. They currently have output capacities of 3.6 and 2.8 million cubic metres per day respectively. In order to meet the increasing demand for Towngas, HKCG has started the phase II development at its gas production plant in Tai Po. This will double the capacity of the plant to 8.4 million cubic metres per day when completed in 1991.

Towngas is distributed through an integrated distribution system to about 753 thousand customers for cooking and heating purposes. The mains network extends to the urban areas of Hong Kong Island including Aberdeen, Repulse Bay, Stanley and Ap Lei Chau, Kowloon and many new towns in the New Territories, including Sha Tin, Tai Po, and Tsing Yi Island. HKCG is currently constructing a 90-kilometre network of 600 millimetre-diameter transmission pipeline in the New Territories. The new transmission line is designed to operate at elevated pressure and will provide an additional 0.3 million cubic metres of 'line pack' storage capacity.

SNG is distributed by HKCG under the Towngas trademark from temporary plants located in Yuen Long and Tuen Mun specifically operated to serve these two new town areas in the New Territories. It is expected that the plants will be decommissioned in 1991-2 when the high transmission pipeline reaches these two areas.

LPG is imported into Hong Kong by sea. About 79 per cent of total sales is distributed to customers, via dealer networks, in portable cylinders. The remaining 21 per cent is distributed through piped gas systems from bulk LPG storage and vaporiser installations which are located in or adjacent to the developments being supplied.

   Currently there are about 378 LPG dealers operating within the territory. Additionally, 23 LPG site operators manage 373 bulk storage installations under government licensing arrangements. Altogether there are 955 thousand LPG customers.

In 1982, the government introduced a piped gas policy to discourage further growth in the use of gas cylinders in domestic dwellings; and at the same time began a programme of encouraging the upgrading of sub-standard gas water heaters. The percentage of domestic dwellings now using cylinders has fallen to less than 40 per cent in 1990 and the number of upgraded gas water heaters amounts to some 50 000. Fatalities arising from fuel gas incidents apart from suicide cases have been reduced to zero.

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      As a further means of maintaining gas safety, the Gas Safety Ordinance was enacted in 1990. This ordinance and its associated regulations constitute a comprehensive package of safety legislation covering all aspects of fuel gas importation, manufacture, storage, transport, supply and use.

The government and the fuel gas supply industry have adopted risk assessment tech- niques for the detailed examination of all potentially-hazardous gas installations. The risk assessments facilitate the taking of remedial measures where necessary, with the aim of ensuring that residents are not exposed to unacceptable societal risk levels.

Main gas statistics and consumption details are at appendix 36.

Professional Registration

Previously there were no general statutory registration systems for professional architects or engineers in Hong Kong. Their activities were only recognised insofar as they affect- ed public health and safety. To improve professional standards and ensure that high standards are maintained while safeguarding consumer rights, the Architects Registration Ordinance 1990 and the Engineers Registration Ordinance 1990 were passed by the Legislative Council on May 3, 1990. In accordance with these ordinances, the Architects and the Engineers Registration Boards were set up with members appointed by the Hong Kong Institute of Architects and the Hong Kong Institution of Engineers. The boards are independent of government and the professional bodies involved, although the admin- istration of the registration systems are carried out by the latter. The boards are currently establishing the procedures and documentation to process applications for registration.

      Action has been initiated to introduce similar legislation for surveyors and planners. The Hong Kong Institute of Surveyors and the Hong Kong Institute of Planners are the associated professional bodies.

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THE major objectives of Hong Kong's transport policy are to maintain the mobility of passengers and freight in order to support economic growth and to meet the social, commercial and recreational needs of the community. This requires commitment to a continuous process of policy review, planning and investment in new infrastructure.

The White Paper on Transport Policy in Hong Kong was published in January 1990, based on the recommendations of the Second Comprehensive Transport Study and taking account of public views on the Green Paper. It set out the government's broad transport strategy and policy intentions for the territory up to 2001. The transport policy is founded on the three principles of expanding and improving the transport infrastructure, expanding and improving public transport services, and managing the demand for road use.

   A major updating of the Second Comprehensive Transport Study with the planning horizon extended to 2011 is being carried out with the objective of reviewing the recommended strategies, taking into account the decision to relocate Hong Kong's International Airport to Chek Lap Kok by 1997 and to build additional port facilities in the Western Harbour and other infrastructure proposals in Metroplan, as well as other strategic studies.

   Major highway projects planned for the 1990s include the North Lantau Expressway and the Lantau Fixed Crossing which will provide a direct expressway link to the new airport; Route 3 comprising the Western Harbour Crossing and a major new highway along the West Kowloon Reclamation to the border; the Hung Hom Bypass, and Route 7 between Sai Ying Pun and Kennedy Town.

   The current policy on public transport is to maintain a safe, comprehensive and efficient network. A wide variety of modes enables passengers to exercise a choice of service quality, speed and fares. It is recognised that the policy of restraining private car use must be supported by an increasing availability of high quality public transport, and a growing network of air-conditioned coach services is now in service.

   The White Paper recognised the benefits of competition in giving an incentive for transport operators to be efficient and to identify and meet passengers' preferences.

   The policy of having public transport services provided by privately-owned companies, or public corporations operating on prudent commercial principles without direct public subsidy, has been re-affirmed.

The objectives of managing road use are to improve mobility of people and goods by making effective use of road space, giving priority to the more efficient and essential road

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users, and managing travel demand to a level with which the road system can cope. A package of measures proposed for managing road use include traffic management and engineering schemes and minimising traffic disruptions caused by road opening works, traffic accidents and defective vehicles. In the longer term, the development of technology for traffic management measures such as area pricing is being watched.

Administration

     The Transport Branch of the Government Secretariat, headed by the Secretary for Transport, is responsible for overall policy formulation, direction and co-ordination of all transport matters. The secretary is assisted by the Transport Advisory Committee, which advises the Governor in Council on major transport policies and issues. The committee has 17 appointed members, including the chairman and six government officials. The Transport Policy Co-ordinating Committee is chaired by the Secretary for Transport.

      The Transport Department and the Highways Department are responsible for the execution of transport policies and measures, and the highways construction and main- tenance programme.

      The Commissioner for Transport, the head of the Transport Department, is the authority for administering the Road Traffic Ordinance and legislation regulating public transport operations other than railways. His responsibilities cover road traffic manage- ment, 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 the authority for the licensing of drivers and the registration, licensing and inspection of vehicles.

The Police Force is the principal agency for enforcing traffic legislation and prosecuting offenders. However, the prosecution unit of the Transport Department handles prosecu- tions involving safety defects found on buses, disqualifications under the Driving Offence Points System and breaches of vehicle safety regulations and government tunnel reg- ulations. In 1990, the unit conducted two prosecutions in respect of buses and other vehicles, 3 280 cases for which disqualification was sought under the Driving Offence Points System and 124 prosecutions in respect of breach of tunnel and other regulations.

The Director of Highways heads the Highways Department, which is responsible for designing and building all highways, and for their repair and maintenance. The department is also responsible for studying new railway networks.

      A Transport Tribunal, set up under the Road Traffic Ordinance and chaired by an unofficial member, provides the public with a channel of appeal against decisions made by the Commissioner for Transport in respect of registration and licensing of vehicles and issue of hire car permits and passenger service licences.

Planning

The formulation of a territory-wide transport strategy up to the year 2011 is being undertaken by updating the Second Comprehensive Transport Study. Detailed transport planning is also carried out at territorial and district levels to resolve transport and traffic problems. In the past year, the West Kowloon Reclamation Transport Study, and a number of studies to investigate the future transport infrastructure requirements in Tseung Kwan O (Junk Bay), Tuen Mun and Tin Shui Wai New Towns were completed. District

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  studies in progress include the Wan Chai District Traffic Study as well as the Central and Wan Chai Reclamation Development Study.

   To map out the long-term strategy for railway development, a Railway Development Study will shortly be commissioned. A Freight Transport Study is also planned for 1991, the results of which will be used in the formulation of freight transport strategy.

   The government is proceeding with the necessary work to ensure timely completion of the supporting transport infrastructure required for the new airport. The Lantau Fixed Crossing will be the first land link to Lantau comprising two road and rail bridges spanning the channels between Lantau, Ma Wan and Tsing Yi.

Cross-border Traffic

With the opening of the first bridge of the Lok Ma Chau Crossing in December 1989, there are now three road border crossing points between Hong Kong and China. The other two crossings are at Man Kam To and Sha Tau Kok. Total capacity of the three crossings is about 28 000 vehicles per day, allowing for immigration and customs requirements. The second bridge of the Lok Ma Chau Crossing is expected to open in 1991.

   There was an increase in cross-border traffic of 12 per cent compared with 1989. As the Man Kam To crossing was already operating at capacity, the increase mainly occurred at Sha Tau Kok and Lok Ma Chau. The average daily traffic figures at the three crossing points in 1990 were 10 200, 1 850 and 1 400 at Man Kam To, Sha Tau Kok and Lok Ma Chau respectively. Goods vehicles accounted for 95 per cent of the traffic reflecting the rapid growth in trade and industrial links with China. At the end of the year, 21 companies operated tourist coach services across the border.

   The Kowloon-Canton Railway continued to play an important role in the freight and passenger traffic between Hong Kong and China. Some 1.8 million tonnes of freight (1989: 1.7 million tonnes) and two million head of livestock (1989: two million) were brought into Hong Kong by rail. Exports to China by rail accounted for 367 000 tonnes, a significant decrease from the 453 000 tonnes carried in 1989. Cross-border passenger traffic on the railway was 28 million in 1990 (1989: 28 million). A further extension of the terminal building at Lo Wu is being planned in order to cope with anticipated future growth in traffic.

   In 1990, ferry services between Hong Kong and China, handled by seven operators, carried 3.6 million passengers (3.1 million in 1989). The new China Ferry Terminal in Canton Road has provided much improved facilities and sufficient capacity to meet demand beyond the turn of the century.

Road Network

Hong Kong's roads have one of the highest vehicle densities in the world. At the end of 1990, there were 363 520 licenced vehicles and about 1 484 kilometres of roads - 403 on Hong Kong Island, 379 in Kowloon and 702 in the New Territories. This high vehicle density, combined with the difficult terrain and dense building development, poses a constant challenge to transport planners. There are seven major road tunnels, over 656 flyovers and bridges, 379 footbridges and 218 subways to keep vehicles and people on the move.

To cope with ever-increasing transport demands, the Highways Department has em- barked on an extensive construction programme, with about 50 road projects under construction and a similar number being actively planned at any one time.

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      Expenditure on highway projects was about $2,240 million, representing a nine per cent increase compared with 1989, while another $607 million was spent on improving and maintaining existing roads.

Strategic Road Network

The spine of the strategic road system is Route 1, which runs from Aberdeen on the southern shore of Hong Kong Island and cuts through Kowloon peninsula to Lok Ma Chau Border Control Point in the northern New Territories. It passes through the Aberdeen, Cross-Harbour and Lion Rock Tunnels.

       On Hong Kong Island, Route 8 runs along the northern shore from the Cross-Harbour Tunnel via the Island Eastern Corridor to Shau Kei Wan and Chai Wan in the east. Route 7 stretches from the Cross-Harbour Tunnel along the north shore, via Gloucester Road, Harcourt Road and Connaught Road to Hill Road at Kennedy Town in the west.

      On the mainland, Route 2 runs from the Kowloon Bay Reclamation, through the Airport Tunnel, via the East and West Kowloon Corridors, Tsuen Wan Road, Tuen Mun Road and Yuen Long Northern Bypass to the junction of Castle Peak Road and Lok Ma Chau Border Link Road. Route 4 runs along the base of the foothills separating Kowloon from the New Territories and connects Kwun Tong and Lai Chi Kok. Another strategic road, Route 5, is a seven-kilometre two-way trunk road connecting Sha Tin with Tsuen Wan, completed in April 1990. It forms part of the New Territories Circular Road System.

The Eastern Harbour Crossing, which forms part of Route 6, opened in September 1989. The remaining sections of Route 6 include Kwun Tong Bypass, Tate's Cairn Tunnel and Road T6 linking Tate's Cairn Tunnel to Tolo Highway. All these projects are at an advanced construction stage. This route, due to be completed by mid-1991, is expected to greatly ease traffic congestion in the Lion Rock Tunnel. The Kwun Tong Bypass and Tate's Cairn Tunnel cost $1.82 billion and $2.65 billion respectively.

       Route 3, which will provide a direct link between the north-western New Territories and Hong Kong Island via the Tai Lam Tunnel, Tsing Yi, West Kowloon Expressway and the Western Harbour Crossing, is another strategic route under investigation. A feasibility study to select the alignment of the section from the north-western New Territories to West Kowloon and another feasibility study for the Western Harbour Crossing were both completed in 1989 and 1990 respectively. A feasibility study for the West Kowloon Expressway also commenced in September 1990.

Improvements to Major Road Networks

On Hong Kong Island, the major project Route 7 was completed early in 1990. Route 7 provides two-way free-flow along Connaught Road from Harcourt Road to Hill Road, including the construction of two flyovers at Harcourt Road and Rumsey Street, an underpass at Pedder Street, widening of Connaught Road West and several footbridges.

In Kowloon, traffic conditions along Route 2 at Gascoigne Road have significantly improved with the completion of work on the Gascoigne Road Flyover. Route 1 has also been improved by the completion of the Princess Margaret Road Flyover reconstruction in mid-1989.

       In the New Territories, remaining sections of the New Territories Circular Road from Pak Shek Au to Au Tau are being constructed in stages and will be completed in 1991. The first stage of a principal road link with China at Lok Ma Chau, which connects with 239

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the New Territories Circular Road at a grade-separated interchange, was completed in December 1989.

   A Tuen Mun to Yuen Long Eastern Corridor has been planned in the north-western New Territories, to provide an eastern continuation of Route 2. This corridor is a two- way trunk road along the eastern side of Castle Peak Road to connect with the proposed Yuen Long Southern Bypass. Construction commenced in May 1990 for completion in mid-1993.

Environmental Impact of Road Construction

The environmental impact of new road projects is carefully appraised at the planning stage by the Highways Department. Where practical, measures such as landscaping works, artificial contouring of surrounding hillsides and installation of noise barriers are con- sidered. Pre-cast decorative concrete panels applied to the retaining wall of the Gascoigne Road Flyover project and the enclosed-type noise barrier for the section of the future Tate's Cairn Tunnel approach roads near Richland Gardens in Kowloon Bay are two good examples.

Road Opening Works

  Besides serving as carriageways for vehicles and pedestrians, the highways also provide space to install various utility services to the general public. To cope with the demand resulting from the rapid development in Hong Kong, utility companies often have to open up the carriageways and footways to maintain services by renewal, repair, and enlargement of pipes, cables and ducts. On average 108 new road openings are started every working day. These are co-ordinated and controlled by the Highways Department through a permit system, under which utility companies are required to carry out works to a required standard and in a limited period of time. In order to co-ordinate these works and to minimise disruption, the department holds monthly Road Opening Co-ordinating Com- mittee meetings with the utility companies, police and the Transport Department.

Tunnels

The Lion Rock Tunnel, which links Kowloon to Sha Tin and the north-eastern New Territories, opened in 1967 with a single tube. A second tube was added in 1978. During peak hours, particularly in the morning rush period, traffic volume exceeded the tunnel's design capacity, and the volume increased to a new high of 104 000 vehicles a day in early 1990. While various traffic management measures, including tidal flow, signal-controlled merging and some restrictions on access by goods vehicles had improved traffic conditions, congestion was still serious. However, the opening of Shing Mun Tunnel, the widening of Tai Po Road and the revision of toll from $3 to $6 at the Lion Rock Tunnel from April 20, 1990, have reduced the average daily traffic in 1990 to 95 600 vehicles. Further relief can be expected with the opening of the Tate's Cairn Tunnel in mid-1991.

The Aberdeen Tunnel, opened in 1982, links the north and south sides of Hong Kong Island. The average daily traffic in 1990 was 50 800 vehicles.

   The toll-free Airport Tunnel provides direct road access from the central area of Kowloon to Hong Kong International Airport, and also crosses underneath the airport runway to Kwun Tong. Since the tunnel opened in June 1982, the volume of traffic using it has been increasing steadily and averaged about 44 600 vehicles per day in 1990.

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      The Cross-Harbour Tunnel, opened in 1972, runs beneath the harbour between Hong Kong Island and Kowloon. An average of 118 300 vehicles used the tunnel each day in 1990. It is one of the world's busiest four-lane tunnels. Traffic congestion at the approaches of the tunnel eased slightly after the opening of the Eastern Harbour Crossing.

      The Eastern Harbour Crossing, the second cross-harbour tunnel, opened in September 1989. This tunnel links Quarry Bay on Hong Kong Island and Cha Kwo Ling in Kowloon by means of an immersed twin-tube crossing incorporating both road and rail links. By the end of 1990, traffic in this tunnel averaged about 32 100 vehicles per day.

      Two new road tunnels were opened in 1990. The Shing Mun Tunnel, opened to traffic on April 20, 1990, links Sha Tin and Tsuen Wan, and the average daily traffic is 30 100 vehicles. The Tseung Kwan O Tunnel, opened to traffic on November 9, 1990, links Kwun Tong to Tseung Kwan O New Town, and the average daily traffic is 6 500 vehicles.

Traffic Management and Control

At the end of the year, there were about 920 signalised junctions in operation, of which 330 junctions were under the control of the Kowloon Area Traffic Control (ATC) System and 190 were under the control of the Hong Kong ATC System.

The Kowloon ATC System has been in operation for more than 13 years. It needs to be replaced by an expanded system in order to cope with increasing demand and to implement more efficient traffic control methods. A consultancy study for the replacement of the system was completed during the year, and work on the recommended system is expected to start in mid-1991.

The Kowloon ATC System is supplemented by a traffic monitoring closed-circuit television system. This system at present covers only the western, southern and northern parts of Kowloon. As part of the Kowloon ATC System replacement project, the television system needs to be expanded to east Kowloon and its coverage of other areas of Kowloon needs to be increased. This expansion is expected to start in 1992 and its completion is aimed to coincide with the commissioning of the new Kowloon ATC System.

About 190 signalised junctions on the northern shore of Hong Kong Island from Kennedy Town to Shau Kei Wan are operating under computer control. The expansion of the Hong Kong ATC System to Mid-Levels and Happy Valley is scheduled for completion by the middle of 1991.

      A consultancy study was commissioned in June 1990 to investigate, design and supervise the civil works in connection with the Hong Kong Island Closed Circuit Television System. Thirty-five cameras are planned, to be commissioned by the end of 1992.

The Transport Department also plans to extend computerised area traffic control to Tsuen Wan New Town. Consultants were commissioned to assist in the preparation of detailed design and contract documents for the new ATC system and work is expected to commence in mid-1991 for completion in 1994-5.

Parking

The government owns 14 multi-storey carparks which provide 8 200 parking spaces. These are operated and managed by a private company under a management contract. Off-street public parking is also provided by the Civil Aviation Department at Hong Kong Inter- national Airport and by the Kowloon-Canton Railway Corporation at railway stations. The private sector operates multi-storey and open-air public carparks in commercial

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buildings, housing estates and open-air lots providing over 50 000 parking spaces. On-street parking is usually metered and provided only at locations where traffic con- ditions permit. By the end of the year, there were 13 500 metered spaces throughout the territory, most of which operate between 8 am and midnight from Monday to Saturday. In Causeway Bay, Happy Valley, Western, Tsim Sha Tsui and Victoria Peak where parking demand is high, meter operation has been extended to include Sundays and public holidays to encourage a better turnover of parking spaces.

   The government's policy is to continue to encourage the private sector to construct and run public carparks at locations of high demand.

Licensing

The number of new private cars registered rose from 28 097 in 1989 to 28 926 in 1990, an increase of three per cent. In 1982, when the total number of licensed private cars was about 190 000, restraint measures were introduced in the form of substantial increases in private car licence fees and first registration tax. Despite this, and the introduction in 1986 of compulsory annual inspections of six-year-old cars, the total number of licensed cars in December 1990 was 197 852, which represented a growth of 9.8 per cent from the total of 180 184 in December 1989.

The total number of registered goods vehicles in December 1990 was 130 045 compared with the total of 123 164 in December 1989, an increase of 5.6 per cent. Included in this total were 102 204 light goods vehicles which grew by 4.7 per cent compared with 1989. Due to the increasing use of these vehicles as private passenger-carrying vehicles and their comparatively higher accident involvement rate, would-be drivers of these vehicles were required in 1989 to take a separate driving test and all six-year-old vehicles were required to undergo a compulsory annual inspection in 1990. Further measures are being considered.

   At the end of 1990, the total number of licensed vehicles in all classes was 363 520, an increase of 5.3 per cent over 1989.

The number of new learner-drivers dropped from 5 733 per month in 1989 to 5 283 per month in 1990.

   Since the introduction of the Driving Offence Points System in 1984, 9 014 drivers have been disqualified, 96 have been served with warning notices and 817 have incurred penalty points for committing offences scheduled under the Road Traffic (Driving-offence Points) Ordinance. The figures for 1990 were 3 280, 23 764 and 17 667 respectively.

Vehicle statistics are at Appendix 38.

Vehicle Examination

The Transport Department operates five vehicle examination centres to conduct annual re-licensing inspections of all public service vehicles, goods vehicles over 12 years old and vehicles used to carry dangerous goods. Pre-registration and type approval inspections of new goods vehicles and public service vehicles and pre-registration inspections of second-hand imported vehicles of all types are also carried out. The construction of a new computerised inspection centre in Kowloon Bay commenced during 1989 and was completed in late 1990. This new centre will increase inspection capacity threefold and permit the department to meet its policy objective of annually inspecting all goods vehicles and trailers. Management and operation of the new centre is expected to be contracted out to the private sector early in 1992.

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       Annual testing of private cars at 17 designated car testing centres in the private sector expanded to encompass all cars manufactured before 1984. A total of 78 371 such cars were inspected in 1990 compared to 80 000 in 1989. With effect from August 1, 1990, this scheme was expanded to include the annual examination of light goods vehicles with a gross vehicle weight not exceeding 1.9 tonnes, mostly vans, over six years old.

Airport service vehicles are inspected within the airport precincts, while franchised buses are checked at their company depots. The high standard of franchised bus maintenance continued throughout the year and few prosecutions for serious defects were found to be necessary.

       New legislation was introduced during the year covering the maximum weight of articulated vehicles, sideguards and rearguards on trucks, brake system warning devices and protective partitions inside vans.

Road Safety

Traffic accidents involving injury decreased by five per cent in 1990. During the year there were 15 471 accidents, of which 3 614 were serious and 311 fatal. This compares with 16 214 in 1989 (4 036 serious, 330 fatal). In-depth investigations using computerised records were carried out at 126 traffic accident blackspots in order to identify accident causes. Remedial accident prevention measures were recommended at 103 of these locations. Remedial measures, when implemented, have been shown to reduce accidents by 21 per cent on average.

Accident statistics are at Appendix 39.

Road Safety campaigns continued to play an important role in reducing traffic accidents. The major themes of 1990 campaigns were adult pedestrian safety, particularly the elderly, and promoting road safety for drivers, especially light goods vehicle drivers and those with less than two years' driving experience. Apart from posters, television announcements and leaflets, four issues of the Road Safety Quarterly were produced and widely distributed. To effectively convey road safety messages to mass audiences, a series of radio and television road safety programmes were broadcast.

A vehicle weighstation at Ma Liu Shui near the Tolo Highway started operation in January to intensify enforcement action against overloaded goods vehicles. Up to end- 1990, 3 517 prosecutions had been made.

A new microcomputer-based traffic accident data system was developed in 1990 to facilitate the fast updating of accident records and easy retrieval of accident statistics for traffic accident blackspot analysis and road safety strategy formulation. The system started operation in December 1990.

By the end of 1990, the Road Safety Association of Hong Kong operated 468 school road safety patrols and school staff patrols operated at 208 schools, all with the objective of ensuring the safety of schoolchildren 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.

Public Transport

The Hong Kong public transport system is notable for its variety of modes and operators and its intensity of service. A network of rail, ferry, bus and other road services extends to almost every part of the territory.

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Railways

There are five rail systems, including a heavily-utilised underground mass transit railway metro, a busy suburban railway, a modern light railway, a traditional street tramway and a mountainside funicular. Important improvements to these systems were made and patronage on the rail systems generally increased during the year.

Mass Transit Railway

The Mass Transit Railway Corporation (MTRC) operates a three-line metro system comprising 43 route-kilometres with 38 stations served by 671 cars formed into eight-car trains. Trains run at two-minute intervals in peak periods on the Tsuen Wan line and every two and a quarter minutes on the Kwun Tong line to the west of Kwun Tong. On the Island line 2.5-minute headways are maintained in peak periods. At off-peak times during the day trains run every four minutes on all lines.

Patronage has continued to increase, and by the end of the year the MTRC was carrying 2.1 million passengers a day. In relation to the length of the system it is the busiest underground railway in the world.

The success of the MTRC depends heavily on interchange arrangements between lines and connections with other modes. There are six stations which offer interchanges between lines, while 81 dedicated feeder bus and green minibus routes help to bring passengers to the railway. Multi-storey car parks are also provided adjacent to the stations at Kwai Fong, Tsuen Wan, Sheung Wan, Tin Hau and Central. Fares ranged from $3 to $7.

Kowloon-Canton Railway

The Kowloon-Canton Railway (British Section) was opened in 1910 and was double- tracked and electrified in the early 1980s. Formerly a government department, it was vested in the Kowloon-Canton Railway Corporation (KCRC) in February 1983.

Although the 34-kilometre railway caters for freight trains to and from China and for four daily passenger through trains each way between Kowloon and Guangzhou, it principally provides a suburban service to the new towns of the north-eastern New Territories. This traffic has grown substantially throughout the period since the first electric trains were introduced in 1982, and by the end of 1990 the railway handled around 500 000 passenger journeys daily. Peak period average headways range from five minutes at the northern end of the line to every three minutes between Sha Tin and Kowloon. Passenger traffic is carried in a fleet of over 300 train cars which are now assembled in formations of up to 12 cars. A new station was opened at Tai Wo in May 1989, bringing the number of stations to 13. To cope with rising passenger demand, a programme of improvements to stations continued during the year, providing for platform awning extensions, additional automatic gates and money-changing machines.

The ordinary adult fares for domestic travel now range from $2.50 to $6.00. Train patronage is helped by interchanges with other operators. The busiest station is at Kowloon Tong, where there are connections with the MTR and many feeder bus and green minibus routes. Feeder buses and green minibuses also serve most other stations, and during the year the KCRC continued to provide free feeder bus services linking Tai Po Market, Fo Tan and Mong Kok stations.

Further improvements are planned in the near future. Phase I of the Ho Tung Lau Depot and Workshops Redevelopment Project, which started in April 1989, was completed

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in July 1990, with the commissioning of a new Rolling Stock Maintenance Centre. When completed in 1994, adequate maintenance and stabling facilities will be provided for the KCR train fleet, which will by then have expanded to 351 cars.

Light Rail Transit

In addition to its main line, the KCRC owns and operates the 23-kilometre Light Rail Transit (LRT) system in the north-western New Territories which commenced operation in September 1988. Initial services comprised five routes with a sixth route introduced in June 1989. There are 41 stops and traffic is handled by 70 light rail vehicles operated either singly or in pairs. By the end of the year, 233 000 boardings a day were handled on the LRT and on its feeder bus services, which are also operated by the KCRC within a transit service area extending from Tuen Mun to Yuen Long. Unusually for Hong Kong, an 'open' fare system is employed on the LRT, with zonal fares providing free transfers from one route to another and to and from feeder buses. Ordinary adult fares ranged from $2 to $3.

       The LRT system is constructed largely on roadside reserves, although there is some tramway-style street running. Active measures have been adopted to familiarise the public with the system and enhance their awareness of safety procedures.

       The system will be extended by three links in Tuen Mun by the end of 1991 and early 1992. A further extension to the Tin Shui Wai new town is expected to be completed in late 1992, to serve more than 100 000 residents in the new town. The completion of these extensions will increase the total route length of the system to 30 kilometres.

Tramways

Electric trams have operated on Hong Kong Island since 1904. Today, Hongkong Tramways operates eight overlapping services over 13 kilometres of double track between Kennedy Town and Shau Kei Wan and along almost three kilometres of single line around Happy Valley. The 163 trams comprise the only all-double-deck tram fleet in the world. During the year, a rebodying programme continued and by the end of the year most of the fleet had been rebodied or refurbished. Tramway patronage increased slightly to about 349 700 boardings daily. Fares for adults were increased from $0.6 to $1 in August, representing the first such increase since 1983. The corresponding increase for children was from $0.2 to $0.5.

Funicular

Hong Kong's other 'tramway' is actually a cable-hauled funicular railway operated from Garden Road in Central to Victoria Gap by the Peak Tramways Company. The 1.4- kilometre line began operation in 1888 and climbs 373 metres on gradients as steep as one-in-two. The service caters largely for sightseers but also serves Peak district commuters. Patronage on the line, which was fully modernised in 1989, averaged 8 619 passengers a day. One way fares for adults and children are $8 and $3 respectively.

Road Passenger Transport

Despite the growth of rail services, road passenger transport still accounted for two- thirds of all public transport journeys. Of the journeys made by road, over half were on franchised buses, with the remainder handled variously by non-franchised buses, green minibuses, public light buses and taxis.

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Franchised Buses

The standard and capacity of franchised bus services continued to improve through effective planning and co-ordination. There are three franchised bus companies which together carried 3.4 million passenger boardings a day on a network of 353 regular routes.

The largest bus operator is the Kowloon Motor Bus Company (KMB), which ran 260 bus routes in Kowloon and the New Territories in addition to 22 cross-harbour routes operated jointly with the China Motor Bus Company (CMB) and one cross-harbour route of its own. KMB also operates 'Airbus' services to and from the airport, comprising two routes to Hong Kong Island and two within Kowloon.

   The KMB fleet at the end of the year comprised 2 887 registered vehicles, including 2 716 double-deckers and 171 single-deckers of various types ranging from small 24 seaters to full-size coaches for airport and express duties. The company further expanded its air-conditioned fleet, and by the end of the year this included 152 single-deckers and 22 double-deckers which were together deployed on 17 routes. During the year 18 new routes were introduced, but in an endeavour to save costs two routes were also withdrawn. In 1990, KMB carried 966 million passengers and operated 195.3 million vehicle-kilometres, compared with 974 million passengers and 201 million vehicle-kilometres in 1989. The Kowloon Motor Bus Company's franchise extends until August 31, 1997. Fares ranged from $1.20 to $12.

Bus services on Hong Kong Island are provided by the China Motor Bus Company, which operated 87 Island routes and, jointly with KMB, 22 cross-harbour routes. At the end of 1990, the CMB's fleet comprised 1 022 double-deckers and four single-deckers. These vehicles carried 281 million passengers and travelled 51.7 million vehicle-kilometres during the year compared with 299 million and 50 million respectively in 1989. The company continued to expand its fleet of three-axle double-deckers during the year, 37 were added and 29 more were under construction or on order. Some of the new double-deckers are air-conditioned, and the first of these entered service in July. The company's franchise extends until August 31, 1993. Fares ranged from $1.20 to $7.

   The New Lantao Bus Company (NLB) operates six regular and two recreational routes on Lantau Island. The NLB's fleet comprised 59 buses at the end of the year, of which 13 were double-deckers. During the year the company carried 8 647 passengers on an average weekday, but on Sundays and public holidays recreational travel raised average ridership to 20 432. A new depot at Mui Wo opens in 1990. Fares ranged from $1.50 to $17.

Minibuses

Hong Kong's minibuses are licensed to carry a maximum of 16 seated passengers. There were 6 904 minibuses in 1990. Of these, 4 350 were public light buses (PLB), and 2 554 private light buses. The PLBs are authorised to carry passengers at separate fares. The private light buses are only authorised to carry group passengers and the collection of separate fares is not permitted.

   The operation of PLBs is regulated by a passenger service licence. There are two types of PLBs. Those in green livery provide services according to official schedules. In 1990, there were 1 379 of them operating on 188 approved routes, each with fixed fares and timetables. They carried 683 000 passengers a day. Red PLBs operate without a schedule. They do not have fixed routes, timetables and fares. In 1990, there were about 2 971 red PLBs which carried 1 061 000 passengers daily.

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In line with government policy to convert more red PLBs to operate on scheduled routes, more new scheduled routes will be identified. In 1990, two green minibus selection exercises were conducted for competitive bidding by minibus operators.

Taxis

As in previous years, the operation of the taxi trade was reviewed in 1990. Reviews on the quota governing the maximum number of taxis that may be licensed in the urban area, the New Territories and Lantau were also carried out and they concluded that 150 additional new licences should be issued for urban taxis in 1990 whereas the numbers for New Territories and Lantau taxis would remain unchanged. At the end of 1990, there were 14 588 urban taxis, 2 442 New Territories taxis, and 40 Lantau taxis, carrying an average of 1 058 300, 179 400 and 1 100 daily passengers respectively. The urban taxis covered by the 150 new licences start operating in 1991.

In 1990, fare increases ranging from 18 to 22 per cent were approved on all three types of taxis. The urban taxi fare was a $8 flagfall and a $0.9 per metre jump; the New Territories taxi fare was a $7 flagfall and a $0.8 per metre jump; the Lantau taxi fare was a $7 flagfall and a $0.8 per metre jump. During the year, there was no change to the operating boundary of New Territories taxis, though a review was being conducted on the feasibility of allowing New Territories taxis to travel through the newly-opened Shing Mun Tunnel.

Non-franchised Bus Operators

      Residents' services were introduced in 1982 to meet the transport needs of relatively isolated residential areas without adequate access to franchised bus services. Residents' organisations may request a non-franchised bus operator to apply for such a service, which is then vetted and authorised under an operator's passenger service licence. Residents' services must operate in accordance with approved schedules of service, which also specify the routing, timetable, stopping places, and, in some cases, the fares. Most of these services operate during peak hours. A licence is normally valid for one year and may be renewed if there is a continuing need for the service.

      At the end of the year, there were 53 residents' services carrying 66 000 passenger trips a day. Vehicles used on these services ranged from small 18-seat coaches to double-deck buses. 26 residents' services were introduced during the year providing bus service to various residential centres in the territory including Tsing Yi Island, Tsuen Wan West, Tuen Mun, Ap Lei Chau and the southern part of Hong Kong Island.

      Apart from residents' services, non-franchised bus operators also serve the needs of factory employees, tourists and students on a group hire basis. At the end of 1990, the licensed fleet of non-franchised buses totalled 3 824 vehicles, of which 289 were double- deckers and mostly air-conditioned.

Ferries

     Ferry services are still an important means of crossing the harbour and essential for travelling to Hong Kong's outlying islands. Ferry travel is provided largely by two franchised operators-Star Ferry Company Limited (SF) and Hongkong and Yaumati Ferry Company Limited (HYF).

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SF operated 12 vessels across the harbour and, during the year, carried 38 million passengers on its three routes. Fares ranged from $1 to $1.50.

HYF owned 73 licensed vessels and operated 26 ferry routes, including passenger and vehicular services across the harbour, services to outlying islands and charter services. In 1990, the company carried 144 500 passengers and 7 500 vehicles daily. Cross-harbour passenger fares ranged from $2.80 to $3.80 and outlying islands fares from $4 to $18.

Patronage on HYF's cross-harbour services further declined as competition from other modes intensified with the opening of the Eastern Harbour Crossing. The long-term business prospects for HYF are now being examined.

Eight minor ferry services were operated by six licensed operators. These were supplemented by kaitos, or local village ferry services, which were licensed to serve remote coastal settlements. During the year, 118 kaitos were operated by 103 operators.

The Port

Hong Kong's most important natural resource after its people is its good deep-water harbour. The port of Hong Kong is one of the world's busiest and handles about 90 per cent of the territory's trade. Vessels of all descriptions ply the busy harbour daily. During 1990, there was one ocean-going ship arrival or departure every 13 minutes.

The Hong Kong Government has always taken the view that it generally should not undertake activities which can be done commercially, and often more efficiently, by the private sector. In many ways Hong Kong leads the world in this respect and the port is a good example. Many of the port facilities, such as the container terminals and dockyards, are privately owned and operated.

The port as a whole is administered by the Marine Department, which is responsible for all aspects of Hong Kong's maritime affairs. The principal function of the department in relation to the port is to ensure that conditions exist for ships to enter port, work their cargoes and leave as quickly and safely as possible.

   The Director of Marine is the Pilotage Authority and is advised by the Pilotage Advisory Committee. The authority has wide powers to regulate and control the pilotage service although the pilots themselves operate as a private company. Tugs are also privately owned and operated. Ships over 5000 gross registered tonnes are required to engage pilots to enter the port.

Immigration and quarantine facilities for vessels calling at Hong Kong are available round the clock at the Western Quarantine Anchorage. At the Eastern Quarantine Anchorage, these services are available between 6 am and 6 pm daily and, in the case of the quarantine service, on request through the Vessel Traffic Centre. These services, including advance clearance, may be applied for by radio.

The Marine Department provides and maintains 75 mooring buoys within the port for ships to work their cargo in the stream. These moorings are classified as 'A Class' and 'B Class' and are suitable for vessels up to 183 and 137 metres in length respectively. All these are typhoon moorings to which vessels may remain secured during tropical storms, so improving efficiency and reducing operational costs.

A variety of harbour craft play a significant role in the efficient running of the port. During the year over 2 100 lighters and 400 motorised cargo boats transported cargo to and from ocean-going ships moored at the anchorages and buoys in the harbour, and private or public cargo working areas ashore.

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In 1990, some 120 000 ocean-going vessels and river-trade vessels called at Hong Kong and loaded and discharged more than 89 million tonnes of cargo. This included 56 million tonnes of general goods from ocean-going vessels, of which 50 per cent was containerised cargo.

      The port of Hong Kong handled 5.04 million TEUS (20-foot equivalent units) of containerised cargo in 1990. Expansion at the Kwai Chung container port continued apace with construction of Terminal 7 being completed by the end of the year. Container Terminals 8 and 9, each with a capacity of 1.5 million TEUS, are now under planning, with the first berth scheduled to come into operation in 1993.

The present port has served Hong Kong's needs well. But it will not be able to cope, in its present form, if the growth in traffic volume experienced over the past decade continues as anticipated. In view of this, plans are being drawn up to develop five container terminals and four multi-purpose berths on the Tsing Chau Tsai peninsula on Lantau over the next decade.

      Consultation to reach consensus with the users and operators of port facilities has always been an important factor in Hong Kong's economic success. The private sector is fully represented on important committees which advise the government on port policy, port operations and land-related issues relevant to container terminals. The massive and diverse development of the port over the next decade will require a great deal of detailed consultation on all aspects of port planning and development, including land, marine and transport aspects. A Port Development Board was established in April 1990 for this purpose. Membership of the board is drawn from a cross-section of shipping, government, commercial and port user interests.

Shipping Services

      Use of the passenger ferry terminals managed by the Marine Department is also on the increase. In 1990, the China Ferry Terminal in Tsim Sha Tsui and the Macau Ferry Terminal in Central handled a total of 16.7 million passengers on routes to China and Macau of which 13.1 million used the Macau service and 3.6 million the China services. This throughput represented an increase of 8.7 per cent over 1989.

      The implementation of the computer/radar Vessel Traffic System has been completed. This now plays a vital role in monitoring the movement of shipping in the waters of Hong Kong with the aim of enhancing safety and expediting navigation. Participation in the system is voluntary at this early stage of implementation but new legislation being prepared will make participation mandatory through the introduction of specific requirements for reporting vessel movements.

The Marine Department's launches patrol the main harbour area and its approaches. They are in continuous radio contact with the Vessel Traffic Centre, thereby enabling them to respond to any emergency and fulfil the executive functions of the duty officer in the Centre. Well-equipped fleets of fire boats, tugs, oil-pollution control vessels and marine police launches are also readily available to respond to emergencies in the harbour.

The full fleet of about 300 powered vessels managed by the department's Government Fleet Division is a highly visible part of the port. In addition to harbour patrol launches, fire boats and police vessels, the government has launches used for immigration, port health and customs clearance of international shipping and for the survey of international

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shipping. The fleet also comprises lighters, a dredger, floating clinics, and launches for transporting government staff.

All government vessels are specially designed to meet their users' needs. The Government Fleet Division designs and procures new vessels, maintains the whole fleet, and mans and operates about 70 general purpose vessels.

   Bunkering facilities within the port are readily available to all vessels at commercial wharves and oil terminals, or from a large fleet of private bunkering barges. Fresh water can also be provided at alongside berths, or from a private fleet of fresh-water boats.

The port has extensive facilities for repairing, dry-docking and slipping all types of vessels, including oil rigs. Vessels of up to 150 000 deadweight tonnes can be accom- modated. A large number of small shipyards are available to undertake repairs to small vessels and build and maintain sophisticated patrol craft and pleasure vessels.

During the year, the government, including the Marine Department and the marine police, had to introduce a number of measures to combat the increasing number of smuggling incidents involving pleasure vessels exporting goods to China. As a result, the number of such incidents dropped but the situation is still under close observation.

By international agreement, the Marine Department is the Maritime Search and Rescue Co-ordinator for the area of the South China Sea north of latitude 10°N and west of longitude 120°E, excluding the immediate coastal waters of neighbouring states. The Maritime Rescue Co-ordination Centre is manned continuously and monitors the various emergency communications channels. A full search and rescue mission can be activated and run by fully-trained staff. Suitably equipped search and rescue vessels and aircraft are available and additional assistance can be obtained from other rescue co-ordination centres in the region. In March 1990, the Marine Department commissioned the first local user terminal for the locating of Emergency Position Indicator Radio Beacon (EPIRB) signals in the South-east Asia region.

Hong Kong is a prominent centre for shipowning, ship financing and ship management activities. Most local shipowners and connected businesses are represented by the Hong Kong Shipowners' Association, whose members control a significant percentage of the world's tonnage. At the end of 1990, the association members' fleet stood at 1 278 ocean- going vessels totalling 69.8 million deadweight tonnes or 38.5 million gross registered tonnage, of which 136 vessels representing 5.84 per cent of the gross registered tonnage were registered with the port of Hong Kong. The association is either a member of or works closely with all significant international maritime bodies to contribute and share in major developments concerning merchant shipping worldwide.

At present, ships registered in Hong Kong are British ships. The register had a total fleet of 6.3 million gross registered tons at the end of 1990. Statutory surveys of these vessels are undertaken worldwide by Marine Department surveyors or authorised classification societies for the issue of certificates in accordance with international conventions relating to maritime safety, pollution prevention and crew accommodation promulgated by the International Maritime Organisation and the International Labour Organisation. A similar service is provided to United Kingdom and foreign ships visiting Hong Kong.

During 1990, a total of 71 ships visiting the port of Hong Kong were subjected to inspection to enforce international conventions. This represented about 0.35 per cent of the foreign ocean-going ships (which excludes river-trade ships) estimated to have visited Hong Kong during the same period. Of these, 28 ships (or 39 per cent) required deficiencies to be

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     made good before the ship sailed from Hong Kong. Spot checks were also carried out by the Mercantile Marine Office to confirm compliance with the International Convention on Standards of Training Certification and Watchkeeping for Seafarers, 1978.

      A plan-approval and survey service is also provided for local shipping, including one of the world's largest fleets of high-technology fast passenger boats, (dynamically-supported craft comprising jetfoils, hydrofoils, side-wall hovercraft and catamarans). Vessels plying within the waters of Hong Kong need to be licensed under the Shipping and Port Control Ordinance and these too are inspected and issued with certificates. A major review of the procedures and requirements for the certification of local craft is under way with the intention of developing a rationalised approach to the safety and control of the many disparate types of craft operating in Hong Kong.

The Examination Section of the Marine Department conducts a wide range of examinations for persons requiring certificates of competency for service on vessels of all sizes and types operating in international and local waters. The section also monitors all aspects of training at approved establishments for the acquisition of various maritime qualifications recognised by the Hong Kong Government and required by international conventions.

A current major concern of the government and Hong Kong shipowners is the falling recruitment of local seafarers. This is being examined by representative sectors of the local shipping community in order to safeguard the future of the industry. The Marine Department and the Hong Kong Shipowners' Association have mounted concerted efforts to stimulate the recruitment of trainee officers and to enhance the image of seafaring careers through appropriate publicity.

      As an important centre for recruiting seafarers, the Marine Department's Seamen's Recruiting Office and the Mercantile Marine Office register and supervise the employment of about 4 500 active seafarers on board some 700 ships of many flags. Considerable attention has been given to provide more comprehensive training for Hong Kong seafarers and, in this respect, the Seamen's Training Centre at Tai Lam Chung in the New Territories provides training courses for new entrants and in-service training for seaman to comply with the requirements of the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, 1978.

(Details of International Movements of Vessels, Passengers and Cargo are given at Appendix 37.)

Hong Kong Shipping Register

Ships registered in Hong Kong follow similar standards of construction, safety and manning to those registered in the United Kingdom. This has hitherto been accomplished by the extension of United Kingdom legislation to Hong Kong, and reliance on the United Kingdom Department of Transport to determine shipping policy and formulate legislation to give effect to new international conventions. However, this cannot continue beyond 1997, and the Sino-British Joint Declaration provides for the future Hong Kong Special Administrative Region to maintain a shipping register under its own legislation.

      Detailed arrangements for the establishment of an autonomous Hong Kong register in advance of 1997 were developed by a steering group comprising government and non-government representatives and were subsequently approved by the Governor on the advice of the Executive Council in June 1990. These arrangements formed the basis of the

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legislation to establish the new Hong Kong Shipping Register, which came into operation on December 3, 1990. The Merchant Shipping (Registration) Ordinance was enacted to establish the register, and a number of amendments were made to the Merchant Shipping Ordinance and the Merchant Shipping (Safety) Ordinance to give effect to the steering group's recommendations. In addition, a major step is being taken in establishing in- dependent legislation by replacing 31 sets of United Kingdom merchant shipping safety regulations with local regulations.

The new Hong Kong Shipping Register reflects the government's commitment to the highest international standards of maritime safety without overlooking commercial realities. Its supporting legislation embodies internationally-based standards for vessel construction, equipment and manning and is consistent with Hong Kong's obligations under International Maritime Organisation and International Labour Organisation con- ventions, including those on safety of life at sea, training and certification of crew, and protection of the marine environment.

Civil Aviation

Following the decision in October 1989 to build a replacement international airport at Chek Lap Kok, the government has embarked on detailed planning and design studies of the airport itself, and other projects relating to the provision of access infrastructure and support community. A Provisional Airport Authority, as a forerunner to a fully autono- mous Airport Authority, was established in April this year to assume responsibility for the airport project.

A sixteen-month consultancy was commissioned by the Provisional Airport Authority and commenced in July to carry out a combined Master Planning, Civil Engineering Design, and Environmental Impact Assessment Study.

The consultancy will recommend the size and layout of the airport and prepare a schematic design for the passenger terminal complex. It will also determine the optimum civil engineering design for the formation of the airport site, and recommend mitigation measures for any adverse environmental impact arising from the construction and subsequent operation of the new airport.

   The target opening date of the airport is early 1997. This is a very tight timeframe and works for the new airport and its associated access infrastructure have been programmed accordingly.

   In the meantime, the government has embarked on a series of improvement projects at the existing Kai Tak Airport in order to ensure it can cater for increased passenger and cargo throughput until the new airport is ready.

Action is being taken to increase aircraft parking capacity at Kai Tak from the present 48 parking bays to 68. This involves extension of the aircraft parking apron onto the Kowloon Bay Reclamation and land to the east of the airport. New parking bays will be completed in three stages in late-1992, mid-1993 and end-1993.

To improve the taxiway system serving the existing cargo and long-term aprons, work commenced in November to construct a taxiway bridge across the nullah. It is scheduled for completion in January 1992.

Another major improvement programme, which commenced in April, involves renovation of the older part of the passenger terminal. The programme, which involves the refurbishment of building finishes, the air-conditioning system, the check-in islands and

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First page of colour section: Marinas, yacht basins and sailing facilities around Hong Kong's coastline bring the pleasures of boats and boating to more and more enthusiasts.

Far Left: Computers at the Vessel Traffic Control Centre help to keep a round-the-clock vigil on shipping in the harbour.

Near Left: The familiar Red Duster is joined by Hong Kong's Blue Ensign with the advent of the Hong Kong Shipping Register.

Below: Star Ferries criss-crossing Victoria Harbour provide a backdrop to busy container loading at Kowloon Wharf.

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the departure baggage system, will be carried out in five phases. Overall completion is scheduled for mid-1992.

Work has started on the construction of an additional two-and-a-half floors to the existing multi-storey carpark and three floors to the office block. Both projects will be completed in mid-1991.

      To cope with the continued growth in cargo throughput, the construction of a second air cargo terminal is now underway. The new facility, which will be operated by Hong Kong Air Cargo Terminals Limited (HACTL), will be completed in late 1991, and will increase the air cargo handling capacity at the airport from 720 000 to 1 440 000 tonnes a year.

      Improvements are also being made to the navigational aids and air traffic control equipment at the airport to ensure they remain fully up-to-date and able to cope with increasing demands over the next few years. New facilities are expected to be brought into operation in phases from March 1992 to December 1994.

      Other new equipment acquired during the year includes a 'Disabled Aircraft Recovery System' which significantly enhanced the ability of the Civil Aviation Department to speedily remove any disabled aircraft on the airfield, and a replacement catamaran which boosted the airport's fire fighting and rescue capability.

      To cope with an increase in interline traffic, especially Taiwanese passengers transferring from Hong Kong to various destinations in China, a second transfer desk facility was provided at the arrival pier on the airside of the passenger terminal. The capacity of the interline baggage handling facility was also improved.

      The year saw the resumption of strong growth both in passenger and cargo throughput at the airport, following a downturn in the second half of 1989 due to events in China. A total of 18.7 million passengers passed through the terminal; an increase of 15 per cent over the total of 16.2 million in the previous year. Some 800 000 tonnes of air cargo, valued $259,864 million, were handled, compared with 730 000 tonnes valued at $234,196 million in 1989. Viewed against Hong Kong's total trade in imports, exports and re-exports, imports by air made up about 20 per cent, exports by air about 30 per cent and re-exports by air about 16 per cent in value terms. The USA remained the major market for exports and re-exports by air, accounting for 38 per cent and 20 per cent respectively.

(Details of International Movements of Aircraft, Passengers and Cargo are given at Appendix 37.)

An increase of 12 per cent in aircraft movements was recorded, bringing the annual total to 105 800. About 78 per cent of the aircraft calling at Hong Kong were wide- bodied types.

      Hong Kong has three airlines. The largest, Cathay Pacific Airways (CPA) commenced scheduled services to Los Angeles in July and Sapporo in October. To cope with the increasing scale of its operations, CPA acquired one L1011, three B747-400s and one B747-200 freighter; by the end of 1990, its fleet comprised 18 L1011s, eight B747-200s, six B747-300s, five B747-400s and three B747-200 freighters, a total of 40 aircraft. CPA became a member of the International Air Transport Association in July.

Hong Kong Dragon Airlines (Dragonair) now operates scheduled services between Hong Kong and China, as well as scheduled services to Phuket, Utapao, Kagoshima, Dhaka and Kathmandu and non-scheduled passenger services to a number of other cities in Asia, mostly in China. During the year, Dragonair acquired another B737, bringing its fleet to five of the type.

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Air Hong Kong (AHK) continued to operate scheduled all-cargo services to Manchester and non-scheduled cargo services between Hong Kong and a number of points, including Bangkok, Singapore, Kuala Lumpur, Melbourne and Sydney. The airline operates two B707 freighter aircraft.

Last year there were significant developments in the air services between Hong Kong and China. Following a re-organisation of the Civil Aviation Administration of China (CAAC), its operations to Hong Kong are now shared by Air China (serving Beijing), China Eastern Airlines and the Guangzhou Regional Administration of CAAC. Arrange- ments for the expansion of services between Hong Kong and China were agreed. Chinese airlines introduced scheduled services on the Dalian-Hong Kong and Xiamen-Hong Kong routes. Having operated non-scheduled services to China for more than four years, Dragonair commenced scheduled services to Dalian, Hangzhou, Kunming and Xiamen and took over from CPA the operation of scheduled services to Beijing and Shanghai.

Other major developments during the year included the introduction by two American airlines, United Parcel Service and Evergreen International Airlines, of scheduled all-cargo services between the United States and Hong Kong in January and April respectively and by Asiana Airlines of scheduled passenger services between Seoul and Hong Kong in December.

With these changes, the number of scheduled airlines serving Hong Kong has increased to 43. During 1990, these airlines operated about 870 direct round trip services weekly between Hong Kong and some 80 other cities. In addition to the scheduled services, an average of 240 non-scheduled flights were operated each week.

In accordance with the relevant provisions of the Sino-British Joint Declaration, the process of separating Hong Kong's air service agreements from those of the United Kingdom is continuing. The fifth Hong Kong Air Service Agreement, which was concluded by Hong Kong with the Government of France, was signed in Hong Kong on August 20, 1990.

In 1990, the Air Transport Licensing Authority granted a total of five licences to Hong Kong airlines: one to Cathay Pacific Airways, three to Dragonair and one to Air Hong Kong. Taken together with those granted in previous years, this meant that, at December 31, Cathay Pacific Airways held licences to operate scheduled services to 60 cities in 31 countries, Dragonair was licensed to serve 52 cities in 11 countries, and Air Hong Kong was licensed to operate scheduled all-cargo services to 17 cities in 12 countries.

  There were also major developments in respect of helicopter services. On November 27, 1990 the first commercial service to Macau was operated from the helipad at the Macau Ferry Terminal by East Asia Airlines.

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THE Hong Kong Government gives high priority to the fight against crime and the maintenance of public order. The Fight Crime Committee, chaired by the Chief Secretary, provides valuable advice and puts forward recommendations on areas of public concern and on measures to improve the maintenance of law and order.

The Royal Hong Kong Police Force has operational responsibility for crime prevention and detection, the maintenance of public order and, in December 1990, began to resume responsibility for the detection of illegal immigrants on the border.

The Immigration Department, through its control of the entry and exit points and activities directed at discovering illegal immigrants, contributes significantly to the main- tenance of law and order.

In anti-narcotics operations the police maintain close liaison with the Customs and Excise Department. The latter also maintains links with overseas customs authorities, and plays a major part in combatting smuggling and enforcing the Copyright Ordinance.

      The Independent Commission Against Corruption enforces the Prevention of Bribery Ordinance and promotes greater community awareness of the evils of corruption.

      The Correctional Services Department administers the penal system and runs correc- tional and rehabilitative programmes. The department manages closed centres and deten- tion centres for Vietnamese refugees and boat people. One closed centre for Vietnamese boat people is now run by a non-government agency.

The Fire Services Department gives advice on fire protection and provides fire-fighting and rescue services. It also operates the major ambulance service.

Fight Crime Committee

In 1990, the Fight Crime Committee continued to provide advice on measures to combat crime. Specific subjects considered included measures to counter organised crime and triads, crime involving juvenile and young offenders, statutory post-release supervision for adult offenders, regulation of the security industry and efforts to call upon public co-operation by reporting crime, preventing crime and proving crime.

The committee continued to act on the recommendations contained in the discussion document Options for Changes in the Law and in the Administration of the Law to Counter the Triad Problem. The Triad Renunciation Scheme was launched on December 8, 1988, and from its inception up to the end of 1990, a total of 951 applications were received, of which 544 genuine triad members have successfully renounced their triad membership. The

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introduction of a statutory post-release supervision scheme for adult offenders is being examined to improve the care and supervision of certain types of ex-prisoners. These measures aim to rehabilitate ex-offenders, reduce the threat posed by some to public safety, reduce the chances of their committing further crimes and turn them into useful members of society.

Amendments to the Gambling Ordinance were enacted to provide heavier penalties for people running illegal gambling operations. Up to the end of 1990, about 340 persons had been successfully prosecuted. Amendments to the Crimes Ordinance were enacted to provide for legislative control on nuisances associated with prostitution. Organised crime legislation is being prepared to combat triads and other organised crime syndicates more effectively. The bill is to be published as a White Bill which, together with a layman's paper, will form the basis for a public consultation exercise. These measures aim to hit triads and gangs through effective legislation against their senior members and the operations through which they earn income.

The Corporal Punishment Ordinance was repealed to abolish judicial corporal punishment in Hong Kong and legislative amendments were also made to abolish corporal punishment in detention centres, training centres and reformatory schools.

   The Fight Crime Committee was very concerned about the rise in crime involving juvenile and young offenders and considered ways to reduce the involvement of young people in crime. An extensive publicity programme was mounted to promote better parental care and responsibility. The Young Offenders Assessment Panel continued to provide advice to the courts on the correctional programmes most likely to reform juveniles and young people. Two special Outward Bound courses were also arranged for inmates of Correctional Services Department and Social Welfare Department institutions.

The development of the Integrated Law and Order Statistical System is nearing completion. By integrating information on offences and offenders kept by the Police Force, the Judiciary, the Correctional Services and Social Welfare Departments, the system will provide comprehensive data on the criminal justice system and on recidivism. Data collection, input and processing started early in 1989 and good progress has been made. Statistics on reported crimes, arrests, court dispositions and offenders in the custody of the Social Welfare Department are now available. Data on offenders in various correctional programmes of the Correctional Services Department and recidivism statistics will be available from mid-1991.

With advice from the Security Association, the drafting of new legislation to replace the Watchman Ordinance and to provide a framework for the regulation of the security industry is continuing.

The District Fight Crime Committees continued to play an important role in the fight against crime. They monitored the crime situation in their districts and helped foster both community awareness of the need to prevent crime and community participation in combatting crime. A large number of fight crime activities were organised to support government's publicity campaigns, particularly in promoting public co-operation in crime fighting and in encouraging better parental care for young people.

The District Fight Crime Committee chairmen attended a special Fight Crime Committee meeting in October, arranged in response to public concern about the crime situation at that time. Afterwards, key members of the Fight Crime Committee briefed the media, and through them, the public on the action being taken in the areas of legislation,

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      operations and publicity to combat crime. The joint Fight Crime Committee/District Fight Crime Committees Conference held in November gave the 19 district committees and the central committee a further opportunity to exchange views on crime-related matters.

Police Force

In 1990, a great deal of the time and energy of the Royal Hong Kong Police Force was taken up by an upsurge in the use of firearms on the streets, a substantial increase in the influx of illegal immigrants arriving in the territory and smuggling at sea. There was also cause for concern about the degree of violence used by criminal elements and the apparent ease at which firearms were obtained.

      During the year there were occasions when robbers and police exchanged gunfire. Tragically, an innocent bystander was killed in an incident on Hong Kong Island and an assistant immigration officer was killed while chasing robbers in another case in Kowloon. In the former case, one man was charged with illegal possession of arms and ammunition; and in an unprecedented move, the Guangdong authorities arrested two other suspects following liaison between Interpol China and detectives from the Hong Kong Regional Crime Unit.

      One of the most vicious crimes of the year was the fire bombing of a Kowloon mahjong association which left six people dead and 23 injured. Triad involvement was suspected in this cruel and calculated attack.

       Open challenge to law and order was demonstrated by some triad factions during the sale of flats by some property developers in Kowloon and the New Territories. Prompt police action led to the arrest of 156 persons, 131 of whom were charged.

The poor economic situation in southern China, coupled with the prospect of em- ployment in Hong Kong, especially in the construction industry which was suffering an acute labour shortage, brought about an increase in the number of illegal immigrants during the first three quarters of the year. Announcements by the government in September that new legal measures would be introduced with the intention of curbing the employment of illegal immigrants appeared to have stemmed the tide as fewer illegal immigrants were reported since then.

       Although land crossing was the more favoured means of entry, there was a significant rise in the number of sea-crossers. The Marine Police have revealed a new method of concealment in which human cargo was often sealed in compartments within the hulls of vessels.

       The increased smuggling of electrical products, cigarettes and luxury cars from Hong Kong to the mainland also necessitated counter-measures by the Marine Police, in liaison with the Customs and Excise Department. Certain legislative controls were brought in to help eradicate the problem.

The financial rewards of smuggling are high. The smugglers are well organised and equipped; and ruthless as well. The latter point was only too poignantly illustrated by the deliberate ramming of a police boat by a smuggler's speedboat in June which killed a young police constable.

       Although there were fewer Vietnamese boat people (VBP) coming to Hong Kong in 1990, the commitment of police resources remained considerable. Marine Police continued to provide an effective screen at sea, and, together with officers based in the land regions, were called upon to escort VBP movements and to respond to incidents in the various

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detention centres. Police are still involved in either manning or guarding three centres requiring a duty deployment of about 550 officers.

Serious disturbances among VBP occurred at the Whitehead Detention Centre. In February, police had to resort to smoke shells and grenades to quell disorder, and in May six companies of police officers, together with ancillary units were deployed, culminating in the seizure of over 2 500 assorted weapons. Subsequent weekly searches have been made and appear to have had the desired effect.

The force continued to be heavily involved in the policing of public meetings, processions and demonstrations throughout the year particularly during May and June. A candlelight rally held in Victoria Park on June 4 to commemorate the events in Beijing the previous year was attended by 100 000 people. The event went off peacefully.

   Recruitment and wastage continued to be major problems throughout the year at a time when the force was expanding to meet its growing responsibilities, particularly the resumption of border duties. Recruitment of junior officers improved considerably in the last quarter, apparantly due to the pay increase.

In November, the force was honoured by a visit by Her Royal Highness Princess Alexandra, in her capacity as Honorary Commandant General. One of her principal engagements was officiating at the opening of Arsenal House - Phase I of the new Police Headquarters complex.

Crime

The overall crime rate increased by 7.9 per cent in 1990 with 88 300 crimes reported to the police compared with 81 808 the previous year. The total number of crimes per popula- tion of 100 000 was 1 522, a rise of 7.2 per cent over 1989. Violent crime, a category which includes murder, wounding, rape, indecent assault, kidnap, blackmail, criminal intimidation, robbery and arson also showed an increase of 8.5 per cent with 18 820 cases against 17 350 in 1989. The upsurge in violent crime was mainly attributed to a rise in the number of armed robberies (+1 577 cases).

The offences of burglary, theft and handling stolen goods increased by 10.2 per cent. However, the number of motor vehicles stolen showed a significant increase with 6 363 cases recorded, a rise of 44.6 per cent over 1989.

A total of 44 013 persons were arrested for crime in 1990, of whom 6 583 were juvenile offenders (aged below 16) and 8 306 were young person offenders (aged between 16 and 20). The corresponding figures in 1989 were 7 437 and 8 283, respectively.

Organised and Serious Crime

There were 78 incidents involving the use of genuine firearms in 1990, representing an increase of 38 compared to the previous year. Cases involving pistol-like objects numbered 364; well up on the previous annual total of 238.

Robberies and attempted robberies against goldsmiths, watch-shops and jewellers increased and 100 cases were recorded, accounting for a loss of property of $168 million.

Concerted action against organised and serious crime gangs continued. Police operations resulted in the arrest of 2 247 persons for robbery and the seizure of 94 firearms, along with the recovery of stolen property valued at $47 million.

Crime statistics are at Appendix 40.

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Commercial Crime

During the year, the Commercial Crime Bureau maintained emphasis on the investigation of fraud within the financial and trading sectors. Documentary fraud and dishonest cheque cases remained a prominent feature, resulting in several successful prosecutions.

The Counterfeit and Forgery Division again met with considerable success in the investigation and prosecution of a number of important cases, in particular forged Portuguese and People's Republic of China passports, counterfeit travellers cheques and US$100 notes, amounting to a face value of US$4 million.

       There was a marked increase in extraditions in 1990, particularly from Australia, New Zealand, the United Kingdom and the United States. Close liaison continued to be maintained with a number of overseas law enforcement agencies.

In the light of the considerable number of complaints received concerning dubious foreign exchange companies, various aspects of relevant legislation were examined with a view to improving regulatory controls.

Narcotics

The Golden Triangle's opium crop was in abundance for the 10th year running and there was consequently an overproduction of heroin. Despite very significant seizures during the year, prices remained low.

No. 4 heroin virtually took over the Hong Kong market. Some No. 3 heroin was still being produced but with a purity of below three per cent. The extremely low purity led to most addicts turning to No. 4 heroin as the main drug of abuse.

Locally, major successes against highly-organised trafficking groups were achieved during the year. July saw the culmination of a nine-month-long investigation by the Narcotics Bureau into a syndicate involved in the importation of cannabis from Thailand, which resulted in Hong Kong's largest-ever seizure of cannabis totalling 980 kilograms.

Several large and sophisticated international syndicates were also neutralised and significant quantities of heroin seized following enhanced co-operation with overseas law enforcement agencies. In August, a Hong Kong resident, involved in smuggling heroin into North America, was sentenced by the High Court to 32 years imprisonment, the longest sentence ever handed down in Hong Kong.

In September 1989, Hong Kong enacted the Drug Trafficking (Recovery of Proceeds) Ordinance 1989. The legislation, which provides for the freezing and confiscating of assets of convicted drug traffickers, took effect in June. Altogether some $240 million worth of assets were restrained under the new legislation during 1990.

Some 265 kilograms of opiate drugs, which comprised opium, No. 3 and No. 4 heroin, were seized compared with 1 154 kilograms in 1989. There were 7 600 arrests for narcotics offences compared to 9 134 the previous year.

Crime Prevention

The Crime Prevention Bureau continued to offer a wide range of services and advice to the community. The field of juvenile-related crime, particularly shop-theft, remained a priority with emphasis also being given to domestic security and vehicle crime.

Juvenile audiences continued to be targetted for 'Robotcop' (a computerised robot) presentations, with over 100 displays being held in schools, shopping centres, youth groups and police station open days throughout the year.

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The continuation of a phased police response to intruder alarm activations has resulted in improved standards within the security industry and considerable savings in police man-hours. Officers of the bureau's Intruder Alarm Inspection Unit supervised this scheme and additionally attended 60 scenes of crime involving the criminal by-pass of alarm installations. In October, legislation was introduced to reduce noise pollution caused by the activation of audible alarm systems by making automatic cut-off units obligatory.

The bureau continues to promote public awareness of crime prevention measures through publicity campaigns, seminars, exhibitions and inspection of premises at risk. To this end, close liaison is maintained with both the Police Public Relations Branch and the Information Services Department, in addition to the District Fight Crime Committees and a wide range of private organisations which share the bureau's commitment to a reduction in preventable crime.

Crime Information

The Police Operational Nominal Index System, which is maintained and operated by the Criminal Records Bureau, provided back-up to police front-line formations and handled some 8 000 enquiries each day. The system is to be replaced by an enhanced system in February 1991.

The Identification Bureau continued to provide important services in relation to fingerprint technology and forensic photography. Over 180 000 records from scenes of crime have been converted into a computer system planned to be fully operational in 1991.

By the end of 1990, the Main Fingerprint Collection consists of 710 635 sets of fingerprints of convicted persons. During the year, 95 160 arrested persons' fingerprints were processed and 33 154 persons identified as having previous convictions.

The Scenes of Crime Section is responsible for the identification of persons in connection with crimes through finger, palm and sole print traces found at scenes of crime. In 1990, the section attended 28 160 crime scenes, resulting in 606 persons being identified as having connection with 684 cases.

The Certificate of No Criminal Conviction Section processed 69 275 applications, and the Photographic Section produced 121 290 monochrome photographs and 852 636 colour prints and slides.

Ballistics and Firearms Identification

Officers of the Ballistics and Firearms Identification Bureau handled 376 cases compared with 296 in 1989.

The year was notable for the increasing use of high-powered military pistols, of which 55 were seized amongst a total seizure of 72 commercially-manufactured firearms. During the same period, 22 home-made firearms were also seized. In 1989, 93 commercially- manufactured and 20 home-made firearms were seized.

Tests and evaluation of a range of bullet-resistant vests were also conducted and satisfactorily concluded with a view to upgrading the existing bullet-stopping capability.

Interpol

The International Criminal Police Organisation, more commonly known as Interpol, was established in 1914 and has police forces from 150 countries as members. Hong Kong Interpol joined as a sub-bureau of the United Kingdom in September 1960.

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      The Interpol Bureau of the Royal Hong Kong Police Force works closely with police forces overseas as well as with various government departments and with consulates and commissions in Hong Kong. The bureau acts as a co-ordination centre for criminal information and investigation between Hong Kong and the rest of the world, and with the assistance of relevant police formations deals with enquiries on behalf of other member countries. Extradition and deportation cases also come under the charter of the bureau.

       Two officers from the force are seconded to the Interpol General Secretariat in Lyons, France and close contact is maintained with them.

Public Order

There were no serious outbreaks of disorder in 1990 and compared with 1989, fewer public demonstrations with smaller numbers of participants on most occasions.

       Officers of the Police Tactical Unit (PTU) continued to escort and monitor Vietnamese boat people and to search their camps for offensive weapons when required.

       PTU training was expanded by the addition of Field Patrol Detachment (FPD) duties, the first company taking up border duties in December. Routine internal security training produced a total of 2 210 officers trained in all aspects controlling public disorder.

A new structure for the police response to serious internal security problems was established in April 1990 with the auxiliary police taking over responsibility for some functions from the military.

Apart from the dedicated PTU and FPD companies, the police force, through training at PTU and within districts, also maintained a high level of readiness for all internal security situations.

Illegal Immigration from China

The continuing downturn in economic activity in southern China and rumours of amnesties fuelled by the unscrupulous operators of illegal immigration rackets brought about a higher level of illegal immigration in the first three quarters 1990. Consequently, arrests of illegal immigrants were much higher than in recent years, averaging 76 a day.

Police counter-measures were specifically targetted at those who offer employment to illegal immigrants and regular large-scale operations were mounted. A total of 27 826 illegal immigrants were apprehended, one of the highest in recent years. Legislative amendments introduced late in the year to deter the employment of illegal immigrants, coupled with continuing pressure through stop-and-search operations, should lead to a diminution of the problem.

Vietnamese Influx

Since June 16, 1988, all Vietnamese boat people (VBP) arriving in Hong Kong have been held in detention centres pending a screening process to determine their status in accordance with the 1951 UN Convention. When VBP reach Hong Kong territorial waters they are advised of this policy and informed that they are free to leave. However, if they elect to stay they are warned that if classified as economic migrants they will be detained pending repatriation to Vietnam.

Vietnamese boat people continued to arrive in Hong Kong throughout the year although their numbers decreased substantially to 6 599 as against 33 969 in 1989.

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Bomb Disposal

The Explosive Ordnance Disposal (EOD) Unit has expanded. It now comprises the Senior Force Bomb Disposal Officer, two Force Bomb Disposal Officers and two Assistant Force Bomb Disposal Officers who are currently under training.

   During 1990, the EOD unit attended 147 incidents ranging from home-made devices to aircraft bombs of World War II vintage. The unit seized 212 kilograms of explosives illegally brought into Hong Kong, and in addition, received 93 reports concerning various suspicious objects which were investigated either by the unit or general duties officers.

Marine Police

Increased smuggling activity led to tightened control on the use of powerful, high-speed speedboats, favoured by the smugglers. Various licensing conditions were imposed in- cluding restricting the number and power of engines that can be fitted and limiting the number of electrical goods permitted on board. The export of cigarettes by vessels under 250 tons has also been prohibited. However, these measures and intensive police operations both at sea and ashore have not been able to eradicate the problem and further legislative controls are being sought.

   The demand on resources for search and rescue operations continued to grow with a total of 755 incidents compared to 585 in 1989. These varied from local incidents involving a single launch to the deployment of the whole fleet and operating in conditions which varied between fair and hazardous.

   Steady progress was achieved with the building programme with the completion of two new bases at Tai Lam Chung and Sai Wan Ho for West Division and Harbour Division respectively. Work continues on two further bases at Tui Min Hoi (Sai Kung) and Mei Sha (Sha Tin) for East and North Divisions respectively.

Traffic

The number of licensed vehicles and the resulting traffic density, in terms of vehicles per kilometre of road, increased over the previous year by 7.2 per cent and 6.8 per cent respectively, highlighting yet again the need for positive traffic control and increased effort in road safety education.

   Road safety campaigns mounted throughout the year emphasised the need to improve the road sense of pedestrians, especially those over 60 years of age, and inexperienced drivers with less than two years' experience.

   The Road Safety Exhibition Centre at Police Traffic Headquarters, Sau Mau Ping Road Safety Town, Sha Tin Road Safety Park and the newly-opened Pak Fuk Road Safety Town were all regularly visited by schools and other organisations.

   The sponsored 'Constable Care' Road Safety Programme, aimed at children between eight and 12 years of age, continued into its third cycle in September with new, attractive and interesting activities which are aimed to enhance road safety awareness among the target age group.

   During 1990, there were 15 092 traffic accidents causing personal injury, a decrease of 5.1 per cent against the previous year. Provisional figures show that there were 316 fatalities and 19 786 casualties.

Traffic accident statistics are at Appendix 39.

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Community Relations

Rising juvenile crime was a major subject in the 1990-91 Fight Crime Campaign.

      Particular emphasis was placed on the consequences of a criminal record which could affect the future of a young person. At the same time, the role of parents was highlighted, the message being that they share some of the responsibility. To convey these points, television and radio Announcements in the Public Interest (APIs) were used.

      As part of the juvenile and youth crime publicity campaign, a Fight Crime comic booklet aiming at youngsters aged 10 to 14 years was published to provide healthy reading material for the target group.

      For the 14 to 20 age group, a 'Help the Police Fight Youth Crime' competition was organised. Five winners were awarded a 19-day visit to the United Kingdom during which they were granted an audience with Her Royal Highness the Princess Alexandra who in her capacity as Honorary Commandant General of the Royal Hong Kong Police Force expresses a personal interest in police youth activities.

Another theme for the Fight Crime Campaign was home security, with special attention paid to burglary prevention. Statistics on home burglary cases indicate that a significant percentage of them occurred as a result of carelessness on the part of the occupants. Publicity was therefore pitched to stress the need to lock up properly before leaving home.

      To further spread these messages to the general public, the support of the District Fight Crime Committee was solicited. With government subsidies, districts were encouraged to organise local events on topics of parental care and home security. These provided a strong base of community support for the Fight Crime Campaign.

      Members of the public were also encouraged to help in the Fight Crime Campaign in the form of the Good Citizen Award and Good Citizen of The Year Award Schemes. The two schemes, which are financially supported by business organisations, give recognition to citizens who have made an outstanding contribution towards fighting against crime either by assisting in the arrest of a criminal or in the prevention of a crime. In 1990, 81 people received the Good Citizen Award.

The Junior Police Call (JPC), established in 1974, continued to prosper and is now the largest youth organisation in Hong Kong. Up to the present, over half a million young people have participated in the scheme which means that one in every seven people in Hong Kong is currently or has been a member.

      JPC provides its members with healthy recreational pursuits as well as involving them in a wide variety of community services. To commemorate the outstanding performance of JPC members in community service, an award scheme, sponsored by a leading bank, is held annually to select the best member, leader, council and school club.

      The Mini-Olympics, an annual JPC sports festival, encourages healthy competition in swimming, basketball, football, table-tennis and athletics. The ninth JPC Summer Youth Camp was again held at the YMCA Youth Village at Wu Kai Sha in August with 700 residential campers and 800 day campers taking part. The camp formed part of the 1990 Summer Youth Programme and the theme was Fight Youth Crime.

      Four regular television programmes jointly produced by the Police Public Relations Branch and Radio Television Hong Kong continued to enjoy good audience ratings: Crime Watch, a monthly programme presented on the Chinese channels of both stations, features reconstructions of unsolved crimes and seeks assistance from the public through the use of telephone hotlines; Police 15, a 15-minute programme and Police Report, a 5-minute

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programme, are aired respectively on the Chinese and English channels every week. Both programmes offer simple crime prevention advice as well as appealing for witnesses of crime to come forward. The fourth programme, a 15-minute weekly programme, is a youth slot primarily for the benefit of JPC members but at the same time serving as an informative youth programme.

The Voice of JPC, a 30-minute Chinese weekly radio programme, also disseminates messages relating to fighting crime and civic education.

Training

Recruit inspectors continue to undergo 36 weeks of training while the recruit constables initial course lasts 24 weeks. These courses cover criminal law, social studies, police and court procedures, drill and musketry, first-aid, physical training, life-saving skills, self- defence, and, for overseas inspectors, an eight-week course in colloquial Cantonese.

Recruit traffic wardens undergo a six-week course covering traffic legislation and procedures. There is also a wide range of specialist and continuation training courses for uniform branch officers.

The Detective Training School holds 12-week Standard Criminal Investigation Courses (SCIC) for inspectors, NCOs and constables. In 1990, these courses were also attended by a small number of officers from the Immigration Department, the Customs and Excise Department and, for the second year, an officer from the Seychelles Police Force. In all, some 500 officers of all ranks have successfully completed the courses.

All officers undergoing SCIC training receive specialist instruction in disaster victim identification techniques and while on the course form the Disaster Victim Identification Unit (DVIU) which would be deployed in the event of a major civil disaster.

Two-week continuation training courses also continued throughout the year, catering for officers of detective constable to detective inspector rank. These courses are designed to update and refresh officers who have served for four years in their respective ranks in a crime formation. A number of ad hoc courses were also held to meet the specific demands of other officers, from both Crime Wing and uniform branch.

Junior, intermediate and senior command courses continued to provide in-service training for inspectors, chief inspectors and superintendents to enhance their management and decision-making skills, with emphasis on individual participation and self-help.

A wide variety of specialist courses ranging from marine fire fighting to traffic re- construction, catering and financial investigation techniques, were organised with the help of outside education establishments. In addition a number of officers were reimbursed for attending individual courses that enhanced their job-related skills.

The Civil Service Training Centre continued to run English, Cantonese, Putonghua and Vietnamese language courses for the force.

Under the police scholarship scheme, six inspectorate officers were sent on full-time first degree courses at the University of Hong Kong, the Chinese University and the City Polytechnic. Officers also attended management and specialist technical courses in the United Kingdom, Canada, the United States, New Zealand and Malaysia.

Inspection Services Wing

The Inspection Services Wing carries out regular inspections at various formations to ensure the effective and efficient operation of the force. The conventional form of

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inspections was overhauled in 1989 and a new style of inspection known as 'Resource Management Study' has been introduced to ensure that the best use is made of all resources available. Ten Management Resources Studies have so far been commissioned.

Complaints Against Police

The Complaints Against Police Office (CAPO) investigates all complaints from the public concerning the conduct and behaviour of members of the police force - including civilian staff and auxiliary police officers. The investigation of all complaints against police is monitored by the Police Complaints Committee.

      The decrease in complaints recorded in 1987 and 1988 reversed slightly in 1989 when 3 221 complaints were received and the upward trend was maintained in 1990 when 3 437 complaints were lodged. This represents an increase of 6.7 per cent from the complaints received in 1989.

      A total of 52 police officers were disciplined and six charged with offences resulting from complaints. The rate of substantiated complaints was four per cent against one per cent classified as false. Complaints of assault, neglect of duty and conduct/manner made up the majority of the complaints, representing 78.6 per cent of the total.

      The system of informal resolution with limited application was put on trial and evaluated during the year. Criteria for application need to be extended for the system to work for the force as a whole.

      In addition to investigating complaints, CAPO has a preventive role and is responsible for educating the force on complaint trends and how they can be avoided. Throughout the year, lectures and seminars on complaint prevention continued to be organised for junior police officers with the aim of improving public relations and reducing situations of conflict.

Planning and Development

Five major projects were completed during the year: Phase I of the new Police Headquarters designed to accommodate specialist units in a six-storey building; Phases I and II of the new Police Tactical Unit Headquarters at Fanling; expansion of the Tai Lam Chung Marine West Division Base; Hung Hom Divisional Police Station, and Tai Hing Divisional Police Station at Tuen Mun.

      Major construction work commenced on Tui Min Hoi Marine East Division Base at Sai Kung and continued on five other projects: Ma On Shan District Headquarters and Divisional Police Station; Tsuen Wan District Headquarters and Tsuen Wan West Divisional Police Station; Tseung Kwan O District Headquarters and Divisional Police Station; Waterfront Divisional Police Station, and Tin Shui Wai Divisional Police Station.

      Following the publication of the Port and Airport Development Strategy in 1989, the formulation of the force's plans for the future policing of Lantau Island commenced early in 1990. Among other things, the construction of the new airport and its related in- frastructure on the north shore of Lantau Island will require considerable enhancement of police resources in the area.

Communications

      The Second Generation Command Control System (CC II) went live in Kowloon Region in September 1990. In the new Regional Command and Control Centre, the Automatic

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Call Distribution feature of the enhanced 999 system facilitates speedy handling of incoming calls. A total of 2 000 portable and 75 mobile radios are now available for communicating with patrol officers, deploying them to incidents as required and generally co-ordinating their activities to provide the best coverage of the region.

  Additionally, the telephone exchanges for Police Headquarters, Kowloon Regional Headquarters and 20 police stations were replaced during the year. CC II will be implemented in the other land regions and Marine Islands District during 1991.

Information Technology

Expansion of the Information Technology Branch continued into 1990 with 43 additional civilian posts. The staff shortage, especially in the Analyst/Programmer grade, has neces- sitated the continued use of contract resources for various projects.

Phase I of the Enhanced Command and Control Computer System facilitates the efficient response to 999 calls, the handling of incidents, the deployment of police resources and the provision of operational support information to patrol officers.

During the year, the Finance Committee approved a commitment of $17.64 million for the extension of the Criminal Intelligence Computer System to the Narcotics Bureau and the Commercial Crime Bureau and also for the provision of intelligence analyst work- benches.

The Enhanced Police Operational Nominal Index Computer System will start in February 1991 while operation of the Computer Assisted Fingerprint Identification System will commence in May 1991.

Contracts for the Major Incident Investigation and Disaster Support System (MIIDSS) and the pilot study on the feasibility of the Station Information Communal System (SICS) were awarded in June and September respectively. MIIDSS will be operational in April 1991 and SICS has been scheduled for May 1991.

Twenty-five additional microcomputers and twenty word processors were provided to various formations during the year.

Transport

During 1990, the force vehicle fleet increased by 77 to a total of 2 195 vehicles, including 752 motorcycles. A computerised Transport Management and Information System fac- ilitates vehicle utilisation control and driver management.

The Police Driving School is scheduled to be relocated in 1991 from Kai Tak to the site of the former Police Cadet School in Fanling to make way for further expansion of the airport.

Research

The Research Branch conducts research into existing and proposed police tactics in order to achieve improvements and to evaluate existing and new police equipment to ensure the force has the most appropriate facilities to carry out its duties.

The major projects concluded in 1990 concerned force policy on the establishment and strength of women police; police manpower and procedures in the magistracies, and a preliminary review of the overall force establishment.

Other projects undertaken included a review of the police driver cadre and research to formulate alternative shift systems for uniform branch personnel.

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Licensing and Societies Registration

The number of applications for licences, permits and registrations, for which the Commissioner of Police is the authority, continued to increase steadily.

During the year the Registrar of Societies registered 204 societies, exempted 42 from the requirement to be registered and cancelled the registrations and exemptions of 93, usually because they had become defunct. At year's end 62 applications under the Societies Ordinance were being processed.

An average of 1 500 applications were received each month for registration as watchmen and at the end of the year 96 957 watchmen were registered with 1012 of these being licensed to carry arms. New legislation to control security guards and intruder alarms will become effective in 1991, after employers have had time to adjust to the new requirements.

Police Dog Unit

The Police Dog Unit is based at the former Ping Shan police station in the New Territories where basic, advanced and refresher training courses are held. Dogs and their handlers are deployed territory-wide on general patrol, tracking and drug detection duties.

The first phase of a four-year expansion programme began in 1990 to increase the size and role of the unit to meet new demands.

      In addition to an enhanced 'on-street' commitment, dogs and handlers will be selected and trained for border duty and arms and explosives detection, tasks currently undertaken by the British Garrison.

Personnel

At the end of the year, the force establishment totalled 27 578 disciplined posts, an increase of 128 over the 1989 figure. The civilian staff establishment stood at 5923, representing 17.6

per cent of the overall establishment.

During 1990, 5 709 applications were received for the post of constable, with 862 of the applicants being appointed. This year saw the final intake of graduates from the Police Cadet School which was closed in March.

      With regard to the recruitment of inspectors, 60 local candidates were appointed from among 1 195 applicants, while 53 overseas officers were taken on strength during the same period. In addition, 66 officers were promoted to inspector from the junior ranks.

      It was a difficult year for police recruitment, particularly for the constable rank. There were shortfalls of 14 inspectors and 1 165 constables in the target intakes for the year. The premature wastage of police officers, especially among the junior ranks, also continued to be a matter of great concern.

Promotions

Promotion prospects in the force remain excellent at most levels. During the year, 10 gazetted officers were promoted to senior superintendent and above, 26 chief inspectors to superintendent, 65 senior inspectors to chief inspector, 98 sergeants to station sergeant and 446 constables to sergeant. In addition 20 exceptionally-experienced station sergeants were also advanced to the rank of inspector.

Exchange Scheme

The year saw the commencement of the fifth round of the Superintendent of Police Exchange Scheme between Hong Kong and the United Kingdom. Under this scheme,

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officers are seconded to Hong Kong from British police forces for a period of two years where they undertake full operational duties as divisional commanders. Similarly, superintendents from Hong Kong are seconded to the three participating United King- dom forces.

   The scheme has proved to be of great value in terms of experience for those involved, to such an extent that it has been increased in frequency to an annual exercise. This means that at any one time there are 12 officers involved.

Consultation

  Liaison between the staff and management continued although since July 1990 the staff associations have declined to attend meetings of the Police Force Council. A Review Committee on Force Consultative Arrangements has been set up to examine the force's present arrangements.

   Personnel Branch has an ongoing responsibility for liaising with the Police Sub- Committee of the Standing Committee on Disciplined Services Salaries and Conditions of Service and its secretariat. In March, force management presented a submission seeking a review of the Police Pay Scale. Subsequently, an announcement in respect of pay scale of the junior police officers cadre was made in September. A further an- nouncement in respect of pay scales of inspectorate officers and above was made in December.

Welfare

The welfare organisation within the force was initiated by the inclusion of a Welfare Fund under the Police Force Ordinance in 1948. An early development, some three years later, was the establishment of a number of primary schools for police children. Other areas covered in those early years were the promotion of force sporting activities and sponsorship of police children's education.

   In 1967, two trusts for police children were established with voluntary donations from members of the public and the Royal Hong Kong Jockey Club. Funds from these trusts are regularly committed to assist in the education of children of police officers.

   The range of services provided by the Welfare Branch has expanded more rapidly in recent years and this trend has continued. The branch now offers a wide range of services to all members of the force and their families including personal welfare, catering, sports and recreation, holiday homes, psychological consultation and assistance on retirement.

   The Welfare Branch also operates a scheme to arrange bulk purchase of electrical domestic products for sale at discounted prices to members of the force. In addition, the Police Credit Union has maintained an attractive savings scheme with over 13 000 members. Apart from offering loans, the Credit Union benefits have included a hospital- isation allowance, a loan protection scheme and a life savings protection scheme. A Central Fund Scheme, established in 1974, for widows and dependants of deceased junior police officers, has remained popular among junior officers who contribute monthly instalments towards a group insurance coverage.

   During the year, social work staff made 5 104 casework visits and conducted 3 946 casework interviews in the four regional welfare offices and three sub-offices. Two Family Life Education programmes were organised on the subject of sex education at home and marital relationships.

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      The Welfare Branch continued to administer 30 self-catering holiday flats and bungalows in Macau, Lantau Island and the New Territories in which officers and their families can spend short vacations. In addition, the force operates a 10-room hostel for junior officers at Shek O Beach on Hong Kong Island. Overnight accommodation is also available at Green Island Recreation Centre.

Patronage at the Police Officers' Club and its much larger counterpart in Kowloon, the Police Sports and Recreation Club, continued to grow, resulting in increased use of all facilities at both clubs.

      Highlight of the force sporting calendar came in August when twenty-six of the force's leading athletes participated in the International Law Enforcement Olympics held in Edmonton, Canada. The team registered success in nearly all the sports entered and returned to Hong Kong with a record number of 28 medals.

In view of the stressful nature of police work, regular stress management workshops were run by the force clinical psychologists for officers of various ranks.

The resettlement office continued to organise retirement preparation programmes and has improved the arrangements for officers of all ranks to undertake resettlement training during their final year of service. During the year, a number of officers attended re- settlement courses run by the Metropolitan Police and the Essex Police in the United Kingdom and the Welfare Branch locally.

Police Museum

The Police Museum, which is situated in the former Wan Chai Gap Police Station, has a fascinating collection of exhibits on the history of the force. These are laid out in four exhibition galleries: Oriental Gallery, Narcotics Gallery, Triad Societies Gallery and Current Exhibition Gallery. The museum is open to members of the public and is in- creasingly popular, especially at weekends and during school holidays.

Royal Hong Kong Auxiliary Police Force

Manned entirely by part-time volunteers from all walks of life, the Royal Hong Kong Auxiliary Police Force has a proud history dating back to 1914. The traditional role of the force is to provide the regular police with additional manpower for such emergencies as natural disasters or public disorder.

The Auxiliary Police are fully integrated with their regular counterparts and carry out a wide variety of constabulary duties in the field of crime prevention, neighbourhood policing, traffic control, special duties and community relations.

      The present strength of the force is 5 380 personnel out of a total establishment of 5 747 of all ranks. Approximately 14 per cent are women officers.

      Throughout the year, the average daily turnout of auxiliaries for normal constabulary duty was 767 officers. Additionally, the force was called upon to provide 48 personnel each day for guard duties at refugee camps set up to house the large numbers of Vietnamese boat people.

Customs and Excise

The Customs and Excise Department is organised into four major branches - the Headquarters Branch, the Operations Branch, the Investigation Branch and the Trade Controls Branch, with the support of a Civil Secretariat. It has an establishment of 3 939

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posts and is primarily responsible for the collection and protection of revenue payable under the Dutiable Commodities Ordinance, the suppression of illicit trafficking in narcotics, the prevention and detection of smuggling, and the protection of intellectual and industrial property rights.

Revenue Protection

The department is responsible for collecting revenue on six groups of dutiable commodities in Hong Kong - alcoholic liquor, tobacco, hydrocarbon oil, methyl alcohol, non-alcoholic beverages and cosmetics. In 1990, revenue of $5,397 million was collected on these dutiable commodities, compared with $4,468 million in 1989.

In early 1990, there was an increase in cases of smuggling cigarettes to China by small craft and relanding of dutiable cigarettes for export by sea. Apart from stepping up marine patrols and searches, added control measures were introduced in May, largely by strengthening restrictions on the export of cigarettes by vessels of less than 250 tons net register and a new requirement of documentary evidence of permission to import in respect of applications to export cigarettes to China.

Anti-Narcotics Operations

The department continued to co-operate closely with the Royal Hong Kong Police Force, overseas customs authorities and other law enforcement agencies in the prevention and suppression of illicit trafficking in narcotics.

During the year, 76 kilograms of heroin, 28 kilograms of opium and 138 kilograms of cannabis were seized. A total of 1 002 persons were charged with drug offences.

Drug Trafficking (Recovery of Proceeds)

The department and the police have joint responsibility for enforcing the Drug Trafficking (Recovery of Proceeds) Ordinance 1989.

On application from the department, the court issued 14 orders prohibiting dealing with realisable properties suspected to be proceeds of drug trafficking. Some five cases were concluded and the court ordered the confiscation of $465,232-worth of assets.

Anti-Smuggling and Import and Export Controls

In 1990, the department detected 386 smuggling cases under the Import and Export Ordinance, arrested 569 persons and seized $37 million worth of goods.

Smuggling by sea between Hong Kong and China was rampant during the first half of the year. With high-powered speedboats and motorised sampans, smugglers operated mostly at night carrying large quantities of television sets and video cassette recorders to China. To counter this, the Export (Television Sets and Video Cassette Recorder) Regulations 1990 were enacted on June 8. These regulations prohibit the export of television sets and video cassette recorders on vessels of less than 250 tons without an export licence.

Early in the year, fourteen chemicals which may be used in the manufacture of toxicological agents for military use were brought under export licensing control under the Import and Export (General) Regulations. One additional chemical was brought under export licensing control on April 30. The department is responsible for enforcing the licensing requirement in respect of the export of these chemicals.

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Intellectual and Industrial Property Rights Protection

The department is responsible for protecting the copyright of literary, dramatic, musical and other forms of intellectual works.

As the result of sustained enforcement action, the problem of computer software piracy was restrained. The once-flourishing outlets for pirated computer software and manuals in Sham Shui Po were nearly all closed down. Other forms of copyright infringement remained inactive throughout the year and the problem of syndicated video piracy was brought under control.

      Successful progress was made in the suppression of dealing in counterfeit goods, particularly watches, ginseng and cigarettes. The goods seized amounted to a value of $120 million. Twenty-two counterfeit watch factories were neutralised, forcing counterfeiters to operate in domestic premises or to shift their production centres overseas.

      The department assumed the responsibility for enforcing the Copyright (Taiwan) Order 1990 which became law on August 1. The order provides for the copyright protection in Hong Kong of works originating in Taiwan.

Customs Co-operation Council

The Customs Co-operation Council (CCC) of which Hong Kong is a member, was established to improve and harmonise international customs operations and facilitate international trade.

The department has assisted the CCC to run a regional liaison office established in Hong Kong since December 1987. This is a central body, primarily for the co-ordination and dissemination of customs intelligence on drug-related matters within the Economic and Social Commission for Asia and the Pacific region.

      Recognising the department's experience in running the regional liaison office, the CCC invited an officer during the year to assist in the establishment of similar regional liaison offices in the Caribbean and Africa.

Endangered Species

     Hong Kong is fully committed to the protection of the elephant. An amendment to the Animals and Plants (Protection of Endangered Species) (Exemption) Order was gazetted on July 17 to conform to the requirements of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). The import and export of ivory items are now subject to licensing control. The department works closely with the Agriculture and Fisheries Department to enforce the licensing requirements and investigate offences in connection with the import and export of ivory.

Police Complaints Committee

     The main function of the Police Complaints Committee is to monitor and review investigation by the Complaints Against the Police Office (CAPO) of the Royal Hong Kong Police Force of complaints made against the police by the public. Set up in 1986 to replace the former UMELCO Police Group, the committee is an independent body appointed by the Governor. The chairman and two vice-chairmen are drawn from the Office of Members of the Executive and Legislative Councils (OMELCO). Committee members include eight Justices of the Peace, the Attorney General or his representative and the Commissioner for Administrative Complaints.

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  During the year, the committee endorsed 3 620 complaint cases, after being satisfied that each case had been thoroughly and impartially investigated by CAPO. Arising from the reviewing of these complaint cases, the committee proposed a number of changes to police practices, procedures and instructions, with a view to improving the overall effectiveness of the complaint system and assisting the Commissioner of Police in minimising public complaints against the police.

Independent Commission Against Corruption

The Independent Commission Against Corruption (ICAC) fights corruption on three fronts: investigation, prevention and education.

The ICAC completed its eighth mass survey on attitudes and perceptions of the general public towards corruption and the commission. Compared with findings in past surveys since 1977, the 1990 survey showed a continuation of respondents' perception that the government was becoming less corrupt. This contrasted with a perceived rising level of corruption in the business sector, with over three-fifths of the respondents perceiving the use of illegal commissions as prevalent. About one-fifth of the respondents also perceived that the level of corruption in Hong Kong would increase in the next few years.

The ICAC is independent of the Civil Service and the commissioner is directly responsible to the Governor. The commission is however subject to external advice and monitoring. The Advisory Committee on Corruption, whose members include leading citizens and senior government officials, provides guidance on policy matters. Each of the three functional departments of the commission - Operations, Corruption Prevention and Community Relations is also guided by an advisory body with members drawn from various sectors of the community. Complaints against the commission are handled by the ICAC Complaints Committee comprising seven members of the Executive and Legislative Councils, the Attorney General and the Commissioner for Administrative Complaints. In all, 10 such complaints received during the year were thoroughly investigated.

Operations

The Operations Department is the investigative arm of the commission. It receives and investigates reports of suspected offences under the Prevention of Bribery Ordinance, the ICAC Ordinance and the Corrupt and Illegal Practices Ordinance.

During the year, the department received 2 400 allegations of corruption, the majority of which were from members of the public who either visited or telephoned the commission's offices. Sixty-six per cent of those making reports identified themselves while the rest did so anonymously.

Prosecutions instituted, or continued from 1989, resulted in 201 convictions. In addition, 99 people were cautioned for lesser breaches of the law. At the end of the year 125 cases were awaiting trial and 817 investigations were still in progress.

Apart from reporting their suspicions and fears of corruption, the public regards the department as a conduit for general grievances and a source of assistance. In 1990, the department received 1 121 reports which were not corruption-related and of these 755 were referred to other government departments for action.

The ongoing experiment on video-taping interviews of suspects saw the introduction of a number of refinements - both technical and procedural. The training of ICAC investigators in interviewing techniques is now part of their basic training. Other disciplined services

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have shown a keen interest in the scheme, and the commission is providing advice and assistance to them.

In preparation for the 1991 direct elections to the Legislative Council, steps have been taken by the commission, jointly with the government's Constitutional Affairs Branch, to improve the existing legislation governing electoral practices and related conduct. The department foresees that demand for additional manpower resources will inevitably arise, as allegations concerning the elections are expected by-products of Hong Kong's evolving political system.

The trend of corruption complaints, continued investigations into complex commercial corruption cases, and direct elections, indicate that there will be many challenges for the department in the year ahead.

Corruption Prevention

The responsibilities of the Corruption Prevention Department vary slightly with respect to government, public bodies and the private sector. But in all cases, the department re- views procedures and recommends changes where necessary to reduce the likelihood of corruption, abuse of position or other malpractices in the client organisations. The department also participates in a wide variety of consultative activities and working parties. Free and confidential advice is also available to private organisations and in- dividuals on request.

During the year, the department conducted 81 studies of specific activities within government departments and public bodies. These studies addressed problems of policy, law, procedures, management controls and staffing. The problems identified and the recommendations made ranged from minor supervisory improvements to significant law changes.

In general, the work of the department falls into two main categories: people-related problems and work-related ones. Examples in the first category include the consequences of the government decision to allow the limited and controlled importation of foreign labour into Hong Kong. The department worked closely with the Immigration Department and the Labour Department, who are jointly responsible for the effective implementation of the scheme, to ensure that the assessment procedures are fair and well understood and that workers subsequently brought into Hong Kong are protected from exploitation and deception.

At the conclusion of investigations into malpractices in the Post Office, the department conducted a series of studies in collaboration with them to review the procedures for the allocation and approval of overtime duty in processing letter mail, parcel mail and Speedpost. The recommendations made addressed a wide range of management problems which are inherent in an operation as labour intensive as that of the Post Office.

       For some years now the department has been co-operating with the Attorney General, the Bar Association and Law Society with a view to eliminating touting. This has now been extended to the general problem of barristers and solicitors giving commissions in order to obtain work, particularly for conveyancing properties. It is hoped that this more generalised approach will help the regulatory bodies to bring about better discipline within the professions.

       In the area of work-related studies, the control of land was again a source of major department activities. Nowadays this subject is closely aligned with control of

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environmental pollution which is of growing importance in Hong Kong. During the year, studies were carried out on the granting of marine dumping licences, the control of livestock waste and the award of crop compensation as a result of land resumption. The Land Development Corporation was assisted in the preparation of new procedures to undertake surveys of buildings and their occupants.

   A series of studies was completed, examining the financial systems of a number of voluntary welfare organisations which received large sums of public money. The major expenditure forecast for the new airport and the port development scheme has also necessitated the department's participation in a number of studies, in particular those by which government appoints its consultants and contractors.

   Increasingly, the Corruption Prevention Department receives requests for advice from government organisations and public bodies. Subjects dealt with during the year included the proposed licensing of guesthouses; procurement instructions for the Government Supplies Department; the supplies procedures of subvented organisations, and ventilation and fire service installations. The department also collaborated closely with the Housing Department in devising and implementing an objective system to assess the performances of building contractors on housing projects.

   One major activity of the department is to express its views on proposed legislation or proposed changes to existing legislation. During the year, the Waste Disposal Ordinance, the Electricity Ordinance, the Gas Safety Ordinance and the Town Planning Ordinance were reviewed as was legislation related to the evolving pattern of elections in Hong Kong.

   About 13 per cent of the department's resources are dedicated to providing advice to the private sector. Much of the effort is to help companies draw up ethical guidelines for their employees and to advise on internal control measures for preventing corruption. The Advisory Services Group also participates in various industries' attempts at self-regulation. Last year the group assisted the restaurant trade and the Travel Industry Council in drafting ethical guidelines and system control checklists.

Liaison with China in the form of discussions and seminars with officials and businessmen from China were held both in China and in Hong Kong. The mutual understanding gained is beneficial to both parties and will assume greater importance in the future. At all meetings the Chinese expressed great interest in the concepts of corruption prevention and the methods of the department.

Community Relations

It is the responsibility of the Community Relations Department to educate the public on the evils of corruption and to enlist public support to fight against it. In the long term, the aim is to inculcate proper social values and a greater sense of civic responsibility in the community. The department carries out its work through the mass media and direct personal contact with all sectors of the community.

   A total of 16 806 liaison activities and 206 special liaison programmes were conducted by the commission's 11 local offices in 1990, reaching some 439 300 people broadly categorised as business managers, workers, public servants, young people and the general public.

   Contact with the private sector was given priority in response to the increasing number of private sector corruption reports received in the past few years. Task force teams were specially set up to plan and co-ordinate liaison with selected trades and industries, resulting in a more focused approach in explaining the spirit and provisions of the Prevention of

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Bribery Ordinance and the need to take appropriate preventive measures against possibilities of corruption, through in-depth discussions and seminars with managerial and supervisory staff.

The pilot-testing of a direct-mail marketing technique was completed in 1990 to disseminate ICAC messages to small industrial establishments in a more cost-effective manner. The department was encouraged by the response and the approach would in future be adopted on a more extensive scale for conveying anti-corruption messages to other target groups.

The Community Participation Programme, launched in 1989, was again enthusiastically received with more than 60 business firms, social service agencies as well as district organisations participating. They initiated their own anti-corruption activities partly funded by the ICAC.

       Another Towards a Fuller Life programme was held in 1990, seeking to promote particularly among young people an attitude towards balanced personal and social values. The 1990 programme comprised a live-broadcast television programme, a radio pro- gramme and other activities.

The school education programme focused on three specific areas: to enhance teachers' effectiveness in moral education; to study young people's attitudes towards work, and to involve parents in the moral education of primary school children.

        To make moral education teachers more effective in their use of the ICAC's moral education teaching materials, the department ran a development programme for these teachers to enrich their theoretical knowledge and practical classroom skills.

In order to prepare senior secondary students for the moral dilemmas they might face as they take up jobs, the department surveyed the attitudes towards work and ethics among senior secondary students, young employees and employers. The survey findings would help design teaching materials for careers counselling in secondary schools.

The Community Relations Department embarked on a new path to bring schools and parents together in helping young children acquire sound values and good habits. To implement this, it designed a moral education teaching package for primary schools which would involve the participation of parents at home. This package was aimed for intro- duction to schools in March 1991.

      To promote public awareness of the evils of corruption and appreciation of the ICAC's role, the department produced its sixth television drama series. Embodying education, emotive appeal and entertainment, the series has proved popular. The previous production was rated among the top 10 programmes on local television channels.

Towards the end of the year, the department revised its advertising strategy to project a positive posture to the public, implying commitment and confidence. A new advertising campaign was conceived to position the ICAC as an organisation aimed at servicing the community and to highlight its contribution to the welfare of Hong Kong. A series of Announcements in the Public Interest (APIs) was planned to convey the message that the commission plays a role in ensuring that Hong Kong is a well-run, efficient and reliable society because of the fair play and integrity it introduces.

Government Laboratory

The Forensic Science Division of the Government Laboratory provides scientific, analytical and advisory services to those government departments enforcing law and order.

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During the year, the laboratory was heavily engaged in the scientific investigation of such diverse crimes as homicide, sexual offences, arson, robbery, forgery of documents, illegal manufacture and possession of drugs and pharmaceutical preparations under the Antibiotics Ordinance, the Dangerous Drugs Ordinance and the Pharmacy and Poisons Ordinance.

These services are grouped into two main areas. One deals with presumptive (opinion) scientific evidence which is labour-intensive in nature and concerns the examination of handwriting, questioned documents and trace materials such as bloodstains, paint fragments and clothing fibres. The other area concerns drugs and forensic toxicology, and deals with definitive (statutory) scientific evidence which tends to be method-intensive with a high potential for automated instrumentation.

The importance of traffic accident reconstruction has been fully recognised in courts of law. Senior professional officers of the Forensic Science Division are appointed as examiners in the City and Guilds Traffic Accident Investigation Examination in Hong Kong. With the increasing workload, special computer software for traffic analysis/ simulation and tachograph equipment were utilised to facilitate the complex analysis required.

  În preparation for the development of the DNA profiling technique, a professional officer was attached to the Chinese University of Hong Kong for six months to study the technique involved and to evaluate some of the probes available commercially, followed by attachments to prominent research centres and forensic science laboratories in the United Kingdom. Background work such as statistical compilation, setting up of a local ethnic DNA data base, evaluation of probes and enzymes has commenced, and the introduction of this technique to casework is expected in the early part of 1991.

In relation to dangerous drugs and other drugs of abuse, items submitted to the laboratory for identification and certification continued to increase. The year also saw a drastic decrease in the purity of heroin seized at street level. With analytical results and statistical information provided from the laboratory, a new sentencing tariff based on the weight of narcotic rather than the weight of mixture has been handed down by the Court of Appeal.

The laboratory continued to provide a twenty-four hour scene of crime service to law enforcement agencies in Hong Kong. During the year, laboratory personnel attended over 700 crime scenes involving arson, robbery, blood spatter interpretation and traffic accidents. They also lectured to various client departments on the scientific detection of crimes.

Immigration Department

The Immigration Department plays an important role in maintaining law and order in Hong Kong.

Immigration Control

Through examination at control points and vetting of visa applications, undesirable persons including international criminals, terrorists and other persona non grata are detected and refused entry into Hong Kong. In 1990, 34 491 such travellers and persons not in possession of proper documentation were refused permission to land and 1 633 persons were refused visas.

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Detection of Forged Travel Documents

During the year, a total of 1 637 forged travel documents were detected, representing an increase of 38.38 per cent, compared with 1 183 in 1989.

       Sustained efforts are required to guard against the upsurge in the use of forged travel documents by illegal immigrants and travellers. Intelligence on forgery is collected and quickly disseminated. Frequent contacts are made with other local and overseas law enforcement agencies and consulates, and special operations are mounted against forgery syndicates.

In one of the biggest joint operations mounted with the Royal Hong Kong Police and United States and Canadian law enforcement agencies, a major international syndicate providing forged travel documents to residents of the People's Republic of China seeking illegal entry into Canada and the United States of America was neutralised in August 1990. Over 700 items were seized, including 15 seals and dies for forging travel documents, and a number of persons in Canada and Hong Kong were arrested.

Interception of Wanted Persons

During the year, 73 196 persons were intercepted at immigration control points and immigration and registration of persons offices. Of these, 858 were wanted in connection with murder cases, 3 455 were suspected robbers, 38 361 were involved in the trafficking of dangerous drugs and 26 328 were involved in other criminal offences. In addition, 104 known or suspected terrorists were identified at points of entry.

Illegal Immigration

Employment opportunities in Hong Kong attract large numbers of illegal immigrants to the territory. The lower wages demanded by these immigrants lure employers to offer them employment. Frequent checks are therefore conducted at target locations, including construction sites, factories, restaurants and other places of employment. Illegal im- migrants arrested at these places are prosecuted and sentenced to imprisonment before they are repatriated to their place of origin. Employers of illegal immigrants are also prosecuted and fined and, in serious cases, custodial sentences are imposed. To cope with the increase in the number of illegal immigrants found working on construction sites, the Immigration Ordinance was amended during the year to make a principal contractor in the construction industry responsible for the presence of illegal immigrants on his site of operation and liable to substantial fines.

In 1990, a total of 30 378 illegal immigrants were apprehended and repatriated. This represents an increase of 72.49 per cent compared with 17 611 in 1989.

Investigation and Prosecution of Immigration Offences

During the year, a total of 5 511 charges were laid against persons who had committed various immigration offences. Apart from illegal immigration, these offences included illegal remaining, breach of condition of stay, making false statements or representations, and conspiracy in the use and supply of forged documents.

Deportation and Removal

The Immigration Department is responsible for the application, issue and execution of deportation and removal orders. During the year, 5 074 persons who were convicted of

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possessing or trafficking in dangerous drugs, deception, theft and other criminal offences were considered for deportation, and subsequently 163 were deported. In addition, 6 146 persons were removed from Hong Kong under removal orders. These included