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For meeting on 12 May 2011 Paper Ref: CSD/2/2011

Commission on Strategic Development Hong Kong SAR’s Work Direction in

Complementing the National Twelfth Five-Year Plan

(Translation)

I. Purpose This paper discusses how the Hong Kong Special Administrative Region (HKSAR) can complement the National 12th Five-Year Plan, reinforcing and enhancing its competitive advantages, further developing its pillar industries and other industries where Hong Kong enjoys clear advantages, and fully capitalising on the development opportunities that may arise during the National 12th Five-Year Plan period by promoting regional co-operation between Hong Kong and the Pearl River Delta (PRD) region. II. Background 2. The National Five-Year Plan is the blueprint and action agenda for the economic and social development of the country in the next five years. The “Outline of the 11th Five-Year Plan for the National Economic and Social Development of the People’s Republic of China” promulgated in March 2006 already included some general statements on Hong Kong, including the continuous implementation of the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA); the support for Hong Kong’s development on various fronts such as financial services, logistics, tourism and information services; and the maintenance of Hong Kong’s status as an international centre for financial services, trade and shipping, etc. 3. The specific reference to Hong Kong’s functions and positioning in the overall national development strategy in the National Five-Year Plan is of great significance for Hong Kong in its endeavour, under the“One Country, Two Systems”principle and the overall direction for national development, to leverage its unique advantages, explore new development opportunities and contribute to the country’s development. There has been general consensus in the community supporting Hong Kong’s efforts in complementing the National 12th Five-Year Plan.

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4. The 2007-08 Policy Address stated that Hong Kong would take early action to complement the preparation of the National 12th Five-Year Plan. In 2008, the HKSAR Government established direct working relationship with the National Development and Reform Commission (NDRC). Over the last two years or so, we have maintained close liaison with the NDRC and other relevant ministries and commissions of the Central Authorities through reciprocal visits, working meetings and other activities to take forward Hong Kong’s efforts progressively in complementing the preparation of the National 12th Five-Year Plan. 5. Issues concerning the National 12th Five-Year Plan were discussed at the Commission on Strategic Development (CSD) a number of times. For example, the CSD explored Hong Kong’s role in the development of the Mainland during the National 12th Five-Year Plan period at a meeting held in April 2010, and had a focussed discussion on the HKSAR’s work in complementing the preparation of the National 12th Five-Year Plan in December 2010. CSD Members present generally agreed that Hong Kong should participate in the preparation of the National 12th Five-Year Plan, and play an active role in complementing the National 12th Five-Year Plan during the Plan period to better leverage Hong Kong’s unique advantages, including enhancing the development of the pillar industries and nurturing emerging industries. In addition, Members were of the view that during the Plan period, Hong Kong should seize the opportunities brought about by its integration with the PRD region, and enhance its co-operation with the Mainland, with a view to sustaining Hong Kong’s economic development. III. The Outline of the National 12th Five-Year Plan 6. The “Outline of the 12th Five-Year Plan for the National Economic and Social Development of the People’s Republic of China” (the National 12-5 Plan) was endorsed at the Fourth Session of the 11th National People’s Congress and promulgated officially on 16 March 2011. It is a significant breakthrough that an individual chapter is dedicated to the Hong Kong and Macao Special Administrative Regions (the Dedicated Chapter) (see Annex 1), whereby the deepening of co-operation between the Mainland and Hong Kong, as well as the functions and positioning of Hong Kong in overall national development are elevated to the national strategic level. 7. The National 12-5 Plan is the blueprint for the economic and social development of the country in the next five years (2011-2015). It serves as an important basis for the Mainland authorities at all levels to formulate their action agenda.

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Development Goals 8 . The National 12-5 Plan states that the country will strive to achieve a number of development goals 1 , including expanding domestic demand, upgrading the industrial structure and improving people’s livelihood, in the next five years by further realising the development concept of adopting scientific development as the theme and the accelerated transformation of the mode of economic development as the main direction, so as to promote the sustainable, co-ordinated and balanced development of the country. 9. On the expansion of domestic demand, the National 12-5 Plan states that a long-term effective mechanism of expanding consumption demand should be established to strengthen people’s consumption power, improve consumers’ expectations and speed up the upgrading of consumption patterns by promoting urbanisation actively and steadily, deepening the reform of the income distribution system, improving the social security system and creating a favourable consumption environment, with a view to further releasing the consumption potential of urban and rural residents and gradually expanding the overall size of the domestic market to make it one of the largest in the world. This will help the country establish a mode of sustainable development under which consumption, investment and export contribute to economic growth in a co-ordinated way. This is a critical step towards balanced development. 10 . On upgrading the industrial structure, the National 12-5 Plan suggests that, instead of continuing with the development of low-cost, low-value-added industries, the country should vigorously develop service and advanced manufacturing industries and strategic emerging industries, and by means of technological innovation, optimise and upgrade the industrial structure so as to enhance the core competitiveness of the industries. Specific goals include eliminating backward production facilities, actively developing resources in the central and western regions, raising the technological levels of industries and developing the seven strategic emerging industries, namely, energy saving and environmental protection, information technology, biotechnology, advanced equipment manufacturing, new energy, new raw materials and new energy vehicles, through policy support and guidance2. 11. On improving people’s livelihood, the National 12-5 Plan states that the country should stimulate the income growth of urban and rural residents, striving to keep residents’ income growth in pace with economic development and reduce the widening income gap between urban and rural areas and between

1 Please refer to Chapters 2 to 4 of the National 12-5 Plan for the development goals. 2 These include fiscal and monetary policies, tax concessions and establishment of industry standards and

infrastructure.

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different regions, sectors and social segments3. At the same time, equality of basic public services should be promoted and the government’s ability to offer protection should be enhanced so that the whole country can share the fruits of development. Specific goals include expanding employment (with an annual increase of 9 million people in employment), adjusting income distribution, deepening the reform of the wage system, and extending the coverage of social security, healthcare services, housing welfare and social services, etc. 12. The National 12-5 Plan also mentions that, while promoting economic development, particular attention should be paid to the environmental impact of development. It proposes promoting energy conservation and emission reduction, developing a circular economy, encouraging conservation of resources, actively responding to global climate change and stepping up environmental and ecological protection, with a view to building a resource-conserving and environment-friendly society. The Dedicated Chapter on Hong Kong and Macao Special Administrative Regions 13. It is a significant breakthrough that an individual chapter is dedicated to the Hong Kong and Macao Special Administrative Regions in the National 12-5 Plan. The Dedicated Chapter has iconic significance for the future development of Hong Kong, as embodied in the following three major areas: (1) The Dedicated Chapter emphasises the Central Authorities’ support

for Hong Kong in reinforcing and enhancing its competitive advantages, including continued support for Hong Kong to develop its financial services, shipping, logistics, tourism, professional services, information and other high-value-added services; support for Hong Kong’s development into a high-value goods inventory management and regional distribution centre; support for reinforcing and enhancing Hong Kong’s status as an international centre for financial services, trade and shipping; and support for Hong Kong’s development into an offshore Renminbi (RMB) business centre and an international asset management centre. The relevant statements are helpful to Hong Kong in further reinforcing and enhancing its overall competitive advantages, in particular its global influence in the financial sector, and playing the roles of “firewall” and “testing ground”. This will assist the country in capitalising on Hong Kong’s financial market as a

3 The National 12-5 Plan anticipates that the annual growth of the overall gross national product, per capita

disposable income of urban residents and per capita net income of rural residents in the next five years will be 7%.

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platform for attracting capital, allocating assets and promoting the “go global” strategy of RMB.

(2) The Dedicated Chapter emphasises the Central Authorities’ support for Hong Kong in nurturing emerging industries and developing the six industries4 where Hong Kong enjoys clear advantages (the Six Industries). The relevant statements will help the Six Industries extend their fields of co-operation and scope of services in the Mainland. Through interactive co-operation efforts, the development of the Six Industries can in turn help upgrade the country’s industrial structure, particularly the development of service industries.

(3) The Dedicated Chapter emphasises the Central Authorities’ support

for deepening the economic co-operation between the Mainland and Hong Kong and continuing the implementation of CEPA, and confirms the significant functions and positioning of Hong Kong’s co-operation with Guangdong under the Framework Agreement on Hong Kong/Guangdong Co-operation (the Framework Agreement), including the establishment of a financial services co-operation zone and a world-class metropolitan cluster with Hong Kong’s financial system taking the lead. It also emphasises the Central Authorities’ support for opening up the Guangdong market to Hong Kong’s service industries under the early and pilot implementation measures, and the gradual extension of such measures to other regions. The relevant statements define clearly the core functions and positioning of Hong Kong in the development of the PRD region, and provide a clear direction and basis for Hong Kong in taking forward further regional co-operation with other provinces.

14. The Dedicated Chapter signifies the Central Authorities’ strong support for maintaining the long-term prosperity and stability of Hong Kong, and provides a historic opportunity for the future development of Hong Kong. It also enables the HKSAR to formulate, under the “One Country, Two Systems” principle and the Basic Law, its own development direction, policies and measures that complement the overall national development strategies.

4 The 2009-10 Policy Address proposed the strategy of developing six industries where Hong Kong enjoys clear

advantages. The relevant industries are medical services, environmental industries, testing and certification, education services, innovation and technology, and cultural and creative industries.

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IV. Ways for Hong Kong to Develop its Industries in Complementing the National 12-5 Plan

15. The National 12-5 Plan presents Hong Kong with numerous new opportunities for economic development. The relevant policy bureaux of the HKSAR Government will formulate corresponding policies for the respective areas under their purview in accordance with the specific contents of the Dedicated Chapter. They will continue to make use of different channels to maintain their dialogue with the stakeholders on how to capitalise on the opportunities presented by the National 12-5 Plan, and take forward their work accordingly. 16. As mentioned in the Dedicated Chapter, the Central Authorities support Hong Kong in reinforcing and enhancing its status as an international centre for financial services, trade and shipping; in developing into a high-value goods inventory management and regional distribution centre; and in developing the Six Industries. In the light of this, the HKSAR Government will actively promote the development of these industries as a priority. The following paragraphs briefly discuss the policy directions and development paths for these industries. Financial Centre 17. The Dedicated Chapter clearly indicates the Central Authorities’ support for further reinforcing and enhancing Hong Kong’s status as an international financial centre, particularly for Hong Kong’s development into an offshore RMB business centre and an international asset management centre, and strengthening its global influence. 18. In developing into an offshore RMB business centre, Hong Kong, with the unique advantages of “One Country, Two Systems” and being a “first mover”, can play the roles of “firewall” and “testing ground”. The HKSAR Government is striving to further promote the development of Hong Kong’s offshore RMB business, and has been conducting overseas roadshows to publicise Hong Kong’s one-stop financial platform that provides various offshore RMB services, including RMB trade settlement, bank financing, bond issuance and wealth management. The relevant statements in the Dedicated Chapter highlight the role of Hong Kong as the country expands the use of RMB in cross-border trade. 19. In addition, the Central Authorities affirm in the National 12-5 Plan for the first time the functions and positioning of Hong Kong’s asset management sector. Our priorities in facilitating the development of the sector include seeking to enter into more agreements on the avoidance of double taxation, continuing to develop an Islamic finance platform, providing tax

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incentives, improving relevant laws and regulations and stepping up overseas promotion. The Government will also strengthen the competitiveness of the asset management sector by continuously improving its regulatory regime, enhancing market quality and facilitating market development. 20. Financial services industry is one of the most important pillar industries in Hong Kong. As an international financial centre, Hong Kong currently enjoys many advantages, including a highly open and internationalised market, a regulatory regime aligned with major overseas markets, the rule of law, and the free flow of information and capital. Moreover, the shift of global economic gravity from West to East after the financial tsunami has not only highlighted the strengths and potential of Hong Kong’s asset management business, but also brought about unprecedented opportunities. Hong Kong is well placed to help the country attract more capital and assist Mainland enterprises in opening up overseas markets during the Plan period, with a view to achieving the goals of increasing the use of foreign capital and expediting the implementation of the “go global” strategy5 as set out in Chapter 52 of the National 12-5 Plan. As the wealth of Mainland enterprises and residents is expected to grow in the future, the demand for wealth management services will continue to increase. To ride on the trend, Hong Kong’s financial services sector should adopt flexible means to actively develop Hong Kong into a wealth management centre for Mainland enterprises and residents. Hong Kong being an important component of the national financial market, the Mainland can make full use of its advantages as an effective asset allocation platform to achieve its policy objective of facilitating the orderly outflow of Mainland capital. At the same time, Hong Kong, as a highly liberalised market in the global setting, can serve as a bridgehead for Mainland capital to go global so as to meet the overall development needs of the country and create a win-win situation for Hong Kong and the Mainland. Trade Centre 21. The National 12-5 Plan affirms Hong Kong’s role as an international trade centre. Hong Kong is well developed in its re-export and off-shore trade, and CEPA and its supplements provide an ideal platform for co-operation between the service industries of Hong Kong and the Mainland. The HKSAR Government will continue to seek the deepening and implementation of CEPA in order to promote co-operation and professional exchange between the

5 The “go global” strategy was formed in mid to late 1990s, and formally put forward for implementation in the

10th Five-Year Plan in 2001. Under the strategy, industries that enjoy comparative advantages are encouraged to increase external investment and expand the scope of international economic and technical co-operation, including developing offshore processing trade, exploring resources outside China in collaboration with foreign enterprises, and running multinational business, with a view to achieving development internationally.

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goods and services sectors of the two places for their joint development in the regional and international markets. The Government will also continue to actively participate in the World Trade Organisation, Asia-Pacific Economic Co-operation and other international organisations for finance and trade. Moreover, apart from maintaining the multilateral trade system, the Government will actively pursue and negotiate free trade agreements with other trading partners to reinforce and enhance Hong Kong’s status as an international trade centre. The Government will also continue to help Hong Kong enterprises, in particular small and medium enterprises, enhance their competitiveness and increase the value of their products and services. 22. One of the important development goals set out in the National 12-5 Plan is to expand domestic demand in the next five years. Chapter 51 of the National 12-5 Plan also mentions the need to nurture new competitive advantages in export and vigorously promote trade in services. If Hong Kong enterprises can seize this opportunity by enhancing their modes of production, raising their production efficiency and building international brands, they will be able to create many new business opportunities for Hong Kong’s trade sector, which can then gain a share in the huge Mainland domestic market. Shipping Centre and Logistics Industry 23. The Dedicated Chapter clearly states the Central Authorities’ continued support for Hong Kong in developing the shipping industry in order to reinforce and enhance its status as an international shipping centre. To consolidate Hong Kong’s status as an international shipping centre, the HKSAR Government will not only endeavour to maintain the existing advantages, including being a free port and having a business-friendly environment and an independent and fair judicial system, but also continue to assist the industry in grasping the opportunities arising from more vibrant shipping activities in Asia through overseas and local promotional activities and measures to support the training of technicians and professionals. This can help strengthen the local maritime cluster, thereby reinforcing Hong Kong’s leading role as a sophisticated maritime service centre in the Asia-Pacific region. In addition, the Hong Kong Maritime Industry Council will conduct a study on the strategies to consolidate Hong Kong’s status as an international shipping centre in the light of the existing opportunities and challenges. We also plan to organise a seminar near the end of this year to promote Hong Kong as a premier international shipping centre and logistics hub in the region. Through the Hong Kong Maritime Industry Council, Hong Kong Port Development Council and Hong Kong Logistics Development Council, we will also consult the stakeholders on how best to implement the proposals in the National 12-5 Plan for the development of Hong Kong’s shipping and logistics sectors. Meanwhile, the Government will also consider upgrading the supporting hardware. For example, we are taking forward a project to deepen the Kwai

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Tsing container basin and its approach channels. Upon the completion of the project, Hong Kong will be able to meet the draught requirements of the new generation of ultra-large container vessels at all tides. 24. On aviation, the Hong Kong Airport Authority is actively enhancing the airport’s handling capacity to cope with future air traffic demand. The midfield expansion project and the construction of a new air cargo terminal are underway, and a public consultation on the Hong Kong International Airport Master Plan 2030 is scheduled for the second quarter of 2011. The Master Plan will set out the development strategies and directions for the airport in the next two decades. In particular, it will deal with the feasibility of building a third runway, and make initial assessments of the economic and environmental impacts of such a project. The consultation will have significant implications for Hong Kong’s status as an aviation centre and its long-term economic development. 25. To facilitate the logistics sector’s development towards providing high-value-added logistics services and handling high-value goods, the HKSAR Government is gradually making available long-term sites in Kwai Tsing for the establishment of a logistics cluster to attract providers of third-party logistics and regional distribution services to operate in Hong Kong. The Government is also actively promoting the wider use of e-logistics services, and continuing to join hands with the trade to promote to the Mainland and overseas markets the professional logistics services offered by Hong Kong. As mentioned in paragraph 23 above, we will promote Hong Kong as a premier international shipping centre and logistics hub in the region by organising seminars, and consult the trade through the Hong Kong Logistics Development Council on how best to implement the relevant proposals in the National 12-5 Plan. In addition, the Government is discussing with the Hong Kong Trade Development Council to conduct a study on the advantages of Hong Kong as a regional distribution centre and on ways to promote Hong Kong’s development in this area. The Government will also continue to liaise closely with the Mainland in order to facilitate the smooth flow of goods in the region. 26. The Dedicated Chapter mentions the Central Authorities’ support for Hong Kong in developing into a high-value goods inventory management and regional distribution centre. These areas of business will not only be new growth points for Hong Kong’s logistics and shipping industries, but also assist Mainland enterprises in going global and linking up with the international market. The development of the logistics and shipping industries will also help promote exchange and interaction between the Mainland and Hong Kong, thereby contributing to economic integration within the PRD region.

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The Six Industries 27. The Dedicated Chapter emphasises the Central Authorities’ support for Hong Kong in developing the Six Industries, namely, environmental industries, medical services, education services, testing and certification, innovation and technology, and cultural and creative industries. The relevant statements will help the Six Industries extend their fields of co-operation and scope of service in the Mainland, and at the same time assist the country in upgrading its industrial structure, particularly the development of service industries. 28. Through technological innovation and manpower training, these industries will not only enhance the diversity and competitiveness of Hong Kong’s economic activities, but also inject new impetus into the economy, thus creating jobs and improving people’s livelihood. This is in line with the development concept of adopting scientific development as the theme and the accelerated transformation of the mode of economic development as the main direction put forward in the National 12-5 Plan. Figures on the value added of and employment in the Six Industries in 2009 are attached at Annex 2. Specific measures taken by the Government to promote the development of the Six Industries are as below. (1) Environmental Industries 29. The environmental industries, while still at their initial stage of development, have been growing impressively in recent years. The HKSAR Government will continue to allocate considerable resources to environmental infrastructure, and create more business and employment opportunities for the environmental protection and engineering sectors by formulating relevant policies and legislation on energy conservation and emission reduction. 30. On Hong Kong-Guangdong co-operation, the HKSAR Government and the Guangdong Provincial Government jointly launched a five-year Cleaner Production Partnership Programme in April 2008 to encourage and help Hong Kong-owned factories in the PRD region to adopt clean production technologies and processes. A total of over $93 million will be provided by the HKSAR Government for the implementation of the programme. So far, the programme has provided financial support for over 1,100 projects carried out by Hong Kong enterprises, and more than 150 Hong Kong and Mainland environmental protection agencies have joined the programme. To further galvanise our efforts in promoting cleaner production, the two governments jointly launched a Hong Kong–Guangdong Cleaner Production Partners Recognition Scheme in August 2009. Under the scheme, commendations are awarded to Hong Kong-owned factories and business entities for their efforts in cleaner production. 166 enterprises have been commended so far.

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31. Furthermore, by implementing Clean Development Mechanism (CDM) projects, Hong Kong-owned enterprises may invest in the development of new or renewable energy in the Mainland, and explore opportunities in green business using new environmental technologies. To date, the Environment Protection Department (EPD) has issued letters of certification to 18 Hong Kong enterprises to enable them to implement CDM projects in the Mainland on wind power, hydroelectric power, waste heat recovery, biothermal energy, etc. 32. In addition, Guangdong and Hong Kong are currently furthering co-operation on the basis of the Outline of the Plan for the Reform and Development of the Pearl River Delta and the Framework Agreement in promoting the use of renewable and clean energy, jointly exploring the use of eco-friendly regenerated materials, and facilitating the development of waste recovery and recycling industries in the two places. These policies, together with the liberalisation measures under CEPA, will help Hong Kong providers of environmental technologies and services expand into Guangdong and other parts of the Mainland, and play a part in improving the environment of the region and building a resource-conserving and environment-friendly society. 33. Chapters 21 to 26 of the National 12-5 Plan mention that the country should actively promote energy conservation and emission reduction, promote green consumerism and develop a circular economy by means of public policies and high and new technologies. All these initiatives will create more opportunities for Hong Kong’s environmental industries to participate in Mainland environmental projects and co-operate with Mainland environmental companies. To further promote the development of Hong Kong’s environmental industries in the Mainland, the EPD has earmarked funds in the Financial Year of 2011/12 for local environmental service providers to participate in Mainland environmental exhibitions and organise study tours and exchange activities. One such activity is tentatively planned for June 2011 in Beijing. (2) Medical Services 34. To promote the development of Hong Kong’s medical services, the Government has reserved four sites at Wong Chuk Hang, Tai Po, Tseung Kwan O and Lantau for private hospital development. So far, 30 development proposals from local and overseas organisations have been received. The Government is formulating the land disposal arrangements and plan to dispose of the sites in phases starting from late 2011 or 2012. 35. Hong Kong’s medical services sector benefits from many liberalisation measures under CEPA. Hong Kong service providers are allowed to set up wholly-owned outpatient clinics, hospitals and convalescent

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hospitals in designated provinces and municipalities in the Mainland. They also enjoy concessions for setting up medical institutions throughout the country in the form of equity joint venture or contractual joint venture. Under CEPA, Hong Kong statutory healthcare professionals may acquire Mainland professional qualifications by various means such as sitting for Mainland qualification examinations, accreditation and short-term practice. As at November 2010, the Health Department of Guangdong Province had issued a total of seven Permits for Establishment of Medical Institution to Hong Kong service providers for setting up outpatient clinics in Guangdong. Among them, four outpatient clinics in Guangzhou and Shenzhen have commenced operation while the rest are still under preparation. 36. Chapter 20 of the National 12-5 Plan mentions that the country will undergo accelerated urbanisation and modernisation in the next five years, and therefore it is necessary to increase the overall carrying capacity of cities and towns and rectify various urban problems. Such development process will generate enormous market potential and additional demand for medical services, thus creating new development opportunities for Hong Kong’s medical service providers. The local medical services sector should capitalise on the opportunities by setting up medical institutions, under CEPA, in the Mainland, including hospitals and outpatient clinics, and introducing advanced services and quality management models to the Mainland, so as to offer a wider choice of services for Mainland residents, boost consumption of medical services and promote the development of medical services in both places. (3) Education Services 37. Hong Kong has all along been making great efforts to develop into a regional education hub that trains up people for various sectors in order to enhance Hong Kong’s competitiveness and support the long term development of Hong Kong, the PRD region and the country as a whole. To give momentum to the internationalisation and diversification of our education services, the Government will continue to allocate sites for building international schools with a view to providing more international school places for the children of expatriates in Hong Kong. With regard to tertiary education, the Government will also continue to promote the development of the self-financing sector through various measures. In addition, the Government will work together with local institutions to publicise Hong Kong’s position as an education hub and attract more non-local students (including Mainland students) to study in Hong Kong. 38. In recent years, Hong Kong and the Mainland have been engaged in a wide range of activities to enhance co-operation on education, and have made good progress in areas such as the training of teachers, exchange among students, co-operation among high schools, vocational training and exchange and co-

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operation on national education for youths. Chapter 57 of the National 12-5 Plan mentions that the country supports the development of those industries where Hong Kong enjoys clear advantages, including education services, and extending their fields of co-operation and scope of service. This policy can provide more opportunities for Hong Kong’s education sector to participate in the country’s education endeavours and help nurture high quality talents for the country. Looking forward, we will, with due respect for the institutions’ autonomy and without prejudice to local students and resources, encourage local tertiary institutions to consider adopting innovative modes of co-operation with their counterparts in Guangdong; take forward co-operation projects on teachers’ training, student exchange, in-service training and joint operation of schools; step up the training of teachers; and develop two-way exchange programmes, to achieve the aim of complementing each other’s strengths and creating a win-win situation. (4) Testing and Certification Services 39. In September 2009, the Government established the Hong Kong Council for Testing and Certification (HKCTC) to spearhead the development of the testing and certification industry. The HKCTC comprises representatives from the testing and certification industry, business sector, professional bodies, relevant public bodies and government departments. It submitted its first three-year market-oriented development plan for the industry in March 2010. 40. The HKSAR Government is now working closely with the HKCTC to implement the development plan by adopting a dual approach, that is, making general improvements to the accreditation service and factors of production to enhance the industry’s competitiveness (including helping the industry attract talent from universities, organising seminars and enhancing the professional knowledge of practitioners), while focussing on the promotion and development of new testing and certification services (for example, authenticity testing of Chinese herbal medicine, food safety system certification, product certification of construction materials, and development of standard testing methods for two types of jade) through panels on four selected trades, that is, Chinese medicine, construction materials, food and jewellery. The HKSAR Government will also step up the promotion of local testing and certification services through participation in major trade fairs and other channels. 41. As regards the provision of services for the Mainland, Hong Kong’s testing and certification industry has been providing a high volume of services for consumer goods produced in and exported from the PRD region, thus providing assurance on quality and safety for overseas buyers. On the testing of products for domestic sale in the Mainland, according to Supplement VII to CEPA signed last year, testing organisations in Hong Kong, starting from this year, can undertake product testing for the China Compulsory Certification

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System on a pilot basis for four types of products processed in Hong Kong, that is, toys, circuit installations, information technology equipment and lighting apparatus. The Government is assisting the industry in implementing this pilot scheme and hopes that the scope of the scheme can be extended in future so that local testing organisations will have more opportunities to participate in Mainland testing work, thereby facilitating trade between the two places. 42. The National 12-5 Plan states that the country supports the development of industries where Hong Kong enjoys clear advantages, including testing and certification, and extending their fields of co-operation and scope of service. Through early and pilot implementation measures, Hong Kong and the Mainland may progressively encourage more Mainland bodies to accept the reports prepared by accredited testing and certification organisations in Hong Kong in areas where third-party testing and certification is required. This will provide more business opportunities for Hong Kong’s testing and certification industry, and facilitate the processing of goods imported from and exported to the Mainland, thus consolidating Hong Kong’s status as a trade centre. (5) Innovation and Technology 43. Innovation and technology give impetus to economic development and enhance competitiveness. To show the support and recognition that the HKSAR Government gives to innovation and technology, the Financial Secretary has taken up the chairmanship of the Steering Committee on Innovation and Technology. The Steering Committee will pull together the efforts of the industry, academia and research institutions to co-ordinate the formulation and implementation of policies on innovation and technology, with a view to generating greater synergy among various policies and programmes. 44. The construction of the Hong Kong Science Park Phase 3 Development Plan will commence in the second half of this year and is expected to be completed in phases from late 2013 to 2016. Upon full occupation of the Phase 3 development, the Hong Kong Science Park can accommodate an additional 150 companies, which will create about 4 000 research-related jobs. Meanwhile, the Government will conduct a comprehensive review of the Innovation and Technology Fund with a view to improving its assessment criteria and application procedures, thereby encouraging enterprises and research and development institutions to conduct more research activities with good commercial potential, to assist Hong Kong enterprises in upgrading their technology levels, and to promote innovative ideas. This will enhance the value-added, productivity and competitiveness of local enterprises. 45. The HKSAR Government has been working with the Ministry of Science and Technology to promote technology co-operation between Hong Kong and the Mainland at all levels through the Mainland and Hong Kong

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Science and Technology Co-operation Committee. Last year, the Ministry of Science and Technology relaxed the restrictions on Hong Kong’s research institutions submitting applications under the “973 Programme” to encourage more Hong Kong research institutions and personnel to participate in national science and technology programmes. The HKSAR Government will continue to work with the Mainland to promote the gradual inclusion of research institutions and enterprises in Hong Kong in the national innovation system, such as appointing more scientific researchers in Hong Kong as experts for national science and technology programmes. Starting from April 2011, the HKSAR Government will provide financial support for Partner State Key Laboratories (SKLs) in Hong Kong through the Innovation and Technology Fund to enhance their scientific research capabilities. At present, there are 12 Partner SKLs in Hong Kong, and each of them will be provided with a maximum of $2 million. 46. At the same time, the HKSAR Government will work together with Guangdong Province to actively implement measures relating to innovation and technology under the Framework Agreement so as to promote the development of independent scientific research in the two places and enhance the environment for technology co-operation between them, with a view to strengthening the innovation capabilities of the region. As for Hong Kong’s co-operation with Shenzhen, the two places have been actively promoting the development of the Shenzhen-Hong Kong Innovation Circle. The three-year action plan, comprising 24 co-operation projects and involving government departments, universities, research institutions and non-government organisations from both places, is in good progress. 47. The National 12-5 Plan elevates technology and innovation to an important strategic level. Chapter 4 of the National 12-5 Plan specifies that “the expedition of the transformation of the mode of economic development through scientific and technological progress and innovation” is one of the country’s policy directions. It is expected that the country will be able to achieve deep integration of emerging technologies with emerging industries in the next five years by raising the level of modernisation of education and strengthening the capability of independent innovation. Chapter 57 of the National 12-5 Plan also states clearly that the Central Authorities support the nurturing of emerging industries in Hong Kong and Macao and the strengthening of the innovation capabilities of such industries. Closer technology co-operation between Hong Kong and the Mainland is in keeping with the spirit of the National 12-5 Plan and will bring about new business opportunities for Hong Kong’s technology sector.

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(6) Cultural and Creative Industries 48. Hong Kong has been committed to promoting the development of cultural industries and expanding its cultural and creative resources. With enhanced efforts in art programme development, audience building, art education and manpower training, we strive to strengthen Hong Kong’s cultural software and explore local and overseas cultural markets, with a view to developing Hong Kong into a focal point for a wide variety of cultural activities, and promoting exchange and co-operation with the Mainland and overseas countries in the areas of culture and arts. 49. Creative industries form an integral part of Hong Kong’s overall economy. Hong Kong enjoys advantages and occupies a leading position in many creative fields, such as film, television, design, architecture, advertising, comics and animation, digital entertainment and game software. In these fields, we have a large and ever-replenishing pool of talented people who have made numerous achievements. By leveraging its advantages and international network, Hong Kong can establish a national base for creative industries to facilitate their development in Asian markets, promote international exchange of creative ideas, and enhance the international profile of the creative brands of the country. 50. In 2009, the Government set up the dedicated office of CreateHK to provide one-stop service for local creative industries and promote their development. The Government also established the $300 million CreateSmart Initiative (CSI) to provide financial support for projects which are conducive to the development of the creative industries and the transformation of Hong Kong into Asia’s creative capital. The HKSAR Government has been actively promoting Hong Kong’s creative industries in the Mainland, and assisting them in organising Mainland-related exchange activities such as business matching sessions, award presentation ceremonies, seminars, workshops and setting up booths in trade fairs to showcase local creative talent, and in establishing business and marketing platforms. Last year, the HKSAR Government worked with the creative industries to organise a series of activities during the World Exposition 2010 Shanghai China (“Shanghai Expo”) to present the achievements of local creative talent and industries. One of the activities, the Hong Kong Ani-Com Carnival, attracted more than 500 000 visitors. 51. On cultural exchange, Hong Kong has been co-operating closely with the Mainland. Hong Kong will organise a number of cultural activities and co-operation events this year. Apart from the 12th Greater Pearl River Delta Cultural Co-operation Meeting, Hong Kong will jointly organise with Guangdong and Macao a number of new large-scale co-operation events, including the joint presentation of a Cantonese Opera performance and a large-

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scale show, and the co-organisation of major cultural exhibitions. Our local art groups participated actively in the Shanghai Expo last year, staging over 100 performances and a number of art exhibitions in Shanghai. 52. These co-operation opportunities can facilitate exchange among performers and artists from Hong Kong and the Mainland, raise the cultural literacy of the community and help explore new areas of co-operation. According to Chapter 44 of the National 12-5 Plan, the country will expedite the development of the cultural industry in the next five years, and will foster the development of the broadcasting, film and publishing sectors by providing infrastructure and other supporting facilities. This will provide new opportunities for Hong Kong’s cultural and creative industries to co-operate with Mainland cultural organisations and enter the vast Mainland domestic market. V. Strengthening Economic and Trade Relations with the Mainland and

Deepening Regional Co-operation 53. While reinforcing and enhancing its competitive advantages and developing emerging industries and industries where it enjoys clear advantages in accordance with the National 12-5 Plan, Hong Kong should also make an effort to deepen its economic and trade co-operation with the Mainland, continue to implement the facilitation arrangements under CEPA, and leverage the significant functions and positioning of its co-operation with Guangdong under the Framework Agreement to establish a financial co-operation zone and a world-class metropolitan cluster with its financial system taking the lead, and fulfil its core functions and positioning in the development of the PRD region. Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) 54. The Dedicated Chapter emphasises the Central Authorities’ support for the continued implementation of CEPA, and for the development of the Six Industries and the extension of their fields of co-operation and scope of service in the Mainland. Since the signing of CEPA in 2003, the HKSAR Government has been seeking to further improve its contents and implementation details. Inclusive of the measures in Supplement VII to CEPA, the two sides have so far announced nearly 280 liberalisation measures concerning trade in services. 55. Hong Kong service suppliers now enjoy preferential treatment in 44 service sectors, covering the four existing pillar industries and the Six Industries, in entering the Mainland market, including facilitating arrangements for the registration of Hong Kong professionals and starting up business in the Mainland. Some examples of progress made are as follows:

(1) As at 31 January 2011, more than 2 300 Certificates of Hong Kong Service Supplier had been issued to over 1 300 Hong Kong

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enterprises. According to the report of a survey completed by the HKSAR Government in 2010, about 48% of the holders of the Certificate had set up their enterprises in the Mainland under CEPA.

(2) Between 2007 and 2009, cumulative business receipts obtained by operations established by Hong Kong service providers in the Mainland under CEPA amounted to about HK$198.5 billion, while enterprises in Hong Kong obtained additional business receipt totaling HK$55.1 billion due to CEPA.

(3) Specific examples of Hong Kong professionals pursuing their careers in the Mainland under CEPA are as follows: - Currently some Hong Kong service providers or local doctors

who have obtained the Mainland Medical Practitioner’s Qualification Certificate have been allowed to set up medical institutions in various parts of Guangdong under CEPA;

- A number of Hong Kong law firms have formed associations with Mainland partners in places such as Beijing, Guangzhou and Tianjin; and

- Over 1 000 Hong Kong professionals in the construction and related engineering services sector have obtained Mainland professional qualifications through mutual recognition of professional qualifications.

(4) As at December 2010, over 3 900 Hong Kong residents had set up individually owned stores in the Mainland with registered capital amounting to RMB 282 million.

(5) Since its introduction in 2003, the Individual Visit Scheme has been extended to 49 Mainland cities. As at December 2010, there had been more than 60 million Mainland visitor-arrivals to Hong Kong under the scheme.

56. With the support of the Central Authorities, there is ample room for the Six Industries to further open up the Mainland market. The liberalisation measures under CEPA constitute an important platform for relevant industries to enter and tap into the Mainland market. Hong Kong-Guangdong Co-operation 57. The Dedicated Chapter clearly defines the significant functions and positioning of Hong Kong-Guangdong co-operation, as well as Hong Kong’s

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core role in the PRD regional co-operation. On this basis, the Government will co-operate further with Mainland provinces and municipalities in taking forward relevant measures, including forging ahead with cross-boundary infrastructural projects, promoting industrial co-operation and improving the living quality in the region. 58. In the Dedicated Chapter, the significant functions and positioning of Hong Kong’s co-operation with Guangdong under the Framework Agreement are elevated to the national strategic level, and the core functions and positioning of Hong Kong in the development of the PRD region are established, with emphasis on the following:

(1) Developing a world-class metropolitan cluster with enhanced competitiveness;

(2) Developing a financial co-operation zone led by Hong Kong’s financial system;

(3) Building an advanced global manufacturing and modern services base;

(4) Developing a modern economic circulation sphere;

(5) Opening up Guangdong’s service industries to the service providers of Hong Kong through early and pilot implementation measures and gradual extension of the measures to other regions; and

(6) Guangdong-Hong Kong-Macao Quality Living Area.

59. The Governments of Hong Kong and Guangdong will continue to liaise closely and work together to implement the Framework Agreement. They have reached consensus on the major initiatives for 2011 and set clear objectives for this year’s work, covering areas such as finance, cross-boundary infrastructure, environmental protection, medical services and education. 60. On industrial co-operation, by leveraging the strengths of the local professional services industry and making use of the early and pilot implementation arrangements under the Framework Agreement, Hong Kong should promote integration between Guangdong’s manufacturing industries and Hong Kong’s service industries, with a view to building a world-class metropolitan cluster. The Dedicated Chapter mentions the Central Authorities’ support for Guangdong to open up its service industries to the service providers of Hong Kong through early and pilot implementation measures and gradual extension of the measures to other regions. This is an important policy direction. Guangdong Province has a resident population of nearly 100 million.

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In 2010, Guangdong’s GDP amounted to RMB 4,547.3 billion, that is, about US$7,000 per capita. Therefore, Guangdong is an ideal place for Hong Kong service providers to enter the Mainland market. Since 2008, the Mainland and Hong Kong have announced 41 measures under CEPA for early and pilot implementation in Guangdong Province, covering 21 sectors which belong to many important industries in Hong Kong. The Guangdong Government has offered active support, and in 2010 announced relevant laws and regulations on measures included in Supplement VII to CEPA for early and pilot implementation in Guangdong. 61. The HKSAR Government will first strive to properly implement the measures for early and pilot implementation in Guangdong. On this basis, it hopes to extend the measures gradually to other regions of the Mainland, in particular the Pan-PRD region with a population of 400 million, to open up more development opportunities for Hong Kong’s service industries. However, Hong Kong’s service industries still face many challenges in entering the Guangdong market6. Hong Kong needs to work closely with Guangdong to step up the promotion of CEPA and measures for early and pilot implementation in Guangdong, encourage our service industries to tap into the Mainland market, and actively follow up any problems encountered during implementation. VI. Way Forward 62. The development concept of adopting scientific development as the theme under the National 12-5 Plan is compatible with the development of a knowledge-based economy proposed by the Chief Executive in 2007. Under this premise, we need to step up manpower training to boost our competitiveness, while strengthening co-operation and co-ordination among the industries, scientists and research institutions to enhance the technological content of our products and actively opening up new markets7. The industries should also complement and reinforce each other in their development, so as to create synergy and drive the development of all sectors in Hong Kong. For example, testing and certification not only improve product quality, help build brands and 6 CEPA provides various facilitation measures for the Hong Kong business community to enter the services

market in the Mainland. Apart from lowering the market entry thresholds for various service industries, CEPA also provides Hong Kong business enterprises with preferential treatment in various service areas which is more favourable than that available to foreign enterprises. However, in making use of the CEPA benefits in entering the Mainland market, Hong Kong business enterprises are still required to comply with the rules and regulations of the Mainland in making applications for setting up business, registering for practice or operating a business. As reflected by views and comments gathered from the business enterprises by different bureaux and departments of the HKSAR Government, there have been some operational problems in the implementation of the liberalisation measures in certain service industries. Examples of such problems include delay in the promulgation of rules and regulations as well as implementation details; insufficient knowledge of the new measures among local officials in the Mainland; differences in the systems and regulatory regimes governing professional services between the two places which lead to connectivity problem; and cumbersome and time-consuming application procedures.

7 Remarks by the Chief Executive at a media session held on 22 June 2009 after a meeting of the Task Force on Economic Challenges.

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bolster consumer confidence, but also provide essential support for our medical services, environmental industries and innovation and technology industry, and enhance our overall productivity. Education services can help upgrade the quality and competitiveness of Hong Kong’s labour force and nurture talents in different fields, providing suitable human resources for other industries and promoting the sustained development of the economy as a whole. Creative industries can enhance the attractiveness and selling points of the products of other industries, and increase the variety of products through innovative design and new ideas, thus meeting the needs of new customer groups and new markets. 63. As the Chief Executive said in his 2008-09 Policy Address, Hong Kong has always followed the principle of “Big Market, Small Government” in promoting economic development. The Government’s role is to formulate policies conducive to market competition. When the market fails, however, the Government should be prepared to intervene in a timely and decisive manner8. We will endeavour to promote the development of the Six Industries in order to consolidate the pillars of our economy, and create more diversified downstream economic activities. In this way, we can boost employment and improve people’s livelihood on all fronts, enabling more people to benefit from economic development. 64. In conclusion, Hong Kong’s industrial development should be based on the characteristics and complementarity of its industries, as well as its resources and advantageous geographical location. By leveraging these factors, Hong Kong’s industries may move towards the direction of high-knowledge and high-value-adding. For instance, Hong Kong’s modern services may enter the Mainland market and open up development opportunities by taking advantage of the innovation capabilities of the testing and certification, innovation and technology and creative industries. In addition, in the course of industrial development, the Government will promote co-operation among the industries, academia and research institutions in converting the results of scientific research into products that are marketable, especially in the PRD market neighbouring Hong Kong. When combining Hong Kong’s advantages in marketing and branding with the Mainland’s strengths in manufacturing, we can create international brands and boost our competitiveness. Also, to promote coordinated economic and social development, we will study and review the industries, crafts and skills, human resources and relevant training that drove Hong Kong’s economic growth in the past, with a view to creating more employment opportunities for the latent productivity in the labour market.

8 2008-09 Policy Address, paragraphs 12 & 131-133.

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65. On the other hand, the National 12-5 Plan fully reflects the Central Authorities’ staunch support for Hong Kong and opens up much room for Hong Kong’s future development. The HKSAR Government will formulate corresponding policies and measures under the principle of “One Country, Two Systems” to fully capitalise on the new opportunities and take forward the relevant work in a practical manner, particular in the following three major areas: (1) Reinforcing and enhancing Hong Kong’s status as an international

centre for financial services, trade and shipping, including developing into an offshore RMB business centre and an international asset management centre;

(2) Strengthening the innovation capabilities of industries, and nurturing new economic growth points, especially the Six Industries; and

(3) Deepening co-operation between Hong Kong and the Mainland, especially Guangdong, continuing to implement CEPA, and gradually extending to other regions the early and pilot implementation measures through which Guangdong opens up its service industries to the service providers of Hong Kong.

66. Under the leadership of the Chief Secretary for Administration, the HKSAR Government has strengthened the existing cross-bureau Steering Committee to oversee the overall co-ordination of policy bureaux’ efforts and the follow-up work. The policy bureaux of the HKSAR Government will maintain dialogue with the stakeholders of their respective policy areas. Members are invited to put forward their views and suggestions on the way forward in the above three major areas. 67. The National 12-5 Plan presents numerous opportunities for Hong Kong’s economic development. The people of Hong Kong should do their best to grasp these rare opportunities so as to promote economic and social development and improve their quality of life. In its future development, Hong Kong should endeavour to make greater contributions to the country’s development and achieve greater radiating effect especially in areas that Hong Kong has a competitive edge, such as advanced services and city management. Members are invited to put forward their views and suggestions on the following strategic issues:

(1) How should Hong Kong support the rapid development and

modernisation of the country more effectively during the National 12-5 Plan period?

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(2) How should Hong Kong capitalise on the opportunities offered by the National 12-5 Plan and the Framework Agreement to facilitate the entry of the Six Industries into the Mainland market, in particular the PRD market?

(3) Do Members have other suggestions on how to enhance Hong Kong’s economic strength in the medium and long term and promote Hong Kong’s industrial development during the National 12-5 Plan period?

Secretariat to the Commission on Strategic Development May 2011

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Annex 1

Extract of the Dedicated Chapter on Hong Kong and Macao in the “Outline of the

Twelfth Five-Year Plan for the National Economic and Social Development of the People’s Republic of China”

Article 14 Deepening co-operation in building a common home for the Chinese nation

From the fundamental interests of the Chinese nation, taking forward the implementation of “One Country, Two Systems” and the peaceful reunification of the motherland; deepening the economic and trade co-operation among the Mainland, Hong Kong and Macao; promoting the development of cross-strait economic relations and working together to bring about the great rejuvenation of the Chinese nation.

Chapter 57 Maintaining the long-term prosperity and stability of Hong Kong and Macao

Unswervingly implementing the principles of “One Country, Two Systems”, “Hong Kong people administering Hong Kong”, “Macao people administering Macao” and high degree of autonomy. Adhering strictly to the Basic Law of the Special Administrative Regions; and fully supporting the Chief Executives and Governments of the Special Administration Regions to govern according to law. Supporting Hong Kong and Macao to fully leverage their strengths and continue to play an important part in the overall development of the country.

Section 1 Supporting Hong Kong and Macao to reinforce and enhance their competitive advantages

Continuing to support Hong Kong in developing its financial services, shipping, logistics, tourism, professional services, information and other high-value-added services; supporting Hong Kong to develop into an offshore Renminbi business centre and an international asset management centre; supporting Hong Kong to develop into a high-value goods inventory management and regional distribution centre; reinforcing and enhancing Hong Kong’s status as an international centre for financial services, trade and shipping; and strengthening the global influence of its financial centre. Supporting Macao to develop into a world tourism and leisure centre and expedite its development as the service platform for business and trade co-operation between China and the Lusophone countries. Section 2 Supporting Hong Kong and Macao to nurture emerging industries Supporting Hong Kong and Macao to strengthen their capabilities in industrial innovation, expedite the nurturing of new economic growth points and take forward co-ordinated economic and social development. Supporting the development of industries where Hong Kong enjoys clear advantages including environmental

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industries, medical services, education services, testing and certification, innovation and technology, and cultural and creative industries and to widen the areas of co-operation and scope of services of these industries. Supporting Macao to promote the moderate diversification of its economy and to accelerate the development of its leisure tourism, convention and exhibition business, Chinese medicine, education services, cultural and creative industries. Section 3 Deepening economic co-operation of the Mainland with Hong

Kong and Macao

Strengthening exchanges and co-operation of the Mainland with Hong Kong and Macao; continuing to implement the Closer Economic Partnership Arrangement. Deepening co-operation among Guangdong, Hong Kong and Macao; implementing the Framework Agreements on Hong Kong/Guangdong Co-operation and Macao/Guangdong Co-operation; promoting co-ordinated regional economic development and developing a world-class metropolitan cluster with enhanced competitiveness. Supporting the development of a financial co-operation zone led by Hong Kong’s financial system and backed by financial resources and services of the cities in Pearl River Delta; building an advanced global manufacturing and modern services base; developing a modern economic circulation sphere; supporting Guangdong to open up its services industry to the service providers of Hong Kong through early and pilot implementation measures and gradual extension of the measures to other regions. Expediting the development of the Guangdong-Hong Kong-Macao Quality Living Area. Strengthening the planning and co-ordination of a comprehensive transportation system among Pearl River Delta Region, Hong Kong and Macao. Strengthening exchanges and co-operation between the Mainland and Hong Kong and Macao in areas of culture and education, etc. Special Column No. 22 － Major co-operation projects among Guangdong, Hong

Kong and Macao

01 Hong Kong-Zhuhai-Macao Bridge To construct a bridge-cum-tunnel sea-crossing carriageway, as well as separate boundary crossing facilities and link roads in Hong Kong, Zhuhai and Macao, to provide a land transport link connecting the three locations.

02 Guangzhou-Shenzhen-Hong Kong Express Rail Link To construct dedicated passenger railways linking up the Wuhan-Guangzhou Passenger Line and the Hangzhou-Fuzhou-Shenzhen Passenger Line.

03 Hong Kong-Shenzhen Western Express Line To study Hong Kong’s third cross-boundary railway linking up the Hong Kong International Airport with the Shenzhen Bao’an International Airport and passing through the Shenzhen Qianhai Area.

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Special Column No. 22 － Major co-operation projects among Guangdong, Hong Kong and Macao

04 Liantang/Heung Yuen Wai Boundary Control Point To shorten travel time between Hong Kong and Shenzhen East; enhance the handling capacity of vehicles and passengers and improve the efficiency of the eastern boundary crossing between Guangdong and Hong Kong.

05 Development of Qianhai New District, Shenzhen To expedite construction of city railways, railway networks, maritime transportation and boundary crossing infrastructure; develop Qianhai by 2020 into an important production service centre in the Asia Pacific region, and a Hong Kong/Guangdong modern service industry innovation and co-operation exemplary zone.

06 Development of Nansha New District, Guangzhou To develop Nansha into a business service centre, an innovation and technology centre and an education training centre serving the Mainland and linking up with Hong Kong and Macao, and to build a port-related industries support services co-operation zone.

07 Development of Hengqin New District, Zhuhai With a planning area of 106.46 square kilometers, to progressively develop the area into an exemplary zone for pursuing a new mode of co-operation among Guangdong, Hong Kong and Macao, a pilot zone for deepening reform and technology innovation, and a new platform for the upgrading of the industries in the western region of the Pearl River estuary.

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Annex 2

Value Added of and Employment in the Six Industries in 2009

Value Added (HK$Million)

Percentage in GDP

(%)

Employment Percentage in Total

Employment(%)

Environmental Industries

4,697 (0.3%) 32 410 (0.9%)

Medical Services

24,077 (1.6%) 71 990 (2.1%)

Education Services

16,386 (1.1%) 62 240 (1.8%)

Testing and Certification

5,090 (0.3%) 12 610 (0.4%)

Innovation and Technology

10,733 (0.7%) 27 470 (0.8%)

Cultural and Creative Industries

62,935 (4.1%) 188 250 (5.4%)

Total: 123,918 (8.0%) 394 970 (11.3%)

Source: Hong Kong Monthly Digest of Statistics (February 2011)