- In July 1993 Democratic Party Economic Spokesman Dr Huang Chen-ha proposed the following
motion debate in the Legislative Council:
As Hong Kong is going through a phase of structural transformation in its economy of
which service industries have become a dominant part, this Council urges the government to
conduct a comprehensive review on the requirements for the development of our service
industries, to formulate relevant policy and to set up the appropriate committee(s) with a
view to making Hong Kong a major service centre in Asia.
- The motion debate was welcomed by the HKCSI as it reflected a recognition of the role of
the service sector, and encouraged discussion and debate. However, the HKCSI had
reservation about the motion in that it lacked a substantive subject matter. In its
comments on the Motion, the HKCSI observed that there was no single service industry in
Hong Kong but rather a diverse range of different operations, each having its own
characteristics and problems. An informed debate on "service industries" as a
whole would require a subject matter which would be of interest to most service
industries, such as "quality and standards" which the CSI has taken up. Without
a concrete subject matter, the "comprehensive review" of service industries
suggested in the motion might become just a general overview of the Hong Kong economy as a
whole.
- The motion debate was passed by a voice vote. In his response to the motion debate on
behalf of government, Financial Services Secretary Michael Cartland referred publicly to
the role of the HKCSI: "The CSI provides a focal point for liaison between the
service sector and government... The existence of the Coalition certainly helps to expand
our range of contacts with the service industries and to ensure closer cooperation on the
general development of the service sectors."
- Since then regular informal meetings were held between CSI Chairman Brian Stevenson,
Secretary General W.K. Chan and Financial Services Secretary Michael Cartland, who was
tasked by the Financial Secretary to coordinate government policy on service industries.
Through these discussions the issue of promotion of services was gradually developed.
- At once stage (March 1994), the idea of a promotional agency in parallel with the TDC
but based upon the HKCSI was raised by Financial Services Branch. However, the CSI
Chairman and Secretary General were of the view that taking the interest of Hong Kong as a
whole, the use of TDC resources would be more cost effective provided that the TDC could
be made to be more responsive to the needs of the service industries. It was agreed that a
study should be done to determine the need for services promotion and the best
institutional arrangement.
- In March 1994 the CSI formed a subgroup to consider the issue of promotion of services.
Financial Services Branch had undertaken to provide assistance for a study on the subject
but the CSI went on to conduct a survey on its own among Chamber members in May 1994. The
result of the survey showed conclusively that there was a perceived need to promote Hong
Kong's service sector. The results were submitted to Mr Cartland during one of the regular
meetings with the CSI Chairman and Secretary General on 28 June 1994.
- In July 1994 the Coalition published an exploratory essay "Promotion of Hong Kong's
Service Sector", which was reproduced in the Chamber's Bulletin in September 1994, to
stimulate discussion on the subject.
- In August 1994, in a paper to the Governor in respect of his annual Policy Address, the
Coalition submitted the following:
The HKCSI has conducted a survey and established that there is a perceived need to
promote Hong Kong's service sector overseas, in the same way Hong Kong's trade is being
promoted overseas by the joint effort of Chambers of Commerce and the Trade Development
Council. Taking account of the complexity of the service industries, any such overseas
promotion will require very careful planning and, above all, a cooperative effort by both
the private and the public sectors. A commitment by the Governor to helping service
industries promote themselves will be very welcomed.
- On 5 October 1994, during the Legislative Council meeting on the Governor's Policy
Address, the following question was put to the Governor by the Hon David Li: "...The
result of a recent survey by the coalition of service industries reached a clear concensus
on the need to promote our service industries abroad. Mr Governor, would you inform this
Council what steps are being taken or planned to promote our service industry
internationally to the advantage of Hong Kong?" To this the Governor replied:
...The point that the Honourable Member has raised, has of course been raised by
others, not least in his own functional constituency who have pointed out that the Trade
Development Council has a specific role related to largely in the past to the
manufacturing sector and that work should embrace the financial services sector and the
service sector as a whole. I am wholly supportive of that idea. I think it makes a
considerable amount of sense. While manufacturing remains very important to our
economy...the service sector is much more important than it has been in the past and it
deserves the Government's active support in selling the service sector to the region and
to the world.
- On 15 October 1994, the Financial Secretary Sir Hamish Macleod formed a steering
committee on promotion of services, consisting of representatives from Economic Services
Branch, Financial Services Branch, TDC and CSI (represented by Brian Stevenson and W.K.
Chan), and chaired by Secretary for Trade & Industry. The steering committee decided
to commission a consultancy study on promotion of services, and established the terms of
reference for the study which included, among other things, to establish the need for the
promotion of Hong Kong's service industries, to identify which service industries in Hong
Kong should be promoted, to establish the type of promotional services they require, and
to consider and recommend the resource requirements.
- In December 1994 the steering committee selected KPMG Peat Marwick as consultant, who
started work in January 1995. The consultant was given an extremely tight deadline to
complete the study. Through the HKCSI secretariat, the consultant interviewed some 30
members of the HKCSI representing different service sectors. This enabled the consultant
to complete the first stage of its study and present its preliminary results in three
weeks' time. On 4 February 1995, five weeks after the consultant started work, an interim
report was completed. The preliminary finding suggested that the promotional strategy be
based on developing themes and business issues which bind the various sectors together,
emphasising links to other sectors. The themes and sectors should be mutually
re-inforcing, emphasising the scale and scope of Hong Kong services, with particular
reference to Hong Kong's regional role and its functional role (as headquarter and
financial, telecom, information, trade, professional and tourism centre.) The consultant
was then asked to recommend, in the final report, resources and organisation options.
- On 1 March 1995, in his final Budget Speech, the Financial Secretary committed
government to working together with the CSI to determine how best to promote services:
...While the Government has provided a framework to encourage the development of the
service sector, its role in promoting trade in services has been relatively modest. This
is hardly surprising. When the Trade Development Council was established, our exports were
dominated by trade in goods. However, given the growing potential for trade in services, I
believe that there is now a case for a more balanced approach to overseas promotion. The
preliminary results of a consultancy study suggest there are several areas where carefully
targetted promotion could help to reinforce Hong Kong's position as a world class service
centre for the Asia Pacific region. Over the next few months, we shall be working with
bodies such as the Coalition of Service Industries and the Trade Development Council to
determine how best this should be done. I believe a new initiative in this area would be
very worthwhile. We have very considerable expertise to sell.
- This initiative was welcomed by the HKCSI which issued a press release accordingly.
- In April 1995 the steering committee met again to hear the final report by the
consultant. The report was then published for public consultation. On 10 May the Acting
Secretary for Trade and Industry Mrs Regina Ip was invited to a meeting of the HKCSI's
Executive Committee to discuss the findings of the report. After further consultation with
the 84 members of the CSI's 8 committees, the HKCSI submitted its response to the
consultancy report to the government on 31 May.
- When Mr Donald Tsang too over as Financial Secretary in September 1995, he expanded the
scope of services promotion considerably. When KPMG was commissioned to conduct the study,
the scope of services promotion was limited to that of exports. Under Mr Tsang's
leadership, the concern was expanded to include consideration over Hong Kong's domestic
productive capacity.
- In his first speech to the business community on 6 September 1995, delivered to a
General Chamber of Commerce audience, Mr Tsang made the following announcement:
I recognise that Hong Kong has to meet complex challenges in the transition from a
manufacturing-based to a service-oriented economy. To ensure that we stay ahead of the
game, I have set up a Task Force, which I personally chair, comprising key Policy
Secretaries. Its mission is to come up with proposals for new policies and new
institutions to promote the service industries. This work will include an assessment of
Hong Kong's strengths and weaknesses as a service economy, the strategies and priorities
for the future, and how to create a domestic environment conducive to further development
of services. We will need your input, Ladies and Gentlemen, as well as the advice of the
services sector as a whole. Let me invite your full and frank participation in this
endeavour.
- The Financial Secretary was echoed later by the Governor in the 1995's Policy Address
delivered on 11 October in which the Governor said:
The Financial Secretary...has already established a Task Force to chart a course for
the further expansion of our service industries. This will be reviewing what we can do to
provide a regulatory and administrative environment conducive to the future development of
our service industry. It will listen carefully to the views of business representatives
and professional experts...
- In the meantime, through the Task Force's direction, a number of government departments
conducted separate studies aimed at identifying action proposals to promote the different
service sectors. The HKCSI and its constituent bodies provided further input into these
studies.
- At the same time, the Financial Secretary set up an ad hoc advisory group comprising
private sector representatives to assist in formulating his strategy for promotion of
services. Both the CSI Chairman Brian Stevenson and Chairman of the CSI Statistics
Committee KC Kwok were members of the ad hoc group.
- In July 1995 the Hong Kong Productivity Council commissioned the same KPMG consultants
to conduct a study on improving productivity of the trading (import, export and trading)
sectors. The HKCSI was invited to join a steering committee for the study and was
represented by Secretary General Dr W.K. Chan. The study was completed in September 1995
and the steering committee was transformed into a working group on the results of the
study. Through Dr Chan, the CSI continued to participate in the working group in
considering the consultant's recommendations. Based on the consultancy report, HKPC
formulated paper for consultation with industry. The paper was examined by the HKCSI which
submitted its response in February 1996.
- An expectation having been created that a service promotion initiative would be launched
by the time of the Financial Secretary's Budget speech, the HKCSI conducted further
consultation among its members and submitted a papers entitled "Towards Service
Excellence" in December 1995 to the Financial Secretary, setting out what the CSI
regarded as the framework for promotion of services and 29 recommendations for government
action. At the invitation of the government, the CSI also agreed to be an organiser and
sponsor of a symposium on services promotion planned for 12 March 1996.
- In January 1996 the Financial Secretary's Task Force produced 67 action proposals for
consideration. Through the CSI Chairman acting in his capacity as a member of the
Financial Secretary's ad hoc advisory group, the CSI submitted a point-by-point response
with another paper on benchmarking of services. The CSI followed this up with another
round of consulation among the 120 members of its nine committees and as a result
submitted a follow up paper "Towards Service Excellence II" to the Financial
Secretary on 14 February, putting forward 15 additional proposals.
- On 6 March 1996, in his maiden Budget speech, Financial Secretary launched his services
promotion initiatives in the form of an addendum to the Budget. The HKCSI again welcomed
this with a press release to the public. Mr Stevenson delivered an address at the 12 March
Symposium giving further support to the promotion proposals.
- As an ongoing exercise, the HKCSI is developing an action agenda in follow up to its
previous position papers on services promotion.
