TRADE AND INDUSTRY
110
Following the publication at the end of 1996 of its report, Competition Policy: the Key to Hong Kong's Future Economic Success, the council carried out an extensive programme of meetings with trade associations and other representative bodies, to brief them on the findings of the report and its recommendations. The report concluded that Hong Kong needed a comprehensive policy and related legislation to promote fair competition. The council recommended enacting a competition law to tackle horizontal and vertical collusive agreements and abuse of a dominant position. It proposed establishing a Competition Authority to investigate possible breaches of the Law and an Appeal Body to hear appeals against decisions by the Competition Authority. The report also recommended action to promote an understanding of the aims of competition policy within government and among the business community and the general public.
The government responded in November 1997 and accepted the council's recommendation to adopt a comprehensive competition policy. It will issue a clear policy statement on competition and require all bureaux to give due regard to the competition angle in setting new policies or reviewing existing ones. It will also request all bureaux and departments to submit new initiatives for promoting competition. The Consumer Council will continue to monitor and review trade practices in the private sector and direct more efforts to help businesses draw up codes of pro-competition practices. The Financial Secretary will chair a Competition Policy Advisory Group to co-ordinate the government's policy in this area. However, the government does not believe an all-encompassing competition law is appropriate at this stage of Hong Kong's economic development.
The council also continued to follow up its report, How Competitive is the Private Residential Property Market?, published in July 1996, and published a supplementary report in January 1997 addressing concerns that developed in late-1996 over a spate of property speculative activities through shell companies and 'chip trading'. It recommended that developers should require applications from companies to specify the name of the beneficial owners and directors and that developers should not allow any owner more than one application. It also recommended prohibiting changes in the beneficial ownership of companies that were successful in a ballot.
The government's response to the council's reports on property was released in May 1997. It accepted 18 of the council's 21 recommendations, including: supplying lots of appropriate size in land auctions, improving efficiency of the development mechanism, publishing medium-term land disposal programmes, rezoning more industrial areas for residential purposes, improving accuracy of estimates of housing supply, requiring developers to sell flats within a specified period to facilitate housing supply, devising a recognised building-certification programme and facilitating the release of developer's land banks for housing. The three recommendations rejected were: the setting up of a framework for specialised mortgage agencies, extending anti- speculation measures to non-consent scheme developments and opening more opportunities for and favouring small developers in housing developments.
The council also published a report, Car Parking in Private Residential Developments, in August. This report was concerned with trade practices arising from complaints on the sale of blocks of car parking spaces to non-residents without residents being given sufficient opportunities to buy and on alleged changes in rental arrangements without adequate notice. The council recommended that land grants should include a requirement that only owners might buy spaces and only owners or