XN000022-1984-03-30 — Page 11

FRIDAY, MARCH 30, 1984

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THE INDUSTRY DEPARTMENT WILL THEREFORE BE SENDING COPIES OF THE TWO REPORTS TO THE MAJOR TRADE AND INDUSTRIAL ORGANISATIONS FOR THEIR COMMENTS. THEY WILL HAVE THREE MONTHS IN WHICH TO SUBMIT THEIR VIEWS, INCLUDING THEIR VIEWS ON THE PROPOSED LEVY, TO THE SECRETARIAT OF THE IDB.

IT IS INTENDED THAT THE PRODUCTIVITY CENTRE'S STUDY TOGETHER WITH THE AD HOC WORKING GROUP'S REPORT ON IT WILL BE AVAILABLE TO THE GENERAL PUBLIC IN DUE COURSE.

BACKGROUND ON THE ETDC AND THE PROPOSED LEVY

THE FINDINGS OF THE STUDY ON THE HONG KONG ELECTRONICS INDUSTRY SUBMITTED IN MAY 1983 INDICATED THAT WHILST THE LOCAL ELECTRONICS INDUSTRY EXPERIENCED A COMPOUND ANNUAL EXPORT GROWTH RATE OF 25 PER CENT BETWEEN 1971 AND 1981, THE VALUE-ADDED PER UNIT SALE DROPPED FROM AN AVERAGE OF 30 PER CENT IN 1973 1977 TO 25 PER CENT IN 1980.

THE ELECTRONICS INDUSTRY IS HEAVILY BIASED TOWARDS PRODUCTION AND THERE IS VERY LITTLE ACTIVITY IN, FOR EXAMPLE, RESEARCH AND DEVELOPMENT, PRODUCT ENGINEERING AND DESIGN, ETC. THIS COULD RESULT IN THE INDUSTRY NOT BEING ABLE TO ACCUMULATE FOR ITSELF THE EXPERIENCE AND CAPABILITY TO MOVE UP MARKET.

THE AD HOC WORKING GROUP THEREFORE ACCEPTED THAT AN ETDC, WHICH DIFFERED ONLY IN NAME FROM THE PROPOSAL FOR THE ESTABLISHMENT OF AN ELECTRONICS TECHNOLOGY DEVELOPMENT LABORATORY BY THE PRODUCTIVITY CENTRE, +APPEARS THE MOST PRACTICAL AND FEASIBLE APPROACH TO GIVE A STRONG IMPETUS FOR THE LOCAL INDUSTRY TO UPGRADE PRODUCTION AND TO EXPLOIT MARKET OPPORTUNITIES FOR ELECTRONICS PRODUCTS.

THE OBJECTIVE OF THE ETDC IS TO FACILITATE THE DEVELOPMENT OF +TECHNOLOGY-INTENSIVE INDUSTRIES IN HONG KONG THROUGH A MECHANISM OF TECHNOLOGY SCREENING, SELECTION, ADAPTATION, DEMONSTRATION, CONSULTANCY AND TRAINING FOR THE DESIGN OF ELECTRONIC PRODUCTS AND UPGRADING OF PRODUCTION TECHNOLOGY TO MEET INTERNATIONAL MARKET DEMANDS.

THE PROPOSED LEVY IS NEEDED TO PROVIDE THE INITIAL FUNDING FOR THE ESTABLISHMENT OF AN ELECTRONICS TECHNOLOGY DEVELOPMENT CENTRE (ETDC).

THE PROPOSED LEVY IS INTENDED TO COVER DOMESTIC EXPORTS OF ALL ITEMS WHICH ARE EITHER NORMALLY REGARDED AS ELECTRONICS PRODUCTS, OR ARE DEDICATED FOR USE IN ELECTRONICS PRODUCTS, OR CONTAIN AN ELECTRONICS CONTENT, HOWEVER SMALL. THIS COULD VIRTUALLY COVER ALL MANUFACTURING INDUSTRY. A FUND CREATED ON THIS BASIS MIGHT THEN BE DEVELOPED TO COVER INDUSTRIAL DEVELOPMENT GENERALLY, INCLUDING ALL RESEARCH AND DEVELOPMENT PROJECTS, RECOMMENDED BY THE IDB.

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