CHAPTER 6 TRADE AND INDUSTRY
HONG KONG's economy continued to mature during the year towards being a regional service and commercial centre and a high-value-added manufacturing base. The government continued to promote manufacturing and service industries and upgrade technological infrastructure.
Hong Kong's external trade declined in 1998 amid regional financial turmoil, with total trade down by 9.6 per cent compared with the previous year. Domestic exports, re-exports and imports had a total value of $188 billion, $1,159 billion and $1,429 billion, respectively.
Trade and Industrial Policies
Hong Kong's continuing success as a leading commercial and manufacturing centre owes much to a simple tax structure and low tax rates, a versatile and industrious workforce, an excellent infrastructure, free flow of capital and information and the government's firm commitment to free trade and free enterprise. The government believes its task is to facilitate commerce and industry within the framework of a free market. The HKSAR maintains no tariffs and no regulatory trade and investment measures other than those required to discharge its international obligations or to protect health, the environment and access to high technology.
The government's industrial policies aim to promote industrial development by creating a business-friendly environment and providing adequate support services. The government zones land for general and specialised industrial use, maintains and develops advanced education and training facilities, ensures a modern legislative and regulatory environment, and funds facilities to enhance productivity and quality. It also promotes inward investment but neither protects nor subsidises any specific industries.
With the weight of the Hong Kong economy shifting towards knowledge-based and higher value-added activities, the government puts increasing emphasis on promoting innovation and technological improvement in industry and business. It aims to strengthen support for technology development and application, build up a critical mass of fine scientists and engineers, skilled technicians and venture capitalists, and encourage the development of a significant cluster of technology-based businesses. The Chief Executive's Commission on Innovation and Technology, appointed in March 1998 and chaired by Professor Chang-Lin Tien, recommended several measures to this end. These include the establishment of a $5 billion Innovation and Technology Fund and an Applied Science and Technology Research Institute, as well as measures to stimulate university-business partnership in research and development
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