ENG-1999 — Page 134

CHAPTER 6

Trade and Industry

104

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 the HKSAR's technological infrastructure.

Hong Kong's external trade declined slightly in 1999, with total trade down by 1.3 per cent compared with the previous year. Domestic exports, re-exports and imports had a total value of $171 billion, $1,178 billion and $1,393 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 that its task is to facilitate commerce and industry within the framework of a free market. Hong Kong 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 specific industries.

The Chief Executive's Commission on Innovation and Technology appointed in March 1998 to advise the Chief Executive on measures to work towards the vision of making Hong Kong an innovation centre for South China and the region submitted its Second and Final Report in June. It made a number of recommendations for driving forward innovation and technology development in Hong Kong, particularly in respect of the institutional arrangement and the building up of human capital. The Government has accepted all of the commission's recommendations.

External Trade

Hong Kong's external trade continued to be dampened by the Asian financial turmoil in the first half of 1999. It picked up in the second half of 1999 amidst the economic recovery in East Asia and the robust demand in the major markets. For the whole