RESTRICTED  
  
WT/TPR/G/380  
1 October  2018 
(18-6023) Page: 1/18 
Trade Policy Review Body   Original: English  
 
TRADE POLICY REVIEW  
REPORT BY  
HONG KONG, CHINA 
Pursuant to the Agreement Establishing the Trade Policy Review Mechanism (Annex 3 of the 
Marrakesh Agreement Establishing the World Trade Organization), the policy statement by 
Hong Kong, China  is attached.  
 
 
Note: This report is subject to restricted circulation and press embargo until the end of the first 
session of the meeting of the Trade Policy Review Body on Hong Kong, China . WT/TPR/G/3 80 • Hong Kong, China  
 
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  Contents  
 
 
1   INTRODUCTION  ................................ ................................ ................................ ..........  4 
2   ECONOMIC ENVIRON MENT  ................................ ................................ ..........................  4 
2.1   Overview  ................................ ................................ ................................ ....................  4 
2.2   Economic Outlook  ................................ ................................ ................................ ........  4 
2.3   Fiscal Policy  ................................ ................................ ................................ ................  5 
2.4   Monetary Policy  ................................ ................................ ................................ ...........  5 
3   TRADE POLICY AND  DEVELOPMENT S ................................ ................................ ..........  5 
3.1   Trade Policy Objectives  ................................ ................................ ................................  5 
3.2   Participation in the World Trade Organization  ................................ ................................ .. 5 
3.3   Participation in Other Regional and International Fora  ................................ ......................  6 
3.3.1    Asia-Pacific Economic Cooperation  ................................ ................................ ..............  6 
3.3.2    Organisation for Economic Cooperation and Development  ................................ ..............  6 
3.4   Bilater al and Plurilateral Trade Initiatives  ................................ ................................ ........  7 
3.4.1    Free Trade and Investment Agreements  ................................ ................................ ...... 7 
3.4.1.1    Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA)  ..................  7 
3.4.1.2    HKC–New Zealand Closer Economic Partnership Agreement  ................................ ........  7 
3.4.1.3    HKC–EFTA Free Trade Agreement  ................................ ................................ ............  7 
3.4.1.4    HKC–Chile Free Trade Agreement  ................................ ................................ ............  8 
3.4.1.5    HKSAR and Macao SAR Closer Economic Partnership Arrangement  ...............................  8 
3.4.1.6    HKC–ASEAN Free Trade Agreement  ................................ ................................ ..........  8 
3.4.1.7    HKC–Georgia Free Trade Agreement  ................................ ................................ ........  8 
3.4.1.8    Free Trade Agreements under Negotiation  ................................ ................................  8 
3.4.1.8.1    HKC-Maldives Free Trade Agreement  ................................ ................................ ..... 8 
3.4.1.8.2    HKC-Australia Free Trade Agreement  ................................ ................................ ..... 9 
3.4.1.9    Trade in Services Agreement  ................................ ................................ ...................  9 
3.4.1.10    Investment Promotion and Protection Agreements ( IPPAs ) ................................ ........  9 
3.4.2    Other Trade -related Initiatives  ................................ ................................ ...................  9 
3.4.2.1    The Belt and Road Initiative  ................................ ................................ ....................  9 
3.4.2.2    Guangdong -Hong Kong -Macao Bay Area  ................................ ................................ ... 9 
4   KEY DEVELOPMENTS  IN TRADE POLICY  ................................ ................................ .... 10 
4.1   Customs and Trade Facilita tion ................................ ................................ ..................... 10 
4.2   Trading and Logistics Services  ................................ ................................ ...................... 11 
4.3   Financial Services  ................................ ................................ ................................ .......11 
4.3.1   Banking  ................................ ................................ ................................ .................. 11 
4.3.2    Securities and Futures  ................................ ................................ .............................. 12 
4.3.3    Insurance  ................................ ................................ ................................ ............... 12 
4.3.4    Offshore Renminbi (RMB) Business  ................................ ................................ ............ 13 WT/TPR/G/3 80 • Hong Kong, China  
 
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  4.3.5    Stock and Bond Connection Schemes  ................................ ................................ ......... 13 
4.4   Tourism  ................................ ................................ ................................ ..................... 13 
4.5   Business and Professional Services  ................................ ................................ ............... 14 
4.6   Innovation and Technology  ................................ ................................ .......................... 14 
4.7   Intellectual Property Trading  ................................ ................................ ........................ 15 
4.8   Protection of Intellectual Property Rights  ................................ ................................ .......15 
4.8.1    Legislation  ................................ ................................ ................................ .............. 15 
4.8.1.1    Patents Law  ................................ ................................ ................................ ......... 16 
4.8.1. 2   Copyright Law  ................................ ................................ ................................ ......16 
4.8.1.3    Trade Marks Law  ................................ ................................ ................................ ...16 
4.8.2    Enforcement  ................................ ................................ ................................ ........... 16 
4.8.3    Public Education  ................................ ................................ ................................ ......17 
4.8.4   Cooperation with Rights Owners and Law Enforcement Agencies  of Other 
Jurisdictions  ................................ ................................ ................................ ...................... 17 
4.9   Competition Policy  ................................ ................................ ................................ ......18 
5   CONCLUSION ................................ ................................ ................................ .............  18 
 
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  1  INTRODUCTION  
1.1.  Hong Kong, China (HKC) is one of the world 's most open economies with a business and 
investment -friendly environment characteri zed by free trade, f ree flow of information, sound and 
transparent regulatory regimes, a robust legal system, simple taxation and low tax rates, and well -
developed transport and telecommunications infrastructure.  
1.2.  In the Index of Economic Freedom released by The Heritage Foun dation in 2018, HKC ranked 
first for the 24th consecutive year. HKC has also consistently been ranked as the freest economy 
in the Fraser Institute's annual report on Economic Freedom of the World.  For 13 years in a row, 
the World Bank has accredited HKC among the  top five economies in terms of ease of paying 
taxes. The World Bank also ranked HKC the fifth easiest place to do business in the world in the 
Doing Business 2018  report.  
1.3.  The Basic Law of the Hong Kong Special Administrative Region (HKSAR) provid es that the 
HKSAR shall maintain the status of a free port, safeguard the free movement of goods and capital, 
be a separate customs territory, and may, on its own, using the name "Hong Kong, China ", 
maintain and develop relations and conclude and implement  agreements with foreign states and 
regions or international organizations in the appropriate fields, including but not limited to the 
economic and trade fields, as well as participate in international organizations and conferences not 
limited to states. T his forms the foundation for HKC 's separate membership in the World Trade 
Organization (WTO).  
1.4.  The institutions and policies that have served HKC well to date, including the rule of law, free 
and open market, a simple tax regime, and a level playing field f or business, remain the bedrock 
of HKC 's prosperity.  Since the last Trade Policy Review in 2014, HKC  has continued to leverage on 
the unique advantages under the "One Country, Two Systems " and inject new impetus to HKC 's 
economy. Through participating in multilateral, regional, plurilateral and bilateral trade 
agreements, HKC secures, maintains and improves access to foreign markets for its goods and 
services.  
2  ECONOMIC ENVIRONMENT  
2.1  Overview  
2.1.  HKC's economy grew by 2.4% in 2015 and 2.2% in 2016, followed by a pick-up in growth to  
3.8% in 2017  alongside the broad -based global economic upturn . The GDP at current market 
prices reached HK$2.7 trillion (US$341 billion) in 2017. The external sector was supported by the 
broad -based global economic upswing that gave ri se to more vibrant global trade flows.  Domestic 
demand also strengthened.   
2.2.  HKC is  a leading trade and financial cent re in the world . In 2017, HKC ranked seventh in the 
world in terms of merchandise trade.  In the same year , HKC was the world 's sixth largest  banking 
centre in terms of external positions, and had the sixth largest stock market in terms of market 
capitalization . We were also the  fourth largest foreign exchange  centre in terms of turnover 
according to a triennial survey conducted by the Bank for  International Settlements in 2016.   
2.3.  HKC's long -term credit ratings are  "AA+" by S&P, "Aa2" by Moody's , and "AA+" by Fitch.  
2.2  Economic Outlook  
2.4.  As a small and open economy, HKC 's near -term economic outlook will mainly hinge on the 
global economic conditions.  Looking ahead, the current growth momentum of the global economy 
should remain supportive to HKC 's exports in the near term.  Domestic demand should continue to 
be underpinned by favourable  job and income conditions and ongoing infrastructure works.  It is 
forecast that the 2018 annual economic growth will be 3 -4%. 
2.5.  Yet, uncertainties in the external environment increased markedly of late, as a result of the 
escalation of US trade conflicts with major economies.  The expectation of continued US interest 
rate hi kes has also turned firmer.  These developments could weigh on global economic sentiment 
as well as trade and investment activities going forward.  Local economic sentiment and asset WT/TPR/G/3 80 • Hong Kong, China  
 
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  markets could also be adversely affected.  The HK SAR Government will continu e to monitor the 
situation closely.  
2.6.  The medium -term outlook for the HKC economy is positive.  Asia will remain an important 
global growth driver.  With its strong competitive edges, HKC could leverage on the huge growth 
potential in Asia.  
2.3  Fiscal Policy  
2.7.  The Government has had fiscal surplus  in fourteen consecutive years since 2004 and its fiscal 
position remains strong . As of March 2018, its  accumulat ed fiscal reserve s amounted  to 
HK$1,103  billion (US$ 141 billion). Surplus for the 2017 -18 financial year  was HK$149 billion 
(US$19 billion ) or 5.6% of GDP. According to the medium range forecast for the five -year period 
ending 2022 -23, there will be fiscal  surpluses in every  financial year during the period , and 
accumulated fiscal reserves will grow to  HK$1,222  billion (US$ 157 billion), representing 
approximately 35.6% of GDP and 21 months of government expenditure.   
2.8.  The fiscal philosophy put forward by the Chief Executive in the 2017 Policy Address envisages 
that, on the premise of ensuring the he alth of public finance, the Government should adopt 
forward -looking and strategic financial management principles in optimi zing the use of surplus to 
invest for HKC and relieve people's burdens. HKC  strives to be innovative, responding to 
community aspirations promptly a nd effectively and making a head start to foster long -term 
development.  
2.9.  HKC will ensure the sustainability of public finances by upholding prudent fiscal disciplines 
and by keeping the government budget commensurate with the growth rate of the economy over  
time. HKC will also strive to preserve, stabili ze and broaden the revenue base.  
2.4  Monetary Policy  
2.10.   HKC is a small and highly externally -oriented economy. HKC 's trade -to-GDP ratio was 375% 
in 2017. A credible fixed -exchange rate system helps minimize the exch ange rate risk, benefiting 
externally -oriented businesses. A stable Hong Kong dollar  is also an important anchor for financial 
stability, which underpins HKC's position as an international financial centre.  
2.11.   The monetary policy objective of HKC is currency stability, defined as a stable external 
exchange value of the currency of HKC, in terms of its exchange rate in the foreign exchange 
market against the U.S. dollar, at around HK$7.80 to US$1. The structure of the monetary system 
is characterized by currenc y board arrangements, requiring the Hong Kong dollar monetary base 
to be at least 100% backed by, and changes in it to be 100% matched by corresponding changes 
in, U.S. dollar reserves held by the Exchange Fund at the fixed -exchange rate of HK$7.80 to US$1 . 
3  TRADE  POLICY AND  DEVELOPMENT S 
3.1  Trade Policy Objectives  
3.1.  HKC's trade policy objectives are  to support and promote a free, open and stable rules -based  
multilateral trading system; to safeguard our rights and fulfil our obligations under multilateral, 
regiona l, plurilateral,  and bilateral agreements and arrangements; and to secure, maintain and 
improve market access for our exports.   
3.2.  The multilateral trading system under the WTO is the cornerstone of HKC 's trade policy. As 
one of the most externally -oriented a nd open economies in the world, HKC embraces the 
globali zation of trade and services , and is committed to supporting the multilateral trading system.  
3.2  Participation in the World Trade Organization  
3.3.  HKC is  a founding Member and a staunch supporter of the WTO . HKC's participation in the 
WTO is guided by two key objectives, i.e. to foster  progressive global trade liberali zation and to 
strengthen the rules  of the  multilateral trading system so  as to provide an effective framework to 
protect HKC against arbitrary and discriminatory actions  by trading partners . HKC believes that t he WT/TPR/G/3 80 • Hong Kong, China  
 
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  rules-based system embodied in the WTO and the  dispute settlement mechanism can provide the 
most effective insurance agai nst trade conflicts and protectionism.  
3.4.  HKC takes its rights and obligations in the WTO seriously. HKC also attaches great 
importance to the timely submission of notifications under all WTO Agreements. As the first WTO 
Member accepting the Agreement on Trad e Facilitation (TFA), HKC implemented all provisions in 
Section I of the TFA upon its entry into force on 22 February 2017. HKC has also established a 
coordinating mechanism, involving 10 government bureaux and departments, to oversee and 
facilitate the co ordination and implementation of the TFA. HKC will continue to ensure that its non -
tariff measures are in compliance with WTO Agreements and are maintained as necessary to 
protect public health, safety, security and the environment, and to fulfil its inter national 
obligations.  
3.5.  HKC also participates actively in the work of the WTO on all levels.  HKC's representatives 
have taken up various positions in WTO bodies . Its Secretary for Commerce and Economic 
Development was also one of the three Vice -chairs of the Eleventh Ministerial Conference ( MC11).  
HKC is committed to taking a balanced and progressive approach to strengthen the functions of 
the WTO and preserve its credibility and relevance. Prior to the MC11 , HKC was actively engaged 
in the discussions on dom estic regulation on trade in services, e -commerce, Investment 
Facilitation for Development and Micro, Small and Medium -sized Enterprises (MSMEs).  
3.6.  HKC continues to pursue plurilateral initiatives with other interested WTO Members, provided 
that these initi atives are consistent with WTO rules and can contribute to multilateral trade 
liberali zation. Following the conclusion of negotiation on expanding the product coverage of the 
Information Technology Agreement (ITA II) during MC10 in 2015, HKC was amongst th e first 
participants to complete the modification of the tariff schedule before 1  July 2016 to implement 
the tariff elimination of the 201  products agreed under ITA  II. HKC will continue to contribute to 
the work of the Committee of Participants on the Expansion of Trade in Information Technology 
Products . Being a Party to the Agreement on Government Procurement (GPA), HKC will also 
continue to actively take part in the work of the Committee on Government Procurement, including 
discussions on the agreed work programmes in the revised GPA and Members ' accession to the 
GPA. Between 2014 -16, HKC has actively participated in the plurilateral negotiations on the 
Environmental Goods Agreement (EGA), which can be a  viable building block for multilateral 
liberali zation of trade in environmental good s and  contribute to the international environmental 
protection agenda.  HKC remains committed to the EGA negotiation and looks forward to its early 
conclusion.  
3.3  Participation in Other Regional and International Fora  
3.3.1   Asia-Pacific Economic Cooperation  
3.7.  HKC attaches great importance to regional economic cooperation with the aim of promoting 
free and open trade in support of the multilateral trading system and contribute s to its work.  Such 
work includes, among others, (a) APEC' s statements in support of the rules -based multilateral 
trading system with the WTO at its core; (b) initiatives to improve connectivity and deepen 
regional economic integration, including the pursuit of the Free Trade Area of the Asia Pacific 
(FTAAP); (c)  initiatives to build capacity of member economies to promote sustainable and 
inclusive growth in the region; and (d) APEC's work in mapping out its Post -2020 Vision.  
3.8.  APEC leaders set a visionary goal of free and open trade and investment in Bogor, Indone sia 
in 1994 (often referred to as "the Bogor Goals") for industrialized economies to achieve no later 
than 2010 and developing economies no later than 2020. Since 2014, the APEC Policy Support 
Unit (PSU) has prepared two interim reviews to assess the progress made towards the Bogor 
Goals, one in 2016 and another in 2018. In the 2018 report, the PSU noted that HKC maintains a 
liberal, open and transparent regim e for services trade and investments .  
3.3.2   Organisation for Economic Cooperation and Development  
3.9.  HKC has been a participant to the Organisation for Economic Cooperation and Development 
(OECD) 's Trade Committee and Committee and Financial Markets since 1994 and  1995 WT/TPR/G/3 80 • Hong Kong, China  
 
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  respectively.  HKC has also participated in the Trade Session (renamed as Trade and Investment 
Session since 2016) of the OECD annual Ministerial Council Meeting since 2009.  
3.4  Bilater al and Plurilateral Trade Initiatives  
3.10.   HKC is committed to strengthening economic relations and seeking trade facilitation and 
investment -related cooperation with its trading partners. HKC has kept an open mind to 
negotiating bilateral and plurilateral free trade agreements (FTAs) with its key and potential 
tradin g partners, so lon g as they are in HKC's interests  and consistent with WTO rules.  So far, HKC 
has signed seven FTAs, respectively with Mainland China, New Zealand, the Member States of the 
European Free Trade Association (EFTA), Chile, Macao, the Associati on of Southeast Asia n Nations 
(ASEAN) and Georgia. We are now negotiating FTAs respectively with Maldives and Australia.  
3.4.1   Free Trade and Investment Agreements  
3.4.1.1   Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA)  
3.11.   Mainland  China  and HKSAR signed the "Mainland and Hong Kong Closer Economic 
Partnership Arrangement" (CEPA) on 29 June 2003. CEPA is the first FTA concluded by HKC. It 
adopts a building block approach to expand its scope and content for achieving progressive 
liberali zation and facilitation of trade and investment.  The two sides have since 2004 signed ten 
Supplements.  Since the last Trade Policy Review in 2014, the two sides have also signed four 
subsidiary agreements, which are " Agreement between the Mainland and Hong Ko ng on Achieving 
Basic Liberalization of Trade in Services in Guangdong " signed in December 2014 ; "Agreement on 
Trade in Services " signed in  November 2015 ; "Investment Agreement " and "Agreement on 
Economic and Technical Cooperation ", both signed  in June 201 7. The two sides will continue to 
enrich the content of CEPA to achieve further liberali zation and facilitation of trade and investment 
between them.  
3.12.   CEPA is a comprehensive FTA covering four broad areas, namely:  
(a) trade in goods - all products of HKC's ori gin can enjoy tariff -free treatment on 
importation into Mainland  China  upon fulfilment of the CEPA rules of origin.  
(b) trade in services - the two sides have basically achieved liberali zation of trade in 
services.  Mainland  China  has fully or partially opened  up 153 services trade sectors to 
HKC's services industry, accounting for 95.6% of all the 160 WTO services trade 
sectors.  
(c) investment – the two sides are committed to providing for investment protection and 
facilitation, and expand market access commitment s to non -services sectors.   
(d) economic and technical cooperation - the two sides have agreed to enhance cooperation 
in various areas with a view to catering for and supporting the development between 
the two places, as well as promoting the cooperation in th e economic and trade aspects  
of the "Belt and Road " Initiative1 and Sub -Regional Cooperation .  
3.4.1.2   HKC–New Zealand Closer Economic Partnership Agreement  
3.13.   The HKC –New Zealand Closer Economic Partnership Agreement entered into force on 
1 January 2011. This Agreement is HKC's first FTA with a foreign economy.  
3.4.1.3   HKC–EFTA Free  Trade A greement  
3.14.   HKC and the EFTA States signed an FTA on 21 June 2011. The part of the FTA between 
HKC, Iceland, Liechtenstein and Switzerland entered into force on 1 Oc tober 2012; whereas that 
between HKC and Norway entered into force on 1 November 2012.  
                                                
1 Belt and Road refers to the land -based "Silk Road Economic Belt " and the seafaring "21st Century 
Maritime Silk Road " which cover economies  across Asia, Europe and Africa.  WT/TPR/G/3 80 • Hong Kong, China  
 
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  3.15.   The first meeting of the Joint Committee (JC) established under the FTA between HKC and 
EFTA States was held in October 2017.  The JC welcomed the smooth and effective im plementation 
of the FTA , and adopted rules of procedures necessary for the effective implementation of the FTA, 
and an Annex of comprehensive disciplines governing domestic regulation which seeks to ensure 
that measures affecting trade in services are tran sparent, administered in a reasonable and 
objective manner, and do not constitute unnecessary barriers to trade.  The Annex will first take 
effect between HKC and Switzerland, and will apply to other EFTA States pursuant to a decision of 
the JC in future.   
3.4.1.4   HKC–Chile Free Trade A greement  
3.16.   Further to the FTA between HKC and Chile which was signed on 7 September 2012 and 
entered into force on 9 October 2014, the two sides signed a comprehensive investment 
agreement on 18 November 2016, which will enter into forc e after the completion of internal 
procedures.  
3.4.1.5   HKSAR  and Macao SAR Closer Economic Partnership Arrangement  
3.17.   The HKSAR and Macao SAR Closer Economic Partnership Arrangement (HK -Macao CEPA) 
entered into force on 27 October 2017 and the liberali zation of trade  in goods and services 
provided for therein was implemented on 1 January 2018.  
3.18.   The HK -Macao CEPA is comprehensive in scope, covering trade in goods, trade in services, 
investment, intellectual property, and economic and technical cooperation, among others.  Apart 
from providing legal certainty on tariff -free movement of goods between the two separate customs 
territories, the two sides agree not to apply tariff rate quotas against goods of each other. On 
trade in services, market access commitments are comple mented with disciplines on domestic 
regulation  to ensure that they do not constitute unnecessary barriers to trade.  
3.4.1.6   HKC–ASEAN Free Trade A greement  
3.19.   The signing ceremony of ASEAN -HKC FTA was held on 12 November 2017 in the Philippines.  
The FTA is expected to enter  into force on 1 January 2019 the earliest, subject to completion of 
the required procedures by the relevant signatories2.  
3.20.   The FTA is comprehensive in scope and of value, encompassing trade in goods and related 
issues, trade in  services, economic and technical co -operation, and dispute settlement mechanism.  
An Investment Agreement was also forged alongside.  It is expected that the FTA and the 
Investment Agreement will reduce restrictions in doing business, enhance trade and inve stment 
flow, foster closer trade and economic relations among the FTA parties and contribute to regional 
economic integration.  
3.4.1.7   HKC–Georgia Free Trade A greement  
3.21.   The HKC -Georgia FTA was signed on 28 June 2018 and will enter into force after the 
completion of the necessary internal procedures by both parties.  
3.22.   The FTA is comprehensive in scope, encompassing trade in goods and related issues, trade 
in services, inves tment (establishment), dispute settlement mechanism, and also contains 
provisions to ensure effective protection of intellectual property rights, promote competition, and 
enhance protection of environment.  
3.4.1.8   Free Trade Agreement s under Negotiation  
3.4.1.8.1   HKC-Maldiv es Free Trade Agreement  
3.23.   HKC commenced FTA negotiations with Maldives in September 2016. The scope of the 
proposed FTA covers trade in goods and related issues, trade in services, investment, economic 
                                                
2 The FTA will enter into force on 1 January 2019 for HKC and those ASEAN Member States (at least 
four) which have completed their required procedures.  WT/TPR/G/3 80 • Hong Kong, China  
 
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  and technical cooperation, and dispute settlement mechan ism. Both sides aim to conclude the FTA 
as soon as possible to foster closer partnership.  
3.4.1.8.2   HKC-Australia Free Trade Agreement  
3.24.   HKC commenced FTA negotiations with Australia in May 2017. The scope of the proposed 
FTA includes trade in goods and related issue s, trade in services, investment, intellectual property, 
competition and dispute settlement mechanism. The conclusion of  the FTA will foster closer 
partnership and contribute to regional economic integration.  
3.4.1.9   Trade in Services Agreement  
3.25.   HKC commenced the n egotiation on the Trade in Services Agreement (TiSA) in 2013 which 
involves 23 WTO Members. TiSA is aimed to be a high -ambition and comprehensive agreement 
with broad participation that could be multilaterali zed in the future. As a service -oriented economy  
and a strong exporter of services, HKC sees great value in TiSA which seeks to eliminate trade 
barriers and liberali ze trade in services through improved market access and new and enhanced 
trade rules. We are ready to advance progress with TiSA participan ts once negotiation resumes.  
3.4.1.10   Investment Promotion and Protection A greements ( IPPAs ) 
3.26.   HKC has been negotiating and concluding IPPAs with foreign economies since 1991, to 
provide additional assurance to foreign investors and to secure additional protection for HKC 
investors in respect of their investments overseas.  
3.27.   As of May 2018, HKC has forged 20 IPPAs with foreign economies, viz. ASEAN, Australia, 
Austria, Belgo -Luxembourg Economic Union, Canada, Chile, Denmark, Finland, France, Germany, 
Italy, Japan, Kor ea, the Republic  of Kuwait, the State of the Netherlands, New Zealand, Sweden, 
Switzerland, Thailand and the United Kingdom.  All these IPPAs, except for the ones with Chile and 
ASEAN, have entered into force.  
3.4.2   Other Trade -related  Initiatives  
3.4.2.1   The Belt and Ro ad Initiative  
3.28.   The Belt and Road Initiative is a new engine for HKC 's economic development. On 
14 December 2017, the HKSAR  Government and  the National Development and Reform 
Commission  of Mainland China signed "the Arrangement between the National Developme nt and 
Reform Commission and the Government of the Hong Kong Special Administrative Region for 
Advancing Hong Kong 's Full Participation in and Contribution to the Belt and Road Initiative " (the 
Arrangement). The Arrangement serves as a blueprint for HKC's further participation in the Belt 
and Road Initiative. Efforts will be stepped up to further open up the Mainland market to HKC, take 
forward the enhancement of the CEPA, and further promote trade and investment with economies 
and regions related to the Be lt and Road.  
3.4.2.2   Guangdong -Hong Kong -Macao Bay Area  
3.29.   In accordance with the principle of "One Country, Two Systems ", HKC has also participated 
in the drawing up of a development plan for the Guangdong -Hong Kong -Macao Bay Area (the Bay 
Area) with the National Development and Reform Commission as well as the Guangdong Provincial 
Government of Mainland China and the Macao SAR Government . The essence of the strategy for 
the Bay Area Development is to define the development focuses of different cities, identify clusters 
of competitive industries,  as well as  leverage on and maximi ze the Bay Area  cities' comparative 
advantages.  
3.30.   Being an inte rnational city with vast experience on global trading, HKC will act as a gateway 
to the Bay Area to facilitate multinational companies ' access to the Mainland market and as a 
springboard for Mainland companies seeking to "go global"  to expand into internat ional markets, 
especially those along the Belt and Road. Fully leveraging on its unique position as an international 
financial  and trading centre, a global offshore Renminbi (RMB) business hub and an international 
asset management centre, plus its lauded p rofessional services sector , HKC is well -placed to meet WT/TPR/G/3 80 • Hong Kong, China  
 
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  the rising demand for fund -raising and financial management services for companies from the Bay 
Area.  
4  KEY DEVELOPMENTS IN TRADE POLICY  
4.1.  HKC regularly reviews its competitiveness, the state of its econ omy as well as the direction 
for developing its industries from a  forward -looking  and strategic perspective.  As a facilitator and a 
promoter, the Government introduces timely and appropriate measures to support industries 
where HKC has strengths and develo pment potentials, and tap new markets.  HKC will also review 
regulatory and tax requirements to remove red tape and create a  business -friendly  environment.  
Key developments of HKC 's trade policy since the last review are set out in the ensuing 
paragraphs.   
4.1  Customs and Trade F acilitation  
4.2.  Notwithstanding that HKC 's customs procedures are recogni zed as among the easiest and 
fastest in the world, HKC is committed to striving for further enhancements to its already liberal 
and highly efficient regulatory regime.  
4.3.  To encourage the trading and logistics industry to move up the value chain, HKC has capped 
the charge for each trade declaration at HK$200 (US$25.6), so as to further lower the cost of 
importing and exporting high -value goods to and from HKC, and enhance HKC's advantage as a 
trading hub. The measure is expected to save the trade HK$458 million (US$58.7 million) per year 
and benefit about 900,000 cases.  
4.4.  To facilitate customs clearance, the Customs and Excise Department (C&ED) launched the 
Single E -lock Scheme under the Intermodal Transhipment Facilitation Scheme (ITFS) with the 
Mainland Customs in March 2016 to facilitate the passage of inter -modal transhipment cargoes.  
Under the Scheme, a "green lane " is set up to facilitate cargoes vehicle flow at land  boundary 
checkpoints. Aided by electronic locks with GPS , the same consignment will only be inspected once 
at the boundary , which helps streamline the clearance process and expedite the flow of 
transhipment cargoes.  
4.5.  To facilitate cargoes transhipped throu gh HKC to enjoy preferential tariff under FTAs signed 
between Mainland China and other economies, the C&ED put in place the Free Trade Agreement 
Transhipment Facilitation Scheme (FTA Scheme) in December 2015. Under this voluntary scheme, 
the C&ED provides traders with Customs supervision services and issues Certificate of Non -
manipulation to certify transhipment cargoes that have not undergone any further processing 
during their stay in HKC. To date, the FTA Scheme covers cargoes transhipping through HKC 
between Mainland China and 233 other economies.  As at 31 March 2018, the C&ED received more 
than 10,000 applications, involving about HK$6.5 billion 's (US$833 million) worth of cargoes with 
an estimated preferential tariff savings of over HK$436 million (US$55.9 million) . 
4.6.  As at end of May 2018, the C&ED has accredited 47 local companies as Authorized Economic 
Operators (AEOs), representing an increase of 194% as compared to May 2014, for enjoying 
customs facilitation, such as reduced inspection and priori tized clearance of cargoes at control 
points.  The C&ED has also entered into Mutual Recognition Arrangements (MRAs) on AEO 
programmes  with the customs administrations of Mainland China, Australia,  India, Japan, Korea, 
Malaysia, Singapore and Thailand respe ctively. Accredited companies will enjoy customs facilitation 
in those economies. Currently, the C&ED is holding MRA discussions with Canada, the European 
Union, Israel, Mexico, and New Zealand.  
4.7.  To maintain HK C's competitiveness as a trading and logistics hub and to align with the 
international trend, HKC is pressing ahead with the phased implementation of the Trade Single 
Window (TSW) for one -stop lodging of all the 50 -plus trade documents and submissions with 
Government for trade declaration and customs c learance purposes, which will help save time and 
cost for the trading community.  Phase 1 is scheduled to be launched in 2018 and will cover 
                                                
3 Australia,  Bangladesh, Brunei, Cambodia, Chile , Costa Rica,  Iceland , India, Indonesia,  Korea, Laos, 
Malaysia, Myanmar,  New Zealand, Pakistan , the Philippines, Peru, Singapore, Sri Lanka , Switzerland,  
Chinese  Taipei, Thailand  and Vietnam . WT/TPR/G/3 80 • Hong Kong, China  
 
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  13 types of trade documents.  The Government will continue to engage the industry in 
implementing the different phase s of TSW through to its completion.   
4.2  Trading  and L ogistics Services  
4.8.  The trading services industry, which accounted for 18% of HKC 's GDP and employed close to 
15% of the total labour force in 2016, remains an important pillar of the HKC economy.  HKC has 
therefore been proactive in strengthening and consolidating its edge as a trading and logistics hub.  
Notably, the booming of global e -commerce has generated demands for cross -border logistics and 
delivery services, particularly air delivery and tr anshipment services. Apart from fostering closer 
economic ties with existing and new trading partners, HKC will actively enhance the supporting 
infrastructure to increase the handling capacity of both air and maritime cargoes, with a view to 
facilitating t he growth of the industry and moving it up the value chain.  
4.9.  On air transport, the Airport Authority Hong Kong (AAHK)  has made available a site of around 
5.3 hectares at the South Cargo Precinct of the Airport Island for developing a modern air c argo 
logist ics centre.  The Government is also actively considering the redevelopment of the Air Mail 
Centre at the Hong Kong International Airport (HKIA) to enhance its efficiency and capacity, with a 
view to fostering cross -border logistics and trading activities th rough the postal channel. These 
efforts will enable HKC to leverage on its strategic location and vast aviation network to strengthen 
its position as a global and regional aviation hub.  
4.10.   To meet the strategic objective of developing HKC into a trading, stor age, logistics and 
distribution hub for high -value goods, such as pharmaceuticals, AAHK will continue to work closely 
with the industry to enhance HKIA 's capacity to handle high -value temperature -controlled goods 
and adopt the necessary temperature control  facilities to cater for the special requirements in 
handling such goods.  
4.11.   On maritime transport, the Hong Kong Maritime and Port Board was established in 2016 
with a view to entrenching HKC 's position as an international maritime centre. The Government is 
working closely with the industry to map out strategies and explore measures that will facilitate 
the development of the maritime and port sectors and high -value -added maritime services in HKC. 
The Government will continue to devote resources to  promote ou r maritime industry and has set 
up a dedicated team in Invest Hong Kong to strengthen promotion to attract more renowned 
maritime enterprises to operate in HKC.  
4.3  Financial Services  
4.12.   HKC is a major international financial centre, comprising an integrated netw ork of 
institutions and markets which provide a wide range of products and services to local and 
international customers and investors. HKC 's financial markets are characteri zed by a high degree 
of liquidity and operate under effective and transparent regu lations, which meet international 
standards. The financial services industry accounted for 17.7% of HKC 's GDP and employed close 
to 6.7% of the total labour force  in 2016. To strengthen HKC 's competitiveness in the face of 
increasing global competition and  maintain its position as a leading regional and international 
financial centre, HKC will continue to improv e the quality of the market, moderni ze the regulatory 
regime and upgrad e our market  infrastructure.  
4.13.   In this regard, the Companies (Amendment) Bill 2018 was introduced into the legislature in 
April 2018 to further facilitate business by, inter alia, streamlining accounting and reporting 
provisions in the Companies Ordinance to facilitate compliance and providing for more flexibility to 
small and mediu m-sized enterprises to reduce their compliance cost.  
4.3.1   Bankin g 
4.14.   HKC has an open banking sector whereby local and foreign banks compete on a level 
playing  field. Under the current three -tier licensing system, foreign banks may  enter the HKC 
banking market as licensed banks, restricted licence banks or deposit -taking  companies. They may 
operate in the form of locally incorporated companies or branches of foreign  banks.  WT/TPR/G/3 80 • Hong Kong, China  
 
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  4.15.   To strengthen monetary and financial stability and user protection, as well as to foster 
innovation of the payment industry, under the Payment Systems and Stored Value Facilities 
Ordinance (Cap. 584) which commenced operation in November 2015, the Monetary Authority is 
empowered to regulate stored value facilities and designated payment systems.   
4.16.   HKC has followed the phased implementation timetable of the Basel Committee on Banking 
Supervision in pursuing the Basel III capital, liquidity and disclosure reforms to strengthen the 
resilience of the banking sector. Laws have been amended  to implement t he Basel III reforms, 
covering  the minimum capital adequacy ratios, the capital buffers, the leverage ratio, the liquidity 
coverage ratio and the net stable funding ratio, together with their associated disclosure 
requirements.  
4.17.   The Hong Kong Monetary Autho rity ( HKMA) established the Fintech Facilitation Office in 
2016 to facilitate the healthy development of the fintech ecosystem and to promote HKC as a 
fintech hub in Asia. In September 2017, the HKMA launched seven Smart Banking Initiatives, 
which cover fo ur main areas. On research and application, the HKMA implemented the 
Cybersecurity Fortification Initiative in 2016 to raise the cyber resilience of banks, published 
Whitepapers on Distributed Ledger Technology in 2016 and 2017, and developed an Open 
Application Programming Interfaces framework for the banking industry in 2018. The Faster 
Payment System and the Hong Kong Trade Finance Platform are scheduled for launch in 
September 2018, and the Global Trade Connectivity Network, which joins trade and trade finance 
platforms in HKC and Singapore, in Q1 2019. On industry liaison, the HKMA has been hosting 
events for fintech stakeholders to facilitate exchange of ideas. On regulatory interface, the HKMA 
launched the Fintech Supervisory Sandbox and Fintech Super visory Chatroom for the industry in 
2016 and 2017 respectively, and plans to issue virtual bank licences in 2018. On talent 
development, the HKMA launched the Fintech Career Accelerator Scheme from 2016. In order to 
support these initiatives, the HKMA has signed fintech co -operation agreements with 
six jurisdictions.  
4.3.2   Securities and Futures  
4.18.   HKC has a vibrant  securities and futures industry . The Securities and Futures  Ordinance 
(Cap. 571) provides the legal framework for the regulation of the sector on a par with international 
standards and practices.  
4.19.   HKC has been implementing a statutory regulatory framework for the over-the-counter 
(OTC) derivative s market in phases since 2014 . This regulatory regime meets the requirements of 
the G20 and is in line with developments in other international financial centres. The key aspects 
of the regime include mandatory reporting, clearing and trading obligations, regulation of the 
necessary infrast ructure, and regulation and oversight of key players in the OTC derivative s 
market.  
4.20.   HKC currently has a paper -based securities market regime. HKC has  been working on  an 
uncertificated securities regime so that investors could choose to hold and transfer s ecurities in 
uncertificated form, which will in turn allow them to  possess the legal ownership, instead of 
beneficial interest only, in the securities. HKC will shortly consult the stakeholders on the 
operational details of the regime and make necessary ch anges to the regulatory framework for 
enabling the introduction of an uncertificated securities market regime.  
4.21.   On asset management, upon passage of the relevant legislation in June 2016, a new open -
ended fund company (OFC) structure was introduced in HKC to provide an alternative to the 
existing unit trust structure , so as to provide an additional choice to fund managers. The 
subsidiary legislation, which sets out the operational details of the OFC regime, came into force in 
July 2018 . 
4.3.3   Insurance  
4.22.   The insura nce industry in HKC is a cosmopolitan and competitive one. A level -playing field  is 
maintained for all insurers and insurance intermediaries irrespective of their country of origin.  This 
is evident from the large number of authorized insurers ( 160 as at 30 April 2018 ) and the strong  WT/TPR/G/3 80 • Hong Kong, China  
 
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  presence of foreign companies, with about 44% of the authorized insurers which were 
incorporated outside  HKC in 2 2 places.  
4.23.   To moderni ze the regulatory infrastructure, facilitate the stable development of the industry, 
provide be tter protection for policyholders, and align with international practice that financial 
regulators should be financially and operationally independent of the Government , the Insurance 
Companies (Amendment) Ordinance 2015 for establishing the Insurance Auth ority (IA) and a 
statutory licensing regime for insurance intermediaries was enacted by the legislature on 
10 July 2015.  The IA took over the statutory functions of the Office of the Commissioner of 
Insurance (OCI) on 26 June 2017 to regulate insurance com panies.  The OCI was disbanded on the 
same date.  The new licensing regime regulating insurance intermediaries is expected to commence 
in two years ' time from the transition, i.e. in June 2019 . In addition,  HKC is preparing the relevant 
legislation  for the establishment of a Policyholders ' Protection Scheme in HKC to  improve market 
stability and safeguard the interest of policyholders in the event of insolvency of an  insurer.  
4.3.4   Offshore Renminbi (RMB) Business  
4.24.   HKC has continued to develop as the global hub for offshore RMB business. As at end 
March  2018, RMB customer deposits and outstanding RMB certificates of deposits totalled 
RMB 604 billion. With the development of RMB bonds  and equity products, HKC has become the 
largest centre for conducting offshore RMB financing activities. As at end March 2018, outstanding 
RMB bonds issued in HKC amounted to around RMB 212 billion . HKC also serves as a platform for 
enterprises and financial institutions from all over the wo rld to conduct RMB trade settlement, 
payments and investments.  In the first three months of 2018, the average daily turnover of HKC 's 
RMB Real Time Gross Settlement system averaged some RMB900 billion, providing pivotal support 
to global offshore RMB financial activities.  In the same period, total RMB trade settlement 
conducted through banks in HKC amounted to around RMB1,000 billion. Our RMB clearing platform 
is also supporting banks from all over the world to conduct their RMB transactions. As at end  
March 2018, there were a total of 199 banks participating in the RMB clearing platform in HKC, of 
which 173 were branches and subsidiaries of foreign banks and branches and subsidiaries 
established overseas by banks in Mainland China.  
4.3.5   Stock and Bond Connection Schemes  
4.25.   HKC has also consolidated its position as the gateway for financial investments in Mainland 
China.  Three mutual capital market access schemes have been launched since 2014.  Shanghai -
Hong Kong Stock Connect and Shenzhen -Hong Kong Stock Connec t were launched in 2014 and 
2016 respectively, allowing Hong Kong and Mainland investors to trade eligible stocks in each 
other 's securities markets.  Northbound trading under Bond Connect was also launched in 2017 to 
allow overseas investors to trade bonds  in the China Interbank Bond Market via linkages 
established between the financial infrastructure institutions of the two places . 
4.4  Tourism  
4.26.   Tourism contribut es significantly  to HKC's economy.  In 2017, visitor arrivals to HKC totalled 
at 58.5  million, generat ing tourism spending of HK$297 billion (US$38.1 billion). According to the 
latest statistics, tourism made up 4.7% of HKC 's GDP, employing close to 259 ,000 people (6.0% 
of total employment) in 2016.  
4.27.   In October 2017, the  Government released a comprehensive  Development Blueprint for 
HKC's Tourism Industry. The blueprint sets out not only a clear vision and mission to develop HKC 
into a world -class premier tourism destination and ensure the balanced, healthy and sustainable 
development of the industry , but al so four development strategies as a basis for formulating and 
taking forward different tourism initiatives. The four development strategies are: (1) to develop a 
diversified portfolio of visitor source markets, with a focus on attracting high value -added 
overnight visitors; (2) to nurture and develop tourism products and initiatives with local and 
international characteristics, including cultural tourism, heritage tourism, green tourism and 
creative tourism, and to consolidate and enhance HKC 's status as a travel destination for Meetings, 
Incentive travels, Conventions and Exhibitions (MICE) tourism, regional cruise hub, and Events 
Capital of Asia; (3) to develop smart tourism; and (4) to upgrade the service quality of the tourism 
industry and encourage the trade in adopting good trade practices. To implement the blueprint full WT/TPR/G/3 80 • Hong Kong, China  
 
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  steam ahead, t he Government has allocated an additional HK$396 million (US$50.8 million) for 
the tourism industry in the financial year of 2018/19, which comprises the additional fundi ng of 
HK$226 million (US$29 million) for the Hong Kong Tourism Board to strengthen its promotion 
efforts, and the remaining HK$170 million (US$21.8 million) mainly for taking forward various new 
initiatives to promote tourism development.  
4.5  Business and P rofessional Services  
4.28.   Professional services and other producer services contributed 13% of GDP and employed 
about 530,000 people in 2016. The professional services industry in particular recorded high 
growth in recent years, contributing nearly 5% of GDP. The HKSAR  Government will continue to 
strengthen government -to-government (G2G) ties with its Mainland China and overseas 
counterparts and secure more liberali zation measures to facilitate access of HKC's service 
industries to Mainland China and overseas ma rkets under more favourable conditions through 
CEPA and other arrangements.  
4.29.   The Professional Service s Advancement Support Scheme provide s funding support to HKC 's 
professional bodies, trade and industry organi zations and research institutes for implementin g 
non-profit -making projects aimed at facilitating promotion and enhancement of HKC's professional 
services.  Projects covering a wide range of professional sectors have been rolled out since 
July 2017.   
4.30.   The Hong Kong International Arbitration Centre is ins trumental in helping to develop HKC 
into a dispute resolution centre. The International Court of Arbitration of the International 
Chamber of Commerce established a branch of its secretariat in HKC in 2008. In 2012 , the China 
International Economic and Trad e Arbitration Commission Hong Kong Arbitration Center and the 
Asia-Pacific Regional Office of the Hague Conference on Private International Law were established 
in HKC. In November 2014, the China Maritime Arbitration Commission opened a branch office in 
HKC. In January 2015, the Permanent Court of Arbitration (PCA) signed a host country agreement 
with the Central People 's Government of China and a related memorandum of administrative  
arrangements with the HKSAR  Government to facilitate the conduct of PCA -administered 
arbitration in HKC, including party -investor arbitration. The PCA has an excellent reputation in 
handling international investment arbitration and is a leading international institution with its 
headquarters in The Hague.  The presence of these law and arbitration -related institutions is a 
strong endorsement of HKC's advantage as a legal services hub in the Asia -Pacific region.  
4.6  Innovation and T echnology  
4.31.   HKC is committed to creating an environment conducive to the developmen t of innovation 
and technology, encouraging investment in this area and enhancing cooperation among the 
Government, industry, academia and research sectors. The Government has devoted considerable 
efforts to  foster innovation and technology development .  
4.32.   The Innovation and Technology Bureau (ITB)  was established  in November 2015 w ith the 
mission to  foster a diversified and knowledge -based economy, thereby raising the competitiveness 
of HKC and improving the quality of life of citizens.  Backed by strong rese arch and development 
(R&D) capabilities, excellent technology infrastructure, world -class universities, a vibrant pool of 
R&D talents, a sound legal system and a strong intellectual property protection regime, HKC has 
an enabling environment for the busine ss sector to collaborate with universities and R&D 
organizations to conduct applied research and commercialize their innovations.  
4.33.   The Hong Kong Science Park (HKSP)  and Cyberport are HKC's flagship innovation and 
technology infrastructure . The HKSP is home to about 680 technology companies  and its 
incubation programme s have nurtured over 800 technology start -ups to date . Stage 1 of the HKSP 
Expansion Programme is underway and expected to be completed in 2020 to provide more 
research infrastructure for the community.  Separately, a Data Technology Hub and an Advanced 
Manufacturing Centre are being developed in Tseung Kwan O industrial estate with a view to 
fostering smart production.  They are expected to be completed in 2020 and 2022 respectively. We 
will est ablish two world -class research clusters at the HKSP, one on healthcare technologies and 
another on artificial intelligence and robotics technologies.  We aim to attract institutions that are 
among the global top echelon in the two areas to conduct collabor ative research in HKC. On the WT/TPR/G/3 80 • Hong Kong, China  
 
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  other hand, Cyberport has established a digital technology community with about 640 companies 
and has been implementing various initiatives over the years to nurture and support its start -ups 
at different stages of their devel opment.  Since 2005, the Cyberport Incubation Programme has 
supported over 470 start -ups in digital technology and related areas.  
4.7  Intellectual P roperty Trading  
4.34.   To enhance HKC 's position as an intellectual property (IP) trading hub, t he Government set 
up a W orking Group on Intellectual Property Trading in March 2013 to advise on the overall 
strategy to promote HKC as an IP trading hub in the region.  In 2015, the Working Group released 
a report with 28 recommended measures under four strategic areas, namely (1 ) enhancing the IP 
protection regime; (2) supporting IP creation and exploitation; (3) fostering IP intermediary 
services and manpower capacity; and (4) pursuing promotion, education and external 
collaboration efforts. The Government accepted the recommend ations and has been working in full 
swing with different IP stakeholders on their implementation since then. The Intellectual Property 
Department (IPD) has, for example, launched the IP Consultation Service and the IP Manager 
Scheme  to raise SME 's awarenes s of IP protection, and to provide them with support in developing 
effective IP management and commerciali zation strategies. The IPD has also published b ooklets on 
"IP Audit and Due Diligence " and "IP Licensing " to equip SMEs with the necessary knowledge on IP 
trading. In addition, the IPD has organi zed various promotion and public education activities to 
promote IP trading in an on -going manner, and has also produced short videos to showcase HKC's 
success storie s on IP commerciali zation. A dedicated website "Hong Kong - The IP Trading Hub " 
(www.ip.gov.hk ) is created by the IPD to provide a one -stop-shop for disseminating IP trading 
information and other useful resources.    
4.35.   The IPD has continued to work with the Department of Justice to promote HKC as an 
international legal services and disputes resolution centre, including one for resolving IP disputes.  
The two Departments have also worked closely to promote the use of arbitrat ion and mediation to 
resolve IP disputes. In pursuance of the initiative, the Arbitration (Amendment) Ordinance 2017 
was enacted to clarify that disputes over intellectual property right (IPR) can be resolved through 
arbitration, and put it beyond doubt th at arbitral awards involving IP are enforceable in HKC.   
4.36.   In order to facilitate the formulation of comprehensive strategies to enhance the manpower 
capacity in IP trading, the IPD commissioned a manpower survey in 2017 to collect data on the 
latest manpowe r situation in IP -related industries in HKC. The survey is expected to be completed 
within 2018.  
4.37.   Further, with effect from 29 June 2018, the scope of profits tax deductions for capital 
expenditure incurred for the purchase of IPR  has been expanded  from the  existing five types  
(covering patents, know -how, copyright, registered designs and registered trademarks) to eight 
with effect from the year of assessment 2018/19 . The additional three types of IPR are rights in 
layout design (topography) of integrated circuits, plant varieties and performances.   
4.8  Protection of Intellectual Property Rights  
4.38.   HKC is committed to protecting IPR. This commitment is underpinned by respecting private 
economic rights and recognising the importance of robust IPR protection to HKC 's economic 
growth. HKC achieves this through comprehensive legislation, rigorous enforcement action, 
sustained public education, close cooperation with rights owners and other law enforcement 
agencies, and promotion of IP trading.  
4.8.1   Legislation  
4.39.   HKC has put i n place a comprehensive legislative framework for the protection of patents, 
trademarks, copyright, registered designs, layout -designs (topographies) of integrated circuits and 
plant varieties. HKC 's IP laws comply fully with the requirements of the WTO Ag reement on Trade -
Related Aspects of Intellectual Property Rights. It is HKC 's on-going commitment to review and 
enhance its IP regime from time to time to ensure that the regime can meet HKC's socio -economic 
needs.  WT/TPR/G/3 80 • Hong Kong, China  
 
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  4.8.1.1   Patents Law  
4.40.   In June 2016, the Patents (Amendment) Ordinance 2016 was enacted to provide for an 
"original grant" patent (OGP) system and refine the existing short -term patent system (collectively 
known as the new patent system). HKC is now pressing ahead with essential preparatory work on 
various fronts for the implementation of the new patent system.  Such work includes: updating the 
relevant subsidiary legislation, drawing up the examination guidelines for the OGP system, and 
developing  a new electronic patent filing system . Subject to the progress of the preparatory work, 
we aim to bring the Amendment Ordinance into force and launch the new patent system in 2019 
the earliest.  
4.8.1.2   Copyright Law 
4.41.   HKC is committed to enhancing its copyright regime and making its best endeavours to 
combat infringing activities, so as to meet economic and social development needs and to catch up 
with technological advancements and international trends.  For example, with the Marrakesh Treaty 
to Facilitate Access to Published Works for Persons Who Are Bli nd, Visually Impaired or Otherwise 
Print Disabled coming into force in September 2016, HKC conducted a three -month public 
consultation in May 2017 to gauge views on the relevant provisions of the Copyright Ordinance 
which might need to be amended to align with the requirements under the Treaty. Taking into 
account the views receiv ed during the consultation, the  Government is preparing a bill to amend 
the Copyright Ordinance to enhance the copyright exceptions for persons with print disability.  
4.8.1.3   Trade Marks Law 
4.42.   In 2014, a public consultation  was launched  on the proposed adoption of the international 
trademark registration system under the Protocol Relating to the Madrid Agreement Concerning 
the International Registration of Marks (Madrid Protocol) in HKC, so as to enable trade mark 
owners to apply for registration in one or more contracting member countries by filing a single 
application.  The feedback received was generally in support of the proposal.  In early 2017, the 
Government decided to proceed with the i mplementation of the international registration system 
under the Madrid Protocol.  HKC is preparing legislative amendments to the Trade Marks Ordinance 
and has embarked on preparatory work on various other fronts for its implementation.  
4.8.2   Enforcement  
4.43.   Rigorou s enforcement actions are taken by the C&ED against piracy and trademark 
counterfeiting activities. The C&ED has a strong enforcement team comprising around 240 officers. 
The infringement situation in HKC has been brought under firm control.  
4.44.   The Anti -Internet Piracy Teams and Computer Analysis and Response Team of the C&ED are 
playing a vital role in tackling Internet piracy. To cope with new enforcement challenges arising 
from the advance of cyber technologies, the C&ED has successfully developed and launc hed four 
systems (three collectively called the Lineament Monitoring System and one called the SocNet 
Monitoring System) for monitoring and tracing infringement on the Internet with a view to 
strengthening the enforcement capabilities and enhancing effecti veness in combating online piracy 
and counterfeiting. These systems operate round -the-clock, targeting "peer -to-peer" file sharing, 
online sale of counterfeit goods and online piracy using cyberlockers.  With a view to stepping up 
enforcement action against online IPR crimes as a result of rapid development of Internet 
platforms, the C&ED launched the Big Data Analytics System in December 2017 to analyse mass 
information  of infringement activities  on the Internet and identify prevailing and emerging trend of 
online IPR crimes . 
4.45.   In addition, the C&ED set up an Electronic Crime Investigation Centre (ECIC) in 
February  2013. The ECIC aims to strengthen research into the latest operation of cyber -crimes, 
formulat e enforcement strategies and procedures on evidence collection and conduct training 
courses on retrieval and preservation of digital evidence for front -line officers. It also conducts 
research on online investigation systems. The ECIC received the ISO 9001 :2015 Quality 
Management System Accreditation in February 2017, a testimony to its commitment to quality and 
compliance with the highest standard.  WT/TPR/G/3 80 • Hong Kong, China  
 
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  4.46.   The C&ED has been sparing no efforts in combating on -line piracy and sale of illicit TV set -
top boxes.  In Dec ember 2017, three offenders involved in a piracy syndicate circumventing paid 
TV channels were sentenced to imprisonment ranging from 21 to 27 months.  This is the first -ever 
case in HKC in which charges of "providing circumvention device or service " and "conspiracy to 
defraud " were applied in successful prosecution against a piracy syndicate of this kind.  Moreover, 
the sentence is the heaviest penalty ever imposed on Internet piracy in HKC.  The rulings and the 
sentences have a strong deterrent effect on sim ilar piracy activities.  In May 2018,  the C&ED 
conducted, on top of its regular patrol and enforcement work, a two -day operation to combat the 
sale of suspected illicit TV set -top boxes and seized suspected illicit TV set -top boxes with an 
estimated market value of about HK$320,000 (US$41,026).  
4.8.3   Public E ducation  
4.47.   The IPD promotes creativity, awareness of and respect for IPR in the community through 
on-going and sustained public education programmes, such as the "No Fakes Pledge " Scheme and 
"I Pledge " Campaign to engender a sense of pride in the selling and buying of genuine goods 
among HKC's retailers, tourists and local consumers. The "No Fakes Pledge " Scheme is th e 
collaboration between the Government and nine trade associations in the retail sector . In 2017, 
the scheme covered over six thousand retail outlets in HKC.  For the "I Pledge " Campaign, the IPD 
has collaborated with right -holders and youth associations to organi ze various events to promote 
creativity and awareness of IP.  School visits and interactive drama  programmes have been 
organized  for students in primary and secondary schools as well as tertiary institutions. Since 
2016, an IP Ambassador Programme has been organi zed to instill respect for IPR among students 
and the general public.  
4.48.   The C&ED, the IPD, the IP industry and youth groups have also been working closely to 
enhance the awareness of and respect for IPR.  They, for example, launched the "Youth 
Ambassador Against Internet Piracy" Scheme in 2006, with a view  to inculcating in the mi nds of 
the participating young people positive values that fortify respect for IPR in the digital 
environment, and enlisting the support of the "Youth Ambassadors" in reporting infringing 
activities on peer -to peer networks . At present, the Scheme has more  than 250 000 members 
from 13 local youth uniformed groups. Various educational activities including IPR workshops, 
visits to production companies and competitions have been organized. Starting from 2016, the 
C&ED has introduced the IPR Badge Programme to provide organized and systematic IPR 
education to the youth. Apart from learning more about IPR protection themselves, participants in 
those courses can also help promote the importance of IPR protection amongst their peers, family 
members and relatives.  
4.8.4   Cooperation w ith Rights Owners and Law Enforcement A gencies  of Other 
Jurisdictions  
4.49.   The Government liaises closely with IPR owners to solicit their assistance in fighting IPR 
infringement. For example, the C&ED has taken the lead in forming an Intellectual Property Rights 
Protection Alliance (IPRPA) with membership comprising individual companies and stakeholders in 
the IPR industry. The IPRPA serves as a platform for voluntary monitoring by the IPR owners of 
IPR infringement activities in the retail market.  Members will report to the C&ED on any suspected 
IPR violation.  
4.50.   In April 2014, the C&ED established the Electronic Recordation and Triage Centre (ERTC). 
Through the use of advanced communication systems, the ERTC has helped rights holders, 
especially thos e based outside HKC, to complete recordation of their copyrights and trademarks 
and conduct preliminary examination of the offending goods without the need to come to the 
C&ED offices in person.  
4.51.   To guard against transshipment of IPR infringing goods, the C &ED has developed 
partnership arrangement with major express courier service providers and the Hong Kong Post to 
facilitate enforcement actions on suspicious parcels. The C&ED has also maintained close 
cooperation with overseas enforcement authorities to e xchange intelligence on both a regular and 
ad hoc bases, as well as mounting parallel and joint operations. The C&ED also works closely in 
collaboration with international and regional organizations, including the World Customs WT/TPR/G/3 80 • Hong Kong, China  
 
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  Organization (WCO), the WTO,  APEC and the INTERPOL in the protection of IPR, and participated 
actively in various operations coordinated by these organizations.  
4.9  Competition Policy  
4.52.   A free and competitive market is the backbone of HKC's economy. HKC is committed to 
promoting sustainab le competition to enhance economic efficiency and free flow of trade, thereby 
bringing benefits to both consumers and businesses.  The Competition Ordinance (Cap. 619) (CO), 
which provides a legal framework for tackling anti -competitive conduct in all secto rs, came into full 
effect on 14 December 2015.  
4.53.   Established under the CO, the Competition Commission is an independent statutory body 
which enforces the CO and investigates possible contraventions, promotes public understanding of 
the CO, conducts market s tudies and advises the Government on competition matters. The 
Competition Tribunal, also established under the CO, is tasked to hear and adjudicate alleged 
breaches of the competition rules.  Under the CO, the Communications Authority is conferred 
concurren t jurisdiction with the Competition Commission to enforce the CO in respect of the 
conduct of undertakings operating in the telecommunications and broadcasting sectors.  
4.54.   Since the full commencement of the CO on 14 December 2015, the Competition 
Commission h as processed over 2,800 cases, brought two cases to the Competition Tribunal and 
issued a block exemption order.  
5  CONCLUSION  
5.1.  Notwithstanding the uncertainty posed by the rapidly changing  global economic environment, 
HKC is committed to maintain ing its free market policy and supporting progressive trade 
liberali zation. HKC will continue to strengthen and consolidate its edge by maintaining an 
environment to facilitate the free flow of goods, capital and information, upholding a sound legal 
system and an indep endent judiciary, striving for the protection of IPR, and promoting innovation 
and technology development.   
5.2.  HKC will continue to work closely with all WTO Members to uphold the multilateral trading 
system which helps sustain a dynamic but stable international market environment in which our 
goods and services can compete on a level playing field, and acts as a powe rful force in countering 
the current of protectionism.  
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