LCQ11: Facilitating development of cross-border e-commerce
19.4.2023

âFollowing is a question by Dr the Hon Kennedy Wong and a written reply by the Acting Secretary for Innovation, Technology and Industry, Ms Lillian Cheong, in the Legislative Council today (April 19): Question: There are views that in the digital economy era, cross-border e-commerce serving as a new trade channel will drive the development of the entire trade chain. Besides, with the total amount of retail spending standing at HK$50 trillion in 2021, the Mainland will become the world's largest market for consumer goods in the future. Hence, it is imperative that the import/export trade and logistics industry in Hong Kong should ride on the development trend and expand cross-border e-commerce with the Mainland, and thereby upgrading and transforming the out-of-date traditional trade mode into a modern and diversified online-to-offline trade mode, with a view to fortifying Hong Kong's position as an international trade centre. In this connection, will the Government inform this Council: (1) whether it has conducted reviews and studies on the future development of Hong Kong's import/export trade industry, including exploring the use of technologies in business development, and whether it will create a post of "Commissioner for the Development of E-commerce" and set up a task force under the Digital Economy Development Committee to advance the development of digital networks and e-commerce platforms for the e-commerce industry, and to actively participate in formulating trade rules governing regional e-commerce for the purpose of setting a long-term value basis for the development of e-commerce; if it will, of the details; if not, the reasons for that; (2) given that as proposed in the Budget published in February this year, $500 million would be set aside for the Hong Kong Cyberport Management Company Limited to launch a Digital Transformation Support Pilot Programme (the Pilot Programme) to assist small and medium enterprises in applying ready-to-use basic digital solutions to achieve digital transformation, whether the authorities will consider extending the objectives of the Pilot Programme to include helping enterprises integrate e-commerce as a trade mode into their traditional import/export trade channels so as to be more in line with the development needs of cross-border e-commerce, and raising the sum so earmarked to $1 billion; if so, of the details; if not, the reasons for that; and (3) whether it will conduct an in-depth exploration to identify ways to coordinate the efforts of the authorities of Guangdong, Hong Kong and Macao to formulate uniform certification standards for their goods, and to open up a "green lane" for the goods that meet the standards, so as to facilitate such goods to circulate within the Guangdong-Hong Kong-Macao Greater Bay Area first? Reply: President, The Government is committed to promoting the use of technology by small and medium enterprises (SMEs) to develop businesses including the adoption of e-commerce. The Government also assists enterprises to develop digital support facilities as well as carry out upgrade and transformation in order to enhance their competitiveness and develop more diversified markets. With coordination of the information provided by the Commerce and Economic Development Bureau, my reply to Dr the Hon Kennedy Wong's question is as follows: (1) and (2) The Government strives to provide a business-friendly environment that facilitates the vibrant development of various sectors (including the import and export trade). Among others, the Government has signed Free Trade Agreements (FTAs) with 20 economies to date, and will continue to actively pursue FTAs with more trading partners as well as to seek accession to the Regional Comprehensive Economic Partnership as soon as possible, with a view to further promoting the development of trade and enhancing Hong Kong's status as an international trade centre. Meanwhile, the Government puts in place various funding schemes which are dedicated to supporting enterprises including the import and export industry to adopt e-commerce, which include: i. The Technology Voucher Programme subsidies local enterprises in using technological services and solutions to improve productivity, or upgrade and transform their business processes, in order to enhance their long-term competitiveness. Solutions include big data and cloud-based analytics solution, cyber security solution, enterprise resource planning solution, logistics management systems and e-commerce platform, etc. They are all conducive to the development of e-commerce by different enterprises; ii. The funding scope of the Dedicated Fund on Branding, Upgrading and Domestic Sales (BUD Fund) covers the support to enterprises in developing e-commerce and integrating online-offline modes of sales and marketing, such as establishing online sales platforms, setting up online shops on third-party online sales platforms, incorporating electronic payment functions into their websites, and developing mobile applications, etc. So far, among the BUD Fund applicants with applications approved, the import and export trade accounts for around 13 per cent and is the second largest beneficiary sector. Apart from implementing the aforementioned funding schemes, the Government also provides other support services. The Hong Kong Productivity Council (HKPC) regularly organises training and activities related to information technology and e-commerce for SMEs and introduces to them the latest technology development and application. The HKPC has also introduced a free one-stop digital transformation solutions platform "Digital DIY Portal" that brings together digital transformation solutions, digital and innovation information and successful cases of digital transformation in industries, in order to assist local SMEs to embark on digital transformation. In addition, in order to expedite the development process of digital economy in Hong Kong, the Government set up the Digital Economy Development Committee (DEDC) in June 2022, chaired by the Financial Secretary. Members include experts, scholars and industry participants from the industry and commerce, finance, logistics, e-commerce, information and communications technology, and academic sectors, etc, as well as relevant government officials. The four sub-groups under the DEDC are undertaking in-depth studies on four major areas, namely cross-boundary data flow, digital infrastructure, digital transformation and talent development, in order to put up specific recommendations to the Government by 2023 for expediting the process of digital economy development in Hong Kong. The Government will formulate appropriate policies and initiatives to promote high-quality economic development in Hong Kong with reference to the DEDC's recommendations. Among them, the Government has been working in collaboration with the sub-group on digital transformation established under the DEDC to proactively devise feasible measures to drive digital transformation of enterprises. It is announced in the Budget to earmark $500 million for Cyberport to launch a Digital Transformation Support Pilot Programme (the Pilot Programme), which will provide subsidies on a one-to-one matching basis to assist SMEs that have little or no prior exposure to digital technology in adopting ready-to-use basic digital solutions, thus expediting the realisation of digital transformation. The DEDC will prioritise the relevant industries to be supported through the Pilot Programme. We envisage that each company can apply for a solution package of up to $100,000, thus receiving a maximum subsidy of $50,000. We envisage that at least 8 000 eligible SMEs will be benefitted. Cyberport is finalising the details of the Pilot Programme. We will consult the Panel on Information Technology and Broadcasting as soon as possible and seek approval of funding from the Finance Committee for the implementation of the Programme. (3) The Guangdong Administration for Market Regulation (GAMR), with the support and co-operation of the Government of the Hong Kong Special Administrative Region and the Government of the Macao Special Administrative Region, is working proactively on developing high quality Greater Bay Area (GBA) Standards for different products and commercial services, for voluntary adoption by enterprises. In the long run, the work on this front can promote regional harmonisation of rules in relevant sectors, facilitate interconnection and integrated development of the three places, and help establish the GBA Standards as a brand, bringing benefits to the trade. The GAMR announced in November 2021 and November 2022 respectively the two batches of a total of 110 items proposed for inclusion in the List of GBA Standards, which covers areas such as food quality and safety, Cantonese cuisine, transportation, mechanical and electrical products, as well as medical care, nursing, education and e-sports, for consulting the views of the trade. The Government will continue to co-operate with Guangdong Province in developing GBA Standards, and will assist in promoting and encouraging the adoption of the Standards by the trade in Hong Kong once the List of Standards has been finalised.