The "Outline of the 12th Five-Year Plan for the National Economic and Social Development of the People's Republic of China"?was promulgated officially on March 16, a government spokesman said. In it, a chapter is dedicated to Hong Kong and Macao (the Dedicated Chapter) and elaborates on the significant functions and positioning of Hong Kong in the development strategy of the country. This is a significant breakthrough in Hong Kong's efforts in complementing the National Five-Year Plan.

The Chief Executive, Mr Donald Tsang, has expressed gratitude to the Central Authorities for their continued strong support for Hong Kong. He said, "The 12-5 Plan is the blueprint and action agenda for the economic and social development of the country in the next five years. The Dedicated Chapter signifies the Central Authorities' strong support for maintaining the long-term prosperity and stability of Hong Kong and provides a historic opportunity for the future development of Hong Kong. It also enables Hong Kong to decide, under the 'One Country, Two Systems' principle and the Basic Law, our development directions, policies and measures that complement the overall national development strategies."

The Dedicated Chapter has iconic significance for the future development of Hong Kong, as embodied in the following three major areas –

(a) The Dedicated Chapter emphasises the Central Authorities' support for Hong Kong in consolidating and enhancing our competitive advantages, including consolidating and enhancing Hong Kong's position as an international financial, trade and shipping centre, and support for Hong Kong's development into an offshore renminbi (RMB) business centre and an international asset management centre. The relevant statements are helpful to Hong Kong in further consolidating and enhancing our overall competitive advantages, in particular our global influence in the financial sector and playing the roles of "firewall" and "testing ground". This will assist the country in capitalising on the Hong Kong financial market as a platform for attracting investment, allocating assets and promoting the "go out strategy" of RMB.

(b) The Dedicated Chapter emphasises the Central Authorities' support for Hong Kong in nurturing emerging industries and developing the six industries where Hong Kong enjoys clear advantages. The relevant statements will help the six industries extend the fields of co-operation and scope of service on the Mainland. Through interactive co-operation efforts, the development of the six industries can in turn help upgrade the country's industry structure, particularly the development of service industries.

(c) The Dedicated Chapter emphasises the Central Authorities' support for deepening the economic co-operation between the Mainland and Hong Kong; continuing the implementation of the Closer Economic Partnership Arrangement (CEPA); and confirming the significant functions and positioning of Hong Kong-Guangdong co-operation, including the establishment of a financial co-operation zone and a world-class metropolitan cluster with Hong Kong's financial system taking the lead; and opening up the Guangdong service industries for Hong Kong on a pilot basis and extending the pilot scheme to other regions. The relevant statements define clearly the core functions and positioning of Hong Kong in the development of the Pearl River Delta region, and provides a clear direction and basis for Hong Kong in taking forward further regional co-operation with other provinces.

The government spokesman said that all relevant policy bureaux of the Government would be responsible for formulating corresponding policies and measures according to the substantive contents of the 12-5 Plan. For example –

(a) In the development of offshore RMB business, the Government will strive to further enhance the RMB settlement platform, conduct overseas roadshows to promote Hong Kong's offshore RMB market and attract more enterprises to make use of Hong Kong's settlement services. At the same time, the Government will continue to encourage overseas enterprises to issue RMB bonds in Hong Kong, as well as Mainland enterprises to issue bonds in Hong Kong. To reinforce Hong Kong's status as an offshore RMB business centre, the Government will also seek to establish channels for enterprises to invest in the Mainland the RMB funds raised in Hong Kong and promote the diversification of RMB financial products and services.

(b) In facilitating the development of asset management business, our priorities include seeking to enter into more agreements for the avoidance of double taxation, continuing to develop an Islamic financial platform, providing fiscal incentives and stepping up overseas promotion. The Government will also continue to strength the competitiveness of our asset management industry by improving the regulatory regime, enhancing market quality and facilitating market development.

(c) In developing the six industries, the Government will adopt proactive and effective measures to strengthen co-operation with the Mainland to explore and serve the domestic market in the Mainland making use of CEPA and the existing regional co-operation platforms.

(d) The Dedicated Chapter mentions support for Hong Kong to develop into a high-value goods inventory management and regional distribution centre. To complement the sector's development towards providing high- value-added logistics services, we will gradually make available long-term sites in Kwai Tsing to attract third-party logistics services providers to operate in Hong Kong. Moreover, we will also proactively promote the wider use of e-logistics services, and continue to promote to the Mainland and overseas markets the professional logistics services which can be offered in Hong Kong. As regards aviation, the Airport Authority is actively increasing the handling capacity of the airport to meet future demand. This includes the midfield expansion project and the construction of a new air cargo terminal.

(e) On regional co-operation, the Dedicated Chapter clearly defines the functions and positioning of Hong Kong-Guangdong co-operation as well as Hong Kong's core role in Pearl River Delta regional co-operation. On this basis, the Government will co-operate further with relevant Mainland provinces and municipalities in taking forward the relevant measures which will focus on forging ahead with advanced manufacturing industry and modern services industries, Qianhai development, the opening up of the Guangdong market under "early and pilot measures" to Hong Kong service industries, cross-boundary infrastructure development, the building of the Guangdong-Hong Kong-Macao Quality Living Area and a modern economic circulation sphere.

(f) The Dedicated Chapter mentions the Central Authorities' support for continuing CEPA's implementation. The Government will continue its dialogue with the relevant Central Government ministries in taking forward the related work.

The government spokesman said, "The Government will continue to spare no effort in taking forward the implementation of the 12-5 Plan according to the 'One Country, Two Systems' principle. The Government has established a working relationship with the National Development and Reform Commission since 2008 and will liaise with the relevant Central Government ministries on this basis. Under the chairmanship of the Chief Secretary for Administration, we have strengthened the cross-bureau steering committee established in 2008 to oversee the overall co-ordination of bureaux efforts and their follow-up work. The Constitutional and Mainland Affairs Bureau will assist in the daily liaison and co-ordination."

The government spokesman said, "The relevant bureaux will continue the dialogue with their stakeholders and take forward the complementary work in an open and pragmatic manner. According to established practice, relevant bureaux will also consult the relevant panels of the Legislative Council on matters that have significant policy and public expenditure implications."

Ends

Wednesday, March 16, 2011 Issued at HKT 20:00