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Removing Business Obstructions

With Hong Kong's economy embarking down the long road of recovery, the government should remove obstacles hampering business operations to sustain the recovery, writes the Chamber's Legco Rep, The Hon JAMES TIEN

Recently released economic data and current market conditions are sending clear signals that Hong Kong's economy has finally come through the worst of times. However, along the long road to full recovery, deflation and unemployment are expected to persist for some time. As such, the government needs to ensure that no policies will impede the economy and business environment.

I believe everyone agrees that the government should improve the business environment by relaxing regulations to give companies more room to operate, which, in turn, will boost the economy. I have long called for the administration to review current policies and laws to see if they hamper business. If they are found to do so, they must be eliminated to maintain the momentum of the economy's recovery.

This is important, because a healthier economy creates more jobs and benefits various sectors of the community, not just employers. Despite this, some labour groups have blocked certain initiatives to relax regulations which I feel would benefit both employees and employers.  

Grasp CEPA opportunities

I am glad to see that some pro-labour Legislative Councillors last month decided to alter their once-strong stance. They put forward motions in Legco urging government to review and improve all existing policies relating to businesses. They also urged that such policies be carried out flexibly on a sectoral basis to help small and medium-sized enterprises take advantage of the Closer Economic Partnership Arrangement (CEPA).

With labour groups agreeing there is a need to reduce business bureaucracy, now is the right time for the administration to act. We have to remember that liberalisation of the Mainland market will be accompanied with increasingly keen competition.  Therefore, we should quickly seize the opportunities created by CEPA to get the full benefit out of the arrangement.

Earlier this year, the government vowed in its Policy Address to form a high-level task force to find ways to further improve the business environment. Unfortunately, the task force has yet to be set up, but I hope this situation can be rectified as soon as possible to enable its members to re-examine and simplify all business-related regulations, including the licensing mechanism.

On the other hand, I have also put forward a number of suggestions to the Financial Secretary on ways to boost our economy and on CEPA.

Solving business disputes

One side-effect expected to result from the surge in trade and economic activity between Hong Kong and China is an increase in business disputes. The Mainland and the Hong Kong Governments should set up a quasi-government body, "Mainland China and Hong Kong Co-ordinating Committee for Investment Affairs and Disputes," to solve issues arising from corporate investment in both Hong Kong and on the Mainland.

Furthermore, although Hong Kong is part China, Hong Kong investment in the Mainland is still regarded as foreign investment and subject to rules governing Sino-foreign joint ventures.

To better protect the interests of Hong Kong investors and local residents working in the Mainland, the government should urge the Central Government to formulate a set of laws similar to the "Commercial Law on Hong Kong and Macau Enterprises and Individuals Investing in Mainland China." This would safeguard their investments and businesses there.

Sustained economic recovery

To speed up the economic recovery, I also recommend that the government further broaden the business migration scheme to attract more applications and funds. The diversification of investment items will make the scheme more attractive, and allow more local industries and sectors to absorb foreign capital and benefit from the scheme. Besides real estate and financial assets, such items as investing in taxi and mini-bus licences, and running restaurants and factories could be included.  In the meantime, the SAR Government needs to continue negotiations with the Central Government to expand the scope of Mainland applicants.

Given that the economy has just turned the corner of recovery, the government should also resist increasing past fees and charges to avoid hampering business operations. In conclusion, I believe all these measures, if implemented, will provide Hong Kong companies with a better environment in which to do business, and ensure our economic growth can be sustained.

If you have any comments or proposals on my views, please send them to me directly at, Legislative Council Building, 8 Jackson Road, Central, Hong Kong.
Or email me at tpc@jamestien.com. Tel. 2500 1013, Fax 2368 5292.