Motion Debate on Grasping the Opportunities brought about by
CEPA to Enhance Employment

Madam Deputy, regarding today's motion, in fact, this is the first time I have seen something like this in the Legislative Council: Members from different political parties, be they stand for the business sector or the grass-roots workers, are all concerned about enhancing the employment opportunities in Hong Kong, and they all look at the issue from a commercial perspective. Having worked in the Legislative Council for so many years, I feel that, in the past, when the Liberal Party proposed in a debate on behalf of the business sector that the Government should adopt a certain course of action, the speeches would give others the impression that such proposals were beneficial to the business sector, and then the labour sector would mostly have some reservations. However, today I am very glad to see that all other Members have agreed to something which all along has been advocated by the Liberal Party.

Madam Deputy, let me speak on the different aspects. First of all, it is about the processing zone. I still remember that, when I first joined the Legislative Council, that was 1993 to 1995 when I was the representative of the Federation of Hong Kong Industries, I had already suggested the establishment of a processing zone at the border. If the processing zone was established at that time, and we could make use of the mainland labour at mainland wages, not at Hong Kong wages, many factories would not have been relocated away from Hong Kong. However, at that time, my proposal was absolutely not supported by the labour sector. They said that if the border processing zone were set up, the "rice bowls" of the Hong Kong people would be taken away, and the jobs would go to the mainlanders. That was not feasible! Today, we are putting forward the proposal of setting up the processing zone at the river-loop area. In fact, the business sector also supports this. But in my opinion, this scheme will take at least five years, if not 10, to materialize. This is because we have to conduct an Environmental Impact Assessment, and we also need to complete the entire relevant infrastructure at the river-loop area. By then all the benefits of CEPA will have lost their relevance because we are talking about the early opportunities in three or five years' time.

Let us take a look at our wages today. In the river-loop area, should Hong Kong wages or Shenzhen wages be paid to workers? Judging from the pace of development in Shenzhen now, it is growing very rapidly when compared to the situation of 10 years ago. Ten years ago, if the Hong Kong wage is $6,000 or $7,000, then the equivalent in Shenzhen would just be between $1,000 and $2,000. However, nowadays in Shenzhen, you can hardly find someone to work for you if you cannot offer a wage of $2,000 or $3,000. Five years later, I feel that the wage gap between Hong Kong and Shenzhen will even be smaller. If the processing zone in the river-loop area could only be completed by then, I think there must still be some factories operating there. But will some well established factories at some other places, such as a factory with 10,000 workers in Dongguan, be relocated to the our river-loop area? In addition, we are talking about something that may happen five years later, so I do have some reservations about this. Of course, some people may say, "Doing something is better than doing nothing." Or "It's better late than never." I believe the scheme will still be of some use by then. I feel that I am saying this to strike a balance because Members today are all praises for this proposal, but I just do not want people place too much expectation on this, thinking that if all the work can be done and CEPA could be implemented, then more job opportunities would be created. In today's motion, the most important point is increasing job opportunities. However, can we really make our grass-roots wage earners hold so much hope, thinking that once the river-loop industrial zone is established and once CEPA is implemented, their job opportunities would be enhanced substantially?

If CEPA had been implemented 10 years ago, it would be very useful. I still remember soon after the reunification in 1997, I had discussed with Mr CHAU Tak-hay, then Secretary for Trade and Industry, for many times. Under "one country, two systems", why could we not have some special trade arrangements? Taking the United States, Canada and Mexico as examples, three different countries could sign some agreements, why could we not do that? Secretary CHAU Tak-hay said at that time to the effect that, we could not breach the provisions of the World Trade Organization (WTO) and ask the country to grant us such benefits. Unfortunately, we have been late for six years. If CEPA could be implemented in 1997, and the other countries could only enforce the WTO provisions officially in the Mainland as late as 2005 or 2006, then we could enjoy eight years of a head start. This would be very useful. But now, we have only two or three years of such early advantages.

Besides, CEPA, the arrangement we are discussing today, is not stipulated by any legislation enacted by the Central Government. Therefore, the Liberal Party had put forward two points to improve the matching arrangements of CEPA when we visited Beijing several months ago. First, we have to consider the enactment of a law on investment by Hong Kong and Macao compatriots. As we proceed with our investments in the present manner, should such investments be treated as foreign investments or domestic investments? This is because foreign investments are entitled to certain benefits, whereas domestic investments also have their share of benefits. But there is no explicit investment law governing investments from Hong Kong and Macao. Even for investments made under the framework of CEPA, the Central Government does not have any guidelines for them. So how should we interpret the situation? All businessmen conducting business to take advantage of the CEPA opportunities, be they professionals or manufacturers, interpret the situation in each of their own way in the Mainland. They conduct their negotiations in whatever cities or provinces they are in, and the outcomes they could get are the ultimate results. I feel that such protection is inadequate. Another point, many manufacturers with factories in the Mainland have met with disputes, which really should not be resolved by way of a lawsuit in court. We have suggested to the Central Government for the establishment of an unofficial arbitration conference, which is similar to the Labour Tribunal in Hong Kong. The operation of such an organization does not entail legal proceedings, but just reconciliation. We all know that, it always happens like this: If someone wishes to start up a factory in a certain city, the original law there could be amended to incorporate two additional laws or an additional provision for the collection of a poll tax. Sometimes a fee is charged on the ground of environmental protection. Such situations often take place in many provinces and cities, and different places have enacted new laws on their own. This puts manufacturers in some very difficult situations. As the Hong Kong Government or Secretary Stephen IP now have come to know this suggestion put forward by us, I hope they can follow this up with the Central Government when they have a chance to discuss such matters.

As for the factories, I also share the views of many Honourable colleagues, that if such factories, such as those making watches and clocks, high-end garments or jewellery, are still operating in Hong Kong, we hope we could keep their operations in Hong Kong by making use of the CEPA advantages. I strongly hope that factories already moved to the Mainland, such as garment factories and plastic toys factories, could be relocated back to Hong Kong, as some Members for the labour sector have suggested. But I think we should not be excessively optimistic.

Madam Deputy, the Liberal Party supports the original motion as well as all the amendments. Thank you.