Restructuring of Hong Kong Enterprises Operating in the Pearl River Delta
28. Many Hong Kong enterprises have actively capitalised on the enormous opportunities in the Mainland market －but they are also facing unprecedented challenges. This is particularly the case for Hong Kong enterprises with manufacturing operations in the PRD. The recent policy adjustments on processing trade in the Mainland call for an overhaul of the modus operandi adopted by our industries for more than two decades. Our industries need to gear up for this new challenge. Industrial restructuring, upgrading and relocation need to be seriously considered.
29. The Government has been working closely with industry and taken a multi-pronged approach to tackle the situation. We relay to the Central Government industry concerns as well as our assessment of the policy adjustments on Hong Kong's economy; propose to the Central Government other flexible measures to match with the policy adjustment; explore with the provinces and industry alternative operating bases and help investors obtain first-hand information about the investment environment.
30. In addition, we plan to improve the Small and Medium Enterprises Funding Schemes and help industries upgrade production facilities and explore new markets. To date, our efforts have paid off. For example, we are most grateful that the Central Government has allowed alternative arrangements regarding the Guarantee Shadow Margin Account requirements.
Implementing the Action Agenda of the National 11th Five-Year Plan
31. The HKSAR Government held the Economic Summit on "China's 11th Five-Year Plan and the Development of Hong Kong" in September last year. The Summit's four Focus Groups submitted a forward-looking Action Agenda to me in January this year. The Action Agenda contains 50 strategic proposals and 207 action items on how we can enhance our competitiveness in areas where we are strong and also support the development of our country. The Government has taken prompt follow-up action on these various recommendations and taken steps to implement about 100 items. For the remainder the Financial Secretary is taking the lead to sort out specific arrangements with the parties concerned, including the Mainland authorities. These action items can achieve a win-win situation for the economic development of both Hong Kong and our country.