Author Archives: hksar gov

  ​   Following is a question by the Hon Carmen Kan and a reply by the Secretary for Constitutional and Mainland Affairs, Mr Erick Tsang Kwok-wai, in the Legislative Council today (January 22):

Question:
      
     Regarding prevention of personal data breaches and financial crimes, will the Government inform this Council:

(1) of the number of data breach incidents that were notified by institutions to the Office of the Privacy Commissioner for Personal Data, Hong Kong (PCPD) and the number of those that were detected by PCPD through proactive investigations in each of the past six years; the number of incidents involving data processors and the number of persons affected in these two categories of incidents respectively;

(2) as it is learnt that PCPD and the Government are studying amendments to the Personal Data (Privacy) Ordinance, including, among others, establishing a mandatory personal data breach notification mechanism, introducing direct regulation of data processors, empowering the Privacy Commissioner for Personal Data to impose administrative fines, but this Ordinance is not on the list of bills which the Government intends to introduce into this Council in the 2025 session, of the progress made and the legislative timetable for the relevant exercise; and

(3) given that the Government plans to amend the Banking Ordinance with an aim to allow the sharing of information among authorised institutions on customers, accounts and transactions for the purpose of preventing and detecting financial crimes, and the Government indicated in its paper submitted to the Panel on Financial Affairs of this Council in October last year that PCPD had provided its comments on the amendments, of the Government’s strategies and measures in place to ensure that the amendments are in line with PCPD’s comments while also addressing the surge in the number of fraud cases?

Reply:

President,

     In response to the enquiry raised by the Hon Carmen Kan, having consulted the Financial Services and the Treasury Bureau and the Office of the Privacy Commissioner for Personal Data (PCPD), the reply is as follows:

(1) In the past few years, the numbers of personal data breach notifications received by the PCPD and data breach incidents uncovered by proactive compliance checks were relatively stable, amounting to around 100 cases per year in total. The number witnessed a rising trend up till 2024, to 217 cases. Among those breach incidents, around 10 per cent of them involved malpractice of data processors, and the number of affected persons varied depending on circumstances of individual cases. The relevant statistics may be found at Annex. 

(2) In light of the rising trend of personal data breach incidents in recent years, the Government and the PCPD are both deeply concerned about the issue. The PCPD has adopted a multi-pronged approach to tackle the situation, on the one hand updating relevant guidelines and strengthening promotional and educational work, and on the other hand strengthening enforcement work and studying amendments to the Personal Data (Privacy) Ordinance (PDPO) to combat the situation.

     With regard to education and publicity work on data security, the PCPD has implemented a series of measures on the following three aspects to raise organisations’ awareness in protecting personal data, so as to help organisations reduce the risk of personal data breaches:

(i) Providing “Data Security” tools to support the industries: including (i) launching a one-stop thematic webpage on “Data Security”; (ii) establishing the “Data Security Scanner” for organisations to evaluate their the security level of their data security measures; (iii) introducing a “Data Security Hotline” for receiving enquiries from the industry; (iv) publishing data security guidelines, including “Guidance on Data Breach Handling and Data Breach Notifications” and “Guidance Note on Data Security Measures for Information and Communications Technology”, etc;

(ii) Strengthening collaboration with the industry: including (i) organising training talks for organisations to promote data security management, and data security seminars for the public, educational sector and non-profit organisations; (ii) collaborating with the Cyberspace Administration of China, the Hong Kong Police Force, the Digital Policy Office and the Hong Kong Monetary Authority to organise or participate in seminars and activities relating to data security and handling of data breach incidents; and (iii) organising the “Privacy-Friendly Awards” to compliment organisations’ outstanding achievements in personal data privacy protection; and

(iii) Organising various promotional activities: including (i) arranging mobile exhibition vehicles to conduct publicity in the community for “Privacy Awareness Week 2024” under the theme of “Safeguard Data Security • Safeguard Privacy”; (ii) introducing “Data Guardian”, a data security mascot; (iii) publishing articles in Chinese and English newspapers, online media and professional journals to explain to the public and the industries the importance of data security.

     Meanwhile, the PCPD will also strengthen its enforcement efforts – upon confirmation that the relevant data breach incident involves contravention of the PDPO’s data security principles, the PCPD will, as appropriate, issue an advisory letter or warning letter to the relevant data user, or serve an enforcement notice on the organisation, directing it to take appropriate remedial measures to prevent recurrence of the situation. If the organisation does not implement relevant measures in accordance with the enforcement notice, such contravention under the PDPO will constitute an offence, and the maximum penalty is a fine of $50,000 and imprisonment for two years.

     With regard to the study of amendments to the PDPO, the PCPD has earlier conducted a comprehensive review of the Ordinance, and its preliminary amendment suggestions include: (1) establishing a mandatory personal data breach notification mechanism; (2) directly regulating data processors; (3) requiring data users to establish a personal data retention period policy; (4) strengthening sanctions and empowering the Privacy Commissioner for Personal Data to hand down administrative fines; (5) clarifying the definition of personal data, etc. On the suggestions above, the PCPD consulted the Personal Data (Privacy) Advisory Committee and the Standing Committee on Technological Developments last year, and listened to the views of different sectors. One of the major concerns of the industry was the strengthened sanctioning powers, and especially their effect and pressure on small, medium and micro enterprises under the current difficult economic situation. The Government fully understands the concerns of the industry. As such, the Government is studying on how to appropriately adjust the legislative amendment proposals, e.g. whether to effect the legislative amendments by phases, thereby reducing the possible effect on business sectors; and how to suitably determine the amount of administrative fines, ensuring they are set at an acceptable level while not losing deterrent effect. The Government is striving to complete the study and come up with concrete legislative amendment proposals at the earliest opportunity, and will consult the Legislative Council, so as to amend the PDPO as soon as possible to further protect the personal data privacy of residents.

(3) To combat fraud and other financial crimes, the Hong Kong Monetary Authority (HKMA) issued a consultation document in January 2024 proposing legislative amendments to the Banking Ordinance to allow sharing of information among banks of information on customer accounts (including personal customers) for the purpose of preventing or detecting crime. The HKMA received 18 separate responses during the consultation period, including comments from the PCPD.

     The Government plans to include specific provisions in the legislative amendments which stipulate that banks can share personal accounts information only when there is reasonable suspicion that the personal accounts may be involved in fraud, money laundering or terrorist financing. Banks will be expected to ensure that the relevant requirements are met in each case and be able to demonstrate the grounds on which the decisions are made. In addition, the legislative amendments will also include, amongst others, requirements for banks to keep shared information confidential and to have adequate systems and control measures in place.

     Subsequent to the briefing for the Panel on Financial Affairs of the Legislative Council in October 2024, the Government is currently drafting the legislative amendments and will continue to engage the PCPD and other stakeholders to ensure that a balance is struck between fighting against financial crime and safeguarding personal data privacy in the legislative amendments.

     Thank you, President. read more

     The effective exchange rate index for the Hong Kong dollar on Wednesday, January 22, 2025 is 107.2 (down 0.1 against yesterday’s index). read more

     Following is a question by the Hon Dominic Lee and a reply by the Secretary for Innovation, Technology and Industry, Professor Sun Dong, in the Legislative Council today (January 22):
 
Question:

     It has been reported that the application of robots and artificial intelligence (AI) technologies has become increasingly popular in recent years, particularly in service industry settings such as hotels and restaurants. There are views that Hong Kong should make forward planning and formulate related policies. In this connection, will the Government inform this Council:

(1) whether it has reviewed if there are issues pertaining to the restrictions on the application of robots and AI technologies under the existing laws and regulations, including the restrictions on the operation of robots in public facilities (such as access to lifts); if there are, whether the Government has plans to amend the legislation to address the related issues;

(2) whether it has reviewed the actual effectiveness of the existing Innovation and Technology Venture Fund and other funding schemes in promoting the introduction of robots and AI technologies by small and medium enterprises and start-ups; whether it has assessed if the Government needs to optimise or increase dedicated funding to support the application of the related technologies in the service industry; if it has, of the details; if not, the reasons for that; and

(3) as there are views that the application of robots and AI technologies may involve issues such as privacy, ethics and labour rights, whether the Government will draw on the experience of the Mainland, Europe and the United States and formulate concrete specifications and guidelines, so as to strike a balance between technological development and the needs of the community; if so, of the details and timetable; if not, the reasons for that?

Reply:
 
President,
 
     In respect of the question raised by the Hon Dominic Lee, having consolidated the information provided by the Development Bureau and the Constitutional and Mainland Affairs Bureau, my reply is as follows:

(1) The development of robotics and artificial intelligence (AI) is originally intended to facilitate societal progress, serve and benefit mankind. At present, there is no specific legislation in Hong Kong to regulate the application of robotics; however, projects must comply with the applicable legislation involving the relevant sectors or scenarios. We encourage developers and the market to be flexible and innovative, and to provide technological solutions that meet the needs of different users, such as a wide range of smart solutions.
 
     Regarding the application of robotics that Hon Lee is concerned about, the Lifts and Escalators Ordinance (Cap. 618) itself does not restrict the access of robots to lifts. In line with the above-mentioned general principles of innovative research and serving the people, if the application of individual technologies is restricted by existing legislations, the relevant bureaux/ departments will actively explore the necessary adjustments based on a people-oriented approach.

(2) The Government has all along attached great importance to the development of robotics and AI technologies. We have established 16 research centres under the AIR@InnoHK Research Cluster, which focuses on the development of AI and robotics technologies. AIR@InnoHK brings together top talents from around the world to promote innovative research, technology transfer and the application of AI and robotics technologies.
 
     In addition, the Government has proposed to set up a $10 billion Innovation and Technology (I&T) Industry-Oriented Fund, which will include AI and robotics as one of the thematic areas of emerging and future industries of strategic importance, to channel more market capital to promote the development of AI and robotics industries.
 
     To further accelerate the development of new industrialisation, the New Industrialisation Acceleration Scheme launched last year also provides funding support on a matching basis to enterprises of industries of strategic importance such as advanced manufacturing and AI, to set up new smart production facilities in Hong Kong. The Government also enhanced the New Industrialisation Funding Scheme to strengthen support for local manufacturers shifting to advanced manufacturing, so as to promote the development of the I&T industry.
 
(3) AI is the “brain” of robots, giving them cognitive, learning and decision-making abilities; while robots are the manifestation of AI. Most of the moral and ethical regulations relating to AI are applicable to robotics technology projects. For example, the Government’s Ethical AI Framework and its revised version in response to the development of generative AI technology have covered the ethical principles, governance framework and risk assessment of AI, providing guidance on the application of relevant technologies.
 
     As for the Personal Data (Privacy) Ordinance (PDPO), it provides for the collection, holding, processing and use of personal data. The Office of the Privacy Commissioner for Personal Data (PCPD) has also published the “Guidance on Ethical Development and Use of AI” and the “Artifical Intelligence: Model Personal Data Protection Framework” to provide recommendations regarding the governance of AI and the protection of personal data privacy, with a view to assisting public and private organisations in complying with the relevant requirements under the PDPO when they develop, procure, implement and use AI systems.
 
     On the other hand, the Government has commissioned the Hong Kong Generative AI Research and Development Center (HKGAI) under the InnoHK Research Clusters to study and suggest appropriate rules and guidelines on generative AI technologies through practical applications.
 
     We will continue to improve the relevant policies, with a view to balancing the development and regulation of robotics and AI, and embracing the opportunities and challenges brought about by “human-machine collaboration”. read more

     Following is a question by Dr the Hon Tik Chi-yuen and a reply by the Secretary for Financial Services and the Treasury, Mr Christopher Hui, in the Legislative Council today (January 22):

Question:

     It has been reported that the Government’s fiscal deficit for the current financial year will be as high as $100 billion. However, it is stipulated under Article 107 of the Basic Law that the Government shall follow the principle of keeping the expenditure within the limits of revenues in drawing up its budget, and strive to achieve a fiscal balance. In this connection, will the Government inform this Council:

(1) given that according to government information, as at November 30 last year, the Government’s fiscal reserves stood at $591.4 billion, which had substantially reduced by almost half when compared with $1,160.3 billion as at March 31, 2020, whether the Government has set a “safety line” for the fiscal reserves; if so, of the response plans in case the fiscal reserves drop to the critical level;

(2) as it has been reported that as at the previous financial year, the Government had issued bonds amounting to over $200 billion, and it will also issue bonds not exceeding $500 billion in the coming five years, while the Government has indicated that there may be room for upward adjustment of the ceiling on the amount of bond issuance depending on the circumstances, whether the Government will set an ultimate ceiling on the amount of bond issuance, so as to avoid triggering debt crises as a result of the total amount of debts substantially exceeding the Gross Domestic Product; and

(3) as it has been reported that the expenditure on civil service remuneration accounts for 25.98 per cent of the Government’s operating expenditure, whether the Government has considered freezing or reducing civil service emoluments, merging civil service grades or streamlining the organisation structure, as well as reviewing the remuneration of senior officials (in particular politically appointed officials)?

Reply:

President,

     Our reply to the question raised by Dr the Hon Tik Chi-yuen is as follows:

(1) The Government has all along been upholding the principle of keeping expenditure within the limits of revenues in drawing up its budget as enshrined in Article 107 of the Basic Law. We strive to achieve a fiscal balance, avoid deficits and keep the budget commensurate with the growth rate of its Gross Domestic Product (GDP), with a view to ensuring the resilience and sustainability of our public finances. The Government has the constitutional responsibility to uphold the principle of fiscal prudence and achieve fiscal balance over a period of time.

     During the epidemic, the Government launched several rounds of large-scale counter-cyclical measures to support enterprises and members of the public. The implementation of anti-epidemic measures also led to a sharp increase in expenditure. These measures, though successful in stabilising the economy and safeguarding people’s livelihood at that time, have led to fiscal deficits in the past few years and a drop in fiscal reserves. Furthermore, as a small and externally-oriented economy, Hong Kong is inevitably susceptible to the influence of a complicated and volatile external environment. While revenues related to the asset market will still require some time to fully recover, the Government has to keep devoting resources to strengthen the growth momentum of our economy and enhance public services. This is why we are having a deficit budget for this financial year (i.e. 2024-25). Taking into account the net proceeds from the issuance of government bonds, the latest projected consolidated deficit for 2024-25 will be under $100 billion.

     The Government is determined to overcome the challenges facing our public finances. In the 2024-25 Budget, we proposed to implement a comprehensive fiscal consolidation programme, which seeks to narrow our fiscal deficit progressively and restore fiscal balance in a few years’ time by containing the growth of expenditure, increasing revenue and issuing government bonds. Given the current economic and fiscal circumstances, we are actively considering enhancing our fiscal consolidation efforts to further contain expenditure growth. These include requiring government departments to reassess their resource allocations and work priorities and better meet the needs of society through reallocation of resources.

     As to the appropriate level of fiscal reserves, there have been different views in the society. Some people think that the more, the better when it comes to fiscal reserves, while some are of view that the Government should not keep excessive social resources and should instead enhance economic efficiency through market forces. As our fiscal requirements will change alongside the continuous development of our economy and society, we consider that we should not and it is inappropriate to set a fixed benchmark or limit for the level of fiscal reserves. Meanwhile, we consider the current level of our fiscal reserves adequate for meeting the day-to-day operation of the Government.

     The Financial Secretary is now formulating the 2025-26 Budget. The levels of revenue, expenditure and fiscal reserves will be reviewed in the light of the imminent and long-term needs of society. This will enable us to strike the right balance and draw up relevant measures and financial arrangements to ensure the sustained and steady development of our economy and society.

(2) The Government has made the issuance of government bonds a financing option for infrastructure projects. Taking into account the pace of development in respect of the Northern Metropolis and other infrastructure projects, the Government announced in the 2024-25 Budget its plans to issue bonds worth about $95 billion to $135 billion per annum from 2024-25 to 2028-29. The actual size of bond issuance will be subject to such factors as the prevailing fiscal position, market situation and works progress. In May 2024, the Legislative Council (LegCo) passed the resolution on the setting of a borrowing ceiling of a total of $500 billion for the Government Sustainable Bond Programme and the Infrastructure Bond Programme. Any adjustments to the borrowing ceiling will require the approval by LegCo.

     The issuance of government bonds on an appropriate scale will further foster the development of the bond market and the implementation of infrastructure projects, which is in line with the practice of many advanced economies. The Government will maintain government debt at a prudent level. According to the forecast given in the 2024-25 Budget, the ratio of government debt to GDP will range from about 9 per cent to 13 per cent during the period from 2024-25 to 2028-29, which is much lower than most advanced economies.

     The Financial Secretary, who is now formulating the 2025-26 Budget, will look into the scale and forms of bond issuance for the next few years.

(3) As to pay adjustment in respect of politically appointed officials and civil servants, having consulted the Civil Service Bureau and the Constitutional and Mainland Affairs Bureau, we give our consolidated reply as follows:

     Regarding the annual civil service pay adjustment, the Chief Executive in Council (CE in Council) will thoroughly consider six factors according to the established mechanism in deciding the civil service pay adjustment. The six factors include the state of Hong Kong’s economy, changes in the cost of living, the net pay trend indicators derived from the annual Pay Trend Survey, the Government’s fiscal position, the pay claims of the staff side and civil service morale. 

     The Government has been strictly controlling the civil service establishment and, since 2021-22, has contained the overall civil service establishment at a level not exceeding that as at end-March 2021 (about 196 000 posts); and the civil service establishment will reduce to 194 000 posts as of end-March 2025. Bureaux and departments have been enhancing efficiency through re-prioritisation, internal redeployment, work processes streamlining and leveraging on technology so as to take forward policies and initiatives of the Government as well as to cope with the rise in workload.

     The existing remuneration package for Politically Appointed Officials of the HKSAR (Hong Kong Special Administrative Region) Government was set in accordance with the mechanism recommended and submitted by the Independent Commission on Remuneration for Members of the Executive Council and the Legislature, and Officials under the Political Appointment System of the Hong Kong Special Administrative Region to the CE in Council for consideration and decision.

     As mentioned just now, we are actively considering enhancing our fiscal consolidation efforts to further contain expenditure growth. The Financial Secretary is now formulating the 2025-26 Budget and will review the fiscal consolidation programme, including proposals on expenditure cut.

     Thank you, President. read more

     Following is a question by the Hon Stanley Ng and a written reply by the Secretary for Development, Ms Bernadette Linn, in the Legislative Council today (January 22):
     
Question:
 
     There are views that air-raid shelters are important relics of the War of Resistance in Hong Kong, and are vivid materials for cultivating the spirit of patriotism and developing characteristic tourism. However, air-raid shelters and related military corridors in Hong Kong have all along not been put to good use. On the other hand, there are many successful cases in the Mainland (e.g. Chongqing and Sichuan) and overseas countries (e.g.‍ the United Kingdom and Germany) where air-raid shelters have been revitalised into tourist attractions to fulfil their historical and educational functions, which are worthy of the Government’s reference. In this connection, will the Government inform this Council:
 
(1) of the following information on all the air-raid shelters in Hong Kong: (i) the location, (ii) the area, (iii) the government department responsible for their management, (iv) the current use and (v) the revitalisation status (set out in the table below);

Name of air-raid shelter	(i)	……	(v)

 
(2) as the Government indicated in its reply to a supplementary question raised by a Member of this Council on June 7, 2023 that it would gradually investigate the situation of air-raid shelters, of the current progress and outcome of the investigation;
 
(3) as there are views pointing out that despite the historical and cultural value of air-raid shelters, the Antiquities Advisory Board has included some air-raid tunnels in the “List of Items Not Falling Under the Usual Category of Buildings/Structures” for which grading assessment and study will not be conducted, while the Antiquities and Monuments Office has not included air-raid shelters in the “List of Government Historic Sites” list, whether the Government will consider conducting studies and assessments of air-raid shelters in order to administratively establish their historical and cultural value, thereby promoting their revitalised use; whether the Government currently has a mechanism in place to assess the revitalisation potential of air-raid shelters (e.g. the necessary conditions for revitalising air-raid shelters, the necessary assessment procedures, and the responsible government departments);
 
(4) whether it has assessed the effectiveness of the revitalisation of the eight air-raid shelters at Deep Water Bay Drive, Shouson Hill, into a wine cellar and clubhouse restaurant, including whether the social and economic benefits generated following the revitalisation have achieved the expected results; and
 
(5) as there are views pointing out that in addition to the revitalisation of air-raid shelters into wine cellars and clubhouse restaurants, revitalising them into museums, bookstores, cultural experience centres, etc, is also a common revitalisation approach in the Mainland and overseas countries, whether the Government will make reference to these successful cases to formulate the air-raid shelter revitalisation plan for Hong Kong?
 
Reply:
 
President,
 
     In consultation with the Culture, Sports and Tourism Bureau, the Leisure and Cultural Services Department, the Lands Department (LandsD) and the Civil Engineering and Development Department (CEDD), our reply to the question raised by the Hon Stanley Ng is as follows:
 
(1) The CEDD has carried out a basic investigation to the known disused air-raid tunnels in Hong Kong. According to the records, there are currently 26 disused air-raid tunnels in Hong Kong, details of which are set out at Annex. 

(2) and (3) Air-raid tunnels bear witness to Hong Kong’s wartime history. The Antiquities and Monuments Office (AMO) is gathering information and will conduct research in due course. Subject to the research results, the AMO will consider including air-raid tunnels with higher historic and heritage value as “Government Historic Sites” for relevant departments’ reference in assessing their potential for re-use. The AMO will also take photo records of the conditions of the air-raid tunnels, so that the public can learn more about them through the images.

(4) According to the information provided by the LandsD, the eight bunkers at Deep Water Bay Drive in Shouson Hill have been leased to Crown Wine Cellars Limited on short-term tenancies since 2003, primarily for operating a private wine club and storage of wine for members of the club. Although the Department does not maintain the statistics, the general impression is that in addition to serving as a wine cellar and club, this unique site also attracts visits from citizens and tourists.

(5) Disused air-raid tunnels are generally very compact and narrow. The re-use of these tunnels would require appropriate strengthening works to ensure safety, along with the installation of additional facilities, such as water supply, drainage, power supply and ventilation, depending on the intended use. These works and installation of facilities will occupy space within the air-raid tunnels, further narrowing the internal space, which may affect the feasibility and cost-effectiveness of their re-use. The Government currently has no plan for the full revitalisation and re-use of the underground air-raid tunnels. Subject to the research mentioned above and other policy needs (e.g. tourism and history education, etc), the Government will conduct a more focused assessment of the conditions, limitations and cost-effectiveness of re-using individual disused air-raid tunnels. read more