Following is a question by Dr the Hon Thomas So and a written reply by the Secretary for Commerce and Economic Development, Mr Algernon Yau, in the Legislative Council today (October 14):
Question:
There are views pointing out that with the Government's active support, the development of the first two phases of the Trade Single Window (TSW) and the related services have yielded positive results, but progress in the digitalisation of "Business-to-Business" (B2B) trade documents, which account for the vast majority of all trade documents, remains relatively slow. While the Government already issued a consultation paper between late 2025 and early 2026 on legislative amendments to facilitate the digitalisation of B2B trade documents, a legal basis and official verification standards are still lacking. In this connection, will the Government inform this Council:
(1) given that the Government has previously indicated that it does not recommend the introduction of a mandatory accreditation or regulatory regime at this stage for establishing the reliability of electronic trade documents owing to the current lack of a leading technological solution in the market, but there are views suggesting that Hong Kong has a responsibility to lead and promote the formulation of the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) Standards for electronic trade documents, whether the Government will promote technological development for the digitalisation of B2B trade documents in such directions as establishing an official regulatory and accreditation framework in the future;
(2) as there are views pointing out that "ValidAP", the Government's platform for the cross-boundary validation of electronic trade documents, has achieved preliminary results in promoting commercial data verification, and the Government is also pressing ahead with Phase 3 of the TSW at full steam, whether the Government will consider adopting existing cross-boundary data verification technology as the basis and taking the lead in developing a comprehensive electronic accreditation and mutual data recognition system covering B2B commercial certificates and transaction records such as electronic bills of lading (eBLs) and commercial invoices; and
(3) as the Project Ensemble launched by the Hong Kong Monetary Authority (HKMA) already covers use cases such as trade finance and eBLs, and the HKMA has signed the Memorandum of Understanding between Shanghai and Hong Kong on Digitised Cargo Trade and Finance Cooperation with the Shanghai Data Bureau and the National Technology Innovation Center for Blockchain, whether the Government will further consolidate existing resources and establish an interdepartmental cross-boundary digital trade sandbox jointly with the Commerce and Economic Development Bureau, the Customs and Excise Department and the Innovation and Technology Commission to enable the logistics, trading, banking and insurance sectors to conduct trials on a common platform for unifying standards on electronic trade documents and data, and connect it to the Project Ensemble and the initiative on Shanghai-Hong Kong co-operation on eBLs, with a view to expediting the formation of digital trade rules recognised in the GBA and even the international community?
Reply:
President,
In consultation with the Customs and Excise Department, and the Hong Kong Monetary Authority (HKMA), the consolidated reply to the question raised by Dr the Hon Thomas So is as follows:
The Government has been committed to promoting the development of digital trade in order to maintain and enhance Hong Kong's position as an international trade centre. With reference to the Model Law on Electronic Transferable Records (MLETR) advocated by the United Nations Commission on International Trade Law, the Government is advancing legislative amendments to facilitate the digitalisation of "Business-to-Business" (B2B) trade documents, and will introduce an amendment bill to the Electronic Transactions Ordinance (Cap. 553) into the Legislative Council within this year. In taking forward the work relating to the digitalisation of trade documents, the Government has been, and will continue to be, actively drawing reference from the practices of other jurisdictions.
The MLETR adopts a functional approach and provides a legal framework to ensure that electronic transferable records (ETRs) possess the necessary characteristics to achieve their legal effect and functions, while upholding the principle of technological neutrality by not prescribing the use of any particular technology or platform. The advantage of this approach is that it affords flexibility to accommodate rapidly evolving technologies and business models, and facilitates cross-border interoperability.
Specifically, the MLETR provides that a reliable method must be used to establish that an ETR may be regarded as equivalent to a paper-based document. In defining "reliable method", the provisions of the MLETR set out a range of factors for consideration, including the security of hardware and software, the ability to prevent unauthorised access, and applicable industry standards. To enhance legal certainty, the MLETR also advocates a "proven-in-fact" approach, under which a method need not be assessed against the criteria of the factor-based evaluation if it has in fact been proven capable of achieving its intended function.
Currently, the more common international practice is for each jurisdiction to provide a legal framework for ETRs that is consistent with international standards (including the MLETR), while, in accordance with the principles of technology-and-medium neutrality, allowing enterprises to use and develop different technological solutions, thereby driving the market to develop technologies and systems that meet practical needs.
The Government has been promoting trade digitalisation through improving the legal framework, upgrading trade infrastructure and facilitating cross-boundary data interoperability. The Trade Single Window, as Hong Kong's digital trade infrastructure, enables the industry to submit trade documents to the Government on a one-stop basis. ValidAP, on the other hand, provides cross-boundary electronic trade document authentication services to verify, among other things, whether an electronic document has been issued by the relevant authority. The two platforms each have their own policy objectives and service scopes, and differ from the proposed end-to-end electronic authentication and mutual recognition system covering B2B transactions.
Given that relevant technological solutions are already available in the market, and that technologies and business models continue to evolve, the Government's current focus is to establish a clear legal framework for the recognition of electronic trade documents and promoting cross-boundary interoperability, thereby creating favourable conditions for the industry to adopt and develop different solutions. It might not be the most cost-effective use of public resources if the Government were to develop or construct similar systems on its own. Regarding the introduction of a mandatory accreditation regime, full consideration must also be given to its impact on enterprise choice and market innovation. At present, other jurisdictions generally have not introduced mandatory accreditation regimes. We will uphold the principle of technological neutrality, allowing enterprises to select suitable solutions according to their business needs, and will continue to monitor international developments and the associated benefits.
The Government understands that promoting cross-boundary interoperability with the Guangdong-Hong Kong-Macao Greater Bay Area and the Chinese Mainland as a whole is of great importance to Hong Kong's commercial and trade development. In recent years, the Chinese Mainland has actively promoted the trials and the application of electronic trade documents, including amending the Maritime Code of the People's Republic of China (Maritime Code) in October 2025 to provide legal status for electronic transport records such as electronic bills of lading. The amended Maritime Code, which was also formulated with reference to the MLETR and relevant international conventions, has been implemented since May 2026. Upon completion of the relevant legislative amendments, Hong Kong will be able to enhance the cross-boundary acceptability of such documents with the Chinese Mainland.
On the other hand, the HKMA is advancing trade finance digitalisation through the multi-year Project CargoX. With the participation of 21 banks, the CargoX Pilot Programme was launched in May 2026 to facilitate the iterative validation of cargo and trade data initiatives. In 2026 and 2027, the Pilot Programme focuses on four key areas, including integrating with key government cargo and trade data platforms (such as the Transport and Logistics Bureau's Port Community System and the Commerce and Economic Development Bureau's Trade Single Window), combining small and medium-sized enterprises' trade flow and cash flow data for banks' multi-dimensional credit assessment, adopting Digital Corporate Identity to enable trusted data sharing, and enhancing connectivity with key trade corridors, such as the Chinese Mainland and the Association of Southeast Asian Nations.
In this connection, the HKMA has collaborated with the Shanghai Data Bureau (SDB) to successfully establish a link-up between the HKMA's Commercial Data Interchange and a digital trade platform developed by the SDB. Known as "CargoX Connect", this collaboration has enabled five pilot banks to access and utilise trade declaration data from the Yangtze River Delta region to facilitate various trade finance processes, such as trade verification and due diligence on trade counterparts, resulting in faster loan drawdowns for Hong Kong businesses engaging in both onshore and offshore trade. To date, this pilot project has enabled the approval of 10 trade finance loans amounting to $180 million. The HKMA intends to extend this successful model to other provinces and cities in the Chinese Mainland as the next phase of development. The Government will continue to monitor standard developments both internationally and in the Chinese Mainland to provide a foundation for cross-boundary interoperability.