Tag Archives: China

     Following is a question by the Hon Elizabeth Quat and a reply by the Secretary for Financial Services and the Treasury, Mr Christopher Hui, in the Legislative Council today (September 8):
 
Question:
 
     In June 2019, the “612 Humanitarian Relief Fund” (the Fund) was established to raise funds through online crowdfunding so as to provide relief in terms of money, etc. for those injured and those arrested in the movement of opposition to the proposed legislative amendments. As at the end of July this year, the donations received cumulatively by the Fund exceeded $253 million. It has been reported that the Fund has not applied for registration under the Societies Ordinance, nor does it fall within any of the associations to which the Societies Ordinance does not apply as specified in the Schedule to the Ordinance. In this connection, will the Government inform this Council:
 
(1) whether it has studied if the Fund is required to apply for registration or exemption from registration under the Societies Ordinance; if it has studied and the outcome is in the affirmative, of the follow-up actions;
 
(2) whether it will enact legislation to regulate public fundraising activities for raising funds to subsidise persons suspected of breaking the law; and
 
(3) given that the Fund itself does not have a bank account and has been receiving donations through a bank account of another body, namely “Alliance for True Democracy”, whether it has investigated if the Fund has received funds from organisations or persons outside Hong Kong, and if the activities of these two associations have contravened the Anti-Money Laundering and Counter-Terrorist Financing Ordinance and other laws?
 
Reply:
 
President,
 
     First, thank you the Hon Elizabeth Quat for raising this question, allowing us to state clearly the position of the Government.
 
     As an international financial centre, upholding the rule of law has always been the cornerstone of Hong Kong’s success. It also lays the foundation for the orderly conduct of various trades, financial services and investment activities in the market. The Government is therefore on high alert for illicit activities. If any persons or organisations have violated laws and regulations, our regulatory bodies and law enforcement agencies will take appropriate actions in accordance with relevant legislations. If there are any acts involving attempts to endanger national security, or incite, aid, abet or provide pecuniary or other financial assistance or property for other persons to commit offences endangering national security, bringing threat to the nation’s and Hong Kong society’s prosperity and stability and the living of the general public, it may constitute an offence under the Hong Kong National Security Law, which is a very serious crime. The Government will take it very seriously.
 
     Regarding the Hon Quat’s question, Members may have already noted that the National Security Department of the Hong Kong Police Force announced last week that they had launched an investigation against the “612 Humanitarian Relief Fund” for suspected contravention of the Hong Kong National Security Law or other Hong Kong relevant laws. In consultation with the Security Bureau, my reply to the question is as follows:
 
(1) According to the records of the Societies Office, the “612 Humanitarian Relief Fund” is not registered as a society or exempted from society registration under the Societies Ordinance. Section 5 of the Societies Ordinance stipulates that, unless otherwise specified, a local society shall apply to the Societies Officer for registration or exemption from registration within one month of its establishment or deemed establishment. Section 2(2) of the Societies Ordinance provides that the Societies Ordinance shall not apply to any person listed in the Schedule to the Ordinance, including any company registered under the Companies Ordinance, any trade union or any trade union federation registered under the Trade Unions Ordinance, any company, association or partnership formed for the sole purpose of carrying on any lawful business and registered under any other Ordinance, etc.
 
     According to the records of the Companies Registry and Labour Department’s Registry of Trade Unions, the “612 Humanitarian Relief Fund” is neither registered as a company under the Companies Ordinance, nor as a trade union or trade union federation under the Trade Unions Ordinance. As mentioned above, the National Security Department of the Hong Kong Police Force is currently investigating the “612 Humanitarian Relief Fund” for suspected contravention of the Hong Kong National Security Law or other Hong Kong laws. If any individual or institution is suspected of any illegal act, the Police will deal with it in accordance with the law having regard to the relevant statutory requirements and the actual circumstances of the case.
 
(2) and (3) The Government has to emphasise that, any funds raised, transferred and used must be in compliance with the regulatory requirements stipulated in the relevant laws. Law enforcement agencies will, in light of the actual circumstances, monitor and keep an eye on the operation of such funds, and take enforcement actions against illegal acts in accordance with the law.
 
     Regarding Members’ concern about anti-money laundering, the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO) requires financial institutions and designated non-financial businesses and professions (such as legal professionals, accounting professionals, trust or company service providers, etc.) to carry out anti-money laundering measures in accordance with the AMLO, including specific requirements such as customer due diligence and record-keeping. The AMLO also provides that any person carrying on a trust or company service by way of business in Hong Kong is required to obtain a licence to provide relevant services. If any person is suspected of providing trust or company services without a licence, he or she will breach the law, and the Companies Registry will investigate and follow-up.
 
     Under the law including the Organized and Serious Crimes Ordinance, the Theft Ordinance, etc., the activity of any persons involving the objectives of money laundering, fraud and other illegal acts will be investigated and prosecuted. 
 
     The Hong Kong National Security Law has clear provision regulating the pecuniary or other financial assistance or property for the commission by other persons of the offences stipulated in the law, in order to combat offences of colluding with a foreign country or with external elements to endanger national security.
 
     On the other hand, in respect of crowd-funding platform, if any online fundraising activities involve financial services-related activities such as an offer to the public to purchase securities or conduct lending, the relevant crowd-funding platform may be subject to regulation by the Securities and Futures Ordinance, the Companies (Winding Up and Miscellaneous Provisions) Ordinance, the Money Lenders Ordinance, etc.
 
     Therefore, crowd-funding activities are regulated by the relevant legislations depending on their purposes and nature.
 
     The National Security Department of the Hong Kong Police Force is currently investigating the “612 Humanitarian Relief Fund” for suspected contravention of the Hong Kong National Security Law or other Hong Kong laws. The Government will not comment on the operation of individual self-proclaimed funds. We strongly appeal to the public to distance themselves from fundraising activities of self-proclaimed funds which are suspected of contravening the Hong Kong National Security Law or other Hong Kong laws, so as to avoid being deceived or bearing any legal risks. 
 
     Thank you President. read more

     Following is a question by the Hon Paul Tse and a reply by the Secretary for Financial Services and the Treasury, Mr Christopher Hui, in the Legislative Council today (September 8):
 
Question:
 
     Some members of the public are concerned about the Government’s practice over the years of spending huge sums of money on engaging consultants for purposes such as publicising Hong Kong and taking forward public works projects. For example, in 2001 and 2010, without extensive consultation, a total of $30 million was spent on designing and promoting the “flying dragon” icon logo to publicise “Brand Hong Kong”, which was criticised as a black box operation; in 2015, nearly $70 million was spent on commissioning a consultancy study on the Environmentally Friendly Linkage System for Kowloon East, but eventually the system was not adopted; in June last year, $49 million was spent on engaging a consultancy firm to formulate a strategy to publicise Hong Kong overseas; and in December last year, $550 million was allocated for conducting consultancy studies related to artificial islands in the Central Waters. A senior engineer has described the situation as “a chaotic situation of consultants administering Hong Kong”. In this connection, will the Government inform this Council:
 
(1) whether it has drawn up guidelines on engaging consultants; if not, whether it will do so; if it has, of the relevant procedure and criteria, as well as the method for determining the level of consultancy fees; whether it has reviewed if the practice of engaging consultants in the aforesaid cases was cost-effective;

(2) whether it will, in conducting recruitment exercises for the relevant civil service posts, accord priority to applicants with experience in consultancy work, so that the research work for similar projects can be entrusted to civil servants in future; and

(3) of the respective total amounts of expenditure incurred by the Government in each of the past five financial years on engaging consultants to publicise Hong Kong and take forward public works projects; whether it has reviewed if such a practice is necessary and in line with the principle of fiscal prudence?
 
Reply:
 
President,
 
     Having consulted the Development Bureau, the Home Affairs Bureau and the Civil Service Bureau, my reply to the three parts of the question is as follows:
 
(1) If the expertise and qualified staff required for an assignment is not available in the Government or within the timeframe required, and the recruitment of such qualified staff is not appropriate, procuring departments may appoint a consultant for assistance upon obtaining policy support of their respective bureaux. As the consultancy services provided by consultants appointed by each department involve different portfolios, departments would determine whether to procure consultancy services, as well as the selection criteria, the assessment methodology and weighting pursuant to their practical needs. Nevertheless, to procure consultancy services in support of the Government’s programme and activities, departments should follow the Government’s established procurement policy and regulations, and acquire value-for-money services through bidding means and procedures along the principles of fairness, competitiveness, openness, transparency and integrity. The Government would keep lists of consultancy firms of different categories for portfolios that frequently require consultancy services for departments’ reference when preparing their invitation lists of consultancy firms.
 
     Consultancy services employed by the Government could be divided into three categories according to their relevant professional fields, including the engineering and associated sector, the architectural and associated sector, and the others. For a consultancy agreement of value above the quotation limit in general procurement regulations (i.e. $3 million) but not exceeding $10 million, the selection and appointment of consultant should be agreed and approved by the relevant departmental consultants selection committee (DCSC). As for consultancy agreements of value above $10 million, depending on which of the three abovementioned sectors it belongs to, the appointment would need to be agreed and approved by the relevant consultants selection board, including the Engineering and Associated Consultants Selection Board (EACSB), the Architectural and Associated Consultants Selection Board (AACSB), or the Central Consultants Selection Board. Moreover, the Civil Engineering and Development Department and the Architectural Services Department have separately promulgated selection handbooks and technical circulars to set out the relevant regulations and guidelines for engineering and architectural consultancies, which have been uploaded to the websites of the two departments.
 
     Prior to inviting consultancy firms to submit proposals, procuring departments should formulate the assessment methodology for consultancy proposals and obtain approval from the relevant consultants selection board. The method to assess consultancy proposals includes the weightings assigned to the assessment of technical and price proposals and the assessment criteria. Technical weighting should normally account for 60 per cent to 70 per cent of the overall score, while the price weighting should account for 30 per cent to 40 per cent. The procuring department should set up an assessment panel to assess the consultancy proposals using the assessment method. The procuring department would recommend the appointment of the consultancy firm with the highest combined score in technical and price assessments for approval by the relevant consultants selection board.
 
     Works departments should follow the procedures prescribed by the EACSB or the AACSB when procuring engineering or architectural consultancy services. In general, all consultancy firms on the abovementioned consultants selection boards’ lists of consultants which fulfil the qualification requirements are eligible to participate in biddings. The assessment panel would assess the technical proposal and price proposal submitted by the bidders in two stages, during which the manpower resources proposals and bidding prices submitted by the consultants will be compared with the relevant estimates by the departments, so as to assess the reasonableness of the consultancy proposals.
 
     The works departments and the Information Services Department (ISD) have reviewed the cost-effectiveness of the consultancy services under their purview as referred to in this question upon their completion.

(2) Appointments to the civil service are based on the principle of open and fair competition in order to select the most suitable candidate to fill a civil service vacancy. As Heads of Department/ Grade are best placed to know the work and operational needs of the grades under their charge, they are responsible for stipulating the entry requirements for such grades, in respect of academic or professional qualification, technical skills, working experience, language proficiency, etc. Heads of Department/ Grade should ensure that these entry requirements are relevant to and commensurate with the satisfactory performance of the relevant duties.

(3) In the past five financial years, the total value of consultancy agreements awarded by the EACSB, AACSB and DCSCs of works departments were $1.16 billion, $1.24 billion, $2.46 billion, $1.46 billion and $1.31 billion respectively.
 
     Works departments would regularly review the in-house manpower resources and the requirements of each particular project in order to decide whether there is any need to employ consultancy firms. Employment of consultancy firms for carrying out parts of the projects could speed up project implementation and introduce innovative technologies and specialist expertise. It could also avoid employing a large amount of manpower during peak construction seasons and expanding departmental establishment excessively. On the whole, the employment of consultants could facilitate the implementation of public works projects.
 
     In respect of promoting Hong Kong, the ISD has only awarded one public relations (PR) service contract relevant to promoting Hong Kong, i.e. the one with the theme “Relaunch Hong Kong”, in the past five financial years. The contract value was about US$5.7 million. In light of the massive disruptions to Hong Kong’s society and economy caused by rioters in 2019, followed by the repercussions brought about by the COVID-19 pandemic, the ISD decided to appoint a PR firm with expertise in areas such as crisis management, city branding, data analysis and global marketing to help the Government to devise a global marketing and PR strategy targeting key overseas markets to help Hong Kong reconnect with the world and relaunch as soon as possible. This special task could not be completed by mere re-deployment of existing manpower. The relevant agreement was procured through open bidding, and is in compliance with the guidelines on appointment of consultancy firms.

     Thank you, President. read more

     The effective exchange rate index for the Hong Kong dollar on Wednesday, September 8, 2021 is 101.3 (up 0.2 against yesterday’s index). read more

     Following is a question by the Hon Mrs Regina Ip and a reply by the Secretary for Financial Services and the Treasury, Mr Christopher Hui, in the Legislative Council today (September 8):
 
Question:
 
     The Stock Exchange of Hong Kong Limited (SEHK) launched the Growth Enterprise Market (GEM) in 1999, and amended the GEM Listing Rules in 2018 to raise the GEM admission requirements and remove the “streamlined application process” for transfer of listings from GEM to the Main Board. Some members of the industry have pointed out that the amendments concerned have undermined the positioning of GEM as a “stepping stone” to the Main Board, and deprived small and medium enterprises (SMEs) of the opportunity to raise funds through listing on GEM (given the fact that only one company was newly listed on GEM in the first half of this year). In addition, in the absence of investors’ attention, it is difficult for the 360-odd companies currently listed on GEM to raise funds (as illustrated by the fact that the “amount of funds raised by companies after listing” last year was less than one fourth of that a decade ago). In this connection, will the Government inform this Council whether it knows if SEHK has plans to revitalise GEM, so that more SMEs can raise funds through listing on GEM; if SEHK does, of the details; if not, the reasons for that?
 
Reply:
 
President,
 
     Hong Kong is a major global listing platform for companies from different jurisdictions. During the past 12 years, Hong Kong had ranked first in the world seven times in terms of funds raised through initial public offerings (IPOs). In the first eight months of this year, Hong Kong raised a total of HK$269.8 billion of funds through IPOs, representing 81 per cent increase when compared with the figure for the same period last year.
 
     The Government, regulators and Hong Kong Exchanges and Clearing Limited (HKEX) strive to develop Hong Kong into a broader and deeper fundraising platform and safeguard investors’ interests.
 
     As far as the Growth Enterprise Market (which is called GEM at present) is concerned, in response to market views that the requirements of GEM back then were abused by market participants, causing possible disruption to the order of the market of some securities and thereby affecting the overall quality of the market, HKEX repositioned GEM in 2018 as a stand-alone board to provide a fundraising platform for small and medium-sized enterprises (SMEs) after consulting the market’s views in 2017.
 
     The streamlined process for transfer to the Main Board (Streamlined Process) was cancelled under GEM having considered the problems more commonly found among GEM issuers back then including high shareholding concentration, illiquidity and high share price volatility, which led to market concerns that the relevant process might be exploited by issuers with poorer quality to gain easier access to the Main Board via GEM. The Streamlined Process was also considered by market participants as being contrary to the objective of the sponsor regime implemented in October 2013 which was to ensure companies seeking a listing either on the Main Board or GEM have comprehensive due diligence conducted on them with properly drafted listing documents prior to admission to the relevant board. If an issuer can list on the Main Board through transfer from GEM without having gone through due diligence process, there is a risk that GEM would be exploited given the different listing eligibility requirements between the two boards which may eventually affect the quality and reputation of the Hong Kong market.
 
     According to the figures from HKEX, the effect of the then Growth Enterprise Market as a “stepping stone” was limited. For example, the total number of transfer from the Growth Enterprise Market to the Main Board as a percentage of the total number of Growth Enterprise Market issuers eligible for the transfer decreased from 7.2 per cent in the second half of 2008 to 2.7 per cent in 2016.
 
     In order to maintain a clear distinction between the positioning of the Main Board and GEM, HKEX raised the minimum market capitalisation at the time of listing of GEM applicants from HK$100 million to HK$150 million and the minimum public float value of securities from HK$30 million to HK$45 million, while at the same time correspondingly raised the minimum market capitalisation at the time of listing of Main Board applicants from HK$200 million to HK$500 million and the minimum public float value of securities from HK$50 million to HK$125 million.
 
     HKEX is cognizant of market views that the relevant measures will have impact on SMEs that intends to list. Nevertheless, HKEX has the responsibility to uphold and continuously enhance the quality of Hong Kong’s capital market and act in the interest of the investing public in accordance with the requirements in the Securities and Futures Ordinance. The relevant measures would help enhance the overall quality of the market and would not deprive suitable SMEs of the opportunity to list in Hong Kong. They will also facilitate the development of the Main Board and GEM in the long run. The increased differentiation between the listing requirements of GEM and Main Board will allow applicants which intend to list in Hong Kong but could not meet the Main Board listing requirements, including SMEs with lower market capitalisation and profit, to choose GEM as a more targeted alternative listing platform.
 
     In light of some feedback that the removal of the Streamline Process would make the transfer to Main Board unduly onerous, HKEX has provided certain facilitating measures for applicants which transfer from GEM under the new process. These include dispensation with certain documentary requirements, exemption from the requirements on post-Initial Public Offering lock-up, restriction on fund raising and appointment of compliance adviser. Furthermore, applicants which transfer from GEM to the Main Board are not required to comply with the relevant delisting procedures.
 
     HKEX understands from the other market consultations conducted subsequently that market participants considered that HKEX should further study about enhancing the positioning and functions of GEM as a specific board for listing of SMEs in order to further attract and facilitate the listing and fundraising of SMEs. On the other hand, there were market comments that the GEM Listing Rules should be reviewed to strengthen regulation. In this regard, HKEX has launched a review to carefully consider the market’s views on GEM’s positioning and market perception as well as to study about the development of similar markets in other places. If the review concludes that changes to the GEM Listing Rules are necessary, HKEX will further consult the market on the proposals. read more

     Following is a question by Ir Dr the Hon Lo Wai-kwok and a written reply by the Secretary for Food and Health, Professor Sophia Chan, in the Legislative Council today (September 8):
 
Question:
 
     The Government announced in February 2018 that $2 billion would be earmarked for launching a 10-year Market Modernisation Programme (MMP) to improve the facilities of public markets (markets) under the Food and Environmental Hygiene Department. In this connection, will the Government inform this Council:
 
(1) whether it will conduct a comprehensive review on the extent of difficulty in and urgency for carrying out modernisation works for the various markets as well as on the development potentials of such markets, and set the priorities and timetable for carrying out related works for the various markets, with a view to speeding up the progress and ensuring that such works can be completed within 10 years; if so, of the details; if not, the reasons for that;
 
(2) whether it will assess afresh the estimated expenditure of MMP, and seek approval from this Council for supplementary provisions as early as possible when necessary; if so, of the details; if not, the reasons for that; and
 
(3) whether, in order to dovetail with modernised markets for maximising their effectiveness, the Government will step up publicity and education efforts among stall operators and patrons of markets about maintaining the hygiene of markets, so as to build a new culture on using markets; if so, of the details; if not, the reasons for that?
 
Reply:
 
President,
 
     The Government announced in the 2018-19 Budget that $2 billion would be earmarked for implementing a 10-year Market Modernisation Programme (MMP) to improve the facilities in public markets under the Food and Environmental Hygiene Department (FEHD). The MMP aims to improve the operating environment of public markets, thereby facilitating tenants’ business operation and, at the same time, providing market patrons with a more pleasant shopping environment. 
 
     My reply to the question raised by the Member is as follows –
 
(1) and (2) In identifying suitable markets for the implementation of different scales of improvement projects under the MMP, the Government considers a host of factors, including the geographical locations and distribution of the markets, condition of facilities in the markets, business viability, community needs and tenants’ readiness, etc. In particular, the Government would seek to ensure that the selected markets are situated in locations which can support their future business viability, and that they are reasonably distributed across the territory to benefit the entire community. In implementing the MMP, the FEHD works closely with the relevant works departments to identify viable hardware improvement options and consults existing tenants on relevant matters such as the facilities improvement options, rental arrangements and management improvement measures, etc. The Government also reports to the concerned District Councils on the implementation of relevant MMP projects in a timely manner and seeks funding approval according to the established mechanism.
 
     The pioneering project of the MMP is the overhaul of Aberdeen Market. After obtaining funding approval from the Legislative Council, the Government commenced the pre-closure preparatory work in August 2021. In November 2021, the Aberdeen Market will be closed fully for the commencement of the overhaul works. The Government will take appropriate measures, including the use of pre-fabricated parts with regards to the actual circumstances, to expedite the works progress, with a view to completing the overhaul works within 2022. Meanwhile, the Government is also carrying out the preparatory and consultation work for the proposed overhaul works for some other markets, including Yeung Uk Road Market, Ngau Tau Kok Market and Kowloon City Market. In addition, the Government has consulted and obtained the support of the relevant Market Management Consultative Committees (MMCCs) on the minor refurbishment or improvement works for 11 markets (including Ngau Tau Kok Market, Yeung Uk Road Market, Luen Wo Hui Market, Fa Yuen Street Market, Quarry Bay Market, Shui Wo Street Market, Tsuen Wan Market, Mong Kok Cooked Food Market, Ngau Chi Wan Market, Shek Tong Tsui Market and Nam Long Shan Road Cooked Food Market). The works in four of the above markets have been completed, while those in six others are scheduled for completion by the end of 2021. For the remaining market, preparation for the works is underway. The works are expected to commence in phases in the second half of 2022.
 
     Support from relevant stakeholders, in particular tenants, is crucial to the smooth implementation of projects under the MMP. The FEHD will continue to actively follow up on the above projects and identify more suitable markets for the MMP, so as to make the best use of the $2 billion earmarked to improve the operating environment of markets. When the projects are close to completion, the Government will review the effectiveness of the MMP in a timely manner and consider earmarking additional resources for the programme.
 
(3) The FEHD attaches great importance to the environmental hygiene of markets and endeavours to step up its promotion and education targeting tenants and consumers with a view to enhancing their awareness on market environmental hygiene and creating a market hygiene culture. Through the regular MMCC meetings of individual public markets, the FEHD reminds tenant representatives to pay attention to environmental hygiene, including to comply with the anti-epidemic measures, to handle the miscellaneous articles and refuse at their stalls properly, to take the appropriate anti-rodent measures, to conduct proper cleansing work at their stalls on the “market cleansing day” organised by the FEHD twice a month, and, for poultry stall tenants, to take stringent cleansing and disinfection measures on a daily basis to prevent the spread of avian flu. In addition, the FEHD also from time to time puts up various promotional posters on health education at prominent positions within public markets and distributes leaflets to tenants and consumers, urging them to pay attention to personal hygiene, to take proper preventive measures against avian flu and to use contactless payment means, etc.
 
     In addition to improving market facilities through the implementation of the MMP, the Government will also implement new market management measures, including strengthening the daily management of public markets and stepping up the promotion and publicity work for public markets, in order to enhance the overall competitiveness of public markets. read more