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IT Trends in Hong Kong -- NI Report Group

IT Trends in Hong Kong

It is not an exaggeration to say that the trend of IT in Hong Kong affects the economic trends in all of Asia. A policy-studying group, in which the Treasury Secretary is assigned to the chairman and special scientists are posted to a secretariat, has been organized in Hong Kong, and a new organization for promoting a practical high-tech policy, for gathering talent, and for training in high-tech companies have been emphasized. With regards to talent, the curriculum of universities is being changed, as universities become aware of the connection between science, business, and talented employees in the field of science and technology, and learn to accept ties in these areas from the mainland. To encourage companies, close relationships with Silicon Valley companies in the U.S. are being established. And "the fund for innovation and technology," with a budget of 5 billion dollars, supports IT in Hong Kong.

The Spread of Cellular Phones Exceeds that in Japan

The rate of spread of cellular phones in Hong Kong was over 76% in December, 2000, and the percentage exceeds that of Japan, and ranks just after that of Northern Europe. The number of cellular phones is 5,230,000, exceeding by far the number of subscription telephones of 3,950,000 (58%). Moreover, the Internet has spread with 2,730,000 persons using the Internet, a percentage of over 40% of Hong Kong's population, twice as high as the rate at which Internet use has spread in Japan, which is 21%. Although the Japanese government advocates establishing itself as the leading IT nation within five years, Japan may lag behind the China bloc, which includes Hong Kong, given the current situation.

Electric communication in present Hong Kong is moving towards full liberalization, changing from a monopolistic system to a competitive one. The competition has generally intensified since 2000, when the conventional four company system changed to a ten company system of five cables and five wireless companies, by passing of a new license.

In international telecommunications, new licenses are issued to new business companies that use various forms of communication, such as satellites, seabed, and ground cable communication. New business companies are going to invest about 10 billion dollars in these forms of communication over the next three years, and this will spur the maintenance and expansion of Hong Kong as the Internet Hub of the Asian Pacific Rim.

PCWW, the IT Leader of Hong Kong

PCCW (Pacific Century Cyber Works;, the new Internet company in Hong Kong, purchased the largest Hong Kong communication company, C&WHKT (Cable and Wireless Hong Kong Telecom) for about 4,200 billion yen in February, 2000. PCCW has only 400 employees, whereas C&WHKT has 13,000. The purchase, which is called "A snake drank an elephant"in Chinese, establishes PCCW as the driving force behind the Hong Kong IT. Mr. Richard Li, Executive Chairman of PCCW, is the second son of Mr. Li, the founder of the Cheung Kong Group Hutchison <>, which is the electric communication section of the Cheung Kong Group, is the top company in the cellular-phone market in Hong Kong. It was reported on extensively in Japan that NTT DoCoMo invested about 43 billion yen to Hutchison, and obtained 19% of their stocks The trend of cellular-phone companies in Hong Kong, whether the Cheung Kong Group, which leads Hutchison, and PCCW to cooperate in accelerating IT or progressing independently, has attracted a great deal of attention

PCCW is currently the only private promotion organization in the cyber-port plan of the Hong Kong Special Administrative Regional government. PCCW made a contract with them formally in May of last year.

The Problem of Hong Kong Moving Toward a High-Tech Base

Hong Kong, which aims at remarkable progress centering on IT in the above-mentioned trends, is progressing towards being the high-tech base of Asia and the world. But the high-tech industry has already grown as major industries in Singapore and Taiwan, and after the Asia currency crisis, Malaysia, Philippine, and Thailand have also become high-tech-oriented. It will not be easy for Hong Kong to maintain high-tech hegemony in Asia. In addition, since there is the possibility of competition with the China mainland, Hong Kong has to promote a policy that can deal with this competition.

Hong Kong also needs to collect engineers and production managers to compensate for its short history of promoting high-tech industries.

However, the social infrastructure of Hong Kong, and its finance, law, and presence of high-grade services, such as accounting, along with its proximity and access to the vast hinterland of China, are advantageous for Hong Kong, and give it an edge in in comparison with the surrounding Asian countries.

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