Local small and medium enterprises (SMEs) are hoping the Hong Kong SAR government could speed up the opening up of the Lok Ma Chau Loop Area to enable development of new cluster industries.

"Governments in Taiwan, Singapore and Japan have showcased very good examples of providing large development zones as incubators to assist new, developing hi-tech or creative industries," Regina Ip, chairperson of Savantas Policy Institute, said yesterday.

She said Hong Kong must catch up in this area in order not to fall behind.

"The government should make good use of the Lok Ma Chau Loop Area to create new industry clusters and expand Hong Kong's economic structure," she said.

Ip made her points at a press conference after leading an SME delegation to Beijing and Tianjin last month.

During the four-day visit, the 50-strong delegation met with officials of the State Planning and Development Commission, Ministry of Commerce, Customs and the two municipal governments.

The delegation exchanged views with relevant ministries and departments, gained a better understanding of policies and their impact on the business sector.

It also reflected difficulties SMEs encountered while doing business in the Pearl River Delta.

For example, it could be a problem for some SMEs that are energy-consuming or create pollution when mainland authorities ask them to move to inner provinces.

Also, the labor contract law that came into effect in January this year has imposed on the SMEs financial burden and triggered many labor disputes in court.

(HK Edition 05/09/2008 page1)