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Archive > Year 1999 > ITSD > 10th Anniversary


Challenges in the promotion of electronic commerce in Hong Kong

Introduction

    o This paper sets out:

      o what Tradelink is;

      o the services being offered by Tradelink and what it is doing to promote such services; and

      o Tradelink's future services and plan.

    o At the same time, the experience gained by Tradelink should provide some pertinent pointers to the challenges and obstacles facing Hong Kong in the promotion and adoption of electronic commerce.

What is Tradelink?

    o Although Tradelink is a private company, it is jointly owned by the SAR Government (being the major shareholder with about 45% of the equity) and eleven other leading trade related companies or organizations as following ?

    o The intention of Tradelink's shareholders is to use Tradelink as a vehicle to help the Hong Kong business community maintain its competitiveness in the international market through the adoption of electronic commerce. To this end, Government gave Tradelink the exclusive right to develop and provide electronic services for a number of widely used trade-related documents for a period of seven years, which started on January 1st 1997. In addition, Government laid down clearly defined timetables for the withdrawal of the corresponding paper-based services.

    o Thus, Tradelink is uniquely poised to spearhead the promotion of electronic commerce in Hong Kong.

    Tradelink's challenge

    o The challenges facing Tradelink may be described as being in two phases.

    o Even at the beginning, the task for Tradelink was more than just the development of the technical platform necessary for the delivery of its exclusive services.

    o Public awareness and appreciation of the use of electronic commerce was and remains a problem. To tackle this problem, Tradelink mounts frequent seminars, often in conjunction with Government and various trade associations, in order to drive home the message. It was some three years ago when these seminars started. As some 70,000 companies are estimated to be submitting Government trade documents, these seminars are still being held.

    o In addition, it was recognized that replacing paper documents by electronic ones alone would only bring limited benefits. The opportunity of introducing electronic services was also taken to re-engineer the processes involved. This has meant numerous meetings led by Tradelink and participated by representatives from the Government Departments involved as well as industry representatives.

    o Costs necessary in the use of electronic services is another major concern for the trading companies. As a matter of principle, the Government and Tradelink have worked together to ensure that the charges for the electronic services are no more expensive, and are often cheaper, than the paper-based services they will replace. Investing in the necessary computer equipment is also regarded as a major expenditure item for most of the smaller companies. Working with some of the well-established personal computer vendors, Tradelink can now offer a plug-and-use computer package that comes with an easy payment by instalment plan.

    o Many of the companies submitting Government trade documents are small and medium enterprises. It has been estimated that 87% have less than ten employees and many of them do not use computers in their jobs. Given the generally low level of awareness and computer literacy, training becomes a necessary adjunct for building confidence in those companies embracing electronic commerce for the first time. It was also necessary to include basic computer training as part of the training programme. For the immediate purposes, Tradelink has been working closely with organizations, such as the Hong Kong Productivity Council and the Clothing Industry Training Authority, to form a network of training centres to provide company-specific training for the use of Tradelink's services. For the longer term, Tradelink is working together some of the tertiary institutions to include general electronic commerce as well as specific Tradelink services in their curriculum.

    o Customer services and support is another important prerequisite. Tradelink's customer hotline is manned by more than 70 customer service representatives, operates seven days a week, and handles around 3,500 incoming calls a day. Tradelink also has a team of about 20 customer service engineers who can respond to customers? requests for technical assistance and provide on-site visits and problem resolution, if required. Such services are provided free of charge.

    o In addition to the usual range of customer support and services, Tradelink has to assist its customers to comply quickly with changes in Government requirements. Apart from the need to distribute the necessary software upgrades quickly to all customers, which is facilitated by the use of automatic delivery through Tradelink's data network, the customers also need to understand the details of the changes involved. Although the details are announced by Government and repeated by Tradelink to its customers, such changes would result in a much higher number of calls to Tradelink's customer hotline.

    o On the security front, Tradelink was probably the first in Hong Kong to adopt a public key infrastructure to ensure message integrity, authentication, and non-repudiation for its electronic messaging services. The legal status for the use of this infrastructure by Tradelink customers has been enshrined in the Import and Export Ordinance and the Industrial Training (Clothing Industry) Ordinance since 1995. At present, more than 120,000 of our security keys have been distributed for use by Tradelink's customers.

    o While Government has laid down specific timetables for the withdrawal of its paper-based services, there is also the recognition that a small proportion of the traders may still not be ready to start using the corresponding electronic services by the time that the Government counters are closed. To cater for such traders and to enable Government not having to maintain parallel paper and electronic systems indefinitely, Tradelink has taken the lead in launching a network of service centres in conjunction with various trade associations. Traders who are not yet registered with Tradelink may use these service centres to convert paper documents into electronic ones for submission to Government.

    Current services

    o At present, about 40,000 of Hong Kong's trading companies have registered with Tradelink. More than 50,000 transactions are processed each day.

    o Tradelink's electronic services enable its customers to:

      o apply for Restrained Textiles Export Licences;

      o distribute approved Restrained Textiles Export Licences to freight forwarders, carriers or cargo terminals to facilitate export;

      o send approved Restrained Textiles Export Licences to U.S. Customs to facilitate import clearance at the U.S. end;

      o keep track of the utilization of textiles quotas;

      o lodge bi-lingual Import and Export Declarations;

      o submit declarations to the Hong Kong Export Credit Insurance Corporation, if they are also its customers;

      o submit Production Notifications; and

      o apply for Certificates of Origin.

    o Electronic submission for applications of Restrained Textiles Export Licences has been made compulsory since January 1999.

    o Electronic submission of Import and Export Declarations commenced in April 1997 and will be made compulsory in April 2000. At present, close to 80% of the declarations are submitted electronically.

    o Electronic submission of Production Notification commenced in September 1999. Already, more than 60% of the notifications are submitted electronically and electronic submission will be made compulsory in early 2000.

    o Electronic submission for applications of Certificates of Origin commenced in October 1999. The target date for making electronic submission compulsory for these certificates is July 2000.

    The way ahead

    o In July 1999, Government approved the implementation of electronic submission of Cargo Manifests and Dutiable Commodities Permits for its Departments. Start dates for these new services are planned for 2001.

    o The Internet has become the preferred platform for the next generation of electronic services and Tradelink has been piloting its own secure Internet gateway. Full production of the gateway is planned for early 2000. All new customers joining then will use Tradelink's Internet-based services immediately and a migration programme will be put in place for existing customers.

    o Apart from transactional services, Tradelink's secure Internet gateway will enable its customers to enjoy an improved service and to access easily a wide range of trade-related information specially put together for them by a team of editors. It will also make it easier for Tradelink's customers to access networks operated by Tradelink's partners.

    o A first step in this direction was made in September 1999, when Tradelink entered into an agreement of cooperation with the China International Electronic Commerce Centre (CIECC) of the Ministry of Foreign Trade and Economic Cooperation. Under the terms of the agreement, Tradelink customers in China will be enabled to use Tradelink's electronic services via CIECC's data network and vice versa. Tradelink and CIECC will also carry out feasibility studies for new services.

    o Tradelink is also in the process of discussing potential agreements of cooperation with other network operators, both locally and overseas.

    o Having helped many Hong Kong companies on their way to adopting electronic commerce, Tradelink will make sure that they can reap maximum benefits from doing so and stay ahead in international markets.


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