Chief Executive Donald Tsang says he understands people's concern over the introduction of an omnibus fair competition law, adding the Government's starting point is not to intervene in the market, but to protect market order and fair competition.

Speaking on RTHK's Letter to Hong Kong programme this morning, Mr Tsang said fair competition involves interplay between governance, harmony and economic development.

Hong Kong has relied on a sector-by-sector approach, whether by opening up a sector for more competition, or by introducing regulations or laws to facilitate market development or prevent market distortions, he said.

"I believe this approach has worked well up until now. But, I also feel the time is right to take a closer look at whether our approach fits with the times, and serves the best long-term interests of our society and economy."

Right time

He added: "We have set up an independent Competition Policy Review Committee to do just that, and are keeping an open mind on whether we need a comprehensive, cross-sector fair competition law."

Mr Tsang said he decided to conduct the study at this particular moment because Hong Kong's economy is in the best shape it has been for years, and certainly since the Asian financial crisis back in 1997 and 1998. "So, we are operating on a firm economic foundation for change, if change is necessary."

Another reason is that Hong Kong's economy is moving further up the value chain as the city leverage its strengths and advantages to make the most of the Mainland's rapid development and enormous potential.

Apart from big international companies and home-grown conglomerates, there are also a much larger number of small and mediumenterprises in Hong Kong.

Fair play

"We need to ensure they have adequate opportunity and the right environment in which to thrive and excel. So, we must ensure the integrity of our level playing field. We do not want to see a situation where a few big companies, whether local or international, can corner the market, fix prices or engage in bid rigging. We don't believe that such harmful practices exist in any prominent way in Hong Kong, but we must do our best to avoid them."

Another reason Mr Tsang decided to look more closely at a fair competition law is that there is a wealth of international experience on which to draw.

"Fair competition laws have become an integral and welcome part of many advanced economies. We can see what has worked and what has not, and avoid the pitfalls that have emerged in other economies that have introduced similar laws."

Concerns addressed

Knowing that some people fear an omnibus fair competition law would hamper, rather than facilitate, market development; or would lead to an increase in legal actions, Mr Tsang said these concerns will be addressed in the review.

"I want to be sure we have an environment where small and medium players have an equal opportunity to boost the vitality and scope of our market, as much as the big guns of the corporate world. Hong Kong people are well known for their work ethic and entrepreneurial flair. They don't want special treatment. They just want to be able to compete fairly. I strongly believe we owe it to them to take a closer look at whether our current approach is right for Hong Kong's future."