The effectiveness of Hong Kong's competition policy is under review, to determine whether it is in line with the times, Chief Executive Donald Tsang says.

Delivering his first Policy Address in the Legislative Council today, Mr Tsang noted Hong Kong has long been recognised as the world's freest economy.

"A level playing field that allows enterprising people to start and run their own businesses is important for sustaining the vitality and harmony of society," he said.

While the international community has commented favourably about fair competition being upheld in Hong Kong, Mr Tsang said, "It is possible that forces capable of cornering the market may emerge in Hong Kong."

The Government introduced a Statement on Competition Policy in May 1998 and has since implemented sector-specific competition policies, including ones for the telecommunications market. Those results "have been particularly noteworthy," he said.

To ensure the competition policy continues to serve the public interest and provide a business-friendly environment, and in response to the views of Legislative Councillors and the public, the Government set up a Competition Policy Review Committee a few months ago.

It is chaired by a non-official with members from different sectors. They will not only gauge the existing policy's effectiveness, but also whether available investigative powers are adequate.

It will also compare the policy with those in other parts of the world and discuss the need to introduce in Hong Kong a comprehensive and cross-sector law on fair competition, as well as its scope and application.

Policy aims to help SMEs operate, flourish 

"We do not seek to intervene in the market. Rather, we want to actively protect market order and fair competition by preventing manipulative practices such as price fixing, bid rigging and market sharing," he stressed.

"Any additional measures, including legislation, will aim to facilitate new ventures by individuals and help small and medium enterprises operate and grow. We can take reference from the comprehensive competition laws enacted in scores of jurisdictions so that we can avoid as far as possible any negative impact stemming from legislation or other related measures."

As Hong Kong enterprises have always embraced competition and thrived in a competitive setting, Mr Tsang believes they will support  the Government's effort to maintain a climate of free and fair competition.