The government yesterday hinted that the fair competition legislation might not be put into effect by the end of next year due to concerns raised by small and medium-sized enterprises, Secretary for Commerce and Economic Development Frederick Ma said.

The government must consider thoroughly all relevant factors before deciding whether to wind up legislation by the end of 2008 as scheduled, he said.

Small and medium-sized enterprises had earlier expressed fears that they would be dragged into lawsuits, and operation cost would increase should the law is enforced.

Ma said the business sectors agreed with the principle of the legislation, but they have concerns over the details.

"The situation of Hong Kong is contradictory to the experience of external economies, where the small and medium-sized enterprises welcome similar legislation," he said.

"We will carefully examine the opinions expressed by business organizations, and the small and medium-sized enterprises," he said, adding that he hoped the law would be welcomed by different sectors when it would be implemented.

Meanwhile, Ma also said the government was highly concerned with the operating environment of Hong Kong factories in the Pearl River Delta region after the mainland introduced new policies for export processing trade, including security deposit.

Ma said he had expressed concern to central government officials during his recent visit to Beijing.

He said Beijing officials were familiar with the situation and are supportive of Hong Kong businesses.

"The meeting with the officials is encouraging," he said.

The government would assist these factories to transform their business model and move to inner part of the nation, he added.

He said Chen Zhou in Hunan Province is offering tax relief to attract Hong Kong investors.

The worsening situation of these factories would affect the local economy as most of them had hired Hong Kong staff.

(HK Edition 09/01/2007 page6)