BoC urges Hong Kong to raise R&D spending to no less than 1.5 pct of GDP

HONG KONG (AFX-ASIA) - Bank of China said the Hong Kong SAR government should raise research and development spending to no less than 1.5 pct of GDP from the current 0.4 pct to enhance the territory's industrialisation.

	    In its monthly economic review, the bank said Hong Kong needs a new force for its economic transformation and the government will play a crucial role.

	    "Apart from development of the service sector and economic integration with China, Hong Kong should push through new industrialisation to deliver high value added products," the bank said.

	    "The government should make more efforts in technology development to raise R&D spending to 1.5 pct or more of GDP from the current 0.4 pct," the bank added.

	    The bank suggests the government set up a technology bureau as a decision  making agency to promote industrial development.

	    "Based on international experience, an independent economic system cannot afford to grow without industrial development," the bank said.

	    "Take Singapore. Its manufacturing sector accounts for about 25 pct of the country's GDP ... In the U.S., the financial centre in New York is serving the country's entire industrial sector," the bank said.

	    The bank said if Hong Kong gives up industrial development, its service sector will risk losing customers.

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