HONG KONG, Jan. 12 (Xinhuanet) -- Hong Kong Special AdministrativeRegion (SAR) Chief Executive Tung Chee Hwa on Wednesday pledged tocontinue improving the SAR's business environment and encourage fair competition.

    Delivering his policy address for 2005 at the Legislative Council, Tung said the business community has suggested improving the business environment through streamlining regulation regimes and simplifying licensing procedures, and the Subgroup on BusinessFacilitation is now studying ways to cancel outdated or unnecessary regulations.

    According to him, the real estate and retail sectors have been initially identified for regulatory review due to their significant bearing on the job market.

    The review in relation to the construction industry will explore ways to streamline lease conditions for land grants, improve the procedures for making lease modifications, simplify town planning processes, rationalize the regulatory regime and shorten planning cycles for development projects.

    The review on the retail industry will focus on catering, supermarkets, convenience stores, cosmetics and pharmaceutical trades, Tung said.

    He promised that relevant government departments will support these reviews by studying improvement measures for implementation in 2005.

    The chief executive noted that Hong Kong, which has long been recognized as the freest and most open economic entity, will endeavor to promote fair competition and adopt different measures according to different circumstances.

    "These range from the use of licensing conditions, contractual provisions, codes of practice and administrative measures to legislation for individual sectors," he said, citing the successful introduction of competition for the telecommunications industry in 1998 and the recent monitoring of the local fuel supply market.

    In the policy address, Tung's eighth since 1997, he also ruled out the possibility of implementing a goods and services tax in the next two-and-a-half years as a way to broaden the tax base, as"the economy is still at the early stage of post-recovery consolidation."

    He said the SAR government has been reducing the deficit according to set targets, expressing its determination of and confidence in restoring fiscal balance by 2008-09. Enditem