The Hong Kong Arts Development Council (HKADC) was established by ordinance in 1995 to plan, promote and support the broad development of the arts which include performing, literary, visual, film and media, arts education, arts criticism and arts administration in Hong Kong.

Arts funding is one of the HKADC's major responsibilities. To meet the different needs of the arts community, different types of grant schemes which include three-year, one-year, devolved and project grants, are introduced to support the broad development of local artists and arts organisations. The HKADC also helps nurture fledging artists and arts groups through proactive projects. The Fresh Wave Short Film Competition, organised in collaboration with the Hong Kong International Film Festival Society, is one example of this kind of aid designed to help aspiring and promising young people to become film makers. Another is the Pilot Partnership Scheme on Xiqu Venue, formed to take xiqu performances to a larger audience and to nurture new talents.

To raise local arts standards, the HKADC has been promoting cultural exchanges between local artists and their counterparts on the Mainland and other countries. In May 2006, the HKADC made arrangements for a delegation of about 30 local arts groups to take part in the Second China (Shenzhen) International Cultural Industry Fair. By participating in the event, the Hong Kong group was able to show the diversity and vibrancy of the arts scene in Hong Kong as well as secure a foothold on the Mainland. A HKADC delegation which included representatives of local arts groups visited cities in the Pearl River Delta Region in November to further strengthen ties with their Mainland counterparts and to study their cultural facilities and needs.

In addition to supporting local artists and arts organisations, the HKADC continues to work with different government departments, and private and public bodies to take the arts closer to the general public.

During the year, the HKADC took part in organising a series of events which included 'The Reading Write-up Competition for Students' and the 'Critics' Recommendation and Cultural Forum' at the annual Hong Kong Book Fair to enhance the joy of reading. The Hong Kong Literature Festival, presented jointly with the LCSD increases people's appreciation of literature through symposiums, interflow activities and artistic performances. The eight-episode television series — Art Odyssey, co-produced with Radio Television Hong Kong, features different arts and cultural facilities around the world and explains how these infrastructures contribute to a city's development.

In September, the HKADC teamed up with the Hong Kong Institute of Architects to participate in the 10th International Architecture Exhibition at the Venice Biennale for the first time under the 'Hong Kong, China' banner. As a result of its success in Venice, the show was repeated in Hong Kong.