By Alfred Hermida BBC News Online technology staff

Hong Kong is preparing to introduce one of the world's most advanced identity cards in an attempt to curb illegal immigration.

An embedded computer chip on the card will hold personal details such as name and date of birth, as well as a digital copy of both thumbprints.

We are asking the government to minimise the data it wants to install on the chip and to use the highest encryption technology

Sin Chung-Kai, Democratic Party

But the plan has raised concerns about personal privacy and the potential threat from hackers.

"We need to have some safeguards," said Sin Chung-Kai, a Hong Kong legislative councillor involved in information technology issues.

"My biggest reservation is individual privacy," he told the BBC programme Go Digital.

"We are asking the government to minimise the data it wants to install on the chip and to use the highest encryption technology to protect the data on the chip."

Data on a chip

The new smart ID card is set to be introduced from next year. Officials estimate that distributing the cards to all Hong Kong's 6.8 million residents will cost $400m.

The plastic smart cards will be about the size of a credit card. A microchip on them will hold details such as gender, pictures and residential status.

Embedded chip will contain thumbprints

Due to privacy concerns, the Hong Kong authorities backed down over proposals to have the cards carry medical and financial records.

In addition, other uses for the cards, like driving licence, library card and an electronic wallet, will be optional.

Despite these concessions, some groups are wary of the potential threat to individual privacy.

"Each government department usually only has access to information with that department," explained Mr Sin. "But the smart ID card empowers a law enforcement agency to gain access to information kept by other departments."

Border traffic

One of the main reasons for introducing the smart cards is to keep tabs on Chinese migration to Hong Kong.

The cards will help speed up border checks. Every day, around 200,000 people travel across the border between the former UK colony and the Chinese mainland.

Chung-Kai: Wants controls on access to data

With the smart card, residents will be able to use self-service kiosks that match the digital biometric data on the card against their fingerprints.

Although Hong Kong was returned to China from Britain in 1997, tight border controls remain and Beijing is anxious to control migration to the territory

And despite the concerns of civil liberties groups, the concept of smart cards is gaining momentum in Asia, Europe and the US.

Last year, Malaysia introduced an optional smart card that works as a driving licence and contains passport information.

Finland has already introduced an optional smart ID card and Japan is planning to do the same next year.