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Following is the speech by the Secretary for Commerce and Economic Development, Mr Gregory So, at a roundtable luncheon in Los Angeles co-organised by the Los Angeles World Affairs Council and the Hong Kong Economic and Trade Office, San Francisco today (December 12, Los Angeles time):
Distinguished guests, ladies and gentlemen,
Good afternoon. I am delighted to be here in Los Angeles. It is great to see so many people here today. Thank you for your keen interest in Hong Kong.
Being the minister for commerce and economic development, my portfolio is hopelessly broad, including trade, industry, tourism, foreign investment, intellectual property, technology, broadcasting, etc. The perk of my job is I get to meet upstart talents and brilliant entrepreneurs from different fields. Many of these individuals are actually from here, the United States (US). They are happy to find their new home in Hong Kong, which is a great city to live, enjoy and thrive as entrepreneurs.
In the next few minutes I will tell you why this is the case. More importantly, I will convince you that Hong Kong is an indispensable springboard for US businesses to reach out to the huge Asia-Pacific market, in particular that of Mainland China.
First, US entrepreneurs choose Hong Kong because they know how the system works, and they know how to work the system. It is a system familiar to the US, a system based on a free flow of capital, goods and services. A system that is open to new ideas and an unfettered exchange of information. It is a system based on international standards and a level playing field for all, where local companies, Mainland enterprises and foreign firms compete side by side.
Secondly, Hong Kong is a premium showcase for American firms to promote their high-quality goods and services in our part of the world. We are the trend-setter and have a prime location in East Asia and strong connectivity with the rest of our region. We also welcome tens of millions of visitors to our city each year. Last year alone, 54 million people visited Hong Kong, of whom about 41 million were from the Mainland of China. Many come to shop for the latest brands and fashion from the US and other western markets. In other words, a ticket to Hong Kong is also a ticket to the vast China market for the "Made in the USA" (United States of America) label.
Thirdly, we have a great working model. Since Hong Kong's reunification with China in 1997, we have been able to preserve and enhance our unique corner of the country under the principle of "One Country, Two Systems", under which we continue to maintain our own currency. The Hong Kong dollar is fully convertible and has been linked to the US dollar since 1983. We have no restrictions on the flow of capital. We also maintain our own tried and trusted common law system with an independent judiciary. And we have our own low and simple tax regime.
Fourthly, in terms of financial connectivity, Hong Kong ranks alongside London and New York as a leading hub for finance. Importantly for us, we are also designated by the Central People's Government in Beijing as China's global financial hub. So, we have a very high stake in, and huge commitment to promoting international financial stability and, at the same time, leading the smooth process of financial liberalisation in the Mainland of China, the second largest economy in the world after the US. With a transparent regulatory regime, free capital flows, the rule of law and international connections, Hong Kong is a testing ground for the internationalisation of the Mainland currency, the Renminbi.
What's more? Hong Kong is a place to nurture, manage and trade ideas and innovation.
Last year, Forbes magazine named Hong Kong as one of the world's top four tech capitals to watch. And this is what Forbes has to say about Hong Kong: " ... with a community of innovative and ambitious entrepreneurs on one side and a population of internationally travelled, wealthy tycoons on the other, Hong Kong could be a powder keg of a techonomy waiting to explode."
In today's knowledge-based economy, businesses and entire economies compete on the strength of innovation. Part of my job is to encourage innovation, and more importantly, to generate business out of innovation.
How? Our strategy is two-fold. One is to develop a vibrant startup ecosystem. We create an environment in which overseas and local entrepreneurs can meet, discover synergies and access markets, capital and talents together.
On a macro level, startups contribute greatly to our economies by bringing us inspiration, technology, talented people and investment from overseas. What can be more exciting than to witness a startup transform into a global brand. That's the kind of success story we all want to see!
We know that startups need many things: seed funding, office spaces, work visa facilitation, communities network, business development support, design support, promotion platform, market access and serial investment, etc.
And so we offer an excellent network to support these needs. We have different types of public and private initiatives especially designed to nurture startups and attract talents, including incubation programmes, government funding schemes, networking communities, co-work spaces and more.
Take for example the creative sector. We want to establish Hong Kong as a creative hub by, among other things, nurturing creative talents and startups. We have sponsored internship and trainee programmes for the advertising and digital entertainment industries. We have also sponsored signature events such as the Business of Design Week, the largest design event in Asia since 2002. Earlier this year, we launched a new design cluster called PMQ. PMQ previously served as the Police Married Quarters on Hong Kong Island. We transformed this historic site into a creative hub with studios and event venues. Many startups from the creative industries have moved into PMQ, spurring synergy and interaction within our creative community.
With concerted efforts from both the government and the private sector, the startup scene in Hong Kong is thriving. One burgeoning trend that I want to highlight is the number of co-work spaces in Hong Kong. The number has really exploded over the past couple years, from just three in 2010, all the way to 31 in 2014, more than a 10-fold increase. By working with like-minded talented people in the same space, startup entrepreneurs feed on that extra ounce of synergistic effect to help them succeed. I have visited many of these co-work spaces. I am impressed by their innovation and entrepreneurial spirit.
One of the Hong Kong SAR Government's programmes, StartmeupHK (StartmeupHK Venture Programme), is giving further impetus to the growth of high impact ventures on a global scale, by facilitating their access to financial, intellectual and social capital.
Venture Programme participants have the unique opportunity to pitch their ventures to the judges and the assembled crowd of angel investors, venture capitalists, and overseas and local business communities.
The Hong Kong SAR Government will try its utmost to help bring startups and innovation to fruition.
Having a vibrant startup ecosystem is one way to drive innovation. Another driver for innovation is the protection, trading and management of intellectual property (IP). IP has become a very valuable asset for individuals and companies. It is the currency for innovation. Knowledge protected by law is traded across borders to drive growth. Over the last two decades, we have seen a growing demand for IP rights in Asia and especially in the Mainland of China.
In 2012, the Mainland recorded the highest number of filings in major types of IP rights such as patents, trademarks and industrial designs in the world.
Hong Kong has long been one of the world's key trading economies and a global financial centre. Now, with the Mainland taking off as an important IP supplier and user, Hong Kong is poised to become the Asian region's IP trading hub.
Last year, we set up a Working Group on IP Trading to devise policies and strategies to promote Hong Kong as an IP trading hub. The Working Group, led by myself, is pressing ahead in four areas.
One: Enhance the IP protection regime. This includes updating our patent system by having our own "original grant patent" system. We shall encourage quality filings from Hong Kong, from China and overseas, and continue to review our IP regime to ensure it follows international norms and best practices.
Two: Support IP creation and exploitation. This includes supporting the industrial and R&D sectors, creative industries and IP users to encourage the creation, use and commercialisation of IP.
Three: Foster IP intermediary services and enhance manpower capacity. This involves promoting high-quality services in IP valuation, financing, insurance, arbitration and mediation as well as due diligence and IP matching services. We also aim to attract and nurture talent in IP-related professions to create the desired clusters.
Four: Enhance promotion, education and external collaboration on IP. We shall highlight Hong Kong's strengths as an IP trading hub to overseas stakeholders. At the same time, we shall raise awareness among companies of the value of IP to their business portfolios.
The startups ecosystem and IP trading are two of the latest developments in Hong Kong for driving innovation. By these measures, local enterprises stand to gain the most by migrating to and accessing a brand new ecology and trading platform, which enable their businesses to be scalable, sustainable and global.
Ladies and gentlemen, I have outlined some of the ways that Hong Kong is working to fine-tune its position as the shortest and most effective route for business, finance, ideas and innovation between the US and Asia, including the Mainland of China.
Thank you for this opportunity to meet you all here in Los Angeles and I hope, and I know, that you will come to visit us in Hong Kong soon. You really cannot afford not to.
Thank you very much.
Ends/Saturday, December 13, 2014
Issued at HKT 10:02
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