Budget Speech by the Financial Secretary (9)

Financial Services

90. The financial services industry is an important sector in Hong Kong's economy.  In 2009, financial services made a contribution of 15.2 per cent to our GDP and hired over 210 000 employees.  The past two years have seen a remarkable development in this industry.  On equity listing, Hong Kong remained first worldwide in 2010 in terms of the total amount of funds raised through initial public offerings.  Enterprises from Russia and France came last year to list here for the first time.  On asset management, Hong Kong's combined fund management business rebounded significantly to $8,500 billion by the end of 2009, representing a year-on-year growth of about 45 per cent.  Overseas financial institutions have focused on the investment opportunities in Asia.  There is a growing number of international and Mainland investors choosing Hong Kong as a platform for their investment.

91. We have also achieved some breakthroughs in the development of Renminbi (RMB) business in Hong Kong.  Prominent growth and progress have been seen in various areas, including cross-border trade settlement, deposits, bond issuance and the introduction of financial products.  Following the revision of the Settlement Agreement on the Clearing of RMB Business in July 2010, the cross-border RMB trade settlement handled in Hong Kong reached RMB 370 billion last year.  At the end of last year, total RMB deposits in Hong Kong exceeded RMB 300 billion, which has increased by four times when compared to some RMB 60 billion a year ago.  The continued issue of RMB bonds and the progressive implementation of the Government Bond Programme help boost the development of the local bond market.

92. Hong Kong strives to enhance the competitiveness of its financial markets to develop itself into a global financial centre.  Apart from optimising the local regulatory regime, we will foster the further development of offshore RMB business, consolidate our position as a platform to raise international capital and enhance the competitiveness of our asset management industry.

93. First of all, we will maintain close contact with relevant Mainland authorities as well as the financial regulators and market participants of both sides to further develop Hong Kong's RMB bond market.  As at end-January, there were a total of 31 RMB bond issues with an issuance size of about RMB 74.4 billion.  The range of issuers has expanded from Mainland financial institutions to multinational non-financial institutions.  We will continue to encourage overseas enterprises to issue RMB bonds in Hong Kong, solicit more Mainland enterprises to issue bonds in Hong Kong and seek the expansion of channels for enterprises to invest in the Mainland the RMB capital raised in Hong Kong.  Moreover, we will optimise the RMB clearing platform to attract more enterprises to use Hong Kong's RMB settlement services.  Diversification of RMB financial products and services will help consolidate Hong Kong's status as an offshore RMB business centre.

94. Second, we will continue to improve our listing platform to attract more enterprises from different places to list in Hong Kong.  On the back of our liquidity, attractive valuations and access to investors in Asia, Mainland and overseas enterprises are attracted to list here.  The Stock Exchange of Hong Kong Limited (SEHK) issued new listing rules for mineral and exploration companies in June 2010 to attract more enterprises from regions rich in natural resources to list in the territory.  While maintaining high standard of regulation, the SEHK will continue to streamline the listing process for overseas companies, shorten the timetable and lower costs.  Last year, the SEHK accepted more jurisdictions, including Brazil and the Isle of Man, to facilitate companies incorporated there to apply to list in Hong Kong.  The SEHK is studying ways to further facilitate secondary listing of overseas companies in Hong Kong, and accept companies incorporated in other jurisdictions, including India and South Africa, to apply to list here.  We will continue to work with the SEHK to step up promotion to attract companies, especially those from emerging markets, to list in Hong Kong.

95. Third, on enhancing the competitiveness of our asset management industry, we will continue to seek to enter into agreements on the avoidance of double taxation with more trading and investment partners to foster the growth of asset management business.  We will also continue to develop an Islamic financial platform in Hong Kong to diversify our financial markets.  Stepping up promotion efforts will be high on our agenda in the coming year.  The Government will continue to lead financial services delegations to stage roadshows in the Mainland and overseas markets with the aim of promoting Hong Kong's strengths as a global financial centre.  We will also strengthen the role of Invest Hong Kong in promoting our financial industry.

Business and Professional Services

96. Hong Kong is a leading global business hub.  Professional services are a high-value-added component of our service industries, and we have distinct advantages in such areas as legal, accountancy, construction and related engineering, and medical services.  Business support and professional services made a contribution of 13.1 per cent to our GDP in 2009 and provided employment opportunities for nearly 460 000 people, representing over one-eighth of our total workforce.  The value of our professional and other business services exported in 2010 reached $69.6 billion, more than doubled that of 2000.

97. With the rapid modernisation of the Mainland economy, there is a growing demand for professional services in terms of both quality and quantity.  Under the CEPA framework, the Government will make continuous efforts to assist our professional services to access the Mainland market.  Such efforts include encouraging mutual recognition of professional qualifications and facilitating the Hong Kong professionals' practice and business start-ups in the Mainland.  The Government will also maintain close contact with the Mainland and the industries to enhance the promotion and effective implementation of CEPA, with a view to assisting Hong Kong's professional services in expanding the scope for development.


98. In 2009, the tourism industry accounted for 3.3 per cent of our GDP and provided employment opportunities for over 190 000 people.  Following the improvement of the global economy and further extension of the coverage of the Individual Visit endorsement for Shenzhen residents, our tourism industry put up a robust performance in 2010.  The number of visitors and their spending reached an all-time high.  We received more than 36 million visitors during the year, a significant increase of 22 per cent over 2009.  Total spending associated with inbound tourism reached some $200 billion, an increase of 30.5 per cent over last year.

99. Over the past few years, we have been investing heavily in our tourism infrastructure.  With its new attraction, "Aqua City", opening at the end of last month, Ocean Park's redevelopment is beginning to take shape.  Hong Kong Disneyland's expansion project is making good progress and the first new themed area, "Toy Story Land", will be opened by the end of this year.  The development of the new cruise terminal at Kai Tak is in full swing, and we will invite tenders from around the world for the contract of operating the terminal.  The terminal building and the first berth are expected to start operation in mid-2013.  

100. We will specify in the Application List two hotel sites for government-initiated sale by open auction or tender this year to foster hotel development.  To increase the supply of different types of hotels, we will regularise the pilot measure of offering sites "restricted to hotel use" on the Application List.  This arrangement will also be applicable to lease modification and land exchange applications from developers.

101. We will continue to allocate resources for the building of tourism hardware and software.  For example, we will explore the potential and directions for further development of our theme parks.  We will also consider giving incentives through the Mega Events Fund or in other forms for organisers to host major events with Hong Kong characteristics, enabling tourists to experience the vibrancy and hospitality of Hong Kong as Asia's world city throughout the year.

(To be continued)

Ends/Wednesday, February 23, 2011
Issued at HKT 12:08