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2015 Policy Address by Chief Executive (3)

High Value-added Maritime Services

31. The total gross tonnage of vessels on the Hong Kong Shipping Register is the fourth-largest in the world.  There are about 700 shipping-related companies in the city, offering comprehensive maritime services, including ship management, broking and chartering, finance, marine insurance, maritime law and arbitration and support services.  With the continuous expansion of our country's maritime and shipbuilding industries, our maritime services sector has enormous potential for growth.  Hong Kong is well positioned to serve as a springboard for Mainland maritime companies looking to "go global", as well as a platform for international maritime companies to tap the Mainland market.  Hong Kong has what it takes to become an important international maritime services hub for China and the Asia-Pacific region.

32. Hong Kong offers a wide range of marine insurance products and services.  We also have the highest concentration of insurers in Asia.  There are currently more than 150 sanctioned insurers, of which 91 are authorised to provide marine and cargo insurance.  These include seven of the 13 members of the International Group of Protection and Indemnity, the largest cluster of representatives outside London.  The gross premiums of marine and cargo insurance business amounted to $2.1 billion in 2013 and saw considerable growth in 2014.

33. The Government will continue to take forward the establishment of a new maritime body to promote Hong Kong's maritime services industry.  Meanwhile, the Government will enhance the functions of the Hong Kong Maritime Industry Council to step up its efforts to foster the development of the industry and nurture talent, especially in high-end professional maritime services.  In the coming year, the Government will join the industry and the Trade Development Council (TDC) to launch promotional events overseas and in the Mainland to attract more high value-added maritime services companies to cluster in Hong Kong.

34. It is also important to expand our pool of talent.  The Government set up the Maritime and Aviation Training Fund in April 2014, which aims to attract young new blood to join the industries and provide financial support for enhancing professionalism and skill level.

35. Driven by economic growth, the aviation industry in the Mainland has seen rapid development in recent years.  To grasp this market opportunity and taking into account the recommendation of the Economic Development Commission, the Government is studying the development of Hong Kong's aerospace financing business so as to strengthen Hong Kong's status as an international aviation and financial centre.


36. The Government will continue to give full support to the Airport Authority (AA) to implement the three-runway system project at the Hong Kong International Airport.  The project aims to strengthen our position as an international and regional transportation hub.

37. The AA has completed the study on the master layout plan for the airport's North Commercial District and will soon commence the first stage of retail development.  It will also take forward the planning and development of the land reserved for cargo use at the South Cargo Precinct of the airport island.

Tourism and Convention and Exhibition

38. The Government is carrying out infrastructure work at the runway and south apron of the former airport to tie in with the hotel development in the "hotel belt" adjacent to the Kai Tak Cruise Terminal.  We will encourage developers to include conference facilities in these hotels.

39. Both theme parks are pressing ahead with expansion plans.  The operating results of Hong Kong Disneyland are improving, and we will commence discussion on the Phase 2 development of the Hong Kong Disneyland Resort with the Walt Disney Company.

40. The Government has commissioned a consultancy study to assess the future demand for convention and exhibition facilities in Hong Kong, and will consider constructing a new convention centre above the Exhibition Station of the Sha Tin to Central Link around 2020.

Innovation and Technology

41. Innovation and technology can diversify the economy, provide wider employment opportunities in research and development (R&D), and enhance the competitiveness and growth of related industries.  According to the latest Global Innovation Index by Cornell University and other organisations, Hong Kong ranked amongst the 10 most innovative places out of some 140 economies surveyed.

42. The Government provides a strategic environment for innovation and technology development through five core strategies.  They include providing world-class technology infrastructure for enterprises, research institutions and universities; offering financial support to stakeholders in the industry, academia and research sector to commercialise their R&D deliverables; nurturing talent; strengthening collaboration with the Mainland and other places in science and technology; and fostering a vibrant culture of innovation.

43. Hong Kong's gross domestic expenditure on R&D increased from $7.1 billion in 2001 to $15.6 billion in 2013, an average annual growth of 7%.  The number of R&D personnel has more than doubled during the same period.

44. The Science Park is currently home to nearly 500 partner companies, providing more than 10 000 technology-related jobs.  By the time Phase 3 comes into full operation in 2016, the Science Park will accommodate more than 600 partner companies.  The Hong Kong Science and Technology Parks Corporation has proposed optimising the use of the remaining vacant site for the development of new R&D facilities.

45. On financial support, the Government's Innovation and Technology Fund (ITF) has provided about $8.9 billion for more than 4 200 projects.  The funding scope of the ITF was expanded in mid-2014, providing stronger support for downstream R&D projects and our universities.  Last September, we launched the Technology Start-up Support Scheme for Universities to encourage university students and teaching staff to start their own technology business and commercialise their R&D deliverables.

46. I propose injecting $5 billion into the ITF and subsuming the Research and Development Cash Rebate Scheme under the Fund.  The Government is also setting up an Enterprise Support Scheme to enhance our funding support for R&D projects of the private sector.

47. There are currently 16 Partner State Key Laboratories in Hong Kong, covering a spectrum of scientific and technological disciplines.  We have also started the first round of applications for Hong Kong branches of Chinese National Engineering Research Centres to invite participation of universities and research centres in Hong Kong.

48. We need dedicated leadership and stronger policy co-ordination for more effective organisation of work among the Government, industry, academia and the research sector.  To this end, we are working to set up an Innovation and Technology Bureau and have submitted our proposal to this Council.

49. The latest Digital 21 Strategy envisions that the Government will make wider use of sensors, the Internet of Things and big data analytics for better public services and sustainable social and economic growth.

50. We intend to use Kowloon East as a pilot area to explore the feasibility of developing a Smart City.

Dispute Resolution Services

51. Hong Kong's tradition of the rule of law and our legal system are conducive to the development of legal and dispute resolution services.  Last year, the China Maritime Arbitration Commission established an office in Hong Kong, its first branch office outside the Mainland.  The Central Government and the HKSAR Government have recently signed the Host Country Agreement and the related Memorandum of Administrative Arrangements respectively with the Permanent Court of Arbitration on the conduct of dispute settlement proceedings in Hong Kong by the court.

52. Renowned arbitration institutions such as the International Court of Arbitration of the International Chamber of Commerce, the China International Economic and Trade Arbitration Commission and the China Maritime Arbitration Commission have set up offices in Hong Kong in recent years.  With increasing maritime activities in Asia, maritime arbitration services have immense potential for growth.  Arbitration awards made in Hong Kong are enforceable in the jurisdictions of over 150 contracting states of the New York Convention, and also in the Mainland and Macao.  We will actively further advance development in this area.

Creative Industries

53. Hong Kong's cultural and creative industries have grown at a rate faster than the overall economy in recent years.  From 2005 to 2012, the value added of the cultural and creative industries increased rapidly at an average annual rate of 9.4%.

54. During the same period, the value added of the design sector has tripled and the number of jobs increased by nearly 50%.  We will maintain our support for the Hong Kong Design Centre, and provide subsidies to enable more local young designers and design graduates to undertake internship or further their studies overseas.  We will also consider expanding the Design Incubation Programme.

55. Going to the cinema is a major form of entertainment for the public.  The Government will consider reserving space for cinemas in major cultural and entertainment development areas, and will explore ways to facilitate cinema development through land sale and planning.

56. We will continue to promote the development of Hong Kong's film industry through a four-pronged strategy.  We will:

(i) encourage more local film production;

(ii) nurture production talent;

(iii) promote film appreciation among students and young people to build up audiences; and

(iv) showcase and promote the brand of "Hong Kong Films" in the Mainland, Taiwan and overseas markets, facilitate the participation of local films in international film festivals, and help drive Hong Kong's development as a film financing platform in Asia.

57. We will inject funding into the Film Development Fund to support the above strategy.

Intellectual Property

58. China will have a rising status as a major intellectual property (IP) user, buyer, provider as well as seller.  Hong Kong can play a key role in providing Mainland and overseas players with a range of intermediary services, in such areas as IP agency and management, consultancy, legal services, dispute resolution and due diligence.

59. The Working Group on Intellectual Property Trading established by the Government in 2013 has formulated its support strategies and corresponding initiatives are being implemented.  For example, the TDC's Asia IP Exchange has showcased more than 25 000 IP listings and formed strategic alliances with 28 partners from overseas, the Mainland and Hong Kong.

Modernisation of Agriculture

60. Conscious action and suitable support from the Government is crucial to the survival and development of local agriculture, which might otherwise diminish gradually.  The Government has recently proposed a new agricultural policy, which will be underpinned by appropriate supportive measures, including the establishment of an Agricultural Park (Agri-Park) and a Sustainable Agriculture Development Fund (SADF) to encourage the application of new and advanced technologies to local agriculture and enhance the industry's overall competitiveness; help farmers move up the value chain and expand the marketing of local agricultural products and brand building; and promote other auxiliary activities which will raise the income of farmers.  The Agri-Park will facilitate knowledge transfer in agricultural science and agro-business management while the SADF will provide financial support.

(To be continued)

Ends/Wednesday, January 14, 2015
Issued at HKT 11:40


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