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Budget Speech by the Financial Secretary (4)
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Fintech

56. Taking advantage of technologies such as mobile communications technology and artificial intelligence, financial technologies (Fintech) offer consumers novel experiences in managing their finances and provide financial institutions with tools to improve their operational efficiency.  Provision of financial services is no longer confined to traditional financial institutions such as banks and insurance companies.  By leveraging the Internet and mobile technologies, telecommunication companies, e-commerce enterprises and start-ups are now able to provide financial services to individuals and enterprises.

57. Fintech can be applied to a wide range of areas such as electronic payments, robo-advisors, distribution of financial products, big data analytics, cyber security, equity crowdfunding and peer-to-peer (P2P) lending.  Some studies predicted that global investments in Fintech will surge from US$12 billion in 2014 to over US$46 billion in 2020.

58. The Steering Group on Financial Technologies which I set up last year has examined the direction for Hong Kong's Fintech development jointly with the industry, R&D institutions and relevant regulatory authorities.  It has recommended a number of measures for creating a conducive environment and encouraging financial institutions and professionals from around the world to drive the development and application of Fintech in Hong Kong.  We shall actively follow up.

59. In recent years, a number of international financial institutions and professional services firms, including Accenture, the Commonwealth Bank of Australia, KPMG, Nest and Tuspark, have chosen to establish laboratories and incubation programmes in Hong Kong.  This underlines our edge in developing Fintech.  Government will set up a dedicated team under the Invest Hong Kong (InvestHK) to organise international events and facilitate start-ups, investors and R&D institutions to establish their presence in Hong Kong.

60. The Enterprise Support Scheme under ITF will provide financial support to Fintech start-ups and financial institutions.  The Cyberport will set aside a dedicated space of 3 000 square metres in its co-working space Smart-Space, and roll out a designated programme to provide support to 150 Fintech start-ups over the next five years.  In addition, it will arrange for 300 university students to join Fintech training camps in overseas universities to gain more in-depth understanding of the career prospects in the sector.

61. The Hong Kong Monetary Authority (HKMA), the Securities and Futures Commission (SFC) and the Office of the Commissioner of Insurance will set up Fintech dedicated platforms to liaise with the industry to ensure that the market will balance between market demand and investors' understanding and tolerance of risk when introducing innovative financial products and services.

62. Consumer protection is an important consideration in Fintech development.  The Payment Systems and Stored Value Facilities Ordinance, which came into effect last year, has enhanced consumer protection.  HKMA is working with the Hong Kong Applied Science and Technology Research Institute, the Hong Kong Institute of Bankers and the Hong Kong Association of Banks to set up a cyber security programme, including the establishment of a cyber intelligence-sharing platform, and the conduct of risk assessment and professional certification.

63. Government will encourage the industry and relevant organisations to explore the application of "Blockchain" technology in the financial services industry, with a view to developing its potential to reduce suspicious transactions and bring down transaction costs.  The Cyberport will provide training to the industry through its incubation programme to promote relevant technologies for developing more services and products.

Start-ups

64. Hong Kong is one of the most popular start-up hubs in the world.  Last year, I introduced a series of measures to improve the ecosystem for start-ups to enable local industries to further diversify.  According to InvestHK, there are now 1 600 local start-ups, representing an increase of 50 per cent over 2014.

65. Entrepreneurship is not exclusive to the young.  Older people with societal experience and professional expertise can join the ranks of entrepreneurs to bring forth new possibilities by applying creativity and technology.

66. I shall continue to offer comprehensive support to start-ups in various areas such as business incubation, financing, business expansion and office space.  The new measures include the following íV

(a) Government will set up a $2 billion Innovation and Technology Venture Fund to co-invest with private venture capital funds on a matching basis in local technology start-ups;

(b) the Science Park will expand in stages to provide additional floor area of 70 000 square metres for start-ups and other technology companies by 2020, with the project estimate amounting to $4.4 billion to be borne jointly by Government and HKSTPC; and

(c) the Cyberport will earmark $200 million to invest in its start-ups.  HKSTPC will continue to support start-ups through its Corporate Venture Fund and incubation programmes.

Creative Industries

67. Hong Kong's creative industries are well-established, blessed with immense development potential and a wealth of talents.  Government will continue to support their healthy growth in line with market principles.

68. The CreateSmart Initiative (CSI) was set up in 2009 to assist the trade in organising projects for the development of creative industries.  Government will inject $400 million into CSI this year, with priority given to supporting start-ups and nurturing talents.

Fashion and Design

69. I announced last year that $500 million would be allocated to further the development of the fashion industry.  I shall implement the three proposals made by the Advisory Group on Implementation of Fashion Initiatives, including íV

(a) strengthening the promotion of local fashion designers and emerging fashion brands in Hong Kong and overseas;

(b) establishing an incubation programme for fashion designers, drawing on the experience of other fashion capitals like London, New York and Seoul; and

(c) setting up a resource centre to provide technical training and support for young designers.

70. I shall launch the third phase of the Design Incubation Programme in the coming financial year to help design start-ups build their business networks, publicise their products and conduct market promotions.  The overall admission quota will be increased to 90 design start-ups.

71. I shall also subsidise through CSI designers of ten emerging local fashion brands to participate in the Paris Fashion Week, while the Hong Kong Trade Development Council (HKTDC) will organise fashion shows for Hong Kong designers in the New York Fashion Week, to showcase their brands, raise their profiles and attract overseas buyers.  We shall launch a series of activities in the latter half of this year.  Among them are the first CENTRESTAGE, an annual international fashion trade fair hosted by HKTDC, and fashion shows and forums organised for Hong Kong and Asian brands during the Business of Design Week.

Film Industry

72. Last year, I injected $200 million into the Film Development Fund (FDF) and implemented a series of measures to promote local filmmaking and encourage young people aspiring to a film career to join the industry.  The First Feature Film Initiative (FFFI) was relaunched last year to provide funding to budding directors.  The award winners of the first FFFI have completed their works, and I look forward to the screening of these three films.  As for the two pieces of winning work of the second FFFI, their production is under preparation.

73. Locally-produced Cantonese films, a key component of the local culture, have all along been well-received by audiences in the Mainland and Southeast Asia.  Cantonese is a common dialect shared by Guangdong and Hong Kong.  The Guangdong Province has a population of over 100 million with box office receipts exceeding four billion Renminbi (RMB) in 2014, offering an extensive market for our locally-produced Cantonese films.  I shall inject an additional $20 million into the FDF to subsidise the expenses incurred by locally-produced Cantonese films for distribution and publicity conducted in the Mainland.  The funding is proposed to be increased from the current $250,000 to $500,000 per film.  This will assist the film industry in leveraging the enhanced measures under CEPA to promote Cantonese films to the Mainland.  The Hong Kong Film Development Council will announce the details in due course.

Arts and Sports

74. To build a supportive atmosphere for arts and culture in the community and promote the development of local professional arts, the Art Development Matching Grants Pilot Scheme, funded in last year's Budget, will be launched this year.  The pilot scheme will help the more established arts groups and organisations enhance their ability in raising private donations and sponsorships through matching grants, thereby widening their funding sources and promoting a culture of donation.

75. Government established the $7 billion Elite Athletes Development Fund in 2012 to provide financial resources for the Hong Kong Sports Institute and offer greater support to athletes, and at the same time identify and nurture young athletes with potential.  Since the establishment of the fund, the number of full-time athletes has increased by 60 per cent.  The outstanding performance of Hong Kong athletes in international competitions in recent years is well-recognised and can foster the development of sports and attract more international competitions to take place in Hong Kong.  Hosting international events not only provides more opportunities for athletes to demonstrate their strengths, but also brings economic benefits, enhances our international profile and develops the potential of the sports industry.

(To be continued.)

Ends/Wednesday, February 24, 2016
Issued at HKT 11:41

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