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Budget Speech by the Financial Secretary (5)

Finding New Markets

76. Under the "new economic order", emerging markets are of growing importance in the global economy.  In view of this trend, we need to expand our trading ties with the rest of the world and develop more markets for Hong Kong enterprises.

77. The Proposal on Formulating the National 13th Five-Year Plan promulgated by the Central Authorities in November last year suggested that the Mainland would step up efforts to further open up its markets to Hong Kong and Macao.  Moreover, it expressed support for Hong Kong to continue to consolidate our competitive industries, to participate in our nation's two-way opening up and the Belt and Road Initiative, and to strengthen our status as the global offshore RMB business hub.

78. Hong Kong enjoys unique advantages under "one country, two systems".  We have not only a free and open market, but also efficient and transparent regulatory regimes well aligned with international standards.  We are well placed to endure any threat that comes with the volatilities in external markets.

79. Looking ahead, we should further leverage these advantages and provide appropriate support for our nation in the deepening of reforms, development of the economy in the process of opening up.

Belt and Road Initiative

80. Our nation is taking forward the Belt and Road Initiative, a strategy for long-term development.  The outcomes will not emerge overnight.  Yet, what is certain is that the emerging markets along the routes are likely to become the new impetus for the future development of Hong Kong.  Government will continue the promotion efforts to deepen the understanding of the business sector and the community of these new markets.

81. HKTDC has launched a series of measures, including the creation of websites, to provide information on relevant business environment to assist the sector in their business expansion.  In addition, Government and HKTDC will jointly organise the inaugural Belt and Road Summit in May this year.  We shall invite key officials from the markets along the routes, representatives of international organisations and business sectors as well as experts in related trades to engage in in-depth exploration of co-operation opportunities and the unique role that Hong Kong can play.

82. I led the first Belt and Road Initiative business mission of the Hong Kong Special Administrative Region Government to visit Hungary, Poland and Germany last September.  I plan to lead another business mission to Central Asia this year.  The visit will enable participants from the business sectors to gain first-hand knowledge about the development potential and business opportunities in the region.

83. Financial services will be in growing demand in emerging markets.  Hong Kong is well-equipped to serve as a platform for financing and fund management for these markets.  I have asked HKMA to establish an office to facilitate the financing of infrastructure projects and provide a platform for pooling the efforts of investors, banks and the financial sector to offer comprehensive financial services for various infrastructure projects.

84. The Asian Infrastructure Investment Bank (AIIB) was officially launched last month.  We shall continue our active discussion with AIIB and the Central Government on Hong Kong's participation in AIIB as a non-sovereign territory.  We shall also continue to support the work of AIIB, and seek to leverage our expertise to service AIIB in capital markets financing, asset management and dispute resolution.

85. The success of the two sukuk issuances by Government in the past two years has demonstrated the ability of our financial market to support the launch of Islamic financial products and meet their financing needs.  We shall seize the opportunity to issue the third sukuk in a timely manner.

Commerce and Logistics

Trade Agreements

86. Government will strive to pursue trade and investment agreements to expand our commercial and trading networks, creating more favourable conditions for Hong Kong enterprises to access the Mainland and overseas markets.  We have conducted five rounds of free trade agreement (FTA) negotiations with the Association of Southeast Asian Nations (ASEAN).  We hope that the negotiations will be concluded this year.  We shall also actively seek to participate in the FTAs that have been or will be concluded between the Mainland and other places.

87. Last November, the Mainland and Hong Kong signed an Agreement on Trade in Services under the framework of CEPA.  The agreement has basically achieved the full liberalisation of trade in services between the two places, facilitating our services industry's access to the Mainland market.  We shall also seek to conclude discussions on a closer economic partnership arrangement with Macao this year.

Commercial Connectivity

88. We have an advanced and efficient transportation network.  The cargo handled by the Hong Kong International Airport makes up 40 per cent of our exports in value terms.  The eastward shift of the global economic balance has fuelled the rapid rise of spending power and growing demand for high-end consumer goods in the Asian region.  This is conducive to the positioning of Hong Kong as an aviation and maritime centre and the development of our high value-added logistics services.

89. The capacity of our airport remains a problem that must be addressed.  The existing two-runway system will reach maximum capacity within two years.  To cater for long-term air traffic demand and sustain Hong Kong's competitiveness as an aviation hub, the Airport Authority Hong Kong (AA) is pressing ahead with the implementation of the three-runway system (3RS) project, which is expected to complete in eight years.  Upon full operation of the 3RS, the airport will be able to handle 100 million passengers and nine million tonnes of cargo annually in 2030.

90. The increasing demand for international air transport services will spur the rapid growth of the aviation business in Hong Kong and Asia.  Hong Kong has well-developed transportation and financial services.  We shall examine the use of tax concession to boost aircraft leasing business and explore business opportunities in aerospace financing.

91. E-commerce is booming in Hong Kong, with sales doubling from $140 billion in 2008 to $280 billion in 2012.  To meet the demand for logistics services brought by electronic trading, Hongkong Post will capitalise on its network to enhance the counter collection service for online purchases.  In the first half of this year, Hongkong Post will install self-service collection lockers in the community to make it more convenient for members of the public to collect their online purchases.

92. Hongkong Post will promote the wider use of online postal portals, such as EC-Ship and My Speedpost, among their clients to facilitate the delivery of goods by internet shops.  It will also continue to provide e-commerce support services to local SMEs in collaboration with HKTDC and the Hong Kong Productivity Council.

93. Shortage of land for the logistics industry has always been a matter of concern.  Government will provide land for logistics use.  We have reserved ten hectares of land in Tuen Mun West for logistics purpose.  One of the reserved sites has gained the support of the District Council and will be released for use by the industry as soon as possible.

"Single Window"

94. At present, the import and export trade has to submit various trade documents to Government through different platforms.  To further facilitate trade in goods, we shall establish a "single window" for "one-stop" lodging of all the 50-plus trade documents and submissions with Government for trade declaration and customs clearance purpose.  The "single window" will connect with other governments' systems as well as trade information platforms run by the private sector.  Government will set up a dedicated office to coordinate with the relevant departments, engage the industries and prepare the detailed design and implementation programme for the "single window".  It is expected that the first phase of the initiative will be launched in 2018.

Intellectual Property

95. IP trading is vital to the growth of a knowledge-based economy.  To encourage enterprises to engage in the development of related business, and to promote Hong Kong as an IP trading hub in the region, we shall expand the scope of tax deduction for capital expenditure incurred for the purchase of IP rights from the existing five categories to eight.  The additions are layout-design of integrated circuits, plant varieties and rights in performance.

(To be continued.)

Ends/Wednesday, February 24, 2016
Issued at HKT 11:49


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