LCQ4: Development plan for a city cluster in the Guangdong-Hong Kong-Macao Bay Area
In March this year, the Premier of the State Council stated in the Report on the Work of the Government that "[w]e will promote closer cooperation between the mainland and Hong Kong and Macao. We will draw up a plan for the development of a city cluster in the Guangdong-Hong Kong-Macao Greater Bay Area, give full play to the distinctive strengths of Hong Kong and Macao, and elevate their positions and roles in China's economic development and opening up". The Guangdong-Hong Kong-Macao Bay Area (Bay Area) covers 11 cities, including Hong Kong and Macao. In April this year, the Chief Executive led a delegation comprising a number of senior government officials, non-official members of the Executive Council and members of the Commission on Strategic Development and the Economic Development Commission to visit a number of Mainland cities in the Bay Area. In this connection, will the Government inform this Council:
(1) as the authorities have indicated that they will promote cooperation in the Bay Area under the principles of "complementarity and mutual benefits", and will conduct research on Hong Kong's role in the Bay Area, of the specific direction and objectives of the research; how the authorities will facilitate the industries where Hong Kong enjoys clear advantages, in particular the finance industry and the financial services industry, to play a leading role in the economic development of the Bay Area, and how they will, through the Mainland and Hong Kong Closer Economic Partnership Arrangement, enable the various relevant industries in Hong Kong to play an important role and make contributions in the Bay Area;
(2) whether it will, based on the findings of the relevant research and visits, formulate specific policies, measures and timetables, including measures for implementing enhanced immigration and customs clearance arrangements, to foster tourism and commercial development with a view to laying a solid foundation for developing the Bay Area into a world-class tourist area in the long run; and
(3) whether the current-term Government will, before the end of its term, arrange for Members of this Council to visit the Mainland cities in the Bay Area; as the Government has indicated that it will submit its views on the planning of the Bay Area to the National Development and Reform Commission before the end of June this year, whether the Government will consult the organisations or chambers of commerce of various relevant industries in Hong Kong before submitting the views; if so, of the details; if not, the reasons for that?
Upon consulting the Financial Services and the Treasury Bureau and the Commerce and Economic Development Bureau, our consolidated reply is as follows:
(1) In accordance with the principle of "one country, two systems", the Hong Kong Special Administrative Region (HKSAR) Government is participating in the drawing up of a development plan for a city cluster in the Guangdong-Hong Kong-Macao Bay Area (the Bay Area development plan) with the National Development and Reform Commission (NDRC) as well as the Guangdong Provincial Government and the Macao Special Administrative Region Government. The successful development of a world-class city cluster in the Guangdong-Hong Kong-Macao Bay Area hinges not only on the ability of Guangdong, Hong Kong and Macao to fully leverage and organically integrate their different yet complementary advantages, but also on a clearly defined role for each city in the coordinated development to avoid any adverse competition, so as to further enhance the global competitiveness of the Bay Area as a whole.
The Bay Area development plan can be regarded as an important regional development plan under the "Outline of the 13th Five-Year Plan for the National Economic and Social Development of the People's Republic of China" (the 13-5 Plan) and the nation's Belt and Road Initiative. As for the HKSAR, the Bay Area development plan must reflect and consolidate Hong Kong's unique positioning that has been clearly defined in the Dedicated Chapter on Hong Kong and Macao (the Dedicated Chapter) in the 13-5 Plan, which includes, in particular, the support for Hong Kong in consolidating and enhancing our status as international financial, transportation and trade centres, strengthening our status as a global offshore Renminbi business hub and an international asset management centre, promoting financing services, business and commerce, logistics and professional services, etc. towards high-end and high value-added developments. The Dedicated Chapter also supports Hong Kong in developing the innovation and technology industry, nurturing emerging industries, as well as establishing itself as a centre for international legal and dispute resolution services in the Asia-Pacific region. Moreover, the Dedicated Chapter supports Hong Kong in participating in the country’s two-way opening up, as well as the Belt and Road Initiative, encouraging enterprises from the Mainland, Hong Kong and Macao to leverage their respective advantages and adopt various collaborative approaches to "go global" together.
Being the country's most international city in the Bay Area, not only can Hong Kong benefit from the advantage of "one country" and the convenience of "two systems", it can also serve as a "super-connector" in the Bay Area. In the development of the Bay Area, Hong Kong should fully leverage its unique positioning, which is recognised in the Dedicated Chapter, and achieve co-ordinated development with other cities in the Bay Area. It should complement the nation's Belt and Road strategy by also serving as a platform for two-way opening up to expand into the international arena with the other Bay Area cities.
On financial services, the HKSAR Government, in accordance with the positioning laid down in the Dedicated Chapter as mentioned above, complements and supports the Bay Area development plan in the following aspects.
First, Hong Kong's strengths and experience in the financial services industry will complement the development of different industries in the Bay Area and open up new business opportunities. As the global hub for offshore Renminbi business, Hong Kong is capable of meeting relevant demands for offshore Renminbi settlement, financing and capital management. Hong Kong also makes an ideal platform for Renminbi capital and risk management as a much wider choice of Renminbi investment products is available in the market upon implementation of the Shenzhen-Hong Kong Stock Connect, the Shanghai-Hong Kong Stock Connect and the Mainland-Hong Kong Mutual Recognition of Funds Arrangement.
Second, enterprises in the Bay Area intending to "go global" can leverage the rich experience of Hong Kong in interacting closely with global markets and capitalise on our sophisticated financial infrastructure. We encourage them to set up corporate treasury centres in Hong Kong to carry out intra-group capital and risk management activities, and to establish captive insurance companies in Hong Kong to enhance efficiency in risk management.
Third, Hong Kong's capital market is stable and mature. It also demonstrates a strong fund-raising capability through initial public offerings and can offer a full range of investment and financing options to enterprises in the Bay Area and attract global investors. The Hong Kong Exchanges and Clearing Limited is assessing the feasibility of introducing a new board to provide a financing platform for a more diverse range of issuers.
To foster financial co-operation in the Bay Area, the HKSAR Government will strengthen the connectivity of financial services within the area, develop additional financing channels and cross-boundary financial services to tie in with the growth of enterprises therein. Meanwhile, the HKSAR Government will seek to relax the entry thresholds of Hong Kong financial institutions entering the Bay Area, and explore ways to achieve a more efficient allocation of resources in the Bay Area by, for example, reducing transaction costs of both tangible and electronic commerce between Hong Kong and the other cities in the Bay Area, and optimising the business environment in the region.
In addition, the Dedicated Chapter has expressed clear support for stepping up efforts to further open up the Mainland market to Hong Kong and Macao, and upgrading the Mainland's closer economic partnership arrangements with Hong Kong and Macao. Through further liberalisation measures under the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA), the industries of Hong Kong will be able to further explore the Mainland market including that of the Bay Area, and to deepen the development and economic co-operation in different industry sectors between the two places. In this connection, the Trade and Industry Department and the Mainland Ministry of Commerce have established a mechanism to discuss and follow up on the further development of CEPA and the implementation of existing liberalisation measures. The HKSAR Government is discussing with the Mainland the expansion and enhancement of CEPA in the areas of investment and economic and technical cooperation. It is expected that some concrete results will be achieved within this year. The HKSAR Government will continue to discuss with the Mainland authorities measures to enrich the content of CEPA.
(2) In summing up the Bay Area visit of April, the Chief Executive said that the HKSAR Government would study the ways in which our participation in the Bay Area development plan could facilitate the flow of people, goods, and capital, as well as that of information, between Hong Kong and the other cities in the Bay Area. The HKSAR Government would also study how Hong Kong industries could make use of the unique advantages to join forces with the Bay Area cities to "go global" together in complementing the Belt and Road strategy.
Regarding tourism, the Guangdong-Hong Kong-Macao Bay Area is located at the south of China and possesses abundant tourism resources, with strong potential to be developed into a world-class tourist destination cluster. Hong Kong, as a diversified tourist destination, will continue to strengthen cooperation with the Mainland, especially Bay Area cities, to further promote "multi-destination" travel. In recent years, many visitors travelled to Hong Kong on a "multi-destination" basis. About 60 per cent of the visitors from short-haul markets travelled on a "multi-destination" basis while the corresponding figure for long-haul markets is over 80 per cent. Hong Kong has well-established international connections. Various major infrastructure projects, including the Hong Kong-Zhuhai-Macao Bridge and the Hong Kong Section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link, will soon be completed, which will serve to further enhance the land transport connections between Hong Kong and the Bay Area and greatly reduce the required transport time. Leveraging on the above advantages, the HKSAR Government is confident of attracting visitors from around the world to travel to Hong Kong and other Bay Area cities, thereby enabling the potentials of tourism resources of the Bay Area to be fully developed.
The HKSAR Government will continue to support the Hong Kong Tourism Board to establish co-operation platforms with Bay Area cities and to jointly develop more "multi-destination" tourism products, as well as encourage the Hong Kong travel trade to seize the opportunities and develop more travel products featuring the Bay Area for Hong Kong citizens and "multi-destination" visitors.
(3) The HKSAR Government wishes to continue arranging visits to the Bay Area for different sectors of Hong Kong society in the future, so that they can learn about the latest development of Bay Area cities. The Chief Executive mentioned at a media session earlier that the HKSAR Government would submit its views on the Bay Area development plan to the NDRC for consideration. It is expected that the NDRC would consult the Guangdong Provincial Government and the HKSAR and Macao Special Administrative Region Governments on the draft development plan before finalising it within this year. The HKSAR Government will, in the process, incorporate the views of the relevant industry sectors and advisory committees.
Ends/Wednesday, May 17, 2017
Issued at HKT 16:01
Issued at HKT 16:01