CE's speech in delivering "The Chief Executive's 2022 Policy Address" to LegCo (3)
35. National strategies including the 14th Five-Year Plan, the GBA development and the Belt and Road Initiative have injected continuous impetus to the growth of Hong Kong. The 14th Five‑Year Plan has supported the development of the "eight centres" in Hong Kong. Our priority is to reinforce our position as an international financial centre, and promote the development of two emerging industries, namely I&T and arts and culture. At the same time, we will continue to play our role as an international trade centre and fully capitalise on our shipping and aviation development to enhance our functions in the regional supply chain. We will also continue to enhance our strengths in legal services and develop Hong Kong into a regional intellectual property (IP) trading centre. The GBA development has enhanced the interconnectivity and integrated development among GBA cities. The Government will make good use of the strengthened Guangdong-Hong Kong and Hong Kong-Shenzhen co-operation mechanisms and utilise the relevant task forces as platforms to deepen collaboration with other GBA cities. We will also actively participate in the development of major platforms for Guangdong-Hong Kong-Macao co-operation, including Qianhai of Shenzhen, Nansha of Guangzhou, Hengqin of Zhuhai and the Shenzhen-Hong Kong Lok Ma Chau Loop. Meanwhile, the Belt and Road Initiative brings tremendous opportunities to our service industry, creating wider networks by fostering people-to-people bonds.
36. The Government will establish the Steering Group on Integration into National Development to be chaired by the Chief Executive, with three Secretaries of Departments (i.e. the Chief Secretary for Administration, the Financial Secretary and the Secretary for Justice) as deputies. The Steering Group will press ahead with initiatives across bureaux and provide steer from a strategic and macro perspective, enhance communications with Mainland authorities and regularly host briefing sessions on national policies. The work of the Steering Group will cover four major areas:
(i) formulating strategic plans for Hong Kong to dovetail with the 14th Five-Year Plan and the GBA development, and proactively forging ahead with development and collaboration;
(ii) formulating work plans and priorities with a view to fostering a greater flow of people, goods, capital and information within the GBA;
(iii) strengthening regional co-operation mechanisms with Mainland provinces and municipalities, and monitoring the progress and effectiveness of the implementation of collaborative projects; and
(iv) proactively promoting high-quality development of co-operation between Hong Kong and the Belt and Road countries in trade and commerce, professional services and cultural exchanges, and formulating relevant measures.
International Financial Centre
37. Hong Kong is an international financial centre, the world's largest offshore RMB business centre and a leading fundraising hub for biotechnology. The financial services sector is Hong Kong's biggest pillar industry, accounting for more than one-fifth of our gross domestic product. To enhance Hong Kong's competitiveness in financial services, we will:
(i) enhance our position as a global fundraising platform – The Hong Kong Exchanges and Clearing Limited (HKEX) will revise the Main Board Listing Rules next year to facilitate fundraising of advanced technology enterprises that have yet to meet the profit and trading record requirements. It is also planning to revitalise GEM (formally known as the Growth Enterprise Market) to provide small and medium enterprises (SMEs) and start-ups with a more effective fundraising platform;
(ii) enhance our strengths as the largest offshore RMB business centre – Hong Kong currently processes about 75% of offshore RMB settlement globally. We will promote the launch of more RMB-denominated investment tools and the provision of stable and highly efficient treasury services such as foreign exchange, exchange rate risk and interest rate risk management tools in the market. We will also enhance market infrastructure;
(iii) promote mutual market access – We will speed up the implementation of a series of mutual market access arrangements supported by the China Securities Regulatory Commission earlier, including introducing a bill within this year to exempt the stamp duty payable for transactions conducted by dual-counter market makers, with a view to enhancing the RMB stock trading mechanism, as well as completing preparations for the launch of the Northbound Trading of Swap Connect as early as possible. We will also explore enhancements to the Southbound Trading of Bond Connect so as to facilitate the issuance and trading of more diverse "dim sum" bonds, and continue the discussion with the Mainland on proposals for the further expansion of mutual market access. Moreover, we will strive to establish insurance after-sales service centres in places such as Nansha and Qianhai in the near future to provide support services for residents in the GBA holding Hong Kong policies. This is also an important step towards mutual access of insurance markets in the GBA;
(iv) develop green and sustainable finance – We will promote the development of Hong Kong as a premier financing platform for governments and green enterprises in the Mainland and around the world. We are also developing Hong Kong into an international carbon market, and will support the HKEX to continue pursuing co-operation with, among others, financial institutions in Guangzhou in carbon market development;
(v) strengthen asset and risk management – Family offices is a key growth segment of the asset and wealth management industry. Last year, Hong Kong managed over $1,700 billion of relevant assets, including those for private trust clients. The Government will introduce a bill within this year to offer tax concession for eligible family offices. The target is attracting no less than 200 family offices to establish or expand their operations in Hong Kong by end-2025. Moreover, we will implement a risk-based capital regime for the insurance industry in 2024 to align with international standards, and launch a public consultation within this year on the proposal of establishing a policy holders' protection scheme; and
(vi) continuously enhance our competitiveness in Fintech – Currently, there are more than 600 Fintech companies in Hong Kong. We will vigorously promote Fintech by encouraging more Fintech services and products to undergo proof-of-concept trials, taking forward cross-boundary Fintech projects and nurturing Fintech talents. The Commercial Data Interchange will be launched within this year to provide a one-stop platform for enterprises to share operational data, enabling banks to make accurate assessments on the operating condition of enterprises and providing SMEs with a better chance of securing loans. On virtual assets, the Government has introduced a bill to propose establishing a statutory licensing regime for virtual asset service providers. The Hong Kong Monetary Authority (HKMA) is examining market feedback on the regulation of stablecoins and will ensure that the regulatory regime is in line with both the international regulatory recommendations and the local context. The HKMA has also begun the preparatory work for issuing "e-HKD" and is collaborating with the Mainland institutions to expand the testing of "e-CNY" as a cross-boundary payment facility in Hong Kong.
International Innovation and Technology Centre
38. I&T provides key impetus for Hong Kong's high-quality economic development. To chart Hong Kong in moving full steam towards our vision of an international I&T centre, the Government will promulgate the Hong Kong I&T Development Blueprint within this year to set out major policies under four broad development directions.
39. First, to enhance the I&T ecosystem and achieve re-industrialisation in Hong Kong. We will:
(i) promote commercialisation of research and development (R&D) outcomes – Hong Kong has strong capabilities in scientific research. We will earmark $10 billion to launch the "Research, Academic and Industry Sectors One-plus Scheme" (RAISe+ Scheme) next year. It will fund, on a matching basis, at least 100 research teams in universities which have good potential to become start-ups. Each team should complete its project in two stages: the first stage for the transformation and realisation of R&D outcomes within three years and the second stage for the commercialisation of R&D outcomes within the subsequent two years. The aim is to incentivise collaboration among industry, academic and research sectors to further promote the "1 to N" transformation of R&D outcomes and the industry development;
(ii) promote the development of technology industry – We will actively promote Hong Kong's new opportunities to the Mainland and overseas. By collaborating with the OASES and making use of the $5 billion Strategic Tech Fund as well as the land and space provided for I&T uses starting from 2024 in the Hong Kong-Shenzhen Innovation and Technology Park (HSITP) in the Lok Ma Chau Loop, we will attract high-quality enterprises and talents to Hong Kong, primarily focusing on industries such as life and health technology, artificial intelligence and data science, as well as advanced manufacturing and new energy technology. Our goal is to attract not less than 100 high-potential or representative I&T enterprises to set up or expand their businesses in Hong Kong in the coming five years, including at least 20 top-notch I&T enterprises, bringing more than $10 billion of investment to Hong Kong and creating thousands of local job opportunities;
(iii) press ahead with re-industrialisation – We will create the post of Commissioner for Industry who will co-ordinate and steer the strategy on re-industrialisation and assist the manufacturing sector in upgrading and transformation by making use of I&T. We will explore the construction of the second Advanced Manufacturing Centre at the Tai Po InnoPark. We will also subsidise the setting up of more smart production lines in Hong Kong under the Re-industrialisation Funding Scheme, with the target of increasing the cumulative number of smart production lines by four times from about 30 at present to over 130 in five years. Furthermore, we will strengthen the collaboration with the Hong Kong Productivity Council to support enterprises in upgrading to smart production; and
(iv) strengthen infrastructure and facilities – We will move full steam ahead with the construction of the HSITP and expedite the development of San Tin Technopole in the Northern Metropolis. The expansion works of the Science Park and Cyberport will be completed in phases from 2025 onward, providing 100 000 square metres of additional floor area. We are also planning the Science Park/Pak Shek Kok Station of the East Rail Line for commissioning by 2033.
40. Second, to enlarge the I&T talent pool to create strong impetus for growth, with additional measures focusing on attracting I&T talents. We will:
(i) attract leading I&T talents around the globe – By collaborating with the OASES, we will provide special facilitation measures in a targeted manner to attract top-notch I&T talents to bring with them their business or R&D outcomes to Hong Kong;
(ii) enhance existing technology talent schemes – We will enhance the TechTAS by lifting the local employment requirement, extending the quota validity period to two years and expanding the coverage to more emerging technology areas. In addition, we will increase the subsidies provided for research institutions and I&T enterprises for employing research talents under the Research Talent Hub Scheme by about 10%. Research talents with a doctoral degree will be further provided with a living allowance;
(iii) enhance accommodation support – We will build more accommodation facilities for I&T talents, including to explore the development of a new InnoCell near Science Park and accommodation facilities for talents at the HSITP. In support of the development of San Tin Technopole, we will allow greater planning flexibility to provide additional accommodation for I&T talents; and
(iv) expand the STEM Internship Scheme – We will offer local I&T internship opportunities to university students studying STEM (Science, Technology, Engineering and Mathematics) programmes overseas or at GBA campuses established by designated local universities.
41. Third, to develop Hong Kong into a smart city to improve the quality of life of our people. We will:
(i) build a smart government – We aim to turn all government services online in two years and provide one-stop digital services by fully adopting "iAM Smart" within three years so as to realise "single portal for online government services". In addition, 100 digital government projects will be launched with the application of technology for the convenience of the public;
(ii) open up data – The Government will continue to actively open up data and encourage public and private organisations to follow suit for innovative industry applications. We will also explore with the Mainland the arrangements for the flow of data from the Mainland to Hong Kong, with a view to jointly promoting the co-ordinated development of smart cities in the GBA; and
(iii) expand the 5G network – We will further expand the 5G network by amending the legislation next year to ensure that appropriate space is made available in new buildings for installation of mobile communication facilities.
42. Fourth, to proactively integrate into the overall development of the country and consolidate Hong Kong's advantages as an international city. The HSITP is the bridgehead for I&T co-operation between Hong Kong and Shenzhen. On the basis of "one zone, two parks" and through in-depth co-operation with Shenzhen, we will study the trial implementation of a cross-boundary policy on I&T co-operation in an innovative, exclusive and designated manner, covering the flows of I&T material, capital, data and people between Hong Kong and Shenzhen. We will proactively attract Mainland and overseas I&T enterprises to the HSITP, providing key impetus for the development of an international I&T centre in the GBA. Recently, our country has announced for the first time the recruitment of payload specialists in Hong Kong to participate in the national manned space programme, fully reflecting the great importance our country attaches to Hong Kong's technology sector. We are actively supporting and facilitating the recruitment exercise to recommend suitable candidates for our country. I look forward to our country's continuing support of Hong Kong's participation in more national pioneering technology missions.
East-meets-West Centre for International Cultural Exchange
43. Embracing both Chinese and Western cultures, Hong Kong has established its cultural infrastructure and global network over the years and drawn in a vast pool of outstanding talents from around the world. The West Kowloon Cultural District (WKCD) has become a new cultural landmark earning worldwide acclaim. In recent years, Hong Kong has even become one of the three largest art markets in the world. The current-term Government is committed to fostering the cultural development of Hong Kong to expedite its progression into an East-meets-West centre for international cultural exchange. The Secretary for Culture, Sports and Tourism will chair the Culture Commission comprising industry leaders to map out a Blueprint for Arts and Culture and Creative Industries Development and enhance the ecosystem for the industries. We will:
(i) nurture a diversified talent pool – The Hong Kong Academy for Performing Arts (HKAPA) ranks first in the Performing Arts category among all higher education institutions in Asia. We have asked the HKAPA to look into ways to nurture arts and cultural talents for Hong Kong and the GBA, and to establish a new campus in the Northern Metropolis and raise the proportion of non-local students. Moreover, we will launch various arts and cultural internship programmes and subsidise HKAPA students or those studying arts and cultural programmes in universities to undertake internships in arts groups and the WKCD. Additional resources will also be deployed to support and nurture promising and budding arts groups and artists. The Leisure and Cultural Services Department (LCSD) will continue to collaborate with the WKCD in grooming more professionals to develop Hong Kong into a regional centre for arts conservation and restoration. Also, to establish a thriving and diversified arts, cultural and creative ecosystem, we will continue to attract more talents in and outside Hong Kong to pursue their aspirations here;
(ii) continuously upgrade cultural infrastructure – We will map out a new 10-year development blueprint for arts and cultural facilities, including plans to increase the number of LCSD's museums to 19 and the number of seats at performance venues by about 50%. The East Kowloon Cultural Centre will be commissioned in phases starting from next year, and will become a base for accelerating the promotion and application of integrated "Arts+Tech". To leverage market forces for the development of the arts and cultural sector, we will also devise measures to encourage the provision of arts and cultural facilities such as theatres in private developments;
(iii) enrich arts, cultural and creative contents – We will establish the Mega Arts and Cultural Events Fund to promote the staging of more international arts and cultural events in Hong Kong, taking into account the views of the Mega Arts and Cultural Events Committee which will include industry personnel. The Government will foster arts and cultural exchanges and collaboration with the Mainland, including organising the GBA Culture and Arts Festival in 2024, as well as the annual Hong Kong Week and Chinese Opera Festival, etc. To promote Hong Kong's pop culture to go global, we will strive to expand the industry's development capacity with three foci on film, TV and streaming platforms respectively. CreateHK will support collaboration between local and the Mainland/Asian production teams for co-production of films and television variety programmes, as well as development of new content on streaming platforms by cross‑sectoral production teams. The Government also plans to collaborate with industry practitioners to organise an annual Pop Culture Festival and explores the feasibility of setting up a Pop Culture Centre in the long term; and
(iv) promote platforms for arts and cultural industries – Hong Kong is home to a number of globally acclaimed platforms for fostering the development of arts, cultural and creative industries, including Art Basel Hong Kong, Hong Kong International Film & TV Market, and Business of Design Week. The first Hong Kong Performing Arts Market will also take place in 2024. We will invite the Hong Kong Trade Development Council (HKTDC) to enhance its Asia IP Exchange portal with a view to creating favourable conditions for the development of arts and cultural industries. We will also explore measures to support the industries in widening the scope of copyright trading activities so as to foster the commercialisation and development of arts, cultural and creative industries.
International Trade Centre
44. Hong Kong is the world's sixth largest commodity trading centre. We are actively pursuing accession to the Regional Comprehensive Economic Partnership (RCEP) which covers 15 countries and a population of 2.2 billion and accounts for nearly 30% of the global trade volume. Accession to RCEP will help enterprises reduce their operating costs and open up overseas markets, thereby strengthening and capitalising on Hong Kong’s status as an international trade centre.
45. We strive to support the convention and exhibition (C&E) industry in order to help SMEs obtain more overseas orders. We will extend the Convention and Exhibition Industry Subsidy Scheme to 30 June 2023. A new $1.4 billion scheme will be launched thereafter to subsidise more than 200 exhibitions to be staged in Hong Kong over three years. To consolidate Hong Kong's status as a premier venue for large-scale international C&E activities, we will take forward the AsiaWorld-Expo Phase 2 project, together with the Wan Chai North redevelopment project near the Hong Kong Convention and Exhibition Centre, to substantially increase large-scale C&E spaces.
46. To provide further support for SMEs, we will:
(i) raise the level of funding support – The cumulative funding ceiling per enterprise under the Dedicated Fund on Branding, Upgrading and Domestic Sales (the BUD Fund) will be raised from $6 million to $7 million. To assist SMEs in developing markets outside Hong Kong, the cumulative funding ceiling per enterprise under the SME Export Marketing Fund will be raised from $0.8 million to $1 million. The special measure to expand its funding scope will also be extended to 30 June 2026 to continue to cover exhibitions and online exhibitions targeting the local market, and the eligibility criteria will be relaxed to cover non-SMEs;
(ii) capitalise on the opportunities in the Mainland – Guangdong ETO will set up a dedicated promotion centre to support the development of Hong Kong people and enterprises in the GBA. The HKTDC will also set up more "GoGBA Business Support Centres" to cover all nine Mainland cities in the GBA, and organise business missions, training, etc. in various Mainland provinces and municipalities;
(iii) extend the principal payment holiday arrangement – The Pre-approved Principal Payment Holiday Scheme will be extended for another six months to 31 July 2023, through the Banking Sector SME Lending Coordination Mechanism of the HKMA, and the principal repayment option will be enhanced to prepare for the eventual normal principal repayment by enterprises in future. Relevant arrangements will also be applicable to loans under the SME Financing Guarantee Scheme; and
(iv) extend concessions of government fees and charges – We will continue to reduce 75% of water and sewage charges for non-domestic accounts for eight months from 1 December 2022 to 31 July 2023, subject to a monthly ceiling of $20,000 and $12,500 respectively per household. We will also continue to provide 75% rental or fee concessions currently applicable to eligible tenants of government premises and eligible short-term tenancies and waivers under the Lands Department for six months from 1 January 2023 to 30 June 2023.
International Shipping Centre
47. Connecting to nearly 600 destinations worldwide and handling about 18 million twenty-foot-equivalent units of containers last year, Hong Kong Port is one of the ten busiest container ports in the world. To consolidate our status as an international shipping centre, we will implement tax concession measures to attract more high value-added maritime enterprises to establish presence in Hong Kong. We will also launch a Maritime Services Traineeship Scheme next year to provide traineeship for young people who aspire to a career in maritime law. We will actively promote the development of "smart port" to strengthen the competitiveness of our port by setting up a port community system to facilitate the flow and sharing of data among operators and other stakeholders.
48. The Government will also upgrade the infrastructure of land boundary control points (BCPs), including rationalising the land BCPs and clearance arrangement under the "East in East out, West in West out" strategy for cross-boundary goods movement, and adopting co-location arrangement and collaborative inspection and joint clearance mode for planning the redevelopment of the Sha Tau Kok Port, Hong Kong-Shenzhen Western Rail Link and bifurcation of the Northern Link.
49. This year, we will work with the Hong Kong Logistics Development Council and the trade to start formulating an action plan to promote high value-added modern logistics development in three major directions:
(i) reinforcing intermodal transport by integrating air, sea and land transport to strengthen the key role played by Hong Kong in the logistics chain of the GBA;
(ii) leveraging our strengths in handling high-value goods to promote the development of high-end and high value-added logistics services, such as the processing of cold chain goods, fresh food and pharmaceuticals; and
(iii) encouraging a wider application of smart logistics solutions by the logistics trade to enhance competitiveness through technology.
International Aviation Hub
50. The Hong Kong International Airport is a globally pre-eminent international aviation hub. We are working with the Airport Authority Hong Kong (AAHK) to fully realise the "Airport City" vision. With the Third Runway commencing operation in July 2022, the Three Runway System is expected to be completed in 2024 and will substantially increase the overall capacity and competitiveness of the airport. The AAHK is also actively taking forward various projects and applying the intermodal transport mode to enhance connectivity between the airport and the GBA cities. For instance, the commissioning of the SkyPier Terminal next year will provide direct transfer facilities for passengers from the GBA to streamline immigration formalities.
51. The Hong Kong International Aviation Academy will work with aviation training institutions in the Mainland to send young people to the airports on each side for internship starting from the first half of 2023. About 300 places will be provided in the first year. The Academy will continue to partner with the National School of Civil Aviation of France to co-organise the Advanced Master Programme in Air Transport Management so as to attract prospective students from Belt and Road countries and consolidate Hong Kong's position as a regional aviation training centre. Moreover, we will develop Hong Kong into the preferred location for aircraft leasing in the region by further enhancing the aircraft leasing preferential tax regime.
Centre for International Legal and Dispute Resolution Services in the Asia-Pacific Region
52. As an international legal centre, Hong Kong possesses a robust legal system, a solid foundation of the rule of law and a rich pool of outstanding legal talents. Last year, Hong Kong was ranked the third most preferred seat for arbitration globally. Leveraging the advantages of our common law system, we will attract more international dispute resolution institutions to set up offices in Hong Kong, and will consolidate our strengths as an international legal services platform for deal making and dispute resolution. To enhance the efficiency and competitiveness of the legal sector, we will also promote the wider use of LawTech. We will:
(i) enhance promotion – Starting with the "Hong Kong Law Week 2022" scheduled for this November, the Department of Justice (DoJ) will lead delegations of local legal profession to conduct overseas visits from next year to showcase to the international community the advantages of Hong Kong's rule of law as well as our diversified legal and dispute resolution services under the common law system, in particular the various mutual legal assistance arrangements on civil and commercial matters between Hong Kong and the Mainland;
(ii) support emerging industries – The DoJ will develop user-friendly and practical legal guides and tools, such as boilerplates of commonly used contractual terms, for financial services, I&T, arts, cultural and creative industries, etc., to facilitate the provision and use of legal services by those within and outside the industry; and
(iii) enhance interaction with the GBA – The DoJ will establish a task force to focus on strengthening mutual legal assistance between the GBA and Hong Kong, and facilitating the convergence of legal practices between the two places. The DoJ will also establish an online mediation platform dedicated to dispute resolution in the GBA within next year to facilitate interactions between people and business of the two places.
Regional Intellectual Property Trading Centre
53. The Government will develop Hong Kong into a regional IP trading centre by leveraging the institutional advantages of Hong Kong's legal and IP protection system. We will:
(i) strengthen protection of IP rights – We plan to achieve the following targets next year: to complete the preparatory work for implementing the international trademark registration system; to secure passage of the amendment bill to the Copyright Ordinance to strengthen copyright protection in the digital environment; and to roll out a pilot project with the China National Intellectual Property Administration to enable Hong Kong applicants to enjoy prioritised examination of qualified patent applications in the Mainland. Our medium-term goal is to conduct a review of the registered designs regime in 2024. We will also enhance the substantive examination capability of patent examiners under the original grant patent system and develop a talent pool, with a view to acquiring institutional autonomy in conducting substantive patent examination by 2030;
(ii) build capacity – Our target is to provide IP training for 5 000 personnel across different industries within the current-term of the Government; and
(iii) promote widely – We will promote Hong Kong's IP trading and professional services through various activities, including the HKTDC's Business of IP Asia Forum organised annually. The HKTDC will also enhance its Asia IP Exchange portal next year to facilitate different sectors to further explore commercial opportunities in IP trading.
(To be continued.)
Ends/Wednesday, October 19, 2022
Issued at HKT 12:06
Issued at HKT 12:06
CE's speech in delivering "The Chief Executive's 2022 Policy Address" to LegCo (1) (with photos/video) CE's speech in delivering "The Chief Executive's 2022 Policy Address" to LegCo (2) CE's speech in delivering "The Chief Executive's 2022 Policy Address" to LegCo (4) CE's speech in delivering "The Chief Executive's 2022 Policy Address" to LegCo (5) CE's speech in delivering "The Chief Executive's 2022 Policy Address" to LegCo (6) CE's speech in delivering "The Chief Executive's 2022 Policy Address" to LegCo (7) CE's speech in delivering "The Chief Executive's 2022 Policy Address" to LegCo (8) CE's speech in delivering "The Chief Executive's 2022 Policy Address" to LegCo (9) CE's speech in delivering "The Chief Executive's 2022 Policy Address" to LegCo (10)