Budget Speech by the Financial Secretary (3)
Promoting High-quality Development
45. The Report to the 20th National Congress of the Communist Party of China emphasises that the pursuit of high-quality development is first and foremost to build a modern socialist country in all respects. Likewise, as Hong Kong advances towards the new stage from stability to prosperity, we must also closely follow this theme. This is how we put making good use of Hong Kong's advantages to meet the needs of our country into practice. It is also the only way to attain better development for ourselves.
46. After the past several decades of development, Hong Kong has penned many success stories, but also faced development bottlenecks in some areas. We must push forward our economy towards high-quality development. We need to persistently drive development through innovation and technology; create new growth impetus through institutional enhancements and policy innovations; and progress towards green transformation by vigorously promoting the development of green and low-carbon technology and industries.
47. The pace of profound changes facing the world that is unseen in a century is accelerating, and global competition is getting more intense. We need to make better use of our unique advantages under "One Country, Two Systems" to fully grasp the Mainland's enormous market, bring together local and overseas talents, capital and other resources, and to attain mutual benefits that can be shared by everyone and bring about better development for everyone under the operation of an open economy.
48. The current-term Government will better integrate a "capable government" with an "efficient market". In areas where government leadership is needed, we dare to lead, take full responsibility and push forward at an accelerated pace; while for areas where the power of market forces is required, we will create a conducive environment and conditions for market forces to unleash their power. These will forcefully push forward high-quality development in Hong Kong.
49. Digital economy plays a crucial role in the course of achieving high-quality development. To speed up the process of digital economy development in Hong Kong, the Digital Economy Development Committee, chaired by me, is undertaking in-depth studies on four major areas to explore, namely, the digital infrastructure needed to promote the development of digital economy, cross-boundary data transfer in a convenient, efficient and secure manner, digital transformation of enterprises and human resources support. The four sub-groups under the committee will provide specific recommendations to the Government this year.
Artificial Intelligence Supercomputing Centre
50. The availability of adequate computing infrastructure is a prerequisite for promoting the development of scientific research and artificial intelligence (AI) industries in Hong Kong. To this end, the Government will conduct a feasibility study on the development of an AI Supercomputing Centre. The study will be completed in 2023-24.
51. Developing into a smart city and a digital economy can help improve people's quality of life. I will earmark a sum of about $200 million to enhance the operation of the "iAM Smart" platform, so as to provide members of the public with more convenient one-stop digital services and improve user experience. The wider use of "iAM Smart" will further promote "Smart Government" and digital transformation of the whole society.
Encourage the Telecommunications Industry to Invest in Infrastructure
52. Advanced and more comprehensive telecommunications infrastructure is an important cornerstone of our economic development. To encourage telecommunications network operators to more actively invest in infrastructure for providing better communication services to companies and the public, I propose to provide tax deduction for the spectrum utilisation fees to be paid by the future successful bidders of radio spectrum.
53. Many local SMEs are actively seeking digital transformation for value creation of their business. To further expedite the pace of digital transformation of enterprises, I will set aside $500 million for Cyberport to launch a Digital Transformation Support Pilot Programme, under which subsidies will be provided on a one-to-one matching basis to assist SMEs in applying ready-to-use basic digital solutions, thus facilitating their digitalisation.
54. The Government also spares no efforts in supporting enterprises to use technologies to enhance productivity and upgrade or transform their business processes. For example, the Technology Voucher Programme, which is widely received by industries, has supported over 20 000 applications since launch. To assist enterprises in better developing digital support facilities as well as carrying out upgrade and transformation, the Hong Kong Productivity Council (HKPC) launched the Biz Expands Easy one-stop online platform last September in order to make the funding application process smoother.
55. The Internet has been undergoing continuous development and evolution. Every generation of technological reform brings about new applications and fresh opportunities, and even disrupts the mode of business operation. The third generation Internet (Web3), currently in its start-up period, has the same huge potential. We must keep up with the times and seize this golden opportunity to spearhead innovation development.
56. Cyberport established the Web3 Hub@Cyberport early this year. I will allocate $50 million to expedite the Web3 ecosystem development by, among other things, organising major international seminars, to enable the industry and enterprises to better grasp frontier development and to promote cross-sectoral business co-operation, as well as arranging a wide array of workshops for young people.
57. Virtual assets (VA) are an integral part of a vibrant Web3 ecosystem. The policy statement on VA issued in October last year has set out the Government's policy stance and approach towards the relevant sector. The market has responded proactively. Over the past few months, a large number of innovative enterprises with potential have been considering setting up business in Hong Kong. For the next step, I will establish and lead a task force on VA development, with members from relevant policy bureaux, financial regulators and market participants, to provide recommendations on the sustainable and responsible development of the sector.
International GreenTech and GreenFi Centre
58. Promoting green economy for sustainable development is an important theme globally, and our country is advancing towards the "3060 Dual Carbon Targets". Bringing together resources such as technological innovation, finance, commerce and manpower, this economic model can drive economic transformation and sustainable development, generate demand and create strong impetus for growth. The whole industry cluster is growing rapidly, but the formation of a leading green technology and finance cluster has yet to be seen around the world.
59. In fact, Hong Kong has an edge when it comes to establishing an international green technology and financial centre. I&T development over the years has pooled together quite a number of green technology enterprises and talents. The Government also takes the lead in promoting the application of green technology, including setting up the Green Tech Fund. Hong Kong plays the role of a leader and a first-mover in green finance and innovation. Last week, we successfully issued $800 million of tokenised green bond, the first of its kind issued by a government globally. This has accentuated Hong Kong's capacity in providing a flexible and favourable legal and regulatory environment for innovative forms of bond issuance. As for the US$5.75 billion equivalent of government green bonds denominated in US dollar, euro and Renminbi (RMB) issued last month, it was the largest ESG (i.e. environmental, social and governance) bond issuance in Asia.
60. On promoting the adoption of green financing by enterprises, grants have been approved for over 200 related debt instruments issued in Hong Kong since the launch of the Green and Sustainable Finance Grant Scheme in 2021, involving a total underlying debt issuance of nearly US$70 billion.
61. Furthermore, the launch of Core Climate by the Hong Kong Exchanges and Clearing Limited (HKEX) last October for the trading of international voluntary carbon credits signifies a critical step forward in the development of carbon marketplace in Hong Kong.
62. We must actively seize the opportunities brought by our country's dual carbon strategies at the right time. We should also leverage our strengths under "One Country, Two Systems" and as an international financial centre to accelerate the development of Hong Kong into an international centre for green technology and finance. We will proceed in five directions, namely:
(a) building a green technology ecosystem to attract top-notch enterprises or start-ups to set up their operations, encourage efficient interaction among industry, academia and research sectors to commercialise R&D outcomes, and boost the demand for green technology through policy support;
(b) green finance application and innovation: facilitating green projects to obtain capital more conveniently and flexibly through financial innovations apart from traditional financing channels;
(c) green certification and alignment with international standards;
(d) training for talents; and
(e) enhancing the exchange and co-operation with the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) and international markets.
63. I will set up a Green Technology and Finance Development Committee, inviting industry representatives from green technology, green finance and green standard certification, etc. to assist in the formulation of an action agenda for promoting the development of Hong Kong into an international green technology and finance centre. The Government will organise an International GreenTech Week at the end of this year to pool together representatives, enterprises and investors from the green technology industries around the world.
(To be continued.)
Ends/Wednesday, February 22, 2023
Issued at HKT 11:39
Issued at HKT 11:39
Budget Speech by the Financial Secretary (1) (with photos/video) Budget Speech by the Financial Secretary (2) Budget Speech by the Financial Secretary (4) Budget Speech by the Financial Secretary (5) Budget Speech by the Financial Secretary (6) Budget Speech by the Financial Secretary (7) Budget Speech by the Financial Secretary (8) Budget Speech by the Financial Secretary (9) Budget Speech by the Financial Secretary (10)