Budget Speech by the Financial Secretary (6)
105. Hong Kong's positioning as an international aviation hub is affirmed and supported by the Central People's Government in the 14th Five-Year Plan and the Outline Development Plan for the GBA. The Hong Kong International Airport (HKIA), which served about 70 million passengers in 2018-19, was the third busiest airport in terms of international passenger throughput around the globe. It was also the world's busiest cargo airport for many years.
106. To support the recovery of air traffic, the Airport Authority Hong Kong (AA) is rolling out a series of measures, which include reducing or waiving airport charges, providing incentives to resume suspended flight services or launch new routes, organising large-scale promotion activities, etc. Meanwhile, the Government and the AA are examining the medium-to-long-term manpower shortage situation in the aviation industry, with a view to identifying solutions to the problem.
107. To enhance Hong Kong's status as an international aviation hub, the Government and the AA are pressing ahead with the "Airport City" development strategy, under which the HKIA will be developed into a node of various economic activities with aviation as its core business. With the addition of new developments and new functions, the HKIA will drive the economic growth of Hong Kong as well as its neighbouring regions.
108. A number of infrastructure projects of the HKIA will be successively completed and commissioned, including the SkyPier Terminal which will commence operation in the middle of this year and the entire Three-Runway System which is expected to be completed by the end of 2024. The HKIA will have its capacity substantially increased and its position as a regional multi-modal transportation hub further enhanced. The above developments will significantly boost passenger and cargo traffic of the HKIA, creating tremendous opportunities for activities such as aircraft repair and maintenance, aircraft parts manufacturing and relevant R&D. The AA is planning to construct a new aviation business park on the Airport Island, and is exploring with Zhuhai authorities the feasibility of building an aviation industrial park in Zhuhai, so as to promote the development of the aviation industry in the two places through synergised cross-boundary co-operation.
109. Under the development strategy of the Airport City, the HKIA is also actively taking forward the integrated commercial development project of SKYCITY. Moreover, logistics infrastructure will be strengthened to further expand the business of high-value goods and e-commerce. With its advantages in terms of geography, infrastructure and transportation, the site will be developed into a vibrant hub of commerce, conventions and exhibitions, tourism, lifestyle and logistics.
Enhance the Aircraft Leasing Preferential Tax Regime
110. The Government will enhance the aircraft leasing preferential tax regime, striving to establish Hong Kong as an aircraft leasing and services hub. The Government has conducted a trade consultation on the proposed enhancement measures, which include allowing tax deduction for the acquisition cost of aircraft and expanding the scope of leases and aircraft leasing activities. This has been welcomed by the trade. These enhancement measures will further attract more aircraft leasing companies to establish a presence in Hong Kong. We will introduce a bill into the LegCo in the fourth quarter of this year.
International Maritime Centre
111. Currently, over 80 per cent of the world's merchandise goods still rely on sea transportation. With Hong Kong's position as a prominent international maritime centre, we have been committed to raising the industry's competitiveness. Measures include attracting more maritime enterprises to establish a presence in Hong Kong through tax concessions; promoting the development of smart port, for instance, by setting up a digitalised port community system, with a view to further enhancing the efficiency of Hong Kong's port and reducing its operation cost.
Promote the International High-end Maritime Service Industry
112. In order to further promote the development of Hong Kong as an international maritime centre, the Transport and Logistics Bureau will set up a task force with the aim of putting forward, in collaboration with the Hong Kong Maritime and Port Board and representatives of the high-end maritime services industry, an action plan on the following strategies by the end of this year. These strategies include:
(a) enhancing business sectors such as ship finance, marine insurance, maritime arbitration and ship management, thereby enabling Hong Kong to become a global leading high-end maritime service market;
(b) facilitating transformation of global maritime and port business towards zero emission;
(c) promoting the development of smart initiatives and digitalisation in the maritime industry; and
(d) promoting exchanges and collaboration among maritime industries in the GBA and those around the world.
113. I will earmark $20 million to expedite studies on strategies for promoting the high-end maritime service industry and enhance exchanges among industries in the international arena and the GBA. The scale of the annual flagship event Hong Kong Maritime Week will also be expanded.
International Trade Centre
114. The National 14th Five-Year Plan supports Hong Kong in enhancing its status as an international trade centre. It also supports Hong Kong's participation in and contribution to our country's comprehensive opening-up and development of a modern economic system. The Report to the 20th National Congress has set out that our country will leverage the strengths of its enormous market to attract global resources and production factors with its strong domestic economy, and amplify the interplay between domestic and international markets and resources, thereby improving the quality and level of trade and investment cooperation.
115. Under our country's new development pattern, we will strengthen our role as a connecting platform for international circulation between our country and the rest of the world. We will also capitalise on the dual engines of the B&R Initiative and the GBA development to facilitate commercial exchanges between the GBA and the Association of Southeast Asian Nations (ASEAN), enhance the strategic positioning of both our country and Hong Kong in global and regional economy and trade, and promote our participation in regional economic integration. All these will place us in a better position to cope with the impact of unilateralism and protectionism.
Open up the Mainland Domestic Market
116. We will fully leverage our unique advantages under "One Country, Two Systems", i.e. enjoying strong support of the Motherland while also being closely connected to the rest of the world, in order to consolidate our leading position in global trade. To further integrate into the overall development of our country in order to create strong impetus for our growth, we need to open up the Mainland domestic market internally, and also expand our international economic and trade networks externally. In doing so, we can play our roles as a "participant" in domestic circulation and a "facilitator" in international circulation. In support of the B&R Initiative, we will explore and tap emerging markets such as ASEAN, the Middle East, Central Asia and Africa while maintaining ties with the European and American markets.
Strengthening Overseas Economic and Trade Connections
117. On expanding our global economic and trade networks, we have been seeking to enter into free trade agreements (FTAs) and investment agreements (IAs) with more economies. The FTAs and IAs signed by Hong Kong so far have covered most of our major trading partners. We will continue to actively take forward the relevant work, with emerging economies as priority targets to inject new impetus into Hong Kong's trade development. Moreover, we are actively seeking to join the Regional Comprehensive Economic Partnership (RCEP) in order to further help Hong Kong build a more comprehensive supply chain and attract more Hong Kong enterprises to invest in the member economies of RCEP, with a view to boosting the trade, investment and relevant development in the region, thereby enhancing Hong Kong's status as a regional trade centre.
Open up Target Emerging Markets
118. To further assist Hong Kong enterprises and investors in opening up markets, the Government will provide additional funding of $550 million in total to the HKTDC in the five financial years starting from 2023-24. The additional funding aims to help Hong Kong enterprises seize opportunities arising from the B&R Initiative and the GBA development and tapping into emerging markets as well as stepping up our global promotional efforts.
119. The Dedicated Fund on Branding, Upgrading and Domestic Sales (BUD Fund) has assisted enterprises in exploring markets outside Hong Kong and benefited more than 3 900 enterprises over the years. I propose to further inject $500 million into the fund and, at the same time, launch "BUD Easy" to expedite the processing of applications, enabling more SMEs to make use of the funding to develop their business. In addition, the Hong Kong Productivity Council has been proactively assisting SMEs in applying for government subsidies, which is well received by the industry. I propose to allocate $100 million to enhance this service in the next five years.
Centre for International Legal and Dispute Resolution Services in the Asia-Pacific Region
120. We will continue to strive to consolidate the strategic positioning of Hong Kong as a centre for international legal and dispute resolution services in the Asia Pacific region under the National 14th Five Year Plan. We will enhance the competitiveness of our legal infrastructure, deepen the mutual legal assistance mechanisms on civil and commercial matters between Hong Kong and the Mainland, and also promote the strengths of and opportunities for Hong Kong's legal and dispute resolution services on all fronts.
121. The AALCO (Asian-African Legal Consultative Organization) Hong Kong Regional Arbitration Centre was established in Hong Kong in May last year. With the support of the Ministry of Foreign Affairs, the International Organization for Mediation Preparatory Office was officially opened in Hong Kong in the middle of this month. To foster integration of legal practices in the GBA, the Department of Justice (DoJ) has set up a task force, comprising experts and academics, to study various measures for facilitating exchanges among the people and businesses in the area. The DoJ will seek to establish and promote the use of a common online mediation platform for dispute resolution in the GBA, with a view to providing a more convenient, efficient and cost-effective means for people and businesses in the GBA to settle cross-boundary disputes online.
Regional Intellectual Property Trading Centre
122. The National 14th Five-Year Plan supports Hong Kong to develop into a regional intellectual property (IP) trading centre. According to the Global Innovation Index 2022 published by the World Intellectual Property Organization, the Shenzhen-Hong Kong-Guangzhou cluster was ranked second among the world's top-performing science and technology clusters for three consecutive years, highlighting the vibrancy of innovative activities in the GBA.
123. The Government will continue to allocate resources to further promote and develop the "original grant patent" system to tie in with Hong Kong's I&T development. An additional funding totalling $10 million will be allocated to the Intellectual Property Department in the next two years for employing and nurturing its patent examiners as well as progressively developing a talent pool, with a view to acquiring institutional autonomy in conducting substantive patent examination by 2030.
124. The Government will also continue to enhance the IP regime. To strengthen copyright protection in the digital environment, the Copyright (Amendment) Ordinance 2022 will come into operation on 1 May this year, following which we will embark on a new round of review as soon as possible as part of our ongoing efforts to enhance the competitiveness of our copyright regime. We also plan to table the relevant subsidiary legislation for implementing the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks in the LegCo in the first half of this year, with a view to putting in place the international trademark registration system under the Protocol as early as possible. This will enable trademark owners to register and manage their trademarks in multiple jurisdictions under one single application.
"Patent Box" Tax Incentive
125. I&T is a key engine for driving the development of a knowledge-based economy. Legal protection of R&D outcomes in the I&T field can be acquired through patent registration, which facilitates IP trading activities such as buying/selling and licensing and the development of new products and services, as well as unleashes the underlying economic value of the concerned intangible assets. To encourage the I&T sector to forge ahead with more R&D activities and create more patented inventions with market potential, we will introduce a "patent box" tax incentive to provide tax concessions for profits sourced in Hong Kong from qualifying patents generated through R&D activities. We will consult the trade on the "patent box" tax arrangements within this year and formulate a competitive concessionary tax rate applicable to Hong Kong. Our target is to submit the legislative amendments to the LegCo in the first half of 2024.
(To be continued.)
Ends/Wednesday, February 22, 2023
Issued at HKT 12:13
Issued at HKT 12:13
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