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Policy Statement & Submission

2018/09/11

Chamber Submission to the 2018/19 Policy Address

Chamber Submission to the 2018/19 Policy Address

11 September 2018

The Hon Mrs Carrie Lam Cheng Yuet-ngor, GBM, GBS
Chief Executive
Hong Kong Special Administrative Region
Tamar
Hong Kong

Dear Chief Executive,

Policy Address Submission

I am pleased to submit herewith proposals from the Hong Kong General Chamber of Commerce for consideration in your forthcoming Policy Address.

We are pleased to see that the Government has made, and is continuing to make, steady progress in implementing the policy initiatives outlined in your first Policy Address. The Chamber supports all of these initiatives.

The challenges that Hong Kong is faced with still remain but we are working as a community in addressing them and the Chamber is committed to supporting the Government in this important effort. The Chief Executive’s second Policy Address provides a good opportunity to prioritise the initiatives Hong Kong must address if we are to continue making progress

In the attached submission, we set out in more detail our proposals on how Hong Kong can best meet the challenges, and take advantage of the opportunities.

We hope that you find our proposals useful and stand ready to assist and support you and your Administration in creating a positive, harmonious, and prosperous Hong Kong.

Yours sincerely,

Aron Harilela

Chairman

Encl.

C.C. The Hon Matthew Cheung Kin-chung, Chief Secretary for Administration
        The Hon Paul Chan Mo-po, Financial Secretary
        The Hon Edward Yau Tang-wah, Secretary for Commerce and Economic Development


 

Hong Kong General Chamber of Commerce
2018/2019 Policy Address Submission

1. The Chief Executive’s 2017/2018 Policy Address contained many positive initiatives, and we are pleased that the Government has been making steady progress in fulfilling the Chief Executive’s policy agenda, which, besides enhancing the SAR’s competitiveness, is also working to promote a better life for all the people of Hong Kong. The challenges that Hong Kong is faced with still remain but we are working as a community in addressing them and the Chamber is committed to supporting the Government in this important effort. The Chief Executive’s second Policy Address provides a good opportunity to prioritise the initiatives Hong Kong must address if we are to continue making progress.

2. Prioritisation is vital for a number of important reasons:

  • We need to continue to urgently heal all divisions that have arisen within our society to achieve the Chief Executive’s vision of “a Hong Kong of hope and happiness - a city we are all proud to call our home”. This necessitates achieving a better quality-of-life for our citizens, to promote social harmony and address inequalities.
     
  • Hong Kong currently has a number of unique advantages and opportunities that can help us achieve the Chief Executive’s vision. But to do so, we must recognize that businesses, as well as the Government, have a crucial role to play. We both want what is best for Hong Kong. However, if business is going to play its role, a number of challenges to creating economic growth must be overcome. This document outlines our thoughts on this process, and the important role that businesses can play to make this possible and in supporting government efforts to build a stronger and better Hong Kong, and remove the barriers to economic growth.

Removing the Regulatory Bottleneck

3. If business is going to maximise its role in helping Government to achieve its vision, the cost of doing business here must be reduced, and unnecessary restrictions eased, so that businesses can get on with promoting economic growth, for the benefit of our citizens. We believe the following actions can make this possible:

  • Implementing proper “joined-up” Government. We support efforts to ensure that processes related to doing business in Hong Kong are fast, smooth and predictable, for example through adopting the “one-stop shop” principle to the fullest extent possible. This requires a strong central coordinating unit, with oversight of all of the actions needed to achieve the Government’s economic vision. This unit should be responsible for promoting and pushing forward reforms to eliminate and avoid unnecessary regulation and red tape. It would effectively serve as a project manager to preempt the possibility of each department operating in a silo. This unit would also ensure consistency of policies across departments, for example in supporting start-ups. We believe that the newly-formed Policy Innovation and Co-ordination Office is an important step forward in this process.
     
  • The Chamber believes that a proper and compulsory regulatory impact assessment (RIA) should be carried out before new regulatory interventions are made. The RIA should weigh the pros and cons of any proposed intervention, and (if intervention is necessary) determine the different options for intervention. The RIA should quantify the costs and benefits of each option to the different stakeholders, the economy, and society in general. RIAs are compulsory in virtually all 36 member countries of the OECD, for example. In the annex to our Policy Address submission on 5 September 2017, we outlined a suggested methodology for conducting RIAs, based on international best practice. Implementing this methodology would build on the Government’s existing “Be the Smart Regulator” programme. A copy of that annex is re-attached.
     
  • At the same time, we would encourage a thorough review of current regulations impacting business to ensure that they are updated to take account of market circumstances, or removed if deemed no longer necessary. As is the case in Mainland China and Singapore, a systemic, universal and compulsory part of government processes should be a review of legislation and regulations at regular intervals to ensure that they are still fit for purpose. If the suitability of regulations is called into question, they should be updated or removed.
     
  • The statutory minimum wage, MPF offsetting, and other employment-related issues should be carefully managed to ensure that they do not hamper economic growth especially under the climate of volatility in global markets.

Removing the Land Bottleneck

4. It is well recognised that there is a chronic shortage of land being made available for housing and commercial use in Hong Kong. There is sufficient land, but our existing land is not being put to the most effective or efficient use. As the Task Force on Land Supply said in its April 2018 Consultation Document, “land development has virtually come to a halt since 2005.”

5. The result is that prices for housing and commercial properties in Hong Kong are the highest in the world. This has a major impact on the cost of living and the quality of life of our citizens, in addition to the costs of doing business. Not only is it increasingly difficult for our citizens to find decent accommodation, and for businesses to find premises at an affordable price, there is also a serious risk of Hong Kong losing the young people who are so important to our future success as they move overseas to find better and less expensive life. In addition to defusing potential social challenges, making land available for commercial use is essential to maintaining Hong Kong’s competitiveness.

6. Accordingly, the Chamber recommends the following steps:

  • When the public engagement exercise on land supply is completed in September this year, the Chamber stands ready to support the Government in the drafting of an implementation plan, with action points and timeframes, to do what is possible to expand the availability of land to support achievement of our shared vision for Hong Kong. The Chamber recommends simultaneously expanding the availability of land, given that all the options will necessarily take time. We support as priorities land reclamation, re-developing “brownfield” sites, developing unused agricultural land and re-zoning industrial sites which are not being used efficiently. Non-renewal of long term leases or developing Hong Kong’s country parks should be an absolute last resort.
     
  • We support a review and updating of the town planning process. Such a review should include updating building codes. To that end, we welcome efforts by the Development Bureau to review, as soon as possible, the standards and definitions adopted by the Planning, Lands and Buildings Departments with a view to consolidating and rationalizing any existing or overlapping development control procedures.

Removing the Labour Bottleneck

7. It is not only land in Hong Kong that is in short supply: manpower is also becoming a scarce commodity. In May-July this year, unemployment stood at 2.8 per cent - the lowest rate in 20 years. While it is impressive that Hong Kong has virtually full employment, there is a downside: the available pool of talent to meet the demand linked to our continued competitiveness is extremely limited. Labour shortages can also challenge plans to provide more housing and other important infrastructure projects that are critical to the well-being of Hong Kong and its people. These problems are likely to become even more acute with Hong Kong’s aging population, according to the projections of the Census and Statistics Department. With this in mind, the Government should give priority to the following measures:

  • Equip our young people with the skills that will be in demand in the future, such as in IT and AI. We support all efforts to prepare our future workforce to adapt to the changing employment landscape brought on by advances in technology. Recruiting, attracting and retaining people with these skills will be crucial for our future economic success. The Chamber believes that the Technology Talent Admission Scheme should be opened up to businesses from outside Cyberport and the Science Park. In addition, the Chamber supports all efforts to place greater emphasis on vocational training, and in engaging the support of business enterprises throughout Hong Kong.
     
  • The Chamber supports a government review of Hong Kong’s immigration processes to ensure that they are as efficient as possible to ensure that businesses can meet their human resources needs – especially those that are linked to new initiatives like the Greater Bay Area development.
  • The Chamber supports the creation of a special labour importation scheme for the elderly care, healthcare, construction, technology, retail and other industries suffering from acute labour shortages. Related to this, there should be efforts to make better use of our older working population and early retirees, as Hong Kong citizens are becoming increasingly healthy and living longer.

Making Hong Kong a Smarter and More Liveable City

8. A healthy and comfortable outdoor living environment is an important component in the quality of life of our citizens, and therefore in achieving our vision for Hong Kong. Technology can also do so, by implementing the Government’s proposal to make Hong Kong a “Smart City”. In this regard, we:

  • Support the Government’s efforts to roll out projects and proposals in its Smart City Blueprint. At the same time, we support the adoption of an aspirational and therefore bolder and less risk-averse approach to ensure that the benefits arising from a Smart City regime are fully harnessed. As part of these efforts, we support government efforts to take the lead in going “paperless” and delivering more public services online, as is the case in many other jurisdictions.
     
  • Support all government initiatives to tackle the challenges of air and marine pollution. While we recognize the need for construction and renovation as part of our dynamic and rapidly changing city, more can be done to keep noise pollution to a minimum.
     
  • Support government efforts to make Hong Kong a more “walkable” city, by giving priority to creating pedestrianised areas wherever possible.
     
  • Endorse further efforts to promote the role of the arts in making Hong Kong a more vibrant and liveable city, through (for example) public sculptures, murals, public and open music performances, and further investment in world-class museums.
     
  • Call for further measures to increase the level of waste recycling in Hong Kong and encourage consumers to purchase recycled materials. As part of that focus, we believe that there should be efforts to address the throwaway culture that is currently so endemic in Hong Kong by finding alternatives to single-use products, especially those made from plastic such as plastic straws and bottles.
     
  • Support efforts to determine whether more landfill sites can be used to produce landfill gas for the generation of electricity or gas.

9. All of these measures, carried out by both the private and public sectors, are important, not only to improve the quality of life of our citizens, but also to attract and retain talent we need to fill skills gaps, and promote our valuable tourism industry.

Greater Bay Area and “Belt and Road” Initiatives

10. Hong Kong’s geographical position, strong expertise in legal and financial services, and other strengths (including trusted and respected courts, rule of law, intellectual property rights protection, leading dispute resolution centre and freedom of information) make it perfectly positioned not only to act as the gateway to the expanding Chinese economy generally, but also to take advantages of the opportunities provided by the Greater Bay Area (GBA) and Belt and Road Initiatives in particular.

  • The Chief Executive’s recent appointment as a member of the leading group for the development of the Guangdong-Hong Kong-Macao Greater Bay Area chaired by Vice Premier Han Zheng is a welcome and encouraging development as this will enable Hong Kong to have input at the highest level in strategizing for and coordinating of the Bay Area’s development.
     
  • We will join the Government in continuing to emphasise to overseas markets Hong Kong’s unique advantages of being a bridge between the Mainland and overseas, and acting as a facilitator of, or intermediary for, business transactions between the two.
     
  • In particular, we will join the Government in continuing efforts to promote Hong Kong’s reputation as a well-established and highly developed international financial hub that also serves as the preferred gateway for meeting the Mainland’s ongoing funding requirements.
     
  • In order to tap into the opportunities that the region holds, it is essential that there ultimately be free and unfettered movement of capital, people, goods and services within the GBA, and we will support Government efforts to make that happen.
     
  • The ability of individuals to move freely is particularly important, and to achieve this, the Chamber will work with Government to promote ease of access to Hong Kong and to the Mainland. In this regard, we would like to reiterate our recommendation of a visa system, based more or less on the APEC Business Travel Card Scheme, for selected categories of GBA residents to enter Hong Kong and vice versa for work and business purposes. We suggest carrying out a pilot scheme at the Lok Ma Chau Loop before the Government makes a final decision on implementation throughout the GBA.
     
  • The Chamber believes Hong Kong has a unique opportunity to serve as a data centre hub utilizing our strategic advantages to serve the GBA.

Conclusion

11. Hong Kong has been described as a place that is endowed with rich blessings (福 地) and has continued to enjoy a high level of growth and prosperity. We have managed to go from strength to strength because of the ability of all sectors of our community to work together towards the common goal of a better Hong Kong. It is of even greater importance today that this ability to overcome differences and willingness to collaborate be maintained and further cultivated. To that end, we all have a part to play and, as a major representative of Hong Kong’s business community, the Chamber looks forward to maintaining our close working partnership with the wider community and with the Government.
 

HKGCC Secretariat

11 September 2018

 

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