19 September 2023
The Honourable John K C Lee, SBS, PDSM, PMSM Chief Executive
Hong Kong Special Administrative Region
Central Government Offices, Tamar
Hong Kong
Dear Chief Executive,
Policy Address Submission 2023-24
The Hong Kong General Chamber of Commerce (the Chamber) is pleased to offer our recommendations on the HKSAR Government’s policy priorities as you go about formulating your next Policy Address.
The challenges Hong Kong is facing are unprecedented. Despite a complete dismantling of pandemic-related restrictions earlier this year, an anticipated rebound in the broader economy has remained elusive due to a perfect storm of actors that have emerged in recent years.
If history is of any indication, it would be a mistake to bet against Hong Kong. To navigate uncharted waters, sustain our standing as a premier international financial centre and preferred trading hub, and restore Hong Kong’s attractiveness as a place to work, live and play, bold and imaginative measures must be implemented. The attached sets out our views on the actions that the Government can consider taking to achieve such goals.
As always, you can count on the Chamber’s support in fulfilling the shared objective of shaping a better and brighter future for Hong Kong.
Yours sincerely,
Betty Yuen
Chairman
Encl.
HKGCC Submission to the 2023 Policy Address Executive Summary
1. Rebranding Hong Kong
1.1 Hong Kong needs to do much more to engage markets abroad and better promote itself. We hope to see further investments in Hong Kong’s network of Economic and Trade Offices across Western markets to correct misperceptions and project a positive image of Hong Kong. To that end, the key elements of any promotional campaign should
1.1.1 Reassert Hong Kong’s standing as an international city to differentiate itself from other Mainland cities including those in the Greater Bay Area (GBA); 1.1.2 Address concerns, over and dispel misconceptions of what Hong Kong’s National Security Law entails; and 1.1.3 Give prominence to the framework and practice of “One Country, Two Systems” under which Hong Kong enjoys unparalleled advantages as a super connector between the Mainland and the rest of the world.
2 Human Capital
2.1 Recent government measures to enhance the Supplementary Labour Scheme (SLS), including the lifting of the general exclusion of 26 job categories under the SLS for two years beginning in September are most welcomed as these would help address short-term demand. Consideration should however be given to medium- to longer-term manpower needs, to ensure that Hong Kong has a readily available supply of labour that is equipped with the relevant skills. Our recommendations range from expanding the work pool to include female and elderly workers, enhancing existing (re-)training and labour importation schemes, to upgrading the educational system to fulfill the demands of an increasingly digitally-driven economy.
3 Land and Housing
3.1 The Chamber urges the Government to give serious consideration again its recommendations on improving land and housing supply in Hong Kong made last year to the Policy Address. In the immediate future, priority should be given to:
3.1.1 Dismantling ‘spicy measures’ aimed at reining in property demand as these no longer serve any useful purpose especially given current economic conditions and amidst a weak outlook for global markets; 3.1.2 Streamlining and expediting statutory development processes to optimize the supply of developable land; 3.1.3 Reviewing legislation, legislative processes and institutions to balance development objectives with countryside recreation; and 3.1.4 Stimulating urban regeneration by expediting the lowering of compulsory sales threshold.
4 Financial Services
4.1 To sustain its standing as an international financial centre, Hong Kong needs to bring in new players by attracting diverse institutional investors such as hedge funds, pension funds, and sovereign wealth funds. The Government should capitalize on Hong Kong’s role as a super-connector by linking these investors, interested in tapping into opportunities on the Mainland, with local governments.
4.2 Existing Connect Schemes could be further harnessed to further promote the use of RMB as an international currency. At the same time, consideration should be given to various measures aimed specifically at foreign enterprises. These include establishing a benchmark for RMB bond issuance augmented by a market for RMB bond futures in Hong Kong, enhancing RMB liquidity in Hong Kong through various policy measures, and attracting more non-Mainland bond issuers.
4.3 To facilitate and aid prospective FOs in opting for a base in Hong Kong, we suggest providing timely information, promoting clarity on tax incentives and associated advantages of setting up in Hong Kong; and introducing fiscal concessions and related programmes to develop Hong Kong into a philanthropy hub.
4.4 We call on the Government to enhance the existing Wealth Management Connect Scheme (WMC 2.0) by reviewing the approach to and policies on such matters as the scope and risk rating of products, investment amount, sales process, advisory process, and marketing promotion.
4.5 Hong Kong is in an advantageous position of reaping the benefits of a worldwide shift towards purposeful investments aimed at providing positive environmental outcomes. This can be achieved by developing a green finance roadmap or strategy to steer the development of green finance in Hong Kong with the crafting of targeted policy measures to achieve such an outcome.
5 Tourism
5.1 Our recommendations for improving tourism in Hong Kong are centred around the SAR’s intrinsic strengths, such as our world-class country parks, cultural heritage and unique character, advantages that the Government could leverage on expeditiously to attract tourists, particularly high-yield visitors such as frequent independent travelers. These include promoting traditional festivals and events across the 18 districts through social media, enhancing accessibility to country parks and recreation areas in the New Territories and Outlying Islands, tapping into opportunities offered by Hong Kong’s marine recreation environment, upgrading tourism infrastructure (both hardware and software), pre-empt over-tourism; and better planning for a sustainable, market-driven night markets.
6 Logistics and Transport
6.1 Continued policy support should be given to the pillar industries of trade and logistics to ensure that they stay robust and healthy. The Chamber’s recommendations include expediting and/or looking into the feasibility of technology-based initiatives, collaborating with relevant Mainland authorities to facilitate the cross-border movement of goods, differentiating Hong Kong from other GBA ports, setting aside land in strategic sites, and offering policy support including subsidies.
7 SMEs
7.1 More than ever, government support is critical to ensure the well-being of SMEs as they are buffeted by global economic headwinds. To that end, we recommend that the Government provide funding and administrative assistance in a number of ways. These range from extending the validity of the SME Financing Guarantee Scheme, relaxing the application criteria for the SME Export Marketing Fund, compiling online information on trade regulations and rules across foreign markets, facilitating SME lending by providing access to government data collected through the Commercial Data Interchange, and implementing accelerated payment programmes to promote cash flow.
7.2 It is also critical that SMEs be properly supported and equipped if Hong Kong’s decarbonization objectives are to be realized given that they are an integral aspect of corporate value chains as a full accounting of emissions becomes increasingly mainstream. Measures to achieve this include funding, educational and administrative support from government.
8 Innovation and Technology (I&T)
8.1 In the short-term, focus should be given to promoting Hong Kong as a smart city. For the medium term, concrete strategies should be devised to bring to market existing technologies with emphasis on such areas as Web 3.0, virtual assets, blockchain, intellectual-property trading, and data; as well as early preparation of priority zones for data centre development modelling. Over the long term, the Government should look at rolling out measures that are aligned with national priorities.
8.2 Building on the success of existing policy measures, continuous support across the talent, financial, and technological pillars can help to further nurture the startup ecosystem in Hong Kong. In particular, there are opportunities to support the fintech ecosystem given the city’s standing as an international financial centre and I&T hub. Our recommendations include, among others, creating a fintech job portal, establishing a centralised platform for fintech companies and private market investors to discover and engage with one another, and setting up a centralised database of pre-approved fintech companies to streamline vendor onboarding and level the playing field.
8.3 We look forward to the opportunity of contributing to the legislative amendment process on regulations relating to privacy, copyright, cybersecurity, cybercrimes, and national security as and when these are considered.
8.4 The business community hopes to see a more comprehensive and transparent strategy that considers data transfer viability between Hong Kong, Mainland China, and other major Asian markets such as India and Indonesia, where there are also emerging data localisation rules. This is necessary to ensure that Hong Kong lives up to the promise of being a premier regional data hub.
9 Livable City
Given that transport and buildings account for the lion’s share of emissions in Hong Kong, the Chamber has put forward a number of recommendations aimed at accelerating the adoption of low-carbon goods vehicles, promoting the use of electric vehicles and public transportation, encouraging the use of Sustainable Aviation Fuel, expediting LNG bunkering as an interim fuel source for maritime shipping, and improving energy efficiency in buildings. The Chamber has also included suggestions for the implementation of a comprehensive waste management plan that also takes into account of the GBA, as well as recommendations to develop and retain local ESG talent and attract the best professionals from around the world as demand for corporate sustainability data disclosures, strategy formulation, and green finance products increases.
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