For Immediate Release
The Hong Kong General Chamber of Commerce (HKGCC) welcomes measures to support economic growth and development of new sectors, presented by the Financial Secretary Paul MP Chan in his Budget Speech today. Many of the initiatives will help prepare Hong Kong for the economic challenges ahead amidst the increasingly volatile business environment and protectionism around the world.
“We are pleased that the Government has responded to our calls to address the rising challenges facing the business community. We are particularly happy to see targeted measures to fast track innovation & technology (I&T) development in Hong Kong, reinforce our role as a regional headquarters for Asia and within the GBA, as well as initiatives to consolidate and support our pillar industries and SMEs,” said HKGCC Chairman Aron Harilela.
Targeted efforts to drive forward the I&T sectors will also stimulate growth across many of Hong Kong’s pillar industries. The additional funding earmarked in this year’s Budget underscores the Government’s commitment to growing the I&T sector. Over $41 billion has been set aside, including $20 billion for the Research Endowment Fund of the Research Grants Council, $16 billion for universities to strengthen their R&D capabilities, and the doubling of financial support for R&D researchers. The $5.5 billion allocated for the development of Cyberport 5 will attract more companies and start-ups to set up their offices in Hong Kong, as well as provide opportunities for young people to pursue their career in I&T.
“The I&T sector will be a key driver of the economy going forward, and help us diversify our economy, as well as dovetail with the Greater Bay Area’s blueprint,” said Harilela. “We have seen how technology is driving growth and efficiencies in other economies, so this is one area where we now need to crank up another gear.”
The Chamber welcomes measures to support and consolidate the continued development and diversification of Hong Kong’s traditional pillar industries, including the financial services, green bonds, tax concessions for marine insurance, and the establishment of an Academy of Finance, among others.
As Hong Kong role’s as a financial hub for the region and the Greater Bay Area rises along with the global economic centre of gravity’s swing to Asia, financial services supported by I&T industries will be crucial to Hong Kong’s future, said Harilela.
“This Budget will help reinforce Hong Kong’s strengths and drive not only new areas of growth, such as I&T, and new products for our financial services industry, but also attract more companies to set up their regional headquarters (RHQ) here. All this will reinforce our standing as one of the world’s leading centres for international finance, business, and transportation,” he added.
The Chamber still hopes to see more initiatives being rolled out, such as tax concessions, to further increase our attraction to RHQ.
Now that the Government sees merit in the Chamber’s proposal to enhance the role of the Tax Policy Unit (TPU), and has moved it directly under the Financial Secretary’s Office, we hope the TPU will now be able to implement such initiatives more quickly. This has never been more important as now as Hong Kong’s role in the GBA, as well as the Belt & Road Initiative, gains momentum and we serve as a nerve centre for businesses.
The Chamber supports many of the proposals that the Financial Secretary has sown for Hong Kong’s future prosperity, and is also pleased to see that SMEs haven’t been left out. The additional $1 billion injection into the BUD Fund, and extension of the application period of the SME Financing Guarantee Scheme, profits tax reduction and other provisions are also welcomed, added Harilela.
“Overall we think this Budget has invested wisely in Hong Kong’s future, so we are pleased with its direction. Two areas that we feel it has fallen short is the Government’s failure to introduce regulatory impact assessments (RIA) into the policymaking process to improve Hong Kong’s efficiency and competitiveness,” said Chamber CEO Shirley Yuen. “The Government has been talking about the need to review regulations and remove red tape to create a business friendly environment, but we need to see more urgent action on this.”
She added an RIA would also help reduce or alleviate the friction currently associated with the legislative vetting process, while enabling the Government to provide a strong and defensible account of its decisions.
“Secondly, while we welcome the increase in funding for universities and researchers, these efforts to develop talent do not address the immediate problems that companies are facing today as a result of the acute shortages of skills and talent, not just in the I&T sectors,” said Yuen.
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