4 September 2024
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 2024
The Hong Kong General Chamber of Commerce (the Chamber) is pleased to provide our recommendations on the HKSAR Government’s policy priorities as you embark on formulating your upcoming Policy Address.
Although the pandemic is now behind us, global markets have become increasingly complex as we confront major upheavals and, possibly, lasting changes to economic, political and social systems as we know them. Our ability to respond and adapt to these unprecedented challenges will determine Hong Kong’s economic well-being and competitiveness over the coming years.
Despite the challenging operating conditions, we share your confidence and positive outlook that Hong Kong will emerge from such difficulties better and stronger. The attached sets out our views on the actions that the Government could consider adopting in its policy agenda to support, strengthen and advance the interests and welfare of citizens and businesses who call Hong Kong home.
As a stakeholder and corporate citizen of Hong Kong, the Chamber stands ready to work with the Government on the shared mission of boosting our city’s status as a preferred destination for businesses and individuals.
Yours sincerely,
Agnes Chan Chairman
Encl.
HKGCC Submission to the 2024 Policy Address
Executive Summary
The current economic landscape in Hong Kong is fraught with challenges, including high interest rates, geopolitical risks, volatility in foreign currencies and uncertainties, creating a difficult environment for many industries. Notably, the strong Hong Kong dollar and the increasing volume of cross-border consumption are impacting the retail and hospitality sectors, along with related investments, posing further challenges for small businesses in Hong Kong.
We strongly advise the Government to persist in improving the business environment, reigniting local consumption and especially extending support to small businesses navigating this complex terrain. While we acknowledge the Government's fiscal constraints, it is crucial to provide reasonable assistance to the real estate sector to mitigate potential damage from significant downward adjustments. Above all, assisting citizens and businesses in rebuilding the momentum and confidence, and outlining a certain and consistent path towards a brighter future is of utmost importance.
Assist Businesses in Navigating a Challenging Environment
1 Small and Medium Enterprises (SMEs)
SMEs are the lifeblood and pulse of Hong Kong, accounting for 98% of the total number of enterprises and 44% of total non-civil-servant employment. Recognising the pivotal role of SMEs in generating employment and creating value, we strongly believe in the necessity of supporting them in this demanding and complex business environment. We suggest that consideration be given to the following policy measure:
1.1 Improve Access to Finance for SMEs
2 Human Capital
Hong Kong has witnessed a significant exodus during the pandemic, leading to a decline in its population of young professionals and others. While we applaud the Government’s efforts to attract and retain talent through various talent admission schemes, the aging population also poses long-term challenges to the labour supply. To this end, continued upskilling and reskilling of the workforce are crucial for staying competitive in this rapidly changing world. We suggest preparing for the future of work through the following strategies:
2.1 Assess the Effectiveness and Enhance Existing Talent Attraction Policies 2.2 Tap into the Latent Labour Pool 2.3 Upskill the Workforce to Meet Future Needs 2.4 Enhance Retirement Benefits to Attract and Retain Talent 2.5 Revisit Policies on Permanent Residence
Raise Hong Kong’s Competitiveness in Key Industries
3 Tourism
The tourism industry in Hong Kong plays a crucial role in fostering economic growth and creating employment opportunities. However, the sector is encountering significant challenges because of the post-pandemic shifts in travel habits. Although visitor arrivals have shown signs of recovery, the spending per capita still lags behind pre-pandemic levels. While we appreciate the Government’s commitment to developing the mega events economy, we believe there is a need to further enhance Hong Kong’s diverse tourism appeals through the following approaches:
3.1 Showcase the Diverse Facets of Hong Kong 3.2 Enhance Tourism Experiences 3.3 Attract High Value-Added Visitors
4 Financial Services
We firmly believe in Hong Kong's irreplaceable position as the region's financial center, attributed to the breadth and depth of its financial market. To spearhead the future of finance, we urge the Government to continue taking proactive steps. By capitalising on the growing wealth management market, tapping into the rising demand for green and sustainable finance, and investing in cutting-edge financial technology, Hong Kong can further solidify its leading role in the global financial landscape:
4.1 Deepen the Family Office System 4.2 Prepare Businesses for Nature-Related Disclosures 4.3 Capitalise on the Growing Carbon Markets 4.4 Prioritise Cultivating and Attracting ESG Talent 4.5 Accelerate the Adoption of Digital Currency 4.6 Establish Comprehensive Cybersecurity Frameworks to Safeguard Financial Data and Systems Against Cyber Threats
5 Trade, Logistics and Transport
The increasing emphasis on supply chain resilience is pushing companies to diversify their sourcing and manufacturing to mitigate risks. Despite this trend, Hong Kong, with its established trade networks and commitment to free trade, remains a vital player in the global value chain. As the geopolitical landscape evolves, competition in the region has been intensified. We advocate for reinforcing Hong Kong’s position as a global trade hub, with a specific focus on enhancing the maritime and port industry:
5.1 Strengthen Hong Kong's Role as an International Trade Centre 5.2 Collaborate for Greater Development of the Entire GBA Port Cluster 5.3 Expedite Smart Port Development 5.4 Optimise Port Operations 5.5 Promote Green Fuel Bunkering 5.6 Decarbonise Commercial Vehicles 5.7 Increase Adoption of Sustainable Aviation Fuel
6 Innovation and Technology (I&T)
Hong Kong aims to evolve into an international I&T hub. To accelerate the digital economy, it is crucial to further boost the data centre capacity, advance information and communications technology (ICT) development, and prepare for the future of artificial intelligence (AI). These steps are essential for Hong Kong to capitalise on the opportunities presented by the emergence of the low-altitude economy, autonomous driving, and other innovative technologies. We suggest that consideration be given to the following strategic initiatives:
6.1 Expand Data Centre Capacity 6.2 Facilitate Data Flow and Safeguard Data Security 6.3 Leap Forward in ICT Development 6.4 Improve Positioning Infrastructure 6.5 Prepare for the Future of AI
7 Greater Bay Area (GBA)
This year marks the 5th anniversary of the GBA, a region rapidly becoming a global economic powerhouse. Given the huge and growing market, the GBA provides new impetus for Hong Kong's economic development. We urge the Government to continue engaging with Mainland authorities to implement innovative policies that enhance connectivity between Hong Kong and other GBA cities:
7.1 Facilitate the Seamless Flow of Resources 7.2 Promote the Use of e-CNY in Cross-Boundary Payments 7.3 Develop a Robust Application Programming Interface Framework
Build a Sustainable City for All
8 Land and Housing
We appreciate the Government's acceptance of our proposals to eliminate all property cooling measures earlier this year, providing timely support to the housing sector. To sustain a healthy property market, additional endeavors are necessary to ensure an adequate supply of land and housing. We urge the Government to proactively plan for the new development areas (NDAs), and embrace green building practices, which are essential for sustainability efforts:
8.1 Accelerate Infrastructure Development to Facilitate the Construction of NDAs 8.2 Enhance Energy Efficiency in Buildings 8.3 Promote Green Building Standards
9 Healthcare
The COVID-19 pandemic has unveiled weaknesses and opportunities in Hong Kong’s current healthcare system. Moreover, the rapidly aging population is outpacing society's capacity to address the healthcare needs of its elderly citizens. To build a robust healthcare system, we suggest consideration be given to the following policy measures:
9.1 Invest in Innovative Health Technology 9.2 Attract, Facilitate and Support Private Investments in Healthcare Services 9.3 Develop the Traditional Chinese Medicine Industry
10 Livable City
Hong Kong is striving to achieve carbon neutrality by 2050. The city must take action by formulating a concrete plan to transition into a net-zero emissions economy and society. This entails promoting green transport and establishing a comprehensive waste management strategy. Additionally, the social pillar of ESG is crucial for fostering a livable environment that can attract and retain talents. We suggest consideration be given to the following policy measures:
10.1 Adopt Nature-Based Solutions for Enhancing Climate Resilience 10.2 Optimise the Overall Waste Management Landscape 10.3 Enhance the Producer Responsibility Scheme on Plastic Beverage Containers and Beverage Cartons 10.4 Promote Sustainable Lifestyles
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