The five main chambers of commerce, who are all here at this business luncheon, have individually issued statements to welcome my Policy Address. But the question – is my 2018 Policy Address a pro-business Policy Address? –should still be answered by the Chief Executive herself. Hopefully, when you leave this Grand Hall, you’ll have no doubt that it is a pro-business Policy Address.
In the last 15 months there have been many initiatives that fall in line with the Government’s mission to facilitate the work of business and to promote, together with the business chambers, Hong Kong success and the Hong Kong story.
I have been on 11 overseas trips since taking office, and on many of these trips I was accompanied by business leaders. So this promotional role of the Government and the business community is actually very aligned.
The Government will do her utmost to help the business sector to seize the many opportunities under the Belt and Road Initiative and the Greater Bay Area, and also to better integrate into the national development. On this front, I hope everyone should feel very encouraged by what President Xi Jinping said about his hopes for Hong Kong and his recognition of the strong contribution made by the business sector.
I also acknowledge that we have a shortage in land and labour, which Aron Harilela mentioned in his introductory remarks. On land, we have launched short- to medium-term measures especially in providing more premises for the business sector, relaunching a very successful policy to revitalise old industrial buildings. Since then, I have received positive feedback from the business sector that this would perhaps provide some immediate relief.
For the longer term, nothing is more important than my vision for Lantau. The Lantau Tomorrow Vision will create for Hong Kong a third CBD. We are planning on the basis of a 4 million-sq-m CBD, and with rail and road it will be very well connected to Hong Kong’s financial district.
On labour, more needs to be done. Come 2019, I, together with the Secretary for Labour and Welfare, will actively engage the business sector with a view to coming up with clear directions for resolving Hong Kong’s labour shortage. In the meantime, we are giving additional support to vocational and professional education and training.
We will be more proactive in conducting government-to-government work. Entering into bilateral and multilateral agreements to provide expanded market access for the business sector is one of our priorities.
Mainland China will continue to be a huge market and a place where we will continue to invest quite heavily. In 2018 I started or restarted bilateral, high-level co-operation platforms with Sichuan Province, Beijing, Shanghai and Fujian Province.
On sector-specific initiatives, the chapter on Diversified Economy has actually attempted to cover more sectors than we did previously. For example, there is a whole section on how we can assist Hong Kong’s film industry. Tourism, innovation and technology, legal services and other areas of the creative industries have also been given due attention.
About promoting employees’ benefits and support, this is a very tricky area. But even in my pro-labour initiatives, I have put in a lot of money. I have allocated $29 billion to implement the evolution of the “offsetting” arrangement in the Mandatory Provident Fund. And I’m picking up the bill – almost every dollar – for the four extra weeks of maternity leave.
Let me end by sharing a few of the positive developments in the past year or so. In the first half of this year, Hong Kong’s economy achieved 4% real growth. Property prices have started to moderate and hopefully rentals for commercial premises will also be moderated in due course. In the first 10 months of this year, our Hong Kong exchange achieved the world’s number one in terms of IPOs, raising a total of HK$250 billion.
We have retained the title of being the world’s freest economy, ranked by the Heritage Foundation and the Fraser Institute. You’ll be pleased to know that we have moved one rank up in the World Bank’s 2019 Doing Business report – we are now the world’s number four in terms of the ease of doing business.
Despite these positive developments, let me assure you that the Government is not complacent. I’m fully aware of the downside risks arising from the U.S.-China trade tension and dispute. Our Secretary for Commerce and Economic Development Edward Yau has met with chambers almost 10 times in the last six months, and we have rolled out various support measures.
We will continue to be very humble and put in a lot of effort to engage the business sector. I want to thank the chambers again for organizing this Joint Business Community Luncheon to talk about my Policy Address, and wish to see you again next year.
Q&A with the Chief Executive
QUESTION: Besides the Re-industrialisation Funding Scheme, will the Government consider drawing up further measures to support our traditional industries?
CHIEF EXECUTIVE: About three months ago, I went to the Tai Po Industrial Estate and opened, for the first time in 50 years, a new textile plant, which uses new technology to upcycle fabrics. We should identify the sectors that have good prospects to go through re-industrialisation by the application of innovation and technology.
But since we are short of land and labour, you have to come up with sectors which will not use a lot of land or labour, but use a lot of technology. Hopefully in the process they will provide more opportunities for young people.
Q: As the Greater Bay Area develops, how much will that initiative be a factor in alleviating the supply and resource constraints in Hong Kong?
CE: The Greater Bay Area certainly will provide opportunities for Hong Kong to address the constraints in taking Hong Kong further. We have to identify win-win solutions for Hong Kong and the Mainland cities.
I have agreed with Guangdong Governor Ma Xingrui that initially we can look at three main areas. One is to facilitate the free flow of people, goods, information and capital. The second area is to develop the GBA as an international innovation and technology centre, and this is where complementarity will come in. Hong Kong will be very good at R&D, and Shenzhen, with its very advanced manufacturing capacity, will be very good at commercialisation of the results of the R&D. The third area is services where Hong Kong has a strategic advantage, such as higher education and medical services. We should help them to be established in the Mainland cities.
Q: How will the Government reassure the community that the Lantau Tomorrow Vision is beneficial for Hong Kong’s long-term development?
CE: I have come to the view that it is simply not possible to get a complete consensus on anything in Hong Kong, because Hong Kong is a free society. The only way to convince the public is to continue to explain.
We have been explaining that we don’t have enough land, and you also have to prepare for the rainy days. With those guiding principles, we conceived Lantau Tomorrow, which we believe will address the aspirations of the people. But it is a very long process and a very complicated project that will last over the next 20 to 30 years.
Q: The labour market in Hong Kong is short of STEM talent. Does the Government have any plans to encourage students in science and technology?
CE: Recently we have signed two co-operation arrangements with the Mainland authorities – one with the Ministry of Science and Technology, the other with the Chinese Academy of Sciences – which both include promoting STEM among students and the younger population.
We are supporting more students to go abroad to participate in STEM competitions, and are upgrading our own Science Museum to promote popular appreciation of STEM.
Q: In terms of the Greater Bay Area, how do you see the way ahead in respect of governmental and inter-governmental policy initiatives?
CE: In order to have a successful Bay Area economy there needs to be high-level co-ordination. The Leading Group on the Greater Bay Area was established in August and is chaired by Vice Premier Mr Han Zheng. The Chief Executives of Hong Kong and Macao will attend the meetings of the Leading Group as full members, and we can also suggest agenda items, write papers and present research ideas.
I think we have all the right ingredients to ensure success in the Greater Bay Area. It is now up to us – the Government, business, individuals and especially the young people – to seize the many opportunities to grow Hong Kong’s economy and to improve people’s livelihood.
Student Insight
Participants in the Chamber’s Business-Schools Partnership Programme who attended the event share their thoughts
I was impressed by the Chief Executive’s answer about STEM education, as I agree that education is the root of everything. I am sure with the Government’s promotion of STEM education, Hong Kong’s technical development will get better and better.
Previously, the opinions I heard about the development of Lantau were negative. However, after the explanation from Mrs Lam, I understand that the land supply shortage is serious, and needs to be improved for the long-term good of Hong Kong.
Before coming to the Luncheon, I thought that business was all about money. However, Mrs Carrie Lam’s speech taught me that business can include a lot, such as cooperation between cities and green technology.
Mrs Carrie Lam’s responses in the Q&A session showed her confidence and passion in improving different aspects of Hong Kong. She was able to give concrete ideas in answer to these questions.