For Immediate Release
The Hong Kong General Chamber of Commerce (HKGCC) is growing increasingly concerned about Hong Kong’s competitiveness, especially how politicized policies are dividing the community and impacting the economy. In its 2017-18 Policy Address cum Budget Submission, presented to the Government today, the Chamber urged the Administration to refocus on core issues to shore up the economy and foster solidarity within the community.
HKGCC Chairman Stephen Ng pointed out that 73% of respondents to the Chamber’s annual Business Prospects Survey believe Hong Kong's competitiveness had deteriorated in the past 12 months, after a steady climb from 42% in 2011.
“The key challenges facing Hong Kong back in 2011 were economic and external, as the world was still trying to recover from the financial crisis of 2008,” he said. “The key threats facing us today have become political and internal. In other words, problems that we have created by ourselves. We have become too parochial. We need to step back and refocus on crucial issues that impact Hong Kong’s immediate and long-term wellbeing in the face of stern international competition.”
The Chamber’s submission recommends Hong Kong should reinforce the fundamentals of its competitiveness as a free trade, regulatory light touch, and low-tax economy. When policies are being formulated, the Government should conduct a proper Regulatory Impact Assessment. The costs of unnecessary regulations and red tape impose a heavy burden on business, particularly SMEs, which account for over 98% of Hong Kong businesses and include all start-ups.
“The Government needs to adopt a holistic rather than a piecemeal approach to regulation, looking at its overall effect on the market. For example, proposed regulatory intervention in the social field (retirement protection, standard working hours, abolition of MPF offsetting mechanism, and so on) should be looked at as a package in assessing their overall costs and benefits, rather than individually,” Ng said.
The Chamber also urged the Government to take necessary steps to help Hong Kong seize opportunities arising from the Belt and Road initiative by clearing government-to-government hurdles, such as boosting diplomatic relations, signing trade and tax treaties, business and cultural exchanges, etc. It should also establish a platform to promote a comprehensive range of professional services; facilitate capital and investment flows, and promote Renminbi internationalization.
Other new growth opportunities include greater adoption of technology as an accelerator to develop Hong Kong into a more liveable and smart city. To facilitate this, the Chamber recommends introducing a 200% “super tax deduction" for R&D expenditure by businesses, to help innovation and technology sectors achieve critical mass.
As a leading financial hub, Hong Kong is in a unique position to take advantage of Fintech to further leverage the strengths of one of our core industries. The rapid growth of Fintech start-ups in recent years indicates that companies do see opportunities here, but more needs to be done to ensure these start-ups are not hamstrung due to insufficient financial support or over-regulation.
Regarding another pillar industry, tourism, the Chamber recommends promoting Hong Kong to overseas tourists in a more holistic manner, instead of the current emphasis on shopping which is clearly unsustainable.
To ensure we have the talent Hong Kong needs, and to facilitate the development into a knowledge-based society, there should be targeted policies to attract overseas talent in relevant areas and professions. A dedicated governmental agency should be set up to oversee Hong Kong’s future human capital needs, and at the same time, the Government should allow labour importation on a larger scale, and expand it to cover all sectors where shortages are threatening our ability to grow.
“We need to be forward looking and find ways to capitalize on these new growth areas for Hong Kong. We need to broaden our horizons and mindset. The world is changing rapidly and unless we change too, we will be left behind,” said Ng.
Media inquiries: Please contact Mr Ray Lai at 28231297 / [email protected]