Policy Address Delivers Long-Awaited Proposals to Drive the Economy Forward

For Immediate Release

The Hong Kong General Chamber of Commerce (HKGCC) welcomes the pragmatic and inclusive proposals laid out by the Chief Executive in her maiden Policy Address today, which seeks to boost Hong Kong’s competitiveness, stimulate the business environment and help tackle many of the deep-rooted difficulties affecting the community.

Chamber Chairman Stephen Ng said, “We were very pleased to hear that the Chief Executive will personally lead a high‑level Steering Committee on Innovation and Technology to provide much needed momentum to boost our innovation and technology (I&T) development. As a leading international business and financial hub, we have constantly reminded the Government about how slowly we have been moving in this area,” he said. “With the promise to put necessary resources into eight key I&T areas to help Hong Kong catch up, and the $700 million pledged to immediately advance Hong Kong’s smart city projects, the Chamber looks forward to finally seeing long-overdue progress being made in elevating Hong Kong up the ranks of the world’s truly leading smart cities.”

Hong Kong’s investment in research and development has been wantonly low, with R&D expenditure accounting for just 0.73% of our GDP. The Chief Executive has rightly identified technology and innovation as the new drivers of our future economy, and the Chamber hopes the Government’s initiatives of providing more university funding in R&D, and super R&D tax deductions for companies’ eligible research expenditure will be able to reach the target of doubling the current amount of our GDP to 1.5% within the next five years. It is imperative that incentives for R&D are rolled out quickly and efficiently so that Hong Kong can catch up with our neighbours who are streaking ahead of us.

“The decision to implement the two-tier profits tax system that the Chamber has been lobbying the Government to implement for many years will also provide a significant boost to Hong Kong’s competitiveness. We have been calling on the Government to implement such a tax arrangement as a quick and effective measure to help SMEs, and we are pleased to see the idea being given strong emphasis. The very attractive rate of 8.25% will not only help SMEs survive by reinvesting their hard-earned money back into their business, it will also encourage local and international budding entrepreneurs to launch their start-ups in Hong Kong.”

The Chamber has also been lobbying the Government to address the dire shortage of MICE facilities, so is relieved that the government buildings nearby the HKCEC will be demolished and undergo redevelopment to make way for badly needed convention and exhibition facilities. “Without extra facilities many of the international events that Hong Kong is trying to attract will have no choice but to go elsewhere. We look forward to seeing this initiative advancing quickly,” said Ng.

The emphasis on making more flats available is an important step towards improving social stability and harmony by putting home-ownership within reach of those working hard to build a better life for themselves and their families. However, “Intervening in the property market runs the risk of creating unintentional side effects, as we have seen from previous policies. The Government needs to make sure the scheme is not abused and that it doesn’t distort property prices in Hong Kong,” said Ng.

The Chamber believes the far-reaching proposals laid out by the Chief Executive, encompassing all members of the community, from the grass roots to students, business and senior citizens, as well as drafting a well thought out blueprint for Kong Kong’s future, will reap dividends for the city.

The Chamber supports the multi-pronged approach to ease the looming challenges on public hospitals as our population rapidly ages by stepping up the development of primary healthcare. However, we are disappointed that little was mentioned about where the manpower will come from to turn many of these ideas into reality. "The healthcare, construction, IT, hospitality, design and other sectors have long been struggling from a dire lack of skills and manpower as unemployment has been at its lowest rate in 20 years. On top of this, our workforce will start shrinking next year, so we think now is the time to look seriously at the need to match talent and import labour to address these acute shortages,” said Ng.

Media inquiries: Please contact Ms Lafee Lo at 2823 1250 /