Highlights of Chief Executive Policy Address 2019 That You Need to Know
The Chief Executive of China’s Hong Kong Special Administrative Region (HKSAR), Carrie Lam, has delivered her third annual policy address on October 16, 2019, highlighting her administration’s efforts to promote the adoption of innovation and technology and boost economic development and competitiveness.
Role as a Facilitator and Promoter in Economic Development
The Chief Executive reiterated HKSAR’s continuous support for the development of the Four Pillar Industries (i.e. financial services, tourism, trading and logistics, as well as professional and other producer services) while placing high priority on the development of innovation and technology, cultural and creative industries and environmental industries. The Chief Executive said HKSAR will increase land supply, invest in nurturing talent and implement tax concession measures.
Plans to Strengthen HKSAR’s Competitiveness in Mainland Domestic Market
HKSAR will ride the wave of opportunities from the Belt & Road Initiative (BRI) as well as the development of the Guangdong-Hong Kong-Macao Greater Bay Area to create a more favourable business environment in the HKSAR while maintaining a free market economy. The policy address unveiled plans to get relevant Central authorities’ support to help Hong Kong enterprises to enter the mainland domestic market. These include tax concessions for Hong Kong enterprises intending to shift from export to domestic sales and streamlined approval process. This will improve HKSAR’s competitiveness in the huge mainland domestic market.
Policies to Support the Development of Innovation and Technology
HKSAR remains committed to promoting the adoption of innovation and technology. The Chief Executive proposed a broader coverage and scope of new technology areas for the Technology Talent Admission Scheme. Under the new proposal, the scheme will be extended to companies outside the Hong Kong Science and Technology Parks Corporation and Cyberport with more new technology areas covered. At the same time, the Researcher Programme and Postdoctoral Hub and Public Sector Trial Scheme will have broader coverage to all technology companies conducting research and development activities. To further promote social innovation, the administration has earmarked HK$500 million to the Social Innovation and Entrepreneurship Development Fund.
Helping Local Enterprises in Global Expansion
HKSAR is stepping up efforts to help local enterprise to tap on global markets, leveraging on the BRI economies. HKSAR will organize delegations and invite mainland and Hong Kong enterprises to conduct joint promotional activities in the BRI economies. In addition, the administration is working to obtain the Central authorities’ support to extend the incentives currently enjoyed by mainland enterprises to Hong Kong enterprises intending to set up businesses in the mainland’s overseas Economic and Trade Co-operation Zones (ETCZs).
On top of that, funds have been earmarked to help local enterprises expand their global footprint. HK$1 billion will be channelled to the Dedicated Fund on Branding, Upgrading and Domestic Sales (BUD Fund), with the funding ceiling under the BUD Fund’s Mainland Programme and Free Trade Agreement (“FTA”) Programme significantly increased to $2 million per enterprise. With the fund injection of $1 billion into the Export Marketing and Trade and Industrial Organisation Support Fund, this will double the cumulative funding ceiling for each enterprise under the SME Export Marketing Fund to $800,000.
In addition to the funding support, the Chief Executive has proposed the provision of a 90% guarantee under the SME Financing Guarantee Scheme for approved loans. It was proposed that the application period of the special concessionary measures (ie. 80% guarantee provided at a substantially reduced guarantee fee) under the SME Financing Guarantee Scheme, as well as the validity period of the three enhancement measures introduced on 19 November 2018 to be extended to 30 June 2022. At the same time, HKSAR has introduced a relief measure under the SME Financing Guarantee Scheme and the SME Loan Guarantee Scheme. Under the newly proposed measure, enterprises may apply for principal moratorium of up to 6 months, during which enterprises only have to perform interest repayments.
These measures and funding allocation will help local Hong Kong enterprises to expand in the mainland’s domestic market and support market development in economies with which the HKSAR has signed FTAs.