Gov’t prioritises elderly care

Chief Secretary Carrie Lam

Care for the elderly is the key priority of this term of the HKSAR Government. And a new bureau, called the Innovation & Technology Bureau, was set up a couple of months ago to seek wider application of innovation and technology, not only in terms of expanding our economy, but also to improve livelihood, including better living for our elderly in an ageing population.


According to the World Health Organisation, elderly people are the fastest-growing age group worldwide. Hong Kong is, of course, no exception, particularly in the light of our advanced healthcare services and shrinking fertility rates. In fact, our city is facing a rapidly ageing population.


In 2014, Hong Kong’s elderly population, now defined as those aged 65 or above, stood at 1.07 million, representing 15% of our total population. By 2034, that is, in 20 years’ time, the elderly population will double to 2.28 million, accounting for 30% of the population. What is also worth mentioning is the blessing of longevity – according to our latest projections, elderly people aged 75 or above will increase from 7.6 % in 2014 to 15.4% in 2034, and further to 22.6% in 2064.


Tackling challenges

No doubt, an ageing population poses challenges to public services and society at large in a number of aspects, ranging from healthcare and elderly-care services to social welfare and community support, in both hardware and software.


The current-term Government is committed to tackling the acute demographic challenges brought by ageing population. We believe that, with early and proper planning for response strategies, the challenges are not insurmountable. And we may even ride on opportunities out of these challenges.


As early as in November 2012, just four months from the time the current-term Government assumed office, we revamped and expanded the membership of the Steering Committee on Population Policy with a view to ensuring that government deliberations on such an important area of work would have the benefit of professionals and experts in relevant fields.


The Committee then comprised not only relevant government officials, but also non-official members from a wide range of sectors such as academics, human resources management, business, social service, healthcare and education. We have devised a comprehensive strategy along five key directions, among which is active ageing, which refers to the process of optimising opportunities for health, participation and security in order to enhance quality of life as people age.


Age-friendly environment

Elderly people, having contributed substantially to building today’s Hong Kong, are valuable assets of society. We attach great importance to the well-being of the elderly.


In the recently announced 2016 Policy Address, a series of policies and public works projects have been promulgated under the theme of building an age-friendly environment. Specifically, we will enhance barrier-free access facilities at public walkways to provide convenient and sheltered access for the elderly; we will improve cultural, recreational and municipal facilities to meet the actual needs of the elderly, by, for example, providing additional chairs and priority seats in indoor facilities as well as fitness equipment in outdoor leisure venues.


We are also considering providing larger toilet compartments for priority use by the elderly in new public toilets, and will assist the elderly to improve their home environment. By these, we wish to create an age-friendly community for our senior citizens.


Some usual critics of the Government ridicule us for pampering the elderly with trivialities. The reality is care for the elderly has always been a top priority of this term of the HKSAR Government and much has been done prior to the Chief Executive’s latest Policy Address.


The Government provides a spectrum of services for the elderly to cater for their needs. To encourage the elderly to stay active and promote a sense of worthiness among them, thereby enabling them to lead a fulfilling life, we have rolled out various schemes. On their daily and social lives, apart from various elderly centres and care services, we have the well-received $2 public transport fare concession scheme which greatly enhances the mobility and social connectivity of our elderly. The Secretary for Labour & Welfare, Matthew Cheung, and the Secretary for Transport & Housing, Professor Anthony Cheung have worked in concert to roll out this very popular scheme.


We also have the Elderly Academy Scheme, encouraging the elderly to engage in continuous learning. On social security, we offer the non-means-tested Old Age Allowance, the Old Age Living Allowance for the elderly in need of financial support as well as the means-tested Comprehensive Social Security Assistance Scheme (CSSA), respectively benefitting 220,000, 430,000 and 170,000 elderly people at the moment. On healthcare, we have in place programmes, such as the Elderly Health Care Voucher Scheme to take care of the general dental and medical needs of the elderly. We also provide allowance for carers of elderly persons from low-income families.


In fiscal terms, government recurrent expenditure on care for the elderly in all respects has grown from $42 billion in 2012-13 to $61 billion in 2015-16, a hefty 45% growth. There should be no doubt that the Government is fully committed to promoting an active lifestyle among the elderly – keep our senior citizens healthy and energetic.


Digital integration

In Hong Kong, with the establishment of the Innovation & Technology Bureau in November last year, the SAR Government will roll out various initiatives to help the elderly integrate in an increasingly digital world.


The Government has financed the development of the eElderly website providing information about elderly services. The Government also promotes the adoption of barrier-free website design and mobile apps by public and private sectors for the convenience of the elderly.


Funding has been provided for developing mobile apps to offer cognitive training for elderly people suffering from dementia and to help the elderly search for information on activities available. We also implemented the ICT Outreach Programmes for Elderly to allow elderly people to experience the use of information and communications technology (ICT) in enhancing their quality of life.


An ageing population gives momentum to the development of the silver hair market. According to a well-acclaimed research, the silver economy in Asia-Pacific is estimated to hit US$3 trillion by 2017, and Hong Kong tops the ranking of silver hair market potential among Asia-Pacific economies. The silver hair market offers plenty of economic opportunities, for example, in financial services, medical services and insurance, tourism, fitness and grooming, and elderly housing.


The elderly today and those in future generations will be more energetic, as we have seen from the fashion show; educated; technology-literate and independent. By bridging the digital divide and harnessing the power of information technology, we should be able to enhance the social connections and quality of life of our elderly citizens.


For example, the use of the Internet can help them better connect with family and friends and keep abreast of the outside world, while the application of technology will enable them to better manage their personal lives and keep track of their health.


Looking ahead, the development of innovation and technology industry in Hong Kong will play a key role in leveraging the opportunities presented by our ageing population.


Chief Secretary Carrie Lam gave these remarks at the Golden Age Expo & Summit 2016 opening. 

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InnoTech a future economic driver

Chief Executive CY Leung

In 2014-15, profits tax and salaries tax receipts both reached new highs. It says something about the state of the economy. And hence, the Government was able to further fund the various measures to improve the quality of life in Hong Kong. This Government knows the importance of the economy to society. So we always put the economy first, not only in setting out the Policy Address, but also in our daily operation.


This year, more than the past few years, we, the Government and the business sector combined, have all the more reason to watch over the changing economic tide and respond as a team.


The Hong Kong team should be confident. We should take confidence in the International Monetary Fund (IMF)’s observation. Just over one week ago, the IMF released its yearly report on Hong Kong, emphasising that: “While the economy is entering a potentially testing period ahead, the risks are manageable with the strong buffers in place, thanks to deft policy management and ahead-of-the-curve regulatory standards.”


Encouraging words from the IMF. The Government part of the team, including the Hong Kong Monetary Authority, is monitoring the financial markets closely. And after all, we have overcome such challenges before.


The Hong Kong team should know that we operate in the right neighbourhood. The Mainland of China, our ASEAN partners and Asia in general are all doing better than the world average. We enjoy the combined advantages of “one country” and “two systems”. We are the singular super-connector that connects the rest of China and the rest of the world. For the short, medium and long term, CEPA, the Guangdong agreements, the 13th Five-Year Plan, Belt & Road, our closer ties with ASEAN, including the Free Trade Agreements with all the 10 member countries that we look forward to signing this year, will provide new opportunities for Hong Kong businesses and other businesses based in Hong Kong.


That was the background against which I prepared this year’s Policy Address. Many of the policies in this Address will continue to drive the growth of the economy long after the end of this Government’s term of office. It will drive not only the growth, but also the diversification of the economy.


For many years, we bemoaned the fact that we relied too much on low-tech manufacturing. No matter how lucrative this business was, Hong Kong can no longer compete on costs. We have to compete on value and hence on value-addedness.


Hong Kong needs to grow new and sustainable economic sectors. We need them to power up our economy, and to create opportunities for all, especially our young people who cry out for diverse job opportunities and upward mobility.


InnoTech gains traction

Innovation and technology is one such sector. Soon after my election, I tabled before LegCo, courtesy of the then outgoing government, the proposal to create an Innovation & Technology Bureau (ITB). Four years later and four years too late, it is finally up and running. And it is gaining traction.


Whatever this Government is capable of doing, we can never dictate to the media. But lately, the media have been carrying interviews with scientists, innovators, venture capitalists and of course our new Secretary for Innovation & Technology. So science, innovation and technology are getting media interest and public attention, and we are, as a community, getting traction.


The bureau, ITB, will co-ordinate the science and technology efforts of our universities. It is co-ordinating not only research, but also development efforts. It will work with the Science Park, Cyberport, the Productivity Council, the Applied Science & Technology Research Institute and other research and development centres.


In addition to the establishment of the ITB, 2015 should be remembered as the year for science, innovation and technology in Hong Kong.


Last February, Sweden’s Karolinska Institutet, which selects the Nobel Laureate in medicine, agreed to establish a regenerative medicine research centre in Hong Kong. This will be its first overseas centre in its 200-year history. The centre will be located in the Science Park and is expected to open this summer. In November, the Massachusetts Institute of Technology announced that it would set up an Innovation Node in Hong Kong – its first such overseas initiative, leveraging on the capabilities of our neighbours: fast prototyping in Shenzhen and manufacturing in other parts of the Pearl River Delta region.


Then, early last month, I was pleased to take part in the formal establishment of the Academy of Sciences of Hong Kong. The Academy will provide independent advice to the Government. It will also seek co-operation with scientists and entrepreneurs from all over the world. And that can only boost our profile as a centre of scientific excellence.


The 2016 Policy Address builds on this year of progress, and promise, in technology and innovation. We take a holistic view, and we will support and nurture the whole ecosystem of innovation and technology – from ideas to business venture, and from products to profits.


In the Address, I pledged to create a $2 billion Innovation & Technology Venture Fund to invest with private venture-capital funds on a matching basis. The fund will bring much-needed capital to our local innovation and technology start-ups.


Last year, the flow of institutionalised venture-capital investment into Hong Kong reached US$324 million – more than double the institutionalised venture-capital investment flowing into Hong Kong in 2014.


Judging from the response of the industry, there will be more, much more, to come. At the Startmeup event organised by InvestHK, close to 1,000 turned up to listen to Elon Musk, founder of Tesla and SpaceX. Last week, I invited 14 young venture capitalists to Government House to discuss their business. I and your Government know that in the end it is not what the Government wants to see, it is what investors want to invest in.


At last count, the number of incubation and co-working locations funded and operated by the business sector has increased from just a few six years ago to over 40 now. Some 1,600 start-ups are run from these incubation and co-working locations. That’s in addition to incubation programmes at Cyberport and the Hong Kong Science & Technology Parks. 


To build on Cyberport’s ICT concentration, the Cyberport will allocate $200 million for a Cyberport Macro Fund, the money to be invested in ICT start-ups.


Cyberport will also expand its quotas for incubation schemes, adding new clusters in areas such as financial technology and e-commerce.


When the third phase of the Science Park comes on stream, later this year, it will house 240 start-ups in a variety of clusters, including biomedical technology and electronics and green technology. The Science Park corporation will focus on three things: robotics, smart city and healthy ageing.


Infrastructure for communications technology. Hong Kong has topped the world in technology infrastructure over the past the five years, according to the World Competitiveness Yearbook. In the Policy Address, I promised to double over the next three years – to 34,000 – the number of Wi-Fi hotspots offering free Wi-Fi services.


Innovation and technology is not just about the economy and employment. It is also about convenience, safety and efficiency in our daily life. So we have also set aside $500 million for an Innovation & Technology Fund for Better Living to support such projects.


Belt & Road connectivity

This year’s Policy Address also mapped out the prospects in the Belt & Road Initiative.


Our economy relies heavily on our external relations. Belt & Road is about building stronger external ties. As part of our high degree of autonomy, we have the unique advantage of being able to conduct, on our own, external relations with other countries.


Belt & Road is about connectivity, namely unimpeded trade, heightened financial integration, enhanced policy co-ordination and expanded cultural co-operation.


As the world’s Chinese financial centre – and China’s major international financial centre – Hong Kong is a natural hub for the capital that will be needed to fund the Belt & Road’s ambitious infrastructure plans.


As the Belt & Road Initiative gains traction, the Renminbi will become more widely accepted and used. We are the world’s leading offshore Renminbi centre, complete with an established Renminbi payment and settlement system.


Our professional services sector has been growing in and outside Hong Kong. The Government will allocate $200 million to support our professionals in their activities in Belt & Road and other countries.


People-to-people ties along the Belt & Road will be important for business-to-business deals. The Government will step up its promotion of Hong Kong’s tertiary education in Belt & Road countries. We will inject $1 billion into the scholarship fund to offer 100 scholarship places to Belt & Road students. Two days ago, I invited some 60 ASEAN students and their Consuls-General to Government House for tea. In each and every one of them, I saw friendship and future partnership, including future business partnerships.


There will be a Belt & Road steering committee and an office. We shall start with two sheets of paper, one listing the sectors for co-operation and the other the priority countries that we should focus on. Merging the two sheets, we shall have a work plan to get started.


Economic benefits

A growing economy brings more jobs, more profits, higher salaries and wages, and generally a better life for all.


Housing still tops our priorities. This Government will continue to pump new supplies of housing land into the market and the Housing Authority. And we shall continue to curb non-occupational demand.


The long-term supply of land is important. We will set up a Lantau Development Office to take forward the planning and development in Lantau. We are also formulating “Hong Kong: 2030+” strategy to work out a blueprint for our long-term development.


We will continue to enhance our connectivity with the world, and in doing so, facilitate our logistics sector to move up the value chain. The Airport Authority will establish a civil aviation academy. The MTR Corporation will also set up an academy to train personnel in rail management and operation. We will, in Government, form a new Maritime & Port Board to develop high value-added maritime services.


Connectivity also includes government-to-government relations. A new Economic & Trade Office, ETO, will be set up in Indonesia this year and another in Korea as soon as possible. These two will make the number of ETOs, Hong Kong Government ETOs, in foreign countries to 13.


This Government believes in access to quality education. We will provide free and quality kindergarten education for up to 80% of the available places in non-profit-making half-day kindergartens, and improve the teacher-to-pupil ratio to 1:11. This will mean an additional and recurrent annual expenditure of about $2.6 billion. We will also set up an $800 million Gifted Education Fund to nurture exceptionally gifted students.


By way of manpower training, we will earmark the site to develop a VTC campus with state-of-the-art facilities. $100 million has also been earmarked to implement a three-year pilot scheme on manpower training in the insurance sector and asset and wealth management sector.


In healthcare, we will implement our $200 billion 10-year hospital development plan. They will provide some 5,000 additional public hospital beds and over 90 new operating theatres. We have also reserved a site to develop a traditional Chinese medicine hospital, and are establishing a testing centre for traditional Chinese medicine.


The Government wants to support businesses. But there is one that we could do without. We will legislate to ban the import and export of elephant hunting trophies, and to further ban the import and export of ivory and phase out the entire local ivory trade.


We are making progress, but there is no room for complacency, and we should not take economic growth for granted. The world economy is one concern. Within Hong Kong, we are being slowed down. The Government, for example, is ready to launch 72 capital works projects with a total estimated value of $67.5 billion, not including the Express Rail Link. These projects include hospital development projects in Kwai Chung and Tuen Mun, as well as youth hostels. As of today, only one among these 72 projects, with a project value of about $100 million, has been approved by LegCo. Any funding proposal not passed before this summer will have to go to the newly elected LegCo from scratch in the autumn. These projects mean jobs for a wide range of sectors. LegCo members should be made aware of the consequences.


This Government believes in growing a bigger economic pie. The people of Hong Kong are self-reliant. They want to pull themselves up by their bootstraps. Given any reasonable opportunity, and some government incentives, the people want to earn their own keep. They don’t want handouts. That’s why the number of unemployment cases under the CSSA has been falling for more than 70 consecutive months.


Chief Executive CY Leung gave these remarks at the Joint Business Community Luncheon 2016.


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HK helps build partnerships

Chief Secretary Carrie Lam

Australia and Hong Kong have long been good friends, and good business partners, keen to co-operate, whatever the opportunity.


In business, our mutual appreciation of free trade, and the value it brings, is clear and compelling. The Australian Government and, in particular, the Hon Andrew Robb, Minister for Trade & Investment, sealed free-trade agreements with North Asia’s three largest economies: Mainland China, Japan and South Korea.


Our commitment to free trade is very much in evidence in Hong Kong-Australian trade relations. Merchandise trade between us was up nearly 9%, year-on-year, through November 2015. And, in 2014, Hong Kong was Australia’s seventh-largest trading partner in services. The Australian Chamber of Commerce in Hong Kong is the largest Australian business community outside Australia.


Hong Kong is Australia’s sixth largest source of investment, totalling A$77 billion at the end of 2014. Our investment ranges from infrastructure and mining, to telecommunications, banking and agriculture.


Mutual economic benefits

Given that we are both staunch advocates of trade and investment liberalisation, an Australia-Hong Kong free trade agreement, as well as a comprehensive avoidance of double-taxation agreement, would only expand our co-operation right across the board: in trade in goods and services, in investment and in the flow of people. That can only bring about economic benefits for both sides. 


The Chief Executive said in his 2016 Policy Address this month that the Hong Kong SAR Government will play an active role to facilitate the implementation of the Belt & Road Initiative, which includes the 21st Century Maritime Silk Road linking China through the South Sea and South Pacific to the Indian Ocean and Europe. This provides a wealth of opportunities for Australia, especially in the light of your country’s vision to unlock the great potential and opportunities of the north and the ever increasing investment from China in those areas. And Hong Kong, as the super-connector between Mainland China and the rest of the world in a wide range of aspects, can certainly play an important role to strengthen the ties between China and Australia, riding on the opportunities under the Belt & Road Initiative.


People-to-people bond

Our role as super-connector is not only limited to the area of business, and what helps business to flourish is not just government agreements. Our relationship is built on the real friendships at both professional and personal levels over many years. This is why our Chief Executive has mentioned on many occasions that we can play a role in strengthening “people-to-people bond”.


For example, in the area of education, Australia is among the most popular destinations for Hong Kong students. As of last June, nearly 8,200 Hong Kong students were studying in Australia and thanks in part to Australia’s New Colombo Plan, more Australian undergraduate students are studying in Hong Kong universities.


Australian youth are also visiting, and working, in Hong Kong through the Hong Kong-Australia Working Holiday Scheme. Established in 2001, which is the second among all the 10 similar arrangements that we have signed with other countries, it has attracted about 1,600 Australians to Hong Kong and more than 50,000 Hong Kong youths to Australia.


Tourism link

Over the first 11 months of last year, Australia was Hong Kong’s eighth-largest inbound market for visitors. Some 520,000 visitors from Australia came to Hong Kong during this period. This can be attributable to the excellent connection between Hong Kong and Australia, with around 100 flights between Hong Kong and Cairns, Brisbane, Sydney, Melbourne, Adelaide and Perth per week. And from early January this year, Gold Coast has become the seventh city with direct flights from Hong Kong.


The outlook for closer bilateral relations between Hong Kong and Australia is very promising. 


Chief Secretary Carrie Lam gave these remarks at the Australia Day Reception.


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HK: burgeoning startup hub

Financial Secretary John Tsang

Hong Kong enjoys a clear competitive advantage in four areas and they are financial technology, IoT (Internet of Things), health tech, and data analytics and e-commerce.


Hong Kong’s prominence in the global economy has long been underscored by our extensive trading network, world-class professional services, unparalleled connectivity and our money prowess as an international financial centre.


Launching pad

And with these strengths, Hong Kong also is developing fast into one of the world’s most attractive hubs for start-ups, for young and not so young, but definitely energetic, entrepreneurs from every corner of the world with innovative and audacious ideas, and also for a world of investors and capitalists looking to tap the ever-expanding China market as well as the overall Asia markets.


In my Government Budget last year, I decided to introduce a host of initiatives to further improve our start-up ecosystem. These new initiatives, from precious seed funding to affordable office space, and from sound business advice to valuable access to investors and global markets, will help kick-start these new companies to grow and to thrive.


Hong Kong’s start-up scene has experienced phenomenal growth in recent years, with now more than 1,500 start-ups in our city, increased by nearly 50% when compared with 2014. These ventures are led by entrepreneurs, led by investors, corporations, universities as well as Government. All passionate about contributing to our own future.


Promising programmes

Hong Kong now counts no less than 11 private innovation labs, incubators and accelerator programmes, including the renowned Accenture, Nest as well as the fintech innovation lab launched by the Commonwealth Bank of Australia just last week. These projects and programmes complement as well as supplement quite nicely the expanding incubation programmes at government-funded organisations, such as Cyberport and the Hong Kong Science and Technology Parks.


The Cyberport has nurtured more than 160 start-ups over the past decade, with a smart focus on information and communication technology (ICT). Its Cyberport Creative Micro Fund helps budding “Elons” develop prototype products, bringing their innovative ideas to life. We have also recently announced the setting up of a Cyberport Macro Fund for investment in ICT start-ups.


Hong Kong Science Park, on the other hand, is home to a great diversity of companies, from multinationals and SMEs to start-ups working in its various incubation programmes. When the Park’s Phase 3 is completed, later on this year, it will count some 240 start-ups in clusters ranging from electronics and green technology to biomedical technology and information and communications technology. Science Park start-ups are focused primarily on robotics, smart cities, IoT and healthy ageing – all areas of significant interest to Hong Kong.


Gov’t funding support

Money is the essential nutrient to start-ups. And the Government is doing everything it can to support a strong and prosperous growth of the start-ups.


We are setting up a new Innovation & Technology Fund for Better Living to finance projects that make good use of innovation and technology to improve daily life. 


And there is also the new Innovation & Technology Venture Fund. The money will be used to invest in local innovation and technology start-ups – on a matching basis with private-venture capital funds.


Government aside, the angel investment scene is also gathering steam. The flow of institutionalised venture capital investment into Hong Kong is indeed encouraging. Last year, we took in US$324 million, according to the Hong Kong Venture Capital Association. That’s more than double the US$139 million in institutionalised venture capital investment that was found in Hong Kong in 2014.


As we continue to attract innovative and scalable start-ups to Hong Kong, I am confident that more established investment firms will also turn to Hong Kong.


Financial Secretary John Tsang gave these remarks at the StartmeupHK Venture Forum 2016.

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Braving risk makes a difference

Financial Secretary John Tsang

A simple, three-letter word, “mad” has no shortage of emotionally charged meanings. For us here, however, mad means you – the extraordinary Make a Difference Institute and everyone associated with it. In my mind, it also conjures up the American Beat culture of the 1950s, which celebrates self-exploration as well as non-conformity to the accepted rules and standards.


In his influential novel “On the Road”, published in 1957, Jack Kerouac, an icon of the Beat generation, wrote about mad life. He said, “…the only people for me are the mad ones, the ones who are mad to live, mad to talk, mad to be saved, desirous of everything at the same time, the ones who never yawn or say a commonplace thing, but burn, burn, burn …”.


Of course, the environment and social backdrop of Kerouac’s era are totally different to the world that we are in today, but you get the message I think. I know that every one of you here – from Hong Kong and also from other parts of the world – is no less mad to live and no less mad to dream, and, clearly, no less mad to make a difference.


And I am confident that you are. And that you will continue to do so. Wherever you come from, wherever you’re heading in on your life’s road.


For that, my thanks to Ada and the Make a Difference Institute team. For this annual forum, as for your year-round programmes and projects, on both a local and regional level. You are change makers, all of you. Creative change makers. And Hong Kong is certainly much the better for it.


MaD’s goal is to challenge young people – people like yourselves – to provoke fresh ways of thinking. Encouraging you to find your own creative way.


Hong Kong is working to do much the same. To make a difference, to ensure that our success in the global economy is sustainable. While Hong Kong’s strengths traditionally lie in the areas of trade, finance, investment and so forth, we are increasingly focusing on innovation and technology, together with the creative industries.


Hong Kong’s cultural and creative industries now employ more than 200,000 people and are accounting for more than 5% of our GDP.


In my Budget last year, I decided to inject an additional $400 million into our CreatSmart Initiative, a programme that helps develop the creative industries here, while promoting start-ups and nurturing talents.


Additional resources were also allocated to support the development of Hong Kong’s fashion design, Hong Kong’s filmmaking industries as well as art and culture industries, to help nurture tomorrow’s stars and to help expand our markets as well.


The spirit to brave risks and innovate in pursuit of excellence have always been the core elements of Hong Kong’s success. Our readiness to embrace new ideas and explore the unknown has powered our ventures into so many new markets and so many new frontiers before.


We shall continue to strive to build a platform for our young people to fulfil their creative aspirations and fascinating ideas, and to bring along many more diversified career opportunities for our young people – for you.


In that, the MaD Institute comes readily to mind. MaD is one of the best examples illustrating how we foster public-private partnerships to bring creative promises to our society as well as to our economy. It’s why, through CreateHK, we have sponsored this MaD forum over the years. It’s why we shall continue to look to you, to MaD, to make a difference.


Financial Secretary John Tsang made these remarks at the opening of MaD (Make a Difference) 2016 on January 22.

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HK ideal fund destination

Financial Secretary John Tsang

As a small but highly externally-oriented market, Hong Kong has always been sensitive to external turbulences. But while the global financial markets struggled in the past two weeks, the markets here in Hong Kong have been able to trade and to operate in an orderly and smooth manner.


This demonstration of stability and grace once again revealed the resilience and robustness of Hong Kong’s system that we have so painstakingly built over the years, with lessons learnt and experience gained from previous crises and giant storms that we have been able to weather.


The latest IMF Article IV Consultation Staff Report has summarised succinctly our strength in its published conclusion that: “the Hong Kong Government’s prudent fiscal management and robust regulatory regime for the financial system, together with the Linked Exchange Rate System between the Hong Kong dollar and US dollar, would provide Hong Kong with strong buffers to deal with near-term challenges, while laying the foundations for steady growth and healthy job creation in the medium term”.


Expanding services

As we continue to consolidate Hong Kong’s competitive advantages and maintain the strength in our systems, we are striving to expand the depth, as well as the scope of our financial services and offer more investment opportunities for those involved in asset and wealth management worldwide.


We are aiming to create even greater demand for asset management, investment and advisory services here in Hong Kong, which I believe would in turn drive up the demand for business consulting, tax, accounting, legal and other professional services as well. The entire business community would stand to benefit from this expansion exercise.


Which is why, offshore private-equity funds in eligible offshore private companies have been exempt from Hong Kong profits tax since last July. Both Hong Kong and special-purpose vehicles incorporated offshore are also exempt from tax for profits derived from certain transactions.


With this clear tax exemption, private-equity managers can now simplify their operations and expand their asset-management activities here in Hong Kong. With that, we hope more private-equity managers will be attracted to set up or enhance their business here, using Hong Kong as the location to hold investments in the Mainland and elsewhere.


This tax initiative is just one of the many measures that we have developed to consolidate Hong Kong’s strength as a full-service asset-management hub.


Asset management hub

We need to provide the right tools in order to help enhance the ability of our fund managers to tap the huge savings pool in the Mainland, if we are to strengthen Hong Kong’s status as a premier international asset-management centre. We are making that a priority of ours.


The mutual recognition of funds arrangement between the Mainland and Hong Kong became operational last July. It allows qualified funds in the Mainland and Hong Kong to be offered directly to the public in each other’s markets. The first batch of southbound funds is already available to Hong Kong investors, and we expect more funds will be launched soon in these markets.


The arrangement will help broaden the investment channels in Hong Kong. And certainly, the Mainland’s diverse pool of public funds will have strong appeal to investors from Hong Kong and around the world. Many asset managers are already strengthening their Hong Kong operations, establishing distribution networks and getting familiar with Mainland market conditions.


The arrangement will also help promote the internationalisation of the Renminbi, reinforcing Hong Kong’s position as the pre-eminent offshore centre. And the additional pool of Renminbi-denominated investment products in Hong Kong will extend our product offerings as well.


We are also taking forward a legislative proposal allowing investment funds to take the form of an open-ended fund company in addition to the unit trust format that we have now. We believe that the added flexibility will attract even more funds to domicile in Hong Kong.


These, and other measures, are part of our ongoing efforts to expand business opportunities for the asset management and venture capital industry in Hong Kong. And our efforts are indeed bearing fruit. Between 2010 and the end of 2014, the combined fund-management business in Hong Kong expanded by about 75%, from some $10 trillion to a record high of $17.7 trillion.


A thriving asset-management industry is also good news for private-equity funds. At the end of September 2015, total capital under management of private-equity funds in Hong Kong reached US$117 billion. This represents about 20% of total capital under management by private equity funds managed in Asia.


IPO destination

Hong Kong is home to some 410 private-equity firms. Among the top 50 global private equity firms, 21 maintain a presence here in Hong Kong as of 2014. In short, Hong Kong remains Asia’s most important centre for private equity.


The Stock Exchange of Hong Kong is an attractive IPO destination for private equity-backed companies. The amount of capital raised for new investment by Hong Kong-based private equity firms over the past three years is equivalent to two-thirds of the capital raised by IPOs on the Hong Kong Exchange over the same period. 


The Shanghai-Hong Kong Stock Connect, in place now for some 14 months, has certainly reinforced Hong Kong’s attractiveness as an IPO exit for private equity managers. Under the Stock Connect arrangement, Mainland investors can trade their shares directly on the Stock Exchange here in Hong Kong, and vice versa.


Financial Secretary John Tsang gave these remarks at the Asia Private Equity Forum 2016.

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HK ideal business base

Financial Secretary John Tsang

This year, more than 2,600 government officials, investors, academics, top management of multinational corporations, as well as 500 journalists from all corners of the world are attending the Asian Financial Forum.


The Asian Financial Forum is, at the moment, the galaxy of stars in the financial and business world.


Talking about the galaxy, I hope that you have all enjoyed the latest episode of Star Wars as much as I did.


Obviously, The Economist did that as well, and that weighty newspaper pronounced the Star Wars galaxy is, and I quote, “both technologically advanced and economically stagnant.”


And doesn’t it sound a lot like the present world – Earth, circa January 2016?


In its smartly penned essay, titled “Wookienomics,” The Economist celebrated “the value of freer trade” as one of the lessons that it picked up from watching the first six episodes of the starry saga.


You can learn that valuable lesson in real life, right here in Hong Kong – and you don’t exactly need 13 hours of stargazing to understand the whole story and how things work.


Hong Kong has been named by the Heritage Foundation, the Fraser Institute, and many other renowned international organisations as the freest economy in the world.


Our transparent and fair market, our extensive trading network, robust legal system as well as the low and simple tax regime make us the ideal base for businesses wishing to tap the ever-expanding Asian market. It’s no surprise Hong Kong is now home to nearly 8,000 overseas and Mainland firms.


Hong Kong’s unique role as the regional trading hub connecting Asia with the rest of the world is at the heart of what we bring to the world economy.


So, too, are our world-class financial services. You can find those, nicely summarised, on the wall here in the Hong Kong booth.


Let me just say that we topped the world last year in IPOs, and we’re the world’s leading offshore renminbi hub. And when it comes to asset management, Hong Kong is also the biggest centre in Asia.


And there’s much more on Hong Kong’s financial horizon, including corporate treasury services. More and more companies, engaging in cross-border commerce, set up their corporate treasury centres right here in Hong Kong. We call them CTCs.


Hong Kong gives corporate treasurers what they need. We have superb financial, banking and professional services, as well as deep capital markets for liquidity and portfolio management.


And in my Budget last year, among other things, I decided to introduce more incentives for qualifying CTCs, based here in Hong Kong, in the form of interest deduction and concessionary profits tax rate. It’s all part of our CTC welcome mat.


It’s designed to help all the multinational enterprises doing business in the region. Our goal is to make them more efficient – primed to flourish in business here in Asia and around the world.


That has to be good for freer trade, for the economic future of Planet Earth and tomorrow’s galactic economy, in which I am sure Hong Kong is set to play a pioneering role in our very own Millennium Falcon that is set to take off.


Financial Secretary John Tsang gave these remarks at the Asian Financial Forum 2016 cocktail reception.

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Capture Belt-Road wealth

Chief Executive CY Leung

It is generally expected that global economic growth in 2016 will remain modest, uneven at best. This is, apparently, the “new norm” in our post-global financial crisis world.


So the challenges remain considerable. Recovery among the major advanced economies is still generally sluggish. The US Federal Reserve took the first step to normalise interest rates in December. But uncertainties regarding the pace of normalisation continue to blunt the global economy.


Meanwhile, the European Central Bank has further eased monetary policy, accentuating the divergence among major central banks. Elevated geopolitical tensions continue to trouble the global economy. And the jittery stock, currency and commodity markets so far in 2016 only add to the uncertainties.


Hong Kong, one of the great trading economies, is hardly immune.


Nonetheless, we have been able to weather external shocks in a variety of sizes and guises, reaffirming Hong Kong’s longstanding strengths: our relentless spirit of entrepreneurship and endlessly adaptable workforce. These have helped us attain moderate economic growth with full employment over the past few years.


In short, you can count on Hong Kong. As an international financial centre, a regional business hub, and the super-connector to the Mainland of China, we have much to offer.


And we are not alone. Asia is expected to remain a critical player in creating global economic growth. That’s thanks to the sound fundamentals and resilient domestic buffers that buttress many Asian economies.


The Mainland of China, of course, is central to this paradigm. Indeed, its GDP has quadrupled over the last decade, hitting US$10 trillion in 2014. Its economy is the world’s second largest, and the biggest trader in goods.


China’s initiatives provide ample opportunities for all of us. Its Silk Road Economic Belt and 21st Century Maritime Silk Road initiative covers more than 60 economies spanning Asia, Africa, the Middle East and Europe.


The Belt & Road’s goals are strikingly ambitious, with the promise of greater policy co-ordination, strengthened infrastructure connectivity, unimpeded trade and investment, deepening financial integration and building people-to-people bond along the Belt & Road’s twin corridors.


Central to the plan is infrastructural growth – a massive expansion of transport and logistical networks across the Belt & Road economies. This physical connectivity will boost economic development throughout Eurasia, strengthening co-operation at all levels, enhancing the competitiveness of the entire region.


Development on this scale demands equally outsized financial resources – and from both the public and private sectors. The Asian Infrastructure Investment Bank, AIIB, which officially opened for business just two days ago on January the 16th, as well as the Silk Road Fund, will help satisfy those needs. Among the founding members of the AIIB, 60% are Asian countries and 14 are G20 members. All members of the BRICS economies are also among the founding members. The Bank is expected to foster sustainable economic development, create wealth and improve infrastructure connectivity in Asia by investing in infrastructure and other productive sectors.


Hong Kong will be part of the strategy. We have the experience, the expertise and the connections to serve as the Belt & Road’s fundraising and financial-management hub. Our financial offerings range from public offerings and loan syndication to private equity funds and the raising of capital through Islamic finance. You are also most welcome to join us, to make the best use of the platform provided by Hong Kong to finance Belt & Road projects.


The Mainland of China’s resolve to reach out is hardly limited to the Belt & Road.


Indeed, in the November communique on its 13th Five-Year Plan, which will run from 2016 to 2020, China highlighted “opening wider to the world” as one of its five key development directions.


Given that China is this year’s G20 Chair, it’s opportune time to take the lead. So it is no surprise that “inclusive and interconnected development” has been put forward as one of the key agenda items in the 2016 G20 Summit.


I wholeheartedly agree with the G20’s vision – that helping emerging countries achieve economic development is both a moral responsibility and an effective way of ensuring global economic and social progress.


Hong Kong, a steadfast supporter of economic and financial co-operation, is well equipped to contribute to this growth model.


We have long enjoyed extensive government-to-government, business-to-business and people-to-people ties. Under the “one country, two systems” arrangement, Hong Kong participates in major international trade networks. And, in this, we are enabled by 21st century communications and logistics infrastructure and a well-earned reputation as the world’s freest economy. We are also known as a welcoming and open society. We welcome competition as much as we welcome co-operation. The Hong Kong Government does not compete with business, local or foreign. We are here only to facilitate.


Hong Kong can help satisfy rising demands for infrastructure investment, as well as the expected increase in the flow of trade, funds and people. We can offer world-class and international legal, accounting and professional services. We can provide infrastructural project management, environmental and risk assessment consultancy. We can deliver transport and tourism-related services as well.


And let’s not forget why there is an Asian Financial Forum. Why we’re here today. I’m talking about Hong Kong’s crown jewel: financial services, which account for about one-sixth of our GDP. We see more potential going forward, hence the setting up of the Financial Services Development Council soon after I took office, and the emphasis there is on “development”.


Our highly efficient capital markets and related infrastructure are adept at managing global investment, as well as large-scale infrastructure project financing.


And Hong Kong has the expertise and experience to accommodate the demand for wealth and risk management, as well as corporate treasury services, from investors, enterprises and financial institutions around the world.


Consider, too, that the renminbi will be more widely accepted by international markets, particularly as Belt & Road projects get going. Hong Kong’s role as the world’s major offshore renminbi hub began in 2004. Since then, we have contributed to the increased use of renminbi in trade settlement, financing and investment worldwide.


Hong Kong is now the world’s largest offshore renminbi business centre. Indeed, banks in Hong Kong handle some 70% – seven-zero per cent – of global renminbi payment. In the first 11 months of 2015, renminbi trade settlement managed by banks here totalled RMB6,166 billion – up 10%, year-on-year.


Renminbi’s importance in the global economy will only continue to increase, given the International Monetary Fund’s decision, in December, to add the renminbi to its Special Drawing Rights basket. Hong Kong will no doubt have a lion share of the expanding renminbi business.


Whatever the currency, money likes Hong Kong, and the feeling is mutual. So rest assured that we will continue to strengthen our financial market infrastructure, boost our talent pool and diversify our renminbi products. We will, as announced in my Policy Address, strive to capture the wealth of the Belt & Road and meet the demand for risk management services, professional insurance and reinsurance services, and corporate treasury.


I am convinced that Asia is indeed ready to shape the new paradigm for global growth. This conviction is rooted in the region’s tradition of open trade and close collaboration, and the economic success it has enjoyed over the decades.


I am equally certain that Hong Kong will play a substantial role in helping Asia realise its promise, while enabling a world of business to take advantage of the golden opportunities this presents.


Chief Executive CY Leung gave these remarks at the Opening Session of the Asian Financial Forum 2016.

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Everyone equal under the law

Chief Justice Geoffrey Ma

This occasion enables us to reflect on the law’s impact on the community, and on the roles of the Judiciary and the legal profession within it. If society puts any value on the concept of the rule of law as a cornerstone or pillar in our community, it is important to understand Hong Kong’s legal system and how justice – for, conceptually, this is after all the purpose of law – is administered. 


Hong Kong’s legal system is based on the common law and on that system’s characteristics of fairness, transparency and access to justice. The key players include of course those who are most intimately connected with the law’s operation, the courts and the legal profession, but of considerable importance is also the understanding and acceptance by everyone, especially those with influence or power (chief among whom is of course the Government and all those within it), of the purpose of the law. The law is there to facilitate the well-being of our society, and not to be seen as somehow obstructing it.


Legal principles

One may perhaps start with certain fundamentals. Laws of course regulate the activities and the often complex interactions between persons or institutions. The object is to enable members of society to lead dignified lives, to enable them and their families to realise ambitions as best as possible, and to achieve mutual respect between all those within the community. To realise these objects, it is necessary to have in place an infrastructure to ensure that these objects can be fulfilled. 


The infrastructure of the law begins with the important requirement that all laws must conform to certain minimum requirements; these are the constitutional norms and requirements. All laws in Hong Kong must conform to the Basic Law. As we all know, the Basic Law sets out fundamental rights and liberties which are constitutionally protected. 


Chapter III of the Basic Law sets out the vast majority of such rights and liberties: 

(1) Equality before the law: Article 25.

(2) Rights of permanent residents: Article 24. Included here are the freedom of movement and the right to enter and leave Hong Kong: Article 31.

(3) Freedom of speech, of the press and publication, freedom of association, of procession and of demonstration: Article 27.

(4) Freedom from arbitrary or unlawful arrest, detention or imprisonment: Article 28.

(5) Freedom of conscience and religious belief: Article 32.

(6) Freedom of choice of occupation: Article 33.

(7) Freedom of marriage: Article 37.


The Basic Law also contains two provisions that help define Hong Kong’s system of law:

(1) First, that the laws in force in Hong Kong shall be, apart from specific provisions of the Basic Law, the common law and rules of equity previously in place: Article 8. This makes Hong Kong, as everybody recognises, a common law jurisdiction.


(2) Secondly, Article 39 of the Basic Law provides that the International Covenant on Civil and Political Rights as applied to Hong Kong shall remain in force and be implemented through Hong Kong’s laws. The ICCPR is implemented in Hong Kong by the Hong Kong Bill of Rights Ordinance Cap. 383. The reference to this international convention in the Basic Law should be noted. Many of the rights I have referred to earlier are to be found in the ICCPR as well. The reference to the ICCPR suggests that in examining the content and substance of the rights contained in the Convention, one must have regard to recognised international jurisprudence.


Equality under the law

The concept of equality is key to an understanding of Hong Kong’s system of law. I have said (as many have said before me) that the law applies equally to every person. No one person or institution is above the law and the application of the law. Thus, the Government and all within it are subject to the law in precisely the same way as everybody else. No special group, institution or person is above the law and the equal application of the law. Equality is a fundamental component of the rule of law itself. A proper acceptance of this means a proper respect for the rule of law.


This brings me to the role of the courts in our community. The courts only become active when legal disputes require adjudication. This may be in a criminal context when the guilt of a person has to be determined. It may be in a civil context when civil rights, commonly about money or property, have to be resolved. It may be in a public context which engages not only the rights of the parties actually before the court, but perhaps more importantly, the public interest as a whole. I shall say more later about public law cases and judicial review.


The constitutional role of the courts is clear from the Basic Law: Hong Kong courts have “judicial power” and the courts are to act independently. The independence of the Judiciary is enshrined in the Basic Law in three articles. Much has been said about the independence of the Judiciary but it always bears repetition to say that an independent Judiciary is pivotal to the existence of the rule of law.


Exercising judicial power

I move onto that part of the infrastructure that represents the practice of the courts. This is the day to day activity of the courts: what judges do in dispensing justice, how we do it and how litigants access justice.


The determination of legal disputes by the courts is what is meant by the exercise of “judicial power” stipulated in the Basic Law. This is a constitutional responsibility. I emphasise the term “legal disputes” because the business of the courts is to determine disputes in accordance with the law. The types of dispute coming to the courts for determination arise from a variety of circumstances and the motives behind the cases brought in our courts also vary a great deal. Be that as it may, as far as the courts are concerned, it is only the legal outcome of the dispute that is relevant. As has been pointed out on numerous occasions, courts only deal with the legal questions that arise for consideration. This is after all the concept of justice itself: the adherence to the law, legal principle and the spirit of the law.


In the handling of legal disputes, judges must give fair consideration to the viewpoints of all parties. Fairness – one of the principal characteristics of the system of law in operation in Hong Kong I have earlier identified – requires that everybody who comes to court will have their arguments fully and properly considered. It is sometimes said that all litigants should have “their day in court”, but it is more accurate to say that each party has a right to be heard. This is the essence of a fair hearing. 


The disputes before the courts are often complex, requiring different viewpoints to be carefully analysed before a just outcome can be reached. Sometimes, hearings can be lengthy and this is reflected in the judgments of the court, but the reason for this is almost always indicative of the complex nature of the dispute and, more important, the need to deal carefully and fairly with the arguments before the court. This is an indication to the public that the court has come to a properly considered view and has acted fairly. A losing party is entitled to know the reasons for an adverse decision. The public is entitled to be assured that a fair hearing is always guaranteed by the courts.


Openness and transparency

It is important that the work of the courts and the way cases are handled by judges is open for all to see. Openness is an objective indicator to test the effectiveness and fairness of our legal system; if you like, it is a measure of the rule of law operating in practice.


Transparency in the judicial process becomes critical in our legal system, and this takes the form of almost all court proceedings being open to the public or in the publication of almost all of the written judgments of the courts. I say “almost all” to exclude those few cases where the subject matter is of such sensitivity that it would not be in the public interest to make them public. I should also perhaps at this point say something about bilingualism and the judgments of the courts. Chinese and English are the official languages in Hong Kong so one will find judgments written in both languages. Where there are judgments of jurisprudential value, these judgments will be translated into Chinese or English, as the case may be, in order to enhance the transparency of the court system.


Transparency in the activity of the courts accordingly provides a useful objective tool to measure the effectiveness of the legal infrastructure I have described. But there must also be access to justice – the last of the three characteristics of our legal system. The existence of user-friendly and effective court procedures contributes to this and was one of the main reasons for the Civil Justice Reform, which came into operation nearly seven years ago. Though there is still room for improvement, I believe that our courts and judges have risen well to the challenges, and this again can be measured objectively. Objectivity is important. Many people have different points of view – and they are entitled to them – but in the final analysis, the only way properly to assess these views, positive or negative, is to do so objectively.


Access to justice can also be measured by reference to the existence of legal aid in Hong Kong. Legal aid has over the years provided the necessary access to justice for many litigants. These have included people who have suffered serious injuries, their families, those persons who have had matrimonial problems and other people who have needed the protection of the law but who did not have the private means to engage legal representation. Certainly, in the important area of public law, legal aid has played its part in ensuring that Hong Kong’s public law and constitutional law have properly developed, thus helping us to reach a greater understanding of our system of law. It is to public law cases and judicial review I now turn.


For the public, it is in this type of case where the three important characteristics of fairness, transparency and access to justice can best be seen and tested. Public law cases, very often with constitutional principles at stake, involve by definition the public interest. Thus, since 1997, Hong Kong courts have had to deal with constitutional and public law issues involving, for example:


(1) The right of abode in Hong Kong of children born to Hong Kong permanent residents;

(2) The freedom of speech, of procession and of demonstration;

(3) Environmental issues;

(4) Marriage;

(5) Social welfare;

(6) Elections.


Public law cases on the whole involve the very rights and liberties that are protected by the Basic Law and which, as a community, we hold dear. These rights and liberties are enjoyed by every member of the community. They reflect fundamental societal values. A greater awareness of rights and liberties means that in the public sphere, proper responsibility and accountability for decisions affecting every aspect of life and activity in Hong Kong are now expected by the community. 


Proper responsibility and accountability in the public sphere is called good governance, and good governance is another term for an adherence to the requirements of the law and to its spirit. In other words, it embodies the concept of the rule of law. This is the essence of that type of case known as judicial review and, most often, this type of case involves the Government or a department within the Government, although it can also involve other public bodies. In judicial reviews, the public interest is always engaged and the effects of a decision of the court in this type of case will almost always affect sections of the public beyond the immediate parties in court. Sometimes, the whole community is directly affected. A decision of the court in public law litigation will often serve as a guide to good governance, whether looking at events in the past or perhaps more important, the future. Although there may occasionally be inconveniences, judicial review overall serves the public interest and facilitates the well-being of our society. This status should properly be recognised. 


Judicial review cases 

It is precisely because of the public interest being engaged in this way that in dealing with judicial review cases, the court will be anxious to ensure that all proper legal arguments are permitted to be ventilated before a decision is made. Owing to the fact that in public law case, reliance is often placed on various rights and liberties that operate in different directions, the court is faced with difficult and complex arguments. As in any other type of case, a judge must fairly hear all proper points of view. I have earlier referred to the aspect of fairness as being a characteristic of justice in the courts. Judicial review cases are certainly to be treated in no different a way. It cannot be otherwise when the public interest is engaged.


It is inevitable given the nature of the type of case that is involved in a judicial review that political, economic and social factors form a part of the background to such cases. However, as both my predecessor Chief Justice Andrew Li and I have said on numerous occasions, the court is only involved in the legal questions which arise. It is usually simply irrelevant to inquire into the motives, political or otherwise, of the parties before the court: what matters are the legal merits. To be preoccupied with the motives of the parties before the court will not be helpful in reaching a proper legal outcome. I reiterate this point: that judicial reviews are all about legality and not the merits or demerits of a political, economic or social argument.


It is for this reason that in judicial review cases, the court is required to be particularly astute in ensuring that only proper cases ought to be considered. Unlike most other types of originating process, the permission of the court is required before any application for judicial review can be instituted. The requisite standard – one that was laid down by the Court of Final Appeal in 2007 – is a high one because potential applicants are required to show their arguments to be reasonably arguable with a realistic prospect of success. 


The Court of Final Appeal reasoned as follows: the purpose of the requirement of leave “is to prevent public authorities from being unduly vexed with unarguable challenges. Whilst in a society governed by the rule of law, it is of fundamental importance for citizens to have access to the courts to challenge decisions made by public authorities on judicial review, the public interest in good public administration requires that public authorities should not have to face uncertainty as to the validity of their decisions as a result of unarguable claims. Nor should third parties affected by their decisions face such uncertainty.”


Where this test is satisfied, a court will proceed to consider the arguments in the same way as any other case to arrive at a result that is in accordance with the law. The infrastructure of the law is there to ensure such a result. And it is open for all to see and ultimately to judge for themselves.


Quality Judiciary

The importance of the law in Hong Kong makes it imperative that the quality of our Judiciary should be of the highest possible standard. Recent judicial appointments have reflected this. There is, however, a continuing need to be aware of practicalities as well. For this reason, following a detailed internal review, the Judiciary has recently written to the Government with proposals to improve the Conditions of Service of judges. There is also the ongoing review of the statutory retirement age for judges, as to which progress has been made. These matters are of considerable importance to the community to ensure and encourage recruitment of the best lawyers to the Judiciary. The maintenance and improvement of the calibre of the Judiciary is key to the judicial functions I have earlier described.


The Government has over the years fully supported the needs of the Judiciary, and we acknowledge and are grateful for this support. The Judiciary has for some time also been discussing with the Government its mid- and long-term accommodation requirements, and the Government has also shown much support here. As you are aware, in September the Court of Final Appeal moved into new premises at the old Supreme Court located on Jackson Road. This was a significant milestone in the history of the Judiciary and the tangible representation of the rule of law is for everyone to see.


This coming year will see the completion of the West Kowloon Law Courts Building in Sham Shui Po. This court building will house Magistrates’ Courts, the Small Claims Tribunal, the Coroner’s Court and the Obscene Articles Tribunal, providing much needed space for the effective operation of these courts. The architecture of the building is in keeping with the dignified stature of a court building.


I have attempted today to give a brief overview of the way justice is administered in Hong Kong. No doubt improvements can be and will be made but I believe that structure to be sound. I welcome the public’s greater awareness of our legal system, for therein lies the key to its continuing utility and acceptance.


Chief Justice Geoffrey Ma gave these remarks at the Ceremonial Opening of the Legal Year 2016.

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Human rights protected

Secretary for Justice Rimsky Yuen

The past year witnessed the 25th anniversary of the promulgation of the Basic Law, the constitutional document of the Hong Kong Special Administrative Region. Next year, we are going to celebrate the 20th birthday of the Hong Kong SAR. The window between these two important dates provides an opportune time to reflect on the implementation of the “one country, two systems” policy, and to explore what the Hong Kong SAR can further achieve in the years to come.


As the Secretary for Justice, one of the aspects under the “one country, two systems” policy that I attach the greatest importance is naturally the rule of law.


So, what is the rule of law situation in the Hong Kong SAR since 1997? Apart from self-assessment, one other option is to see how we are perceived by others. In this regard, the World Bank commissioned the Worldwide Governance Indicators project, which assessed the governance indicators of over 200 countries and territories over the period from 1996 to 2014. One of the governance indicators is the rule of law indicator. From the figures which we can obtain, the aggregate indicator in respect of the rule of law in the Hong Kong SAR in 1998 is 80.4 (out of 100). Since 2003, the aggregate indicator achieved by the Hong Kong SAR has been consistently above 90, and achieved the indicator of 93.8 in the year 2014. This, in my view, provides an illustration as to how the international community perceives the rule of law situation in the Hong Kong SAR.


Judicial independence

What about judicial independence, which is one of the most crucial aspects of the rule of law? Gladly, the state of judicial independence in the Hong Kong SAR has also received international recognition. In the latest Global Competitiveness Report 2015-2016 published by the World Economic Forum on September 30, 2015, the Hong Kong SAR is ranked fourth in terms of judicial independence out of 140 jurisdictions around the world.


One unique arrangement put in place by the Basic Law is that we may invite judges from other common law jurisdictions to sit in our Court of Final Appeal. Since it was established in 1997, we have been having eminent judges from other common law jurisdictions sitting in our Court of Final Appeal and deciding cases involving matters of great public importance. This arrangement facilitates cross-fertilisation between the Hong Kong SAR and other common law jurisdictions, which is conducive to the healthy development of our legal system based on the common law. From the structural point of view and also from the perspective of the international community, the presence of leading judges from other common law jurisdictions is a strong testimony of the independence of our Judiciary.


Whilst past efforts have produced positive results, the road ahead is not without challenges. As has often been said, the upholding of the rule of law requires eternal vigilance and the joint efforts of the Government, the legal profession, the Judiciary and indeed all of us in the community.


Certain incidents in the past year have provided causes for concerns. As the Hong Kong SAR is a pluralistic and cosmopolitan city, it is not surprising that different people may have divergent views on political, social or economic issues. Against this background, it is all the more important to ensure that the freedom of speech as well as the freedom of assembly, of procession and of demonstration as guaranteed under our Basic Law and our Bill of Rights are properly guarded. However, it is of equal importance that every person who seeks to exercise such rights should do so peacefully and within the limit permitted by the law. In certain past cases, participants of public order events had resorted to unlawful violence and even the use of dangerous materials which might potentially cause serious tragedies if not stopped in time. Such conducts should not have been tolerated, and if we cherish the rule of law, we (as responsible members of the community) should stand up and express our disapproval to such unlawful conducts so that history would not repeat itself.


Recently, the reported case concerning the missing of certain persons related to a bookstore has caused much concern as well as generated heated discussion in the community. Since the case is still being actively investigated by the Police, it is not appropriate to jump to any conclusion at this stage. However, the interests in the case and the concerns expressed are totally understandable and should be properly addressed.


Respect for fundamental human rights is an integral part of the rule of law. The right to liberty and security of person are firmly guaranteed under the Basic Law and the Bill of Rights. Except properly permitted under our laws, neither unauthorised criminal investigation nor unlawful arrest within the jurisdiction by anyone or any authority shall be tolerated. Any suspected case of infringement deserves full and thorough investigation, and this is what the Government is seeking to achieve.


I notice that some people in the community seek to link this case with the discussion over the co-location arrangement which the Government aims to put in place for the Hong Kong section of the high-speed railway under construction. Insofar as may be necessary, let me reiterate that any future co-location arrangement will be devised in strict compliance with the Basic Law and the spirit of the “one country, two systems” policy, so that the fundamental rights of Hong Kong people will be fully respected.


Positioning of the HKSAR

The rule of law is not just our core value. The rule of law together with our world-class legal infrastructure and the wealth of our professional talents are the attributes which enable the Hong Kong SAR to position itself from the macro perspective for future purposes.


As an international financial and commercial centre, the Hong Kong SAR can ill afford to ignore the impact brought about by the continuing process of globalisation, as well as the growing number of bilateral and multilateral trade or investment arrangements. Amongst others, the “Belt and Road” initiative will bring about new opportunities in cross-border trade and investments. On the other hand, how the Trans-Pacific Partnership, if and when implemented, would change the world economy and affect the Hong Kong SAR is a topic that deserves serious study.


One point is clear. To maintain the Hong Kong SAR’s competitiveness, clear policy objectives and long-term planning are indispensable. In this regard, the promotion of the Hong Kong SAR as a centre for international legal and dispute resolution services in the Asia-Pacific region by making the best use of the advantages enjoyed under the “one country, two systems” principle is and will continue to be our policy objective.


Over the years, considerable efforts have been made by the Government and the relevant stakeholders. Such efforts have not been futile. In the 2015 International Arbitration Survey released by the Queen Mary University of London, the Hong Kong SAR is ranked the third most preferred seat worldwide (just behind London and Paris), and is also rated the most preferred seat overall outside Europe. Besides, our home-grown Hong Kong International Arbitration Centre (HKIAC) is named as the most preferred arbitral institution outside Europe and also ranked as the third best arbitral institution worldwide.


Another recent achievement of the HKIAC is the setting up of its Shanghai Office in the China (Shanghai) Pilot Free Trade Zone in last November. This is a ground-breaking arrangement, since the HKIAC is the very first and so far the only international arbitration body which has an office in the Mainland.


Insofar as software is concerned, we are conducting a study on the arbitrability of intellectual property rights. Our aim is to introduce legislative amendments so as to make it clear that intellectual property disputes can be made subject matter of arbitration. At the same time, a sub-committee of the Law Reform Commission is looking into the question of third party funding for arbitration. The consultation paper it published in last October recommended the law to be clarified to the effect that, subject to certain conditions, third party funding for arbitration should be expressly allowed.


In the context of mediation, two areas of recent development merit attention. First, in December last year, the China Council for the Promotion of International Trade joined hands with the Hong Kong Mediation Centre to establish the CCPIT-HKMC Joint Mediation Center in Hong Kong. The setting up of this centre is a milestone in the co-operation between the Mainland and the Hong Kong SAR in the promotion of mediation. Second, the Steering Committee on Mediation published a consultation paper on the enactment of apology legislation in Hong Kong in June last year. Thus far, the response received has been positive, and we intend to conduct further consultation on various specific issues in the near future.


On the whole, with the solid foundation thus far built up and the unique position enjoyed under the “one country, two systems” policy, the Hong Kong SAR should aim to advance further. Not only should the Hong Kong SAR aim to remain as the hub of international legal and dispute resolution services in the Asia-Pacific region, it should consider positioning itself as such a centre for the jurisdictions caught by the “Belt and Road” initiative.


Common Entrance Exam 

Last week, the Law Society decided that starting from 2021, a person may only become a trainee solicitor if he or she passed a Common Entrance Examination. The CEE will be set and marked by the Law Society. Besides, the Law Society will require certified completion of the PCLL course, although it will not require any examination to be set by the providers of the PCLL course.


The Law Society’s decision has attracted rather divergent views. Given the importance of legal education, the Department of Justice will be monitoring the development closely.


In our view, the ultimate yardstick for considering any changes to legal education and training is public interest, as opposed to the interests of the universities or those of the legal profession. After all, the legal profession is not a business but a vocation, and it exists to serve the community and to be a gatekeeper of the rule of law.


Any examination should be designed with at least three objectives in mind. First, it should ensure fairness to all those who aspire to join the legal profession. Second, it should ensure that our future legal profession would remain pluralistic. Students from different sectors of the community should have an equal chance to join the legal profession. Third, it should be effective to ensure good quality and integrity, which are the keys to maintaining public confidence in, and the competitiveness of, our future legal profession.


As and when it takes the matter forward, I hope the Law Society will work closely with all the relevant stakeholders so that an outcome satisfactory to all can be achieved.


Secretary for Justice Rimsky Yuen gave these remarks at the Ceremonial Opening of the Legal Year 2016.

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