CE delivers Lunar New Year message

Chief Executive CY Leung

Among the many festivals in Hong Kong, I like Chinese New Year the most because it has the strongest festive atmosphere.


To celebrate the festival, we visit Lunar New Year fairs, do festive shopping and prepare red packets, snack boxes and New Year cakes and puddings together with our families.


Leading a busy life, some Hong Kong people, especially young people, prefer to do less for Chinese New Year celebrations. 


Despite being an international city, Hong Kong should definitely preserve the Chinese New Year traditions. 


They represent the inheritance of traditional Chinese culture and are part of our culture. 


Therefore, I hope that they can be passed on from generation to generation to highlight Hong Kong’s characteristics as a melting pot of Chinese and Western cultures.


My wife and I wish you a healthy and prosperous year ahead.


This is a translation of Chief Executive CY Leung’s Lunar New Year message delivered on January 27.

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A robust economy improves lives

Chief Executive CY Leung

Economic development is the only sustainable way to make lives in Hong Kong better.  It is only through economic development that we can grow a bigger economic pie, find the financial resources to sustain our efforts in improving people’s livelihood. 


That is what this year’s Policy Address sets out to do.  What the five Policy Addresses of this Government have worked to do.


To grow the economy, we need to grasp the opportunities.  And there are plenty of opportunities ahead.  Globalisation and free trade – though somewhat challenged at the present – remain the driving force of global economic development.  And the world is looking more and more to our country in promoting more free trade.  Hong Kong, being the freest economy in the world, and given the importance of trade, in both goods and services, to us, can only gain from these latest developments. The National 13th Five-Year Plan, the Belt & Road Initiative, or the free trade agreement that we are negotiating right now with ASEAN, Hong Kong’s second largest trading partner, are all solid opportunities.  And we will keep close tabs on the impact – and opportunities – brought about by Brexit. 


The Government is part of the Hong Kong team, your team, and is determined to help businesses to make the most of these opportunities. 


Belt & Road Office to be expanded

Last year, we set up a dedicated Belt & Road Office – headed by a Commissioner – to draw up strategies and measures under the Belt & Road. The Office has been in busy dialogue with the Central Authorities in Beijing and businesses in Hong Kong so that we could work, again, as a team.  This year, we will expand the Office, giving it considerably more resources to execute business plans. 


The Mainland of China is our biggest economic partner. The scope of our economic co-operation has been broadening.  Every time I sit down with Mainland local government leaders, we find new things to do in new sectors.  So we are fast expanding our official presence up north.  There is now one Economic & Trade Office in each of the Mainland’s five regions.  By mid-year, we expect to add under these offices new units in Tianjin, Zhejiang, Guangxi and Shaanxi, bringing the number of cities in the Mainland where the Hong Kong SAR Government is represented to 16.


Our network of Economic & Trade Offices (ETOs) in foreign countries continues to grow as well.  When I took office in 2012, there were 11 ETOs in total.  The one in Seoul is now under way, and we have announced the setting up of new ETOs in India, Mexico, Russia, South Africa and the United Arab Emirates. The new one in Indonesia of course has just opened its doors. Now, this will bring the total number of ETOs in foreign countries to 18, a marked increase from 11 when I took office four years ago. 


And let us not forget about infrastructure – links that connect us with the Mainland of China, the wider region and the rest of the world. 


Hong Kong-Zhuhai-Macao Bridge soon to be completed

Work on the Hong Kong-Zhuhai-Macao Bridge is now in its last phases. The three sides, namely Hong Kong, Zhuhai and Macau, will strive to complete the entire project by the end of this year for simultaneous commissioning.  The Bridge will slash travel time from the Kwai Tsing Container Terminals to Zhuhai from three and a half hours to 65 minutes.  This will boost trade, commerce, tourism, and more, between Hong Kong, the west coast of the Pearl River Delta, Guangxi Province and possibly Vietnam.


Then there is the Guangzhou-Shenzhen-Hong Kong Express Rail Link, a 26-kilometre line flowing from the terminus in West Kowloon to Shenzhen and further north, tying us seamlessly to the Mainland’s high-speed rail network.  We expect that the Hong Kong section of the Express Rail Link will commence service in the third quarter of next year. And construction of the third runway at the airport has now started.


Within our urban areas, the new Central Kowloon Route will link West Kowloon with Kowloon Bay, cutting down travel time from 30 minutes to five minutes.  We will also start the study on Route 11, which will enhance the long-term development of Northwest New Territories and its connection to Lantau and the airport. 


So the opportunities are there and the infrastructure is there.  What we need is the will to grasp the opportunities – and embrace the challenges at the same time.   


One of the greatest challenges is to move up our value ladder, which raises this question: Does the Government have a new role in this?


Nurturing new industries 

I said in this year’s Policy Address that we should consider a more active role – in promoting traditional sectors, and in nurturing emerging ones.


Take financial services as an example. Financial services is a key pillar employing over 250,000 people and contributing more than 17% of our GDP.  Over the past four years, the Financial Services Development Council, which I announced to establish when I was Chief Executive-elect, has released 26 reports on how we could continue to grow this sector.  The Government will actively consider the Council’s recommendations on taxation, laws and regulations, the nurturing of financial talent, and implement the feasible measures. 


I have also asked the Trade Development Council (TDC) to work with the Financial Services Development Council in promoting also our financial services outside Hong Kong.  The TDC, after all, has been promoting Hong Kong effectively for more than half a century now.  And it has an extensive network of offices, both in the Mainland of China and overseas.


Innovation and technology (I&T) is another area where the Government can, and should, consider taking on a new role.  I&T will be the growth engine of Hong Kong’s economy, providing jobs for our young people and making our industries more efficient and competitive.


Boosting I&T development 

I suppose I could, without sounding immodest, say that this Government has given unprecedented policy and financial support to drive the development of I&T.  We set up the Innovation and Technology Bureau in 2015.  Last year, we injected some HK$18 billion to build up an integrated I&T ecosystem. We also helped by expanding the Hong Kong Science Park, by financing R&D, funding start-ups, by driving “re-industrialisation” and high-technology production, by raising tech-awareness generally and by encouraging SMEs to use technology services and solutions.  Some of these programmes are already in place, and more will be up and running this year.


We are seeing results.  Last year, Hong Kong counted nearly 2,000 start-ups, up 25% over 2015.  And we have grabbed the attention of world-class research institutes and enterprises. The Massachusetts Institute of Technology set up its first overseas Innovation Node here. Sweden’s Karolinska Institutet – a leading medical university that selects Nobel laureates in physiology or medicine – opened its first overseas reparative medicine centre in the Hong Kong Science Park last October. The Alibaba Group launched a HK$1 billion Hong Kong Entrepreneurs Fund. And Sequoia Capital initiated a Hong Kong X-Tech Startup Platform to support early-stage and angel projects. 


So we are bringing talent, ideas, capital, market, and entrepreneurial experience together onto the Hong Kong platform, a platform that provides the combined advantage of “one country” when we compete with other countries, and the advantage of “two systems” when we compete with the Mainland cities. This platform “super-connects” between the rest of China and the rest of the world, also in the space of I&T.  And we should take note of the appointment last month of a new Deputy Director of the Central Government’s Liaison Office in Hong Kong, Mr Tan Tieniu – one of the leading scientists in the country. I think there is a message there.


Establishing a tech park in the Lok Ma Chau Loop

In the Policy Address, I announced a range of measures to accelerate the growth of the I&T sector, including considering tax and financial concessions to attract I&T enterprises from Hong Kong, the Mainland and overseas.  The Hong Kong/Shenzhen Innovation and Technology Park in the Lok Ma Chau Loop, four times the site area of the Hong Kong Science Park, will be a key base for I&T enterprises, research and higher education institutes from the region and around the world.   When completed, this new Park will offer a total floor space that equals 13 million square feet. 


The Government will support the Hong Kong Science and Technology Parks Corporation to build an InnoCell next to the Science Park, providing living space with flexible design and ancillary facilities for staff of incubatees, start-ups and research personnel.


We will, as well, ask our world-class universities to conduct more research in areas that tie in with Hong Kong’s “re-industrialisation”.  The University Grants Committee will review allocation of research grants, expanding the assessment criteria to include research impact, and effectiveness of knowledge and technology transfer.  We will also ask the universities to refine knowledge and technology transfer plans.


I am confident that our work has laid a solid foundation for Hong Kong’s I&T development.  For the transformation and upgrading of the Hong Kong economy.


As we look for opportunities and growth, we have not lost sight of our goals, our obligations, to the community at large.  Not for the few, but for all. 


Increasing land supply to lessen housing shortage

Housing remains the biggest frustration for the people. It is our biggest hindrance to quality of life. And to tackle the root of the problem we have to increase land supply. After four and a half years, we have the following to report.  


We have 94,000 private housing units that are at various stages of construction and are yet to be sold. This figure is 45% higher than that when I took office.  This is also a record high since such statistics were released 12 years ago.


As for public housing, for the five-year period from 2016-17, the estimated public housing production is 94,500 units, an increase of 37% from the previous five-year period. 


And let us look at Government’s land sale programme as well. Government land sale in the five financial years since I took office will produce more than double the number of units compared to that of the previous five financial years.


For commercial and other business land uses, government land sale in the current financial year can provide 555,000 square metres of floor area, exceeding the total supply in the preceding four financial years.  This, I hope, will start to arrest the growth in rent, and ease some pressure off our businesses.


We all wish the new supply could have arrived earlier. But rezoning of land uses takes at least a year, land sale preparation six months and construction three to four years. Looking at the increased supply that I just mentioned, I believe we are seeing the tail end of the severe pent-up shortage.


Developing new areas and extending new towns 

And there is good prospect in the pipeline – we expect to welcome in the first families to the New Development Areas and extended new towns in about six to 10 years. Longer term, we should look at the country parks, while carrying out technical studies on reclamation in Siu Ho Wan on Lantau, Lung Kwu Tan in Tuen Mun, and Ma Liu Shui in Sha Tin, which will be completed this year. We are of course studying also the brownfield sites.


Housing aside, helping the underprivileged is another key policy area. Indeed, we are now spending 55% more than the case five years ago. But the good news is that the number of CSSA (Comprehensive Social Security Assistance) cases on account of unemployment is now at its lowest since May 1997.


I know you – as employees and as employers – have a good deal to offer as to how we should move forward as a society on retirement protection. Especially on Government’s proposal to progressively abolish the “offsetting” of severance payments or long-service payments with Mandatory Provident Fund contributions. 


I am sure I will hear from you in a short while.  But let me just say upfront that I know there is no “perfect” solution, and doing nothing is not the answer. Like you, I have on my desk an “In” tray and an “Out” tray. Unlike you, I have a third tray that is labelled “Too Difficult”. This long-standing issue has been in the “Too Difficult” tray for too long and it stands in our way whenever we want to move forward our labour relations.


The proposal in the Policy Address is, I believe, practical and practicable. But Government remains open minded on the formulation of the solution. Government is in a listening mode and, as I believe, we should all be.


Chief Executive CY Leung gave these remarks at the Joint Business Community Luncheon 2017.


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Aus-HK business entrenched

Financial Secretary Paul Chan

Hong Kong and Australia have long been good friends – in the pursuit of business, innovation, as well as good wine.


In the past couple of years, quite a number of my ministerial colleagues visited Australia. I am pleased to note that their talks with the Australian ministers included discussion of a comprehensive avoidance of double taxation agreement.


I hope negotiations on that can begin soon. This is because throwing open our respective doors via double taxation avoidance and free trade agreements can only mean expanded trade, more business and investment, and ramped up opportunities for innovation on both sides.


We also brought up the possibility of an Australian-Hong Kong free trade agreement, as free trade is one of our common aspirations.


These two agreements would definitely make the best of business sense for all concerned. After all, Hong Kong is Australia’s sixth-largest trading partner in services and sixth-largest foreign investor. And our investment in Australia runs from infrastructure and telecommunications to banking, property development, transport, hospitality, agriculture and much more.


And you need only glance at the numbers to see how broadly based, how deeply entrenched, Australian business is here in Hong Kong. At last count, around 550 Australian companies called Hong Kong home. In addition, over a thousand Australian companies keep their representative offices in Hong Kong.


And, no surprise here: the Australian Chamber of Commerce in Hong Kong is the biggest anywhere beyond Australia, and the second-largest chamber in Hong Kong.


From banking and finance, to construction, transport, food, beverage, and more, Australian business believes in Hong Kong’s advantages: an efficient and free market, the rule of law together with robust intellectual property protection, a low and simple tax system, as well as a level playing field for business.


Like most international companies, Australian enterprises also count on Hong Kong’s unique role as the gateway to Asia and the super-connector to the vast consumer markets on the Mainland of China.


Innovation and technology development, which is high on the Hong Kong Government’s policy agenda, is certainly an area that we can further co-operate and learn from each other’s experience.


Just 14 months ago, we set up the Innovation & Technology Bureau in our Government to oversee the planning and development of our I&T sector. Last year, we injected some US$2.3 billion to fuel the development of the industry.


These funds are being distributed to our world-class universities for them to undertake midstream R&D, and to boost the commercialisation of their solid R&D output. Some other funds are being provided to support SMEs to adopt technology services and solutions. And we will be setting up a US$250 million Innovation & Technology Venture Fund, for investing, together with private venture capital funds, in promising local I&T start-ups.


Australia, I’m pleased to note, is very much part of Hong Kong’s I&T future. Most recently, Australian telecommunications company Superloop has completed the first phase in the construction of its dark fibre network in Hong Kong, strengthening our already strong ICT infrastructure. The Hong Kong network is the company’s largest installation to date. A smart move, I would say.


As one of the world’s leading financial centres, and China’s international financial capital, Hong Kong is also growing apace as a Fintech hub. Indeed, we newly established the Fintech Facilitation Office under the Hong Kong Monetary Authority to fast-track development of financial technology. Our Fintech office, I am sure, is working closely with the Innovation Lab established by the Commonwealth Bank of Australia last year right here in Hong Kong, which is the first of the bank’s offshore lab.


And, finally, if you are a wine lover like me, you will be excited to know that Hong Kong is indeed Australia’s fifth-largest wine-export destination in value. And among the world’s biggest consumers of Australian wine on a per capita basis.


Since we decided to do away with the wine duty back in 2008, Hong Kong has become a wine free-port, as well as the region’s wine-trading and distribution hub.


Add it up, and you can well understand why Langton’s, one of the leading wine auction houses in Australia, opened its East Asia office here in Hong Kong last July, extending its brokerage business into the heart of Asia’s wine country.


Financial Secretary Paul Chan gave these remarks at the Australian Consulate-General’s Australia Day Reception on January 24.

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Work together for a brighter future

Chief Executive CY Leung

This year marks the 20th anniversary of Hong Kong’s return to the Motherland.


Over the past two decades, our country has made remarkable achievements, playing an increasingly important role in international affairs. Under the arrangement of “one country, two systems”, Hong Kong has benefited from the strength of “one country” and the convenience of “two systems”.


With the rapid growth in the Mainland and the favourable initiatives offered by our country, the current-term Government and the Hong Kong community shall make good use of the unique dual advantages of “one country, two systems”, leverage our economic development for improving people’s livelihood, and at the same time contribute to our country’s development.


Hong Kong an inalienable part of China

As we benefit from the opportunities brought by the development of our country and the national policies in our favour, we must clearly recognise that Hong Kong is an inalienable part of our country.


This is both a legal fact and an internationally recognised political reality, leaving no room whatsoever for Hong Kong to become independent or separate from the Motherland in any manner.


The high degree of autonomy that Hong Kong enjoys shall be in accordance with the provisions of the Basic Law. The autonomy is not absolute or arbitrary. Nor can it take any other form or be exercised to any other degree.


Amidst international relations of great complexity, it is the obligation of each and every Hong Kong citizen to safeguard our country’s sovereignty, security and territorial integrity.


Current policies to continue

The current-term Government will continue to implement “one country, two systems” strictly in accordance with the Basic Law, uphold Hong Kong’s core values, including human rights, liberty, democracy, the rule of law and integrity, and build a stable and harmonious society.


This last Policy Address in my term of office reviews the achievements of the current-term Government and reports the preparations I have made for the medium and long-term development of Hong Kong.


Five years ago, I said that we should “rise to the challenges ahead”. The phrase epitomises not only my aspiration at that time, but also what we Hong Kong people have experienced in the course of building this place that we call home. “Challenges” speaks of our understanding of the problems, and “rise” embodies our determination and action.


Five years ago, I put forward a holistic and concrete Election Manifesto. Throughout these five years, I published a work report every year to update the public on the progress of implementing the Manifesto.


Gratitude to all

Today, all commitments in my Election Manifesto have basically been implemented. I would like to extend my gratitude to all politically appointed officials and civil servants for their dedication.


My thanks also go to the Executive Council, the LegCo, the statutory bodies as well as members of the public for your support and co-operation.


The front and back covers of this year’s Policy Address feature photos of Victoria Harbour. Magnificent at day and radiant at night, the view of Victoria Harbour symbolises the achievements due to the endeavours of generations of pragmatic and enterprising Hong Kong people.


A rosy future

Hong Kong is a blessed land. We must cherish the blessing and treasure our hard-earned achievements, advantages and cross-strata harmony. We must also value our opportunities and waste no time. Let us work with one heart and one vision to create a promising future.


Building on our previous success to strive for an even better future, we, Hong Kong people of this generation, shoulder an important and epic responsibility.


In the coming half year, I and the HKSAR Government will continue to work with full dedication for the overall long-term interests of Hong Kong.


Hong Kong is my home. With my great affection and commitment for this place, I shall continue to join hands with all seven million Hong Kong people to make contributions to Hong Kong and our country.


Chief Executive CY Leung made these remarks in his 2017 Policy Address on January 18.

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Gov’t boosting economy, livelihood

Chief Executive CY Leung

The current-term Government upholds the vision of “Developing the Economy & Improving People’s Livelihood”. We believe that only through economic development can we improve people’s livelihood and promote social harmony and inclusion.


The Heritage Foundation of the United States has rated Hong Kong as the world’s freest economy for 22 consecutive years. According to the Human Freedom Index 2016 published by the Cato Institute of the United States, Hong Kong has topped the ranking for six consecutive years. The index measures the state of freedom in 159 jurisdictions based on 79 indicators covering such areas as the rule of law, freedom of movement, civil liberties and economic freedom.


Over the past four years, Hong Kong’s economy has seen moderate growth and receding inflation. The Government maintains a sound fiscal position. The working population increased in total by 160,000 while the unemployment rate remained at a very low level. Apart from reinforcing the competitive edges of traditional industries, the Government also strives to promote the development of emerging industries.


Land and housing supply for the short and medium terms has increased significantly while medium and long-term planning is actively pursued. Many infrastructure projects are underway.


In the past four years, the Government has made full efforts to alleviate poverty, care for the elderly, support the disadvantaged and encourage employment. Over these four years, earnings for the employees in the lowest three income decile groups have increased by 5.2% after discounting inflation.


The number of Comprehensive Social Security Assistance (CSSA) cases has continued to drop and the poor population is shrinking. The Government has invested heavily in healthcare infrastructure.


Air quality in our city and water quality in Victoria Harbour have improved notably. Measures on climate change and waste management have been implemented progressively and important progress has been made in the protection and conservation of species and the rural environment.


The world’s political and economic landscapes are undergoing profound changes. China is playing an increasingly prominent and leading role in the global economy. Against this background, Hong Kong’s dual advantages of “one country” and “two systems” and its role as the “super-connector” are becoming more apparent.


Leveraging the National 13th Five-Year Plan and the Belt & Road Initiative, Hong Kong enjoys endless opportunities, as we excel in “what the country needs, and what Hong Kong is good at”.


The Government attaches great importance to the executive-legislative relationship, and seeks to work with all Members of the Legislative Council (LegCo) of different political affiliations.


The community expects the executive authorities and the legislature to perform their respective functions and waste no time or opportunity in jointly promoting Hong Kong’s social and economic development.


Hong Kong is an inalienable part of our country. There is absolutely no room for independence or any form of separation. Under “one country, two systems”, every one of us has the obligation to fully comply with the Basic Law and safeguard national sovereignty, security and territorial integrity.


Chief Executive CY Leung made these remarks in his 2017 Policy Address on January 18.

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HK a shining startup hub

Secretary for Commerce & Economic Development Gregory So

This StartmeupHK Venture Forum brings together innovative start-ups, entrepreneurs, investors, students and thought leaders from Hong Kong and overseas to celebrate the world’s most vibrant start-up ecosystems. My colleagues at InvestHK have lined up an amazing programme for you this afternoon with world leading experts who will share the latest cutting edge technology trends and discoveries; investors from Hong Kong, Asia and the US who will give their perspectives on the start-up evaluations; pitches from Hong Kong’s emerging entrepreneurs, and last but not least, a cyber illusionist who will pull his magic tricks using technology.


This year’s festival focuses on key sectors which highlight Hong Kong’s strengths as a startup hub, namely retail technology, fashion technology, smart city, Fintech and digital health.


The lightning speed of technological development is without doubt bringing disruption across all industries. With the advance progress and adoption of artificial intelligence, robotics, augmented reality, smart city, health tech and big data analytics to name a few, enterprises in traditional industries are forced to change and adapt or die. With the vibrancy and entrepreneurial spirit the city is famous for, Hong Kong has a good environment and all the ingredients to facilitate this whole new generation of disruptors to create, test, show and launch their new businesses, right here in our city. Hong Kong has been ranked as one of the fastest growing start-up hubs in the world and it has become a hotbed of innovation and a hub for ideation to commercialisation.


Entrepreneurs come to Hong Kong to grow their business. Here, we can ensure the fastest and most scalable “go to market” process. In addition to funding, innovators and start-ups in Hong Kong can also easily locate top-notch designers, while manufacturers, R&D (research and development) facilities, state-of-the-art supply chain management and just-in-time logistics come together and make it happen for entrepreneurs and big businesses. 


Largest tech platform to be established

Two weeks ago, we had another major breakthrough. Hong Kong and Shenzhen signed a Memorandum of Understanding on jointly developing the Hong Kong/Shenzhen Innovation & Technology Park at the Lok Ma Chau Loop. This will be the largest innovation and technology platform ever established in the history of Hong Kong. With a total floor area of 1.2 million square metres, the park will become a key base for co-operation between the two places in innovation and technology development involving robotics, biopharmaceuticals, smart city and Fintech. It is also an excellent opportunity to strengthen the two places’ co-operation in scientific research, higher education, creative, and other complementary facilities.


The synergy we are seeing in Hong Kong’s growing start-up ecosystem is nothing short of amazing. InvestHK conducted its third Startup Profiling Survey and the results were shared in November last year. We surveyed 40 co-work spaces, incubators or accelerators and the results all pointed to an upward trend.


A start-up boom     

The number of startups has risen from 1,558 in 2015 to 1,926 – that is a 24% year-on-year increase. The number of jobs created was 5,229, an astonishing 41% year-on-year increase compared to 2015.


Among the 600 foreign founders, one-fifth of them come from the US, 13% from the UK, 11% from Mainland China, and 10% from France. Other places of origin include Australia, Germany, Canada, the Netherlands, Singapore, India, Italy, Japan and South Korea.


They have brought with them international experience and different perspectives, and together with an increasing number of local players, the Hong Kong startup community is truly reflecting the dynamism and multiculturalism of Asia’s world city.


But we do not rest on our laurels. Our government will continue to offer comprehensive support to start-ups in various areas such as business incubation, financing, business expansion and office space.


A one-stop portal for start-ups    

InvestHK has recently refreshed the Startmeup.hk website, which is a one-stop portal for the startup community to find out about the latest start-up events and access a host of resources, including government financing and incubation schemes, accelerators, angel investors and venture capitalists.


Since its launch in 2013, StartmeupHK has become an integral part of InvestHK, a Hong Kong government agency tasked with attracting and retaining foreign direct investment of strategic importance to the economic development of Hong Kong.


Secretary for Commerce & Economic Development Gregory So gave these remarks at the StartmeupHK Venture Forum on January 17.

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HK enjoys Belt-Road advantages

Financial Secretary Paul Chan

The Asian Financial Forum has been named the first major event to commemorate the 20th anniversary of the establishment of the Hong Kong Special Administrative Region. With much more to come, all under the theme of “Together‧Progress‧Opportunity”.


Over the decade, the forum has welcomed 20,000 high-profile professionals from Hong Kong, the Mainland and all over the world.


In recent years, about one quarter of the forum participants are returning participants.


And we believe they are returning for more than this celebrated happy hour and the connections it creates.


They are returning – indeed you are returning – because of the continuing rise of Hong Kong as a financial services capital. And you are not alone in appreciating the opportunities that offers. Last May, the International Institute for Management Development named Hong Kong the most competitive economy in the world. The Swiss Institute also put the city at the top in financial efficiency.


Not surprising in either case. Consider. Over the past decade, the Hong Kong stock market finished among the top five global markets for IPO (initial public offerings) every year. Indeed, it finished first in five of those years, including the past two. Raising an impressive US$300 billion over that decade.


There are other ways of raising capital. Profitably. And Hong Kong makes it happen like nowhere else. Take, for example, our inaugural sukuk. The US$1 billion issue, in 2014, was the world’s first US dollar-denominated sukuk packaged by an AAA-rated government.


Hong Kong’s financial services sector attracts a world of interest. Some 70% of our asset management business comes from investors outside Hong Kong. Which means that our asset managers enjoyed a remarkable volume of new business over this past decade. Indeed, our combined fund-management business totaled about US$2.2 billion in 2015, almost four times higher than just a decade earlier.


Hong Kong has captured the risk-conscious market as well. The insurance sector’s annual gross premium income almost tripled, to some US$50 billion, between 2005 and 2015. Nowhere in Asia will you find a higher insurance density, per capita, than Hong Kong, which comes in at around US$6,000 per person.


Then there is the renminbi. With the support of the Central authorities, Hong Kong launched its offshore renminbi business about 13 years ago. Today, we count the deepest, most liquid, renminbi market outside the Mainland. Our renminbi-denominated investor products are unmatched.


China has been issuing renminbi sovereign bonds to international investors through Hong Kong. Last month, the ministry issued bonds totalling RMB14 billion in Hong Kong, following a first-batch issue of about RMB14 billion last June. Indeed, 2016 marks the eighth year in a row that the Ministry of Finance has issued renminbi sovereign bonds in Hong Kong.


No less important, Hong Kong has been first mover in securing mutual access between the markets of the Mainland and Hong Kong.


The Shenzhen-Hong Kong Stock Connect, launched just last month, follows the launch of the Shanghai-Hong Kong Stock Connect in 2014 and the introduction of the Mainland-Hong Kong Mutual Recognition of Funds Arrangement in 2015.


Under these access schemes, the cumulative net fund flow from Mainland investors to Hong Kong, combined with funds from Hong Kong and overseas investor flowing into the mainland, has realised more than US$70 billion since their respective launches.


Hong Kong’s singular role in the two-way opening up of the mainland’s capital markets will continue to grow. Continue to create opportunity for Hong Kong, for the Mainland, and for a world of finance and commerce.


Indeed, Hong Kong has the capital, the connections, the products and the expertise to serve as the financial and investor services hub for the Mainland’s Belt & Road initiative.


Encompassing some 65 nations spanning Asia, Europe, the Middle East and Africa, the Belt-Road is perhaps the 21st century’s most ambitious multilateral undertaking. And Hong Kong will take very good advantage of it – of that, I can assure you.


Financial Secretary Paul Chan gave this speech at the cocktail reception for the 10th Asian Financial Forum on January 16.

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HK super-connecting China, the world

Chief Executive CY Leung

This year’s theme is “Asia: Driving Change, Innovation & Connectivity”. The three key words here are “change”, “innovation” and “connectivity”. Hong Kong happens to have something to share on all these.


“Change”. This year is a special one as it marks the 20th anniversary of Hong Kong’s return to China. And we have changed a lot since then – definitely for the better.


We have scaled new heights because of our ability to change, to adapt to circumstances, and to seize emerging opportunities. And that means taking full advantage of the “one country, two systems” arrangement, which came into force 20 years ago, as well as the opening up and reform of the Mainland of China, which has a slightly longer history.


“One country, two systems” is an innovative constitutional arrangement. Back in the 1980s, when we prepared for Hong Kong’s return to China, many people had doubts on whether “two systems” in “one country” would work. In other words, whether the Hong Kong system would survive the change in 1997, as our legal system, our passport, and our currency for example, are all different from the Mainland’s.


Today, no one questions “one country, two systems”, “one country, two currencies”, “one country, two legal systems” or “one country, two passports”. If anything, we only stand to gain from “one country, two systems”. It has become our strength, our niche. It enables our city to enjoy the best of both worlds. We are part of China and enjoy the “China advantage”, benefitting from all the opportunities that come with the Mainland’s development. At the same time, we practise, so to speak, “the other system” that is separate from the Mainland cities. We enjoy the free movement of trade, capital and information, the rule of law, as well as a simple and low tax regime.


Super-connecting China and the world

The combined advantages of “one country” and “two systems” have made us the “super-connector” between the Mainland of China and the rest of the world. Certainly in finance, one of Hong Kong’s greatest strengths. The Shenzhen-Hong Kong Stock Connect launched last month is a fine example of how our super-connector role can benefit all – Hong Kong, Shenzhen, the whole of Mainland, as well as investors from all over the world.


“One country, two systems” will continue to be our cutting-edge as we forge ahead. For sure, the global economic outlook is less than rosy. Growth is generally sluggish. The world is still adjusting to Brexit and the change of leadership in the United States. Doubt is cast on the future of the European Union, globalisation and free trade.


But for Hong Kong, we can take heart in our strengths. Our economy and the financial market remain solid. We have moderate growth, low inflation, full employment, and a sound fiscal position. And, no less importantly, our country remains one of the fastest growing economies in the world, and a staunch supporter of free trade.


The world’s freest economy

And Hong Kong remains a level-playing field for all. The government here does not compete with businesses as we don’t have government-linked business corporations. So you can understand why the Washington-based Heritage Foundation has named Hong Kong the world’s freest economy for the past 22 years. And why, last November, we were ranked the world’s freest city for six years in a row in the Human Freedom Index co-published by the United States’ Cato Institute and Canada’s Fraser Institute. We also topped the ranking in the 2016 World Competitiveness Yearbook published by Switzerland’s International Institute for Management Development. All these show that our economic, and other kinds of freedom – the key to competition, innovation and entrepreneurial success – are highly valued by us and the international community alike.


But we need to get the most out of our niche – we need to expand our super-connector role, in terms of magnitude, sector as well as value. In 1993, when Tsingtao Beer became the first Mainland enterprise to be listed in Hong Kong – it raised less than US$130 million. Thirteen years later, the gigantic ICBC – Industrial & Commercial Bank of China – raised 120 times that amount.


And now we super-connect also in other sectors. And that brings me to the subject of “innovation”.


Today’s growth engine – for Hong Kong and the world at large – is innovation and technology.


I&T is high on the policy agenda of my Government. We established the Innovation & Technology Bureau some 14 months ago, and injected a massive US$2.3 billion for promoting I&T. The funding will support start-ups together with private venture capital funds, drive R&D in universities, expand I&T infrastructure, and develop Hong Kong into a smart city.


Magnet for global technology firms

Our efforts have attracted the attention of top institutions around the world. Last year, the Massachusetts Institute of Technology announced its first overseas “Innovation Node” in Hong Kong. Sweden’s Karolinska Institutet – a leading medical university that selects Nobel laureates in physiology or medicine – opened its first overseas reparative medicine centre in the Hong Kong Science Park. World-renowned venture capital firm – Sequoia Capital – launched a Hong Kong X-Tech Startup Platform to help enterprising youngsters achieve success. The idea is to bridge the gap between innovative research and real applications, by bringing together R&D, funding and entrepreneurial experience through the Hong Kong X-Tech Platform.


They chose Hong Kong because of our ability to super-connect – between the rest of China, and the rest of the world. As pointed out by the MIT President, “by bringing MIT to Hong Kong and Hong Kong to MIT, the Innovation Node will deepen MIT’s activities in Hong Kong and, through Hong Kong, in the entire Pearl River Delta region”.


And we have another example. Two weeks ago, the Hong Kong Government and the Shenzhen Government signed an agreement to jointly develop the Lok Ma Chau Loop, an 87-hectare area on the Hong Kong side of the border with Shenzhen on the Mainland of China, into a Hong Kong/Shenzhen Innovation & Technology Park. When completed, it will be a key I&T research base – not just for Hong Kong, but also for enterprises and research institutes from Shenzhen, other parts of the Mainland, and the rest of the world.


In Fintech, as well, Hong Kong can be a platform bringing people and ideas together. Last November, we held our first ever Fintech week, attracting 2,500 participants from international Fintech companies, start-ups and investors. The Hong Kong Monetary Authority, together with ASTRI – the Hong Kong Applied Science & Technology Institute – has set up a Fintech Innovation Hub for testing industry-wide Fintech solutions. Our Cyberport also launched in December the Smart-Space Fintech, a co-working space providing some 4,300 square metres for Fintech activities. We look forward to hearing from you on how Hong Kong can better support Fintech development.


China’s Belt & Road Initiative is a grand project for building up connectivity among more than 60 countries on three continents. Hong Kong, as a super-connector, has much to offer in this ambitious, multi-level and multilateral initiative including, of course, our financial services.


Financial hub for the Belt & Road

We are, after all, a major financing hub with one of the world’s most sophisticated capital markets and largest stock exchanges. We are also the world’s largest offshore renminbi hub, handling 70% of global offshore renminbi payments. Now that the currency is added to the International Monetary Fund’s Special Drawing Rights basket, the renminbi has gained increasing popularity as a trading and an investment currency. Our asset and risk management services, as well as corporate treasury services capabilities, complement our renminbi strengths. Adding all these up, and Hong Kong has what it takes to become the full-service financial centre for the Belt & Road.


To take full advantage of the Belt & Road opportunities, the Hong Kong Government is building up support for our companies and professionals.


Last year, a dedicated government Commission – the Belt & Road Commission – was set up to devise and implement strategies under the Belt & Road; and we are in discussion with the Asian Infrastructure Investment Bank on joining the institution as a non-sovereign territory.


The Infrastructure Financing Facilitation Office, under the direction of the Hong Kong Monetary Authority, offers a one-stop shop for infrastructure investment and financing. To date, more than 50 partners have joined the office, including development banks, public and private sector investors, project developers, operators and professional service providers. I encourage you to join us, to partner with us in riding the Belt & Road opportunities.


Chief Executive CY Leung gave these remarks at the opening ceremony of the 10th Asian Financial Forum “Asia: Driving Change, Innovation & Connectivity” on January 16.

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Gov’t supports tourism development

Chief Executive CY Leung

Hong Kong Disneyland is a major, strategic tourism investment. And a successful one. Since its opening in 2005, Disneyland has received over 58 million visitors, as well as coveted awards from the Themed Entertainment Association and the International Association of Amusement Parks & Attractions.


And Disneyland has continued to introduce new attractions and offerings – the Fairy Tale Forest, Hyperspace Mountain and, of course, the Iron Man Experience. As you will discover, this is truly a Hong Kong ride – not very often that you get to fly over Tsing Ma Bridge, Victoria Harbour and a few of our mountain ranges, while fighting alongside the Iron Man to save our city.


Beyond the Marvel superhero, the Walt Disney Company and the Government will continue to bring more fantastic offerings to the Hong Kong Disneyland. Just last month, we announced the expansion and development plan for Disneyland, with new attractions rolling out starting from 2018. The expansion, together with the completion of major cross-boundary infrastructure in the next few years, including one of the longest bridges in the world, the Hong Kong-Macao-Zhuhai bridge that will provide a fixed road link between Lantau Island, where we are, and the west bank of the Pearl River Delta area, will bring in more visitors from the Mainland of China, Southeast Asia and the world beyond.


The Government will, as always, support the development of Hong Kong Disneyland and the tourism sector. Joining hands with the industry and the community, we will strive to promote diversified and high value-added tourism, and boost Hong Kong’s standing as a premier destination for tourists all over the world.


Chief Executive CY Leung gave these remarks at the grand opening of the Iron Man Experience at the Hong Kong Disneyland Resort on January 10.

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Anniversary events youth-focused

Chief Secretary Carrie Lam

The 20th anniversary is a very memorable occasion for Hong Kong. This is a time for use to review the progress and achievements made over the last 20 years under “one country, two systems”. It is also an occasion for us to envision, to have our dream and to think about the future.


So, as we mark the beginning of 2017 and the 20th anniversary, we want really to share the joy of reaching this milestone with the whole community, so the Hong Kong SAR Government is joining hands with different sectors to organise a wide variety of celebration activities under the theme of “Together • Progress • Opportunity”. These activities include large-scale sports and cultural events, major exhibitions, international conferences, as well as community and district events to be held in Hong Kong. We will also showcase Hong Kong’s talents in design, art and culture overseas and in the Mainland.


Youth is a major focus in our 20th anniversary celebrations, whether in terms of events, activities or projects. Indeed, over the last two weeks, I have signed on behalf of the Hong Kong SAR Government two very important Memorandums of Understanding to take forward two projects. One is of course the building of the Hong Kong Palace Museum in the West Kowloon Cultural District and the other is to jointly develop another innovation and technology park in an area called the Lok Ma Chau Loop together with Shenzhen. These two projects were conceived and developed very much with young people in mind, because we want to give our young people diversified opportunities – that is, not all of you need to go into banking, financial services, etc. You have a future in innovation and technology, as well as cultural and creative industries.


But coming back to the 20th anniversary, there are many more ways for you, as students, to take part in the celebration. You can, for example, produce a video of your own and send it to our video competition themed on “Togetherness”. The competition will run until the 24th of February, so you have enough time to put your creativity or innovation into gear.


We have recruited 100 youth ambassadors – and maybe if you are enthusiastic we could recruit a bit more youth ambassadors – under the 20th Anniversary Youth Ambassadors Programme organised by the Home Affairs Bureau and the Commission on Youth. These young ambassadors will assist us in various international conferences and activities to be held in Hong Kong to promote Hong Kong’s hospitality, and help receive young visitors from overseas during their stay here. They will also participate in international exchange programmes.


To help youngsters develop their potential and interest in nature and heritage conservation, we are organising two internship programmes for those aged between 18 and 29. These two programmes of course are additional to the many internship and student exchange programmes that we have been running for many years. These two particular internship programmes will give young interns the rare opportunity to learn the intricacies of conserving giant pandas at Wolong in Sichuan Province, and conserving artefacts at the Palace Museum in Beijing. Details of the programmes, including recruitment of interns, will be announced in the first quarter of 2017, but I have to forewarn that we are offering only limited opportunities, so the competition is going to be very fierce to get into these two internship programmes.


In addition to the events offered by the Government, district and community organisations will also host an array of activities to invite more people to join the celebration. District Councils, for example, are organising district-based events. I am very pleased to learn from your Supervisor, Annie Wu, that your school will also be sponsoring a series of celebrations. I look forward to hearing more from the school about the activities at today’s ceremony.


The Hong Kong SAR 20th anniversary is not only an occasion for joyful celebration, but also an opportunity for us, our young people in particular, to learn and explore and appreciate the uniqueness of Hong Kong. With the staunch support of the country and concerted efforts of all sectors of the community, “One Country, Two Systems” has been successfully implemented in Hong Kong since 1997. I do hope that through the diverse anniversary activities, all people, especially our young people, can better appreciate the historical background leading to Hong Kong’s present status as a unique Special Administrative Region in China, and how the city has continued to thrive despite various challenges over the last 20 years. I am sure it will help renew and reinforce our collective efforts to overcome the challenges ahead, reach new heights, and contribute to our nation and our city in the years to come. And this is very much the theme of this school’s celebrations, and that is to serve the country and to serve the people of Hong Kong.


Chief Secretary Carrie Lam gave these remarks at the launch ceremony of “CFSS • Innovation • STREAM” in celebration of the 20th anniversary of establishment of the Hong Kong Special Administrative Region on January 9.

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