Gov’t fighting people trafficking

Trafficking in persons is a heinous crime that has never been tolerated in Hong Kong. Hong Kong’s long and well-established legal framework, stringent enforcement action by our professional and highly efficient law enforcement agencies, a fiercely independent judicial system with eminent foreign judges from other common law jurisdictions invited to sit on our Court of Final Appeal as a regular feature since 1997, respect for the rule of law in society, as well as a clean and reliable government have placed us on a solid footing to combat trafficking in persons. The Hong Kong Special Administrative Region Government (HKSARG) has always attached great importance to the fight against trafficking in persons crimes, responding to this international issue through targeted and multi-pronged measures on areas including victim identification, law enforcement, prosecution, victim protection, enhancement in staff training and forming partnership with local and overseas stakeholders. As acts of criminals continue to evolve, we also keep our anti-trafficking in persons efforts under continuous review and updating from time to time to keep abreast of changes.


Although trafficking in persons is neither widespread nor prevalent in Hong Kong, it has been clear to us that combating trafficking in persons requires the concerted efforts of various bureaus and departments of different disciplines. It cannot be tackled by any single party or from any single perspective. To underscore our commitment and to ensure high-level policy steer to achieve the best results, a high-level internal steering committee, led personally by the Chief Secretary for Administration and comprising all the relevant policy secretaries and department heads, was set up last month. Its remit is to map out and take forward an overarching strategy and heighten public awareness of trafficking in persons. Shortly after its establishment, the committee wasted no time and promulgated a comprehensive Action Plan to Tackle Trafficking in Persons & Enhance Protection of Foreign Domestic Helpers to step up our anti-trafficking in persons measures and safeguard the labour rights and benefits of foreign domestic helpers.


With a population of nearly 380,000 and steadily growing, foreign domestic helpers account for about 9% of our total workforce. We fully recognise their sterling contribution. They assist our families in household chores and taking care of our elderly and children, thereby unleashing the potential of the local labour force, especially women. In return, they enjoy and deserve comprehensive and equal protection under our laws, on a par with local workers – not only because it is in our interest to do so, but it is the right thing to do. Indeed, Hong Kong is one of the best, if not the best, jurisdictions in the world when it comes to labour protection for foreign domestic workers. With the implementation of the new action plan, I have confidence that Hong Kong will be an even safer and more attractive place of work for foreign domestic helpers.


Whilst this is not the right occasion for me to walk through the plan page by page, I consider it important to highlight at least some of the salient features in order to clear the air, put the record straight and demonstrate that Hong Kong is by no means a centre for human trafficking, and that we do offer full and effective protection for our foreign domestic helpers. 


Put simply, our multi-faceted action plan comprises several key building blocks covering victim identification, protection and support, investigation, enforcement, prosecution and prevention as well as partnership with stakeholders. Building on the useful experience so far, we will further extend the victim screening mechanism to all 24 police districts in Hong Kong. We will also extend such mechanism to the Labour Department in the next phase to ensure that foreign domestic helpers falling victim to abuse and exploitation could be identified as early as possible. As regards increasing support for foreign domestic helpers, not only will we set up a dedicated hotline with interpretation services, we will also have dedicated teams in relevant departments to ensure high efficiency in investigation, law enforcement and prosecution against trafficking in persons crimes and malpractices of employment agencies, and to facilitate close inter-departmental co-operation. As trafficking in persons is often a cross-border issue, we will step up co-operation with the home countries of our foreign domestic helpers. We will promote high-level government-to-government dialogues to keep abreast of the latest developments and discuss issues of mutual interest, while drumming up local publicity on the lawful rights of foreign domestic helpers and various protective measures available in Hong Kong. The promulgation of the action plan thus marked a significant milestone in our efforts to tackle trafficking in persons. We look forward to joining hands with all stakeholders and the consuls general in Hong Kong in realising our goal.


There is, however, one lingering myth which I must take this opportunity to dispel. Specifically, the view has been held in some quarters that there is no law in Hong Kong to penalise culprits of trafficking in persons crimes. Let me stress that there is nothing further from the truth. The fact of the matter is that our regime has provided an adequate and solid legal framework to effectively combat trafficking in persons crimes. Although we have not put all the laws that deal with trafficking in persons crimes into a single piece of legislation, our laws have already covered the conduct of trafficking in persons, even if you examine our laws through the lens of the Palermo Protocol which does not apply to Hong Kong. Our laws target trafficking in persons crimes from at least six aspects. Let me elaborate.


First, the Crimes Ordinance (Cap 200) prohibits trafficking in persons to or from Hong Kong for the purpose of prostitution; harbouring another person or exercising control or direction over another person for the purpose of that person’s prostitution or that that person shall do unlawful sexual acts with others; and any person from procuring another person to become a prostitute or cause prostitution of that person in Hong Kong or elsewhere. It also prohibits other crimes including rape, procuring another person by threats to do unlawful sexual acts with others and criminal intimidation. Moreover, there are provisions under the Crimes Ordinance that provide extra-territorial effect against certain sexual offences committed against children outside Hong Kong, including related arrangements and advertisements, making them punishable in Hong Kong.


Second, the Human Organ Transplant Ordinance (Cap 465) prohibits commercial dealings in human organs.


Third, the Prevention of Child Pornography Ordinance (Cap 579) prohibits printing, making, producing, reproducing, copying, importing or exporting, publishing and possessing child pornography.


Fourth, the Immigration Ordinance (Cap 115) prohibits arrangement for an unauthorised entrant to Hong Kong, and employing illegal workers.


Fifth, the Employment Ordinance (Cap 57) imposes criminal liability on employers involved in non-payment, under-payment of wages or delay in payment of wages, failure to grant rest days and statutory holidays to employees.


Finally, there are other relevant ordinances which prohibit such crimes as assault, forcible taking or detention of persons with intent to sell him or her, child abduction, deception and blackmail, etc.


The most serious penalty for the above offences is life imprisonment. Also, quite a number of the above offences are offences “relevant to the definitions of organised crime and specified offences” under the Organised & Serious Crimes Ordinance (Cap 455), under which proceedings obtained from organised and serious crimes could be frozen or confiscated in suitable and appropriate cases by court orders.


This multiple-legislation approach has been providing our law enforcement agencies and prosecutors with sufficient powers to investigate and prosecute trafficking in persons cases. In short, whilst we do not have the form or semblance of a single piece of law to tackle human trafficking, we do have the full substance and range of effective penalties and criminal sanctions for this purpose through a host of legislation. I do hope that my explanation will put to bed the unfair and unwarranted criticisms against Hong Kong.


Let me also emphasise that the HKSARG does not shy away from reviewing our legislation when the situation warrants. We never sit on our hands. And we always adopt a no-nonsense attitude. A recent shining example is the Employment (Amendment) Ordinance 2018 that came into effect on February 9 this year. The maximum penalties for the offences of overcharging of commission from job-seekers, including foreign domestic helpers, and unlicensed operation by employment agencies, have been increased by seven times from a fine of $50,000 to $350,000 plus imprisonment for three years. The statutory time limit for prosecuting these two offences has also been extended from six months to 12 months. The scope of the overcharging offence has been expanded to cover, in addition to the licensee, the management and employees of employment agencies. These measures have drastically increased the deterrent effect and provided better protection for all foreign domestic helpers.


Laws are of no use unless they are properly enforced. We rely on the joint efforts of various government departments which may directly come across victims and witnesses in their day-to-day operation, to tackle the crimes relating to trafficking in persons. Step by step, we have built a solid foundation in this regard. A few major milestones are worth mentioning when we are about to embark on implementing the action plan.


First, an inter-departmental trafficking in persons working group was established in 2010 to enhance the enforcement strategy against trafficking in persons. The working group is chaired by the Security Bureau and comprises members from the law enforcement agencies, the Department of Justice, the Labour Department and the Social Welfare Department. In 2016, the working group issued a Guideline on Inter-departmental Cooperation for the Handling of Suspected Cases of Trafficking in Persons for relevant departments.


Second, the Department of Justice in 2013 incorporated a new paragraph entitled “Human Exploitation Cases” into the Prosecution Code to highlight the identification of trafficking in persons cases and broad principles on their handling, having regard to applicable international standards and practices. Last year, a new chapter on “Human Exploitation” was added to the Prosecution Manual to provide further guidance to prosecutors on trafficking in persons issues.


Third, the first trafficking in persons victim screening mechanism was introduced in 2015 by the Immigration Department and then gradually extended to the Police and the Customs & Excise Department.


More recently, in March 2018, we set up the high-level internal steering committee led by the Chief Secretary and promulgated a comprehensive action plan.


Further training programmes and workshops have been regularly provided to the law enforcement agencies and prosecution since 2016 to update them on knowledge and skills involved in trafficking in persons cases. All these speak volumes about the fact that we are making all-out efforts in combatting trafficking in persons activities and that we really mean business. We will continue to leave no stone unturned in implementing the various measures under the Action Plan to Tackle Trafficking in Persons & Enhance Protection of Foreign Domestic Helpers. We will also review its implementation from time to time and identify further initiatives as and when necessary.


Close co-operation with local civil society and international counterparts is critical to winning the battle. I much look forward to joining hands with all stakeholders to achieve the best results. On this positive note, I wish the conference today a huge success and a most stimulating and fruitful exchange to come.


Chief Secretary Matthew Cheung gave these remarks at the International Conference on Combatting Human Trafficking 2018 on April 27.

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HK plays key Belt-Road role

The Belt & Road Initiative proposed by President Xi Jinping offers what the global economy needs in the 21st century – a way forward that we can all embrace and a future built on co-operation, mutual benefits and friendship. So far, more than 270 agreements or deliverables have been entered into among the economies along the Belt & Road corridors. These agreements and projects are cross-border, with extensive coverage ranging from infrastructure, finance, trade and commerce, information technology and digital development to agriculture, poverty alleviation, healthcare, environmental protection and conservation.


Hong Kong is destined to play an important role in the development of the Belt & Road Initiative. As a highly open economy with extensive connections and international experience, we are the freest market in the world, allowing free flow of trade, capital, goods, talent and information whilst keeping close ties with our Motherland. Our strengths and unique position as the gateway connecting overseas businesses with their Mainland counterparts have made Hong Kong an indispensable player in the Belt & Road Initiative.


Last December, we signed the Arrangement between the National Development & Reform Commission & the Government of the Hong Kong Special Administrative Region for Advancing Hong Kong’s Full Participation in and Contribution to the Belt & Road Initiative. This arrangement is most important as it allows Hong Kong to give full play to our unique advantages under “one country, two systems” to contribute to the nation on the one hand, whilst seizing those opportunities brought by the initiative to provide new impetus for our economic growth on the other.


According to the Asian Development Bank, it is estimated that Asia will require an infrastructure investment of US$1.7 trillion per year until 2030. Power supply is the key to the development of any economy. Numerous energy infrastructural projects, including power plants and electricity grid developments, are being taken forward in Belt & Road economies such as Indonesia, Pakistan and Kazakhstan, where some of the graduates today come from.


As a dynamic international financial centre, coupled with our strong tradition of rule of law and a fiercely independent judiciary, Hong Kong is well-placed as a “one-stop” platform for raising funds and sourcing the necessary professional services for Belt & Road projects. Our deep pool of world-class multi-disciplinary talent offers a wide spectrum of professional services across different sectors, not only in the electricity industry but also in law and particularly in arbitration services, accounting, engineering, architecture, management, consulting and more.


Indeed, Hong Kong enterprises and professionals are already participating in quite a number of big-ticket infrastructural projects in regions along the Belt & Road. Some notable examples include power plants in Thailand and Vietnam, the metro system in Saudi Arabia, airports in Cambodia and Sri Lanka, as well as a waste management system in Bangladesh.


I should add that our professional services and expertise are of world-class standards. For instance, the Hong Kong Mass Transit Railway Corporation currently runs the railway in Stockholm of Sweden and Melbourne of Australia, the Cross Rail in London of the UK, as well as part of the rail services in Shenzhen, Hangzhou, Shanghai and Beijing. It will shortly also run the Metro in Sydney of Australia and the new light rail system in neighbouring Macau.


People-to-people links form an integral part of this very ambitious initiative. To this end, the Hong Kong Special Administrative Region Government is committed to promoting educational co-operation and exchanges with the Belt & Road countries. We have launched the Hong Kong Scholarship for “Belt & Road” Students to attract outstanding students from Indonesia, Malaysia and Thailand to pursue undergraduate studies in Hong Kong. At the same time, we have also introduced a new subsidy scheme to encourage and support students in Hong Kong to participate in exchange programmes in the Belt & Road region.


The Hong Kong Special Administrative Region Government spares no effort to work with all quarters in Hong Kong to seize the opportunities offered by the Belt & Road.


Chief Secretary Matthew Cheung gave these remarks at the Belt & Road Advanced Professional Development Programme in Power & Energy Graduation Ceremony.

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HK a business, financial hub

This is my first visit to Jakarta, the fast-beating business and cultural heart of Indonesia, and my fifth ASEAN country visit since taking office on July 1 last year, signaling the growing ties between Hong Kong and Indonesia, against the backdrop of an enhanced relationship between Hong Kong and the ASEAN region.


Just now I had a very constructive meeting with President Jokowi. It was actually our second meeting since we last met in Hong Kong in May 2017, at that time I was the Chief Executive-elect. In the year or so between our two meetings, I am glad that so much has been achieved by the two governments in terms of collaboration, and our bilateral ties have grown even stronger.


While the President was in Hong Kong last year, he witnessed the signing of a Hong Kong-Indonesian MOU on cultural co-operation and a joint statement on labour co-operation. A month later, our two economies signed an agreement on the automatic exchange of financial account information for tax purposes.


In July, our Financial Secretary, Mr Paul Chan, visited this fast-rising global city to officiate at the formal opening of Hong Kong’s newest Economic & Trade Office – our 12th in the world and second in ASEAN. The mission of the Jakarta Office, headed by Mrs Do, like that of our other Economic & Trade Offices, is to expand economic and trade ties between us, and to create opportunity for both of us.


HK-ASEAN co-operation

Last November was particularly gratifying. The Financial Secretary officiated at the inauguration ceremony of the Indonesian Chamber of Commerce in Hong Kong. And, after three years of negotiation, Hong Kong and the 10 member states of ASEAN – of which Indonesia is a founding member – formally signed a free trade agreement and related investment agreement.


These two agreements cover trade in goods and trade in services, as well as investment, economic and technical co-operation and dispute-settlement mechanisms. They are, in short, comprehensive in scope. They will bring legal certainty and heightened market access in trade and investment to our respective companies. They will create new opportunities for business and bolster trade and investment flow between Hong Kong and ASEAN, including, of course, Indonesia, which represents over one-third of ASEAN’s collective GDP and over 40% of its population.


Indonesia is home to the ASEAN Secretariat, which is an important reason behind the establishment of our ETO here in Jakarta. After all, ASEAN is Hong Kong’s second-largest trading partner, with bilateral trade in goods last year between Hong Kong and ASEAN totaling more than US$120 billion, up 12% over the previous year.


Our trade with Indonesia was also strong last year, up nearly 8% over 2016, to US$5.4 billion. Let me add that Hong Kong is a major source of foreign direct investment in Indonesia. In 2017, we were fourth in Indonesia’s FDI, with an amount exceeding US$2 billion.


Adding it up, I would say we have come a long way in a short time. I would say, too, that we have only just begun to tap the opportunities between Hong Kong and Indonesia, and between Hong Kong and ASEAN as a whole. The opportunities exist not only in trade and investment, but also in culture, in education, in travel and in forging a closer people-to-people bond. Consider, for example, the rise in Indonesian visits to Hong Kong. Last year, we welcomed more than 480,000 Indonesian tourists to Hong Kong, up more than 40% over a decade ago.


That should not be surprising as Hong Kong is an attractive and enticing international city for people from around the globe. Ours is a distinctive blend of East and West, a mix of global and local offerings – in everything from fashion and food, arts and culture, to leisure and entertainment.


Ladies and gentlemen, that is also a reflection of our “one country, two systems” framework. It rewards us with powerful, and ever-deepening, ties to the Mainland economy, while leaving us free to pursue global prospects. Hong Kong enjoys the unparalleled advantage of being part of China, while maintaining our unique strengths in the rule of law, independence of the judiciary, our capitalist system, rights and freedoms, etc, all enshrined in the Basic Law.


Not surprisingly, Hong Kong is one of the best places in the world to do business. For the past two years, Hong Kong has been named the most competitive economy in the world by Switzerland’s International Institute for Management Development. The Washington-based Heritage Foundation has named Hong Kong the world’s freest economy for 24 consecutive years. And, in the World Bank’s “Doing Business 2017” report, Hong Kong finished fourth for ease of doing business out of nearly 200 economies.


Hong Kong’s tax regime has always been rated highly in those global rankings. Our tax regime has always been low and uncomplicated by global standards, but we are not complacent. Since my taking office as the Chief Executive, my government has been working to make our tax regime even more competitive. A two-tiered profits tax system has been put in place since the beginning of April this year. Our profits tax rate has been lowered to 8.25% for a company’s first HK$2 million, that is US$256,000, in profits, while our standard tax rate is only at 16.5% and that standard tax rate will apply to profit exceeding the HK$2 million amount. And to encourage corporations to invest in research and development, we are putting in place “super deductions”, that is, a 300% tax deduction for the first HK$2 million in eligible R&D expenses, with the remainder at 200%.


Financial services is another strength. Just last month, the London-based Global Financial Centres Index, a semi-annual ranking of the world’s top financial centres, rated Hong Kong third, behind only London and New York. In the index’s “Human Capital” category, Hong Kong finished first.


We are China’s international financial capital, and have the first-mover advantage in the Mainland’s continuing economic reforms. Hong Kong has long been the world’s largest offshore renminbi business centre. And our financial services strengths, our capital-raising expertise and related professional services know-how, will make key contributions to the development of our country, and help power the far-reaching Belt & Road Initiative.


Belt-Road benefits

I do not have to tell Indonesia about the Belt & Road Initiative. Indeed, this plan was first proposed by President Xi Jinping in 2013, right here in Jakarta. I know Indonesia, with its strategic location and fast-growing economy, supports this strategic initiative, alongside many other nations across different continents. Built on multilateral co-operation in infrastructure, in trade and investment, in culture and in people-to-people bonds, the Belt & Road Initiative will rise as a global economic force deep into the 21st century. The member states of ASEAN are poised to play a key role and benefit from it. And with the Central People’s Government’s support, Hong Kong can contribute to each of the five areas of connectivity under the Belt & Road Initiative. This is already well illustrated in two successful Belt & Road Summits organised by the Hong Kong Trade Development Council in 2016 and 2017 and another Belt & Road Seminar held at the Great Hall of the People in Beijing in February this year in conjunction with the newly-established Belt & Road General Chamber of Commerce.


Given the significant Muslim population along the Belt & Road, Islamic finance will surely expand as the big-ticket infrastructure projects find traction. In this, Hong Kong can also offer its services. Over the past years, we have issued three international sukuk or Islamic bonds. Each has been a success. Each is a testimony to global investor confidence in Hong Kong’s financial services experience and economic fundamentals.


Alongside the financial sector, we take pride in our services professionals – world-class engineers and surveyors, architects, designers and planners, together with specialists in insurance, arbitration, risk management, project consulting and communications. They have much to offer Indonesian businesses looking to find the fast lane of the Belt & Road.


At the Boao Forum for Asia earlier this month, President Xi Jinping announced a series of measures for the further opening up of China. I believe two will prove particularly beneficial to Hong Kong and the companies that partner with us. One is further relaxation in financial services, especially in insurance. The other is President Xi’s pledge to provide a more attractive investment environment in the Mainland. In both cases, Hong Kong has what it takes to make a difference.


Then there is the Guangdong-Hong Kong-Macao Bay Area development. This development is now being taken forward as a national strategy and the detailed Development Plan will be promulgated very soon. With a collective population of 68 million, and a combined GDP of some US$1.5 trillion, the Bay Area is destined to rise as a global centre for finance, high-end services and innovation and technology.


Ladies and gentlemen, I have quickly outlined Hong Kong’s advantages, and the many opportunities in front of us. By this I mean not only Hong Kong, but our friends from Indonesia and ASEAN. But I believe, I personally believe, the best of Hong Kong is yet to come.


Chief Executive Carrie Lam gave these remarks at the “Indonesia-Hong Kong Strategic Partnership on the Belt & Road Initiative” seminar and luncheon in Jakarta on April 25.

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Youngsters HK’s future

This award is a very meaningful award. It’s an internationally recognised award.


It recognises the perseverance, readiness and courage of the awardees to embrace challenges which is very important for any youth in Hong Kong. The current term Government attaches great importance to nurturing our youngsters, particularly their development.


Youngsters represent our future, our hope, we can’t leave anyone behind. That’s why the Government has decided to upgrade the Youth Commission to become the Youth Development Commission to be chaired by the Chief Secretary – myself.


We just had our first meeting this afternoon and finished half an hour ago – very useful meeting, very constructive. We will address various issues of concern to young people of Hong Kong and carve out a career path for them and also enable them to seize the opportunities in the Guangdong-Hong Kong-Macao Bay Area development.


So, a lot will be happening in the future – we’ll forge collaboration, interaction and innovation with a view to building a better Hong Kong. We engage more gainful and constructive dialogue with our young people regardless of their background and nationalities. Hong Kong is our home, we have to make sure Hong Kong forges ahead as Asia’s world city.


Chief Secretary Matthew Cheung gave these remarks at the Hong Kong Award for Young People’s 96th Silver Award presentation ceremony on April 24.

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Talent dev’t high on policy agenda

The Jockey Club has funded numerous education infrastructure projects to help develop talent in Hong Kong. The earliest landmark was created in 1960 when the first Jockey Club-funded school – the Jockey Club Modern School – was established. Its generous donation was later expanded to cover all levels of mainstream education and vocational training. Some notable examples include the construction of the Hong Kong University of Science & Technology, which is now among the world’s top universities, and the Jockey Club Innovation Tower at the Hong Kong Polytechnic University, which is home to the Hong Kong Polytechnic University School of Design and the Jockey Club Design Institute for Social Innovation.


Hardware aside, the Jockey Club’s support for developing our human capital also takes the form of targeted scholarships. This year marks the 20th anniversary of the Hong Kong Jockey Club Scholarships, which is one of the most prestigious scholarship schemes in Hong Kong. It recognises outstanding undergraduate, post-graduate and vocational students as well as students with special education needs who combine outstanding character, leadership and academic performance with a strong commitment to serve the community. Over the past two decades, the scheme has awarded $400 million to more than 500 deserving students. Beyond financial assistance, awardees are also given valuable learning experiences through, for example, leadership training at top-notch universities abroad, induction programmes and high-table dinners hosted by community leaders.


The Jockey Club also offers scholarships at the University of Chicago Booth School of Business (Hong Kong Campus) to support aspiring leaders in non-profit-making organisations to pursue an Executive MBA programme. This world-class programme will help empower them with a global vision and an international network, thereby building the capacity of Hong Kong’s social service sector to respond to the increasingly complex social problems of the 21st century.


I have cited all these concrete examples in order to prove the determination and commitment of the club in widening our talent pool.


On the part of the Government, talent development is always high on our policy agenda. The new high-level Human Resources Planning Commission under my chairmanship has come on stream. It seeks to ensure that Hong Kong has the right quantity and quality of human resources to meet our fast changing social economic landscapes, and maintain our long-term competitiveness and as a vibrant international city. We need to fully capitalise on the huge opportunities flowing from the Guangdong-Hong Kong-Macao Bay Area development and the Belt & Road Initiative.


It is noteworthy that this year’s Budget has committed an additional recurrent expenditure of $2 billion to drive quality education. This is on top of the additional $5 billion secured when this term of Government took office last July. I should state that education has all along topped the list of the Government’s recurrent expenditure. It is estimated to account for $84.6 billion or 20.8% of the total, to be followed by social welfare on $79.8 billion or 19.6% and health at $78.1 billion or 17.5%. This manifestly underlines the importance that the Government attaches to investing in our future generations and human capital.


The Budget has also announced an injection of $800 million into the Gifted Education Fund in 2018-19 to enhance the development of gifted students. Another $800 million will also be injected into the HKSAR Government Scholarship Fund to increase the number of scholarships starting from the 2019-20 academic year to incentivise students to pursue excellence in both academic and non-academic areas.


Building on the solid foundation laid by the Hong Kong Jockey Club Life-wide Learning Fund, we have earmarked $2.5 billion in this year’s Budget to set up a new Student Activities Support Fund to provide support for students with financial needs to participate in life-wide learning activities for whole-person development.


We live in a highly competitive world and we must do our best to propel Hong Kong forward and talent provides the modernised engine.


Chief Secretary Matthew Cheung gave these remarks at the Hong Kong Jockey Club Community Day on April 21.

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Insurance sector to see good growth

The Hong Kong Federation of Insurers was founded on August 8, 1988, to promote the interests of the insuring public and advance the growth of the industry. Indeed, as the representative body of insurers in Hong Kong, it is fitting to say that HKFI has been a witness to many changes for the insurance industry over the past 30 years. In June last year, we saw the formal establishment of the Insurance Authority, and we have next year the imminent introduction of a statutory licensing regime for insurance intermediaries.


These regulatory changes have to be seen in the context of wider developments in the overall landscape for the insurance industry. First, Hong Kong’s demographic changes usher in a rapidly ageing society, which would lead to increased demand for insurance products. The second development concerns the Greater Bay Area and the Belt & Road, which we anticipate can bring new business opportunities, especially in reinsurance and captive insurance. Thirdly, there is the global trend of the development of fintech, and more specifically, insurtech. All of these changes bring opportunities and challenges, and the Government stands committed to helping the insurance industry to sail through these challenges.


Here I must digress briefly to refer to President Xi’s speech delivered at the Boao Forum for Asia on April 10. This speech referred to a change welcomed by the insurance industry because President Xi reiterated that the commitments made in November 2017 on the progressive opening of China’s financial services to foreign investors within three to five years would be duly implemented. It is actually interesting that he made a specific reference to the insurance industry – that there should be an acceleration in the opening up of the Mainland’s insurance sector.


Yesterday, Governor Yi Gang of the People’s Bank of China announced at Boao six measures to further open China’s economy, including a raise in the foreign equity cap in life insurance companies to 51% by late June this year, and a full elimination of the cap within three years. So this presents more opportunities for Hong Kong, and the Government and the Insurance Authority will continue to work with our counterparts to seek to enlarge the window for Hong Kong insurers.


Now let me come back to the happenings in Hong Kong. After taking over the statutory functions of the Office of the Commissioner of Insurance last June, the Insurance Authority is working on a new licensing regime for the regulation of insurance intermediaries. The target is for the regime to come into operation in mid-2019. Here I need to acknowledge the strong support provided by the HKFI and the industry – otherwise, this would be a mission impossible. This regime brings Hong Kong in line with the Insurance Core Principles published by the International Association of Insurance Supervisors and also addresses the concern expressed previously by the International Monetary Fund.


Another development is our ageing society. In 2016 about 16% of our population was aged 65 and above. But this will rise to about 29% in 2036. The need for retirement protection has seen a rise in demand for annuities, because they can provide a stable future income stream to the annuitants. We are working with the HKFI to formulate proposals on tax concession for premiums of deferred annuity products. This will encourage the development of the deferred annuity market as another option under the voluntary third-pillar for retirement protection. We count on HKFI’s professional input from the service providers’ perspective, and we will also join hands to educate the public about annuity products for retirement protection.


For the third development, I look beyond Hong Kong to the Greater Bay Area and Belt & Road initiatives, which present new opportunities for our insurance industry. For the Greater Bay Area, with the increased flow of people, capital and investments, this should lead to increased cross-border co-operation among insurers in Guangdong, Hong Kong and Macau, and we will continue to closely liaise with the industry and relevant authorities to promote cross-border opportunities for the local industry.


As for the Belt & Road Initiative, Hong Kong has the potential to emerge as a major risk management centre for large-scale investments and infrastructure projects. Aside from direct insurance and insurance brokerage services to Mainland enterprises, there are opportunities in reinsurance and captive insurance in particular.


To further develop Hong Kong as a captive domicile, we are amending the Inland Revenue Ordinance to extend the existing 50% tax concession for profits arising from offshore insurance business of professional reinsurers and captive insurers to their onshore business. The Government and the IA will strengthen our promotional work and proactively seek the support of relevant Mainland authorities to encourage more Mainland enterprises to set up captive insurers in Hong Kong.


The final development I would flag is the revolutionary impact of technological changes. Financial technology is revolutionising the financial services industry globally, and the insurance industry is no exception. The use of big data analytics can help insurers gain insights of customers’ needs and market demand, while the use of blockchain technology can raise business efficiency and allow insurers to enjoy easy and secure access to timely and accurate data. In this regard, I am glad to note that HKFI is developing a blockchain e-platform for motor insurance. I encourage the insurance industry to continue to devote more resources to embrace insurtech.


Of course, the Insurance Authority has also been proactive in promoting the application of fintech in the insurance industry in Hong Kong. The IA launched an Insurtech Sandbox last September to facilitate a pilot run of innovative insurtech applications by authorised insurers. Also in September last year, the IA launched a pilot Fast Track scheme, which aims to expedite applications for new authorisation to carry on insurance business using solely digital distribution channels. In addition to the above, the IA has also signed MOUs with a number of jurisdictions to strengthen international co-operation.


I am sure the insurance industry in Hong Kong is gearing up to cope with the changes and seize the new opportunities arising. Looking forward, I have every confidence that the public and private sectors will continue to work hand in hand to safeguard the professionalism and prosperity of our insurance industry, and that HKFI will continue to play an important role in the growth and development of the sector.


Secretary for Financial Services & the Treasury James Lau gave this speech at the Annual Reception of the Hong Kong Federation of Insurers on April 12.

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HK to boost I&T ecosystem

This is already the third edition of the Internet Economy Summit. The first summit was held in 2016, just a few months after an Innovation & Technology Bureau was created within the Hong Kong Special Administrative Region Government to provide dedicated leadership and co-ordinated effort in this area. Since then, the Government has made significant investments to boost innovation and technology. These included a total of $28 billion allocated under the last term of the HKSAR Government. It was a good start but given the speed of technological evolution, that is clearly not enough. And investment is only one, though an important one, measure to achieve our ultimate goal of fostering economic development and improving people’s daily lives through wider application of I&T. We must keep reinforcing and upgrading our capability as well as providing a conducive ecosystem for I&T development in Hong Kong.


This is the reason why this term of the Government, which started on July 1 last year, has come up with a more holistic approach to drive I&T in Hong Kong. In my maiden Policy Address last October, I outlined an eight-pronged strategy for Hong Kong to strengthen our competitiveness in the global I&T race, ranging from more resources for research and development and nurturing a talent pool to venture capital and popular science education. We have also highlighted four key technology areas namely healthcare technologies, artificial intelligence and robotics, smart city and fintech. I believe these can become new economic drivers for Hong Kong’s future development.


Our I&T efforts will be given a major boost in the context of the Guangdong-Hong Kong-Macao Bay Area on which a State Council-approved development plan will be promulgated soon. This economic blueprint for the nine cities in Guangdong and the two Special Administrative Regions of Hong Kong and Macau, with a population of 68 million and a combined GDP of US$1.5 trillion, will provide enormous opportunities. One of our targets is to develop an international I&T hub in the bay area and Hong Kong will play a key role in it. Together with the planned Hong Kong-Shenzhen Innovation & Technology Park at the Lok Ma Chau Loop, Hong Kong, Shenzhen and cities in the bay area can complement one another and create our version of Silicon Valley.


To realise our vision, we have put together a comprehensive package of long and medium-term initiatives as well as immediate support measures for relevant industries. I have set a goal to double Hong Kong’s R&D expenditure as a ratio to the Gross Domestic Product to 1.5% by 2022, or about $45 billion a year. To help achieve this, we will for the first time in Hong Kong provide super tax deduction of up to 300% for R&D expenditure incurred by enterprises.


On talent development, we are launching a $500 million Technology Talent Scheme, which includes the establishment of a Post-doctoral Hub and a dedicated Re-industrialisation & Technology Training Programme to subsidise local companies to train their staff in advanced technologies, especially in Industry 4.0. These will be rolled out by the third quarter of this year. Our goal is to encourage more young people to engage in R&D and technology entrepreneurship as a long-term, life-long career. We will have a separate programme for young people tomorrow. In addition, we will provide studentships for local students to pursue research postgraduate programmes in our publicly funded universities.


At the same time, we aim to attract the best talents from the Mainland and overseas to enrich Hong Kong’s ecosystem. In order to attract the world’s top scientific research institutions and technology enterprises to Hong Kong, we have earmarked $10 billion to support the establishment of two research clusters in Hong Kong: one on healthcare technologies and the other on artificial intelligence and robotics technologies. We aim to achieve a win-win result by attracting the best scientific and innovation brains from around the world to join forces with our local research talents.


I should point out that the above-mentioned $10 billion is just part of the $50 billion funding committed by the Financial Secretary in his Budget Speech delivered in February this year to support I&T development in Hong Kong. Other initiatives include allocating $7 billion to the Science Park to boost support for its tenants and set up a Smart Campus. Cyberport will also receive $200 million to enhance support for its startups.


In adopting new technology, the Smart City Blueprint for Hong Kong published last December provides a clear roadmap for making use of technologies to drive economic growth and enhance the quality of living in our city. Pivotal to this no doubt is the application of information and communications technology, in particular big data analytics, cloud computing and Internet of Things to take advantage of the ever-increasingly connected Internet-driven economy. We will invest more than $900 million in the next few years to implement several smart city infrastructure projects, including the provision of e-ID to all residents, and launching a multifunction smart lamppost pilot scheme.


The success of all these programmes and initiatives requires strong leadership and sustained investment well into the future. Within the Government, the high-level Steering Committee on Innovation & Technology, which I personally chair, will provide the steer and co-ordination needed at the highest level to implement our I&T agenda. With the support of industries and the community at large as well as our partners in the Mainland and around the world, I look forward to sharing with you the results and achievements on different fronts at next year’s Internet Economy Summit.


Chief Executive Carrie Lam gave these remarks at the Internet Economy Summit 2018 on April 12.

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Gov’t will be proactive: CE

What will investors be looking for when they are trying to find a destination for investment or to set up a major office to look after their investment for their institutional investors, wealthy people and so on? I come round to think that there will be four factors. First is the core strength of this place. Second is connectivity. Third is the growth opportunities and finally it’s a proactive government.


Core strengths      

On the core strengths, this has been rehearsed time and again by myself and by my senior colleagues whenever we promote Hong Kong. Hong Kong prides itself on the rule of law underpinned by an independent judiciary. When I said an independent judiciary, they are not just empty words. If one looks at the Basic Law, the section with the largest number of provisions in the Basic Law is about the judicial system. All the details about Hong Kong’s judiciary are laid down in this constitution, governing “one country, two systems”. Notably it’s the design of the Court of Final Appeal. Just three weeks ago, I announced that I have accepted the recommendation to appoint two more illustrious and eminent lady judges. For the first time, a lady judge is going to sit on the Court of Final Appeal, making a total of 14 such illustrious, world-renowned judges from other common law jurisdictions sitting on the Court of Final Appeal. So I will ask myself if Hong Kong does not have an independent judiciary, if Hong Kong’s judges or courts are, as alleged by some of the commentators, under the undue influence of China or the Government, how on earth would these illustrious judges be happy or willing to sit on the Court of Final Appeal? So I hope that that is a very good indicator of Hong Kong’s independent judiciary.


Beyond the independence of judiciary, we also look to establish a legal and dispute resolution services hub in order to exemplify this very unique strength of Hong Kong, the rule of law. Of course for investors, you also look for a place where there is a very clear and strong market access, transparency and regulatory certainty. I don’t need to go into all these. I’m sure some of the speakers or panellists later on will talk about Hong Kong’s regulatory environment and the rule-based system that we are practicing in this place which of course make us one of the most important international financial centres in the world.


And then we have a clean and efficient government. Although from time to time, there are still complaints about our efficiency and about some bureaucratic rules and inertia, but I think by and large, we can claim that the Hong Kong Special Administrative Region Government is both a clean and efficient government.


And then we have very strong public finances. Investors will worry if the government of the place is in great debt; then you would be worried about whether the rules will be changed overnight and so on. But the HKSAR Government is extremely blessed with very strong fiscal strength. By the end of the last financial year, our total fiscal reserve, that is not counting the Exchange Fund reserve, just the accumulated surpluses over the years, amounts to over $1,100 billion. And what does $1,100 billion mean? It means that even without any tax revenue, we can sustain the current Government for two full years. Of course, on top of that, we do have other assets and we have the Exchange Fund.


Then we’ll come to something which will be very close to your heart, that is the very low tax regime, simple and now more competitive. We used to say the Hong Kong tax system is simple and low. I have inserted this word “competitive” in this term of the Government. Because in order to stay ahead of the game in this highly globalised environment, we have to be competitive. Otherwise, we will be sort of “defeated” by other economies. So we now have a tax review policy unit going on to look at what more we can do in providing tax measures that are favourable for all sorts of activities. We have already introduced, from the beginning of this fiscal year, the two-tiered profits tax. So, when a flat rate of 16.5% for profits tax is low enough by world standard, we now have a two-tiered profits tax, which charges half of 16.5, that is 8.25% for the first $2 million profits of all enterprises. Of course, it will bring more benefits to the SMEs and the start-ups and the micro-companies, but generally we don’t discriminate. For big companies, the first $2 million profits will also be charged at the lower rate in this two-tiered profits tax system.


We will shortly be introducing a piece of legislation to introduce for the first time in Hong Kong’s tax system what we call “super deductions”. In other words, in order to incentivise corporations to spend on certain areas in their conduct of business, we give them extra profits tax deduction. And the first area so identified is research and development, because I have a strategy to push Hong Kong’s innovation and technology development and we could not just rely on public funding for R&D. We want to have more investment by private corporations on R&D. So, this piece of legislation will introduce super deductions for corporations’ R&D expenditure. Again, sort of two-tiered: for the first $2 million, it will be 300%, and for anything above $2 million, it will be a 200% deduction.


We have other things to come on the tax system, but that will be very targeted. For example, we already have some favourable and facilitating tax measures for attracting what we call the treasury functions to Hong Kong for aircraft leasing activities. And in the promotion of Hong Kong’s bond market, the Financial Secretary has just announced in his Budget that we will provide a grant of up to $2.5 million per bond issuance in Hong Kong in order to attract more bond issuance to Hong Kong, especially green bonds. The Government will take the lead in the issue of green bonds and we have already introduced a Green Finance Certification Scheme so that corporations will feel more at ease to issue green bonds in Hong Kong.


Finally, in terms of our core strengths, there is one aspect that has not been highlighted enough, which I will do every time when I talk about Hong Kong’s core strengths. That is our being one of the safest cities in the world. I am sure as an investor, especially an investor who wants to bring their young family to Hong Kong, you will be very concerned if this is not a safe city. Our crime rate, expressed in the number of crimes big and small, per 100,000 population is only 758, which is a new low in the last 46 years, which is much, much lower than similar cosmopolitan cities like New York, London and Paris. Don’t take it for granted. This safe-city reputation is the result of the very hard work of our disciplinary forces, especially many of our policemen and policewomen in the front line.


International recognition      

All these core strengths when they are put together, earn us something. They are very well recognised by international agencies. For 24 years in a row uninterrupted, Hong Kong has been ranked as the freest economy in the world by the US-based Heritage Foundation. And the last two years, we also won the top ranking of being the world’s most competitive economy by the Swiss-based IMD. And I am happy to say, as I came back from the World Economic Forum (WEF) in Davos, in the last year or so the WEF ranking of Hong Kong’s competitiveness has also risen from ranking number nine to now number six. Of course, I look forward to maintaining and improving these international rankings during my term.


Now, I come to the second aspect about connectivity. Because institutional investors like yourselves, many of you are multinational, so you need to travel extensively, meeting your investors and your counterparts in other parts of the world. Hong Kong is an extremely well-connected city. Our Hong Kong International Airport is now receiving over 72 million passengers every year, making us the world’s number three in passenger volume. But we are the world’s number one in terms of air cargo. We are going to see more and more high-end air cargo using Hong Kong. We have a Third Runway System now under construction and when it is completed, we will be able to take in over 100 million passengers.


I said Hong Kong is well connected because you can travel to 220 destinations all over the world from our Hong Kong International Airport. That’s why sometimes I look at reports from my government colleagues telling me a dignitary or head of state is coming to Hong Kong, they are coming to Hong Kong on transit because they could not fly direct from home, so they have to use Hong Kong which is an extremely efficient aviation hub in the world. This is on the aviation side.


On the land side, 2018 is an extremely exciting year for us in terms of enhanced connectivity. Within the next 12 months or so, Hong Kong will commission three major pieces of cross-boundary infrastructure. You have heard a lot about the bridge especially in recent days, the Hong Kong-Zhuhai-Macao Bridge, which will significantly shorten the travelling time between Hong Kong and the western part of Guangdong from the current four hours to only 45 minutes between Lantau Island and the city of Zhuhai. And then we will be opening by end-September the Hong Kong section of the Guangdong-Shenzhen-Hong Kong high-speed rail, and the travelling time between the West Kowloon Station and Guangzhou is a mere 48 minutes. To Shenzhen, it is an even shorter distance. I was telling the Shenzhen party secretary that in the future coming to your office for a meeting will be quicker than going to the Kowloon office of the HKSAR Government. And then we will be opening the seventh land-based boundary control point in an area called Heung Yuen Wai in Hong Kong and Liantang on the Shenzhen side. This eastern boundary control point has not been well publicised enough because it is, up till now, an extremely smooth project. Good things in Hong Kong do not get reported! You heard a lot about the bridge, you heard a lot about the train, but how come there is this big piece of infrastructure that has not been mentioned? We are all expecting to open this in either the end of this year or early 2019 because every day now, this city has 600,000 passenger trips across the land-based border – this is discounting by ferry, by air. Just the six control points together are receiving over 600,000 passenger trips every day, making them the world’s busiest control points.


Apart from physical connectivity by air, or by road, or by rail, digital connectivity is equally important. I hope you are satisfied with your speed of Wi-Fi and Internet access in Hong Kong, and it’s uninterrupted. We still have a blueprint to turn Hong Kong into a smart city, to extensively increase the number of Wi-Fi hotspots in the public facilities and so on. And Hong Kong is also home to major data centres, that is Amazon, Google and so on.


Financial connectivity is something that is more or less exclusive to Hong Kong because of “one country, two systems” and the very supportive policies from the Central Government. Since 2014 we almost have one major initiative every year. We launched the Shanghai-Hong Kong Stock Connect in 2014, 2015 is the Mutual Recognition of Funds, 2016 is the Shenzhen-Hong Kong Stock Connect and last year, that is within the first week of my assuming office, we launched the Bond Connect. I expect with what President Xi told the world yesterday at the Boao Forum for Asia, with the opening up or the further opening up of the financial services, Hong Kong will stand to benefit from this enhanced connectivity.


Abundant opportunities      

The third area is the growth opportunities. Where’s the growth coming from in this very mature economy, Hong Kong? This Government has a strategy to consolidate our traditional strengths and also to look for new economic areas for growth. In terms of one of our strongest pillars, that is financial services, you have heard what the Hong Kong Exchange has done in recent months. They are really picking up the momentum with the support of the Securities & Futures Commission, with the completion of the consultation on the changes to the listing rules to accommodate new technology and new economy corporations, to put in place pre-revenue listing for biotechnology companies, and also to attract companies, especially Mainland companies which have listed abroad, to come back to Hong Kong for secondary listing. All the exciting development in the Hong Kong financial services will take place within this year.


We have not lost sight of the port. The port is still extremely important for Hong Kong although we are facing a lot of competition from Mainland ports. Our ranking has gone down from the world’s number one to maybe the world’s number five. But we are moving up at the high-end into maritime services. Whether it’s in terms of maritime insurance, registration, licensing or arbitration, these will be the activities that my Government will promote insofar as the port logistics and maritime services are concerned.


The two areas that my Government has identified for a major push with government support, investment and public-private partnership will be I&T as well as creative industries. On the former, I can give you a one-hour talk on I&T. I just suggest you may wish to read my Policy Address delivered on 11 October last year, in which I have outlined an eight-pronged approach to promote I&T development in Hong Kong, ranging from infrastructure, a second science park in the area called the Lok Ma Chau Loop, to attraction of talents, provision of tax incentives and building up critical mass in Hong Kong’s research capability by attracting more overseas, renowned, research and development institutions to Hong Kong. The recent very good gesture of my Financial Secretary to give us $50 billion in I&T in his latest Budget is very much welcomed.


President Xi Jinping announced a series of measures at the Boao Forum for Asia yesterday. Of the four major initiatives, two will particularly be relevant to Hong Kong. One is further relaxation in financial services, especially in insurance, because in the last year or so, since my campaign days, I have heard a lot of complaints and requests from the insurance sector that it’s quite difficult to access the Mainland market. So this very explicit announcement by President Xi should be very much welcomed. We are waiting for details and we will do more research and share it with the insurance and other financial sectors in Hong Kong.


The other is President Xi’s pledge to provide a more attractive investment environment in the Mainland. But that doesn’t mean that you can forego Hong Kong. I think Hong Kong will continue to be that conduit, providing the needed professional services for you to access the more favourable investment environment in the Mainland. I think whether in terms of broadening relaxation and providing a more favourable investment environment and also in strengthening the intellectual property protection, all these aspects mentioned by President Xi give me the impression that my country is now very confident. As President Xi said, we are not looking for trade surpluses. We just want global peace and global business so that we could raise the people’s standard of living.


Together with the two major national initiatives which Hong Kong will play a significant part in, that is the Belt & Road Initiative and the Guangdong-Hong Kong-Macao Bay Area, I feel that the growth opportunities in Hong Kong are just plenty. It is for us to seize these opportunities and to provide the necessary environment for institutional investors and also to provide more job opportunities for our young people.


On the Belt & Road, we have already signed an arrangement with the National Development & Reform Commission and every year we now host, together with the Hong Kong Trade Development Council, an international Belt & Road Summit in Hong Kong. This year is the third edition which will take place on 28 June. If you have interest, please come to join this very exciting annual summit on the Belt & Road. Later this year, we will have another Belt & Road summit which is theme-based on tourism, that is, how we can promote tourism along the Belt & Road countries.


On the bay area development now we are enthusiastically waiting for the State Council to announce the approval of the Bay Area Development Plan, but even before that, I have been visiting cities in the bay area and having meetings with the Guangdong cities’ officials to talk about collaboration.


Finally, is the Government. I know that Hong Kong is very proud of a small-sized government, market economy. That will still be our guiding principle. But as I just mentioned, in the highly globalised and competitive environment, the Government has to be more proactive. We could not just lay back and wait for things to happen. So I can promise you and assure you that in this term of the HKSAR Government, myself and my colleagues will be very proactive. We will play well the traditional roles of being a public service provider and a regulator. In addition, we are very happy to play the role of a facilitator and a promotor. What do we mean by being a facilitator? There are sometimes very interesting projects that come our way but these projects do not nicely fit into the bureaucratic compartments. So we need to be able to respond to these interesting projects and find a way forward. For that purpose, I have created or transformed an office in the Government, previously called the Central Policy Unit, into what I called now PICO, the Policy Innovation & Co-ordination Office. The PICO will be happy to receive any project proposals, to provide the first-stop and hopefully the one-stop advisory services for investors who are happy or willing to take forward some unconventional projects in Hong Kong for the benefit of investors and for the benefit of Hong Kong’s economy.


Chief Executive Carrie Lam gave these remarks at the Bloomberg Invest Asia Summit on April 11.

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Boosting the economy with I&T

When it comes to financing, you’re certainly in the right city. One of the world’s leading financial capitals and China’s major international financial centre, Hong Kong is indisputably well positioned to meet the varying financing needs of tech companies and of all companies in fact, whatever their business, their size and their stage of development.


Our stock market capitalisation rings in at more than US$4 trillion. And in terms of funds raised through initial public offerings, the Hong Kong Stock Exchange has topped the world in five of the past nine years. Last year, we raised US$16.5 billion.


We have recently reviewed our listing regime to look for ways to facilitate the listing of emerging and innovative sector companies here in Hong Kong. We are proposing to permit the listing of pre-revenue biotech issuers as well as companies from emerging and innovative sectors with weighted voting right structures. We are also proposing to establish a new concessionary secondary listing route for Greater China and international companies that wish to secondary list in Hong Kong. A market consultation on these proposals has just been completed and I look forward to the implementation of the new listing regime very soon.


As for innovation and technology, without doubt it is the most powerful driver of the global economy in this increasingly globalised, technology-transforming world. It is certainly central to Hong Kong’s policy agenda and critical to the sustainable development of our city.


Substantial resources have been allocated in the past few years to support the development of I&T with a focus on four critical areas. They are biotechnology, artificial intelligence and robotics, smart city and fintech.


This year, an additional $50 billion – that’s nearly US$6.5 billion – has been earmarked for supporting the development of I&T and smart city initiative. Part of the additional resources will be provided for Cyberport, Hong Kong’s information and communication technology (ICT) flagship, to enhance support for startups and promote the development of digital technology ecosystem.


One of our key initiatives that I would like to highlight is our plan to establish two research clusters – one for healthcare technology, the other for artificial intelligence and robotics technologies. The objective is to attract more renowned international and Mainland research institutions and technology companies to Hong Kong and to bring in more experts from around the world, thereby helping us nurture our homegrown talent.


I am confident because of our encouraging track record in this regard. For example, in late 2016, the celebrated Karolinska Institutet of Sweden opened its first overseas research facility for reparative medicine at Science Park.


Then, last September, the Massachusetts Institute of Technology (MIT) opened its first overseas Innovation Node here, providing entrepreneurial education and training for students and researchers from MIT and from Hong Kong as well.


MIT has also established a consortium here for research and development collaboration with the support from the Hong Kong University of Science & Technology. To date, our Innovation & Technology Fund has supported 13 of the MIT-led consortium’s R&D projects, ranging from Internet-of-things for intelligent buildings and transport to e-learning research.


And we will also launch a Technology Talent Scheme later this year. New initiatives include the creation of a Postdoctoral Hub scheme, designed to help recruit post-doctoral talent for our research institutions. The scheme will also fund local companies on a matching basis to train their employees in high-end technology.


Of course, it helps that Hong Kong boasts world-class ICT infrastructure, counting 11 regional and trans-Pacific submarine cable systems, 20 overland cables systems connected to the Mainland and 10 external communication satellites. Our average Internet connection speed is the world’s fourth-highest. Our household broadband penetration rate exceeds 92% and our mobile penetration rate, at 247%, is among the highest anywhere in the world.


According to Compass, a San Francisco-based research firm, Hong Kong is among the world’s five fastest-growing startup centres and one of the world’s top 25 startup hubs.


The startup scene here is flourishing. InvestHK’s latest Startup Profiling Survey shows that startups this past year have gone up by 16%, to 2,300, with a 21% gain in startup jobs, to about 6,300.


We believe I&T is not just a single industry but a new model of development – one that sets new industries in motion, gives fresh impetus to traditional industries, creates wealth as well as a flourishing future for our young people.


Today’s forum is a timely and welcoming platform for sharing our experience in embracing innovation and technology and in turning inspirations into applications, and exploring how I&T can bring real and long-term benefits to our society and mankind.


Financial Secretary Paul Chan gave these remarks at the Asia-Pacific Business Forum 2018 held by the United Nations Economic & Social Commission for Asia & the Pacific on April 10.

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HK an ideal business gateway

This is the first time for Hong Kong to receive the Prime Minister of the Netherlands, signifying that the close ties between Hong Kong and the Netherlands are growing from strength to strength. Our trade relationship dates back to the 17th century when trade between the Netherlands and southern China, including Hong Kong, boomed. Today, the Netherlands is Hong Kong’s third largest trading partner in the European Union while Hong Kong is the Netherlands’ fifth largest trading partner in Asia.


The Netherlands has a notable presence in finance, trade, transportation, wholesaling and retailing as well as other sectors including technology, innovation and design in Hong Kong. Currently, there are over 200 Dutch firms in Hong Kong, including the famous brand names of ABN AMRO, KLM Royal Dutch Airlines, Philips, Shell, Heineken and much more. I have no doubt that our bilateral relations will continue to develop and thrive in the years ahead.


Hong Kong is renowned for its strategic geographical location and connectivity, reaching half of the world’s population within five hours’ flight time. We are also the most open, international, well-connected, vibrant and important financial metropolis in China, making Hong Kong an ideal gateway for overseas businesses including those from the Netherlands to enter the China market as well as the entire Asia and Asia-Pacific region, which are the world’s fastest growing and biggest markets.


Last year, US$8 billion worth of goods in the total trade between the Netherlands and the Mainland was routed through Hong Kong. That accounted for nearly 8% of the total trade between the Netherlands and our motherland in 2017, demonstrating our growing role in strengthening the links between Hong Kong, the Mainland and a world of business.


Our motherland’s far-reaching Belt & Road Initiative and the Guangdong-Hong Kong-Macao Bay Area development will certainly create new impetus for our trade, financial, economic and cultural links with our counterparts.


Hong Kong is destined to play a major role in those two unprecedented mega developments, given our ever-increasing economic integration with the Mainland, our financial and professional expertise, and our unique advantages and attractions under “one country, two systems”. We stand ready to join hands with our Dutch business partners to seize the outsized opportunities that the Belt & Road and Bay Area initiatives will offer long into this 21st century.


People-to-people connection forms an integral part of the Belt & Road Initiative. The signing ceremony of the working holiday agreement between Hong Kong and the Netherlands later this morning will open the doors further for our young people to foster broader, deeper and more frequent cultural, academic and talent exchanges. The agreement also signifies the fusion of the bauhinia and the tulip.


Prime Minister, the fourth month-long Dutch Days in Hong Kong is well under way and will continue right through April under the theme of “Golden Age”. It is both a celebration of the long and close relations between the two places and more importantly, a renewal of the shared commitment to forge a new golden age of collaboration on business, innovation, art and enterprise. I am sure that this year’s Dutch Days in Hong Kong will be yet another resounding success.


Acting Chief Executive Matthew Cheung gave these remarks at the opening ceremony of the Consulate General of the Netherlands on April 9.

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