Legal ties with Mainland an edge: SJ

Under the principle of “one country, two systems” guaranteed by the Basic Law, Hong Kong, as the only common law jurisdiction in China, has the unique advantage of enjoying strong support from the motherland and being closely connected to the world, acting as a super-connector for Mainland capital to “go global” and for channelling foreign investments into the Mainland. To maximise the advantages of the common law system that Hong Kong takes pride in, and leverage its strengths to meet the country’s needs, the Department of Justice has been actively developing legal mechanisms for mutual legal assistance in civil and commercial matters with the Mainland, with a view to building bridges for collaboration between the “two systems” and providing greater convenience and stronger legal protection for cross-boundary civil and commercial activities.

 

After establishing the relevant mechanisms, we have not stopped in our tracks. We have been actively participating in and promoting professional exchanges between the Mainland and the Hong Kong legal sectors, so that we will remain “down-to-earth” and have a practical grasp of the implementation of the relevant mechanisms in both places, as well as the views and needs of the industry and other stakeholders.

 

Our colleague from the Legal Enhancement & Development Office earlier participated in a roundtable meeting co-organised by the Law Society of Hong Kong and the Guangdong Lawyers Association, under the theme of “Experience Sharing on the Implementation of Mutual Legal Assistance between the Mainland and Hong Kong on Cross-boundary Dispute Resolution”. Together with around 70 outstanding young lawyers from both Guangdong and Hong Kong, they conducted in-depth discussions and shared experiences on matters relating to the various mutual legal assistance arrangements between the Mainland and Hong Kong on civil and commercial matters, including the issues relating to the implementation of those arrangements in Hong Kong and the Mainland.

 

I am very pleased that the Law Society of Hong Kong and the Guangdong Lawyers Association have provided a valuable platform for the exchange of views on the actual operation of the relevant arrangements from the users’ perspective as well as on the room for further enhancement. For example, Hong Kong lawyers shared their experience on the interpretation of “choice of court agreement” by the Hong Kong court for the purpose of the Mainland Judgments (Reciprocal Enforcement) Ordinance. Mainland lawyers shared their experience on the service of Hong Kong legal documents in the Mainland and suggested to explore the extension of the scope of mutual legal assistance with the Mainland to pre-litigation preservation or interim measures. We place great importance on these constructive comments and will carefully study them and take appropriate follow-up action.

 

With the strong support of the central government, Hong Kong and the Mainland have so far concluded a total of nine arrangements on mutual legal assistance in civil and commercial matters, covering procedural assistance, arbitration matters, and mutual recognition and enforcement of judgments relating to matrimonial and family cases, bankruptcy or winding-up proceedings and other civil and commercial matters. This highly targeted yet comprehensive mutual legal assistance regime is one of the key contributing factors to Hong Kong’s unique competitiveness in legal and dispute resolution services, giving Hong Kong an advantage that is unavailable to other jurisdictions. The department will spare no efforts in further consolidating and enhancing this edge.

 

In terms of future work, we will strive to bring into operation as soon as possible the Mainland Judgments in Civil & Commercial Matters (Reciprocal Enforcement) Ordinance, which was passed last year and will provide a more comprehensive regime for the mutual recognition and enforcement of civil and commercial judgments between the two places. Meanwhile, we will continue to maintain close communication with the legal industry and other stakeholders, listen attentively to their requests and suggestions, promote and optimise the operation of the relevant arrangements, so as to ensure we are responding proactively to people’s needs, stimulating the development of legal and dispute resolution services, facilitating the interface between the legal systems of the Mainland and Hong Kong and enhancing the rule of law.

 

Secretary for Justice Paul Lam wrote this article and posted it on his blog on April 19.

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HK proactively attracts talent

I am glad to join you all today at the International Forum on Progress Through Collaboration. This forum could not be timelier. With the strong support of our motherland, and the concerted efforts of the Hong Kong Special Administrative Region Government and society at large, Hong Kong has resumed full normality after three years of the COVID-19 pandemic.

 

Having resumed normal travel with Mainland China and the international world, Hong Kong is back on stage and back in business – in the business of making great progress through collaboration.

 

Just now, the Chief Executive has updated us on certain policy areas – including financial services, business and trade, innovation and technology, legal and dispute resolution services – that our Government is putting in efforts, leveraging the city’s strengths under the “one country, two systems” principle.

 

At the core of our work is collaboration with the business, academic and research sectors alike, to drive Hong Kong’s “eight hubs” development as underpinned by the National 14th Five-Year Plan.

 

Our collaboration is cross-sectoral. An example with promising prospects is the development of fintech. The growth in the number of fintech companies speaks for itself – from no more than 180 five years ago to over 800 to date.

 

We are also pleased to note that many of them are founded by talent worldwide – from Mainland China, France, Israel, the UK, and other places.

 

And to support sustainable fintech development, we are providing startups with seed funding, investor matching, incubation and professional support services; launching regulatory sandboxes in collaboration with Mainland authorities; and taking bold initiatives such as issuing early this year the first ever tokenised government green bonds.

 

Speaking of green finance, opportunities are tremendous likewise. As the Chief Executive has noted, a recent initiative is the international carbon marketplace named Core Climate, launched by Hong Kong Exchanges & Clearing last October, to enable effective trading of voluntary carbon credits and instruments across Asia and beyond.

 

From a macro perspective, our Government is establishing a Green Technology & Finance Development Committee to produce an action agenda. This agenda will cover, among other things, green certification and green standard setting, converging the Mainland and international standards.

 

No less important, our collaboration is multicultural. Hong Kong is developing into an East-meets-West centre for international cultural exchange to tell good Hong Kong stories worldwide.

 

At centre stage is the West Kowloon Cultural District. It is home to two world-class museums – M+ museum and the Hong Kong Palace Museum, as well as Xiqu Centre, combining the East with the West and the ancient with the modern.

 

Other infrastructural projects of the city, to be completed in the near future, include the East Kowloon Cultural Centre to support art tech development and the Kai Tak Sports Park to provide world-class venues for international sports events.

 

Speaking of events, we are welcoming the launch or return of various mega events in Hong Kong. The recent ones include Art Basel Hong Kong, the Hong Kong Sevens, Entertainment Expo Hong Kong and the Digital Economy Summit. Leisure and business travellers are coming in to boost our economy. Their visits also help enhance our city’s cosmopolitan image.

 

All such hardware and software add to the ecosystem of Hong Kong’s arts and culture, and creative industries. To enrich this ecosystem, our Government is working with industry leaders – through the newly formed Culture Commission – to map out a development blueprint.

 

Looking beyond the city, our collaboration is regional as well as international. With our motherland’s Guangdong-Hong Kong-Macao Greater Bay Area development and Belt & Road Initiative, Hong Kong actively plays the role as a super connector between Mainland China and the rest of the world.

 

As the Chief Executive has mentioned, our Government is stepping up collaboration with Shenzhen to develop the Shenzhen-Hong Kong Innovation & Technology Co-operation Zone, as well as the Association of Southeast Asian Nations member states to seek early accession to the Regional Comprehensive Economic Partnership.

 

We are determined to achieve these goals by upholding Hong Kong’s competitive strengths, including a highly open and internationalised market, the rule of law, robust infrastructure and the free flow of capital, information and people.

 

And to take our city’s “eight hubs” development to new heights, I and the Financial Secretary are respectively driving inter-bureau efforts to proactively bring in top-notch talent and strategic enterprises from around the world.

 

Our enhanced package of talent admission schemes – with application procedures streamlined, requirements relaxed, and new initiatives introduced – has been well-received.

 

A prime example is our newly launched Top Talent Pass Scheme, targeting high-income professionals and graduates from the world’s top 100 universities. Over 20,000 applications were received in just a quarter’s time, and nearly 12,000 of them were approved as of late March.

 

The internationalised nature of the scheme can be seen by the wide-ranging locations of the top universities where the talent in the approved cases graduated. They range from Mainland China, Singapore and South Korea to the US, Australia, the UK and also Canada.

 

At the same time, a dedicated Office for Attracting Strategic Enterprises has been set up to draw enterprises of strategic value to our economy by tailoring incentive packages. We are also breaking new ground by setting up a fund of around US$4 billion to co-invest in them or their projects.

 

Our target sectors include life and health technology, artificial intelligence, data science, fintech, advanced manufacturing and new energy technology. The office’s active discussion with relevant enterprises is underway, with good news to be announced in good time.

 

Chief Secretary Chan Kwok-ki gave these remarks at Our Hong Kong Foundation International Forum on Progress through Collaboration on April 17.

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Belt-Road brings opportunities

President Xi Jinping launched the Belt & Road Initiative back in 2013. This visionary initiative is built on connectivity – in infrastructure, trade, finance and people-to-people bonds – here in Asia to the Middle East, Africa and far beyond. Its goal is clear and clearly laudatory: the achievement of common development and prosperity for all.

 

Some 60 economies came together a decade ago in pursuit of that goal. But today, more than 150 countries and 32 international organisations have signed Belt & Road agreements with the Mainland. Collectively, they account for about 40% of the global GDP and 45% of the world’s merchandise trade.

 

And let me add that with the rising economic importance of Asia and the centre of economic gravity shifting from the West to East, the future of the Belt & Road is all the more promising.

 

Economists are expecting that the 10 countries of ASEAN are on the way to become the fourth largest economy in the world by 2030. Meanwhile, the Gulf countries, amid high geopolitical tensions and the financial turbulence in Western economies, are also looking to this part of the world to diversify their investments. They are very keen on collaborating with us.

 

This cannot be more explanatory than the impressive progress of co-operation. The annual trade volume between China and Belt & Road nations has doubled since the initiative’s inception, from around US$1 trillion in 2013 to more than US$2 trillion last year, with an average annual growth rate of 8%.

 

Last year, despite the challenging economic environment, China’s Belt & Road non-financial outbound direct investment increased by 3.3% to about US$21 billion.

 

Increasing infrastructure connectivity among the Belt & Road countries is also bringing widespread benefits to participating economies.

 

Both Julia (Ms Julia Carlton, master of ceremony) and Regina (Mrs Regina Ip, Co-Chair of the Maritime Silk Road Society) alluded to the various mega infrastructure projects in Pakistan, in Southeast Asia and in Africa. I am not going to repeat them here, but they certainly signify some of the landmark initiatives set in motion by the Belt & Road Initiative.

 

HK’s roles

Hong Kong is a participant, contributor and beneficiary of the Belt & Road Initiative. Under the “one country, two systems” principle, Hong Kong serves as a key link, a central connector, between our nation and the world. We are, as well, a functional platform for the Belt & Road, blessed with advantages that can make all the difference for Belt & Road economies and companies.  

 

That certainly includes our diversified financial and professional services offerings.

 

Hong Kong, after all, is a premier fund-raising platform. Aspiring for faster and greater development as well as higher quality of life, many Belt & Road countries have devised ambitious infrastructure development plans.

 

Green transformation is a common project as the world heads towards carbon neutrality. Estimates have suggested that the gap for green funding in Asia would amount to US$66 trillion in the next three decades. This is a huge funding gap.   

 

Hong Kong is Asia’s premier green fund-raising platform. Our green and sustainable debt arranged or issued reached more than US$80 billion last year. They included multi-currency issuances involving US dollars, Euro, renminbi and Hong Kong dollars, with various tenures of bonds up to 30 years.

 

Besides, in experimenting with the combination of fintech, blockchain technology and bond issuance, as well as increasing the efficiency of transactions, we issued the first ever government tokenized green bond in February this year. 

 

What’s more, Hong Kong also has strong greentech potential, where green start-ups with innovative technologies are already opening up their markets in the Belt & Road countries.

 

Synergising with the strengths of innovation in the Greater Bay Area, we see boundless potential for Hong Kong as a regional or even world green leader. That’s why I have set out in my Budget to develop Hong Kong as an international greentech and GreenFi centre.

 

As Belt & Road countries re-centre their economic focus to the East, it can be expected that the use of renminbi (RMB) as a trading and reserve currency will rise. Given China as the world’s second largest economy, the use of RMB has ample room to grow in light of the current very modest share of the currency in the world’s cross-border payments and as reserve currency – both at the moment being less than 3% of the global total. 

 

Hong Kong as the world’s largest offshore RMB centre, and as a trusted international financial centre, stands ready to play an active role in the process, thus also helping with the internationalisation of RMB. 

 

We are striving to enrich our RMB ecosystem and infrastructure and to roll out more products and risk management tools so that we will be able to address the investment needs of countries.

 

Our services sector is no less formidable, no less diversified. From feasibility studies and project management to architectural and engineering design, as well as legal services, risk management and many more, Hong Kong is the world’s one-stop Belt & Road centre for professional services.

 

Connectivity boosted

We have already set off to revitalise and renew Hong Kong’s links with the Belt & Road countries to capture the enormous opportunities ahead. That includes visits to ASEAN countries and the Middle East by the Chief Executive and other senior government officials since October last year.

 

Our mission, let me add, was rewarding for all concerned. For instance, in the Chief Executive’s visit to the Middle East in February, 13 business-to-business MOUs and co-operation agreements were signed. 

 

I am confident that more financial, commercial and trade co-operation, and collaboration, will follow.

 

Business and investment aside, we are equally keen to advance connectivity with countries, and communities, of wide-ranging cultural and ethnic backgrounds.

 

We are blessed to have the full support of our country in emerging as an East-meets-West centre for international cultural exchanges. Realising that goal will demand surpassing connectivity, and creativity, with our Belt & Road partners.

 

And that includes welcoming talent from Belt & Road countries to Hong Kong. I am pleased to remark that since the launch of our various new or upgraded talent admission schemes since last December, the response has been overwhelming. We are glad to note that today’s Belt & Road Forum puts a spotlight on Belt & Road opportunities and on talent, as well – on enticing professionals from these countries to look to Hong Kong for their future.

 

Of course, we would be glad to see our people, particularly the younger generation, to explore their careers and opportunities in Belt & Road countries as well. That means more people-to-people exchanges and business opportunities for Hong Kong. No doubt, the forum today will consider how we can train, and retain, our own young professionals to help Hong Kong take full advantage of the promise that the Belt & Road offers.

 

Financial Secretary Paul Chan gave these remarks at the Belt & Road Forum: Brave New World on April 14.

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Virtual asset risks controlled: FS

Rebranded from the Internet Economy Summit, the Digital Economy Summit is a great comeback, bringing great minds, visionaries and pioneers together to brainstorm how Hong Kong can maximise the potentials of digital economy and take innovation and technology to a higher level.

 

And for this FinTech Forum, I am glad that we have a distinguished group of speakers and panellists from regulators, the financial services industry, Web3 innovators and academia who will dive deep and share their valuable insights on different aspects of fintech, Web3 and the digital economy.

 

As the starter for today’s rich programme, allow me to briefly talk about some of the developments and opportunities for the fintech industry in Hong Kong.

 

Hong Kong as a leader in fintech

 

Hong Kong has a vibrant fintech ecosystem. The COVID-19 pandemic did not stop us from attracting world-class visionaries to make Hong Kong their home. Only five years ago, we counted no more than 180 fintech companies. Today, we are home to more than 800 fintech enterprises, large and small. Together, they offer a wide range of innovative services in mobile payments, cross-border transfers, intelligent financial consultancy, wealth management, virtual asset trading and blockchain. A number of them have already marched into markets in Asia.

 

Our approach to fintech

 

This is the success of the concerted effort of the Government, the public sector and the private sector. As for the Government and the public sector, we have been taking a proactive and catalytic approach in spurring fintech development. That includes a series of seed funding schemes, investor matching, incubation and professional support services for fintech startups, including, among others, those provided by Cyberport. That also includes creating a favourable regulatory environment that facilitates innovation – for instance, rolling out regulatory sandboxes in collaboration with the authorities in the Greater Bay Area. We also take the lead in experimenting with fintech, like issuing the first ever tokenised government green bonds in February this year, by bringing bond issuance onto a distributed ledger.

 

Funding is a key element for startups. By building a vibrant private equity and venture capital ecosystem, as well as taking forward a series of reforms to facilitate the listing of new economy companies on our stock exchange since 2018, we have reinforced our strengths as a prime location for global innovative enterprises to grow and thrive, where they could access capital from the Mainland and all over the world.

 

Of course, much is attributable to the constant drive for innovation and excellence by our entrepreneurs who always invent new applications and business models and find new opportunities under evolving environments.

 

Fintech meets Web3

 

The emergence of Web3 is triggering a new wave of innovations in fintech. Virtual assets, stablecoins, decentralised finance, non-fungible tokens etc. They are set to become major forces of financial transformation in the years to come. We know they are irreversible trends that need to be embraced, but at the same time, some important issues arise. For example, would there be regulatory gaps? Would they transmit risks to the traditional financial system and threaten financial stability? How could we best protect individual investors from fraud and scams?

 

That is why when we issued our policy statement on the development of virtual assets, we have emphasised the “same activity, same risks, same regulation” principle, and the need to put in place timely and necessary guardrails so that virtual asset innovations can thrive in Hong Kong in a sustainable and responsible manner.

 

“Sustainable” is the keyword here. A healthy, sustainable ecosystem must have a strong immune system – that is, the ability to weed out the bad players, and insulate our financial system and stability from undue impact. The crux of this is whether we could apply balanced, proportionate regulation that will properly and adequately mitigate pertinent risks, while leaving sufficient room for innovative products and services to break new ground.

 

Regulation and facilitation are not against one other. Rather, they go hand in hand: when we have a robust, consistent, predictable and fit-for-purpose regulatory regime, it instils confidence and trust in investors and market players, basing on which a vibrant innovative environment will be built.

 

Looking ahead

 

In taking forward Web3, virtual assets and other financial innovations, the Government will continue to strike the appropriate balance between regulation and facilitation. Rest assured that we are committed to building a favourable environment for our fintech firms to thrive and prosper.

 

Looking ahead, allow me to share some thoughts on what I think are important for the fintech development in Hong Kong.

 

First of all, let us bear in mind that fintech is not just about finance and technology. The success or otherwise of fintech, virtual assets or other Web3 applications in finance will be staked on whether new technologies, models and applications could actually serve the needs of the real economy; address pain points that have long existed; increase efficiency of transactions; create value and better experiences for the people; and, ultimately, work for the betterment of the community.

 

Indeed, innovation is commonly expected as a means to make financial services more accessible and inclusive. This is an area that we all need to work harder together. To this end, the Commercial Data Interchange, or CDI, launched by the Monetary Authority with a view to facilitating small and medium-sized enterprises to obtain loans from banks more effectively, is such a case in point.

 

Moreover, there is ample room to make use of fintech to contribute to high-quality development. You may be aware that in the Budget this year, I have pointed to greentech and green finance as a key direction of development. Web3 and blockchain technology can certainly help advance the development of green technology and green finance, such as issuing tokenised green bonds which I mentioned earlier. I truly look forward to more such innovation, and that is bound to capture tremendous opportunities as the world heads towards carbon neutrality.

 

Secondly, we need a deep pool of talent to support fintech. As you may know, we are taking forward in full swing various new initiatives to compete for talent to enrich and diversify Hong Kong’s talent pool.

 

Meanwhile, to breed local talent, we also offer dedicated schemes that help financial services practitioners enhance their fintech literary platform. Specifically, we have been developing professional fintech qualifications applicable to the key financial services sectors, aiming to provide a clear ladder for new and incumbent practitioners to upgrade their fintech expertise. In my Budget this year, I have also set out a fintech internship scheme to cultivate fintech talent for post-secondary students now studying in Hong Kong and the bay area.

 

Concluding remarks

 

Every generation of technological reform breeds novel applications and fresh opportunities. Innovation does not come without risk. Rather than standing still, the real issue is how to control the associated risk and move forward steadily. Judging from the approach we have taken thus far, I have much confidence and optimism in Hong Kong’s fintech future.

 

Financial Secretary Paul Chan gave these remarks at the FinTech Forum of the Digital Economy Summit 2023 on April 14.

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HK’s digital economy set to advance

The digital economy has transformed the world in unprecedented ways, reforming traditional business models and creating new industries. The pandemic has highlighted the importance of a robust digital economy like never before.

 

From e-commerce and online education, to remote work and smart city innovations, the adoption of digital technologies is now part of the new normal today around the world everywhere. The digital economy offers a way forward for businesses and individuals alike, providing opportunities for growth and resilience in the face of uncertainties.

 

That is why we have rebranded this summit from its previous name of Internet Economy Summit to the Digital Economy Summit this year.

 

This year’s summit is the first in-person mega event in the field of innovation and technology organised by the Hong Kong Special Administrative Region Government, since our emergence from the COVID-19 epidemic. Yes, Hong Kong has resumed normalcy in full and is back on the centre stage.

 

This two-day summit serves as the perfect occasion for senior executives, entrepreneurs, innovators, academics and policy makers worldwide to reconnect again, in Hong Kong, in Asia’s world city.

 

At the first session of the 14th National People’s Congress held in Beijing last month, President Xi Jinping said that our country would fully implement a development strategy driven by innovation and constantly increase our scientific and technological capabilities.

 

Under the unique principle of “one country, two systems”, Hong Kong enjoys the unparalleled advantage of having the strong support of national strategies, while being connected with the rest of the world. The country’s key strategies of the National 14th Five-Year Plan and the Guangdong-Hong Kong-Macao Greater Bay Area development support Hong Kong’s development into an international I&T centre.

 

We are now poised to start a new chapter of digital economy development through our persistent pursuit of I&T advancement.

 

As Hong Kong emerges from stability to prosperity, the Hong Kong SAR Government is committed to promoting I&T development in order to foster a more vibrant and diversified economy. To echo the theme of today’s summit, we must embrace the sweeping changes brought about by the digital revolution, in order to emerge stronger than ever in a smarter future.

 

To lead Hong Kong in moving full steam towards becoming an international innovation and technology (I&T) centre, we published the Hong Kong I&T Development Blueprint last December. It sets out four broad development directions, formulates eight major strategies and devises specific development targets at different stages. Here, I would like to take the opportunity to highlight some of the major strategies.

 

First, to enhance Hong Kong’s competitiveness and speed up industry development, we established the Office for Attracting Strategic Enterprises last December. The office is dedicated to attracting enterprises of strategic importance and investments.

 

Next is the $30 billion Co-Investment Fund, designed to encourage enterprises with strategic development value to set up or expand their businesses in Hong Kong.

 

In addition, we will launch the $10 billion Research, Academic & Industry Sectors One-plus Scheme. This “RAISe +” scheme is going to further promote the transformation and commercialisation of Hong Kong’s outstanding research and development outcome.

 

We will also forge ahead with the construction of the Hong Kong-Shenzhen I&T Park. With a gross floor area of 1.2 million sq m, the Park is set to become Hong Kong’s largest-ever I&T platform.

 

Together with neighbouring land and its counterpart the Shenzhen I&T Zone, the area will form the 540-hectare Shenzhen-Hong Kong I&T Co-operation Zone. It will power the rise of the Greater Bay Area as one of the world’s I&T hubs and provide bountiful opportunities for innovators and dreamers from all over the world.

 

As announced in this year’s Budget of the Hong Kong SAR Government, we will commit over $700 million to expedite the development of digital economy and over $9 billion to roll out an array of I&T initiatives and measures.

 

We have also issued a policy statement last year to set out Hong Kong’s commitment towards the development of virtual assets. This forms our larger plans in capitalising on the development of the third generation Internet, or Web3.0, in which we see huge potential for future growth. All these clearly demonstrate that the Hong Kong SAR Government will continue to proactively steer our future high-quality economic development in the era of digital economy.

 

Ladies and gentlemen, as the only city in the world where the global advantages and the China advantage converge, Hong Kong will continue to be the ideal base for Mainland enterprises to develop their global reach and a launch pad for foreign companies to gain access to the Mainland Chinese market. It is our top priority to ensure that the business and investment prospects in Hong Kong will continue to flourish in the years to come.

 

Chief Executive John Lee gave these remarks at the Digital Economy Summit 2023 on April 13.

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