I&T development boosts economy

Chief Executive Carrie Lam

As many of you know, I delivered my maiden Policy Address two days ago. I love to regard my presence at this I&T Symposium as a good post-Policy Address PR for two reasons : one is to reiterate the importance my Government attaches to development of I&T in Hong Kong, a subject which has been given prominence in my Policy Address and the other is to tell our symposium participants and exhibitors that my Government is committed to providing more convention and exhibition facilities to meet the ever growing demand for expos, symposiums, conventions etc. to be held in Hong Kong, as I have announced in my Policy Address the proposal to build a new wing of the Hong Kong Convention & Exhibition Centre on an adjacent site now occupied by three government office buildings. These initiatives fit in with my conviction that the best of Hong Kong is yet to come.

 

In the last month or so, I made two keynote speeches on I&T, first at a Hong Kong X Foundation event during which they launched a white paper on Hong Kong’s I&T development and then at the opening of the InnoTech Expo organised by Our Hong Kong Foundation. On both occasions, I confessed that I was on a sharp learning curve as far as I&T development was concerned since taking office on July 1 this year. As a result of that learning process during which I had interacted with local, Mainland and overseas experts and visited technology and entrepreneurship projects, I have drawn the conclusion that innovation and technology will help power Hong Kong’s future economy, improve people’s livelihood and create quality jobs for young people as well as opportunities for young entrepreneurs.

 

However, in a highly competitive environment globally and with fast advances in the Mainland, the above vision may only be realised by the Government adopting the right policies, investing the needed resources and connecting with talents and renowned research institutions. Thus, in my first Policy Address, I have set out eight major areas which my Government will step up efforts. I will briefly outline these efforts and will refer you to the Policy Address website to read the full text.

 

First is to increase resources for research and development (R&D). Here, we have set a goal to double the R&D expenditure as a percentage of the Gross Domestic Product from the current 0.73% to 1.5% by the end of the current-term Government’s five-year term of office. Apart from Government injecting more resources into the Research Endowment Fund under the University Grants Committee for allocation to the eight publicly-funded universities, we will take a bold step to provide super tax deduction for expenditure incurred by private enterprises on R&D, to the tune of 300% for the first $2 million and 200% for the remainder.

 

Second is to nurture local talent and recruit overseas talents. We will launch a $500 million Technology Talent Scheme to establish a Postdoctoral Hub to provide funding support for enterprises to recruit postdoctoral talent for scientific research and product development and another $3 billion to provide studentships for local students to engage in research postgraduate programmes. We will also invite world-acclaimed universities, R&D institutes as well as technology enterprises to collaborate and carry out forward-looking research projects with social benefits.

 

Third is to provide investment funding to support startups.  We have seen a number of venture capital funds setting up in Hong Kong in recent years. To further boost the momentum, we have just launched the $2 billion Innovation and Technology Venture Fund and are inviting private VC companies to joint hands with the Government to invest in our technology startups. I believe that, given time, local enterprises will be more willing and ready to invest in technology development.

 

Fourth is to provide the hardware in terms of technological research infrastructure and related facilities. At present, Science Park, Cyberport, Hong Kong Productivity Council and R&D Centres have been supporting local R&D activities. We have a number of infrastructure projects in the pipeline, including expansion of the Science Park, development of the Data Technology Hub and the Advanced Manufacturing Centre in the Tseung Kwan O Industrial Estate. We are also working in full speed to implement the Hong Kong-Shenzhen Innovation & Technology Park at the Lok Ma Chau Loop, based on an agreement we signed with the Shenzhen Municipal People’s Government in January this year. When completed, this will be the largest I&T infrastructure in Hong Kong. A residential building for talent called InnoCell is also being built at Science Park and should be completed in 2020.

 

Fifth is to review existing legislation and regulations, so as to remove those outdated provisions that impede the development of innovation and technology. To this end, I realise that there will be a lot of resistance within the Government, so I will task the newly formed Policy Innovation & Co-ordination Unit which works directly to me to spearhead this exercise.

 

Sixth is to open up government data for use as raw materials in technological research, innovation and development of smart city. I am happy to see that the Hospital Authority is taking steps to set up a big data analytics platform on health data, with other useful data in other areas to follow.

 

Seventh is to adjust government procurement methods to include I&T as a criterion in the selection process, with a view to encouraging local technological innovation.

 

Last but not the least is to step up our STEM education both at the school and community level. We will encourage fairs like this electronics fair to consider opening up a day for school visits so that students may be impressed by what technology could offer and inspire them to learn more. On the part of the Government, the Leisure & Cultural Services Department will update the permanent exhibitions of the Hong Kong Science Museum to further promote STEM education using the museum’s facilities.

 

I should just add that apart from the eight major areas to promote I&T development, my Policy Address also contains a section of promoting smart city development in Hong Kong and I&T, electronics and technologies all have an important role to play in various smart city initiatives, or what this symposium’s theme refers to – connected living.

 

In introducing my Policy Address in the Legislative Council, I said that in the coming few years, Hong Kong is entering a period when opportunities and challenges co-exist. This also applies to I&T development. The Guangdong-Hong Kong-Macao Bay Area will bring exceptional opportunity for Hong Kong to join hands with Shenzhen and other bay area cities to develop an international I&T centre very much like the Silicon Valley. Hong Kong is blessed with distinct competitive edges including our unique advantages of “one country, two systems”, geographical location, business environment, legal system, intellectual property protection, R&D capability, financial services etc. Also, the setting up of the Karolinska Institutet research centre and an innovation node of the Massachusetts Institute of Technology (MIT) in Hong Kong last year has also created more opportunities for us to work with and attract other renowned research institutes to Hong Kong. The challenge to seizing these opportunities naturally lies in how fast and how effective we are in pressing ahead with the initiatives I have committed to in my Policy Address.

 

Ladies and gentlemen, an innovation-driven economy will help enhance the competitiveness of Hong Kong and drive sustainable economic growth. We need all the stakeholders, that is, the Government, industry, academia and the research sectors, to collaborate and co-create to make this happen.

 

Chief Executive Carrie Lam gave these remarks at the Symposium on Innovation & Technology 2017 on October 13.

via Moroccan Trader I&T development boosts economy

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Envisioning hope, happiness for HK

Chief Executive Carrie Lam

Today, with much relief, I present the first Policy Address in my term of office to the Legislative Council. During the past three months, the community has voiced a lot of expectations towards this Policy Address. I have listened to them all. I appreciate that many issues in the community require the Government’s attention. At the same time, I have accepted the suggestion of the Non‑official Members of the Executive Council that I should make use of the opportunity today to share with Hong Kong people my governance philosophy and to highlight some of the specific measures, rather than following the previous practice of spending two to three hours reading out the Policy Address. Without the constraint of a time limit, the Policy Address I deliver today runs to some 49,000 characters. It comprehensively covers such areas as good governance, diversified economy, nurturing talent, improving people’s livelihood, liveable city and connecting with young people. I hope that when you read it, you will get a better grasp of Hong Kong’s current situation as well as the vision of the Government. That said, I am fully aware that a lengthy Policy Address does not guarantee flawless policies or effective implementation. Together with my political team, I will continue to listen to the views of Honourable Members and members of the public with humility, so as to ensure that this Policy Address will set a new starting point for Hong Kong.

 

This year marks the 20th anniversary of Hong Kong’s return to the Motherland, a milestone for us to build on our achievements and begin a new chapter of development. In his keynote address delivered at the Meeting Celebrating the 20th Anniversary of Hong Kong’s Return to the Motherland and the Inaugural Ceremony of the Fifth‑term Government of the Hong Kong Special Administrative Region (HKSAR), President Xi Jinping said in all earnestness that the destiny of Hong Kong has always been intricately bound with the Motherland. In the last two decades, thanks to the support of the Motherland and with an international vision, Hong Kong has kept its distinct features and strengths. This fully demonstrates that “one country, two systems” is the best institutional arrangement to ensure Hong Kong’s long‑term prosperity and stability after our return to the Motherland. It is a workable solution and an achievable goal welcomed by the people. Thus, everybody with a passion for Hong Kong has the responsibility to ensure that, here in Hong Kong, “one country, two systems” advances in the right direction, the obligation to say “no” to any attempt to threaten our country’s sovereignty, security and development interests, as well as the duty to nurture our next generation into citizens with a sense of national identity, an affection for Hong Kong and a sense of social responsibility.

 

Furthermore, through immense contributions made by generations of Hong Kong people and countless challenges overcome, we have established our core values including an independent judicial system, adherence to the rule of law, a highly efficient and clean Government, freedom of the press, respect for human rights, pluralism and inclusiveness as well as the freedom of expression. Since our return to the Motherland, these institutional strengths, rights and freedoms have been protected by the Basic Law under the principle of “one country, two systems”. These constitutional bulwarks and cornerstones of a civilised society and our moral values are unbreachable. The HKSAR Government and myself will, with our utmost endeavours, implement the “one country, two systems” principle, uphold the Basic Law and safeguard the rule of law.

 

In the past three months, in my new capacity as Chief Executive, the honour as well as the immense responsibility of the office are most deeply felt. Some of the decisions cannot be delegated. Certain views must be stated in unequivocal terms. And some of the tasks have to be taken up by myself. What I find most encouraging and touching is the warm support I have received from numerous leaders in our community. Some of them have joined the Executive Council and various statutory bodies or advisory bodies, some have participated in outbound business delegations or summit meetings, and some have spoken in support of Hong Kong through their liaison with Mainland and overseas organisations. I will capitalise on this rich talent pool during my tenure in working on Hong Kong’s future.

 

Opportunities, challenges ahead
In the coming few years, Hong Kong is entering a period when opportunities and challenges co‑exist. The Belt & Road Initiative and the Guangdong‑Hong Kong‑Macao Bay Area development of our country will bring enormous opportunities for Hong Kong’s economy. We must leverage the unique advantages of the HKSAR and the support we receive from the Central Authorities. We will continue to respect the rules governing the economy and market operations and promote free trade. With a new, proactive style of governance, strong commitment embodied in the new roles of the Government as well as a new fiscal philosophy to manage our finances wisely, we will inject new and continuous impetus to Hong Kong’s economy.

 

Sound public finance and optimal use of public resources are key to good governance.  With years of practical experience in public finance, I fully appreciate the requirements stipulated in the Basic Law of keeping expenditure within the limits of revenues and avoiding fiscal deficits as far as possible. But the fact is the HKSAR Government last went into deficit in 2003‑04. Taking into account the investment return previously injected into the Housing Reserve, the Government currently has a fiscal reserve in excess of $1,000 billion. We are well positioned to use our accumulated fiscal surpluses, which are wealth derived from the community, wisely to benefit the community. On the premise of ensuring the health of our public finance, I will adopt forward‑looking and strategic financial management principles in making investment for Hong Kong and relieving our people’s burdens.

 

On people’s livelihood, meeting the public’s housing needs is our top priority. The Government has no magic wands, but in the past few months the Directors of Bureaux concerned have demonstrated their readiness to think out of the box in a bid to address the community’s pressing needs. We strive to meet public expectations by pursuing new directions and new initiatives. On care for the elderly, we do not see the ageing population as a threat to public finance. We have, instead, taken the opportunity to devise a variety of effective elderly care services. We will continue to devote resources to poverty alleviation as well as support for the disadvantaged in order to build a caring and inclusive society. On education, we will uphold the “Led by Professionals” principle and deploy the necessary resources to nurture our next generation.

 

If I am to put in simple terms the style of this Policy Address, I would say that it speaks of determination, boldness in innovation as well as a conscientious effort to address the needs of the people.

 

Our economy has been performing very well this year, expanding by 4% in real terms year‑on‑year in the first two quarters. Entering into the third quarter, our positive economic development has continued with export growing notably and domestic demand remaining firm, displaying an encouraging performance. The local labour market has continued to see full employment, with the employed population increasing steadily and the unemployment rate dropping to 3.1% in recent months.  This is the lowest level in almost two decades. Household income has generally recorded solid increases, with the earnings of full‑time employees in the lowest decile group increasing by 4.5% in real terms after discounting inflation. Inflation has dropped for six consecutive years. Barring abrupt negative shocks externally, our overall economic growth this year is expected to go higher than 3.5%, the mid‑point in the earlier forecast range of 3‑4%, and would fare better than the annual average of 2.9% over the past decade.

 

However, in order to sustain these favourable trends for our economy, diversifying our economy is the only solution. The current‑term Government is determined to boost the development of emerging industries in addition to our traditional industries, and considers that both innovation and technology (I&T) and the creative industries have a competitive edge and much potential. They will not only bolster economic growth, but also create quality employment opportunities for our young people.

 

For Hong Kong to catch up in the I&T race and to become an international I&T hub, the Government will step up efforts in eight key areas, viz. resources for research and development (R&D), nurturing a talent pool, venture capital, scientific research infrastructure, legislation review, opening up data, government procurement and popular science education, to propel I&T development and will put in necessary resources.

 

We have set a goal to double the Gross Domestic Expenditure on R&D as a percentage of the Gross Domestic Product from the current 0.73% to 1.5% within the current‑term Government’s five‑year tenure. We have set aside no less than $10 billion as university research funding, and will provide additional tax deduction for R&D expenditure incurred by enterprises. The Education Bureau will make available $3 billion to provide studentships for local students admitted to University Grants Committee‑funded research postgraduate programmes. The Innovation & Technology Bureau will launch a $500 million Technology Talent Scheme, including the establishment of a Postdoctoral Hub. Our aim is to encourage our young people to engage in research and product development. At the same time, I will strive to attract top overseas scientific research institutions to Hong Kong. In the past three months, several internationally renowned institutions approached me directly and expressed interest in setting up key technology collaborative platforms here. We will also invest $700 million to immediately take forward several projects to develop Hong Kong into a smart city.

 

To press ahead with I&T development at full steam, I will personally lead a high‑level, inter‑departmental Steering Committee on Innovation & Technology to examine and steer measures under the eight areas of I&T development as well as smart city projects. The Chief Executive’s Council of Advisers on Innovation & Strategic Development, to be formed by revamping the Economic Development Commission and the Commission on Strategic Development, will also offer ideas and advice to the Government on I&T development to maintain Hong Kong’s competitiveness in the global arena and enhance Hong Kong’s alignment with the development of our country.

 

Creative industries cover a very broad scope. Capitalising on Hong Kong’s established advantages and coupled with financial assistance, the Government will seek to promote the further development of these diverse sectors, in particular the design industry. We propose injecting $1 billion into the CreateSmart Initiative, and providing more resources to the Hong Kong Design Centre to implement a series of measures to reinforce Hong Kong’s status as a city of design excellence in Asia. The Commerce & Economic Development Bureau will identify more room for development through integrating design and industry. It will also foster closer links between Hong Kong’s design industry and Shenzhen and other design cities in the Mainland and overseas to open up new markets for Hong Kong.

 

Apart from fostering the development of the emerging industries, we will also reinforce and further enhance our financial services sector, transportation services and logistics industry, tourism, construction and related professional services sectors, legal services, etc. Through policy steer, allocation of resources and external promotion, we will seize the opportunities arising from the Belt & Road Initiative and the Guangdong-Hong Kong-Macao Bay Area development. Take the financial services sector as an example. The Financial Leaders Forum chaired by the Financial Secretary will put forward strategic and forward looking proposals, which will be followed up by relevant departments. The Government will allocate more resources to the Financial Services Development Council to enhance its role in promoting market development and nurturing talent. The Government will also take the lead in arranging the issuance of a green bond in the next financial year and promote the establishment of green bond certification schemes that meet international standards by local entities.

 

Competitive tax initiatives
In order to further enhance the competitiveness of Hong Kong, we will demonstrate greater determination in our taxation policies. The Financial Services & the Treasury Bureau has made proposals on the two tax measures put forward in my Election Manifesto, with a rate of tax reduction even deeper than what I had proposed, and will strive to implement them within 2018. On the two tier profits tax system, the profits tax rate for the first $2 million of profits of enterprises will be lowered to 8.25%, or half of the standard profits tax rate, instead of 10% as proposed in my Election Manifesto. Profits above that amount will continue to be subject to the standard tax rate of 16.5%. To ensure that the tax benefits will target small and medium enterprises, we will introduce restrictions such that each group of enterprises may only nominate one enterprise to benefit from the lower tax rate. To encourage research and R&D investment by enterprises, we propose that the first $2 million eligible R&D expenditure will enjoy a 300% tax deduction with the remainder at 200%.

 

In recent years, government departments have been shouldering an increasing workload, and might not have been able to fully meet public expectations in policy implementation. We are determined to improve the situation on several fronts. First, we will augment the civil service establishment by at least 3% in the next financial year to provide immediate relief to the workload pressure on colleagues and to respond to public aspirations. We will proceed to ask the Heads of Departments to streamline administration, foster innovation and collaboration, and leverage technology. We will revamp the Central Policy Unit into the Policy Innovation & Co-ordination Unit and place the Efficiency Unit under the Innovation & Technology Bureau to enhance inter departmental collaboration and assist departments in technology application. In the long term, I propose establishing a new civil service college with upgraded facilities in Hong Kong so as to better equip the civil service for various challenges. The Civil Service Bureau has already commenced project planning and site search.

 

Innovative approaches may also be applied to the formulation of concrete measures aimed at benefitting people’s livelihood. To relieve the burden of long distance public transport expenses on commuters, colleagues in the Transport & Housing Bureau, after three months of diligent effort, propose to introduce a non means tested Public Transport Fare Subsidy Scheme to provide fare subsidy, to an extent, for commuters if their monthly public transport expenses exceed a specified level. Our proposal is to set the line at $400 in the monthly expenditure on public transport, with the Government providing a subsidy amounting to 25% of the actual expenses in excess of this level, subject to a cap of $300 a month. We anticipate that over two million commuters will benefit from the scheme, which will cover the fares of MTR, franchised buses, green minibuses, ferries and trams. The scheme will be simple and easy to understand, and will not require any application. The Government aims to launch the scheme within one year after obtaining funding approval from the Finance Committee of the Legislative Council.

 

For quite a long time, a variety of problems have persisted in the community. Some of them have been set aside due to incessant arguments. Some of them have not been taken forward for fear of criticisms. The current term Government sets no easy goals and avoids no difficult tasks. With this style of governance, we will make every effort to solve these problems for our people.

 

Alleviation of housing needs
First, the difficulty in achieving home ownership and the poor living conditions. My housing policy comprises the following four elements:

    (1)     housing is not a simple commodity. Our community has a rightful expectation towards the Government to provide adequate housing. This is also fundamental to social harmony and stability. Therefore, while maintaining respect of a free market economy, the Government has an indispensable role to play in this area;

    (2)     we will focus on home ownership to enable our people to live happily in Hong Kong and call it their home. The Government will strive to build a housing ladder to rekindle the hopes of families in different income brackets to become home owners;

    (3)     focusing on supply and based on the Long Term Housing Strategy, we will step up our effort in increasing the supply of housing units; and

    (4)     with insufficient land and when new supply is not yet available, we will strive to optimise the existing housing resources to meet the housing needs of families that have long been on the waiting list for public rental housing (PRH) and to help residents in poor living conditions.

 

PRH is the first rung on the housing ladder. At present, there are about 756,000 households living in PRH, among which 19% are elderly persons and 16% are receiving Comprehensive Social Security Assistance. PRH is a long established safety net for the grassroots and low income families. The Government will strive to shorten the waiting time for PRH while stepping up our effort to help those relatively better off PRH tenants to move up the housing ladder and vacate their units for allocation to the needy.

 

One approach is to substantially increase the supply of units under the Green Form Subsidised Home Ownership Scheme (GSH), which specifically caters for PRH tenants. The Hong Kong Housing Authority (HKHA) launched the GSH Pilot Scheme in 2016 and selected a PRH project in San Po Kong to provide 857 units for sale at affordable prices to enable Green Form Applicants to become home owners. The project was nearly 18 times over subscribed and all units were sold. PRH units in different districts are in turn vacated for allocation to those on the waiting list.

 

From the perspectives of housing policy, utilisation and allocation of the HKHA’s resources, and public aspirations for home ownership, GSH has its merits and no shortcomings. In fact, apart from assisting PRH tenants to become home owners, PRH applicants who have passed the detailed eligibility vetting are also eligible for GSH and can thus more quickly fulfil their aspirations for home ownership. In view of this, I consider that our future public housing developments should include more GSH units instead of PRH units. I have requested the HKHA to complete the review on GSH as soon as possible, with a view to regularising the scheme and offering more GSH flats for sale. After a preliminary technical assessment, the Housing Department considers that some 4,000 new PRH units in Fo Tan, Sha Tin, can be converted into GSH units for sale in late 2018.

 

Newly constructed Home Ownership Scheme (HOS) flats on the housing ladder have all along been providing middle income White Form applicants with the opportunities to own subsidised flats. The Government will continue to increase the supply of HOS flats. In the past, HOS flats with premium unpaid used to be available for sale on the secondary market only to Green Form applicants. The HKHA launched two rounds of the Interim Scheme of Extending the HOS Secondary Market to White Form Buyers (Interim Scheme) in 2013 and 2015 respectively on a pilot basis to allow eligible White Form applicants to purchase HOS flats with premium unpaid. This allows tenants of private premises more opportunities to become home owners and at the same time facilitates the turnover of HOS flats.

 

Taking into account the Tenants Purchase Scheme flats with premium unpaid, there are a total of 380,000 flats available on the secondary market for purchase by White Form buyers. I propose that the HKHA regularise the Interim Scheme.

 

In my Election Manifesto, I proposed to introduce, on top of HOS, affordable “Starter Homes” for middle class families in Hong Kong, thus re-igniting the hopes of families with a higher income to own a home in the face of hiking private property prices. This has generated a lot of attention in the community. I must reiterate that given the limited land supply for public housing, the Government will provide the proposed “Starter Homes” units only on the premise that the existing supply of public housing will not be affected. It now appears that the land supply for “Starter Homes” will have to come from sites already owned by private developers or to be bought from the Government.

 

Our initial thinking is to incorporate provisions into the land lease to require developers to pursue mixed developments, i.e., to design, build and offer for sale a specified number of “Starter Homes” units in addition to private housing units, and to sell these units to target buyers who meet the eligibility criteria set by the Government. These criteria include, among others, Hong Kong residents who have lived in Hong Kong for seven years or more and have never owned any property here. Their income will fall between the income limits for HOS applicants and about 30% higher than the HOS limits. Based on the prevailing HOS income limits, the upper income limit for the new scheme will be set at not exceeding $34,000 a month for singletons and $68,000 for households with two or more members. The prices and sizes of such units will be determined having regard to the affordability of eligible buyers. The alienation restrictions may be tighter than those for the HOS. We need to further consider how to deal with the subsidy given to the buyers at the time of purchase, i.e., the issue of premium payment.

 

As “Starter Homes” is a new concept and a type of Government subsidised flats for sale, the implementation details will intertwine with those of HOS and GSH, which will see a notable increase in supply. The Government will discuss with the HKHA and relevant sectors and listen carefully to the views of the community. Details of the scheme will be finalised for announcement in mid-2018, so as to dovetail with our proposal to launch a pilot scheme by the end of next year using a residential site at Anderson Road, Kwun Tong, on the Government’s Land Sale Programme to provide about 1,000 residential units.

 

Even if our housing policy has broad community support, it takes time to find land for increasing the housing supply. The current term Government will think out of the box to facilitate the implementation of various short term community initiatives to increase the supply of transitional housing, with a view to alleviating the hardship faced by families on the PRH waiting list and the inadequately housed. Specific measures that may be considered include:

    (1)     optimising the use of idle government premises by providing rental housing units like those under the “Light Housing” project launched by Light Be in Sham Tseng;

    (2)     supporting the Community Housing Movement initiated by the Hong Kong Council of Social Service on a pilot basis, including encouraging the Urban Renewal Authority to participate by offering units in old buildings;

    (3)     facilitating the Hong Kong Housing Society in allowing the owners of its subsidised housing to rent out their flats with premium unpaid to needy families at below market rentals on a pilot basis;

    (4)     exploring the wholesale conversion of industrial buildings into transitional housing with waiver of land premium; and

    (5)     supporting non-profit making organisations to explore the feasibility of constructing pre-fabricated modular housing on idle sites.

 

Admittedly, these measures on transitional housing are unable to resolve the problem of insufficient supply we face today. Nevertheless, they will help us pool community efforts and resources and demonstrate our determination in tackling this priority livelihood issue together.

 

The determination to resolve problems together is precisely the consensus we need in tackling the issue of increasing land supply. Established in September this year, the Task Force on Land Supply (Task Force) will lead the community to examine the pros and cons of different land supply options in a thorough and macro manner, with a view to achieving the broadest consensus in the community. With an important mission to achieve within a tight time frame, the Task Force plans to launch a public engagement exercise in the first half of 2018. I appeal to all sectors of the community to consider the difficult issues of land supply in an inclusive, open and rational manner. We also look to the Task Force to draw up a comprehensive package of proposals and a visionary land supply strategy.

 

To maintain and consolidate the international status of our convention and exhibition industry, there is a pressing need for new venues. Otherwise, Hong Kong will miss the opportunities to host some of the large‑scale conventions and exhibitions that are either internationally important or newly launched. The current‑term Government is determined to tackle this long‑standing problem. After a detailed study, we consider that the priority is to build a new convention and exhibition venue of international standard in the proximity of the existing Hong Kong Convention & Exhibition Centre (HKCEC) in Wan Chai. The new venue must be connected to and integrated with the existing HKCEC to maximise the benefits. Therefore, we have decided that for the time being, we will give up the identified site at the Wan Chai Sports Ground announced by the Government earlier. Instead, we will demolish and redevelop the three government buildings next to the HKCEC in Wan Chai North into a new wing that can be connected to and integrated with the existing HKCEC. Based on an initial estimate, the project will add about 23,000 square metres of connected convention and exhibition facilities. Hotel facilities, which complement convention and exhibition activities, and Grade A office space, which can help alleviate the market shortfall, can be built on top of the new convention and exhibition venue.

 

The proposed new wing of the HKCEC will not be sufficient to make up for the venue shortage. We will continue with the development of a new convention centre above the Exhibition Station of the Shatin to Central Link to provide the market with an additional 15,000 square metres of convention space. As a longer‑term plan, when the reprovisioning of the Wan Chai Sports Ground is satisfactorily resolved, the site may be earmarked for the further development of convention and exhibition facilities so as to reinforce and enhance the status of Wan Chai North as a convention and exhibition hub in Asia. We will also continue to explore the feasibility of expanding other existing convention facilities.

 

Healthcare, retirement protection, education
With an ageing population, the challenges faced by public hospitals will be huge.  They will not be able to fully address the demand for healthcare services even with the Government’s allocation of additional resources for hospital development projects and for the Hospital Authority, not to mention that prevention is better than cure and that home care and community care services will better meet the aspirations of the elderly to enjoy their golden years. Through the Working Party on Primary Health Care led by Professor Rosie Young, the Government had put forward a proposal as early as 1990 to step up the development of primary healthcare in Hong Kong. I happened to be the secretary of this working party and was responsible for drafting its report. Twenty‑seven years on, while there has been advancement in disease prevention, health education and family medicine, our public healthcare services are still hospital‑oriented and a large portion of public resources is devoted to hospitals. The Secretary for Food & Health, herself an expert in primary healthcare, has been an advocate in this area for many years. I shall give her my full support in drawing up a blueprint for the development and delivery of primary healthcare services, and the setting up of the first district health centre with a new operation model on a pilot basis in Kwai Tsing District.

 

The “offsetting” arrangement under the Mandatory Provident Fund (MPF) Scheme is another issue that has beleaguered the labour sector. At present, over $3 billion of accrued benefits from employers’ MPF contributions is used each year for offsetting severance payment or long service payment, thus reducing the total amount of employees’ MPF benefits on retirement. The current‑term Government has made clear its stance that the “offsetting” arrangement should be abolished and is willing to increase its financial commitment to mitigate the impact of the abolition on enterprises, in particular micro, small and medium enterprises. The Secretary for Labour & Welfare will continue to discuss with the business sector and labour sectors, with a view to putting forward a proposal that takes into account the interests of both employers and employees in the coming months.

 

Under my new fiscal philosophy, the Government should make the right investments and in a timely manner so as to reduce the extra expenditure which may have to be incurred if action is delayed. Moreover, public resources should be used to address people’s most pressing needs. In my Policy Address, I pledge to reduce the waiting time to zero for two kinds of services: first, pre‑school rehabilitation services for children with special needs, such as those suffering from autism, hyperactivity disorder, language disorder or dyslexia; and second, appropriate home and community care services for the elderly in need of support, including those discharged from hospital. In the year ahead, we will increase the places for pre‑school rehabilitation services from 3,000 to 7,000 and the number of community care service vouchers from 3,000, as from early this year, to 6,000. The Government is ready to allocate more resources in order to achieve the target of zero waiting time.

 

Ageing and dilapidation of buildings is another issue that has plagued the public for a long time. At present, there are over 5,000 residential and composite buildings aged above 50 years in Hong Kong. Without timely inspection and maintenance, they will pose hazards to both the residents and passers‑by. To further safeguard public safety and to assist owners in need, the Government will launch Operation Building Bright 2.0 at a cost of $3 billion. The Government will devote another $2 billion to subsidise old buildings to meet the fire safety requirements under the Fire Safety (Buildings) Ordinance. The Development Bureau and the Security Bureau will take forward these two schemes in collaboration. The Urban Renewal Authority is setting up a one‑stop Building Rehabilitation Platform to provide comprehensive assistance to owners.

 

To secure public support for the Government, we must adopt a people‑oriented approach and be attentive to the needs of the people. Thus, we have put forward an array of initiatives in this regard in the Policy Address, including:

     (1) providing a recurrent Air‑conditioning Grant for public schools starting from the next school year so as to provide a more comfortable teaching and learning environment for teachers and students in hot weather;

     (2) providing more assistance for patients with uncommon disorders, including providing subsidies for specific drug treatments according to individual patients’ special clinical needs as well as subsidies for eligible patients to participate in compassionate programmes of individual pharmaceutical companies;

     (3) significantly enhancing the Low‑income Working Family Allowance Scheme whereby, for a four‑person household with two eligible children, the monthly payment will increase by 23% from the current $2,600 to $3,200 if the monthly household income is $19,000 or below and the total monthly working hours of all household members are not less than 192;

     (4) setting up a Special Needs Trust for parents in need so that they can rest assured that their children with intellectual or other disabilities will receive proper care through the use of the assets they left behind after their departure;

     (5) proposing to increase the statutory paternity leave from three days to five days and commencing a study and the related work on extending the duration of the 10‑week statutory maternity leave;

     (6) doubling the number of internship places in government departments for students with disabilities from 50 to 100 a year, thereby enhancing their competitiveness when they enter the work force;

     (7) conducting a comprehensive review on the entry requirements relating to Chinese proficiency for all grades in the civil service so as to increase government job opportunities for the ethnic minorities;

     (8) resuming the construction of new public markets to offer wider choices of fresh provisions to the public, and improving the facilities and management of existing public markets, including expediting the installation of air‑conditioners;

     (9) establishing a Countryside Conservation Office under the Environment Bureau, drawing on the experience of the countryside conservation efforts in Lai Chi Wo, to co‑ordinate conservation projects in remote countryside areas. The initiative will not only protect natural ecology and cultural resources, but also promote eco‑tourism; and

     (10)   taking the lead, including providing subsidies, to encourage telecommunications companies to extend the fibre‑based network to villages in remote locations. It is estimated that about 170,000 villagers in about 380 villages currently without high‑speed broadband network coverage will benefit.

 

During my election campaign, I pledged to connect with young people. As stated in the Policy Address, we will strive to do our best in youth development work by addressing their concerns about education, career pursuit and home ownership, and encouraging their participation in politics as well as public policy discussion and debate. Education is the key to nurturing talent, and Government expenditure on education is the most meaningful investment for our future development. I proposed during my election campaign an immediate increase of recurrent education expenditure by $5 billion a year. This was much welcomed by the community.  Various quality education initiatives funded by the $3.6 billion allocation are being launched progressively starting from this school year. As to how the remaining $1.4 billion recurrent funding should be put to good use, the Government will examine the relevant issues and continue to discuss with the education sector. We will also provide additional resources where necessary. We need to carry out in‑depth reviews on eight key areas of education, including professional development of teachers, curriculum arrangement, assessment system, vocational and professional education and training, self‑financing post‑secondary education, school‑base management, parent education and University Grants Committee’s funding on research and student hostels. The Education Bureau will set up task forces this year to take forward the reviews on these various areas. Under the principles of “Led by Professionals” and “Listening to Views Directly”, we will invite education experts, including professionals with good knowledge of the situation of frontline teachers and student learning, to participate in the work of the task forces.

 

As regards encouraging young people to participate in public policy discussion and debate, we will appoint more young people to various government committees with the aim of increasing the overall ratio of youth members to 15% within the current‑term Government. As a start, we will invite young people to become members of selected boards and committees in areas such as youth development, I&T and the environment by self‑recommendation through the pilot member self‑recommendation scheme. We will soon start the recruitment of 20 to 30 young people aspiring to pursue a career in policy research as well as policy and project co‑ordination to join the proposed Policy Innovation and Co‑ordination Unit on a non‑civil service contract basis, so that they can gain experience in public administration and the voices of young people can be heard at senior levels of the Government.

 

Conclusion with a vision
Honourable Members and fellow citizens, my vision is for a Hong Kong of hope and happiness – a city we are all proud to call our home. I see a vibrant international metropolis that is just, civilised, safe, affluent, enjoys the rule of law, compassionate and well‑governed. To achieve this vision, we need to have a society that is united, harmonious and caring. This vision is not, in reality, that far off. In fact, it has been Hong Kong’s way to success for more than half a century. We have not lost our intrinsic advantages. Hong Kong people are still brilliant and the Hong Kong spirit has not been eroded. As the lyrics of Hong Kong Our Home, the HKSAR 20th Anniversary Theme Song, go:

     “We’ve built wonders through hard work
     Believing in ourselves evermore
     That’s why I treasure Hong Kong
     That’s why I appreciate Hong Kong.”

As long as we can achieve consensus, and capitalise on our strengths, the best of Hong Kong is yet to come!

 

Let’s connect for hope and happiness!

 

This is a translation of the Policy Address speech delivered by Chief Executive Carrie Lam at the Legislative Council on October 11.

via Moroccan Trader Envisioning hope, happiness for HK

Celebrating HK-Japan ties

Chief Executive Carrie Lam

It is a pleasure to join you for the opening ceremony of the Japan Autumn Festival in Hong Kong. The festival was launched last year, and with great success. That inaugural festival brought Hong Kong together. More than 180,000 people took in the 140 events over the course of the festival’s two-month run last year.

 

This year’s festival gets going today and continues through in the next two months, when the legendary Japanese rock band Anzenchitai takes the stage at AsiaWorld-Expo as part of the group’s 35th Anniversary Tour. In between, we’ll get our full fill of Japanese culture, everything from art exhibitions and sports specials to events spotlighting the surpassing joys of Japanese food and beverages – the latter ranging from beer to sake to whiskey.

 

There’s more, including a film festival devoted to a dozen of the great Akira Kurosawa’s movies which delights me as I am an admirer of this great master’s films and have actually watched almost every one of them. And, of course, a wide range of Japanese brand products and services will be on show throughout Hong Kong.

 

For most of us, the Japan Festival never really ends. Japanese culture and lifestyle are embraced year-round here, and in so many ways – from the ever-popular sushi and ramen restaurants that call Hong Kong home, to Japanese performing arts groups, the automobiles that light on our roads, the appliances in our homes, and the wealth of Japanese food products that fill our fridges, tables and stomachs.

 

Our love for all things Japanese is visible, too, in the huge, and growing, number of Hong Kong people visiting Japan. Last year, more than 1.8 million of us took in the cultural delights of Japan.

 

That, I should add, was up some 21% over the previous year, which was up a remarkable 65% over the year before that.

 

Hong Kong is among the favourite destinations of Japanese travellers. In the first half of this year, we welcomed about 580,000 Japanese visitors, up 17%, year-on-year. This continuing stream only feeds the friendship and understanding that have long marked relations between our two peoples.

 

Business ties are no less important, no less rewarding. Last year, Japan was our fourth-largest trading partner and Hong Kong is Japan’s eighth. The trading of Japanese food is perhaps the most noteworthy. With a population of only some seven million, we have been Japan’s largest export market for food and agricultural products for 10 years, accounting for about a quarter of Japan’s total export.

 

And Japan was Hong Kong’s ninth-largest source of inward direct investment in 2015, with a value amounting to US$29 billion. That investment speaks of capital, of course. But also of business strategy. And with well over 650 Japanese regional headquarters and regional offices here, that strategy is clear: Hong Kong is their gateway to business opportunity in the mainland of China and throughout the Asian region.

 

Autumn is a brilliant time to visit Japan, with the leaves in flashing colours as we can see from the backdrop and the country’s popular hot springs that are much more alluring in the fresh seasonal air.

 

Autumn is no less attractive in Hong Kong. For hiking in the hills and along our seashores. For good-time events such as the international Wine & Dine Festival. For the return, in early December, of the Hong Kong ePrix, the opening event of the Formula E racing season. The Japan Autumn Festival in Hong Kong, the second year in a row, has naturally enriched our events calendar.

 

Chief Executive Carrie Lam gave these remarks at the Japan Autumn Festival in Hong Kong – Rediscovering Nippon opening ceremony on October 10.

via Moroccan Trader Celebrating HK-Japan ties

HK strikes right balance

Financial Secretary Paul Chan

Governments around the world, including Hong Kong, strive to strike the right balance between regulation and risk. This is especially true of the financial services industry in our current era of rapid high-tech innovation.

       

Accuracy as well as speed of decision-making can have a big impact on competitiveness. At the same time, we must not compromise investor protection.

      

Regulations and international standards have evolved quickly in response to the rapid changes in the financial markets and security landscapes.

      

Allow me to share with you some of the work we have done to develop Hong Kong’s financial services by improving market quality and complying with international standards.

      

At this summit three years ago, a new proposal for mutual recognition of funds (MRF) between Hong Kong and the Mainland of China was a topic of discussion. The proposal was well received and the advantages are clear – MRF provides a wider choice of products to investors in both markets.

      

Three years on, I am pleased to tell you that the Securities & Futures Commission has reached MRF agreements not only with the Mainland, but also with Switzerland last December and with France in July this year. The SFC will continue to explore similar arrangements with other jurisdictions in order to further expand our fund distribution network.

 

Conducive business environment      

To further develop the asset management industry, we have expanded the legal framework for fund structures through introducing the open-ended fund company (OFC). This regime provides market participants with more choice in establishing and operating funds in Hong Kong. Our target is to commence the regime next year, after passage of the relevant subsidiary legislation.

      

To promote the use of the OFC structure, the Government introduced in June this year a bill on extending profits tax exemption to onshore privately offered OFCs. Once the legislative amendments are passed, all OFCs, public or private, onshore or offshore, can enjoy profits tax exemption, thereby creating a more conducive tax environment for such funds.

      

Another hot topic regarding regulation and market development around the world is financial technologies, fintech.

      

Connecting the dots between fintech regulation and fintech innovation is not easy. Regulation is often perceived as an obstacle to the development and application of fintech, which thrives on innovation, change and disruption.

       

While we all recognise the exciting benefits and potential of fintech, and the need to create an environment for fintech to flourish, we at the same time have to ensure that the public and investors are not exposed to excessive risk. Only then can we maintain stability and confidence in the market.

      

What we have come up with as a solution is the sandbox approach. Last year, the Hong Kong Monetary Authority (HKMA) launched the Fintech Supervisory Sandbox. This enables banks and their partnering fintech firms to conduct live tests of their new technological initiatives at an early stage under a controlled environment. Projects do not require full compliance with the HKMA’s usual supervisory requirements. It is a safe environment for new initiatives to test the water and get advice from regulators without putting consumers at risk. The sandbox strategy has helped banks to reduce lead time required for launching their fintech products. It has also provided them with useful feedback from consumers at an earlier stage. With the regulatory sandbox, we aim to achieve a win-win result.

      

Building on its initial success, the HKMA has recently upgraded its sandbox with new features that enhance connectivity between banks and fintech firms. And just last month, the SFC and the Insurance Authority have also announced the launch of their own sandbox initiatives. I would encourage industry players to make good use of these sandboxes.

      

On the topic of fintech, allow me to extend an invitation to you to join our signature fintech event, Hong Kong FinTech Week, which will begin on October 23. The event is expanded this year to showcase Hong Kong’s unique qualities, fintech startups and market access as well as the latest trends in fintech development. The biggest players from around the world will be there so I encourage you all to take part.

 

Financial sector insured      

Let me now turn to the insurance industry, which is another pillar of Hong Kong’s financial sector. Our new insurance regulator, the Insurance Authority, or IA for short, began operating in June this year.

      

The IA is independent of the Government. Its goal is to support the sustainable development of the insurance industry while enhancing protection of policyholders through a more holistic regulatory system.

      

The IA is now preparing for the commencement of the new statutory licensing regime for insurance intermediaries in about two years’ time.

      

To align Hong Kong’s regulatory regime with international standards, the IA is pressing ahead with its plan to develop a risk-based capital requirement. This regime is going to make capital requirements more sensitive to the level of risks borne by insurers, thereby enhancing the supervisory capacity to identify, assess and mitigate vulnerabilities.

      

We believe the IA, being operationally more nimble, will be able to cope with regulatory challenges more effectively.

      

Meanwhile, we are also drawing up the legislation for the establishment of a Policy Holders’ Protection Scheme (PPS). The PPS aims to better protect policyholders, maintain market stability in the event of insurer insolvency and enhance public confidence in the insurance industry.

      

Similarly, we are working with the audit profession to enhance independence of Hong Kong’s auditor regulatory regime.

      

I am glad to say that the industry is supportive of this government initiative to expand the ambit of the Financial Reporting Council. The council would become an independent auditor oversight body, regulating auditors of public interest entities. We will soon introduce the amendment bill into the Legislative Council.

 

Aligning with int’l standards         

Above all, the Government is committed to strengthening Hong Kong’s position as a global financial centre. As such, we place great importance on international standards of best practice.

 

On anti-money laundering and counter-terrorist financing, AML and CTF in short, we are proud to be an active member of the Financial Action Task Force (FATF) since 1991.

      

To keep pace with the international standards in this highly sensitive area, the Government introduced two amendment bills into the Legislative Council in June this year.

      

The first amendment bill concerns the codification of customer due diligence and record-keeping requirements, as well as the introduction of a licensing regime for trust or company secretarial service providers, and the other amendment bill affects the disclosure of beneficial ownership of companies incorporated in Hong Kong.

      

These two amendment bills are part of our international obligations to combat money laundering and terrorist financing. We shall spare no effort to ensure that the AML/CTF regulatory regime in Hong Kong is up-to-date and benchmarked against international best practices.

      

Our banks continue to meet and exceed international standards under the Basel Accords for capital, liquidity and disclosure. Notably, the banking industry in Hong Kong remains well capitalised, with a consolidated capital ratio of 18.7% at the end of June; that’s double the international minimum requirement. Quarterly average liquidity is also well above statutory minimum requirements.

      

We have built a robust regulatory framework over the years to safeguard the good health of our banking system. We have successfully implemented the first and second phases of the Basel III standards in good time.

      

Preparatory work is also under way for implementing some latest Basel capital and liquidity standards. These include revisions to the leverage ratio framework, capital treatment of expected loss provisions, Net Stable Funding Ratio, etc, which are scheduled for implementation on January 1, 2018.

      

We are also amending our Banking Ordinance to bring the regulatory regime in respect of banks’ financial exposure limits up to date. We are confident that these efforts will strengthen our financial system and contribute to Hong Kong’s financial stability in the long run.

       

Derivatives regulatory regime      

Last, but by no means least, I would like to update you on the OTC (over-the-counter) derivative regulatory reform and the short position reporting regime.

 

Hong Kong is committed to implementing the G20 commitments on the OTC derivatives regulatory reform, and has been implementing the regulatory regime in phases.

      

Since July this year, the HKMA’s reporting requirement has been expanded to cover all interest rate derivatives, foreign exchange derivatives, equity derivatives, credit derivatives and commodity derivatives. In addition, mandatory clearing of dealer-to-dealer trades of certain interest rate derivatives and designation of central counterparties have already commenced since September 2016.

      

Meanwhile, in keeping with the development of short-selling activities in the Hong Kong market, the SFC expanded the scope of the short position reporting regime in March this year. The regime now covers all securities that can be short sold.

      

I cannot emphasise enough the importance of collaboration between the Government, financial regulators and the industry in achieving the right balance between risk and regulation.

      

We have made some good progress and we will continue to enhance the resilience of the financial markets while promoting market development and protecting and educating the public and investors.

   

Financial Secretary Paul Chan gave these remarks at the Pan Asian Regulatory Summit 2017 on October 10.

via Moroccan Trader HK strikes right balance

Enhancing HK’s competitiveness  

Financial Secretary Paul Chan

According to the Hong Kong Monetary Authority (HKMA), pre-tax operating profits of banks in Hong Kong grew by about 8.7% last year. Given that the global economy, as well as the Hong Kong economy, have been performing much better than expected so far in 2017, I am sure that performance will be even better this year. For the first half of 2017, the total assets of banks, the deposits that they have taken and the loans that they have made all have registered impressive growth. Net interest margin has also seen improvement. Pre-tax operating profits of the banking industry have grown by over 18% over the same period last year.

 

I am happy to see that while banks in Hong Kong are making decent profits, they are at the same time maintaining prudent underwriting standards and strong balance sheets. The excellent resilience of the banking sector is one of the core strengths of Hong Kong as an international financial centre. For Hong Kong, we have built up a robust market and a strong regulatory framework over the years to safeguard the good health of our financial and banking system.

 

Strong banking sector

Therefore it is crucial that we keep up with the international standards in regulation and risk management. We have been implementing Basel III standards in Hong Kong over the past few years. Throughout the implementation, the banking sector has continued to grow, holding strong capital and liquidity positions and good asset quality.

 

Notably, banking in Hong Kong remains well capitalised, with a consolidated capital ratio of 18.7 % at the end of June – that’s double the international minimum requirement. Quarterly average liquidity is also well above statutory minimum requirements.

 

In addition, the classified loan ratio of our banks stood at only 0.68 %, and that speaks of the sector’s asset quality.

 

We are now working on the next phase of the Basel III implementation. It covers several revised capital and liquidity standards, including the revised securitisation framework for capital requirements, as well as Net Stable Funding Ratio requirements.

 

We are also preparing legislative amendments for implementing the latest financial exposure framework from the Basel Committee on Banking Supervision, along with recovery planning requirements prescribed by the Financial Stability Board.

 

I count on your support for these regulatory reform initiatives. They can only strengthen the banking sector.

 

All well and good. But, of course, Hong Kong is one of the world’s great financial centres for more than our robust regulatory regime.

 

Boosting economic development

The Government is sparing no effort in enhancing Hong Kong’s competitiveness as the global financial centre in Asia. Going forward, the Government will play a more active role as a facilitator and promoter in furthering Hong Kong’s economic development.

 

The financial services sector is one of Hong Kong’s pillar industries, accounting for about 18 % of our GDP. We have successfully launched a host of new initiatives to further broaden our capital markets and develop our financial services industry.

 

The Shanghai and Shenzhen Connect, the Bond Connect, as well as the Mainland-Hong Kong Mutual Recognition of Funds arrangement, are all encouraging examples of our work on this front. Apart from the Mainland, the Securities & Futures Commission has entered into mutual recognition of funds management arrangements with France and Switzerland.

 

We have also introduced tax incentives to promote the development of the fund management industry, Corporate Treasury Centre and aircraft leasing in Hong Kong.

 

If there are any other areas where you think the Hong Kong Special Administrative Region Government should do more to create more business opportunities for you, please feel free to let me know. You know where to find me I’m sure.

 

Developing fintech

Fintech will be a key driver in the future growth of the banking sector. With a world-class financial infrastructure and an increasing influx of talent in this area, Hong Kong is well positioned to develop into a hub for fintech. And I am sure that you are working together to make that happen, fast.

 

In a recent Accenture report, Hong Kong ranked third in Asia-Pacific in private fintech investment, just behind the Mainland of China and India. Last year, some 140 fintech-related startups were operating in Hong Kong. That’s up about 60 % over the previous year.

 

It helps that fintech companies here attracted about US$400 million in venture capital investment between 2014 and 2016. That all but triples what Singapore’s fintech companies took in over the same period. Not that we are counting, of course.

 

I am sure you are aware that we have launched a host of initiatives in recent years to facilitate the development of fintech for Hong Kong’s financial services industry.

 

Just over a year ago, the Hong Kong Monetary Authority launched its Fintech Supervisory Sandbox to speed up the time-to-market for banks’ fintech products and services. It gives banks the opportunity to test out new technology in the real world without full compliance requirements.

 

At the end of August, 19 bank trials had used, or completed, testing under Sandbox.

 

Fintech collaborations

We are also encouraging fintech partnerships. For example, we teamed up with the Applied Science & Technology Research Institute (ASTRI) last September, launching an innovation hub to spur collaboration between fintech firms and banks, while creating neutral ground for them to explore promising possibilities.

 

The Fintech Career Accelerator Scheme is another ASTRI partnership. It places undergraduate and postgraduate students in fintech projects in the banks here. The intent of course, is to nurture both the projects and the people behind them.

 

We are also nurturing more fintech startups and talent through various supporting measures, ranging from seed funding and business guidance to networking and incubation programmes. For example, Cyberport, the largest digital community in Hong Kong, has been providing designated space for fintech startups and has attracted young entrepreneurs from around the world focusing on blockchain, cyber security, cross border payment, eCommerce, big data and AI.

 

The HKMA has also partnered with banks in a number of fintech areas including the use of Distributed Ledger Technology (DLT) on trade finance, mortgage loan applications and digital-identity management, as well as central bank digital currency.

 

Fintech activities

The HKMA organises a wealth of fintech activities. On October 25, as part of this year’s Fintech Week, the HKMA will host Fintech Day, featuring panel discussions, startup demonstrations, workshops on DLT and Open Application Programming Interface and more.

 

I look forward to seeing you there.

 

Apart from the licensing system for stored-value facilities introduced last year, the HKMA has also been working on a faster payment system scheduled for roll-out next September.

 

The new system, enabling credit transfer, direct debit, addressing services and electronic direct-debit authorisation, will give the public greater convenience and lower costs through the availability of real-time retail payments across bank accounts and stored-value facilities.

 

I am sure that you will all actively participate in the system, expanding services to your customers while creating new business opportunities in market segments that traditionally rely on cash, from wet markets and taxi drivers to other SMEs.

 

We believe the use of digital technology can also make compliance more efficient and effective.

 

That includes making greater use of technological solutions to customer due diligence. In this regard, we are now working on a KYC (know-your-customer) utility. And we are hopeful that some of these developments will help address de-risking, an issue often raised in the context of financial inclusion.

 

Finding the proper balance in combatting money laundering while protecting the interests of legitimate account holders is, of course, a fundamental issue.

 

I am pleased to note that recent feedback from the community is encouraging. They are telling us that customer experience is improving.

 

Mainland opportunities

Beyond the prospects and borders of Hong Kong, the sustained growth of the Mainland of China offers boundless promises to our financial services sector.

 

The Belt & Road Initiative has been gaining much momentum in the past few years, and Hong Kong will play a pivotal role in it as a financing and professional services hub for Belt & Road infrastructure projects.

 

Apart from facilitating infrastructure financing, we are also getting ourselves ready to welcome infrastructure project companies to be listed on our stock exchange, and to tap our Islamic finance and green finance capabilities.

 

Another exciting new development that will create more immediate opportunities for Hong Kong is the Guangdong-Hong Kong-Macao Bay Area development. It is a key component of China’s national development strategy, which brings together Hong Kong, Macau and nine other fast-growing cities in Guangdong Province including Shenzhen, Guangzhou and Zhuhai, with a combined population of over 66 million.

 

This is the most affluent region in China, with an aggregate GDP of US$1.3 trillion, which is similar to that of South Korea or Australia. It is also the leading innovation and technology hub of China.

 

Infrastructure enhancing connectivity

With the completion of the Hong Kong-Zhuhai-Macao Bridge and the high speed rail (Guangzhou-Shenzhen-Hong Kong Express Rail Link) in the coming year, the flow of people, goods, capital and information between Hong Kong and the region will be greatly enhanced. Adding all these together, the bay area will certainly be a promising economic hinterland for Hong Kong providing considerable business opportunities, in particular for wealth management professionals.

 

Currently we are working closely with relevant Mainland authorities in drawing up a work plan that can drive the co-ordinated development of the bay area, reflecting the unique positioning of Hong Kong, reinforcing Hong Kong’s role as China’s international financial centre and driving closer collaboration between Hong Kong and neighbouring cities in developing Hong Kong’s innovation and technology sector.

 

Ladies and gentlemen, I am confident that with the continuing innovation and drive our banking sector has long shown the world, and the support of the Central Government under the unique “one country, two systems” arrangement, Hong Kong will continue to flourish in this 21st century of promise.

 

Financial Secretary Paul Chan gave these remarks at the Hong Kong Association of Banks Distinguished Speaker Luncheon on October 9.

via Moroccan Trader Enhancing HK’s competitiveness  

Reaping Belt-Road, bay area bonanza

Chief Executive Carrie Lam

Today’s event is billed as a “roundtable”, although the head table is not a round one. Those of you with a fondness for tales of King Arthur will recall that his knights sat around a round table, a visible symbol that no one knight was above any other.

 

Hong Kong may not enjoy quite the equivalent of Camelot’s round table. But this administration believes in inclusion, in the community-wide opportunities that constructive dialogue can realise. I am sure attendees today will find much food for thought from distinguished speakers in the subsequent panel discussion.

 

Maiden Policy Address

In two days’ time, I shall deliver my maiden Policy Address, which I hope will contain not only initiatives for the coming year, but also my vision for the future of Hong Kong. While I do not intend to disclose any content today, you can be sure that opportunities for Hong Kong under the Guangdong-Hong Kong-Macao Bay Area and the Belt & Road Initiative will feature quite prominently. The theme of today’s discussion is therefore a most timely and relevant one.

 

The theme is also an inspiring one as it attempts to bring together these two critically important national development strategies. In other words, instead of approaching these in isolation, much synergy could be derived from interactions of both, particularly in shaping the future of Hong Kong.

 

Indeed, I view the bay area development, first detailed by Premier Li Keqiang in his Government Work Report in March this year, as a key pillar for the Belt & Road Initiative.

 

In my view, the bay area will serve as the gateway between the Chinese Mainland and the countries along the Belt & Road. Its air- and sea-cargo throughput leads the world, presenting a central passageway for air, land and sea transport linking countries along the Belt & Road.

 

No less important, the bay area encompasses Hong Kong, Macau and such Guangdong cities as Guangzhou and Shenzhen, which are amongst the most international and economically advanced cities in the country.

 

In fact, the bay area encompasses 11 cities and an overall population of 66 million. That, ladies and gentlemen, is greater than the United Kingdom’s. And the bay area’s overall GDP, at US$1.36 trillion, represents 12% of the GDP of our whole country, and is equivalent to that of Australia.

 

HK’s unique Belt & Road role

Hong Kong’s contributions within the bay area towards the Belt & Road Initiative are unique, thanks to “one country, two systems”. During my first official trip to Beijing in August, I secured the Central Government’s blessing for Hong Kong to enter into a comprehensive agreement with the Mainland on our participation in the Belt & Road Initiative. We have since then been in active talks with the National Development & Reform Commission on the content of the agreement, and I look forward to putting pen to paper, hopefully before the end of this year.

 

As we see it, Hong Kong, the most international of the bay area’s cities, already serves as the multilateral bridge between the Mainland and the rest of the world. It’s a role we will continue to play for the bay area – as a gateway for multinational companies accessing the Mainland market and as a springboard for Mainland companies seeking to go global.

 

Mainland investment in Hong Kong will increase as the Belt & Road Initiative gains traction. We are, after all, a global financial services capital – the world’s largest offshore renminbi business hub and an international asset management centre.

 

We are, as well, China’s international financial capital. Hong Kong, in short, is well placed to provide highly professional risk assessment and management services to Belt & Road projects and to meet the rising demand for fund-raising and financial management services amongst Chinese companies taking part in such projects.

 

And Hong Kong’s lauded professional services sector, which works to the highest international standards, can offer a wide range of other services, from consulting, law and arbitration to insurance, construction, project management and more.

 

I&T hub

One area which I would like to highlight is innovation and technology. We aim to develop an international innovation and technology hub in the bay area which will no doubt also contribute to the Belt & Road Initiative. At the moment, a high-tech industrial belt, set in motion by the Mainland’s innovation-driven development strategy, already powers the Pearl River Delta Region. Guangzhou and Shenzhen specialise in innovation and technology industries, while Foshan, Zhongshan and other cities focus on advanced manufacturing.

 

If Hong Kong does not wish to be left behind, it is important for us to join hands with these cities in the bay area in the development of the innovation centre. Indeed, after three months of intensive learning on the job, I am convinced that innovation and technology will help power Hong Kong’s future economy, improve people’s livelihood and create quality jobs for young people as well as opportunities for young entrepreneurs. It will therefore be a priority area for my Government. As I see it, Hong Kong has a lot of potential in this field. For example, we have a clear competitive edge in R&D capabilities. We enjoy free flows of ideas, talent and capital. Intellectual property is highly valued here and it is protected under our common law system.

 

In fact, our vibrant startup environment already attracts a world of interest and we are regarded as one of the fastest-growing technology startup ecosystems in the world. Today, some 2,000 innovation and technology startups and about 50 incubators are based here in Hong Kong. That, ladies and gentlemen, is up 24% over the same period last year.

 

I am glad to note that Guangdong and Hong Kong share the common goal of developing the bay area into an innovation and technology hub. I have met Guangdong Governor Ma Xingrui twice already since July 1 and we are both committed to this joint venture, which will certainly be a win-win proposition. Hong Kong can contribute to the development as our international networks can connect the bay area with international markets. And we are well versed in global technology trends and technical standards, thanks to a base of highly skilled workers supported by well-respected tertiary institutions. At the same time, Hong Kong is set to benefit from the collaboration with other cities in the bay area as it would provide our businesses with better access to the manufacturing hub of the Pearl River Delta and ample opportunities in the huge Mainland and Belt & Road markets.

 

Add it up – Hong Kong is best positioned within the bay area to play a key role in turning the Belt & Road vision into business opportunities. All these opportunities, provided they are seized in a timely and proactive manner, will translate into tangible benefits for enterprises and professionals in Hong Kong.

 

Beyond its economic value, the bay area has the potential to emerge as an appealing lifestyle centre as well as a showcase for co-operation between the Mainland, Hong Kong and Macau.

 

So what will it take to realise this dynamic future?

 

Close collaboration

First, co-operation will be critical. We will need to reach a consensus on a clearly defined set of roles for each city within the bay area, if we are to minimise adverse competition and duplication of resources. This would produce better synergies and enhance the global competitiveness of the bay area as a whole.

 

Looking at Hong Kong, I believe we must enhance our status as international financial, trade and transport centres. We must also develop our emerging industries. That includes, in addition to innovation and technology which I mentioned earlier, legal and dispute-resolution services, the creative sector, medical and health services and higher education.

 

Second, we must, while upholding “one country, two systems” and Hong Kong’s unique strengths, facilitate the free flow of people, goods, capital and information within the bay area.

 

A case in point, educational institutions, research and development centres and scientific research institutions in Hong Kong can apply for science and technology project funds on the Mainland, but they cannot use those funds in Hong Kong. This, of course, is a barrier to co-operation in scientific research.

 

In everyday life, Hong Kong residents living and working on the Mainland are still facing barriers in some areas such as education, social welfare, transport and travel. Not surprisingly, this has discouraged some Hong Kong people from exploring opportunities in the bay area.

 

Thanks to the announcement by President Xi Jinping in his keynote address in Hong Kong on July 1 this year that various CPG (Central People’s Government) ministries will roll out concrete measures to provide more convenience to Hong Kong people working and studying on the Mainland, there is some good news. For example, since August, the China Railway Corporation has introduced self-service ticket machines that can read Hong Kong people’s Mainland Travel Permits in about 210 stations, including Beijing, Shanghai, Zhejiang, Fujian and Guangdong. This has shortened the time it takes for Hong Kong people to buy and collect train tickets. We expect more supportive policies and measures from the CPG to be rolled out as the bay area development gathers speed.

 

Infrastructure boosting connectivity

There’s more on the way to boost connectivity between Hong Kong and the rest of the bay area. The Hong Kong section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link will take passengers less than 50 minutes to get from West Kowloon to Guangzhou, while the Hong Kong-Zhuhai-Macao Bridge will reduce travelling time between Zhuhai and Hong Kong International Airport to 45 minutes, down from the current four hours by road. And a new land control point at Liantang/Heung Yuen Wai will open on the eastern part of Hong Kong and Shenzhen, enhancing connectivity to the eastern part of the province.

 

As we all know, Hong Kong’s shortage of land impedes the expansion of many industries. Similarly, Hong Kong’s market is small, limiting growth potential. The enhanced connectivity between Hong Kong and the rest of the bay area would allow us to tap into the latter’s land, labour and capital resources, while opening up a market almost 10 times our domestic one.

 

In creating a business environment for the bay area that is globally competitive, new policies are expected to better implement the liberalisation measures under the Closer Economic Partnership Arrangement and to promote the convenient flow of factors for production. These will certainly provide new impetus to the development of Hong Kong.

 

All cities in the bay area are excited about the future prospects and are pressing full-steam ahead with the development. On the day my Government took office, I signed a framework agreement with the National Development & Reform Commission and the governments of Guangdong and Macau on the bay area development. In mid-August this year, the commission formally consulted the governments of Guangdong, Hong Kong and Macau, as well as relevant Mainland authorities, on the bay area development plan.

 

We have proposed a variety of measures regarding Hong Kong’s participation in the bay area and, through relevant policy bureaus, we have solicited the views of industry sectors and advisory bodies, reflecting their input to the commission.

 

We expect the bay area development plan to be formalised by the New Year. Playing an active role in taking forward the bay area development will be the Government’s major task in taking forward co-operation with the Mainland.

 

In the end, the development will, I’m confident, give full play to the strengths of Hong Kong. It will cement our position as the key international gateway to the Mainland and elevate our role in China’s opening up.

 

Ladies and gentlemen, for the Belt & Road Initiative and the bay area development to achieve their goals, it is important that the Government, business and the community work together to tackle the challenges and impress upon our younger generation the many opportunities ahead. I appeal to community leaders like your good selves to continue to maintain a keen interest in these national initiatives.

 

Chief Executive Carrie Lam gave these remarks at the China Daily Asia Leadership Roundtable Luncheon “Guangdong-Hong Kong-Macao Bay Area from The Belt & Road Perspective: Opportunities & Challenges” on October 9.

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Policies guided by core values

Chief Executive Carrie Lam

Upholding core values is essential, and this is especially the case today. Rarely in recent history has the world faced so many pressing and diverse challenges at the same time: climate change and natural disasters, poverty and forced displacement, the rise of extreme politics and armed conflict – these are the topics that seem to dominate headlines on a daily basis. The areas of focus chosen by the Lui Che Woo Prize this year, namely prevention of climate change, alleviation of poverty, and promotion of harmony among diverse groups, are indeed very relevant to today’s situation.

 

I believe that in the 21st Century, we have unprecedented resources to tackle the challenges: our world is more prosperous, more technically advanced and more interconnected than ever before.

 

I believe that we should all make a little extra effort to improve the environment and help our fellow citizens. Of course, this is easier said than done.

 

To motivate positive change we seek inspiration. Here, we need look no further than the Lui Che Woo Prize and its worthy recipients. Together, you serve as a great source of inspiration to others to build a better world together.

 

With this in mind, I would like to say a few words about each of this year’s laureates:

 

Mr Xie (Zhenhua) has channeled his political experience and diplomacy skills to the goal of curbing climate change. He has sought global solutions for this global challenge, including international negotiations that led to the successful conclusion of the Paris Agreement in 2015. He has also championed the cause in China, making significant contributions to mitigating climate change in the world’s second-largest economy.

 

Landesa identified the importance of land ownership in lifting people out of poverty. Over the past 50 years, Landesa has worked in many of the poorest parts of the world, finding solutions in different communities to achieve its goal of “helping people to help themselves”. Landesa has assisted more than 120 million poor families around the world to secure land rights and plan for a brighter future.

 

And the International Paralympic Committee (IPC) fully deserves its own “gold medal” today. I remember that, when Hong Kong hosted the Paralympic Equestrian Events of the 2008 Beijing Games, spectators were truly moved and inspired by the achievements of the competitors. IPC, through its many events in many countries, gives Para-athletes a chance to shine on the world stage, and, even more important, it gives hope to people with disabilities and promotes a more inclusive and compassionate society.

 

So, once again, I congratulate the award winners. But it is also important to remember that, to make positive change, we don’t have to be great athletes, accomplished diplomats or part of a global organisation.

 

We can all do a little more to recycle waste and conserve energy, show compassion for our fellow citizens and support and encourage people in need of a little extra help.

 

As Hong Kong’s Chief Executive, I am also abundantly aware that my government and I must lead by example.

 

In my previous capacity as the Chief Secretary, I chaired the Government’s Steering Committee on Climate Change. After months of hard work, we published Hong Kong’s Climate Action Plan 2030+ earlier this year, outlining the Government’s longer-term action in combating climate change and setting out the carbon emission reduction target for 2030. I have reaffirmed my commitment to this cause in my election manifesto. In particular, I will aim to reduce Hong Kong’s carbon intensity by 65% to 70% by 2030 compared with the 2005 level, and gradually replace coal-fired electricity generation by clean and renewable fuels.

 

As the Chief Secretary I also chaired the Government’s Commission on Poverty since its re-establishment in 2012. During my term, the commission had spared no efforts in taking forward various initiatives from setting for the first time, the official poverty line in Hong Kong, formulating and launching the Low-income Working Family Allowance, to enhancing the upward mobility of young people with grassroots background and furthering the work of the Community Care Fund and social innovations. As the Chief Executive now, I will monitor closely the implementation of the various initiatives. I will continue to chair the annual Commission on Poverty Summit to garner first-hand information through listening to the disadvantaged and consider policies to remedy deficiencies together with them.

 

And promotion of harmony among diverse groups is my priority as the Chief Executive. Hong Kong has been suffering from quite a serious divisiveness and has accumulated a lot of frustration. I will endeavour to heal the divide and to ease the frustration – and to unite our society to move forward. It will take time, but my observation in the past three months is that we are moving towards the right direction.

 

Next week, I will deliver my first Policy Address. I look forward to setting out my vision and goals for Hong Kong in the coming five years.

 

Regarding content of the Policy Address, of course, I cannot give much away as yet. However, I can assure you that my policies will be guided by core values that we all share: strengthening education, caring for the disadvantaged and promoting an inclusive, harmonious and proactive community.

 

Last, but by no means least, I also take this opportunity to commend Dr Lui on his remarkable achievements in business and in the community.

 

As many of you would know, Dr Lui did not have the benefits of a high-quality education or wealthy childhood. He worked his way to the top.

 

Today he is known for his philanthropy and as much as for his business achievements. Through the Lui Che Woo Prize, I hope that more of our younger generation will be inspired to face challenges and make their own success in whatever field they choose.

 

Tonight standing here, I want to also say something about this wonderful city, Hong Kong. Last week, I presided over the presentation of Shaw Prize to very distinguished scientists, medical doctors and others. And later this year, I have agreed to present prizes at Yidan Prize for Education. So for a small place like Hong Kong, we have throughout the year, three distinguished international prizes to recognise people of international standing. This speaks for itself that Hong Kong is an international city that deserves our pride and our support.

 

Chief Executive Carrie Lam gave these remarks at the Lui Che Woo Prize – Prize for World Civilisation Prize Presentation Ceremony on October 3.

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HK to reach greater heights

Chief Executive Carrie Lam

During the past twenty years, leveraging its position as a special administrative region of the People’s Republic of China, Hong Kong has witnessed, participated in and benefitted from the continuous reform and opening up of our country. Through business, investment, employment, studies and exchanges in various areas, Hong Kong people have acquired a better understanding of our country and fostered deep emotional bonds with the people in the Mainland. As reflected in the theme of the publicity video broadcast in the Mainland on the 20th anniversary of Hong Kong’s return to the motherland, people of the two places join hands in serving our country and engaging the world, and together we seize opportunities to go from strength to strength.

 

From a personal perspective, my knowledge of and concern about our country’s development can be traced back to the “Knowing China & Caring about Society” activities that I participated in during my university days. I joined several study tours to the Mainland organised by the then China Study Society. In 1979, as the deputy leader of an exchange tour organised by the student union, I went on a two-week study and exchange trip to Tsinghua University with dozens of students from different faculties of The University of Hong Kong. During the trip, I met my long-time favourite writer Bingxin in the Minzu College and called on Prof Qian Weichang, a well-known physicist. I was deeply moved by their lofty patriotic conviction. I could feel the Mainland students’ friendliness and warmth towards the students from Hong Kong. We climbed the Great Wall together. We enjoyed dumplings at students’ homes. Despite meagre resources (for example, hot water supply was available for only limited durations in deep winter at the Tsinghua University student hostels) the strong feelings that “we are all Chinese” were pervasive and remain vivid to me. As the experience has left an indelible mark in my life, I recounted this trip and included a photo of my first visit to Tiananmen Square in Beijing in a book I published during my election campaign about my personal development.

 

Today, China’s capital Beijing is a prosperous city with high living standards. Comparing this with Beijing 38 years ago, the pace of development is astonishing. Indeed, our country was poor in the early days of its establishment and people led a hard life. After nearly 40 years of reform and opening up, China has made big strides forward: from managing to stand on its feet to becoming prosperous and strong, and is now the second largest economy in the world. The quality of life of its people has continued to improve. Internationally, China plays a very important role in various areas such as politics, economics, technology and environmental protection.

 

Three months ago, President Xi Jinping visited Hong Kong to join us in celebrating the 20th birthday of the Hong Kong Special Administrative Region, and administered the oath-taking for myself and the Principal Officials of the fifth-term Government. President Xi stated clearly that Hong Kong has always had, and will continue to have the strong backing of our motherland. The continuous development and growing prosperity of our country not only gives Hong Kong strength to rise to challenges, but also provides opportunities for Hong Kong to explore new directions for its development, and to seek new impetus as well as an expanded scope for such development.

 

During the past three months, in my new capacity as the Chief Executive of the HKSAR, I have been deeply impressed by the strength bestowed upon us by our country and the immense opportunities lying before us. I have visited the UK, Singapore, Thailand and Myanmar, and met with senior officials from different countries during their visits to Hong Kong. All of them expressed a keen interest in our country’s Belt & Road Initiative and the development of the Guangdong-Hong Kong-Macao Bay Area. They have also put forward specific proposals on forging closer ties with Hong Kong with a view to further taping into the Mainland market and attracting capital from the Mainland. These positive responses from the international community have reinforced my confidence in the future of Hong Kong with our unique advantages under “one country, two systems”. 

 

During the same period, I have also visited Beijing, calling on 16 ministries in the Central People’s Government and organisations, attended the 13th National Games and met with the Director of General Administration of Sport of China. I have also visited Shanghai, Hangzhou, Tianjin, Changsha and Shenzhen, and held separate meetings with the provincial governors of Guangdong, Guangxi, Hunan, Yunnan, Jiangxi and Fujian in the margins of the Pan-Pearl River Delta Regional Co-operation Chief Executive Joint Conference. In addition, I have received the President of the Supreme People’s Court, the Minister of Science & Technology, the former Chairman of the China Development Bank Corporation, officials of the National Development & Reform Commission, the Ministry of Commerce, the Taiwan Affairs Office of the State Council as well as leaders of various provinces including Guangdong, Hubei, Shandong, Sichuan, Jiangsu, and Zhejiang provinces during their visits to Hong Kong. With their full recognition of the strengths of Hong Kong, coupled with the support of the Central Government and our enhanced ties with the Mainland, I am very optimistic that Hong Kong will have an even brighter future. 

 

As long as we capitalise on our strengths, stay focused, seize the opportunities before us and stand united, I am sure that Hong Kong can reach even greater heights. I also believe that this “Pearl of Orient” of our country will continue to shine, contributing to the development of our country and becoming an even better place to live in.

 

Chief Executive Carrie Lam gave these remarks at the National Day Reception in Celebration of the 68th Anniversary of the Founding of the People’s Republic of China on October 1.

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Gov’t supports working women

Chief Executive Carrie Lam

There are numerous examples of prominent female leaders in our private sector. And their leadership has blazed a trail for women.

 

I believe that access to education is critical to enabling women to participate fully in all areas of our society. In this, much has been achieved in Hong Kong over the past 20 years. In 1921, the University of Hong Kong admitted its first female student. In the years since, we have achieved gender equality in education, and our female students are excelling academically.

 

Females now represent nearly 55% of the students enrolled in programmes funded by our University Grants Committee in the 2016-17 academic year. That’s up 6% over 1996-97 totals.

 

In some disciplines traditionally perceived to be male dominated, the percentage of female students has also increased considerably. The percentage of female students studying medicine, for example, has soared over these past two decades – rising from some 37% 20 years ago to more than 51% last year. The percentage of female students majoring in engineering and technology has also more than doubled over the last 20 years – from just over 14% to 29.5% last academic year.

 

In the workplace, women in Hong Kong enjoy equal employment opportunities and are protected under the same labour legislation as men. The female labour force participation rate has increased from some 45% in 1996 to nearly 51% in 2016. But this is an area that this government will work harder at, because I noticed that even at 51% female labour participation rate, there is room for doing better, especially when Hong Kong is facing a major labour shortage in time to come.

 

In the professional field, women last year made up 48% of Hong Kong’s solicitors and 50% of our public accountants, compared to 32% and 33% respectively 20 years ago.

 

Over that same period, women’s share of managerial positions has gone from about 20% to 33%. In short, women today take up one in every three Hong Kong managerial positions.

 

At the top management level, the news is less encouraging, I’m afraid. About 12% of the board directors of Hong Kong’s Hang Seng Index companies are women. Still, that compares favourably with Singapore at under 10%, Japan at 3.4%, and South Korea at just over 4%.

 

Hong Kong, of course, must – and will – do better in this regard. But it will demand your concerted efforts to create a more enabling corporate environment in Hong Kong.

 

Turning to the Hong Kong Special Administrative Region Government, the news is mixed. We have only two female Principal Officials in the new-term Government – myself and the Secretary for Food & Health Prof Sophia Chan. I did admit openly that I failed miserably in getting more female leaders on to my team and there is a long story to tell you why I failed. That said, 10 of the 19 Permanent Secretaries – the highest rank in our civil service – are women.

 

And, as of 2016, more than one-third, 35.7% to be exact, of our senior civil service colleagues, at the what we call the directorate grade level, are women. That, I should add, is a promising leap from just over 15% 20 years ago.

 

In social and political participation, last year the number of female registered electors was up more than 44% over 1998, while the corresponding increase in male registered electors was less than 27%.

 

For Government-appointed advisory and statutory board and committee members, some 32% of the non-official members are now women, up from about 17% in 1996. And we are working towards a benchmark of 35%.

 

Government has an important role to play in encouraging the advancement of women. We are doing so through policy-making, public engagement and international collaboration.

 

Allow me now to give you a bit of background. The protection of women’s rights in Hong Kong is enshrined in the Basic Law, our constitutional document. Article 25 of the Basic Law stipulates that all Hong Kong residents are equal before the law. Local legislation is also in place to protect women against domestic violence, sexual discrimination and other inequities.

 

The Sex Discrimination Ordinance, enacted in 1996, makes discrimination unlawful on the grounds of sex, marital status or pregnancy, and sexual harassment. It also provided for the establishment of the Equal Opportunities Commission, created to eliminate discrimination and promote equality of opportunity between women and men.

 

In 2015, the Sex Discrimination Ordinance was amended to protect service providers from sexual harassment by their customers. Protection was extended to service industries with a large number of female practitioners, including nurses, waitresses, flight attendants and salespersons.

 

Hong Kong is no less committed to safeguarding women’s rights in line with international principles. The United Nations Convention on the Elimination of all Forms of Discrimination against Women was extended to Hong Kong in 1996. Hong Kong submits regular reports to the United Nations Committee on the Elimination of Discrimination against Women as part of China’s periodic reports.

 

In response to the committee’s recommendations, we established the Women’s Commission in 2001. It develops long-term strategies, advises the Government and champions women’s causes in Hong Kong. It also maintains close ties with more than 300 local women’s groups and relevant service agencies, as well as international organisations.

 

With the commission’s advice, gender mainstreaming was introduced to the Government in 2002.

 

Since 2002, the Government has applied a Gender Mainstreaming Checklist to various policy and programme areas. Today, all government bureaus and departments must apply gender mainstreaming in formulating major government policies and initiatives.

 

To raise awareness of gender-related issues in the business community, the Government set up a Gender Focal Point network among listed companies here last December. Over 160 listed companies are using Gender Focal Points. In addition, the Women’s Commission has organised a variety of activities to enhance corporate understanding of gender issues and create an environment in which female colleagues can excel.

 

The commission also established the Capacity Building Mileage Programme to help women. The programme is used in more than 80 women’s groups and NGOs across Hong Kong. To date, more than 94,000 participants have enrolled.

 

A Funding Scheme for Women’s Development was launched by the commission in 2012. It provides funds for women’s groups and NGOs, helping them organise programmes and activities conducive to women’s development. The funding scheme’s theme, “Women’s Employment”, complements the Government’s work in motivating more women to join the labour force. To date, it has funded more than 90 organisations and over 240 projects.

 

As a working mother, I firmly believe that the Government should help women enter, or remain, in the workforce, creating conditions that allow them to maintain a work-life balance. To that end, the Government is enhancing childcare and elderly services support, strengthening training and employment services and promoting family-friendly employment practices.

 

For childcare services, we provide about 7,000 places at some 250 subsidised childcare centres and kindergarten and childcare centres. And we are continually enhancing these services. We have, for example, given additional funding to allow existing facilities to extend their service hours. We are now conducting a study on the long-term development of our childcare services. In this school year, we have introduced free quality kindergarten education for all kids in Hong Kong. For many of these kindergartens, we are encouraging them to provide extended, whole-day service so as to relieve women who need to go out to work.

 

The Government is also strengthening elderly care services, while providing support for those who care for elderly persons. That includes women who care for elderly persons at home.

 

In support of female employment, the Employees Retraining Board has offered more than 700 training courses straddling 28 industries and generic skills. About 82% of the trainees in board courses today are women. The board has also launched schemes allowing trainees to attend courses according to their own schedules.

 

In the workplace, a family-friendly environment is essential in creating equal opportunities for men and women. To that end, the Government has legislated numerous employment benefits, including rest days, maternity leave and paternity leave.

 

The biennial Family-Friendly Employers Award Scheme has become a key initiative in engaging the business sector’s buy-in. Last year, more than 2,700 companies and organisations participated in the award programme.

 

I assure you, I will work with Hong Kong business and the Hong Kong community to expedite and expand opportunities for women, on both the private and public sectors.

 

Our continuing prosperity is predicated on full and equal opportunity, at the highest levels – at all levels – for both men and women.

 

Chief Executive Carrie Lam gave these remarks at the WomenCorporateDirectors 2017 ASPAC Institute conference.

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HK scaling new heights

Chief Executive Carrie Lam

Since taking office on July 1 this year, many people asked how do I feel as the Chief Executive. Others take the view that since I have been in Government for over 30 years and rising through the ranks to become the Chief Secretary, it should be a seamless transition to the position of Chief Executive. But I am sharing with you tonight that there are indeed some adjustments to make. 

 

First is my dress. As the first lady Chief Executive, there is a legitimate expectation that I should dress well, and put on local designs to showcase Hong Kong’s fashion brand. But you know couture pieces are not always affordable by a government official. Tonight’s outfit is the second piece I have ordered from a renowned local designer who made my dusty pink outfit on my inauguration day. This naturally reflects the importance I attach to this occasion. The second adjustment I have to accommodate is my bodyguards. Although they may not be as charming as Kevin Costner, they are perfectly professional, reliable and discreet. But that discipline of giving advance notice to anything I want to do and the loss of opportunities to be alone on the streets, in the markets or in the countryside are something I still have to get used to. The third experience, a more serious one, is to come out to speak to, and act for, the people of Hong Kong, whenever they are anxious or in distress and look up for some leadership. 

 

Although many people congratulated me on a great start, Hong Kong has not had a quiet three months. Four members of the Legislative Council have been disqualified by the court, while another two have their appeals rejected; several student activists have been imprisoned following a sentence review by the Court of Appeal; banners and posters advocating independence of Hong Kong have appeared in our university campuses; several typhoons hit Hong Kong including one with a signal no.10, the first one since 2012; teachers worried about job loss by a sudden drop in student numbers because of policy changes in Shenzhen; and students anxious about their studies in the United Kingdom because of hiccups in the issue of visas. All these require immediate actions and unequivocal response which fall on the shoulders of the Chief Executive: there is simply no room for wait-and-see or delegation.

 

Last year on this occasion, I took the non-conventional step of showing you a short video during my speech. That was about our collaboration with the British Council to put on Event Horizon – Hong Kong featuring Sir Antony Gormley’s distinct life-sized sculptures atop Hong Kong’s skyscrapers. I noticed that that was quite well received. So, tonight, I am going to show you another four-minute video, this time specially produced for this event and has never been screened before. So, let’s watch the video.

 

Ladies and gentlemen, yes, the best of Hong Kong is yet to come. As the new Chief Executive of Hong Kong, I am full of confidence and optimism. I have said during my election campaign and on many occasions, as long as we get our act together, adopt a clear vision and embrace the many opportunities in front of us, Hong Kong will scale new heights. 

 

Why? First of all, Hong Kong will continue to succeed under “one country, two systems”, enjoying the unique advantages which Shanghai and Singapore, both highly competitive and thriving cities, do not have. In his very important speech delivered in Hong Kong on July 1 this year, President Xi Jinping has again pledged the nation’s support for the Hong Kong Special Administrative Region. From CEPA to a comprehensive agreement on Hong Kong’s participation in the Belt & Road; from Shanghai – Hong Kong Stock Connect and Shenzhen – Hong Kong Stock Connect to Bond Connect launched in July this year, Hong Kong occupies this unrivalled position as the world’s largest offshore renminbi centre. I am much encouraged by my first official trip to Beijing last month meeting a total of 16 ministries, commissions and organisations including the Asian Infrastructure Investment Bank in which Hong Kong became a member this June. Various plans and agreements are underway to enhance Hong Kong’s co-operation with the Mainland. Indeed, immediately upon returning to Hong Kong on Saturday, I will be meeting with the Minister of Science & Technology of the Central People’s Government to discuss Hong Kong’s development in technology. 

 

Second, the good things you have seen about Hong Kong from the video are underpinned by core values including the rule of law, the independence of the judiciary, a robust legal aid system ensuring access to justice, as well as freedom and rights guaranteed under the Basic Law. It is therefore extremely disturbing for me to learn that some politicians and commentators here in the UK are querying the independence of our judges over recent judgements, without any sound basis. Those comments are totally unfair to our judicial system which has gained worldwide recognition and disrespectful of our judges, including illustrious UK judges who sit on our Court of Final Appeal as non-permanent judges.

 

Third, at a time when public order seems to be at a disarray, and my sympathy goes to victims of several terrorist attacks in the United Kingdom, Hong Kong remains one of the safest cities in the world. Our total crime rate, at 852 per 100,000 population, is the lowest since 1972. But there is no room for complacency. Our law enforcement agencies will step up surveillance and international co-operation to strengthen our preparedness and combatting ability.

 

Fourth, Hong Kong is not just any Chinese city. We have the experience and skills of doing business with the outside world for over half a century. Our international outlook and connectivity has given us an edge and the high degree of autonomy we enjoy in conducting our external affairs, as provided for under the Basic Law, has enabled us to grow that relationship in the past 20 years as a Special Administrative Region of the People’s Republic of China. We now have a network of 12 economic and trade offices in the world, with the latest addition being the Jakarta office as our second office in ASEAN; we are committed to open new offices in South Korea, India, the Middle East, etc; we have just concluded a free trade agreement with ASEAN; we have commenced FTA negotiations with Australia; we have agreed with the UK government to start a strategic dialogue on trade partnership and have just signed a Fintech-bridge agreement with the UK government; we have plans to enter into more comprehensive agreements on the avoidance of double taxation and investment promotion and protection agreements; and Hong Kong businesses are now a major source of FDI to many countries.

 

Finally, the new term of the HKSAR Government that I lead has a strong sense of purpose and a strong sense of urgency. We know Hong Kong cannot rest on her laurels and there are many policy decisions we need to take, many investments we need to make and many people we need to connect in order to stay competitive. We know our people want us to tackle the housing shortage, provide better education, look after the disadvantaged and care for the elderly as our population ages. My team of Principal Officials, two of whom are joining me on this London trip – Edward Yau, the Secretary for Commerce & Economic Development, and James Lau, the Secretary for Financial Services & the Treasury – is sparing no time in rolling out their respective plans and engaging their respective stakeholders. There are so many friends and supporters of Hong Kong in the audience tonight. I cannot thank you more for what you have done for Hong Kong over the years. I am sure you will continue to give us your wise counsel and speak up for Hong Kong when this city you love is being unfairly attacked. On our part, we will unveil the best of Hong Kong and welcome you to our wonderful city.

 

Chief Executive Carrie Lam gave these remarks at the Hong Kong Trade Development Council Annual Dinner in London.

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