HK fashion design to thrive

Hong Kong thrives because of a host of advantages. Our strategic location right at the heart of Asia and at the doorstep of Mainland China is one of them. At the same time, our efficient logistics network, our strong connectivity, our ability to reach half of the world’s population within five hours’ flight time, as well as our free port status make Hong Kong an ideal sourcing hub in Asia.


Hong Kong enjoys unique status and advantages under “one country, two systems”. Hong Kong is a highly open and international city, with a business environment that is open and facilitating, as well as professional services that are of excellent quality. Added with our fundamental strengths, including the rule of law, free flow of capital and information, a business-friendly environment, a diverse and international talent pool, and a low and simple tax regime, Hong Kong is named the world’s freest economy by the Heritage Foundation 25 years in a row, the second most competitive economy by the International Institute for Management Development, and the fourth easiest place to do business by the World Bank.


It is no wonder that more and more international companies have chosen to establish a presence in Hong Kong. Compared to 2017, there is a 6.4% increase in the number of overseas and Mainland companies setting up in Hong Kong – the total number now exceeds 8,700. The growth is even more prominent in the number of companies using Hong Kong as their regional headquarters, which now reaches 1,530, up 8.3%.


At the same time, Hong Kong’s start-up ecosystem skyrocketed in the last few years. The latest survey shows that there are over 2,600 startups in Hong Kong, representing an increase of 18% over 2017. Hong Kong’s startup community is highly international, with 35% of the founders coming from outside Hong Kong. This high proportion is rather unique, and it highlights the attractiveness of Hong Kong to the international business community, and the key role we play for businesses globally.


To help Hong Kong enterprises and investors expand their markets, further reinforce Hong Kong’s status as an international trade and investment hub and establish our worldwide network of economic and trade connections, Hong Kong has also been actively seeking to forge free trade agreements (FTAs) and investment agreements with our trading partners.


Last week, we signed a FTA and an investment agreement with Australia, which are modern, of high standard and comprehensive in scope. This FTA is the fourth one signed by this term of Government. Altogether we have signed eight FTAs and they bring better market access for trade in goods and services as well as investment protection to Hong Kong investors. They also reduce restrictions in doing business and offer more business opportunities for Hong Kong enterprises and service providers. But these benefits are not confined to Hong Kong enterprises. Overseas companies which satisfy the relevant criteria and irrespective of their origin, can also enjoy the preferential treatments under the agreements. We welcome companies around the world to set up business in Hong Kong or to partner with Hong Kong companies to explore the vast opportunities that the FTAs offer.


Our deepening integration with Mainland China allows Hong Kong to play a strategic and vital role in two national development initiatives, namely the development of the Guangdong-Hong Kong-Macao Greater Bay Area and the Belt & Road Initiative.


The greater bay area encompasses a total area of 56,000 sq km, with a population of 69 million and a total GDP of US$1.5 trillion. Its population and area are much larger than those of the New York, San Francisco or Tokyo bay areas. The Greater Bay Area is also the most affluent region in China with a growing middle class.


Through further deepening co-operation amongst Guangdong, Hong Kong and Macau, the development of the greater bay area is aimed at promoting the co-ordinated economic development in the area, leveraging the complementary advantages of the three places, and developing into an international first-class bay area for living, working and travelling.


Hong Kong’s role in the development of the greater bay area is very clear. We will consolidate and enhance our status as an international aviation hub and a global offshore renminbi business hub. We will strengthen our role as an international asset management centre and a risk management centre, promote the development of high-end and high value-added services, and the development of innovation and technology industries, nurture emerging industries, and establish Hong Kong as the centre for international legal and dispute resolution services in the Asia-Pacific region. These areas of work are all conducive to maintaining Hong Kong as an international metropolis with enhanced competitiveness.


Hong Kong is also a key link for the Belt & Road Initiative. With the unique advantages and strengths I have mentioned just now, Hong Kong will provide strong support to Mainland and foreign companies in their participation in the Initiative by providing a platform for raising capital and a host of professional services.


The textiles and apparel industry has long been a cornerstone of Hong Kong’s economy. Over the years, Hong Kong has evolved into a production controlling hub, an international sourcing centre for textiles and apparel products, as well as a fashion design hub. In addition to our excellent infrastructure and connectivity, we have top-notch fashion designers and professionals who can provide you with all the required services. We are experienced in fabric procurement, sales and marketing, quality control, logistic arrangements, as well as international and domestic rules and regulations. Being resourceful and versatile, they cater for diverse customer needs and fast orders.


The Hong Kong Special Administrative Region Government has spared no efforts in furthering the development of the fashion design industry, including promoting local fashion designers and brands, and nurturing fashion design startups. Our dedicated funding schemes have continued to support projects to nurture young fashion designers and fashion design startups, and provide local and overseas platforms to showcase local fashion designs and brands and explore business opportunities. The Hong Kong Trade Development Council organises CENTRESTAGE, the Hong Kong Fashion Week and delegations of Hong Kong fashion designers to London, New York, Tokyo and many other international fashion weeks.


Construction works for the Sham Shui Po Design & Fashion Project are under way. Upon its commissioning scheduled for 2023, the project will become a design and fashion hub for grooming budding designers and startups and enabling design startups to realise and commercialise their designs.


Acting Secretary for Commerce & Economic Development Bernard Chan gave these remarks at the Prime Source Forum 2019 on April 2. 


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Bay area I&T hub benefits HK

Beginning, of course, with the 25 splendid young men and women who have been selected as this year’s Innovation & Technology Scholarship Award winners. They are all undergraduates coming from six universities and a wide range of programmes in science, medicine and engineering. Their purpose, dedication and pursuit of knowledge have been recognised, and I have no doubt that this award will mark a fresh milestone in their quest for excellence.


The universities are no less worthy of recognition. They serve the students with a distinction driven by commitment and pride. And, clearly, they have instilled in each of our award winners a culture of learning steeped in innovation and technology, grounded in scientific research and critical thinking.


I am as delighted as anyone here, including of course the parents. After all, my Government is committed to nurturing Hong Kong’s rise as an international I&T hub. And we can’t do that without our world-class universities and our world-class students. My Government’s role is to help enable their success through our policies, initiatives and resources. We help, as well, by proactively pursuing desired goals for our economy and our community. Which is why, in my Policy Address last October, I pledged $20 billion to the Research Endowment Fund under the University Grants Committee. These funds will strengthen the research capabilities of our universities. My Government also set in motion a scientific research matching fund of $3 billion to further boost research funding through contributions from the non-public sector.


We are also setting up two world-class research clusters at the Hong Kong Science Park. One will be dedicated to healthcare technology, the other to artificial intelligence and robotics. In each, internationally renowned institutions will establish research laboratories, collaborating with our universities and centres of research excellence.


I look forward, as well, to proposals for the City I&T Grand Challenge. As outlined in my Policy Address, my Government has allocated $500 million over the next five years for this annual competition, which seeks to encourage our people, students included, to apply I&T to tackle issues and challenges related to our everyday lives. I’m sure many of our students here today have some smashing thoughts and grand ideas on improving our daily lives. Our grand challenge welcomes them.


The bigger challenge, of course, is ensuring Hong Kong’s continuing success in the years and decades to come. An international I&T hub to be developed in the Guangdong-Hong Kong-Macao Greater Bay Area will help get us there, through supporting policies from the Central Government and efforts of the three governments. I am confident that the 25 young men and women we are honouring today will play a vital role in realising the promise of I&T development in Hong Kong.


Chief Executive Carrie Lam gave these remarks at the award presentation ceremony of the Innovation & Technology Scholarship Award 2019 on April 1.

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Belt-Road brings opportunities

Embedded with “five areas of connectivity”, namely policy co-ordination, financial integration, unimpeded trade, facilities connectivity and people-to-people bonds, the Belt & Road Initiative provides new impetus not only to the global economy, but also sustainable development. I believe that as part of PolyU’s Belt & Road Strategic Platform, the Belt & Road Advanced Professional Development Programme in Power and Energy echoes well with one of the key focuses of the initiative on the establishment of energy partnerships. Hong Kong has a unique role to play in this vision. The strengths of Hong Kong’s energy sector in system operation, manpower development and project financing are most pertinent.


In respect of system operation, Hong Kong’s electricity supply is safe, reliable and affordable, which is essential for powering economic growth. Hongkong Electric Company, a partner of this programme, has upheld successfully a reliability rating of over 99.999% since 1997, reaching 99.9999% in 2017, which is almost unparalleled in other parts of the world. I understand that you have visited their facilities and I am sure that you find their rigorous system and talent pool most impressive. Hong Kong stands ready to showcase our power companies’ expertise and operational experience to other Belt & Road countries that have plans to develop and modernise their electricity systems.


As regards to manpower development, PolyU is renowned for nurturing a pool of talented technicians and engineers in Hong Kong for over 80 years. It is the first publicly funded, post-secondary technical institution in Hong Kong that offers courses in mechanical engineering and building construction. Over the years, graduates of PolyU and other higher education institutions in Hong Kong have dedicated their career to ensuring that our electricity systems meet the highest international standards. They are the unsung heroes behind Hong Kong’s success story. Given our institutions’ significant contribution to professional education, applied research and community partnership, they are well positioned to be the pioneers in launching training programmes for professionals from Belt & Road countries, and I do encourage them to do so.


Regarding project financing, Hong Kong enterprises and professionals have been actively participating in numerous energy projects in regions along the Belt & Road. Our companies have not only invested in traditional electricity generation systems in India and Southeast Asia, but also in renewable energy and smart grids. As Asia’s leading financial centre, Hong Kong is well placed to play on the strength of our financial infrastructure and comprehensive capital-raising channels to help meet the financing needs of Belt & Road investments and projects. I am certain that many energy infrastructure projects in the region will continue to benefit from our companies’ investment. In fact, a company listed in Hong Kong has formed a partnership to establish a fund with an initial capital of US$160 million to invest in the energy sector in Asia and markets along the Belt & Road corridors.


No less important, Hong Kong stands ready to be the professional services platform for Belt & Road projects. We have a deep pool of world-class talents in various areas who are experienced in leading and implementing international and large-scale projects. Their strengths cover not only the electricity and engineering industries, but also architecture, surveying, accounting, law and consulting, and more.


Ladies and gentlemen, the Belt & Road Initiative provides a golden opportunity for Hong Kong to capitalise on our distinct advantages as the key link of and the prime platform for the Belt & Road. In particular, for power and energy projects, Hong Kong has a lot to offer in terms of system operation, capacity building and project financing. I look forward to seeing graduates from this programme participate in developments along the Belt & Road and foster our links upon returning to your countries.


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

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Airport key to HK’s future

Airports connect people. They create jobs, enable trade, spur economic growth and stimulate cultural exchanges. No less important, they bring global leaders, such as yourselves, to us. Airports bring people together. They reduce the world to the size of a global village.


Take Hong Kong International Airport. Now 21 years old, the world-class facility at Chek Lap Kok has helped shape Hong Kong into the global financial services and trade centre it is today. Last year, the airport achieved recording-breaking performance by handling more than 74 million passengers and over 5 million tonnes of cargo and air mail. More than 120 airlines operate some 1,100 flights a day, connecting Hong Kong to more than 220 destinations around the world. Nowadays, one of my headaches while meeting senior officials overseas or on the Mainland is to meet their aspirations for more direct flights with Hong Kong, which normally I could not entertain because of the capacity constraints at Hong Kong International Airport.


It is therefore no surprise that the Guangdong-Hong Kong-Macao Greater Bay Area’s Outline Development Plan, promulgated last month, confirms Hong Kong’s role in several key areas, from finance to trade and transport, including serving as the Greater Bay Area’s international aviation hub. A cluster of nine prosperous cities in Guangdong Province, together with Hong Kong and Macau, the two Special Administrative Regions, the Greater Bay Area boasts a population of some 70 million and a combined GDP of US$1.6 trillion. It is now an important national strategy to develop the Greater Bay Area into a vibrant world-class city cluster, and a quality living circle for living, working and travelling.


Hong Kong is committed to taking full advantage of the Greater Bay Area, and our place as its aviation hub. Our third runway is now under construction, with commissioning targeted at 2022. By 2030, we expect our airport to handle 100 million passengers and 9 million tonnes of cargo annually.


In short, Hong Kong International Airport will play a critical role in carrying Hong Kong to the future, connecting us with the Greater Bay Area and the Mainland, with Asia and the world beyond. It will help us all excel.


Chief Executive Carrie Lam gave these remarks at the Airports Council International Joint World Governing & Regional Board Dinner on March 31.

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Youth exchanges well received

Hong Kong is very blessed to have a very robust consular community. We have over 60 diplomatic consular representations in Hong Kong, and I have always been encouraging them to showcase their culture, their education, even their cuisine and their wine in Hong Kong. Throughout the year, we now have Le French May in the month of May; we have the Dutch Days before the Le French May in April; and in autumn, we will have the Japan Autumn Festival. And I was told that later in the year, we will be welcoming the German Week in Hong Kong. Thank you very much, Consul General, for bringing us these wonderful events. And secondly, particularly for the Dutch Days, I have been writing the foreword for you on a few occasions. This is really the time for me to come personally to congratulate the consulate for organising this wonderful event in Hong Kong.


The month-long festival of all things delightfully Dutch is now in its fifth year of showcasing the Netherlands’ remarkable culture, creativity and innovation. This year’s theme, Rembrandt as Innovator, responds to the 350th anniversary of the death of Rembrandt, the great Dutch painter and creative genius. Dutch Days will feature a variety of events in celebration of this great painter, introducing to Hong Kong people his masterful art and his life.


And there is much more Dutch to look forward to, including a week-long film festival, sustainability seminars targeting water management – another Dutch art in itself – and plastics recycling. Both will be led by Dutch experts and organised in concert with local universities. A family fun day is also on tap, showcasing the diverse culture of the Netherlands. I’m told that among the programme will feature a primer on the making of poffertjes – the delectable, pocket-sized Dutch pancakes which I am sure will be enjoyed by adults and children alike.


There is much we can learn from the Netherlands, which is why I am so heartened by the expanding connections between our two economies and our two peoples. Last year, the Netherlands were Hong Kong’s third-largest merchandise trading partner in the European Union, with Hong Kong people particularly keen about Dutch milk and milk products, which made up one fourth of our imports from the Netherlands. Last year, as well, we welcomed the Prime Minister of the Netherlands, Mr Mark Rutte, to Hong Kong – the first Dutch Prime Minister ever to visit us. Among other things, the Prime Minister witnessed the signing of a Working Holiday Programme agreement between us. The agreement, which took effect in January this year, enables our respective young people to spend up to 12 months enjoying the distinctive culture and lifestyle of our two places.


Regrettably I was out of town when the Prime Minister visited Hong Kong, but I did have the honour to meet him in Davos at the World Economic Forum in January this year. We were both delighted to learn that Hong Kong youth are very keen to go to the Netherlands under the working holiday programme, with the quota of 100 more or less filled up already. I hope that the Netherlands could favourably consider increasing the quota in the future, such that more young people will have the opportunity to experience the beautiful country and the diverse culture of the Netherlands.


Chief Executive Carrie Lam gave these remarks at the Opening of Dutch Days in Hong Kong on March 30.

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More aid for children pledged

We believe that children are the future and hope of our society. Early stage development is of paramount importance because it is the period in life when the brain develops most rapidly and has high capacity for change and thus it is the best time to lay the foundation for health and well-being throughout life. A continuum of care is therefore needed to safeguard and maximise children’s development outcomes. In addition, early childhood education also plays a crucial role in children’s all-round development and life-long learning.


Quality family services

The Family Health Service (FHS) established under the Department of Health provides a comprehensive range of health promotion and disease prevention services for children from birth to five and women at or below 64. Maternal Health Service (Antenatal & Postnatal), Family Planning Service, Cervical Cancer Screening Service, Woman Health Service and Child Health Service are delivered by FHS. These services are provided by a dedicated team of medical and nursing professionals and supporting staff, through a network of maternal and child health centres and woman health centres.


Hong Kong’s maternal mortality ratio (MMR) is among the best in the world. In 2015, the figure for MMR was only 1.6 per 100,000 registered live births, as compared with the average of 14 per 100,000 live births among the Organisation for Economic Co-operation & Development countries. In 2017, Hong Kong’s MMR was 1.8 per 100,000 registered live births. Quality and accessible maternal health services are delivered by health professionals in both public and private sectors.


Public maternal health services are provided free of charge to Hong Kong residents by eight birthing hospitals of the Hospital Authority and maternal and child health centres under a comprehensive antenatal shared-care programme to monitor the whole process of pregnancy. The programme includes antenatal health assessment, check-ups, relevant investigations and health advice. Pregnant women with high risk factors or suspected to have antenatal problems will be referred to the Obstetric Department of Hospital Authority for follow-up, management and delivery care.


After delivery, mothers are provided with postnatal physical check-ups, advice on breastfeeding, child care and contraception by public hospitals or maternal and child health centres. Mothers with postnatal mood or adjustment problems are given counselling and provided with support from specialists or social services as appropriate.


Over 90% of newborns of local mothers register with maternal and child health centres each year for child health services. The service is provided free of charge to eligible children in Hong Kong. The components of the child health service include immunisation, health and developmental surveillance, as well as parenting.


To ensure timely identification and referral of children with health or developmental problems to relevant public health units, health care professionals work in partnership with parents and caregivers to monitor children on an ongoing basis. This component of child health service includes physical examination of the newborn child, monitoring of the child’s growth parameters and nutrition, newborn hearing screening for children who did not receive the screening test at the birthing hospitals, preschool vision screening, and developmental surveillance conducted at scheduled ages. In addition, pre-primary teachers, with parental consent, can also refer children with suspected physical, developmental or behavioural problems to maternal and child health centres for preliminary assessment.


Parenting programmes are also provided by maternal and child health centres to equip parents of children with necessary knowledge and skills, including anticipatory guidance on child development, childcare, breastfeeding and nutrition and more during the antenatal period and throughout the preschool years of children. For parents of children with early signs of behavioural problems or those who encounter difficulties in parenting, a group training programme on positive parenting skills is offered.


To identify at an early stage various health and social needs of children aged zero to five, the HKSAR Government has introduced the cross-bureau and cross-department Comprehensive Child Development Service. It is a joint effort of the Labour & Welfare Bureau, Education Bureau, Department of Health, Hospital Authority and Social Welfare Department and their frontline service units to help identify at-risk pregnant women, including teenage mothers, mothers with substance misuse and mental health problems, mothers with postnatal depression, families with psychosocial needs, and pre-primary children with health, developmental and behavioural problems. Needy children and families identified are referred to relevant service units for appropriate health or social services.


Serving pre-schoolers

To enable pre-school children with special needs to receive necessary training early in their prime learning period, the Government launched a pilot scheme in November 2015 to provide Onsite Pre-school Rehabilitation Services to children attending kindergartens or kindergarten-cum-child care centres through inter-disciplinary service teams co-ordinated by non-governmental organisations.


The inter-disciplinary service teams comprising occupational therapists, physiotherapists, speech therapists, psychologists, social workers and special child care workers are tasked to provide early intervention service for children and offer professional advice and support to kindergarten teachers, child care workers and parents.


Given the positive results of the pilot scheme and full recognition by parents and kindergartens teachers, the Onsite Pre-school Rehabilitation Services have been regularised since October 2018 with the number of service places increased from about 3,000 to about 5,000, which will be further increased to 7,000 in October 2019.


To identify at an early stage and to provide assistance to pre-primary children and their families with welfare needs, the HKSAR Government has allocated $990 million from the Lotteries Fund to launch a three-year pilot scheme to provide social work services in phases for about 150,000 pre-primary children and their families in subsidised or aided child care centres, kindergartens and kindergarten-cum-child care centres. The first phase of services was launched last month.


Furthermore, the Budget announced last month proposed to allocate an additional funding of about $156 million from 2019-20 onwards to increase the level of subsidy for services provided by child care centres to alleviate parents’ financial burden, improve the manning ratio of qualified child care workers in day and residential child care centres and enhance training to improve service quality, and provide in phases about 400 additional aided standalone child care centre places to provide long full-day child care services for children aged below three.


We also believe that quality kindergarten education fosters in children an inquisitive mind, inculcates in them an interest in learning and exploration, promotes their balanced development and develops their healthy self-concept and confidence. To this end, the current-term Government has implemented the new kindergarten education policy starting from the 2017-18 school year with a substantial increase in government funding to enhance teachers’ remuneration, reduce parents’ financial burden and improve the quality of teaching.


A professional development framework for kindergarten teachers has also been developed to provide more structured in-service training for them. The purpose is to equip them with the knowledge and skills necessary for fostering a supportive and motivating environment, as well as applying evidence-based intervention strategies. We also encourage collaboration between tertiary education institutions and non-governmental organisations to jointly provide programmes on professional development for teachers. We are glad to note that positive feedback has been received from teacher participants.


Parents also play a vital role in children’s learning. To promote parent education and home-school co-operation, starting from the 2019-20 school year, the HKSAR Government will increase recurrent funding by about $30 million so that additional resources can be provided to federations of parent-teacher associations and parent-teacher associations of schools for organising more community-based and school-based parent education programmes or activities.


Ladies and gentlemen, as you can see, child development tops the policy agenda of the current-term HKSAR Government. Indeed, the Government set up Hong Kong’s first-ever high-level Commission on Children last year to co-ordinate holistically government and community efforts in protecting and enhancing the well-being of children throughout their various stages of growth. This advisory body is chaired by myself as the Chief Secretary for Administration and comprises both senior officials and knowledgeable non-official members.


Chief Secretary Matthew Cheung gave these remarks at the Symposium on Early Childhood Intervention hosted by the Boys’ & Girls’ Clubs Association of Hong Kong on March 29.

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Gov’t backs green financing

The Hong Kong Special Administrative Region Government is determined to develop Hong Kong into a leading hub for green finance in the region, with focus on Mainland China and economies along the Belt & Road economic corridors. By leveraging our strengths and advantages as an international financial centre, we seek to create value through sophisticated professional services and our unparalleled expertise and reputation in the provision of financial services. Indeed, Hong Kong’s sound legal and regulatory system, a deep and liquid capital market, robust financial infrastructure and a wealth of financial intermediaries and talent help maximise Hong Kong’s potential in developing into a regional green finance hub.


While recognising the importance of market forces in shaping and determining the demand and supply for green bonds and other green financial products, the HKSAR Government will facilitate and provide necessary infrastructure and catalysts for jump-starting market developments. We will at the same time build up our international profile on green finance with increased international visibility and proactive promotion targeting audiences overseas.


We launched in June 2018 the Green Bond Grant Scheme to subsidise eligible green bond issuers in obtaining certification under the Green Finance Certification Scheme and attract more corporate green bond issuance in Hong Kong. From a broader perspective, the enhanced transparency and accreditation standard of green financial products will help strengthen market confidence in green finance.


As announced in the Chief Executive’s inaugural Policy Address in 2017, the current-term HKSAR Government would take the lead in arranging the issuance of a green bond to demonstrate the Government’s support for sustainable development and determination to combat climate change and to promote the development of green finance. The Financial Secretary further announced in the 2018-19 Budget the launch of the Green Bond Programme with a borrowing ceiling of HK$100 billion to encourage more issuers to arrange financing for their green projects through our capital markets and help grow the local green investor base. We are actively preparing for issuing the inaugural government green bond under the Programme targeting global green investors as soon as practical. 


In addition, the three-year Pilot Bond Grant Scheme was also launched to attract local, Mainland and overseas enterprises to issue bonds, including green bonds, in Hong Kong. We have also introduced the Enhanced Qualifying Debt Instrument Scheme to provide tax concession for bond investment in Hong Kong with the aim of promoting our bond market development including green bond.


The priority that we accord to green finance is in consonance with our country’s National 13th Five-Year Plan to construct a green financial system, develop green loans and green bonds, and establish green development funds. Green finance is also a theme championed by G20 at the Hangzhou Summit in September 2016 where the importance of green finance was mentioned for the first time in its Leaders’ Communique, recognising the need to scale up green finance in order to support environmentally friendly and sustainable growth globally.


Indeed, G20’s call for scaling up green finance is underpinned by a growing market appetite for green bonds as evidenced by the increasing diversification of issuers and investors in the global green market. According to the Climate Bonds Initiative, global green bond issuance for 2018 reached US$167.3 billion, up 3% over the preceding year.


In parallel, the Mainland’s financial institutions are actively promoting relevant financing products such as green bonds to raise capital for environmental projects with a long payback period, such as renewable energy technology, waste treatment and sewage treatment. Last year alone, their green bond issuance that aligned with international green bond definitions reached US$30.9 billion, representing about 18% of the global market, second to the United States.


Locally, a two-fold increase to about US$11 billion worth of green bonds were arranged and issued in Hong Kong last year by notable issuers from private sectors of Hong Kong, Mainland China and abroad, as well as multilateral agencies such as the World Bank, the Asian Development Bank and the European Investment Bank. This testifies to the strengths of our financial platform in supporting further development of Hong Kong as a major green finance hub in the region. According to the Climate Bonds Initiative’s green bond trading venue league table, the Hong Kong Exchanges & Clearing Limited was ranked fifth globally and first in Asia last year.


We envisage that certification bodies that are well conversant with a spectrum of international, regional and local standards and guidelines will play a more significant role in the green finance development internationally, in view of the underlying trend of international harmonisation for a broader investor base. To this end, the HKSAR Government will continue to support the Green Finance Certification Scheme and encourage local, Mainland and overseas enterprises to make use of the scheme and our capital markets for financing their green projects. In fact, the Hong Kong Quality Assurance Agency developed the Green Finance Certification Scheme with reference to a number of international and national standards on green finance. The scheme also upholds its independence by refraining from rendering advisory or consultancy service in tandem to avoid potential conflict of interest.


Ladies and gentlemen, to facilitate cross-border investment in green bonds, we also make use of every opportunity to promote our competitive capital markets and green finance platform at regional and international forums, including the Asian Financial Forum held in Hong Kong in January this year under the theme of “Creating a Sustainable and Inclusive Future”. Relevant authorities such as Monetary Authority, HKEX and Securities & Futures Commission are also working in tandem with the Government’s effort to develop Hong Kong as a leading centre for green finance and connect green finance flows with the Mainland and the rest of the world.


Hong Kong is an internationally renowned financial centre and global RMB business hub. We are well equipped to become a leading regional hub for green finance through issuing bonds, initial public offerings and other channels such as fund distribution in Hong Kong. However, we need the support and active participation of relevant sectors to achieve this ambitious goal.


Acting Chief Executive Matthew Cheung gave these remarks at the Green Finance Certification Scheme Presentation Ceremony cum Forum 2019 on March 25.

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HK to play active bay area role

The Greater Bay Area development has been progressing with a lot of momentum, and for good reason. In his opening remarks at the second plenary meeting of the leadership group earlier this month, Vice Premier Han Zheng mentioned three unprecedented circumstances surrounding the Greater Bay Area development. To respond to the theme of this seminar which is the Guangdong-Hong Kong-Macao Greater Bay Area in the global economy, I have attempted to elaborate on each of these three characteristics of the Greater Bay Area with reference to the global economy.


Firstly, Vice Premier Han said that the high-level support and commitment to the Greater Bay Area, a regional development, by the Central Government is unprecedented. Apart from the personal guidance from President Xi Jinping, over 20 central ministries and commissions are represented at the Greater Bay Area Leading Group where policy guidance, effective co-ordination and practical measures are determined. For example, at the first plenary meeting, we were given the mandate to develop an international innovation and technology hub in the Greater Bay Area. At the second plenary meeting, eight measures from taxation to youth entrepreneurship were endorsed to facilitate the flow of people, goods, capital, etc. As the global economy is beset with uncertainties and instability as well as the rise of protectionism, the openness and interconnectivity of the nine Mainland cities and the two Special Administrative Regions of Hong Kong and Macau under “one country”, “two systems”, “three customs territories”, “three legal systems”, etc is a solid demonstration of how economies with different characteristics can work together to achieve a win-win outcome.


Secondly, Vice Premier Han observed that the response of the three governments and various sectors in the three places is highly enthusiastic. Speaking on behalf of Hong Kong, I can easily explain why. Despite its past successes, such as being rated as the world’s freest economy by the US-based Heritage Foundation for 25 years in a row and the world’s second most competitive economy by the Lausanne-based International Institute for Management Development in its latest report, Hong Kong could not rest on its laurels. In light of economic globalisation, our pillar industries are inevitably facing severe competition, for example, our container port in terms of cargo throughput has dropped from the world’s number one in early 2000s to number seven in 2018, and new industries have not emerged. In addition, Hong Kong’s further economic growth is hampered by the shortage of land and labour. The Greater Bay Area comprising some 70 million people, a territory of 56,000 sq km and an economy already surpassing that of Korea at some US$1.6 trillion, provides Hong Kong with tremendous new opportunities. This city cluster has huge demands for quality services ranging from higher education, legal, accountancy and medical to sophisticated financial services such as raising of capital, risk management, asset management, etc. Hong Kong, the world’s number three global financial centre and a predominantly service economy, stands ready to meet those needs.


Thirdly, Vice Premier Han told us that the Greater Bay Area will take on an unprecedented historic role in the country’s further reform and opening up after four decades of remarkable success. As elucidated by President Xi in his 19th CPC National Congress report, China’s economy has been transitioning from a phase of rapid growth to a stage of high-quality development. For China, this is a pivotal stage for transforming the growth model, improving the economic structure, and fostering new drivers of growth. Located at the forefront of China’s opening up along the coast and with the pan-Pearl River Delta Region as its vast hinterland, the development of the Greater Bay Area signifies a new attempt to break new ground in pursuing opening up on all fronts in a new era. It will facilitate the early realisation of innovation-driven development to support the continued growth in innovation capability and competitiveness of the Chinese economy. It will facilitate the further deepening of reform and opening up, the building of a new system of open economy in line with international standards, and the development of a new platform for high-level international co-operation.


Harnessing strengths

Given the unprecedented conditions and enormous opportunities, I am determined to lead Hong Kong to play an active role in the Greater Bay Area development. In so doing, we will faithfully uphold the principle of “one country, two systems” and leverage on our clear and compelling strengths. One of these strengths is our financial prowess which accounted for 18.9% of our GDP at the end of 2017.


According to the Global Financial Centres Index, Hong Kong ranks number three after New York and London. We have the world’s fifth largest securities market with funds raised through IPO (initial public offering) topping the world in six out of the past 10 years, including last year with US$36.5 billion raised. Some 70 of the world’s top 100 banks are operating in Hong Kong and total assets managed amounted to US$3.1 trillion in 2017. Benefitting from increased connectivity with the Mainland capital market, Hong Kong is the world’s largest offshore RMB hub. Our insurance and bond markets are also growing to meet the needs of local, Mainland and overseas companies.


To position Hong Kong to seize the opportunities arising from the Greater Bay Area as well as the growing ASEAN markets, my Government has taken some significant initiatives. These include a new listing regime to accommodate the innovative companies and pre-revenue biotechnology companies; profits tax exemptions for onshore and offshore funds meeting certain conditions; grants to promote the issuance of bonds, especially green bonds in Hong Kong; mutual recognition of funds with the Mainland, the United Kingdom, France, Switzerland and Luxembourg; Faster Payment System and virtual banking licences to support fintech; and the setting up of an Academy of Finance to nurture local and Mainland talents. The Outline Development Plan for the Greater Bay Area has laid out the clear direction to develop an international financial hub to progressively promote mutual financial markets access and to vigorously develop special financial products and services. I look forward to Hong Kong taking a leading role in fulfilling these aspirations.


Developing an international innovation and technology hub in the Greater Bay Area has been given special emphasis in the Outline Development Plan. Although the innovation and technology sector accounted for a mere 0.7% of Hong Kong’s GDP in 2017 and our total R&D (research and development) expenditure represents only 0.8% of GDP, I see great prospects for Hong Kong to contribute to and benefit from an international innovation and technology hub in the Greater Bay Area. Here, our strengths lie in our local universities with three of them amongst the world’s top 50, our translational capability at our two flagship institutions, the Science Park and Cyberport, our rule of law, robust intellectual property protection and international connections.


Since taking office some 20 months ago, my Government has rolled out numerous policies and projects to advance our innovation and technology capability and invested some US$13 billion, and introduced a super tax deduction to incentivise private businesses to invest in R&D. While these measures will take some time to produce tangible results, we are thrilled by the very positive response from renowned overseas institutions in collaborating with our local universities to establish research centres in two research clusters at the Science Park on health technology and artificial intelligence and robotics. Over the past several months, I have witnessed MOUs signed by local universities with Harvard, Stanford and Johns Hopkins from the United States, Imperial College and University College London from the United Kingdom, Institut Pasteur from France and Fraunhofer Institute from Germany, etc. Prior to this initiative, the Karolinska Institutet of Sweden and an MIT Innovation Node have already established their presence in Hong Kong. These efforts of the Hong Kong SAR are set to help accelerate the development of major technological infrastructure facilities and cross-border, cross-study collaborative research in the Greater Bay Area, and will enhance the in-depth integration of industries, academia and research.


In addition, Hong Kong’s deep and liquid capital market will promote the commercial application of technological achievements through direct financing by private equity funds or capital raising through listing. In my view, the Greater Bay Area has good potential to become not only the Silicon Valley of the East but also Silicon Valley and Wall Street within the same city cluster.


Ladies and gentlemen, let me end by referring to a statement in the Preamble of the Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area, and I quote, “The development of the Greater Bay Area is not only a new attempt to break new ground in pursuing opening up on all fronts in a new era, but also a further step in taking forward the practice of ‘one country, two systems'”. Hong Kong looks forward to working closely not only with the nine Mainland cities in Guangdong and Macau, but also businesses and institutions who share our vision for technological advancement and economic prosperity.


Chief Executive Carrie Lam gave these remarks at the Guangdong-Hong Kong-Macao Greater Bay Area: A Rising Star in the Global Economy session at the China Development Forum 2019 in Beijing on March 25.

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More resources for arts dev’t

The Hong Kong Arts Festival, the first of its kind in the city, has delighted audiences with a wide array of splendid performances and programmes since 1973, and contributed greatly to the development of Hong Kong into an arts and cultural metropolis. In the past month, the festival has presented a total of 166 performances, including 15 world premieres and 16 Asian premieres, as well as about 420 PLUS and educational activities, attracting an attendance of over 300,000 people with more than 90% of tickets sold. Many international and local artists in the performing arts gathered here for the festival and brought a blend of traditional and creative programmes to all art lovers in the region.


The Government of the Hong Kong Special Administrative Region attaches great importance to the development of arts and culture in Hong Kong, and makes every endeavour to allocate more resources to the local arts and cultural sector. The latest Budget proposes the allocation of an additional funding of $176 million for hosting large-scale world-class performing arts programmes and arranging telecasts of selected mega shows in different places across the city in the next five years. The Budget also proposes that subvention for arts groups including the Hong Kong Arts Festival Society Limited in the year of 2019-20 will increase by $54 million, with the aim of presenting more arts productions to enrich the cultural life of our city.


Furthermore, the West Kowloon Cultural District, one of the largest cultural icons in the region, is set to create a vibrant cultural quarter for Hong Kong and foster interaction, collaboration and development of the local arts scene. Following the grand opening of the Xiqu Centre this January, other major facilities in the West Kowloon Cultural District will be coming on stream in the next 24 months.


In the next few years, some strategic cultural projects such as the New Territories East Cultural Centre and the Heritage Conservation & Resource Centre will also commence operation. I believe that, with the successive completion of major cultural projects in town and the Government’s continuous funding support for local arts groups, the development of arts and culture in Hong Kong will reach a new milestone.


Chief Secretary Matthew Cheung gave these remarks at a toasting ceremony for the 47th Hong Kong Arts Festival Finale Ceremony at the Hong Kong Cultural Centre on March 23.

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Bay area brings HK opportunities

The global economy is inevitably facing considerable uncertainties caused notably by the protracted trade dispute between the United States and China, impasse over Brexit as well as other events. In January, the IMF (International Monetary Fund) revised downward the 2019 global growth forecast to 3.5%. And in OECD (Organisation for Economic Co-operation & Development)’s latest interim economic outlook report published earlier this month, it predicted that the world economy would grow by 3.3% in 2019, a downward adjustment of 0.2 percentage points compared to its last forecast in November 2018.


For Hong Kong, we expect our real GDP to expand by 2% to 3% this year, following 3% growth in 2018 and 3.8% growth in 2017. Of course we would love to see a better-than-expected growth, amid the recent encouraging signs that the US-China trade negotiations are heading to an amicable outcome. However, we know that, trade issues aside, there are other deep-seated differences between China and the United States. These will not be easy to resolve, certainly not in the short term. And whether Hong Kong, a Special Administrative Region (SAR) of the People’s Republic of China enjoying a high degree of autonomy, will suffer further collateral damage is yet to be seen.


Creating connections
But what is clear to me is Hong Kong, this vibrant economy rated as the world’s freest economy by the Heritage Foundation 25 years in a row, second most competitive economy by the International Institute for Management Development and fourth easiest place to do business by the World Bank, is again displaying her resilience and can-do spirit to turn challenges into opportunities. Why do I say this? This is because amidst those difficulties and uncertainties in the West, many people and investors are increasingly looking to the East. Possessing unique strengths under “one country, two systems” and essential assets such as the rule of law, the independence of the judiciary, strong professional services, clean and efficient government, etc, Hong Kong is Asia’s world city. In overseas promotions targeting businesses in other parts of the world, we deploy the tag line “Think Asia, Think Hong Kong”, whereas if we are talking to businesses in Asia venturing to connect with the West, we say “Think Global, Think Hong Kong”. For several decades, Hong Kong is good at connecting economies, companies, people and ideas. Hong Kong has long been the multilevel bridge between Mainland China and the rest of the world, creating the connections that reward commitment, creativity and effort, and connections that help us all excel.


Our ability to leverage on our strengths and our international connectivity has enabled us to excel in a major national strategic initiative – the Guangdong-Hong Kong-Macao Greater Bay Area that Peter has put a spotlight on in his address, highlighting the vast economic growth opportunities it presents for Hong Kong, Macao and the nine Guangdong cities that make up this ambitious city cluster of 70 million people and a combined GDP of some US$1.6 trillion. I am pleased to say that work on the Greater Bay Area is progressing well, and progressing fast. For example:


(a) An ambitious Outline Development Plan was promulgated by the Central Government on February 18, 2019;

(b) A high-level Leading Group chaired by Vice Premier Han Zheng was set up last year to provide overall steer and effective co-ordination, and for the first time, the Chief Executives of the Hong Kong SAR and the Macao SAR are members of this central leadership group. The Leading Group has already met twice, giving clear indications and directions on a range of issues, notably the development of an international innovation and technology hub in the Greater Bay Area;

(c) Tangible measures have been rolled out to facilitate free flow of people, goods, capital, etc in the Greater Bay Area, including two tax measures much welcomed by the people of Hong Kong; and

(d) There has been growing interest abroad about the Greater Bay Area which has prompted the three governments to conduct joint promotions overseas, with the first destination being Tokyo, Japan, next month.


The Greater Bay Area will certainly bring new opportunities to the region and provide Hong Kong with new impetus to grow her economy and improve people’s livelihood.


Adopting new roles
Peter has, in his opening remarks, portrayed “a new investing age” for investors and aptly provided the advice that investors should look into new markets, new technologies and new approaches in order to seize the many opportunities. The Hong Kong SAR Government is committed to enhancing the business and investment environment for all and to do so, I have advocated also three “new”s – a new style of governance, created new roles for government and adopted a new fiscal philosophy. Let me briefly illustrate these in our efforts to enhance our financial services industry.


Hong Kong is ranked the world’s number three in the latest Global Financial Centres Index. We are the world’s largest offshore RMB centre. Funds raised through initial public offerings (IPOs) came first in the world for six out of the past 10 years, including last year at a total of US$36.5 billion raised through IPOs. Under a new proactive style of governance, I set up a Financial Leaders Forum in 2017, shortly after taking office, chaired by the Financial Secretary to take a visionary view of Hong Kong’s financial services development and put in place practical policy measures to support the industry. These include enhancing our listing regime to accommodate the emerging and innovative companies with weighted voting rights and pre-revenue biotechnology businesses, expediting the use of Fintech with the introduction of the Faster Payment System now serving over 2 million customers and the issue of virtual banking licences shortly, growing the bond market with a pilot bond grant scheme and promoting green finance through a government green bond programme and subsidies for qualified green bond issuers. In introducing these new measures, we are mindful of ensuring adequate investor protection, monetary stability as well as market consultation and transparency.


We are fully aware of the potential of the emerging Asia and to tap that potential, the Hong Kong SAR Government has to adopt some new roles. Apart from being a public service provider and a regulator, I have required my government bureaux and departments to also perform the role of a facilitator and a promoter. One aspect of work that stands out in the past 20 months under this guidance is the emphasis we put on government-to-government co-operation, and entering into multilateral and bilateral agreements to provide a better operating environment for businesses and professionals. These include a total of five Free Trade Agreements signed or concluded, including one with the 10 member nations of ASEAN (Association of Southeast Asian Nations) and one with Australia. These also include Comprehensive Double Taxation Agreements, Investment Promotion & Protection Agreements, mutual recognition of funds, and expansion in our international network. Just over three weeks ago, I was in Bangkok, and this was my third trip To Bangkok after taking office, for the formal opening of our Economic & Trade Office there, our 13th overseas office and third in ASEAN. That speaks of the importance my Government places on ASEAN. We have plans to set up similar new offices in Dubai, Moscow, Mumbai and Seoul.


My new fiscal philosophy aims at wisely using our accumulated surpluses to invest for Hong Kong’s future and to increase Hong Kong’s competitiveness. Since taking office, I have allocated over US$1 billion recurrent expenditure for education and committed some US$13 billion expenditure for innovation and technology. While maintaining a simple tax system, we have rolled out two tax concessions from the current fiscal year, with the introduction of a two-tiered profits tax lowering the tax rate to only 8.25% for the first HK$2 million of profits, and a super tax deduction to incentivise private businesses’ investment in research and development. Also starting from April this year, different types of onshore and offshore funds meeting certain conditions will be eligible for profits tax exemption. And the Financial Secretary is studying the case of introducing a more competitive tax environment to attract private equity funds to set up and operate in Hong Kong. Hong Kong’s asset management industry was already managing a total asset value of US$3.1 trillion in 2017 but I believe Hong Kong enjoys an unparalleled edge in further developing the asset management business.


Hong Kong’s strengths in financial services are clearly recognised in the Greater Bay Area Outline Development Plan unveiled last month. The Greater Bay Area will strengthen our status as a global offshore RMB business hub and international asset and risk management centre. Coupled with our efficient links to other major commercial centres around the world, as well as our financial regulatory and supervisory framework that follows international standards, Hong Kong can help promote an efficient flow of factors of production within the Greater Bay Area to support the development of the real economy. The new roles and initiatives I have mentioned will help Hong Kong seize the many opportunities arising from the Greater Bay Area.


In my opinion, the key to the success of the Greater Bay Area will be in working together, in complementing our respective strengths. Certainly, the market size of the Greater Bay Area and its advanced and comprehensive industrial system offers much for Hong Kong businesses. At the same time, Hong Kong has much to offer to the Greater Bay Area. Hong Kong is a global city, free and open to business, with world-class strengths in financial and professional services and a legal system rooted in the rule of law. Above all, we have the unique advantage under the “one country, two systems” framework, a framework that shapes our relations with the Mainland and the world.


Beyond financial services, the plan recognises Hong Kong’s strengths as well in trade and transport, research and technology, and aviation. As an international aviation hub, Hong Kong International Airport last year handled a record-breaking 74 million passengers and 5.1 million tonnes of cargo and air mail. The airport’s three-runway system, now under construction, will further strengthen connections between Hong Kong, the Mainland and the world. Meanwhile, with the timely commissioning of the high-speed train and the Hong Kong-Zhuhai-Macao Bridge last year, land-based connectivity between Hong Kong and the Greater Bay Area Mainland cities as well as Macao has been strengthened.


Chief Executive Carrie Lam gave these remarks at the Bloomberg Invest Asia Summit on March 21.

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