HK set to meet challenges

Since its inception in 2007, the Asian Financial Forum has been growing in size and influence, and it is now a highlight in our events calendar. I’m delighted that this year, over 3,300 policymakers, business and financial leaders as well as investors from more than 40 countries and regions are joining us to explore opportunities, do deals, make connections and, ultimately, find innovative ways to excel in 2019.

 

That, of course, will be a considerable challenge. This new year is already charged with the trade discord between the two largest economies in the world and uncertainties in other parts of the world. For many economies including Hong Kong, moderated growth and for many companies, diminished business and financial results in 2018 appear inevitable. However, for Hong Kong, I believe there are more opportunities than challenges, or put it another way, by leveraging on our solid foundations and proactive policies, we could turn some of those global challenges into our opportunities. And our financial industry, which contributed almost 19% of our GDP in 2017, is well placed to serve the economy.

 

Indeed, Hong Kong is a city built on finance and possesses the singular good fortune to create opportunities both within the Mainland and the world at large. The results of that unique advantage are clear and compelling. We are among the world’s top three international financial centres, in good company with New York and London. Our stock market boasts the world’s sixth largest capitalisation at US$3.8 trillion, which is about 11 times our GDP. In 2018, we topped the world in initial public offerings, taking in some US$37 billion. It should not come as a surprise because since 2009, Hong Kong has taken the first place globally in IPO funds raised for six out of the 10 years.

 

We are Asia’s second largest international banking centre behind only Japan, and home to over 75 of the world’s 100 top banks. Our asset and wealth management sector manages about US$3.1 trillion, two-thirds of that coming from non-Hong Kong investors. We are, as well, the biggest offshore renminbi centre in the world, processing more than 75% of global offshore renminbi payments.

 

Hong Kong is ranked fourth globally on the ease of doing business, according to the World Bank’s Doing Business 2019 Report. That is why over 8,700 overseas and Mainland companies maintain an office in Hong Kong, up 6.4% over the previous year. Among them, 1,530 have chosen to set up regional headquarters here, up 8.3% year on year. Consider, too, foreign direct investment. In 2017, global foreign direct investment inflow to Hong Kong totalled over US$100 billion, third in the world. As for outflow, we were fifth.

 

There’s a good deal more I could spotlight in terms of financial figures and results, but allow me, for the next few minutes, to focus on our fundamental strengths, which have brought Hong Kong from a largely regional financial centre 20 years ago to a financial hub of global clout and significance today.

 

A driving force, of course, has been Mainland China. Through four decades of reform and opening up, the Mainland today is the second largest economy in the world, its GDP soaring to US$12 trillion. But, no less important, Hong Kong has taken full advantage of the opportunities we’ve been presented with, especially under the unique “one country, two systems” principle since the reunification. We have played an irreplaceable role in the Mainland’s success while benefitted significantly in many respects.

 

Thanks to our competitiveness and adaptability, as well as our long-standing embrace of free and unfettered trade, Hong Kong has been rated as the world’s freest economy for 24 years running by the Washington-based Heritage Foundation.

 

Being a global financial centre for decades has also made Hong Kong China’s international financial capital, the only Chinese city to fully develop a market-based financial system, one underpinned by the rule of law and internationally aligned regulatory regimes. This has earned Hong Kong the trust of business from all over the world.

 

Both Mainland and international investors take confidence in Hong Kong. We add value and create wealth for Mainland enterprises, international investors and, of course, ourselves. In this, we continue to advance, responding to both the development needs of the Mainland and the appetite of international investors. You can see that at work, from the listing of H-shares in Hong Kong in the early 1990s, to the Real Time Gross Settlement system for four currencies – US dollar, euro, renminbi and Hong Kong dollar – and the renminbi-denominated financial products at the turn of the century. More recently, we’ve launched Stock Connect, the northbound trading of Bond Connect and, this past year, the new listing regime for companies from emerging and innovative sectors.

 

We will reinforce our prime role in connecting the Mainland with the rest of the world. Hong Kong is the largest source of realised foreign direct investment in the Mainland, contributing US$95 billion, that’s 69%, in 2017. The Mainland is also Hong Kong’s second largest source of inward direct investment, contributing 21%, or US$23 billion, in 2017.

 

Since last May, the daily quotas of northbound and southbound trading under Stock Connect have quadrupled, to RMB52 billion and RMB42 billion respectively. As for the mutual recognition of funds between Hong Kong and the Mainland, aggregate net sales totalled RMB9.6 billion as of last November.

 

We’ve been blessed, too, with a strategic location, with half the world’s population no more than five hours away by air. It helps, too, that our time zone is neatly situated between that of London and New York.

 

Our location will pay premium dividends in the decades to come, thanks to the Guangdong-Hong Kong-Macao Greater Bay Area – a regional development of national strategic importance consisting of some 70 million population and already a GDP of US$1.5 trillion. The fast-emerging development as well as the recently commissioned cross-boundary infrastructure have linked Hong Kong to Macau and nine cities in Guangdong Province into a bay area that will, over time, rival that of the bay areas of Tokyo and New York in economic might. With the ambition to develop an international innovation and technology hub, our bay area has been described by some as combining Silicon Valley with New York City.

 

Then there’s the Belt & Road, an ambitious, multi-dimensional, multilateral initiative highlighting increases in infrastructure, finance, trade and commerce as well as people-to-people bonds. The Belt & Road infrastructure will increase demand for project financing and insurance in managing financial, legal, political and regulatory risks.

 

Hong Kong is well placed to serve as a premier financial and risk-management centre for the Belt & Road’s big-ticket projects. The Hong Kong Monetary Authority’s Infrastructure Financing Facilitation Office brings Belt & Road project owners and investors together. And, just last month, our Insurance Authority launched the Belt & Road Insurance Exchange Facilitation platform. This platform is a clearing house for information and assistance. It will help insurance companies make deals with bankers, project managers and others involved in insurance risk for infrastructure projects. In short, Hong Kong has what it takes, and what the Belt & Road needs, to make a palpable difference.

 

In keeping with this forum’s theme, Creating a Sustainable & Inclusive Future, the Hong Kong Special Administrative Region Government also places a high priority in developing our economy on a sustainable basis, and on becoming a regional hub for green finance. Our inaugural government green bond will soon be issued. It comes with a borrowing ceiling of $100 billion – that’s nearly US$13 billion.

 

Financial technology is high on our priority as well. We are convinced it will help sustain growth and enhance competitiveness in our financial services sector. And we are moving rapidly to build our fintech industry. At last count, more than 500 fintech companies and startups were based here. We are reaching out to fintech partners all over the world – from the Middle East, Europe and South America to Shenzhen, our neighbour in southern China. Indeed, in early November last year, Hong Kong’s annual Fintech Week, which attracted more than 8,000 fintech players, became the world’s first cross-boundary fintech event, with the final day taking place in the city of Shenzhen.

 

Last September, we launched our Faster Payment System. It connects banks and stored-value facility operators, enabling real-time credit transfer and direct-debit services between merchants and customers, as well as peer-to-peer transfers through the system. It marked a significant step forward for e-payment in Hong Kong. We’ll take another e-giant step soon, with the establishment of virtual banks here. The Hong Kong Monetary Authority is expected to issue its initial batch of virtual bank licences in this quarter. These and other fintech services can only help drive competition, creating value and promoting financial inclusion.

 

The more immediate vision, certainly for the world at large, is somewhat less grand, as I mentioned at the outset. In recent months, the world economy has been affected by trade friction between the Mainland of China and the United States. Investors are also anxious about the pace of monetary policy normalisation in major economies, as well as Brexit’s rocky road, geopolitical conflicts and a good deal more.

 

Hong Kong, one of the world’s most open economies, will inevitably be affected by these and other external factors, particularly those that relate to the Mainland economy. It’s why we accord the highest priority to ensuring financial stability and the integrity of our financial systems and markets.

 

Our linked exchange rate system is rock solid, underpinned by more than US$400 billion worth of foreign exchange reserves. Our banking system is resilient and well capitalised, with total capital ratio at about 20%, well above international standards. The smooth operation of our capital markets is guaranteed through robust regulatory oversight and a host of contingency measures. Stress tests have and will continue to be conducted to ensure that we are fully prepared for different circumstances. The International Monetary Fund, I’m pleased to note, has just given us a clean bill of health, a vote of confidence in the resilience of our economy, as well as the integrity and reliability of our financial system.

 

Investor sentiment had been affected, of course. That’s evident in the stock market’s increased volatility. Nevertheless, our economy grew 3.7% in the first three quarters of 2018. Economic growth for 2018 as a whole is forecast at 3.2%, which is higher than the trend growth rate in the past decade for the second consecutive year. And our unemployment rate remains at a 20-year low of 2.8%. In short, we are performing as well as can be expected, given the uncertainties of the global economy. No less important, we are prepared for shifting economic and political tides.

 

The Asian Financial Forum, strategically taking place in the middle of the first month of the new year, is designed to help you plan for contingencies and to help you gather financial and market insights from distinguished speakers and participants from all over the world. For me and members of my delegation attending this year’s World Economic Forum at Davos later this month, it helpfully provides a warm-up to a global exchange. I’m sure the Asian Financial Forum, over these two days, will prove invaluable for you and your business and investment strategies. I’m confident, too, that Hong Kong can help you in considering and capturing regional and global opportunities.

 

Chief Executive Carrie Lam gave these remarks at the Asian Financial Forum 2019 on January 14.

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Gov’t fosters business ties

In the first eight months of 2018, Hong Kong’s total exports of toys and games and baby products reached US$4.1 billion and US$730 million respectively, representing year-on-year increases of 8.6% and 13.4% respectively. Hong Kong is also crucial in driving the development of licensing industry in Asia, the fastest-growing region in 2017 at a rate of 8.8%, which is double the global average growth rate. 

 

We owe the robust development of these industries to our sound regulatory and institutional framework, including but not limited to that on financial, legal and intellectual property. Our competitive advantage also lies in our strategic position under the Belt & Road Initiative and the development of the Guangdong-Hong Kong-Macao Greater Bay Area which allow us to serve as the link between the Mainland and the rest of the world, and to best capture opportunities arising from rising demands and enhanced connectivity.

 

I am therefore most pleased to see that the well-established trio of fairs have been providing an invaluable avenue for entrepreneurs to showcase and debut a wide array of products in response to the latest market trends and demands. In this regard, I believe that many of you are aware that the Hong Kong Special Administrative Region Government is actively taking forward the initiative to promote STEM (science, technology, engineering and mathematics) education at schools. For those of you who are interested in exploring further, I am sure that you will benefit from visiting the Smart Tech Toys zone in the Hong Kong Toys & Games Fair this year which features various toys and games incorporated with the latest technologies.

 

The concurrent hosting of the trio of fairs facilitates cross-sectoral business opportunities. Take the rapidly developing licensing industry as an example. It provides unlimited opportunities for entrepreneurs from different sectors to meet potential licensees to explore possibilities for expansion to other markets including the Mainland, Asia and beyond. 

 

In tandem with these cross-sectoral efforts, the Hong Kong Special Administrative Region Government will continue to promote our unique advantages under “one country, two systems”; and foster business ties on various fronts amidst the uncertainties in the global market. We are actively forging free trade agreements and investment agreements with our trading partners in order to provide better market access to Hong Kong businesses. We will also continue to play a major role in contributing to the development of the Greater Bay Area and seize opportunities arising from the Belt & Road Initiative. These initiatives will not only enhance our position as an international trade and sourcing centre, but also reinforce our unique role as the window for the Mainland market to go global and attract foreign investments.

 

Chief Secretary Matthew Cheung gave these remarks at the Joint Opening Ceremony of the Hong Kong Trade Development Council’s Hong Kong Toys & Games Fair 2019, Hong Kong Baby Products Fair 2019 and Hong Kong International Licensing Show 2019.

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HK a licensing hub

Licensing is one of the most dynamic forms of intellectual property (IP) trading which enables more flexible and diversified use of IP rights, thereby unleashing fully their economic value. The creativity of international licensing agents and licensees can often turn a popular cartoon figure or a trendy graphic into a wide range of merchandise products ranging from clothing, stationeries, houseware to games. E-sports, which has much to do with the skilful application of licences and IPs of games and leagues, is a new spotlight for licensing business and will be covered by one of the thematic sessions of the Conference.

Licensing business is thriving in Asia, which sees an impressive growth of almost 6% in the sales of licensed merchandise in 2017. Mainland China is a powerful engine behind. Indeed, within Asia, the Mainland and Hong Kong are the only two economies which recorded a double-digit growth rate in the year. Going forward, the Belt & Road Initiative and the Guangdong-Hong Kong-Macao Bay Area development will open the door to more unprecedented opportunities for licensing and related businesses across Asia and beyond.

As an international commercial and trading hub, Hong Kong is always an ideal place for any business venture to tap the enormous opportunities ahead. We are one of the major hosts to a highly developed licensing business and one of the leading markets in the region, buttressed by a vibrant creative sector which accounts for 2.4% of our GDP in 2016. 

The Hong Kong Special Administrative Region Government attaches great importance and provides a wide array of support to the development of the creative industries of Hong Kong. We believe that these emerging industries will help nurture more home-grown creations to enrich our pool of IPs for licensing activities. We look forward to working closely with players of the relevant sectors with a view to consolidating Hong Kong’s status as the hub for licensing businesses in Asia.

Chief Secretary Matthew Cheung gave these remarks at the Asian Licensing Conference opening session at the Convention & Exhibition Centre on January 7.

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Gov’t boosts research resources

Today, technology and innovation are driving changes in ways that we have never imagined, and changes appear at every level of our economy and our society. If Hong Kong is to continue to flourish, we must ensure that our young people be given every opportunity to succeed, every opportunity to tackle real-life challenges with innovative ideas and an analytical grounding.

 

That, ladies and gentlemen, adds up to education inspired by a formidable foundation in science, technology, engineering and mathematics, or STEM in short. While a mathematical solution is seldom as eye-catching as a physical invention, the elements of creativity and innovation in STEM are very much mathematics-based. Mathematics provides a reliable system and logical language for verifying hypotheses and proving new theories for the development of sciences, technologies and engineering.

 

Consider your smartphone. It is the infusion of pioneer technology like AI (artificial intelligence) and big data sciences in our daily lives. But let us not forget, it is the use of mathematics and computational thinking which provide the solid theoretical foundation and efficient algorithms for the technological advancement that we are witnessing.

 

It is the reason why my Government mandates that all students study mathematics and coding in their primary and secondary years. It’s also the reason why the Education Bureau advocates mathematical modelling as an integral part of STEM education. That allows students to experience mathematics at work in real-life situations, from the control of traffic lights to weather forecasts.

 

Of course, I’m not suggesting that every student become a mathematician. What I do hope for, or what my Government is working towards, is encouraging a community-wide, economy-fuelled awareness and appreciation of mathematics. It is, after all, a universal language, and our future demands that we be fluent in it.

 

At the same time, we are also encouraging excellence in mathematical research, for which I’ve committed additional resources since taking office in July last year. The highlight of that commitment is an undertaking in my Policy Address delivered in October this year to inject $20 billion into the Research Endowment Fund of the UGC (University Grants Committee).

 

I am naturally delighted to be here today to congratulate the winning team and the finalists of this year’s competition, and applaud the 260 students in more than 90 teams who participated. I understand that they come from over 60 Hong Kong schools, and among them 19 are participating for the first time. This is testimony to the excellent work of Hang Lung Properties, the Chinese University of Hong Kong’s Institute of Mathematical Sciences & Department of Mathematics, and all awards committee members, which make the Hang Lung Mathematics Awards such a great success. My thanks as well to the mathematics teachers and professors involved, whose dedication helps nurture so many brilliant students for Hong Kong.

 

Chief Executive Carrie Lam gave these remarks at the 2018 Hang Lung Mathematics Awards Announcement & Awards Presentation on December 20.

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HK committed to heritage protection

Heritage conservation has been one of the priorities of the present-term Government.  This year, the Government has allocated additional resources for strengthening the protection, promotion and transmission of intangible cultural heritage, exploring the expansion of the Hong Kong Museum of History, making sustained efforts in renovating the permanent exhibition of the Hong Kong Museum of History as well as the Hong Kong Heritage Museum, and also taking forward the advance work of the construction of the Heritage Conservation & Resource Centre, which will serve to enhance the functions and status of our museums in such areas as the collection, conservation, and display of cultural heritage.

 

Furthermore, the Government will work closely with selected non-profit-making organisations through the Built Heritage Conservation Fund to implement the first five batches of projects under the Revitalising Historic Buildings Through Partnership Scheme. We will also continue to process applications in relation to graded historic buildings which are privately owned or leased, with a view to helping prevent deterioration of these historic buildings owing to lack of maintenance. 

 

The success in conservation and inheritance of culture depends on the co-operation between the public, the Government and all sectors of the community. It is essential for keeping our culture alive for future generations.

 

Chief Secretary Matthew Cheung gave these remarks at the 25th Anniversary Celebration Ceremony & Heritage Connect Launch Ceremony of the Lord Wilson Heritage Trust on December 15. 

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Joint effort urged for development

We published today in the Gazette the first phase infrastructure works of Kwu Tung North (KTN) and Fanling North (FLN) New Development Areas (NDAs) authorised by the Chief Executive in Council according to statute. We aim to seek funding from the Legislative Council for the first phase works in the first half of 2019 and commence land resumption and clearance for the first phase area in the second half. This is a significant step forward as the project is poised to enter the construction phase.

 

The development of the KTN and FLN NDAs (formerly known as the Northeast New Territories) involves large-scale resumption of private land (including brownfields) in the New Territories. Not only are the two NDAs a core part of our multi-pronged strategies, they are of critical importance to our housing supply in the medium and long term.

 

The KTN and FLN development has been beset with hurdles, and confrontations, since planning and consultation for the two NDAs restarted in 2008 (Table 1). Our experience shows that, while the NDA model provides a means to utilise existing land resources to make available sizable land for integrated re-planning, it is neither painless nor free of controversy. As Government-initiated NDA meets the definition of “public purpose”, the Land Resumption Ordinance will be invoked to resume most of the land in the two NDAs for development. Still, the development concerned will directly impact on existing land owners and users, including squatter households, farmers, rural workshops and brownfield operators.

 

Of the total area of 612.5 hectares (ha) for KTN and FLN, almost 50% is preserved for the Long Valley Nature Park (LVNP), green belt and agricultural uses. The actual development area is about 320 ha (Figure 1). Upon completion, the NDAs will provide 72,000 housing units (nearly 70% as public housing) for about 190,000 people and create more than 40,000 job opportunities. Population intake is expected to start in 2023 and infrastructure works to complete in 2031. Full implementation of the NDAs will thus take more than 10 years to complete, and in the process impacting a total of 4,200 people in 1,500 households, 440 business operators and 28 ha of active farmland.

 

Given the acute land shortage faced by our society, affected villagers and business operators would hopefully appreciate the wider public interest at stake in considering their own private interests. In pushing forward the NDA development, working out a solution to sensibly and reasonably compensate and rehouse affected villagers and business operators, and doing so in a manner which helps to minimise potential conflicts and facilitate the progress of clearance, have always been key challenges for the Government. Tackling such challenges calls for patient communications with stakeholders, as well as timely adjustments to implementation details, including revision to compensation and rehousing policies, where they are justified.

 

The first phase development will require resumption of 68 ha of private land, as well as clearance of 100 ha of government land, 18 ancestral graves and two urns. It includes two sites of approved land exchange applications covering a total area of about two ha, as compared with the 68 ha of land to be resumed by the Government in the same phase. First phase works covers site formation and engineering infrastructures, including roads and sewerage, construction of the Fanling Bypass, as well as establishment of the LVNP as an ecological mitigation measure. Taking into account the payment of zonal A ex-gratia compensation for private land to be resumed within the NDAs, the estimated land resumption and clearance cost will be over $13.3 billion, whilst the main works will cost about $18.2 billion, representing an average cost per sq m of land of about $19,000. These figures have yet to take into account expenditures regarding the provision of rehousing units for affected villagers (including means-tested public housing units and non-means tested rehousing units), assistance to farmers on agricultural rehabilitation, as well as the reprovisioning of the residential care homes for the elderly (RCHE) in Dills Corner Garden.

 

The compensation and rehousing arrangements approved by LegCo in July this year have gained broad-based support within the community. This shows that our society continues to be able to resolve problems and conflicts through patient and cordial dialogues and mutual understanding. In the coming months, apart from endeavouring to secure LegCo’s funding approval, we will continue to make the best possible preparations for land resumption and clearance for the first phase development. These include speeding up the screening exercise for the more than 400 households affected; offering assistance to the business operators who wish to relocate their business undertakings; finalising the timetable of phased clearance of the RCHE at Dills Corner Garden and ensuring the commencement of operation of the new RCHE complex in 2023 as scheduled; discussing with farmers options for agricultural rehabilitation; as well as rendering assistance as far as possible to villagers in handling their pets. We will also assess the number of affected villagers outside the first phase development who would wish to opt for early removal, and consider the necessary arrangements to be put in place.

 

Development of KTN and FLN NDAs has just reached a critical milestone. Having spent more than 10 years in planning, consultation and adjustment, we have now struck a reasonable balance between upholding Hong Kong’s wider interests and addressing the concerns of different stakeholders. Collaborative efforts from all concerned will continue to be required as we take forward the implementation of this and other NDAs. Let us work together and rise to the challenge!

 

This op-ed piece from Secretary for Development Michael Wong was published in local newspapers on December 14.

 

Table 1:     Major Events of Kwu Tung North and Fanling North Development

 

2008-2013

Resumed “North East New Territories” study with 3-stage public engagement. About 5,000 people attending a forum of September 2012 insisted “no relocation or clearance”.

2013

Executive Council (ExCo) agreed to go ahead with Kwu Tung North (KTN) and Fanling North (FLN) development first and special ex-gratia compensation and rehousing (C&R) arrangement for the NDAs.

2013-2015

Town Planning Board held 45 full-day meetings to deal with about 53,000 comments on the draft Outline Zoning Plans (OZPs) for KTN and FLN. Police assistance was requested after clashes between attendees and staff.

2014

Some people were prosecuted for trying to force their way into the Legislative Council (LegCo) building when a confrontation broke out while the Finance Committee (FC) considered the funding application for the first phase detailed design.

2014

ExCo considered arrangements for elderly homes at Dills Corner Garden.

2015

ExCo approved draft OZPs for KTN and FLN.

2015-2016

Over ten thousand objections were received each time when the original and revised schemes for first phase road and sewerage works were gazetted. Government met with objectors on various occasions to resolve disagreement.

2016

ExCo considered special rehousing arrangement for the NDAs.

2017

ExCo further considered special rehousing arrangement for the NDAs.

2017

ExCo considered new ex-gratia compensation arrangement for business undertakings.

2017

Dissatisfied with the C&R arrangements, the North District Council (NDC) requested Government to shelve the development plan.

2018

Enhanced C&R arrangement, approved by ExCo, obtained NDC’s support and FC’s funding approval. ExCo subsequently authorised road and sewerage works and land resumption limits.

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Infrastructure important for tourism

For Hong Kong, we are the world’s number one destination eight years in a row, handling nearly 60 million visitors per year. Many of them might be coming to our city for the second, third or many times. We also have this very gigantic number, 60 million visitors, against 7.4 million of the total population, which is eightfold of our local residents. I believe some experiences Hong Kong has encountered might be of relevance to our common challenges in this business. So I will point out four areas.

 

First, tourists these days begin their journey well before they set foot in a city. I say so because the tour journey starts usually not by plane, nor from any hotel, but actually it starts at the desktop computer, the cellphone, the pictures on Instagram or Twitter, through word of mouth and also comments on social media. So actually the journey starts well before they set off.

 

My second observation is that tourists know far more than before, fortunately or unfortunately, not from official channels, but from, for instance, Twitter. In fact, non-official information actually plays a more significant role than what we, the governments, are providing.

 

The third observation is that tourists do not just come to see. The old description of sightseeing is a bit outdated because nowadays you can see a lot of things on the web. People come here to experience.

 

Last but not the least, tourists these days instantly share their experience, real time, by split seconds, with their friends in other parts of the world. These are the major challenges that we are facing.

 

Hong Kong experience

I would also add that the typical Hong Kong experience in this business includes a highly internationalised tourist mix and a very large group of Mainland visitors. The Chief Executive mentioned just now that this year we might be seeing 60 million tourists coming to Hong Kong, with 47 million of them from the Mainland. The other 13 million are overseas visitors coming to Hong Kong, and although they capture a smaller share, it is not a small number by itself. So we are facing a very dynamic internationalised clientele coming to Hong Kong as tourists.

 

The second experience that Hong Kong is having is that even Mainland visitors coming to Hong Kong are looking for some non-Mainland experience, because Hong Kong is not just another Chinese city. There is some uniqueness in every city, Hong Kong in particular.

 

The third challenge we are facing is that tourism nowadays is highly cross-region and highly cross-culture. This is self-explanatory and I won’t go into details.

 

Lastly, Hong Kong is taking advantage of the multi-destination travel that we are talking about in today’s forum. Multi-destination means that people do not come to a single city for tourism experience. They are hopping on – using a place to go around. A figure that I can quote is that 49%, almost half of the short-haul visitors coming to Hong Kong are having multi-destination travel. For people coming here even for a very short while, say, a few days from nearby countries, almost half of them do not stop only in Hong Kong. For long haul visitors, 88% of them coming to Hong Kong are also multi-destination travellers. This backdrop gives us the context to talk about the Belt & Road Initiative and the Guangdong-Hong Kong-Macao Greater Bay Area development.

 

Important observations

I would also share four observations and experiences with members here as a kick-off for the ensuing discussion. First, every bridge connects. I say this because Hong Kong is actually having the privilege of two major cross-boundary infrastructures commissioned in the last two months, the Express Rail Link (Hong Kong section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link) and the Hong Kong-Zhuhai-Macao Bridge. I say every bridge connects to emphasise that infrastructures, particularly roads, railways, bridges, airports and sea ports, are important infrastructures supporting tourism. And to a certain extent, some of these infrastructures by themselves are also tourist attractions. For our case, the bridge connecting Hong Kong, Macau and Zhuhai is heavily patronised by first-time visitors, who come not just to Hong Kong, Macau and Zhuhai, but simply to have an experience of the bridge. In the initial months after the bridge opened, we had a survey which showed that about one-fifth of the visitors actually come for a single day, just to travel upon the bridge. It also says how important the investment in infrastructures that connect cities, regions and countries is, and how such investment boosts and changes the tourism landscape.

 

The second observation also starts with every: every visitor counts. That might be easier said than done. It might be just lip service, but with the experience I mentioned, with the very interesting background that we are having among our modern day visitors, every single visitor’s experience in a city or country actually counts. They bring back home their experience after visiting a city, and the experience they share and the comments they make on social media are also important. So that calls for a quick response from any government or tourism industry player in tackling problems, as well as leveraging on advantages. It also calls for inter-governmental co-ordination; streamlining of cross-boundary procedures; collaboration with the travel industry; enforcement of regulations and gauging tourists’ feedback.

 

The third observation also starts with every: every bit local. It is in fact a tagline we used in one of our tourist promotions in the Sham Shui Po area in Hong Kong, a very localised district. While the world is getting highly globalised, travellers and visitors tend to focus on things that are local rather than metropolitan or international. People simply like to travel, shop, eat or dine like a local. So we discover the cities with very interesting facets that might not be revealed to visitors in the old days. We are talking about local culture, local delicacies, local traditions, local festivals, local designs or street corner cafés. This is in fact relevant to the new tagline that we are using in rediscovering our city tourism.

 

The final observation is every difference makes a difference. Here I am talking about the diversity in any city and in our region. We are talking about rejuvenated heritage, in which Hong Kong, Macau and also Guangzhou have invested a lot. We are talking about the contrast between town and country. Yesterday night when I hosted a small dinner for incoming speakers, I talked about the wow factors created by the very stunning landscape on some of our coastline in the northeastern part of our territory, which surprised a lot of people as the common perception about Hong Kong is a metropolitan city. Actually, the hexagonal columns in the (Hong Kong UNESCO) Global Geopark in Sai Kung area are more spectacular than our skyscrapers on both sides of the harbour. These are the wow factors and differences that people coming to our city are getting. It also includes all the things about cross culture, about East meets West, and nature, which brings a contrast to a metropolitan city.

 

To conclude, these are small things that might be too easy to neglect by policy makers or the tourism industry. But these are all little things that a big city destination like Hong Kong is facing day-in and day-out. But nothing is better than having all these dots connected and these experiences shared in the forum today. We hope this would be one of the dots that would connect Hong Kong with the neighbouring cities in the greater bay area. We hope this would connect Hong Kong and the tourism industry around the world when we explore the vast markets along the Belt & Road.

 

Secretary for Commerce & Economic Development Edward Yau gave these remarks at the Hong Kong International Tourism Convention on December 12.

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Gov’t boosts IT in schools

Through efforts to sustain the development of information technology (IT) in education, the Government aims to prepare students for challenges of the 21st century. Over the past two decades, we have been tapping into the power of IT to enhance the effectiveness of learning and teaching, and there has been remarkable enhancement in schools’ IT environment and capacity.

 

Building on existing strengths and the experiences gained, the Education Bureau continues to unleash students’ potential and develop their learning to learn capabilities through leveraging on the use of IT. We have adopted a holistic approach that encompasses different strategic actions, which include enhancing schools’ IT infrastructure, promoting capacity building in schools, and renewing curriculum. By now and for the first time in Hong Kong, all 1,000 public sector schools have basically established a WiFi infrastructure on their campus. With WiFi service covering all classrooms, students can learn on their own and collaborate with one another by using mobile computing devices. This development provides a favourable environment for revolutionary changes both within and outside the classroom. What was once unlikely has or will become possible and practicable. To facilitate teachers in adjusting to the wave of change, we have been organising a variety of training programmes that seek to further enhance the professional leadership and capacity of school leaders and teachers.

 

Schools have been positive towards implementing e-learning. Apart from devising their own e-learning plans according to their circumstances and needs, schools also adopt various e-learning strategies to enhance effectiveness of learning and teaching. I am excited to learn of these good practices in some schools. For example, various learning management systems facilitate peer collaboration, and enable students to exchange information and ideas or work on a project together anytime and anywhere. Also, the collection of learning data and the provision of timely feedback are at our fingertips, which encourages self-directed learning of students. The technologies of virtual reality and augmented reality are now used by schools to conduct virtual field trips and experiments, and to help students acquire new knowledge in various subjects and areas, such as Chinese history, geography, STEM education and language learning. While schools have different paces in implementing e-learning, the school community has generally demonstrated a paradigm shift in transforming learning and teaching through the innovative use of IT.

 

In fact, competency in using IT is an important 21st century skill. We have also placed due emphasis on developing students’ information literacy, with a view to enhancing their awareness of e-safety and nurturing them as effective, responsible and ethical IT users. Since the update of the framework on “Information Literacy for Hong Kong Students” in 2016, various online resources and training programmes have been made available to support teachers in developing students’ information literacy and teaching students the right attitude towards using IT. I know that teachers have skilfully incorporated the element of information literacy into cross-curriculum learning activities that put students into authentic contexts. For example, the ability to locate reliable information among multiple sources and to identify facts and judgements when reading a news article is developed in library and language lessons. In addition, many schools have already agreed on a set of principles with students and their parents to ensure that students will use IT and IT tools to enhance learning in a responsible and proper way. With teachers’ adequate support, students set out to explore the digital world and this exploration has become part of their learning experience and daily life.

 

To better equip the younger generation for a challenging future, we need to enrich the education sector with useful insights, expertise and innovation from different countries and regions. Let me take this opportunity to thank the Hong Kong Education City for making this exposition a valuable platform for educators to conceive and exchange innovative ideas on learning and teaching. I believe that what educators aspire to learn and do today will inspire the education community on tomorrow’s learning.

 

Secretary for Education Kevin Yeung gave these remarks at the Learning & Teaching Expo 2018 opening ceremony on December 12.

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HK an ideal tourism partner

Hong Kong has long been the pre-eminent bridge connecting Asia, including the Mainland of China, with the rest of the world. This connectivity is underpinned by an extraordinarily strong tradition of Hong Kong being the bastion of free trade.

 

Indeed, Hong Kong has been ranked the world’s freest economy by the US-based Heritage Foundation and by the Canada-based Fraser Institute since 1995, without a break. This exceptional connectivity however is multifaceted. From finance, trade and logistics to, of course, tourism, Hong Kong is almost the synonym of connection, where ideas meet opportunities, investments meet ventures, demand meets supply, and where the East meets the West. This people-to-people connectivity has made Hong Kong the most visited city in the world according to Euromonitor International.

 

Belt & Road Initiative

First announced by President Xi Jinping in 2013, the Belt & Road Initiative spreads across Asia, Europe and Africa to promote infrastructural connectivity and financial integration, boost trade and investment, deepen policy co-ordination, and create stronger people-to-people bonds among participating countries. The initiative is about collaboration and sharing benefits. Hong Kong as the world’s freest economy, most visited city and China’s most international city, is an ideal partner in leveraging the potentials offered by the Belt & Road Initiative for tourism development. Let me take a moment to explain how this partnership works.

 

Global financial centre

Firstly, Hong Kong is the ideal place for arranging financing for any large-scale development projects with our deep liquidity and premier financial infrastructure. Hong Kong is the world’s largest offshore renminbi business hub and we have 44 heavy construction and engineering companies listed on our Stock Exchange. Hong Kong is also consistently ranked among the world’s top initial public offerings markets. It is highly likely that we will top the world again this year given the huge amount of funds raised so far this year. At the end of September, our stock market capitalisation stood at about HK$32 trillion, that is over US$4 trillion, which is 12 times our GDP.

 

We have put in place measures to promote sustainable developments in the region. A Green Bond Grant Scheme was launched to subsidise the costs incurred by green bond issuers in obtaining green finance certification. A Government Green Bond Programme, with a borrowing limit up to HK$100 billion, will be rolled out soon. In addition, we have introduced a pilot Bond Grant Scheme plus tax incentives to attract more issuers to come to Hong Kong to issue bonds. Only in the first half of this year, we have attracted at least 15 green bonds issues, raising an aggregate amount of US$8 billion.

 

Hong Kong is also a member of the Asian Infrastructure Investment Bank. We have also set up an Infrastructure Financing Facilitation Office under the Hong Kong Monetary Authority to provide a platform for pulling together investors, banks, financial institutions and infrastructure owners and operators to offer comprehensive services for various infrastructure projects.

 

All the above have made Hong Kong an ideal partner for arranging financing for tourism projects, which are essential to propel tourism development.

 

Regional education hub

Secondly, Hong Kong as a regional education hub, has world-class universities, professional bodies and international schools to provide a wide range of educational and training opportunities for students in Belt & Road countries in meeting global standards of excellence. For tourism in particular, we have one of the world’s best hotel and tourism schools. The Hong Kong Polytechnic University’s School of Hotel & Tourism Management has been ranked No. 1 in 2017 in the Hospitality & Tourism Management category in ShanghaiRanking’s Global Ranking of Academic Subjects, as well as in the Hospitality, Leisure, Sport & Tourism subject area by the Center for World University Rankings. It is also ranked among the top three hospitality and leisure management institutions globally in the QS World University Rankings by subject in 2017 and 2018.

 

On top of that, we offer world-class training opportunities for hoteliers. Our city’s many international hotel brands, including home-grown Mandarin Oriental and the Peninsula, make us the best place to acquire first-hand experience of world-class hotel operations.

 

We are taking forward a number of measures to provide a quality education platform here for both local and non-local students, which include expanding quotas for admission of non-local students, setting up a Government Scholarship Fund for outstanding local and international students, and allowing students from outside Hong Kong to stay here without limitation for up to 12 months after graduation.

 

Open immigration regime

Thirdly, Hong Kong maintains an open immigration regime and we welcome talents from around the world to work, live, study, invest and travel in our city. Currently, nationals of about 170 countries and territories can visit Hong Kong for business or leisure visa-free. To further facilitate tourist flow between Hong Kong and Belt & Road countries, we will consider relaxing visa requirements for nationals of Belt & Road countries. We hope other countries will consider the same for the common good of our tourism sector.

 

Diversified tourism offerings

Fourthly, Hong Kong is a place full of contrasts, diversity and dynamism. We offer a broad range of tourism products to cater for the diverse interests of visitors. This involves constant upgrading and improvement of services, creating and reinvesting in new attractions, and rediscovering hidden treasures in our tourism resources.

 

For example, Tai Kwun, the rejuvenation of three historical monument buildings in Central, is now a new exciting cultural landmark and a must-see for tourists. Our two flagship theme parks are also wasting no time to expand their capacity and enhance attractiveness. Hong Kong Disneyland will have new attractions almost every year to 2023 under its multi-year expansion plan. For Ocean Park, it just opened a new hotel last month, and will be commissioning a new waterpark and another hotel in the next few years. We will also see a much enhanced list of tourist attractions, including the heritage and cultural offerings at the West Kowloon Cultural District as well as the integrated development of the SkyCity development adjacent to the Hong Kong International Airport, comprising retail complexes, dining areas, hotels and entertainment facilities.

 

We also roll out district tourism programmes to assist and entice visitors to explore Hong Kong’s local life and districts’ characteristics. Visitors will experience first-hand and in close encounters the local character of Hong Kong as a city where the East meets the West, where tradition crosses over with modernity.

 

We are not missing our rich green tourism resources which are within arm’s reach of our city centre. Apart from our normal countryside tourism offering, this year, we have launched a scalable School Excursion Programme package for secondary schools outside Hong Kong, combining school exchange with an immersive conservation and cultural focus. We pulled together the green tourism attractions in the “four corners” of Hong Kong, that is, Ocean Park in the south, the Mai Po Ramsar Site and the Hong Kong Wetland Park in the north, the Hong Kong UNESCO Global Geopark in the east and Ngong Ping 360 in the west, together with Tai Kwun, PMQ and the Dr Sun Yat-sen Historical Trail, etc, which offers a probably unrivalled experience of learning, adventure, fun, thrill and amazement, yet in a safe and easy to get around setting. We hope this programme can help contribute to better mutual understanding amongst the kids of different cultures.

 

Creating new tourism products aside, city management, municipal services and quality assurance as well as safety are all important ingredients to fulfil a good tourist experience. Any city that is safe and easy to travel will be greatly welcomed by visitors. On this, I am proud to report that Hong Kong is one of the safest cities in the world, and a city that is easy for any tourists to get around with its efficient public transport and tourist-friendly facilities.

 

Regional co-operation

On top of our diverse tourism offerings, Hong Kong’s advantages as a global aviation hub and well-connection with the Mainland offers enormous opportunities for regional co-operation, for instance, multi-destination travel and the development of “fly plus cruise” and “rail plus cruise” travel products.

 

The Hong Kong International Airport provides excellent connectivity with over 120 airlines serving over 220 destinations worldwide. There are over 1,100 flights daily to and from the airport, reaching half of the world’s population within five hours’ flight time. The commissioning of the Hong Kong Section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link and the Hong Kong-Zhuhai-Macao Bridge has further enhanced our connections with the Mainland. Our Kai Tak Cruise Terminal can accommodate the largest cruise ships in the world. Together, we can create a win-win situation for all by strengthening the regional collaboration through for instance, development of mutually supporting cruise itineraries.

 

Bay area development

As for the Guangdong-Hong Kong-Macao Greater Bay Area development, it is an ambitious city cluster development encompassing Hong Kong, Macau and nine cities in the Guangdong Province of the Mainland. Working together, the synergies to be brought about by these cities are obvious and tremendous.

 

The greater bay area city cluster possesses abundant tourism resources with distinctive appeals, such as Guangdong’s traditional Lingnan culture and Macau’s entertainment and leisure resources as well as Hong Kong’s vibrancy and diversity as an international metropolis. Our different yet complementary advantages combined enable the greater bay area to rival other famous bay areas in the world.

 

Together, the greater bay area presents to the world a model of cross-city co-operation and that tourism development is not a zero-sum game. We work together in every aspect to create an even bigger pie for all.

 

In this connection, the city clusters would further collaborate to develop more “one trip multi-destination” tourism products and conduct joint promotions overseas. In fact, our survey suggests that 45% of our short-haul visitors are taking multiple destination itineraries while the figure for long-haul visitors is remarkably over 80%.

 

To facilitate international travellers, foreign nationals in Hong Kong can visit Guangdong Province for a maximum of 144 hours visa-free. This allows international travellers ample time to experience the diverse tourism offerings of Hong Kong and Guangdong Province, while ensuring the border crossing is hassle free.

 

What’s more is the exponential improvement in land connection with the Mainland and Macau that makes such “one trip, multi-destination” travel even easier. In addition to the commissioning of the Guangzhou-Shenzhen-Hong Kong Express Rail Link in September and the opening of the Hong Kong-Zhuhai-Macao Bridge in October, another cross-boundary infrastructure in Liantang/Heung Yuen Wai, connecting Hong Kong to the expressway in the eastern part of Guangdong, is expected to be completed soon in 2019. Indeed, the commissioning of three key infrastructures in a city in about a year is probably very much unprecedented in the world. Hong Kong’s enhanced connectivity with the greater bay area and beyond would make Hong Kong an ideal launch pad for international travellers to start their vacations.

 

On top of that, the greater bay area adds more opportunities for Belt & Road countries. The greater bay area has pulled together a spectacular 69 million population which is the most affluent part of China. The collective GDP is over US$1.5 trillion, comparable to that of South Korea. The greater bay area is, I would say, a large source market for tourism for Belt & Road countries to tap.

 

Conclusion

Ladies and gentlemen, I don’t need to expound on the importance of tourism to economic development and the enrichment of people’s life. The question is how we can do better and achieve more. The Belt & Road Initiative and the greater bay area development, which are about collaboration and sharing benefits, have presented us with new potential. And Hong Kong as the world’s most visited city, freest economy, top financial centre, safest city, and one which has one of the world’s best educational facilities and the world’s top hotel brands, is your ready partner to leverage on the opportunities offered by the two initiatives.

 

We are committed to strengthening co-operation with different economies to promote tourism development, be it regionally or internationally.

 

Financial Secretary Paul Chan gave these remarks at the Hong Kong International Tourism Convention on December 12.

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HK to grasp tourism opportunities

In a time of increasing unilateralism and protectionism, tourism is a welcome tonic – a buoyant multilateral embrace of shared experience, cultural co-operation and people-to-people bonds. Indeed, connectivity, inclusiveness, the promise of mutual benefits and many other ambitions are the reasons why President Xi Jinping launched the Belt & Road Initiative some five years ago.

 

We know that developing people-to-people bonds is one of the five connectivities pertaining to the Belt & Road Initiative, and we believe that tourism exchange is a powerful means of promoting such bonds. Tourism exchange can foster people’s understanding and appreciation of each other’s culture and living. This provides the foundation for closer and stronger relationships and co-operation in the longer term.

 

Multilateral co-operation is no less central to the Belt & Road Initiative and to tourism development. Easing visa regulations, expanding flight connections, enhancing cultural co-operation – these and other considered measures can only help boost tourism and the rewards they offer us all. In developing regional tourism, for example, multi-destination visits can be effective. Consider, for example, the Asia Cruise Cooperation, a strategic alliance among Hong Kong, Hainan, Taiwan, Xiamen, the Philippines and Korea, in which alliance members jointly promote cruise tourism for mutual benefits.

 

The Belt & Road Initiative is about capacity building and sharing benefits. Hong Kong is an international hub for professional services, from financial and legal, to architectural, communications, transportation management and many more. We also run one of the largest hospitality and tourism schools in Asia. We have the expertise, the experience and the institutions to provide services to other economies along the Belt & Road on tourism infrastructure developments, as well as train professionals for the tourism industry. And we look forward to playing a central role in the Belt & Road Initiative’s international tourism development.

 

Closer to home, the Guangdong-Hong Kong-Macao Greater Bay Area has the means to rival Tokyo, San Francisco and New York-the world’s three renowned bay areas-in tourism potential. The bay area’s size and significance underscore that promise. With a collective population of 70 million, the bay area boasts a combined GDP of some US$1.5 trillion, that is roughly the size of Australia or South Korea. The greater bay area’s tourism offerings are wide-ranging and undeniably inviting – from cosmopolitan, East-meets-West Hong Kong and the entertainment capital of the world, Macau, to the rich Chinese culture and heritage of the greater bay area’s nine Mainland cities. At the same time, the greater bay area is an important source market for other economies given its high level of affluence. You will hear more in-depth sharing of what this greater bay area means for international and regional tourism in one of the plenary sessions this morning.

 

I believe that Hong Kong is uniquely positioned to drive tourism opportunities emanating from the Belt & Road Initiative and the greater bay area. And my Government is committed to realising Hong Kong’s tourism potential. Last October, we published a development blueprint for Hong Kong’s tourism industry. It emphasises four key strategies: diversifying our visitor source markets; offering tourism products with international and local characteristics; promoting smart tourism; and enhancing our service quality.

 

Enhancing connectivity is the key for the strategies to work. In this connection, our Hong Kong International Airport links more than 70 million passengers a year to 220 destinations. And we are now expanding the airport into a three-runway system. On completion in 2024, we will have the capacity to handle up to 100 million passengers a year.

 

On land, the Hong Kong section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link opened at the end of September. It now offers direct connection from Hong Kong to 44 Mainland destinations. And from those destinations, the rest of China opens up through the nation’s 25,000-kilometre high-speed rail network.

 

Then there’s the Hong Kong-Zhuhai-Macao Bridge, which opened in late October and speeds us to the greater bay area’s western region. The impact of the bridge in bringing tourists to Hong Kong is obvious. Therefore, we have been working to ensure that our tourist spots and local communities are prepared. We are also collaborating with the Zhuhai and Macau authorities to ensure that our guests can have the best experience in Hong Kong.

 

I should also add that there will be a new – which is the seventh – land boundary control point between Hong Kong and Shenzhen at Liantang/Heung Yuen Wai. To be completed next year, this boundary control point will significantly shorten the time needed to travel from Hong Kong to the east of Shenzhen and beyond. All these infrastructure projects open up new opportunities barely reachable before and provide a solid foundation for Hong Kong to serve as an international gateway of the greater bay area.

 

Hong Kong has received about 60 million visitors so far this year, including over 13 million international visitors, and was ranked as the most visited city in the world by Euromonitor International. Coupled with the fact that Hong Kong is the world’s freest economy and China’s most international city, Hong Kong is best positioned to leverage the vast tourism potential of the Belt & Road Initiative and the greater bay area development. We are prepared to grasp these opportunities ahead of us, and we welcome you to join us.

 

Chief Executive Carrie Lam gave these remarks at the Hong Kong International Tourism Convention on December 12.

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