Dr Jonathan CHOI Koon-shum (Chairman of the 50th terms of office) December 2016
Hong Kong should respond to the new developments. While consolidating its pillar industries, Hong Kong also has to support the development of potential industries such as the innovation, technology, cultural and creative industries.
Strategic positioning of financial services in “Belt and Road”
China’s full implementation of the “Belt and Road initiative” will bring about unprecedented opportunities for Hong Kong. Therefore, the HKSAR Government should take the lead in directing the society to think about how to actively participate in it. Indeed, as Hong Kong is situated in an important strategic location of the “21st Century Maritime Silk Road” , it should be able to use its comparative advantages in the financial sector to provide a wide range of financial supporting services to the “Belt and Road” projects. We hope that the HKSAR Government will actively explore providing policy support in a number of areas.
First, as the largest offshore RMB center, Hong Kong should enlist the support of the Central Government to liberalize the two-way flow of the RMB between Hong Kong and the Mainland. It can pilot this in Guangdong and Hong Kong and then gradually extend it to other provinces and cities in order to establish a sound two-way flow mechanism for the currency, paving the way for the Mainland’s RMB-denominated trade and investment with the “Belt and Road” countries.
The HKSAR Government may consider setting up an offshore RMB investment and financing platform for the “Belt and Road” projects by offering RMB-denominated financial products and investment instruments. It will be conducive to a new offshore RMB circulation mechanism for the “Belt and Road” countries. By allowing the “Belt and Road” countries to invest in RMB through Hong Kong, it will strengthen their willingness to hold RMB, thus serving as an important bridge to promote further RMB internationalization.
The HKSAR Government should also reinforce its cooperation with organizations, such as the Silk Road Fund and the Asian Infrastructure Investment Bank, to encourage them to set up their capital operation and market operation departments in Hong Kong. Hong Kong can also serve as a major bond issuing location for the “Belt and Road” governments and enterprises to provide financing for infrastructure investment and financing projects, which not only will help broaden Hong Kong’s offshore RMB market and fund usage, but also inject new elements into Hong Kong’s financial industries as well as overall economic development.
Promoting creative and innovative industrial development
As the society continues to progress, innovation and technology have become an important driving force of global economic growth. In recent years, China has been actively advocating the “mass entrepreneurship and innovation” policy. Hong Kong should respond to the new developments. While consolidating its pillar industries, Hong Kong also has to support the development of potential industries such as the innovation, technology, cultural and creative industries. We recommend that the HKSAR Government should further improve Hong Kong’s investment environment for scientific research, such as streamlining the application and approval procedures for the existing support schemes and encouraging local research enterprises to strengthen cooperation with the Mainland. In addition, it can attract talents and investors in innovation and technology industries from around the world to come to Hong Kong in order to enhance the development potential of Hong Kong’s innovation and technology talent pool and industries.
The HKSAR Government can also consider allocating more resources for start-ups, providing support in infrastructure and integrated services during their growth process, and offering help to raise the overall service standards of business incubators on the market, thereby reducing the start-ups’ costs and risks while increasing their success rate.
Cultural and creative industries also play an important role in promoting innovative economic development. In our view, the HKSAR Government may consider setting up a coordinating body or cross-sectoral cultural and creative committee. The purpose is to strengthen cooperation with the business community to promote cross-industry matching not only to support start-ups, but also develop leading enterprises, especially in areas where Hong Kong’s strengths lie, such as films, digital entertainment and design, giving them more support in terms of financial aid and personnel training.
In summary, the Chamber hope that the HKSAR Government will actively unite all sectors of the society to work together in response to the new economic developments, reinforce Hong Kong’s unique strengths and functional roles to capture the opportunities arising from China’s development, and give more support to Hong Kong’s industries and enterprises, hence creating new economic growth drivers for Hong Kong’s long-term development.
