By Chermaine Lee
As the Policy Address 2018 puts a majority of its focus on Hong Kong’s most discussed and contentious issues: land supply and housing; there were relatively fewer new policies concerning other economic issues this year.
One area that is a continuing theme from the CY Leung era and a national priority of the government’s masters in Beijing is continuing the development of the city’s role in the Belt and Road initiative (BRI) and the Guangdong-Hong Kong-Macao Greater Bay Area (GBA).
However, while CY Leung was Belt and Road obsessed (mentioning it 48 times in the 2016 Policy Address), Carrie Lam is less B&R focussed. Concerning the BRI, Mrs Carrie Lam only mentions providing “funding support” for projects that promote Hong Kong’s professional services. The ongoing efforts from the government are on the engagement of the city with the mainland and other B&R related countries.
Mrs Lam puts the city’s strengths as finance and investment, infrastructure and maritime services, economic and trade facilitation and co-operation, people’s connections, dispute resolution services – and the development of the GBA.
GBA the focus
The much-hyped GBA initiative is yet to enter the implementation stage. Mrs Lam says she will “establish a high-level steering committee for the development of the GBA… [which] will be responsible for the overall coordination of matters.” A GBA Development Office will also be set up and a commissioner will be appointed to implement the relevant work.
Mr Ronick Chan Chun-ying (F-Finance), a current LegCo member and an advisor at the Bank of China (Hong Kong), tells Harbour Times, “The blueprint of the GBA has been in discussion for a very long time but a complete plan has still not been agreed upon. So far there’s no concrete direction for the GBA. The government should implement the policy as soon as possible.”
Bring back factories
Another key policy for boosting Hong Kong’s economy lies in the re-industrialization funding scheme of $2 billion, which is said to help develop innovation and technology (I&T) and the promotion of R&D in the city. The fund aims to subsidize manufacturers to set up smart production lines.
Mrs Lam says that the Precision Manufacturing Centre in Tai Po Industrial Estate and the Advanced Manufacturing Centre, currently in construction, will provide facilities for smart production. An extra $2 billion might be allocated to selected suitable land for building manufacturing facilities.
R&D
Mrs Lam has set the target of doubling the city’s R&D spending to 1.5% of GDP in the next five years since her Policy Address last year. The policies of encouraging innovation include more tax reduction on R&D expenditure, extra-university research funds and a plan to build a “smart city.”
“This is a very bold target and the subsidies from the government is not enough [to boost innovation]. The private sector also needs to contribute, but the current I&T investment might not be effective,” says Mr Chan.
Fixing tenders for innovators
The government is set to introduce a policy in April 2019, in which the technical weighting in tender assessment will go up, supposedly offering higher chances for tenders with innovation in obtaining government contracts. It also plans to invite sectors to create I&T solutions to tackle issues, which can earn them prize money from a $500 million fund and trials of the solutions in public organizations.
Robo-government, Robo-warden
Regarding the Smart City blueprint, there are some concrete measures to be implemented, including the use of artificial intelligence (AI) and chatbot in the GovHK portal next year with an aim to facilitate the public’s access to the government’s e-services.
The city’s top information official will also set up a scheme named Smart Government Innovation Lab, which will accept proposals from industries on I&T and product suggestions for public services.
What Mr Chan is most concerned about the Smart City blueprint is the privacy issue that will come from developing smart prisons.
“Would using the data from the prisoners be violating their privacy? There are debates but I am quite curious about the behavioural analysis it will produce from implementing a ‘smart prison’,” he says.
Fintech; Greentech
The technological development extends to finance. On top of the Faster Payment System (FPS) launched in September, the Hong Kong Monetary Authority is expected to issue the first batch of virtual banking license by the end of this year or early next year.
Mrs Lam is also keen on issuing green bonds to support sustainable development and bolster the growth of green finance in the city. If the LegCo greenlights this proposal, a green bond program will be launched, but the Policy Address does not specify any timeframe.
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