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Better integration of a capable government and an efficient market

The Chief Executive delivered the first Policy Address of the current-term Government last week, and many sectors of the community had in-depth and comprehensive discussions on its contents in the past few days. Through a forward-looking and out-of-the-box mindset, the Policy Address focuses on solving the constraints and problems facing Hong Kong’s social and economic development from multiple perspectives and at multiple levels.

Whether it be creating strong impetus for economic growth, competing for enterprises and talents, or increasing land and housing supply, under the leadership of the Chief Executive, we have made every effort to advance with active planning and a proactive attitude. The whole development concept has clearly moved from “positive non-interventionism” and “big market, small government” in the past towards a direction that would better integrate a “capable government” and a “highly efficient market”. This is a clear and obvious choice for Hong Kong.

In the face of increasing uncertainties and risks related to global development, enterprises tend to reduce their investments. As such, in the current situation, our industries may fall into a state of underinvestment if led solely by market forces. This would be contrary to the broad direction of strengthening the growth momentum, accelerating development and finding new economic growth points. This is when the Government’s support and intervention are required so as to provide guidance, form consensus, inject power for promoting accelerated development.

However, this does not mean that the Government can solve every problem. The crux is on the need to identify the main trends and grasp the key points. For areas where we face the fiercest global competition and the parts that need government guidance, we dare to lead, take full responsibility, and accelerate development. Meanwhile, for areas where market forces are needed to foster development, we let the market unleash its potential by creating a favourable environment and conditions. Only then can we harness the power of a capable and proactive Government, while at the same time enjoying the market’s high efficiency in allocating resources, thereby facilitating the rapid development of the Hong Kong economy in the future.

For the Hong Kong economy to keep up with the development of neighbouring areas, we must build our financial services even better and stronger, and put innovation and technology (I&T) in a more prominent position, including developing I&T as an industry and widely adopting I&T in traditional industries to promote the comprehensive upgrading and restructuring of the economy. At this critical juncture of developmental transformation, we must work together to allow Hong Kong’s economic development to enter a new chapter and embark on a new path.

There are a range of new policies and measures in the Policy Address about developing I&T, and attracting strategic enterprises and talents. We will set up dedicated offices or teams to provide one-stop services in handling and following up on these cases, so as to ensure that the indicators set out in the Policy Address could be achieved in a concrete and solid manner. Many enterprises, as well as friends from the business or I&T sectors, are very interested in the relevant measures. Quite a number of foreign chambers are also enquiring on the relevant details.

On attracting enterprises, we will soon establish the Office for Attracting Strategic Enterprises (OASES), for attracting high-potential and representative strategic enterprises from around the globe, particularly those from life and health technology, artificial intelligence and data science, financial technology, and advanced manufacturing and new energy technology. We will also set up an advisory committee, comprising representatives from relevant business sectors and leaders, to advise on the overall strategy of attracting strategic enterprises. The Chief Secretary for Administration will oversee the work of talent attraction, which will be implemented by the Labour and Welfare Bureau.

To support the OASES and better align with the work of the Talents Service Unit, we will expand the functions of the SAR Government’s overseas Economic and Trade Offices and Mainland Offices, and set up Dedicated Teams for Attracting Businesses and Talents in the offices. In casting a wider net to attract enterprises and talents, we will proactively reach out to target enterprises and talents, encouraging them to establish a foothold and develop in Hong Kong. As such, enterprises and talents will succeed while fostering better developments for Hong Kong and creating employment opportunities of higher quality for the residents.

The enterprises that we wish to attract to the territory are all leading and representative enterprises from industries with strategic importance to Hong Kong. We will set aside $30 billion from the Future Fund to establish the Co-Investment Fund for attracting enterprises to set up operations in Hong Kong, while at the same time consider co-investing in the enterprises or their individual projects, taking into account their potential to drive industry development and job creation in Hong Kong, thereby benefitting Hong Kong further as a whole.

The Hong Kong Investment Corporation Limited (HKIC), as announced in the Policy Address, has been set up to manage the Co-Investment Fund ($30 billion). The HKIC will also manage the Hong Kong Growth Portfolio ($22 billion), the GBA Investment Fund ($5 billion) and the Strategic Tech Fund ($5 billion) launched under the Budgets over the past few years.

The purposes of the HKIC are to identify investment opportunities and strategically promote development of target industries, so as to enhance the long-term competitiveness and economic vitality of Hong Kong while generating investment return. Its board of directors will comprise industry leaders, experts and government officials. We are in the process of formulating the institutional arrangements and governance structure of HKIC and will announce the details in due course.

Hong Kong is in a new phase of development, and is moving towards a new chapter of governance and prosperity. The blueprint and measures outlined in the Policy Address will vigorously promote Hong Kong’s even better development and integration into the national development.

October 23, 2022