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Accelerate the Development of New Quality Productive Forces
Over the past week, the society has focused its attention on the "Two Sessions" held in Beijing, including President Xi Jinping's important speech at a delegation meeting and the delivery of the Government Work Report by Premier Li Qiang. The market has gained insights from the events about the overall fundamentals of the Mainland economy, assessment of its economic prospects, as well as the direction, focus, measures and indicators of the country's future development. These all serve as important guidelines for our efforts in promoting economic development in Hong Kong. The following are some of my preliminary observations.
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The first is on the general economic direction of "pursuing progress while maintaining stability; promoting stability through progress; and establishing the new before abolishing the old." Last year, the Mainland's gross domestic product (GDP) surpassed RMB 126 trillion, marking an increase of 5.2% and ranking it among the fastest-growing major economies in the world. The overall economic recovery and growth were boosted, with significant progress made in areas such as scientific and technological innovation breakthroughs and building of a modern industrial system. Taking into account the needs, goals, potential and supporting conditions, the Central Government has set the Mainland's economic growth target this year at around 5%. Under the current complex international environment, this is not an easy target. But the Mainland economy has a solid foundation, and the Mainland authorities have ample policy space. Coupled with strong leadership and solidarity, I believe this target can surely be achieved. The Mainland's growth will provide the strongest support for the steady and faster development of the Hong Kong economy.
The second is on "new quality productive forces".President Xi mentioned this in September last year. "Striving to modernise the industrial system and developing new quality productive forces at a faster pace" is listed as the first major task in the Government Work Report this year. This indicates that the Mainland will enhance the breadth and depth of in developing high-tech industries, and is determined to overcome various constraints and challenges. These will provide a more favourable environment for the development of innovation and technology (I&T) in Hong Kong. It will also open up deeper and broader development space that will reinforce and enhance Hong Kong's role and status as an international financial centre.
"New quality productive forces" represent a significant leap in productivity driven by technological innovation. Factors of production are being transformed towards digitalisation and intelligentisation. Some advanced economies have already achieved significant breakthroughs in certain areas, and have been taking the lead in the world. Many countries are also seeking to excel in this round of great change brought by intelligentisation so that they could significantly enhance their productivity and competitiveness.
"New quality productive forces" aim to fully realise the leading role of innovation. They encompass revolutionary breakthroughs of technology, innovative allocation of production factors, and structural upgrading and transformation of industries. They are an intrinsic element of high-quality development.
The Central Government has highlighted the need to accelerate the development of "new quality productive forces". In this regard, the Hong Kong SAR government is making strenuous efforts. Building upon the enormous investments made in the I&T sector, we must, by capitalising on our unique advantages, make greater strides in promoting the relevant key areas in the future. Specifically, we need to (1) promote the optimisation and upgrading of industry chains and supply chains; (2) actively nurture emerging and future industries such as new materials and life sciences; and (3) advance the innovative development of the digital economy, drive "digital industrialisation and industrial digitisation", and strengthen the research and development on and application of big data, artificial intelligence, etc.
Take the development of artificial intelligence (AI) as an example. We are currently promoting the development of the AI ecosystem in Hong Kong on all fronts through proper top-level design, putting in place regulations and guidelines, building infrastructure, engaging in R&D, and nurturing and attracting talent, as well as attracting enterprises and investments, etc. Cyberport is expediting the establishment of the AI Supercomputing Centre (AISC), and operation of its first phase will start this year the earliest. The recently announced Budget also allocated a funding of $3 billion for a three-year subsidy scheme to support local universities, research institutions and enterprises, etc. to leverage the AISC's computing power and foster scientific breakthroughs.
We are also committed to expediting the development of green technology and green finance. Innovation driven by green technology will enhance the application of digitalisation, networkisation, intelligentisation and other new technologies. It will also catalyse the development of new materials and standards. Indeed, Hong Kong enjoys clear institutional advantages and solid foundation on such fronts as patents, formulation of new standards and manpower development.
Technological development requires the support of financial services. Hong Kong has a leading edge in green finance. The variety of green financial products issued in Hong Kong is becoming increasingly diverse. In addition to green bonds and loans, there are many new products. The latest figures from the Securities and Futures Commission (SFC) show that over 200 environmental, social, and governance (ESG) funds have been authorised by the SFC, with a year-on-year increase of 24%. The related assets under management have also recorded a year-on-year growth of 20%, reaching over HK$1.3 trillion in scale. We are accelerating the promotion of green fintech, climate-related disclosure standards, etc., so as to enable financial services to better support the development of green technology. These will bring new opportunities to Hong Kong as an international financial centre.
Digitalisation has become a new driving force for economic development. As a new key production factor, data links different industries and sectors and empowers enterprises to boost efficacy and competitiveness. Data on its own can even be developed into an industry, creating more new business opportunities. In the Budget this year, I have set out the vision to build a data trading ecosystem, and we will expedite its development along the direction of building "new quality productivity forces". In particular, we should adapt measures to local conditions, and leverage Hong Kong's unique advantage of "one country, two systems" in bringing together both Mainland and international data. In fact, the presence of a highly efficient data ecosystem is one reason why many enterprises chose to establish a foothold in Hong Kong. Building a mechanism that facilitates data trading is the key. We have commissioned an expert group to undertake an in‑depth study on how Hong Kong could play the role of "superconnector" in data trading, and how we could contribute to the formulation of international rules on data trading, etc. We will endeavour to build a robust data trading ecosystem and platform, which will enable us to unleash the potential of data as a new industry with enormous growth prospects. This will also empower the upgrading and transformation of traditional industries.
The third is on the "expanding high-level opening-up and fostering mutual benefit". The Central Government's tasks this year include expanding high-level opening up, enhancing the synergy of resources from the domestic-international dual circulation, and raising the quality and stabilising the quantity of foreign trade. In this connection, major exhibitions such as the China International Import Expo, the Canton Fair, the China International Fair for Trade in Services and the Global Digital Trade Expo will continue to be held, and they will accelerate the development of the international logistics system. These events will provide enormous opportunities for Hong Kong, as local enterprises may participate in large-scale exhibitions and conventions in the Mainland. Meanwhile, Hong Kong may launch corresponding events or international conferences at around the time when events in the Mainland are held. This will not only further promote the development of the local convention and exhibition industry, but also help attract more business visitors, boosting our retail, catering and transport industries.
Be it economic or social development, we must have good coordination of development and security. A stable and secure environment is the prerequisite for all social and economic progress. The Hong Kong SAR Government is now pressing ahead with the legislative work on Article 23 of the Basic Law at full steam. The Safeguarding National Security Bill was gazetted and introduced into the Legislative Council (LegCo) for first reading and second reading just days ago. LegCo has been scrutinising the Bill over the past few days. We believe that early completion of legislative work will allow us to safeguard national security better and earlier, so that Hong Kong can have a more secure and stable environment. We will thus able to focus our efforts on pursuing development and economic progress, and fulfil our people's aspirations for a better and more secure life.
March 10, 2024
