Budget Speech by the Financial Secretary (6)
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95. Expanding our Free Trade Agreement (FTA) and Investment Promotion and Protection Agreement (IPPA) networks would help Hong Kong businesses and investors open up new markets, protect their overseas investments and attract foreign investors to Hong Kong. In addition to signing the Closer Economic Partnership Arrangements (CEPA) with the Mainland and Macao, we have forged four FTAs and 20 IPPAs with other economies. The signing of Comprehensive Avoidance of Double Taxation Agreements (CDTAs) not only will benefit our businessmen, but will also attract more enterprises to use Hong Kong as their base for overseas investments. The Government has so far concluded CDTAs with 38 tax jurisdictions.
96. We will actively seek to sign FTAs, IPPAs and CDTAs with other economies, including those along the Belt and Road, to fortify our position as an international trade and investment hub.
97. As a "facilitator" and a "promoter" for economic development, the Government will be more proactive in strengthening and consolidating Hong Kong’s edge as a trading and logistics hub. The Government will actively enhance the supporting infrastructure to increase the handling capacity of both air and maritime cargo, with a view to moving the trading and logistics industry up the value chain.
98. On air transport, the Hong Kong International Airport (HKIA) has been the world’s busiest cargo airport for seven years in a row. The cargo it handled accounted for about 1.6 per cent of total cargo volume by weight, but 40 per cent of imports and exports by value.
99. Situated at the heart of Asia, the HKIA boasts a vast global network. This, together with its proximity to the Pearl River Delta and the Bay Area as well as the imminent commissioning of the Hong Kong-Zhuhai-Macao Bridge (HZMB), promises ample opportunities for our air cargo industry. The booming of global e-commerce has generated demands for cross-border logistics and delivery services, particularly air delivery and transhipment services. In December 2017, the Airport Authority Hong Kong (AA) made available a site of around 5.3 hectares at the South Cargo Precinct of the Airport Island to develop a modern air cargo logistics centre.
100. We are actively considering the redevelopment of the Air Mail Centre at the HKIA, which has been operating for 20 years. The Centre will be equipped with modern facilities to significantly enhance its efficiency and capacity. For fiscal planning, I have set aside $5 billion for the project. In addition, we are engaging with the AA and other postal authorities to explore collaboration with a view to maximising the use of the centre’s transit handling capability to foster cross-border logistics and trading activities.
101. Our strategic objective is to develop Hong Kong into a trading, storage, logistics and distribution hub for high-value goods such as pharmaceuticals. Between 2014 and 2016, pharmaceuticals handled by the HKIA grew by over 30 per cent. The AA and the industry will continue to proactively enhance the HKIA’s capacity to handle high-value temperature-controlled goods and adopt the necessary temperature control facilities to cater for the special needs in handling such goods.
102. Hong Kong is a free port. As we upgrade our facilities, we will also move ahead with times and review existing measures timely with a view to facilitating the trade and attaining the greatest economic benefits. At present, trade declaration is not required for transhipment cargo via Hong Kong, and the level of declaration charges for imports and exports are kept at a low level. To encourage the trading and logistics industry to move up the value chain, the Government will cap the charge for each declaration at $200, so as to further lower the cost of importing and exporting high-value goods to and from Hong Kong, and enhance Hong Kong’s advantage as a trading hub. The measure is expected to save the trade $458 million per year and benefit about 900 000 cases.
103. The Hong Kong Maritime and Port Board was established in 2016 to foster the development of our maritime and port sectors and high-value-added maritime services. The Transport and Housing Bureau is now working with the sector to map out strategies and explore measures that will facilitate the development of the maritime industry in Hong Kong. The Government will continue to devote resources to promote our maritime industry. Invest Hong Kong (InvestHK) will also set up a dedicated team to strengthen promotion to attract more renowned maritime enterprises to operate in Hong Kong.
Tourism
104. We strive to develop Hong Kong into a world-class premier tourism destination to ensure the healthy and sustainable development of the industry.
105. I will allocate an additional $396 million to the tourism industry in the new financial year, of which $226 million will be provided for the Hong Kong Tourism Board (HKTB) to implement the Development Blueprint for Hong Kong’s Tourism Industry released by the Tourism Commission last year.
106. The Development Blueprint sets out four development strategies, namely (1) to develop a diversified portfolio of visitor source markets for Hong Kong, with a focus on attracting high value-added overnight visitors; (2) to nurture and develop tourism products and initiatives with local and international characteristics; (3) to develop smart tourism; and (4) to upgrade the service quality of our tourism industry. Highlights include:
(a) supporting the trade in exploring tourism business opportunities arising from the Belt and Road Initiative, the development of the Bay Area, as well as the commissioning of the Guangzhou-Shenzhen-Hong Kong Express Rail Link (XRL) and the HZMB, including organising a tourism forum under the themes of the Belt and Road and the Bay Area with a business matching conference in collaboration with the HKTB;
(b) providing new experience for visitors by incorporating design elements and making use of I&T application as well as light and art installations that blend with district characteristics at major tourist spots;
(c) promoting green tourism by enhancing supporting facilities at popular hiking trails and those with good tourism potentials; and
(d) allocating an additional funding of $30 million to the Travel Industry Council of Hong Kong for enhancing the Pilot Information Technology Development Matching Fund Scheme for Travel Agents.
107. I will also allocate a total of $310 million in the next few years to support the Ocean Park in developing education and tourism projects. For the benefits of local students, the Ocean Park will distribute 10 000 complimentary admission tickets to primary and secondary school students in the coming year.
Business and Professional Services
108. The Government is committed to expanding its network of Economic and Trade Offices (ETOs). At present, we have 12 overseas ETOs. To enhance trade relations with the Association of Southeast Asian Nations (ASEAN), open up the emerging opportunities there, as well as actively participate in and support the Belt and Road Initiative, the Chief Executive announced that an ETO would be set up in Thailand. We are in close liaison with the Thai government to this end. Regarding our proposal to set up new ETOs in countries including Korea, India, Russia and the United Arab Emirates, we are actively following up with the governments concerned.
109. The Government has launched the Professional Services Advancement Support Scheme to provide funding support for business and professional organisations, thereby facilitating external promotion and enhancement of Hong Kong’s professional services. I encourage the professional services sector to work with other sectors in applying for funding and exploring new business opportunities.
Support for Small and Medium Enterprises
110. Hong Kong is home to about 330 000 small and medium enterprises (SMEs), accounting for over 98 per cent of the total number of local enterprises. To help SMEs, including start-ups, grasp economic opportunities and boost their competitiveness, I will enhance the current funding schemes as follows:
(a) injecting $1.5 billion into the Dedicated Fund on Branding, Upgrading and Domestic Sales (BUD Fund);
(b) injecting $1 billion into the SME Export Marketing and Development Funds;
(c) extending the geographical scope of the Enterprise Support Programme under the BUD Fund from the Mainland to include the ASEAN countries. The respective cumulative funding ceiling for enterprises undertaking projects in the Mainland and ASEAN markets will be $1 million;
(d) increasing the cumulative funding ceiling for enterprises under the SME Export Marketing Fund from $200,000 to $400,000, and removing the existing condition on the use of the last $50,000 of grants;
(e) extending the application period for the special concessionary measures under the SME Financing Guarantee Scheme to 28 February 2019; and
(f) in the five financial years from 2018-19, providing a total of $250 million additional funding to the Hong Kong Trade Development Council (HKTDC) for assisting local enterprises (SMEs in particular) in seizing opportunities arising from the Belt and Road Initiative and the Bay Area development, promoting the development of e-commerce, and enhancing Hong Kong’s role as a premier international convention, exhibition and sourcing centre.
External Promotion
111. The Information Services Department, our ETOs overseas and in the Mainland, InvestHK and the HKTDC will strengthen collaboration and take a more proactive approach in promoting our advantages overseas and attracting investments to Hong Kong.
Construction Industry
112. Despite its acclaim for high efficiency, Hong Kong’s construction industry must continue to upgrade through wider adoption of innovative technology to enhance productivity, built quality, environmental performance and site safety. The Construction Industry Council (CIC) established the Construction Innovation and Technology Application Centre last year, leading the industry to embrace innovation through collecting, exhibiting and experiencing the latest construction technologies and applications.
113. Starting this year, the Government will adopt building information modelling (BIM) technology in the design and construction of major government capital works projects. The CIC will formulate BIM technical standards, help equip the industry and encourage the use of such technology in private works projects.
114. Furthermore, we are now assisting the industry in establishing large-scale, highly automated steel reinforcing bar prefabrication yards. The Government will also take the lead in piloting Modular Integrated Construction (MiC) in public projects. We are considering extending the current gross floor area concessions for promoting green and innovation buildings to cover buildings adopting MiC. We are also conducting studies on relevant manufacturing facilities to promote the wider use of such a construction method in Hong Kong.
Construction Innovation and Technology Fund
115. I propose to set up a $1 billion Construction Innovation and Technology Fund to boost the capacities of enterprises and practitioners in the construction industry to adopt new technology, and support the industry to harness innovative technology. Eligible contractors, registered sub-contractors and consultants can apply for financial support from the Fund to acquire the software and hardware as well as to nurture the expertise required for using local and overseas innovative construction technologies, such as BIM, steel reinforcing bar products produced in local prefabrication yards and MiC when carrying out construction projects. The Fund will also support students and practitioners of the construction industry to receive training on innovative construction technologies.
Creative Industries
116. Since 2009, the Government has injected a total of $1 billion into the CreateSmart Initiative (CSI). In the new financial year, the Government intends to inject another $1 billion into the CSI to strengthen support for the development of the creative industries, especially in nurturing youths and helping start-ups, and also to enable the Hong Kong Design Centre to implement initiatives to enhance public understanding of the value of creativity and design.
(To be continued.)
Ends/Wednesday, February 28, 2018
Issued at HKT 12:04
Issued at HKT 12:04
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