III. Diversified Economy
35. For 23 consecutive years, Hong Kong has been ranked as the world’s freest economy by the Heritage Foundation of the United States. Hong Kong has also been crowned as the world’s most competitive economy for two years in a row by the International Institute for Management Development based in Lausanne, Switzerland. The Canadian think-tank Fraser Institute recently published its annual report on Economic Freedom of the World. Since the publication of the report in 1996, Hong Kong has always been ranked the world’s freest economy. In the World Economic Forum’s latest Global Competitiveness Report, Hong Kong has leapt three places to reach the sixth place worldwide. Such recognition does not come easily. We will continue to respect the rules governing the economy and market operations, and promote free trade. At the same time, we will leverage our unique advantages under “One Country, Two Systems”. With a new style of governance of being proactive, a strong sense of commitment embodied in the new roles of the Government, as well as a new fiscal philosophy to manage our finances wisely, we will inject new and continuous impetus to Hong Kong’s economy.
Hong Kong’s Current Economic Situation and Outlook
36. Our economy has been performing very well this year, expanding by 4.0% in real terms year-on-year in the first two quarters. Entering into the third quarter, our positive economic development has continued with export growing notably and domestic demand remaining firm, displaying an encouraging performance. The local labour market has continued to see full employment, with the employed population increasing steadily and the unemployment rate dropping to 3.1% in recent months. This is the lowest level in almost two decades. Household income has generally recorded solid increases, with the earnings of full-time employees in the lowest decile group increasing by 4.5% in real terms after discounting inflation. Inflation has dropped for six consecutive years.
37. Looking ahead to the second half of the year, we believe that our economy will continue with its consistently upward trend. This is partly attributable to the modest growth of the global economy and the steady performance and positive outlook of the Mainland economy, which is particularly important for our export trade. In addition, sanguine local economic sentiment will bring momentum to our economy. Barring abrupt negative shocks externally, our overall economic growth this year is expected to go higher than 3.5%, the mid-point in the earlier forecast range of 3-4%, and would fare better than the annual average of 2.9% over the past decade.
38. While upholding the free market principle, the Government has to actively enhance its role in boosting our economic vibrancy through efforts in various areas, including land supply, talent, government-to-government business, policy directions, investment, business-friendly environment and taxation. In the face of keen global competition, the Government must step up its policy effort in the areas of talent and innovation to ensure sustainable economic development.
Land Supply for Economic Development
39. To maintain Hong Kong’s competitiveness and seize new opportunities, the Government will continue to increase the supply of various types of land, including general industrial/commercial sites, sites for logistics use, and sites for convention and exhibition facilities, etc., in order to meet the needs arising from economic development. Under the 2017-18 Land Sales Programme, the Government has put up three sites, one each for commercial, hotel and industrial uses for sale in the first three quarters. The Government expects to put up a number of commercial sites, located at the Kai Tak Development Area, above the terminus of the Hong Kong Section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link, at the New Central Harbourfront, Caroline Hill Road, Queensway Plaza and Sai Yee Street, etc., for sale starting from next year onwards. These sites will provide a total of about 1.1 million square metres of floor area.
40. In addition to a site of about 3.2 hectares for logistics use in Tuen Mun Area 49, the Government will continue to identify suitable sites for such use at different locations (including Hung Shui Kiu New Development Area, Yuen Long South development, Tuen Mun Areas 40 and 46 and New Territories North). We will also continue to support the Airport Authority Hong Kong (AAHK) in its development of SKYCITY, a facility combining retail, dining and entertainment purposes, to turn the Airport North Commercial District into a unique tourist attraction.
Convention and Exhibition Sites
41. The convention and exhibition industry is crucial to Hong Kong as an international centre for commerce and trade. By attracting world-class and the most prestigious international conventions and exhibitions to Hong Kong, we have reinforced our position as an international hub. Regarding conventions, apart from the annual Asian Financial Forum and the Business of Design Week, we hosted the Belt and Road Summits on the Belt and Road Initiative of our country in the past two years to promote this major national policy as well as the opportunities for international business collaboration and to facilitate the related business matching in Hong Kong. Regarding exhibitions, a number of large-scale international exhibitions are organised in Hong Kong every year. Among them, over 10 are the largest Asian, or even global, procurement platforms for the trades concerned, such as electronics, jewellery, gifts, clocks and watches, lighting, and culture and arts.
42. To maintain and consolidate the international status of our convention and exhibition industry, there is a pressing need for new venues. Otherwise, Hong Kong will miss the opportunities to host some of the large-scale conventions and exhibitions that are either internationally important or newly launched. The current-term Government is determined to tackle this long-standing problem. After a detailed study, we consider that the priority is to build a new convention and exhibition venue of international standard in the proximity of the existing Hong Kong Convention and Exhibition Centre (HKCEC) in Wan Chai. The new venue must be connected to and integrated with the existing HKCEC to maximise the benefits. Therefore, we have decided that for the time being, we will give up the identified site at the Wan Chai Sports Ground announced by the Government earlier. Instead, we will demolish and redevelop the three government buildings next to the HKCEC in Wan Chai North into a new wing that can be connected to and integrated with the existing HKCEC. Based on an initial estimate, the project will add about 23 000 square metres of connected convention and exhibition facilities. Hotel facilities, which complement the convention and exhibition activities, and Grade A office space, which can help alleviate the market shortfall, can be built on top of the new convention and exhibition venue.
43. The proposed new wing of the HKCEC will not be sufficient to make up for the venue shortage. We will continue with the development of a new convention centre above the MTR Exhibition Station of the Shatin to Central Link to provide the market with an additional 15 000 square metres of convention space. As a longer-term plan, when the reprovisioning of the Wan Chai Sports Ground is satisfactorily resolved, the site may be earmarked for the further development of convention and exhibition facilities so as to reinforce and enhance the status of Wan Chai North as a convention and exhibition hub in Asia. We will also continue to explore the feasibility of expanding other existing convention facilities.
44. In redeveloping the site vacated by the government offices buildings in Wan Chai North, we will take the opportunity to thoroughly examine the traffic arrangements. To make full use of the new MTR Exhibition Station of the Shatin to Central Link in Wan Chai North, we propose to upgrade and enhance the footbridge network in Wan Chai North and its proximity to connect the convention and exhibition facilities to the MTR Wan Chai Station, Admiralty Station and the MTR Exhibition Station of the Shatin to Central Link. This will improve the pedestrian walkway network in the area. We will also capitalise on the completion of the Central-Wan Chai Bypass to optimise the traffic arrangements in the vicinity and enhance the efficiency of the road network linking Wan Chai North.
Revitalisation of Industrial Buildings
45. The Government is exploring different approaches to facilitate the transformation of industrial buildings and releasing land resources. Possible options include reactivating the revitalisation scheme for industrial buildings by offering incentives to encourage owners of old industrial buildings to undertake redevelopment or wholesale conversion, and considering how operating space can be provided legally and safely under the scheme for certain industries with development potential, such as cultural, arts and creative industries, and for appropriate community facilities. To address the issue of fragmented ownership in certain old industrial buildings, the Government will consider ways to facilitate the assembly of titles, including examining the threshold of “compulsory sale” applicable to old industrial buildings. The Government is also studying how to facilitate the conversion of the lower floors of industrial buildings for non-industrial purposes, subject to fire safety and building safety requirements, and will review the definition and coverage of “industrial” and “godown” uses in land leases.
46. The continuing development of Hong Kong’s economy requires a supply of talent for different sectors. Nurturing local talent is thus the priority task of the Government. In this connection, we will set up a Commission for the Planning of Human Resources, to be chaired by the Chief Secretary for Administration, for the training of talent for different industries and the formulation of policy initiatives to attract talents from outside Hong Kong more proactively. In addition, the pooling of talents benefits the development of various sectors. The Government will enhance Hong Kong’s training resources and policy initiatives to fully realise our soft-power and strengthen our training capacity in such areas as aviation, maritime, railway, finance, construction, city management, etc. This will not only provide suitable talent for the high value-added and diversified development of Hong Kong in the long run, but also make contribution in training talents for our country as well as the Belt and Road cities and neighbouring areas.
47. Through conducting more government-to-government dialogues and establishing more bilateral and multilateral ties with the Mainland and overseas countries, we will promote Hong Kong’s advantages and attract more Mainland and international enterprises, investors and talent to Hong Kong.
48. On the enhancement of bilateral ties, the Government will actively seek to sign free trade agreements (FTAs), investment promotion and protection agreements (IPPAs) and comprehensive avoidance of double taxation agreements (CDTA) with other economies, including those along the Belt and Road to open up markets, and to further strengthen Hong Kong’s position as an international trade, commercial and financial centre.
49. After years of negotiations, Hong Kong will sign an FTA and an IPPA with the Association of Southeast Asian Nations (ASEAN) in November this year. This will help foster closer bilateral economic ties, boost the confidence of investors and enhance investment flows, thereby benefiting our economy. The Hong Kong and Macao Closer Economic Partnership Arrangement (HK-Macao CEPA) is expected to be signed within this year. We will sign an FTA with Georgia upon the completion of all the necessary internal procedures by both parties. We will continue to negotiate bilateral FTAs with Australia and the Maldives. We will also sign IPPAs with Bahrain and Mexico respectively after both parties have completed all the necessary internal procedures. In addition, we are engaged in a strategic trade dialogue with Britain to discuss its post-Brexit trade relationship with Hong Kong. We will review our bilateral and multilateral economic and trade relationships with our trading partners with a view to creating the most favourable environment and maximising the business opportunities for external trade and investment.
50. The Government has so far concluded CDTAs with 38 tax jurisdictions. Following the signing of an agreement with Saudi Arabia this August, we will continue to identify potential negotiation partners, especially countries along the Belt and Road. We hope to further expand our CDTA network, bringing the total number of such agreements to 50 over the next few years.
51. On multilateral relations, we will maintain our active participation in the affairs of the World Trade Organisation (WTO) and the Asia-Pacific Economic Co-operation (APEC). The Secretary for Commerce and Economic Development (SCED) will be one of the Vice Chairs of the WTO’s Eleventh Ministerial Conference to be held in December this year.
52. We now have 12 Economic and Trade Offices (ETOs) in major economies around the world. To further expand the network of our ETOs and to strengthen our work on external promotion, in addition to the new ones proposed earlier (such as those to be set up in India, Russia and the United Arab Emirates), the Government is planning to set up an ETO in Thailand, which will be our third ETO in ASEAN, after Singapore and Indonesia. This plan takes into account the fact that ASEAN is currently Hong Kong’s second largest merchandise trading partner and the fourth largest services trading partner. It is also an economic region with significant development potential under the Belt and Road Initiative. The addition of an ETO in Thailand will make the ETO network in ASEAN on par with that in the European Union.
Enhanced Co-operation with the Mainland
53. Regarding the Mainland, we have upgraded the network and functions for our offices in the Mainland. At present, our five offices in the Mainland cover 31 provinces, municipalities and autonomous regions, with each office having at least two liaison units. In future, these offices and their 11 liaison units will enhance government-to-government connection both at the central and local levels, strengthen the promotion of Hong Kong in the Mainland and establish platforms for direct communication between Hong Kong’s business sector and relevant Mainland authorities. This will further enhance the close relationship between Hong Kong and the Mainland, and support Hong Kong people and businesses to fully grasp the development opportunities in the Mainland.
54. In addition, the DoJ is actively liaising with the Mainland authorities on proposals for facilitating the resolution of cross-boundary civil and commercial disputes through a clear and user-friendly legal regime with the aim to further safeguard the rights of the parties from the two places. In this regard, the DoJ will explore with the Supreme People’s Court and relevant authorities appropriate ways to expand the scope of the arrangements on mutual legal assistance between the two places in civil and commercial matters. Furthermore, the DoJ will soon renew the “Co-operative Arrangement on Legal Matters” with the Shenzhen Municipal People’s Government to enhance legal collaboration and exchanges between Hong Kong and Shenzhen.
55. The DoJ is also stepping up its overseas promotion of Hong Kong’s international legal and dispute resolution services through co-operation with international organisations such as the United Nations Commission on International Trade Law (UNCITRAL) and participation in the work of the “Friends of the Chair on Strengthening Economic and Legal Infrastructure” under the Economic Committee of APEC.
56. In the face of competition from other economies as well as the rise of protectionism in recent years, Hong Kong is facing increasingly grave challenges. We must develop a high value-added and diversified economy. This embraces the development of new economic sectors such as innovation and technology and creative industries, and capitalising on the opportunities arising from the national Belt and Road Initiative as well as the Guangdong-Hong Kong-Macao Bay Area (Bay Area) development, in order to generate new impetus for our future economic development.
Opportunities Arising from the Belt and Road Initiative
57. The Belt and Road Initiative is a new engine for Hong Kong’s economic development. In the current-term Government, the Commerce and Economic Development Bureau (CEDB) has been tasked to co-ordinate the work of the HKSAR Government on the Belt and Road Initiative. The SCED is proactively steering the next stage of work on the Belt and Road Initiative. To ensure that the CEDB will be able to take forward the work on the Belt and Road Initiative more effectively and on a sustained basis, we will provide additional resources to reinforce the manpower for the Belt and Road Office. The SCED has also revamped the Trade and Industry Advisory Board into a broader platform to facilitate liaison with enterprises and various professions and to collect their views more effectively.
58. To fully participate in and capitalise on the opportunities brought by the Belt and Road Initiative, and to leverage our edge under the “what the country needs, what Hong Kong is good at” policy, the HKSAR Government will step up communication with the Central Authorities to gain a deeper understanding of the policy directions and implementation of the Belt and Road Initiative. We will also co-operate with enterprises and chambers of commerce to translate policies into business opportunities. We are in discussion with the Central Authorities with the aim of entering into an agreement of Hong Kong’s full participation in the Belt and Road Initiative with the National Development and Reform Commission (NDRC) by the end of this year. The agreement will cover various areas such as finance, infrastructure, economic and trade facilitation, people-to-people bonds, project interfacing, dispute resolution as well as the Guangdong-Hong Kong-Macao Bay Area development. Specific measures will be drawn up to lay down the principles and provide a blueprint for mutual co-operation. Among these measures, we will explore the establishment of an information sharing platform for Belt and Road projects so that enterprises will have a better grasp of relevant information to facilitate more effective project interfacing and enterprise collaboration. The HKSAR Government will also establish a joint working mechanism with the NDRC for direct and regular dialogues, to strengthen communication and co-operation and to oversee the implementation of the agreement.
59. The second Belt and Road Summit (the Summit), jointly organised by the Government and the Hong Kong Trade Development Council (TDC), is a significant initiative in driving the Belt and Road Initiative. The second Summit held on 11 September this year gained strong support from the Central Authorities and attracted the active participation of many countries and various sectors in Hong Kong. Over 3 000 government representatives of different countries and leaders of different sectors from more than 50 countries and regions took part in the Summit. The business matching sessions, in particular, received an overwhelming response from the business sector. As many as 170 investment projects in transport and logistics infrastructure, energy, natural resources and public utilities, and urban development were featured through project presentations and networking sessions, with more than 600 participants. In addition, one-to-one business matching meetings were arranged for over 200 companies, including project owners, investors and professional services providers. The Summit successfully achieved its objective of “turning vision to action, fostering concrete co-operation under the Belt and Road Initiative”. Building on the success of the Summit this year, the HKSAR Government plans to continue to work with the TDC and stage the event every year, making it a key platform to promote and foster Hong Kong as an international commerce and trading platform for the Belt and Road Initiative.
Development of the Guangdong-Hong Kong-Macao Bay Area
60. After the signing of the co-operation framework agreement by the governments of Guangdong, Hong Kong and Macao, and the NDRC, witnessed by President Xi Jinping, on 1 July this year, we have basically completed the drafting of the development plan for a city cluster in the Guangdong-Hong Kong-Macao Bay Area (the Plan). Soon to be promulgated by the State Council, the Plan will provide a blueprint for building a world-class city cluster through complementary co-operation among the three places. The HKSAR Government will actively participate in taking forward the development of the Bay Area, so as to create favourable conditions for diversifying our industries, in particular for promoting innovation and technology development. Moreover, we will seek further facilitation measures for Hong Kong people to study, work, and start up and operate business, live and retire in the Bay Area and thereby facilitating the flow of people, goods, capital and information between Hong Kong and other cities in the Bay Area and making it a quality living circle for Hong Kong people.
61. To more effectively take forward various tasks related to the development of the Bay Area, the Steering Committee on Co-operation with the Mainland, chaired by the Chief Secretary for Administration, will be renamed as the Steering Committee on Taking Forward Bay Area Development and Mainland Co-operation. This will enable us to capitalise on the unique advantages of Hong Kong in the Bay Area and formulate concrete work plans in a more focused manner. The Constitutional and Mainland Affairs Bureau will set up a Guangdong-Hong Kong-Macao Bay Area Development Office, which will be responsible for co-ordination with the relevant central authorities, the Guangdong Provincial Government, the Macao SAR Government, and the relevant bureaux and departments of the HKSAR Government. The office will proactively approach trade associations, professional bodies and relevant stakeholders to co-ordinate effort related to the implementation of the Plan. Additional resources will be allocated to the office for undertaking research and publicity on the Bay Area development to assist Hong Kong people and enterprises to discover new opportunities.
62. The current-term Government is committed to promoting two-way investments. Invest Hong Kong (InvestHK) under the CEDB will maintain closer ties with the HKSAR’s offices overseas and in the Mainland to identify targets and proactively attract enterprises, including start-ups, to Hong Kong. According to the latest annual survey jointly conducted by InvestHK and the Census and Statistics Department, there are over 8 200 business operations in Hong Kong with parent companies overseas and in the Mainland. Among them, 1 413 have their regional headquarters in Hong Kong, representing an increase of 2.5% over the same period last year. The Government also encourages local enterprises to explore investment opportunities overseas and in the Mainland. This will in turn add momentum to the development of professional services in Hong Kong.
A Business-friendly Environment
63. To create an environment for all businesses to thrive, the Government must devote effort to business facilitation. Through the Business Facilitation Advisory Committee, we will improve our regulatory regimes and provide an effective platform for communication across departments and sectors so that the industries can put forward their views on regulatory matters to the Government.
64. Our business facilitation work has won recognition worldwide. In the past ten years, Hong Kong has all along been ranked by the World Bank’s Doing Business report among the top five easiest places to do business across the globe. Our ranking last year further moved one notch up to the fourth place. This achievement is made possible only by hard effort. Looking ahead, we must enhance our business facilitation effort and remove red tape for various industries so as to enhance Hong Kong’s competitiveness. We will also step up our dialogue with the World Bank and share the results of our work in this area with them so that Hong Kong will be able to maintain its position among the world’s top ranking economies in the Doing Business report.
New Taxation Proposal
65. We must maintain a simple and low tax regime, which is one of the important competitive advantages of Hong Kong. In the face of new dynamics arising from economic restructuring and global competition, we should strategically utilise our tax measures to enhance Hong Kong’s competitiveness by promoting the development of our industries and economic diversification.
66. The Financial Services and the Treasury Bureau will soon implement the two specific tax measures put forward in my Election Manifesto. On the two-tier profits tax system, the profits tax rate for the first $2 million of profits of enterprises will be lowered to 8.25%, or half of the standard profits tax rate, instead of 10% as proposed in my Election Manifesto. Profits above that amount will continue to be subject to the standard tax rate of 16.5%. The tax rate for the first tier, which is even lower than that proposed in my Manifesto, will provide further tax relief to small and medium-sized enterprises (SMEs). To ensure that the tax benefits will target SMEs, we will introduce restrictions such that each group of enterprises may only nominate one enterprise to benefit from the lower tax rate. To encourage research and development (R&D) investment by enterprises, the ITB will consult the industries on additional tax deduction for R&D expenditure. It is proposed that the first $2 million eligible R&D expenditure will enjoy a 300% tax deduction with the remainder at 200%. The implementation of the above two initiatives requires the formulation of the operations details and the enactment of legislation. We will submit the draft legislation as soon as possible, with a view to implementing the proposals in 2018.
67. The Government will maintain communication with stakeholders with the aim to formulate forward-looking tax policies and initiatives to promote the economic development of Hong Kong.
68. The above initiatives of the Government apply to all trades and industries. For individual industries, we need to draw up more concrete policies and measures depending on how developed they are. I would like to first talk about two emerging industries in respect of which we have a competitive edge and much potential: innovation and technology and the creative industries.
Innovation and Technology
69. Since the establishment of the ITB in November 2015, the Government has been actively promoting scientific research and the development of innovation and technology. Our efforts in these two years are beginning to see results. Capitalising on our advantages of “One Country, Two Systems”, our geographical location, business environment, legal system, intellectual property, R&D capability, financial services, etc., and given the opportunities brought by the National 13th Five-Year Plan and the Guangdong-Hong Kong-Macao Bay Area development, Hong Kong has huge potential to become an international innovation and technology hub. Nevertheless, we must keep reinforcing and upgrading our capability, provide a conducive eco-system for innovation and technology, drive entrepreneurship through R&D results, foster economic development and improve people’s daily lives.
70. Innovation and technology is not a single industry, but a new model of development. The development of innovation and technology can lead to new industries and create wealth, provide more employment for young people and improve people’s daily lives. To catch up in the innovation and technology race, the Government will step up its efforts to develop innovation and technology in eight major areas.
71. First, increase resources for R&D. We have set a goal to double the Gross Domestic Expenditure on R&D as a percentage of the Gross Domestic Product to about $45 billion a year (i.e. from 0.73% to 1.5%) by the end of the current Government’s five-year term of office. The Innovation and Technology Fund has doubled its financial support for innovation and technology from $730 million in 2013-14 to over $1.5 billion in this financial year. From 2013-14 to 2016-17, the research funding provided by the University Grants Committee (UGC)/Research Grants Council (RGC) has increased by 18% from $4.46 billion to $5.28 billion. We have set aside no less than $10 billion as funding for university research, which will be disbursed upon the completion of the review on research funding by the UGC task force led by Professor TSUI Lap-chee. But before that, the funding provided by the RGC need not be confined to the investment return of the Research Endowment Fund. We can also draw down part of the principal as appropriate. To give private companies an incentive to increase investment in technological R&D, we will provide additional tax deduction for expenditure incurred by enterprises on R&D. The first $2 million eligible R&D expenditure will enjoy a 300% tax deduction and 200% for the remainder. With this measure, we hope to reverse the ratio of public sector versus private sector expenditure on R&D from government-led to public-private participation, which will make R&D funding more sustainable.
72. Second, pool together technology talent. With its blend of Chinese and Western cultures, top-notch tertiary institutions and outstanding scientific research achievements, Hong Kong is the prime location for establishing an international hub of scientific research talent. To train and pool together more technology talent and to encourage them to pursue a career in innovation and scientific research, the ITB will launch a $500 million “Technology Talent Scheme” in the coming year, one of the initiatives is to establish a “Postdoctoral Hub” to provide funding support for enterprises to recruit postdoctoral talent for scientific research and product development. With an injection of $3 billion into the Research Endowment Fund, the Education Bureau (EDB) will provide studentships for local students admitted to UGC-funded research postgraduate programmes to incentivise more local students to engage in research work, thereby promoting the development of innovation and technology. In addition, we will provide funding to subsidise local enterprises on a matching basis for training their staff on advanced manufacturing technologies, especially those related to Industry 4.0, with a view to driving “re-industrialisation”. We will also expand the current Internship Programme to benefit more enterprises and Science, Technology, Engineering and Mathematics (STEM) graduates.
73. The Government has been striving to attract top overseas scientific research institutions to Hong Kong. Last year, the Massachusetts Institute of Technology set up an innovation node and the Karolinska Institutet from Sweden established a research centre in Hong Kong. The presence of these renowned institutions bears testimony to the fertile ground in Hong Kong for developing innovation and technology. In the past three months, several other internationally renowned institutions approached me directly and expressed interest in setting up key collaborative technology platforms in Hong Kong. Indeed, we have sufficient scientific research capabilities to attract world-acclaimed universities, R&D institutes as well as technology enterprises to collaborate and carry out forward-looking research projects that will benefit the society. Such collaborative effort will not only create a pool of top talent around the world in Hong Kong, but also raise the standard of our technology talent.
74. Third, provide investment funding. The Innovation and Technology Commission rolled out a $2 billion Innovation and Technology Venture Fund Scheme last month to co-invest, on a matching basis, with venture capital funds in local technology start-ups. Other public bodies under the Government, such as Science Park and Cyberport, also have different funding schemes to support start-ups. I believe that, given time, local enterprises seeking outlets for capital will be more than willing to invest in technology development.
75. Fourth, provide technological research infrastructure. We are now working with the Shenzhen Municipal People’s Government to jointly develop the Lok Ma Chau Loop into the “Hong Kong-Shenzhen Innovation and Technology Park”, with a view to providing the largest-ever innovation and technology park in Hong Kong. The development of the Guangdong-Hong Kong-Macao Bay Area and collaboration between Hong Kong and Shenzhen will connect the upstream, midstream and downstream sectors of innovation and technology industries, thereby developing an international innovation and technology hub in the Bay Area. In addition, the Data Technology Hub and the Advanced Manufacturing Centre in the Tseung Kwan O Industrial Estate, as well as the expansion of Science Park, will be completed from 2020 onwards to provide the infrastructure critical for driving “re-industrialisation”. The “InnoCell”, a residential building for talent adjacent to Science Park to be completed in 2020, is another key supporting facility. In support of innovation and technology start-ups, apart from our continuous support to the Shenzhen Municipal People’s Government in respect of its youth entrepreneur hubs in Qianhai and Nanshan, the Space Sharing Scheme for Youth is also in the pipeline. In the first phase of the scheme, a floor area of some 60 000 square feet will be made available for start-ups and other uses at no more than one-third of the market rent.
76. Fifth, review existing legislation and regulations, so as to remove outdated provisions that impede the development of innovation and technology. With the rapid advancement in technology, new economic models such as the sharing economy are becoming increasingly popular in the Mainland and overseas cities in recent years, leading to the emergence of many new economic activities. I will ask the Policy Innovation and Co-ordination Unit to be established to work with all bureaux to proactively review the policies and legislation within their policy purview to bring them up to date and remove red tape in order to foster the development of a new economy.
77. Sixth, open up government data. In the digital era, we need to expedite the opening up of government data for use as raw materials in technological research, innovation and the development of smart city. At present, the Government provides over 3 100 datasets and 1 000 application programming interfaces for free use by the public. Government departments will proactively open up datasets in various areas to bring convenience to the public and to facilitate technological research as well as the development of various industries. The Hospital Authority will also establish a Big Data Analytics Platform to identify useful information that will support the formulation of healthcare policies, facilitate biotechnological research, and improve clinical and healthcare services. This will promote innovation in healthcare services.
78. Seventh, Government to lead changes to procurement arrangements. We will explore the inclusion of innovation and technology as a tender requirement and will not award contract only by reference to the lowest bid, so as to encourage local technological innovation. The ITB will also make use of its block vote of $500 million to promote the use of technology by government departments to enhance service quality. Launched in mid-2017, the scheme has received very positive responses from departments. The ITB has just agreed to provide $100 million to fund more than 20 applied technology projects or studies proposed by departments. Some of these projects will commence in this financial year.
79. Lastly, popular science education. Apart from disbursing one-off grants to public sector primary and secondary schools in the 2015/16 and 2016/17 school years respectively, the EDB has updated the curricula of the Science, Technology and Mathematics Education Key Learning Areas, with a view to enhancing the ability of students in the integration and application of knowledge and skills as well as nurturing their creativity, collaboration and problem-solving capabilities. In addition, the EDB will soon complete the drafting of a supplementary document on “Computational Thinking – Coding Education” for use by schools. For the professional development of teachers, starting from the current school year, the EDB will arrange a series of intensive training programmes for the leadership tier and middle managers of all primary and secondary schools to enhance their capacity in planning and implementing school-based activities related to STEM. The STEM Education Centre, newly set up in the Arts and Technology Education Centre at Lok Fu, Kowloon, will commence operation shortly to provide training and relevant teaching support to primary and secondary school teachers. To provide more opportunities for students to apply what they have learnt and share their learning with each other, we will collaborate with tertiary institutions and other relevant organisations to arrange more large-scale quality activities for students, e.g. education fairs related to science and technology. The Leisure and Cultural Services Department will also update the permanent exhibitions of the Hong Kong Science Museum to further promote STEM education using the museum’s facilities.
80. Smart city development can improve people’s daily lives and make Hong Kong a more liveable city. The Government has just completed the consultation on the Smart City Blueprint, and the responses from various sectors are very positive. We are studying the feedback received and will make public the Smart City Blueprint for Hong Kong within this year, ahead of the original schedule. Prior to this, we will invest $700 million to push ahead with the following key infrastructure projects for smart city development:
- provide an “eID” for all Hong Kong residents so that everybody can use a single digital identity and authentication to conduct government and commercial transactions online. This will foster the development of a new economic service model that place emphasis on direct interface with residents and consumers. It will also provide a key digital infrastructure for smart city development;
- launch a pilot Multi-functional Smart Lampposts scheme at selected urban locations to support the building of a smart city with city-wide coverage of data and network. The Smart Lampposts will provide convenient data services and collect various real-time city data, enhance city and traffic management, and complement the future infrastructure development for 5G mobile communications services in Hong Kong; and
- reform the development technology of e-Government systems and build a big data analytics platform to support the adoption of cloud services and new information technology by government departments, thus enhancing operation efficiency and cyber security.
81. To become a smart city, we must strive to achieve universal broadband coverage across the territory as far as possible. Currently, the household broadband penetration rate in Hong Kong is over 90%, among the highest in the world. Most people can now enjoy high-speed quality broadband services. However, for villages, remote locations in the New Territories and the outlying islands, the progress of network coverage by telecommunications companies is slow due to the high costs of network installation and a small base. In view of this, I propose that the Government takes the lead to provide telecommunications companies with financial incentives in the form of subsidies to encourage the extension of fibre-based network to villages in remote locations. The plan will cover about 380 villages currently without high-speed broadband network coverage and is expected to benefit nearly 170 000 villagers. This initiative not only demonstrates the people-oriented philosophy of the current-term Government, but also provides the telecommunications infrastructure necessary for the conservation and revitalisation of rural and remote areas in future.
82. “Smart Mobility” is an important element for Hong Kong’s development into a smart city. Through the application of technology, Smart Mobility aims to facilitate the public in planning their travel arrangements, enable people to make the best use of public transport services and alleviate road traffic congestion. The Government will continue to develop intelligent transport systems and integrate various existing transport mobile applications of the Transport Department into an “all-in-one” platform to facilitate one-stop search for walking, driving, public transport and real-time traffic information by the public. Starting from 2019-20, we will also install a new generation of on-street parking meters which accept payment of parking fees through multiple means, including remote payment through mobile applications. These parking meters will also be equipped with sensors to detect whether a parking space is occupied, and provide real-time information to assist motorists in finding vacant parking spaces. This will reduce the need for vehicles to circulate on roads to look for parking spaces. Furthermore, the Transport Department is studying the installation of in-vehicle units so as to allow motorists to receive timely traffic information, pay tunnel fees without stopping the vehicles, etc. The Transport Department expects to complete the study in mid-2018 and will explore ways to promote the installation of such devices as soon as practicable.
83. To press ahead with innovation and technology development at full steam, I will personally lead a high-level, inter-departmental Steering Committee on Innovation and Technology to examine and steer measures under the eight areas of innovation and technology development as well as Smart City projects. The objective is to take forward innovation and technology development in Hong Kong in an expeditious and efficient manner.
84. Our creative industries have immense development potential. They are not merely a cluster of emerging professions, mainly in the design, arts, cultural and communications sectors that are popular among young people, but are also a powerhouse that will drive the economy, add value and make Hong Kong a more attractive international city.
85. From 2005 to 2015, the value added in nominal terms contributed by creative industries increased at an average annual rate of 5.4%. The number of employees and establishments in these industries also increased by around 15% and 39% respectively. In 2015, the value added in nominal terms contributed by creative industries exceeded $57 billion, accounting for 2.5% of our GDP. These industries also employed over 135 000 persons.
86. Of the eight sectors that constitute the creative industries, the growth in the design industry is very impressive. From 2005 to 2015, the growth in the value added reached 314%, representing an average annual growth of 15%. In monetary terms, the value added increased from $1 billion in 2005 to $4.1 billion in 2015. The number of employees and establishments in the design industry increased by 68.8% and 125% respectively in the same period.
87. With their international outlook and innovative thinking, Hong Kong’s professional design talents are able to assist their clients in enhancing their competitiveness, branding and adding value to their products and services. We can make use of the Guangdong-Hong Kong-Macao Bay Area to proactively promote the further development of our creative industries. For example, by strengthening co-operation in design, we can realise the concept of “Shenzhen Going Global, Hong Kong Attracting Foreign Investments”. Another example is to jointly promote the production of Cantonese films and television programmes in Guangdong, Hong Kong and Macao by further opening up the market and encouraging investment, promoting co-operation and exchange among talents, and fully capitalising on Hong Kong’s role as a talent hub in the creative industries.
88. We can also further enhance our policies, improve services and products through creativity and treat creativity as a “problem-solving” tool in public administration and business operation. The Government is pleased to take the lead, and encourage enterprises and the community to place more emphasis on creating and design so as to shape Hong Kong as a creative city that values design. In the coming year, the CEDB will in partnership with the Civil Service Training and Development Institute include creativity and design thinking as key components of training programmes for directorate officers, and step up training on creativity and problem-solving capability. Apart from training, we put equal weight on practical application. In collaboration with the EU, the CEDB will proactively work with key public service providers within the Government to redesign their workflow and their communication channels with the public through effective application of design thinking in a bid to further enhance efficiency and meet the public’s needs.
89. The nurturing of creativity and design thinking should begin at an early age. Also, education programmes on creativity should not be confined to nurturing artists, designers or architects. Design thinking should become a problem-solving capability and a new way of thinking that promotes value adding and advocates inter-disciplinary collaboration. We need to place more emphasis on the promotion of design and creativity both within and outside our education system. As regards professional design education, there are now no less than 11 publicly-funded programmes relating to design in Hong Kong. They range from advanced diploma programmes to postgraduate programmes funded by the University Grants Committee. The Hong Kong Design Institute and the Technological and Higher Education Institute of Hong Kong under the Vocational Training Council provide 15 programmes, covering a wide range of design subjects such as clothing design, interior design, fashion design, furniture design, stage design and visual design. We must also promote design and creativity training to other professions and apply them to the operation and management of enterprises. Such training can even become a kind of on-the-job administration education and post-school training. We encourage and support enhanced co-operation with local and overseas organisations to jointly take forward the development in this respect.
90. Looking forward, we will further the development of our creative industries, in particular the design industry, by leveraging our existing advantages and the provision of financial support. We suggest injecting $1 billion into the CreateSmart Initiative to strengthen our support for the development of the design industry and the creative industries, especially the nurturing of young talent, and enhance the community’s awareness of creative thinking and design capability.
91. In this regard, the Hong Kong Design Centre (HKDC) has always been a close partner of the Government in promoting design and related creative industries. Since the establishment of the HKDC in 2001, the Government has provided $300 million in total to fund its operation, with the aim of nurturing design talent, as well as enhancing and promoting the image of Hong Kong’s design industry in the region and around the world. Such efforts include the hosting of the Business of Design Week, which has attained a very high reputation. In recent years, the HKDC has been commissioned by the Government to administer the Design Incubation Programme and the Fashion Incubation Programme. The HKDC also runs the Hong Kong Young Design Talent Award to nurture new blood for the local design sector. As design is becoming highly valued, we see room for promoting design thinking among people of different age groups through the HKDC. We plan to provide more resources for the HKDC to implement a series of measures to reinforce Hong Kong’s status as a city of design excellence in Asia.
92. There is much room for development by combining design and industry. There are also opportunities at the district and retail levels. We will actively look into ways for young designers to make full use of the traditional base for apparel and fabrics in Sham Shui Po District to create new synergy. This can drive the local economy and enrich the tourism resources of the district. At the same time, this can foster the development of Hong Kong’s fashion design industry.
93. Apart from co-operation in innovation and technology, Hong Kong and Shenzhen have enormous potential for collaboration in their design industry. The construction of the Qianhai HK-SZ Design Innovation Hub, which commenced about a month ago, is an excellent example. We will liaise more closely with other design cities in the Mainland and overseas, and promote Hong Kong’s position as a creative hub, thereby opening up new markets for Hong Kong.
94. As for film making, the Government has adopted a multi-pronged approach in promoting the development of the film industry. Initiatives include encouraging local film production, nurturing talent, audience building and establishing the Hong Kong film brand name both in the region and overseas. Established in 1999, the Film Development Fund aims to provide funding for various initiatives conducive to the development of the film industry. Since 2007, the Government has injected $540 million into the Film Development Fund and supported the production of a great number of films through this Fund. Many of these films have attained encouraging achievements, winning a total of over 110 local and international awards. In the light of changes in the film market in the past decade, we will review the operation of the Film Development Fund this year with a view to driving the further development of the local film industry and nurturing more professionals for film production or post-production, so that the industry will be better able to respond to market needs.
95. The publishing industry has a long and distinguished history in Hong Kong. To enable Hong Kong publishers to tap into the Mainland market, the Government will continue to explore feasible measures with the relevant Mainland authorities. Meanwhile, the EDB is promoting a reading culture which will be conducive to providing new impetus for our publishing industry.
96. Creative industries and intellectual property are inseparable. Our intellectual property regime is the cornerstone for the long-term development of the creative industries. The Government will continue to strengthen the regime, promote the development of Hong Kong as a regional intellectual property trading centre and encourage commercialisation of intellectual property so that the development of our creative industries can further diversify.
97. To reinforce and enhance Hong Kong’s status as a global financial centre, an offshore Renminbi (RMB) business hub and an international asset management centre, we will capitalise on the opportunities arising from the Belt and Road Initiative and the Bay Area and make the best use of Hong Kong’s advantages to promote diversified development of our financial market. Through continuous development of various existing financing channels in Hong Kong and timely updating of the regulatory regime, we will develop Hong Kong into a premier financing platform for new business enterprises in the region so as to cater for the new economic environment. On this front, the Financial Leaders Forum chaired by the Financial Secretary will put forward strategic and forward-looking proposals, which will be followed up by relevant departments. The Government will allocate more resources to the Financial Services Development Council to enhance its role in conducting strategic research, formulating recommendations, promoting market development and nurturing talent. Following consultation on the concept of introducing a new board earlier, the Hong Kong Exchanges and Clearing Limited is now considering the views collected with a view to drawing up a more detailed proposal for consultation with the market.
98. To demonstrate our support for sustainable development and determination to combat climate change, and to promote the development of green finance in Hong Kong, we will take the lead in arranging the issuance of a green bond in the next financial year. Through this initiative, we seek to encourage investors in the Mainland and along the Belt and Road as well as international investors to arrange financing of their green projects through our capital markets. With our encouragement, the AAHK has announced the issuance of a green bond in Hong Kong. We will continue to encourage public sector bodies to follow suit and promote the establishment of green bond certification schemes that meet with international standards by local entities.
99. Together with the industry and the Mainland authorities, we will continue to explore expansion of the channels for two-way flow of cross-border RMB funds to reinforce and enhance the status of Hong Kong as a global hub for offshore RMB business. In deepening mutual financial market access between Hong Kong and the Mainland, we will explore the possibility of including in the two-way mutual access mechanism a wider range of investment products, such as exchange-traded funds, and extending the Mainland-Hong Kong Bond Connect to cover Southbound Trading.
100. Maintaining investor confidence in our financial markets is crucial to the development of Hong Kong as an international financial centre. Building on the existing foundation, we will strengthen the risk prevention and resilience of our financial system and ensure that our financial market mechanism is on par with international standards. We will establish a Policy Holders’ Protection Scheme to provide policy holders with a safety net, so as to boost public confidence in the insurance sector.
101. The Government and the Mandatory Provident Fund Schemes Authority (MPFA) have commenced work on the eMPF, a centralised electronic platform which will enhance the administrative efficiency of the Mandatory Provident Fund schemes, thereby providing more room for fee reduction. A working group comprising all the 14 trustees who are operating MPF schemes has been formed to steer the development of the eMPF.
102. As an international financial centre with a highly-developed information and communication technology sector, Hong Kong is an ideal place for the development of financial technologies (Fintech). We will continue with our efforts to promote local Fintech development and encourage the industry to experiment with innovative businesses. Following in the steps of the Hong Kong Monetary Authority (HKMA), the Securities and Futures Commission and the Insurance Authority just introduced the Supervisory Sandbox in September to facilitate the launch of new Fintech products and services in the market. The banking industry is exploring the establishment of a Know-your-customer Utility (KYCU) to enhance the efficiency of banks in conducting customer due diligence.
103. Regarding payment services, 13 stored value facilities (SVF) service providers issued with licences last year are now actively promoting and enhancing their payment products and services. To further promote market development and facilitate person-to-person (P2P) payments, the HKMA will launch the Faster Payment System (FPS) next year to allow banks and SVF service providers to conduct real-time settlement and transfer on a single payment platform, thereby encouraging merchants to adopt more varied innovative retail payment products for the benefit of consumers. In support of the further development of the sector, the Government will actively promote the use of new payment channels (such as smartphone e-wallet) for various government fees and charges in future. We will also continue to encourage stakeholders to connect the financial institutions with various Fintech talents so as to facilitate the training and exchange of talents.
Transportation Services and Logistics Industry
104. The Hong Kong International Airport (HKIA) is an important driving force for local economic growth, consolidating Hong Kong’s status as an international maritime and aviation centre and a hub for people flows and cargo flows. We must capitalise on the unique advantages of Hong Kong in terms of its geographical location and infrastructure, and continue to enhance the HKIA’s hardware and software. Regarding hardware, the focus is on enhancement of the passenger and cargo handling capacity. Measures include actively assisting the AAHK in implementing the Three-Runway System and enhancing the airport infrastructure and intermodal facilities. As for software, the Government has signed a Memorandum of Co-operation with the Civil Aviation Administration of China, and the Civil Aviation Authority of Macao in July this year to further enhance the efficiency of air traffic management in the Pearl River Delta region and carry out detailed technical analysis to facilitate the optimisation and synergised development of the airspace in the Bay Area. The Government will also develop high value-added aviation services including aircraft leasing and related business, and continue to expand Hong Kong’s aviation network.
105. The booming growth of e-commerce has generated an ever-increasing demand for cross-border logistics and delivery services, in particular air mail and transshipment services. At present, the Air Mail Centre located at the HKIA has to process a vast volume of air mail every day. As it has been almost 20 years since it commenced operation, there is room for enhancement in its processing capacity for air mail. In view of this, Hongkong Post is holding discussions with the AAHK and other postal authorities on the expansion of the Air Mail Centre at the HKIA in order to enhance its capacity and operating efficiency to cater for the future growth in air mail volume.
106. To entrench Hong Kong’s position as a diversified international maritime centre, the Hong Kong Maritime and Port Board established by the Government is actively working with the industry to formulate a comprehensive strategy to bolster and promote the development of Hong Kong’s maritime industry and high value-added maritime services (including marine insurance, maritime legal and arbitration services, ship finance, ship management and ship registration), and encourage overseas maritime enterprises to set up presence in Hong Kong. Furthermore, the Transport and Housing Bureau signed a Memorandum of Understanding with Maritime London in September this year to further strengthen liaison and collaboration between Hong Kong and the United Kingdom in promoting high value-added maritime services and training of maritime practitioners. The Government is also actively implementing various trade facilitation measures for the shipping industry, including strengthening the services of the Hong Kong Shipping Register by providing timely services to overseas shipowners through the Government’s Economic and Trade Offices overseas and in the Mainland, thereby enabling their ships to set sail promptly upon their registration with the Register.
107. Over the years, tourism has remained one of the pillar industries of Hong Kong. Visitor arrivals increased by 1.9% year-on-year in the first eight months of this year. The current-term Government has set a clear vision and mission to press ahead with the development of Hong Kong into a world-class premier tourism destination. Apart from maintaining a steady growth in visitor numbers, we are more concerned about attracting more high-yield overnight visitors to ensure the balanced, healthy and sustainable development of the tourism industry.
108. In August this year, the HKSAR Government and the China National Tourism Administration signed the “Agreement on Further Enhancement of Tourism Co-operation between Mainland and Hong Kong”. Build on the existing foundation, the Agreement aims to further enhance the exchanges and collaboration between the two places. Measures include launching of promotional campaigns in the Belt and Road countries and Bay Area cities jointly, developing “multi-destination” tourism products to achieve a win-win outcome, promoting the development of Mainland-Hong Kong cruise tourism and enhancing co-operation in tourism regulation, etc.
109. The Financial Secretary recently convened a high-level tourism co-ordinating meeting in early October at which he directed bureaux and departments to drive the implementation of various tourism-related measures through closer co-operation and co-ordination.
110. Adopting the four development strategies set out below, the current-term Government will formulate and implement relevant measures and initiatives in a holistic and orderly manner to boost the further development of tourism:
- We will develop a diversified portfolio of visitor source markets for Hong Kong, with an emphasis on attracting high-yield overnight visitors. Efforts will include assisting the industry in seizing the tourism opportunities brought by the Bay Area development, organising a “Belt and Road” tourism forum with the participation of Belt and Road countries and the relevant tourism sectors so as to help the local industry expand their visitor source markets, and providing continuous support to the Hong Kong Tourism Board (HKTB) in its promotion of Hong Kong’s tourism features and image, including “multi-destination” products and itineraries, to source markets. For the medium and long term, we will discuss with the China National Tourism Administration and the tourism industry to continue to deepen tourism collaboration between the Mainland and Hong Kong;
- To develop and explore tourism products and projects with local and international characteristics, including cultural tourism, heritage tourism, green tourism and creative tourism to enrich visitors’ experience. For example, in the short and medium term, we will explore different green tourism attractions and collaborate with local districts to promote the development of sustainable green tourism, and examine ways to improve their supporting transport arrangements. We will also explore the feasibility of co-collaborating with creative media schools to enable visitors to experience, through the use of multimedia and creative technology, the historical landscape and community culture of places with a rich historical culture amidst the modern urban setting of these places today. This would enrich our cultural and heritage tourism products. In addition, we will consolidate and enhance Hong Kong’s status as a travel destination for meetings, incentive travels, conventions and exhibitions (MICE) tourism and a regional cruise hub. We will also strive to attract different kinds of new and mega events to Hong Kong;
- To promote smart tourism. Short- and medium-term measures include improving Wi-Fi facilities in tourist hotspots, exploring ways to use smart technology to provide travel facilitation services for tourists at suitable attractions and border control points, such as sending messages to inbound tourists’ mobile phones to provide them with basic and useful tourist information and public transport information of different attractions for itinerary planning. We will also encourage the industry to make good use of innovative technology to enhance their competitiveness; and
- To upgrade the service quality of our tourism industry and seek the LegCo’s early approval of the Travel Industry Bill to safeguard the rights of tourists. We will also promote good business practices in the industry to maintaining Hong Kong’s image as a tourist destination.
Construction and Related Professional Services Sectors
111. For the Hong Kong construction sector, the Belt and Road Initiative has brought visions while the Guangdong-Hong Kong-Macao Bay Area initiative has generated concrete opportunities and made it easier to achieve results.
112. The Mainland and Hong Kong signed an Agreement on Economic and Technical Co-operation under the Closer Economic Partnership Agreement (CEPA) on 28 June 2017, which expressly supports Hong Kong’s participation in the development of pilot Free Trade Zones. The Government will capitalise on the new opportunities and continue to assist the construction and related professional services sectors in their business development in the Mainland. The Government will also deepen the co-operation with Qianhai, Hengqin and Nansha in accordance with the Agreement signed in June 2017. We will continue to discuss with the Mainland various issues such as mutual recognition of professional qualifications, rationalisation of the work of “professionals” and “practitioners”, and promote the “Hong Kong management model” already adopted in Qianhai to other Free Trade Zones.
113. The construction industry has been facing the challenges of high construction costs and labour shortage in recent years. Hence, the Government is proactively promoting the adoption of technology and innovative construction methods to improve productivity and cost-effectiveness. For instance, the Government is assisting the industry in establishing large-scale and highly automated steel reinforcing bar prefabrication plants for the production of prefabricated steel reinforcement components for use in construction projects. We will also adopt Building Information Modelling technology in the design and construction of major government capital works projects that are scheduled to start in 2018, and promote the use of this technology in private construction projects. Besides, the new Construction Innovation and Technology Application Centre of the Construction Industry Council will be in operation by the end of this year to provide the latest information on local and overseas construction technologies and to support their adoption by small and medium enterprises.
114. The DoJ will implement various initiatives to consolidate Hong Kong’s position as a centre for international legal and dispute resolution services in the Asia-Pacific region. These initiatives include promoting such services of Hong Kong in the Mainland and overseas in collaboration with the relevant sectors and making extra efforts to promote further co-operation among relevant sectors in Hong Kong, the Mainland and overseas, and providing professional services to Mainland enterprises “going global” as well as those enterprises investing in the Mainland.
115. One of the DoJ’s priorities is to step up efforts in proactively promoting Hong Kong as an international legal and dispute resolution services centre for the “Belt and Road” Initiative and the Bay Area, and encourage the legal sectors of Hong Kong and the Bay Area to enhance their level of co-operation. This includes exploring the setting up of a Bay Area legal co-operation platform for the legal sectors of the three places to effect mutual notification, exchange information, provide training and develop a talent pool.
116. To attract more international legal services and dispute resolution institutions to set up branches or offices in Hong Kong, the Government is rolling out the Legal Hub programme. Works are being taken forward to renovate the West Wing of the former Central Government Offices and the former French Mission Building. The programme will start providing office space for international and local law-related organisations around early 2019.
117. The blossoming of Over-the-top television services and various forms of online infotainment over the Internet and mobile platforms in recent years has completely changed the business environment of Hong Kong’s broadcasting industry. With the emergence of new channels providing education, entertainment and information to the public and the popularity of online media platforms, the existing disparities in the regulatory regimes for the broadcast contents of traditional media and the Internet platforms have become obvious.
118. Indeed, traditional media have great influence as they can reach all households directly and all household members, regardless of age, easily. Some therefore opined that free television services should be kept under strict control. Such conventional view is understandable, but the fact is technological advancement has brought significant changes to people’s viewing habits. In addition to this, the imbalanced regulatory regimes and tough competition from the Internet platforms have made it very difficult for traditional media to run their business.
119. To provide a balanced competitive environment for the broadcasting market, and to leave more room for innovation and investment in order that the development of local free television services can sustain, the Government is now reviewing the broadcasting-related ordinances with the aim of relaxing obsolete statutory requirements and rationalising the regulatory regimes. We will listen carefully and evaluate the responses from different sectors of the community before making a decision. We undertake to make our best endeavour to gauge public opinions and maintain close communication with the industry in the process. In this regard, we expect to conduct public consultation on the relaxation of the regulatory regimes in early 2018.
Agriculture and Fisheries Industry
120. The Government will continue to implement the measures under the New Agriculture Policy, which include preparing for the establishment of an Agricultural Park and commencing the consultancy study on designating Agricultural Priority Areas. The latter aims to assist in formulating policies and measures to promote the rehabilitation of fallow agricultural land and curb the damage to agricultural land or alteration of agricultural land to incompatible use. We will also facilitate operations in industrial buildings/zones that employ hydroponics and other agro-technology. With various measures complementing each other, we strive to achieve the long-term and sustainable development of local agriculture. We will also expand the existing fish culture zones, improve the fish culture environment and promote the development of marine fish culture.