They heavyweights of international business made their priorities clear to the Chief Executive. In politics, like business, you win some and lose some. The government had its own agenda in 2016.
Hong Kong is, as Milton Friedman called it, ‘the capital of capitalism’. As such is it blessed with a panoply of business organisations and they know what they want – and the told the CE so before the Policy Address. If they got what they wanted, it was because it aligned with the CE’s priorities on ‘One Belt, One Road (OBOR)’ and the development of innovation and technology in Hong Kong. If not, there was little joy for them.
OBOR, Smart City
This policy address was all about the OBOR. Measures linked to Beijing’s Silk Road pivot included: strengthening Hong Kong’s offshore RMB business; setting up a platform for the development of Islamic finance; a HK$200 million injection to support the professional services sector in enhancing exchanges and co-operation; and a Belt and Road steering committee headed by Mr Leung himself.
The policy address also offered a blueprint of the ‘Smart City’ at some length, with a promise to ambitiously extend WiFi coverage to 34,000 free hotspots in 3 years.
AmCham – Win some, ignore some
AmCham’s focused on, among other priorities, protecting the interest of shipping lines and furthering Hong Kong’s advantage in port services and logistics. These concerns were somewhat addressed in the policy address through the establishment of a new Hong Kong Maritime and Port Board to “promote manpower development, marketing and research on all fronts to develop a high value-added maritime services sector”. The board is, however, of a lower authority than what the sector had been asking for, and what it can deliver remains unclear.
Chinese medicine development is another sector where AmCham encouraged the government to attract high-end travellers from Europe and the US interested in the sector. Incidentally, the Policy Address indicated that high end travellers in general would be the priority going forward (as opposed to low end day trippers). The government touted its ongoing plans to promote Hong Kong’s Chinese medicine services, research,and personnel training, but had no new projects to support the industry.
AmCham members are keen to see more mainland students. More ‘synergies’ and exchanges between local and mainland students were addressed with the extension of the Mainland University Study Subsidy Scheme and the injection of HK$1 billion into the Targeted Scholarship Scheme to offer more university places for students in the Belt and Road countries.
The AmCham’s concerns over issues surrounding rule of law and the Umbrella Movement were nowhere to be found in the policy address. There was no mention of recognising foreign same-sex marriages and partnerships for the purpose of work visas. Relaxing product regulations was not on the agenda – on the contrary, the government’s hostile stance toward both traditional and electronic cigarettes was reaffirmed. And while the AIIB was mentioned, the Trans-Pacific Partnership (TPP) was ignored.
HKGCC – Smart City yay, imported workers nay
As Hong Kong’s oldest and most influential Chamber, they may be expected to get some, or most of what they want. But this Policy Address was long on pro-Beijing measures and had fewer nods to local business. The HKGCC’s reaction, as per their official press release, was largely favourable, with a few caveats.
In the Chamber’s favour, the government will bump an additional HK$4.7bn in total into the innovation and technology industry following the establishment of the Innovation and Technology Bureau (ITB). Among the sums included: HK$2 billion to the ITB; another HK$2 billion to set up an Innovation and Technology Venture Fund; HK$500 million to set up an Innovation and Technology Fund for Better Living; and HK$200 million to launch a Cyberport Macro Fund.
Meanwhile, CY Leung promised to import workers in face of labour shortage in the industry and to review the Supplementary Labour Scheme, which were two requests explicitly made by the HKGCC. In a HKGCC press release following the announcement, however, it was stated that, “the reality is that these [measures] fall short of our immediate needs, and we have yet to see any significant measures to address the issue of an aging population.”
The press release also noted the “omission of support to SMEs” and urged the government to come up with “more concrete measures to promote high-end and high value-added tourism-related activities”.
Other notable suggestions ignored in the policy address included reforming the corporate tax into a two-tier system and introducing a comprehensive Regulatory Impact Assessment (RIA) with reference to the British model.
CanCham – Garbage in, FSDC power out
CanCham realised a major victory by calling on the government to step up waste management initiatives alongside other environmental protection measures. CY Leung did, at last, take some concrete steps to introduce a quantity-based charging scheme for municipal solid waste, which included a HK$50 million plan on preliminary public engagement to prepare the public for the new programme.
A proposal to give more power to the Financial Services Development Council to coordinate different financial regulatory regimes was left out even though Leung promised to offer more resources to the Council. The Chamber’s bold criticism of the government over the deteriorating freedom of the press also went unanswered.
BritCham – In search of a business minister
BritCham had few wins of their priorities reflected in this Policy Address. Many of BritCham’s suggestions were either inadequately addressed or snubbed. They included setting up a ‘Minister for Business’, and introducing measures to shore up Hong Kong people’s deteriorating English language capability.
One BritCham priority the CE seemed willing to advance was working to increase to the number of non-locally trained medical professionals in Hong Kong.
For many of businesses’ priorities, they will have to wait for the budget delivered next month to see if the Financial Secretary, Mr John Tsang, can answer to some of their priorities that were neglected in this policy address.