Dr Jonathan CHOI Koon-shum (Chairman of the 53rd terms of office) February 2023
CGCC expects to see the Budget help the local business community capture opportunities from the country’s “dual-circulation” development, and to deepen cooperation with the Mainland in such areas as finance and I&T.
On behalf of CGCC, I wish everyone a healthy and prosperous Year of the Rabbit.
This month, the Financial Secretary announces his new Budget. CGCC expects to see the Budget leverage the resumption of normal travel between Hong Kong and the Mainland to help the local business community capture opportunities from the country’s “dual-circulation” development, and to deepen cooperation with the Mainland in such areas as finance and innovation and technology (I&T). It is also important for the HKSAR government to strike a balance between fiscal consideration and economic development, so as to provide an important foundation for promoting Hong Kong’s sustained growth and social harmony and stability.
Serving as the intersection of “dual circulations”
The gradual relaxation of anti-epidemic policies in the Mainland and Hong Kong, with the two places confirming the cancellation of the pre-departure nucleic acid test requirement and prescribed daily quota for cross-border travel, has laid favorable grounds for trade and social exchange to return to normal soon. Since the Central Economic Work Conference has made the recovery and expansion of consumption a priority, the Budget should actively offer financial support for Hong Kong businesses to tap into the Mainland consumer market, to promote Hong Kong products and services with an edge, to explore Mainland product markets that promise potential, and to accelerate the creation of domestic sales channels in the Mainland and the expansion of import distribution businesses.
The resumption of normal travel allows Hong Kong to resume the role of “super connector” and facilitator of “international circulation”. It will be appropriate for the new Budget to propose financial support measures to facilitate the implementation of policies that will help consolidate and elevate Hong Kong’s bridging function. The authorities may want to consider setting up a dedicated office to centralize the promotional work related to the Regional Comprehensive Economic Partnership (RCEP), so as to strengthen Hong Kong’s position as the bridgehead linking the developments of markets in the Guangdong-Hong Kong-Macao Greater Bay Area (Greater Bay Area), Association of Southeast Asian Nations (ASEAN), RCEP and the “Belt & Road” Initiatives.
Last month, CGCC led a business delegation of about 70 entrepreneurs to Vietnam, where they paid visits to a number of political and business units. We hope the Budget will provide greater subsidies for overseas and Mainland trade delegations, visits and exhibitions, to further enhance Hong Kong’s dual roles in “going global and attracting foreign investment”.
Fueling the finance-I&T “dual-engine”
CGCC has long been advocating the creation of a “South-North dual engine (finance-I&T)” development paradigm in Hong Kong, and deeper I&T cooperation with the Mainland cities in the Greater Bay Area, which, in light of the HKSAR government’s plans to develop the Northern Metropolis and Kau Yi Chau Artificial Islands, will fuel Hong Kong’s long-term development.
The Budget can offer support to facilitate the expansion of mutual access between the Mainland and Hong Kong financial markets as well as the expansion, in terms of both depth and scope, of cooperation on financial infrastructure building. It can also allow certain favorable policies to foster the development of specific strategic emerging industries, such as the development of more RMB-denominated investment and risk management tools, and the enrichment of the range of green financial products. In particular, promotion should be strengthened in the neighboring regions such as the ASEAN to uphold Hong Kong as an Asian and even global hub for the transactions and management of digital assets.
Meanwhile, the Budget should actively find ways to attract big tech companies from the Mainland and overseas to set up in Hong Kong, and to encourage the establishment of international research centers in the city, to facilitate technological transfer and the commercialization of research and development results. Hong Kong should especially seek to achieve better synergy and integration with Shenzhen in industrial spatial planning, lobby for Shenzhen’s strategic industrial clusters to set up in the Northern Metropolis, and provide corresponding facilities and favorable policies to promote the flow of talents, capital and equipment between the two cities. The HKSAR government can also study the feasibility of creating an “international university city” in the Northern Metropolis to promote industry-academia-research integration and attract global talent to converge in Hong Kong.
Balancing fiscal situation and economic development
The Financial Secretary predicted that Hong Kong will record a fiscal deficit of over HKD100 billion due to the epidemic which has lasted for three years. While the Budget has to allocate greater resources to promote economic recovery and improve people’s livelihood, it must also ensure the stable and healthy development of Hong Kong’s fiscal situation. We hope the authorities will actively identify policies and measures to increase financial growth momentum, and continue to provide suitable support to help businesses maintain their operations.
To summarize, with the motherland’s full support, Hong Kong can expect more opportunities than challenges in the Year of the Rabbit. As long as it accelerates its integration into the country’s development, plenty of development opportunities await in the future.