maiden Policy Address today (October 11), the Chief Executive, Mrs Carrie Lam,
outlined plans to diversify Hong Kong's economy and create more opportunities
for the city.
"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," Mrs Lam said.
Mrs Lam unveiled new tax measures to reduce the
burden on companies, including a two-tiered profits tax system that would lower
the profits tax rate to 8.25 per cent - half the current standard
rate - on the first $2 million of profit.
"To ensure that the tax benefits will target
small and medium-sized enterprises (SMEs), we will introduce restrictions such
that each group of enterprises may only nominate one enterprise to benefit from
the lower tax rate," she said.
This, Mrs Lam said, would "provide further
tax relief to small and medium-sized enterprises". The standard profits
tax rate of 16.5 per cent would remain unchanged for profit beyond $2 million.
In addition, the Chief Executive proposed that the first $2 million in eligible
research and development (R&D) expenditure enjoy a 300 per cent tax
deduction and 200 per cent for the remainder. A bill to implement the two
initiatives will be submitted to the Legislative Council as soon as possible.
Mrs Lam singled out the convention and exhibition
industry as "crucial to Hong Kong as an international centre for commerce
and trade". She said that a new convention and exhibition venue "of
international standard" would be built opposite the existing Hong Kong
Convention and Exhibition Centre in Wan Chai, in the space now occupied by
three government buildings.
The linked facilities would occupy about 23,000
square metres. In addition, a new convention centre will be built above the MTR
Exhibition Station of the Shatin to Central Link in Wan Chai, adding 15,000
square metres of convention space.
The Wan Chai Sports Ground will also be developed
for convention and exhibition facilities once the Sports Ground's resettlement
is satisfactorily resolved.
The Government will continue to increase the
supply of land for various uses. In the coming year, a number of commercial
sites will be put up for sale, including sites at the Kai Tak Development Area,
above the terminus of the Guangzhou-Shenzhen-Hong Kong Express Rail Link and at
the new harbourfront in Central.
These and other sites will add about 1.1 million
square metres of floor area. In addition, a site of about 3.2 hectares in Tuen
Mun Area 49 has been set aside for logistics use.
Mrs Lam said that Hong Kong would capitalise on
the opportunities presented by the Belt and Road Initiative and the
Guangdong-Hong Kong-Macao Bay Area development. The Government, she said, hopes
to forge a comprehensive agreement regarding Hong Kong's participation in Belt
and Road projects with the National Development and Reform Commission by the
end of this year.
She added that the Government would provide
additional manpower resources for the Belt and Road Office, and that the Belt
and Road Summit, jointly organised by the Government and the Hong Kong Trade
Development Council for the past two years, would become an annual event.
Regarding the Bay Area development, the Chief
Executive said it will "create favourable conditions for diversifying our
industries, in particular promoting innovation and technology
development". She added that she would "seek further facilitation
measures for Hong Kong people to study, work and start up and operate business,
live and retire in the Bay Area", creating a "quality living circle
for Hong Kong people".
Mrs Lam emphasised the need to diversify Hong
Kong industries, citing innovation and technology (I&T) and the creative
industries as ripe for development. In particular, she said, "Hong Kong
has huge potential to become an international innovation and technology
hub." To that end, Mrs Lam said she would "personally lead a
high-level, inter-departmental Steering Committee on Innovation and Technology".
The Government has 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 per cent to 1.5 per cent) by the
end of the current Government's five-year term of office. In addition:
*No less than $10 billion has been set aside as university research funding;
*The Innovation and Technology Bureau will kick-start a $500 million Technology Talent Scheme; and
*The Education Bureau, through a $3 billion injection from the Research Endowment Fund, would provide scholarships for local students admitted to University Grants Committee-funded research postgraduate programmes.
Mrs Lam said that initiatives have also been
created to enhance the teaching of science, technology, engineering and
mathematics studies. They include a series of training programmes for the
leadership tier and middle managers of all primary and secondary schools.
The Government will invest $700 million for Smart
City infrastructure projects, including an eID, a single digital identity
allowing individuals to conduct government and commercial transactions online.
Mrs Lam added that "universal broadband coverage across the territory as
far as possible" was essential to becoming a smart city. She proposed offering
financial incentives to encourage telecommunications companies to extend their
fibre-based networks to rural and remote areas.
Mrs Lam said Hong Kong's creative industries were
"a powerhouse that will drive the economy, add value and make Hong Kong a
more attractive international city". She said the Government would inject
$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".
Nurturing talent is a government priority, Mrs
Lam said. She pledged to enhance Hong Kong's training resources and policy
initiatives in such areas as aviation, maritime, railways, finance,
construction and city management.
She added that a Commission for the Planning
of Human Resources, chaired by the Chief Secretary, would be established to
boost talent training and attract more talent from other places.
In finance, the Chief Executive said the
Government plans to issue a green bond to encourage Mainland, Belt and Road and
international investors to finance their green projects through Hong Kong's
She added that the Government would promote international-standard green bond certification schemes issued by local bodies.
Ends/Wednesday, October 11, 2017
Issued at HKT 13:36