Hong Kong update: Budget 2017-2018 – Financial Secretary pledges to boost pillar industries and promote diversified economic development

In his first Budget yesterday (22 February), the Financial Secretary, Paul Chan, pledged to consolidate and enhance the competitiveness of Hong Kong’s pillar industries and promote diversified economic development by supporting industries in which Hong Kong has advantages as well as emerging industries.

On the economy, Mr Chan reported that Hong Kong’s economic growth picked up over the course of 2016, after a weak performance in the first quarter. Overall, there was a modest growth of 1.9% in 2016. Unemployment averaged 3.4 per cent last year, sustaining a state of full employment in general. Underlying inflation rate was 2.3 per cent in 2016 – the fifth consecutive year of easing.

On the fiscal front, a Government surplus of HK$92.8 billion is forecast for 2016-17, and the fiscal reserves are estimated to reach HK$953.7 billion by the end of March 2017.

Looking ahead, in 2017, Mr Chan said that economic growth in the advanced economies will be modest and patchy. Uncertainties brought about by political changes in many parts of the world and rising populist and protectionist sentiments may render the global economic outlook volatile. With this in mind, he forecast GDP growth of two to three per cent in 2017.

Among the initiatives announced are those aiming to boost Hong Kong’s pillar industries, i.e. trading and logistics industry, financial services, tourism as well as business and professional services.

On maritime services, Invest Hong Kong would strengthen promotion activities overseas and in the Mainland with a focus on Hong Kong’s development as a regional maritime services hub, as well as a platform connecting the Mainland with the maritime industry in other parts of the world.

On the aviation industry, following the completion of the Hong Kong-Zhuhai-Macao Bridge, the Government will look at how to better connect Hong Kong and the Pearl River Delta region. Cross-boundary helicopter services will be considered to enhance connectivity. The Government also plans to introduce a bill into the Legislative Council in 2017 to amend the Inland Revenue Ordinance to offer tax concessions aimed at attracting aircraft leasing companies to Hong Kong.

As regards the air cargo industry, the Airport Authority Hong Kong (AA) has reserved land on both airside and landside to support the growth in transshipment, cross-boundary e-commerce and high value-added air cargo business.

Turning to Financial services, the Securities and Futures Commission and the Hong Kong Exchanges and Clearing Limited were analysing the views received during the consultation last year on proposed enhancements to the decision-making and governance structure for listing regulation.

To develop the asset and wealth management sectors, the Government proposes extending the profits tax exemption to onshore privately offered open-ended fund companies.

Mr Chan said Hong Kong has a narrow tax base, and as a small and open economy, is particularly susceptible to global economic fluctuations. The Government will therefore set up a tax policy unit in the Financial Services and the Treasury Bureau to comprehensively examine tax issues from a macro perspective.

On tourism, the industry would receive an additional HK$243 million in 2017-18 for initiatives including: light shows and home-grown mega events; tourism projects with local characteristics and green tourism elements; transit, overnight and cruise tourism passengers; enhanced publicity in the Mainland and overseas; and training through the Travel Industry Council of Hong Kong to enhance service quality.

For business and professional services, Mr Chan said Mainland enterprises have been active in making investments overseas and tapping overseas markets, and Hong Kong can capture business opportunities by capitalising on its quality professional services, socio-cultural advantages and rich international business experiences.

The Government would continue efforts to explore new markets for the local commercial sector and professionals, with the opening of a new Hong Kong Economic and Trade Office (HKETO) last year in Indonesia, and new HKETOs planned for Korea, India, Mexico, Russia, South Africa and the United Arab Emirates. The network of liaison offices in the Mainland will also be strengthened to provide a more even spread throughout the country.

Mr Chan also announced in his Budget Speech initiatives aiming to diversify economic development, with a focus on innovation and technology (I&T), creative industries as well as arts and culture.

The Government fully supports the Hong Kong Productivity Council (HKPC) in facilitating industrial upgrading and transformation for a shift towards high value-added production. The Government has also commissioned the HKPC to establish an Inno Space to turn innovative and technological ideas into industrial designs or products, with a view to expanding the start-up culture in Hong Kong and supporting re-industrialisation.

Mr Chan said he would set up a new committee on I&T development and re-industrialisation. The new tax policy unit will also explore enhanced tax deductions for I&T expenditure.

Start-ups will continue to be supported, for example via the HK$2 billion Innovation and Technology Venture Fund. The Fund will inject new capital and energy into technology start-ups in Hong Kong.

To help the development of financial technologies (Fintech), the Hong Kong Monetary Authority is developing a new Faster Payment System to provide a round-the-clock inter-bank real-time payment platform. The Government will also encourage the industry to make good use of the trial environment provided by the Fintech Supervisory Sandbox, so as to deliver more products and services based on different kinds of new technology.

On creative industries as well as arts and culture, Mr Chan said the vision is to shape Hong Kong into a trend-setting creative hub as well as a metropolis rich in arts and culture. The Government would sponsor a series of events in Hong Kong, overseas and in the Mainland to showcase the robust development of Hong Kong’s creative industries during the 20th anniversary of the establishment of the Hong Kong Special Administrative Region in 2017, including design exhibitions; film festivals; exhibitions on the works of Hong Kong comic artists and architecture; and fashion shows. Extra resources will also be allocated to support more local art groups and artists to perform in major overseas and Mainland cities to showcase Hong Kong’s cultural strength.

Mr Chan also explained three key objectives regarding public finance in his Budget: first, proactively develop the economy and improve people’s livelihood; second, invest continuously for the future and make Hong Kong an even more liveable city; and third, make good use of financial resources to build a fair and just society where people from all walks of life can share the fruits of economic advancement.

Mr Chan said the Government would continue to invest substantially to protect and enhance the environment and strive to further improve air quality, water quality, green and blue assets and waste management, as well as step up efforts to combat climate change and conserve nature, to make Hong Kong an even more liveable city.

To continue promoting wider use of electric vehicles thereby improving roadside air quality, the current First Registration Tax exemption arrangement for electric vehicles would be revised. From 1 April 2017 to 31 March 2018, First Registration Tax of electric commercial vehicles, motor cycles and motor tricycles will continue to be fully waived, while the First Registration Tax waiver for electric private cars will be capped at HK$97,500.

In conclusion, Mr Chan said amid global political and economic uncertainties, Hong Kong must invest for the future in a bid to enhance its overall competitiveness, apart from deploying resources to improve people’s livelihood. Through consolidating pillar industries, as well as nurturing industries over which Hong Kong has advantages and emerging industries, Hong Kong could explore new areas of economic growth and create quality and diversified employment opportunities.

The Budget website is www.budget.gov.hk and the complete document can be downloaded at: www.budget.gov.hk/2017/eng/speech.html

Hong Kong Economic and Trade Office, London
The Government of the Hong Kong Special Administrative Region
18 Bedford Square, London WC1B 3JA, UK United Kingdom
Email: general@hketolondon.gov.hk
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News from Hong Kong (Consulate General of Finland)

  • Finland is hot in Hong Kong. The number of FinnCham members increased by 20 % in 2016.
  • The Hong Kong Finnish community
    • Around 300 Finns living in HK
    • All along a few dozen students studying or as a trainee of min. 3 months
  • Finland and Hong Kong are reflecting ways to meet the challenge of the future of health services, caused by the aging population in both countries. This provides opportunities for cooperation
  • Hong Kong is interested of Finnish Fintech (Financing technology) knowhow and Finland’s lively start-up business
  • The Finnish Edutech xEdu made a cooperation agreement with its HK counterpart Education City. That enables piloting of Finnish education start-ups in HK
  • Fun Academy (ex-Rovio) has done an agreement with Sky Wide Education Group, who is setting up kindergarten utilizing Finnish education methods. The first one is opened in February.
  • HK tourism to Finland is developing well (+32 %). Direct flights from Finland. Finland is well-known about the education system and exotic winter.
  • The content for the agreement on preventing double taxation will be finalized in the beginning of 2017
  • Investments from HK to Finland are expected to increase: Invest in Finland will recruit an expert whose task is to follow South China (Guangzhou).
  • Finland 100 lecture series will be presenting Finland’s strengths in spring 2017.


Latest edition of the Hong Kong Review

The latest edition of the Hong Kong Review, newsletter of the Hong Kong Economic and Trade Office, London (HKETO) is now online. The complete file can be viewed on our website at http://www.hketolondon.gov.hk

Highlights among the stories in the latest edition are:

Chief Secretary visits London
Visit to the UK by Carrie Lam, Hong Kong’s Chief Secretary for Administration. More…

Shenzhen-Hong Kong Stock Connect
Initiative to create a stock-trading link between Shenzhen and Hong Kong launched. More…

Hong Kong Fintech Week
Inaugural Hong Kong Fintech Week organised by Invest Hong Kong. More…
Smart Cities conference
The conference, organised by Hong Kong Science Park, looked at how urban areas use information and communications technologies, big data and open data, as well as green and sustainable development. More…

Disneyland to expand
Hong Kong Disneyland Resort will be expanded to include 20 new attractions. More…


Hong Kong’s 2017 Policy address focuses on developing economy and improving livelihood

Hong Kong Chief Executive C Y Leung delivered his fifth Policy Address at the Legislative Council yesterday (January 18).

The Policy Address outlines plans and initiatives to develop Hong Kong’s economy, improve people’s livelihood, boost land supply and housing, and enhance education.

On economic development, Mr Leung said the National 13th Five-Year Plan and the Belt and Road Initiative would provide new opportunities for Hong Kong in areas such as financial and professional services, as well as innovation and technology (I&T).

The Government would actively consider the recommendations on the sustainable development of Hong Kong’s financial market and financial services sector by the Financial Services Development Council (a high-level cross-sectoral advisory body established by the Government in 2013) concerning taxation, laws and regulations, nurturing talent, etc., and take forward the feasible measures.

The Government will invite the Hong Kong Trade Development Council to strengthen overseas promotion of Hong Kong’s financial services industry.
Mr Leung said Hong Kong would expand its network of offices in the Mainland and overseas to promote Hong Kong’s strengths and advantages, with preliminary work under way to set up five new Economic and Trade Offices in India, Mexico, Russia, South Africa and the United Arab Emirates.

Four new Liaison Offices supporting the Hong Kong Special Administrative Region’s work in the Mainland would be set up by mid-year in Tianjin, Zhejiang, Guangxi and Shaanxi, bringing the total number of Liaison Offices to 11.

To give full play to Hong Kong’s role as a ”super-connector” for the Belt and Road Initiative, more staffing resources would be given to the Belt and Road Office, which was set up last year, to formulate and implement strategies on a long-term basis. Hong Kong and countries along the Belt and Road would consider relaxing visa requirements to facilitate movement and boost people-to-people bonds.

The Policy Address website is www.policyaddress.gov.hk and the complete document can be downloaded at: www.policyaddress.gov.hk/2017/eng/index.html


Finland-Hong Kong Trade Association Newsletter Autumn 2016

Dear Friends,

It has been a very busy year once again in terms of events and networking. We have organized various interesting happenings from Chinese New Year event celebrating the Year of the Monkey to very practical issues on doing business in Hong Kong.
We cooperated also this year in an export initiative – this time in food & beverage project with the Food from Finland/Finpro. More on this project in the next Newsletter.

The Finland-Hong Kong Trade Association continues to operate as a network to Hong Kong and Southern China business. We implemed this in close cooperation with the Hong Kong Trade Development Council (HKTDC) and the Hong Kong Economic and Trade Office in London. The trade association is also a member of the Federation of Hong Kong Business Associations Worldwide.

Please follow our web site to find fresh information about the events and other matters related to Hong Kong. New members with their new ideas are always welcome!


Read the whole newsletter here.


Hong Kong’s Independent Commission Against Corruption – newsletter

The ICAC Post – an electronic newsletter for local and international business communities – aims to keep businessmen posted on the latest development of Hong Kong’s anti-corruption work. The latest edition can be found here: http://www.icac.org.hk/icac/post/issue23/post_en.html

Highlights of this issue:
•ICAC remains unwavering in anti-graft mission
Read more:
•CPD launches training packages for retail industry
•Parallel trader jailed for bribery in tablet computers scam
•Corruption complaints (January-June 2016)


Hongkong taiteilee kahden järjestelmän välimaastossa

Kauppalehti, 19.7.2016 18:00

Hongkong on kehittynyt vahvaksi markkinataloudeksi, vaikka se on osa vankasti säädeltyä Kiinaa. Moni suomalainenkin yritys on asettunut Aasian solmukohtaan tekemään bisnestä.


Kun Iso-Britannia vuonna 1997 luovutti Hongkongin mahtipontisin seremonioin Kiinalle, moni hongkongilainen uskoi maailmanlopun koittavan.
Kommunistisen Kiinan pelättiin, jos ei kansallistavan, niin ainakin romuttavan yhden Aasian neljästä tiikeritaloudesta.

Lue koko artikkeli täältä.


Hongkongers are like Chinese banyan trees, says city’s Finnish envoy

Interview with Jari Sinkari, Finland’s consul general in Hong Kong by South China Morning Post

Clinging to stone walls and steep slopes as they thrive in a tough urban environment with the odds stacked against them, the Chinese banyan tree is the perfect metaphor for the indomitable spirit of Hongkongers, Finland’s top diplomat in the city says.

The trees, commonly found in Hong Kong but not seen in the subarctic climate of the Nordic country, have long fascinated the envoy, and he considers them representative of the city’s ”can-do spirit”.

”Hong Kong people are like banyan trees because they are flexible and know how to look for opportunities,” said Jari Sinkari, Finland’s consul general in Hong Kong.

”They are able to find water and resources even though you would think they would not survive. For me, it is a metaphor for Hong Kong.”

Read the article in full: http://www.scmp.com/news/hong-kong/politics/article/1861928/hongkongers-are-chinese-banyan-trees-says-citys-finnish


Hongkong -pinta-alaansa paljon suurempi

Hongkong IIHongkong on kaupan, ta­lou­den, ilmailun ja merenkulun solmukohta. Pilvenpiirtäjien ja puistojen kaupunki on tunnettu modernista liike-elämästään ja perinteitä noudat­ta­vasta kulttuuristaan. Hongkong on portti manner-Kiinaan ja manner-Kiinasta maail­malle. Suomalainen muoti esittäytyi Hong Kong Trade Development Councilin (HKTDC) Hong Kong Fashion Week –muotitapahtumassa 19. – 22.1.2015. Suomi-Hong Kong kauppayhdistys toimii aktiivisesti Suomen ja Hong­kon­gin sekä Etelä-Kiinan välisen kaupan edistämiseksi.  

Hongkong on yksi maailman tiheimmin asutuista alueista, jossa asuu 7,2 miljoonaa ihmistä vain 1 104 neliökilometrin alueella. Hongkongin saari, mantereeseen kuuluva Kowloonin niemimaa ja Kiinaan rajalle ulottuvat uudet territoriot (New Territories) muodostavat Hong­kongin alueen. Hongkong on tunnettu modernista liike-elämästään ja perinteitä noudat­tavasta kulttuuristaan. Pilvenpiirtäjien lisäksi Hongkongista löytää puistoja ja useita mah­dol­li­suuk­sia moni­puo­lisiin kulttuuri-, urheilu- ja vapaa-ajan harrastuksiin. Tiet, tunnelit ja sillat yhdistävät kau­pungin manner-Kiinaan ja muualle maailmaan. Hongkong on portti ulkomai­sille yrityksille manner-Kiinaan ja kiinalaisille yrityksille maailmanmarkkinoille. Hongkong on kaupan, ta­lou­den, ilmailun ja merenkulun solmukohta.

Hongkong –  vaurastuu ja verkottaa  

Hongkong sijaitsee neljän tunnin lentomatkan päässä Aasian avainmarkkinoista ja viiden tunnin etäisyydellä väestöstä, joka vastaa puolta maailman asukasluvusta. Verotus on alhainen: 16,5 % yritysverotus, 15 % henkilökohtainen verotus, 5 % työnantajan sosiaali­turvamaksut ja 0 % ALV. 18 prosentin varallisuuden kasvu Hongkongissa on voimakkainta Aasian ja Tyynen meren alueella.

Vuoden 2014 marraskuun lopussa muualta kuin manner-Kiinasta saapuvien vierailijoiden määrä oli saavut­tanut 12,4 miljoo­nan ja manner-Kiinasta  42,8 miljoonan tulijan rajan eli  yhteensä 55,2 miljoonaa ihmistä oli käynyt Hongkongissa jo ennen vuoden loppua verrat­tuna 54,3 miljoonaan turistiin vuonna 2013.  84 prosenttia maailman johtavista luksuksen ja muodin vähittäiskauppiaista ja 41 prosenttia kaikista kansain­välisistä vähittäiskaupan tuotemerkeistä on Hongkongissa. Hongkong sain neljänneksi eniten suoria investointeja vuonna 2013 maailmassa Yhdysvaltojen, Kiinan ja Venäjän jälkeen. InvestHK:n tukemien Start-up –yritysten lukumäärä on kasvanut 77 prosenttia vuodesta 2010.Honkongluonto

Suomalaiset muotisuunnittelijat Hongkongin muotiviikon vetonauloina

Suomalainen muoti esittäytyi Hong Kong Fashion Week –muotitapahtumassa 19. – 22.1.2015. Suomi-Hong  Kong –kauppayhdistyksen projektiin osallistui 10 lahjakasta muotisuunnittelijaa, jotka esittelivät ainutlaatuisia visioitaan ja suomalaista laatua viikon aikana. Muotinäytös, lehdistöaamiainen, messuosasto, laulaja Saara Aallon esitykset ja monet muut tapahtumat kuuluivat suomalaisten ohjelmaan.


Kauppayhdistyksen varapuheenjohtaja Johanna Heikkinen

Suomi-Hong Kong kauppayhdistyksen tavoitteena oli edistää suomalaisten suunnitte­li­joi­den kansainvälistymistä HKTDC:n palveluja hyö­dyn­täen. Päämääränä oli luoda asiak­kuuk­sia ja hyviä kontakteja liiketoiminnan kehittä­mistä varten. Kymmenen eri tuotenimen yh­teis­­osasto toi volyymiä ja lisäsi vierailijoiden kiinnostusta suomalaisia tuotteita kohtaan. Yhteistyö Suomi-Hong Kong kauppayhdistyksen, Suomen pääkonsulaatin, FinnCham Hong Kongin ja Visit Finlandin kesken auttoi oheisohjelman suunnittelussa ja toteutuksessa. HKTDC mahdollisti verrattain edullisen osal­lis­tumisen messuille.  ”Muutamia ostotilauksia tehtiin jo paikan pää­l­lä. Suomalaiset saivat runsaasti media­näkyvyyttä ja onnistuivat tapaamaan hyviä ostajaehdokkaita”, toteaa Johanna Heikkinen, projektin vetäjä ja Suomi-Hong Kong kauppayhdistyksen varapuheenjohtaja.

Suomi – Hong Kong kauppayhdistys toimii aktiivisesti kaupan edistäjänä

Suomi-Hong Kong kauppayhdistys toimii aktiivisesti Suomen ja Hong Kongin sekä Etelä-Kiinan välisen kaupan edistämiseksi.

HKTDC tukee kauppayhdistyksen toimintaa tarjoamalla monimuotoisia liiketoi­minta­pal­veluja kauppayhdistyksen jäsenyrityksille, oli sitten kysymys messuista, verkostoitumis­tapahtumista, kontakteista tai markkinatiedosta. Kauppayhdistys on maailmanlaajuisen Federation of Hong Kong Business Associations Worldwide’n jäsen. HKTDC esittäytyy vuosittain Helsingissä pidettävässä tilaisuudessa, jonka yhteydessä vietetään kiinalaista uutta vuotta.

Erkkila Hongkong

Kauppayhdistyksen puheenjohtaja Tomi Erkkilä ja hongkongilaiset toivottavat hyvää uutta vuotta

Hong Kong Europe Forum Helsingissä toukokuussa

Suomi-Hong Kong kauppayhdistys täyttää 30 vuotta vuonna 2015. Yksi juhlavuoden tapahtumista on 22. toukokuuta järjestettävä Hong Kong Europe Forum, joka kokoaa 16 eurooppalaisen Hong Kong-kauppayhdistyksen edustajat Helsinkiin. Kauppayhdistys järjestää samana päivänä myös juhlaseminaarin. Toukokuun tilaisuudet avaavat jälleen kerran mahdollisuuden edistää suomalaisten yritysten kansainvälistymistä.

Kirjoittaja: Anne Hatanpää, yhteyspäällikkö, Keskuskauppakamari