Yes, Hong Kong CAN!
Our Hong Kong Foundation’s (OHKF) research “Yes, Hong Kong CAN!” points out a number of opportunities for future development of Hong Kong, and urges the Hongkongers to expand the role of Hong Kong as global financial center and at the same time to develop other sectors such as innovation and venture capital, creative arts, and international professional services.
As the world’s economy slows down and Chinese economy enters the ‘new normal’, Hong Kong must adjust its path forward accordingly. We must think outside the box to realize our full potential, and maintain growth and prosperity. The summit, titled “Yes, Hong Kong CAN!”, featured Prof Lawrence Lau, Vice-Chairman of OHKF and Ralph and Claire Landau Professor of Economics at The Chinese University of Hong Kong. Prof Lau explored the future role of Hong Kong in the world economy and the opportunities ahead.
To encourage more East Asian enterprises to list in Hong Kong, the government should encourage the development of multi-currency-denominated securities, including those of East Asian enterprises denominated in their local currencies.
Moreover, to attract more international firms to set up headquarters in Hong Kong, the city’s tax regime and related regulations should be improved to avoid dual taxation. In addition, Hong Kong should simplify procedures for overseas insurance and reinsurance companies to set up global or regional headquarters. Likewise, it should coordinate with other jurisdictions on rules and regulations to avoid disadvantaging international insurance and reinsurance companies that set up their headquarters in Hong Kong.
At the same time, the government should consider expanding the market for Hong Kong Dollar denominated bonds such as government bonds. This will also help to attract institutions from the Mainland to issue more Renminbi denominated bonds in Hong Kong, making the local bond market grow further.
Innovation and Venture Capital
Hong Kong has considerable strengths in innovation and venture capital. To play a greater role in international innovation and venture capital, the government should target to lift the overall expenditure on R&D from current 0.7% to 4% of GDP in the long-run by offering tax concessions to encourage investment in research and development, and to facilitate the IPOs for start-up companies or perform merger and acquisitions.
To diversify our development, Hong Kong should encourage creative arts. Taking the movie industry as an example, China’s total box office earnings have been soaring in recent years and Hong Kong is the best springboard for foreign movies to enter China. For example, the city is now home to the headquarter of Flagship Entertainment, a joint venture between Warner Brothers from the United States, China Media Capital from the Mainland, and Television Broadcasts Limited from Hong Kong. Building on our achievements, Hong Kong can further develop its creative arts.
Education, healthcare and legal services hold great potential for development. Hong Kong should increase the number of places in its public and private universities to attract more local and overseas students. Also, universities should boost their respective strengths as research-based or teaching-oriented institutions. Hong Kong’s healthcare system, given ample professionals and infrastructure, can develop into a full-grown industry as the best medical service center in Asia, provided that local residents’ demand for sufficient and high-quality medical services are met. In addition, Hong Kong should try to increase its share of market for legal services across East Asia. With its sound basis of the rule of law and a large number of legal professionals, Hong Kong should become an international legal, arbitration and mediation services center in East Asia.
Role in “one belt, one road”
China’s “one belt, one road” initiative has come in good time to lead Hong Kong, an international hub, in exploring new markets worldwide. Hong Kong will be able to provide financial and legal services and other professional services in fields of accounting, consultation, arbitration and mediation to 66 countries across Europe, Asia and Africa.
To conclude, there is clearly still great potential for the economy of Hong Kong. It will require the united efforts of everyone in Hong Kong to fully realize this potential. Yes. Hong Kong CAN create yet another economic miracle!