The Chief Executive’s second Policy Address has put forward various initiatives to spur economic development. The Government is expected to promote more actively the growth of industries, such as finance, logistics, tourism and R&D, and take concrete steps to improve Hong Kong’s business environment and enhance competitiveness, gearing up the economy to fly high again.

This year’s Policy Address has devoted much coverage to economic development, including building the Lantau Metropolis, setting up the Innovation and Technology Bureau (ITB), and commencing negotiation on ASEAN-Hong Kong Free Trade Zone. Still, these policy initiatives are mostly in a conceptual and study stage with no concrete plans for implementation. As in the past, committees have been formed, but come up with little substance. How can the overall economic efficiency be increased in this way? What the Administration gives is merely room for imagination and an impression of “making empty talk on economic matters but giving out welfare benefits too generously”. Setting up advisory committees is desirable for gathering different views and public opinions for food for thought. Yet, committees have not been expected to play a leading role and policy-making cannot rely solely on public pulse. Otherwise what is the point of having policy bureaux? So the Government is expected to be more proactive.

Maximise Lantau’s Potentials

Though shedding little light on furthering the development of pillar industries such as finance and logistics, the Policy Address has given much elaboration on re-initiating the plan for developing the Lantau Island. Lantau development plan undoubtedly has huge potentials. Some academics have estimated that the clustering effect and synergy produced by tourism and other industries on Lantau can bring handsome economic benefits of nearly HK$100 billion to Hong Kong. Compared to the developed land in urban area, which is almost saturated for development, Lantau is a precious land resource. With proper planning and use, it will be an important land reserve to support Hong Kong’s economic development.

The plan for Lantau development remains on the drawing board but has been shelved after Hong Kong’s reunification with China. No decision has been made after rounds of discussion. Reviving the plan, the Government has showed strong determination by setting up the Lantau Development Advisory Committee to launch bridge-head economy and explore the building of East Lantau Metropolis Core Business District. However, the entire plan has just reached its infancy. It is a pity that our city has wasted the chance of being an early bird, while neighbouring competitors in the region have geared up. For the sake of Hong Kong’s long-term development, the Government must demonstrate courage and determination to catch up down the road.

The Policy Address has not talked much about tourism. The only specifics are preliminary proposals on, for instance, the “Kai Tak Fantasy” idea of the Economic Development Commission and increasing hotels and leisure facilities on Lantau. The administration has earlier released the Assessment Report on Hong Kong’s Capacity to Accommodate Tourists, but the Policy Address has not taken due respect and paid heed to its findings. Policy-makers are strongly urged to revamp strategies over inbound tourism by paying attention to the Report, and they should also discuss with the tourism sector to devise short- term measures to enhance Hong Kong’s capacity for increasing influx of inbound tourists, solicit high-end tourists, divert and diverge crowds of tourists from popular tourist spots and resolve the acute shortage of hotel rooms. For the long-term planning, the Administration should consult and engage the public, tourists and industries into drawing up a comprehensive blueprint for tourism development in the next decade.

Stronger Push on R&D Investment

On the innovative technology front, the creation of ITB in the Policy Address, though significant, is merely just a beginning. Yet, the Administration has not fully assessed the entire portfolio, parameter and variety of innovative-technical experts and talents should be fostered and developed. Officials seem to be empty-headed about the road ahead, let alone to have a grasp of human resources required. Policies and strategies for inno-tech promotion, as an essential part for contemporary modern cities, must not be taken lightly and overlooked in Hong Kong’s long-term development strategy.

According to one of the latest report by the International Monetary Foundation, it is the dedication and commitment of governments and industries on R&D that has contributed to the flying colours of R&D in Singapore and Korea. Both countries triumphed with a doubling of their per capita GDPs in just a decade, with R&D investment accounting for more than 2% of their economic growth. Contrarily, Hong Kong’s R&D investment has attributed only 0.7% to 0.8% to its GDP over the past five years. The figures are telling on the importance of R&D investment to the entire economic development.

Evidently, in the Report on Global Innovation Index for 2013, Hong Kong ranked the 8th in the world in overall terms, 2nd in innovation investment (after Singapore), 15th in innovation export, 36th in knowledge and technology export, and 5th in creativity export. The figures have demonstrated that Hong Kong can do well in inno-tech development. Yet, the Report criticised Hong Kong for its deficiency in inno-tech knowledge sharing, declining technology export, shortage of related talents, as well as insufficient R&D investment by its business sector.

The setup of ITB proposed by the Government should focus on fostering closer cross-bureau integration and incorporating more resources to nurture high-potential technological development and attract quality talents. It should also put more weight on R&D and technology education while enhancing collaboration among industries, universities and research institutes. Furthermore, the bureau should introduce policies to support technology export, promote regional and international cooperation in innovation, as well as facilitate knowledge sharing and exchanges, striving to build Hong Kong as an innovation hub. I hope the Government can get rid of its conservative mindset and put more financial and social resources to support inno-tech development, nurture and attract R&D talents, and encourage R&D investment. “No mill, no meal”, as the saying goes. We have already missed a lot of time and opportunities, and now we are facing strong competitions and new challenges. The development of the inno-tech industry is doomed for Hong Kong if our policy-makers refuse to think out of the box. If so, we had better travel another road than do it to no avail. 

Time to Revitalise Logistics and Financial Sectors

Unfortunately, the Policy Address has just touched lightly on how to improve the business environment, attract foreign investment and boost economic competitiveness of Hong Kong. In recent years, the local economy has fallen short of new engines for boosting economic growth. As shipping infrastructure in the PRD region keeps gaining strength, Hong Kong’s role as an entrepôt is fading and the growth of its logistics industry is slowing down. Our financial sector has been tapping on the rapid economic development in the Mainland, which has yet completed its systemic reforms and capital account opening-up. Hong Kong has put much emphasis on the equity market. But its markets for bonds, foreign exchange, fixed income products and commodities are underdeveloped, lagging behind London and New York. Besides, our corporate financing and IPO markets are not diversified enough to effectively stimulate economic growth. All in all, the most pressing issue Hong Kong facing is how to enhance our business environment and competitive edge - this too is the key for spurring up the city to fly high again.