Innovative, high-technology green development has a critical role to play in the city’s future, Hong Kong Special Administrative Region Financial Secretary Paul Chan said when delivering the 2023-24 budget this week.
“We must push forward our economy towards high-quality development and persistently drive development through innovation and technology; create new growth impetus through institutional and policy innovations; and progress towards green transformation by vigorously promoting the development of green and low-carbon technology and industries.”
Mr Chan said Hong Kong had an edge in establishing an international green technology and financial centre as Hong Kong had pooled together many green technology enterprises and talents. Hong Kong should strive to become an international green technology and financial centre.
To help realise that ambition, he would set up a Green Technology and Finance Development Committee comprising representatives from a wide variety of industries, including green technology and finance, as well as green standard certification, to formulate an action agenda. This would include the building of a green technology ecosystem to attract prominent companies and start-ups, and policy support to boost the demand for green technology.
The Government would organise an International GreenTech Week at the end of this year, inviting companies and investors from green technology industries worldwide.
The digital economy would play “a crucial role in the course of achieving high-quality development”, Mr Chan said.
The Financial Secretary, who chairs the Digital Economy Development Committee, said in-depth studies are being conducted on various elements of the digital economy and that recommendations would follow this year.
These include a feasibility study on establishing an Artificial Intelligence Supercomputing Centre. Adequate computing infrastructure, Mr Chan said, “is a prerequisite for promoting the development of scientific research and artificial intelligence industries in Hong Kong”.
Cyberport established the Web3 Hub@Cyberport early this year. The Financial Secretary is allocating HK$50 million to expedite the Web3 ecosystem development. Mr Chan said Web3, the third-generation Internet, had great potential. “We must seize this golden opportunity and keep up with the times to spearhead innovation development.”
Virtual assets were an essential part of Web3, Mr Chan said, adding that he would lead a task force on VA development to “provide recommendations on the sustainable and responsible development of the sector”.
To realise Hong Kong’s vision of becoming an international I&T hub, the Financial Secretary said Hong Kong must “pool the efforts of government, industry, academic and research sectors to commercialise research and development results, and promote the development of the I&T industry”.
To that end, the Financial Secretary said that of the $10 billion earmarked in his previous Budget to promote life and health technology, $6 billion would be set aside to help universities and research institutes develop thematic research centres. Those interested in creating a life and health technology research institute will be invited to submit proposals in 2023-24.
“Microelectronics is the core technology in high-tech and information industries,” Mr Chan said. He added that the Government would support the establishment of a Microelectronics Research and Development Institute, with the aim of making it a leading organisation for supporting microelectronics development in the Asia-Pacific region.
The Financial Secretary said Hong Kong Science and Technology Parks Corporation (HKSTPC) would inject $400 million into its Corporate Venture Fund to benefit more promising technology start-ups. HKSTPC will also launch a $110 million Co-acceleration Programme in collaboration with partners to expand high-potential technology start-ups into regional or global enterprises.
The overall outlook for the Hong Kong economy was positive with growth for this year forecast at 2.5% to 5.5%, Mr Chan said. However domestic and external cost pressures will push underlying inflation to 2.5% and headline inflation to 2.9%.
“In the medium to long term, the Hong Kong economy will see abundant opportunities. Our country pursues high-quality development and will maintain reasonable growth. Other emerging Asian economies will also continue to register relatively fast growth.”
He forecast the Hong Kong economy would grow an average of 3.7% per annum in real terms from 2024 to 2027, higher than the trend growth of 2.8% during the decade before the epidemic. The underlying inflation rate was forecast to average 2.5% per annum.
The Financial Secretary also reduced profits and personal income tax 100% up to a ceiling of $6,000 and gave rates concession for business and domestic tenants.
As small and medium-sized enterprise business had yet to return to normal, he would extend the application period of all guarantee products under the SME Financing Guarantee Scheme (SFGS) from end June 2023 to the end of March 2024, giving SMEs more room to adjust and secure a firm footing.
Hong Kong Budget 2023-24