'Budget To Spur Growth Of Digital Economy In HK'

The government’s new financial roadmap unveiled on Wednesday set "the right direction" in developing the city’s digital economy, according to a lawyer specialising in fintech, and puts the territory in a strong position to draw in the needed talent and international tech firms to grow as an international innovation and technology hub.

Rocky Mui, a partner at Clifford Chance, told RTHK’s Backchat programme that the new budget’s multi-billion dollar drive to develop capacity for cutting-edge tech such as artificial intelligence (AI), quantum technology and third-generation internet (Web3) charts a promising course for the SAR.

"It's very exciting in terms of how Hong Kong is positioning itself," Mui said. “The government identified what I see as the right areas to go into – the AI, Web3 and of course, virtual assets, which is a subset under the Web3 and blockchain ecosystem.”

Financial Secretary Paul Chan on Wednesday proposed pumping HK$3 billion into enhancing AI and quantum tech research, and for the launch of a feasibility study into building an AI ‘supercomputing centre’ here.

Another HK$50 million will be set aside to develop Web3 while Chan will head up a new task force on the sustainable development of the virtual asset industry here.

Mui said many international cryptocurrency firms are already looking to boost their presence here even as a more robust licensing regime is set to come into force in June.

The Securities and Futures Commission has proposed allowing retail investors to buy large-cap cryptocurrencies on licensed virtual asset platforms, complete with investor protections and regulatory oversight.

“It gives that clarity in terms of a regulatory regime here, that gives confidence to the market and also investors,” he said.

“A lot of the international players are planning, or their plans are already underway to establish more substantially locally, and to obtain their licence.”

Mui said the easing of Covid restrictions has already resulted in an influx of needed talent, that the government is hoping to complement by nurturing local talent.

Looking forward, the fintech expert said the industry will need to look to find new ground and new applications for established technologies such as blockchain.

“It’s all potential, but it’s all about applying that in practice,” he said. “I think the next step is really looking at adoption of the technology to further enhance whichever industry, whichever businesses – it may not just be only virtual assets… but it’s really about trying to capture opportunities in applying the right technology in the right areas.”