Fintech Ties To Expand

Chief Executive Carrie Lam

Unlocking new ideas and applying technologies is one of the main themes in my Policy Address delivered in October last year. I spoke at some length about the promise of innovation and technology in Hong Kong, its potential in helping to diversify our economy, improve livelihood and creating quality jobs especially for our young people, as well as committed to a clear strategy for innovation and technology development in Hong Kong. Just three weeks ago, our Financial Secretary delivered his annual Budget Speech and allocated more than $50 billion – that is about £4.5 billion – to accelerate innovation and technology development in Hong Kong.

Among the measures is the establishment of two research clusters on healthcare technologies and artificial intelligence and robotics technologies, to attract the world's top scientific research institutions and technology enterprises to Hong Kong for conducting more midstream and downstream research and development projects in collaboration with local universities and scientific research institutions. A bill to introduce tax incentives for corporations to increase their spending on R&D will shortly be introduced in Hong Kong. The many top institutions and enterprises in the United Kingdom, some of which I interacted with during my visit to London last September, are clearly our targets.

We are also in the midst of remaking Hong Kong into one of the world's smart cities, transforming the way we live and work. In December last year, we unveiled the Hong Kong Smart City Blueprint. It sets out our vision for building a smart Hong Kong powered by a thriving economy and a high quality of living. A good deal of that is already well established. Our telecommunications network, for example, is world class, with fixed and mobile broadband speeds and penetration rates among the highest anywhere.

At the same time, there is a lot of potential in applying innovation and technology in many industries. For example, Hong Kong has long been renowned for its high-rise infrastructure, as well as the construction, design and management industries that support it. We are looking to innovation and technology to drive its future. My Government will help lead the way, as beginning this year, we will adopt Building Information Modelling technology in the design and construction of major government capital works projects. And we are setting up a $1 billion Construction Innovation & Technology Fund to encourage industry to adopt innovative technology.

We see the advantage, too, of expanding the reach of innovation and technology in government. Plans include heightened training in innovation and the application of technology for our civil servants. In addition, a big-data analytics centre will be in place by 2020, introducing real-time data transmission and sharing among government departments. In the coming year, we will also adopt public cloud services for government departments. Soon after, we will revamp the government's cloud infrastructure, enabling digital services delivery among government departments, service providers and others. A soon to be established Policy Innovation & Co-ordination Office will be tasked to review existing legislation and regulations with a view to removing outdated provisions that impede the development of innovation and technology. We are also examining government procurement to make sure that innovative solutions will not be overlooked.

In the end, of course, our resources, funding and support are focused overwhelmingly on creating an enabling environment for business and business innovation. In this regard, we are applying innovation and technology to retool our pillar industries and to spark entirely new industries, creating careers and wealth that reward us all.

We are focused, in short, on building a new model of development. This fstival surely underlines the creative and entrepreneurial spirit that drives the collaboration between Hong Kong and the UK. It was also the catalyst for a joint statement on "Closer Collaboration between the UK & Hong Kong on Trade & Economic Matters", which was announced earlier today.

That statement naturally embraces free trade. Hong Kong and the UK enjoy close trade ties, and our bilateral trade increased 4.4% last year. The UK was Hong Kong’s 13th largest global trading partner in 2017. In services, the UK was our third largest partner in 2015. And the UK, at the end of 2016, was Hong Kong's eighth-largest source of inward direct investment. Not surprising, with more than 670 UK companies doing business in Hong Kong, and using Hong Kong as the gateway to markets in Mainland China and throughout the Asia region.

The joint statement also singles out creative industries and the promise they hold for our two economies. In 2016, Hong Kong's creative industries employed about 135,000 professionals in areas ranging from design and the arts to communications, animation and film. Hong Kong has long been a global centre for filmmaking and film talent. Over the past two years, some 30 UK production companies have turned to Hong Kong for location shooting. And Hong Kong looked to the UK for some $3.8 billion worth of creative goods in 2016, from jewellery to books, particularly, I’m told, children’s books.

The joint statement also spotlights the priority our two economies place on innovation, research and development, underlining the opportunities that innovation and technology offer Hong Kong and the UK – at the governmental, business and institutional levels. A good start is the signing of the Hong Kong-UK Fintech Bridge Agreement, which I witnessed while in London. It opens wide the door to expanded fintech co-operation between us.

Chief Executive Carrie Lam gave these remarks at the GREAT Festival of Innovation reception on March 21.