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HONG KONG e-News 17 january 2013

Chief Executive outlines Hong Kong’s development blueprint in maiden policy address

In his maiden policy address to the Legislative Council on Wednesday 16 January 2013, Hong Kong’s Chief Executive, Mr CY Leung, said that promoting economic development is the Government’s primary goal, and that the Government is also determined to address issues relating to Hong Kong’s housing supply, ageing population and environmental problems.

Highlighting his principle of “appropriately proactive” governance, Mr Leung said the Government should refrain from intervention when the market is functioning efficiently, except to ensure a level playing field. “But in cases of market failure, the Government must take appropriate action to address the problem,” he said.

Hong Kong must take full advantage of two trends – the Mainland’s rapid economic development, and the global economic swing towards Asia. The National 12th Five-Year Plan adopted by the Central Government of the People’s Republic of China in 2011 provides huge opportunities for Hong Kong’s development as an international centre for finance, trade and shipping. Hong Kong is also well placed to diversify its industries to meet the needs for start-up initiatives, investment, business operation and employment.

Identifying promising industries

The Government will establish an Economic Development Commission, with working groups on particular sectors (transportation, convention and exhibition industries and tourism, manufacturing industries, innovative technology, cultural and creative industries, and professional services) to focus on efforts to broaden Hong Kong’s economic base, enhance its long-term development, and identify industries which present opportunities for economic growth.

Hong Kong will continue to reinforce and enhance its role as an international shipping centre, covering both aviation and maritime transport. Hong Kong will also build on the strengths of its existing terminal business to develop high value-added maritime services. The recommendations of a consultancy study in this regard will be available later this year.

Closer co-operation with Mainland China and development of financial services

The Chief Executive said he will focus efforts on maximising benefits from the Closer Economic Partnership Arrangement (CEPA) between Hong Kong and the Mainland. This includes setting up an additional joint working group to provide targeted assistance to sectors that have encountered relatively more entry barriers, with emphasis on assisting small and medium enterprises.

To take advantage of the rapid economic development in the Mainland’s central region, Mr Leung said the Government would establish a fifth Hong Kong Economic and Trade Office on the Mainland, in Wuhan, which is in the central part of China. The Government is also considering opening liaison offices in other Mainland Chinese cities.

On financial services, a Financial Services Development Council will be formed to explore ways to complement the internationalisation of the Mainland’s financial market and further develop Hong Kong’s financial services industry. Mr Leung said Hong Kong has great potential to capitalise on its advantages as an offshore centre for Renminbi business and is set to play a crucial role in the internationalisation of the Mainland’s commodity futures market. Hong Kong will also consolidate its leading role as the asset management centre in the Asia-Pacific region, and develop into a comprehensive fund and asset management centre.

Business links with overseas trading partners

To promote business links with overseas trading partners, the Government will pursue more Free Trade Agreements and Investment Promotion and Protection Agreements with different countries. Hong Kong will also continue to press its case for joining the China-ASEAN Free Trade Area.

Increasing the housing and land supply

The Chief Executive set our comprehensive strategies to address Hong Kong’s housing needs. The Government will increase supply of public housing flats to assist families in need, and encourage those who can afford it to buy their own homes by providing subsidised home ownership flats, so as to build a progressive housing ladder. The Government will at the same time maintain the healthy and steady development of the private property market.

The Government is determined to develop new land extensively and build up an abundant land reserve. Measures to increase supply of housing land in the short to medium term include rezoning government and industrial sites for residential use, and increasing the density of new residential sites. Long term land supply measures for housing and other uses include the development of new towns, land reclamation outside the Victoria Harbour, and developing rock caverns.

Increasing commercial land supply

The Government will also address the shortage of commercial land supply. The conversion of office buildings and sites in Central and Wan Chai for commercial use will be expedited, as will be the development of the North Commercial District on Chek Lap Kok Airport Island and the new business district in Kowloon East. The Government will also turn the Kai Tak Development Area into a tourism and entertainment hub by setting up the Kai Tak Fantasy at the runway tip of the former airport for the development of a recreational landmark and an edutainment destination.

Improving air quality

The Government will strive to improve air quality on all fronts, through better co-ordination of relevant policies on environmental protection, energy, transport and planning, as well as co-operation with Guangdong, China.

The target is to broadly achieve the new air quality objectives by 2020. Over the past six months, substantial progress has been made, including setting the emission reduction targets with Guangdong for 2015 and 2020, and enacting legislation to further tighten the emission caps for power plants for the years beyond 2017.

The next priority will be improving roadside air quality. To this end, the Government will set aside HK$10 billion (EUR 977 million) to support and subsidise the phasing out of diesel commercial vehicles, a major source of roadside pollution in Hong Kong, by means of greater financial incentives and regulatory measures. The scheme will significantly reduce the overall emissions of particulates by 80% and nitrogen oxides by 30%. The Government will also set a service life limit for newly registered diesel commercial vehicles at 15 years.

In addition, the Government will continue to take the lead in using more electric vehicles and solicit participation from public bodies and leading enterprises. For example, the Government has set aside funding for franchised bus companies to try out electric buses. The Pilot Green Transport Fund is also subsidising the testing of electric taxis, coaches and goods vehicles.

In September 2012, the Government launched an incentive scheme to encourage ocean-going vessels at berth to switch to low-sulphur diesel. The Government will bring in new legislation to enforce the requirement of fuel switch at berth and will submit a proposal to the Legislative Council to this end, following the completion of a consultation with the maritime sector.

Supporting Arts and Culture

With strong support from the Government, local arts groups and organisations have flourished in recent years. Mr Leung is confident that the future West Kowloon Cultural District would develop into a world-class hub of arts and culture. The Government would allocate more funding to support young artists and new arts groups, and strengthen the training of arts administrators.

More details of the 2013 Policy Address can be found at: