Chief Executive CY Leung and Financial Secretary John Tsang will soon reveal their top priorities for 2016 in the Policy Address and Budget, respectively. Given a rapidly changing social, economic and political landscape, Hong Kong must stay visionary, relevant, and influential in order to remain a top international business hub. The continued success of the city will, in fact, depend on government initiatives in many strategic areas.
Hong Kong will continue its role as an economic model – a source of business best practices with a simple and low tax regime, intellectual property rights protection, and the rule of law – for Main-land China. It is well positioned to exemplify key principles such as an open, efficient and globalized capital market through engagement with PRC’s ministries and departments.
In global and regional trade, proactive partici-pation is vital to strengthening Hong Kong’s competitiveness. The HK-ASEAN Free Trade Agreement (FTA), Trade in Services Agreement (TISA), and developments regarding the One Belt, One Road (OBOR) and the Asian Infrastructure Investment Bank (AIIB) initiatives are important to the city’s pillar and emerging industries. The Trans-Pacific Partnership (TPP) should be next.
The progress on the implementation of G20’s new standard of automatic exchange of taxpayer information is on the right track for Hong Kong, but no effort should be spared to assess and address any tax-related proposals which may have a material impact on Hong Kong. Uncertainty must be clarified as they often hinder economic activities and financial investments. The US Foreign Account Tax Compliance Act (FATCA) enacted earlier is an example.
Copyright challenges, particularly those arising from the online environment, are significant; and they require patent reform without delay and a crackdown on counterfeit products. It calls for a robust intellectual property rights protection regime for all products and industries, along with international best standards on the protection and enforcement of trademark, copyright and patent rights.
The Customs Department is commended for tackling counterfeit pharmaceuticals at retail, distribution, and trans-shipment through Hong Kong. At the retail level in particular, sales of counterfeit drugs are reported to have dropped drastically over the last 10 years. To encourage investment in the sector and safeguard pharmaceutical patent rights, an effective patent linkage regime is highly recommended.
While Hong Kong is renowned in a number of areas globally, its digital agenda is far behind the competition. There is an urgent need to connect the current analogue silos and create an environment to attract talent to capitalize on opportunities in data analytics for urban planning, energy efficiency, traffic control, as well as services for education, healthcare and an aging population.
One of Hong Kong’s assets is a pool of talent – a mixture of overseas and local human capital – from which companies can source and staff their workforce. The business sector can only benefit when policies regarding vocational training, labor law, and immigration policy are relevant to the current economic model, as opposed to the existing regime dating back to an era when Hong Kong was still a manufacturing-based economy.
As the government attempts to rebrand Hong Kong through a new, high-level global destination marketing campaign as a dynamic and exciting modern city with a focus on the high-end long-haul markets, it is an opportunity to better leverage the expertise of PR agencies in developing a year-round campaign which highlights sporting events, culinary traditions, nature, arts and culture, in addition to other unique aspects including offerings of traditional Chinese medicine.
On the transportation front, a green trans-port system by redefining road space usage and making road and rail-based mass public transport more efficient is most urgent. Ideally, Hong Kong could use more natural gas as a cleaner form of fuel for road transport as well as electricity generation; but it would require a better distribution infrastructure such as the provision of a high-capacity LNG terminal nearby.
Simultaneously, Hong Kong needs to address the lack of backup land in order to support local operations of container vessels and the liberalization of Shenzhen and Nansha cargo seaports. The Transportation and Housing Bureau’s Proposals for Enhancing the Use of Port Back-up Land in Kwai Tsing is a positive step in supporting one of Hong Kong’s most important industries amid increasing regional competition. The key is to secure Hong Kong’s position as a trans-shipment hub of the world.
The next 12 months may turn out to be no less challenging than the last 12. However, there is so much to do to improve upon Hong Kong’s status as a top-tier commercial and business center. Yes, it will take initiation, collaboration and execution, and it will lead to tremendous results – enhanced livelihood and quality of life for the people, and a strengthened business environment on par or above any others.