6 key takeaways for the HK marketing community from Budget 2024

Tourism tactics, building the Hong Kong brand, luring talent and supporting small and medium enterprises (SME) are part of the main goals for Hong Kong in the upcoming year as laid out in the latest Budget 2024. 

During an opening speech delivered at LegCo, Hong Kong’s finance chief Paul Chan stated that Hong Kong’s economy has grown 3.2% in 2023. Moreover, the labour market continued to improve, with the seasonally adjusted unemployment rate declining from 3.5% in the fourth quarter of 2022 to the latest 2.9 %.

Hence, this is still a deficit budget, which is expected to result in a consolidated deficit of HK$101.6 billion for the fiscal year 2023-24.

Moving forward, the external environment will continue to put pressure on Hong Kong's exports of goods, he said. However, the global monetary conditions may ease progressively over the course of the year, which would bode well for export performance.

Overall, Chan said the rising incomes among the general public will continue to support private consumption.  Chan added successive government measures will help lift consumption sentiment as well.  Fixed asset investment should also increase alongside continuing economic growth. The government forecasts that the Hong Kong economy will grow by an average of 3.2% a year in real terms from 2025 to 2028.  

He then went on to lay out Hong Kong’s financial plan for the public and for businesses. Below, MARKETING-INTERACTIVE lays out some of the key takeaways from the Budget 2024 that businesses and marketers in Hong Kong should focus on.

1. Attracting enterprises, capital and talent 

Over 10 strategic enterprises will sign a partnership agreement with The Office for Attracting Strategic Enterprises (OASES) next month.  The companies have either confirmed setting up or expanding their businesses in Hong Kong, or they are planning to do so. 

Together with the 30 companies from the first batch, they are expected to bring about over HK$40 billion in investment to Hong Kong, creating about 13k jobs over the next few years.  

The government has also put in place user‑friendly fund re-domiciliation mechanisms for open-ended fund companies and limited partnership funds, aiming to attract existing foreign funds to establish and operate in Hong Kong. In the first half of 2024, the government will submit a legislative proposal enabling companies domiciled overseas, especially enterprises with a business focus in the Asia-Pacific region, to re-domicile in Hong Kong.

In terms of pooling talent, the government has rolled out several measures in recent years, including the top talent pass scheme (TTPS), to trawl for talent.  In the past year or so, more than 140k applications were approved under various talent admission schemes. About 100k of them have already arrived in Hong Kong.  

Chan said the Hong Kong Talent Engage (HKTE) will organise a global talent summit and the Guangdong‑Hong Kong‑Macao Greater Bay Area High‑quality talent development conference (全球人才高峰會暨粵港澳大灣區人才高質量發展大會) in May to promote Hong Kong's advantages as an international talent hub, enabling the flow of talent among the cities of the GBA.

2. Building the Hong Kong brand through mega events

The government has set up a mega events coordination group to reach out proactively for more mega events to be staged in Hong Kong, while strengthening inter-departmental collaboration for such events to be successfully held.  It has earmarked HK$100 million to boost mega-event promotions over the next three years.

The Hong Kong Tourism Board (HKTB) will hold pyrotechnic and drone shows against the backdrop of the splendid night views of Victoria Harbour every month. The HKTB will also revamp its light-and-sound show, "A symphony of lights" (幻彩詠香江).

The Development Bureau (DEVB) will also introduce commercial facilities such as food and beverages, retail and entertainment on a pilot basis at selected suitable harbourfront locations to bring convenience and better experience to visitors.

Apart from inviting visitors to Hong Kong, the government will visit regions and markets to tell the good stories of the city and expand its circle of friends. The government will launch a new sponsored overseas speaking engagement programme.  Renowned scholars and industry leaders will be sponsored to attend overseas events and give speeches to promote Hong Kong and its many advantages.

3. Promoting energising tourism

The government also plans to allocate additional funding, totalling HK$1,095 million, to support the Tourism Commission and the HKTB in organising Hong Kong events and activities.

The HKTB will promote immersive, in-depth tourism with themes such as "citywalk" (城市漫步), and promote young-adult focused activities such as hiking, cycling, stand-up paddle-boarding, trail running and stargazing in the wilderness. It's all part of an energising effort to soft-sell Hong Kong.

The HKTB will develop new seasonal, festival and event experiences of varying themes featuring Chinese and Western arts, popular cultures, wine‑and‑dine, outskirt explorations, active sports and more to cater to the interests of wide-ranging visitor segments. 

Furthermore, the HKTB will enhance the quality tourism services scheme and launch a new round of publicity activities, including reality shows and the commendation of outstanding frontline staff in the service industry. This aims to promote Hong Kong as a hospitable, people-focused city in collaboration with various sectors.

Additionally, the HKTB will launch a new Hong Kong tourism brand, and continue to target source markets and collaborate with GBA cities to jointly promote multi‑destination tourism.

The government will promote mega-events and design in-depth thematic tours, enrich tourism resources and provide more novel products and experiences to cater to visitors of all types and sources.  This aims to help stimulate retail, consumption, catering and transportation demand throughout Hong Kong.

4. Assisting small and medium enterprises (SME)

To assist SMEs in tackling their capital-flow problems, the government will extend the application period for the 80% and 90% guarantee products under the SME financing guarantee scheme (中小企融資擔保計劃) for two years to the end of March 2026.  The total guaranteed commitment under the scheme will increase further by HK$10 billion.

Furthermore, SMEs in the food and beverage industry and the retail industry will be invited to select suitable options among ready‑to‑use basic digital solutions and apply for subsidies on a matching basis early this year under the digital transformation support pilot programme (數碼轉型支援先導計劃). 

The solutions will focus on three areas, including digital payment and shopfront sales, online promotion and customer-management solutions.  It is expected that at least 8,000 eligible SMEs will benefit from the pilot programme.

Additionally, the government propose to inject HK$500 million more into the dedicated fund for branding, upgrading and domestic sales (BUD fund), aiming to help SMEs boost their competitiveness and tap into mainland and overseas markets. This includes the launch of "eCommerce easy" (電商易) under the fund. It will provide support of up to HK$1 million per enterprise for implementing e‑commerce projects in the mainland.

5. Embracing digital economy and artificial intelligence

The government has commissioned an expert group to undertake an in‑depth study on how to develop a robust data trading ecosystem in Hong Kong, the scope of which includes Hong Kong's role as a "super connector" (超級連接人) in data trading and promoting the formulation of international data trading rules.  

The aim is to enable us to unleash the potential of data elements and facilitate its development into a new industry with an enormous growth momentum, hence empowering the upgrading and transformation of traditional industries.

In terms of Web3 development, the HKMA will soon roll out a "sandbox" (沙盒) for entities interested in issuing stablecoins to conduct trials, under manageable conditions, on the issuance process, business models, investor protection and risk management system.  The "sandbox" will also facilitate communication on future regulatory requirements. 

While artificial intelligence (AI) is the key to propelling the development of the digital economy in Hong Kong, Cyberport is expediting the establishment of an AI supercomputing centre to meet the demand of research institutes and the industry for computing power.  

The first phase facility is expected to start operating within this year at the earliest.  By early 2026 at the soonest, the computing power of the supercomputing facility is expected to reach 3,000 petaFLOPS.  The scale of such power is equivalent to the capacity of processing nearly 10 billion images in one hour.

Meanwhile, the government will allocate HK$3 billion to Cyberport for the launch of a three‑year AI subsidy scheme to support local universities, research institutes and enterprises to leverage the centre's computing power and achieve scientific breakthroughs.  

The subsidy will also be used to strengthen the cyber security and data protection of the Centre, and launch promotional and educational activities, etc. to encourage mainland and overseas AI experts, enterprises and R&D projects to come to Hong Kong.

6. Positioning Hong Kong as an East-meets-West centre for international cultural exchange

The government will inject about HK$1.4 billion and HK$2.9 billion into the film development fund (電影發展基金) and the CreateSmart Initiative (創意智優計劃) respectively in 2024/25, to support projects in various areas such as film, arts and design.  

Among them, the government will organise the Hong Kong Fashion Design Week (香港時裝設計周) annually from 2024 onwards.  It aims to turn the Hong Kong Fashion Design Week into an Asian fashion design mega event, thereby introducing Hong Kong's fashion design brands internationally.

Furthermore, the government has launched the Signature Performing Arts Programme Scheme (重點演藝項目計劃), supporting the production of representative and large-scale local signature performing arts programmes to be staged as long-running performances and become another cultural icon of Hong Kong.  Culture, Sports and Tourism Bureau will devise the key arrangements of the Signature Performing Arts Programme Scheme in the first half of 2024.

Moreover, the government will organise the first Hong Kong Performing Arts Expo (香港演藝博覽) in October this year to provide a comprehensive platform for showcasing top-notch performing arts productions and enhancing exchanges to create business opportunities for these programmes and creative talents. 

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