6 key takeaways for the HK marketing community from Policy Address 2023

Hong Kong chief executive John Lee delivered the 2023 Policy Address today at the LegCo and he highlighted heavily on capitalising on the city’s advantages and developing new areas of growth as we enter the post-pandemic era. 

Lee opened by stating that Hong Kong came out of the pandemic with strength. The real Gross Domestic Product (GDP) in the first half of the year saw a 2.2% increase, year-on-year, and the latest unemployment rate dropped to 2.8%. 

While inbound tourism and local consumption have been the key drivers of the city’s economic recovery, Lee said the average daily visitor arrivals have reached nearly 70% of the level over the same period in 2018 this summer. The private consumption expenditure grew by 8.2%, year-on-year. 

“As the aviation and related sectors gradually resume handling capacity, the number of visitor arrivals is expected to increase. The improvement of the economy and the labour market, alongside measures launched by the government to sustain economic recovery, will boost private consumption,” he said.

Moving forward, as Hong Kong total goods exports and Hong Kong's investment and assets markets have been negatively impacted by the external environment, Lee said the city was facing keen competition from other economies, while tackling internal challenges such as ageing population and manpower shortage.

He then went on to lay out Hong Kong’s policy plan for the public and for businesses. Below, MARKETING-INTERACTIVE lays out some of the key takeaways from the Policy Address 2023 that businesses and marketers in Hong Kong should focus on. 

1. Luring enterprises and talents 

The government will develop "headquarters economy" (總部經濟) to attract enterprises from outside Hong Kong to set up headquarters and/or corporate divisions in Hong Kong, bringing in quality enterprises to explore the immense opportunities brought about by the national and international dual circulation.

To attract more overseas companies to set up operations in Hong Kong and facilitate foreigners working in these companies to travel to the mainland for business purposes, foreign staff of companies registered in Hong Kong may, starting tomorrow (26 October), apply with the Chinese Visa Application Service Centre in Hong Kong for "multiple-entry visas" (一簽多行) valid for two or more years to the mainland, enjoying priority processing.

The government will also introduce a mechanism to facilitate companies domiciled overseas, in particular those with a business focus in the Asia-Pacific region, for re-domiciliation to Hong Kong. It aims to introduce the legislative amendments into the LegCo in the first half of next year.

In terms of talent attraction and retention, the government will establish the physical office of the Hong Kong Talent Engage (HKTE) (人才服務辦公室) by the end of this month, following the launch of the online platform for the HKTE last year. The office will provide support for incoming talents and follow up with their development and needs after arrival. 

The government has also implemented the Capital Investment Entrant Scheme (資本投資者入境計劃). Under the scheme, eligible investors who make investments of $30 million or above in assets such as stocks, funds and bonds, can apply for entry into Hong Kong. This aims to strengthen the development of Hong Kong's asset and wealth management business, financial services and related professional services.

2. Establishment of Chinese Culture Promotion Office

The Leisure and Cultural Services Department (LCSD) will establish a Chinese Culture Promotion Office (弘揚中華文化辦公室), which will be tasked to plan and implement programmes to promote Chinese culture and history, and the Chinese Culture Festival (中國文化節) will be organised starting next year.

The government will also set up a museum to showcase the development and achievements of China, covering areas such as its history, politics, economic development and culture. Before the commissioning of the new museum, the LCSD will set up exhibition galleries in existing museums to display the relevant contents.

3. Establishment of international innovation and technology centre

The government will set up the New Industrialisation Development Office. (新型工業發展辦公室). Established under the Innovation, Technology and Industry Bureau and led by the Commissioner for Industry, the office will adopt an industry-oriented approach to promote new industrialisation in Hong Kong, support strategic enterprises to develop their businesses in Hong Kong, assist the manufacturing sector in upgrading and transformation by making use of I&T, and provide support for start-ups.

4. Revitalisation of tourism

The government will transform the Cultural and Heritage Sites Local Tour Incentive Scheme (文化古蹟本地遊鼓勵計劃) into the Characteristic Local Tourism Incentive Scheme (本地特色旅遊鼓勵計劃), providing more in-depth itinerary design and training, with a view to encouraging the trade to develop more thematic tours such as green ecology tours, traditional culture tours and pop culture tours to showcase the diversified cultural landscape of Hong Kong. 

Moreover, the government will promote smart tourism. An inter-departmental Working Group on Smart Tourism (智慧旅遊工作組) will be set up under CSTB to formulate and implement initiatives to promote smart tourism, including launching a new round of Information Technology Development Matching Fund Scheme (旅行社資訊科技發展配對基金計劃) for travel agents, adopting technologies to enhance visitors' experience (such as augmented reality), driving tourist attractions to provide multilingual virtual guides, and making use of smart technologies to strengthen management of inbound tour groups. 

The government will establish Sha Tau Kok Cultural tourism zone. Starting early next year, we will gradually open up the Sha Tau Kok Frontier Closed Area (excluding Chung Ying Street). In the initial stage, visitors can apply online for Closed Area Permits to enter Sha Tau Kok for sightseeing. This aims to promote the  cultural and eco-tourism of Sha Tau Kok and nearby outlying islands. 

5. Supporting small and medium enterprises to embrace challenges

In view of the rapid growth of eCommerce business worldwide, the Commerce and Economic Development Bureau (CEDB) will establish the inter-departmental eCommerce development task force to implement policies assisting Hong Kong's SMEs in developing eCommerce business on the Mainland, including organising Hong Kong Shopping Festivals on eCommerce platforms to promote awareness of Hong Kong brands for developing the nation-wide domestic consumption market.

The bureau will also launch "ECommerce Easy" under the dedicated fund on branding, upgrading and domestic sales to enable enterprises to make use of HK$1 million for the implementation of eCommerce projects within the cumulative funding ceiling of HK$7 million; and expediting the rollout of the Single E-lock Scheme and the Trade Single Window, to enhance efficiency in customs clearance and eCommerce delivery.

Having regard to the cash flow situations of different enterprises, the government will provide more flexible repayment options so that enterprises may choose to repay only 10%, 20% or 50% of the original principal amount payable each month during the specified period, enabling them to have more time to gradually switch to normal repayment.

On the other hand, Cyberport will launch the "Digital Transformation Support Pilot Programme" by the end of this year to subsidise SMEs in the retail and food and beverage sectors in applying for electronic payment and other digital packages.

6. Advance development of digital government

The government will set up the digital policy office by merging the existing office of the government chief information officer and the efficiency office. Led by the commissioner for digital policy, the new office will be responsible for formulating policies on digital government, data governance and information technology.

It will consolidate information technology-related resources within the government, promote the opening up of data and co-ordinate with departments to offer more digital services.

From 2024, the government will launch over a hundred digital government initiatives to promote digital government and the smart city. These projects include areas such as enhancing the 1823 enquiry service through an AI chatbot and providing electronic payment options for all government fees within one year.

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