Chief Executive outlines new strategies for economic development

Hong Kong Chief Executive Donald Tsang hosts a news conference after delivering his 2009-10 Policy Address on October 14.

Hong Kong Chief Executive Donald Tsang, in his annual Policy Address on October 14, set out strategies for the territory to break new ground in economic development and sustainable growth.

Mr. Tsang also laid out his vision to improve the quality of life in Hong Kong, including major projects in Central, and unveiled new measures to promote family values as well as help the elderly and other vulnerable groups.   

“We are entering a new era, but we need not worry about the new competitive landscape.  With an open mind, pioneering spirit and full preparation, we can break new ground together,” Mr. Tsang said.

The Chief Executive said the global economic crisis underscores the need for Hong Kong to diversify its economic base in areas that complement the traditional pillar industries of financial services, tourism, trade and logistics and professional services.

The 2009-10 Policy Address outlines strategies for Hong Kong to break new ground in economic development and sustainable growth.

He announced new initiatives to develop six industries in which Hong Kong enjoys clear advantages: education services, medical services, testing and certification services, environmental industries, innovation and technology and cultural and creative industries.

This includes a package of measures to optimize land use by releasing the potential of more than 1,000 old industrial buildings. Owners will be encouraged to revitalize or convert their existing industrial buildings for use by the six industries.

“With appropriate policies to remove obstacles to their development, the six industries will enter a new phase of development, propelling Hong Kong towards a knowledge-based economy,” said Mr. Tsang.

The specific initiatives are:

1. Education services: Four undeveloped sites have been allocated for international school development, while two sites have been reserved for operators providing self-financing degree programs.
2. Medical services: Four sites have been reserved for private hospital development.
3. Testing and certification services: The Hong Kong Council for Testing and Certification will draw up a three-year development plan for the industry, including promoting the development of Chinese medicine.
4. Environmental industries: Working toward the goal of improving air quality and reducing carbon emissions, the government has committed to reducing the energy intensity of Hong Kong at least 25% by 2030, compared to 2005 levels. To help achieve this goal, Mr. Tsang said the government will continue to focus on promoting the use of cleaner fuel and improved energy efficiency. In addition, the government will expand its green procurement list and actively apply green specifications in procurement procedures.
5. Innovation and technology: Allocate approximately US$25.6 million for a cash-rebate initiative to encourage enterprises to invest in research and development and forge partnerships with research institutions.
6. Cultural and creative industries: Support local cultural and creative industries to further develop the mainland China market through the Closer Economic Partnership Arrangement (CEPA), Hong Kong’s free trade agreement with the Mainland.

Mr. Tsang identified several new challenges for the territory, including promoting stronger regional cooperation and maintaining Hong Kong's status as a global financial center. He said Hong Kong should collaborate with Shanghai in developing the country’s financial services industry, adding that competition between the two cities is not a “zero-sum game .”

“As a prime, global financial center in the Asian time zone, Hong Kong enjoys many advantages, including a highly open and internationalized market, a regulatory regime aligned with major overseas markets, the rule of law and the free flow of information and capital,” Mr. Tsang said.

To promote Hong Kong-Taiwan cooperation, Mr. Tsang said greater emphasis will be placed on developing relations through the establishment of a Hong Kong-Taiwan Economic and Cultural Cooperation and Promotion Council and the setting up of a multi-functional office in Taiwan.

The Chief Executive also said Hong Kong will strengthen cooperation with Guangdong Province. He said the two governments are also formulating a framework agreement for regional cooperation.

In his Policy Address, Mr. Tsang set out his vision to enhance Central’s appeal as a vibrant district for business and entertainment. Among his plans are opening up public space at the Central Ferry Piers site, converting the Central Market into an “urban oasis,” preserving the Central Government Offices Main and East wings, implementing the Central Police Station project, recommending the conversion of Murray Building into a hotel and the development of a creative industries cluster on the original site of the Central School.

“The idea of conserving Central is premised on our respect for the history of the district,” the Chief Executive said. “We endeavor to strike a balance between protecting the environment and providing quality space, which is a growing public concern, and relieving the shortage of office space in the city center.”

Identifying family values and elderly care as cornerstones of a progressive society, Mr. Tsang pledged to provide additional support for vulnerable members of the community.

He also urged residents to focus on amending in 2012 the electoral methods for electing the Chief Executive and forming the Legislative Council. The National People’s Congress Standing Committee made the decision in 2007 to roll forward the democratic development of the constitutional arrangements. The government will begin an extensive public consultation on the issue in November.