Key takeaways from HKSAR chief executive's policy address

The Chief Executive of China's Hong Kong Special Administrative Region (HKSAR) John Lee delivered his third policy address to the HKSAR Legislative Council on Wednesday, the first since the special administrative region completed the legislation of the Basic Law Article 23.

This year's report outlines Hong Kong's development vision, goals, key measures, and performance indicators. According to Lee, he held over 40 consultation sessions and visited communities to hear their feedback and ideas for the policy address. He received more than 9,500 submissions through letters, emails, and social media.

The following are the main points of the policy address.

Fostering development of maritime industry

The HKSAR will establish a "Hong Kong Maritime and Port Development Board", a high-level advisory body to assist the government in formulating policies and long-term development strategies for the maritime sector.

Chaired by a non-official member and comprised mainly of maritime industry representatives, the board aims to enhance policy implementation and promote sustainable development in Hong Kong's maritime industry. Additional funding will be allocated to boost research capabilities, enhance promotional efforts in the Chinese mainland and overseas, and improve manpower training.

The board will be formed by reconstituting the existing Hong Kong Maritime and Port Board and is part of broader measures to strengthen the maritime sector. Lee emphasized that Hong Kong aims to become a green maritime center, with an Action Plan on Green Maritime Fuel Bunkering to be announced by the end of this year, focusing on emissions reduction and green fuel promotion.

To foster a commodity trading ecosystem, the HKSAR government will explore tax concessions and support measures to attract businesses from the Chinese mainland and abroad. Additionally, a new port community system will be installed by next year, providing features such as shipment tracking and real-time transport information.

Besides, four quality logistics sites will be released for the development of modern, high-end logistics facilities to expand high-value-added logistics services in Hong Kong.

Changing capital investment entrant scheme

The chief executive also announced that the capital investment entrant scheme will now include residential property investments, effective immediately.

Under this enhancement, investments in residential properties priced at a minimum of 50 million Hong Kong dollars (approximately $6.4 million) will be eligible, with a cap of 10 million Hong Kong dollars counting toward the total investment.

Starting March 1 next year, investments made through an eligible private company wholly owned by the applicant will also be considered part of their eligible investment.

Since its launch this March, the scheme has garnered over 550 applications, indicating strong interest from high-net-worth individuals in Hong Kong.

To further enhance its position as an international asset and wealth management center, Hong Kong will collaborate with sovereign wealth funds along the Belt and Road, particularly in the Middle East, to set up funds for investing in assets in the Chinese mainland and beyond.

Currently, Hong Kong hosts around 2,700 single-family offices and is projected to become the world's largest cross-border wealth management center by 2028.

Cutting liquor duty rate

Starting today, the duty rate for liquor with an import price of over 200 HK dollars (about $25.7) will be reduced from 100 percent to 10 percent for the portion above 200 HK dollars.

The duty rate for the portion of 200 HK dollars and below, as well as liquor with an import price of 200 HK dollars or below, will remain unchanged, Lee said.

Currently, Hong Kong imposes a duty of 100 percent on the import price of liquor (with alcoholic strength of more than 30 percent). The move was aimed at promoting liquor trade and boosting the development of high-value-added industries, including logistics and storage, tourism and high-end food and beverage consumption, according to Lee.

Building international gold trading center

Noting that Hong Kong ranks among the world's largest import and export markets for gold by volume, Lee said that the current complexity in geopolitics underscores Hong Kong's edge in security and stability, and hence an attractive location for investors for gold storage, spurring relevant activities such as gold trading, settlement, and delivery.

"This will spur development of the related industry chain, ranging from investment transactions, derivatives, insurance, storage, to trading and logistic services," Lee said.

The HKSAR government will promote the development of world-class gold storage facilities, facilitating the storage and delivery of spot gold by users and investors in Hong Kong and driving demand for related services such as collateral and loan businesses, opening up new growth areas for the financial sector, Lee said.

The financial services and the treasury bureau of the HKSAR government will set up a working group to take forward the establishment of the international gold trading center, Lee said, adding that this will include, among other things, strengthening the trading mechanism and regulatory framework, promoting application of cutting-edge financial technology, and actively exploring with the mainland authorities on the inclusion of gold-related products in the mutual market access program.

Attracting more overseas students

Hong Kong will attract more overseas students, especially those from ASEAN and other Belt and Road countries and regions, to study in the city, Lee said.

Creating the "Study in Hong Kong" brand is one of measures to develop Hong Kong into an international hub for post-secondary education. Hong Kong will attract more overseas students to study there through the provision of scholarships and other incentives, Lee said.

Also, Hong Kong will strive to host international education conferences and exhibitions while encouraging local post-secondary institutions to enhance collaboration and exchanges with their counterparts around the world in promoting the "Study in Hong Kong" brand on a global scale.

The HKSAR government implemented a new talent admission regime in late 2022. More than 380,000 applications have been received to date, and around 160,000 talents have arrived in Hong Kong with their families, Lee said.

To build a quality talent pool for development, Lee said that the HKSAR government will reform various aspects of the talent admission regime, including expanding the list of universities under the Top Talent Pass Scheme to 198 universities by adding 13 top mainland and overseas universities, and extending the validity period of the first visa of high-income talents under the scheme from two years to three years.

(With input from Xinhua)