Hong Kong Economic and Trade Office, Brussels
The Government of the Hong Kong Special Administration Region
Chief Executive's Annual Policy Address - 10 October 2018

The Chief Executive of the Hong Kong Special Administrative Region (Hong Kong SAR) Mrs Carrie Lam, delivered her second Policy Address to the Legislative Council on Wednesday 10 October.

"The Policy Address I present today also reflects my experience since I assumed office as the Chief Executive," Mrs Lam said.  "In the past year or so, my political team and I have taken a pragmatic approach to "care", "listen" and "act'; while being "innovative", "interactive" and "collaborative" in implementing our policy initiatives proactively." 

Titled "Striving Ahead  Rekindling Hope", the 2018 Policy Address has unveiled over 240 new initiatives which comprehensively covers such areas as good governance, housing and land, diversified economy, nurturing talent, improving people's livelihood, liveable city and connecting with young people.  Building on the Hong Kong SAR's unique strengths under "One Country, Two Systems" and combining with the current-term Government's unflagging efforts since assuming office on 1 July 2017, this Policy Address carries the Chief Executive's unswerving determination in leading Hong Kong to strive forward. 

In this Policy Address, housing and land supply is treated as a stand-alone chapter and is placed before the chapters on economy and people's livelihood.  To help resolve the challenge of land supply shortage, the Chief Executive said the Government is determined to "identify and produce land and build a land reserve" in a resolute and persistent manner.  The current-term Government will increase the ratio of public housing, allocate more land to public housing development, and undertake that 70 per cent of the housing units on the Government's newly developed land will be for public housing.  The Government will also launch a new "Lantau Tomorrow Vision" to drive economic development and improve people's living quality.  In this connection, the Government has decided to commence immediately a study on reclamation of a 1 700 hectares island off East Lantau for economic development and housing for up to 1.1 million people.

Amidst the unstable and fluctuating international trade environment, the Chief Executive said Hong Kong must pursue the development of a diversified economy in order to enhance its capabilities in withstanding external shocks.  To advance the development of innovation and technology (I&T), the Chief Executive proposed a series of measures –

  • Injecting HK$20 billion (EUR 2.2 billion) into the Research Endowment Fund set up by the Research Grants Council, launching a new Research Matching Grant Scheme with a total commitment of HK$3 billion (EUR 333 million) and setting up fellowship schemes to strengthen the pool of talent in research and I&T in Hong Kong;
  • Allocating HK$2 billion (EUR 222 million) for launching a Re-industrialisation Funding Scheme and earmarking an additional HK$2 billion (EUR 222 million) for the Hong Kong Science and Technology Parks Corporation to identify suitable land for building manufacturing facilities required by the dedicated advanced manufacturing sector; and
  • Opening up government data and introducing a pro-innovation government procurement policy.

To capitalise on Hong Kong's unique strengths and the immense opportunities brought by the Belt & Road Initiative and the Guangdong-Hong Kong-Macao Greater Bay Area development, the Government will implement a series of measures to support and enhance the development of high value-added maritime services, which include formulating tax measures to foster ship leasing business; providing tax concessions for the marine insurance sector; supporting Hong Kong to provide dispute resolution services to the global maritime industry; injecting HK$200 million (EUR 22 million) into the Maritime and Aviation Training Fund; and further expanding our CDTA network to attract more international marine and maritime service providers to set up offices in Hong Kong.

Spurring the continued development and strengthening our capital markets are vital to cementing Hong Kong's status as an international financial centre.  In this connection,  the Government has adopted a five-pronged approach in facilitating Fintech development, namely promotion, facilitation, regulation, talents and funding.  The Hong Kong Monetary Authority (HKMA) launched in September 2018 the Faster Payment System to link up banks and stored value facilities operators.  It enables the public to make real-time money transfer anytime and anywhere with the use of mobile number, email address or common QR code as account proxy for the payee.  The HKMA is processing the first batch of virtual banking licence applications.  The licences are expected to be issued by end-2018 or early 2019 at the earliest. 

To boost the development of Hong Kong's film industry in the next few years, the Chief Executive has also proposed to make a one-off injection of HK$1 billion (EUR 111 million) into the Film Development Fund to nurture talent, enhance local film production and expand markets.

As talent is the most important element in Hong Kong's continued development, and education is the key to nurturing talent, the Chief Executive said the Government will implement the all-graduate teaching force policy in public sector primary and secondary schools in the 2019/20 school year, incurring additional funding of about HK$1.5 billion (EUR 166 million); provide a "Life-wide Learning Grant" for public schools to help students broaden their horizons; give additional recurrent resources of HK$570 million (EUR 63 million) to schools to strengthen administrative support; and set aside an additional provision of HK$800 million (EUR 89 million) to support students with special educational needs.

As for the improvement of labour welfare, retirement protection tops the labour policy agenda of the current-term Government.  In this regard, the Government will drive to secure the passage of the enabling legislation to abolish the 'offsetting'; arrangement under the Mandatory Provident Fund Scheme within the current term of the Government, and implement the abolition two years after the legislative amendments.  The Government will enhance the support for employers and assist the micro, small and medium-sized enterprises in making preparation for the change.  The Government will extend the statutory maternity leave from the current 10 weeks to 14 weeks, and reimburse the additional four weeks' statutory maternity leave pay to the employers.  In addition, the Government will increase the statutory paternity leave from three days to five days as early as possible.

To create a liveable city, the Government will also strive to develop a convenient transport network, a green countryside, a beautiful harbour, a sustainable environment, a heritage with historical significance, as well as quality cultural, arts, recreational and sports activities and good social order, so that people will be keen to stay in Hong Kong and make it their home.  Key initiatives announced in this Policy Address include –

  • strengthen primary healthcare services by setting up the city's first District Health Centre in Kwai Tsing, and extending this model to other districts;
     
  • promote the development of Chinese medicine with a dedicated fund of HK$500 million (EUR 55 million) to promote applied research and specialisation in Chinese medicine would commence operation in the first half of 2019;
  • ban the import, manufacture, sale, distribution and advertisement of e-cigarettes and other new smoking products for protection of public health;
  • introduce a water taxi service in the harbor;
  • extend the Old Age Living Allowance to eligible elderly people living across the boundary in the Mainland provinces of Guangdong and Fujian;
  • allocate additional resources to the Commission on Children to implement various measures to safeguard the rights and well-being of children; an
  • formulate a new Hong Kong Rehabilitation Programme Plan to address the needs of persons with disabilities.

In her second Policy Address, Mrs Lam also emphasized that the rule of law is the most important core value of Hong Kong, and independence of the Judiciary is the key to embodying the rule of law.  "We will continue to steadfastly safeguard judicial independence and uphold the rule of law.  It is in everyone's interest that the rule of law remains strong, respected and visible," Mrs Lam said.

Other major measures announced in this Policy Address are set out below.

Land supply

  • Complete two studies on brownfield operations within this year with a view to making necessary arrangements for reprovisioning existing operations to facilitate housing development
  • Introduce the "Land Sharing Pilot Scheme" for meeting the short to medium-term housing demand
  • Reactivate the revitalisation scheme for industrial buildings to provide incentives to owners to convert old industrial buildings, and allow the provision of transitional housing within revitalised industrial buildings

Housing

  • Continue to implement the new initiatives in housing policy, including delinking the selling prices of subsidised sale flats from the market prices
  • Review the public-private housing ratio under the Long Term Housing Strategy
  • The Hong Kong Housing Authority will consider allowing owners of its subsidised sale flats with premium unpaid to sublet their flats to families in need; introduce an initiative whereby under-occupied public rental housing households may enjoy rent exemption upon transfer
  • Accept the recommendation of the Hong Kong Housing Society (HKHS) to introduce the 'Flat for Flat Pilot Scheme for Elderly Owners';
  • Allocate land to support the HKHS in redeveloping its aged housing estates with a view to increasing the supply of housing units
  • Invite the Urban Renewal Authority to explore redevelopment of the sites under the Civil Servants' Co-operative Building Society Scheme

Diversified Economy

  • Promote technology transfer by increasing the funding support to the Technology Transfer Offices of universities, the Technology Start-up Support Scheme for Universities, as well as the State Key Laboratories and Hong Kong branches of the Chinese National Engineering Research Centre
  • Proactively open up appropriate government premises for the installation of 5G base stations by mobile service operators
  • Enhance the status of Hong Kong as an international commerce and trading centre by signing more bilateral and multilateral agreements
  • Fully participate in and contribute to the Belt & Road Initiative to generate new impetus for economic development
  • Establish a Steering Committee for the Development of the Guangdong-Hong Kong-Macao Greater Bay Area for the overall co-ordination of participation in the development of the Greater Bay Area and identify opportunities for Hong Kong
  • Closely monitor the impacts of the trade friction between China and the United States on Hong Kong and introduce supportive initiatives for various sectors in a timely manner

Transport

  • Rationalise tolls for the three cross-harbour tunnels
  • Waive or pay tolls for franchised bus services to reduce fare increase pressuresLaunch consultations on Electronic Road Pricing Pilot Scheme in Central

Environment    

  • Study feasibility of regulatory control of plastic table ware; Government to take the lead in reducing use of plastic table ware
  • Develop renewable energy sector with the Government taking the lead and supporting individuals and NGOs to install renewable energy facilities

Animal welfare

  • Amend laws to protect animal welfare; establish an "Animal Watchers Scheme" by the Police

Labour and Welfare            

  • Allocate more than HK$500 million (EUR 55 million) to strengthen support services for ethnic minorities  

Healthcare

  • Continue to implement the first 10-year Hospital Development Plan and prepare for the second 10-year Hospital Development Plan with a view to providing more than 9 000 hospital beds in the future
  • Launch a pilot scheme to provide free outreach seasonal influenza vaccination services for primary students at schools; increase the subsidy under the Vaccination Subsidy Scheme and expand its eligible groups to cover people aged between 50 and 64
  • Expand the target beneficiaries of the Community Care Fund Elderly Dental Assistance Programme to cover elderly persons receiving Old Age Living Allowance aged 65 or above
  • Introduce free cervical cancer vaccine for school girls of a specific age group

For more information, please see the Policy Address website