FHKI Submitted Policy Recommendations to 2024 Policy Address
FHKI Submitted Policy Recommendations to 2024 Policy Address
20-09-2024
Driving Change with Industrial Innovation
FHKI Submitted Policy Recommendations to 2024 Policy Address
Today (20 Sept), the Federation of Hong Kong Industries (“FHKI”) submitted its policy recommendations for the 2024 Policy Address to the Chief Executive of the HKSAR.
FHKI Chairman Steve Chuang emphasised that the local business community is currently grappling with significant challenges, compounded by global economic uncertainties and geopolitical tensions. As the international economic landscape undergoes dramatic shifts, governments worldwide are actively bolstering their industrial policies to address these challenges. At this pivotal moment for economic transformation in Hong Kong, FHKI strongly urges the Government to maintain and strengthen its focus on industry-oriented policies, develop new quality productive forces tailored to local conditions, seize the national strategic opportunities, and collectively forge a new paradigm in industrial and technological innovation.
The six key advocacies outlined in the submission are as follows:
|
1. Maximize Cash Flow for SMEs
FHKI welcomes the Hong Kong Monetary Authority's (HKMA) introduction of the nine measures to support SMEs ("the Nine Measures"). However, there remain SMEs facing operational pressures due to ongoing financing difficulties. FHKI recommends that the HKMA optimise the Nine Measures to include the following: (a) In situations where customers are making regular repayments and have not violated loan terms, credit limits should not be adjusted due to fluctuations in collateral values. Even if adjustments are made, the transition period provided to customers should be extended to 12 months; (ii) Encourage banks to collaborate with e-commerce and logistics platforms to provide unsecured credit facilities to businesses with insufficient property collateral, using customer orders and cargo volumes as the basis for credit assessment; (iii) Ask banks to proactively streamline their loan approval processes to align with the actual needs of SMEs, maintain effective communication, and establish performance pledges for responding to credit limit and loan applications, ensuring timely access to funding.
2. Boost Supercomputing Power for Competition
FHKI urges the Government to expedite the establishment of local supercomputing centres, with the aim of developing Hong Kong into an international data hub. This would attract the world's top companies and talent to set up operations, while providing supercomputing power at preferential rates to specific local industries with substantial demand. Given the significant power and cooling requirements, the Government is advised to ensure the availability of adequate network security equipment during the construction and operation phases. We recommend the Government to engage in strategic negotiations with the power companies, CLP Power and HK Electric, to provide tax incentives and other measures to accelerate the power supply and reduce electricity tariffs for the supercomputing centres. These considerations should be incorporated into the negotiation on the Scheme of Control Agreements starting 2034.
3. Drive Intelligent Medical Engineering and “Primary Evaluation”
FHKI suggests the Government to vigorously develop intelligent medical engineering - an interdisciplinary field integrating medicine, engineering, and artificial intelligence. The industry will drive initiatives in drug development, medical robotics, diagnostics, imaging analysis and healthcare data management, while facilitating cross-disciplinary integrations. By providing funding, interdisciplinary support, talent training, and life data policies, the Government can drive this industry to further enhance Hong Kong's position in medical technology.
Furthermore, FHKI persuades the Government to accelerate the establishment of the Centre for the Medical Products Regulation (CMPR), with the objective of registering drugs and medical devices under the "primary evaluation" approach, and extend an invitation to the National Medical Products Administration (NMPA) to set up a dedicated branch at the Hong Kong-Shenzhen Innovation and Technology Park (HSITP). This strategic positioning would pave the way for the future CMPR's assessment outcomes to gain recognition from the NMPA. FHKI advises the establishment of a comprehensive register of medicines and medical devices, accompanied by a rigorous classification management system, and the timely formation of expert panels for the diverse medical device categories, drawing upon the guidance and insights of industry experts and leaders to contribute for the formulation of robust approval standards and methodologies.
4. Revitalise the Financial Markets
FHKI is extremely concerned about the proposed revisions by HKEX to its Corporate Governance Code this year. These proposals include the mandatory introduction of lead Independent Non-Executive Directors (INEDs) and the capping of INED’s tenure and number of boards they serve. These suggestions will further deepen the difficulty and cost for listed companies, especially SMEs, in finding suitable candidates. It will make potential companies hesitate to list in Hong Kong and instead opt for exchanges that have more appropriate and market-oriented regulations. To revitalise the liquidity of Hong Kong's stock market, the authorities must strengthen the existing free and open characteristics that our financial market possesses. FHKI suggests that in reviewing the corporate governance codes, the Government and HKEX should align with other major exchanges worldwide to uphold Hong Kong's competitiveness.
Moreover, FHKI urges the HKEX to lower the listing thresholds for GEM and simplify the compliance requirements for GEM-listed companies seeking to transfer to the Main Board, thereby reducing the costs of such a transfer. For potential listing companies, specifically startups and small-to-medium enterprises, the following strategies should be implemented respectively: (1) strengthening disclosure-oriented regulatory mechanisms for SMEs to reduce compliance costs, and (2) introducing professional investors as the initial public offering (IPO) target for startup companies, allowing retail investors to trade shares after the lock-up period. Additionally, the HKEX should consider introducing a Chinese name and rebranding the GEM to attract investment and listings from the Mainland and countries along the Belt and Road initiatives.
5. Build Northern Metropolis I&T Museum
The Northern Metropolis represents a significant milestone in Hong Kong's journey towards industrial diversification. In light of the limited information accessible to the business sector and the public via official channels, FHKI recommends the establishment of the "Northern Metropolis I&T Museum" by the Innovation, Technology and Industry Bureau. This museum would vividly and engagingly showcase the key vision and planning for this crucial development, including the envisioned industrial landscape, operations of advanced manufacturing facilities, necessary supporting infrastructure for new industries, applications of smart production lines, and the eco-friendly operations of the Metropolis. The initiative will also facilitate timely preparations for relevant industries, spark interest among the younger generation towards new industries, attract globally prominent enterprises to establish presence, and visualise the new industrialisation occurring within the Metropolis to local SMEs and startups.
6. Support Venturing into the ASEAN
As the ASEAN has become an important economic and trade partner for Hong Kong's business sector, FHKI recommends the Government to negotiate with ASEAN member states to provide Hong Kong enterprises and business personnels with Multiple Entry Business Permits. Such permits would enable the holder to travel freely within the ASEAN member states during the valid period, as well as extend their permitted duration of stay. Additionally, the Government should establish more Economic and Trade Offices (ETOs) across the ASEAN region and organise more trade missions and exhibition activities. These concerted efforts would serve to directly support Hong Kong businesses operating in the ASEAN marketplace, while also promoting Hong Kong brands. Meanwhile, the Government can proactively assist the local business community in developing the lucrative halal industry and market. This could involve the establishment of relevant funding schemes to bolster Hong Kong firms in setting up dedicated halal food production facilities, as well as developing halal certification and testing frameworks.
In addition to these six major initiatives, FHKI has proposed a series of short, medium, and long-term measures across six critical areas: kickstarting economic recovery and alleviating financial pressures on businesses; driving new industrialisation through innovation and technology; strengthening Hong Kong's unique competitive advantages; enhancing regional connectivity; bolstering the industrial talent pool; and enhancing the sustainable competitiveness of the local business community.
*Please click here to download the full version of the FHKI Submission (Chinese version only)
Media Enquiries:
Tel: 2732 3178 / 2732 3154
Email: media@fhki.org.hk
