Motion Debate on the 2022 Policy Address (2022.11.17)

MR CHAN KIN-POR (in Cantonese): Thank you, Deputy President. Hong Kong is an international financial centre and the financial industry has been its main artery; all industries strive when the financial industry thrives. In the past years, the trade war, “black-clad violence” and the epidemic have impaired Hong Kong and hit various sectors of the financial industry, from the stock market to the insurance market, to a different extent. As the epidemic situation has recently improved, the Government has decided to press ahead with resuming normalcy. The Global Financial Leaders’ Investment Summit has been successfully held earlier; officials at various levels will soon pay visits to tell the good stories of Hong Kong and publicize the new opportunities offered here.

It has been clearly stated in the report to the 20th National Congress of the Communist Party of China that “one country, two systems”, capitalism, and the unique position and advantages of Hong Kong will remain unchanged in the long run, which means that the prosperity and stability of Hong Kong are guaranteed. In fact, the country highly values the development of Hong Kong; Hong Kong is never an ordinary city, but as a financial and trade centre as well as a centre of connectivity of the country with the rest of the world. With the country’s full support, Hong Kong can rest assured; it is time now for Hong Kong to capitalize on its advantages and reinvigorate its enviable reputation as an international financial centre.

The Policy Address proposes on this basis a number of reforms of the financial industry, such as enhancing the internationalization of the financing platform, strengthening our offshore Renminbi business, and promoting mutual market access in the financial industry between Hong Kong and the Mainland. I support all these proposals and hope for their early implementation. I would like to point out in particular that international investors have been losing confidence in the Hong Kong market in recent years, so among various efforts in resuming normalcy, it is all-important to rebuild their confidence in Hong Kong. Only with a steady injection of liquidity from worldwide that the Hong Kong market can be constantly revitalized. Therefore, we should on one hand maintain a good market environment and keep up our strengths, and on the other hand, we should strive for strategic companies and business opportunities in the Mainland to come and settle in Hong Kong. When money can be made here, capital, talents and funds will flow in as a matter of course.

Deputy President, I would like to talk about the series of measures proposed in the Policy Address to “attract enterprises, investment and talents”, especially the Office for Attracting Strategic Enterprises (“OASES”) which will offer special facilitation measures and one-stop services and proactively invite international enterprises to come to Hong Kong. In fact, over the past 10 years and so, I have made similar suggestions to the four successive terms of Government, including, by drawing reference from Singapore, developing a headquarters economy so that the Government can take the initiative to attract international enterprises to invest in Hong Kong. However, the Government has been making excuses in the past, such as “positive non-intervention” and “big market, small government”, and has indicated that it will not interfere with the free market, but only take passive measures to facilitate business.

I have repeatedly pointed out in the Council that this mindset has long been outdated. When we look at the Singapore Government, senior officials lead teams out of the country to call for business, and a dedicated department is set up to provide one-stop services for international enterprises. Eventually, it successfully attracts many international enterprises and its economy grows stronger; meanwhile, many business opportunities have been drifted away from Hong Kong. If we stop waiting for our ship to come in and make our move now, it is better late than never. I am confident that the new OASES led by the Financial Secretary will be able to deliver results, and I look forward to taking the next step, which is to gradually expand the scope of specific sectors for attracting investment to the other sectors with development potentials.

I will move on to talk about the expectations of the insurance sector on governance. The Government has been keen on consolidating Hong Kong’s position as an international insurance hub in recent years, but businesses have still not yet resumed amid the epidemic. In comparison, Singapore, being Hong Kong’s competitor, has already achieved political and economic stability; its government has been really aggressive in attracting talents and investment by rolling out a wide range of preferential policies, which have attracted many international insurance companies and talents to go there, and thus giving Singapore a competitive edge. Hong Kong is falling way behind. In this connection, the insurance sector is studying the business practices and policies in Singapore’s insurance industry, hoping to identify the shortcomings of Hong Kong. Suggestions will be made to the Government in due course. The Government currently has a policy in place to proactively attract investment, but the insurance sector is excluded from the designated professions. I hope that after hearing the views of the sector, the Government will be able to provide necessary assistance.

Moreover, since the occurrence of the financial tsunami, the Insurance Authority (“IA”) of Hong Kong has formulated numerous compliance provisions in accordance with international regulatory requirements. In order to meet the compliance and capital requirements, even small- and medium-sized companies are required to spend tens of millions of dollars, which has added to their burden while they are already facing operational difficulties. The sector hopes that the Government can comprehensively review the regulatory regime and remove outdated and overly stringent provisions, so as to at least ensure that our requirements are not tougher than our competitors and we stay competitive. Besides, the various new initiatives, such as the risk-based requirements and the policy holders’ protection fund, should be rolled out in a gradual and sensible manner, so that companies of all scales can all adapt to the changes.

In addition, I am glad to hear from the Chief Executive that the Government will strive to establish insurance after-sales service centres shortly, which is long-awaited by the sector. I hope that the governments of the two places will conduct a study as soon as possible to implement the proposal of cross-border sale of Hong Kong insurance products. Yet, I would also like to remind the Government that the insurance industry is highly professionalized in terms of compliance, products and sales models, and there are obvious discrepancies between the markets in the two places, so the Hong Kong Federation of Insurers should be fully engaged in the discussion and negotiation. This is an important note, because the sector is worried that if the proposal turns out to be unadaptable to the actual situation, most of the insurance companies will not be able to join, thereby defeating the purpose of establishing the Guangdong-Hong Kong-Macao Greater Bay Area (“GBA”).

When expanding into GBA or exploring international businesses, the sector needs to rely on insurance technology to enhance operational efficiency and security. The sector is looking into the introduction of new technologies such as using application programming interface to connect with partnering industries, building cloud-based modes of operation, and adopting artificial intelligence in underwriting and reinsurance management. Applying these technologies may affect the operation of the entire industry and even touch on legal issues; besides, high-end technologies are involved, which will need the assistance of the Government and IA. I hope that they can discuss more with the sector and help promote the development of the industry across generations.

Thank you, Deputy President.

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