Thank you, President. In the face of the political suppression from the West and changes in the social environment in recent years, Hong Kong needs major reforms to reverse the current situation. The new Policy Address has incorporated a wide range of views from political parties and the public. It has put forward new ideas and highlights in various areas such as finance, shipping, economy, innovation and technology, and people’s livelihood, with reform and the pursuit of change as the guiding principles. It has proposed many targeted measures, which I believe will help Hong Kong better respond to the challenges posed by the current political environment and various changes in society. Many of these measures will benefit people’s livelihood and effectively improve people’s lives.
Finance has always been an important economic pillar of Hong Kong. In the face of increasingly fierce global competition, it is imperative to develop new financial strengths. The Policy Address proposed a number of effective measures to promote the development of the financial industry and consolidate Hong Kong’s position as an international financial centre in various aspects. Amidst the complex geopolitical landscape of today’s world, Hong Kong’s security and stability give it an advantage in maintaining its unlimited potential. The Policy Address mentioned the establishment of an international gold trading centre and a commodity trading ecosystem to attract physical gold storage in Hong Kong to drive the development of gold trading, settlement and delivery activities. Commodities, including metals and minerals, account for more than half of the global shipping trade volume. The Government proposed to explore the introduction of tax concessions and support measures to attract relevant enterprises to set up businesses in Hong Kong, and to further build a commodity trading ecosystem. These two major financial markets will not only enhance Hong Kong’s status as an international financial centre, but also bolster the development of various related industries, such as legal, insurance and logistics. They will become new areas of economic growth for Hong Kong.
In addition, deepening the mutual market access regime will facilitate the pooling and circulation of Mainland and foreign capital in Hong Kong, which will certainly benefit the bond and stock markets. At the same time, the enrichment of offshore Renminbi (“RMB”) business, such as bond clearing, collateral and financing arrangements, and the provision of more RMB-denominated investment products will help Hong Kong further consolidate its position as a wealth management centre. Moreover, attracting high-quality overseas enterprises to set up offshore trading headquarters in Hong Kong will undoubtedly promote the development of the headquarters economy. These reforms will not only expand northbound and southbound capital flows, but also encourage more enterprises to establish their presence in Hong Kong, thereby further reinforcing Hong Kong’s competitiveness as an international financial centre.
With regard to shipping, Hong Kong is one of the busiest and most efficient ports in the world, ranking fourth in the International Shipping Centre Development Index. The Policy Address encourages leading or high-potential marine insurance business operators to establish presence in Hong Kong to broaden the range of marine insurance products and further enhance risk management services. This will help promote the development of high value‐added maritime services and demonstrate Hong Kong’s determination to become a leading international shipping centre. In fact, Hong Kong has always been a popular location for ship registration. There are about 2 500 ocean-going vessels of more than 100 t in Hong Kong, and about 8 300 in China. The total number of such vessels exceeds 11 000, which is a very large scale. However, most of the insurance for these vessels is underwritten by European and American insurers. Local insurers have not been able to make an impact in this area.
Given the current complex geopolitical environment, many companies are concerned that taking out insurance with a foreign insurer may result in indemnity barriers due to sanctions. Because of that, the development of marine insurance in Hong Kong has become even more important. The huge development potential in this area should not be overlooked. It is foreseeable that the demand for marine insurance will continue to grow. The insurance industry welcomes the Government’s efforts to strengthen manpower training for marine insurance and provide more diversified and competitive training opportunities to cope with the robust development of the marine insurance industry in the future.
Regarding the insurance industry, the Policy Address also mentioned that the Insurance Authority will conduct a comprehensive review of the capital requirements of insurance companies next year, including examining capital requirements for infrastructure investment, enriching insurance companies’ asset allocation and driving investment in infrastructure such as the Northern Metropolis. If these funds can be used effectively and insurance companies are encouraged to explore more investment channels, it will have a positive impact on Hong Kong’s overall economy. In calculating the solvency ratio of insurance companies, if the bonds issued by the Hong Kong Government or the State or government-guaranteed infrastructure bonds can be fully taken into account or even enjoy additional incentives in asset valuation, insurance companies will definitely be incentivized to prioritize government infrastructure bonds, so as to achieve a win-win situation. On the one hand, it will promote the development of government infrastructure, and on the other hand, it will expand the investment channels for insurance companies.
President, I have stressed on various occasions the importance of supporting and strengthening local fund companies. I hope the Government will give serious consideration to this. Currently, due to the decrease in foreign capital investment in Hong Kong stocks, some major banks or analysis institutions have stopped writing analysis reports on the stocks of some Hong Kong and state-owned enterprises, making it difficult for fund managers to obtain professional analysis reports on which to base their investments. Therefore, the Government should actively encourage local investment managers holding funds in the short, medium and long term to increase their investment proportion of Hong Kong stocks. In the long run, local fund companies need to be supported and strengthened. The Government should cultivate local fund investment companies in terms of talent and business by referring to Singapore’s approach, which involves allocating business to local fund companies with good performance and certain business for their management. Many seed capital funds in Singapore are used to nurture local funds. One or two of these funds will grow and eventually become large local professional fund companies. In order to attract and encourage more companies to invest their research teams in conducting in-depth data analysis of Hong Kong stocks to provide fund managers with a more comprehensive and professional investment basis, so that fund managers and investors can make informed investment decisions, the authorities should provide more incentives, such as tax concessions and other support measures, to encourage them to make more efforts in this area.
Besides, I would like to talk about social and livelihood issues. Housing has always been the crux of livelihood issues. The Policy Address proposed a series of measures to address the housing issue in response to public demands. An extra ballot number will be allocated to applicants who have failed to purchase a unit under the Home Ownership Scheme in the last two consecutive sales exercises, as well as young family applicants and one-person applicants aged below 40 with White Form status, so as to increase their chances of success in a ballot to facilitate home ownership by young people and enhance their sense of belonging. At the same time, the Government will introduce a reward scheme for reporting tenancy abuse of public rental housing (“PRH”) in order to combat the abuse of government resources and recover units that have been used in violation of regulations, so that people in genuine need can be allocated PRH units more quickly. The Hong Kong Monetary Authority also relaxes the maximum loan-to-value ratios with immediate effect to help people in need of home ownership and to encourage the public to work hard rather than “lie flat” and make home ownership their goal. These measures will help stabilize the property market and have a positive impact on Hong Kong’s overall economy. As for the housing needs of the grass roots, I am glad that the Government is determined to solve the problem of subdivided units by replacing them with “Basic Housing Units”, which have a floor area of approximately 80 sq ft, windows and an individual toilet. I hope that the Task Force on Tackling the Issue of Subdivided Units will properly handle the transition process, so that the public can bid farewell to subdivided units. Through a series of measures, I believe the public can feel the Government’s determination to ensure that people can live in peace and work in contentment, and its action to create a better living environment.
With regard to healthcare, the current-term Government has shown the courage to reform. It will not only conduct a comprehensive review of the positioning and objectives of the healthcare system, but also reform the functions and division of work among the Hospital Authority and relevant departments, so as to improve the quality and cost-effectiveness of healthcare services. It will make efforts to improve public healthcare services, and has proposed the establishment of a third medical school to train more healthcare manpower, so that Hong Kong’s healthcare system can truly meet the long-term needs of the public and cope with the pressure on the healthcare system from the ageing population.
I would like to specifically talk about the proposal in the Policy Address to explore legislating for private healthcare price transparency. This measure will bring significant benefits to the public and to the healthcare system as a whole. First of all, the legislation is expected to effectively reduce medical inflation. The cost of inpatient medical care in Hong Kong often see double-digit increases. According to an international survey, the fees for the same operation in Hong Kong are 20% to 30% higher than in other Asian countries. As a result, insurance premiums would only increase. Even if they have medical insurance, retired elderly people will not be able to afford the annual double-digit premium increases. Legislating for private healthcare price transparency, requiring disclosure of standard operation fees, and severely penalizing insurance fraud are effective ways to prevent unreasonable increases in medical fees. Members of the public will have a clear idea of the level of charges before seeking treatment. Those who can afford it will choose private hospitals, leaving public healthcare services for those in need. This will fully address the current problem of long waiting times in public hospitals.
The new Policy Address has devoted considerable coverage to areas such as developing the economy and improving people’s livelihood, which demonstrates the Government’s determination and vision. The Government understands that only when people’s livelihood is truly improved can Hong Kong’s overall social environment and atmosphere gradually improve. I sincerely hope that the Government will continue to work hard to accelerate economic recovery, implement various measures and plans in a pragmatic manner, and create a better future for Hong Kong.
Thank you, President.