MR CHAN KIN-POR (in Cantonese): Deputy President, the Policy Address comprehensively examines various important policy areas, and actively follows up various problems. Having assumed office for only several months, the new Government has performed so many tasks, reflecting that the Government is bold and resolute in making Hong Kong better. I sincerely hope that all policies that benefit Hong Kong will ultimately be implemented.
First, I would like to talk about the issue of the economy. Over the years I have all along advocated developing headquarters economy, which not only attracts foreign enterprises to Hong Kong to stimulate our economy but also creates many quality job opportunities for young people. Regrettably, the number of foreign companies or regional headquarters in Hong Kong in recent years has been trending lower instead of the other way around. I have put questions to the Government many times, and at the consultation exercise for the Policy Address I have advised the Chief Executive to explore ways to restore the confidence of foreign investors.
Finally, the Policy Address gives us some good news. This year the decline in the number of foreign companies in Hong Kong has reversed and the number is now increased to 8 200. Among them, 1 413 have their regional headquarters in Hong Kong, representing an increase of 2.5% over last year and a record high in recent years. I think such an achievement is attributed to the many tasks performed by the Chief Executive and officials in charge of financial and monetary affairs, including Financial Secretary Paul CHAN and his team. I hope they will continue with their hard work to produce good results for Hong Kong. I think the Government must make continuous effort to create a favourable development environment, relinquish passive approaches to investment promotion, and adopt the practices of certain countries, such as Singapore, in playing a proactive role, so as to attract companies all over the world to come to invest in Hong Kong.
In addition, the Policy Address says that the Government is actively encouraging the commercial sector of Hong Kong to participate in the development of the Belt and Road Initiative. In a recent interview, Secretary for Commerce and Economic Development Edward YAU indicated that a working team would be established to coordinate the Belt and Road Initiative, so as to promote business opportunities arising from the Belt and Road Initiative among the commercial sector of Hong Kong, and enable them to grasp opportunities to go global. In fact, it is a common practice in foreign countries that the government would assume a leading role in promoting economic and trade development, and the SAR Government has gradually changed the passive approach adopted in the past. I hope that the a coordinating team will not only undertake promotion work, but also take further steps to explore business opportunities for the commercial sector and lead them to explore local markets. In fact, if we can capitalize on the opportunities arising from the Belt and Road Initiative, the Hong Kong economy will have a new development engine, and many quality jobs will be created for young people. For this reason, Hong Kong should learn to adopt proactive approaches and grasp our opportunities.
Regarding the insurance issue, the Policy Address does not say much. Now, I would like to talk about problems that are of concern to the insurance sector. As one of the important industries of Hong Kong, the insurance industry has developed quite well over the past several years. But to facilitate the sustainable development of the industry, we must act correctly in terms of major policies. We must integrate with the Mainland and strive to become the bridgehead for international insurance companies to enter the Mainland. Given the huge insurance market on the Mainland nowadays, Hong Kong insurance companies need to develop the Mainland market in the long run, but non-local insurance companies, including Hong Kong-invested companies, must establish joint ventures with Mainland companies if they intend to start up business on the Mainland, and their shareholding shall not exceed 50%, thus deterring Hong Kong-invested insurance companies.
I believe that the Government should expeditiously seek approval from the relevant Mainland departments to allow Hong Kong-registered insurance and reinsurance companies or foreign-invested insurance companies with global headquarters or regional headquarters in Hong Kong to operate wholly-owned business on the Mainland or to allow them to have a majority shareholding in the joint-venture company. In addition, as Hong Kong-registered insurance companies have yet to enjoy national treatment and are still treated as non-local companies on the Mainland, the sector hopes that the Government will strive for better terms for Hong Kong, so that Hong Kong insurance companies will likewise enjoy national treatment. Even if they have yet to be granted full national treatment, a treatment better than that accorded to non-local companies will already be of great help. Not only do these proposals enable the insurance industry of Hong Kong to explore the huge market on the Mainland, but they also induce international insurance companies to establish regional headquarters in Hong Kong, so that Hong Kong may further develop into an insurance and reinsurance centre, and create more quality insurance jobs for young people, gaining various ends at once.
In addition, the insurance sector hopes that the Government can proceed with the mutual recognition of compliance requirements between the Mainland and Hong Kong. As Hong Kong and the Mainland has a separate set of compliance requirements for their insurance market, an insurance company operating simultaneously on the Mainland and in Hong Kong will have to follow two different sets of compliance requirements, and its operating costs will naturally be increased. In particular, following the operation of the Insurance Authority (“IA”), Hong Kong insurance companies have to face more compliance requirements. In addition, since the total amount of premiums on the Mainland is far higher than that in Hong Kong, foreign-invested companies naturally choose the Mainland, instead of Hong Kong, for establishing their presence in Greater China or when conducting organizational restructuring. This will be detrimental to the development of the Hong Kong insurance industry in the long run. For this reason, the sector hopes that the Government will promote a mechanism for mutual recognition of compliance requirements of the two places, so as to save huge compliance expenses, facilitate the operation of companies in the two places simultaneously, and enhance our competitive edge to attract foreign-invested insurance companies to establish regional headquarters in Hong Kong.
The development of financial technologies is a general international trend, and the insurance industry also actively participates in it. According to the Policy Address, IA just introduced the Supervisory Sandbox in September. Insurance companies can conduct pilot trials of their technological initiatives before introducing them in the market, thus obtaining actual market data and information, and facilitating the expeditious launch of products and services. The sector welcomes this development. However, I must reiterate that following the introduction of more technologically-advanced products and services in the market, the manpower demand in the industry will naturally drop, and the loss of jobs will be inevitable. I hope the Government will face up to the problem by, for example, providing retraining opportunities, lest employees affected will not be victimized due to technological development.
According to the Policy Address, the Government plans to implement the Voluntary Health Insurance Scheme (“VHIS”) in 2018 and will offer tax incentives for members of the public who procure such products. The insurance sector hopes for an expeditious implementation of VHIS and the provision of favourable tax deduction by the Government to encourage more public participation. In addition, the Government can also continue utilizing the mode of insurance to address the ageing problem in society. VHIS has become a good precedent to prove that the mode of insurance can be used to help address social problems, particularly social problems arising from population ageing. Such a mode has long been adopted in foreign countries. In fact, the Government can, through offering tax concessions, encourage members of the public to take out insurance related to people’s livelihood, such as annuities, health insurance and education insurance, so as to make preparations for their future, thus reducing their reliance on public resources.
Finally, I would like to summarize my views on the Policy Address. I always think a society should treat families as its core. If most families live happily and joyfully, society as a whole will be happy and joyful, so the Government should treat families as the core in its policy implementation. Quite a lot of proposals in the Policy Address are oriented toward families, such as enhancing maternity leave, perfecting the Low-income Working Family Allowance and the Old Age Living Allowance, setting up a Commission on Children, providing more assistance to patients with uncommon diseases, increasing the supply of transitional housing, and introducing the Public Transport Fare Subsidy Scheme. I think these schemes will alleviate the pressure faced by different family members in their lives and address the existing social ills. If the pressure faced by various members of a family can be alleviated, the overall pressure faced by that family will be alleviated, and social grievances will naturally be alleviated. For this reason, the direction of the Government is absolutely correct, reflecting that the Government is resolute in making Hong Kong better.
My only disappointment is that the new Government has failed to incorporate “work-life balance” into its Policy Objectives. Given the immense livelihood pressure in Hong Kong, and the lack of upward mobility opportunities for young people, considerable grievances have been accumulated in society. In the face of such a situation, the Government can follow the practices of European countries and America in implementing “work-life balance” measures to help people enjoy life and cherish their families in addition to working, so as to enhance their satisfaction with life. The implementation of specific measures may be led by the Government, including flexible working hours, special casual leave, work from home and cultivation of hobbies. Regrettably, the Government has failed to do so. I believe that apart from striving to pursue economic development, we need to accord equal importance to “work-life balance” measures. Only by adopting a two-track approach can social grievances be dispelled.
I so submit