MR CHAN KIN-POR (in Cantonese): President, a lack of upward mobility of young people is actually a brain-racking problem which arouses young people’s dissatisfaction with society. As a matter of fact, this problem is not unique to Hong Kong but has long existed in mature economies such as Europe and the United States. As Hong Kong’s economy has become increasingly mature over the years, the further expansion of the economic pie has become increasingly difficult, and young people have fewer opportunities at workplace. How should we increase the upward mobility of young people? This is an issue the Government should face up to. Personally, I will give my full support to the motion moved by Mr Tony TSE today to urge the Government to assist small and medium enterprises and promote upward mobility of young people.
Ever since the Central Government promoted the development of the Guangdong-Hong Kong-Macao Greater Bay Area (“the Greater Bay Area”), Hong Kong has got new economic opportunities. If we can seize these opportunities, we will be able to bring opportunities to our young people for upward mobility. Given the large market of the Greater Bay Area, I have learnt that many young people have gone north to start their own business or get a job. Of course, they have to overcome problems such as a lower starting salary and different living habits. As there is hearsay that the Central Government will soon announce its plan for the Greater Bay Area, I hope there will be more support for young people to start business or find a job in the Mainland.
Apart from participating in the development of the Greater Bay Area, Hong Kong can create plenty of jobs by developing headquarters economy, thereby increasing the number of quality job opportunities to let young people broaden their international perspective. Thanks to the strong promotion efforts of the Government in recent years, including the provision of tax concessions to multinational enterprises for establishing corporate treasury centres in 2016, more and more foreign companies have come to Hong Kong to set up their offices. The latest figures have shown an upward trend in the number of foreign companies. The total numbers of regional headquarters, regional offices and local offices set up by foreign companies in Hong Kong have increased from 8 225 in 2017 to 8 754 in 2018, an increase of 529 companies. Among these companies, most of them are from the Mainland, Japan and the United States. They mainly engage in industries such as export trade, wholesaling and retailing, finance and banking and professional services.
An increase in the number of foreign companies in Hong Kong will naturally bring more jobs. The number of employees of such companies increased from 443 000 in 2017 to 485 000 in 2018. The increase of over 40 000 jobs is surprising, but it also proves that the approach of creating quality jobs through the development of headquarters economy is feasible. In fact, foreign companies generally offer better-paid jobs which allow post-holders to have close connections with the parent companies to broaden their international perspective. These are decent jobs for young people. Therefore, I hope the Government will step up its efforts and give priority to the promotion of headquarters economy by, among others, providing tax or financial concessions to multinational enterprises investing in Hong Kong. It may even learn from Singapore and provide foreign companies with tailor-made services. I have lately heard of similar proposals raised by other Members and I urge the Government to conduct detailed studies.
It is worth noting that despite an increase in the number of foreign companies in Hong Kong over the years, the increase in the number of new jobs stood stably at an average of some 10 000 in each of the past few years. It is therefore surprising to see an increase of 40 000 jobs last year. While credit should go to the Government for its promotion efforts, I think the upsurge in jobs might likely be related to the development of the Greater Bay Area. To a very large extent, foreign or Mainland companies come to invest in Hong Kong because they know that Hong Kong is inextricably linked with the Mainland. Once the Greater Bay Area is developed, the market reach of Hong Kong will be greatly expanded. Some far-sighted foreign and Mainland companies thus plan ahead to seize the first-mover advantage in Hong Kong. Moreover, the Hong Kong offices of these companies mainly engage in import and export trade, wholesaling and retailing businesses, followed by financial and professional services. All these businesses rely heavily on the Mainland’s market, and I do not think I have to expound on this point. So, the development of the Greater Bay Area may at the same time promote the headquarters economy of Hong Kong and indirectly create jobs.
Meanwhile, the Government intends to strengthen Hong Kong’s position as an international insurance hub and is now planning to promote the development of marine insurance and the underwriting of specialty risks. By then, Hong Kong will need many professionals specializing in insurance claims, underwriting and risk management, and the insurance industry can actually provide young people with a new career path. As Hong Kong is in lack of these talents, I have suggested long ago that the Financial Secretary should set up an insurance college to train talents for the insurance industry. I hope that in the near future, we will have more young insurance professionals joining the trade to promote the development of the industry.
President, I would like to take this chance to respond to a Member who spoke on the Mandatory Provident Fund (“MPF”) earlier. As mentioned by that Member, the overall investment return of the MPF system dropped by 10.3% in 2018, representing an average loss of 21,000 per person. Yet, we should also note that the overall investment return of the MPF system was up by 22.3% in 2017. I urge Members to give accurate and fair comments when they speak.
Moreover, according to that Member, it is better for the MPF contributions to be spent on home purchase than being lost by fund brokers. He even accused brokerage fees of being the sole factor causing losses in MPF investments. On this point, I must say that there are hundreds of thousands of intermediaries in Hong Kong engaging in real estates, insurance and other agent/brokerage businesses. It is reasonable for these intermediaries to get paid for their efforts. Although the Government advises people not to pay intermediaries in its Announcement in the Public Interest (“API”), it only targets at the unlawful intermediaries who claim to provide better loan services to defraud money. The Government is meant to eliminate such unlawful acts. I do not think the warning of “don’t pay any intermediaries” in the Government’s API is telling people not to pay law-abiding estate agents, insurance agents or stock brokers for their services. That is simply impossible. I urge Members to give accurate and fair comments when they speak.
That Member also talked about home ownership. The Central Provident Fund System in Singapore is widely commended for allowing people to use their contributions for home purchase and health care services. However, do we know that the contributions amount to 37% of a person’s income in Singapore? By contrast, the contribution rate is only 10% in Hong Kong. Hong Kong people are weird: On the one hand, they envy Singaporeans’ good living environment and spacious home; on the other hand, they oppose Singapore’s land reclamation practice. When we are impressed by the good measures in other places, we should look into the full picture before making any comparison. Lastly, I hope Members will give accurate remarks, speak to the fact and make fair comments. That is very important. Thank you, President.