Findings of the survey of companies in Hong Kong with parent companies located outside Hong Kong and the survey of startups in Hong Kong
Source countries of inward investment
Mr CHAN Chun-ying noted in the findings of the 2019 survey of companies in Hong Kong with parent companies located outside Hong Kong that the total number of persons engaged by these companies reached 493 000, but there was no details of which source country/territory with companies set up in Hong Kong created the most local employment. Mr CHAN said that InvestHK should consider putting up extra promotion efforts to attract more companies from that source country/territory to set up business operations in Hong Kong, thereby creating more local employment. In this regard, Mr CHAN requested and Associate Director-General of Investment Promotion 3 (“ADG3”) undertook to provide information on the number of persons engaged by business operations in Hong Kong with parent companies located outside Hong Kong, with a breakdown by source country/territory.
Factors affecting Hong Kong’s attractiveness for inward investment
Mr CHAN Chun-ying noted that the top unfavourable factors of Hong Kong as a location for setting up business were all associated with costs of accommodation and staff, and that Hong Kong had recently been ranked the world’s most costly city by the Global Wealth and Lifestyle Report 2020 published by a Swiss private bank. Given such deterrent factors, he enquired about the Administration’s measures to attract direct investment from Mainland and overseas. Mr CHAN also suggested that in the survey of startups, the favourable and unfavourable factors of Hong Kong as a destination for startups should also be identified so that more targeted strategies to attract startups could be formulated.
DGIP said when Mainland or overseas companies came to invest in Hong Kong, they were focusing on different business opportunities Hong Kong had to offer, such as opportunities offered by Hong Kong itself, or as a gateway to the Guangdong-Hong Kong-Macau Greater Bay Area (“Greater Bay Area”) or to Asia or to Belt and Road markets. Companies assisted by InvestHK would be asked about the factors influencing their investment decisions. InvestHK would make reference to the gathered information to develop its promotional messages for general marketing uses, and to tailor make propositions for individual investors. On the costs issue, he said InvestHK would discuss with companies ways to mitigate the costs of market entry in Hong Kong, for example, by making use of co-work spaces at the initial stage.
Trade relations between the Mainland and Hong Kong – Amendments to the Agreement on Trade in Services of the Mainland and Hong Kong Closer Economic Partnership Arrangement
Mr CHAN Chun-ying welcomed the signing of the Amendment Agreement, which included nine measures in relation to the banking services. Referring to the Mainland’s policy support for launching cross-boundary financial management pilot programmes, Mr CHAN enquired about the exact timing for the announcement of the relevant implementation arrangements.
Mr CHAN Chun-ying also referred to the measure to support Hong Kong-funded non-bank payment institutions to conduct electronic payment business in the Mainland. Similar to what the Octopus Cards Limited had done in the past, it was anticipated that non-bank payment institutions would choose to provide electronic payment services at the public transport system in the Mainland as its entry point to the Mainland market. In this regard, Mr CHAN asked whether the Administration and/or the Mainland authorities would provide any specific support for the non-bank payment institutions to start their businesses in the Mainland, say by encouraging the Mainland public transportation operators to use the electronic payment services provided by Hong Kong-funded non-bank payment institutions.
DGTI responded that the Mainland had provided policy support for the two mentioned measures. The Financial Services and the Treasury Bureau (“FSTB”) was discussing with its counterparts in the Mainland the implementation details of the measures. It was hoped that some progress could be made before the CEPA Forum.
Mr CHAN Chun-ying sought clarifications on whether TID (which was responsible for discussing with the Mainland authorities measures to enrich the content of CEPA) or FSTB (which assumed the policy responsibilities in respect of, among others, the banking system and financial cooperation with the Mainland) should be contacted to further discuss the implementation arrangements of the new measures in relation to the banking services.
DGTI replied that the CEPA Agreement on Trade in Services had covered many industries which fell within the portfolios of different B/Ds. Individual B/Ds would determine the policy directions and take the lead in formulating proposals for promoting the further liberalization and facilitation of trade and investment between the Mainland and Hong Kong under their respective purviews. TID worked closely with B/Ds in the development and implementation of free trade agreements signed between Hong Kong and other economies, including CEPA. Specifically, TID gathered proposals from individual B/Ds on new liberalization measures or implementation of existing measures, and followed up with the Ministry of Commerce under the framework of CEPA. DGTI added that members and the trade might send their views to TID and/or relevant B/Ds (i.e. FSTB for banking services related measures).