Speech at Panel on Commerce and Industry

Latest development of the Hong Kong Science Park and industrial estates

Establishment of InnoHK research clusters in the Hong Kong Science Park

Mr CHAN Chun-ying asked how the two InnoHK research clusters would contribute to promoting re-industrialization in Hong Kong.

Commissioner for Innovation and Technology (“CIT”) replied that the InnoHK initiative had received enthusiastic response, with a total of 65 proposals from world renowned universities and research institutes received. After a rigorous assessment process, the Administration had been following up with the institutions concerned. As discussion was still in progress, it was not the time to announce the number and the list of laboratories that would be set up in the two InnoHK research clusters. Despite the ongoing novel coronavirus outbreak, the overseas research institutions remained keen to establish their presence in the InnoHK research clusters. The first batch of research and development (“R&D”) laboratories for the two InnoHK research clusters was expected to be set up progressively this year.

S for IT added that promoting R&D was the key to innovation and technology (“I&T”) development and it formed an important part in re-industrialization in Hong Kong. The establishment of the InnoHK research clusters would help capture and consolidate Hong Kong’s R&D strengths, as well as promote the development of advanced technologies and the relevant local industries, thereby fostering the development of advanced manufacturing industries that were based on new technologies in the long run. While manufacturing activities currently accounted for only about 1% of Hong Kong’s gross domestic product, the Administration would continue to actively promote re-industrialization in Hong Kong.

Referring to the Chief Executive’s announcement in the 2019 Policy Address that the Administration would examine the establishment of the third InnoHK research cluster, Mr CHAN Chun-ying would like to be briefed on the key considerations in taking forward the establishment of the third InnoHK research cluster and its research focus.

S for IT said that the Administration positioned the InnoHK as a long-term initiative. The 2019 Policy Address Supplement had mentioned examining the setting up of the third InnoHK research cluster so as to further promote global R&D collaboration in Hong Kong. The Administration would review a number of factors such as the strengths of Hong Kong and the global technological development in considering the research focus of the third InnoHK research cluster. There was no fixed timeline for the establishment of the third InnoHK research cluster and the Administration would update the Legislative Council when more details were available.

Nurturing university start-ups

Noting that HKSTPC had joined hands with The University of Hong Kong (“HKU”) to set up the HKSTPC Western District Hub to provide incubation services for university start-ups and strengthen the academic-industry linkage, Mr CHAN Chun-ying asked how many start-ups could be admitted in the HKSTPC Western District Hub. He also enquired about the differences between the incubation services provided in the HKSTPC Western District Hub and the three existing incubation programmes (namely Incu-App, Incu-Tech and Incu-Bio) run by HKSTPC in HKSP, and how could the HKSTPC Western District Hub complement the three incubation programmes.

CIT responded that HKSTPC had been providing support on various fronts for start-ups in HKSP through its three existing incubation programmes. In addition, HKSTPC had been proactively enhancing its collaboration with local universities to help start-ups spun off from universities build connections with the industry and providing incubation services in order to facilitate technology transfer and commercialization of R&D results. In this respect, the HKSTPC Western District Hub jointly set up by HKSTPC and HKU had come into operation since February 2020. HKSTPC had also been discussing with other local universities the possibility of having similar collaboration.

Chief Executive Officer, HKSTPC (“CEO, HKSTPC”) supplemented that the HKSTPC Western District Hub had a total floor area of about 4 000 sq ft which could accommodate up to about eight to 10 start-ups at a time. He also said that many technology start-ups were established by university professors/students. HKSTPC launched the Science and Technology Entrepreneur Programme in January 2019 to provide pre-incubation support, which included HK$100,000 seed funding to help them apply their innovative ideas and start their own businesses, etc, for entrepreneurial technology talents. It was roughly estimated that over 40% of the approved applications were originated from students and/or professors of local universities. In view of that, HKSTPC would like to strengthen its linkage with local universities so as to give further impetus to the growth of university technopreneurship and facilitate technology transfer.

Developing innovation and technology infrastructure

Noting that HKSTPC had invited proposals for leasing of the Advanced Manufacturing Centre (“AMC”) in April 2019, Mr CHAN Chun-ying enquired whether HKSTPC would accord priority to companies involved in the four major technology fields, namely biomedical technology, AI and robotics, smart city and financial technology (“fintech”).

CIT responded that AMC would be completed in 2022 and HKSTPC was discussing with several technology enterprises which were interested in taking up the floor space in AMC. CEO, HKSTPC supplemented that electronics, medical appliances, smart city and robotics were the focused areas of AMC. While fintech might not be suitable for admission to AMC, which was purposely-built for smart manufacturing, HKSTPC would also engage the industry to drive the development of fintech in Hong Kong.


SME Financing Guarantee Scheme – Special 100% Guarantee Product

Scheme structure and loan recovery

Mr CHAN Chun-ying declared that he was a consultant of a bank which might become one of the participating lending institutions (“PLIs”) for the Special 100% Guarantee Product under SFGS. Mr CHAN welcomed the Administration’s proposed introduction of the Special 100% Guarantee Product which had long been called for by the business sector. He then enquired about the timing of transferal of the loans to The Hong Kong Mortgage Corporation Limited (“HKMC”) without recourse to PLIs after the loan drawdown by PLIs.

Executive Director and Chief Executive Officer, HKMC (“ED/CEO, HKMC”) said that under the 80% and 90% Guarantee Products, the credit facilities were provided by PLIs following formal credit assessment procedures with PLIs determining the interest rates; whereas under the Special 100% Guarantee Product, the credit facilities would be provided by HKMC direct, and the necessary enforcement and debt recovery expenses would be borne by HKMC in the event of default. The timing of transferal of the loans to HKMC might vary from PLI to PLI, and would be subject to discussion between HKMCI and PLIs, as certain PLIs might prefer a batch transfer approach while some other PLIs might not. Whichever the approach would be, the timing of loan drawdown by the loan applicants concerned would not be delayed.

Financial implications of the Special 100% Guarantee Product

Mr CHAN Chun-ying enquired about the rationale behind HKMCI’s ceasing to provide any loan guarantee beyond the HK$20 billion loan guarantee commitment or when the expenditure for settling default claims and related costs was about to reach HK$5.625 billion.

ED/CEO, HKMC said that similar to the operation under the 80% and 90% Guarantee Products, HKMC would report regularly to its Board of Directors and the Hong Kong Monetary Authority (“HKMA”) the latest position of loan drawdown and default rates. HKMCI would discuss with PLIs on the point of ceasing to provide further loan guarantee when the loan commitment reached the HK$20 billion limit, or when the expenditure for settling default claims and related costs was about to reach HK$5.625 billion, so as to control the default rate.