The 2016-2017 Budget

Financial Secretary John Tsang Chun-wah announced his ninth Budget on February 24th. In his speech he promised an increase in financial services in the coming year. Cross-boundary Services In 2015, RMB trade settlement conducted through Hong Kong banks totaled RMB 6.8 trillion, representing a nine per cent increase over 2014.  RMB lending business also continued to grow.  Outstanding loans amounted to RMB 300 billion at end-2015, representing an increase of 58 per cent as compared with 2014. Hong Kong authorities shall continue to explore with the Mainland authorities ways to open up more channels for the two-way cross-boundary RMB fund flows, including the possibility of increasing the investment quota for us under the RMB Qualified Foreign Institutional Investors (RQFII) Scheme. Mr. John Tsang Chun-wah said "We have discussed with relevant authorities of the Central Government the launch of the Shenzhen-Hong Kong Stock Connect and the enhancement of the Shanghai-Hong Kong Stock Connect.  " Asset Management At the end of 2014, the combined fund management business amounted to $18 trillion, representing a year-on-year growth of 10.5 per cent.  Funds from overseas investors continued to increase and recorded growth of nine per cent in 2014, accounting for over 70 per cent of the fund management business. The capital under management in private equity funds amounted to US$120 billion as at September 2015. Green Finance The development of green finance is proposed in the Proposal on Formulating the National 13th Five-Year Plan.  The Mainland's financial institutions are promoting relevant financing products such as green bonds to raise capital for environmental projects with a long payback period, such as renewable energy technology, waste treatment and sewage treatment.  Government will strengthen efforts to publicize Hong Kong competitive capital market and highlight edge in developing green financial products.  The Airport Authority (AA) will also explore the …

  Mr. John Tsang Chun-Wah said aid would be given to foster talent, in which expenditure for education would be $75 billion, accounting for 21.5 per cent of recurrent government expenditure, which is an increase of 70 percent over ten years.   More subsidy would be provided to future leaders in Finance Internship Programme, to increase this internship vacant spots to 40 this year.   The Scheme for Cross-boundary Study Tour for Post-secondary Financial Talents, which allows Hong Kong students to understand the dynamics of the mainland financial market, would receive subsidies for 30 students to join the scheme.   The ASEAN Internship scheme launched in 2014 would be extended to cover the Hong Kong Academy for Performing Arts, Hong Kong Shue Yan University and Hang Seng Management College, increasing the number of participating institutions to 11.   In order to enrich IT programme in secondary schools, a steering committee including IBM, Google, Microsoft and Huawei would be set up to coordinate and promote such IT development. More internships and activities would be organised to nurture IT professionals.   He said that there would be an increase in monthly allowances of Internship Programme under ITF, and would be extended to cover incubatees and SME tenants of the Cyberport and Science Park.   Start-ups would be funded by the Innovation and Technology Venture fund, to encourage fresh blood into the field.   To encourage continuing education, Mr. Tsang said starting from the next academic year, a pilot scheme to provide tuition fee subsidy would be implemented, to subsidize three cohorts of students admitted to designated professional part-time programmes offered by the Vocational Training Council, covering construction, engineering and technology programmes. The expenditure would amount to $200 million which would benefit 5600 people.   He also said that $420 million had been …

The government finds new markets for the future development of Hong Kong, including "One Belt, One Road" which is a strategic initiative proposed by Chinese President Xi Jin-ping in 2013.   HKSAR government will keep raising the business sector and the community's awareness of the Belt and Road Initiative. By doing this, the government is going to cooperate with Hong Kong Trade Development Council (HKTDC) to organise the inaugural Belt and Road Summit where representatives of key officials, international organizations can engage and discuss the future development of Hong Kong in May.   "One Belt, One Road" refers to the Silk Road Economic Belt and 21st Century Maritime Silk Road which is a long-term development strategy launched by the Chinese government with the intention of promoting economic cooperation among countries.   The government also will continue the discussion with the Central Government as well as the China-led Asian Infrastructure Investment Bank (AIIB) which was officially launched last month, supporting the work of AIIB.   A closer economic partnership arrangement with Macao should be introduced this year as well.   Relating to the aviation and maritime centre and logistics, the three-runway system project is expected to complete in eight years. The system is expected to handle 100 million passengers and nine million tonnes of cargo annually in 2030.   A land of ten hectares in Tuen Mun West is reserved for logistic purposes.   Owing to a double in E-commerce from $140 billion in 2008 to $280 billion in 2012, Hongkong Post will introduce self-collection lockers in the community for the public to collect their online purchases in the first half of 2016.   A "single window" is expected to be launched in 2018 to connect with governments' system and trade information platforms run by the private sector.      The …

In his budget speech today, Tsang said the government will set up a $2 billion Innovation and Technology Venture Fund to co-invest with private venture capital funds on a matching basis in local technology start-ups.   The Science Park will expand in stages to provide additional floor area of 70 000 square metres for start-ups and other technology companies by 2020, with the project estimate amounting to $4.4 billion to be borne jointly by Government and HKSTPC; and the Cyberport will earmark $200 million to invest in its start-ups.  HKSTPC will continue to support start-ups through its Corporate Venture Fund and incubation programmes.   As for fashion and design, Tsang vowed to strengthen the promotion of local fashion designers and emerging fashion brands in Hong Kong and overseas by establishing an incubation programme for fashion designers and setting up a resource centre for young designers.   Tsang will also launch the third phase of Design Incubation Programme and increase the admission quota to 90 design start-ups. Ten emerging local fashion brands will be subsidised to participate in the Paris Fashion Week, while the Hong Kong Trade Development Council (HKTDC) will organise fashion shows for Hong Kong designers in the New York Fashion Week. HKTDC will also host an annual international fashion trade fair, fashion shows and forums for Hong Kong and Asian brands.   Locally-produced Cantonese film is highlighted in Tsang's speech. An additional $20 million will be injected into the FDF(Film Development Fund) to subsidise the expenses incurred by locally-produced Cantonese films for distribution and publicity conducted in the Mainland. The funding is proposed to be doubled from the current $250,000 to $500,000 per film.   In the art and sports field, the Art Development Matching Grants Pilot Scheme will be launched this year to help the more established …

  Mr. John Tsang Chun-Wah addressed financial aid towards tourism industry. He attributed a weakening external economy, devaluation of neighbouring currencies, relaxation of visa requirements of mainlanders along with the "one trip per week measure" as the obstacles. He also mentioned about recent civil unrest in Hong Kong to be a deterring factor for tourists.   In light of this, he proposed several policies to alleviate the situation. Including waiving licence fees: He proposed waving licence fees for 1800 travel agents, 2000 hotels, guesthouses restaurants, restaurants and hawkers for a year, adding up to $140 million in operational costs for these measures.   The financial secretary also proposed improvements in several tourist attractions.The scale of major events would be expanded, such as the Formula E Championship , the Hong Kong Wine and Dine Festival, Rugby 7s etc.   Mr. Tsang also said the Hong Kong Tourism board would open up new visitor sources implementation of matching fund for promoting tourist attractions, shopping and spending, a promotion about MICE(Meetings, Incentive travels, Conventions and Exhibitions) tourism  and fly-cruise" tours would be implemented. Local traders' participation fees for overseas promotion fairs would be waived as well.     He also said the Travel Industry Council would subsidize small and medium-sized travel agents on a matching basis, to incorporate information technology.   Mr. Tsang said that the government would reinforce promotion on Hong Kong's natural scenery and the Dr. Sun Yat-sen Historical Trail "Art across Time", PMQ, and the former Central Police Station Compound which will open this year.   In the long term, he said several new attractions will open in the future, including a new hotel in 2016 and a Iron Man-themed area in Hong Kong Disneyland in 2017, a new hotel in Ocean Park in 2017, and a new water park …

Financial Secretary John Tsang Chun-wah announced the 2016-17 Budget at Legislative Council this morning. He started by saying that Hong Kong has secured decent economic growth, maintained low unemployment, and managed healthy public finances. "Acute social conflicts will add uncertainties to the already adverse economic environment," he said. He anticipated that political dispute would intensify over the coming months because of the Legislative Council (LegCo) By-election and General Election. Asian region's export performance was worsened by the global economic setback in 2015. The Hong Kong's overall economic performance in 2015 dropped. Hong Kong's exports of goods fell 1.7 per cent, which recorded the first annual decline since 2009. Exports of service also declined 0.6 per cent, the first annual decline since 1998. Both local tourism and retail sales were in a weak condition in 2015. Visitors arrivals dropped 2.5 per cent for a year and retail sales was also recorded the first decrease since 2009. There was a decline in the value of total exports of goods and the number of visitor arrivals in Hong Kong since mid-2015, and he forecasted a more severe fall will happen in 2016. The GDP growth in real terms at one to two per cent in 2016, lower than last year's growth. The headline inflation rate for 2016 will be 2.3 per cent and the underlying inflation rate at two per cent.