New measures to promote re-industrialization
Development of the Microelectronics Centre
Noting that currently, there were not many microelectronics-related businesses located in the vicinity of Yuen Long IE, Mr CHAN Chun-ying was concerned whether the proposed development of the Microelectronics Centre would be an effective measure to help create synergistic effects and provide ancillary support to the interested enterprises to establish microelectronics and related production lines. He enquired whether the Administration had consulted the relevant sectors about their interest to set up microelectronics-related operations in the area.
S for IT said that the Microelectronics Centre would offer a range of important ancillary support to the industry in terms of dedicated facilities such as high standard super-clean rooms and waste treatment, etc. Commissioner for Innovation and Technology (“CIT”) added that the proposed Microelectronics Centre could host around 10 microelectronics-related enterprises depending on their scale and would create clustering effects and enhance the growth of these sectors. Prior consultation conducted by HKSTPC with the microelectronics industry had confirmed the keen interest of a number of microelectronics-related enterprises in setting up operations in the proposed Microelectronics Centre which would host not only enterprises engaged in integrated circuit (“IC”) design or production, but also in related industries such as advanced materials. The proposed Microelectronics Centre would be provided with dedicated facilities, such as those for high standard waste and water treatments. It would not affect the operation of other enterprises in the Yuen Long IE.
Eligibility criteria and funding principles of the Re-industrialisation Funding Scheme
Mr CHAN Chun-ying expressed support for the new measures to promote re-industrialization. Noting that the funding under RFS would be provided on a 1 (government):2 (enterprise) matching basis, with the Government covering a maximum of one-third of the total approved project expenditure or HK$15 million per project, whichever was lower, Mr CHAN expressed concern that with a low government financing ratio of 33%, the creation of a legal charge in respect of the relevant production line would lessen the attractiveness of RFS. He also enquired about the effect of the legal charge vis-à-vis debentures which were commonly required by banks in providing credit facilities to companies.
S for IT said that although the Administration would create a legal charge in respect of the production line, it would provide flexibility for the funded projects by allowing the transfer of shareholding rights (rather than a transfer of the whole production line) and addition of new investors. CIT added that funding under RFS would be grants rather than loans, and would effectively reduce the funded enterprise’s investment risk by one-third. The aim of the legal charge, which would take effect over a few years, was to retain the funded production line in Hong Kong for a reasonable period in order to bring substantive economic benefits to Hong Kong.
Promotion of inward investment
Source countries of inward investment and factors affecting Hong Kong’s attractiveness for inward investment
Mr CHAN Chun-ying suggested that for the sake of better presentation, InvestHK should provide, in its future reports to the Panel, information on the top eight to 10 source markets of investment projects completed in the past five years, instead of the top five source markets as shown in the histogram under paragraph 11 of the Administration’s paper (LC Paper CB(1)1046/18-19(05)). DGIP noted Mr CHAN’s suggestion and undertook to follow up accordingly.
In response to Mr CHAN Chun-ying’s enquiry about InvestHK’s performance in respect of bringing in direct investment in 2018, DGIP advised that the total investment amount arising from projects completed by InvestHK in 2018 was HK$22.9 billion, creating a total of 5 268 jobs in 436 companies. ADGIP3 added that the figures on investment and jobs were provided by the companies concerned on a voluntary basis, and did not necessarily reflect the whole picture, as some of the companies had not disclosed relevant information to InvestHK.
Promotion focus of the StartmeupHK Team and the sector teams
StartmeupHK
Mr CHAN Chun-ying enquired about the effort of StartmeupHK team in assisting start-ups from overseas to set up or expand their businesses in Hong Kong.
DGIP advised that comprehensive support measures were provided for start-ups investing in Hong Kong, including multifarious funding schemes under ITF, tax reduction for R&D expenditure and admission schemes for outside talents, professionals and entrepreneurs. InvestHK would help these start-ups gain access to available funding schemes and support, and work with HKSP and Cyberport, as well as other private sector operators of accelerators, incubators and co-working spaces to support the development of start-ups.
Financial services sector and financial technology sector
Mr CHAN Chun-ying suggested that InvestHK should provide information on the performance of new entrants to the relevant industries to prospective investors when undertaking promotion work in the Mainland and overseas countries. He noted that in the pie charts in Annex B to the Administration’s paper (LC Paper No. CB(1)1046/18-19(05)), the financial services sector was presented as one sector from 2014 to 2016 under the breakdowns of completed projects by sector in the respective years, only to be divided into two separate sectors, namely the financial services sector and FinTech sector from 2017 onwards. He enquired about the rationale for the separate presentation of the two interrelated sectors.
DGIP advised that in its sector-specific promotional events in the Mainland and overseas, InvestHK would share with potential investors detailed information on market conditions of the relevant industry sectors, and case studies of how companies had leveraged Hong Kong as a base to develop their businesses in the Mainland and in Asia. He added that InvestHK, the Financial Services and Treasury Bureau and the three financial regulators had been working closely to develop Hong Kong’s FinTech ecosystem. InvestHK had also set up a dedicated FinTech team aiming to attract top innovative FinTech enterprises and FinTech start-ups worldwide to Hong Kong. As there was significant interplay between the FinTech ecosystem and the traditional financial services sector, the FinTech team worked closely with the team responsible for the financial services sector in a collaborative manner.