HK$10 billion earmarked to help Hong Kong’s hi-tech sector catch up
Paul Chan highlights financial technology and e-sports as growth areas
Hong Kong’s financial secretary has earmarked HK$10 billion for developing information technology amid criticism that the hi-tech sector is lagging far behind others.
Delivering his maiden budget speech on Wednesday, Paul Chan Mo-po vowed to continue supporting innovation and technology but gave few new and specific policy initiatives to help the industry.
He highlighted financial technology, or fintech, as a key growth area and singled out e-sports as a sector with great potential.
Regarding fintech, Chan said authorities had been working to enhance the digital payment infrastructure in the city, and residents might in future be able to settle government bills with e-payment tools.
He also promised to go on supporting banks in testing and adopting new technologies, such as biometric authentication.
“We will continue to encourage the industry to develop and apply fintech, which has immense potential, and promote Hong Kong as a hub for setting up the standards of these technologies and applying them,” he said.
Chan said e-sports, mainly video game competitions, could boost the gaming industry and application of relevant technologies such as virtual reality.
The government would invite the Cyberport hi-tech hub in Pok Fu Lam to study the technologies and explore the promotion of e-sports, he added. The Hong Kong Tourism Board said recently that it was in talks to bring in e-sports to boost tourism.
Chan said he would set up a new committee on innovation and technology development and “reindustrialisation”, a plan to drive Hong Kong’s economic growth with hi-tech manufacturing.
The committee, formed by officials and industry experts, would study the city’s IT strategy and make policy proposals.
Meanwhile, a tax policy unit will work on additional tax benefits for innovation expenditure.
Last year the former financial secretary, John Tsang Chun-wah, unveiled an HK$18 billion package to develop the IT sector by investing in start-ups, expanding co-working space and supporting research projects at universities.
Some of that money will be injected into the industry this year.
The HK$2 billion Innovation and Technology Venture Fund, announced by Chief Executive Leung Chun-ying in his policy address last year, will be launched in the coming months to co-invest with private venture capital funds in technology start-ups, according to government officials.
The fund will focus on early round investments with the government committing half of the amount a venture capital puts in each start-up firm.
No plan has been announced on how to allocate the HK$10 billion fund.
Analysts say the money and initiatives are far from enough for Hong Kong’s tech industry to catch up with other countries.
William Chan, tax partner at Grant Thornton Hong Kong, said the city had been slow approving new technologies and promoting innovation. “It takes them [regulators] years to issue licences for electronic wallets,” he said. “And in terms of enhancing tax deductions, everybody is doing it, but Hong Kong is still thinking about it.”
Theresa Chan, deputy chair of CPA Australia Greater China’s tax committee, said the government venture fund would stimulate innovation, but the amount of money was too small.
“We would like to see the investment in the Innovation and Technology Venture Fund extend beyond what was announced today to ensure it will remain competitive with similar initiatives in Singapore and other markets,” she said.