Hong Kong tech minister defends city’s investment in R&D

Nicholas Yang says despite spending a low percentage of GDP, city’s contribution to overall investment is considerable as Communist Party paper slams Hong Kong’s technology sector as ‘tepid’

PUBLISHED : Wednesday, 16 May, 2018, 3:32pm
UPDATED : Wednesday, 16 May, 2018, 11:09pm

Hong Kong’s technology minister on Wednesday dismissed criticisms the city had invested too little to drive innovation and technology, two days after funding-starved scientists welcomed greater ­access to mainland grants ­promised by President Xi Jinping.

Secretary for Innovation and Technology Nicholas Yang Wei-hsiung said while the city’s investment in research and development has been relatively low in terms of percentage of gross domestic product, government money made up a large percentage of overall investment.

“If you take a look at the proportions of investment from the public and private sectors, you will see that the Hong Kong government has contributed a rather large share,” Yang said on a radio programme.

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His comments came as Communist Party mouthpiece People’s Daily published a commentary that described Hong Kong’s innovation and technology sector as “tepid”, saying it lagged behind the rest of the country and its mainland neighbour Shenzhen.

Zhang Qingbo, a Hong Kong-based People’s Daily reporter, wrote: “Hong Kong has ‘burning needs’ and ‘acute pain’ in developing innovation and technology. In recent years, China has been developing new technologies by leaps and bounds, and Shenzhen has been driving innovation in full swing. In contrast, such developments in Hong Kong have been tepid, which has drawn much criticism from its own public.”

Yang said that while Shenzhen spends more of its GDP on research and development, “90 per cent of that investment comes from the private sector”.

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In 2016, Hong Kong spent HK$19.7 billion (US$2.51 billion), or 0.79 per cent of its GDP, on research and development according to the latest official figures. Some 47 per cent of the total expenditure, or HK$9.3 billion, was financed by the government, and close to 49 per cent was funded by the private sector.

Across the border, Shenzhen spent nearly 84.3 billion yuan (US$13.24 billion) on research and development in 2016, or 4.3 per cent of the city’s annual GDP. More than 94 per cent of the total expenditure, or more than 79.5 billion yuan, came from the private sector.

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Yang said the Innovation and Technology Bureau would look for other sources of funding to meet the goal set by Chief Executive Carrie Lam Cheng Yuet-ngor to double investment on research and development by 2022.

One of the new sources, Yang said, would be central government grants, of which Hong Kong scientists will have greater access after a pledge by President Xi Jinping.

Reported by China’s state news agency Xinhua on Monday, Xi’s move was part of his response to 24 scientists from Hong Kong who wrote to him last year. Xi also ordered state departments to help Hong Kong become an international centre of innovation and technology.

On Wednesday, Beijing’s liaison office in Hong Kong said it had encouraged the scientists to write to Xi and spent “more than half a year” coordinating different policies to pave the way for the funding.

Hong Kong is home to 16 state laboratories and six branches of the Chinese National Engineering Research Centre. But researchers there had not been able to access Beijing’s generous grants and faced high tariffs when moving machines and equipment across the border.

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Each of the 22 labs or centres had already received 1 million yuan from the new funding, according to Nancy Ip Yuk-yu, vice-president of the University of Science and Technology.

Yang said he believed mainland funding would be stable and increase. “China has set a clear goal to be a strong state of technology by 2025. To realise this goal, it will continue to funnel resources,” Yang said.

The technology chief dismissed concerns that the influx of mainland money would undermine academic freedom and cost Hong Kong scholars job opportunities.

“I am not sure if I am capable of giving a guarantee but you may ask the scholars. I think most of them, even all of them, will tell you that they are enjoying academic and research freedom,” Yang said, adding he did not expect mainland scholars to flock to Hong Kong to receive the funding.

Yang said the city would also give out more incentives to companies to attract investment from the private sector.