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HKSARG’s Work on the Belt and Road
Trade and Economic Ties
- The Chief Executive and Principal Officials have led delegations to visit B&R countries, including countries of the Association of Southeast Asian Nations (ASEAN) and in South Asia, the Middle East, Central Asia and Europe, to learn more about these places and to discuss with local governments and businesses to strengthen and implement cooperation in various areas, including policy coordination, trade and finance, arts and culture, youth policy, education, R&D, etc.
- The Economic and Trade Offices (ETOs) set up by the HKSAR Government in Mainland China and overseas will further promote economic ties and exchanges with B&R countries. In the Mainland, following Shandong, Hunan and Henan in 2016, new liaison units were set up in Tianjin, Zhejiang, Guangxi and Shaanxi in 2017. In overseas countries, the Jakarta ETO was established in 2016. Preparatory work is also underway for setting up ETOs in other Belt and Road countries.
- Hong Kong signed a Free Trade Agreement (FTA) with ASEAN in November 2017. FTA negotiation has also begun with other trading partners. Hong Kong has so far signed Investment Promotion and Protection Agreements with 20 economies and has concluded negotiations with Bahrain, Mexico, Myanmar and the United Arab Emirates. Negotiations will commence or continue with other B&R countries.
- In November 2016, the HKSAR Government launched the “Professional Services Advancement Support Scheme” to support exchange and cooperation between Hong Kong’s professional services providers and their overseas counterparts, including those in B&R countries.
- The Hong Kong Monetary Authority established the Infrastructure Financing Facilitation Office in 2016, which provides a platform, through inviting different organisations to become partners and organising various training workshops, high-level seminars and investor roundtables, to bring together key stakeholders to cooperate and to participate in major infrastructure investment and financing, including those in B&R countries.
- Hong Kong is the world’s largest offshore RMB business hub, providing diversified investment, financing and risk management products and handling over 70% of all offshore RMB transactions. The HKSAR Government will help expand Renminbi (RMB) services, providing a platform for enterprises and financial institutions all over the world to raise RMB funds and to drive the internationalisation of RMB.
- In 2016, the HKSAR Government amended legislation to allow, subject to specified conditions, interest deduction in calculating profits tax for intra-group financing business of corporations operating in Hong Kong, and to reduce profits tax rates by half for qualifying corporate treasury centres, to attract multinational and Mainland corporations to centralise their treasury functions in Hong Kong.
- Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect were launched in November 2014 and December 2016 respectively, to enhance connectivity between the Mainland and Hong Kong capital markets.
- Hong Kong’s membership application was approved by the Asian Infrastructure Investment Bank (“AIIB”) on 23 March 2017. Upon deposit of the first installment of capital subscription with the bank, Hong Kong will officially become a member of AIIB, and will be able to provide a variety of investment and financing services for the bank, further consolidating its position as an international financial centre.
- Given the growing demand for Islamic financial services from the large number of Islamic states along the B&R, Hong Kong can play an important role in the world of Islamic finance, having already issued three Islamic bonds (Sukuk) successfully.
International Logistics, Shipping and Transport
- Hong Kong has signed air services agreements or air services transit agreements with 42 B&R countries, and will continue to carry out negotiations with trading partners along B&R regions for more agreements or enhancements of existing agreements.
- The HKSAR Government has set up the Hong Kong Maritime and Port Board to formulate maritime and port-related strategies and measures together with the shipping industry, to promote the long-term development of Hong Kong’s maritime industry and port services.
- Construction work is now underway to expand Hong Kong International Airport (HKIA) into a three-runway system. Upon completion, cargo throughput is expected to increase to 9 million tonnes per year, further consolidating Hong Kong’s position as an international logistics centre.
- Work on the Hong Kong section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link (XRL) is underway and targeted for completion in the third quarter of 2018. To link up with Mainland China’s rail network that stretches 16,000 km, the new 26 km high-speed rail link will significantly shorten the travel time between Hong Kong and major Mainland cities to further consolidate Hong Kong’s strategic position as China’s southern gateway. It will also strengthen Hong Kong’s socio-economic ties with the Mainland and inject new vigour into Hong Kong’s medium and long-term development by creating new opportunities.
- Regarding road transport, the completion of the Hong Kong-Zhuhai-Macao Bridge is expected to shorten the time required to move goods from Zhuhai in the Mainland to Hong Kong’s Kwai Tsing Container Terminals from 3.5 hours to just 65 minutes. Travel time between HKIA and Zhuhai will also be shortened from 4 hours to just 45 minutes, thereby greatly increasing business opportunities for Hong Kong’s modern logistics sector.
- To promote long-term economic growth and regional cooperation, Hong Kong has stepped up efforts to improve cross-boundary transport infrastructure with the Mainland. Construction work on the new boundary control point at Liantang/Heung Yuen Wai is underway and is scheduled to be completed in 2018. The new boundary control point will be the seventh land crossing between Hong Kong and Mainland China. It will connect with the “Eastern Corridor” in Shenzhen, an expressway which links up the eastern part of Guangdong and adjacent provinces (Fujian and Jiangxi) via the “Shenzhen-Huizhou” and “Shenzhen-Shantou” Expressways, and is of strategic importance in terms of regional integration and cooperation.
Innovation and Technology
- The HKSAR Government provides strong support for local research and development (R&D) activities via the Hong Kong Science Park, the Cyberport, and five R&D centres working closely with the industries. Hong Kong is capable of providing R&D support for the B&R regions.
- The CE, at her 2017 Policy Address, proposed to introduce a 300% tax deduction for the first $2 million eligible research and development (R&D) expenditures with the remainder at 200%, with a view to encourage R&D investment by enterprises.
- The HKSAR Government has been working to bring world-class R&D institutions to Hong Kong. For example, Massachusetts Institute of Technology set up its first overseas Innovation Node in Hong Kong in June 2016, and Karolinska Institutet, a world-class medical university, set up its first overseas reparative medicine centre in Hong Kong in October 2016.
- Hong Kong Scholarships for B&R Students have been set up to help students from B&R countries to study in Hong Kong. A funding scheme has also been launched to encourage and support local students to go on exchanges in B&R regions.
- The HKSAR Government will continue to organise exchange programmes for Hong Kong students to interact with students in Mainland cities along the B&R, and to progressively increase funding and include more B&R language tests in international examinations to encourage students to learn these languages. There will also be financial support for non-government organisations to organise B&R exchange activities to raise the awareness among students.
- The “Funding Scheme for Exchange in Belt and Road Countries” was launched in 2016 to support registered non-profit-making organisations and statutory bodies to organise, on a matching basis, exchange programmes in B&R countries for young people in Hong Kong aged 15 to 29.
- The HKSAR Government will extend the bilateral working holiday scheme to cover more B&R countries to broaden the horizons of Hong Kong’s young people through experiencing local culture and customs on a short stay basis.
- Memorandums of understanding on cultural cooperation with B&R countries have been signed to promote exchange and cooperation in arts and culture. To promote the arts and culture of Hong Kong, performances, exhibitions, seminars and forums are organised in Hong Kong, the Mainland and other countries. Artists and arts groups from around the world (including those in B&R countries) are invited to perform, exhibit and participate in seminars, forums and other cultural and arts exchange activities in Hong Kong.
- The HKSAR Government will continue to work with Mainland cities to promote multi-destination tourism products to attract tourists from B&R countries. Regional cooperation will be encouraged for the cruise industry to create synergy by bringing together the financial resources of neighbouring ports to attract more international cruise liners to call at the ports in the region. In addition, a variety of activities will be organised to encourage Hong Kong’s travel industry to tap into the tourist markets of B&R countries.
- The HKSAR Government will consider relaxing visa requirements for nationals of B&R countries for employment, study and travel purposes.