Hong Kong to add $1bln to support SMEs

Ties with the Mainland and Taiwan are also strengthened to further bolster small enterprises.

Chief Executive Donald Tsang says the Government plans to inject an additional $1 billion into the SME Export Marketing and SME Development Funds next year.

Delivering his Policy Address this morning, he said the move will encourage small and medium enterprises' participation in export promotion activities and enhance their competitiveness, according to a government report.

To offer more support to SMEs, the Mortgage Corporation is also exploring the establishment of a market-oriented loan guarantee scheme to provide a sustainable platform for obtaining credit, he added.

Strengthening financial co-operation with the Mainland is vital for Hong Kong's financial services, he said, adding these should be positioned and developed in a way that will increase the city's contribution to promoting the modernisation of the Mainland's financial system, particularly the internationalisation of the renminbi and the increased convertibility of the Mainland's capital account in a gradual and orderly manner.

Mainland ties
He said the Government will seek "early and pilot implementation" in Hong Kong of those Mainland financial services which have not been liberalised because the capital account is not yet opened or it is necessary to test the market through piloting. "For example, we may seek the expansion of channels for enterprises to invest in the Mainland the RMB capital raised in Hong Kong."

The Government will promote capital flows between banks in Hong Kong and the Mainland, and to attract more foreign enterprises to use Hong Kong's RMB settlement services by taking advantage of the development of cross-border trade settlement in RMB.

It will also encourage more Mainland, Hong Kong and foreign enterprises to issue RMB bonds in Hong Kong; and strengthen the linkage between products traded on the stock exchanges of Hong Kong and the Mainland, seek mutual access for market participants and intermediaries, and expand the channel for capital flows between the two places.

"We will enhance financial co-operation with emerging markets. Apart from Islamic finance, we will also tap into business opportunities in Russia, Central Asia, India, South America and other emerging markets to attract more large enterprises to list in Hong Kong and make use of Hong Kong's well-established financial and trading platform to expand their international business."

HK-Taiwan
In the coming year the Government will promote multi-faceted, multi-level exchanges with Taiwan. These include updating air services arrangements, support for the regulatory bodies of both places to strengthen the liaison mechanism on co-operation in regulating the banking industry, the use of the new platform to explore opportunities for economic and trade co-operation and double taxation avoidance issues.

"We will pursue the setting up of an office in Taipei by the Hong Kong Tourism Board and discuss with Taiwan the establishment of a multi-functional office in Taipei by Hong Kong."

On the insurance industry, the Government will take into account public views and draft legislation on the establishment of an independent insurance authority. "To further boost market confidence and promote financial stability, we are preparing, in collaboration with the industry, a proposal to establish an insurance policyholders' protection fund. We hope to consult the public by the end of this year."

To promote the healthy and sustainable development of the tourism industry, the Secretary for Commerce & Economic Development will review the operation and regulatory framework of the entire tourism sector, including the role, powers, responsibilities and operation of the Travel Industry Council of Hong Kong, as well as its working relationship with the Travel Agents Registry.

National plan
"To ensure Hong Kong can better leverage its unique advantages and functions during the National 12th Five-Year Plan period, we will strive to enhance Hong Kong's status as an international centre for financial services, trade, shipping and logistics, and to develop the six industries where Hong Kong enjoys clear advantages.

"We are actively helping our service industries, especially the professional services sector, expand their presence in the Mainland market progressively. We are working with Guangdong Province to seek to incorporate the most important functions and roles of Hong Kong-Guangdong co-operation into the Five-Year Plan.

"We will continue to provide suitable sites for port back-up uses to facilitate efficient port operations. We will continue to consolidate Hong Kong's position as an international maritime centre, reinforce the maritime service cluster, strengthen the training of human resources and promote our quality and comprehensive maritime services both locally and abroad."