Policy Address 2018 — Highlights for Hong Kong startups

The Policy Address 2018 was delivered by Chief Executive Carrie Lam in mid-October. It highlighted the potentials of our younger generation and more empathizes were given to the development of startup industries.

With no doubt, the government is putting in more effort with startups, especially towards the innovation technology field. So what is the government going to do? How can these new regulations reassure the world that Hong Kong is catching up with the startup trend? Here are the highlights of the Policy Address 2018.

FinTech

Financial Technology (FinTech), a combination of finance and technology, is the upcoming trend for businesses. Being Asia’s largest financial hub, the territory has an array of favourable conditions for the deployment of financial technologies: the relatively-loose regulatory environment, strength of its financial sectors, network of connections to the Mainland China market as well as the West, and its safeguard for intellectual property and data protection.

The government aims to establish the city as a hub for the application and setting of standards for cutting-edge FinTech. According to Policy Address 2018, financial regulators will make use of “supervisory sandbox” to let financial institutions test new FinTech applications.

FinTech Supervisory Sandbox: HKMA launched the FinTech Supervisory Sandbox (FSS) in September 2016 to facilitate the pilot trials of FinTech and other technology initiatives of authorised institutions before they are launched on a fuller scale. According to the HKMA, an enhanced Fintech Supervisory Sandbox 2.0 will be launched by the end of 2017 with new features including a Fintech Supervisory Chatroom to provide speedy feedback to banks and tech firms.

SFC Regulatory Sandbox: SFC launched the SFC Regulatory Sandbox in September 2017 to enable qualified firms to identify and address any risks or concerns associated with their regulated activities before their products are fully launched.

Insurtech Sandbox: The IA launched an Insurtech Sandbox in September 2017 to facilitate pilot trails of innovative Insurtech initiatives.

(More information to be found in WHub’s Hong Kong FinTech Ecosystem Toolbox 2017.)

On the other hand, the government would use Financial Leaders Forumwhich is chaired by the Financial Secretary, as a platform to deliberate on strategic financial-based proposals and monitor progress of projects to safeguard Hong Kong’s position as an international financial centre.

Hardware-IoT

To strengthen Hong Kong’s position as an international trading centre, echnology is an inevitable part. To kick start, $500 million would be provided to the Technology Talent Scheme, which includes establishing a Postdoctoral Hub, expanding internship programmes to attract more technology talents and providing more subsidies to local enterprises to enhance their on-hand training.

While more investments are to be made, re-industrialization also serves a great part in the reformation. More innovative and technological ideas would be promoted through the “Inno Space”.

The government would also work closely with the Hong Kong Science and Technology Parks Corporation, particularly on the Science Park expansion project. An Advanced Manufacturing Centre and a Data Technology Hubwould also be developed to promote re-industrialisation.

A series of support would be given to small or medium enterprises by reviewing and restructuring government-administered or guaranteed funding schemes.

E-commerce

E-commerce is another field in which the government has high expectations on. In order to cope with the upcoming “E-finance” trend, an inter-departmental platform would be set up to promote the development of e-commerce.

On the other hand, HKMA planned to launch the Faster Payments System in September 2018 to enable round-the-clock retail payments in Hong Kong dollar and Renminbi in a real-time manner.

Green Tech

Apart from promoting Fintech, green finance is also a crucial exploratory field. Experts are going to explore the feasibility and flexibility of the government in terms of the possibility of issuing a green bond.

Nevertheless, green technologies might also be implied in the foreseeing years on different transportation, such as vehicles and ferries. In order to improve poor air quality and ones quality of life, the emission of fossil fuels can be greatly reduced when the new legislation takes place.

Smart city

The Hong Kong government plans to carry out proof-of-concept trails in Kowloon East including illegal parking monitoring system, multi-functional smart lampposts, smart rubbish bin system and energy efficiency data system, etc.

The government is also looking into means for better traffic management. A new generation of on-street parking meters would be installed to provide parking space vacancy information and accept remote payment. The government also plans to develop a mobile application for transport to provide real-time traffic information. A pilot Multi-functional Smart Lampposts scheme would be launched at urban locations to collect real-time city data with the aim to help enhance traffic management.

Others

Since the startup culture is slowly arising, the government is going to set up key technology collaborative platforms and encourage local educational institutes, as well as international research institutes and technology companies to join in the research with the local R&D community.

Cyberport would support the government’s “Space Sharing Scheme for Youth” through a tripartite partnership, so as to provide a reasonable and affordable co-working space area for youngsters to get an easy start with their business. On the other hand, additional funds would be launched for local innovation and technology startups.