PwC’s comments on the Policy Address 2024

View this page in: 繁體中文版

Hong Kong, 16 October 2024 – PwC Hong Kong is pleased to see that the Hong Kong SAR Government has adopted its recommendations presented in September, particularly our advice on capital markets, talent and business attractions and directions for embracing the digital economy. In line with the development of Hong Kong's new quality productive forces, PwC proposed a strategic three-pronged approach to enhance the city's global competitiveness and financial resilience. This strategic approach focuses on recouping capital, attracting enterprises and talent, and optimising opportunities within the digital economy. PwC looks forward to the implementation of the new Policy Address to actively promote economic reforms across various sectors and steering Hong Kong towards greater prosperity. Meanwhile, the Hong Kong government is encouraged to maintain close dialogue with all stakeholders to ensure that the policies are effectively carried out and continuously refined to better meet the needs and expectations of all citizens.

Peter Ng, PwC Asia Pacific and China Vice Chairman, said, “PwC supports the government as it continues to consolidate and enhance Hong Kong's status as an international centre for finance, shipping and trade. We also support efforts to further expand cross-border and regional cooperation in deepening overseas networks, attracting enterprises and talent, and accelerating the development of the digital economy. These efforts will help strengthen Hong Kong's competitiveness in the global market and promote sustainable development. At the same time, Hong Kong should fully integrate with the Chinese Mainland to accelerate the development of new quality productive forces, including advancing the Northern Metropolis, strengthening cooperation within the Greater Bay Area, and leveraging technological innovations to achieve high-quality economic development.”

PwC’s comments

1. Capital Market

Eddie Wong, PwC Hong Kong Capital Markets Services Partner, said, “We welcome the measures proposed by the Hong Kong government to strengthen Hong Kong's position as the world's largest offshore RMB business hub. By continuously enhancing financial market infrastructure, upgrading the central settlement system for debt instruments, and offering more RMB-denominated investment products, Hong Kong's status as an international financial centre will be solidified. We support the government in further optimising the securities market and expanding financial cooperation with the Middle East and the Association of South East Asian Nations (ASEAN) markets. Deepening mutual market access, optimising listing approvals and reducing transaction costs will help enhance the city’s competitiveness to attract both international and Chinese Mainland enterprises to list in Hong Kong.”

2. Financial Services

Josephine Kwan, PwC Hong Kong Asset & Wealth Management Partner, stated, ““Hong Kong should continue to attract international investments from a diverse investor base and expand its overseas networks. We commend the Hong Kong government’s initiatives to foster financial cooperation with the Middle East and ASEAN through collaboration with sovereign wealth funds along the Belt and Road to create new funds to invest in the Chinese Mainland and other regions, as well as expand new sources of capital such as Middle East ETF tracking Hong Kong stocks and open new distribution channels for private equity funds through HKEX listings. The Hong Kong government has stepped up its efforts to enhance the cross-boundary Wealth Management Connect Scheme, launch the first phase of an integrated fund platform and broaden the scope of tax concessions for funds and single-family offices. These measures will further solidify Hong Kong’s status as an international asset and wealth hub and support its aim to be the largest cross-boundary wealth management centre by 2028.”

Chris Chan, PwC Financial Services Markets Leader, GBA Services, remarked, “We are delighted to see the Hong Kong government promoting Hong Kong as the financial risk management centre for China. This includes encouraging Chinese Mainland and overseas enterprises to establish captive insurers in Hong Kong to support their global business growth. As outlined in PwC’s recommendation report, this can be achieved by targeting Chinese Mainland organisations with a global footprint, whether state-owned enterprises (SOEs) or private firms, and introducing a fast-track licensing process to meet their development needs. At the same time, allocating more funds to Hong Kong infrastructure projects will allow insurers to diversify their assets and drive major investment in initiatives such as the Northern Metropolis.”

3. Tax

Jeremy Ngai, PwC South China (incl. Hong Kong SAR) Tax Leader, said, “We welcome the government’s multi-pronged approach to boosting the development of the shipping and logistics industries. Measures include enhancing and greater promotion of existing tax concessions for maritime services, and developing Hong Kong as a green maritime centre. The development of international financial, shipping and trading centres are closely intertwined. The government’s measures to create a commodity trading ecosystem and expand high value-added logistics will facilitate synergistic development, so that Hong Kong can enhance its competitive advantage.”

Agnes Wong, PwC South Private Clients and Family Office Tax Leader, said, “We welcome the government’s reiteration of its intention to expand the scope of qualifying assets under the tax concession regimes for funds and single family offices. We hope the government can expedite the start of the legislative process. We also welcome the government’s receptiveness to various suggestions to expansion of permissible investment assets under the New Capital Investment Entrant Scheme to cover residential properties worth no less than HK$50 million, as well as extending the validity period of the first visa of high-income talent under the Top Talent Pass Scheme to three years. We hope the government can consider aligning the list of permissible investment assets with the qualifying assets under the family office tax concession regime, so that the two regimes can complement each other. These measures can simultaneously expand Hong Kong's capital and talent pools, achieving two goals at once.”

4. I&T

Albert Wong, PwC Hong Kong Public Sector Consulting Partner, highlighted, “We are pleased to see the government has taken a multi-pronged approach to developing new industrialisation, which is fundamental to realising new quality productive forces in Hong Kong. Starting with the formulation of a development plan, and complemented by policy measures that can support the growth of innovation and technology (I&T) capabilities, markets, networks and talent (such as the setup of Third InnoHK research cluster and increased funding and investment in I&T), Hong Kong has the essential elements to strengthen its role as the international I&T hub for China.”

5. Digital Assets

Peter Brewin, PwC Hong Kong Digital Assets Leader, added, “Hong Kong is driving at speed to establish itself as a global leader for the next generation of financial markets. These will be tokenised, will settle instantaneously and will operate on a blockchain based electronic payment system via the settlement infrastructure being built by the HKMA as part of Project Ensemble. Many jurisdictions are talking about this, but few are putting it into production as fast as Hong Kong. The establishment of a Digital Bond Grant Scheme shows that tokenisation in Hong Kong is now moving from proof of concept to the government supporting broader market adoption. In order to capture the benefits of this technology, this initiative will support bond issuers and financial institutions with the significant initial technology upgrades that they need in order to build out the network effects, liquidity and new market infrastructure required.”