Hong Kong’s new growth industries

Overview

  • Financial services, trading and logistics, tourism and professional services have been Hong Kong’s four pillar industries. Now we are rapidly developing six new industries in which Hong Kong enjoys distinct advantages, to accelerate our drive towards a knowledge-based economy, maintain the city at the leading edge and secure continued prosperity.
  •  The National 12th Five-Year Plan stated clearly the Central Government’s support for Hong Kong to develop these six new industries: Medical Services; Environmental Industries; Testing and Certification Services; Education Services; Innovation and Technology; and Cultural and Creative Industries.
  • At the same time, our efforts to make Hong Kong a wine hub by abolishing wine duty and various other measures to support the industry have also paid dividends.

Medical Services

With good private hospitals, clinics and highly-skilled medical and dental practitioners and medical research facilities, Hong Kong is well on the way to establishing itself as a world-class centre for healthcare.  Hong Kong is also a world leader in many branches of high-end medical research.

  • Our researchers have pioneered breakthroughs in adult-to-adult live donor liver transplantation, non-invasive prenatal diagnosis, and use of oral arsenic trioxide to treat leukemia.
  • Professor Rossa Chiu of the Department of Chemical Pathology at the Chinese University of Hong Kong won two prestigious international research awards: the 2011 International Federation of Clinical Chemistry and Laboratory Medicine (IFCC) Young Investigator Award and the 2011 Professors’ Prize given by the Association of Academic Heads of Clinical Biochemistry Departments in the UK.
  • The University of Hong Kong is rated by the Times Higher Education World University Rankings 2011-12 Asia’s second top university and 34th in the world for clinical, pre-clinical and health-related subjects.
  • The Public Health Laboratory Services Branch of the Centre for Health Protection has been designated by the World Health Organization as one of the global reference laboratories for Severe Acute Respiratory Syndrome (SARS) and influenza A H5, a supranational reference laboratory for tuberculosis, and a regional reference laboratory (Western Pacific Region) for measles.
  • Hong Kong is poised to become a biotechnology centre, thanks to China’s leading company in the field, Beijing Genomics Institute, basing its main laboratory, BGI (Hong Kong), in the city.
  • Four sites have been reserved for private hospital development and we plan to put two of them for tender in the first quarter of 2012.
  • Medical training has been enhanced overall.
  • Chinese medicine is being promoted. The Government is strengthening the regulation of Chinese medicine with the full implementation of the registration of proprietary Chinese medicines and standards are being set for 200 commonly used Chinese herbal medicines. At the same time, we are fostering exchange with Chinese medicine counterparts in the Mainland and around the world. We are also exploring integrated Chinese and Western medicine service models to enhance our healthcare system.

Environmental Industries

Hong Kong plans to become greener and cleaner and develop environmental industries such as sewage and waste management, environmental engineering and consultancy services.  We are also making efforts to become a leading centre in the region for green products, technologies and services.

  • To strengthen green procurement, we have expanded the number of items on the Government green purchase list to over 100. The Government also promotes green procurement in services and public works projects.
  • The Buildings Energy Efficiency Ordinance, enacted in November 2010 and which will come in full operation on September 12, 2012, stipulates energy efficiency standards for key installations in new buildings, such as air-conditioning, electrical, lift and escalator and lighting installations. Existing buildings are also required to comply with the Codes when undergoing major retrofitting. Central building services installations in commercial buildings are required to carry out energy audits once every 10 years.
  • A $300 million (US$38.7 million) Pilot Green Transport Fund encourages the public transport sector as well as goods vehicles to test low-carbon transport technology, including electric vehicles (EVs).  EVs like Mitsubishi i-MiEV, Tesla Roadster, Nissan LEAF and Smith commercial EVs have already entered the Hong Kong market and we welcome more manufacturers. First Registration Tax on EVs has been waived till March 2014. This is a good incentive given that Hong Kong tax can be up to 115% of car price.
  • Under the Cleaner Production Partnership Programme, more than 90 local environmental technology service providers offer professional services to factories in the Pearl River Delta (PRD) to adopt cleaner production technology.
  • The Hong Kong Science Park has established a Solar Energy R&D Support Centre to help develop solar energy and related technologies in Hong Kong and the PRD.
  • The Government is supporting the local industry to participate in environmental expos, trade missions and other related activities. This will give the industry a platform to share experience and explore areas for cooperation with other overseas and international enterprises, as well as build up local brands to develop a green economy. Hong Kong hosts Eco Expo Asia which is becoming a premier eco-exhibition in the region.
  • The environmental services sector is now included in the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) free trade pact, enabling Hong Kong service providers or foreign companies based in Hong Kong to set up wholly-owned enterprises in the Mainland.

Testing and Certification Services

Hong Kong’s testing and certification industry, comprising over 200 accredited testing laboratories, inspection bodies and certification bodies, maintains the highest global standards, assuring overseas buyers of the quality and safety of products sourced in the region.  Given the increasing global demand for product safety and quality, there is much potential for the industry, which also supports Hong Kong’s position as an international trading hub.

  • Service providers accredited by the Hong Kong Accreditation Service are recognised by over 80 accreditation bodies in more than 60 economies. They adopt highest quality product and management system certification, such as ISO 9001, ISO 14001, ISO 22000, and ISO 27001.
  • Testing, certification and inspection services cover a wide spectrum, including textiles, toys, electronics, food, consumer goods and industrial products.
  • The Hong Kong Council for Testing and Certification was established in September 2009 to advise the Government on the overall strategy to develop the industry. The Council works to strengthen the industry and develop new business opportunities in four selected trades – Chinese medicine, jewellery, food and construction materials.
  • Hong Kong’s accredited testing laboratories can now do testing for products processed in Hong Kong for the China Compulsory Certification (CCC) System (e.g. toys, electrical products, information technology equipment and lighting apparatus). This opens up more opportunities for Hong Kong’s testing and certification industry in the Mainland and promotes trade between the two places.

Education Services

We aim to enhance the city’s status as a regional education hub, leveraging three fundamental strengths which set Hong Kong apart as an excellent place for education: cultural diversity, opportunities and international standards.

  • Hong Kong universities are consistently ranked among the best in Asia. Three of them have been ranked among the top 50 in the world and top five in Asia. For the third year in a row, the Kellogg/HKUST executive MBA programme has been recognised as the best in the world by the Financial Times 2011 EMBA global rankings.
  • We have 48 international schools – more than any other Asian city – offering over 10 different national curricula and the international baccalaureate.
  • To further internationalise the higher education environment, we have doubled places for non-local students in our higher education institutions from 10% to 20%.  Immigration and employment restrictions have been relaxed, so that non-local students can remain in Hong Kong without restriction for up to one year to look for employment.
  • About 1 200 non-local courses provide sub-degree or above level education.
  • Every year, more than 3 000 overseas students come to Hong Kong which offers many attractions for them: a cosmopolitan and liberal learning environment; English as a common medium of instruction; internationally recognised qualifications; global perspectives and employment opportunities; cross-cultural competencies; on the doorstep of the world’s fastest-growing destination for overseas students; and 15 degree-awarding higher education institutions, including nine publicly-funded and six self-financing degree-awarding institutions.
  • Under the PhD Fellowship Scheme designed to attract students from around the world to pursue doctoral studies in Hong Kong, selected students will get a monthly stipend plus annual research-related travel allowances.
  • We have made available 12 sites for the development of the self-financing post-secondary education sector. A 16.4 hectare site at Queen’s Hill has been identified for self-financing institutions which, together, will offer places for at least 8 000 students, including 4 000 residential students.
  • A $2.5 billion (US$320 million) Self-financing Post-secondary Education Fund is being set up for scholarships and quality enhancement.
  • A site of more than 30 hectares at Lok Ma Chau Loop on the Hong Kong/Shenzhen boundary is to be developed as an education zone for higher education institutions and R&D centres.
  • Four greenfield sites have been allocated for new international schools or expansion of existing ones. They will offer about 5 000 new places in the coming few years.

Innovation and Technology

Hong Kong is leveraging its R&D capabilities, excellent infrastructure, world-class universities, sound legal system and robust intellectual property protection regime to become a regional innovation and technology hub.

  • Hong Kong Cyberport is a creative digital community and home to over 100 ICT and digital content companies. Cyberport has industry support centres, including a Collaboration Centre, Technology Centre, Knowledge Centre and Entrepreneurship Centre, which spearhead the growth and development of the local ICT and digital entertainment industry.
  • Hong Kong Science Park, managed by the Hong Kong Science and Technology Parks Corporation (HKSTPC), is home to more than 350 technology companies in electronics, information technology and telecommunications, precision engineering, biotechnology and green technology industries. HKSTPC’s incubation programme has nurtured around 320 local technology start-ups and around 100 design start-ups to date. Phase 3 of the Park is being developed at an estimated cost of $4.9 billion (US$628 million). Expected phased completion will be from late 2013 to 2016 with occupation starting from early 2014 to accommodate 150 more technology companies.
  •  The $5 billion (US$640 million) Innovation and Technology Fund (ITF) provides funding for applied R&D projects to boost productivity and competitiveness of our manufacturing and service industries and drive commercialisation. Five R&D Centres have been set up under the ITF: automotive parts and accessory systems; information and communications technologies; logistics and supply chain management enabling technologies; nanotechnology and advanced materials; textiles and clothing. Up to 50% of the approved funding for an ITF project can be used in the Mainland to support R&D collaboration between the Mainland and Hong Kong.
  • The $200 million (US$25.6 million) R&D Cash Rebate Scheme aims to reinforce the research culture of Hong Kong enterprises and encourages them to strengthen their partnership with local research institutions.
  • The Guangdong-Hong Kong Technology Cooperation Funding Scheme and the Shenzhen-Hong Kong Innovation Circle facilitate science and technology cooperation between the two places. The latest example is the establishment in 2011 of an R&D centre in Hong Kong by BYD Co. Ltd. for R&D collaboration with local research institutes to develop electric vehicles.
  • We are working with the Ministry of Science and Technology to enhance Hong Kong’s participation in national-level science and technology projects and enhance collaboration with research institutes and enterprises in the Mainland. For instance, we are facilitating the inclusion of Hong Kong scientists into the National Science and Technology Programmes Expert Database. We will also facilitate development of technology clusters which complement the Mainland’s technology developments.
  • Additional funding has been released for 12 Partner State Key Laboratories in Hong Kong.
  • Hong Kong has earned a world reputation for extensive and highly efficient use of smart card technology in daily life.  Octopus, for example, processes more than 11 million transactions valued at over $110 million (US$14 million) daily. With seven million people, Hong Kong has one of the world’s largest populations using smart ID cards.
  • A culture of innovation is being promoted in the community.
  • In September 2011, Google announced plans to build a data centre in Hong Kong, reaffirming Hong Kong’s status as the prime location for data centres in the region.
  • Hong Kong-made app “Talkbox Voice Messenger” won the Grand Award in the category of “Communications” in APICTA 2011, an annual flagship event in ICT industry in the Asia-Pacific region.

Cultural and Creative Industries

Hong Kong is accelerating the development of its dynamic cultural and creative industries – film, television, design, architecture, advertising, animation and comics, arts, publishing and digital entertainment.

  • We have about 32 000 cultural and creative industry-related establishments with more than 188 000 practitioners. Cultural and creative industries contribute 4% ($63 billion/US$8.08 billion) to Hong Kong’s GDP annually, making the sector a strong driving force for the territory’s future development.
  • Multi-faceted schemes are in place to enhance cultural software through arts programme development, manpower training, promotion of arts education, audience building and cultural exchanges.
  • The Hong Kong Arts Development Council plans, promotes and supports the broad development of the arts in Hong Kong, including the literary, performing and visuals arts, film and media arts.
  • CreateHK, which co-ordinates policy on creative industries and provides a one-stop shop service to the industry, follows a seven-pronged strategy to drive the development of creative industries: training local talent; supporting start-up companies; developing the local market; expanding overseas and the Mainland market; developing creative clusters; fostering a creative atmosphere in the community; and supporting the development of mega events to establish Hong Kong as Asia’s creative capital.
  • The $300 million (US$38.7 million) CreateSmart Initiative (CSI) supports the development of creative industries.  The $320 million (US$41 million) Film Development Fund (FDF) supports the development of the film industry.
  • The InnoCentre provides a design incubation programme for design start-ups, offering office space, design education and professional development.
  • A creative industries landmark at the former Police Married Quarters on Hollywood Road is expected to open in 2014.
  • Resources have been allocated to provide art space in industrial buildings, which can be rented by artists at concessionary rates.
  • $486 million (US$62 million) has been earmarked for a series of initiatives from 2010-11 until 2014-15. They include: stepping up promotion of public art; trainee programmes for arts administrators; supporting student participation in arts and cultural activities; enhancing the Hong Kong Arts Festival brand; and strengthening the development and preservation of Cantonese Opera.
  • The Government has injected $1.5 billion (US$192 million) into the Arts and Sport Development Fund (Arts Portion) as seed money. The annual investment returns will be used for the long-term development of arts and culture.
  • Hong Kong actress Deanie Ip won the Coppa Volpi for Best Actress award at the 68th Venice International Film Festival for her role in the film A Simple Life.

Wine hub

Since the abolition of all local wine duties in February 2008, Hong Kong has become a regional hub for wine trading and distribution and the first tax-free wine port among major economies. Wine trading, distribution, auctions and other related businesses have shown notable growth. The Government will continue to support the industry to reinforce Hong Kong’s status as a regional hub for wine distribution and trading.

  • According to the industry, Hong Kong has firmly established its position as one of the three largest wine auction centres in the world.
  • In 2010-11, the value of the city’s wine imports jumped 74% to $8 billion.
  • Wine promotion cooperation agreements signed since August 2008 with France (and its Bordeaux and Burgundy regions), Spain, Australia, Italy, Hungary, Portugal, New Zealand, USA (and its Oregon and Washington states) and Chile have helped consolidate Hong Kong’s position as a regional wine hub.
  • In late October 2011, the Hong Kong Tourism Board staged the third Hong Kong Wine and Dine Festival. The number of wine and food booths increased by 22% over 2010 to 287 and more than 160 000 people attended the four-day event. The Trade Development Council’s Hong Kong International Wine and Spirits Fair in November 2011 attracted some 930 exhibitors and 19 000 business visitors – a growth of 37% and 35% respectively over 2010.
  • The Government will continue to help the industry grow through a number of support measures. They include: maintaining the present simple import/export procedures; consolidating the certification scheme for wine storage facilities; facilitating the clearance of wine exported to the Mainland through Hong Kong; fostering manpower training and education; combating counterfeits; enhancing/encouraging key home-grown and international wine promotional events in Hong Kong; and assisting wine-producing countries/regions establish regional offices here.
  • In mid-2010, the Mainland customs facilitation scheme started on a trial basis in Shenzhen to ease wine exports from Hong Kong to the Mainland. Measures include pre-valuation of wine duty before arrival at Mainland borders and fast customs clearance.

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