Hong Kong’s taking a strong initiative to compete for enterprises and talents, as Chief Executive John Lee Ka-chiu declared in his maiden Policy Address, indicates that the city needs to re-examine its “positive noninterventionism” economic policy under changing circumstances.
As Professor Richard Wong of the University of Hong Kong has correctly pointed out, Hong Kong experienced its own “Age of Liberty” after 1945 and came to be called the world’s freest economy by Milton Friedman (Richard Wong, Fixing Inequality in Hong Kong (HK: Hong Kong University Press, 2017), p 3). There is hardly any doubt that Hong Kong was once blessed, and now is cursed, by its noninterventionist policy. The brain-drain problem and the fierce competition for global talent and enterprises are imperceptibly imposing the silence of a slow-motion death on our vibrant economy. Being the first step in the right direction, the new proactive policies to attract enterprises and talent will lead the city out of the quagmire. We should trust our chief executive.
Seven measures will be taken to attract enterprises, investment and talents. These measures are:
(1) Establishing the Office for Attracting Strategic Enterprises (OASES), led by the financial secretary, for attracting strategic enterprises from the Chinese mainland and overseas by offering them special facilitation measures and one-stop services.
(2) Establishing the Talents Service Unit, led by the chief secretary for administration, for formulating strategies to recruit talents from the mainland and overseas and coordinating relevant work, as well as providing one-stop support for incoming talents.
(3) Setting up dedicated teams for attracting businesses and talents in the mainland offices and overseas economic and trade offices of the HKSAR government to proactively reach out to target enterprises and talents and persuade them to pursue development in Hong Kong.
(4) Setting aside HK$30 billion ($3.82 billion) from the Future Fund to establish the Co-Investment Fund for attracting enterprises to set up operations in Hong Kong and investing in their businesses.
(5) Launching the Top Talent Pass Scheme (TTPS) to widely entice talents to pursue their careers in Hong Kong.
(6) Enhancing existing talent admission programs to better attract talents.
(7) Allowing eligible incoming talents to, upon becoming permanent residents, apply for a refund of the extra Stamp Duty paid for purchasing residential property in Hong Kong.
Many commentators like to compare the TTPS with the new Overseas Networks and Expertise Pass (New Pass) introduced by Singapore in August 2022. To tackle the problem of the talent crunch at high levels, the New Pass was introduced to add vigor to Singapore’s foreign-talents policy. The New Pass will allow high earners (those earning at least HK$2 million annually) to live in Singapore without first having to secure a job in the city-state. These high-earners will be allowed to operate and work for several companies at the same time, and their spouses will also get permission to work in the city-state. Besides the New Pass, the Ministry of Manpower of Singapore will extend to five years the duration of work passes for experienced professionals with skills in shortage.
In fact, Singapore introduced a comprehensive foreign-talents policy in the late 1990s (Linda Low, Human Resource and Employment Challenges in a Knowledge-Based Economy, in Linda Low & Douglas Johnston (eds), Singapore Inc: Public Policy Options in the Third Millennium (Singapore: Asia Pacific Press, 2001), p 218). Before introducing the New Pass, Singapore was applauded for implementing the flexible Personalized Employment Pass for high-earning foreign professionals. Other countries also offer similar programs to attract talents. For example, the United Arab Emirates has a Golden Visa Scheme for talent in medicine, science and technology and culture and arts that lasts for five to 10 years. The United Kingdom has a Golden Talent Visa with a five-year duration.
Not to be outdone, Hong Kong should be more proactive and break the fetters of its outdated laissez-faire policy because the world is trying to attract the same pool of talents, especially those who have the ability and experience of leading and driving innovative changes in a highly competitive and volatile market. If Hong Kong wants to remain as a regional talent hub and if it wants to retain its competitive edge, it should proactively trawl the world for talents. Though a lot more can and needs to be done to tackle the brain-drain problem, the successful implementation of the proactive policies to attract talents and enterprise will turn Hong Kong into an extremely attractive and competitive city. Hopefully, the brain-drain problem will consequently dwindle to insignificance thanks to a booming economy.
We agree that the initiatives to attract talents will succeed only if borders reopen fully. Provided that the COVID-19 pandemic is under control, the Hong Kong Special Administrative Region government will continue to resume interconnectivity with the Chinese mainland by adopting the “reverse quarantine” policy. Concerning inbound flight control mechanism, some expats still complain that the “0+3” arrangement has failed to meet their expectations. Perhaps the HKSAR government should provide a road map for the removal of remaining pandemic restrictions.
To enhance our competitiveness, the John Lee administration will set up the OASES to attract foreign enterprises to invest here. The OASES, to be established within this year, will be tasked with attracting high-potential and representative strategic enterprises from around the globe, particularly those from industries of strategic importance, such as life and health technology, artificial intelligence, data science, financial technology, advanced manufacturing and new energy technology.
The OASES looks similar to the Economic Development Board of Singapore. The EDB is widely regarded as a success story in the city-state. Its officers have worked very hard to attract foreign companies to invest in Singapore. Hon Sui Sen, the first chairman of the EDB, made the EDB so successful and large that he had to break off different components of the organization, turning the industrial estates section into the Jurong Town Corp, and the development finance section into the Development Bank of Singapore (Lee Kuan Yew, From Third World to First (NY: HarperCollins Publishers, 2000), p 59).
Finally, a new Hong Kong Investment Corp will be led by Financial Secretary Paul Chan Mo-po to form a co-investment fund for attracting enterprises by investing in their respective businesses. As a matter of fact, Hong Kong has been lagging far behind Singapore in setting up its own investment fund. Like the EDB, Temasek, which is an investment fund set up by the Singapore government, is also a success story. The portfolio of Temasek comprises shares in companies, startups and joint ventures previously held by the Singapore government such as a bird park, a hotel, a startup airline, and an iron and steel mill.
Fantasy is often more attractive than the real world. Nevertheless, we can no longer indulge in the fantasy that noninterventionist economic policy remains a panacea for all our troubles while we are living in times of great changes. Like a fountain of wisdom, Singapore’s proactive policy to attract enterprises and talents is too valuable to be ignored. With the right policies to attract enterprise and talents, Chief Executive John Lee is the right leader at the right moment to pull our bleeding economy out of its malaise.
Junius Ho Kwan-yiu is a Legislative Council member and a solicitor.
Kacee Ting Wong is a barrister, a part-time researcher of Shenzhen University Hong Kong and the Macao Basic Law Research Center, and co-founder of the Together We Can and Hong Kong Coalition.
The views do not necessarily reflect those of China Daily.