Hong Kong is ramping up efforts to transform the Northern Metropolis into a hub for economic growth and industrial innovation, with Financial Secretary Paul Chan Mo-po pledging to adopt a flexible, industry-oriented approach to fast-track progress in the multi-year flagship project.
Writing in his Sunday blog, Chan said the Hong Kong Special Administrative Region government will explore creative solutions across legal structures, administrative procedures and financing mechanisms to speed up industry development in the ambitious township located near the boundary with Shenzhen, Guangdong province.
His remarks followed Chief Executive John Lee Ka-chiu’s latest Policy Address, underscoring the great economic potential of the Northern Metropolis that is expected to account for one-third of the SAR’s population and land area.
Lee announced the establishment of the Committee on Development of the Northern Metropolis -- a high-level body that he will personally chair, supported by three dedicated working groups.
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According to Chan, the Working Group on Devising Development and Operation Models he heads will hold its first meeting this month. Taking into account the nature and scale of different industry parks in the 300-square-kilometer area, his team will formulate bespoke development and operation models for them.
Distinct from the traditional land-tender approach of the “highest bidder wins”, the SAR government will adopt an industry-linked “two-envelope approach” that requires bidding companies to submit technical proposals and development plans.
The submissions will be evaluated holistically, considering factors like investments, technologies and job opportunities the companies bring, their potential to benefit downstream industries, and economic and tax contributions, rather than simply granting land to the deepest-pocketed developers.
Moreover, to address the project’s significant capital requirements, the working group will design a range of financing schemes, including equity, bonds, public-private collaboration, and “provision of land, as a form of capital participation”. Taking the last one as an example, Chan said this model enables the government to provide land, while private enterprises shoulder the costs of construction and operations.
Such approaches, he said, are designed to maximize market resources to expedite land development and lighten the fiscal burden on the government for early-stage infrastructure.
The Policy Address also announced that the finance chief will spearhead efforts to develop preferential policy packages to lure high-value-added industries and high-potential enterprises to Hong Kong. The packages will include land grants, land premiums, financial subsidies and tax incentives, in a bid to enhance Hong Kong’s competitiveness in an increasingly fierce global race for investment.
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In addition to Hong Kong’s edge in its simple, low-tax regime, the government will adopt a flexible and innovative method to negotiate with target enterprises and offer tailored incentives from the policy toolkit on a case-by-case basis.
Chan revealed that the Office for Attracting Strategic Enterprises will soon announce a new batch of companies establishing or expanding operations in Hong Kong with its assistance, including multiple global players in the pharmaceutical industry.
According to government data, the OASES, since its operation in late 2022, has attracted 84 cutting-edge technology firms to the city, committing a total of HK$50 billion ($6.43 billion) in investments.
InvestHK -- the SAR government’s investment promotion arm -- has brought in more than 440 companies to set up or expand their operations in Hong Kong this year, with investments expected to contribute HK$46 billion and create about 9,000 jobs.
Contact the writer at irisli@chinadailyhk.com
