💡 Highlights from Hong Kong's Policy Address 2024

5 minute read

Hong Kong's Policy Address for 2024 is out. While Chief Executive John Lee Ka-chiu's previous addresses focused heavily on national security and post-pandemic recovery, this year's blueprint shifts towards macroeconomic development.

Lee underlined a “reform mindset”, and set the stage for proposals responsive to international circumstances and tailored to local conditions. Here are some key highlights:

Upping Hong Kong's global financial game (with a splash of liquor)

Hong Kong is doubling down on its strengths as a global financial hub. The government is set to attract private equity funds and major sovereign funds – especially those in the Middle East – by implementing new tax incentives for funds and single-family offices.

To further strengthen the financial sector, the securities market is getting a boost with streamlined IPO procedures and reduced transaction costs. 

Also in the works: An international commodity exchange with accredited warehouses and favorable tax policies to drive trade – leveraging Hong Kong's status as the world's largest gold import-export market.

And – to shake things up further – Hong Kong is slashing the duty on liquor from 100% to 10% for amounts above an import price of HK$200. 

Diversifying the economy for future growth 

The city is taking steps to create a more resilient and diverse economy. It’s taking steps to nurture both new industries and established sectors, while expanding trade partnerships.

To support a strategic shift towards innovation, a HK$10 billion innovation and technology fund will funnel investment into strategic emerging industries, while a fresh HK$1.5 billion round for the Research Matching Grant Scheme will draw more support for institutional research initiatives.

To top it all off, a $500 million investment will kickstart the Incentive Scheme for Recurrent Exhibitions 2.0, and a new Working Group on Promoting Silver Economy will develop strategies to boost silver consumption and related industries. 

A new “Home Sweet Home” for Hong Kong

Addressing the housing shortage was a critical component of the policy address. With ambitious plans to create more land for housing, the public housing supply target has been increased to 189,000 units over the next five years – an 80% increase from the current term.

Considering the latest economic and financial environment, the Hong Kong Monetary Authority (HKMA) will relax mortgage loan conditions for both residential and non-residential properties. Effective immediately, the maximum mortgage loan-to-value ratio will be 70%, and the maximum debt-to-income ratio will be 50%, regardless of property type, usage, or buyer status. Additionally, new legislation will be introduced to establish a regulatory regime for renting subdivided units, addressing a significant housing concern in the city.

🎓 Simply Finance: Silver Economy

The Silver Economy refers to economic activities aimed at meeting the needs and harnessing the purchasing power of the aging population, particularly those aged 50 and over. 

This includes products and services that cater to the consumption patterns, living standards, and health requirements of the older generations.