Chief Executive Carrie Lam

Technology will become increasingly critical to the success of the Belt & Road Initiative, which is all about enhancing connectivity between countries. Originally envisioned as encompassing Asia, Africa, the Middle East and Europe, it has now extended its vision and its reach to Latin America. Given its vast political and geographical magnitude, connectivity can only be enhanced efficiently with the help of technology.

When we talk about trade along the Belt & Road today, innovation and technology is inevitably part of that discussion, and it's fintech that increasingly dominates the conversation. Fintech can enable cost-effective financial services, while promoting cross-border trade and investment along the Belt & Road. Given its clear potential in lowering the cost of doing business, fintech promises a level playing field for business, and that can only spark further innovation.

Apart from fintech, lawtech is also becoming increasingly important. Hong Kong positions itself as the region's legal and dispute-resolution services hub and has been consistently rated as the one of the most preferred seats of arbitration outside Europe. What distinguishes Hong Kong is the rule of law, backed by the trusted common law system, the independence of our judiciary, and the abundance of well-qualified legal professionals. On the latter, some 900 local solicitor firms and about 85 foreign firms practise here. They are well versed in both the international and the Mainland's legal and regulatory landscape, and will most assuredly play a pivotal role in the progress of the Belt & Road Initiative.

Traditionally, legal practitioners handle highly confidential information in their daily work. Without mature technology in providing a watertight protection for information security, the legal industry was not among the first to embrace the digital transformation. But now, given the substantial and continuing advances in cloud security, the legal sector is increasingly seeking innovation with a view to capturing the time and cost savings there for the taking.

In addition to machine learning for legal research and AI-driven programmes for providing simple legal advice, efficient and effective online legal services have an enormous potential, particularly in the context of the Belt & Road Initiative where a large geographical area is covered. In anticipation of a rise in cross-border transactions as a result of the initiative, private sector stakeholders in Hong Kong, including the Law Society, are already actively exploring the creation of an e-platform known as the eBRAM, that is the Belt & Road Arbitration & Mediation Centre, to facilitate the conclusion of transactions as well as dispute resolution. The group in charge of eBRAM came to see me a month ago asking for money and I tried to respond as positively as I could.

Also because of the wide geographical coverage of the Belt & Road, there are inevitably language barriers that have to be overcome in the course of co-operation. In fact, the Belt & Road region is home to more than a thousand languages and dialects. Translation technology and language databases will be in considerable demand to meet the needs for effective communication, particularly when it comes to contracts. I have been told that the eBRAM will also seek to address these issues. My Secretary for Justice will tell you more about this platform later this morning.

My Government has made innovation and technology a policy priority, which I believe will benefit all sectors, including the legal sector. Hong Kong's strengths lie in R&D, in technology adoption and start-ups and a deep talent pool. In terms of technologies, local universities and research institutions in Hong Kong possess strong capabilities in blockchain, AI, robotics, facial recognition and related fields. At the Hong Kong Science Park and Cyberport alone, some 300 tenants and incubatees focus on AI, robotics and data analytics.

AI technology is particularly important for the provision of online legal services. The Government will devote more resources to enhance Hong Kong's R&D and application capabilities in the AI field, train relevant talents and support technology start-ups to boost the development of AI technology in Hong Kong. On enhancing R&D capabilities, we have earmarked $10 billion in this year's Budget for setting up two research clusters to attract the world's top scientific research institutions and technology enterprises to Hong Kong for conducting more midstream and downstream R&D projects in collaboration with our local universities and scientific research institutions. One of the research clusters will focus on AI and robotics.

I am pleased to note that we do have some achievements on the AI front already. Last year, the Hong Kong University of Science & Technology became the first Asian institution admitted to the Partnership on AI to Benefit People & Society, an international consortium founded by such technology giants as Microsoft and Google to promote AI development. Just last week, SenseTime Group Limited, our home-grown unicorn, has been entrusted by the Ministry of Science & Technology of Mainland China to establish the "National Open Innovation Platform for Next Generation Artificial Intelligence on Intelligent Vision". And I have earlier announced that the renowned Institute of Automation under the Chinese Academy of Sciences has already agreed to join the aforementioned research cluster on AI and robotics.

The Government will also continue to fund R&D projects on AI through different schemes under the Innovation & Technology Fund. With the support of the fund, the Hong Kong Applied Science & Technology Research Institute has been collaborating with different financial institutions to develop blockchain applications in areas like trade finance, mortgage, digital identity management and insurance. The institute has also worked with local banks to develop a smart investment platform which provides investment options through the use of AI, big data analytics and machine learning programme calculations, and developed AI technology on reading different handwritten Chinese characters for enhancing the efficiency of document processing. I believe that, when the technologies have become mature, they will have the potential to be adopted in legal services as well.

To encourage enterprises to conduct more R&D activities, including those on AI, blockchain and cloud technologies, we will shortly introduce a new tax incentive under which their first $2 million of eligible R&D expenditure will enjoy a 300% tax deduction and 200% for the remainder. The relevant legislation has already been introduced into the Legislative Council and I hope that it will be passed sooner rather than later.

And we have a series of measures to attract and to nurture talent on innovation and technology. Among them is a pilot fast-track Technology Talent Admission Scheme which enables enterprises to attract overseas technology talent in focused technology areas, including AI and cybersecurity. In addition, we have launched a $500 million Technology Talent Scheme, including a Postdoctoral Hub, to provide funding support for enterprises to recruit postdoctoral talent for scientific research and product development. We will also subsidise enterprises to train their staff on high-end technologies.

We hope that all these efforts would create a conducive environment for innovation and technology development in Hong Kong. We would welcome the legal sector to join us and embrace innovation and technology, with a view to adding value to our existing business models. I am confident that innovation and technology, coupled with the quality, experience and expertise of our legal professionals, will make all the difference for Hong Kong and for the Belt & Road.

Chief Executive Carrie Lam gave these remarks at the opening ceremony of the Belt & Road Conference on September 28.