Financial Secretary Paul Chan announced in his Budget a series of policy initiatives to consolidate and enhance Hong Kong’s status as an international trade centre, international aviation hub and international maritime centre.

Mr Chan noted that the Recommendations for Formulating the 15th Five‑Year Plan support Hong Kong to consolidate and enhance industries with a competitive edge.

To consolidate and enhance the city’s status as an international trade centre, he highlighted that Hong Kong has to expand its commerical and trade network through strengthening its role as the functional node for the Belt & Road Initiative.

The Government will collaborate with industry players to further develop the Association of Southeast Asian Nations and Middle East markets, and explore the potential of Central Asia, South Asia and North Africa markets.

Meanwhile, the Government will forge more free trade agreements and investment agreements (IAs) and is exploring the signing of new IAs with Saudi Arabia and Egypt.

To further attract enterprises to set up in Hong Kong, last year’s Policy Address announced that the Government would formulate preferential policy packages to promote industries and investment.

The Financial Secretary said the Government has formulated a preliminary framework, which would take into account a series of factors, including the enterprise’s industry and its technology level, as well as the potential economic contributions and employment opportunities it can bring to Hong Kong.

Policy tools include land grant arrangements, financial subsidies and tax incentives. The preferential tax rates will be half‑rate or 5%. The Government will introduce an amendment bill this year.

Mr Chan will also establish and chair the Advisory Committee on Tax Policy to gather views widely from commercial, industrial and professional sectors, so that Hong Kong’s tax policy can reinforce economic development.

In addition, the Government will set up a cross-sectoral professional services platform to bring together Hong Kong’s professional services providers in the field of legal services, accounting, financial services, testing and certification, marketing, etc. to support Mainland enterprises in going global.

To promote further development of the exhibition industry and brand building as an international convention and exhibition hub, the Government will earmark $100 million for attracting large-scale international exhibitions with new elements to Hong Kong through collaborating with relevant organisations on a pilot basis.

Its objective is to develop Hong Kong into the first‑choice platform for showcasing Mainland and international brands, while attracting high‑spending business visitors to Hong Kong and driving high value-added economic activities.

The Budget also outlined measures to support local enterprises and strengthen their competitiveness.

The Government will inject $200 million into the Dedicated Fund on Branding, Upgrading & Domestic Sales (BUD Fund), raise the funding ceiling of “Easy BUD” to $150,000 per application, and provide more targeted funding support for enterprises in artifical intelligence application.

The Hong Kong Export Credit Insurance Corporation will introduce a pilot scheme this year to provide protection for small and medium enterprises engaging in exports with higher-risk buyers.

Additionally, the Centre for Food Safety will waive the fees related to the certification of food products export for two years. The Government will also introduce a new unified brand for local agricultural and fisheries products in the middle of this year, supported by a certification, testing and traceability mechanism.

To further enhance Hong Kong’s competitiveness as an international aviation hub, Mr Chan highlighted that the Government will strive to enter into new air services agreements and expand traffic rights with regions demonstrating development potential, such as the Middle East, Central Asia, Africa and South America.

He noted that the new passenger departure facilities at Terminal 2 of Hong Kong International Airport (HKIA) are scheduled to commence operations in May, which will substantially enhance the airport’s overall capacity.

In addition, the construction of the intermodal pier under Phase 1 of the HKIA Dongguan Logistics Park has been completed. The remaining works are expected to be completed within this year and targeted for commissioning in the first half of next year.

Hong Kong will also elevate its status as an international maritime centre, with the Government striving to promote smart logistics and digital transformation in the industry, while expanding the cargo hinterland to secure more transhipment cargo.

Mr Chan said the Government will launch the Future Innovative Logistics Acceleration Scheme this year to drive the transformation of the industry and enhance the interconnectivity of logistics data, with a view to increasing the competitiveness of the logistics industry and developing Hong Kong into an international smart logistics hub.

Meanwhile, the Government has reserved about 32 hectares of land in the Hung Shui Kiu/Ha Tsuen New Development Area for developing a modern logistics cluster and will invite expressions of interest from the industry for the development of the first site this year.

To further promote the development of high value added maritime services in Hong Kong, the Government will introduce an amendment bill in the first half of this year to enhance tax concession measures for the maritime service industry and provide a half rate tax concession to eligible commodities traders.

To consolidate Hong Kong’s premier position in ship registration, the Government will introduce an amendment bill this year to revamp the existing ship registration arrangements, including permitting a dual registration arrangement to cater for the diverse operating models of international maritime enterprises.

The Government will also provide port dues concessions for vessels powered by green fuel as well as those carrying green fuels to attract more vessels to bunker green fuel in Hong Kong. An incentive scheme will also be launched for green vessels registered in Hong Kong to encourage green transformation of Hong Kong fleets. All these involve government subsidies of around $34 million. The Government will take forward a legislative amendment exercise this year to provide more anchorages for green maritime fuel bunkering operations.

The finance chief added that the Government will amend the relevant legislation within this year to extend the current arrangements under the Air Transhipment Cargo Exemption Scheme to other sea transhipment and sea-air transhipment modes.