News Alert: HK/China equity strategy: 2022 HK Policy Address – bringing back talents
What happened
Hong Kong chief executive John Lee delivered his first policy address since he took the office. As the city is facing challenges from brain drain, the focus of the policy address is to attract talents and businesses back. Key measures listed below:
- Talent & businesses:
- Launch Top Talent Pass Scheme that gives 2-year visa for talents with >HK$2.5 mn annual salary and students graduated from top 100 universities
- Allow qualified talents buying their first home in HK to refund BSD and New Residential Stamp Duty after staying in the city for seven years
- Set aside HK$30 bn to establish co-investment fund to attract firms to set up operation in HK
- Plan to attract 100 high-potential innovation & tech firms to set up or expand businesses in HK in next five years
- Housing:
- Public housing: build 30,000 simple public housing units in the next five years; aim to reduce public housing waiting time to 4.5 years in 2026-2027 vs current 6 years
- Private housing: will start to rezone “green belt” sites to residential sites in 2024; strive to redevelop brownfield sites; will put forward development proposal for a site in Tseung Kwan O that will provide 50,000 residential units
- Financial market:
- Set up Hong Kong Investment Corporation Limited
- Promoting mutual mkt access, with measures incl exempting stamp duty payable for transactions conducted by dual-counter market makers, enhancing RMB stock trading mechanism & completing preparations for Northbound trading of Swap Connect as early as possible
- Aim to attract no less than 200 family offices by end-2025
Our view
- We think plans mapped out in this policy address will help HK regain some global competitiveness lost during the pandemic, and is positive to the city’s financial and technology industry in the long run
- That said, the condition of staying HK for 7 years for talents to get the tax refund is longer than market speculated, which dampened the hope that the move may lend some support to HK property market
- In addition, Mr. Lee didn’t mention plans to further ease local Covid restrictions and reopen the border with the mainland, suggesting a return to pre-pandemic norm in the near term is just a wishful thinking
