Fintech, innovative and creative industries lead Hong Kong’s priority sectors

It is 20 years since the UK transferred sovereignty of Hong Kong and it became a Special Administrative Region (SAR) of China, albeit with a separate political and economic system. Yet both the UK and China remain significant to Hong Kong’s FDI strategy for the future. Dr Jimmy Chiang, Acting Director-General of Investment Promotion, Invest Hong Kong, explains what this means and why three very specific future-facing niches are integral to the work his agency is performing.

We have come to associate Hong Kong with very definite contributions to the world’s economy; and those qualities will continue to form the basis of Hong Kong’s economic strengths. For example, Hong Kong is one of the world’s most important financial centres. It has an established and respected stock exchange and a highly-traded currency. The tax regime is also favourable. The capital markets, financial services, and business and professional services sectors have traditionally thrived in Hong Kong and will continue to do so. Not only is the finance and banking sector world-class, it also creates an ideal environment in which fintech can thrive.

What is more, Hong Kong has a deep natural harbour, a world-class international airport with top ratings for the movement of freight, and a highly-developed logistics industry. A third runway is in progress at the airport; and aircraft leasing is ripe for Government promotion (given that it taps into both Hong Kong’s highly-developed aerospace industry and its established banking/asset finance sector). Tourism and travel, as well as world trade and consumer products, will remain high on the agenda as magnets for FDI.
We also associate Hong Kong with industry, electronics and a healthcare system that promotes and nurtures biomedical advances. And let’s not forget the food and beverage sector this territory has spawned. All of that will continue to deliver high potential for further FDI activity and remain on the long list of Hong Kong’s traditional economic pillars.
But very specific niches are emerging upon which Hong Kong will additionally build its FDI strategy. Unsurprisingly, first up is fintech. On February 8, 2017, the Hong Kong Government stressed that it has implemented initiatives to “promote fintech application, investment and development in Hong Kong”. Impressively, the number of fintech-related start-ups increased from 86 in mid-2015 to 138 in November 2016; and Hong Kong attracted US$370 million in fintech venture capital between January 2014 and September 2016.
A pledge is already in place to establish the city as a hub for the application and setting of standards for cutting-edge fintech, such as cyber security and blockchain technology. And now, the Government has introduced additional measures on regulation, facilitation, talent, promotion and funding so that Hong Kong can fulfil its high potential as a centre of fintech excellence. What is more, the Government plans to launch a $2 billion Innovation & Technology Fund in the first half of 2017 to encourage investment from venture capitalists into fintech and other technology start-ups.
There is no doubt that Hong Kong is fishing for technology companies from around the world to bring their ideas, talent and teams to the city. It has a keen eye on the UK market, watching for entrepreneurial activity and ideas that could be accelerated in a nurturing environment. To this end, InvestHK has not just added manpower in Hong Kong but it has also put in post in London a dedicated fintech manager, promoting Hong Kong as a generous and supportive landing place for young companies’ ideas and their emerging technologies.
And it is not just fintech that is on Hong Kong’s radar; it is interested in conversations with all sorts of innovative and creative companies. To demonstrate the fervour with which Hong Kong is pursuing its goals, the Government has committed wholeheartedly to nurturing its knowledge-base and technology talent in Hong Kong. “Last year, the Hong Kong Government established an Innovation and Technology Bureau,” points out Dr Chiang. “This is to promote healthier development of innovation and technology.” He adds that the Government has also allocated funds to subsidise Hong Kong’s SMEs to make better use of technologies to run their businesses, thereby creating a safe environment in which new technologies can be pioneered and business efficiencies returned with negligible financial risk.
There are also two technology incubators in place: the Cyberport ( and the Science Park ( These accommodate a very wide range of technology companies which can innovate, sustain and grow their businesses both in Hong Kong and then across the Asian region – always with that all-important support.
Further, in 2013, InvestHK launched StartmeupHK ( to promote the Hong Kong start-up ecosystem and connect entrepreneurs in local and overseas start-up communities. It is all about promoting Hong Kong as a start-up location on the world stage. There have been two StartmeupHK Festivals, with the most recent one taking place in January 2017 and attracting 5,000 participants. Retail innovation, fashion technology, smart cities and health technology were all showcased, alongside all-important fintech.
What is more, Hong Kong and Shenzhen have just signed a deal to develop the Lok Ma Chau Loop and jointly create an innovation and technology park. “It will be the largest in the history of Hong Kong,” confirms Dr Chiang. “It will be bigger than existing incubators and will address robotics, bio-pharma, smart cities as well as fintech.”
While the UK is a rich hunting ground for Hong Kong in terms of fintech and other technology companies – including start-ups – China is also an FDI bedrock for Hong Kong, supplying a steady stream of FDI opportunities. Dr Chiang explains: “We think that Hong Kong will continue to benefit in the short-to-medium term as a location which Chinese companies will use as a stepping stone to the international market across all sectors.” As a quid pro quo, companies worldwide have and will continue to locate in Hong Kong as a first step into China.
Of course, China’s One Belt, One Road, initiative will have a significant impact on trade in years to come and Hong Kong has a vital role to play here too. The initiative calls for huge investment in and development of trade routes and infrastructure projects across Asia, Africa and Europe; and, importantly, it means collaboration.
Also, crossing all sectors and vital for Hong Kong’s future FDI success is the city’s role as a Corporate Treasury Center (CTC) for international companies, especially following the reduction in corporation tax in Hong Kong, along with other tax incentives. Dr Chiang points out that there is a trend towards global companies co-locating their global headquarters with their CTCs. “Feedback from multinationals has been quite positive,” he confirms.
While much of the world worries about uncertainty, partly promoted by geo-politics, InvestHK is cautiously optimistic in the near term, albeit that the Government is paying close attention to the Brexit situation in the UK, elections in Europe and US/global trade.
Returning to the traditional role Hong Kong has played in relation to world trade and its continuing basis for FDI, Dr Chiang concludes: “Hong Kong has been a super-connector between China and the rest of the world. This will help our traditional economic pillars – like business services, legal and financial activities – to do well. Our role as a trading hub will continue to be strengthened whatever else happens. It is our bread and butter.”