China Politics

Hong Kong announces plans to ‘trawl the world for talents’

Key Points
  • In his first policy address since he took office in July, Lee said the government would set aside billions to attract businesses to the city, and launch a so-called top talent pass scheme to "entice talents to pursue their careers in Hong Kong."
  • Hong Kong has lost thousands of residents since the pandemic started, worsening a "brain drain" from the international financial hub.
John Lee, Hong Kong's chief executive, arrives to deliver his policy address at the Legislative Council in Hong Kong on Oct. 19, 2022.
Paul Yeung | Bloomberg | Getty Images

Hong Kong Chief Executive John Lee on Wednesday announced plans to attract talent and investment to the Asian financial hub which has lost thousands of residents since the pandemic started.

In his first policy address since taking office in July, Lee said the government will set aside 30 billion Hong Kong dollars ($3.8 billion) to attract businesses to the city, and launch a so-called top talent pass scheme to "entice talents to pursue their careers in Hong Kong."

"Over the past two years, the local workforce shrank by about 140,000. Apart from actively nurturing and retaining local talents, the government will proactively trawl the world for talents," according to an official transcript of his speech.

Hong Kong's Hang Seng index advanced slightly in early trade but gave up gains ahead of the speech. It last traded 1.9% lower after briefly falling 2%.

Attracting foreign talent

People who earn an annual salary of around $318,000 or more, and graduates from the world's top 100 universities who have three years of work experience over the past five years, will be eligible for a two-year pass "for exploring opportunities in Hong Kong."

Foreigners who enter Hong Kong under talent attraction schemes, buy a residential property and become permanent residents will be able to apply for a refund of buyer's stamp duty and new residential stamp duty for their first property, Lee said.

Hong Kong's property market is the most volatile in the world — by far, says investment firm
Hong Kong's property market is the most volatile in the world: Investment firm

"The arrangement applies to any sale and purchase agreement entered from today" and thereafter, he added.

Hong Kong's housing prices have seen quarterly declines since the third quarter of last year, according to the Rating and Valuation Department.

Housing crisis

Hong Kong's housing shortage has been a long-standing problem for the city and "solving the housing problem tops the agenda" of the government, Lee said in his almost three-hour speech.

The chief executive said his administration is targeting to increase overall public housing supply. The government will also aim to limit the waiting time for public rental housing to 4.5 years, down from 6 years at the moment.

Shares of Hong Kong-listed real estate companies gave up earlier gains as Lee spoke. It was a mixed bag after the lunch break — China Overseas Land and Investment was up 2% and CK Asset was 0.77% higher. Country Garden added 0.71% while Sino Land lost 0.4%.

Asian financial hub

Lee also announced measures aimed at enhancing Hong Kong's competitiveness as a financial center, including making it easier for some companies to list in the city.

Stock exchange operator Hong Kong Exchanges and Clearing will revise the listing rules for its main board next year "to facilitate fundraising of advanced technology enterprises that have yet to meet the profit and trading record requirements," he said.

The government will also develop the tech sector.

"Our goal is to attract not less than 100 high-potential or representative [innovation and technology] enterprises to set up or expand their businesses in Hong Kong in the coming five years," he said, adding that it could bring in HK$10 billion of investment and create job opportunities.

What is Hong Kong's relationship with China?
What is Hong Kong's relationship with China?

Covid policy

In terms of Covid policies, Lee said his government is "making our best efforts to discuss with the Mainland to strive for resuming normal cross-boundary travel in a gradual and orderly manner."

"Our first target is to implement 'reverse quarantine' in Hong Kong, also known as 'pre-departure quarantine,'" where travelers quarantine in Hong Kong before going into the mainland.

Hong Kong was a British colony before it was handed to China in 1997 to be governed under a "one country, two systems" framework. Hong Kong was promised autonomy for 50 years and has freedoms that other Chinese cities do not have, including limited election rights.

Hong Kong lifted mandatory quarantines for travelers last month, after around two years of Covid-related border control measures. Travelers still need to take multiple Covid tests and monitor their health upon arrival.

Lee, a Beijing loyalist, was the only candidate in the election in May to replace his predecessor Carrie Lam. Around 1,500 members of a largely pro-Beijing election committee voted, and Lee won 1,416 votes to become Hong Kong's top leader.

CNBC's Jihye Lee and Lee Ying Shan contributed to this report.