Tag Archives: China

     Following is a question by Professor the Hon Priscilla Leung and a written reply by the Secretary for Housing, Ms Winnie Ho, in the Legislative Council today (June 4):
 
Question:
 
     It is learnt that the Housing Department is actively promoting smart estate management, including employing drones to inspect lift shafts, external walls of buildings and pipes located beneath higher ceilings, utilising LiDAR-based localisation to capture images and analysing the images with artificial intelligence and thermal imaging technology to identify problems with the buildings, thereby reducing the risks of working at height and enhancing work efficiency. In this connection, will the Government inform this Council:
 
(1) of the number of public housing estates (PHEs) where drone technology is applied in day-to-day management at present, and its percentage in the total number of PHEs in Hong Kong; whether it has compiled statistics on the specific effectiveness of the authorities in enhancing maintenance efficiency and reducing incident risks (e.g. ‍the time saved or the reduction rate of untoward incidents) since the implementation of smart estate management;
 
(2) as it is learnt that, prior to using drones for inspections, the management offices of the relevant PHEs will notify households in advance, and the system will automatically blur faces to protect household privacy, of the standard procedures for notifying households (e.g. the number of days of advance notification and the means by which the notification is made) and the operational details of the automatic face blurring technology; how the authorities will handle privacy-related complaints from households arising from drone inspections; and
 
(3) of the plans in place to further promote the application of drone technology and other innovative technologies in the management of PHEs (including the implementation timetable, the number of estates where such technologies will be applied, as well as an overview of the estimated expenditure and resource allocation)?
 
 
Reply:
 
President,
 
     The Hong Kong Housing Authority (HA) is actively promoting smart estate management through innovative technologies to enhance management efficiency and service quality; expedite the handling of maintenance of public facilities; strengthen hygiene and cleanliness; and enhance the sense of well-being and belonging among public rental housing (PRH) residents. In 2024, the HA selected ten public housing estates as pilot projects to proactively introduce suitable innovative technologies for smart estate management, such as the use of Internet of Things sensors, artificial intelligence (AI), mobile devices, and robots. In response to the questions raised by Professor the Hon Priscilla Leung, the reply is as follows:
 
(1) and (3) In the past, inspections of building facades or lift shafts required work staff to perform on-site work, with the former involving working at height and the latter involving enclosed spaces, which are relatively high-risk types of work. With the advancement of technology, the HA has introduced the use of drones to assist in estate maintenance works in PRH estates since 2023. Compared with the traditional long-distance visual inspections, the use of drones for inspections of building facade not only reduces the risks of working at height for works staff, but also provides clearer, quicker, and safer results. As for the use of drones for lift shaft inspections, compared with the traditional method of scaffolding or setting up work platforms inside the lift shafts for manual survey, use of drones not only reduces the risks of works staff entering and leaving the lift shafts, but also gains a more precise understanding of the issues, and shortens lift suspension time significantly, thereby minimising the impacts and inconvenience to the residents. Drone inspections also make it feasible to survey in high-level and enclosed lift shafts.
 
     For building facade inspections, the HA’s drone inspection contract covers all PRH estates in Hong Kong. To date, the service providers have completed the required facade inspections for about 20 PRH estates, with inspections in others are ongoing.
 
     For lift shaft inspections, the HA has earlier successfully completed a trial use of drone inspections of lift shafts. Utilising the Light Detection And Ranging (LiDAR) positioning technology, the drone can be used by the site staff to conduct clear preliminary inspections and identify the necessary repairs at an early stage, such as concrete spalling and defects in electrical devices, and all can be more accurately displayed. Starting from early 2025, the HA has incorporated drone-based lift shaft inspection requirements in the consultancy contracts for lift modernisation projects. The HA also monitors the effectiveness of these inspections in improving maintenance efficiency and reducing accident risks, as well as collect the relevant data as the basis for further advancement in the future. The cost of drone inspections constitutes only a small portion of the overall estate maintenance and improvement works expenditures. Using drones to collect images and three-dimensional data can create detailed models, together with the AI algorithms, it allows a more precise identification of hard-to-reach defects. This enables works staff to co-ordinate the project and procure necessary materials more effectively, thus enhancing project efficiency. Additionally, using drones for inspections eliminates the need for scaffolding; shortens the inspection time and reduces the inconvenience caused by the works to the residents. At the same time, site staff does not need to enter high-rise enclosed space to check various equipment conditions, which can improve workplace safety management and make the overall process more time-efficient and effective.
 
     To further promote the application of innovative technologies in PRH estate management, the HA has established a dedicated co-ordination team to oversee the trial of various technologies across different management functions and review operational models, including updating workflows and manuals as well as providing appropriate training to staff. The HA will also launch a centralised property management platform within this year to optimise estate management operations through data analysis, so as to enhance management efficiency and improve service quality. The HA will closely monitor relevant technological developments and introduce more innovative technologies as appropriate to optimise estate management works.
 
(2) Drones used for facade inspections are normally equipped with cameras, infrared detection lenses, and range finders, performing tasks such as capturing images, recording videos, and/or measuring specific targets during flight of designated routes. Through the images collected by the drones, together with AI technology, it helps identify areas of concern for repairs. The estate offices usually issue notices to the residents concerned 14 days before the filming takes place, advising them to close windows and draw curtains during the filming period, so that the residents can be informed of the arrangement and prepared in advance.
 
     Regarding the arrangement for using drones to inspect building facades, the HA has consulted the Office of the Privacy Commissioner for Personal Data (PCPD). The PCPD advised that drone operations in Hong Kong involving the collection, holding, processing, or use of personal data must comply with the Personal Data (Privacy) Ordinance (Cap. 486) and the relevant guidelines issued by the PCPD. In this connection, the HA has requested the service providers to formulate and strictly implement measures to protect residents’ privacy in accordance with the PCPD’s guidelines. Currently, service providers use AI to automatically detect and blur the portrait of a person, and ensure that no records containing identifiable images are retained, thereby safeguarding residents’ privacy. Furthermore, these processes must be irreversible, and the system must not retain unprocessed original images.
 
     The HA will endeavour to protect residents’ privacy. If any related complaints are received, the Housing Department will handle them in accordance with established procedures. read more

     The Transport Department (TD) today (June 4) said that the next online auction of vehicle registration marks (VRMs) will be held from noon on June 19 (Thursday) to noon on June 23 (Monday) through the auction platform E-Auction (e-auction.td.gov.hk). Interested bidders can participate in the online auction only after they have successfully registered as E-Auction users.
 
     A spokesman for the TD said, “A total of 150 Ordinary VRMs will be available at this online public auction. The list of VRMs (see Annex) has been uploaded to the E-Auction website. Applicants who have paid a $1,000 deposit to reserve the Ordinary VRM for auction should also register as an E-Auction user in advance in order to participate in the online bidding, including placing the first bid at the opening price of $1,000. Otherwise, the VRMs reserved by them may be bid on by other interested bidders at or above the opening price. Auctions for VRMs with ‘HK’ or ‘XX’ as a prefix, special VRMs and personalised VRMs will continue to be carried out through physical auctions by bidding paddles, and their announcement arrangements remain unchanged.”
 
     Members of the public participating in the online bidding should take note of the following important points:
 
(1) Bidders should register in advance as an E-Auction user by “iAM Smart+” equipped with the digital signing function; or by using a valid digital certificate and an email address upon completion of identity verification. Registered “iAM Smart” users should provide their Hong Kong identity card number, while non-Hong Kong residents who are not “iAM Smart” users should provide the number of their passport or other identification documents when registering as E-Auction users.
 
(2) Bidders are required to provide a digital signature to confirm the submission and amount of the bid by using “iAM Smart+” or a valid digital certificate at the time of the first bid of each online bidding session (including setting automatic bids before the auction begins) to comply with the requirements of the Electronic Transactions Ordinance.
 
(3) If a bid is made in respect of a VRM within the last 10 minutes before the end of the auction, the auction end time for that particular VRM will be automatically extended by another 10 minutes, up to a maximum of 24 hours.
 
(4) Successful bidders must follow the instructions in the notification email issued by the TD to log in to the E-Auction within 48 hours from the issuance of email and complete the follow-up procedures, including:
 

• completing the Purchaser Information for the issuance of the Memorandum of Sale of Registration Mark (Memorandum of Sale); and
• making the auction payment online by credit card, Faster Payment System (FPS) or Payment by Phone Service (PPS). Cheque or cash payment is not accepted in the E-Auction.

(5) A VRM can only be assigned to a motor vehicle registered in the name of the purchaser. Relevant information on the Certificate of Incorporation must be provided by the successful bidder in the Purchaser Information of the Memorandum of Sale if the VRM purchased is to be registered under the name of a body corporate.
 
(6) Successful bidders will receive a notification email around seven working days after payment has been confirmed and can download the Memorandum of Sale from the E-Auction. The purchaser must apply for the VRM to be assigned to a motor vehicle registered in the name of the purchaser within 12 months from the date of issue of the Memorandum of Sale. If the purchaser fails to do so within the 12-month period, in accordance with the statutory provision, the allocation of the VRM will be cancelled and a new allocation will be arranged by the TD without prior notice to the purchaser.
 
     The TD has informed all applicants who have reserved the Ordinary VRMs for this round of auction of the E-Auction arrangements in detail by post. Members of the public may refer to the E-Auction website or watch the tutorial videos for more information. Please call the E-Auction hotline (3583 3980) or email (e-auction-enquiry@td.gov.hk) for enquiries.  read more

     Following is a question by the Hon Adrian Ho and a reply by the Acting Secretary for Transport and Logistics, Mr Liu Chun-san, in the Legislative Council today (June 4):

Question:

     In the reply to a question from a Member of this Council in 2018, the Government undertook to conduct a study and consult stakeholders on the proposal to convert bus-only lanes into “public transport-only lanes” with a view to allowing the shared use by other public transport modes. Meanwhile, according to information from the Transport Department, the number of bus trips along busy corridors in certain districts decreased cumulatively by 6 762 trips between 2014 and 2023. As such, there are views that this is an appropriate time to review the bus-only lane policy. However, the Government has indicated earlier on that it currently has no plans to open bus-only lanes for use by other vehicles. In this connection, will the Government inform this Council:

(1) whether it has compiled statistics for each year of the past five years on the changes in the number of bus-only lanes in Hong Kong, the average traffic volume and vehicle speed in these lanes during peak hours, as well as how these figures compare with those for other lanes on the same road sections; if so, of the details; if not, how the Government determines the number of bus-only lanes to be added or reduced in the absence of such data;

(2) of the findings of the Government’s study and consultation on the aforesaid proposal to convert bus-only lanes into “public transport-‍only lanes”, as well as whether there are specific reasons and actual data supporting the current decision of not to open up bus-only lanes; and

(3) with regard to the reduction in the number of bus trips along certain busy corridors in recent years, whether the authorities have reassessed the need for bus-only lanes on such corridors and studied the opening up of such lanes; if so, of the details; if not, the reasons for that?

Reply:

President,

     Hong Kong citizens mainly commute by public transportation, which accounts for nearly 90 per cent of the total passenger trips each day. Franchised bus is a road-based public transport mode with the highest carrying capacity. The average daily patronage in 2024 exceeded 3.7 million, making up over 30 per cent of the total daily public transport ridership.

     Bus-only lanes (BOLs) (see note) are traffic lanes designated for use only by “franchised bus” or “franchised and non-franchised bus” during the prescribed time. Other vehicles have to make use of other traffic lanes next to the BOLs or alternative routes. Under the policy of giving priority to public transportation, the Transport Department (TD) has implemented BOLs to accord priority to buses with high carrying capacity to use the roads, thereby reducing delays caused by traffic congestion and encouraging the public to use convenient public transportation for travel. 

     Our reply in response to the questions raised by the Hon Adrian Ho is set out below:

(1) In implementing bus priority measures, the TD will consider the actual road situation and traffic conditions, including the design of roads and junctions, the number of traffic lanes, the number of bus routes and bus service frequencies, the traffic volume of other types of vehicles, availability of alternative routes, the impact on the flow of other vehicles, etc and carefully assess the feasibility of such measures, in order to strike a proper balance and ensure smooth operation of the transport network. In addition, the TD will work out the appropriate effective period of bus priority measures based on the actual road conditions and consult relevant stakeholders and districts to ensure the measures are in the interest of the public.

     As of May 2025, there were 115 BOLs in total across Hong Kong Island, Kowloon and the New Territories. Over the past five years, the TD added 16 BOLs. According to the TD’s on-site observations as well as feedback from bus companies, BOLs can effectively minimise the impact of traffic congestion on bus services, enhance the stability and efficiency of bus frequencies and facilitate the travel of the public. The TD did not compile statistics on the daily average volume of bus traffic and vehicle speed in respect of each BOL compared with those for other lanes on the same road sections.
 
(2) The TD has examined the proposal of converting some BOLs into “public transport-only lanes” for the shared use by other modes of public transport such as taxis and public light buses (PLBs). In doing so, we need to consider the pros and cons. While the proposal can benefit passengers of PLBs and taxis, it will at the same time increase the number of vehicles sharing the same road space with buses, making BOLs busier and affecting bus passengers. Taking the BOL of Tuen Mun Road eastbound near Harrow International School Hong Kong to Sham Tseng Interchange as an example, about 510 buses pass through the BOL per hour during peak hours on weekdays carrying about 21 000 passengers, compared with the services of taxis and PLBs carrying about 1 100 passengers per hour during peak hours on weekdays at the same road section. On the premise of maintaining smooth operation of the BOL and balancing the needs of various road users, this section of BOL was not opened up. In light of changes in traffic flow and bus operation of Tuen Mun Road after the implementation of new toll plans at the Tai Lam Tunnel, the TD will review the arrangement of BOL of Tuen Mun Road in a timely manner under the public transport-oriented policy.

     If the opening up of certain BOLs can improve the operational efficiency of other public transport modes, the TD will make better use of these BOLs through various means by taking into account relevant factors. For example, some green minibus (GMB) routes require access to specific BOLs to reach designated pick-up and drop-off points. After considering factors such as service frequencies, boarding/alighting points as well as bus traffic of the relevant BOLs, the TD will issue permits to the routes concerned for using the relevant BOLs. At present, a total of 56 GMB routes have been granted such permits.

(3) The TD is committed to reducing the number of buses plying on busy roads in Central, Causeway Bay and Yau Tsim Mong districts with a view to reducing roadside air pollution, traffic congestion, etc. As most of the BOLs are not located at these busy roads, there is no direct impact on the overall bus traffic of BOLs.

     The TD has from time to time reviewed and improved BOLs and traffic facilities of the road sections in the vicinity. For example, the TD has reviewed the arrangement of the BOL from 200 Hennessy Road westbound to the section of Hennessy Road near Luard Road. After reviewing the traffic data, actual road situation and other factors as well as consulting relevant stakeholders and the district, the TD adjusted the effective period of the BOL of Hennessy Road westbound between Fleming Road and Luard Road from 7am – 9am to 5pm – 7pm, and shortened the BOL by 65 metres to balance the needs of other vehicles for loading and unloading.

     In summary, the TD will continue to monitor the implementation of BOLs and road traffic, and review and enhance individual road sections in a timely manner. 

     Thank you, President.

Note: BOLs refer to bus lanes and designated bus gates. read more

     Following is a question by the Hon Chan Pui-leung and a written reply by the Secretary for Labour and Welfare, Mr Chris Sun, in the Legislative Council today (June 4):
 
Question:
 
     Training courses of the Employees Retraining Board (ERB) offered by the appointed Training Bodies (retraining courses) aim at assisting service targets in entering the employment market and continuously upgrading their skills. It has been reported that at present, the ERB had a balance of over $13 ‍billion but an annual deficit of about $800 million to $900 million, which has aroused public concern about issues such as the effectiveness and coverage of its courses, as well as the adequacy of its financial resources in the long run. In this connection, will the Government inform this Council:
 
(1) whether it knows the overall placement rate of trainees who had completed retraining courses in each of the past three years, together with a breakdown by training course;
 
(2) whether it knows if the ERB has followed up on a long-term basis the employment situation of trainees who have completed placement-tied courses and collected the relevant data (e.g. the average time taken to successfully secure employment, the proportion of trainees who have not successfully secured employment and the reasons for that); whether the ERB has provided trainees with the relevant employment advice; if the ERB has, of the details; if not, the reasons for that;
 
(3) as it is learnt that some people have repeatedly attended retraining courses for the purpose of applying for retraining allowance, leading to abuse and waste of resources, whether the Government has followed up in this regard; if so, of the details; if not, the reasons for that;
 
(4) as there are views that the contents of some retraining courses are overlapping and outdated, whether the Government knows if the ERB will consider keeping abreast of the times and further enhancing the courses, as well as adding more relevant courses to tie in with the current market demand; if the ERB will, of the details; if not, the reasons for that;
 
(5) whether the Government has assessed the effectiveness of retraining courses; as there are views pointing out that the enrolment rate of young people in retraining courses is relatively low, how the authorities promote and attract trainees of different age groups to enrol in such courses; and
 
(6) given that the ERB currently has an annual deficit of about $800 million to $900 million, how the Government ensures its long-term financial sustainability so that it can continue to provide retraining courses?

Reply:
 
President,
 
     Since its establishment in 1992, the Employees Retraining Board (ERB) has been playing an important part of the training strategy for the labour force. The 2024 Policy Address announced the reform of the ERB to enhance its role and positioning from providing employment-related training for low-skilled workers to devising skills-based training programmes and strategies for the entire workforce. Since January 2025, the ERB lifted the restriction on educational attainment of trainees and expanded the service targets to the entire workforce; increased the annual number of training places by at least 15 000; strengthened collaboration with higher education institutions and leading enterprises, etc; and enhanced career planning and job matching services, etc. In addition, the ERB is working out the details and timetable for medium- to long-term work, including how it could gauge and project future skills requirements, reposition itself and build a new branding, adjust its structure and staffing and amend the Employees Retraining Ordinance (the Ordinance). The ERB will submit its recommendations by the end of this year.
 
     The ERB’s operation is funded by the Employees Retraining Fund (ERF) under its administration. At present, the major sources of income of the ERF are investment return, Employees Retraining Levy (Levy) and course fees. In 2014, the Government injected $15 billion into the ERF for generating investment income to finance the services and operation of the ERB. In addition, the Government injected $2.5 billion into the ERF in 2020 to enable the ERB to implement the “Love Upgrading Special Scheme” and to meet the anticipated commitment arising from the increase in the statutory cap of monthly training allowance per trainee. On the Levy, all employers of workers imported under the labour importation schemes designated under the Ordinance are required to pay the Levy. The Levy is transferred to the ERF for the provision of training and retraining to local workers. In 2021-22 to 2023-24, the average annual Levy income was around $59 million. The ERB has to optimise the use of the Government injection and strive to operate on a financially sustainable basis with due regard to cost effectiveness.
 
     On the Member’s question, in consultation with the ERB, my reply is as follows:
 
(1) and (2) At present, the ERB provides three main types of training courses, namely placement-tied courses, skills upgrading courses and generic skills courses. Of these, placement-tied courses are tailored for the unemployed to assist them in acquiring industry-specific vocational skills to enhance their employability.
 
     Training bodies appointed by the ERB provide three to six-month placement follow-up services to all trainees who completed placement-tied courses (i.e. with an attendance rate of at least 80 per cent), such as provision of job vacancy information, arrangement of placement counselling and recruitment activities, to help them enter the employment market. In light of the reform measures recommended in the 2024 review, the ERB has strengthened its career planning and job matching services, etc. The ERB will explore ways to enhance the level of its career planning and employment support services, thereby providing more comprehensive career development support for its service targets.
 
     The employment decisions of trainees are affected by multiple factors such as the prevailing market situation, family factors and personal plans. In the past three years (2022-23 to 2024-25), the overall placement rates of ERB’s placement-tied courses were above 80 per cent. The ERB is unable to breakdown the placement rate by training courses as the number of such courses is substantial.
 
(3) At present, retraining allowance will be provided for full-time placement-tied courses with duration of seven days or more to subsidise trainees’ expenses for transport and meals during the period for attending the courses, with a view to encouraging and supporting citizens in receiving training. Trainees in placement-tied courses are required to pass the interviews conducted by training bodies to ascertain their intention to engage in employment. Only trainees who attain an attendance rate of at least 80 per cent are eligible to apply for retraining allowance. In addition, trainees can enrol in no more than two placement-tied courses within one year, and they are not allowed to apply for the same course, or course at a similar or lower level of competency in the same discipline as the course previously enrolled.
 
     The ERB keeps under review the arrangement for disbursement of retraining allowance and implements enhancements in a timely manner to ensure the effective use of training resources. Starting from April 1 this year, the ERB has tightened the number of times a trainee can apply for retraining allowance each year, from a maximum of two times within one year and four times within three years to no more than once a year, to ensure effective use of the ERB’s resources and that more citizens have access to training opportunities.
 
(4) The ERB closely observes the latest developments in the local employment market. To ensure that training courses meet the market demand, the ERB, during course development, conducts market research and demand analysis, consults stakeholders of various sectors such as employer associations, trade unions, the ERB’s relevant industry consultation networks, industry experts and technical advisors. This is to ensure that the training courses meet the market needs and complement the industry’s training needs. The ERB also conducts regular reviews of courses and make adjustments as needed after rolling out the courses.
 
     In terms of medium- to long-term measures, the ERB will strengthen its research capabilities to grasp the trends for prevailing and future skills demands and the manpower needs of different industries (including emerging sectors). The ERB will formulate an appropriate training framework to guide its training bodies to develop suitable courses to meet the upskilling needs of people with different backgrounds and educational attainments. The ERB will also strengthen collaboration with higher education institutions and leading enterprises to offer more and a wider diversity of courses on skills upgrading.

(5) The full Board of the ERB and its Quality Assurance and Review Committee are responsible for monitoring the performance indicators and overall performance level of training courses, and undertaking reviews when necessary. The ERB has established performance indicators covering such areas as utilisation of training places, trainees’ completion of training and placement. Taking the most recent year (2023-24) as an example, all performance indicators were met.
 
     Apart from training courses for the general public, the ERB also provides dedicated youth programmes for young people aged 15 to 29 to assist them in acquiring vocational skills training and placement services. In the past three years (2022-23 to 2024-25), the number of intakes aged 15 to 29 was around 6 per cent of the total number of intakes of ERB courses. The number of intakes of the dedicated youth programmes was also on the rise.
 
     The ERB convenes regular meetings of the “Focus Group on Training for Youth” with representatives of employers, youth concern groups, social service sector, training bodies and the relevant government departments to review the dedicated youth programmes. The ERB also collects information on the employment and further studies of the graduates of placement-tied courses, to ensure that the courses align with the latest development and cater for the needs of the youth. The reformed ERB will continue to explore development of more skills-based and a wider diversity of courses to meet the upskilling needs of people with different backgrounds and educational attainments (including the youth).
 
(6) As of March 31, 2024, the ERF’s balance was around $13.5 billion. In 2021-22 to 2023-24, the ERF recorded deficits of around $970 million, $880 million and $930 million respectively. During the same period, the incomes of the ERF was around $610 million, $730 million and $640 million respectively, with interest income being the major income source; the ERB’s expenditure was around $1.59 billion, $1.6 billion and $1.57 billion respectively, with training courses and programme expenses being the major expenditure. The ERB will continue to closely monitor its financial position and report regularly to the full Board and its Finance and Administration Committee.
 
     The medium- to long-term work recommended in the comprehensive review comprises reforming the ERB’s functions, organisational structure and operating mode and consolidation of training resources. These involve amendments to the Ordinance and resources deployment. The ERB is further studying the medium- to long-term reform work with a view to submitting its recommendations to the Government by the end of this year. The Government will then study the follow-up work with the ERB and jointly implement the reform. read more

     Following is a question by the Hon Robert Lee and a reply by the Secretary for Financial Services and the Treasury, Mr Christopher Hui, in the Legislative Council today (June 4):
 
Question:
 
     It is learnt that there are currently over 1 100 fintech companies in Hong Kong, including eight licensed digital banks, four virtual insurers and 10 virtual asset trading platforms. Regarding the development of fintech, will the Government inform this Council:
 
(1) of the plans in place to assist licensed fintech companies in expanding their operations and developing products, such as assisting them in expanding their service scope to the Guangdong-Hong Kong-Macao Greater Bay Area, promoting the asset-under-management size and turnover of Exchange Traded Funds on Virtual Asset (VA), enhancing the international competitiveness and attractiveness of VA-related products, as well as developing more futures and options products for VAs, etc;
 
(2) whether it will urge the regulators to allow institutional and retail investors to participate in more VA transactions of different types and currencies and relax the eligibility requirements for professional investors, as well as include VAs as assets under the Securities and Futures (Financial Resources) Rules, so as to facilitate the development of the VA market; and
 
(3) how the Government will formulate enhancement measures in the three aspects of regulatory statute, tax concessions as well as publicity and promotion, so as to further attract large-scale international fintech companies to establish presence in Hong Kong, and of the plans in place to assist the financial services industry in introducing fintech in order to enhance operational efficiency and reduce costs, thereby promoting the upgrading and transformation of the industry?
 
Reply:
 
President,
 
     As an international financial centre with a robust regulatory environment and abundant business opportunities, Hong Kong is an ideal location for promoting the development of fintech. The Financial Services and the Treasury Bureau (FSTB) and the financial regulators maintain close communication with the industry to understand their development needs, with a view to formulating appropriate measures to facilitate the development of fintech.

     My reply to the various parts of the question is as follows:
 
(1) To facilitate the continuous and vibrant development of fintech enterprises in Hong Kong, we have adopted a multi-pronged strategy including enhancing Hong Kong’s financial infrastructure, building a vibrant fintech ecosystem, nurturing fintech talents, and strengthening our connection and co-operation with the industry in the Mainland and overseas, with a view to creating and providing a conducive environment, thereby promoting fintech innovation and application.
 
     On advancing investment products related to virtual assets (VAs), the Securities and Futures Commission (SFC) authorised the first batch of VA futures exchange traded funds (ETFs) for retail investor trading in December 2022, Asia’s first batch of VA spot ETFs in April 2024, as well as Asia’s first VA futures inverse product in July 2024. These products have broadened the product diversity of the Hong Kong market, further enhancing Hong Kong’s position as Asia’s leading ETF market.
 
     Besides, in February 2025, the SFC promulgated the “ASPIRe” roadmap, aspiring to strengthening the security, innovation and growth of the market in Hong Kong. One of the focuses of the roadmap is to expand the range of VA products and services, so as to fulfil the need of various types of investors under the prerequisite of investor protection, while enhancing the international competitiveness and attractiveness of Hong Kong’s VA market.
 
     The specific measures of the roadmap includes allowing staking services involving VA within systems with sufficient protection measures, to enable for investors to earn additional returns. In this regard, the SFC provided regulatory guidance respectively to licensed VATPs (virtual asset trading platform) on their provision of staking services, and to SFC-authorised funds with exposure to VA (VA Funds) on their engagement in staking. On April 10, 2025, the SFC allowed two licensed VATPs to provide staking services to clients through the imposition of relevant licensing conditions, which was followed by two SFC-authorised VA spot ETFs updating their fund documents in April and May 2025 for their engagement in staking activities.
 
     The SFC is also considering introducing VA derivatives trading for professional investors and will put in place robust risk management measures. These measures will further enrich the product options available in the Hong Kong market while ensuring that transactions are conducted in an orderly, transparent and safe manner.
 
     In light of the latest development of the VA market, the FSTB will promulgate the second Policy Statement on development of VA, articulating the next-step policy vision and direction, including exploring how to leverage the advantages of traditional financial services and innovative technologies in the area of VAs, enhance security and flexibility of real economy activities, and encourage local and international companies to explore the innovation and application of VA technologies.
 
     As for assisting fintech companies in expanding business, the Invest Hong Kong works closely with industry players to conduct publicity and promotion in the Guangdong-Hong Kong-Macao Greater Bay Area, including participating in major fintech events in the region, as well as connecting with local government departments, regulators, industry associations and innovation and technology parks, with a view to promoting advantages of Hong Kong fintech companies and further expanding into the Mainland market.
 
(2) Currently, before including any VAs for trading, licensed VATP operators should perform all reasonable due diligence on these VAs, and ensure that these VAs continue to satisfy all criteria. Before providing any VA for retail trading, VATPs should take all reasonable steps to ensure the selected VAs are of high liquidity. The relevant requirements seek to provide sufficient protection for investors (especially retail investors). The SFC will continue to asset the potential risks of VAs in respect of volatility, liquidity, and market manipulation, etc, and keep a close watch of relevant international regulatory development, so as to review the aforementioned requirements. Further, in light of VAs’ nature, characteristics and risks, we will continuously evaluate whether the requirements relating to prudential treatment of VA exposures are in line with those in other jurisdictions.
 
     In respect of professional investors’ qualifying criteria and minimum monetary threshold requirements, the SFC has conducted a review during 2019/20. The outcome of the review was that the current minimum monetary thresholds were simple and easy-to-interpret and appropriately reflected an investor’s loss absorption ability, as well as being in line with those in comparable jurisdictions (such as the United States, the United Kingdom, Singapore and Australia). We will continue to evaluate whether the professional investor qualification requirements are in line with those in comparable jurisdictions.
 
     It should be noted that with the International Organization of Securities Commissions’ (IOSCO) publication of its Final Report with Policy Recommendations for Crypto and Digital Asset Markets in November 2023, the IOSCO recommends that regulatory frameworks should seek to achieve regulatory outcomes for investor protection and market integrity that are the same as, or consistent with, those required in traditional financial markets, which is an approach adopted by the SFC since as early as 2018.
 
(3) To attract more large-scale international fintech companies to establish presence in Hong Kong, the Office for Attracting Strategic Enterprises (OASES) offers one-stop services and special facilitation measures. On regulation, the OASES assists companies in understanding the licensing and regulatory framework of the relevant sectors and co-ordinates with the financial regulators when necessary to facilitate the licence applications. Regarding tax benefits, the OASES shares with companies information of applicable tax benefits and funding schemes and connects companies with the higher education institutions, research and development institutions and innovation and technology parks, with a view to expediting their business development in Hong Kong. Separately, we will further enhance the preferential tax regimes for funds, single family offices and carried interest, including the inclusion of VAs as qualifying transactions eligible for tax concessions. As for publicity and promotion, the OASES actively engages overseas and the Mainland strategic enterprises to introduce the advantages and policies in relation to fintech in Hong Kong through organising regular duty visits and enterprise exchange activities, thereby attracting more high-potential fintech companies to Hong Kong.
 
     The Government has been working closely with the financial regulators and industry players to actively promote the financial services sector to adopt fintech through multi-pronged measures. According to a survey in 2023, the adoption rate of generative AI in Hong Kong was the highest (38 per cent) among all markets and well above the global average (26 per cent). In October 2024, we issued a policy statement on the responsible application of AI in the financial market. Since the policy statement was issued, we have introduced various initiatives to assist the financial institutions in seizing the opportunities and adopting AI responsibly, including publishing practical guidelines, launching sandbox schemes, as well as organising seminars and talks.
 
     The Government and financial regulators will continue to maintain close liaison with the industry and assess their needs for fintech, with a view to formulating the corresponding support measures for facilitating the development of new quality productive forces.

     Thank you, President. read more