On February 23, 2022, the government of the Hong Kong Special Administrative Region (HKSAR) released its 2022 / 2023 budget. The contents of the budget are considered comprehensively, covering individual residents and enterprise market entities in various industries, focusing on the objectives of fighting the epidemic, stabilizing the economy, relieving people's hardship, preventing risks and promoting development. Recently, the epidemic situation in Hong Kong has become severe again. 8674 cases of covid-19 pneumonia were reported on the day of the budget. The number of cases confirmed in the fifth wave of the epidemic has exceeded the cumulative total of the previous two years, of which more than 30000 cases have been confirmed since February. For Hong Kong, in addition to the care and support of the central government and brother provinces and cities, it also needs the concerted efforts of the people of Hong Kong to fight and overcome the epidemic, provide support for the downward economy and make good arrangements for medium - and long-term economic development. The main concerns are as follows:
First, the budget is conducive to accelerating the recovery of Hong Kong's economy. Despite the impact of the epidemic, Hong Kong still maintains a good financial situation. The revised fiscal surplus in 2021 / 22 is estimated to be HK $18.9 billion, much better than previously expected. It is precisely because the Hong Kong government adheres to a prudent financial management style that it has this more active budget. One is to distribute another HK $10000 electronic consumption coupons to residents. Based on the registration data collected from the consumer voucher scheme launched last year, the SAR government will issue HK $5000 consumer vouchers to more than 6.3 million people who have successfully registered in April, benefiting about 6.6 million people. The consumer voucher scheme will inject impetus into the market, accelerate economic recovery, further consolidate the habits of merchants and citizens in using electronic payment, and promote the development of digital economy. It is estimated that it will drive the economy by about 1%. Second, the Hong Kong government from the "future fund" "In the accumulated income, HK $100 billion will be set aside to set up a special fund under the capital works reserve fund to accelerate the process of promoting land, housing and transportation infrastructure projects in the northern metropolitan area. Third, it is planned to launch 103 public land within five years to provide 57000 units for the market, including urban renewal projects and private development projects. Hong Kong's overall economy will recover significantly in 2021 , an increase of 6.4%, reversing the previous two consecutive years of decline. The unemployment rate also fell from 2 7.2% at the beginning of last year to 3.9%. Looking forward to 2022, affected by the epidemic, the economic performance in the first quarter is not optimistic. However, considering the changes of internal and external situation and the positive role of fiscal measures, the annual economic growth of Hong Kong is expected to be about 3%.
Second, the budget will help alleviate the difficulties of people's livelihood and enterprises. The first is to announce the implementation of the measures to suspend the recovery of rent arrears, and prohibit owners from taking legal actions against designated industries to recover rent arrears of merchants through legislation for a period of three months, up to six months. The Hong Kong Monetary Authority will also communicate with the banking industry to deal with the repayment situation of owners flexibly. Second, from May, the application threshold for public transport subsidies will be reduced from HK $400 to HK $200. Citizens can apply for subsidies after the cost of public transport reaches HK $200. Third, a number of measures have been introduced to ease the pressure on enterprises, including a 100% reduction in profits tax for the 2021 / 22 tax year, with a ceiling of 10000 yuan; Waiving the business registration fee in 2022 / 23, benefiting 1.5 million business operators; Continue to reduce 75% of the water and sewage charges payable by non residential users; Extension of Exemption / reduction of existing 34 categories of government fees and charges, etc. Third, enhance the turnover capacity of enterprises, ensure normal daily operation and reduce the risk of credit default caused by temporary capital problems. The government will extend the application period for all credit guarantee products under the SME financing guarantee scheme by one year to the end of June next year. In order to enable exporters of small and medium-sized enterprises to obtain bank export financing, the Hong Kong Export Credit Insurance Bureau plans to launch the "export credit guarantee scheme" on a trial basis in March to provide up to 70% credit guarantee for export financing of insured households. At the same time, in order to encourage exporters to undertake larger orders from overseas buyers, the Hong Kong Credit Insurance Bureau will also launch a "flexible compensation rate" arrangement in the second half of this year to improve enterprise insurance protection, which is expected to benefit about 2400 policyholders.
Third, the budget will promote more cross-border financial cooperation in Dawan district. First, for qualified family investment management entities managed by a single family office, the proposed tax preference and half tax preference for shipping enterprises will attract more domestic enterprises to set up business in Hong Kong and create more cooperation opportunities for the linkage service of financial institutions in the bay area to high-end private banking customers. Second, Hong Kong attaches great importance to the development of scientific and technological innovation enterprises and has planned a complete scientific and technological innovation ecological industrial chain. Last year, through the introduction of SPAC and other mechanisms, Hong Kong continued to improve the capital market service function, which can attract more overseas technology medium-sized stocks to return and domestic small and medium-sized scientific and technological innovation enterprises to list in Hong Kong, thus providing a broad market space for the scientific and technological innovation financial services of the bay area bank. Third, Hong Kong plans to set up a 5 billion yuan Dawan district investment fund, and plans to issue no less than 15 billion yuan of inflation linked bonds and no less than 35 billion yuan of silver bonds in the next year. Relevant measures provide more sources of funds for major projects planned in the 14th five year plan of the Bay District, and benefit more investors in the region, including providing more suitable Investment products with stable returns, and develop silver hair and pension financial markets; Hong Kong citizens can directly invest in green projects with environmental benefits and participate in the construction of Green Hong Kong; We can explore to provide more diversified choices for cross-border wealth management and bond customers, and promote mutual integration and interoperability of financial markets. In the future, Hong Kong will also explore further expanding the two-way circulation channels of cross-border RMB funds, continue to promote the development of offshore RMB products and enrich RMB financial products and bonds. Four, one belt, one road, will be built in the year of. The Hong Kong Mortgage Corp will study and implement the pilot scheme of securitization of infrastructure financing within the year, and issue $450 million worth of infrastructure financing securitisation products, consolidate the important role of Hongkong as the capital financing center of the infrastructure and the first choice of overseas financing platform under the "one belt and one road" initiative. The Hong Kong government has officially submitted an application to join the regional comprehensive economic partnership agreement (RCEP) in mid January this year. It will join in about 18 months. Previously, it will strive to introduce more opening-up measures under the framework of the mainland Hong Kong Closer Economic Partnership Arrangement (CEPA), so as to create more favorable conditions for Hong Kong industries to enter the mainland market.
