Deepen financial innovation and activate industrial momentum! Deloitte interprets Hong Kong's latest Policy Address
The Zhitong Finance App learned that on September 16, the Chief Executive of the Hong Kong Special Administrative Region simultaneously published the first “Five-Year Plan” and the fifth “Policy Address” during his tenure. Ou Zhenxing, managing partner at Deloitte China South China, said that the “Policy Address” proposed a series of measures to deepen financial market development, covering market systems, financial products, fintech and international connectivity, reflecting that Hong Kong is further enhancing the competitiveness of the capital market in terms of market size, institutional efficiency, product innovation and international connectivity. This is also in line with Hong Kong's first five-year plan, which proposes a development direction for enhancing the depth, breadth and liquidity of the stock and bond markets, and making full use of the real economy of financial services.
Ou Zhenxing pointed out that in terms of financial innovation, the government proposed normalizing the issuance of digital bonds, exploring the application of different digital currencies throughout the entire cycle of bond dividends and redemptions, and further developing tokenization and digital asset infrastructure. What is worth paying attention to in the next phase is how to gradually connect the different pilots into a large-scale market ecosystem, including legal and regulatory frameworks, settlement, escrow, accounting, and cross-border interoperability, so that fintech can be further transformed from innovative applications into financial infrastructure that enhances market efficiency.
In terms of improving the competitiveness of the capital market, streamlining prospectus disclosure requirements, expanding overseas companies from Southeast Asia and the “Belt and Road” to go public in Hong Kong, optimizing the listing mechanism and the listing system for 18C specialty technology companies, and promoting T+1 settlement will all help improve market efficiency and international competitiveness.
On this basis, post-listing liquidity should also be further enhanced, including price discovery, securities lending, market making mechanisms and research coverage, so that the advantages of IPOs can be transformed into a deeper and more dynamic secondary market. In terms of product and asset allocation, the development of more thematic stock indices, bonds and commodity indices, ETFs and derivatives will promote the interconnection of housing trust funds, and help enrich the product ecosystem of the Hong Kong financial market. The next step is to simultaneously expand the investor base, enhance product liquidity and market participation, and further strengthen Hong Kong as an important platform for global investors to allocate assets in China and Asia.
Ou Zhenxing said, “Looking forward to the future, the Hong Kong International Finance Centre can focus on three results: more international, more in-depth, more trusting, and more effective use of financial services to the real economy, linking capital market advantages more closely with technological innovation, green development, trade and industrial upgrading, and transforming financial advantages into a driving force for economic growth.”
Lui Chi-hong, Managing Partner of Deloitte's Hong Kong Government and Public Service Industry, said, “The key to the development of the Hong Kong gold market is the collaborative improvement of storage, pricing, settlement and gold-related product design. Through the gold central clearing system and tokenized warehouse receipt financing, enterprises can obtain faster settlement, more flexible capital turnover, and enhance transparency and risk management. With the deepening of connectivity with the Shanghai Gold Exchange and the Shanghai Futures Exchange, Hong Kong can also further enrich the variety of commodity futures options that are settled in RMB and promote the internationalization of RMB denominated products.”
Lui Chi-hung pointed out that in terms of “financial+technological innovation,” promoting the practical application of tokenization technology in various asset classes and use cases through the HKMA's Ensemble project will help Hong Kong's digital asset market to become more mature and integrated into traditional markets such as securities, bonds and fixed income. At the same time, it is also essential to promote “financial+intellectual property rights”. Through the intellectual property financing sandbox, intellectual property such as patents and copyrights are incorporated into the financial service system, and professional services such as banking, insurance, valuation, law and accounting are linked to provide cross-border support to help effectively transform the value of intellectual property into a new type of financing asset.
Liu Mingyang, Deloitte's Hong Kong Tax and Business Advisory Managing Partner, said, “We support the strategic tax measures proposed by the Government in the latest Policy Address. These measures are aimed at attracting high value-added companies and enhancing Hong Kong's competitiveness in the global asset and wealth management industry. The government continues to optimize the fund, single family office, and preferential tax system for ancillary benefits, and Deloitte expects the relevant draft regulations to be passed smoothly in the short term. This move will effectively attract more overseas family offices and large well-known fund managers to transfer their business to Hong Kong or expand their business in Hong Kong, and further drive Hong Kong's continued economic growth and demand for professional services.”
Liu Mingyang pointed out that Deloitte supports the “Policy Address”'s proposal to implement stamp duty relief for non-residential property transfers to be listed in the first half of 2027 to enhance flexibility in establishing and preparing for the listing of housing trust funds. At the same time, it is hoped that the relevant policies will further expand the scope of application, so that Hong Kong companies holding non-residential properties can also enjoy stamp duty relief when transferring company shares, so as to revitalize the local non-residential real estate market more comprehensively.
Continuing from last year's “Policy Address”, the government proposed a preferential policy package exclusive to the northern metropolitan area, covering land grant arrangements, financial support and tax relief, providing a highly competitive tax rate of 5% or half tax (8.25%) for individual enterprises in key industries and regional headquarters such as finance, advanced manufacturing, scientific research, logistics and supply chain management.
The “Policy Address” also focuses on Mexico's development of supply chain management and procurement business. It is a strategic fit for Hong Kong to build a “high value-added supply chain service center”. The aim is to attract more enterprises to enter Hong Kong, and international organizations and multilateral institutions to set up regional headquarters in Hong Kong. Deloitte looks forward to the government announcing more details of the preferential policy package and will continue to provide professional support to companies to enjoy tax benefits.
Jiang Weixuan, Deloitte China Strategy and Economic Consulting Partner, said, “The government is planning to integrate the construction of the northern metropolitan area with higher education and innovation industries, and the planning direction is forward-looking. According to the “five elements in one city” plan, the three university towns have collaborated to establish campuses, science and technology zones, industrial zones, and living communities. Daguling also incorporates elements of art and blue and green. Its value lies not only in the educational space itself, but also in introducing enterprises, talents, and immediate needs into the park through the flow of people, knowledge, and innovation, significantly shortening the development cycle of the industrial park, and providing a starting point for the overall ecology.”
Jiang Weixuan pointed out that in terms of new industrialization, the “three major innovation and technology parks, five major R&D institutions” and platforms such as Xintian, Hung Shui Kiu, and Shaling have built a complete carrier from basic research to pilot testing to mass production. The next key is to promote “industrial PPP” in areas with high financial and technical barriers, such as shared trial production line facilities. The government acts as a co-investor and risk sharer, and the park company is responsible for operation, and enterprises use it as needed. This has enabled PPP to shift from infrastructure delivery to industry-oriented development, and from building leasing to capacity sharing, becoming a new paradigm for public-private partnerships.
Land allocation in university towns should be embedded in industry contribution ratings, so that college competition can shift from ranking to industrial ecological organization ability. Beidu should also become a two-way overseas platform, providing cross-border compliance, intellectual property rights and international market connections. He stressed that the success or failure of Beidu is not about how many familiar sites it has launched, but rather whether it can form a complete industrial ecosystem. The university city is a traffic engine, and industry-oriented PPP is a new paradigm of cooperation.