In this year’s Chinese People’s Political Consultative Conference (CPPCC) session, four members of Business and Professionals Alliance (BPA) for Hong Kong raised a total of six proposals. Some of them are concerned with youth development, including the promotion of social mobility among youth, establishment of a unified academic accreditation authorities, as well as facilitating the tax system and policies for Hong Kong people who work in the three Special Economic Zones (namely Hengqin, Qianhai and Nansha) in China. These proposals align with the BPA’s theme of the year “Innovation, Upstream and Hong Kong’s Future”.
Representing the business and professional sectors, BPA’s proposals also stressed on the importance of promoting economic development and social mobility, such as introducing incentive policy to promote workplace consultation, relaxing RMB remittance limit, and supporting the development of local securities dealers in mainland China. The proposals align with BPA’s slogan: Business drives economy, Professionalism improves livelihood.
Mr. Andrew Leung Kwan-yuen, Chairman of BPA, stressed that the proposals are not only recommended on paper, BPA will also continue to follow up on the progress in Hong Kong after the CPPCC session from time to time. For example, we have been actively working with our network of business and professional circles to help young people identify exchange and internship opportunities. Meanwhile, BPA will continue to be the bridge to promote multifaceted cooperation in terms of professional exchanges and economic development between Hong Kong and mainland China.
The Proposals raised by BPA members in the CPPCC session are as follows:
1. Peter Lam Kin-ngok’s proposal “Regarding the collaboration to promote the Hong Kong Youth social mobility between the mainland China & Hong Kong”
As Hong Kong’s industry is getting monotonous and saturated, there are limited chances for upward mobility of young people in Hong Kong, which also coupled with high rents and labour costs. Entrepreneurs face huge challenges in Hong Kong. On the contrary, China is a country with a vast territory and huge market potential. As Peter Lam suggested, “the two places can work together to promote the social mobility of Hong Kong youngsters”, his proposal can be summarized as follows:
● Engaging full support by the leaders from the officials of the Hong Kong and Macau Affairs Office to encourage youngsters in Hong Kong to go to mainland China for internship and entrepreneurship programme. CPPCC members from the business community can play a dual role, which promotes and establishes youth entrepreneurship fund in Hong Kong and Macao, as well as provides internship opportunities for youngsters who are interested in developing their career in China.
● Implementing policies to draw youngsters in Hong Kong and Macao to work or to start their businesses in the three Special Economic Zones, namely Hengqin, Nansha and Qianhai. Measures include providing preferential tax rates in Hengqin, or leasing part of the land from Nansha to Hong Kong. The establishment of “Guangdong Nansha Youth Innovation and Entrepreneurship Park” can also attract young people to develop their careers in the special economic zones. A number of industries such as education, health care, elderly care, cultural creative and testing should be included in the development of Nansha District as incentives.
● Outstanding young entrepreneurs should be granted with policy support and broader access for investing in Guangdong or even other provinces. For young professionals in Hong Kong and Guangdong, cross-border recognition of professional qualifications should be accelerated through partnership mechanisms. Hong Kong professionals in the accounting, legal and other professional fields should firstly be accredited. The governments shall then gradually expand the scope of accreditation, so that the service sector can meet the international standard.
2. Andrew Leung’s proposal “Establishment of a unified education accreditation authority and strengthening the standard of domestic higher education system”
Since the introduction of Open Door Policy, the annual number of mainland students studying abroad has been rising. From 1978 to 2012, a total of 2,644,700 Chinese students have studied abroad. China has already become the largest source of overseas students. In 2012 alone, there were nearly 400,000 students studying abroad.
Given the difficulties of overseas institutions in assessing Chinese applicants’ diploma, transcripts or other academic qualifications, some Chinese students even allegedly forged qualifications which were found out by foreign media in recent years. The reputation of Chinese students was adversely affected. Some of the overseas institutions therefore have imposed retention policy on Chinese students. Thus, Andrew Leung recommended “the establishment of a unified education certification authority and strengthening the standard of domestic higher education system”, some proposals are highlighted as follows:
● Establishing a department for education accreditation under the Ministry of Education, which is responsible for the assessment of qualification of Chinese students, and the issuance of certifications for overseas university applications.
● Arranging personnel in each province, region, as well as the first, second and third tier city and handling the applications to facilitate students obtaining supporting documents issued by the Ministry of Education.
● Imposing fees on education accreditation on each application, but the levy should be set at an affordable level for students.
● Setting up a special hotline and e-mail under the academic accreditation authority to facilitate the overseas institutions to check the validity.
3. Andrew Leung’s proposal “Suggesting the Guangdong provincial government to provide measures to encourage enterprises to implement labor consultation mechanism”
Standing Committee of the People’s Congress of Guangdong Province announced the “Regulations on Collective Negotiation and Collective Contract in Enterprises of the Guangdong Province (Revision Draft)” in October 2013, and intended to pass legislation this year. In fact, the wages and benefits of workers in Guangdong have grown rapidly in recent years. Under the fierce competition in the labor market, most companies have voluntarily implemented appropriate labor negotiation system to recruit and retain employees, as well as to safeguard employees’ best interests. In order to safeguard the rights and interests of workers and enterprises, to improve communication between workers and enterprises, and to further cultivate harmonious labor relations, Andrew Leung had the following recommendations in his proposal:
● In response to the current actual labor market and enterprise market behavior, Guangdong provincial government should re-examine whether it is necessary to legislate the Revision Draft. If there is no need for legislation, the Revision Draft should be shelved.
● Utilise the advantage of the “early and pilot implementation” policy approach, and make better use of the labour market and incentive measures to replace the legislation, such as recognizing corporations which embrace sound consultation and human resources management systems. This incentive measure will also set higher standards for other corporations to uphold.
4. Joint proposal from Jeffrey Lam Kin-fung (first sponsor), Peter Lam Kin-ngok, Andrew Leung Kwan-yuen, Christopher Cheung Wah-fung and Hui Hon-chung: “Promote Hong Kong Enterprises in Nansha, Hengqin, Qianhai for Investment and Development”
As Jeffrey Lam pointed out in the joint proposal, due to the changes in the global economic environment and industrial upgrading, Hong Kong, Macao and Guangdong need to find new modes of cooperation to cope with the challenges. The establishment of special economic zones, namely Nansha, Qianhai, Hengqin will undoubtedly provide new pattern of regional integration. It will also help materialize the idea of one hour living circle between Hong Kong and the Pearl River Delta region.
Details of the joint proposal: “Promote Hong Kong Enterprises in Nansha, Hengqin, Qianhai for Investment and Development” are as follows:
● Reservation of lands in the special economic zones for the development of Hong Kong-owned corporations or joint venture investments, especially in Nansha. Introduction of incentive policies to encourage local enterprises, Hong Kong youngsters and professionals to develop their business and career in those areas.
●Simplification of personal income tax system for cross-border workers. The proposal recommends to implement the simplified tax system in Guangdong, Hong Kong and Macao on a pilot basis, which allows residents in these places paying tax only to the government of their places of origin, on the premise of returning to their place of origin at least once a week.
5. Joint proposal from Jeffrey Lam Kin-fung (first sponsors) and Peter Lam Kin-ngok, Andrew Leung Kwan-yuen, Christopher Cheung Wah-fung and Hui Hon-chung “Relaxing the RMB remittance limit imposed in Hong Kong and opening bank accounts in mainland China”
There is an increasing economic integration due to the frequent exchanges between the people in Hong Kong and mainland China. Many investors, professionals and elites in various fields frequently travel between the two places, especially after the comprehensive development of the three new special economic zones in the future. It is estimated that there will be greater demand for asset management and currency exchange. Thus, we proposed “Relaxing the RMB remittance limit imposed in Hong Kong and opening bank accounts in mainland China.” As an Offshore RMB Centre, in addition to trying to draw more purchase of RMB for trade settlement transactions through Hong Kong, it should also relax the inflow of RMB in Hong Kong’s market and to facilitate Hong Kong residents to invest in RMB products.
● Hong Kong, as an Offshore RMB Centre, in addition to trying to draw more purchase of RMB for trade settlement transactions through Hong Kong, it should also relax the inflow of RMB in Hong Kong’s market and to facilitate Hong Kong residents to invest in RMB products.
● We suggest relaxing the RMB remittance limit on a gradual basis. Remittance limit shall be relaxed from RMB20,000 to RMB50,000 per day in the beginning. A review should be conducted after 3 to 5 years thereafter, which consider further relaxation of remittance limit to RMB100,000 or even phasing out the restriction.
● Many Hong Kong residents have a RMB account in their local bank accounts. But Hong Kong residents cannot manage their assets or escrow which transacted in RMB at the same bank. The Central Government can consider a gradual relaxation of restrictions on Chinese banks to open accounts for Hong Kong residents and professionals who work or live in mainland China.
6. Christopher Cheung Wah-fung’s proposal “To expand the financial reform and utilise Hong Kong’s strength”
Hong Kong serves as a pilot base for economic liberalization in China as well as financial reform. Since a decade ago, Hong Kong has begun to engage in offshore RMB business and has become the largest offshore RMB centre nowadays. According to the statistics, Hong Kong has drawn over RMB1 trillion worth of deposits and certificates of deposit balances in total. As of last year, a total of 797 mainland enterprises have listed on the HKEx, which raised a total amount of more than HK$13.7 trillion.
In Christopher Cheung’s proposal, he supports to expand the financial reforms and utilise Hong Kong’s strength by enhancing financial cooperation between the two places, highlights of the proposal include:
● Strictly limit shareholder qualifications in Hong Kong-invested securities companies: in the beginning of the implementation of CEPA 10, only those local financial institutions in Hong Kong can be shareholders of Hong Kong-owned joint venture securities company. Branches of foreign financial institutions established in Hong Kong shall not be included at this stage in order to strengthen the risk management during the opening of Chinese market, and to avoid adverse impact on the market.
● Broaden access gateway to the Mainland China: Securities Law of China stipulates that the requirements for establishment of securities companies include ‘majority shareholders have sustained profitability and good reputation, no material breach of law & regulations in the preceding 3 years and net assets of not less than RMB200,000,000.’ He therefore suggested relaxation of asset size and profitability requirements for Hong Kong shareholders, which will provide opportunity for small and medium securities dealers to engage in the business concerned.
● As regards the situation of “big doors are open, but small doors are not yet open” under CEPA, the proposed policy will help to overcome the existing challenge, by introducing Hong Kong’s success and excellence in management into China. In the premises of protecting Chinese financial system and orderly asset movements, QDII2 shall be implemented gradually as soon as possible. The government should also continue to utilise Hong Kong stock market as an avenue for the high quality private enterprises to go global.
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