As a businessman, I attach as much importance to the 2013-14 Budget as to the Policy Address. In the budget announced last week, Financial Secretary John Tsang Chun-wah used 1,100 words or so to express the government's support for small and medium-sized enterprises (SMEs), including waiving the business registration fee and offering a one-off reduction of profits tax. Compared with Chief Executive Leung Chun-ying's Policy Address, in which SME-related policies were covered with less than 300 words, the budget is much more satisfying and substantive.
Tsang cited six areas where the government can support SMEs by helping them to raise capital and tap new markets. Although the measures are more or less expected, they do, in some way,"help a lame dog over a stile" when it comes to enterprises in great difficulties. However, some of these are just old tricks. Extending the application period for the special concessionary measures under the SME Financing Guarantee Scheme for one year to the end of February 2014, and continuing to make use of the HK$1 billion BUD Fund set up last June to assist Hong Kong enterprises in enhancing their competitiveness on the mainland are ideas that have been repeatedly discussed by the government and the public.
Another measure, however, is something new. According to the budget, the Hong Kong Trade Development Council (HKTDC) will set up more design galleries in mainland cities other than Beijing and Guangzhou to offer platforms for Hong Kong enterprises, especially SMEs, to showcase their products. This will enable these companies to gain access to the mainland market and build up greater awareness of Hong Kong brands there. I believe that, by setting up such galleries, the HKTDC can help SMEs with limited capital to tap markets in lower-tier markets.
I feel that, in recent years, the Hong Kong government has given more attention to developing mainland or overseas markets than it should do, while neglecting the local market. Over-emphasis on external markets is thoughtless if well-intentioned. We should note that since local industries began heading north, vacancies for blue-collar jobs in the SAR have dropped dramatically. If the government does understand the situation and redevelop local markets for SMEs, such as establishing professional wholesale markets based on relatively mature industries, including the manufacture of apparel, infant and children's products, jewelry, electronic devices and small commodities, it is not only helping SMEs to upgrade and restructure, it's creating jobs for the grassroots.
The HKSAR government can take full advantage of the city's superiority in various fields to attain the goal - Hong Kong is free of exchange controls, added-value tax and import and export restrictions on normal goods; the territory has an extremely convenient local and regional transportation network, plus a reputable and attractive business environment.
I hope the government will strive to reenergize and promote local markets. There's a possibility of more Hong Kong enterprises on the mainland returning to the SAR, and the authorities should be well prepared to offer them sufficient resources.
The author is vice-president of the Chinese Manufacturers' Association of Hong Kong.