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Hong Kong’s tech sector calls for more financial support for start-ups, as city pushes to be global tech hub

HONG KONG: Technology companies in Hong Kong have called for more financial support to get start-ups in the industry off the ground, ahead of the city’s annual policy address

Hong Kong’s Chief Executive John Lee is expected to lay out clearer plans for tech and innovation development when he delivers his second annual policy blueprint on Wednesday (Oct 25). 

This comes as the city pushes to become a global tech hub. 

The government has set up a HK$5 billion (US$639.6 million) Strategic Tech Fund, with another HK$3 billion earmarked in this year’s budget plan to enhance basic exploration in frontier fields such as artificial intelligence (AI) and quantum technology. 

GEOPOLITICAL UNCERTAINTIES AFFECT HONG KONG

Local lawmakers have previously called for more government support in start-up financing, over concerns that geopolitical uncertainties would undermine the appeal of Hong Kong’s tech firms to investors.

There are also worries that insufficient support, coupled with less strict tech regulatory regimes overseas, for example the West, could cause some companies to exit the city. 

In the West, tech companies have more freedom to launch various products and services, said Mr Nixon Chau, managing director and general manager of Chinese AI firm SenseTime. The company is behind the AI-powered chatbot SenseChat, China’s answer to American AI firm OpenAI’s ChatGPT. 

“But in Asia, there are more regulated policies,” he added. “Every step of this technological movement has been thought through quite carefully before we grant permission.”

“For mainland companies like Tencent or Alibaba, they have their own development centre in mainland China,” he added. 

“Hong Kong is more like their investment hub. Companies want to base their top management here, where they can draw up IT strategies with their China counterparts, in terms of what they want to see in their region.”

But Mr Kwan cautioned that in the long term, multinational corporations could re-assess if Hong Kong is a viable place to continue parking their regional headquarters, as part of a de-risking strategy that companies have employed in the past decade. 

“Corporations have started placing their tech people across the region,” he noted. “They don’t want to put everyone in the same city. Usually, it will be a mix of Hong Kong and Singapore. And it will be combined with another location, such as Tokyo, China, Kuala Lumpur or Manila.”

BOLSTERING HONG KONG’S TECH AMBITIONS

Industry players believe tapping on the Greater Bay Area’s (GBA) resources can bolster Hong Kong’s own tech ambitions.

“One of the advantages is that we have a big market, in terms of the source of talent, and also the market for business solutions, tech solutions and applications,” said Mr Simon Chan, chairman of hi-tech park Cyberport. 

Recruitment trends show that mainland professionals, for instance, account for 95 per cent of applicants under Hong Kong’s Top Talent Pass Scheme. 

Western expatriates, on the other hand, have been slower to return. 

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Mr Chan said the maturity of Hong Kong’s tech and education ecosystem could change this.

“I have no concern about where they are coming from as long as they have the talent, they can benefit and resolve the talent supply shortage in Hong Kong,” he added. 

Tech companies are also doing their part to retain local talent. 

“We have invested a lot in terms of helping the universities, during (the students’) research stage,” said Mr Chau. 

“By doing so, we are able to provide a relationship with those researchers before they get out of university… to stay in Hong Kong as well as stay in our ecosystem.”

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