Hong Kong Chief Executive John Lee delivers his policy address at the Legislative Council on October 19.
Anthony Kwan/Getty ImagesHong Kong Chief Executive John Lee unveiled a series of new measures designed to “proactively trawl the world for talents” during his inaugural policy address on Wednesday, while underscoring the need to strengthen national security.
To combat an intensifying brain drain fueled by years of Covid restrictions and diminishing political freedoms, Lee introduced a new two-year visa for people who make at least HK$2.5 million ($318,000) a year, and individuals who have graduated from any of the world’s top 100 universities with at least three years of working experience. The new visas will not be subject to any quotas.
Lee also announced that people who qualified for the talent incentive program buying a home in Hong Kong and later becoming permanent residents can receive a refund on the extra stamp duties they had to pay on their property purchase.
Other measures Lee introduced include setting up a special office to attract enterprises from mainland China and overseas that operate in strategically important industries such as artificial intelligence, fintech and new energy, as well as a dedicated team to recruit talented people. Lee also said his administration will set up a HK$30 billion investment fund to attract enterprises to set up operations in Hong Kong.
“The pandemic has had an impact...but since we have transited from chaos to governance, and from governance to prosperity, we do not only have our intrinsic advantages, but also many new opportunities,” Lee said in a press conference. “Now with a series of tailor-made measures, I am confident that we can attract talents.”
However, Lee refused to lay out a time frame for the full removal of all pandemic restrictions in his nearly three-hour speech. Hong Kong only ended its hotel quarantine requirement for overseas arrivals in late September, but has kept in place other rules like prohibiting travelers from visiting “high risk” venues such as restaurants during the first three days of their visit.
The Hong Kong government’s unwillingness to diverge significantly from the China’s zero-Covid policy has become a catalyst for many businesses and executives to relocate to places like Singapore that have already fully reopened. The labor force in Hong Kong plunged to a decade-low of around 3.75 million between March and May, followed by a slight rebound, according to government data. Meanwhile, new visa applications for overseas workers in Hong Kong have dropped by two-thirds over the past four years, government data in 2021 shows.
Hong Kong's retail sector has been battered by the lack of overseas visitors due to the strict Covid measures adopted by the city's government.
Lam Yik/BloombergInaki Amate, chairman of the European Chamber of Commerce, welcomed the new measures but said they are not enough. “It’s fundamental that we go all the way to remove all the current Covid measures to be competitive in the eyes of talents abroad,” said Amate. “Hong Kong today is still perceived to be a place that is difficult to come in and difficult to live in.”
It’s a view shared by David Graham, executive director of the British Chamber of Commerce. “Their talent attraction strategies will provide both financial and non-financial support to encourage overseas talent to come to Hong Kong,” Graham said in an email. “However, the Chamber believes that these initiatives will only succeed when operated in unison with the borders fully reopening and Covid restrictions further eased.”
Hong Kong’s pro-Beijing lawmaker Regina Ip, however, disagreed. “As the chief executive has explained very clearly, Hong Kong is adopting a very careful and step-by-step approach toward reopening our city,” She said. “I’m confident that the new measures rolled out by the chief executive to attract top talents and top companies will be able to take us forward in improving Hong Kong’s competitiveness.”
Lee kicked off his speech at the Legislative Council by stressing the importance of safeguarding national security, echoing Chinese President Xi Jinping’s remarks during the opening of the Communist Party congress three days ago. Lee vowed that his government will press ahead with the preparatory work for the enactment of a controversial security law, which was shelved 19 years ago after it sparked a massive public backlash.
Article 23 of Hong Kong’s mini-constitution, known as the Basic Law, stipulates that the government passes legislation to prohibit any act of treason, theft of state secrets and ban foreign political bodies from operating within the city. It would be seen as an extension of the national security law Beijing imposed on Hong Kong in June 2020 that outlaws subversion, secession, terrorism and collusion with foreign forces.
Lee took office as Hong Kong’s chief executive on July 1, after winning an election that featured only one candidate. A career police officer turned security official, Lee played a key role in pushing for a controversial extradition bill that sparked sometimes-violent protests across Hong Kong in 2019. He was also one of the 11 government officials sanctioned by the U.S. when after the national security law was adopted and then used to arrest scores of political activists, opposition lawmakers and journalists.
