Chief Executive Donald Tsang outlines projects to further boost Hong Kong's competitiveness going forward
	Hong Kong Convention and Exhibition Centre's expansion will increase its exhibition space by 42 per cent

Environmental protection, tax cuts and a HK$250 billion (US$32 billion) infrastructure programme were among some of the highlights announced in Chief Executive Donald Tsang's first policy address of his five-year term aimed at setting a new direction for Hong Kong.

Mr Tsang stressed the need for Hong Kong people to adopt a new mindset to achieve another golden decade. "Over the next five years, we need to cultivate a new spirit for these new times. We need to become new Hongkongers better equipped to sustain developments in the new era."

The government had earmarked 10 major infrastructure projects which will form the backbone for the city's development – among them the Kai Tak development and the South Island rail - to stimulate economic growth and create 250,000 jobs. "A rough estimate of the added value to Hong Kong's economy brought about by these projects would be more than HK$100 billion (US$12.8 billion) annually, amounting to 7 per cent of our GDP in 2006," said Mr Tsang.

The policy blueprint also pledged to enhance the appeal of Hong Kong as an international convention, exhibition and tourism capital in the midst of regional competition in these sectors. The Chief Executive noted that the Hong Kong Convention and Exhibition Centre's exhibition area will increase by 42 per cent with the completion of the atrium link extension in 2009.
 
More exhibition space

To cater for longer-term demand, another exhibition venue, AsiaWorld-Expo, is considering the early commencement of its phase II expansion, which will increase its exhibition area to 100,000 square metres. "We are also looking at providing additional convention and exhibition facilities in conjunction with the Hong Kong Trade Development Council. We will also gauge the need for land supply for hotel development," Mr Tsang said.

To maintain competitiveness, profits tax would be lowered by one per centage point to 16.5 per cent while the standard salaries rate is reduced to 15 per cent in the financial year ending March 2009, along with a waiver on property rates for the fourth quarter of the year.
 
The government would help Chinese mainland enterprises to participate in Hong Kong's stock market through the Qualified Domestic Institutional Investors Scheme (QDII) and help in the promotion of international arbitration services. To further enhance the city's financial hub status, the government would study the need to develop an Islamic bond market to attract Middle Eastern investors who want to invest in the mainland.

"We should actively leverage on this new trend by developing an Islamic financial platform in Hong Kong," said Mr Tsang.

Environmental package

The Chief Executive's environmental agenda included a HK$93 million (US$12 million) injection into cleaning up Hong Kong-owned plants in the Pearl River Delta in southern China; plans for motorists to switch off idling vehicles and laws on replacing industrial diesel with ultra-low sulphur diesel in industrial and commercial processes.

Full policy address at A new direction for Hong Kong