US policy restricting investment in China tech has ‘limited’ impact on Hong Kong, innovation chief says

A US policy designed to restrict investment in Chinese technology would have “relatively limited” impact on Hong Kong’s innovation and technology development, the city’s technology chief said on Wednesday.

In a written reply to lawmakers on Wednesday, Secretary for Innovation, Technology and Industry Sun Dong commented on an executive order signed by US President Joe Biden in August to prohibit or restrict US investment in certain sensitive high tech sectors in China. The move came amid growing tensions between the two nations over the global supply chain of advanced technologies.

The order – which targets semiconductors, quantum computing, and artificial intelligence – also covers Hong Kong and Macau.

Sun said the city’s IT sector had a “diversified” strategy to attract investment, talent, and enterprises from different regions, and did not typically rely on a single market for materials or to launch a product.

“Impact of any unilateral policies implemented by individual country… is relatively limited,” he said.

Sun’s remarks came after the government expressed “strong objections and disapprovals” to the order soon after it was signed in August, calling the restrictions “unreasonable” and urging the US to lift them.

National integration

Sun on Wednesday also said the government had worked to integrate into Beijing’s plans for technological development.

In another written response to lawmaker Martin Liao, Sun said the government had been working with Shenzhen, a mainland Chinese city across the border, to develop a “co-operation zone” for the IT sector.

In August, the Chinese government announced its Development Plan for Shenzhen Park of Hetao Shenzhen-Hong Kong Science and Technology Innovation Co-operation Zone. Last week, Chief Executive John Lee said in his second Policy Address that the planning of the Northern Metropolis – a major development plan spanning much of northern Hong Kong near the city’s border – would align with the Hetao Co-operation Zone.

The Northern Metropolis, a holdover policy from previous leader Carrie Lam which stresses the integration between Hong Kong with Shenzhen, has come under criticism over alleged misallocation of land resources and causing environmental harm to biodiverse wetland areas.

Sun said on Wednesday that as of September, 18 local enterprises and research and development institutions had moved into the Shenzhen side of the zone, specialising in areas such as microelectronics, medical technology, big data and artificial intelligence.

He added that the government had set up various funding schemes to assist local IT enterprises, including a new HK$10 billion fund that promotes “new industrialisation.”

Under the New Industrialisation Acceleration Scheme, enterprises in fields including life and health technologies, AI, advanced manufacturing, and new energy technologies would be supported to set up new production facilities, according to last week’s Policy Address.

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