Hong Kong’s Innovation and Technology Role in Mainland China’s 12th Five Year Plan

By Alan Lung, Director & General Manager, APICC

(Asia Pacific Intellectual Capital Centre Whitepaper #7, March 2011)

Executive Summary

(Download the English Version of this paper as a pdf file)

(Download the Chinese version of this paper as a pdf file)

Milton Friedman described Hong Kong as a laissez-faire economy and he credited that policy for Hong Kong’s prosperity since the end of the Second World War. Yet some local Hong Kong activists mock the “Freest Economy of the World” rating as business-government collusion that ignores a widening wealth gap, a more sustainable economic growth strategy and social justice.

Since 1997, the HKSAR Government has been learning to deal with increasingly demanding and diversified groups of stakeholders in the community. At the same time, Hong Kong is increasing its integration with Mainland China. Hong Kong has distinct advantages including: rule of law, integrity, free press, open information environment and Hong Kong’s free and independent thinking capacity. As a Special Administrative Region of China, Hong Kong is treated as a separate custom territory under the “United States-Hong Kong Policy Act of 1992” and can import many U.S. technologies that have embargo on Mainland China. But how do we turn those advantages into economic opportunities? What can Hong Kong do for Mainland China in the context of the 12th Five Year Plan? How do we attract the world to use Hong Kong as gateway for further economic cooperation with China?

Objectives of China’s 12th Five Year Plan

The National 12th Five Year Plan (12-5 Plan) was released as a draft document and passed on 18th October 2010 at the 5th Plenary Session of the 17th Party Congress by the Central Committee of the Chinese Communist Party. Many of the goals stated in the proposal are closely related to Innovation & Technology and Knowledge Economy. Hong Kong is still very new to this planning process and many of the discussions centered on and around Hong Kong’s role as a financial centre and other commercial interests. Hong Kong also seems confused on whether the 12th Five-year Plan is directives “from above” and or if it is a national development plan seeking proposals “from below”.

The 12-5 Plan stated China’s economic ambition to become a truly “moderately wealthy” nation during the period of 2011-2015. To achieve this, China will continue with “Reform and Opening” and rely less on an export-oriented model for growth. More emphasis will be put on domestic consumption and sustainable development. The intention is real improvement in standard of living and real wage increases for the vast majority of the population. To achieve quality growth, planners at the Central Government level fall back on the tradition Confucian values of “knowledge” and “education” – which translates into “Innovation and Technology” (as understood by national leaders) and the “Knowledge-based Economy” (as it is practices in the United States and Europe).

Developing the Knowledge Economy as a reciprocal win-win strategy

Hong Kong, however, is somewhat uncomfortable with becoming part of a planned economy. Hong Kong was essentially built on a foundation of “… good laws, well administered” since it came under British Rule on 29 August 1842 after the Treaty of Nanking. Hong Kong has remained a Special Administrative Region (SAR) under Chinese rule after 1997. A legal and administrative system that is separate from mainland China has remained in place. Hong Kong is a territory of China that has done most of the important things right and a territory mainland China could continue to look at when faced with confusion regarding policy choices. Hong Kong also has all essential “first-level business conditions” which enables Hong Kong to turn into a world-class innovation and technology centre and incubation and commercialization hub to service R&D outputs from Hong Kong, mainland China and from the world.

Hong Kong, however, needs a footing – a positioning and a more active role in the 12-5 Plan. Such a cooperation process of asserting Hong Kong’s “Soft Power” to facilitate trade relations between China and the West should be based on Hong Kong’s most distinct competitive advantages. It can have many names: “Innovation & Technology”, “Commercialization”, “Knowledge-based Economy” or offering Hong Kong’s “Soft Technology” to mainland China.

The Knowledge Economy idea is not new to Hong Kong. In the early 18th Century, Europeans in Hong Kong used “advanced technology” — the China Clippers, the fastest sailing ships in the early 18th Century — to ply trade route between China and Europe. Therefore, some argue that Hong Kong is already a Knowledge-based Economy and nothing more needs to be done. Yet, Hong Kong does not have a meaningful critical mass that would allow it to become a technology hub or to develop commercialization knowhow. University-based researchers keep using government money to invent and develop technologies and end up selling the results cheaply to mainland and international companies.

The lack of solid initiatives and ideas in Hong Kong has prompted some academics to quote John F. Kennedy’s 1961 inaugural speech and remind that Hong Kong should: “… ask not what the country can do for you; ask what you can do for your country”. Hong Kong must be proactive – identify and design an appropriate strategy and the supporting implementation policy and measures to make things happen. Hong Kong must also focus on its core strengths – the essential attributes and competitive differences that mainland China and the rest of the world cannot duplicate easily.

Relying solely on the “Four Pillar Industries” and “Six New Industries” need not be the only strategies for Hong Kong. A vertical sector-based industry support strategy is something Hong Kong should try to avoid. A more logical support strategy Hong Kong should adopt is the horizontal support strategy – an approach favored by the OECD and by the European Union as it does not name the “winning sectors” and exclude the “emerging” or “unforeseen” sectors which often become real winners because of market driven forces.

Discovering Hong Kong’s market niche

A diplomat who is also a very well-learnt scholar of contemporary Russian and Chinese history said if Gorbachev had a little piece of Hong Kong when he was trying to reform USSR through “Perestroika” and “Glasnost” in the 1980s, it would have been easier for him and he could have done a much better job. Hong Kong should not overlook the historical perspectives — Hong Kong has made much contribution in the early 80s by providing capital and production skills to the Pearl River Delta. Now that China is rich, Hong Kong’s “soft power” has become more valuable than the money Hong Kong businessmen provided in the past. And these are the ingredients China is looking for to achieve the objective of quality growth.

Hong Kong’s role in China’s 12th Five Year Plan (12-5) must include China’s “Self-initiated Innovation” objectives. To find a market niche for itself, Hong Kong also need to understand and face up to its own inadequacies. Moving Hong Kong towards knowledge-based production is not a sharp break from the past — nor is it a “sector-based” support strategy as misunderstood by some opponents. Coming up with a coordinated economic development policy and providing business facilitation to turn part of Hong Kong economy into a commercialization hub (along the lines of Silicon Valley, Boston and the Research Triangle of North Carolina) is not a big step for Hong Kong to take. Samson Tam, Hong Kong legislator for the IT Sector, suggested publicly that Hong Kong needs an “Innovation and Technology Bureau”. He suggested that the proposed Bureau “… will have the responsibility to build up links to initiatives in mainland China and the rest of the world under the “Open Innovation” theme”. Hong Kong has been successful as a trading hub of goods, but Samson believes that Hong Kong also has potential to evolve into a trader of knowledge, linking R&D in universities and serving as a technology transfer and commercialization centre that serves mainland China and the world.

Opponents of “Innovation & Technology” and “Knowledge Economy” should take note that the subject is not about supporting narrowly defined “technology” or supporting narrowly defined business sectors. The concept, as it is practiced by the Danish Mindlab and many future centres in Europe, embraces “social innovation”, “public sector innovation”, very broad perspectives on social and economic development, R&D and job creation and business and economic value creation across all business sectors. NESTA[1] (National Endowment for Science, Technology and the Arts) of the UK which is the closest equivalent of the Innovation and Technology Commission (ITC) in Hong Kong, takes risk on behalf of the UK Government by investing in medium to long-term projects, informing the UK Government on innovation policy and encouraging a culture that helps innovation to flourish. The result is a UK innovation policy that embraces all innovative activities.

It was suggested that HKSAR Government could play the role of a creator of “virtuous ecology” to facilitate economic growth. Indeed, the idea of “Virtuous Ecology” has a Buddhist origin ‐‐ an “Indra’s Net”, often pictured as a light-weight “spider web” with jewels of water droplets attached: “… formless with qualities that depend on the wisdom of the observer.” Such a metaphor is particularly relevant to Hong Kong’s role in the National 12-5 Plan. Asserting Hong Kong’s “Soft Power” and a light-weight facilitation role have no conflict with the market-driven philosophy of Hong Kong or the national development strategy (see point 6.6 for a list of proposed facilitation measures).

The National 12th Five Year Plan is not an order from above. It is not a static thing, but a constantly evolving set of national development objectives Hong Kong could contribute to. Hong Kong needs to take this opportunity to upgrade its own economic infrastructure – or risk becoming irrelevant to the mainland economy and other economies of the world.

[1] NESTA’s (National Endowment for Science, Technology and the Arts) stated aim is to transform UK’S capacity for innovation.


中国内地 十二五”规划的互補定位及角色

(亚太知识资本中心白皮书第七章,2011 年3 月。作者: 龍家麟)



1997 年以来,香港特区政府已学会如何面对社会上日益要求严格和多元化的利益群体。同时,香港也在加快与大陆的经济合作。香港有其独特的优势,包括:法律健全、诚信的声誉、媒体自由、公开的信息环境和自由独立的思维模式。香港只是中国的一个特别行政区,但基于《1992 年美国-香港政策法》,对美国来說、香港是独立关税区,并能够进口许多对大陆禁運的美国技术设备。但是如何才能将香港的这些优势转化成经济机遇呢?在“十二五”规划下,香港能为大陆带来什么呢?如何才能利用香港这个“门户”为中国寻求更进一步的国际经济合作?


“十二五”规划以草案的形式发布,并在2010 年10 月18 日中国共产党第十七届中央委员会第五次全体会议上通过,其中许多目标都与科技创新和知识经济密切相关。香港仍然是五年计划进程中的新面孔,但许多议题都围绕着香港作为商业中心和其它商业利益的功能展开。在“十二五”规划到底是“自上而下”的规范指示,还是国家为寻求发展而冀望得到“自下而上”政策建议这个问题上,香港还是显得有些混乱。

“十二五”规划阐述了中国致力于在2011 至2015 年期间全面建设小康社会的决心。为了实现这一目标,中国将继续坚持邓小平的对外改革开放政策,同时,减少对出口导向型经济增长模式的依赖,并将更多的重心放在刺激国内消费和促进经济的可持续发展上,提升大多数人的生活标准和实际工资水平。为达到质的增长,中央政府领导者引入传统儒家思想中的“知识”与“教育”(“科教兴国”) 并将其转化成“创新科技”(如国家领导人的理解)和“知识经济”(如美国和欧洲的实践经验)。


某种意义上说,香港并不愿意成为中国计划经济的一部分。1842 年8 月29日《南京条约》签订之后,香港由英国政府管治,从根本上说、香港是建立“法律健全、管理完善”基础上的。1997 年7 月1 日起,中国对香港恢复行使主权,香港成为中国的一个特别行政区,其不同于大陆的法律制度及行政体系被保留了下来。中国对香港恢复行使主权,但香港不单只中国主权下的一地区、而且是在众多重要决策和事情中、早就有了合理正确决定的地区,同时香港也可以成为中国大陆遇到政策难题时可以参考的对象。香港拥有可以让其成为世界级创新科技中心、创业基地、商业中心的“第一层商业条件”,并因此可以有系统和条件发展成为服务于香港本地、大陆和世界其他国家输出的研发成果的中国地区。

但是,香港应明确其在“十二五”规划中的定位及更加积极的角色。香港的“软实力”、是有能力促进中国同西方国家间的贸易关系,但要成功的话,这能力必须建立在香港独一无二的竞争优势基础上。发展这香港的独特优势时, 可以用很多名称的, 包括“创新科技”、“科技产业化”、“知识经济”以及为大陆提供“软技术”。

“知识经济”这一观点对香港来说并不陌生。早在18 世纪初期,香港的欧洲人用“高级技术”— 中国飞箭(18 世纪初世界上最快的帆船)来往中国和欧洲之间进行贸易。因此,有人说香港已经是“知识经济”社会,不需要再做其他的了。但是香港并不具备可助其达到成为技术中心的有意义的临界点或发展科技产业化的专项技术的世界中心。高校的研究人员一直用政府的钱去开发新技术,最后却将研究成果低价售给大陆或国际上的一些公司。

香港缺乏扎实的政策措施和发展观念。这一点使一些学者引用肯尼迪的就职演说并说香港人应该“不要问国家能为你做什么,要问你能为国家做什么”。香港应更积极主动,寻找并提出正确的战略与配套实施政策和措施来实现这战略性目标。香港应将其重心放在核心优势上——本质特征和竞争差异,这些就是大陆和世界其他国家或地区无法轻易复制, 独一无二的香港竞争优势。



一位外交官,同时也是俄罗斯和中国当代历史的资深研究学者说,80 年代戈尔巴乔夫尝试通过“改革开放”来改变苏联未果。如果当时他可以拥有一个小小的香港,那么他的改革会进行更加顺利、并更有可能取得更大的成就。香港也不能忽视自身和相对中国经济发展的地位和历史观点——香港在80 年代初通过向珠三角地区提供资金和生产技能为国家做出了巨大的贡献。现在,中国经济腾飞了,那么香港的“软实力”也就比过去香港商人提供的资金更有价值了。这些也是中国寻求实现高质量增长目标的重要组成部分。


反对“科技创新”和“知识经济”的人应该注意到,这不是在狭义上支持“技术”或特定行业的战略。丹麦的智慧实验室(Danish Mindlab) 和欧洲其他未来中心拥抱社会创新、公共部门创新,有着非常广阔的社会和经济发展愿景,包括研发和创造就业机会、产业和为所有行业创造的经济价值。英国的国家科学、技术和艺术捐赠委员会(NESTA)[1]的设置最接近于香港的创新科技署。它以英国政府的名义,通过投资中长期的项目承担风险,并结合英国政府的相关创新政策,鼓励蓬勃发展创新的文化。其结果是:英国技术创新的政策,成功地包含了所有的创新活动和经济发展。

有人建议香港特区政府扮演促进经济增长的“良性生态”创造者的角色。实际上,“良性生态”这个观念有一个佛教源头,也叫因陀罗网,常常被描绘成由点点水滴宝珠所结成的“蜘蛛网”,品质的高低依赖于观察者的智慧。这个比喻是特别适用于香港在中国“十二五”规划中的有可能产生的作用。突显出香港的“软实力”和细微的促进角色,这角色并没有与香港的市场主導观念和国家发展战略有所冲突(参见本文6.6 中建议的香港政策措施清单)。