15 March 2019 – Co-chaired by Mr William Wai-Hoi Doo, JP, Chairman, Fung Seng Enterprises Holdings Ltd and Mr Jean Lemierre, Chairman of BNP Paribas, the 14th Hong Kong – France Business Council plenary session was concluded with success on 15 March 2019, in Paris.

Attended by 11 French members and 9 Hong Kong members including HKTDC Executive Director, the Plenary session covered topics including the economic outlooks of Hong Kong and France, dynamics of Hong Kong and French young entrepreneurs and bilateral partnerships.

Brexit Opportunities for Foreign Investors in France
Mr Ross McInnes was appointed by the French Prime Minister as co-chairman of the "Action Publique 2022" working group committee, which was responsible for proposing measures to enhance public service efficiency. He shared that the government was determined to implement structural changes on pivotal areas such as education and healthcare systems which were fundamental to improving France’s competitiveness. He deemed that the government’s desire to reduce excessive public spending and reform the civil service sector was revolutionary. New measures were also executed to tackle problems related to ageing population and unemployment benefits which were major sources for public spending.

Compared with other European countries such as Germany and the UK, Mr McInnes said that the French economy had some prominent advantages which were attractive to foreign investors. These included highly-skilled labour force, comprehensive vocational training and apprenticeship system, abundant depository of registered patents, diversified professional services and ample support in R&D development. The French government had implemented significant measures to create a more open economy, such as reduction of government’s ownership in state-owned enterprises, encouragement of privatisation and participation of non-French institutional investors. Apart from Paris, cities such as Toulouse, Lyon, Grenoble and Nantes had developed robust eco-system and the infrastructure development in northern France had become highly competent.

On the question regarding the yellow vests protest in France and President Macron’s reform, Mr Jean Lemierre opined that populism had become a critical issue in Europe as a sizable minority was affecting the reform process in the European Parliament. For the yellow vests protest in France, it was sparked off by a minority group of people who were outspoken and aggressive in the social media. They expressed strong views on the government’s policies particularly on energy transition and increase in heating fuel cost. These views triggered dissatisfaction and unrest in many cities. Since President Macron later decided to have open public debates on the government’s reform and policies, the yellow vests protest was gradually contained.

On the subject of Brexit, members hoped that “hard Brexit” could be avoided as damage had already been done. He opined that international banks had to relocate activities including management staff, trading floors and risk management units from London to Paris under the supervision of the European Central Bank.

HKSAR Government’s New Initiatives in the Greater Bay Area and Opportunities for Hong Kong and French Businesses
Ms Margaret Fong introduced Chinese Government’s outline development plan on the Greater Bay Area (GBA) which was a 11-city region hosting 70 million people with a combined GDP of USD 1.5 trillion. The key was to transform the region into a world-class city cluster with focus on innovation and technology. Among the four core cities, Macau would be positioned as a world-class tourism centre; Guangzhou as a commerce and industry hub; Shenzhen as a capital for innovation and creativity, whereas Hong Kong performed as an important international hub in finance, trading, aviation, offshore RMB business, asset management, risk management, convention and exhibition, sourcing, as well as legal and dispute resolution services.

Ms Fong said that Hong Kong and France could work together closely on new business opportunities driven by the GBA. In the area of innovation and technology, French companies could commercialise their technology and leverage Hong Kong’s international talents and professional services such as protection of intellectual property (IP). The Science Park and Cyberport were two major platforms in Hong Kong where French technology companies could identify co-operation opportunities particularly for young entrepreneurs and start-ups.

The Hong Kong Shenzhen Innovation and Technology Park which aimed to open in the next few years would offer plenty of attractive benefits for the French companies. With its ideal location situated between Hong Kong and Shenzhen, and yet within the Hong Kong territory, French companies could take advantage of the rule of law, IP protection, tax benefits and R&D resources in Hong Kong while tapping talents and manufacturing capabilities across the border. Besides, Hong Kong was keen to develop smart city, artificial intelligence, robotics, bio-tech and fintech which French companies were particularly strong at.

Ms Fong also shared that the Hong Kong government was keen to develop the city into a centre for green bonds which French banking and financial institutions could share their valuable experience. As Renminbi business was gaining momentum with the rising demand of Renminbi-denominated products, there would also be surging opportunities for the French asset management and wealth management companies.

The tremendous consumer market potential in the GBA was also highlighted. Hong Kong would play an even more important role as a gateway for reaching the affluent Chinese consumers. She cited the example of Hong Kong’s re-export of close to US$300 million worth of French wine to Mainland China and Macau each year. French businesses could also find potential collaboration in sectors such as lifestyle products, healthcare, entertainment and financial services. In light of the promising bilateral relations between Mainland China and France, French smaller companies and start-ups which were looking into Asia could benefit from Hong Kong and the immense business opportunities to be unfolded in the GBA.

France: AI Global Actor
INRIA, a well-established research institute dedicated to digital science and technology development in France was introduced. Under the supervision of the Ministry of Research and the Ministry of Industry, INRIA engaged professional research specialists working on international collaborations in the areas of science, technology transfer and innovation. Since the French President Macron was keen to support artificial intelligence (AI) development, a strategic plan with a budget of EUR 105 billion over four years was introduced. The key initiatives included the set-up of an innovation council, an AI system and a fintech fund to promote research, education, industry innovation, as well as transformation of administration. Additional efforts were made in the eco-system to avoid brain drain and talent loss, sustain interests of students and researchers, and increase the number of start-ups in France.

Valeo, a global automotive supplier which specialised in innovative technologies and systems that helped making automobiles more environmental friendly also shared their experience. The sharing stressed the importance of developing advanced technology to reduce traffic and air pollution. CO2 emission had become a serious issue in Mainland China and Asia and it would be critical to find innovative mobility solutions for building future smart cities in the region.

Hong Kong: Asia’s Powerhouse for AI Innovation
Guest speaker Mr Andy Bien, Chief Information Officer, Airport Authority Hong Kong mentioned that an airport was not just a transportation hub, but a small city in essence. By implementing technologies in the airport, the Hong Kong International Airport (HKIA) aimed to transform into a smart city. He highlighted that the HKIA currently ranked third in the world in terms of passengers’ number, after Dubai International Airport and London Heathrow Airport. As for air cargoes, HKIA continued to enjoy the highest world ranking for nine consecutive years.

While a third runway was being built to alleviate the growing capacity problem, Mr Bien shared that a technology roadmap was put in place in 2015 to provide seamless travel, attentive services and refreshing retail experiences for passengers. The most cutting-edge technologies would be adopted including advanced biometrics such as facial recognition for security check, mobile apps for baggage arrival check and robotics which could eliminate labour-intensive work. He quoted HKIA’s collaboration with Amadeus, a European company which developed the airport’s check-in kiosk system. He expressed that HKIA welcomed partnerships with French companies for bringing more innovative ideas to facilitate future development.

Side Visit
Ahead of the Plenary Meeting in Paris, Mr Doo led the Hong Kong delegation to Lille, visiting the Hauts de France Regional Council, the Décathlon Campus, EuraTechnologies etc.