Published: 01:03, March 10, 2020 | Updated: 06:44, June 6, 2023
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Cyberport can offer vital benefits to HK and the region in future
By Oriol Caudevilla

I mentioned in my article “Bay Area creates new opportunities for HK” (March 13, 2019) that the Guangdong-Hong Kong-Macao Greater Bay Area project will play a decisive role in molding Hong Kong’s future. The Bay Area in fact has been described by some media as “China’s plan to beat Silicon Valley”, and not without reason. Each of the leading Bay Area cities is expected to leverage their respective strengths to contribute to the project’s success. For instance, Hong Kong will contribute its expertise in banking and financial services, while Shenzhen will leverage its technological prowess — where cutting-edge technology companies like Huawei and Tencent are domiciled.

However, it does not mean that Hong Kong cannot make significant contributions in innovation as well. As I mentioned in another column, “HK should leverage Bay Area to become a fintech hub like Singapore” (June 19, 2019), Hong Kong is fast developing into a leading fintech hub, one key part of the government’s fintech strategy being Cyberport.

Cyberport is managed by Hong Kong Cyberport Management Co Ltd, which is wholly owned by the Hong Kong SAR government, and it is the flagship of Hong Kong’s digital tech industry.

It houses about 600 tech companies, of which 200 are non-local. According to the data provided by InvestHK, Cyberport’s publicly funded incubation program has admitted 108 new startups in 2018-19. It has achieved an impressive survival rate of 72 percent.

In 2018, the government allocated HK$300 million (US$38.6 million) to Cyberport for strengthening the support to its incubatees. HK$5.5 billion has also been earmarked for the development of Cyberport 5, which is expected to be completed in 2024.

Cyberport can currently play a pivotal role in two different ways: firstly, as an integral part of the Bay Area project, and making meaningful contributions to the Bay Area’s technological advancement; secondly, as a link between American and Chinese tech companies

Despite Shenzhen being presumed to be the leading technology contributor to the Bay Area project, there is still room for Cyberport, and therefore Hong Kong, to make significant contributions. This is also important in the context of the US-China trade war.

This is because Cyberport can play a key role connecting the two rivals. In September, Cyberport’s chairman, Lee George Lam, participated in a symposium organized by the Hong Kong Trade Development Council in Los Angeles. Lam stated that technology companies and universities from Hong Kong and the US should collaborate more closely on digital entertainment and artificial intelligence, even amid the ongoing trade war, and even after Washington’s targeting over the past year Chinese tech giants ZTE and Huawei.

Hong Kong has something that Shenzhen does not have: its “one country, two systems” governance concept, which avails it the unique advantage of enjoying the Chinese mainland’s support yet not tied to its legal structure. Despite the mainland having passed the new foreign investment law that, among other things, protects foreign IP and prohibits forced technology transfers, many American companies — especially tech-related companies — are still reluctant to enter into the mainland market.

One of the main reasons why the trade war started was US President Donald Trump’s belief that tariffs were a necessary way to pressure China into abandoning what the US side claimed were China’s “unfair trade practices” — i.e., China’s alleged “stealing” of its foreign partner’s intellectual property and “forcing” American companies in China to hand over their technology.

China is trying hard to curb these practices, but it will take some time before foreign companies realize that China has moved to the next phase in its economic development, in the same way that Japan evolved from a copycat in the 1950s and 1960s to a world leader in innovation and technology, and now leads the world in the number of patent filings. China is basically following the pattern established by Japan, from copycat to innovator. What’s remarkable in China’s case is that it is taking far less time to undergo the same transformation.

To sum up, Cyberport can currently play a pivotal role in two different ways: firstly, as an integral part of the Bay Area project, and making meaningful contributions to the Bay Area’s technological advancement; secondly, as a link between American and Chinese tech companies, since Hong Kong is in the perfect position to serve as the “gateway to China” but with a legal system different from the one on the Chinese mainland, thanks to “one country, two systems”.

Perhaps many tech companies from the US or Europe that do not yet dare to start operating on the mainland can use Cyberport as a steppingstone. This may prove inevitable, as the success of US-China relations will necessarily have to be based on mutual cooperation in every possible area because trade wars and escalating tariffs will only cause mutual harm. According to Sun Tzu, “The greatest victory is that which requires no battle.” There’s no reason why the world’s two biggest economies cannot achieve a win-win solution to their ongoing dispute.

The author holds a doctorate in Hong Kong real estate law and economics. He has worked as a business analyst for a Hong Kong publicly listed company.

The views do not necessarily reflect those of China Daily.