Anthony Lin FCPA, Financial Controller, Gammon Construction Limited, and member, the Institute’s Property, Infrastructure and Construction Interest Group Organizing Committee
Given the acute land and housing shortage in Hong Kong, it is no surprise that the Northern Metropolis Development Strategy has immediately become the talk of the town since it was unveiled during the Policy Address in October 2021. The Northern Metropolis will encompass new development areas in Hung Shui Kiu, Ha Tsuen, San Tin, Kwu Tung North as well as neighbouring rural areas in Yuen Long, Tin Shui Wai, Fanling, Sheung Shui, and Lok Ma Chau, making up a total area of about 300 square kilometres (more than a quarter of the total land area of Hong Kong). It hopes to provide more than 900,000 homes, housing around 2.5 million people, and generate 650,000 jobs.
The plan is to create a second engine for the city and develop the Northern Metropolis as an IT hub. Not only will it foster the development of innovation and technology, it would also benefit a wide range of professional services, such as financial services, legal, architecture, engineering, healthcare and consulting, which are expected to complete the ecosystem and allow enterprises to capitalize on new opportunities.
Hong Kong is confronted with development conflicts and challenges on various fronts, with the insufficient supply of land for development and housing units impeding our social and economic development and affecting people’s livelihood. With this new development, the government will be able to identify and produce land for development and build a land reserve, which will help to meet demand for land supply.
Land development has, indeed, always been a race against time. It is expected to take five to 10 years to develop the infrastructure for the Northern Metropolis and 15 to 20 years to deliver the whole plan. Balancing a long-term development plan while managing short-term changes in the economic environment and in land demand would be the biggest challenge.
In addition, a large investment in infrastructure is needed. As mentioned previously by the Financial Secretary of Hong Kong, at least HK$100 billion is needed to expedite the implementation of infrastructure work relating to land, housing and transportation. However, financial concerns will be less of an issue as the initial funding will come from the government’s Future Fund, which was set up in 2016, and any ongoing expenses can be funded by government bonds and land sales.
Last but not least, while development and conservation will always be a dilemma, by leveraging expertise in our city and experiences from other countries, there is always hope to strike a balance and preserve both.
The Northern Metropolis Development Strategy is a key plan to map out the future of Hong Kong. I strongly believe the strategy will reshape the city for the better.
“With this new development, the government will be able to identify and produce land for development and build a land reserve, which will help to meet demand for land supply.”
Peter C.W. Choy FCPA, Managing Director, TPJ Management Consultancy Limited, and Convenor, the Institute’s Property, Infrastructure and Construction Interest Group Organizing Committee
The outline of the National 14th Five-Year Plan expressly supports Hong Kong to enhance its competitive advantages and better integrate into the overall development of the country.
Through the formation of the “Twin Cities, Three Circles” framework, the socioeconomic collaboration between Hong Kong and Shenzhen in areas such as economic development, infrastructure, innovation and technology, and ecological conservation can be further improved to facilitate Hong Kong’s integration into the overall development of the Mainland, including the Greater Bay Area.
The development of the Northern Metropolis will optimize land, manpower, ecological, environmental and cultural resources, economic and social capital pools, and synergies between Hong Kong and Shenzhen. It will see the upgrade of the Hung Shui Kiu/Ha Tsuen New Development Area to become the New Territories North Modern Services Centre, which will integrate with the Qianhai Shenzhen-Hong Kong Modern Service Industry Co-operation Zone. It will also see the introduction of San Tin Technopole, which will be an ecosystem supporting the IT industry with research and development, production, investment and financing services.
To achieve this target, the Hong Kong government will carry out five new railway projects – which will make the Northern Metropolis accessible by railway – four large-scale housing land expansion projects, two outdoor eco-recreation and tourism space projects, as well as develop three wetland conservation parks totalling more than 1,200 hectares.
The impact of the Northern Metropolis on Hong Kong will be seen over the next 20 years. After the full development of these new areas and infrastructure, the metropolis will be able to provide more residents with employment options, provide the city with a better chance to integrate into the development of Mainland China, and enable the sustainable growth of Hong Kong.
“The development of the Northern Metropolis will optimize land, manpower, ecological, environmental and cultural resources, economic and social capital pools, and synergies between Hong Kong and Shenzhen.”
Ricky Chow CPA, Partner, Tax Services, PwC Hong Kong
The Northern Metropolis Development Strategy lays out a blueprint to expand Hong Kong’s rural areas near Shenzhen into a metropolis with a total area of 30,000 hectares. To ensure its success, the introduction of relevant supporting policies that take a holistic view would be critical for propelling continued growth.
Development of the Northern Metropolis will take quite some time to complete. Consequently, it may be beneficial to initially prioritize public transportation infrastructure to ensure the area is easily accessible. In addition, the government should take the lead by relocating and developing some key government facilities in the Northern Metropolis. This would help build critical mass while drawing business conglomerates to the area. Given that nearly a quarter of newly created jobs are to be related to innovation and technology (I&T), the government will need to attract young talent living in urban areas to the Northern Metropolis. The unique metropolitan landscape featuring rich cultural and natural resources in the northern New Territories could be gripping incentives for new residents looking to live in a greener community.
Another focus of the development plan is the improved integration with Shenzhen in I&T areas spanning talent, capital and ideas. The San Tin Technopole is well poised to serve as one of the core facilities to advance the I&T economy and develop synergy between Hong Kong and Shenzhen. Nevertheless, a clear division of roles between the San Tin Technopole, the adjacent Hong Kong-Shenzhen Innovation and Technology Park in the Lok Ma Chau Loop, as well as the Shenzhen Innovation and Technology Zone, would be useful. These developments are contextualized by the consensus view that the I&T industry is the new economic engine to drive the global economy.
The government should not underestimate the financial burden for carrying out this development plan. If the Northern Metropolis and the Lantau Tomorrow Vision are to be developed concurrently, partnership models will need to be utilized with the private sector to raise additional funds for these two ambitious projects. Raising funds from the debt market by issuing government bonds may be a viable option to unblock blended finance from banks and investors. The government could also seize the chance to strengthen the position of Hong Kong as the international centre for green financing by issuing green bonds to finance the development of the projects in the most environmentally-friendly manner.
A competitive fiscal policy to attract multinational companies and talent to Hong Kong is indispensable to the success of the Northern Metropolis.
“These developments are contextualized by the consensus view that the I&T industry is the new economic engine to drive the global economy.”