Hong Kong innovation chief says US investment ban on Chinese tech will bring ‘short-term difficulty’ to city’s talent drive, financing for local firms

Sun Dong however urges faith in city’s development ambitions, stressing move will not change global development pattern of ‘rise of the East and decline of the West’

He vows to counter US measures by broadening financing sources for start-ups and considering more direct support for key tech firms

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The San Tin area in Hong Kong’s New Territories has been earmarked for a technopole, representing the city’s ambitions in the sector. Photo: Winson Wong

Published: 12:46pm, 12 Aug 2023Updated: 4:35pm, 12 Aug 2023

Hong Kong’s innovation chief on Saturday conceded Washington’s restrictions on US investments in sensitive Chinese technologies would bring “short-term” difficulty to his government’s drive to attract businesses and talent, as well as financing for local firms.

Secretary for Innovation, Technology and Industry Sun Dong pledged to counter the US measures by broadening financing sources for local start-ups and considering more direct monetary support for strategically important tech firms.

US President Joe Biden’s executive order unveiled on Wednesday seeks to restrict US venture capital and private equity investments in Chinese firms in semiconductors and microelectronics, quantum information technologies and certain artificial intelligence systems.

Hong Kong Secretary for Innovation, Technology and Industry Sun Dong has called for faith in the city’s development. Photo: K. Y. Cheng

The restrictions, expected to come into force in about a year, will also cover companies in Hong Kong and Macau. The Hong Kong government has slammed the measures as “unreasonable”, with Sun admitting the curbs would have an impact on businesses in the city.

“In the short term, especially in terms of investment, it can’t be ruled out that some of our innovation and technology companies will encounter a bit of difficulty in financing,” Sun told reporters after a radio interview.

He also told the radio programme that the government might also face short-term challenges in bringing in leading technology firms and talent, a bid that is part of Chief Executive John Lee Ka-chiu’s economic policy.

But Sun reaffirmed his faith in the city’s tech ambitions in the long run, saying: “The revolution of a new generation of technologies and industries will not stop because of this. I believe it will not change the global development pattern of the rise of the East and the decline of the West.”