Hong Kong’s Financial Secretary Donald Tsang has thrown the future of the US investment bank Hambrecht & Quist’s proposed $1.2bn Silicon Harbour microchip venture into doubt, claiming Hong Kong is not suited to high-technology manufacturing. Tsang said he saw the territory’s hi-tech future in software and internet research and development. Manufacturing is too labour-intensive. We can’t cope, he told a meeting in Singapore. He said that while Hong Kong nurtures visions of becoming a hi-tech hub like Singapore, it should not duplicate what is already on offer elsewhere in the region.
We cannot be in the manufacturing side. But we would be very good on software development, particularly Chinese language-based software development, he said.
We could also be very good in multimedia creative work and content development.
Tsang said while he was open-minded about all private sector proposals, including Silicon Harbour, at the end of the day, he would have to reconcile any proposals with government policy. The Hambrecht plan calls for 200 hectares of land, crowded Hong Kong’s scarcest commodity, which is four times as much as the territory’s other IT mega-project, the $1.67bn Cyberport.
Tsang said: I am quite willing to be convinced. But because such a large tract of land is required for this project, I am scared. He also expressed concern that profit margins were thin in the microchip business and technology changed fast, making Hong Kong potentially vulnerable to changing trends.
Hambrecht has reportedly said it would scrap its proposal if the government does not agree to tax incentives and favorable land lease by the last quarter of the year.
