Hong Kong Special Administrative Region (HKSAR) government will allocate about 200 million HK dollars to launch a new scheme for local enterprises, to promote innovation and technology, said HKSAR Chief Executive Donald Tsang on Wednesday.

"We hope this scheme will inculcate a research culture among enterprises and encourage them to establish long-term partnerships with research institutions," Tsang introduced the scheme while delivering his annual policy address at the Legislative Council.

Under the "R&D Cash Rebate Scheme" to be launched, enterprises conducting applied R&D projects with the support of the Innovation and Technology Fund or in partnership with local designated research institutions will enjoy a cash rebate equivalent to 10 percent of their investments.

He noted that Hong Kong's research and development capabilities and the competitiveness of enterprises will be enhanced, and more business and employment opportunities will be created.

The local government will review the effectiveness of the scheme three years after its implementation.