The Capital Investment Entrant Scheme, which takes applications from foreigners investing more than HK$10 million (US$1.3 million, RM4.64 million), will be suspended starting tomorrow, Chief Executive Leung Chun-ying said in his annual policy address today. The government will continue to process the applications it currently has on hand.

Hong Kong is cutting the program at a time when tensions with China have increased, underscored by pro-democracy protests that ended last month. It was introduced in 2003 when the government sought to boost an ailing economy and in the same year relaxed its border to Mainland Chinese tourists.

A total of 24,481 people were approved for residency under the plan as of September 30, of which 21,822 were Chinese nationals, according to immigration data. Investments made totalled HK$205.8 billion.

Real estate investing was removed from the program in 2010 to curb investor demand as home prices surged in Hong Kong. The number of mainland Chinese buyers, who have helped drive up home prices in recent years, have declined since Leung announced an additional 15 per cent tax on foreign buyers in 2012. — Bloomberg