Last month, the Financial Secretary released the 2026-27 Budget, placing the coordinated development of innovation and technology (I&T) and the financial sector at its core. By promoting mutual empowerment and positive interaction between these two sectors, the Budget aims to drive the expansion of diversified industries while accelerating the development of the Northern Metropolis, positioning Hong Kong to proactively align with the nation’s 15th Five-Year Plan. The business community must fully support the HKSAR Government’s overall development strategy of “driving growth with I&T” and “financial empowerment” to lead all sectors to more actively integrate into and serve the country’s broader development agenda, and to promote high-quality economic development in Hong Kong.
During this year’s “Two Sessions”, I also submitted several proposals to the Chinese People’s Political Consultative Conference (CPPCC) on how Hong Kong can better align with the 15th Five-Year Plan. These included deepening I&T cooperation between the Mainland and Hong Kong, consolidating Hong Kong’s position as the leading offshore renminbi (RMB) business hub, and developing Hong Kong into the preferred platform for Chinese enterprises going global. These will help Hong Kong better leverage its strengths during the period of the 15th Five-Year Plan.
Innovation and technology driving industrial upgrading
The development of artificial intelligence (AI) is a top priority in the new Budget, which proposes a series of measures to accelerate the promotion of the “industries for AI and AI for industries” vision. The deep integration of AI across various sectors represents a major highlight in the Budget. The HKSAR Government will allocate funding to promote AI training across society and provide subsidies to support AI adoption by enterprises, closely linking talent development with practical business applications.
We hope the HKSAR Government will actively allocate resources and introduce preferential policies and supporting measures to attract more leading Mainland tech companies and research and development (R&D) centers to establish operations in the Northern Metropolis. At the same time, it should explore strengthening collaboration between Mainland and Hong Kong tertiary institutions in conjunction with the development of the Northern Metropolis University Town. This could attract renowned universities from the Mainland and abroad to open Asian campuses and international science laboratories in Hong Kong. By actively promoting the “Study in Hong Kong” brand, the city can attract and cultivate high-end I&T talent, upholding Hong Kong as an international I&T and education hub.
The core of AI development lies in the coordinated support of computing power and data. For a long time, Hong Kong has faced constraints including insufficient computing power supply, high land costs, long construction cycles, expensive electricity, and a shortage of specialized talent. These factors have limited the pace of research and the efficiency of converting research results into practical applications. The Budget has certainly taken the right direction by proposing to take forward the Sandy Ridge data facility cluster project. Nevertheless, supercomputing facilities are highly energy intensive. In the long run, issues relating to energy consumption and operational costs must be addressed in order to expand overall computing capacity. To this end, stronger cooperation with the Mainland should be considered. For example, the HKSAR Government could explore purchasing computing power or developing offshore computing centers. It could also promote cross-regional computing and data cooperation with regions such as Shaoguan in Guangdong Province and Inner Mongolia. Authorities could also explore establishing a cross-border comprehensive bonded zone for computing in the Mainland cities in the Greater Bay Area or the Hainan Free Trade Port, transmitting data in a close loop via dedicated fiber-optic networks. In addition, the Government could introduce convenience measures regarding computing power application for Hong Kong research institutions and enterprises. With all these, the efficiency of Hong Kong’s computing infrastructure could be significantly increased.
Consolidating the financial sector’s strengths
The Budget also introduces numerous measures in the financial sector, including doubling the size of the RMB Business Facility to RMB 200 billion, issuing Mainland government bond futures in Hong Kong, building the international gold trading market, and promoting the inclusion of real estate investment trusts (REITs) under mutual access. We believe these policy initiatives are conducive to Hong Kong’s development as a globally leading offshore RMB business hub, while further expanding the depth and breadth of the city’s financial services. We hope the authorities will study the issuance of more diversified and longer-tenor offshore RMB bonds, improve mechanisms facilitating two-way circulation of cross-border RMB, and provide comprehensive risk-management services for global enterprises.
Building a one-stop “going global” platform
The Budget proposes establishing a cross-sector professional services platform integrating legal, accounting, financial, testing, certification and other services. This platform will support Mainland enterprises venturing into global markets through Hong Kong, while deepening engagement with ASEAN and Middle Eastern markets and exploring opportunities in Central Asia, South Asia, and North Africa. We hope the HKSAR Government will provide more targeted support to help the business community further explore opportunities in emerging markets. In particular, the networks of various chambers of commerce could be leveraged to bolster Hong Kong’s role as a strategic hub for enterprises seeking to go global, and support the country in enhancing connectivity with international markets.
To reinforce Hong Kong’s role as the preferred platform for Mainland enterprises going global, we believe stronger top-level policy coordination is needed. Led by the Chinese Ministry of Commerce, the HKSAR Government and relevant institutions could establish a normalized cooperation mechanism to jointly study trends in overseas expansion, policy needs, and risk management. Authorities also intend to establish a one-stop service platform for Mainland enterprises going global, offering end-to-end guidance on market research and compliance review. In addition, a dynamic overseas-risk early warning system could be developed to help enterprises effectively mitigate potential risks.
In summary, the new Budget closely aligns with the nation’s 15th Five-Year Plan and introduces a series of concrete measures that will inject new momentum into Hong Kong’s long-term development. These initiatives will not only enhance the resilience of Hong Kong’s economy and strengthen its competitiveness, but also lay a solid foundation for diversified growth. More importantly, they will enable Hong Kong to better integrate into and serve the nation’s overall development strategy, contributing positively to China’s modernization.
