Hong Kong, frequently hailed as an international financial hub, is in the midst of a groundbreaking economic rebirth. The recent sale of a Labubu figure, a designer toy by Hong Kong artist Kasing Lung, for more than HK$1 million ($128,000) at the Yongle International Auction in Beijing, is a potent sign of the city’s escalating creative industry promise. This boom mirrors the Chinese trendy toy market’s explosive growth from 6.3 billion yuan ($880 million) in 2015 to 60 billion yuan in 2023, representing a compound annual growth rate of over 30 percent. Hong Kong’s status as an international business center, combined with its robust intellectual property protection, makes it a fertile incubator for global IP. In 2022, the city’s design service exports amounted to HK$4.8 billion, with almost 60 percent going to the mainland market, highlighting the profound linkages between the Hong Kong Special Administrative Region’s creative industry and its hinterland.
Despite these heartening developments, Hong Kong faces significant economic challenges. Over the past two decades, the city has experienced a sharp shrinkage in its manufacturing industry, with its share in GDP falling from 21 percent in 1985 to a mere 1 percent in 2021 — far below similar economies like Singapore (20.3 percent) and South Korea (25.2 percent). This process of deindustrialization has made Hong Kong overly reliant on financial and professional services, thus weakening its overall economic resilience. The SAR government’s “new industrialization” initiative aims to arrest this trend, with the goal of achieving a 5 percent contribution to GDP from high-end industries by 2030. However, to achieve this goal, the city needs to overcome huge hurdles, such as a severe land shortage, a widening talent gap, and a mismatch between academic research and commercial application.
To overcome these challenges, Hong Kong must adopt a more industry-focused approach to innovation. Taking a page from Shenzhen’s extremely successful “Four 90 percent” model, in which 90 percent of the city’s research and development institutions, talent, financial input, and patents come from the private sector, Hong Kong should restructure its research funding mechanisms. One potential solution is the establishment of a HK$5 billion “Industry Demand Matching Fund”, which would allow leading firms to identify key technological difficulties while universities compete to come up with solutions. This project would significantly improve the city’s low commercialization rate of research and development achievements, which is currently below 15 percent, compared to 45 percent in Shenzhen.
The forthcoming 15th Five-Year Plan (2026-30) can provide a chance to officially position Hong Kong as an international creative industry hub and an advanced smart manufacturing center, offering definitive policy guidance for its future growth
Aside from monetary enticements, Hong Kong also needs to develop a robust ecosystem for creative industries. A suggested 200-hectare “Creative Industry Park” in the Northern Metropolis would combine IP development, digital content creation, and intelligent manufacturing into a unified innovation hub. Furthermore, the establishment of a “Hong Kong Creative Industries Development Bureau” — modeled on South Korea’s very successful Korea Creative Content Agency — would be able to offer end-to-end assistance to local companies, from IP registration through expansion into the global market.
The Guangdong-Hong Kong-Macao Greater Bay Area plan offers another vital chance for Hong Kong’s industrial rebirth. Through a “Hong Kong HQ + GBA Manufacturing” strategy, companies can tap the city’s expertise in design, branding, and international reach while taking advantage of the Chinese mainland’s advanced production capabilities. This model has already worked for furniture manufacturer Twenty One from Eight and fashion brand Shanghai Tang, which have realized 40 percent cost savings and 60 percent shorter production cycles by maintaining high-value operational functions in Hong Kong while outsourcing manufacturing to the GBA.
To further boost regional cooperation, Hong Kong is advised to strive for innovative financial instruments, including the issuance of GBA tech bonds and the creation of a HK$50 billion GBA Industrial Upgrade Fund. Enhancing cross-border IP trading and developing a cross-border R&D funding pool would also increase innovation flows across the region. These efforts would not only enhance Hong Kong’s status as an international financial hub but also lead toward a more integrated, high-value GBA economy.
In the long run, Hong Kong’s economic renaissance will hinge on its capacity to reconcile global competitiveness with further integration into national development planning. The forthcoming 15th Five-Year Plan (2026-30) can provide a chance to officially position Hong Kong as an international creative industry hub and an advanced smart manufacturing center, offering definitive policy guidance for its future growth. Through the development of closer industry-academia relationships, land use optimization for innovation, and enhanced GBA cooperation, Hong Kong can evolve from its “Made in Hong Kong” heritage to a new future of “Created in Hong Kong”.
This transformation is poised to not only enhance the diversity of the city’s economy but also reinforce its distinctive role within China’s “dual circulation” strategy. As Hong Kong embarks on this endeavor, it possesses the potential to reestablish itself as a global front-runner in creativity and advanced manufacturing, thereby securing sustained prosperity while aiding in the realization of the nation’s expansive economic goals.
The author is a member of the All-China Youth Federation and a member of the Kowloon City District Council.
The views do not necessarily reflect those of China Daily.
