Hong Kong leader John Lee Ka-chiu on Wednesday laid out a strategic blueprint to boost the special administrative region’s economy, enhance people’s livelihoods, and consolidate the city’s role as an international center.
Presenting the fourth Policy Address of his five-year term, Lee said his ultimate objective in governance is to improve people’s livelihood with better housing for members of the public, higher income for workers, enhanced care for the elderly, and greater prospects for young people.
Reaffirming the SAR’s economic growth forecast of 2 percent to 3 percent for the current year, he said the city will accelerate the development of Northern Metropolis as it searches for new growth drivers.
Graphic highlights: Policy momentum
Donning a specially designed green tie, he started delivering the fourth Policy Address of his five-year term at the Legislative Council at 11 am on Wednesday.
The chief executive said the Policy Address will serve as a roadmap for the special administrative region to achieve a vibrant economy, pursue development, and improve people's livelihood, accelerating the city’s advancement from stability to prosperity.
“It also outlines a strategic plan for Hong Kong to proactively align with national development strategies and achieve breakthroughs in forging a new landscape.”
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Saying that the economy and people's livelihood are mutually reinforcing, the CE said he has been pushing reforms since assuming office in 2022, both within the government and in the wider community, to facilitate economic growth and improve people's livelihood.
“I have transformed and instilled in the government a culture that is ‘result-oriented’."
Pointing out that his government has been pressing ahead with public housing production and introduced Light Public Housing (LPH), the CE said while applicants for Public Rental Housing (PRH) waited an average of 6.1 years for a flat three years ago, the composite waiting time is now 5.1 years.
Over the same period, the median household income rose by HK$3,000, an increase of 11 percent, he added.
Northern Metropolis development
Terming the Northern Metropolis as the new engine for Hong Kong's economic development, the CE said he will accelerate its development and set up the Committee on Development of the Northern Metropolis under his guidance to formulate operational models for the various development areas therein.
Three working groups will be set up under the committee: Working Group on Devising Development and Operation Models, Working Group on Planning and Construction of the University Town, and Working Group on Planning and Development.
“I will also expedite the development of the University Town, streamline administrative procedures by removing barriers and easing restrictions, adopt safe, efficient, and cost-effective construction practices, and introduce dedicated legislation to fast-track the Northern Metropolis development,” he said.
The CE said while the government has been accelerating the development of the Northern Metropolis for the past three years, he remains deeply concerned about its progress, given the sheer size of the area and the magnitude of the investment required.
“Embracing a new mindset, we will adopt safe, cost-efficient, and time-saving construction methods, materials, and equipment from different jurisdictions. We will also introduce dedicated legislation to accelerate the development of the Northern Metropolis.”
The SAR government will attract and cultivate industries to create jobs and enhance productivity and preferential policy packages will also be formulated to improve efficiency and flexibility in negotiations with enterprises that are establishing and scaling up operations.
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The government will roll out parcels of land in phase one of the Hetao Shenzhen-Hong Kong Science and Technology Innovation Cooperation Zone this year, according to the CE.
“We will complete Phase 2 planning for the development scale and distribution of industries to finalize Hong Kong Park's overall layout and consider offering workspaces flexibly to companies under the ‘moving in while construction is underway’ approach.”
It will enable them to move in earlier without having to wait for the completion of the entire park's construction, he added.
The CE said the San Tin Technopole – spanning some 210 hectares of land for I&T – will serve as a strategic base for the I&T industry.
Pledging to release a conceptual outline and development plan for the innovation and technology industry at San Tin Technopole within this year, he said: “It will cover top-level planning, industry positioning and layout, the coordinated development of land parcels, and the strategies for channeling market resources to invest in the development.”
To dovetail with the development of the Northern Metropolis, construction works of Kwu Tung Station and Hung Shui Kiu Station are proceeding in full swing for completion in 2027 and 2030, respectively, he added.
“Cross-boundary railway projects will lead to the comprehensive integration of metro networks in Hong Kong and Shenzhen, significantly enhancing the GBA's infrastructure connectivity and boosting industry's confidence in setting up operations.”
Improving livelihoods
The CE said the “most extensive chapter” of his latest Policy Address will focus on improving the livelihood of city residents, encompassing nine critical areas essential to the well-being of the community, covering land and housing, transport, healthcare, social welfare, labor protection and a caring and inclusive society.
The nine areas include increasing the supply of public housing, creating land for large development projects, promoting long-term economic development while increasing government land reserves, continuing healthcare reforms, promoting “aging in place”, and supporting and protecting workers.
“These demonstrate my commitment to placing people's livelihood at the heart of governance. Indeed, economic development ultimately serves the well-being of our people, enabling them to enjoy better quality of life,” he added.
Identifying safeguarding the basic housing needs of people of Hong Kong as the top priority of his governance, the CE said that since assuming office, he has strengthened housing protection for the grassroots by accelerating the construction of Public Rental Housing (PRH), launching the innovative Light Public Housing (LPH), and cracking down on PRH tenancy abuse.
The government will increase the supply of flats under the Home Ownership Scheme and the Green Form Subsidized Home Ownership Scheme, optimize the sale and alienation restriction arrangements, and help more PRH tenants realize home ownership, while enabling the owners of subsidized sale flats to enter into the private housing market, he said.
“In the five years starting from 2026-27 onwards, the overall public housing production (including LPH) will reach 189,000 units, about 80 percent higher than when I took office.”
Subdivided unit (SDUs) households can improve their living conditions by moving into PRH or LPH units one year earlier, while saving about HK$36,000 or HK$50,000 in rent on average per year, respectively, he added.
The Basic Housing Unit regulatory regime, designed to eradicate substandard SDUs, is being scrutinized by the Legislative Council (LegCo), Lee said. “Subject to passage of the bill, the regime will be implemented in March next year.”
Given the supply of HOS flats in the next five years is expected to be about 50 percent more than the five-year supply when the current-term government took office, opportunities for both Green Form and White Form applicants to purchase HOS flats will increase significantly, he added.
Boosting status as global hub
Pointing out that Hong Kong has reclaimed its third-place position in the Global Financial Centres Index ranking through sustained efforts of the government to strengthen our financial system, Lee said the city, building on this momentum, will harness the asset-reallocation wave of global investors to cement its status as an international financial center.
“Our strategy will deepen the equity market, expand a world-class bond market and a vibrant currency market, while advancing the insurance, asset management and wealth management sectors.”
Hong Kong will also expedite the development of new growth areas, building a premier international gold trading market, driving the development of fintech, and promoting green and sustainable finance, he added.
Hong Kong’s stock market has maintained its strong momentum, ranking first globally in IPO fundraising with cumulative funds raised exceeding HK$130 billion, he said.
The CE said he will assist mainland technology enterprises in raising funds in Hong Kong, strengthening financial support for the nation's development as a science and technology powerhouse.
The government will further consolidate Hong Kong's position as a bond market hub, he said, detailing some related measures.
Lee also spoke about the plans to build a vibrant currency market, expediting the building of an international gold trading market, an international risk management center, an international asset and wealth management center, steady development of fintech, and the development of green and sustainable finance.
Saying that he has accepted the recommendations of the Working Group on Promoting Gold Market Development, the CE expressed his support for new investment products such as tokenized gold and issuing gold funds.
Pointing out that Hong Kong is expected to become the world's largest cross-boundary wealth management center in the next few years, he said, following the launch of Cross-boundary Wealth Management Connect 2.0 in February last year, the number of mainland accounts investing in Hong Kong's wealth products has increased from 25,000 to 110,000.
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“We will further enhance the preferential tax regimes for funds, single-family offices, and carried interest to attract more funds to establish a presence in Hong Kong.”
Speaking about the city’s status as an international trade center, the CE said, “As the evolving geopolitical landscape has disrupted existing supply chains, we will actively open up new markets, promote digital trade, and support the transformation and upgrading of SMEs.”
Regarding Hong Kong’s aviation hub status, he said Hong Kong saw an increase of over 60 percent in the number of passenger and cargo flights over the past two years, connecting with more than 200 destinations worldwide.
“We will continue to leverage the opportunities brought by the Three-Runway System at the HKIA and increase the number of long-haul and transit routes, reinforcing Hong Kong's top global ranking for cargo throughput and our advantages of being the GBA's transit hub.”
The SAR government will step up the promotion of legal services in Hong Kong and deepen its mediation culture, reinforcing our positions as an international legal hub and the Capital of Mediation, said the CE.
Headquartered in Hong Kong, the newly-launched International Organization for Mediation reflects the importance the central government attaches to Hong Kong and the confidence of the global community in the city's development, he said. “It will also strengthen Hong Kong's positioning as a center for international legal and dispute resolution services.”
The Department of Justice will construct the Hong Kong International Legal Service Building adjacent to the IOMed headquarters to house facilities such as the headquarters of the Hong Kong International Legal Talents Training Academy, as well as international legal and dispute resolution services institutions, he added.
Strengthening governance
To ensure that a culture of continuous improvement can take root, the Hong Kong leader will establish an accountability system for Heads of Department by systematizing and institutionalizing their responsibility for their departments, and enhance the appraisal system for civil servants.
An AI Efficacy Enhancement Team will be set up to drive technological reform, coordinating and steering government departments in the effective use of artificial intelligence technology and in the re-engineering of outdated workflows, he said.
“The team will examine with government departments their need for reform, with priority given to departments with greater interface with the public. Departments may also initiate request to the team for prioritized assistance in enhancing their efficiency.”
Hong Kong ranked second globally in government efficiency in the World Competitiveness Yearbook 2025, which reflects well on the city’s civil servants being an outstanding team, and the reforms introduced by the current-term government, alongside the concerted efforts of the civil service, he said.
Stressing the importance of effective management, the CE said senior civil servants are all responsible for management. “I have therefore been considering ways to strengthen their sense of responsibility to enhance the overall management standard of the departments.”
The most direct and effective way to do this is to strengthen the accountability of the Heads of Departments by clearly emphasizing that HoDs are tasked with building a strong management team, and lead their senior civil servants to jointly manage staff and operation systems, he added.
Lee said he will promote the development of AI+ with a strong emphasis on safety risk prevention, implement AI government services, and facilitate the wide-scale application and development of AI across different sectors in society to boost overall efficiency.
“I will also put into practice the philosophy of better integration of ‘an efficient market’ with ‘a capable government’, and introduce a market-based business model to enhance the services of the Leisure and Cultural Services Department (LCSD).”
Serious problems will now be subject to investigations from an independent panel under a two-tier system on wrongdoing, the CE said.
The existing functions of the Public Service Commission will be expanded to enable it to conduct investigations, and the investigation panel will be independent from the government to ensure impartiality and will be able to examine civil servants of all ranks. Investigations from the panel would be activated after the director of the bureau notifies their secretary of the department concerned and obtains the latter's agreement, the CE added.
“Apart from assessing the performance of senior civil servants (including HoDs) in accordance with the existing mechanism, secretaries of departments and directors of bureaus will need to supervise the senior civil servants under their charge to properly perform personnel management work for staff at all ranks, including performance appraisal, posting, promotion, and discipline.”
Speaking on improving governance at the district level, the CE said the SAR government set up the Steering Committee on District Governance and the Task Force on District Governance in July 2023 to strengthen coordination in addressing issues such as environmental hygiene, community beautification, facility development, and community services more effectively.
Industry development, reform
To drive industry development, the SAR government will leverage market forces through enhanced measures, such as flexible land grant arrangements, tax concessions, capital subsidies, and talent grooming, said Lee.
The government will pursue structural upgrades of the city’s industries, he said, adding: “We will consolidate our traditional strengths in sectors such as financial and legal services, while actively nurturing emerging ones, including advanced manufacturing, life and health technology, new energy, AI and data science, to create more high-quality job opportunities, increasing people's income and enhancing overall economic efficiency.”
The government will formulate preferential policy packages, including land grants, land premiums, financial subsidies, and tax incentives, to attract high value-added industries and high-potential enterprises to set up in the city.
The government will also explore the establishment of a more flexible mechanism, including allowing the Chief Executive and the Financial Secretary to introduce tax incentives that comply with international standards, he added.
The government has signed an agreement of intent with a European aeronautic services company to provide aircraft dismantling, recycling, and trading services of high-value parts, said Lee.
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“Hong Kong's life and health technology research is flourishing, underpinned by a mature system connecting the government and the industry, as well as the academic, research, and investment sectors,” he said, adding that it aligns with the rise of innovative drugs through home-grown research and development in the country and expands into international markets.
The SAR government will attract more pharmaceutical companies to set up operations in Hong Kong to conduct clinical trials and medical treatments for rare disease drugs, high-end cancer drugs, and advanced therapy products, he added.
The SAR government will set up the Hong Kong Centre for Medical Products Regulation and submit a legislative proposal on regulating medical devices in 2026, while the Hospital Authority will establish the Office for Introducing Innovative Drugs and Medical Devices to identify the needs and benefits of innovative drug treatments for local patients.
New energy industry
Hong Kong is working to achieve carbon neutrality before 2050, in which the new energy industry will play a crucial role, with a view to meet the country's "dual carbon" targets, said Lee.
“We will expedite the application of green technologies, create quality employment opportunities and build an influential industry chain of new quality productive forces.”
The measures include developing a sustainable aviation fuel industry chain, formulating hydrogen standard certification, developing the GBA Hydrogen Corridor in collaboration with Guangdong province, and the construction of Hong Kong's first large-scale electric vehicle (EV) battery recycling facility at the EcoPark.
Development of AI, data science industries
Stressing that AI is a core driver of a technological revolution and industrial transformation, Lee said Hong Kong is well-positioned to become a global AI hub thanks to its strengths in scientific research, capital, data, and talent.
The government will step up the promotion of AI as a core industry for Hong Kong's development, he said, adding: “We will promote the development of AI+ and facilitate an extensive and deep integration of AI across sectors, with a view to achieving ‘industries for AI’ and ‘AI for industries’, while placing strong emphasis on safety risk prevention.”
A HK$3 billion Frontier Technology Research Support Scheme will soon begin accepting applications to attract top international researchers to the city to lead basic research in cutting-edge technologies, said the CE.
“We have also earmarked HK$1 billion for the establishment of the Hong Kong AI Research and Development Institute in 2026, to facilitate upstream AI R&D, the midstream and downstream R&D outcome, and the expansion of use cases.”
The Hong Kong Investment Corporation Limited (HKIC) has invested in a number of AI enterprises engaging businesses in fields such as AI Large Language Model, cloud computing and AI drug development, he said.
“Hong Kong will further capitalize on the advantages under "one country, two systems", and promote the early establishment of a compliant and secure mechanism for cross-boundary flow of mainland data to Hong Kong Park for scientific research purposes, supporting AI application testing and innovation.”
Speaking on promotion of AI business applications, he said the Hong Kong Monetary Authority (HKMA), in collaboration with Cyberport, has launched the second cohort of the AI Sandbox initiative to promote AI applications to more financial institutions.
The HKMA is also developing an AI model evaluation approach to step up testing on the system security of financial institutions, Lee said, adding the Development Bureau will provide subsidies to encourage the application of AI in private sector construction works.
Integrated development of education, technology, talent
With a distinctive competitive edge in post-secondary education, Hong Kong is the only city worldwide that hosts five universities ranked among the world's top 100, the CE said.
Starting from the 2026/27 academic year, the enrolment ceiling for self-financing non-local students of each funded post-secondary institution will be raised from the level currently equivalent to 40 percent of local student places to 50 percent; and the over-enrolment ceiling of self-financing places of funded research postgraduate programs will be increased from 100 percent to 120 percent.
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The EDB will establish the Task Force on Study in Hong Kong to step up the promotion of higher education in Hong Kong.
Pointing out that the Hong Kong Diploma of Secondary Education Examination has been recognized by 1,100 higher education institutions worldwide, he said, “We will intensify our efforts to promote the DSE's international recognition, attract more outstanding teachers and students from around the world to come to Hong Kong, and support the development of international schools.”
Hong Kong ranks third globally in "Technology", in the World Digital Competitiveness Ranking, the CE said, adding: “With three major I&T parks and five key R&D institutions as the framework, we will propel I&T development, pool global talents and make full use of Hong Kong's R&D platform to support the development of aerospace science and technology.”
We will also promote the development of new industrialization, press ahead with the low-altitude economy, support people-oriented scientific research, and facilitate leading I&T enterprises to establish a presence in our city.
Developing a talent pool
Since the implementation of an array of new talent admission policies by the current-term government, over 230,000 people have come to Hong Kong for work and development, with the Top Talent Pass Scheme recording an application rate as high as 55 percent for extension of stay, said the CE.
Hong Kong's ranking in relation to global talents is rising steadily, climbing 12 places in two years to the fourth place globally this year, ranking first in the Asia Pacific region, he said, adding: “This reflects that our talent policy is on the right track and effective, and is one of the important driving forces for economic development.”
The SAR government will launch the Innovation and Technology Talents Exchange Scheme for Industry and Academic Sectors, encouraging university professors to engage in corporate R&D activities for a better grasp of industry needs, he added.
Integrated development of culture, sports, tourism
Hong Kong is among the world's top three arts trading centers, the Hong Kong leader said.
“We will step up our efforts to build Hong Kong into a global premium arts trading hub, attracting more international auction houses, galleries, and professionals to establish a presence here.”
The measures include developing an arts ecosystem at the Airport City to host arts studios, galleries, and dealers under one roof, enhancing the city’s international arts trading platform by deepening collaboration with Art Basel, and engaging the industry to carry out studies on taxation, financing, talent, and related areas of arts trading to explore policy measures applicable to Hong Kong.
The SAR government will promote sports development by supporting elite sports, maintaining Hong Kong as a center for major international sports events, enhancing professionalism in sports, developing sports as an industry, and promoting sports in the community, according to the CE.
“Efforts will be made to continuously improve the functionality and positioning of sports venues, enhance the governance of national sports associations, strengthen support for athletes, and step up publicity in the community.”
Speaking on the successful delivery of the National Games, Lee said, “We will spare no effort in staging the competitions to be held in Hong Kong, and work with Guangdong and Macao to make the 15th NG and NGDSO a success.”
Integrating into national development
Pointing out that Hong Kong enjoys the unique advantages of attracting overseas enterprises and assisting mainland enterprises to go global under the "one country, two systems" policy, he said while Hong Kong earlier focused primarily on bringing in enterprises, achieving remarkable growth and success, the new opportunities ahead for Hong Kong will come from helping mainland enterprises expand abroad.
The city will also develop education, technology, and talent in an integrated manner, and press ahead with the integrated development of culture, sports, and tourism, enabling the people of Hong Kong to live in a community with a thriving economy and vibrant culture, he added.
With mainland enterprises accelerating their pace to "go global", the HKSAR government will capitalize on the advantages of Hong Kong as an export platform to unlock new areas for economic growth, said Lee.
Mainland enterprises going global can establish Corporate Treasury Centres (CTCs) and regional headquarters in Hong Kong for cross-boundary settlement, remittance, financing, and related functions, he said, adding that they can also tap Hong Kong's professional high value-added supply chain services in fields such as accounting and law to help them explore overseas markets.
“I will establish a one-stop platform by mobilizing Hong Kong's overseas offices, including those under InvestHK and the Hong Kong Trade Development Council (HKTDC), as well as Hong Kong offices in the mainland, and set up the Task Force on Supporting Mainland Enterprises in Going Global to encourage mainland enterprises to use Hong Kong in expanding their businesses overseas.”
While playing a vital role in driving the development of the Guangdong-Hong Kong-Macao Greater Bay Area, the SAR government will take more measures to deepen the city’s cooperation with Guangdong and Macao, forging closer convergence of our respective rules and mechanisms to enhance the flow of people, goods, data, and capital.
The government will leverage the strengths of Hong Kong's exhibition industry and consolidate our position as the ideal platform for mainland brands to "go global" and for "bringing in" brands from around the world, he added.
Implementing ‘one country, two systems’
Referring to President Xi Jinping’s statement that "one country, two systems" possesses its distinctive institutional strengths and strong vitality and is a good system that sustains the long-term prosperity and stability of Hong Kong and Macao, Lee stressed the need to stay committed to the cause.
“We will continue to fully, faithfully and resolutely implement ‘one country, two systems’, ‘Hong Kong people administering Hong Kong’ and a high degree of autonomy,” he said, adding the "one country, two systems" principle is the best institutional arrangement for maintaining Hong Kong's long-term prosperity and stability.
Being a global metropolis, the SAR has remained an open, inclusive, safe, and stable city underpinned by the rule of law since its return to the motherland in 1997, he said.
“With an ever-expanding influence internationally, Hong Kong is rated the world's freest economy, as well as an advanced and business-friendly city. These fully demonstrate the notable institutional strengths and great vitality of ‘one country, two systems’.”
As an international city with its distinctive role of connecting to the rest of the world, Hong Kong also has infinite room for development as it enjoys a solid backing from the motherland, enjoying far-reaching opportunities brought by national development – from the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) to the Belt and Road Initiative (BRI), he added.
Safeguarding national security
Hong Kong has overcome turmoil and unrest, and maintained safety and stability in our society since the implementation of the Hong Kong National Security Law five years ago – transitioning from chaos to order – and is now advancing from stability to prosperity, said the CE.
Stressing his government’s resolve to continue to steadfastly safeguard national sovereignty, security and development interests, he said: “We will remain vigilant at all times, prevent and mitigate risks, and ensure the long-term stability and safety of Hong Kong.”
The SAR government will continue to enhance the legal system and enforcement mechanism for safeguarding national security to prevent, suppress, and impose punishment for acts and activities endangering national security, he said.
“The government will spare no effort in promoting national security education,” he said, adding that the National Security Exhibition Gallery has already attracted over one million visitors since its opening a year ago.
More than 3,300 national security education district tutors have been trained to promote national security messages in the community, he added.
‘Patriots administering Hong Kong’
The Hong Kong leader said that with an improved electoral system and district governance system, the principle of "patriots administering Hong Kong" has been fully implemented.
Pointing out that the HKSAR government has held six important elections, including the recent Election Committee Subsector By-elections, Lee said: “The HKSAR will devote all efforts in preparing for the general election for the eighth-term Legislative Council to be held on Dec 7 this year, ensuring that the election is conducted in a fair, just, honest, safe and orderly manner."
Patriotic education
Referring to a series of large-scale commemorative activities organized by the HKSAR government to mark the 80th anniversary of victory in the Chinese People's War of Resistance against Japanese Aggression and in the World Anti-Fascist War, Lee said Hong Kong will collaborate with Shenzhen to promote a new red educational route, under the theme of "Chinese Cultural Celebrity Rescue" history in order to enhance understanding among people of Hong Kong and tourists of the history of the War of Resistance in Hong Kong.
“We will comprehensively review and conduct restoration and protection work on historic sites relating to the participation of the Communist Party of China in the War of Resistance in various districts, with a view to integrating them into tourism routes and educational activities.”
The government will promote patriotic education facilities in the mainland, making them the patriotic education bases of the HKSAR to encourage more students and young people to visit, he said, adding that the government will establish a close connection with patriotic groups to unite efforts in organizing more patriotic education activities.
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To strengthen students' affection for and sense of belonging to the country, Hong Kong’s Education Bureau will integrate patriotic education into daily learning and teaching, according to the CE.
“We will popularize the ‘Love Our Home, Treasure Our Country’ series of activities, continuously strengthen the Constitution and Basic Law Student Ambassadors Training Scheme, design itineraries for students to experience the founding history of our country, and conduct focus inspections on national education.”
This year's Policy Address was drafted after officials had held more than 40 consultations, beginning on June 16, and interacted directly with a broad selection of the community. The government also received 10,100 suggestions through various channels. It comes about a month earlier than the traditional October schedule, with the government to facilitate adequate preparations before the Legislative Council election slated for December.
