Hong Kong is well known and recognized as a dynamic nexus of finance, trade, international talent and cultural exchange, but now arguably stands at a pivotal juncture. While the global economy is beset by rapidly varying headwinds, political upheavals and unpredictable geopolitical pressures, it is also pivoting toward advanced technologies in artificial intelligence, robotics, Internet of Things, miniaturization and the NewSpace economy. Against this backdrop, Hong Kong must survive, but can it also thrive?
It can if it effectively leverages its unique strengths to carve out a leadership role in emerging sectors, including the low-altitude economy (LAE), the NewSpace economy and the urgent area of space sustainability. These domains, characterized by rapid innovation and increasing and necessary cross-border collaboration, also demand strategic international partnerships to unlock investment, technology, talent and opportunity. Drawing from global precedents and Hong Kong’s intrinsic advantages, I outline below some pertinent suggestions for how Hong Kong can position itself as a global hub for these high tech, space-related industries.
Hong Kong’s unparalleled connectivity, robust legal framework, and proximity to the Chinese mainland’s manufacturing and technological prowess and the ready, flourishing Guangdong-Hong Kong-Macao Greater Bay Area market also make it an ideal testbed for these rapidly emerging tech and AI industries. The LAE, for example, encompasses complex drone logistics, urban air mobility issues in widely varying environments, and the aerial, monetizable data services drones can provide. This is a global industry predicted to be worth $1.5 trillion by 2040, according to Goldman Sachs. Meanwhile, satellite internet, driven strongly by low Earth orbit (LEO) satellite constellations, promises to be even larger, with the capacity to bridge digital divides across developing nations including in Southeast Asia. It will revolutionize affordable connectivity, with over 50,000 satellites expected to launch by 2030 (Euroconsult, 2023), many from new Chinese constellations such as the “thousand sails”.
Hong Kong’s potential success in these burgeoning NewSpace enterprises hinges on transcending some of its more traditional roles. We must evolve from a financial and transactional intermediary to one that also includes aspects of a “translational economy” that can convert capital and ideas into scalable, globally relevant solutions. This requires fostering ecosystems where international stakeholders coalesce around shared objectives using Hong Kong as a global base. I can think of several models that could help us, as briefly expanded below.
The national 14th Five-Year Plan (2021-25) emphasizes technological self-reliance just as the Greater Bay Area emerges as a “Silicon Valley of the East”. By aligning with bodies such as the China National Space Administration and by leveraging Shenzhen’s hardware ecosystem, Hong Kong could powerfully anchor cross-border supply chains
I believe success can come through selecting appropriate investment partnerships that facilitate purposeful mobilization of capital. Hong Kong’s status as Asia’s premier financial hub provides a springboard for attracting overseas investment. Targeted strategies are essential to make this work. Sovereign wealth and venture capital alliances can play a major role. Middle East sovereign funds are aggressively investing in space tech and smart mobility, as was evident in the amazing UAE pavilion at the recent International Astronautical Congress in Sydney, Australia in October, where I saw the breadth and vision of their activities firsthand. Hong Kong could position itself as their gateway to Asia by establishing co-investment platforms focusing on LAE and satellite startups. Recent government policy shifts, hinted at in the chief executive’s latest Policy Address, are key here; and suitable tax incentives for research and development-intensive projects and green bonds for sustainable aviation could further entice capital.
Another area is public-private partnerships (PPPs). The Hong Kong Special Administrative Region government could catalyze risk-sharing frameworks. For instance, partnering with firms like EHang (a Guangzhou-based but internationally active autonomous aerial vehicle leader) to develop vertiport infrastructure across the Greater Bay Area would signal commitment. Hong Kong’s Airport Authority could collaborate with major international partners to trial cargo drones.
Finally, Hong Kong could initiate additional listing reforms specifically for space. Expanding the Hong Kong Stock Exchanges and Clearing Ltd’s Listing Rules Chapter 18A to include pre-revenue space enterprises would attract initial public offerings from global players, enhancing liquidity and visibility.
Another key area is that of effective technology collaboration that, as I spoke about in my other recent piece, means building bridges, not silos. Technology transfer and co-innovation are critical for Hong Kong to avoid too much dependency on external systems. Key approaches here could include the establishment of international R&D consortia, ideally with the involvement of our elite universities and the residents of Hong Kong’s Science Park, but also including Shenzhen’s Qianhai free trade zone, and ideally Dongguan’s manufacturing base too. These could foster cross-border R&D clusters. Joint international ventures should also be sought for satellite components that would combine Hong Kong’s fintech and logistics expertise with external technical prowess.
Another regulatory aspect we could excel in is intellectual property protection and technology transfer via a regulatory framework that strengthens IP arbitration through the newly established International Organization for Mediation while leveraging Hong Kong’s world-class legal system. When coupled with existing tech transfer offices at our elite universities, this would provide multinationals with the confidence they need to invest. The city could emulate Luxembourg’s “SpaceResources.lu” initiative, which offers legal certainty for various space ventures.
The third key area we could concentrate on is talent integration and cultivating a global innovation cohort. Human capital remains a linchpin of success. While attracting and retaining talent is a key government policy, Hong Kong could further address its STEM talent gap through such ideas as specifically targeted visa programs to prioritize aerospace engineers, AI specialists, and satellite systems architects with perhaps fast-track residency for those joining local ventures. Our elite universities could establish targeted dual-degree programs with key international institutions that focus on space systems and urban air mobility. Scholarships funded by firms like Huawei could nurture homegrown talent.
It’s also clear that Hong Kong’s efforts should dovetail with the mainland’s broader ambitions while leveraging the “one country, two systems” framework that I believe has served us remarkably well so far by careful integration with national and Greater Bay Area strategies. The national 14th Five-Year Plan (2021-25) emphasizes technological self-reliance just as the Greater Bay Area emerges as a “Silicon Valley of the East”. By aligning with bodies such as the China National Space Administration and by leveraging Shenzhen’s hardware ecosystem, Hong Kong could powerfully anchor cross-border supply chains.
Finally, the uncertain and rapidly evolving geopolitical sensitivities necessitate prudence. Hong Kong should focus on nonsensitive and noncontroversial areas such as climate monitoring satellites and deepen ties with neutral partners like Switzerland and the UAE. Regulatory fragmentation, airspace management, and infrastructure costs also pose hurdles. A unified air traffic control system for drones, developed in partnership with the Civil Aviation Administration of China and international aviation bodies, is urgent. The upgrading of cyber-physical infrastructure to support 6G and satellite-ground integration will require sustained investment.
In summary we need urgent action through visionary leadership and targeted resources. Hong Kong’s future as a space-tech hub hinges on bold, coordinated purpose. By embracing multilateral investment models, fostering open innovation, and cultivating a global talent pool, the city can transcend its geographic constraints and emerge as a linchpin of the NewSpace economy. As I’ve argued in prior commentaries, Hong Kong’s success will depend not on isolation but on its ability to convene, collaborate, and catalyze a philosophy that must guide its ascent into the skies and beyond. I believe the time for slow incrementalism has passed. For Hong Kong, the final frontier is not space itself but the courage to reimagine our role within it.
The author is director of the Laboratory for Space Research at the University of Hong Kong.
The views do not necessarily reflect those of China Daily.
