Chief Executive John Lee Ka-chiu’s fifth Policy Address, unveiled alongside Hong Kong’s first five-year plan on Wednesday, represents a strategic anchor for the future development of Hong Kong as a leading global city. The Policy Address builds on a record of accomplishments that have improved the city’s socioeconomic development in recent years. The two documents are aligned to a series of initiatives and investments aimed at strengthening the city’s competitiveness in an increasingly unstable global environment.
International trade and investment are being reshaped by strategic rivalry, supply-chain reconfiguration, technological disruption and shifting patterns of capital and talent flows. For an open and outward-looking economy such as Hong Kong, the question lies in how to effectively leverage comparative strengths as a global financial and innovation hub, while identifying new engines of growth and improving governance capacity.
The two documents are timely responses to global uncertainties. At the center of the strategic road map is the Northern Metropolis. The proposed expansion of the three university towns and the clear positioning of their respective functions will strengthen collaboration between academia and industry. The upgrading of the working group responsible for planning and constructing the university towns is another welcome move, where stronger high-level government coordination and the inclusion of lay members are set to enhance the governance capacity needed to align land use, infrastructure, talent, research, commercialization and community development, and to translate the University Town vision into measurable actions.
Promoting innovation and technology development is also important. To take the special administrative region government’s emphasis on encouraging wider artificial intelligence adoption as an example: Supporting the diffusion of AI across sectors can raise productivity, transform business processes and create demand for locally developed solutions. Meanwhile, continued efforts to optimize government services through AI can serve a dual purpose: improving efficiency, responsiveness and user experience of public services, while giving government a practical role as an early adopter and responsible user of frontier technologies.
Another area that is intricately linked to the city’s competitiveness lies in its ability to attract international investments, strategic enterprises, and talent. In this context, it is encouraging to see the government proactively offering targeted economic incentives; namely, financial subsidies, land grants and tax concessions among others, for selected enterprises in strategic sectors.
Similarly, the talent measures introduced in the two documents are key engines to foster international competitiveness. To name but a few examples, relaxing requirements for extensions of stay for tech startup talent could substantially reduce the uncertainty faced by these professionals during the vulnerable early stages of business formation. Likewise, a new visa category for nonlocal participants in short-term training programs would allow Hong Kong to cast a wider net internationally, giving prospective talent exposure to opportunities in Hong Kong.
Finally, the government’s initiatives to deepen international exchanges — particularly its broader and more proactive pursuit of cooperation opportunities under the Belt and Road Initiative — position Hong Kong as a committed advocate of multilateral cooperation at a time when multilateralism is under increasing strain.
While Hong Kong readies its policy anchors to strengthen its global competitiveness and standing, this trajectory is not devoid of challenges, and its success hinges on further efforts.
The city could be affected by any deterioration in Sino-US relations, which is shaped by challenging negotiations on critical issues such as trade, AI development, regional security, and scientific and educational exchange. The good news is, there have been efforts to improve bilateral relations from both sides recently. Stable Sino-US relations will enable the SAR to thrive in building its global strengths; an escalation in bilateral disagreement, even in targeted industries, poses a challenge to Hong Kong’s growth trajectory.
Hong Kong’s competitiveness is grounded in two institutional pillars — market and governance. The city’s market positioning is well recognized globally. The 40th edition of the Global Financial Centres Index ranked Hong Kong third in the world, outperforming Singapore and other financial hubs in the Asia-Pacific region. The city was ranked fourth in talent competitiveness and first in cross-boundary wealth management. Hong Kong is also building up its global reputation in good governance. Its status as an international dispute resolution center is gaining recognition. Hong Kong’s Independent Commission Against Corruption shares effective practices and supports capacity building in numerous countries and regions. Elevating Hong Kong’s credibility as a global hub of effective governance will make the city even more attractive as a place of investment and business transaction.
International competition for talent will intensify. Canada recently announced its successful recruitment of dozens of scholars from the Massachusetts Institute of Technology and other top United States institutions. European countries have launched similar efforts. Hong Kong will need to actively mobilize its highly ranked universities, especially the five local universities that are ranked top 100 internationally, as engines for talent recruitment. Universities must also work closely with industry partners and venture funders to broaden their human capital building strategies at scale in frontier areas.
Recognizing potential challenges, integrating a risk assessment mechanism in the policy anchors, and putting in further efforts in elevating governance capacity will enable Hong Kong to develop proactive strategies to more effectively navigate the multipolar world.
The author is the Kerry Group professor in public policy, and director of the School of Governance and Policy at the University of Hong Kong.
The views do not necessarily reflect those of China Daily.
