Hong Kong’s Financial Secretary, Paul Chan, presented the 2025-26 Budget, highlighting challenges and opportunities. While acknowledging the risks posed by global geopolitical tensions, he pointed out that technological advancements and artificial intelligence (AI) are reshaping industries, creating new businesses, products, and services.
He urged Hong Kong to act quickly during this critical period to boost development, focusing on innovation and modernisation. Chan emphasized that transformation and forward-thinking strategies are essential for the city’s growth, with the government committed to fast-tracking the progress of a high-quality economy.
The Budget outlines measures aimed at fostering new areas of growth. In innovation and technology (I&T), the government plans to position Hong Kong as a global hub for AI collaboration and development.
AI will be developed as a core industry by supporting cutting-edge research and practical applications, while traditional sectors will receive support to modernise and adapt. The government will establish the Hong Kong AI Research and Development Institute and introduce the Pilot Manufacturing and Production Line Upgrade Support Scheme (Manufacturing+) to drive these efforts.
On the financial front, efforts to improve the listing regime will continue, alongside hosting the Hong Kong Global Financial and Industry Summit. A gold market development plan is also on this year’s agenda.
To harness the opportunities brought by rapid technological advancements, the Budget prioritises the development of the Northern Metropolis.
This initiative includes expanding infrastructure, such as I&T land at the Hong Kong Park of the Hetao Shenzhen-Hong Kong Science and Technology Innovation Co-operation Zone and San Tin Technopole. Other plans involve innovative land-use strategies, building a data facility cluster at Sandy Ridge, and selecting suitable locations for conference and exhibition facilities.
Tourism will also receive support through the “tourism is everywhere” initiative and the implementation of the Tourism Industry Development Blueprint 2.0. A study will explore transforming the waterfront and former sites near Hung Hom Station into a new harbourfront landmark, potentially including a yacht club.
In addressing land supply issues, Chan announced that no new commercial sites will be put up for sale next year due to high office vacancy rates. This move is intended to allow the market time to absorb existing space. The government is also considering converting commercial land into residential use and offering more flexible land-use options.
Chan proposed stricter fiscal policies to maintain a balanced budget. These include controlling government spending while gradually increasing revenue. Adopting technology and simplifying procedures will make public services more efficient. Revenue measures include raising the air passenger departure tax and reviewing tolls for government-operated tunnels and roads, following the “user pays” principle wherever possible.
The government also plans to expand bond issuance responsibly, using the funds for infrastructure projects that will benefit Hong Kong’s future. These investments aim to create long-term value for the community while maintaining sound public finances.
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Geoff Thomas is an award winning journalist known for his sharp insights and no-nonsense reporting style. Over the years he has worked for Reuters and the Canadian Press covering everything from political scandals to human interest stories. He brings a clear and direct approach to his work.
