By Clare Jim and Jessie Pang
HONG KONG, Feb 25 (Reuters) – Hong Kong’s economy will remain buoyant this year, growing by 2.5%-3.5%, with an expected return to a more robust fiscal position following several years of budget deficits, financial secretary Paul Chan said in his annual budget speech on Wednesday.
“In the medium term, protectionism will persist in some major economies, while fragmentation of the global economy will continue. Nevertheless, the rise of the “Global South” and the reshaping of the global trade and investment landscape will unlock new markets and new growth areas,” Chan said.
The financial hub is also redoubling its focus on the technology and AI sector to bolster integration with mainland China’s longer term national policy blueprint, or Five-Year Plan, Chan said, amid challenges including trade tension and Chinese economic fragility. Hong Kong is a special administrative region of China.
TECHNOLOGY FOCUS
The government has earmarked at least HK$20 billion ($2.56 billion) to invest in two development zones, including the San Tin Technopole and Hetao Hong Kong Park, on the border with China — that will focus on technological industries and research and development to generate new economic drivers.
These are both part of a broader mega project known as the Northern Metropolis, spanning 30,000 hectares (116 square miles), aiming to bolster Hong Kong’s technological collaboration and linkages with mainland China — as Beijing prepares to announce in March its latest 5-year-plan setting out national policy priorities and targets between 2026-2030.
“The Chief Executive will lead a cross-bureau, cross-departmental task force for Hong Kong to proactively align with the 15th Five-Year Plan, and for the first time, to formulate Hong Kong’s five-year plan,” he said.
Hong Kong would seek to capitalise on its financial sector to better serve industries with a competitive edge including information and technology.
“In so doing, we can leverage our strengths to serve the country’s (China’s) needs,” Chan said, noting the city would seek to entice more global talent and firms in sectors such as aerospace and Artificial Intelligence to base here.
But Hong Kong also faces geopolitical and reputational risks as it continues with a years-long crackdown under a China-imposed national security law, with former media mogul and China critic Jimmy Lai recently sentenced to 20 years in jail for a foreign collusion charge that drew international criticism.
($1 = 7.8220 Hong Kong dollars)
(Reporting by Jessie Pang, Clare Jim, Donny Kwok, James Pomfret and Anne Marie Roantree; Writing by James Pomfret; Editing by Christopher Cushing and Kim Coghill)
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