Economy, livelihood: Key takeaways from HKSAR chief executive's 2025 Policy Address

John Lee, chief executive of China's Hong Kong Special Administrative Region (HKSAR), delivered his fourth policy address on Wednesday, which he said is anchored in the economy and people's livelihood.

Noting that this year marks the conclusion of China's 14th Five-Year Plan period (2021-2025) and the preparatory year for the 15th Five-Year Plan, Lee said, "this policy address serves as a roadmap for Hong Kong to strive for a vibrant economy, pursue development, and improve people's livelihood – accelerating our 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."

Lee stressed that his ultimate objective in governance is to improve people's livelihood. He announced plans to accelerate the development of the Northern Metropolis, establishing a "Committee on Development of the Northern Metropolis" under his leadership.

Furthermore, under "One Country, Two Systems," Hong Kong enjoys the unique advantages of attracting overseas enterprises and assisting Chinese mainland enterprises to go global, Lee noted. "In the past, we focused primarily on bringing in enterprises, achieving remarkable growth and success. The new opportunities ahead for Hong Kong, however, will come from helping Chinese mainland enterprises expand abroad," he said.

To strengthen governance, Lee said he will establish an accountability system for Heads of Department (HoDs) as well as an AI Efficacy Enhancement Team.

Lee indicated that the policy address will elaborate on the policy objectives, key measures and key performance indicators, and a supplement offering more details on the policy measures and related matters has also been compiled.

Here are some key takeaways from his policy address.

To further accelerate development of Northern Metropolis

Lee announced the establishment of the "Committee on Development of the Northern Metropolis" with the aim of speeding up the development of the area.

"The Northern Metropolis, our city's strategic development area bordering Shenzhen, covers a land area and planned population intake accounting for about one-third of Hong Kong's total," Lee said, adding that the area represents a substantial source of economic value and development potential.

Lee said that the committee, under which three working groups will be set up, will be tasked with streamlining administrative workflows and removing unnecessary barriers and restrictions.

The Working Group on Devising Development & Operation Models will formulate development and operation models for industry parks in the Northern Metropolis, taking into account their nature and scale.

The Working Group on Planning & Construction of the University Town will set up a research task force to conduct field trips on the successful models of university towns elsewhere, seeking views from local, mainland and other internationally renowned universities.

The Working Group on Planning & Development will be responsible for managing the end-to-end process from planning to implementation. It will comprise a dedicated project supervision office to strengthen the coordination and supervision of the approval process.

Lee said that dedicated legislation will be introduced to speed up the Northern Metropolis development, empowering the HKSAR government to devise simplified statutory procedures for a number of issues.

Improving people's livelihood

Lee unveiled a series of measures in his policy address aimed at improving people's livelihood, with a focus on employment, poverty alleviation and family support.

"Improving people's livelihood is my key policy priority. The economy and people's livelihood are mutually reinforcing," Lee said.

He said that the HKSAR government will ensure the employment priority of local workers. It will also strengthen labor protection including protecting digital platform workers and enhancing occupational safety and health.

The HKSAR government has agreed to the new mechanism of adopting a formula for implementing the annual review of the Statutory Minimum Wage (SMW) rate proposed by the Minimum Wage Commission. According to Lee, the first adjusted SMW rate derived under the new mechanism is expected to take effect on May 1, 2026.

To combat poverty, the HKSAR government will continue a targeted approach by directing resources to those most in need. Key initiatives include injecting HK$180 million (about $23.14 million) into the Child Development Fund to support long-term development of upper primary students from disadvantaged communities.

The HKSAR government will also enhance measures to promote fertility, including extending the claim period of the additional child allowance for newborns from one year to two years and improving infant and child day care services.

Other efforts to raise living standards include increasing housing supply, enhancing care for the elderly, and supporting people in rehabilitation.

Supporting mainland enterprises in global expansion

Lee announced that Hong Kong will establish a task force dedicated to supporting Chinese mainland enterprises in their overseas expansion.

The HKSAR government will also create a one-stop platform by leveraging Hong Kong's overseas offices to encourage mainland firms to use the city in expanding overseas business, Lee said.

Noting the accelerating pace of mainland enterprises "going global," Lee emphasized Hong Kong's role as an export platform to unlock new areas for economic growth.

The HKSAR government will steer the task force and coordinate various bureaus, departments and agencies in formulating proposals for enterprises seeking international expansion.

Measures to be introduced include encouraging banks to establish regional headquarters and attracting mainland enterprises to set up corporate treasury centers in the city.

In 2024, Hong Kong was home to more than 1,400 regional headquarters of non-local enterprises, more than 300 of which were from the mainland.

Strengthening the stock market

Lee said that the HKSAR will utilize the Technology Enterprises Channel to help Chinese mainland technology enterprises in raising funds in Hong Kong, bolstering financial support for China's development as a science and technology powerhouse.

Lee emphasized the HKSAR government's commitment to encouraging more overseas enterprises to pursue secondary listings in Hong Kong and support the return of China Concept Stock companies from overseas markets, with Hong Kong as their preferred destination. Additionally, he pledged to press ahead with the inclusion of an RMB trading counter under Stock Connect's Southbound trading for Hong Kong stocks.

The Hong Kong stock market has maintained its strong momentum, said Lee, adding that at the end of August, the cumulative amount of funds raised through IPOs exceeded HK$130 billion ($16.71 billion), nearly six times higher than that of the same period last year, ranking first globally in IPO fundraising.

Reinforcing status as global hub

Lee also announced plans to expedite the development of new growth areas to reinforce Hong Kong's status as an international financial center, including the establishment of an international gold trading market.

He said that the HKSAR will support the Airport Authority Hong Kong and financial institutions to establish Hong Kong's gold storage facilities, with a target gold storage capacity of over 2,000 tonnes in three years, propelling Hong Kong into a regional gold reserve hub.

Lee emphasized the need to encourage gold traders to set up or expand refineries in Hong Kong, and to explore with the Chinese mainland the feasibility of processing supplied materials in the mainland to produce refined gold for exporting to Hong Kong for trading and delivery.

A central clearing system for gold will be set up in Hong Kong to provide efficient and reliable clearing services for transactions of gold in compliance with international standards, and to invite the participation of the Shanghai Gold Exchange to prepare for mutual market access with the Chinese mainland in the future.

Lee also highlighted plans to offer a greater variety of gold investment vehicles by assisting issuers in issuing gold funds, and to support the development of new investment products such as tokenized gold, and pledged support for the setting up of a trade association for the gold industry, with a view to establishing an exchange platform with the HKSAR government and regulators, stepping up promotional efforts and attracting more clients from Belt and Road countries and regions, while strengthening talent training.

Lee noted that the International Board of the Shanghai Gold Exchange has set up its first offshore delivery vault in Hong Kong and launched new contracts for delivery. Cooperation between the gold markets of Hong Kong and Shanghai will continue to be promoted.

Full support for IOMed

The International Organization for Mediation (IOMed), headquartered in Hong Kong, will strengthen Hong Kong's positioning as a center for international legal and dispute resolution services, said Lee, pledging full support for the work of the IOMed.

The HKSAR government will organize international conferences, professional training, internships and other programs to engage Hong Kong's youth and legal professionals work with the IOMed, nurturing more international mediation professionals for Hong Kong.

"The Department of Justice will construct the Hong Kong International Legal Service Building adjacent to the IOMed headquarters. The building will 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," Lee said.

Lee also said that HKSAR will "step up the promotion of legal services in Hong Kong and deepen our mediation culture, reinforcing our position as an international legal hub and the Capital of Mediation."

'Partner port' network

The HKSAR government will establish "partner port" relationships with mainland regions of strategic importance and areas within the Belt and Road Initiative framework, while preparing for the development of a green shipping corridor, Lee said.

Efforts are underway to expand Hong Kong's cargo sources by promoting intermodal cargo transport from the mainland's inland provinces and cities to international markets through Hong Kong via railway, sea, land and river routes.

Currently, cargo originating from Chongqing and Chengdu can be sent by sea-railway intermodal service to Yantian Port in Shenzhen or Beibu Gulf in Guangxi, then tran-shipped to the Kwai Tsing Container Terminals by feeders or daily liner service. This fully leverages the complementary strengths of the ports concerned, achieving mutual benefits.

"We will also require all vessels providing methanol bunkering services in Hong Kong waters to install mass flow meters to improve bunkering efficiency within next year," and "will amend the Merchant Shipping (Registration) Ordinance next year to render the registration processes more flexible and digitalized," Lee said.

Development of AI, data science industries

Hong Kong will accelerate the development of artificial intelligence (AI) and data science industries, Lee said.

Lee highlighted Hong Kong's advantages in scientific research, capital, data and talent, as well as abundant use cases, outlining measures to facilitate an extensive and deep integration of AI across sectors, with a view to achieving "industries for AI" and "AI for industries."

To promote scientific research and leverage the city's talents, the HKSAR government has earmarked HK$1 billion (about $128.62 million) for the establishment of the Hong Kong AI Research and Development Institute in 2026.

Hong Kong will capitalize on its advantages under "One Country, Two Systems" and promote the early establishment of a mechanism for cross-boundary flow of mainland data to Hong Kong Park for scientific research purposes, supporting AI application testing and innovation, Lee said.

AI application will also be scaled up, he added. The HKSAR government will promote AI applications in government services and the business sector, while government departments will develop their own AI solutions.

Universities to admit more non-local students

Starting from the 2026/2027 school year, Hong Kong universities will be permitted to admit self-financing non-local students up to 50 percent of local student places.

"Universities in Hong Kong are highly popular, with a double-digit year-on-year increase in the number of self-financing non-local applicants," Lee said.

The current cap of non-local student intake stands at 40 percent of local places. Meanwhile, the enrollment ceiling for self-financing places in funded research postgraduate programs will be increased from 100 percent to 120 percent, he said.

To attract more international teaching and research talents and students, the Education Bureau of the HKSAR government will establish the Task Force on Study in Hong Kong. Relevant measures include rolling out the "Hong Kong: Your World-class Campus" large-scale publicity campaign to promote Hong Kong's quality resources in areas such as academic studies, scientific research and international cooperation.

(With input from Xinhua)