Hong Kong Chief Executive John Lee Ka-chiu boldly declared, “Without innovation and technology, there is no future.” This statement encapsulates the city’s ambitious and rapidly unfolding transformation into a leading technology hub. Leveraging its established position as a global financial center, Hong Kong is strategically positioning itself to become a cornerstone of China’s broader push for technological advancement and a new era of innovation-led growth.
This strategic shift is not merely rhetoric; it’s backed by a substantial commitment of resources. The city’s approach centers on cultivating an ecosystem of “patient capital” – long-term investment strategies with a high risk tolerance, prioritizing sustainable growth over short-term gains. This approach is critical for nurturing the kind of high-risk, high-reward ventures that characterize technological innovation. Hong Kong’s financial markets have long been a vital source of direct financing for mainland Chinese technology companies, drawing in substantial global investment and facilitating international collaboration. The city is now increasingly becoming a central meeting point for both domestic and foreign patient capital.
While science and technology form the core of Hong Kong’s aspirations, the path hasn’t been without its challenges. High operating costs and human resource expenses have historically hindered the city’s ability to compete with tech hubs like Guangzhou and Shenzhen. However, a proactive shift in recent years is yielding remarkable results. The current administration has implemented a multi-pronged strategy, starting from its inception. This included the establishment of the Hong Kong Investment Corp. Ltd. in 2022 and the launch of a substantial HK$30 billion (approximately $3.85 billion) Co-investment Fund, along with the Hong Kong Growth Portfolio, the Greater Bay Area Investment Fund, and the Strategic Tech Fund. These initiatives are designed to channel funding towards enterprises and projects that boost Hong Kong’s competitiveness and industrial diversification.
Further strengthening its commitment, the Hong Kong government launched the New Industrialization Development Office in 2023, alongside a HK$10 billion New Industrialization Acceleration Scheme. Plans are underway to establish a third InnoHK research cluster dedicated to innovation-driven R&D. Chief Executive Lee’s recent policy address underscored this commitment with the announcement of a further HK$10 billion Innovation and Technology Industry Oriented Fund. The tangible impact of this commitment is evident in the November 2024 signing of contracts with 17 key enterprises, including industry leaders like iFlytek, Pharmaron, and Pudu Robotics, bringing the total number of key enterprises committed to establishing bases in Hong Kong to 62, with an estimated investment exceeding HK$42 billion and the creation of over 17,000 jobs.
The success of this strategy is further highlighted by the 11th edition of the “Top 100 Hong Kong Listed Companies” awards. This event showcased companies with significant potential for developing new productive forces, demonstrating the remarkable growth of technology companies supported by the Hong Kong Stock Exchange. The companies recognized represent a diverse range of sectors, including prominent names like Tencent, Alibaba, Baidu, Li Auto, Xiaomi, Akeso, WuXi AppTec, Meituan, and Trip.com. These companies showcase the remarkable success of the exchange in fostering the growth of some of China’s most innovative technology companies, further emphasizing Hong Kong’s pivotal role in funding and nurturing future technological advancements. Their impressive performance metrics, including high average operating revenue, net profit, and return on equity, demonstrate the vibrancy and profitability of Hong Kong’s evolving tech sector.
Undersecretary for Innovation, Technology and Industry Lillian Cheong Man Lei aptly summarized the situation, stating that Hong Kong is entering a new era of technological innovation and real economy development. The government’s substantial investment, coupled with the burgeoning ecosystem of local tech companies, is attracting both domestic and international talent and investment, solidifying Hong Kong’s position as a globally competitive hub with a high-quality industrial chain. This ambitious strategy sets the stage for continued growth and further solidifies Hong Kong’s role as a pivotal player in the global technology landscape.
