Hong Kong is setting a broader economic course with its first five-year development plan. Chief Executive John Lee presented the plan to the legislature on Wednesday, outlining goals that reach beyond the city’s traditional role as an international financial center.
Technology, higher education, innovation, housing, and living standards now sit alongside finance, trade, maritime services, and aviation in the government’s long-term priorities.
The plan comes as mainland China moves ahead with its own 15th five-year plan for 2026 to 2030. Hong Kong’s government has stressed that its approach will not replace the city’s capitalist system with a planned economy.
Instead, officials describe the document as a framework for setting strategic priorities while keeping market-based activity at the center of the economy.
Technology Takes a Bigger Role
Lee said the plan aims to support economic growth, strengthen competitiveness, and improve people’s living standards. He also said Hong Kong should become more focused on technology and develop a wider mix of industries.
“We will be a Hong Kong that is highly empowered by technology,” Lee said.
One major target involves research and innovation spending. The government wants domestic spending on innovation activities to rise from 1.63% of gross domestic product in 2024 to 3% after 2030. That shift would give research, technology development, and related industries a larger role in the economy.
The plan also links industry growth with higher education. Three university towns are planned as part of the Northern Metropolis, with each expected to have a different focus. One will concentrate on fields such as artificial intelligence and robotics.
Northern Metropolis Moves Forward
The Northern Metropolis remains one of the plan’s largest development projects. The area near Hong Kong’s border with mainland China is expected to provide land for technology businesses and new academic facilities while strengthening connections with Shenzhen, a major technology center.
Former Chief Executive Carrie Lam first proposed the project in 2021. The plan aims to create about 650,000 jobs and provide homes for around 2.5 million people.
The government also wants the project to address housing conditions. Officials have proposed larger minimum sizes for private homes in the Northern Metropolis to increase average living space per person.
The project reflects Hong Kong’s growing economic links with mainland China. Since the handover from British rule in 1997, those links have expanded through trade, culture, transportation networks, and border infrastructure.
Finance Remains Important
The new strategy does not move finance into the background. Hong Kong still plans to strengthen its position in international finance, maritime services, trade, and aviation.
Officials also want to reinforce the city’s role as the world’s largest offshore renminbi hub. The government is exploring whether it can use China’s currency, the renminbi, to settle certain government expenditures where appropriate.
This approach combines Hong Kong’s established financial role with newer priorities in technology and education. The government expects the wider mix of industries to support economic growth over the next five years.
Jobs, Families and Living Standards
The plan also includes measures aimed at household finances and employment. Lee’s administration plans to extend a newborn cash allowance for another three years.
The current payment provides HK$20,000, or about $2,550, for each newborn. The amount would rise to HK$30,000, or about $3,800, for a second or subsequent child.
The government and business sector also plan to introduce a program focused on youth employment. These measures form part of a wider effort to address demographic pressures and improve household well-being.
Lee said he expects incomes to improve over the next five years. He also pointed to better education and more diversified industries as expected outcomes of the plan.
Political Context
Lee’s current term ends next year, making the timing of the five-year plan politically significant. Observers are watching whether the new economic agenda and his latest policy measures will shape momentum around a possible second term.
Lee, a former security chief, also oversaw the passage of Hong Kong’s homegrown national security law in 2024. Officials said the law, along with a China-imposed security law, was needed to support stability after the large anti-government protests of 2019.
At the same time, Hong Kong faces pressure to maintain a distinct economic identity as it competes with regional financial centers and major mainland Chinese cities.
Gary Ng, a senior economist at Natixis Corporate and Investment Banking, said the overall policy direction remains similar to earlier plans. However, he noted that the government is taking a more active role by setting numerical targets and deadlines.
“Technology and education could drive breakthroughs, supported by government debt and more favorable policies, but the rest will still be challenging,” Ng said.
Hong Kong’s first five-year plan sets a broader economic direction, with technology, research, education, housing, and employment receiving greater attention alongside finance.
Its progress will largely depend on the development of the Northern Metropolis and the government’s ability to turn its technology and education targets into measurable economic results.