Chief Executive John Lee today unveiled a key plan in his 2025 Policy Address that calls for formulating preferential policy packages to attract more enterprises to set up in Hong Kong with a view to promoting high-quality development.

Mr Lee said that the Financial Secretary will lead the relevant policy bureaus, departments and public organisations in formulating packages of preferential policies that include land grants, land premiums, financial subsidies, and tax incentives, to attract high value-added industries and high potential enterprises to set up in Hong Kong.

He explained that the Office for Attracting Strategic Enterprises and Invest Hong Kong can use the policy packages flexibly during negotiations with enterprises on settlement details, then report to the Financial Secretary for approval.

The Government will also explore the establishment of a more flexible mechanism, including allowing the Chief Executive and the Financial Secretary to introduce tax incentives that comply with international standards.

Mr Lee pointed out that to consolidate Hong Kong’s status as an international aviation hub, the Government has reached an agreement of intent with a leading European aeronautic services company to operate in Hong Kong.

The company will provide aircraft dismantling, as well as recycling and trading services of high value parts. This, he emphasised, will drive the development of industries such as trading, insurance, financing and leasing, creating new job opportunities through the sector’s value chain.

The company will also collaborate with the Hong Kong International Aviation Academy to provide talent training in relevant professions.

With regard to the development of the new energy industry, the Government will develop a sustainable aviation fuel (SAF) industry chain. It will work with the Mainland authorities to enable a local enterprise, one of the world’s major SAF suppliers, to develop its business in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA), covering upstream collection of raw materials, the setting up of production plants and large-scale production, to dovetail with the specified target SAF consumption ratio for flights departing from the Hong Kong International Airport by 2030.

Additionally, the Government will formulate hydrogen standard certification, establish public hydrogen filling facilities on Hong Kong Island and in Kowloon, press ahead with more trial projects, and develop the GBA Hydrogen Corridor in collaboration with the Guangdong Province.

The Chief Executive highlighted that Government is pushing forward the construction of Hong Kong’s first large-scale electric vehicle battery recycling facility at the EcoPark, which is expected to commence operation in the first half of 2026.

To promote the development of the life and health technology industry, the Government will set up the Hong Kong Centre for Medical Products Regulation and submit a legislative proposal on regulating medical devices in 2026. Apart from expediting the “1+” mechanism for new drugs, the Government will also promote the standardisation of clinical data within the GBA and establish a real world data platform, helping pharmaceutical companies bring innovative drugs to the Mainland and international markets more quickly.

In terms of the development of the Artificial Intelligence (AI) and data science industries, the Government has earmarked $1 billion for the establishment of the Hong Kong AI Research & Development Institute in 2026, to facilitate upstream AI research and development (R&D), the midstream and downstream R&D outcome, and the expansion of use cases.

The Government will promote AI applications in government services. The Digital Policy Office will roll out various AI applications in respect of data analysis, customer service and document processing to promote extensive application in departments, while ensuring security and controllability.

Furthermore, the Government will promote AI business applications. The Monetary Authority, in collaboration with Cyberport, has launched the second cohort of the AI Sandbox initiative to promote AI applications to more financial institutions. The authority is also developing an AI model evaluation approach to step up testing on the system security of financial institutions. 

Meanwhile, the Development Bureau will provide subsidies to encourage the application of AI in private sector construction works. The Department of Justice will also establish an interdepartmental working group to review the legislation needed to support a wider application of AI.

The Chief Executive added that the Government will put up for tender a site of about 10 hectares at Sandy Ridge in the North District this year for the development of a data facility cluster. It will provide advanced computing power facilities, promoting the development of data and AI related industries.