Hong Kong, Sep 17 (AP) Hong Kong's Chief Executive John Lee unveiled strategic plans on Wednesday to accelerate the development of a thriving economic zone near the border with mainland China. The initiative focuses on fostering industries like artificial intelligence and higher education to drive new avenues of economic growth and reinforce Hong Kong's standing as an international competitor.
With the challenge of setting Hong Kong apart from regional competitors and mainland Chinese cities, especially after the heightened restrictions on democracy activism and Beijing's increased influence, Lee emphasized economic revitalization. “My ultimate objective in governance is to improve people's livelihood,” he said. “The well-being of our people is intertwined with the health of our economy. Economic growth is the foundation of improving livelihood.”
In his yearly policy address, Lee introduced plans for leading a committee dedicated to developing the Northern Metropolis. This ongoing project anticipates establishing a new IT hub and a university town adjacent to the tech-centric city of Shenzhen, aiming to generate 650,000 jobs and accommodate 2.5 million residents. The proposal was initially introduced in 2021 by Lee’s predecessor, Carrie Lam.
Lee announced that the government would implement various financing strategies and legislative measures to streamline processes, such as simplifying the establishment of industrial park companies and expediting building plan approvals.
Hong Kong's economy recorded an estimated 3.1 percent GDP growth in the second quarter of 2025, buoyed by robust exports and stronger domestic demand. Additionally, the city led globally in funds raised through initial public offerings during the year's first half, as Chinese companies increasingly chose Hong Kong for listings amid US-China tensions.
However, challenges persist as empty storefronts are still evident across many areas. Retail sales from January to July experienced a decline, with several restaurants shutting down. The downturn largely resulted from decreased tourist spending and many locals opting for more cost-effective and diverse weekends in mainland China. The unemployment rate in Hong Kong currently stands at 3.7 percent.
A significant focus of Lee’s policies is to bolster growing industries alongside the city's traditional financial and legal sector strengths. The development of the artificial intelligence and data science industry is a particular priority, with plans to tender a 10-hectare site for constructing a data facility cluster within the year and launching an AI research and development institute next year.
Other industries Lee aims to cultivate include the pharmaceutical, medical products, and new energies sectors.
Aiming to transform Hong Kong into a sought-after hub for higher education, the government has increased efforts, notably as the Trump administration in the US encouraged universities to cap international student numbers and increased scrutiny on student visas. Lee's administration plans to raise enrollment limits for international students in government-funded universities starting next academic year and allocate new sites for student hostel construction.
Additionally, the University Grants Committee will allocate 40 million Hong Kong dollars (around USD 5 million) to support eight publicly funded universities in enhancing their outreach efforts and attracting educators and students from outside Hong Kong.
In line with Beijing's longstanding objectives, Lee, formerly a security chief, introduced a national security law to ensure stability in the aftermath of massive 2019 anti-government protests.
To deepen patriotic education, he announced collaboration with Shenzhen, a nearby mainland city, to promote a “new red educational route,” enriching locals' and tourists’ comprehension of Hong Kong’s World War II history. Earlier this month, Beijing commemorated the 80th anniversary of WWII’s conclusion with a military parade.
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