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Editorial | Budget sets Hong Kong up for its next phase of growth
The city’s improving economy and public finances have enabled a raft of tax allowances and concessions, but a volatile global environment means sustaining fiscal discipline remains critical
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The Hong Kong government’s annual budget is always a delicate and difficult balancing act. From investing in the future and aligning with national development to caring for the disadvantaged and supporting the middle class, Financial Secretary Paul Chan Mo-po has more room to juggle this year as the economy and public finances continue to improve. But the volatile economic and global environment means the city is not out of the woods yet.
If the focus in previous budgets was on stimulating post-Covid recovery and fighting fiscal deficits, this year’s blueprint sets the right direction by further consolidating the city’s economic fundamentals and seizing opportunities for the next critical stage of development without losing sight of the pressures facing the weak and needy. With the theme of “driving high-quality, inclusive growth with innovation and finance”, the budget sought to address an array of immediate and long-term challenges facing Hong Kong.
Strategically, the city is gearing up for China’s 15th five-year plan by mapping out its own master plan to work towards the national goals. There are also measures to reinforce the traditional economic pillars of finance, trade and tourism, while doubling down on diversifying and nurturing emerging sectors, including AI, intellectual property trading, aerospace, microelectronics, international arbitration and the low-altitude economy.
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In addition to promoting the offshore yuan market, wealth management and digital bonds, an advisory committee on tax policy will be set up to enhance competitiveness for businesses.
Supporting the national five-year plan
Chan said the city possesses a unique edge in artificial intelligence, life and health technology, financial technology and new energy, and can contribute to the country’s modernised industrial system and technological self-reliance. The city’s roles as a “superconnector” and a “super value-adder” can foster two-way opening up – helping enterprises go global while bringing in investments. The city’s international environment and world-class universities will continue to attract high-calibre talent from overseas, he added.
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