Hong Kong Unveils First Five-Year Plan to Widen Economic Base Beyond Finance

Hong Kong Chief Executive John Lee on Wednesday presented the city's first five-year plan, a politically symbolic move that mirrors Beijing's approach to development and seeks to broaden Hong Kong's identity beyond international finance to include technology and higher education.

Addressing the legislature, Lee said the plan is intended to deliver breakthroughs in economic development, strengthen competitiveness, improve social well-being and advance the city's integration into and service of national development.

The special administrative region has long taken pride in minimal government intervention in the economy, even as officials increasingly invoke Beijing's vision for the city. Mainland China approved its 15th five-year plan for 2026 to 2030 in March.

Before releasing Hong Kong's plan, the city government said it would act as a framework setting out the financial hub's strategic priorities rather than a planned economy, and insisted the capitalist system would be preserved.

A central goal is to accelerate development of the Northern Metropolis, which is to supply land for the innovation and technology sector and host university towns near the Chinese tech hub of Shenzhen. First proposed in 2021 by Lee's predecessor, Carrie Lam, the project is intended to provide 650,000 jobs and housing for 2.5 million people.

Under the plan, the government aims to raise domestic expenditure on innovation activities from 1.63% of gross domestic product in 2024 to 3% after 2030. It also envisages linking industry development with academic sectors where Hong Kong holds a competitive edge in the Northern Metropolis.

Each of the three planned university towns would have a distinct focus, including one centred on fields such as artificial intelligence and robotics.

While pursuing its innovation and technology ambitions, the government also plans to reinforce Hong Kong's standing as a hub for international finance, maritime activity, trade and aviation. It proposes to deepen the city's role as the world's largest offshore centre for the renminbi, mainland China's currency, and to explore settling government expenditures in renminbi where appropriate.

Observers are watching whether Lee will use the five-year plan and his latest policy proposals to build momentum for a second term next year. The former security chief carried out Beijing's long-standing demand for a homegrown national security law in 2024; officials said that law and a China-imposed security law were needed for stability after large anti-government protests in 2019.

Lee has faced pressure to set Hong Kong apart from regional rivals and mainland Chinese metropolises, particularly after Beijing's tightening grip clouded the city's image as a freewheeling financial centre.