Deloitte highlights strategic recommendations for 2025 Policy Address to accelerate Hong Kong's economic transformation

HKSAR Chief Executive John Lee is set to deliver his fourth Policy Address next month, with economic transformation expected to be a key theme. In line with the Central Government's latest Work Report, which calls on Hong Kong to deepen international engagement and integrate more fully into national development, the city is uniquely positioned to harness its advantage as a bridge between China and the global economy to catalyze transformative growth.

This momentum is already reflected in Hong Kong's economic performance in 2025. Real GDP expanded by approximately 3% year-on-year in both the first and second quarters, while IPO proceeds and stock market performance ranked among the strongest globally. Amid an evolving global landscape, the 2025 Policy Address is poised to reinforce Hong Kong's traditional strengths as an international financial center, while advancing its evolution into a global hub for innovation and investment.

Deloitte China Southern Region Managing Partner Edward Au says, "Hong Kong's dual role as a 'super connector' and 'super value-adder' places it at the heart of global capital flows, technological innovation, and national development. At this critical stage of economic transformation, the ability to adapt, innovate, and contribute to national priorities will be vital to driving high-quality, sustainable growth through 'new quality productive forces'. To help our city seize these emerging opportunities, Deloitte has proposed a set of recommendations across three areas to advance capital and financial markets growth, accelerate Northern Metropolis development, and expand the innovation and technology (I&T) ecosystem."

Attracting Capital and Connecting Mainland and Global Markets

Strengthening Hong Kong's financial services sectors will require targeted measures to boost stock market liquidity and attract new economy listings, alongside increased support for mainland enterprises going global and a stronger family office ecosystem. To enhance stock market liquidity, Deloitte recommends extending trading hours through a phased approach, broadening the investor base of the Southbound Stock Connect scheme, and temporarily reducing stamp duty for renminbi (RMB) counter trading under the HKD-RMB Dual Counter model.

Since HKEX launched the New Listing Regime in 2018, allowing more biotech companies, innovative firms, and weighted voting rights (WVR) companies to list in Hong Kong, these market segments have grown more established. However, the definition of 'innovative companies' remains ambiguous, while WVR listings have recently declined.

"To attract a wider spectrum of new economy firms, we recommend expanding the 'innovative' criteria, relaxing the voting ratio limit for WVR firms, and easing rules for secondary listings. Additionally, we propose widening the scope of confidential applications under the 'Technology Enterprises Channel' and launching a new 'Overseas Companies Listing Channel' to attract and support overseas-listed mainland and international companies to Hong Kong," says Edward Au.

With Hong Kong's exchange-traded fund (ETF) and derivatives markets gaining traction, Deloitte recommends diversifying investment products within these segments to attract more domestic and overseas capital, particularly from the Middle East and ASEAN. To deepen regional financial cooperation, HKEX could consider cross-listing ETFs with Indonesian and Thai exchanges and opening "Capital Market Service Stations" in Jakarta and Bangkok through the Government's overseas Economic and Trade Offices to target regional investors and issuers.

Deloitte China Hong Kong Government & Public Services Industry Leader Gary Wu says, "Driven by the Government's headquarters economy strategy, Hong Kong now hosts a record 9,960 companies with overseas or Mainland parent firms. As mainland enterprises expand their global footprint, Hong Kong has a strategic opportunity to serve as a professional bridge between the mainland and the world by enhancing financing channels, promotional platforms, and talent mobility. To this end, we recommend launching a 'China to Global (C2G) Enterprise Credit Risk-Sharing Fund', establishing a dedicated 'C2G Service Office', and introducing dedicated business visas to support cross-border operations."

Deloitte China Hong Kong Tax & Business Advisory Leader Anthony Lau says, "Family offices have become a strategic growth engine for the local economy, backed by over HK$2 trillion in assets under management across local family offices and private trusts. The Government can leverage this industry's vast potential by strengthening its philanthropic ecosystem, and expanding the Capital Investment Entrant Scheme (CIES) investment scope to include digital assets and ease property investment limits. Moreover, establishing a 'CIES Connect' investment channel in consultation with mainland authorities, mirroring the closed-loop fund flow model under the Wealth Management Connect Scheme, could further open the door to cross-border investment."

Accelerating Northern Metropolis Development

Deloitte China Strategy and Economic Advisory Partner Alvis Kong says, "Deloitte supports the Government's continued efforts to accelerate Northern Metropolis development. Through innovative land development and financing models that go beyond traditional public-private partnerships, these initiatives have already delivered promising results. As the Central Government expects the city to 'break down barriers and remove constraints' in its growth strategy, Hong Kong should continue exploring solutions to key development bottlenecks.

"We have seen strong interest from a broad range of potential investors in the Northern Metropolis. To build compelling strategic partnership, it is essential to align construction standards with those of the Greater Bay Area (GBA) and adopt robotics to reduce construction cost. Furthermore, introducing profit-sharing mechanisms can make income streams more attractive to investors, while asset securitization can help unlock additional project potential."

Given the current challenges facing Hetao Hong Kong Park, including the need for clearer cross-border factor flow mechanisms and stronger appeal to leading enterprises, the priority is to promote regional integration and enhance the business environment.

"The critical path to unlocking Hetao's lies in securing the first batch of anchor investors, which will create a lighthouse effect. Instead of adopting a traditional property development approach, the Government could selectively invite 'industry chain leaders' with truly compelling offers. This will create exponential growth in the park's development, delivering a financial and strategic win-win for both Hetao and investors," adds Alvis Kong.

"To turn vision into reality, Hong Kong must mobilize capital at scale. By working closely with GBA cities to establish a joint financing platform that effectively leverages mainland capital, the Government could accelerate advanced manufacturing projects in Hetao and attract long-term investment to transform the Northern Metropolis into a world-class innovation hub," says Gary Wu.

Bolstering I&T Development

As AI technologies reshape industries, the Government should sharpen its focus on Hong Kong's competitive edges through targeted investment in fintech, healthcare, logistics, and engineering. Meanwhile, rising geopolitical risks make AI autonomy a pressing priority, highlighting the importance of greater industry participation in open-source initiatives, adoption of open-source standards, and engagement with relevant international organizations. To drive transformation from within, the Government could encourage departments to review workflows, scale effective solutions, and prioritize AI literacy among junior and mid-level civil servants.

The low-altitude economy presents a new frontier for smart city development. By expanding the regulatory sandbox to cover passenger eVTOL aircraft, automated inspection systems, and AI-powered air traffic control, Hong Kong can unlock new possibilities for urban mobility. Infrastructure investment, such as vertiports, charging stations, and citywide airspace networks, will be key to enabling seamless multimodal connectivity. Integrating low-altitude infrastructure into urban development, including the Northern Metropolis, will create space for scaling operations and advancing Hong Kong's smart city ambition.

Echoing the Government's vision for a trusted and innovative digital assets ecosystem, Deloitte recommends expanding product offerings to boost market liquidity, forging partnerships with other GBA cities to advance financial innovation, and exploring secure, compliant adoption of stablecoins to support mainland enterprises in their global expansion. As part of a broader strategy to enhance Hong Kong's I&T ecosystem, the city should also foster a one-stop support system that integrates support across visas, employment, housing, and education to attract and retain global talent. 

Click here to view the full set of recommendations.