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Financial Secretary


Strengthening Our Fundamentals to Achieve Higher-quality Development

Global investment sentiment has demonstrated evident changes in recent months. The Hong Kong stock market recently surpassed the 19,000-point level, hitting a nine-month high with a notable increase in turnover. Last week also saw market turnover of over $200 billion in a single trading day. Over the past four weeks, the Hang Seng Index has risen by more than 3,300 points, registering an increase of about 20%. Compared to the low point at the beginning of the year, the market has rebounded by more than 30%. In recent months, some funds have been actively flowing into the Hong Kong stock market, adding to the positive atmosphere in the market.

With the market expecting interest rates to have peaked, together with the cancellation of all demand-side management measures for residential properties at the end of February, the residential property market has also seen visible improvement. Flat prices reversed a downtrend that lasted for ten consecutive months and trended towards stabilisation, while the number of transaction increased to over 8,500 last month. The stabilisation of flat prices and the increase in trading volume are consistent with our expectations when we introduced the relevant policy.

Overall, Hong Kong’s improving macroeconomic situation and stable fiscal position have been well recognised by international rating agencies. In its latest assessment of the Hong Kong economy published in May, S&P Global maintained Hong Kong's rating outlook as stable. Its main justifications included the steady further recovery of the Hong Kong economy, the stabilisation of the property market, and the restoration of fiscal balance over the next three years or so.

Indeed, there remains an uneven recovery among different industries, with sectors such as retail and catering still striving to adapt to the challenges posed by in residents’ and visitors’ consumption patterns. We are responding to market changes by proactively striving to create more favourable market conditions and atmosphere in collaboration with the business community with a view to identifying new growth areas and generating additional value added for Hong Kong.

Hong Kong boasts rich, diverse, and unique characteristics in consumption and tourism. We are introducing new tourism elements and packages, along with different promotional strategies, to create new tourism experiences and highlights. Continuously creating novel and pleasant experiences for residents and tourists will spark consumer demands and business opportunities. For example, during the recent Cheung Chau Bun Festival, over 50,000 residents and tourists from around the world visited Cheung Chau and experienced for themselves this traditional Hong Kong festival. The vibrant atmosphere of parades, lion dances, and the "Bun Scrambling Competition" deeply impressed visitors from various places, and many local businesses reported sales that exceeded their expectations. From the drone show featuring a bun tower over Victoria Harbour to the physical enjoyment of the Bun Scrambling Competition, we strive to provide locals and visitors an enriched understanding and experience of the festival, and enhance Hong Kong's tourism offerings and cultural identity.

Mega events not only attract more visitors and create a lively atmosphere for the city, but also bring tangible benefits to our economy. Following the various mega events in the first half of the year, we will soon announce the exciting activities for the second half. These events are set to inject vitality to our city and help spending, and offer more attractive destinations and spending options for residents and tourists.

Ensuring a steady economic recovery in the short term, as well as generating momentum for greater and faster growth potential in the medium term, is the cornerstone for bolstering confidence. In recent years, we have invested heavily in promoting innovation and technology development. The local innovation and technology ecosystem has been growing vibrantly. This has created new growth points for the economy while driving the transformation of traditional industries.

We have seen promising progress in nurturing innovation and technology enterprises. For example, Cyberport welcomed over 400 new companies in the past year, bringing the total number of community companies to over 2,000, including 8 unicorns. Its startups have raised over HKD 40.6 billion. With the advance of artificial intelligence development and in addition to its strengths in fintech and Web 3.0 cluster, Cyberport also strives to facilitate digital transformation of our enterprises via technology adoption. The Hong Kong Science and Technology Park, another local innovation and technology flagship, hosts 1,700 innovation and technology companies from 27 countries or regions, including 12 unicorns. Last year, over 640 startups graduated from its incubation programmes, showing an annual increase of more than 40%.

To further incentivise collaboration among the research, academic and industry sectors, and accelerate the “from 1 to N” transformation of research and development outcomes and industry development, we launched the "Research, Academic and Industry Sectors One-plus Scheme" in October last year. The goal is to fund at least 100 university research teams with potential to become successful startups through a matching scheme, with their projects to be completed in phases in around five years. Over 90 applications from different universities had been received for the first round of the scheme, with funding supported for more than 20 of them. The details will be released shortly.

May 19, 2024

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