Chen Maobo: Hong Kong will establish a licensing system for providers of digital asset trading and custody services within this year.

On February 25, Hong Kong Financial Secretary Paul Chan Mo-po delivered the 2026-2027 annual budget. Paul Chan Mo-po pointed out that in the financial sector, Hong Kong will actively cooperate with national development strategies, promote the internationalization of the Renminbi, and continue to reform the securities market. The Hong Kong government will also legislate to optimize the tax system for family offices and funds within the year, as well as establish a licensing system for digital asset trading and custody service providers. In terms of promoting tourism, to support the "traveling everywhere" and promote "urban-rural integration", the government launched the "North Urban-Rural Integration Fund" pilot program to encourage the development of rural tourism projects. He stated that this year is the beginning of the "14th Five-Year Plan", with the country continuously opening up at a high level, coupled with technological breakthroughs and innovations bringing new opportunities to Hong Kong. Hong Kong must adapt to local conditions to cultivate new productive forces, and leverage its advantages in connectivity and talent aggregation to help businesses explore new markets. Paul Chan Mo-po proposed a series of measures to drive innovation and technology development in the budget, including establishing an "AI+ Industry Development Strategy Committee", advancing the Sha Tin Data Center project, promoting AI training, accelerating the government's digital transformation, speeding up the development of the AI industry, promoting the deep integration of AI with various industries, and encouraging the widespread application of AI for the benefit of all. The Hong Kong government will also establish an "International Clinical Trial Academy" to contribute to the introduction and export of national biotechnology, helping Hong Kong become an international medical innovation hub. To promote the development of new industries, the budget sets aside resources to build the first overseas national manufacturing innovation center in Hong Kong, and launches the "Elite Enterprise Cultivation Program for New Industries". The Hong Kong government will promote the deep integration of technological innovation and industrial innovation through key projects, including the Heptagon-HK Science and Technology Innovation Cooperation Zone and the Nantian Science and Technology City. Regarding land supply, Paul Chan Mo-po stated that the government will announce specific land sale arrangements quarterly based on market and other conditions to ensure stable market development. Considering the vacancy rate and supply-demand situation in the non-residential property market, the Hong Kong government will continue not to sell general commercial land next year. In terms of public finance, Paul Chan Mo-po pointed out that in the past year, the improvement in the economy and capital markets has led to increased tax revenues, coupled with the gradual results of the strengthened financial consolidation plan, Hong Kong's public finance situation has improved faster than expected, with the operating account for the 2025/26 fiscal year returning to surplus ahead of schedule, and the comprehensive account and net proceeds from debt remaining roughly balanced. The government will continue to strictly control the growth of government operating expenses and proceed with the "Resource Efficiency Optimization Plan" as planned. In addition, to provide support to citizens, the budget proposes to increase the tax deductions for basic, single parent, married couples, children, and supporting parents/grandparents from the 2026/27 tax year, and increase the deduction limit for elderly residential care expenses. In conclusion, Paul Chan Mo-po stated that the past year has seen many changes in the external environment, with Hong Kong also undergoing economic transformation. The development of technological innovation, especially AI, has brought many opportunities and challenges. However, Hong Kong has been growing and progressing through innovation and transformation, with the recalibrated direction and steady development of the Hong Kong economy. Hong Kong must leverage its advantages, seize the solid support from the country for Hong Kong, accelerate economic development, and create better development opportunities and enhance the quality of life for its citizens.