On October 16, 2024, Hong Kong Chief Executive John Lee Ka-chiu delivered his third policy address under the theme “Reform for Progress, Development for the Future.” The address introduced key initiatives focused on enhancing Hong Kong’s status as an international financial center, covering financial policies, talent acquisition, and real estate reforms.

Financial Policies

1. Enhanced Financial Connectivity

Hong Kong plans to deepen financial integration with Mainland China by optimizing the Bond Connect and Cross-boundary Wealth Management Connect programs. In addition, to further internationalize the renminbi, the measures will expand Southbound Connect eligibility to include non-bank financial institutions and introduce repurchase products backed by onshore RMB bonds to enhance market liquidity.

2. Development of a Global Gold Trading Hub

Leveraging its role in the global gold trade, Hong Kong will establish an international gold trading center. Through this initiative, the government aims to attract investments across derivatives, insurance, logistics, and trade, creating new growth drivers for the financial industry.

3. Optimization of the Securities Market

Furthermore, the government intends to promote RMB-denominated stock listings, expand the range of RMB stock products, and encourage more Chinese and international companies to list in Hong Kong, thereby enhancing market diversity.

4. Fintech and AI Adoption in Finance

Hong Kong will release a policy statement on the responsible use of AI in financial services alongside a Sustainable Finance Action Plan. Moreover, the city aims to align its regulatory framework with International Sustainability Standards Board (ISSB) guidelines by introducing an ISSB adoption roadmap.

5. Expansion of Green Finance

To complement these efforts, the government will incentivize financial institutions to issue green bonds and loans, promoting sustainable investments to support carbon neutrality goals.

6. Financial Regulatory Reforms

Lastly, Hong Kong will refine its financial regulatory framework to improve transparency, stability, and efficiency, with a focus on balancing fintech innovation and risk management.

Talent Recruitment and Innovation Initiatives

1. Expansion of Talent Admission Programs

The “Top Talent Pass Scheme” will be expanded to include 13 additional universities, increasing the total to 198. High-income professionals will now receive three-year visas instead of two. In addition, employment policies will be optimized to attract skilled professionals in fields experiencing labor shortages.

2. Establishment of a Technology Investment Fund

To further promote innovation, a new HKD 10 billion “Innovation and Technology Industry Investment Fund” will be launched. It will support industries such as AI, robotics, life sciences, and new energy, fostering the development of a comprehensive innovation ecosystem.

Real Estate Policies

1. Relaxation of Mortgage Rules

The Hong Kong Monetary Authority (HKMA) will ease mortgage conditions for residential properties. Regardless of property value, whether the property is for self-use or held by a company, or whether the buyer is a first-time purchaser, the maximum loan-to-value (LTV) ratio will be set at 70%. Additionally, the debt-to-income (DTI) ratio will be capped at 50%.

2. Adjustment of the Capital Investment Entrant Scheme

Under the revised scheme, investments in residential property will now be permitted, with a minimum investment threshold of HKD 50 million. Notably, up to HKD 10 million in real estate investment can count toward the total quota.

Economic Data

Hong Kong’s economy recorded moderate growth in Q2 2024, with real GDP expanding by 3.3% year-on-year. While economic growth is expected to continue through the remainder of 2024, geopolitical tensions, global economic uncertainties, and fluctuating interest rates pose potential risks to long-term recovery.