Hong Kong Chief Executive John Lee Unveils 2025 Policy Address, Pledging Economic Growth and Livelihood Improvements

Hong Kong Chief Executive John Lee Ka-chiu delivered his fourth Policy Address on September 17, 2025, under the theme 'Deepening Reforms for Our People Leveraging Our Strengths for a Brighter Future'. The address, presented earlier than the traditional October schedule to accommodate upcoming Legislative Council elections, outlined a comprehensive blueprint anchored on two core pillars: boosting the economy and improving people's livelihoods. Lee emphasized that the well-being of the people is 'intimately linked to the health of our economy', making economic growth a key driver for livelihood improvement.

Economic Revitalization and Industrial Development

The 2025 Policy Address introduced a range of initiatives aimed at strengthening Hong Kong's economic vitality and attracting investment. A significant commitment includes an extra HK$30 billion expenditure on public works over the next two to three years, part of a larger HK$120 billion allocation over the coming five years to drive economic growth. For small and medium-sized enterprises (SMEs), 11 measures were announced, including extending the application period for the SME financing scheme for two years, with an 80 percent government guarantee on loans, and extending for one year the scheme allowing SMEs to repay principal loans without interest. Additionally, water and sewage charges will be cut by 50 percent for 260,000 business accounts, capped at HK$10,000 or HK$5,000 a month, and trade effluent surcharges reduced by 50 percent for 35,000 business accounts.

To attract more investment and talent, a new platform combining the Hong Kong Trade Development Council, Economic and Trade Offices, and InvestHK will be established. Preferential policy packages, including land grants, financial subsidies, and tax incentives, will be formulated to attract high-value industries and companies. The development of the Northern Metropolis was highlighted as a 'new engine for Hong Kong's economic development', with Chief Executive Lee personally chairing a new committee to accelerate its progress and dedicated legislation to streamline statutory procedures.

In financial services, measures include a 'fast lane' for mainland technology firms to raise capital in Hong Kong and exploring a 'T+1' stock settlement cycle. The city also aims to become a premier offshore Renminbi center by pushing the Renminbi trading counter into Stock Connect and expanding cross-border RMB repurchase agreements. Hong Kong targets a gold storing capacity of over 2,000 tonnes in three years, establishing itself as a regional gold reserve hub with a new central clearing system for gold.

Innovation and Technology (I&T) received significant attention, with a HK$1 billion allocation for the establishment of the Hong Kong AI Research and Development Institute in 2026. An AI Efficacy Enhancement Team will coordinate government departments' application of AI. Green technology commercialization will be incentivized, supported by a HK$300 million Fast Charger Incentive Scheme for 3,000 additional fast chargers by 2028. An IP Financing Sandbox will be launched for the technology sector, and the Copyright Ordinance will be modernized to address AI technology development.

Enhancing Livelihoods and Social Welfare

Improving people's livelihoods remains a central focus, with 60 percent of the government's recurring expenses dedicated to social welfare, public health, and education. Key initiatives include:

• Housing: Continuous increase in public housing supply and creation of land for large development projects.
• Healthcare: Shortening waiting times for surgery by approximately 10 weeks, enhancing preventive screening and care services at family medicine clinics, and promoting mental health measures. The service quota for assisted reproductive services will be increased to 1,500.
• Family Support: Starting from the 2026-27 assessment year, the additional child allowance for newborns will be extended from one year to two, allowing taxpayers to claim a total of HK$260,000 per child in the first two years. 15 new aided childcare centers will be established over three years, adding approximately 1,500 day care places for children aged up to three.
• Elderly Care: Enhanced measures for elderly people living at home, increased financial aid capacity, and the establishment of three new neighborhood centers. A Working Group on Ageing Society Strategies will be formed.
• Education: Restrictions on admission of self-financing non-local students for post-secondary institutions will be relaxed, increasing the enrolment ceiling from 40 percent to 50 percent of local student places. A HK$2 billion allocation from the Quality Education Fund will support digital education in primary and secondary schools, and a 'Blueprint for Digital Education' will be released in 2026.
• Women's Development: The annual funding of the Women Empower Fund will be raised by 50 percent to HK$30 million.

Cementing Hong Kong's Role as an International Center

The Policy Address underscored Hong Kong's unique advantages under the 'one country, two systems' principle, with Chief Executive Lee noting the city's rating as the 'world's freest economy' and an 'advanced and business-friendly city'. Efforts to cement its international role include:

• Talent Attraction: Hong Kong has risen to fourth globally in talent competitiveness. Initiatives to attract more international teaching and research talents and students include increasing non-local student places and earmarking new sites for hostels. A Young Talent Training Programme will provide opportunities for internships in international organizations.
• Mainland Integration: Deepening cooperation with the Greater Bay Area on carbon trading and green finance, and supporting mainland enterprises to 'go global'.
• Global Hub Status: Repositioning Hong Kong as a capital hub, a logistics powerhouse, and a magnet for talent, with ambitions to become a global hub for AI development and a regional gold reserve hub.

The Policy Address aims to foster a 'vibrant economy' and 'accelerate advancement from stability to prosperity', aligning Hong Kong with national development strategies while addressing the immediate needs of its citizens.