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Accelerating Development through Reform and Innovation

Last week, I delivered the 2025-26 Budget, in which I highlighted the need for Hong Kong to lead its future development through reform and innovation. Central to this vision is the strategic use of artificial intelligence (AI) to accelerate the development of new quality productive forces. We must strive to establish AI as a core industry to empower the transformation of traditional sectors.

The rapid advancement of AI is reshaping the medium- to long-term landscape of the global economy. "AI+", which emphasises the deep integration of AI across various industries, is transforming traditional production, business and consumption models, thereby redefining the core competitiveness of economies worldwide.

Last Wednesday, I delivered the 2025-26 Budget Speech at the Legislative Council.

Our country introduced the "AI+" initiative last year, focusing on the comprehensive adoption of AI in research and development (R&D) and the establishment of a globally competitive digital industry cluster.

Thanks to the "one country, two systems" framework and its unique international characteristics, Hong Kong serves as a convergence point for data from both the Mainland and abroad. Coupled with the strong research capabilities of five of the world's leading universities, we are well-positioned to advance cutting-edge AI research and applications, and establish ourselves as an international hub for exchange and collaboration in the AI industry.

Press conference for the Budget.

The Budget underscores the importance of AI development, committing additional resources to enhance five key elements: computing power, algorithms, data, talent and capital. We are also dedicated to exploring new application scenarios. Good progress has been made thus far.

For instance, the AI Supercomputing Centre at Cyberport has recently commenced operation. On R&D, the "AIR@InnoHK" research platform has gathered 16 dedicated laboratories. For the newly established Hong Kong Microelectronics Research and Development Institute, two pilot lines will be assembled at the Microelectronics Centre in Yuen Long this year. Operations are expected to begin next year, thereby promoting the transformation of research outcomes from "one to N".

Building on this foundation, we must accelerate AI applications to achieve the "AI+" goal to empower the development of industries. The Budget has set aside $1 billion to establish the Hong Kong AI Research and Development Institute, aimed at expediting the upstream R&D, as well as the midstream and downstream transformation of research outcomes into industry applications.

On the capital front, the Hong Kong Exchanges and Clearing Limited will launch a "technology enterprises channel" (TECH) to facilitate the listing process for specialist technology companies. The Hong Kong Investment Corporation Limited will also leverage its role as "patient capital", guiding and driving more international patient capital to invest in our key industries.

Participating in the joint television programme "Budget Forum".

We have proposed to host the inaugural "International Young Scientists Forum on Artificial Intelligence" to promote AI research and its industrial development. The forum will focus on open-source technologies, particularly the design and application of RISC-V open-source chips. It also aims to gather the world's most creative young minds to discuss the future of the industry and its benefits to humanity.

Meanwhile, the Hong Kong Investment Corporation Limited will organise the inaugural "International Conference on Embodied AI Robots", allowing top Mainland and international robotics companies to showcase their products while connecting the industry, academia and investment sectors. They will engage in focused discussion on embodied AI, which is a key area of development. This event will facilitate cross-sectoral exploration and exchanges as well as enhance Hong Kong's international influence in related fields.

Participating in the joint television programme "Budget Forum".

Participating in the joint radio phone-in programme "Budget Phone-in".

To help nurture talent, we have engaged several leading tech companies in Hong Kong. We will connect over 100 local cutting-edge tech firms and startups with primary and secondary schools, providing teachers and students with access to their valuable resources. This initiative aims to encourage students to engage with technology through interactive exchanges and field trips, allowing them to gain hands-on experience with tech products and see AI applications in action. The enthusiasm of young people for technology will be their greatest motivation to learn and embrace change. We have received positive responses from the tech industry, with major companies such as Tencent, Alibaba, Lenovo and SenseTime already on board. The Hong Kong Investment Corporation, Science Park, and Cyberport will also coordinate various tech startups to participate.

In response to shifts in the international environment, we must respond to challenges through reform, drive development through innovation, and embrace technology to lead our future. By developing AI as a core industry, Hong Kong can break free from old development models, create new job opportunities and propel economic growth, thus fostering a more diversified and advanced economic structure and industrial landscape.

March 2, 2025