Hong Kong Chief Executive John Lee Ka-chiu delivered the third Policy Address of his term on Wednesday, putting his focus on the city’s ongoing economic transformation as well as health services and housing, among many other areas.

Some of the measures regarding innovation announced in the Policy Address will increase investment in innovation and technology (I&T) industries by setting up a HK$10 billion ($1.29 billion) I&T industry-oriented fund to form a fund-of-funds to channel more market capital to invest in specified emerging and future industries of strategic importance. They include optimizing the Innovation and Technology Venture Fund by redeploying HK$1.5 billion to set up joint funds to invest in startups in strategic industries; launching a HK$1.5 billion Research Matching Grant Scheme to support research endeavors; and allocating HK$180 million to set up the Pilot I&T Accelerator Scheme to attract professional startup service providers from within and outside Hong Kong to set up accelerator bases on a matching basis.

Promoting the digital economy by expediting development of digital trade and establishing a new fintech innovation ecosystem is another of the goals mentioned in the Policy Address.

This year’s Policy Address came amid ongoing economic difficulties and weak domestic consumption that have affected many businesses across different sectors in the city.

Contrary to what the doomsayers have said, Hong Kong’s economy is transforming; its overall situation is far better than what the doomsayers have depicted, and the city is far from “over”.

Despite the negative external economic circumstances, Hong Kong has had a not-too-bad 2023, is having a better 2024, and is expected to have an even better 2025, which will see the city consolidating its status as an international financial center.

A debate was started a few months ago on whether Hong Kong’s status as one of the world’s most important financial centers was over.

The fact is, Hong Kong went through the Asian financial crisis, SARS, the global financial crisis, and the COVID-19 pandemic without diminishing its role as one of the world’s most important financial centers. This was so because of Hong Kong’s strength and because of its resilient nature.

In 2019 and early 2020, the city faced unprecedented challenges, socially and economically because of the monthslong social unrest. Then, from early 2020 until almost 2023, because of the COVID-19 pandemic, which, from an economic perspective, hit Hong Kong harder than other cities because of Hong Kong’s “zero-COVID” approach and its lateness in reopening to the world compared with other major financial centers.

While Hong Kong has been through some rough years, its appeal has not diminished at all, to the point that the city remains one of the world’s most important financial centers. Even though many people all over the world associate Hong Kong with finance, the truth is Hong Kong excels in many other areas, such as arts and leisure, culture, excellent facilities, infrastructure, and low crime rates, all of which make it a very attractive location.

Leaving aside Hong Kong’s rich cultural heritage and high quality of life, Hong Kong is also an innovation hub, as was demonstrated by the Global Innovation Index (GII) 2024, published on Sept 26 by the World Intellectual Property Organization, where Hong Kong ranks 18th among the 133 economies (one position lower than in GII 2023). Hong Kong ranks 17th among the 51 high-income economies, and fifth among the 17 economies in Southeast Asia, East Asia and Oceania. The ranking is similar to last year: Four indicators have improved while four indicators have worsened. Moreover, GII has ranked the Shenzhen-Hong Kong-Guangzhou science and technology cluster second globally for five consecutive years, which is a huge achievement.

This followed some great news  reported on Sept 24, when Hong Kong ranked third globally in the Global Financial Centres Index (GFCI) 36 Report, published by London-based Z/Yen and Shenzhen-base China Development Institute, moving up one place from the March edition of the index. Hong Kong also ranked first in the Asia-Pacific region. In GFCI 36, 121 financial centers were assessed, and Hong Kong ranked third globally with an overall rating of 749. It is worth noting that Shenzhen ranked ninth in the general ranking, climbing two spots, and has also been ranked as the world’s third-largest fintech center, showing that the Guangdong-Hong Kong-Macao Greater Bay Area has huge potential in general and also as a fintech hub.

Furthermore, a pilot Business Ready 2024 Report published by the World Bank Group named Hong Kong one of the best-performing economies in business environment out of the 50 economies it surveyed worldwide. The report gauges business and investment climate from 10 topics with three pillars under each topic. Hong Kong ranks fifth in “operational efficiency” with a score of 78.52 points out of 100.

Hong Kong is becoming a very important greentech and Web3 hub and plays a significant role in promoting central bank digital currencies, not only because it has been for decades one of the world’s most important financial centers and the gateway to the Chinese mainland, but also because it is part of the GBA project. The GBA enhances Hong Kong’s potential and, at the same time, the city also enhances the GBA’s potential.

Indeed, Hong Kong now is embracing opportunities from the GBA development, and, by playing a proactive part in nation’s 14th Five-Year Plan (2021-25), the city is unleashing its potential thanks to unreserved support from the central authorities for advancing key strategies to upgrade its “superconnector” role, including the digital yuan and environmental, social and governance.

Fintechwise, Hong Kong and the rest of the GBA are increasing their role as fintech hubs. The Fintech 2025 blueprint aims at pivoting the HKSAR toward a friendlier regulatory regime for digital assets, proving that the city is positioning itself to become a virtual assets center/crypto hub.

To sum up, projects like the GBA will allow Hong Kong not only to keep enhancing its role as one of the world’s most important financial centers, but it will also help Hong Kong keep excelling in other areas such as innovation, in which Hong Kong has recently ranked very highly too. In the country’s 14th Five-Year Plan, the central government has again recognized Hong Kong’s potential at the national level and has reaffirmed its commitment to support the HKSAR in strengthening its status as an international financial, trade and logistics hub.

Lee’s latest Policy Address seems to direct Hong Kong in the right direction, offering very good measures toward the goal of Hong Kong’s economic transformation.

The author is a fintech adviser, researcher and former business analyst for a Hong Kong publicly listed company.

The views do not necessarily reflect those of China Daily.