The 2026 Budget Speech by the Financial Secretary outlines key initiatives for developing life and health technology, international biomedical innovation hubs, and smart manufacturing. It also discusses the establishment of new industrialization centers, support for emerging industries, and tax arrangements for R&D expenditures. The speech emphasizes public-private partnerships and collaboration among industry, academic, and research sectors to accelerate technology development and innovation.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
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On 25 Feb 2026, the Budget Speech by the Financial Secretary underscores the advancement of integrated life and health technology development. This encompasses upstream (research), midstream (outcome transformation), and downstream (industries), leveraging the 'One plus Three' model for research support through InnoHK Research Clusters. The midstream will be supported by the RAISe+ Scheme, while downstream industries will benefit from I&T parks hosting nearly 500 relevant enterprises.
The speech also introduces the Greater Bay Area International Clinical Trial Institute, located in Hetao Hong Kong Park, and the upcoming International Clinical Trial Academy, aimed at promoting global biomedicine technology. The Real-World Study and Application Centre, established last year, supports pharmaceutical companies in expediting drug launches.
A $500 million fund is allocated for Chinese Medicine Development, outlining a comprehensive, high-quality development blueprint. The Chinese Medicine Hospital of Hong Kong and the Government Chinese Medicines Testing Institute have commenced services, aiming to spur research, innovation, and standard-setting.
The Budget Speech emphasizes new industrialisation, focusing on smart manufacturing. Schemes such as the New Industrialisation Funding and Acceleration Scheme, as well as the New Industrialisation Elite Enterprises Nurturing Scheme, target high-growth enterprises. A Co-operation Agreement with the Ministry of Industry and Information Technology aims to establish a national manufacturing innovation centre in Hong Kong.
Pilot lines for third-generation semiconductors will commence operation, facilitated by the New Industrialisation Acceleration Scheme. A study on the long-term development of new industrialisation in Hong Kong is also in progress.
To synergize market forces with innovation, the speech promotes the integration of technological and industrial innovation through key infrastructures like Hetao Hong Kong Park and San Tin Technopole. The potential release of underdeveloped private land for industrial development is also discussed.
Hetao Hong Kong Park, currently hosting over 60 enterprises, plans to expand with Phase 2 development. A $10 billion funding injection from the LegCo is sought to accelerate this. San Tin Technopole, an extension of the Loop, will focus on industrial space for prototyping and mass production, with a dedicated company leading its development and a $10 billion initial capital injection planned.
The low-altitude economy is highlighted as a new engine for smart city development, with regulatory frameworks being refined and trial projects underway. Aerospace development aims to turn Hong Kong into an aerospace power, connecting the Mainland aerospace industry with the global market. The Hong Kong Exchanges and Clearing Limited ("HKEX") will review listing requirements to facilitate aerospace enterprises.
The development of autonomous driving in Hong Kong is being accelerated, with the Airportcity Link autonomous transport system scheduled for operation this year. New materials R&D is progressing towards commercialization, with local start-ups setting up production lines at EcoPark. The third InnoHK research cluster, focusing on new materials and energy, will be established in phases in the first half of the year.
RISC-V technology is promoted, with the Hong Kong RISC-V Alliance aiming to bring together industries, academia, and investors for collaboration. The development of embodied AI and quantum technology is also supported, with relevant research and industry applications being promoted.
A $10 billion Innovation and Technology Industry-Oriented Fund is introduced to invest in strategic emerging fields. The RAISe+ Scheme supports research teams from universities to commercialise R&D outcomes, with 49 projects approved. Tax arrangements for R&D expenditures will be reviewed to enhance cross-border scientific collaboration.
The Hong Kong Investment Corporation ("HKIC") aims to bring in more frontier technology enterprises and patient capital, promoting industry clustering and economic competitiveness. Since its full operation, the HKIC has invested in over 190 projects, with further capital injection planned to promote I&T development.
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