Hong Kong’s Chief Executive John Lee has thrown down the gauntlet with his boldest vision yet for the city’s economic future, unveiling an ambitious plan to supercharge development along the border with mainland China and transform the city’s traditional economic landscape. Announced on September 17, 2025, during his annual policy address at the Legislative Council, Lee’s blueprint centers on the fast-tracking of the so-called Northern Metropolis—a mega-project that aims to urbanize a vast swath of land near the tech powerhouse of Shenzhen, create hundreds of thousands of jobs, and cement Hong Kong’s status as a global innovation hub.
“We are now undergoing an economic transition. It is irreversible progress. Transformation is an inevitable process for a stronger economy,” Lee declared, according to AFP. His nearly three-hour speech focused on diversifying Hong Kong’s economic engines, nurturing new industries, and improving the livelihoods of its people—an approach he summarized under the theme: “Deepening Reform, Focusing on People’s Livelihoods, Leveraging Our Strengths, and Creating a Better Future,” as reported by RTHK.
At the heart of Lee’s plan is the Northern Metropolis, an area almost three times the size of Paris and expected to eventually cover a third of Hong Kong’s land area. The vision is sweeping: to build a new IT hub and university town near Shenzhen, providing 650,000 jobs and housing for 2.5 million people. Lee announced he would personally chair a high-level committee to expedite the project, slashing red tape and introducing new legislation to fast-track development—a move designed to “create a new growth driver” and deepen integration with the mainland, according to Bloomberg.
To keep pace with the rapid evolution of global technology, Lee placed a premium on artificial intelligence, declaring it a “core industry” for Hong Kong’s future. The government will allocate HK$1 billion (about US$128 million) to establish an AI research hub and plans to put a 10-hectare site up for tender this year for a data facility cluster. The launch of an AI research and development institute is slated for 2026. Lee emphasized that these measures will help Hong Kong “leverage its strengths and create a better future,” as reported by AFP and Bloomberg.
It’s not just about technology. The government also aims to cultivate other emerging sectors, including pharmaceutical and medical products and new energies. Officials are exploring the establishment of a dedicated base for electric vehicle assembly in the New Territories, where mainland EV giants like Neta Auto and GAC Motor’s Aion have already set up shop. Industry watchers believe Hong Kong could serve as a strategic export and assembly hub for Southeast Asia and Europe, leveraging its proximity to mainland China and its international business environment.
Lee’s administration is also betting big on education, with plans to boost international student quotas at government-funded universities starting in the next academic year. New sites will be earmarked for student hostels, and the University Grants Committee is allocating HK$40 million (about US$5 million) to help eight publicly funded universities step up recruitment of teachers and students from outside Hong Kong. These moves are designed to reinforce Hong Kong’s reputation as a global higher education hub, especially as other countries tighten student visa policies.
In a nod to the city’s storied past, Lee announced a partnership with Shenzhen to promote a “new red educational route” that will help locals and tourists better understand Hong Kong’s role in World War II. The initiative comes on the heels of Beijing’s recent military parade commemorating the 80th anniversary of the war’s end, underscoring a renewed emphasis on patriotic education and historical awareness.
Economic indicators offer a mixed picture. Hong Kong’s GDP grew by an estimated 3.1% in the second quarter of 2025, outpacing forecasts and buoyed by strong exports and improved domestic demand. The city even ranked first globally in funds raised through initial public offerings in the first half of the year, as Chinese firms flocked to Hong Kong amid ongoing U.S.-China tensions. Yet the city isn’t out of the woods: retail sales dropped between January and July, vacant shops dot many districts, and the unemployment rate hovers at 3.7%. Many residents are spending weekends across the border in mainland China, lured by cheaper goods and more diverse offerings. Restaurants have shuttered and some analysts warn of persistent headwinds from China’s economic slowdown and global trade volatility.
Housing remains a perennial concern. While the government is weighing the revival of the long-dormant Tenants Purchase Scheme—which would allow public housing tenants to buy their flats at reduced prices—analysts like Patrick Wong of Bloomberg Intelligence warn that without more effective interventions, Hong Kong’s housing market could remain under pressure, with home prices at their lowest since 2016. Some hope that anticipated U.S. Federal Reserve interest rate cuts will provide relief, but the outlook remains uncertain.
The property sector, meanwhile, has floated proposals to boost the real estate market, but measures such as reducing capital requirements for mainland buyers or easing property taxes have so far been left unaddressed. Lee’s administration is caught between the urgent need for affordable housing and the risk of overstretching public finances, especially with the massive Northern Metropolis project looming.
Integration with the mainland is a clear through-line in Lee’s vision. The Hong Kong Monetary Authority will encourage banks—especially those from mainland China—to set up regional headquarters in the city, targeting expansion into Southeast Asia and the Middle East. A new task force will be established to attract mainland companies to use Hong Kong as a springboard for overseas growth, capitalizing on the city’s unique position as a bridge between China and the world.
Lee’s plan is not without its skeptics. Environmental groups and some locals have raised concerns about the potential ecological impact of the Northern Metropolis and the strain it could place on public finances. Lee pledged to adopt advanced building technologies from China and overseas to reduce construction costs and timelines, but questions linger about sustainability and long-term viability.
Despite these challenges, Lee remains optimistic. His policy address, the fourth since taking office, was described by state media as a forceful push to “deepen reform” and “focus on people’s livelihoods.” If successful, the Northern Metropolis and associated reforms could fundamentally reshape Hong Kong’s economy, broaden its global appeal, and help the city weather the storms of geopolitical rivalry and economic uncertainty.
As the dust settles on Lee’s sweeping announcements, all eyes are on how quickly these promises will turn into reality—and whether Hong Kong can truly reinvent itself for a new era.