Hong Kong’s Digital Transformation: A New Era of ‘Smarter’ Growth in the Face of Mainland China’s Dominance

The Hong Kong government is taking steps to digitalize the local economy by establishing a high-power office to develop policies that will make the city “smarter” and more electronically connected to mainland China. This vision was outlined by Financial Secretary Paul Chan Mo-po at the Digital Economy Summit. With a digital economy market worth an estimated 50 trillion yuan (US$6.91 trillion) just across the border, Hong Kong aims to secure a substantial portion of this economic opportunity, especially with Beijing supporting its integration into the Greater Bay Area.

China is a global leader in digital payments and services, prompting Hong Kong to catch up in these areas. Chan highlighted the potential for growth in fields like fintech, Web3, and artificial intelligence, which present opportunities for new businesses as the city builds the necessary infrastructure. Initiatives like the Commercial Data Interchange have already facilitated significant financial transactions, and the new tech policy office aims to explore advancements in 5.5G networks, high-performance computers, and secure cross-border information flow.

The pilot scheme launched in December for the flow of personal data across the Greater Bay Area is expected to enhance banking, credit referencing, and healthcare services for Hongkongers. Additionally, the upcoming iAM Smart platform, designed to assist 1.8 million companies with payments and government services, is part of a comprehensive policy package aimed at leveraging Hong Kong’s potential in the digital economy. Success in this endeavor will depend on effective execution and Hong Kong’s readiness to capitalize on the opportunities presented by mainland China’s digital economy.