Paul Chan Mo-po’s high-profile speech highlighting Hong Kong’s vibrant AI development at the Global Financial Leaders’ Investment Summit held last week boosted the city’s determination to stand firm amid geopolitical headwinds.

The Hong Kong Special Administrative Region, a bustling financial hub, continues to demonstrate its potential for high investment returns despite the uncertainties brought about by new technologies and connections with the Middle East.

Chan, the city’s financial secretary, demonstrated his visionary leadership by emphasizing Hong Kong’s commitment to innovation and technology (I&T) as a catalyst for economic growth, and said that he expects an increase in the number of “unicorns” (startups valued over $1 billion) within the next five to 10 years.

In line with its vision, Hong Kong has been actively collaborating with the Middle East, signaling its global reach. Notably, Asia’s first-ever exchange-traded fund investing in Saudi Arabia is set to be listed on the Hong Kong Exchanges and Clearing Market (HKEX) soon. This strategic partnership opens doors for investors to explore new opportunities and foster stronger economic ties between the two regions.

While Hong Kong embraces the possibilities of new technologies, its financial regulators maintain a cautious stance towards the use of AI. By allowing only responsible practices, the city aims to mitigate potential threats and ensure the sustainable development of the technology sector. This prudent approach safeguards investor interests and promotes a healthy and secure investment environment.

China, a dominant force in the global economy, is undergoing a significant shift in investment strategy. The country is moving away from traditional investments such as real estate and deposits, redirecting its focus towards capital-market driven investments. With China’s projected market size expected to surpass that of the US, investors are encouraged to align their investment strategies with areas that can benefit the most from government policies.

The HKSAR’s robust legal system, renowned for its efficiency and transparency, serves as a magnet for talent. Individuals are attracted to settle in the city due to its strong rule of law, which provides a stable environment for both personal and professional growth. This influx of talent further fuels Hong Kong’s innovation ecosystem, attracting world-class researchers and entrepreneurs to contribute to the city’s development.

Hong Kong’s world-class research capabilities, talent pool, and vibrant capital markets make it an ideal location for tech companies to thrive

Hong Kong’s commitment to I&T as a core engine for economic growth has become increasingly apparent. The SAR government has invested over HK$200 billion ($25.6 billion) to support the development of a thriving innovation ecosystem amid geopolitical challenges. By actively pursuing cross-border data flow initiatives within the Guangdong-Hong Kong-Macao Greater Bay Area (GBA), Hong Kong aims to enhance collaboration and synergy with neighboring cities, fostering a vibrant innovation network.

The city’s remarkable achievements in nurturing startups, attracting enterprises and talent, and transforming research and development outcomes showcase its ability to overcome challenges and maintain its unique advantages. Hong Kong’s vibrant capital market acts as a catalyst for technology companies, drawing them to the city to tap into its vast resources and funding opportunities.

Looking ahead, the next five to 10 years are expected to witness the emergence of more  unicorns in Hong Kong. The combination of the city’s favorable investment climate, strong government support, and a resilient business environment creates a fertile ground for startups. Investors, seeking opportunities with good yields, tend to be more cautious in challenging investment environments. Hong Kong, with its wealth of investment opportunities and great potential returns, stands out as an attractive destination for those willing to embrace the complexities of the market.

Hong Kong’s commitment to fostering I&T as a key driver of growth is evident in its comprehensive plan outlining the development direction and roadmap for the sector. Substantial investments have been made to build, consolidate, and enrich the I&T ecosystem in the city. Despite geopolitical challenges, Hong Kong’s I&T sector has thrived, thanks to its unfettered access to international data that attracts AI firms and other data-intensive industries.

The development of cross-border data flow within the GBA is a significant milestone. It enables data convergence, benefiting various sectors, including pharmaceuticals and biomedicine. Hong Kong’s world-class research capabilities and deep pool of talent further contribute to its appeal as a destination for tech companies to establish a strong presence.

Moreover, Hong Kong’s vibrant capital markets, ranging from venture capital and private equity to listing platforms, provide ample opportunities for tech companies to realize their growth ambitions. With the expectation of producing more unicorns in the coming years, Hong Kong presents lucrative investment opportunities for those looking to enter the market at an opportune time.

In short, Hong Kong is a dynamic economy that places a strong emphasis on innovation and technology. The government’s unwavering commitment to I&T development is evident in its substantial investments and comprehensive plan. The city’s unique advantage of unfettered access to international data, coupled with its cross-border data flow initiatives, positions it as an attractive hub for data-driven businesses. Hong Kong’s world-class research capabilities, talent pool, and vibrant capital markets make it an ideal location for tech companies to thrive.

Investors keen on exploring the potential of the I&T sector should consider Hong Kong a promising destination. Despite the complex and challenging environment, the city offers a wealth of investment opportunities with the potential for significant returns. By embracing the opportunities presented by Hong Kong’s commitment to I&T, investors can contribute to the city’s growth trajectory while reaping the benefits of their investments.

The author is chairman of the Asia MarTech Society and sits on the advisory boards of several professional organizations, including two universities.

The views do not necessarily reflect those of China Daily.