Gov’t earmarks $10b to power next-generation industries

The spending plan backs space robotics, low-altitude drones, and first driverless transport.

Financial Secretary Paul Chan Mo-po outlined new measures in his 2026 budget speech to strengthen Hong Kong’s emerging industries.

The government has completed the first stage of legislative amendments for the low-altitude economy (LAE) and is refining civil aviation regulations.

Under the first cohort of the Regulatory Sandbox, 32 projects have conducted trials along designated routes, including applications such as unmanned aircraft for building management and inspection.

Trial projects for traffic management systems, shared platforms, cross-boundary routes, and passenger-carrying aircraft are planned to roll out in phases this year, with cross-boundary logistics trials with the Mainland also under exploration.

The Hong Kong Space Robotics and Energy Centre, part of InnoHK, is participating in the Chang’E-8 lunar mission, with its lunar surface operation robot having entered prototype testing.

The Innovation and Technology Fund (ITF) has also allocated over $100m to support six R&D projects from universities.

The CUHKSat-1 satellite, developed by the Chinese University of Hong Kong and supported by ITF, was successfully launched into its planned orbit with HKEX having been asked to review listing requirements to facilitate aerospace enterprise listings in Hong Kong.

Authorities are also supporting low earth orbit satellites and expanding telecommunications infrastructure, including future 6G applications.

The Airportcity Link autonomous transport system is scheduled to begin commercial operation this year, marking Hong Kong’s first driverless project.

Two local start-ups will set up production lines at EcoPark, Tuen Mun, mid-year to upcycle recyclables into materials for electricity-free cooling and acoustic metamaterial products.

A third InnoHK research cluster, focused on new materials, advanced manufacturing, energy, and sustainable development, will be established in phases.

The Hong Kong Investment Corporation (HKIC) is promoting RISC-V technology through strategic investments and the Hong Kong RISC-V Alliance.

Embodied AI start-ups are supported in Innovation and Technology parks and through HKIC initiatives.

Universities are conducting studies on AI-based quantum simulation and the convergence of AI and quantum computing, and two state key laboratories in quantum technology have been established.

The $10b Innovation and Technology Industry-Oriented Fund will channel investment into strategic fields such as life and health technology, AI, robotics, and future industries.

The RAISe+ Scheme has also approved 49 university projects for R&D commercialisation in areas including health sciences, new materials, new energy, AI, and advanced manufacturing.

Chan said that the government will review tax arrangements for R&D expenditures to support cross-boundary collaboration and industry development within the Greater Bay Area.