New I&T industry fund to back strategic technologies

It will cover life and health technology, AI, and robotics.

Hong Kong plans to establish an Innovation and Technology Industry-Oriented Fund of at least $40b, combining government and private capital to invest across five technology and industry themes.

It will cover life and health technology, artificial intelligence (AI) and robotics, semiconductors and smart devices, digitalisation and industrial upgrading, and future and sustainable development.

The government will provide $10b, with private capital expected to contribute at least three times that amount.

The initiative forms part of Hong Kong’s First Five-Year Plan for Economic and Social Development, released on 16 September.

In line with this, the government will also provide up to $2.5b under an enhanced Innovation and Technology Venture Fund scheme to establish matching funds with private investors for start-ups in strategic industries.

At least $7.5b in market capital is expected to be raised under the scheme.

The Hong Kong Investment Corporation will deploy patient capital through co-investments in hard and core technology, biotechnology, new energy and green technology, and related applications.

The plan also sets out four areas for fintech development — data and payment infrastructure, AI, resilience, and the tokenisation of finance.

The Hong Kong Monetary Authority’s Project Ensemble will be used to expand practical applications of tokenisation across different asset classes and use cases.

The government will also support the development of digital assets including central bank digital currency, stablecoins, tokenised deposits, tokenised bonds, and tokenised securities products.

Moreover, it will expand the use and coverage of supervisory sandboxes across financial services as it develops its regulatory framework for emerging financial products.