Hong Kong bets on tech financing

Jul 03, 2025

same skyline, new mission: Hong Kong's financial hub pivots from moving money to funding tech

Hong Kong is putting up HK$170 billion to reinvent itself as a scitech financing capital

Is Hong Kong about to regain its spot as a premier financial centre? Having struggled through years of its own deficits and the low-energy PRC stock market, the city looks set for a turnaround driven by two major forces

global repricing of PRC equities
exceptional state scitech investment

Hong Kong has over HK$170 bn [~US$22 bn] in state innovation funds and HK$647 bn [~US$82 bn] in fiscal reserves, despite recent deficits. This will be welcome support to Beijing’s GBA (Greater Bay Area) vision, and promises to position the city both as a financial and tech/innovation hub.

conventional financial hub

Building a reputation over decades as the financial gateway to Asia, Hong Kong leveraged proximity to the PRC, a reliable legal system, and free-market norms. Yet, severe stress arrived in 2022–24: PRC stocks sagged, the Hang Seng Index declining some 14 percent in 2022, only slightly less in 2023. Hang Seng’s China Enterprise Index fared still worse, falling some 20 percent in 2022 and 14 percent in 2023.

Hong Kong remains one of the world's most cash-rich jurisdictions, despite running fiscal deficits for three years in a row (with a projected HK$87 bn [US$11 bn] deficit in 2024–25. Reserves stood at HK$647 bn [US$83 billion] in March 2025, over 20 percent of GDP. Built up over years of surplus, this reserve affords the flexibility to transform.

⚡️while others react to outcomes… we track the policy frameworks driving them

the funding ecosystem

The Hong Kong Investment Corporation (HKIC), created in 2022, manages HK$62 bn [~US$8 bn] across strategic funds

Hong Kong Growth Portfolio: HK$32 bn [~US$4bn] for strategic investments with Hong Kong nexus
Co-Investment Fund: HK$30 [~US$4 bn] to draw firms to Hong Kong
Strategic Tech Fund: HK$5 bn [~US$0.64 bn] targeting hard and core technology, biotechnology, and new energy
GBA Investment Fund: HK$5 bn [US$0.64 bn] focused on the macro region

HKIC has taken positions in some 80 start-ups, 36 percent in Hong Kong, 42 percent in the PRC, and 22 percent offshore. All must relocate to Hong Kong and list on the HKEX when going public.

Beyond HKIC, Hong Kong operates an extensive network of government-affiliated investment vehicles totalling over HK$170 bn.

Innovation and Technology Venture Fund (ITVF): HK$2 bn original fund plus HK$1.5 bn enhanced scheme for AI, biotech, and advanced manufacturing
HKSTP Venture Fund: HK$1 bn for seed-to-Series A tech startups
Cyberport Macro Fund: HK$400 mn [US$51 million] for IT entrepreneurs
MTR Lab Venture Fund: HK$300 mn [US$38.26 mn] for transport and smart city tech
HKMA-Saudi Joint Fund: HK$7.8 bn (US$1 bn) targeting manufacturing, renewables, fintech, and healthcare

bringing in and going global

Utilising HK$30 bn [US$4 bn] from the Future Fund, OASES (Office for Attracting Strategic Enterprises) has attracted 84 firms to invest HK$50 bn [US$6 bn] each, creating some 20,000 jobs. Mostly setting up regional HQ or R&D centres in Hong Kong, they span AI, biotech, fintech, and advanced manufacturing. Hong Kong’s Future Fund, a long-term investment portfolio, was launched in 2016. Seeded with an initial endowment of some HK$220 bn (~US$28 bn) drawn from the Land Fund, it aims to secure high investment returns, including but not limited to scitech.

Complementing these efforts is InvestHK, an investment promoter. After 25 years of focusing on attracting foreign investment, it now champions the offshore ventures of Hong Kong-based firms. Leveraging the city's ‘super-connector’ role, it assists local firms, not least in fintech, in accessing global markets and partnerships, as seen in recent deals in the UAE. This shift reinforces Hong Kong's credibility and regulatory strengths.

scitech funding directions

Financial support for scitech development is a fixture with Beijing. May 2025 'Guidelines' from macro agencies, including MoST (the Ministry of Science and Technology) and the PBoC, outlined 15 new measures to boost financial services for sci-tech innovation, e.g. scaling up support for major tech firms and improving structural monetary policy tools.

Redesignated under the GBA framework as a ‘hub’ for both finance and tech innovation, Hong Kong’s shift from its familiar role entails merging financial services with tech. State policy, finance, and supply of human skills are deemed critical to the vision.

market recovery and global repricing

Hong Kong's stock market rebounded in 2024 from two bad years. The Hang Seng Index surged some 18 percent, its China Enterprise Index gained 26.4 per cent, and its TECH Index some 19 percent. Recovery owed much to optimism over Beijing’s policy stance and improved market sentiment following announcements from CSRC (the China Securities Regulatory Commission).

HKEX (Hong Kong Exchanges and Clearing Limited) broke records, cash equities on 8 October 2024 hitting HK$620.7 bn in turnover. Stock Connect reached new highs with Northbound and Southbound average daily turnover reaching C¥150 bn and HK$48 bn.

International investors are reassessing PRC assets, with many seeing deep value prospects. Trading at historically low pricing, they offer price-to-earnings ratios of 11-15x, compared to the S&P 500's 26x. The gaps, with renewed expectations of stimulus, lure foreign investment back to Hong Kong and the PRC.

Ranking in the global top four in 2024, Hong Kong's IPO market raised HK$88 bn [~US$11 bn] from 71 new listings. Outperforming 2023 by some 90 percent, this included the biggest IPO since 2021. A revised listing process and treasury share regime assisted.

Listings of tech/innovation firms have multiplied, due to new product launches, e.g. Asia's first Spot Virtual Asset ETFs (exchange-traded funds) and Hong Kong's first-ever Covered Call ETFs. Exchange-traded product (ETP) markets reached a record daily turnover of HK$18.9 bn [US$2.41 bn], up 35 percent y-o-y.

fin meets tech

Focusing on becoming a scitech financing hub aligns Hong Kong with Beijing’s push for financial services to drive tech. With HK$170 bn [US$22 bn] in state innovation funds, HK$647 bn [US$82 bn] in fiscal reserves, and a recovering stock market, Hong Kong seems less of a disaster case.

Good prospects are created by global PRC asset repricing, as well as massive state-science investment. Reclaiming Hong Kong’s status as a premier financial centre is again in view.

Will (Hong Kong + scitech) = a 21st-century financial centre? Beijing appears prepared to bet on it.

Beijing’s belief in this vision, as seen in the GBA framework and state-backed funds, underscores the ‘why’ behind Hong Kong’s comeback: it’s a calculated bet on leveraging its financial expertise to fuel a tech-driven future.

HK finance chiefs

Paul Chan Mo-po 陈茂波 | HKSAR financial secretary

Extending beyond traditional financial metrics, Beijing’s strategic vision encompasses Hong Kong's role as an all-round innovation hub. The Office for Attracting Strategic Enterprises would, Chan announced, welcome over 10 new such firms in March 2025, total commitments reaching HK$50bn [US$6.38 billion] and creating over 20K jobs. Cross-border collaboration featured in his support for initiatives linking Hong Kong's Faster Payment System with the PRC infrastructure, due to launch mid-2025. This accords with Hong Kong's broader transformation, which Chan says is 'expected to become the world's largest cross-boundary wealth management centre by 2028’.

Chan has urged merging finance with tech innovation. His 2025–26 Budget Speech pointed to moderate growth recorded for two consecutive years via promoting innovation and tech development, while attracting firms, capital, and institutional investors. Highlighting buoyant stock market performance, he cited trading as ‘more active, with average daily turnover exceeding HK$200bn [US$25.51 bn], 50 percent over last year's average' .

Architect of Hong Kong's fintech transformation, Paul Chan Mo-po has been Hong Kong Financial Secretary since 2017. He is an experiecned accountant and former President of the Hong Kong Institute of Certified Public Accountants. He previously served as Secretary for Development from 2012 to 2017. Chan holds BBA and MBA degrees from the Chinese University of Hong Kong, where he serves as an Adjunct Associate Professor, and has studied at Harvard Business School.

Clara Chan 陳家齊 | HKIC (Hong Kong Investment Corporation) CEO

Inaugural CEO of Hong Kong Investment Corporation Clara Chan 陳家齊 sees the HK$62 bn fund [US$7.91 bn] as a catalyst for the city’s tech future, while maintaining rigorous standards. She defines HKIC's dual mandate as 'not only connecting funds but merging technology, human skills, and industry to support startup growth.' Under her leadership, HKIC displays impressive leverage ratios; Chan claims that 'for every single dollar invested, over four of related funds can be mobilised'.

Extending beyond financial returns to strategic ecosystem development, Clara Chan has guided HKIC investment in over 100 firms across hard and core tech, biotech, and new energy sectors, with 5-10 portfolio firms in store for Hong Kong IPOs by year-end 2025.

The first Chief Executive Officer of the Hong Kong Investment Corporation, the HKSAR's flagship sovereign fund established in 2022, Chan is a barrister in the High Court of Hong Kong. Joining the Hong Kong Monetary Authority in 2010 as a Manager in the Reserves Management Department, she was Senior Manager by 2012 and Division Head by 2015. She was appointed Chief Investment Officer (Private Markets) in the Exchange Fund Investment Office in 2018 and Executive Director (Monetary Management) in 2020. She co-chairs the World Economic Forum Global Future Council on Responsible Investing and is a Council member of Lingnan University.

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