Development paradigm shift in Hong Kong
A new chapter of targeted governance and diversified economic expansion unfolds in the SAR
As the central government of China pushes forward the 15th Five-Year Plan (2026-30) for national economic and social development, the Hong Kong Special Administrative Region has rolled out its maiden five-year development blueprint on Sep 16. For the first time, Hong Kong is drawing up a long-term road map to tie its own progress closely to national strategies and serve the broader national development agenda. Centered on reform and innovation, this landmark document seeks deeper institutional change. It aims to boost governance efficiency, tear down structural bottlenecks and sharpen Hong Kong's overall competitiveness.
This five-year plan reflects a major shift in thinking as Hong Kong advances from restoring order to delivering prosperity. Such a change in mindset shows that Hong Kong is reevaluating its development path, bringing about a paradigm shift in development philosophy, the government's economic role and overall governance approaches.
To begin with, Hong Kong is striking a smarter balance between its time-tested traditional strengths and promising new growth drivers. Its five-year plan did not come in "normal times". The world is going through profound and persistent changes, with supply chains restructuring, geopolitical tensions rising, technological competition heightening and climate transformation accelerating — all of which are reshaping global, regional and local economic realities. As a highly open economy, Hong Kong is exposed to these global swings. Its pillar industries such as finance, shipping and real estate can no longer guarantee sustained and inclusive growth, so it faces increasing pressure to foster fresh sources of economic expansion.
Meanwhile, Beijing is advancing Chinese modernization at full steam. The Chinese mainland's huge consumer market and high-quality growth create tremendous opportunities for Hong Kong. The 15th Five-Year Plan assigns Hong Kong a clear strategic position: to consolidate its status as an international hub for finance, shipping, trade and aviation; to build itself into a global innovation-tech center; and to become a magnet for top-tier international talent. Hong Kong can now fully focus on growth and reform.
The SAR's new plan commits to reinforcing its four core economic sectors and talent attraction advantages. It also stresses advancing new quality productive forces while building on existing strengths. The construction of the Northern Metropolis stands out as a key growth engine for higher education and innovation. By linking universities, research bodies and industrial parks, and fully exploring the inherent advantages of the "one country, two systems" policy, Hong Kong can cultivate a thriving innovation ecosystem where research and industry deeply infuse and reinforce each other.
Hong Kong is redefining the boundary between an effective market and a proactive government. Free market principles have long defined its economy, and the old "positive noninterventionism" policy was once hailed as a key to its success. Still, today's technological race and fierce global competition present new challenges. Some ambitious projects — large-scale research platforms or artificial-intelligence-related infrastructure — demand heavy investment, take years to bear fruit and carry high risks. Left entirely to profit-driven private investments, these vital undertakings may never get off the ground.
Drawing on the national guideline of pairing an effective market with a proactive government, Hong Kong's new plan embraces this very idea. Market forces will keep allocating resources, but the government will step up strategic guidance, major infrastructure investment and institutional overhaul. The goal is to let capital, talent and technology flow freely, while official policy fosters a business-friendly environment. The market stays dynamic, and government intervention stays targeted — neither side crowds out the other. This is not about ditching free market values; it is about making them work in concert for Hong Kong's better future.
Hong Kong is blending long-term planning with its familiar annual administrative cycle. In the past decades, Hong Kong's administration centered around the annual Policy Address and the Budget. This system lets policymakers react nimbly to external dynamics and market fluctuations. Yet big-ticket strategic projects often span many years and involve multiple government bureaus. Short-term annual measures could struggle to match long-term ambitions, and cross-department coordination sometimes fell short. The new five-year plan fills this gap. It lays out five-year priorities and pathways, while the Policy Address will translate these strategic blueprints into concrete steps in the form of annual projects.
It's worth noting that Hong Kong is not simply copying mainland planning models, nor is it swapping market-driven capitalism for socialist central planning. Rooted in "one country, two systems" policy, this new hybrid framework preserves market flexibility while adding long-term strategic vision. It balances steady long-range direction with practical policy agility, raising policy consistency so that grand visions can turn into real-world results. By aligning local strengths with national needs, Hong Kong is positioning itself to unlock new potential through the Guangdong-Hong Kong-Macao Greater Bay Area integration, the Belt and Road Initiative connection, and the international talent hub formation.
Finally, Hong Kong's release of its inaugural five-year development blueprint demonstrates that it is now setting off on a new path toward prosperity through good governance. Those who underestimate Hong Kong overlook the city's resilience, ingenuity and patriotism. The development paradigm shift will not only be a significant event in the city's history, but will also reverberate across the world.
Chen Ying is a research fellow at the Chinese Institute of Hong Kong. Zhao Hai is the vice-president of the Chinese Institute of Hong Kong.
The authors contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.
Contact the editor at editor@chinawatch.cn.
