Launch event of Low-altitude economy "Regulatory Sandbox X" held
The launch event of the low-altitude economy "Regulatory Sandbox X" was held today (November 24), with an aim to further promoting the development of low-altitude economy in Hong Kong and exploring innovative applications. The Secretary for Transport and Logistics, Ms Mable Chan; the Director-General of Civil Aviation, Mr Victor Liu; the Executive Director of Hong Kong Productivity Council (HKPC), Mr Mohamed Butt, and the Chief Digital Officer of HKPC, Mr Edmond Lai, officiated at the event.
Speaking at the event, Ms Chan said, "the low-altitude economy 'Regulatory Sandbox X' announced by the Chief Executive, Mr John Lee, in his 2025 Policy Address in September this year was launched today. As an advanced version of "Regulatory Sandbox", "X" represents "extended" and "extra". The goal of "Regulatory Sandbox X" is to handle more complex scenarios, such as cross-boundary low altitude drones, unconventional aircraft designed for passenger-carrying, and integrated operation platforms. Projects under the low-altitude economy "Regulatory Sandbox" launched in March have been progressively implemented, injecting smart vitality and creating new prospects for Hong Kong. We will continue to engage with the industry and gather diverse perspectives to enable the drafting of the Action Plan on Developing Low-Altitude Economy by the end of next year. This will establish the foundational infrastructure for the top-level design of the entire low-latitude economy, providing the industry with a clear and forward-looking trajectory."
The HKPC is a technical partner of the "Regulatory Sandbox" launched by the Working Group on Developing Low-altitude Economy. At the event, the Chief Digital Officer, Mr Edmond Lai, stated that the HKPC has been actively contributing to and advancing innovation and practical implementation in Hong Kong's low-altitude economy sector. With "Regulatory Sandbox X" focusing on more complex and technologically advanced application scenarios, the HKPC will continue to serve as a technical partner, striving for R&D in forward-looking areas such as new materials, new energy, and advanced traffic management systems, to support the industry in strengthening technical standards and application capabilities, fostering the adoption of innovative solutions in real-world environments.
In the first batch of "Regulatory Sandbox", 38 projects were selected, with 29 projects already implemented, covering a wide range of fields and application scenarios, including emergency and rescue, logistics and distribution, inspections and safety maintenance, surveillance, and low-altitude infrastructure, injecting new smart dynamics into the city. "Regulatory Sandbox X" will bring new elements of "extra", "extended" and "collaboration", and raise the work on developing low-altitude economy to the next level.
On the same day, the Project Facilitation Task Force (the Task Force) under the Working Group on Developing Low-altitude Economy provided a detailed briefing to nearly 200 industry professionals on the content and application details of "Regulatory Sandbox X". The Task Force and the government-appointed partners will continue to actively assist in advancing the "Regulatory Sandbox X" pilot projects. The first phase of applications, primarily focuses on unmanned aircraft system traffic management system demonstrations, will commence from today until January 9, 2026. For more details, please refer to the website of the low-altitude economy "Regulatory Sandbox X" of the Transport and Logistics Bureau (www.tlb.gov.hk/eng/highlights/transport/low-altitude.html).
Launch event of Low-altitude economy "Regulatory Sandbox X" held Source: HKSAR Government Press Releases
Launch event of Low-altitude economy "Regulatory Sandbox X" held Source: HKSAR Government Press Releases
LegCo Secretariat releases Research Brief on "The 2026-2027 Budget"
The following is issued on behalf of the Legislative Council Secretariat:
The Financial Secretary (FS) presented the fourth Budget of the current-term Government on February 25. The Legislative Council Secretariat (the Secretariat) today (April 2) released a Research Brief on "The 2026-2027 Budget".
Supported by strong stock-trading stamp duty income and bond issuance, total government revenue soared by 21.9per cent year-on-year to HK$688.8 billion in the 2025-2026 fiscal year (see Annex 1). With a HK$2.9 billion surplus for the Consolidated Account, Hong Kong recorded a fiscal surplus for the first time after three consecutive years of deficits. While this arrived three years earlier than the Government projected, when excluding net bond proceeds, the underlying deficit remained at HK$100.4 billion. This equates to 3per cent of Gross Domestic Product (GDP), which is still below the average (4.6 per cent) of the 37 advanced economies tracked by the International Monetary Fund.
The Research Brief examined the Government's near-term fiscal position and the reinforced fiscal consolidation programme already implemented, as well as analysing the fiscal space for expanded bond issuance. The Research Brief pointed out that total public expenditure grew 5.4per cent to HK$844.2 billion. This is estimated to rise a further 7.2per cent to HK$904.7 billion in this fiscal year. Driven mainly by an ageing population, health and social welfare remain the largest spending areas, with infrastructure replacing education as the third-largest (see Annex 2). Over the past five years, infrastructure expenditure has surged by over 40 per cent. As Northern Metropolis-related (NM) projects are rolled out progressively, capital works expenditure is expected to average around HK$120 billion per annum over the next five years.
As part of the fiscal consolidation programme in the 2026-2027 fiscal year (see Annex 3), FS proposed transferring HK$150 billion of the Exchange Fund's (EF) investment income to finance the development of NM and other infrastructure projects. This withdrawal, which is the first in 42 years, has drawn considerable debate. Some argue that it could undermine the EF's capacity in preserving Hong Kong's financial stability, and question whether such a drawdown might become a "regular practice". Others, however, regard this proposal as an "innovative" measure that is "safer" than expanding bond issuance.
Meanwhile, FS also proposed raising the bond issuance ceiling from HK$700 billion to HK$900 billion, with a greater share of longer-term bonds. The Research Brief noted that concerns over the trajectory of government debt persist, given mounting repayment pressure on the bonds issued in recent years. Net bond proceeds are projected to be compressed by 43.3 per cent between 2026-2027 and 2030-2031 fiscal years, and the gross government-debt-to-GDP ratio is expected to increase to 19.9 per cent. However, this ratio remains far below the average of advanced economies (see Annex 4), and interest expenses amount to just 1.2per cent of government revenue. As reflected in a range of key financial indicators, Hong Kong's fiscal position remains resilient by international standards and its creditworthiness continues to rank among the strongest of any major advanced economy.
The Research Brief also suggested that as the Government moderates expenditure growth to restore fiscal balance, the recovery of the private sector will be key to sustaining economic growth momentum. To actively support and proactively align with the National 15th Five-Year Plan, Hong Kong is formulating the first-ever Five-Year Plan, which could provide a framework for sequencing public investment commitments alongside the fiscal consolidation timetable.
On long-term fiscal health, the Research Brief pointed out that population ageing, low fertility and the impact that AI will bring to the labour market could further strain public finances. Despite the pro-natalist measures introduced by the Government, registered births fell to a record low in 2025. The Research Brief compared the pro-natalist policies in Hong Kong with those in selected advanced economies in Asia and Europe, noting that effective responses require early, sustained and comprehensive intervention, rather than relying primarily on financial incentives. International experience points to facilitating workforce transition as crucial to safeguarding the tax base. As profits tax and salaries tax account for a large share of the Government's recurrent revenue, the ability to steer workforce towards high complementarity with AI has direct implications for the tax base. The Research Brief observed that the upgrading of the Employees Retraining Board into Upskill Hong Kong with a mandate to provide skill-based training, specifically incorporating AI applications, is a timely policy response.
The Legislative Council (LegCo) will resume the Second Reading debate on the Appropriation Bill 2026 at its meeting of April 22 and Members will speak on the Bill.
The Research Brief is prepared by the Secretariat's Research Office of the Research and Information Division with a view to enhancing information support for Members. The Research Brief is now available on LegCo website: app7.legco.gov.hk/rpdb/en/uploads/2026/RB/RB01_2026_20260402_en.pdf.
Source: AI-found images
