Hong Kong’s ambitious Northern Metropolis has received a shot in the arm with a HK$150 billion (US$19 billion) fund launch to kick-start the high-tech park’s development.
The site is massive, covering some 30,000 hectares, which is about one third of Hong Kong’s total land area and about the size of Philadelphia in the USA, or Edinburgh in Scotland.
And before the ink has dried since the announcement of the plan, more than 60 firms have moved into the first two buildings in the Phase 1 development of the San Tin Technopole, the centrepiece of the entire project. The infrastructure is already well in place: drainage has been laid, internal roads built with slip roads connecting to the main highway, electricity has been connected and buildings are sprouting like stalagmites while construction cranes dot the skyline. The area is a hive of activity.
When completed, the project will create 650,000 jobs and house 2.5 million people.
Naturally, such a project will require money, and Hong Kong has plenty of that. Hong Kong is the world’s top capital market, ranking the top spot for Initial Public Offerings (IPOs) in 2025. A combination of revenue earned from IPOs and bond sales, pushed Hong Kong’s 2025-26 budget to a surplus to some $3 billion (US$383 million). As Hong Kong is the envy of the world for its monetary management, raising the necessary funds for the $224 billion ($28 billion) project should not be difficult.
Normally, surpluses go into the government’s exchange fund, currently standing at $4.1 trillion ($524 billion), which is used to maintain the Hong Kong dollar’s peg to the US dollar. But with such ambitious plans afoot, Financial Secretary Paul Chan Mo-po has proposed taking some $150 billion ($19 billion) from the exchange fund to support the Northern Metropolis. Investment returns from the exchange fund last year topped $300 billion ($38 billion). This, he sees, as an investment, not an expenditure. After all, he said, this is only half of last year’s profits.
In his Budget speech last week Chan announced the setting up of a “Northern Metropolis Urban-Rural Integration Fund” which will entail an initial capital of $200 million ($25.5 million) to boost rural tourism in the area. Hong Kong is rich in heritage, and some 200 villages will benefit from the scheme. Another $1 billion ($128 million) will be earmarked for a heritage conservation fund for revitalzation projects and maintenance of historic buildings.
The government will also inject another $10 billion ($1.27 billion) into an adjacent project known as the Hetao Hong Kong Park, otherwise known as the Hong Kong-Shenzhen Innovation and Technology Park. A dedicated company for this development, set up by the government in 2023 is seeking public-private partnerships to take up its offer to occupy some 1 million square metre gross floor area on 87.7 hectares of land. It is expected this site alone will provide some 52,000 innovation and technology jobs.
Although the metropolis is mainly high-tech, it will also house a university town with accommodation for students and a training hospital, as well as possibly earmarking some land for private hospital development. Applications will soon be open to develop campuses in the Hung Shui Kiu/Ha Tsuen area with an offer of $10 billion ($1.3 billion) in loans to the successful applicants. Tertiary education bonds are likely to be issued to support the construction of the university and its facilities. The universities have the capacity to issue bonds with their substantial financial reserves and profitable self-financing programes. After all it is normal for universities elsewhere to raise capital by the issuance of bonds. The government can provide a guarantee for the bonds, allowing them to receive a credit rating equivalent to government bonds which currently stands at AA+.
Investors can rest assured the Chinese Central Government will do everything in its power to preserve its southern treasure for generations to come with Hong Kong being the pinnacle for the Greater Bay Area.
Mark Pinkstone
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When China’s Paramount Leader Deng Xiao Ping floated the idea of one country two systems for the future of Hong Kong, the west scoffed at the possibility of a communist regime and a capitalist bastion living hand in hand. Some 29 years later the prophets of doom were proven wrong as Hong Kong is now more prosperous than ever and it’s future will be more so.
For more than 150 years Hong Kong lived under a British colonial rule. There was no democracy, only authoritarian management. The succession of ruling governors were hand-picked by the Foreign and Commonwealth Office and appointed by the Prime Minister, without any consultation with the people of Hong Kong.
But the people of Hong Kong didn’t mind. If they had never seen democracy, how could they miss it. The governors were diplomats and their upper-crust training ensured that the natives were happy and that their rice bowls were filled. The diplomats got on well with the Chinese government as they knew that harmony was the key component to a successful relationship.
Then came along a politician for the first time to run Hong Kong in the name of Chris Patten, who had lost his seat in the Bath electorate, about 156 km west of London. John Major was Prime Minister at the time and a good friend of Patten. So, to make up for the political loss in Bath, Major offered Patten the cushy job of being governor of Hong Kong.
In 1992 Patten and his family arrived in Hong Kong and as a typical politician, he arrived like a bull in a china shop (pun intended). There was no diplomacy involved. Patten and Major had decided that the foreign office diplomats were pussy-footing with the Chinese during the previous decade negotiating Hong Kong’s future and a firmer stand was necessary.
Unlike his predecessors, Patten knew nothing of Chinese traditions and customs. He just could not understand Chinese mentality and that applied not only to the mainlanders but also the local Chinese. The East is East and the West is West and never the twain shall meet wrote poet Rudyard Kipling in 1889. But, in Hong Kong they did.
The Joint Declaration between Great Britain and China on the future of Hong Kong and the subsequent Basic Law (Hong Kong’s mini constitution) provided the pathway for Hong Kong’s future, including democratic elections for the city’s legislative council. But Patten was impatient and decided to introduce a fully elected legislature in 1995 immediately before the handover in 1997. This infuriated the Chinese-side, and they provided for a provisional legislature to replace Patten’s council as soon as Hong Kong was reverted to Beijing’s administration.
After 1997, Hong Kong formed its first directly elected Legislative Council in 1998, while the Chief Executive is elected by an Election Committee — a system similar to the U.S. presidential election. Hong Kong's Election Committee now has 1,500 members, whereas the U.S. Electoral College has only 538 members.
Since then, Hong Kong has flourished. The prophets of doom and Kipling were wrong. Despite many attempts by the west to dismantle the Deng formula Hong Kong is one of the most successful places on the planet. Year after year it is breaking records to the envy of many. Hong Kong has secured third place in the Global Financial Centres Index. In the latest World Competitiveness Ranking, Hong Kong's position has risen one spot further to rank second globally. And in the World Talent Ranking, Hong Kong has moved up 10 places to rank the fourth globally and the first in Asia. Hong Kong also continues to come first as the world's freest economy. And Hong Kong has what many want – stability.
The Hong Kong formula is unique and successful. Never tried before, it was seen as an experiment and the world was watching, waiting for it to fail. But the Hong Kong people are resourceful and will take any challenge head on. There is no failure.
The Hong Kong Special Administrative Region (HKSAR), established under the People’s Republic of China (PRC) Constitution, has maintained the previous capitalist system and way of life. Its common law system continues to operate, and it enjoys the free flow of people, capital, data, goods and more. The vibrancy and prosperity of the central government has always been Hong Kong's strongest backing.
Hong Kong’s 29th birthday under the PRC guidance, coincides with the 105th Anniversary of the Founding of the Communist Party of China. Naturally there have been celebrations all round, and justifiably so. Both Hong Kong and the central government are proud of what they have achieved. And both, particularly in the past year have taken top ranking as the preferred place in the world to trust and to do business.
Chief Executive John Lee, at a celebratory function on July 1 summed it up with: “Hong Kong, the Pearl of the Orient, will ride the wave of flourishing national development and sail with the wind, steering towards a brighter and more prosperous future!”
And the future is being mapped out in Hong Kong’s first five-year plan, currently under consultation with the public. The plan, a road map for future leaders to follow, will include a futuristic block of land, one third of Hong Kong’s total, to house high tech innovative research and development facilities with university, hospital and new town ancillary services. This Northern Metropolis straddles the river that acts as the boundary between Hong Kong and neighboring Shenzhen, with bridges linking the two; further proof that Hong Kong is an integral part of China.
