Financial Secretary Paul Chan said Hong Kong will pursue high-quality development by growing its digital economy and ensuring the city is at the forefront of the third generation Internet (Web3) development.

As Hong Kong advances towards a new stage of stability, Mr Chan said the city must think about how to attain better forms of development. Hong Kong has penned many success stories, but also faced development bottlenecks in some areas.

In his 2023-2024 Budget, the Financial Secretary stressed the need to persistently drive development through innovation and technology; create new growth impetus through institutional enhancements and policy innovations; and progress towards green transformation by vigorously promoting the development of green and low-carbon technology and industries.

To speed up the process of developing the digital economy in Hong Kong, the Digital Economy Development Committee, chaired by the Financial Secretary, will undertake in-depth studies in four major areas to explore. These include looking at the digital infrastructure needed to promote the development of the digital economy, examining ways on ensuring the transfer of cross-boundary data in a convenient, efficient and secure manner, and the digital transformation of enterprises and human resources support. The four sub-groups under the committee will provide specific recommendations to the Government this year.

The Government will conduct a feasibility study on the development of an artificial intelligence (AI) Supercomputing Centre as part of efforts to promote the development of AI industries in the city. The study will be completed in 2023‑24.

Mr Chan said the Government will earmark a sum of about $200 million to enhance the operation of the “iAM Smart” platform, so as to provide members of the public with more convenient one‑stop digital services and improve user experience. The wider use of “iAM Smart” will further promote Smart Government and the digital transformation of the whole society.

The Financial Secretary also advocated the development of an advanced and more comprehensive telecommunications infrastructure. He said the Government would encourage telecommunications network operators to invest in infrastructure to provide better services to companies and the public, and proposed tax deductions for spectrum utilisation fees to be paid by the future successful bidders of radio spectrum.

Additionally, to accelerate the pace of digital transformation of enterprises, Mr Chan said the Government would set aside $500 million for Hong Kong Cyberport to launch a Digital Transformation Support Pilot Programme, under which subsidies will be provided on a one-to-one matching basis to assist small and medium-sized enterprises in applying ready-to-use basic digital solutions.

The Financial Secretary said the Government will spare no effort in supporting enterprises to use technology to enhance productivity and upgrade or transform their business processes. For example, the Technology Voucher Programme, which is widely received by industries, has supported over 20,000 applications since its launch.

Then there is the Government’s commitment to ensuring Hong Kong is at the forefront of Web3 development. Mr Chan said the city must keep up with the times and seize this opportunity to spearhead innovation in this field. He pledged to allocate $50 million to expedite the Web3 ecosystem development by, among other things, organising major international seminars, to enable the industry and enterprises to grasp frontier development and to promote cross-sectoral business co-operation.

Mr Chan also talked about virtual assets (VA) as a vital component of spearheading the development of the Web3 ecosystem. He noted over the past few months, a large number of innovative enterprises with potential have been considering setting up business in Hong Kong. For the next step, the Financial Secretary said he would establish and lead a task force on VA development, with members from relevant policy bureaus, financial regulators and market participants, to provide recommendations on the sustainable and responsible development of the sector.