Core Insights - Deloitte forecasts that the Hong Kong Special Administrative Region government will record a surplus of approximately HKD 15.6 billion for the current fiscal year, with fiscal reserves expected to increase to HKD 669.9 billion by the end of March 2026 [1] - The actual deficit for the Hong Kong government from April to September 2025 is projected at HKD 103.2 billion, a significant reduction compared to the same period last year, primarily due to increased stock stamp duty revenue and bond issuance, alongside a faster economic growth driving up operational income and various tax revenues [1] - Deloitte anticipates that the Hong Kong government may achieve fiscal balance in the 2025/2026 fiscal year [1] Recommendations for Government Budget - Deloitte suggests three key expectations for the upcoming government budget, including the development of the Northern Metropolis as a new growth engine for Hong Kong [1] - Strengthening Hong Kong's capital markets is highlighted as a priority [1] - Maintaining Hong Kong's competitive advantage as a regional asset and wealth management center, such as providing up to 50% investment tax credits for companies investing in the Northern Metropolis, optimizing taxes to promote dual listings, and encouraging capital investments [1]

Core Viewpoint - Deloitte estimates that Hong Kong's fiscal budget for 2025/26 will be approximately balanced with a surplus of HKD 15.6 billion, and the fiscal reserves are expected to reach around HKD 669.9 billion by March 31, 2026, reflecting a year-on-year increase of 2.4% from HKD 654.3 billion last year [1] Group 1: Fiscal Proposals - Deloitte suggests developing the Northern Metropolis as a new growth engine for Hong Kong, proposing investment tax credits and subsidies for businesses investing in the area, as well as a 150% special tax deduction for interest expenses and professional fees related to bonds issued for supporting the development [1] - A dedicated tax framework is recommended for the Hong Kong-Shenzhen Innovation and Technology Cooperation Zone, extending tax incentives to activities in the Shenzhen area [1] Group 2: Tax Optimization and Dual Listing - Recommendations include optimizing tax policies to promote dual listings and capital investment, such as providing a "safe harbor" for companies dual-listed in Hong Kong and reducing the stamp duty rate on transactions involving dual-listed company shares by 0.05% [2] - The proposal to change the interest expense deduction condition from "actual taxation" to "applicable tax rate" standard for Corporate Treasury Centers (CTC) and provide unilateral tax credits for CTC income [2] Group 3: Financial Services and Wealth Management - The expectation to maintain Hong Kong's competitive advantage as a regional asset and wealth management center includes offering preferential tax regimes for eligible fund managers, reducing the profits tax rate to 8.25% [2] - Additional recommendations include tax incentives for licensed digital asset market participants and single-family offices, as well as enhancing the charitable ecosystem [2]

Group 1 - The Financial Secretary of Hong Kong, Paul Chan, attended the Future Investment Initiative conference in Saudi Arabia, meeting with local officials and business leaders [1][3] - Hong Kong is accelerating the development of the Northern Metropolis as a key driver for economic diversification and innovation in technology, aiming to provide more quality job opportunities for citizens [3] - The Hong Kong government is adopting flexible approaches to develop the Northern Metropolis, including land allocation and talent importation, to expedite planning and industrial development [3] Group 2 - Paul Chan highlighted the ambitious development vision of the Middle East and its strong growth momentum, while China is also promoting high-quality development and open cooperation [3] - Hong Kong is positioned as a global financial hub, serving as an international fundraising and professional service platform for Chinese enterprises going global and as an ideal gateway for Middle Eastern companies entering the Chinese market [3] - Approximately 300 mainland enterprises are preparing to list in Hong Kong, with many planning to expand into the Middle Eastern market [3] Group 3 - Hong Kong leads in offshore RMB, asset and wealth management, and family office sectors, being the largest offshore RMB center globally [4] - The demand for RMB-denominated assets and risk management products is expected to rise as trade between China and Saudi Arabia increasingly settles in local currencies [4] - Hong Kong manages over $4.5 trillion in assets, establishing itself as a major asset and wealth management center in Asia, with a thriving family office ecosystem [4]

Core Viewpoint - The development of the Northern Metropolis (referred to as "North Metropolis") is crucial for Hong Kong's future growth and is a key policy objective of the Hong Kong Special Administrative Region (HKSAR) government [1][2]. Group 1: Strategic Importance - The North Metropolis serves as a platform for deep cooperation within the Guangdong-Hong Kong-Macao Greater Bay Area and is an important vehicle for attracting investment [1]. - The HKSAR government aims to align more proactively with national development strategies and integrate into the broader national development framework [1]. Group 2: Key Issues for Development - There are several critical issues that require further research and prompt implementation, including: - Innovating institutional mechanisms to enhance development speed and unlock potential [2]. - Flexibly formulating and applying policies to deeply bind target industries and attract global talent [2]. - Utilizing technology and digitalization to improve the quality and efficiency of public services in the development area [2]. - Coordinating comprehensive planning to support the interconnected development of the Greater Bay Area urban cluster [2]. - Leveraging the unique advantages of "one country, two systems" and Hong Kong's role as a "super connector" to enhance industrial integration, innovation cooperation, and academic exchanges with the Beijing-Tianjin-Hebei region [2]. Group 3: Strategic Direction - To accelerate the development of the North Metropolis and reinforce Hong Kong's positioning as an international financial, trade, shipping, and innovation center, it is essential to maintain strategic focus and direction [2].

Core Viewpoint - The Hong Kong Railway Company (MTR) has officially launched the Northern Link project, which is a significant transportation backbone for the Northern Metropolis area and the largest among several railway projects being promoted by MTR [1][2]. Group 1: Project Overview - The Northern Link project will connect the East Rail Line and the Tuen Ma Line, with a branch line directly linking to the Shenzhen Huanggang Port, establishing the third direct railway connection between Hong Kong and mainland China [2]. - The main line of the Northern Link is expected to enhance public transport connectivity in multiple new development areas within the Northern Metropolis, forming a circular railway that significantly improves the coverage and resilience of the railway network [2]. Group 2: Government and Company Statements - The Secretary for Transport and Logistics of the Hong Kong SAR Government, Chen Mei-bao, emphasized that the Northern Link is a landmark project in the infrastructure of the Northern Metropolis, facilitating the flow of people and contributing to regional development [2]. - MTR Chairman, Ouyang Boquan, stated that the Northern Metropolis is a new engine for Hong Kong's future development, and the railway will deepen cross-border connections with the mainland [2]. Group 3: Project Timeline and Progress - MTR reported that the construction progress of the East Rail Line's Kwu Tung Station, part of the Northern Link project, is on track, with structural completion expected in November 2023 and operations targeted to commence in 2027 [3].

Core Viewpoint - The Hong Kong government is prioritizing the development of the Northern Metropolis as a new economic engine, aiming to enhance competitiveness and create job opportunities [1][2]. Group 1: Development Strategy - The Northern Metropolis Development Committee has been established to oversee and accelerate the development of the Northern Metropolis, focusing on legislative work, industry facilitation, and land project approvals [2]. - The committee is chaired by the Chief Executive, with three working groups dedicated to different aspects of development, including operational model design, university city planning, and comprehensive project management [2]. Group 2: Economic Potential - The Northern Metropolis is expected to occupy one-third of Hong Kong's area and future population, presenting significant growth potential and economic value [1]. - The Chief Executive emphasized that accelerating the construction of the Northern Metropolis is crucial for Hong Kong's future development and economic advancement [1].

Group 1: Policy Focus - The Chief Executive of Hong Kong, John Lee, emphasized that "benefiting people's livelihood" is a key focus of the new policy report, aiming to enhance long-term economic competitiveness and improve citizens' happiness and sense of gain [2][11] - The report outlines nine key areas related to citizens' daily lives, with housing being the top priority, including accelerated construction of public housing and innovative "simple public housing" initiatives [2][3] Group 2: Northern Metropolis Development - The Northern Metropolis is highlighted as strategically important, occupying one-third of Hong Kong's land, with plans to accelerate its development and attract industries and major projects [4][6] - A new "Northern Metropolis Development Committee" will be established to streamline administrative processes and introduce competitive practices for land management [5][6] Group 3: Housing and Land Policies - The government plans to allow the transfer of unused plot ratios from redevelopment projects to other areas, aiming to optimize land use and facilitate urban renewal [3][6] - A pilot program will permit property owners to offset land compensation costs by returning land to the government, with specific compensation rates set for different land classifications [6][7] Group 4: Financial Market Initiatives - The report proposes exploring the reduction of the stock settlement cycle to T+1, with consultations planned for the first half of next year [9] - The government aims to optimize the "New Capital Investor Entry Scheme" by lowering the residential transaction threshold to HKD 30 million, enhancing the scheme's attractiveness to investors [10]

Group 1: Northern Metropolis Development - The Northern Metropolis concept was first introduced in the 2021 policy report, covering an area of approximately 300 square kilometers, aimed at becoming an economic engine driven by innovation and technology [2] - The Chief Executive emphasized the region's strategic importance, as it borders Shenzhen and accounts for about one-third of Hong Kong's future population, presenting significant economic value and development potential [2] - A "Northern Metropolis Development Committee" will be established to accelerate development, with the Chief Executive as the chair, and three working groups focusing on operational models, university city planning, and overall project management [2][3] Group 2: Financial Market Development - The Hong Kong stock market has shown strong performance, with the Hang Seng Index rising over 20% since the beginning of the year and IPO fundraising exceeding HKD 130 billion, a nearly sixfold increase year-on-year [6] - The policy report outlines plans to assist mainland tech companies in raising funds in Hong Kong and to optimize listing regulations, including exploring the shortening of the stock settlement cycle to T+1 [6][7] - The report also aims to attract more overseas companies to list in Hong Kong, leveraging the unique connectivity mechanisms with mainland China [6] Group 3: Housing and Living Standards - The government plans to increase public housing supply to 189,000 units over the next five years, reducing the average waiting time for public housing from 6.1 years to a target of 4.5 years by 2026-27 [11] - There will be a shift in housing policy from rental to ownership, with increased support for home ownership programs and adjustments to eligibility criteria for public housing residents [11][12] - The report proposes to lower the investment threshold for residential properties, allowing high-net-worth individuals more options in the housing market, which is expected to stimulate demand [12]

Group 1: Northern Metropolis Development - The Northern Metropolis concept was first introduced in the 2021 policy report, covering an area of approximately 300 square kilometers, aimed at becoming an economic engine driven by innovation and technology [2] - The Chief Executive emphasized the strategic importance of the Northern Metropolis, which borders Shenzhen and is expected to account for one-third of Hong Kong's future population, creating numerous jobs and enhancing productivity [2][5] - A new "Northern Metropolis Development Committee" will be established to accelerate development, with three working groups focusing on operational models, university town planning, and overall project management [3][4] Group 2: Financial Market Development - Hong Kong's stock market has shown strong performance, with the Hang Seng Index rising over 20% since the beginning of the year and IPO fundraising exceeding HKD 130 billion, marking a nearly sixfold increase year-on-year [6] - The policy report outlines measures to attract overseas companies for secondary listings in Hong Kong, leveraging the unique connectivity with mainland China [6][7] - Proposed changes include shortening the stock settlement cycle to T+1, which aligns with international standards and enhances market liquidity [7] Group 3: Housing and Living Standards - The government aims to increase public housing supply to 189,000 units over the next five years, reducing the average waiting time for public housing from 6.1 years to a target of 4.5 years by 2026-27 [10][11] - The policy shift focuses on facilitating home ownership rather than rental, with plans to increase the supply of subsidized housing and optimize transfer arrangements for public housing residents [10][11] - Adjustments to the capital investment scheme will lower the investment threshold for residential properties, potentially boosting demand in the real estate market [11]

Core Viewpoint - The Northern Metropolis is identified as a new engine for Hong Kong's economic development, with significant potential for growth [1] Group 1: Development Initiatives - The Hong Kong government will accelerate the development of the Northern Metropolis [1] - A "Northern Metropolis Development Committee" will be established, led by Chief Executive John Lee, to formulate operational models for various development zones within the Northern Metropolis [1] Group 2: Educational Development - The government will promote the construction of a university town [1] - Research will be conducted on the development model for the Northern University Town [1]