Hong Kong will seek to create new momentum for economic growth by developing its innovative and technological capabilities, Chief Executive Leung Chun Ying said on Wednesday (Jan 13).
The government will set up a HK$2-billion (S$370-million) fund to encourage private venture capital funds to invest in local start-ups, Mr Leung said in his annual policy address.
The government will match the private investments dollar for dollar.
The initiative is seen as part of the city's efforts to overcome weak growth and a diminishing competitive edge. Growth in Q3 last year tapered off to 2.3 per cent year on year after expanding 2.8 per cent in the previous quarter - the lowest pace of growth in five quarters.
Last year, Hong Kong was ranked 11th in the 2015 Global Innovation Index, falling behind Singapore which took the eighth position.
Amid rising discontent among Hong Kongers over the wealth gap and anger with Beijing's perceived meddling in Hong Kong's political affairs, Mr Leung said in his address there was a "greater need for harmony and solidarity" amid global uncertainties.
The Chief Executive, who is expected to seek a second term next year, spent more than an hour highlighting the importance of seizing opportunities under the "One Belt, One Road" strategy of Chinese President Xi Jinping to better link China with external economies.
"By leveraging the combined advantages of 'one country' and 'two systems', industries in Hong Kong, regardless of scale, can perform their role as a 'super-connector' to attract foreign technologies and investment. They can also serve as a platform or partner for mainland enterprises to 'go global'," said Mr Leung, referring to the "one country, two systems" formula under which Hong Kong has maintained its autonomy since the former British colony was returned to China in 1997.
Mr Leung said he will chair a committee on the "Belt and Road" initiative which will be responsible for formulating strategies and policies for Hong Kong's participation in the initiative.
The government will also set up six more liaison units in mainland China, so as to expand the network and improve functions of its offices in the mainland, said Mr Leung.
Other key policies Mr Leung announced include increasing the housing supply and curbing the rise in property prices, and developing Hong Kong into a centre for aerospace financing.
He also outlined plans to make Hong Kong one of the most-wired in the world, by doubling the number of free Wi-Fi spots to 34,000 in three years. Wi-Fi service will be made available at all public rental housing estates and public hospitals, markets, parks, promenades, tourist spots and public transport interchanges.
Hong Kong will also seek to alleviate population ageing through attracting talent from overseas and fostering a supportive environment to raise a family, said Mr Leung.