Scaling the Future: Harnessing Mainland Innovation for Hong Kong’s Next Era of Growth
In 2026, “true innovation” is no longer measured by the quantity of ideas generated but by the quality of solutions that can be integrated into day-to-day living and commercialised. This version of innovation produces novel ideas that create impact and drive progress around specific contexts, becoming more precise and tailored to societal needs. “True innovation” is “Future-Ready” at its core.
This re-focusing reflects a fundamental shift in how global competitiveness is defined: Innovation and Technology (I&T) capability has superseded traditional industrial metrics to become the ultimate benchmark of modern societal progress. Today, a city or nation’s maturity is measured not merely by raw academic output or startup headcount, but by its speed and agility in deploying I&T to solve complex, systemic human challenges.
And the Chinese Mainland is one such market, moving from a focus on scale to focusing on the innovation systems that make R&D and tech evolution a reality. In the Mainland, a policy-driven push is emerging for new quality productive forces that contribute to “true innovation”.
In the 15th Five-Year Plan, according to experts at KPMG and Cisco, innovation is codified as an essential driver of economic growth across healthcare, I&T development and the evolution of its fintech market. Mainland hubs like Shanghai are dominating pure innovation and venture capital scaling, while the Greater Bay Area (GBA) has cemented its position as the world’s leading manufacturing and execution cluster. According to The Asian Cities Internationality Index (ACII) 2026 launched by HKGCC and IPSOS, Shanghai maintained its dominant first place in the Innovation and Ideas dimension. This leading position is underpinned by robust investment in and output of innovation, strong international talent mobility, and a dynamic startup ecosystem.
Hong Kong’s own Five-Year Plan, released on 16 September, focuses on creating a smarter city, supported by technological solutions that can address emerging pain points in society across these same areas. As we embark on this journey, the co-ordination between Government, businesses and other sectors of society can benefit from analysing the Chinese Mainland experience of moving from policy signalling and pilot application to business models, sector-wide adoption and deployment.
Powering Future-Ready Healthcare for Shifting Demographics
In Asia, one such systemic challenge to address is the need to create resilient healthcare systems to take on increased burdens of its aging population. According to the Asian Development Bank (ADB), by 2050, one in every four people in Asia will be aged 60 or above, an estimated total of nearly 1.3 billion people. One of the markets to experience a sudden transition will be the Chinese Mainland. Estimates say that in 2030, the Mainland’s aging population is expected to reach 270 million, increasing the burden on its healthcare system.1
With this need to keep up with its fast-aging population, the Chinese Mainland’s healthcare sector is rapidly scaling, thanks to local R&D efforts. The industry has evolved from a generics-led market to one that prioritises innovation and preventative care solutions. In fact, the pharmaceutical sector is expected to balloon in size from US$226.7 billion in 2024 to US$448 billion in 2035.2
The main driver of this increase will be the biologics market, with innovative oncology and autoimmune therapies experiencing higher demand in coming years, as more than 78% of elderly people suffer from at least one chronic condition.3
To ensure that the healthcare system can accommodate the current healthcare burden and expand to handle future numbers, policies in the 15th Five-Year Plan have attempted to focus on this segment, known as the silver economy. The provision of basic elderly care services and the integration of technology in medical services have been prioritised for the co-ordinated development of senior-friendly living environments.
On a business front, Chinese companies are also partnering to create funding channels, push R&D capabilities and expand their international reach. In the first quarter of 2026, total transaction volume of licensing deals in the Chinese Mainland exceeded US$60 billion, a marked jump from 2025.4 Of the 10 innovative drugs approved for marketing this year, eight were domestically produced.5 This is thanks in part to the R&D friendly national policies that have fast-tracked approval for drugs, led to the creation of more smart factories that deploy AI and smart tech in manufacturing, and deeper integration of robotics in the healthcare sector. As of 2026, 50% of the world’s smart factories are based in the Chinese Mainland.6
According to Dr Maggie Lo, Chief Manager (Life and HealthTechnology) at the Office for Attracting Strategic Enterprises(OASES), Hong Kong’s First Five-Year Plan and Policy Address emphasise major healthcare reforms including the Hospital Authority’s hospital redevelopment programme and the Primary Healthcare Blueprint, creating access to newer products and models of care. “Chinese Mainland hubs have shown that innovation ecosystems scale much faster when government, hospitals, universities and industry move in the same direction”, she said. By 2046, more than one in three Hong Kong residents will be aged 65 or above. Illnesses like cancer, heart disease, diabetes and dementia will place a greater burden on the healthcare system and these shifting demographics must be kept in mind moving forward. According to Dr Lo, “The trends point to the same priority: earlier detection, better chronic disease management and early access to innovative treatment.”
As the Mainland moves towards exporting its technical standards and expertise from a public healthcare and R&D perspective, some cities are fast emerging as case-studies for Hong Kong to tap into.
The Beijing-Tianjin-Hebei (BTH) innovation cluster is home to leading domestic and international R&D firms, like Novo Nordisk and BeiGene. Key to the cluster’s success is how it aligns academic expertise with research infrastructure. Moving to the eastern coast, the Yangtze River Delta (YRD) is integrating AI with synthetic biology to accelerate R&D efforts and, by extension, commercialisation. Shanghai is leading the region in pure innovation scale, backed by a robust venture capital engine. According to Eli Lilly and Lilly China, the Mainland’s innovation in biopharmaceuticals is fuelled by a dual engine of providing talent with access to cutting-edge biotechnology and having policy reforms that are aimed at encouraging companies and entrepreneurs to think outside the box for innovative therapies.
Home to its own leading medical schools and a robust AI-focused innovation sector, Hong Kong’s foundation grants it a strategic advantage to become a pioneer in future-ready medical solutions, while leveraging learnings from key innovation clusters. As a long-standing “super connector” for firms looking to expand into the Chinese Mainland and for Mainland enterprises looking to expand globally, Hong Kong can utilise its own innovation roadmap to expand on its “super value-adder” role — providing firms with not just financial resources and funding as they register IPOs but also access to enhanced R&D techniques and a streamlined pathway to commercialisation.
Mapping an “Intelligent” AI Pathway
Both the 15th National Five-Year Plan and Hong Kong’s First Five-Year Plan are also marking a new phase of utilising artificial intelligence (AI) for targeted macroeconomic growth metrics. We are now seeing a shift from “digitalisation” to “intelligence” as agentic AI and other solutions are integrated into businesses and core public infrastructure.
This “AI+” framework also made its way onto the agenda of the meeting between Chinese President Xi Jinping and US President Donald Trump. The use of Chinese AI models has risen exponentially over the past months. The Mainland’s AI market is valued at around US$176.7 billion, with over 6,200 companies and more than 30% of large industrial firms having adopted AI as large-scale deployment remains a priority in the national agenda.7
According to Accenture’s Chinese Consumer Insights survey, 77% of consumers on the Mainland already use AI tools on a weekly or daily basis. This trend is reshaping the way people interact with data and information systems, and requires dedicated engines to power.
Beijing, Guangdong, Shanghai, Zhejiang and Shandong are all playing leading roles in the Mainland’s AI industry. They account for more than 80% of the sector, while the YRD accounts for almost one-third of the national industry.8
According to Eric Chan, Chief Public Mission Officer at Cyberport, “The Chinese Mainland has demonstrated how close collaboration among technology companies, research institutions and industry, supported by strong infrastructure and investment, can accelerate the adoption of AI across sectors such as finance, healthcare, manufacturing and logistics.”
From a policy stand-point, different regions in the YRD have been assigned different subcategories of AI enablement for more efficient resource and talent allocation. For instance, Shanghai specialises in large models, embodied AI and AI for science; while Zhejiang’s focus is the digital economy and commercial adoption of AI. Local government bodies have also aligned with these targets and offer financial subsidies and access to innovative tools for AI R&D and deployment for private companies looking to innovate.
Since 2025, AI has been a key focus for Hong Kong’s macroeconomic outlook, and collaboration efforts within the GBA have honed in on this pillar. The Shenzhen-Hong Kong-Guangzhou innovation cluster is moving up the ranks of the Global Innovation Index and has already overtaken the Tokyo-Yokohama corridor to become the world’s largest innovation cluster.
The GBA itself provides Hong Kong with a unique opportunity to realise its I&T hub potential. Its geographic advantages and industrial level infrastructure create an environment where advanced AI architectures can be tested before being deployed at larger scales. Thanks to the collaborative framework established with the national computer internet service node and the China Computing Power Network Guangdong-Hong Kong-Macau Greater Bay Area Dispatch Centre, enterprises are able to allocate computing capacity while also reducing cost.
On a policy front, the Hong Kong Government has already established targets to integrate AI tools across 200 different government processes by the end of 2027. The GBA is also where SME digitalisation and digital supply chain transformation is being comprehensively advanced. As Hong Kong moves towards deepening the development of the GBA as outlined in the First Five-Year Plan, creating an environment where startups and entrepreneurs are actively encouraged to contribute innovative ideas in the AI sphere will be the catalyst that transforms raw computing capacity into exportable solutions. But while the GBA provides the testing ground, realising true commercial success requires an additional layer of integration. Innovation requires not just capital, but also top-tier international talent.
According to Chan, “We must deepen collaboration across the Greater Bay Area and build on our strengths as an international financial centre, trusted regulatory environment and global talent hub. Hong Kong can play a unique role in connecting world-class research, computing resources, capital and industry demand. With strong governance and responsible AI practices, we can unlock the full potential of AI, build trust, and create lasting economic value.”
Hong Kong excels by leveraging its open business environment and incredibly strong IPO performance to connect regional tech startups with international investors. Furthermore, backed by strong Government support, Hong Kong can facilitate the exchange of global research talent. This gateway function ensures that as the region develops next-generation AI, the ecosystem remains globally connected and commercially viable on the world stage.
Activating the “Finance+” Value Engine
Alongside digital health and intelligent ecosystems, financial services are also experiencing an upheaval. Fintech is rewiring the way banks and businesses operate. Digital products have continued to grow in the Mainland due to high consumer demand. By 2027, cash transactions are expected to account for just 3% of total financial transactions, as more than 1 billion people use Alipay and other digital payment apps.9
Fintech deployment has historically been linked to helping expand banking operations to underserved communities while also cutting down on fraudulent activity and helping manage emerging cyber risk threats. 33% of businesses in Asia believe that cyber risk and data breaches are top threats they must address and government data from the region has tracked an up-tick in cybersecurity breaches in the past few years.10 Executives and C-Suite members are no longer debating about whether to deploy AI but rather how to do it in a way that generates more value for the business and creates long-term resilience.
According to data from PwC, attitudes in the Mainland around what AI can bring to the table are changing. When asked about what AI’s role in their company is, more than 75% of businesses stated it was used for strategic transformation and value creation.
Keeping this in mind, the National Financial Regulatory Administration (NFRA) has proposed updated cybersecurity rules for banking and insurance firms that are integrating AI with their products. The NFRA rules categorise cyber incidents into four tiers based on severity. Companies have been provided with set playbooks on how to handle different threats with 32 different measures being outlined. The goal is not to limit the deployment of AI but to ensure that the integration is carried out efficiently and responsibly.
According to KPMG, the Chinese fintech market is considered a “mature” one, where investment occurs outside of traditional VC, PE and M&A pathways. There is greater involvement of national banks and institutions, leading to centralisation of innovation, backed by policies from the NFRA and innovation at an individual company and sector level.
For instance, in September, the Shanghai branches of Industrial and Commercial Bank of China (ICBC) and China Construction Bank (CCB) facilitated digital yuan transfers worth hundreds of millions. The transactions took seconds, rather than days of processing time usually reserved for large sums of capital. This is part of a broader push for the regional and international use of the e-CNY, a digital currency that ensures greater transparency for large sum transfers.
Earlier, in July, a national catalogue for sci-tech finance data was also announced, introducing 26 indicators across eight categories to improve capital flow to innovative companies. Through leveraging this data, institutions can refine digital credit products and further develop risk-control and investment models. Experts currently believe that the second half of 2026 will have more consolidation between payment, credit and wealth managers.
As an international financial centre, it is no surprise that Hong Kong’s First Five-Year Plan highlighted the “Finance+” growth driver. Promoting patient capital and venture capital investments in companies focused on technological and industry innovation is a key path for the city moving forward — an area that Shanghai with more than US$320 billion worth of assets under management is very familiar with.11
Shanghai’s policies have aimed to capture high-quality investments and cultivate long-term capital through the establishment of strategic funds, providing a tested model for how targeted public guidance can de-risk deep-tech research and early-stage commercialisation. For Hong Kong, this patient capital framework provides valuable insights into how to expand its “Finance+” ecosystem across technological innovation, trade, green development, Intellectual Property (IP), maritime services and livelihood.
Policies that have shaped Shanghai’s asset management depth and the Mainland’s rapid e-CNY digital infrastructure are complemented by Hong Kong’s unmatched offshore RMB liquidity, world-class capital markets, and international legal standards. Ultimately, Hong Kong does not merely channel capital — it actively engineers the financial pathways needed to fund SMEs, spearhead green transformation, and de-risk cross-border tech ventures.
Collaborating for Long-Term Resilience
The Chinese Mainland’s rapid evolution across healthcare, AI, and fintech offers a compelling look at how targeted policy, patient capital, and industrial scale align to realise true innovation. Translating these regional breakthroughs into global commercial impact requires cross-sectoral partnership and the deployment of innovation-friendly regulatory frameworks for the development of a “Future-Ready” society.
As Hong Kong advances its First Five-Year Plan, deepening cross-border integration allows the city to leverage the Mainland’s technological scale while deploying its own institutional strengths, firmly embedding its role as a “super value-adder” for its international counterparts and its own local innovation industry.
1, 2. KMPG
3. Guangdong Academy of Medical Sciences
4, 5, 6. KMPG
7. Xinhua News Agency
8. Hong Kong Trade Development Council (HKTDC)
9. Nikkei Asia
10. Marsh
11. China Daily
