PwC unveils strategic insights for the 2025 Policy Address: Identifying new options for growth

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Hong Kong, 19 August 2025 – As the Hong Kong SAR government embarks on public consultations for its 2025 Policy Address, PwC is eager to share its insights and policy recommendations for the coming year. 

Buoyed by strong exports performance and improved domestic demand, Hong Kong’s economy continued to expand solidly in the second quarter of 2025 and saw a 3.1% year-on-year increase in real GDP, picking up slightly from the preceding quarter. The government forecasts real GDP growth will be between 2% to 3% for the whole of 2025. 

PwC urges the government to take decisive steps to identify new options for growth, leverage Hong Kong’s position as a super-connector between the Chinese Mainland and global markets, revitalise market vitality and strengthen partnerships with the Chinese Mainland and regional collaborators, thereby solidifying Hong Kong’s status as an international financial centre.

Charles Lee, PwC China Vice Chair and Managing Partner, said, “At PwC, we understand the unique position Hong Kong holds as a vital link between the Chinese Mainland and global markets. Given the current landscape of challenges and opportunities, it is crucial for the government to act decisively in rejuvenating the market while embracing closer integration with the Chinese Mainland and regional partners. Our policy recommendations aim to enhance Hong Kong’s global competitiveness and financial resilience through strategic connections, technological innovation, and stable financial market development. By taking bold actions, Hong Kong can further cement its status as a leading international finance hub.”

PwC’s recommendations

1. Strengthening Hong Kong’s role as a global and regional connector 

Agnes Wong, PwC South Private Clients and Family Office Tax Leader, said, “ Hong Kong is at a crossroads when it comes to fostering a headquarters economy, where strategic initiatives such as tax incentives and facilitating measures are pivotal. We saw a 5% rise in the number of regional headquarters in the city to 1,410 in 2024. It’s imperative to capitalise on this growth by creating a seamless and supportive environment for international executives. By offering a regional headquarters tax incentive and establishing a one-stop service platform, we can significantly enhance Hong Kong’s appeal to global markets, drive sustained economic development and reinforce Hong Kong’s role as a dynamic super-connector between the Chinese Mainland and the world.” 

Davis Cho, PwC Hong Kong Hotel and Hospitality Assurance Leader, said, “Infrastructure to promote regional connectivity is increasingly important as the Northern Metropolis (NM) takes shape. Making optimum use of different Public-Private Partnership (PPP) models will help ensure project viability. The government should use flexible concession terms that cushion investors against real estate valuation risks while also exploring risk-sharing on NM sites. Tourism-focussed development largely centres around Victoria Harbour, and the establishment of a Harbourfront Development Authority can bring together different stakeholders and departments.”

2. Driving new growth engines in Innovation & Technology

Davis Cho said, “Recognising the Northern Metropolis as an economic engine for Hong Kong’s future growth, we recommend establishing it as a hub for the headquarters of tech companies by leveraging its proximity to Shenzhen and to Hong Kong’s distinct legal system. Additionally, we propose establishing Hong Kong as a leader in pharmaceutical research and development, enhancing the region’s strengths in traditional Chinese medicine development.”

Peter Brewin, PwC Hong Kong Digital Assets Leader, added, “In light of the government’s recent Policy Statement on the Development of Hong Kong’s Digital Asset Sector 2.0, we recommend accelerating digital asset strategies. We also see the potential to position Hong Kong as a digital-first asset & wealth management hub. Establishing blockchain-native asset registries would facilitate tokenisation of assets, while implementing mechanisms for registering the issuance and transfer of digital assets representing land, IP and equity shareholding etc. can ease processes and reduce the time span for transactions.” 

3. Optimising financial markets for sustainable growth

Eddie Wong, PwC China Capital Market and Accounting Advisory Services Leader, said, “Hong Kong is uniquely positioned to enhance its capital markets by fostering innovation through an expanded OTC platform for innovative companies and startups. It can facilitate cross-border investment through initiatives such as Primary Equity Connect, and by broadening the scope of confidential filing to include dual primary listing applicants, large-cap and high-growth companies. This enables them to safeguard sensitive information longer and maintain competitive advantage. By improving shareholder protection standards, offering targeted tax incentives for RMB-denominated assets, and gradually reducing trading costs, Hong Kong can strengthen its accessibility and competitiveness, ensuring sustainable growth and solidifying its role as a premier global financial hub.”

Josephine Kwan, PwC Hong Kong Asset & Wealth Management Industry Leader, said, “With Hong Kong’s Asset & Wealth Management sector now overseeing USD 4.5 trillion in assets, the industry stands as a cornerstone of the city’s financial ecosystem. In order to secure Hong Kong’s leading position as an international financial centre, it is vital to take a holistic approach to promote Hong Kong as the destination of choice for businesses. Measures should include preferential tax treatment and attractive talent policy. Hong Kong should also promote Hong Kong fund vehicles and continued advancement of strategic cross-border initiatives such as Wealth Management Connect (WMC), Mutual Recognition of Funds (MRF), and the inclusion of ETFs into Stock Connect.” 

Agnes Wong said, “Family offices are key to Hong Kong’s asset and wealth management sector. To attract more family offices to Hong Kong, we recommend further enhancing the existing tax concessions, including expanding qualifying assets to cover artworks and collectibles, allowing both residential and non-residential properties in Hong Kong to count toward the minimum asset threshold, and introducing other complementary measures.”

4. Advancing Hong Kong’s appeal as a destination of choice

Josephine Kwan said, “The global democratisation of private markets and the accelerating retailisation of alternatives are irreversible forces reshaping the investment landscape. In response, we recommend establishing a roadmap that supports the growth and responsible distribution of alternative assets to retail investors – while prioritising investor protection and effective liquidity management. As Hong Kong celebrates the 25th anniversary of the Mandatory Provident Fund (MPF) System later this year, the inclusion of alternative investments presents a timely opportunity to evolve the system and enhance long-term retirement outcomes.”

Michelle Taylor, Partner at Tiang & Partners, said, “Hong Kong stands out in Asia as an ideal location for the development of a robust secondary debt trading market, thanks to its advanced financial infrastructure, enduring stability and internationally respected legal and regulatory framework. We recommend that the Hong Kong government invest in the enhancement of local clearing and settlement systems to streamline transaction processes, boost market liquidity, lower borrowing costs and make Hong Kong even more attractive to global investors. We also propose the creation of a comprehensive legal, tax, and regulatory environment specifically designed to support the securitisation and repackaging of assets and receivables by private funds and financial institutions.” 

Notes to Editors 

Download the report: PwC’s recommendations for the Chief Executive’s 2025 Policy Address: Identifying new options for growth

Download the executive summary: PwC’s recommendations for 2025 HKSAR Government Policy Address – Executive Summary