Following is a question by the Hon Tommy Chung and a written reply by the Secretary for Commerce and Economic Development, Mr Algernon Yau, in the Legislative Council today (July 8):
 
Question:
 
     There are views that in recent years, the Government has been actively promoting digital transformation and encouraging small and medium enterprises (SMEs) to adopt AI technologies to optimise their operational workflows. In the face of the complexity of the external environment and competitive pressures of cross border trade, the import and export (I&E) sector can make good use of AI (e.g. intelligent customs clearance, supply chain forecasting and risk management) to enhance efficiency and reduce costs. In this connection, will the Government inform this Council:
 
(1) whether the Government has compiled, for the past year, statistics on (i) the services provided by various government departments to support SMEs in the I&E sector in adopting AI technologies (including the number of enterprises using such services, major application scenarios), and (ii) the total expenditure incurred by the Government in providing such AI support services for SMEs in the I&E sector; if so, of the details; if not, the reasons for that;
 
(2) whether the Government has assessed the effectiveness of the existing measures (e.g. funding schemes, technical consultations and talent training) that support SMEs in the I&E sector in adopting AI technologies, including the coverage of these measures, the situations of applications submitted by enterprises and approvals granted, and whether it has conducted quantitative assessments of whether these measures can enhance enterprises' operational efficiency; if so, of the details; if not, the reasons for that; and
 
(3) of the Government's short-term (about one to two years) and long-term (about three to five years) targets for promoting further application of AI technologies by SMEs in the I&E sector, and whether it has drawn up corresponding policy measures and timetables (e.g. increasing funding amounts, formulating guidelines on AI applications and strengthening collaboration with technology enterprises); if so, of the details; if not, the reasons for that?
 
Reply:
 
President,
 
     The Government has been adopting a multipronged approach to promote diversified development, upgrading and transformation of small and medium enterprises (SMEs) of various sectors (including the import and export sector) through measures including funding support, capacity building, publicity and promotion, market expansion. In recent years, technologies such as AI develop rapidly. The Government encourages the trade to adopt technologies having regard to business needs, with a view to reducing operational costs, enhancing efficiency and market competitiveness.
 
     Having consulted the Financial Services and the Treasury Bureau and the Innovation, Technology and Industry Bureau, a consolidated reply to the three parts of the question is as follows:
 
     Different government bureaux and departments have various schemes and measures to support enterprises (including SMEs) to adopt AI in different business scenarios.
 
     As regards funding support, the Dedicated Fund on Branding, Upgrading and Domestic Sales (BUD Fund) is one of the Government's initiatives in supporting SMEs. The BUD Fund has been providing funding support to the manufacturing or service industries (including the import and export sector), encouraging non-listed Hong Kong enterprises to develop diversified markets with a view to enhancing their competitiveness through branding, upgrading and restructuring, and promoting sales. To encourage SMEs to implement projects with AI elements, the BUD Fund has provided more targeted funding support to enterprises since mid-June 2026. The Guide to Application of the BUD Fund has explicitly stated that fundable project measures include the application of AI in eligible projects, provided that the funding criteria of the BUD Fund can be satisfied. Examples include the development of AI chatbot function in the company website, or adoption of AI to ensure that the production lines meet the regulatory requirements of target markets.
 
     In addition, the $500 million Digital Transformation Support Pilot Programme (Pilot Programme) provided funding support on a matching basis to help nearly 8 800 SMEs adopt off-the-shelf and basic digital solutions, thereby accelerating their digital transformation. The Government will allocate an additional $300 million to enhance the Pilot Programme in order to encourage SMEs to adopt AI and cybersecurity digital solutions, thereby enhancing their competitiveness and strengthening information security. The Government will also actively consider expanding the scope of the programme to cover more sectors. The Government is currently reviewing the Pilot Programme to devise the funding model, scope, funding levels, and implementation details for the new round of the Pilot Programme, with a view to better aligning the programme with enterprises' needs. Our target is to roll out the enhanced Pilot Programme in the second half of 2026 following consultation with the Legislative Council.
 
     On the other hand, the SME ReachOut, established by the Government and operated by the Hong Kong Productivity Council (HKPC), helps SMEs identify suitable government funding schemes and provides them with capacity building services, including providing SMEs with information related to technology transformation, digitalisation and e-commerce, etc through one-on-one technology/business know-how consultation meetings, seminars, networking events and annual large-scale events. The Government has allocated $100 million to gradually enhance the services of SME ReachOut in the ensuing five years starting from 2023. The SME ReachOut also organised the two-day "E-commerce Innovation Expo 2026 - Expanding Brand Horizons" in June 2026, featuring AI-related thematic zones, namely New Retail Tech Application and Smart Operations, to help SMEs understand and identify suitable technological application solutions. The Expo attracted over 3 000 visitors and handled over 5 400 enquiries.
 
     At the same time, the Government provides SMEs with four-in-one integrated consultation and referral services through the four SME centres (namely the Support and Consultation Centre for SMEs under the Trade and Industry Department, the SME Centre under the Hong Kong Trade Development Council (HKTDC), the SME One under the HKPC and the TecONE under the Hong Kong Science and Technology Parks Corporation). The four SME centres also co-organise four-in-one seminars on themes such as technology adoption, exploration of overseas and Mainland markets, with a view to helping SMEs enhance their competitiveness. In the past year (i.e. July 2025 to June 2026), the SME ReachOut and the four SME centres organised a total of 13 seminars related to AI applications, attracting over 900 participants.
 
     The HKTDC also works closely with leading technology enterprises through its "Transformation Sandbox" to help enterprises accelerate the automation of business processes, improve operational efficiency and expand their digital marketing footprint, while leveraging technology to gain insights into key market trends. Furthermore, the HKTDC's Digital Academy offers a range of online courses that cover areas like AI applications, helping local SMEs enhance their digital competitiveness. In 2026-27, the Digital Academy will invite AI experts and leaders in international trade to deliver practical courses and thematic seminars with a view to assisting Hong Kong SMEs in capturing global business opportunities.
 
     Besides, the Hong Kong Artificial Intelligence Research and Development Institute (AIRDI) will strive to promote the integration of AI technology with industry, accelerate the commercialisation of research outcomes, and make it easier for SMEs to access practical AI solutions. At the same time, the AIRDI will provide security assessments and related consulting services for AI applications to lower the barriers for SMEs in terms of technology adoption and compliance.
 
     Existing schemes and measures under different government bureaux and departments that support SMEs to adopt AI are generally applicable to different sectors. The Government does not maintain statistical breakdown and information in respect of the numbers of applications made, usage by, expenditure incurred for the import and export sector, and the related effectiveness assessment. The 2026-27 Budget promotes the industrialisation of AI and deepening of its integration across various industries while encouraging wider AI application. The Government will continue to maintain close communication with the import and export sector, with a view to understanding the development of and challenges faced by the trade under rapid technological advancement. The Government will also review and enhance relevant schemes and measures as appropriate, thereby further promoting SMEs' adoption of AI and leveraging AI to drive industrial transformation, innovation and development.

Ends/Wednesday, July 8, 2026
Issued at HKT 16:25

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