Hong Kong Forges Path as Global AI Governance Leader Amid Rising Tech Risks

As artificial intelligence integrates into daily life with the ubiquity of electricity, Hong Kong faces a critical juncture: harness its transformative power or risk being overwhelmed by its dangers. A 2025 global survey by the University of Melbourne and KPMG revealed 66% of users blindly trust AI outputs, while 56% report workplace errors from misuse. With nearly half uploading sensitive data to public tools like ChatGPT, the urgency for robust Hong Kong AI governance has never been greater. Experts warn that without decisive action, the city risks reputational damage, stifled innovation, and talent flight.

The Imperative for AI Regulatory Leadership

Hong Kong’s common law system, financial regulatory expertise, and cross-border networks position it uniquely to pioneer global AI standards. Roman Fan Wei, Managing Partner of Deloitte China AI Institute, emphasizes that “good AI governance makes Hong Kong companies more competitive and attracts global investment.” Yet the city currently lacks dedicated AI legislation, relying instead on fragmented sector-specific rules enforced by bodies like the Privacy Commissioner for Personal Data and Hong Kong Monetary Authority.

This patchwork approach creates regulatory gaps. Nick Chan Hiu-fung, Hong Kong deputy to the National People’s Congress and partner at Squire Patton Boggs, advocates for a standalone AI ordinance based on accountability, traceability, and human oversight. “Legislation must balance reducing AI biases without restraining technological development,” Chan told China Daily. Meanwhile, RPC partner Peter Kwon Chan-doo stresses consistency: “Enterprises need clear guidelines for AI deployment planning and budgeting.”

Four Pillars of Effective Governance

1. Unified Regulation
   Proposed laws must address copyright gaps in AI-generated content. Chan supports amending Hong Kong’s Copyright Ordinance to incentivize international AI firms to base operations locally.
2. Risk-Based Classification
   High-risk AI systems (e.g., healthcare or finance) require “human-in-the-loop” controls, ensuring human operators oversee critical decisions. Deloitte’s Silas Zhu Hao notes, “Limited resources demand smart risk allocation—sometimes using AI to validate other AI models.”
3. Enhanced Privacy Safeguards
   Conflicts arise when AI trains on public data containing personal information. The Personal Data (Privacy) Ordinance mandates erasure of unnecessary data, but cross-border flows remain vulnerable. Zhu warns, “Hong Kong’s data openness increases deepfake and privacy violation risks.”
4. Dedicated Oversight Body
   Experts unanimously call for a central AI regulatory agency comprising government, industry, and academic stakeholders. “This is vital for international alignment and Hong Kong’s status as an AI hub,” asserts Fan.

Positioning Hong Kong on the Global Stage

As the EU, US, and China develop divergent frameworks, Hong Kong can bridge standards through multilateral engagement. Chan suggests leveraging platforms like the Asian-African Legal Consultative Organization, while Fan advocates partnering with OECD and UN initiatives. The city’s hybrid legal expertise—spanning common law, continental law, and Islamic law—enables drafting internationally resonant regulations.

Recent steps include Hong Kong’s 2023 Ethical AI Framework for government projects and the 2024 Generative AI Guideline addressing data leaks and bias. However, Zhu stresses that combining Western tech frameworks with Chinese regulatory rigor could make Hong Kong a “contributor to global AI standards.”

Hong Kong stands at a crossroads: become a trusted global AI governance leader or yield to fragmented, reactive policies. By enacting risk-proportionate regulations, establishing cross-border data safeguards, and forming a dedicated AI oversight body, the city can transform existential challenges into competitive advantages. Stakeholders must act now—collaborate, invest, and innovate—to secure Hong Kong’s position as the world’s responsible AI hub.

Must Know

What are the biggest AI risks for Hong Kong businesses?

Unchecked AI use risks data breaches, copyright violations, and operational errors. The KPMG/University of Melbourne survey found 49% of employees uploaded sensitive data to public AI tools, exposing companies to legal and reputational harm. Robust internal policies and employee training are essential.

How is Hong Kong currently regulating AI?

No dedicated AI law exists. Sector-specific bodies like the Privacy Commissioner for Personal Data enforce existing rules. The Digital Policy Office issued non-binding guidelines in 2023 (Ethical AI Framework) and 2024 (Generative AI Guideline), urging transparency and risk assessment.

What is a “risk-based approach” to AI governance?

It prioritizes strict controls for high-impact AI systems (e.g., healthcare diagnostics) while allowing lighter oversight for low-risk applications. Hong Kong’s proposed framework would require human intervention for critical decisions and rigorous bias testing.

Can Hong Kong compete with global AI hubs?

Yes—its common law system, financial expertise, and ties to mainland China offer unique advantages. By creating clear regulations and a dedicated oversight body, it can attract firms deterred by regulatory uncertainty elsewhere.

What immediate steps should companies take?

Audit AI tools for compliance with Hong Kong’s Personal Data Ordinance. Implement “human-in-the-loop” protocols for high-stakes AI outputs. Adopt the Privacy Commissioner’s Model Personal Data Protection Framework for AI systems.