Flag-raising ceremony marking the Chinese National Day in Hong Kong
Hong Kong Chief Executive John Lee delivers a speech on stage during an official reception marking the Chinese National Day in Hong Kong, China October 1, 2022. Reuters

Hong Kong leader John Lee will on Wednesday deliver his inaugural policy address that is expected to focus on reviving the city's credentials as an international business hub and on housing after extended COVID lockdowns and political upheaval.

Lee, a former career policeman with limited financial expertise, will have the challenging task of lifting Hong Kong's regional competitiveness after its economy shrank 1.3% in the second quarter.

COVID-19 restrictions have hit the China-ruled city hard since early 2020, battering shops and restaurants, bringing tourism to a halt, and stoking an exodus of expatriates.

Lee, speaking to reporters on Tuesday, emphasized a need for Hong Kong to relaunch itself, citing a recent speech by Chinese leader Xi Jinping, who said Beijing would help Hong Kong "resolve deep-seated issues and problems in economic and social development" and consolidate its "international position" in finance, trade and other areas.

"We are now embarking on a new chapter for further prosperity and this is a new phase for Hong Kong," Lee said.

"Hong Kong has emerged from chaos to order, and now we're moving from order to prosperity," added Lee, referring to pro-democracy demonstrations in 2019.

Beijing responded to the protests with a sweeping national security law in 2020, prompting an exodus of Hong Kong residents to countries including Britain, that offered "lifeboat" citizenship schemes in response to the law.

Lee was sanctioned by the United States that year for his role in the crackdown on freedoms.

More than 200,000 people have left over the past two years or so, according to government figures.

In a bid to retain foreign workers, Lee is expected to announce a stamp duty refund for foreigners who have owned property in Hong Kong for more than three years and who agree to permanent residency, according to the South China Morning Post.

A new 18-month visa is also expected to be launched for graduates of prominent foreign universities, in a bid to reverse a brain-drain of talent, media has reported.

On the issue of housing, Lee has vowed to be "pragmatic" in increasing land and housing supply.

Affordable housing has been a priority for all of Hong Kong's leaders since the former British colony returned to Chinese rule in 1997. Despite their efforts, many people still live in cramped flats that are among the world's priciest.

Transaction volumes are at their lowest levels in 20 years thanks to weak sentiment and rising interest rates. Property prices that were resilient through the 2019 protests and pandemic are now expected to drop about 10% this year.