Hong Kong authorities will seek half of the HK$440 million (US$56.2 million) investment for a planned national innovation centre in Yuen Long from the private sector, while setting performance benchmarks that an analyst has called ambitious.

The target was announced after Financial Secretary Paul Chan Mo-po revealed the plan in his latest budget in February, which earmarked funds to establish the first national manufacturing innovation centre outside mainland China as part of efforts to spearhead artificial intelligence (AI) development.

“We expect the innovation centre to be self-sufficient three years into its operation and gradually become profitable in its fifth year,” the Innovation, Technology and Industry Bureau said in a paper submitted to lawmakers on Thursday.

The bureau added the government would subsidise the centre with about HK$220 million, while the remaining HK$220 million covering other expenditures such as equipment purchases, commercialisation and operations would be sought from the industry.

Earlier, an insider told the South China Morning Post that the centre would be located in the Yuen Long InnoPark and focus on semiconductors that could be used in electric vehicles (EVs) and aerospace equipment designed for extreme environments, including deep-sea exploration.

The source added that the centre was expected to operate for a minimum of one year and must pass a formal evaluation before being designated as a national innovation centre.