Hong Kong has made “significant” progress in its bid to transform itself into a technology hub, according to a Chinese venture capital investor, whose firm was recently selected by the city to invest in local start-ups under a HK$2 billion (US$250 million) government initiative.

“You can see fundamental, significant changes are indeed taking place,” said Steve Sun, founding managing partner of Dalton Venture, in an interview on Thursday. “I believe that over the next decade, Hong Kong can replicate the innovation and technology ecosystem we see in Shanghai.”

The Hong Kong government’s measures to retain research talent and encourage the commercialisation of research results were “gradually taking effect”, according to Sun.

Dalton Venture, a Shanghai- and Shenzhen-based venture capital firm focused on life sciences, was among nine firms admitted last week to an “enhanced scheme” of Hong Kong’s Innovation and Technology Venture Fund (ITVF), which enlists venture capital partners to co-invest in tech start-ups.

The ITVF was launched in 2017 to attract private capital to Hong Kong’s tech industry, and had so far selected 17 funds as partners with 57 start-ups in its portfolio.