Hong Kong has unveiled a HK$30bn ($3.8bn) co-investment fund to attract overseas businesses back to the city after an exodus of talent sparked by strict lockdowns and a tumultuous political climate.

A raft of measures to address the brain drain were announced by Hong Kong’s chief executive, John Lee, in his first policy address on Wednesday – but his plans have largely failed to reassure investors.

Lee, who said the workforce had shrunk by about 14,000 people in the last two years, unveiled visa and tax concessions to lure skilled workers back to the financial hub and announced that he would cut property duties for non-permanent residents.

“Apart from actively nurturing and retaining local talent, the government will proactively trawl the world for talent,” said Lee.

He outlined how the city will give preferential treatment to “top talent” from the top 100 universities globally and those earning HK$2.5m ($318,473) or more annually.

In a nearly three-hour speech he also revealed major infrastructure projects and plans to deliver more housing in a city with one of the world’s least affordable property markets.

Lee’s new economic strategy comes after huge – and sometimes violent – democracy protests in the city three years ago were followed by a sweeping clampdown on dissent.

Local democracy activists remain in jail or awaiting trial – or have fled overseas – while schools have been ordered to turn students into Chinese patriots.

The crackdown coincided with some of the world’s strictest coronavirus pandemic rules, many of which remained in place long after other countries reopened.

The city, which scrapped mandatory quarantine for international arrivals only last month, has seen its deficit soar while the border with the Chinese mainland remains all but closed because of Beijing’s strict zero-Covid rules.

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Lee faces global economic challenges that many other countries are grappling with such as rising global interest rates, the uncertainty sparked by Russia’s invasion of Ukraine, and fears over China’s economy.

The reaction from investors and analysts to his proposals has been lukewarm.

Hong Kong’s stock exchange, which has lost more than a quarter of its value since the start of the year, closed down 2.38% on Wednesday.

Kenneth Chan, a a political scientist at Baptist University, said there was little to reassure foreign talent about Hong Kong’s core values.

“For a lot of people who are looking at Hong Kong … it’s a new era with a lot of uncertain elements, mostly political elements. They have to think very carefully before making the move and commit,” he told the news agency AFP.

After nearly three years, Hong Kong is gradually moving away from its version of China’s zero-Covid policy, which failed to keep out the virus and has left the city internationally cut off.

Authorities have axed the unpopular hotel quarantine for incoming travellers and loosened some social-distancing rules.

But the pace of reopening still lags behind regional rivals such as Singapore, which has gone on its own charm offensive to lure talent and has roared back as a global transport hub.