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Cannix Yau

As Hong Kong grapples with a deficit projected to reach just under HK$100 billion (US$12.9 billion) for the 2024-25 financial year, many experts have called for the government to bolster the city’s dwindling reserves by issuing more bonds to fund infrastructure investment.
They believe this could foster the growth of the financial services sector and boost capital flows.
Last Sunday, Financial Secretary Paul Chan Mo-po weighed in on the debate, saying the government could issue bonds to fund megaprojects, a practice he described as “common” in the international community when investing in the future.
With Chan set to deliver his budget plan on Wednesday, the Post delves into whether issuing additional bonds could help ease the city’s financial strain.
1. How many types of government bonds have been issued?
Several types of government bonds have been issued under different programmes.
As of the end of December last year, the debts stemming from green bonds issued under the government’s Sustainable Bond Programme amounted to HK$203.7 billion, infrastructure bonds were at HK$34.6 billion and Silver Bonds were at HK$54.9 billion. The proceeds are used to finance public projects.


Separately, some institutional bonds and retail bonds, including iBond and another series of silver bonds, were issued under the Government Bond Programme purely for market development and not used for funding government expenditure.
The outstanding amount of those bonds was about HK$178 billion with proceeds credited to the bond fund, which had a balance of HK$229.9 billion as of December 31.
2. What about bonds issued by statutory bodies?
In January 2025, Hong Kong’s Airport Authority issued about US$7 billion equivalent multicurrency multi-tranche institutional public bonds for refinancing the maturing borrowings in the 2025-26 financial year amounting to about HK$22 billion. The funds were used for capital expenditure and mainland Chinese investments.
The authority said its net borrowings were about HK$107 billion as of January 2025, with an overall estimated borrowing cost of about 3.5 per cent per annum.
In August last year, the Urban Renewal Authority issued senior bonds at HK$12 billion. The offering comprised bonds worth HK$4 billion with a three-year tenor, HK$5 billion with a five-year tenor and HK$3 billion with a 10-year term.
It was the URA’s first issuance in the Hong Kong dollar public institutional bond market since 2009. The authority said the proceeds from the offering would fund capital expenditures on urban renewal projects and be used for general corporate purposes.
Transport minister Mable Chan also hinted last month that the city’s rail giant, the MTR Corporation, was expected to issue bonds to diversify its ways of financing.

3. How much government debt has been repaid?
According to the Financial Services and Treasury Bureau, the government started repaying HK$800 million in 2023-24 for those bonds used for funding government expenditures, and the bureau estimated that the repayment would increase to HK$24.2 billion in 2024-25, and HK$44.8 billion in 2025-26.
4. How is the city’s debt compared with other places?
As of the end of December, government debts stood at more than HK$293 billion, stemming from the combined worth of green bonds, infrastructure bonds and Silver Bonds.
The amount excluded outstanding bonds with a nominal value of HK$178 billion issued under the Government Bond Programme. Proceeds are credited to the bond fund, which had a balance of HK$229.9 billion as of December 31.
Finance chief Chan said last week Hong Kong’s current ratio of government debt to gross domestic product (GDP) was only about 9.3 per cent, which was well below the levels in some other developed economies in which the rate exceeded 100 per cent.


An International Monetary Fund report published in January said general government debt in the city was expected to remain low, at 11.4 per cent of GDP in 2029, and well below the level of fiscal reserves.
In comparison, United States government debt accounted for 124 per cent of the country’s nominal GDP in Dec 2024 while China recorded a government debt to GDP ratio of 90.1 per cent in 2024 and the United Kingdom’s debt was provisionally estimated at 97.2 per cent of GDP last year.
In 2024, net government debt in Japan accounted for 155.8 per cent of its GDP while the Singapore government debt accounted for 173 per cent of the country’s nominal GDP in September last year.
5. Is the government relying too much on bond issuance?
The answer is ‘no’ according to Liu Yang, an associate professor of finance at the University of Hong Kong. Instead, he said the government should make full use of the government’s bond programme to raise funds for infrastructure projects amid the successive deficits.
He estimated the value of all government bonds was equal to about 16 per cent of GDP as of the end of last year.
Liu argued this was still “significantly below” the borrowing undertaken by most developed economies, suggesting the government could issue bonds worth HK$100 billion to HK$150 billion for the new financial year.
“Hong Kong has ample fiscal reserves and no net debt concerns. Aligning policy goals with financial resources, strategically utilising existing fiscal reserves and issuing debt within the bond programme limits can be wise moves,” he said.
“This approach would not compromise long-term fiscal sustainability and would foster the development of capital markets and the internationalisation of the renminbi.”


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Experts have called for the government to issue more bonds for infrastructure investment ahead of Paul Chan’s budget speech


Experts have called for the government to issue more bonds for infrastructure investment ahead of Paul Chan’s budget speech.


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Explainer | How big is Hong Kong’s debt? The Post unpacks the city’s bond financing

Experts have called for the government to issue more bonds for infrastructure investment ahead of Paul Chan’s budget speech

1. How many types of government bonds have been issued?