LettersHong Kong’s economic comeback is the best answer to its critics

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At the World Economic Forum in Davos in January, the Hong Kong pavilion was flooded with meeting requests and was well attended by senior figures who a few years ago might have given it short shrift. Fractious transatlantic relations have signalled a growing impulse on the part of Western nations to diversify away from the United States and rebalance trade, supply chain and security ties. This shift in geopolitical and economic fault lines, coupled with the stabilising predictability injected by the Chinese delegation at Davos and Beijing’s strong backing for Hong Kong, has helped raise Hong Kong’s standing among global business and academic leaders.

The renewed global interest reflects a real economic comeback. Over the past year, Hong Kong’s financial markets staged a broad recovery – from renminbi currency futures and exchange traded funds to leveraged products, derivatives and options. The average daily turnover in the securities market rose 90 per cent year on year in 2025 to HK$249.8 billion (US$32 billion). The market raised HK$285.8 billion across 119 initial public offerings, including three in the world’s top 10, enabling Hong Kong to reclaim its crown as the world’s leading IPO fundraising venue. Hong Kong’s continuous modernisation of its legal framework for digital finance – notably enactment of the Stablecoins Ordinance – provides a solid foundation for the city to become a leader in cross-border digital payments.

Driven by a strong rebound in trade, tourism and new niche markets such as the staging of high-profile sports, cultural and entertainment events – to which the opening of the Kai Tak Sports Park contributed substantially – Hong Kong’s economy grew at an estimated 3.5 per cent in 2025, above the government’s expectations. Hong Kong’s public finance also appears to have improved significantly. The Hong Kong Institute of Certified Public Accountants estimates that the fiscal deficit will shrink to HK$1.4 billion, while the government’s fiscal reserves will rise to HK$652.9 billion, equivalent to the government’s expenditure over 10 months.