Hong Kong’s Hang Seng Index has surged 27 percent so far this year despite a crash in April following US President Donald Trump’s announcement of global tariffs. Yet this disruption meant little in the long run, with the market quickly recovering. This is of course not random, but reflective of a wider sentiment. As reported in The Wall Street Journal, Hong Kong has once again “regained its crown” as the top listing place in the world for companies to make initial public offerings.

The article states that the expansion has been driven by “optimism in China’s economic outlook and supportive policies, as well as exciting developments in artificial intelligence and innovation”.

Funds raised from 44 new listings in the city rose more than eightfold to HK$109.4 billion ($14.03 billion) compared with a year earlier, according to Hong Kong Exchanges and Clearing.

The number of outstanding applications for IPOs in the city now stands at over 200. This is the highest total in the entire world.

The robustness of Hong Kong’s financial market is in stark contrast to the Western media’s narrative that the city is “in decline” as a global financial center, or the “dead” narrative  pushed by the BBC even a week ago. Yet, again, these politically motivated narratives have no basis in reality. Instead, I argue, that with the political turmoil and the COVID-19 pandemic out of the way, Hong Kong is in fact undergoing a revival of sorts, with the geopolitical uncertainties of the Trump era driving an increasing boom in its financial sector.

 Hong Kong is undergoing a financial renaissance, leaving politically fanciful narratives about “decline” in the dust. What is, so to speak, the West’s loss, is Hong Kong’s gain

Why is this happening? First, the need for China to continue economic growth, reform and opening-up, and to navigate the difficulties imposed by the US, has led to a surge in Chinese mainland firms utilizing Hong Kong as a platform for international expansion. Hong Kong is, and has always been, the mainland’s gateway to the bigger world, a city with a unique free market and free-port economy that facilitates trade and investment. During a time when the US is putting up massive trade barriers, never has such an asset been more pivotal to China’s national interests. Hong Kong signifies global ambition and reach, and is able to reel in investors from all over the world.

Second, with such tensions, it provides a politically safe platform to do so within China’s sovereign protection. Once upon a time, Chinese firms dreamed of listing themselves on the New York Stock Exchange. The policies of successive US administrations have made this a politically unacceptable risk, seeking to politicize the process in ways which harm or undermine China’s national security; for example, by demanding information that inevitably serves as a means of intelligence gathering. As a result, the Chinese authorities have soured on permitting their biggest firms to list on foreign exchanges. It is for this reason that Shein — an e-commerce platform specializing in fast fashion — reportedly pulled out of attempting to list on the London Stock Exchange. Hong Kong has everything such firms need, and Shein is likely to come here instead.

Third, Hong Kong provides a haven of stability and certainty amid global turmoil. This is not just attractive to domestic investors but foreign ones too. Where else is better to invest in China? If the US and others are intent on pushing China-bound capital away from their markets, it must logically go somewhere else; Hong Kong is where. Even amid an unfavorable global economic environment, many Chinese firms are booming and offer immense global-level prospects across a wide range of sectors. The city has also been successful in courting new sources of capital from the Middle East and Southeast Asia, all of which have contributed to the investment bonanza we are now seeing throughout the city.

To summarize, Hong Kong is undergoing a financial renaissance, leaving politically fanciful narratives about “decline” in the dust. What is, so to speak, the West’s loss, is Hong Kong’s gain. A record number of IPOs and a steadily climbing market have finally swept away the pessimism of 2019-23. This is a city that has shown remarkable resilience, overcome crises, and reclaimed its crown as the world’s leading financial hub.

The author is a British political and international-relations analyst. 

The views do not necessarily reflect those of China Daily.