Hong Kong rose two places to become the world’s fifth-largest trading entity in merchandise trade in 2025, according to the World Trade Organization’s latest Global Trade Outlook and Statistics report.

Total merchandise trade increased 17.5 percent year-on-year to $1.585 trillion, accounting for 3 percent of global trade.

The city was the world’s fifth-largest exporter and sixth-largest importer of goods in 2025, both up three positions from a year earlier.

Secretary for Commerce and Economic Development Algernon Yau Ying-wah said on Thursday, “The report fully demonstrated that despite the challenges brought about by geopolitics and trade protectionism in the past year, Hong Kong’s external trade remained resilient and achieved an encouraging result.”

He said Hong Kong’s longstanding commitment to free trade and its support for the rules-based multilateral trading system have provided trading partners with a predictable and transparent market.

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Leveraging its institutional advantages and international business environment, Hong Kong has become “the most important and agile gateway” for business and trade in the region, Yau added.

Trade momentum has carried into 2026. For the first two months of the year, the value of total exports of goods increased 29.6 percent from a year earlier and imports grew 34.1 percent.

According to the WTO report, the world’s top 10 merchandise traders in 2025 was largely unchanged from 2024, with China, the United States, Germany and the Netherlands retaining the top four positions. If the European Union is taken as a single trading entity, the Hong Kong Special Administrative Region ranks fourth.

Tommy Chung Ki-fung, a Hong Kong lawmaker representing the import-and-export sector, attributed the city’s rise in the rankings to sustained global demand for artificial intelligence and high-technology equipment, which boosted trade in electronics and telecommunication products.

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“Exports have shifted to higher value-added goods,” Chung said. Benefitting from the mainland’s advances in high technology, exports of products such as integrated circuits, electric vehicles and industrial robots via Hong Kong have increased, while in the past, the city mainly exported garments, toys and home appliances.

Chung added that Hong Kong’s export markets have become more diversified and have reduced reliance on traditional Western destinations. Trade with members of the Association of Southeast Asian Nations has expanded rapidly, with Vietnam overtaking the United States to become Hong Kong’s third-largest trading partner, he said.

Moreover, shipping disruptions and higher freight costs caused by the ongoing Middle East conflict are likely to be short-term challenges, the legislator told China Daily, noting that exports are expected to recover as tensions ease, and the medium to long-term outlook remains “cautiously optimistic”.

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For commercial service trading, the WTO report showed that Hong Kong ranked 22nd globally in 2025. Its total trade in commercial services reached $211 billion, increasing 6.6 percent from 2024 and accounting for 1.2 percent of the world’s total.

Chung said he expects the Hong Kong SAR’s services trade to expand in the coming years and the rankings to rise into the top 20, as China’s 15th Five-Year Plan (2026-30) is implemented.

By aligning with the country’s “going global” initiative, Hong Kong is well-placed to provide professional services to Chinese firms expanding overseas and build its role as a management hub for a high-value-added supply chain, he said.

A spokesperson for the Hong Kong Trade Development Council said that the robust growth in total trade value last year further reinforced the city’s position as an international trading hub.

More international exhibitions, conferences and business missions will also be organized to create business opportunities for mainland and overseas companies, the spokesperson said.

Contact the writer at irisli@chinadailyhk.com