Reports or predictions of Hong Kong’s “demise” have become a genre of their own. Every few years, another “obituary” appears: The city has “lost what made it distinctive”; it is becoming “just another big Chinese city”.
Hong Kong has indeed constantly pursued and witnessed changes. But the claim that the city’s economic recovery is superficial and its international role is disappearing is difficult to reconcile with the evidence. By most conventional measures, 2025 was one of the Hong Kong Special Administrative Region’s strongest financial years since before the COVID-19 pandemic.
HK economy regains momentum
Hong Kong’s real GDP grew by 3.5 percent in 2025, up from 2.6 percent in 2024 and marking a third consecutive year of expansion. Growth reached 3.8 percent year-on-year in the fourth quarter, exceeding the SAR government’s earlier forecast and gathering pace as the year progressed. The government expects growth of between 2.5 and 3.5 percent in 2026.
These are not spectacular emerging market figures, nor do they suggest that every part of the economy is flourishing. They are nevertheless respectable for a mature, high-income economy facing elevated interest rates, trade tensions, and an uncertain global outlook. One may debate the composition or distribution of that growth, but it is hard to describe the economy as stagnant.
HK returns to the top of the IPO market
The clearest recovery has taken place in capital-raising activities, for which Hong Kong is best known. In 2025, the Hong Kong Exchanges and Clearing Ltd ranked first globally for initial public offerings. More than 106 new listings raised approximately HK$274.6 billion ($35.3 billion). It was Hong Kong’s first return to the top of the global table since 2019 and represented an increase of more than 200 percent on the previous year. Against total global IPO proceeds of about $158.4 billion, Hong Kong finished ahead of every other financial center, including the New York exchanges. Secondary fundraising also rose to approximately $66 billion, its highest level since 2021.
Critics point out that many of the issuers were Chinese mainland companies. That is true, but it is not the disqualification they suggest. Major financial centers have always drawn strength from the economies around them. New York from the United States, Frankfurt from Germany, and Tokyo from Japan. Their role is to connect enterprises in a large economic hinterland with investors who may be based anywhere in the world.
Hong Kong’s role in the mainland economy, the world’s second largest, is therefore an advantage, not an embarrassment as American economist Stephen Roach suggested. Its value lies in offering mainland companies, particularly those in biotechnology, artificial intelligence technology, and green energy, access to international capital through a familiar regulatory, legal, and professional infrastructure. The more useful question is not where the issuers come from, but whether Hong Kong can continue to attract issuers, advisers, and investors when other venues are available. The 2025 figures suggest that it can.
The composition of demand matters as well. International institutional investors took part in the year’s major offerings because they considered the expected returns worth the risk. That does not prove that political considerations played no role in the wider market environment. It does show that the demand cannot simply be dismissed as an administrative creation.
HK overtakes Switzerland in wealth management
The figures for private wealth are perhaps more consequential because assets under management tend to move less dramatically than share prices. Hong Kong’s total assets under management rose by 20 percent to a record HK$42.2 trillion, or roughly $5.38 trillion, its third consecutive year of growth. Cross-border assets under management reached about $2.95 trillion, narrowly exceeding Switzerland’s $2.946 trillion.
On that measure, Hong Kong became the world’s largest center for international wealth booking. Rankings of this kind always depend on definitions, and a narrow lead should not be overstated. Still, the direction of travel is significant. Wealthy families and institutions can move their assets relatively easily. In deciding where to hold them, they pay close attention to property rights, currency convertibility, tax, regulation, and the quality of banking, legal, and accounting services. The presence of nearly $3 trillion in cross-border assets does not answer every concern about Hong Kong, but it is strong evidence that confidence in its financial infrastructure and legal system remains substantial.
The talent picture is more mixed than the ‘exodus’ narrative suggests
The post-2020 discussion of Hong Kong has often focused on those who left. The 2019-20 unrest was real and had far-reaching social as well as economic consequences. Yet it is only one side of the demographic story.
By the middle of 2025, Hong Kong’s talent admission programs had received more than 500,000 applications and approved nearly 330,000. Around 160,000 professionals had already arrived with their families, comfortably exceeding the original target of 105,000, while the overall population had returned to net inflow after the pandemic years.
Many of the new arrivals are from the mainland, and they do not necessarily replace those who departed on a one-for-one basis. But cities have always been reshaped by successive waves of migration. The relevant economic question is whether Hong Kong can still persuade skilled and ambitious people to build careers and families there. Application numbers running far ahead of the government’s target indicate that it can.
The harder questions of identity and rule of law
The strongest criticism of Hong Kong is not economic. It concerns the city’s political character and the rule of law on which its success has long depended. These questions cannot be answered by pointing to GDP or the Hang Seng Index.
National security cases account for less than 0.2 percent of Hong Kong’s criminal caseload. That statistic is relevant, although it is not a complete response to concerns about the constitutional significance of those cases. What it does show is that national security litigation should not be treated as if it constituted the whole of legal life in Hong Kong. Commercial disputes, contracts, property rights, and ordinary civil and criminal matters continue to be decided within a common law system, as do national security cases. The courts continue to operate as usual, overseas judges continue to serve, and final appeals are still heard in Hong Kong.
Capital flows are not a referendum on civil liberties. They do, however, tell us something about whether businesses and investors believe the city’s political system and commercial institutions remain workable. The commitments described above suggest that many sophisticated market participants still do.
The question of identity also deserves greater care. Hong Kong has always been both a Chinese city and an outward looking internationalized one. Its value comes from that combination. It retains a freely convertible currency pegged to the US dollar, a separate legal system, distinct customs and immigration arrangements, and participation in international organizations under its own name and as a special administrative region of China. Hong Kong in 2025 was plainly not 100 percent identical to Hong Kong a decade earlier. But neither was it interchangeable with Shenzhen, Shanghai, or any other mainland city. No other Chinese city offers quite the same institutional combination, which helps explain why leading mainland companies continue to use Hong Kong to raise international capital.
Dependence or comparative advantage?
Roach’s final charge is that Hong Kong’s resilience somehow counts for less because it depends on the mainland. Yet every major financial center is tied to a wider economic hinterland. New York’s position rests heavily on the scale of the American economy; London’s developed through its connection first to the British Empire and later to European and global markets. Economic integration does not make a financial center irrelevant. It is usually one of the reasons the center exists.
The mainland’s importance to Hong Kong is obvious. The real issue is whether Hong Kong adds institutional value to that relationship. Stock Connect, Bond Connect and the closer integration of the Guangdong-Hong Kong-Macao Greater Bay Area give international capital routes into mainland markets that competing Asian centers cannot easily reproduce. At the same time, they give mainland firms and investors access to global capital. That intermediary role remains a genuine comparative advantage.
A recovery that should neither be ignored nor oversold
The 2025 figures do not prove that Hong Kong has solved every problem. The property market, domestic consumption, geopolitics, and public policy choices will continue to test the city. Nor can financial performance dispose of serious and genuine debates about political and constitutional change.
What the figures do undermine is the lazy assumption that Hong Kong is simply fading away. In 2025, it returned to first place globally for IPOs, became the leading cross-border wealth center, remained third in the Global Financial Centres Index with its highest score in more than a decade, recorded 3.5 percent economic growth, saw the Hang Seng Index rise by nearly 28 percent, welcomed almost 50 million visitors and attracted far more applications under its talent schemes than originally expected.
Hong Kong has changed, sometimes in ways that deserve close attention. But a fair assessment must account for the sources of resilience that the city still possesses. As figures show, this is not a city sliding into irrelevance. It is a city that has recovered its footing and remains exceptionally difficult to replace.
The author is a (non-practicing) solicitor of Hong Kong, and is currently working as a postdoctoral fellow at the School of Law of City University of Hong Kong.
The views do not necessarily reflect those of China Daily.
