Hong Kong's economy maintains steady momentum, strengthening its financial hub status

Editor's note: Yang Hangjun is a professor and executive dean at the Graduate School of Excellence, University of International Business and Economics. The article reflects the author's views and not necessarily those of CGTN. It has been translated from Chinese and edited for brevity and clarity.

July 1 marks the 29th anniversary of Hong Kong Special Administrative Region (HKSAR)'s return to the motherland and serves as an important vantage point for assessing the city's economic resilience and its role as an international financial center.

At a time when global growth is slowing, geopolitical tensions are rising, and trade protectionism is resurging, international financial centes are under sustained pressure—and Hong Kong is no exception.

Yet the latest data suggests a different narrative is emerging. Hong Kong's real GDP grew 5.9% year on year in the first quarter of 2026, marking its fastest quarterly expansion in nearly five years. Meanwhile, the latest global financial centers index shows Hong Kong has maintained its position as the world's third-largest financial center and the leading financial hub in the Asia-Pacific region, further narrowing the gap with New York and London.

These indicators are more than just a sign of recovery—they show that Hong Kong's position as an international financial center remains structurally intact.

What appears as steady momentum is in fact the result of a deeper balance between cyclical recovery and structural resilience, which are both key factors in economic growth. On the surface, the rebound has been supported by tourism, consumption, and cross-border services. But these cyclical drivers alone cannot account for the consistency of Hong Kong's performance. 

The deeper explanation lies in its institutional foundation. Hong Kong's long-standing rule-of-law system, market orientation, and internationalized financial infrastructure continue to define its competitiveness in global finance.

In today's financial system, credibility, liquidity, and efficiency matter more than short-term stimulus measures. This is where the "One Country, Two Systems" framework continues to play a decisive role.

By preserving Hong Kong's common law tradition, free flow of capital, and alignment with global standards, the framework ensures the city remains deeply embedded in international markets while maintaining unique connectivity with the mainland.

In periods of global uncertainty, this dual positioning has strengthened Hong Kong's appeal as a stable and predictable destination for global capital. This confidence is reflected in continued inflows and expanding participation from global financial institutions, which increasingly view Hong Kong not as a transitional hub, but as a core node in their global allocation strategies.

According to Boston Consulting Group's Global Wealth Report (May 2026), Hong Kong SAR overtook Switzerland in 2025 to become the world's largest cross-border wealth management center.

At a structural level, Hong Kong's enduring advantage lies in its dual connectivity. It is simultaneously embedded in global capital markets and deeply integrated into the Chinese mainland economy, creating a financial bridge that few centers can replicate. Through Stock Connect, Bond Connect, and Swap Connect, Hong Kong has reinforced its position as the world's leading offshore RMB hub and a primary channel for Chinese mainland enterprises accessing global capital markets. This structural role is not incidental—it is the core reason Hong Kong continues to hold its competitive edge.

Looking ahead, Hong Kong's trajectory will depend on whether it can sustain this balance between stability and transformation.

While preserving its legal and financial foundations, it is also expanding into fintech and digital finance through the Guangdong–Hong Kong–Macao Greater Bay Area.

Under "one country, two systems," Hong Kong is positioned not only to remain a leading international financial center, but to deepen its role as a two-way gateway between China and global markets, turning external pressures into long-term strategic opportunity.