Chen Maobo: Hong Kong's economy is expected to continue its good momentum next year and will continue to consolidate and enhance its advantages in the financial market.

On December 28th, the Financial Secretary of the Hong Kong Special Administrative Region, Paul Chan Mo-po, stated in an essay that looking ahead to next year, the Hong Kong economy is expected to maintain a good momentum. The market generally expects the global economy to continue to expand moderately, even if growth slows down, with the mainland and Asia as the main engines of growth, which will continue to provide important support for the Hong Kong economy. In addition, it is generally expected that interest rates will be cut, which will also be beneficial for business and investment sentiment. Paul Chan Mo-po mentioned that Hong Kong will continue to consolidate and enhance its advantages in the financial market, including improving the competitiveness of the stock market, attracting more high-quality companies from Southeast Asia, the Middle East, and globally to list in Hong Kong. At the same time, Hong Kong will diversify its financial market, including accelerating the development of the bond and currency markets, green finance, financial technology, and actively exploring new opportunities such as commodity trading and international gold trading. Paul Chan Mo-po pointed out that 2025 is approaching, and looking back at this year, Hong Kong has overcome many challenges. Despite uncertain developments in the external environment, the local asset market has continued to improve, with capital inflows, an increase in visitors, good overall export and fixed capital investment performance, and stable local consumption. It is estimated that Hong Kong's economic growth this year will accelerate to 3.2%, slightly higher than the initial forecast at the beginning of the year. Overall, export and investment performance are strong, driving the economy, while the stock and property markets have seen rises in both prices and transactions, consolidating positive market expectations. In terms of asset markets, the Hong Kong stock market has performed well, rising for the second consecutive year. As of last week, the Hang Seng Index closed at 25,818 points, up about 29% from the end of last year, making it the best-performing year since 2017 among major global stock markets. This upward trend is supported by active trading volumes, with the amount raised through new listings more than doubling annually; trading volume and post-listing financing amount have both increased by about one times annually. In the first eleven months of this year, the average daily turnover of Hong Kong stocks was close to 260 billion RMB. IPO fundraising amount ranks first globally, with over 270 billion RMB raised by the middle of this month, and four of the listings are among the top ten global new listings this year. During the same period, follow-up financing for listed companies exceeded 510 billion RMB. In terms of asset and wealth management business, in the first nine months of this year, funds net inflows for SFC-authorized funds registered in Hong Kong exceeded 41 billion USD, increasing by more than 1.5 times compared to the entire previous year. The residential property market has also remained active, with the number of transactions in the first eleven months of this year close to 57,000, a 16% increase compared to the same period last year, marking the second consecutive year of growth. Property prices have risen by about 3%, rent by about 4%, and the market generally holds positive expectations for the residential property market. As for the office market, the atmosphere has also improved, with transaction volume in the first ten months increasing by 74% compared to the same period last year, and vacancy rates for Grade A office buildings slightly decreasing. In fact, the Hong Kong economy has maintained a growth momentum for the third consecutive year, with all three major drivers of the economy performing well this year. Overall exports were strong in the first three quarters of this year, continuing to be a major contributor to growth. Fixed capital investment increased by 2.5% in the first three quarters of this year, with a further expansion to 4.3% in the third quarter alone, the best performance in a quarter in the past four quarters, mainly supported by the significant increase in investments in machinery, electronic equipment, software, and other equipment and intellectual property products, believed to be related to the widespread adoption of automation, digitalization, and digitization by businesses. Private consumption also benefitted from the recovery of the asset market and the overall improvement in market sentiment, rising by 0.9% in the first three quarters of this year, reversing the decline seen in the same period last year. Paul Chan Mo-po stated that more importantly, 2026 will mark the beginning of the country's "14th Five-Year Plan," and Hong Kong will be more actively aligned with the nation's development strategy. It will focus on integration, innovation, and trade as the three important engines of development for Hong Kong. 1. Enhancing the function and connotation of an international financial center. Hong Kong will continue to consolidate and enhance its advantages in the financial market, including improving the competitiveness of the stock market and attracting more high-quality companies from Southeast Asia, the Middle East, and globally to list in Hong Kong. Hong Kong will also diversify its financial market, including accelerating the development of the bond and currency markets, green finance, financial technology, and actively exploring new opportunities such as commodity trading and international gold trading. In addition, the status of the renminbi in global cross-border trade and investment is increasing, and as an offshore renminbi business hub, Hong Kong will continue to assist the steady promotion of the internationalization of the renminbi from three aspects, including improving offshore renminbi liquidity, optimizing related financial infrastructure, and enriching investment products and risk management tools. 2. Accelerating the construction and expansion of an internationally leading innovation and technology hub, especially in collaboration with the Greater Bay Area. Globally, breakthroughs in artificial intelligence and biotechnology are the main focus of investment, and Hong Kong must leverage its own advantages to lead in the wave of innovation and development. Artificial intelligence will define the core competitiveness of future economies and reshape the global economic landscape. Hong Kong is accelerating the cultivation of artificial intelligence as a core industry and empowering traditional industries with the "AI+" strategy. Hong Kong will promote its development from six aspects: computing power, algorithms, data, application development, financial support, and talent cultivation. In the field of biotechnology, Hong Kong's advantages are even more prominent. Hong Kong will continue to attract more world-class pharmaceutical companies and medical research institutions to establish themselves in Hong Kong, and establish a "first approval" mechanism for the registration of medical devices, consolidating Hong Kong's position as a regional medical research and development center. 3. Enhancing the function of an international trade center. Facing the new international economic and trade landscape, as well as the reshaping of industrial and supply chains, Hong Kong will continue to play its role as a "super connector" and "super value-added" intermediary. The country encourages mainland enterprises to expand globally and participate deeply in international industrial division and cooperation. Hong Kong is actively establishing a transnational supply chain management and trade finance center, providing services such as supply chain management, trade finance, financial management, professional services, compliance consulting, and corporate training to enterprises expanding globally. In this regard, Hong Kong has established a "Mainland Enterprises Going Global Task Force," bringing together public and private organizations to provide comprehensive support to mainland enterprises going global. Paul Chan Mo-po stated that on the foundation of a good year in 2025, Hong Kong is about to enter a new year. New challenges are inevitable, but they will also bring greater opportunities. Through better integration and service to the national development strategy, Hong Kong will experience better development, create more high-quality jobs, and ensure that the benefits of economic diversification reach the people. At the same time, Hong Kong will remain highly vigilant and cautious, amidst an environment full of uncertainties, to prevent various "black swans" and "grey rhinos," and coordinate the two main axes of "safety" and "development" well, allowing Hong Kong to continue to move forward steadily in both society and economy in 2026.