Hong Kong’s economy is showing signs of steady recovery and resilience, with Financial Secretary Paul Chanannouncing that the city remains firmly on track to meet its annual growth target despite persistent global headwinds and domestic challenges. Speaking at an economic forum on Saturday, Chan expressed confidence that Hong Kong’s GDP growth for 2025 would align with the government’s forecast range of 3.2% to 3.7%, signaling renewed optimism for the city’s post-pandemic rebound.
The statement comes as Hong Kong continues its effort to reassert itself as a leading international financial hub, diversify its economy, and strengthen economic ties with mainland China and other global partners. While the city faces challenges including sluggish property markets, rising borrowing costs, and slowing global trade, officials say the fundamentals remain strong — bolstered by tourism, financial services, and innovation-driven industries.
Economic Recovery Driven by Services and Tourism
After years of pandemic-related disruptions, Hong Kong’s service sector — a pillar of its economy — has staged a meaningful comeback. Visitor arrivals have continued to climb, especially from mainland China, Japan, and Southeast Asia, helping lift retail sales and hospitality revenues. 
“Tourism and consumption have been leading the recovery,” Chan said, noting that monthly retail sales in 2025 have surpassed pre-pandemic averages. “We are seeing the confidence of local consumers returning, while international tourists are once again viewing Hong Kong as a must-visit destination.”
The government has also launched a series of initiatives aimed at attracting visitors and investors, including promotional campaigns under the “Hello Hong Kong” program and targeted incentives for business conferences and cultural events. These efforts, combined with easing travel restrictions in the region, have helped support sustained growth in the tourism sector — one of the key contributors to the city’s economic rebound.
Financial Sector Remains a Global Anchor
Hong Kong’s financial markets continue to play a central role in driving economic resilience. Despite global monetary tightening and volatile capital flows, the city remains a critical bridge between China and international investors, with a robust pipeline of listings, asset management inflows, and fintech expansion.
Chan highlighted that stock market activity has stabilized after a period of sluggish performance, while bond issuance and wealth management services are gaining traction again. He also reaffirmed the government’s commitment to maintaining the Linked Exchange Rate System, ensuring monetary stability amid a fluctuating global environment.
“Our position as a global financial center remains unshaken,” Chan said. “Hong Kong continues to attract long-term capital, with investors recognizing the city’s transparency, rule of law, and its unparalleled connectivity with the mainland.”
Technology, Green Finance, and Innovation at the Core of Future Growth
In addition to traditional finance, Hong Kong’s economic strategy is increasingly centered around innovation, green finance, and technological advancement. The government has been accelerating investments in these areas, particularly through the Northern Metropolis and the Hong Kong-Shenzhen Innovation and Technology Park, which are designed to foster deeper integration with China’s Greater Bay Area (GBA).
“Hong Kong must not only be a global financial hub but also a center of innovation,” Chan remarked. “We are building an economy that is greener, smarter, and more digitally connected.”
The administration has also announced plans to expand funding for research and development, encourage private investment in green infrastructure, and attract startups in artificial intelligence, fintech, and biotechnology. These moves aim to transition Hong Kong from being primarily a service-driven economy to one built on sustainable and high-value industries.
Addressing Structural Challenges and Economic Pressures
Despite the optimistic outlook, Chan acknowledged that Hong Kong continues to face structural challenges, including high living costs, a cooling property market, and an evolving global geopolitical environment.
The city’s housing market — once a key source of wealth and growth — has seen prices stagnate as rising interest rates dampen demand. To address affordability concerns, the government is accelerating land supply and public housing projects, while urging banks to maintain flexibility in mortgage lending.
Externally, Hong Kong remains sensitive to global developments, including the U.S.-China trade tensions, tightening global liquidity, and slowing growth in major economies. However, Chan insisted that Hong Kong’s fiscal discipline and policy adaptability position it well to weather potential turbulence.
“We are prepared for volatility,” he said. “Our fiscal reserves remain strong, giving us room to maneuver if economic conditions deteriorate. But right now, all indicators suggest we are moving in the right direction.”
Strengthening Connectivity With Mainland China
A major part of Hong Kong’s long-term strategy continues to revolve around deeper integration with the mainland, especially through initiatives tied to the Greater Bay Area, which connects Hong Kong with major Chinese cities like Shenzhen and Guangzhou.
According to Chan, Hong Kong will continue to play a pivotal role as the offshore financial center for China, facilitating international investment flows, bond connect programs, and the internationalization of the renminbi.
“Hong Kong’s future lies in serving as China’s global connector — a place where East meets West in finance, innovation, and culture,” Chan said.
Investor Confidence and Global Perception
While international investors have expressed concerns in recent years about Hong Kong’s political landscape and its autonomy under Beijing’s governance, Chan reaffirmed that the city’s institutional strengths remain intact. He emphasized the continued independence of Hong Kong’s judiciary and its commitment to international standards of business regulation.
“Investors can have confidence that Hong Kong remains open, free, and competitive,” Chan said. “We are taking every step to ensure transparency, fair governance, and alignment with global financial norms.”
Recent capital inflows into Hong Kong’s asset management sector, along with renewed activity in its IPO market, have bolstered optimism that global investors are gradually regaining trust in the city’s long-term prospects.
Outlook for 2026 and Beyond
Looking ahead, Chan projected that Hong Kong’s growth momentum would extend into 2026, driven by continued recovery in domestic demand, regional trade, and technology investment. The government is expected to release updated GDP projections early next year, but preliminary data suggest the city could maintain growth above 3% annually if global conditions remain stable.
Economic analysts, however, caution that sustained growth will depend on Hong Kong’s ability to diversify its economic base, attract foreign talent, and maintain competitive advantages in the face of intensifying regional competition from Singapore, Shanghai, and other Asian financial centers.
Still, for now, the tone is one of measured confidence.
“Hong Kong’s resilience has been tested — and it has endured,” Chan concluded. “We have learned, adapted, and emerged stronger. The world may be uncertain, but Hong Kong’s direction is clear. We are open for business, we are innovating for the future, and we are ready to meet our growth ambitions.”
With economic data pointing upward and investment sentiment gradually improving, Hong Kong’s 2025 growth target appears within reach, reaffirming its place as one of Asia’s most dynamic and adaptive economies in a rapidly changing world.
