Paul Chan stated that efforts will continue to consolidate and enhance the competitive advantages in the financial markets, including improving the competitiveness of the stock market to attract more high-quality companies from Southeast Asia, the Middle East, and even the Global South to list in Hong Kong. At the same time, it is necessary to diversify the local financial market by accelerating the development of fixed income and currency markets, green finance, fintech, and actively exploring new opportunities such as commodities trading and international gold transactions. As an offshore Renminbi business hub, Hong Kong will continue to support the steady and prudent advancement of Renminbi internationalization in three aspects: enhancing offshore Renminbi liquidity, optimizing relevant financial infrastructure, and diversifying investment products and risk management tools.
On December 28, Paul Chan, the Financial Secretary of the Hong Kong Special Administrative Region government, published his weekly blog titled ‘Marching Confidently into the New Year.’
Paul Chan stated that we will continue to consolidate and enhance our competitive advantages in the financial markets, including improving the competitiveness of the stock market to attract more high-quality companies from Southeast Asia, the Middle East, and even the Global South to list in Hong Kong. At the same time, we must diversify the local financial market by accelerating the development of fixed income and currency markets, green finance, fintech, and actively exploring new opportunities such as commodities trading and international gold transactions.
Furthermore, the status of the Renminbi in global cross-border trade and investment is rising. As an offshore Renminbi business hub, Hong Kong will continue to support the steady and prudent advancement of Renminbi internationalization in three aspects: enhancing offshore Renminbi liquidity, optimizing relevant financial infrastructure, and diversifying investment products and risk management tools.
Full text follows:
Marching Confidently into the New Year
As 2025 draws to a close, looking back on this year, we have overcome numerous challenges. Despite uncertainties in external developments, the performance of the local asset market has further improved, capital inflows have continued, the number of inbound tourists has increased, overall exports and fixed capital investment have performed well, and domestic consumption has stabilized. It is estimated that Hong Kong’s economic growth this year will accelerate to 3.2%, slightly higher than the forecast at the beginning of the year. Overall, good performances in exports and investments have been the main drivers of the economy, while the simultaneous rise in prices and trading volumes in the stock and property markets has reinforced positive market expectations.
In terms of the asset market, Hong Kong stocks have shown strong performance, rising for the second consecutive year. As of last week, the Hang Seng Index closed at 25,818 points, up approximately 29% from the end of last year. In terms of gains, this will be the best-performing year since 2017, ranking among the top performers in major global stock markets. This upward trend has been supported by active trading volumes, with IPO fundraising increasing more than twofold year-on-year; overall market turnover and follow-on financing after listing have both increased by about 100% year-on-year. In the first eleven months of this year, the average daily turnover of Hong Kong stocks was close to HKD 260 billion. IPO fundraising ranked first globally, exceeding HKD 270 billion as of mid-December, with four of the listings ranking among the top ten largest global IPOs this year. During the same period, follow-on financing by listed companies exceeded HKD 510 billion. In terms of asset and wealth management, net inflows into SFC-authorized funds registered in Hong Kong reached over USD 41 billion in the first nine months of this year, already surpassing last year’s total by more than 1.5 times.
The residential property market has also remained active, with transaction volumes reaching nearly 57,000 in the first eleven months of this year, up approximately 16% year-on-year, marking the second consecutive annual increase. Property prices have risen cumulatively by about 3%, and rents have increased by approximately 4%. The market generally holds a positive outlook for the residential property market. The office market sentiment has also improved, with transaction volumes in the first ten months rising 74% compared to the same period last year, and vacancy rates for Grade A offices slightly declining.
In fact, Hong Kong’s economy has maintained growth momentum for the third consecutive year, with all three drivers of the economy showing good performance this year. Overall exports performed strongly in the first three quarters, continuing to be the main contributor to growth. Fixed capital investment rose by 2.5% in the first three quarters, with growth expanding to 4.3% in the third quarter alone, making it the best-performing quarter in four quarters. This was mainly supported by significant increases in investment in machinery, electronic equipment, software, other equipment, and intellectual property products, likely due to widespread automation, digitization, and digital transformation across enterprises. Private consumption benefited from the recovery in the asset market and overall improvement in market sentiment, rising by 0.9% in the first three quarters, reversing the decline seen in the same period last year.
Looking ahead to next year, Hong Kong’s economy is expected to maintain its positive momentum. The market generally expects that although global economic momentum may slow down, it will still maintain moderate expansion, with mainland China and Asia as a whole remaining the primary growth engines. These factors will continue to provide important support for Hong Kong’s economy. Additionally, the general expectation of interest rate cuts will benefit the business and investment climate.
More importantly, 2026 marks the beginning of the country’s 15th Five-Year Plan. We will proactively align with national development strategies, with finance, innovation and technology, and trade serving as Hong Kong’s three key growth engines.
First, comprehensively enhance the functions and substance of the international financial center. We will continue to consolidate and strengthen our competitive advantages in financial markets, including enhancing the competitiveness of the stock market and attracting high-quality companies from Southeast Asia, the Middle East, and even the Global South to list in Hong Kong. At the same time, we aim to diversify Hong Kong’s financial markets by accelerating the development of fixed income and currency markets, green finance, fintech, and actively exploring new opportunities such as commodities trading and international gold transactions.
Moreover, the role of the renminbi in global cross-border trade and investment is growing. As an offshore renminbi business hub, Hong Kong will continue to support the steady advancement of renminbi internationalization through three key measures: enhancing offshore renminbi liquidity, optimizing relevant financial infrastructure, and broadening the range of investment products and risk management tools.
Second, accelerate the construction and expansion of a world-class innovation and technology hub, particularly through collaboration with cities in the Guangdong-Hong Kong-Macao Greater Bay Area. Globally, breakthrough developments in artificial intelligence and biomedicine have become focal points for investors. Hong Kong must leverage its strengths to take a leading role in this wave of technological innovation.
Artificial intelligence will define the core competitiveness of future economies and reshape the global economic landscape. We are accelerating the development of AI as a core industry in Hong Kong and leveraging the ‘AI+’ strategy to empower traditional industries’ transformation and upgrading. We will promote its development across six areas: computing power, algorithms, data, application development, funding support, and talent cultivation. In biomedicine, Hong Kong’s advantages are even more pronounced. We will continue to attract world-class pharmaceutical companies and medical research institutions to establish operations here, while creating a ‘first-tier approval’ mechanism for medical devices and drug registration to solidify Hong Kong’s position as a regional healthcare R&D center.
Third, enhance the functions of the international trade center. In response to the evolving global trade landscape and the restructuring of industrial and supply chains, Hong Kong will continue to play its roles as a ‘super connector’ and ‘super value-added facilitator.’ The central government encourages mainland enterprises to expand globally and deeply participate in international industrial cooperation and division of labor. Hong Kong is actively building a cross-border supply chain management and trade financing hub, providing services such as supply chain management, trade financing, treasury management, professional services, compliance consulting, and corporate training to outbound enterprises. To this end, we have established a dedicated task force for mainland enterprises going global, pooling resources from both public and private sectors to provide comprehensive support to these enterprises.
Building on the solid foundation of 2025, we are about to enter a new year. New challenges are inevitable, but they will also bring greater opportunities. By better integrating into and serving the broader context of national development, Hong Kong will achieve stronger growth and create more quality jobs, ensuring that the benefits of economic growth and diversification reach the public more effectively. Meanwhile, we will remain highly vigilant against potential ‘black swan’ and ‘gray rhino’ events amid an uncertain external environment, balancing the two main axes of ‘security’ and ‘development’ to ensure stable social and economic progress in 2026.
December 28, 2025
Editor /rice
