Hong Kong Financial Secretary Paul Chan attended the Legislative Council's financial affairs panel yesterday (June 2) to outline the latest status of HK's economy, indicating steady improvement. Stephen Roach, the US economist who once declared HK "is finished," recently backtracked during an interview, stating it is "too early to declare HK over". He instead emphasized that the tense China-US relationship has actually injected new vitality into HK.
The global trend of the "rise of the East and decline of the West" is irreversible, and HK's greatest advantage lies in the motherland's "one country, two systems" principle. By actively integrating into the national development strategy and deepening international cooperation, HK has successfully played the roles of a "super-connector" and a "super value-adder," bolstering international confidence in the city. Countless facts have debunked the "HK is finished" narrative, proving that ignoring the tides of the times and making unfounded predictions will only damage one's reputation and cause missed opportunities.
Last year, Roach asserted that HK "is finished," claiming that under "one country, two systems," HK's deep integration with the Chinese Mainland meant that if the Mainland's economy faltered, HK would inevitably suffer. He further argued that the implementation of the HK National Security Law had weakened the city's autonomy and created greater development challenges. These views merely regurgitate the so-called "Mainlandization of HK" rhetoric, reflecting Roach's politically biased perspective rather than an objective financial or economic analysis. Today, HK's impressive development achievements showcase the remarkable institutional advantages and vitality of "one country, two systems," discrediting the pessimistic narrative about HK.
Despite ongoing global uncertainties and rising US protectionism, HK's economy remained resilient in the first quarter of this year. Real GDP grew by 3.1% year-on-year, up from 2.5% in the fourth quarter of last year. Seasonally adjusted, quarter-on-quarter GDP growth increased from 0.9% in the previous quarter to 1.9%. Among the "three engines" driving economic growth, HK's external trade performed strongly, benefiting from sustained external demand and the US tariff front-loading effect.
Total goods exports grew by 8.4% year-on-year in the first quarter, up from 1.3% growth in the fourth quarter of last year. With a rise in inbound tourists, increased cross-boundary transportation, and robust cross-boundary financial and fundraising activities, total service exports rose by 6.6% year-on-year, while overall investment spending increased by 2.8%.
HK's achievements in initial public offerings (IPOs) and secondary stock offerings have been particularly encouraging this year. In the first quarter, the HK Stock Exchange saw 15 new listings, raising HK$18.2 billion—a 25% increase in the number of IPOs and a 287% rise in funds raised. CATL's successful listing in HK became the largest global IPO so far this year. Additionally, there are 150 IPOs in the pipeline, many of which involve leading companies. Currently, HK ranks second globally for IPO fundraising.
Recently, Fitch, S&P, and Moody's all assigned HK a "stable" outlook, reflecting the international community's vote of confidence. Moody's even upgraded HK's credit rating outlook, citing the city's robust credit reliability and ability to navigate challenges amid global trade tensions.
HK's economic resilience and strong prospects reflect its unique advantages under "one country, two systems." The Central Government places great importance on HK's long-term prosperity and stability. Under the Central Government's leadership, HK has improved its legal framework for safeguarding national security and entered a new phase of governance and economic revitalization. Financial connectivity measures between HK and the Mainland continue to deepen, individual travel from Mainland cities to HK and Macao has resumed, and the International Organization for Mediation recently established its headquarters in HK. The unwavering support of the motherland remains HK's greatest strength in development.
China is advancing its unique path to modernization and remains committed to reform and opening up. Investing in China is investing in the future. HK, with its unparalleled business environment and integration into national development, stands to offer global investors even greater opportunities. Savvy investors can clearly see this.
As the saying goes, "He who does not plan for the long term cannot plan for the short term; he who does not consider the whole cannot manage a part." From Fortune magazine's 1995 cover story "The Death of HK" to Roach's recent acknowledgment of his misjudgment, the facts have repeatedly proven that the "HK is finished" narrative does not hold water. Hong Kong and its motherland welcome global investors to place their trust in the city, invest in HK, and jointly pursue development and shared prosperity. Veteran investors and economists like Roach should think independently and not follow the herd, lest they mislead investors and become a laughingstock on the international stage.
(Source: Wen Wei Po; English Editor: Zoey Sun)
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