"Predictions that 'Hong Kong is dead' have proven to be misguided. Contrary to concerns that the implementation of the national security law would drive Western capital away and undermine Hong Kong's status as a global financial hub, the city is transforming into a new international financial center by attracting capital from mainland China and the Middle East and Southeast Asia.
Next month marks the 29th anniversary of Hong Kong's return to China and the sixth anniversary of the national security law's implementation. According to the Hong Kong-based current affairs magazine, Asia Weekly, Hong Kong is establishing a new model of internationalization, serving as a bridge connecting mainland China with capital from the Middle East, Central Asia, and Southeast Asia. As U.S. and European capital exits, funds from mainland China and the Middle East are filling the gap, fundamentally altering Hong Kong's financial landscape.
The shift in Hong Kong's status is evident in various indicators. The city's economy is showing signs of recovery, with its gross domestic product (GDP) growing by 5.9% in the first quarter of this year, marking the highest quarterly growth rate in nearly five years.
In its '2026 Global Asset Report' released at the end of May, the Boston Consulting Group (BCG) stated that Hong Kong has surpassed Switzerland to become the world's largest cross-border asset management center. Hong Kong's cross-border asset management volume has reached $2.95 trillion, exceeding Switzerland's $2.24 trillion.
Notably, over 60% of the cross-border assets managed in Hong Kong have originated from mainland China. Based on the vast wealth of mainland China, Hong Kong's cross-border asset management market is growing at an annual rate of 10.7%, the fastest among major global asset management markets. Asia Weekly noted, "Hong Kong plays an irreplaceable role as a financial bridge connecting mainland China and the world."
The initial public offering (IPO) market has also regained its former glory. According to the Hong Kong Stock Exchange and KPMG, the total amount raised through IPOs in Hong Kong reached HK$280 billion last year, more than doubling from the previous year and marking a return to the world's largest IPO market for the first time in six years.
This growth trend continues this year. In the first quarter, Hong Kong's IPO fundraising reached HK$110.4 billion, a sixfold increase compared to the same period last year, representing the largest quarterly amount since 2021. The Hong Kong Stock Exchange has once again claimed the top spot in global fundraising, surpassing New York and Nasdaq.
The increasing demand for overseas fundraising among mainland Chinese companies is identified as a key driver behind the recovery of Hong Kong's IPO market. Major Chinese firms, including the world's largest battery manufacturer CATL, are listing on the Hong Kong stock market, attracting global investors back to the city.
Moreover, global investors are actively participating in Hong Kong IPOs. According to the Hong Kong Stock Exchange, more than three-quarters of the companies newly listed on the exchange by early March this year attracted international investors as cornerstone investors, a significant increase from last year.
The presence of Middle Eastern capital is also growing. In the first quarter of this year, participation rates of key investors from Middle Eastern sovereign wealth funds, including the Qatar Investment Authority, Abu Dhabi Investment Authority, and Kuwait Investment Authority, surged from below 20% in 2024 to nearly 40% in Hong Kong IPOs.
As geopolitical uncertainties in the Middle East increase, Hong Kong is being recognized as an alternative investment destination due to its stable financial infrastructure and access to the Chinese market. Inquiries about investments in Hong Kong stocks and bonds from Middle Eastern high-net-worth individuals and the establishment of family offices to manage ultra-high-net-worth assets have also seen a significant rise. Hong Kong is emerging as a key hub for Middle Eastern capital investing in Asia's technology and new energy sectors.
Southeast Asian capital is also flowing into Hong Kong. Asia Weekly reported that more than ten foreign companies are currently seeking to list in Hong Kong, many of which are technology, food and beverage, and fintech firms from Vietnam, Indonesia, and Thailand. Over the past decade, approximately 150 Southeast Asian companies have listed in Hong Kong, raising a total of $4.3 billion.
Additionally, Hong Kong is proactively advancing in the digital finance sector. The Hong Kong Monetary Authority implemented a stablecoin ordinance last August and issued stablecoin licenses to major financial institutions like HSBC. This has heightened expectations for the issuance of stablecoins linked to the Hong Kong dollar and offshore yuan assets. Hong Kong is also seen as leading the competition to build new financial infrastructure that connects traditional finance with digital assets.
Asia Weekly concluded, "While Hong Kong's past internationalization was based on Western capital from the U.S. and Europe, it is now being restructured into a multipolar framework encompassing mainland China, Southeast Asia, Central Asia, and the Middle East, forming a unique new model of internationalization for Hong Kong."
* This article has been translated by AI.
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