Hong Kong’s Evolving Role: 2025 Review & What Execs Should Watch for 2026

Kristina Coluccia
Nov 13
4 min read

As tariffs, geopolitical friction, and global supply-chain shifts reshape how companies source and produce goods, Hong Kong is re-defining — not disappearing — as a pivotal “control-hub” in the broader “China Plus One / Asia Plus One” supply-chain strategy. Below is a snapshot of Hong Kong’s economic performance in 2025, recent policy and regulatory trends, and what business leaders should watch when using Hong Kong as a regional base in 2026.

2025 Performance

GDP & Growth Outlook: Modest but resilient

Several institutions foresee Hong Kong’s 2025 real GDP growth in the 2–3% range, consistent with earlier budget forecasts.
More optimistically, International Monetary Fund (IMF) recently revised its growth forecast to 2.4% for 2025, citing Hong Kong’s strong financial fundamentals and its ability to adapt to new markets and financial instruments.
On the demand side, external demand — particularly exports of goods and services — helped propel first-quarter 2025 growth to 3.1% year-on-year.

Export & Trade Dynamics: Reinforced “super-connector” credentials

In April 2025, merchandise exports rose ~14.7% YoY (to HK$434.5 billion), with marked growth in shipments to the Chinese mainland and other Asian markets.
By October 2025, exports surged by 17.5% YoY, a sign that trade policy uncertainties might be easing — at least in the short term.
A recent study commissioned by Hong Kong Trade Development Council (HKTDC) reaffirmed Hong Kong’s status as a “supply-chain superconnector,” especially as firms adjust to geopolitical risks, tariffs, and rising demand for resilience and supply-chain diversification.

Domestic Headwinds: Retail, consumption, and labor-market drag

Despite strong export performance, challenges remain domestically. Elevated interest rates and a strong Hong Kong dollar continue to weigh on the retail, tourism, and real estate sectors.
Weak local consumption — partly due to residents opting to spend across the border and increased online shopping — has dampened hopes of a robust retail rebound.

Policy & Regulatory Shifts — 2025-2026 Signals

Government strategy: “One Country, Two Systems” & long-term adaptability

According to the 2025–26 budget framework, the Hong Kong government is stressing its dual advantage: global connectivity and proximity to China’s domestic market. This underpins policy efforts to expand economic capacity, open new growth areas, and align Hong Kong with broader national development strategies.

Supply-chain realignment & nearshoring

The climate of global trade uncertainty has pushed many firms based in or operating via Hong Kong to rethink their supply chains. A 2025 survey by HSBC revealed that about 72% of Hong Kong firms are either adopting or planning nearshoring, with preferred destinations being the Chinese mainland, South Asia, and Europe.

Meanwhile, the HKTDC-commissioned supply-chain study noted accelerating regionalization — a clear sign that Hong Kong remains central to diversified “Asia Plus One” strategies.

Infrastructure, logistics & trade-facilitation moves

While some future-facing analyses highlight investments in digital logistics, customs automation, and smart-logistics hubs, concrete public data is still limited. These could nonetheless strengthen Hong Kong’s value as a transshipment and control hub over time.

What Executives Should Watch in 2026

If you are doing business in or via Hong Kong — using it as a regional control hub — here are the strategic checkpoints for 2026:

Supply-chain diversification: Given tariff risks and geopolitical uncertainty, continue to assess and expand alternative manufacturing/sourcing nodes (e.g., South Asia, Southeast Asia). Hong Kong remains ideal for orchestration and regional coordination.
Leverage export-oriented momentum: The strong export performance in 2025 shows demand in Asia and other regions remains solid. Companies in trade, logistics or re-exporting can leverage this trend — but stay alert to swings in global demand or renewed trade tensions.
Monitor local-market headwinds: Weak domestic consumption — especially in retail and property — may limit opportunities relying on local sales or domestic demand. If your business depends on local consumption, plan accordingly.
Regulatory alignment & China-integration strategies: With the Hong Kong government signalling continued efforts to align with broader national strategies, firms should pay attention to any regulatory — or financial-market — reforms. These could influence capital flows, ease of doing business, and regional coordination.
Institutional resilience & flexibility: Use Hong Kong as a flexible, resilient base — a hub for governance, treasury, and regional oversight — rather than a fixed production centre. The dual “global-plus-China” advantage remains one of Hong Kong’s strongest assets.

Hong Kong: Adapting, Not Retiring

In 2025, Hong Kong demonstrated its resilience and adaptability. Despite global headwinds, its economy grew, exports rebounded, and firms increasingly view it as a cornerstone in evolving “China Plus One / Asia Plus One” supply-chain strategies. For executives, the message is clear: Hong Kong remains a compelling control hub — particularly for firms seeking to balance access to Asia, Europe, and China while managing regulatory and geopolitical risks.

That said, success in 2026 will depend on strategic flexibility, diversified supply-chain design, and close attention to regulatory developments. Companies that treat Hong Kong as a dynamic pivot — not a static base — are likely to reap the most benefit.

Woodburn Accountants & Advisors is one of China and Hong Kong’s most trusted business setup advisory firms.

Woodburn Accountants & Advisors is specialized in inbound investment to China and Hong Kong. We focus on eliminating the complexities of corporate services and compliance administration. We help clients with services ranging from trademark registration and company incorporation to the full outsourcing solution for accounting, tax, and human resource services. Our advisory services can be tailor-made based on the companies’ objectives, goals and needs which vary depending on the stage they are at on their journey.