Hong Kong economy showed resilience in first quarter of 2026, Paul Chan says
Finance chief credits mainland China's steady growth as key buffer against Middle East conflict and stock market jitters.
Hong Kong's economy demonstrated notable resilience in the first quarter of 2026, according to Financial Secretary Paul Chan Mo-po. Despite a "more volatile" stock market and ongoing geopolitical tensions stemming from the Middle East conflict, the city leveraged the steady growth of mainland China's economy to maintain stability. Chan highlighted that the complex and fast-changing landscape, including uncertainty from US-Israel actions against Iran, continued to fuel market jitters. However, active trading persisted with the average daily turnover for the first two months exceeding HK$260 billion, marking a significant 17% increase year-on-year, even as the benchmark Hang Seng Index fell by approximately 2%.
Chan positioned this performance as part of Hong Kong's strategy to establish itself as a global hi-tech financing hub. The review did not address whether the city would meet its full-year growth forecast of 2.5 to 3.5 percent, a target set in late February just before the latest conflict escalation. The minister acknowledged external pressures, noting that Hong Kong and other oil-importing global cities are contending with the war's impact on fuel prices, a cost already being passed to travelers through airline surcharges. The assessment underscores Hong Kong's economic interdependence with mainland China while navigating a turbulent international environment.
- Q1 2026 economic resilience credited to leveraging mainland China's steady growth, positioning HK as a tech finance hub.
- Average daily stock market turnover for Jan-Feb hit over HK$260B, a 17% year-on-year increase despite Hang Seng Index falling ~2%.
- Full-year growth forecast (2.5-3.5%) remains unaddressed amid Middle East conflict volatility and rising fuel costs.
Why It Matters
Highlights Hong Kong's strategic economic positioning and vulnerability to global geopolitical shocks, crucial for international investors and businesses.