A version of this article was originally published in Caixin Global.
Hong Kong had a strong 2025. Economic growth was up 3.5%, the equity market climbed 28%, and tourism grew 12% — but the city cannot afford to be complacent.
Hong Kong faces a range of financial and demographic pressures that will shape its future, especially during the next five years.
To thrive, business and government will need to adjust to shifting supply chains, China’s reliance on artificial intelligence (AI) to drive manufacturing, and a rapidly aging population, according to research by the Oliver Wyman Forum based on roundtable discussions with more than 80 C-suite executives from the region. This includes moving forward with financial policy reform, promoting the city’s advantages as a platform for mainland corporates going global, and tapping into the silver economy by designing more products and solutions for older consumers.
Strategies for Hong Kong to sustain growth through the next five years
We identified four key areas that will shape the city’s future. Business and government leaders need to be proactive in responding to these changes if Hong Kong’s economy is going to keep surging.
Positioning Hong Kong as a bridge to China’s AI-led manufacturing shift
Hong Kong faces both opportunities and challenges with the rapid change in global supply chains. Business leaders we spoke with expect Southeast Asia and South Asia will attract more manufacturing, as firms strengthen supply chain resilience and import more component parts from China, in turn creating new trade corridors. But they also think China’s export sector will remain a powerhouse, owing to its efficiency, innovation, and scale. Trade between China and Southeast Asia alone is expected to reach $1.4 trillion by 2030, up from $890 billion in 2024.
China’s exports to the region will not be limited to components. The country’s pursuit of so-called mass-AI seeks to rewire the economy with artificial intelligence. AI-enabled exports, from medical sensors to industrial equipment, will grow steadily, especially to the Global South countries, where there will be fewer concerns about national technology sovereignty. Business leaders assume this requires a greater level of complexity, with Chinese companies more likely to expand internationally rather than just export.
Strengthening Hong Kong’s role in regional finance and capital
Hong Kong can leverage its role as a global treasury hub for Chinese corporates looking to expand regionally and globally. The city already is the fourth largest global foreign exchange hub and the largest Renminbi hub, but more can be done. The Hong Kong Chief Executive’s recent policy speech acknowledged the opportunity, and multiple government agencies are working to expand this business. Tax benefits, relaxed visa rules, and stronger promotional work will all further promote the city’s opportunities.
Prospects are not limited to trade and treasury operations. Hong Kong will also be a bridge for those investing in Chinese companies. The United Arab Emirates and Saudi Arabia, for example, regularly invest in China’s tech sector. One major Saudi corporate investor recently told us it has made more than 15 investments in the last year.
Hong Kong has a role to play intermediating this capital, but it will require constant promotion of the city’s financial strengths and bridge-building via personal visits to the Middle East and other regions.
Tapping into Hong Kong’s silver economy and aging workforce
The changes on the trade front occur at a time when the city must meet the needs of its rapidly aging population. The median age is expected to reach 50 by 2030, up from 39 in 2010. That shift will create labor shortages, especially in the financial and trade-related sectors, but also potential markets because much of the region is rapidly aging.
Across Asia, roughly 785 million people will be 60 or older by 2030, over twice as many as in 2010, according to United Nations’ population projection. Hong Kong’s insurers, banks, and other businesses already are catering to this population by providing more fixed yield products, off-peak senior travel options, and solutions with health insurance options. Designing financial and other products tailored for older investors or exporting AI-enabled medical devices and solutions to the rest of the region could create new sources of growth.
Building and attracting talent the city needs
Success across these three pillars — trade, technology, and demographics — means Hong Kong must become a talent magnet. The city is already well positioned. In our study of 1,500 cities globally, Hong Kong ranks high across a range of measures, including STEM universities, multinational presence, venture capital, and visa policies.
China’s business and government must act now to sustain growth through 2030
Hong Kong’s 2030 outlook is bright. But preparing for the opportunities means making it easier for the best and brightest from China and the world to work in the city. Hong Kong’s ability to pivot in response to a fast-changing environment has long been built on its talent. It is this community, much like the business leaders who joined our own roundtables, who will spot the opportunities and pivot their businesses in turn, to Hong Kong’s benefit.
Read the original piece here (paywall).