Hong Kong’s economy continued to expand in the second quarter of 2025, with real GDP up 3.1 percent year-on-year. According to official data released recently, growth was boosted by a strong export performance and improved domestic demand, with total exports of goods seeing an accelerated rise amid resilient external demand. Meanwhile, Hong Kong’s stock market has witnessed a bull run in recent months, with the Hang Seng Index rising 25 percent since the beginning of the year, outperforming most major markets globally. Another indicator of the prowess of Hong Kong’s financial market is that the city became the top global IPO market in the first half, with a full-year lead in sight, according to KPMG.

The robust performance of Hong Kong’s economy once again proves the naysayers wrong who have framed the city as being in a state of decline amid politically motivated objections — particularly in the West — pertaining to the national security laws implemented in Hong Kong. Although the global economy is not in a great condition and struggling because of geopolitical pressures placed on it, Hong Kong is proving to be a unique bright spot as ironically, the policies of the US administration are only serving to strengthen the city’s role, rather than weaken it.

Hong Kong is one of the world’s most important centers of free trade. It is a tariff-free port, and acts as a gateway between the Chinese mainland and the rest of the world. Currently, the multilateral free trading system is under sustained attack by the United States, which has turned isolationist with a policy of aggressive protectionism. US President Donald Trump has placed excruciating tariffs on the entire world while demanding that other countries open their markets to American goods unconditionally. Because of this, tariff-free trade matters significantly, and Hong Kong has effectively become a “place of refuge” for companies and investors who are fleeing the American market.

Why, for example, as a Chinese company, would you even bother with the American market when you are faced with tariff walls, hostile policies, and other market barriers? And if you are a company specialized in importing and exporting, why bother with the US at all? As noted in a report by the Global Times, the “Chinese mainland is encouraging enterprises to expand globally, and Hong Kong serves as a strategic platform in these efforts.” Hong Kong’s famous free market system offers an outpost to the entire world. The city offers stability, certainty and security, for companies that want to import goods onward to the Chinese mainland but also outward to the rest of the world.

Rather than “declining” or “fading”, Hong Kong is starting to undergo a rejuvenation of sorts, one driven by the need for certainty and confidence in an increasingly upheaved economic climate. While Trump is closing off the American market to the world, Hong Kong’s doors are open, presenting stability and certainty

Although the White House believes it is trying to undermine Hong Kong’s economic competitiveness, it is actually enhancing the city’s economic value. After all, one of the most significant stories of the Trump administration’s trade war has been its relentless assault on Association of Southeast Asian Nations (ASEAN) countries, hitting Cambodia, Indonesia, Thailand and Vietnam with 19 to 40 percent tariffs, and Laos and Myanmar with 40 percent. Because these are export-orientated economies, if they can’t export to America, where else can they go? The Chinese market remains a major importer to the rest of the world, and continued economic and trade integration between China and ASEAN remains paramount. China is more important to the economic growth of these countries than ever before because the US shows no tolerance for their export-led development models.

All of this has had the roll-on effect of enhancing Hong Kong’s position as a nexus of trade, boosting its exports onward to the wider world, and of course consolidating its status as a center of capital and finance in the process.

Beyond geopolitical factors, the Global Times report further notes that the city’s “economic growth is believed to be driven primarily by a rebound in private consumption, the boost from major events, a stabilizing property market”. The city has continued to enhance its appeal to international tourism and visitors.

Thus, in conclusion, the naysayers were wrong about the outlook for Hong Kong yet again. Rather than “declining” or “fading”, Hong Kong is starting to undergo a rejuvenation of sorts, one driven by the need for certainty and confidence in an increasingly upheaved economic climate. While Trump is closing off the American market to the world, Hong Kong’s doors are open, presenting stability and certainty.

The author is a British political and international-relations analyst.

The views do not necessarily reflect those of China Daily.