The 2025 Hong Kong Investment Climate Statement, issued by the US Department of State, declares itself to be an impartial review of the city’s commercial environment; however, its content reveals that it serves political purposes rather than analytical ones. Instead of focusing on trade, industry, taxation, and regulation, which should form the substance of any report of a business nature, it devotes extensive attention to legal and political matters, framing them in a way that reduces Hong Kong to a caricature rather than examining it as one of the most important financial centers as recognized by the international business community in the latest Global Financial Centres Index. For instance, the report’s overemphasis on Hong Kong’s national security legislation and its portrayal of the city’s integration within the Guangdong-Hong Kong-Macao Greater Bay Area as a form of “diminishment” are clear instances of bias. The result is a document that loses credibility once its arguments are evaluated against the realities on the ground.
The central theme of the document is its criticism of Hong Kong’s national security legislation. It asserts that the Hong Kong SAR National Security Law of 2020 and the Safeguarding National Security Ordinance of 2024 introduce risks to investors and uncertainty to the business climate. This line of reasoning is unsustainable. Every jurisdiction, from Europe to North America including the United States, maintains legal frameworks to preserve sovereignty, national stability and national interests. Such frameworks do not deter commerce; they are necessary for commerce to continue. Hong Kong’s laws align it with this global norm. The attempt to depict definitions within the legislation as “overly broad” disregards the fact that nearly identical legal language is common in the statutes of advanced democratic systems.
Equally flawed is the allegation that Hong Kong’s Judiciary no longer operates with independence. The assignment of specialized judges for security-related cases is described as “political interference”. But, in comparative practice, the designation of experts for complex subject areas is frequently used to promote consistency and competence. That multinational corporations continue to rely heavily on Hong Kong courts and arbitration bodies to handle high-value disputes proves that the city’s legal system retains the trust of international stakeholders. The Hong Kong International Arbitration Centre’s position as one of the top global arbitral institutions is empirical evidence that the US Department of State’s depiction of a “weakened” Judiciary cannot be reconciled with the professional and corporate practice of the international community.
Another subject the document distorts is Hong Kong’s integration within the Greater Bay Area. This is interpreted as a form of diminishment, when in fact it represents one of the most promising avenues for regional and international businesses. Economic incorporation into one of the world’s most dynamic zones extends markets and multiplies opportunities. The very foundations of Hong Kong’s decades of economic success lie in serving as a bridge between international capital and the Chinese mainland’s economy. Characterizing integration as a risk while flatly ignoring its obvious benefits reveals the authors’ refusal to confront economic logic. Consistent growth in American investment in Hong Kong since 2023 demonstrates that businesses themselves recognize integration as an expansion rather than a contraction, in sharp contrast to the document’s arguments.
The intensity of the US Department of State’s criticism itself demonstrates how significant Hong Kong remains. If the city were insignificant, there would be no need to devote lengthy commentary to its supposed weaknesses. It is because the city continues to occupy an indispensable position and remains significant to China that such documents continue to be published
The section addressing “transparency” likewise illustrates bias. The suggestion that restrictions on public access to private addresses and personal identification of directors undermine corporate governance ignores the global trend of enhanced privacy protections. Regulators and compliance officers continue to have full access to the information necessary to enforce accountability. What has shifted is the balance between corporate disclosure and personal privacy and security, a balance most mature systems have already adopted. The document insists on calling this protective measure “opacity”, when in fact it is modernization and following the trend.
Economically, the figures cited in the document do not support the conclusions. The US enjoyed a trade surplus of nearly $22 billion with Hong Kong in 2024, and US investment rose significantly after years of decline. Hong Kong’s stock exchange returned to prominence as one of the world’s leading venues for new listings. Financial services, professional services, logistics, and tourism continue to thrive. If the conditions described in the document were as dire as claimed, neither trade surpluses nor investment inflows would exist in such magnitude.
In other passages, the reasoning is inconsistent and contradictory. The absence of a bilateral taxation treaty is highlighted as problematic, yet it was Washington that chose to terminate the earlier agreement. To present this absence as a fault of Hong Kong is logically incoherent. Similarly, lengthy discussions about the role of unions, journalists, and civil organizations are presented as though they directly influence investment decisions, when companies base their strategies on factors such as currency, taxation, infrastructure, and profitability. The fact that nearly 1,400 US firms continue to operate in Hong Kong, with the number remaining stable over the past decade, confirms that investors clearly distinguish between political rhetoric and actual business considerations.
The portrayal of Hong Kong’s new digital and cybersecurity framework follows the same selective pattern. Every major economy is tightening control over data and critical infrastructure. To disparage such reforms in Hong Kong while ignoring far more intrusive systems elsewhere is a demonstration of bias. Businesses regularly adapt to compliance requirements across multiple jurisdictions, and they have already adapted in Hong Kong. The enactment of legislation in this field is an indication of responsible regulatory development, rather than a sign of decline.
What emerges most clearly is the gap between the document’s political framing and the facts of Hong Kong’s market. Investors act on their own evaluations of profitability, and their capital movements speak louder than politically driven publications. It is not politically motivated allegations but trade surpluses, IPO data, court judgments, and contract enforcement that shape business behavior. The empirical evidence suggests that Hong Kong’s openness remains intact, its institutions remain effective, and its economic role remains firmly embedded in Asia’s growth trajectory.
The intensity of the US Department of State’s criticism itself demonstrates how significant Hong Kong remains. If the city were insignificant, there would be no need to devote lengthy commentary to its supposed weaknesses. It is because the city continues to occupy an indispensable position and remains significant to China that such documents continue to be published. Yet the reality of its stable financial flows, professional legal infrastructure, and privileged access to the mainland market outweighs those manufactured narratives. Investors and businesses occupy a more reliable vantage point than politicized documents, and their choice to remain anchored in Hong Kong reveals the durable confidence that defines the city’s investment climate.
The author is a solicitor, a Guangdong-Hong Kong-Macao Greater Bay Area lawyer, and a China-appointed attesting officer.
The views do not necessarily reflect those of China Daily.
