Hong Kong had a good year in 2025, with the GDP growth around 3.5 %. That was well above what international analysts originally predicted. Over the year, the gloomy mood of the past years melted away.

Initial expectations on economy´s development were affected by uncertainties in global economy, trade turbulence and tariffs.  Another key factor was the development of economy in China and it´s impact on Hong Kong. While those worries were justified, now we can say that the conclusions in terms of predictions went wrong. Why so?

Hong Kong got image damage abroad following the 2019 protests and the subsequent national security legislation. There were concerns about the consequences for Hong Kong´s development. No doubt, many question marks remain.  That development has spread “pessimistic outlook” which has been in political jargon in many countries for quite some time – also in Finland.  Did this play a role in overly pessimistic predictions on economy?

Maybe many of us somewhat overlooked the fact that Hong Kong economy was recovering from the COVID time downturn. As an example, growth in inbound tourism continued, towards pre-COVID level. Also, domestic consumption was slowly picking up. This recovery meant growth.

Or maybe the impact of geopolitics didn´t go right. There are so many concerns and uncertainties which dominate the scene and our thinking. If we look at the Hong Kong financial sector, we may see that geopolitics is not only doom and gloom.

The finance sector has been doing extremely well. Hong Kong has gained back its position as the third largest financial center in the world. Hang Seng index grew with over 25 %, record level of new listings, the city attracted new wealth offices, we saw a strong resurgence in capital inflows. In current geopolitics, businesspeople and investors are looking for relocation, risk diversification or safe heavens. More money comes in, and not just from Mainland China.

Looking at Hong Kong´s foreign trade relations it´s always important to keep in mind that much of the trade is transiting through Hong Kong. The city is a trade hub between China and the rest of the world. Hong Kong´s leadership frequently underlines area´s role as a “bridge builder” or “super connector”.

Hong Kong´s exports saw a strong growth last year, well over 10 %. Trade increased in both ways particularly with other Asian partners – Vietnam (y-o-y increase of 97 %!), Malaysia, Taiwan, and many others. That development can´t be explained with the much discussed “frontloading” in anticipation of future tariff changes, nor with Temu or Shein packages. There may be a more long-term development underway – regional dimension gaining more emphasis in Hong Kong´s trade relations.

Another observation on Hong Kong´s trade relations what I would make is that there seems to be stronger growth with those countries which are traditionally strong in trade with Hong Kong. USA has good figures both in trade growth and with number of new companies in Hong Kong. From Europe France and Switzerland remain strong. The leading countries in growth of exports are UK, Netherlands, Poland and Hungary.

What about Finland? The value of exports of goods has remained largely steady for a long time, at around 100 million Euros annually. The exports are clearly on lower level than those of Sweden, Norway or Denmark – and both Sweden and Denmark had strong increase in exports to Hong Kong last year. There are in itself good explanations for Finland lagging behind other Nordics, but still?  On a positive note, Finland´s trade in services with Hong Kong has been on a growth track and surpasses now the pre-COVID levels – largely due to transport services, Finnair, tourism sector.

Others are actively and even aggressively pursuing opportunities to expand business in Hong Kong. That is what Finnish companies should also do, and what the Consulate General has been supporting as we can. No need to shy away in fear of geopolitical tensions. Those tensions will not disappear, and Finnish business has to look for successes in this complicated environment. No need to stick head into bushes!

Hong Kong is top of the world in various rankings on business environment and economic freedom. Its own markets are bigger than the population of Finland. In addition, it can serve as a platform for Finnish companies for business in Mainland China, particularly in the so called Greater Bay Area, as well as in the broader Asian region. It remains a very international metropole, which also means that competition is hard and hopes of quick wins are unlikely to materialize. But there are Finnish success stories in Hong Kong, and that hopefully encourages others.

Finland has a good brand image in Hong Kong – Aurora, Santa Claus, white snow and white nights are well known. Also, the high level of education, frontrunner role in sustainability, and – of course – happiness. Last year the Moomin 80 Anniversary gained a lot of positive attention in Hong Kong, with many tens of various kinds of events taking place. That gives good background to do business in Hong Kong.

Timo Kantola

Consul General

Hong Kong

Picture: Consulate General of Finland in Hong Kong and Macao