Speech by FS at Defining Hong Kong's Role in the Changing Global Economy conference (English only) (with photos/video)
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Mr Robin Harding (Asia Editor for the Financial Times), Daryl (Chairman of the Sino Group, Mr Daryl Ng), Consuls-General, ladies and gentlemen,
Good morning. It is a pleasure to join you at this conference, a gathering of policymakers, distinguished business leaders and innovators, to explore Hong Kong's evolving role in the global economy.
I'm sure that by the end of today's discussions, you will appreciate Hong Kong more and recognise the enduring value we bring to the world.
In considering Hong Kong's role in the changing global economy, allow me to highlight our two major development priorities: strengthening our position as an international financial centre and advancing innovation and technology.
Hong Kong as a rising IFC
First, geopolitical developments are elevating - rather than diminishing - Hong Kong's status as an international financial centre (IFC). As you may recall, the opening months of 2025 were marked by significant policy shifts in the United States (US), bringing a new level of uncertainty to the global markets. In the wake of the turbulent Liberation Day saga, investors around the world responded with heightened caution, reassessing risks and recalibrating their strategies.
And consider this data: gold prices have surged by over 55 per cent this year, reflecting heightened risk aversion. Bitcoin had once soared by more than 110 per cent, demonstrating demand for alternative stores of value. The equity markets in the US boomed - for instance, the S&P 500 rose by around 14 per cent, but the US dollar depreciated by around 10 per cent, with 10-year Treasury yields having fallen by more than 60 basis points.
What do these tell us? They revealed that amid heighted policy uncertainty and market volatility, investors are seeking safe havens. In this process, they look for transparent, consistent and stable policy environments, and value jurisdictions with familiar legal systems and trusted regulatory frameworks.
They, of course, continue to pursue returns. Yes, Hong Kong is the answer. At the start of this year, the average P/E (price-to-earnings ratio) of Hong Kong stocks were only around 12. And when the DeepSeek moment highlighted China's technological strength and cost efficiency, global investors quickly realised they had underallocated to this region.
Indeed, this wave of global investor interest has translated into significant capital flow into our market. The Hang Seng Index has surged by over 30 per cent year-to-date, following an 18 per cent gain last year, with an average daily turnover more than doubled that of last year. IPO (initial public offering) fundraising reached approximately US$28 billion as of October, making Hong Kong the global leader in new listings so far this year. Follow-on fundraising has been even stronger, reaching US$61 billion in the same period.
The asset and wealth management industry is also experiencing robust growth, with strong capital inflows. In the first eight months of this year, Hong Kong-domiciled funds recorded net inflows of US$43 billion.
Bank deposits have increased by 10 per cent so far this year, reaching over US$2.4 trillion.
Financial institutions have responded accordingly, with many expanding their operations in the city. We are seeing leading financial firms leasing larger office spaces, and in the case of some fintech companies, even acquiring entire building blocks.
Going forward, geo-economic reconfiguration is accelerating regional economic co-operation and advancing trade and investment within blocs. We are witnessing growing momentum in initiatives such as FTA (free trade agreement) 3.0 between China and ASEAN (Association of Southeast Asian Nations), as well as the expanding corridors of collaboration with the Middle East. Within these, Hong Kong plays a pivotal and strategic role - connecting markets, channelling capital, matching businesses, and providing professional expertise.
On capital markets, bilateral cross-border collaboration is gaining significant traction. Hong Kong's deepening cross-border collaboration with the Middle East is a compelling case in point. Over the past few years, we have worked closely with Saudi's Tadawul to facilitate the mutual listing of ETFs (exchange-traded funds) on each other's market. We then strengthened cross-border regulatory collaboration to pave the way for dual listings. Last week, we marked a historic milestone by welcoming the first Middle Eastern company to list on the Hong Kong Stock Exchange.
Indeed, our collaboration extends beyond finance into the industrial and commercial sectors. The Hong Kong Monetary Authority and the Public Investment Fund of Saudi Arabia will soon jointly launch a US$1 billion fund to support Hong Kong and Greater Bay Area companies to expand into Saudi Arabia, contributing to the development of non-oil economic sectors in Saudi Arabia. Next month, a major Saudi development company will be hosting a roadshow in Hong Kong to seek strategic partners and professional service providers to support their infrastructure development.
Innovation and technology
The second major development direction for Hong Kong is innovation and technology - our new engine of growth.
Our strategy focuses on sectors where we hold a competitive advantage: artificial intelligence (AI), biotech, fintech, as well as new energy and new materials.
To realise this vision, several key elements are essential: cutting-edge technology, technology enterprises, talent, market, land resources and capital.
On the enterprise front, we have established the Office for Attracting Strategic Enterprises (OASES), dedicated to bringing in high-impact, high-potential tech companies engaged in frontier technologies. Over the past three years, we have attracted over 100 such enterprises, many of which are global leaders in their respective fields. Collectively, these companies are expected to invest around US$8 billion in Hong Kong, creating about 22 000 quality jobs. Many are now setting up R&D (research and development) centres or regional headquarters in this city, often bringing with them upstream and downstream partners, thereby further enriching our innovation ecosystem.
We have established the Hong Kong Investment Corporation Limited, HKIC, as patient capital, to help us realise this vision. I'm sure Clara (Chief Executive Officer of the Hong Kong Investment Corporation Limited, Ms Clara Chan) will share more on this at the upcoming panel session.
In terms of land resources, the Northern Metropolis will be the carrier of our vision for innovation and technology. It also functions as a strategic base for collaboration with other Greater Bay Area cities, in particular Shenzhen. We are accelerating its development through innovative policies and tailor-made incentive packages. The goal is to anchor leading technology companies here to build a vibrant ecosystem so that our vision in innovation and technology will be deeply ingrained with industry development.
Speaking of the Greater Bay Area, there is an additional advantage that few regions can match. It is where high-end manufacturing capabilities and cutting-edge AI innovation simultaneously reside. AI technology can be directly and seamlessly applied, tested and validated in real-world industrial settings.
On talent, Hong Kong continues to be a magnet for global professionals. Since the launch of new and enhanced talent admission schemes at the end of 2022, we have received over 550 000 applications, approved more than 370 000, and more than 250 000 individuals have already arrived.
In fact, amid the geopolitical landscape, we have recently welcomed hundreds of scholars, researchers and world-renowned academics. And outstanding students are on their way here too. Here in Hong Kong, we believe that intellectual excellence knows no borders. We welcome the world's brightest minds to our city where merit - not politics - defines opportunity.
Concluding remarks
Ladies and gentlemen, in short, Hong Kong is accelerating its role as both an international financial centre and a premier global innovation hub. Few cities in the world can lead in these dimensions simultaneously - and with such momentum.
I wish you all a rewarding summit, and good health and continued success in the time ahead. Thank you very much.
Ends/Tuesday, November 18, 2025
Issued at HKT 11:35
Issued at HKT 11:35
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FS attends Defining Hong Kong's Role in the Changing Global Economy conference