Speech by Head of CEPU at 2026 Asia-Pacific Think Tank Forum · Shenzhen in Shenzhen (English only) (with photos)
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Distinguished guests, ladies and gentlemen,
I would like to thank the Shenzhen Academy of Social Sciences and Shenzhen University for convening the inaugural Asia-Pacific Think Tank Forum. This gathering is particularly timely, as Shenzhen prepares to host the APEC (Asia-Pacific Economic Cooperation) Economic Leaders' Meeting next month, and the region looks to deepen co-operation and advance shared prosperity.
I lead the Chief Executive's Policy Unit of the Hong Kong Special Administrative Region (HKSAR) Government. Our role is similar to that of an in-house government think tank: we conduct strategic and forward-looking research, and co-ordinate the Chief Executive's annual Policy Address.
Last month, Hong Kong launched its First Five-Year Plan. I was privileged to contribute to its preparation, particularly from a policy research perspective.
Today, I am grateful for the opportunity to share some observations on the important themes identified by our hosts. These are also issues that we have followed closely as we chart Hong Kong's policy direction.
The organisers have set a number of themes for this forum. Taken together, they capture both how far APEC has come and the questions that may shape its next chapter.
First, institutional opening and regional integration. Second, digital development and artificial intelligence (AI). Third, the free trade area of the Asia-Pacific. Fourth, industrial and supply chains. Fifth, green and inclusive growth. A common thread runs through these five themes. What crosses a border today is no longer just a container. It may also be a rule, a dataset, a verified figure or a certificate.
Hong Kong encounters these questions every day. Under our unique institutional advantage of "one country, two systems", different legal, monetary, customs, and regulatory arrangements operate within one country - and Hong Kong has accumulated valuable experience in connecting different systems and making cross-border exchanges work in practice.
I would like to support this claim with the trade statistics of Hong Kong. In 2012, Chinese Mainland goods re-exported through Hong Kong to the United States, the EU (European Union), and the United Kingdom made up 17 per cent of Hong Kong's re-exports. In 2025, only 6.5 per cent. The traditional route connecting Chinese factories with Western consumers has seemingly narrowed.
But Hong Kong's trading role has not disappeared. It has changed. In 2025, Hong Kong's total exports rose by 15.4 per cent over 2024, to a level a quarter above their pre-pandemic peak. One route narrowed, and three other widened:
- first, Chinese Mainland goods flowing outward to new markets in ASEAN (Association of Southeast Asian Nations), the Middle East and India;
- second, goods originating outside the Chinese Mainland passing through Hong Kong - say, semiconductors from South Korea moving through Hong Kong to assembly lines in Vietnam;
- and third, running inward into the Chinese Mainland, advanced chips feeding its drive in artificial intelligence.
At Davos in January, the Managing Director of the IMF (International Monetary Fund) described this in a sentence. "Trade is like a river," she said. "You put an obstacle, it goes around it." One route narrowed, and three widened. That is the river, bending.
But a river that bends is not yet a river that can be navigated. At every new bend, someone has to build the harbour: the moorings, the pilots, the customs house. In trade, the harbour is not made of concrete. It is made of institutions. A contract both parties will sign. A certificate both parties will believe. A payment both parties can settle. A document both parties' courts will recognise.
China's planning language has an exact term for this. Hard connectivity (硬聯通) is the bridge and the railway. Soft connectivity (軟聯通) is the agreement that your licence is valid on the other side of the bridge. The Asia-Pacific has achieved an extraordinary expansion of physical connectivity over recent decades. As trade becomes more digital, services intensive and environmentally accountable, soft connectivity may become an increasingly important part of the region's next phase of development.
Hong Kong's contribution may therefore lie in helping to build that connectivity - and approaching it as we would a good harbour: open, reliable and available for shared use. Let me illustrate this through three examples: supply chains, carbon markets and digital trade.
Supply chains: production spreads, services connect
First, supply chains. Globally, as production networks spread across more economies, regional supply chains require more than factories, ports and shipping routes. They also need trusted finance, certification, insurance, treasury and dispute-resolution services.
What we see from Hong Kong's experience is this: an electronics manufacturer in Dongguan, in the GBA (Guangdong-Hong Kong-Macao Greater Bay Area), may now build in Penang or Haiphong and ship directly to Munich. The goods may no longer pass through Hong Kong, but many of the services supporting them still can. Production can move; trusted institutions are less easily reproduced.
Hong Kong has been adapting to this shift. The National Five-Year Plan has positioned the city as a high value-added supply chain services centre. In response, the Government established the GoGlobal Task Force (Task Force on Supporting Mainland Enterprises in Going Global) in October 2025. Since then, it has assisted more than 340 Mainland enterprises with financing, overseas standards, certification and compliance; about 30 per cent of them position Hong Kong as a regional or international headquarters or corporate treasury centre.
The figures provide quantitative support for this shift. Exports of transport, financial, insurance, intellectual-property and other business services rose from about $480 billion in 2012 to $623 billion in 2024 - a cumulative increase of around 30 per cent. Together, these services accounted for nearly three-quarters of Hong Kong's total services exports in 2024. They have become a substantial export sector in their own right, alongside the cross-border business that they support.
Hong Kong has also been helping to connect the Mainland enterprises, the Southeast Asian producers and the overseas customers through services they can use and trust. This may offer one practical example of how stronger institutional connectivity can support APEC's vision of an open, connected and resilient Asia-Pacific.
Carbon: a price the border can read
A second example is carbon. Globally, climate policy is becoming trade policy. The EU’s Carbon Border Adjustment Mechanism, CBAM, entered its definitive phase this year, requiring importers to account for the emissions embedded in products such as steel and aluminium. A carbon price already paid in the country of production may reduce the importer's liability - but only if the emissions and payment can be verified.
What we see from Hong Kong is a challenge of recognition.
- Shenzhen pioneered the country’s first pilot carbon market in 2013.
- Building on such early experience, the national emissions trading system - launched in the power sector in 2021 - expanded last year to steel, cement and aluminium, taking coverage to about 60 percent of national emissions.
- China is also developing a framework for cross-border carbon trading and closer links with international markets. Much of the region's carbon is therefore already being measured and priced; the next question is whether that price can be understood and recognised across borders.
Hong Kong has been developing the infrastructure to support this. Core Climate of the HKEX (Hong Kong Exchanges and Clearing Limited) is the world's only international voluntary carbon marketplace offering settlement in both Hong Kong dollars and Renminbi. Under the latest Policy Address, Core Climate and the Hong Kong Quality Assurance Agency will explore Hong Kong's participation in cross-boundary carbon trading, supporting the country in building a carbon market with greater international influence. Core Climate is also deepening co-operation with Brazil, Malaysia and Kazakhstan, drawing on Hong Kong's strengths in finance and standard setting to connect carbon markets along the Belt and Road with international markets, while piloting cross-border transactions and building practical cases.
Hong Kong's experience may offer one practical lesson for APEC: green markets depend not only on setting a carbon price, but also on making that price credible and readable across borders. Greater compatibility in measurement, verification and disclosure could help the region connect different carbon systems while preserving their individual characteristics. A tonne priced at home should carry meaning abroad.
Digital trade: one shipment, one set of documents
Thirdly, digital trade. Globally, trade is becoming digital, and its documents and systems remain fragmented. A single shipment may involve customs declarations, bills of lading, cargo records, financing documents and payments - each moving through a different platform or legal framework. The challenge is no longer simply to digitise each step, but to connect them.
What we see from Hong Kong is the journey of a single container. Cargo leaving the Greater Bay Area can already use the "One-Data-Multiple-Declarations" arrangement, allowing trade information to be submitted to both Chinese Mainland and Hong Kong Customs. Building on this foundation, the same trusted data can increasingly support electronic trade documents, logistics and trade finance. The container and its data can therefore move together - more quickly, securely and seamlessly.
Hong Kong is turning this vision into an end-to-end digital trade chain. The Port Community System now brings together cargo, customs and logistics data, with more than 8 000 enterprises registered and over 20 successful trade-finance applications using trusted cargo-flow data. The Government will also introduce legislation this year to give electronic trade documents the same legal standing as paper documents, while further connecting trade and cargo data with financial institutions.
The broader insight for APEC is that digital trade advances when trust travels with the data. Hong Kong can serve as a connecting node among the Chinese Mainland, ASEAN and international markets - a shared digital facility through which the region's trade can flow more simply and securely.
To close, three examples, three stories, one pattern. In each, the river has bent. In each, what the region needs at the new bend is not another bridge but an institution that two sides will recognise. And in each, Hong Kong is building that institution as something open to all.
Why Hong Kong can do this is not a mystery. It is a common-law jurisdiction, a separate customs territory, a freely convertible currency and a member of the WTO (World Trade Organization) and APEC in its own right, inside the world's largest manufacturing economy. The National Five-Year Plan adopted in March describes Hong Kong in eight characters: backed by the motherland, connected to the world (背靠祖國、聯通世界). Hong Kong's own Plan answers with three connectivities: hard, soft, and the connectivity of hearts. The first, the hard connectivity the region has largely built. The second, the soft connectivity is the subject of this address. The third, connectivity of hearts is the purpose of this forum.
APEC's theme this year is an Asia-Pacific community that prospers together. A community, in the end, is a set of mutual recognitions: of each other's contracts, certificates, data and, ultimately, each other. It is built harbour by harbour.
Hong Kong is not the largest economy in this room, and never will be. But when a river bends, size is not what is needed at the bend. What is needed is a harbour that every vessel can use. That is what Hong Kong is building, and what it offers to the Asia-Pacific.
I look forward to learning from all of you - all the leaders and thinkers gathered in this room. Thank you, and I wish this forum great success. Thank you very much.
Ends/Monday, October 12, 2026
Issued at HKT 15:50
Issued at HKT 15:50
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