How Hong Kong is fighting to redefine its future with an institutional moat, wealth surge

For decades, warnings of Hong Kong’s terminal decline have arrived in periodic waves.

When Stephen Roach, the former chairman of Morgan Stanley Asia, ignited a firestorm with his February 2024 assertion that “Hong Kong is over”, he pointed to a toxic cocktail of domestic and external pressures.

Roach, who doubled down on his “wake-up call” a year ago, argued that the city’s economic glory was being extinguished by a loss of political autonomy following 2020’s national security law, the spillover from mainland China’s protracted malaise, and the city’s precarious position in the crossfire of Sino-US tensions.

Despite the prominent American economist’s perceived gloom, the “Hong Kong is back” camp – led by a defiant local government – is wielding evidence to the contrary. The city claimed the IPO fundraising crown last year and ranked behind only New York and London in the latest Z/Yen Global Financial Centres Index.

Behind the heated debate lies a fundamental question: in an era defined by shifting capital flows, geopolitical fragmentation and evolving regulatory frameworks, how can Hong Kong keep shining as a globally leading financial centre?

“Hong Kong must adapt to a changing world order,” said Anthony Cheung, chair professor in public administration at the Education University of Hong Kong. As the city’s traditional intermediary role between China and global markets erodes, he argued, it must rely more explicitly on its institutional strengths to recalibrate its competitive position.

A shrinking moat in the wake of China’s rise