Hong Kong has once again displayed its resilience. The city retained its No 3 ranking in the Global Financial Centres Index, just behind New York and London, while initial public offerings surged eightfold in the first half of 2025. For the first time since 2019, Hong Kong held the top spot in global IPO fundraising. The city clearly still matters in global finance.

However, Chief Executive John Lee Ka-chiu’s policy address, while ambitious, was short on specifics. It promised growth in finance, shipping, innovation and talent but offered too few assurances to keep global firms confident. The real challenge is to turn momentum into trust, making sure Hong Kong and its markets remain usable even as geopolitical risks intensify.

The starting point is stark. In 2020, the US withdrew recognition of Hong Kong’s high degree of autonomy guaranteed under the Basic Law. Every US countermeasure against China – sanctions, export controls, investment bans – now applies to Hong Kong unless the city is explicitly carved out.

It is true that Hong Kong cannot afford to be narrowly fixated on the United States. Diversification of ties with Southeast Asia, the Middle East and Europe is already under way and must continue, but this will take time. For now, the United States remains the world’s largest consumer market and the central player in finance and technology. For Hong Kong, the task is to work pragmatically with Washington to avoid becoming collateral damage, even while building broader partnerships elsewhere.

Relations are further constrained by unresolved irritants – the national security law, high-profile dissident cases such as Jimmy Lai Chee-ying and US sanctions on Hong Kong officials. These ensure no reset with Washington.

Still, Hong Kong is not powerless. Global capital continues to bet on it. The task now is to transform that momentum into structural assurances through functional carve-outs – arrangements that endure because they serve mutual interests rather than political expediency.