Hong Kong's key position in a changing global order

The trade disputes between China and the United States, often framed in terms of risk, also present a historic and strategic opportunity for the Hong Kong Special Administrative Region. Rather than retreat in the face of geopolitical uncertainty, the SAR should embrace its evolving role — not just as a gateway between China and the rest of the world, but as the premier financial center for the next generation of emerging markets.

An immediate opportunity lies in the potential shift of Chinese companies away from US stock exchanges. Over the past two decades, many of China's best-known firms — Alibaba, JD, Baidu, and others — chose to list in New York to access the world's deepest pools of capital. But times are changing. With intensifying scrutiny from US regulators, the Holding Foreign Companies Accountable Act, and growing restrictions on Chinese investment, the US risks surrendering one of its significant competitive advantages — openness.

For the past 15 years, US dominance in global equity flows was built not only on the depth and liquidity of its markets but on a reputation for being open to foreign issuers and investors alike. Now, as Washington prioritizes national security over market openness, a vacuum is emerging — and Hong Kong is uniquely positioned to fill it.

Already, companies such as Alibaba, JD and NetEase have completed secondary listings on the Hong Kong Exchanges and Clearing. Should US delisting accelerate, Hong Kong stands ready to absorb a new wave of high-quality Chinese issuers. With reforms allowing dual-class shares, biotech listings and pre-revenue tech companies, Hong Kong's capital markets have proven to be nimble and adaptive. With the central government's continued policy support, the SAR can evolve into the natural home for China's global champions.

But the opportunity runs far deeper than accommodating returning Chinese listings.

Hong Kong can redefine itself as the financial artery of the Belt and Road Initiative. As Chinese companies expand their infrastructure, energy and digital connectivity across Asia, Africa and the Middle East, they require world-class financing, insurance, legal services, and dispute resolution — all of which Hong Kong is well-positioned to provide. Projects such as the China-Pakistan Economic Corridor, Laos' high-speed railway and ports in East Africa show the scale of China's engagement abroad. Hong Kong can serve as the operational and financial headquarters for these massive, complex projects.

Moreover, Hong Kong should actively welcome companies from BRI partner nations to list and raise capital. Many fast-growing firms in Southeast Asia, the Middle East and Africa struggle to access deep capital markets that offer international visibility. By providing these companies a trusted, efficient listing platform, with the advantages of Hong Kong's legal system, regulatory transparency and international investor base, Hong Kong can become the preferred capital-raising center for the Global South.

In the fixed income space, the expansion of "dim sum" bonds — offshore renminbi-denominated debt — offers another dimension of growth. Sovereigns and corporates from BRI countries could issue bonds in Hong Kong, accessing Chinese liquidity and diversifying their investor base. Hong Kong's Bond Connect program, now enhanced with the Southbound link, can be further expanded to support greater cross-border financing activity.

Finally, as the RMB's internationalization accelerates, Hong Kong is poised to remain the leading offshore RMB center. Today, the city handles about 80 percent of all offshore RMB settlements. With trade between China and BRI countries increasingly conducted in RMB, Hong Kong's importance as a clearing and settlement hub will only grow. It is not just about facilitating transactions — it is about anchoring the broader ecosystem of trade, finance and investment flows centered around China's evolving role in the global economy.

The opportunity before Hong Kong is historic. It demands vision, proactive leadership, and, crucially, the unwavering support of the central government to ensure that Hong Kong continues to thrive under the "one country, two systems" framework. In a world being reshaped by fragmentation and new alignments, Hong Kong can stand as a beacon of connectivity, innovation and openness.

As a Chinese saying reminds us, "Within every crisis lies a new opportunity; within every disruption, a new chapter can be opened." The world is changing. The era when global finance flowed effortlessly to New York and London is giving way to a multipolar reality. Hong Kong, if it acts decisively, has a once-in-a-generation chance to shape the future of global capital flows — and its own destiny.

The author is a research lead and co-manager at a Hong Kong-based asset manager, Pacat Capital Management. He is also the publisher of Panda Perspectives, a research publication on the greater China market and economy.