HK set to ride on the 'blue oceans'

But as 2026 dawned, industry opinions were divided. Optimists argued that the forces underpinning last year's strength, such as robust demand for electronics, particularly artificial intelligence devices, and deepening commercial ties with emerging markets, remain firmly in place. Skeptics, on the other hand, warned that tariff risks that were deferred rather than resolved may reassert themselves in the new year, eroding export momentum.

A better-than-expected 2025

According to the latest figures from the Census and Statistics Department, the value of Hong Kong's total exports of goods jumped 18.8 percent in November 2025 from a year earlier, marking the 21st consecutive month that recorded a year-on-year growth. For the first 11 months as a whole, exports climbed 14.3 percent year-on-year — the strongest performance for the same period since 2022.

Exports to most major destinations went up, with shipments to Malaysia and Vietnam surging more than 50 percent, compared with the first 11 months of 2024. Exports to Japan saw double-digit growth, while those to the United States increased nearly 7 percent.

Most major product categories posted gains, led by technology-related segments. Exports of electrical machinery, apparatus and components rose nearly 16 percent, while shipments of office machinery and automatic data-processing equipment jumped more than a quarter.

Part of the surge reflected exporters' unease amid swings in US trade policy. To avoid possible duty hikes, traders frontloaded shipments during temporary tariff suspensions, according to Tommy Chung Ki-fung, a Hong Kong lawmaker representing the import-and-export sector.

At the same time, the buoyant global demand for AI-enabled electronic devices, particularly computer equipment, has been identified as another factor behind the increase. As AI and high-technology products continue to drive the Chinese mainland's exports, Chung said Hong Kong is positioning itself as a reliable springboard for such goods into overseas markets, benefiting from its sound legal system, sophisticated financial services, and favorable geographic location.

Policy support from the HKSAR government, including incentives for AI development and reforms aimed at dismantling outdated regulatory barriers, has further strengthened the city's role as an export hub for China's AI products in the face of strong global demand.

"AI-related products emerged as the central driver of world trade growth in 2025," noted Kenneth Lee, head of the Special Project and Business Advisory Section at the Hong Kong Trade Development Council's research team. Global trade in AI products in the first half of last year expanded more than 20 percent year-on-year; this outstripped the 6 percent growth recorded for the overall global merchandise trade.

"Hong Kong's electronics sector, which accounts for more than 70 percent of the city's total export value, in particular, benefited from this AI-driven trade," he noted.

New opportunities, old challenges

It remains to be seen whether these tailwinds can be sustained in 2026. With global trade conditions clouded by slowing growth in advanced economies and persistent geopolitical tensions, the push and pull between supportive structural forces and latent tariff headwinds will be decisive.

Chung said he is "cautiously optimistic" about Hong Kong's export outlook this year. Demand from emerging markets, especially Southeast Asia and the Middle East, which now account for a growing share of the SAR's exports mix, continues to expand, offering what he describes as "blue-ocean" opportunities that are likely to persist over the next five to 10 years. More fundamentally, he argued, AI represents a "long-term, transformative" boost to Hong Kong's exports. The Hong Kong Trade Development Council is on the same page, forecasting that Hong Kong's merchandise exports will continue to improve in 2026, supported by strong demand for AI-related electronics. It saw growth of up to 9 percent and suggested that exports could even achieve double-digit expansion if exporters had not brought forward shipments in 2025.

More than half of exporters surveyed by the council said growing appetites for AI and new-technology consumer electronics are most likely to drive business expansion this year.

That optimism, nonetheless, is tempered by external uncertainties. Challenging economic conditions in the US and Europe, compounded by debt and inflation pressures in parts of the European Union, could sap local demand and, in turn, weigh on Hong Kong's export performance, warned Chung.

Against this backdrop, the Hong Kong General Chamber of Commerce has adopted a measured outlook. Doris Fung, an economist at the chamber, said she expects Hong Kong's export growth to moderate to around 3 percent this year, noting that even with a Sino-US tariff reprieve in place until Nov 10, lingering uncertainty over trade in AI parts and chips could cloud export prospects.

The World Trade Organization revised its forecast for growth in global merchandise trade volumes down to 0.5 percent in October last year — from a projected 2.5 percent in April — warning that the tariff shock temporarily obscured by a wave of frontloaded shipments is expected to surface in 2026.

As demand in traditional markets softens, Chung said Hong Kong exporters have become more nimble in seeking new customers and sources of growth. But this transition isn't easy for small and medium-sized enterprises (SMEs), which account for the bulk of Hong Kong's exporters. They typically grapple with limited resources and the high costs of building and maintaining new overseas distribution channels.

Chung said the SAR government and business chambers should play a more proactive role in facilitating direct links with trade bodies in target markets, creating credible platforms that will accompany SMEs through their first overseas deals before they're able to operate independently.

He's also calling for targeted subsidies and guaranteed financing programs for priority sectors, such as AI, as well as companies venturing into strategically important emerging markets.

Contact the writer at irisli@chinadailyhk.com