HK exports to grow up to 9pc in 2026, boosted by AI-driven electronics demand

Hong Kong's exports are projected to grow up to 9 percent next year, driven by global robust demand for artificial intelligence-related electronics products, according to the Hong Kong Trade Development Council.

As the city's exports saw a better-than-expected growth of 13.8 percent year on year in the first 10 months, HKTDC estimated that the full-year exports in 2025 will reach 13 percent growth.

The council also noted that the impact of front-loaded trade earlier this year partly dragged down next year's trade performance projection; otherwise, the exports would record double-digit growth.

Electronics products accounted for over 70 percent of Hong Kong's exports, among which half are exempt from US tariffs, HKTDC said, adding that it maintained optimism about the outlook for the export of electronic commodities in the city.

AI development has entered the application phase, fueling the robust demand for electrical products, which is set to last for the following one to two years, said Irina Fan Yuen-yee, director of research at HKTDC. 

The strong need for electronics goods, especially parts and components, concentrates on the business side, she said, describing it as a "rigid demand" that Hong Kong exporters would benefit from.

The US tariffs were not ranked among the top three primary concerns for Hong Kong exporters in 2026, after China and the United States reached a trade agreement, HKTDC said.

Despite the greater clarity on global trade, heightened uncertainty remains in the next year, Fan said.

Amid tariff risks, global business leaders are developing longer-term strategies to optimize their US and non-US business portfolios, said HKTDC.

With a 20 percent reciprocal tariff on mainland China from the US, which is relatively in line with or even lower than many of their Southeast Asia counterparts, China's mature and highly productive supply chain showed competitiveness in the world. Therefore, most suppliers would not have many changes in location next year, Fan noted.

Meanwhile, HKTDC's Export Confidence Index for the fourth quarter slightly declined due to lingering Sino-US tariff uncertainties, but stayed above the 50-point threshold, indicating expansion. 

Over the next two years, Asia stands at the center of export expansion plans for Hong Kong enterprises, HKTDC said. For 42 percent of respondents, the Chinese mainland is the highest priority market, followed by the rest of Asia and the ASEAN bloc, accounting for 30.3 percent and 18.9 percent, respectively.