Tech demand cushions HK exports as Middle East tensions pose downside risks: Paul Chan

Hong Kong’s economy demonstrated resilience in the second quarter of the year, lifted by a 42.9 percent year-on-year surge in goods exports for April and a rebounding financial market, according to Financial Secretary Paul Chan Mo-po. However, he cautioned that ongoing geopolitical tensions in the Middle East could dampen future growth.

Speaking at a Legislative Council Financial Committee meeting, Chan highlighted that April export growth was largely fueled by strong global demand for artificial intelligence-related electronic products. 

The city’s tourism and labour markets also showed steady improvements. April’s inbound visitor arrivals rose 10 percent year-on-year, while visitor numbers during the Labour Day Golden Week recorded an 8 percent annual increase. 

The seasonally adjusted unemployment rate edged down slightly to 3.7 percent from 3.8 percent during the same period last year. Meanwhile, basic consumer price inflation accelerated to 1.6 percent, pushed up by a 3.3 percent spike in energy-related costs.

Chan added that the financial markets saw a recovery during the first four months of the year. Average daily stock turnover reached HK$270 billion, surpassing the full-year 2025 average of HK$250 billion. IPO fundraising skyrocketed sixfold year-on-year to HK$151.4 billion. 

The housing market also trended upward, recording simultaneous increases in both property prices and transaction volumes.

While the impact of Middle East conflicts on Hong Kong has been limited to date, Chan warned that persistent uncertainties have already driven up global oil prices and inflation. He warned that any further escalation of regional tensions could bring tangible downside risks to the city's economic outlook.  

However, he stressed that robust global demand for technology components will sustain export growth, while thriving inbound tourism, vigorous cross-border financial activity, and steady demand for commercial services will bolster solid service exports. 

On the labor importation scheme, Chan stated that the policy strictly targets sectors facing acute manpower shortages, such as healthcare and catering, with the government continuously monitoring the situation. 

Supported by steady growth in retail consumption and tourism, he predicted that unemployment is unlikely to worsen this year. He added that authorities are reviewing retraining programs to help grassroots workers adapt to a wider range of jobs. 

In response to concerns about cash-flow challenges facing the construction sector, Chan pledged to work with the Hong Kong Monetary Authority to ensure banks provide flexible financing and loan arrangements for contractors.

𝗗𝗼𝘄𝗻𝗹𝗼𝗮𝗱 𝗧𝗵𝗲 𝗦𝘁𝗮𝗻𝗱𝗮𝗿𝗱 𝗔𝗽𝗽 ↓