Hong Kong’s government released its 2026 first-half economic report on August 17, highlighting a 5.1% year-on-year real GDP growth, the strongest semi-annual performance in nearly five years. The second quarter saw a 28.9% surge in goods exports, with June alone experiencing a 53.4% spike in export value. Interestingly, Hong Kong does not manufacture chips or host large data centers. Yet, as the global AI frenzy intensifies, Hong Kong’s exports have surged even more. What is Hong Kong profiting from? Besides exports, which sectors are thriving? And how sustainable is this growth?

Why Hong Kong Profits from Transit, Not Chip Manufacturing

Many assume AI benefits are limited to companies like Nvidia, chipmakers, and data centers. However, Hong Kong is quietly reaping AI gains. According to the Hong Kong Census and Statistics Department, AI-related products now account for about 70% of Hong Kong’s total goods exports. The export value of AI-related products grew 41.5% in the first quarter and jumped to 63.7% in the second quarter. How does Hong Kong, without chip production, see AI products dominate 70% of exports? The answer lies in re-export trade. As a key global technology trade hub, mainland China-produced chips, servers, and AI hardware are often re-exported through Hong Kong worldwide. The hotter AI gets, the greater the global demand for these hardware products, the more goods pass through Hong Kong, and the better its trade data looks. In essence, Hong Kong earns not from manufacturing chips, but from facilitating their transit—leveraging its traditional strengths in trade logistics, financial settlement, and warehousing distribution. The 53.4% jump in June’s export value suggests AI demand is still accelerating, with no signs of cooling yet.

Three Other Sectors Rising Besides Exports

AI isn’t just boosting exports; other sectors of Hong Kong’s economy are also recovering. First, the finance and insurance sector grew 7.8% year-on-year in the second quarter, the fastest among all service sectors. This is driven by active stock market trading, a rebound in IPOs, and a 51% surge in Hong Kong insurance new policy premiums in the first quarter. Finance is a pillar of Hong Kong’s economy, and its growth significantly impacts overall economic performance. Second, the property market saw 22,156 residential property sale and purchase agreements in the second quarter, a 32% year-on-year surge, marking the highest quarterly volume in 14 years. Overall residential property prices rose 3% in the second quarter. Mainland Chinese buyers accounted for a record high of over 107.1 billion Hong Kong dollars in property registrations in the first half. Third, private consumption expenditure has expanded year-on-year for five consecutive quarters, with a 2.8% real growth in the second quarter. With tourists returning and local consumption recovering, online retail sales grew 28% in the first half, significantly outpacing the 10% overall retail growth. Different sectors show varied recovery paces. The construction sector rebounded 8.4% in the second quarter, indicating recovery in infrastructure and real estate-related activities. The accommodation and food services sector is also steadily recovering, with further growth expected as tourist numbers continue to rise.

Can This Growth Continue? Two Key Variables

The 5.1% growth rate is impressive, prompting the Hong Kong government to raise its full-year forecast. The government revised its 2026 GDP growth forecast from 2.5%-3.5% in May to 3.5%-4.5%, a full percentage point increase, reflecting growing confidence in Hong Kong’s economic performance. The second half outlook depends on two key variables. First, the sustainability of AI demand. Hong Kong’s current growth is heavily reliant on AI-related product exports, which account for 70% of all exports. With global AI investment still accelerating, as evidenced by the 53.4% surge in June exports, if this trend continues, Hong Kong’s exports will remain strong. Second, the global trade environment. As a highly open economy, Hong Kong is closely tied to global trade conditions. Currently, demand from major trading partners is stable, and Hong Kong’s trade hub status is being consolidated, providing a solid foundation for export growth. Overall, supported by AI demand and its trade hub advantages, Hong Kong’s economy is expected to maintain steady growth in the second half of the year. Hong Kong’s core competitiveness has never been manufacturing, but connectivity—backed by mainland China and linking the world. Amid the AI wave, with chips and hardware produced in mainland China and re-exported globally via Hong Kong, the city’s trade hub role is even more critical. The 5.1% GDP growth is essentially a reaffirmation of Hong Kong’s connectivity advantage, proving again that supported by the mainland and connected to the world, Hong Kong’s trade and financial positions are enhanced, offering promising future growth. This article is solely a compilation and interpretation of publicly available economic data and does not constitute investment, immigration, property, or tax advice. Data sourced from the Hong Kong Census and Statistics Department and public media reports. For specific decisions, consult qualified professionals.