Hong Kong's Ascent: A Beacon of Competitiveness in a Turbulent World
June 20, 2025, 10:51 am
In a world where economies rise and fall like the tide, Hong Kong has emerged as a lighthouse, shining brightly as the third most competitive economy globally. The International Institute for Management Development (IMD) recently released its World Competitiveness Yearbook 2025, revealing that Hong Kong has climbed two spots from last year. This marks a significant achievement, as it is the second consecutive year of upward movement for the city. The last time Hong Kong held such a high rank was in 2019, making this a moment of pride for the region.
Hong Kong's success is not a stroke of luck. It is the result of strategic planning and a commitment to fostering a business-friendly environment. The IMD's assessment covers 69 economies, evaluating them on various factors of competitiveness. Hong Kong excelled in key areas: government efficiency, business efficiency, economic performance, and infrastructure. It ranked second in both government and business efficiency, sixth in economic performance, and seventh in infrastructure. These rankings are not just numbers; they reflect a robust ecosystem that attracts private sector investment.
The Chief Executive of the Hong Kong Special Administrative Region (HKSAR) heralded this achievement as a testament to the effectiveness of government policies. The rankings affirm that Hong Kong's business environment is world-class. Factors such as the rule of law, a transparent market, and a simple tax regime contribute to this favorable climate. Business leaders recognize these strengths, which include the free flow of capital, information, goods, and talent.
Despite global economic uncertainties and geopolitical tensions, Hong Kong's economy has shown resilience. The city recorded a year-on-year GDP growth of 3.1% in the first quarter of 2025, with projections for the full year ranging between 2% and 3%. This growth is a testament to the city’s ability to weather storms and adapt to changing conditions.
The number of local companies registered in Hong Kong reached a record high of 1,460,494 by the end of 2024. This surge includes 145,053 new local companies and 1,079 non-Hong Kong companies, indicating a vibrant entrepreneurial spirit. The government’s recent introduction of a company re-domiciliation regime aims to attract even more businesses. This new legislation simplifies the process for companies to relocate to Hong Kong, enhancing its appeal as a global business hub.
Two major insurance companies, AXA and Manulife, have already announced plans to re-domicile to Hong Kong under this new regime. This move signals confidence in the city’s regulatory framework and business potential. The government is not resting on its laurels; it actively seeks to enhance Hong Kong's status as an international financial, trade, and shipping center. The Office for Attracting Strategic Enterprises has successfully lured over 80 strategic enterprises, promising HK$50 billion in investments and the creation of more than 20,000 jobs.
In the IMD rankings, Hong Kong excelled in specific sub-factors, claiming the top spot for tax policy and business legislation. It also ranked second in education, international investment, and finance. These indicators paint a picture of a well-rounded economy, capable of sustaining growth and attracting global talent.
The Hong Kong Stock Exchange stands as a testament to the city’s financial prowess. By May 30, 2025, its market capitalization had surged by 24% year-on-year, exceeding US$5.2 trillion. The exchange has also seen a remarkable increase in initial public offerings (IPOs), raising nearly HK$79 billion (US$10.12 billion) this year alone. This positions Hong Kong as a leader among major global exchanges, reinforcing its status as a top financial center.
Yet, Hong Kong's journey is not without challenges. The city must navigate a complex global landscape marked by protectionist tendencies and shifting trade dynamics. The government’s commitment to maintaining a competitive edge is crucial. It must continue to innovate and adapt to ensure sustainable economic growth.
As Hong Kong forges ahead, it stands as a model for other economies. Its unique position as a “super-connector” between China and the world allows it to leverage both local and global advantages. The city’s ability to attract talent and investment will be vital in the coming years.
In conclusion, Hong Kong's rise to the third spot in the IMD World Competitiveness Ranking is a remarkable achievement. It reflects a well-coordinated effort to create a thriving business environment. As the city continues to navigate the complexities of the global economy, its resilience and adaptability will be key. Hong Kong is not just a city; it is a symbol of opportunity and growth in an ever-changing world. The future looks bright, and the journey is just beginning.
Hong Kong's success is not a stroke of luck. It is the result of strategic planning and a commitment to fostering a business-friendly environment. The IMD's assessment covers 69 economies, evaluating them on various factors of competitiveness. Hong Kong excelled in key areas: government efficiency, business efficiency, economic performance, and infrastructure. It ranked second in both government and business efficiency, sixth in economic performance, and seventh in infrastructure. These rankings are not just numbers; they reflect a robust ecosystem that attracts private sector investment.
The Chief Executive of the Hong Kong Special Administrative Region (HKSAR) heralded this achievement as a testament to the effectiveness of government policies. The rankings affirm that Hong Kong's business environment is world-class. Factors such as the rule of law, a transparent market, and a simple tax regime contribute to this favorable climate. Business leaders recognize these strengths, which include the free flow of capital, information, goods, and talent.
Despite global economic uncertainties and geopolitical tensions, Hong Kong's economy has shown resilience. The city recorded a year-on-year GDP growth of 3.1% in the first quarter of 2025, with projections for the full year ranging between 2% and 3%. This growth is a testament to the city’s ability to weather storms and adapt to changing conditions.
The number of local companies registered in Hong Kong reached a record high of 1,460,494 by the end of 2024. This surge includes 145,053 new local companies and 1,079 non-Hong Kong companies, indicating a vibrant entrepreneurial spirit. The government’s recent introduction of a company re-domiciliation regime aims to attract even more businesses. This new legislation simplifies the process for companies to relocate to Hong Kong, enhancing its appeal as a global business hub.
Two major insurance companies, AXA and Manulife, have already announced plans to re-domicile to Hong Kong under this new regime. This move signals confidence in the city’s regulatory framework and business potential. The government is not resting on its laurels; it actively seeks to enhance Hong Kong's status as an international financial, trade, and shipping center. The Office for Attracting Strategic Enterprises has successfully lured over 80 strategic enterprises, promising HK$50 billion in investments and the creation of more than 20,000 jobs.
In the IMD rankings, Hong Kong excelled in specific sub-factors, claiming the top spot for tax policy and business legislation. It also ranked second in education, international investment, and finance. These indicators paint a picture of a well-rounded economy, capable of sustaining growth and attracting global talent.
The Hong Kong Stock Exchange stands as a testament to the city’s financial prowess. By May 30, 2025, its market capitalization had surged by 24% year-on-year, exceeding US$5.2 trillion. The exchange has also seen a remarkable increase in initial public offerings (IPOs), raising nearly HK$79 billion (US$10.12 billion) this year alone. This positions Hong Kong as a leader among major global exchanges, reinforcing its status as a top financial center.
Yet, Hong Kong's journey is not without challenges. The city must navigate a complex global landscape marked by protectionist tendencies and shifting trade dynamics. The government’s commitment to maintaining a competitive edge is crucial. It must continue to innovate and adapt to ensure sustainable economic growth.
As Hong Kong forges ahead, it stands as a model for other economies. Its unique position as a “super-connector” between China and the world allows it to leverage both local and global advantages. The city’s ability to attract talent and investment will be vital in the coming years.
In conclusion, Hong Kong's rise to the third spot in the IMD World Competitiveness Ranking is a remarkable achievement. It reflects a well-coordinated effort to create a thriving business environment. As the city continues to navigate the complexities of the global economy, its resilience and adaptability will be key. Hong Kong is not just a city; it is a symbol of opportunity and growth in an ever-changing world. The future looks bright, and the journey is just beginning.