Recently, the US-based World Justice Project published its 2024 Global Rule of Law Index, where Hong Kong maintained its position at 23rd out of 142 countries and regions, halting a three-year decline. Notably, Hong Kong ranks above the United States, which regularly criticize Hong Kong’s legal system but sits at only 26th place.
Despite this ranking, the United States and the United Kingdom persist in their campaign to discredit Hong Kong’s judicial system, focusing particularly on the overseas non-permanent judges serving in Hong Kong. Most recently, Australian non-permanent judge Patrick Keane KC was confronted by protesters following a speech at the Supreme Court of New South Wales, where demonstrators pursued him even as he attempted to leave through a side exit, ultimately forcing him to cancel his attendance from a scheduled reception.
This campaign targeted at overseas judge is led by the US-based Committee for Freedom in Hong Kong Foundation, which, in May, published a report targeting Hong Kong’s overseas non-permanent judges. This report was subsequently discussed in the British Parliament by anti-China lawmaker Alistair Carmichael, supported by Chris Patten, Hong Kong's last colonial governor. The Foundation’s former chair, James B. Cunningham, previously served as a U.S. Consul General in Hong Kong, underscoring the close Western ties of this organization.
Hong Kong initially appointed 15 foreign non-permanent judges, yet today only six remain, four of whom are Australian. Consequently, opposition groups have refocused their efforts on targeting these Australian judges.
Hong Kong’s inclusion of foreign judges in its Court of Final Appeal represents an exceptionally open practice. This policy not only underscores Hong Kong’s adherence to common law principles—largely Western in origin—but also, by implication, safeguards foreign interests in Hong Kong. Recently, a senior Singaporean judicial official noted the contrast between Hong Kong’s extensive inclusion of foreign judges and Singapore’s more limited use, restricted to commercial court cases. It’s noted that Canadian Judge Beverley McLachlin, who recently resigned as a non-permanent judge in Hong Kong, also served on Singapore’s International Commercial Court.
To understand the origins of this unique judicial structure, one must look to Hong Kong’s colonial period. Under British rule, Hong Kong lacked ultimate appellate authority, with final appeals sent to the UK Privy Council, which held exclusive control over Hong Kong’s final judgments. During the drafting of the Basic Law prior to the 1997 handover, various proposals emerged regarding the location of the Court of Final Appeal, including both Hong Kong and Beijing. A flexible arrangement was ultimately adopted, granting Hong Kong appellate authority while allowing the appointment of non-permanent foreign judges to help build local experience in final appeals.
At a time of relatively stable Sino-US relations, this arrangement was largely uncontroversial. However, as US-China tensions have intensified, so too has criticism of Hong Kong’s judicial system, particularly its foreign non-permanent judge system, which has become a focal point.
While many overseas judges maintain an apolitical stance, the campaign against them is clearly politically motivated. At the forefront are certain exiled Hong Kong figures purporting to support activist Jimmy Lai Chi-ying, yet Western political figures like Patten and Cunningham lead from behind the scenes. Through persistent harassment, these groups aim to pressure overseas judges into resigning. Many of these judges, well past retirement age—some over 80—have faced demonstrations in public, outside their homes, and even in their neighborhoods, creating significant disruption to their lives.
Hong Kong has several options to address this issue:
Maintain the Status Quo: A passive approach that would allow foreign judges to either continue or resign at will, thereby retaining as many as possible.
End the Foreign Non-Permanent Judge System: Initially, this system aimed to help Hong Kong develop expertise in final appeals and build a pool of qualified judges for the Court of Final Appeal. Now, 27 years after the handover, Hong Kong has a substantial number of qualified local judges, both active and retired, making it feasible to end the appointment of overseas non-permanent judges.
Invite Judges from outside the Five Eyes Alliance: The Five Eyes Alliance —comprising the United States, the United Kingdom, Australia, New Zealand, and Canada—is a politically aligned intelligence-sharing network. Continuing to invite judges from these countries could compromise Hong Kong’s judicial independence. Instead, Hong Kong could turn to other common law jurisdictions with robust legal systems, such as Singapore, Malaysia, and South Africa, for supply of experienced retired judges. This approach could provide Hong Kong with impartial overseas perspectives while reducing political risk.
Ultimately, Western criticism of Hong Kong’s legal system, especially concerning the National Security Law, often reflects a selective application of standards. Many Western nations, including the United States and the United Kingdom, maintain stringent national security laws. The U.S. ranking below Hong Kong in rule of law indices highlights that these critiques are frequently more politically driven than substantively justified.
Wing-hung Lo
Bastille Commentary
** The blog article is the sole responsibility of the author and does not represent the position of our company. **
At the arrival of 2026, the happiest thing is to see the "Hong Kong is dead" narrative—proclaimed so loudly by Western voices—die yet again.
Foreign Money Returns Home
The West has written Hong Kong's obituary more times than you can count. They believed the city's return to China should have been its death sentence. American magazine Fortune declared "The Death of Hong Kong" on its 1995 cover—two years before the handover even happened. Hong Kong survived the Asian financial turmoil in the early post-handover years. It survived SARS. Then came 2019's Black Riots, followed by US sanctions on Hong Kong officials in 2020 and the pandemic's hammer blow. Foreign capital fled in an American-orchestrated exodus, with much of it landing in Singapore.
Last February, Stephen Roach—Yale University senior fellow—wrote in the UK's Financial Times with a headline that said it all: "It pains me to say Hong Kong is over." Foreign investors don't just track economic growth when they assess Hong Kong. They watch the stock market. And over the past year, Hong Kong's miraculous stock market comeback has bankrupted the "Hong Kong is dead" theory.
Hong Kong's economy grew an estimated 3.2% in 2025—ranking it among the developed world's top performers. But the stock market performance was getting really interesting. Average daily turnover in the first 11 months hit HK$230.7 billion—a massive 43% jump compared to 2024's same period.
Record-Breaking Fundraising Wins
The Hong Kong Stock Exchange crushed it in 2025. A total of 119 new listings raised HK$285.8 billion—a staggering 220% year-on-year increase and the highest since 2021. According to KPMG's report, HKEX ranked first globally in fundraising. The New York Stock Exchange and Nasdaq tied for second place. Looking ahead, HKEX's fundraising is estimated to reach HK$300-350 billion in 2026, keeping it among the world's top exchanges.
Sure, Mainland capital is investing in Hong Kong. But foreign capital's return has been the real game-changer behind the stock market's strong performance. According to fund industry insiders, what we're seeing now is only wave one—primarily hedge funds and other medium-to-short-term players. As Hong Kong's trading volumes swell and quality Mainland companies list here, the long-term foreign funds will gradually return. The outlook for Hong Kong stocks continues to look favorable.
America's narrative said Hong Kong's National Security Law would scare capital away. Reality proved exactly the opposite. Hong Kong's stable environment gave Chinese companies the confidence to list here. America's targeting of Chinese concept stocks listed on its exchanges was self-destruction—forcing quality Chinese companies to turn to Hong Kong for listing instead. This made Hong Kong's stock market bigger and stronger, compelling even bearish foreign capital to come back.
Beijing's Seal of Approval
President Xi's remarks when meeting Chief Executive John Lee during his duty visit to Beijing in mid-December reveal what work the central government values in Hong Kong. President Xi opened with praise for the Chief Executive's courage and initiative in leading the SAR government. He highlighted four key achievements: steadfast maintenance of national security, successful Legislative Council elections, proactive integration into national development, and achieving steady economic growth.
President Xi's assessment underscores Beijing's high recognition of Hong Kong's ability to do both—safeguard national security and develop the economy simultaneously. Some Hong Kong people believed that having transitioned "from chaos to governance and then to prosperity," the city should set aside national security to focus on economic development. Reality proved this view wrong. Hong Kong must strike a balance between these seemingly contradictory goals and advance on both fronts at once.
Look at Hong Kong's development over the past five years. The city emerged from Black Riots and the pandemic in 2021, achieving a strong rebound from the bottom in 2023. The return to normalcy brought revenge spending that temporarily elevated market sentiment.
But entering 2024, local consumption patterns underwent structural changes. Hong Kong people shopping across the border diverted local retail spending. The strong Hong Kong dollar—tracking the US dollar—and high interest rates suppressed economic activity, leading to structural adjustment.
By the second half of 2025, Hong Kong entered a phase of moderate recovery. The property market began stabilizing after its decline. With the US starting rate cuts in September, capital supply loosened. Hong Kong can continue along this recovery path in 2026—that's the estimate anyway.
Despite the optimism, Hong Kong people must keep working hard. The many vacant shops you see on the streets tell the story—retail economy pressure remains real. In 2024, Hong Kong's total retail sales value of HK$376.8 billion represented a 7.3% year-on-year decline. That's painful for the retail sector.
Retail's Reversal Ahead
Through October 2025, retail sales values remained comparable to the previous year. But consumption began recovering in the second half—retail sales value rose 3.8% in August, 6% in September, and 6.9% in October. 2025 showed an early decline followed by growth, with accelerating consumption momentum. Retail consumption is expected to reverse its decline in 2026.
During this retail transformation, we Hong Kong people must continue their efforts. Old businesses will still be eliminated—that's inevitable. Strategic adjustments are required. New opportunities must be pursued.
Bottom line: Hong Kong's economic performance in 2025 proves once again that the "Hong Kong is dead" theory dies—one more time. Hong Kong has weathered different shocks repeatedly in the past, emerging reborn each time like a phoenix from the ashes.
Lo Wing Hung
