Hong Kong rises to world's fifth-largest trading entity in merchandise trade
According to the report "Global Trade Outlook and Statistics" published by World Trade Organization (WTO), Hong Kong ranked as the world's fifth-largest trading entity in merchandise trade in 2025, two places up from 2024. The total merchandise trade recorded a year-on-year increase of 17.5 per cent to US$1,585 billion, accounting for 3 per cent of the world's total.
The Secretary for Commerce and Economic Development, Mr Algernon Yau, said today (April 2), "The WTO report fully demonstrated that despite the challenges brought about by geopolitics and trade protectionism in the past year, Hong Kong's external trade remained resilient and achieved an encouraging result, making the city the world's fifth-largest trading entity in merchandise trade after the Chinese Mainland, the United States, Germany and the Netherlands. If the European Union is taken as a single trading entity, Hong Kong ranks fourth."
Mr Yau noted that Hong Kong has long adopted free trade and firmly supports and has upheld the rules-based multilateral trading system to provide trading partners with a predictable and transparent market. In addition, leveraging the institutional advantages under the "one country, two systems" framework and the highly internationalised business environment, Hong Kong has become the most important and agile gateway for business and trade in the region.
"The report also showed that a series of measures carried out by the Hong Kong Special Administrative Region Government(HKSARG) for promoting trade, including expanding economic and trade networks, stepping up efforts in attracting enterprises and investment, deepening ties with international markets, exploring emerging markets, enhancing support for small and medium-sized enterprises, and promoting Hong Kong's participation in the Belt and Road initiative and opening up the Mainland market, have achieved fruitful results, enabling Hong Kong to continue to play a pivotal role in international trade," Mr Yau added.
He said, "This year marks the beginning of the country's 15th Five-Year Plan and the HKSARG is also formulating Hong Kong's five-year plan to actively align with it. The 15th Five-Year Plan explicitly supports Hong Kong in better integrating into and serving the overall national development to further consolidate and enhance Hong Kong's status as an international trade centre, leveraging its unique advantages of being backed by the motherland and connected to the world. The HKSARG will continue to promote trade and focus on further assisting Mainland enterprises in going global through Hong Kong as a platform to explore new areas of economic growth in addition to strengthening the aforesaid measures, with a view to fulfilling our roles as a 'super connector' and a 'super value-adder'."
Riding on the good performance last year, merchandise exports continued to show strong performance in early 2026. In February 2026, the values of Hong Kong's total exports and imports of goods both recorded year-on-year increases, at 24.7 per cent and 29.9 per cent respectively. Taking January and February of 2026 together, the value of total exports of goods increased by 29.6 per cent over the same period in 2025. Concurrently, the value of imports of goods increased by 34.1 per cent.
According to the WTO report, Hong Kong ranked as the world's fifth-largest trading entity in merchandise trade in 2025. Hong Kong was the world's fifth-largest exporter and the sixth-largest importer of goods (both were three places up from 2024).
Globally, the world's top 10 merchandise traders in 2025 were basically the same as those in 2024. While the top four traders, namely the Chinese Mainland, the United States, Germany and the Netherlands, remained unchanged in ranking, Hong Kong moved two places up to the fifth position, followed by the United Kingdom, Japan, France, Italy and Mexico.
For commercial service trading, Hong Kong was the world's 22nd-largest commercial service trading entity in 2025. It was the world's 23rd-largest commercial services exporter and the 25th importer (both remained the same ranking as that in 2024). Hong Kong's total trade in commercial services amounted to US$211 billion in 2025, accounting for 1.2 per cent of the world's total and representing a 6.6 per cent increase from 2024.
The "Global Trade Outlook and Statistics" report is available at www.wto.org/english/res_e/reser_e/gots_e.htm.
Photo source: wto.org
LegCo Secretariat releases Research Brief on "The 2026-2027 Budget"
The following is issued on behalf of the Legislative Council Secretariat:
The Financial Secretary (FS) presented the fourth Budget of the current-term Government on February 25. The Legislative Council Secretariat (the Secretariat) today (April 2) released a Research Brief on "The 2026-2027 Budget".
Supported by strong stock-trading stamp duty income and bond issuance, total government revenue soared by 21.9per cent year-on-year to HK$688.8 billion in the 2025-2026 fiscal year (see Annex 1). With a HK$2.9 billion surplus for the Consolidated Account, Hong Kong recorded a fiscal surplus for the first time after three consecutive years of deficits. While this arrived three years earlier than the Government projected, when excluding net bond proceeds, the underlying deficit remained at HK$100.4 billion. This equates to 3per cent of Gross Domestic Product (GDP), which is still below the average (4.6 per cent) of the 37 advanced economies tracked by the International Monetary Fund.
The Research Brief examined the Government's near-term fiscal position and the reinforced fiscal consolidation programme already implemented, as well as analysing the fiscal space for expanded bond issuance. The Research Brief pointed out that total public expenditure grew 5.4per cent to HK$844.2 billion. This is estimated to rise a further 7.2per cent to HK$904.7 billion in this fiscal year. Driven mainly by an ageing population, health and social welfare remain the largest spending areas, with infrastructure replacing education as the third-largest (see Annex 2). Over the past five years, infrastructure expenditure has surged by over 40 per cent. As Northern Metropolis-related (NM) projects are rolled out progressively, capital works expenditure is expected to average around HK$120 billion per annum over the next five years.
As part of the fiscal consolidation programme in the 2026-2027 fiscal year (see Annex 3), FS proposed transferring HK$150 billion of the Exchange Fund's (EF) investment income to finance the development of NM and other infrastructure projects. This withdrawal, which is the first in 42 years, has drawn considerable debate. Some argue that it could undermine the EF's capacity in preserving Hong Kong's financial stability, and question whether such a drawdown might become a "regular practice". Others, however, regard this proposal as an "innovative" measure that is "safer" than expanding bond issuance.
Meanwhile, FS also proposed raising the bond issuance ceiling from HK$700 billion to HK$900 billion, with a greater share of longer-term bonds. The Research Brief noted that concerns over the trajectory of government debt persist, given mounting repayment pressure on the bonds issued in recent years. Net bond proceeds are projected to be compressed by 43.3 per cent between 2026-2027 and 2030-2031 fiscal years, and the gross government-debt-to-GDP ratio is expected to increase to 19.9 per cent. However, this ratio remains far below the average of advanced economies (see Annex 4), and interest expenses amount to just 1.2per cent of government revenue. As reflected in a range of key financial indicators, Hong Kong's fiscal position remains resilient by international standards and its creditworthiness continues to rank among the strongest of any major advanced economy.
The Research Brief also suggested that as the Government moderates expenditure growth to restore fiscal balance, the recovery of the private sector will be key to sustaining economic growth momentum. To actively support and proactively align with the National 15th Five-Year Plan, Hong Kong is formulating the first-ever Five-Year Plan, which could provide a framework for sequencing public investment commitments alongside the fiscal consolidation timetable.
On long-term fiscal health, the Research Brief pointed out that population ageing, low fertility and the impact that AI will bring to the labour market could further strain public finances. Despite the pro-natalist measures introduced by the Government, registered births fell to a record low in 2025. The Research Brief compared the pro-natalist policies in Hong Kong with those in selected advanced economies in Asia and Europe, noting that effective responses require early, sustained and comprehensive intervention, rather than relying primarily on financial incentives. International experience points to facilitating workforce transition as crucial to safeguarding the tax base. As profits tax and salaries tax account for a large share of the Government's recurrent revenue, the ability to steer workforce towards high complementarity with AI has direct implications for the tax base. The Research Brief observed that the upgrading of the Employees Retraining Board into Upskill Hong Kong with a mandate to provide skill-based training, specifically incorporating AI applications, is a timely policy response.
The Legislative Council (LegCo) will resume the Second Reading debate on the Appropriation Bill 2026 at its meeting of April 22 and Members will speak on the Bill.
The Research Brief is prepared by the Secretariat's Research Office of the Research and Information Division with a view to enhancing information support for Members. The Research Brief is now available on LegCo website: app7.legco.gov.hk/rpdb/en/uploads/2026/RB/RB01_2026_20260402_en.pdf.
Photo source: HKSAR Government Press Releases
Photo source: HKSAR Government Press Releases
Photo source: HKSAR Government Press Releases
Photo source: HKSAR Government Press Releases
