Written by Lin Long’an,

Member of the 14th National Committee of the Chinese People’s Political Consultative Conference,

President of the GREATER BAY AREA IMPORTERS AND EXPORTERS ASSOCIATION

The release of the First Five-Year Plan for the Economic and Social Development of the Hong Kong Special Administrative Region (2026–2030) marks the first time Hong Kong has systematically set the tone for its medium and long-term development in the form of a “five-year plan”. Since its return to the motherland, Hong Kong has long operated under the framework of spontaneous market regulation. The proactive introduction of a five-year planning mechanism itself signals a shift in governance logic: from passively responding to external shocks to proactive planning and systematic layout. Centered on the development of “four core industries”, the Plan clearly defines Hong Kong’s new positioning as an “international trade center” amid the restructuring of global supply chains. It also answers a widely discussed question: amid escalating geopolitical frictions, how long can Hong Kong maintain its advantages in traditional entrepôt trade?

The Plan’s answer is not to cling to existing strengths, but to pursue transformation proactively. It identifies cross-border e-commerce, brand globalization, digital trade and other new forms and models as key drivers for the transformation and upgrading of Hong Kong’s trade center. This not only reflects Hong Kong’s response to profound shifts in the global trade landscape in recent years, but also systematically unlocks its unique strengths of “connecting the mainland to the world”.

Consolidating Hong Kong’s Position as an International Trade Center

When elaborating on the development of the international trade center, the Plan proposes to “expand networks, strengthen strengths and generate new growth”, and clearly charts a path toward “digitalization and diversification”. This represents a redefinition of Hong Kong’s trade role. In the past, Hong Kong’s core value as a trade center lay in its function as an entrepôt. Leveraging its free port status, low tariffs, common law legal system and efficient logistics, it served as a cargo transit hub linking the Chinese mainland to the rest of the world. However, as the mainland’s industrial chain matures and neighboring ports grow more competitive, the dividends generated solely by physical cargo flows are diminishing. This aligns with the vision outlined in the shipping chapter: transforming from a port of high cargo throughput to a value-driven port.

Hong Kong’s solution is to upgrade itself from a “cargo transit station” to a “high-value-added service hub”. The Plan encourages manufacturing, technology and logistics enterprises to conduct high-value-added activities in Hong Kong, including international order placement, foreign exchange settlement, trade finance and supply chain management. In other words, physical goods do not necessarily need to be loaded and unloaded in Hong Kong, yet capital flows, information flows, risk management and legal services generated alongside cargo movement can be largely anchored here. This trade model relies more on institutional frameworks and professional services, and better aligns with Hong Kong’s comparative advantages.

Meanwhile, the Plan stresses maintaining robust ties with European and American markets, deepening engagement with ASEAN and the Middle East, exploring emerging markets in Central Asia and Africa, and striving to join the Regional Comprehensive Economic Partnership (RCEP) at an early date. Amid slowing growth in traditional trade partners and rising trade barriers in some markets, Hong Kong must proactively expand its “economic and trade network” to diversify external risks. Integrating the overseas office networks of the Invest Hong Kong and the Hong Kong Trade Development Council will consolidate previously scattered promotion resources and generate synergies.

Cross-border E-commerce: A New Frontier for “Brands Going Global”

If consolidating Hong Kong’s status as a trade center constitutes top-level design, cross-border e-commerce serves as the most market-oriented and expansible practical lever outlined in the Plan. The Plan explicitly states that Hong Kong will “vigorously develop cross-border e-commerce… and drive brands to go global”. It offers subsidies, capacity-building training and promotional support to help small and medium-sized enterprises (SMEs) upgrade, advance digital transformation and adopt emerging technologies.

This policy response addresses pressing real-world demands. Mainland e-commerce platforms and a growing number of emerging brand enterprises have rising demand for global expansion, yet they commonly face shared pain points: high logistics costs, complicated payment and settlement procedures, substantial overseas compliance risks, and low brand recognition. Hong Kong holds comparative advantages across all these segments. As an international trade and logistics hub, it boasts a comprehensive shipping and multimodal transport system. As an international financial center, it delivers natural conveniences for cross-border payments and trade finance. Its common law system, alongside professional services including international arbitration and mediation, provides enterprises with risk management and dispute resolution support for overseas expansion.

The Plan introduces a dedicated “Mainland Enterprises Global Expansion Task Force”, integrating functions of mainland and overseas economic and trade offices, Invest Hong Kong and the Hong Kong Trade Development Council. It delivers one-stop comprehensive services for mainland enterprises covering overseas market analysis, risk management, legal services, international brand promotion, supply chain coordination and cross-border financing. This arrangement essentially connects Hong Kong’s strengths in professional services spanning finance, law, exhibitions, testing and certification, forming a complete service chain for “brands going global”.

The Plan proposes supporting eligible premium Hong Kong brands to be included in the “China Premium Consumer Brands” catalogue. It encourages deeper collaboration between mainland and Hong Kong enterprises in brand cultivation, R&D and design, supply chain management and global marketing, optimizing the “Mainland Manufacturing + Hong Kong Services” global expansion model. Its core objective is not to compete with the mainland or Southeast Asia in manufacturing, but to focus on Hong Kong’s core soft power strengths: brand positioning, international packaging, testing & certification and legal compliance. It positions “Hong Kong services” as the value-added link connecting mainland manufacturing to the world. At the same time, the Plan guides overseas enterprises to leverage Hong Kong’s exhibition platforms to introduce premium products and services into the mainland market, fostering genuine two-way circulation rather than one-way agency relationships.

New Forms of Digital Trade

Compared with cross-border e-commerce, the dedicated section on “new forms and models such as digital trade” carries far-reaching institutional implications. The Plan commits to accelerating the electronicization of trade documents, expanding imports and exports of digital technologies, digital products and digital services, refining the data service industrial chain, exploring facilitative arrangements for cross-border data flows within the Greater Bay Area, and actively participating in global digital trade governance. This demonstrates that Hong Kong’s trade transformation extends beyond transactional upgrades to encompass data, regulatory rules and infrastructure development.

Notable priorities include the rollout of Phase 3 services under the Hong Kong Trade Single Window, as well as advancing interconnection between Hong Kong’s Single Window and those of the mainland and other economies. The Single Window consolidates document submission channels previously scattered across customs, inspection and quarantine and other government departments. Cross-border mutual recognition of such systems will substantially cut compliance and time costs for SMEs.

The Plan also proposes linking the Trade Single Window with the Hong Kong Monetary Authority’s Commercial Data Exchange Platform, enabling banks to access commercial data as references for trade financing. This strengthens connectivity between trade data and financial services, addressing the long-standing financing difficulties of SMEs caused by insufficient collateral and limited financial transparency. By assessing risks based on authentic trade documents and supporting data, banks can deliver more accurate risk pricing and targeted financing, reducing financing costs and easing funding shortages. This aligns with the Plan’s “Finance + Trade” strategy, further enhancing services covering trade finance, supply chain finance, settlement, clearing and risk management.

In addition, the ongoing CargoX platform connects freight logistics and trade data systems to advance electronic documentation and cross-border data exchange. Only when cargo, document and capital flows are fully digitized and interconnected can Hong Kong meaningfully reduce time costs and uncertainties in cross-border trade — a foundational prerequisite for translating institutional digital trade frameworks into tangible operational efficiency.

Reactivating Institutional Advantages

The rollout of cross-border e-commerce, brand globalization and digital trade hinges on another core theme reiterated throughout the Plan: building an integrated ecosystem linking professional services including finance, law, exhibitions, testing and certification. The Plan calls for comprehensive upgrading of CEPA, striving to grant national treatment to Hong Kong service suppliers, and advancing mutual recognition of rules and standards across trade, investment, finance and digital governance. For Hong Kong, this means its professional service sectors can access the mainland market with lower barriers, extending institutional and professional strengths to a broader range of cross-border commercial scenarios.

Deepening offshore RMB business is equally vital. The Plan pledges to support wider adoption of RMB in cross-border economic and trade activities, facilitating exchange between RMB and other currencies. For enterprises operating along the Belt and Road and in ASEAN markets, this will reduce foreign exchange costs and currency fluctuation risks. Meanwhile, strengthening the dual-platform function of the exhibition industry delivers offline support for brand globalization, serving both as a showcase for mainland brands to reach global buyers and a critical springboard for overseas enterprises to enter the mainland market.

Challenges and Outlook

Translating well-designed institutional frameworks into tangible competitive strengths remains subject to multiple challenges. First, regional competition intensifies as Singapore, Shanghai, Qianhai and Nansha all accelerate the development of cross-border e-commerce and digital trade infrastructure. Hong Kong’s existing advantages rely on consistent policy implementation efficiency and high-quality professional services. Second, facilitating cross-border data flows requires a balanced approach between data security and operational efficiency, meaning relevant supporting measures may be rolled out prudently. Third, digital transformation capabilities vary widely among SMEs; government subsidies and training programmes must effectively reach the most vulnerable enterprises to deliver meaningful policy outcomes.

Nevertheless, Hong Kong’s comparative strengths in developing new trade formats remain distinct: predictable operations underpinned by the common law system, internationally aligned financial infrastructure, a highly internationalized professional service sector, and its unique positioning as a gateway “rooted in the motherland and connected to the world”. Together these form a recognizable set of institutional and service advantages. If flagship initiatives including interconnection of the Trade Single Window, data-linked trade financing and the Mainland Enterprises Global Expansion Task Force are implemented on schedule, Hong Kong can achieve differentiated and complementary development alongside Singapore and Shanghai. Rather than competing on port cargo throughput, the competition will center on who can deliver more efficient, credible “soft infrastructure” for global supply chains.

The trade-focused arrangements laid out in Hong Kong’s first five-year plan reflect a clear transformation logic: shifting from capturing “entrepôt dividends” via free port policies to unlocking “rule-based dividends” and “service dividends” through institutional opening-up, digital infrastructure and a complete professional service ecosystem. Cross-border e-commerce, brand globalization and digital trade may appear as isolated industrial policy tools, yet they fundamentally represent a redefinition of Hong Kong’s global role. Amid profound restructuring of global trade patterns, Hong Kong is positioning itself to actively integrate into the dual circulation of mainland enterprises “going global” and international capital “entering China”. How far this development path can progress will depend on granular policy execution, tangible progress in cross-border institutional alignment and real market feedback. Still, the policy roadmap outlined in the Plan provides Hong Kong with a clear development blueprint for trade transformation over the next five years.