Hong Kong has seen its fair share of upheaval. The implementation of targeted policies, however, has seen it bounce back from significant challenges with incredible tenacity. This playbook – one that promotes foreign investment, entrepreneurship and ease of doing business – can be followed by other aspiring global hubs faced with similar challenges.
By the end of 2022, pandemic-related restrictions and macroeconomic forces resulted in a shrinking workforce and significant financial turbulence. In 2023, Hong Kong lost its crown to Singapore as Asia’s leading financial centre, and by 2024, Stephen Roach, former chairman of Morgan Stanley Asia, famously declared the city to be “over”.
The government reacted and began implementing policies to reverse the economic decline which saw a significant portion of the expat population move abroad. It unveiled a new visa to re-attract global talent and within months, Chief Executive John Lee reopened the borders. The result has been a renewed wave of success for Hong Kong and a true revival of its status as a global hub.
Last year, Hong Kong topped the global IPO rankings for the first time since 2019. KPMG predicts that 2026 could be the city’s strongest year on record, with proceeds from new listings reaching a potential HK$500 billion (US$64 billion).
The wider economy has also followed. In September, Hong Kong once again ranked third among the world’s financial centres, behind just New York and London. By mid-2025, even Roach had softened his view, telling Bloomberg that it was “too early to declare Hong Kong over”.
The city’s challenges, at times brought on by external shocks and macroeconomic factors, have clear parallels with the Middle East’s leading hub.
Dubai, like Hong Kong, is a megacity which has drawn on connectivity and stability for rapid growth.
The emirate has faced arguably its greatest ever test this year as US-Israeli strikes on Iran impacted the wider region. Some analysts, as with Hong Kong, were quick to predict Dubai’s decline.
What was underappreciated by many was the extent of scenario planning Dubai’s government had undertaken. Prudent choices which followed a clear playbook were implemented quickly and have since seen the emirate recover much of its momentum.
The Dubai Government introduced a package of support measures, including an economic incentives package worth more than US$680 million to support tourism, trade, logistics, real estate and other areas of the economy.
Non-oil private-sector activity is fast returning to pre-conflict levels and new business from overseas is also reported to now be growing at the fastest pace in two years.
Major businesses are continuing to establish themselves in the city, attracted by the emirate’s long-term potential. Robinhood, newly licensed by Dubai’s financial regulator, chose the Dubai International Financial Centre (DIFC) as its regional headquarters. In September’s Global Financial Centres Index, industry professionals ranked Dubai first in the world for fintech.
The dual stories of Hong Kong and Dubai share a lesson. In both cases, judging a city during its greatest test proved to be a poor guide to its future trajectory.
Hong Kong has also become far more intertwined with the Gulf hub in recent years. The Asian hub has increasingly looked to the Middle East – and the UAE in particular – for investment opportunities. In September, HKMA and HKEX formed a strategic working group with Dubai’s financial regulator and Nasdaq Dubai in a move which will help further bolster business linkages between the two financial hubs.
We have also seen an increase in business-to-business links and cross-border cash flows. Mashreq, a UAE bank, recently invested US$125 million into its Hong Kong arm. The Emirates is now Hong Kong’s leading trading partner in the Middle East, with two-way trade totalling almost US$49 billion last year. According to HKEX, Hong Kong and Dubai’s financial partnership will ensure capital-market development and increased connectivity between the two cities for years to come.
No city is completely immune to external geopolitical shocks, but the playbooks implemented by these two major global financial centres hold lessons for other cities, whether established centres or aspiring hubs.
Resilience is often built before a crisis, not during it. Dubai could act quickly because it had planned for a regional shock. The speed and clarity of messaging are also crucial, as investors and workers look for signs that a city will remain open. Partnerships across regions have also proven to act as shock absorbers and must be developed and nurtured.
Not every city has Dubai’s array of offerings or Hong Kong’s markets. But the question for all of them is whether they would be prepared if their own worst moment arrived.
Written by Radu Magdin.
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