Hong Kong is Dying with Fiscal Deficit Skyrocketing... Can It Survive?

Hong Kong, once hailed as a global financial powerhouse, is facing unprecedented challenges. For the third consecutive year, the city is grappling with a fiscal deficit of HKD 100 billion—a staggering figure that raises critical questions about its economic future. In this video, we explore the root causes behind this recurring financial crisis and what it means for Hong Kong’s role on the global stage.

We start by examining Hong Kong’s historical resilience in overcoming past crises, such as the 1997 Asian Financial Crisis, the 2003 SARS epidemic, and the 2008 Global Financial Crisis. Despite these earlier challenges, the city managed to rebound due to strong fiscal reserves and prudent policies. However, today’s deficits reflect deeper, structural issues tied to geopolitical tensions, regional competition, and economic fragmentation.

Next, we analyze how rising tensions between the U.S. and China, along with global economic decoupling, have disrupted Hong Kong’s financial services and trade. Shrinking investment flows, declining IPO volumes, and a cooling real estate market have all contributed to a significant loss of revenue. Meanwhile, the rise of regional competitors like Shenzhen and Guangzhou is challenging Hong Kong’s dominance in the Greater Bay Area (GBA).

We also highlight the city’s increasing fiscal dependency on Beijing, raising concerns about its economic autonomy. At the same time, we discuss the urgent need for Hong Kong to diversify its revenue sources, embrace innovation, and strengthen collaboration within the GBA to remain competitive.

As Hong Kong stands at a crossroads, this video poses a critical question: Can the city reinvent itself to maintain its status as a global financial hub and bridge between China and the world?