HONG KONG: Outwardly, Hong Kong hasn’t changed. Vintage trams still trundle through Central, street names are unchanged since the 1997 handover, and Hong Kongers drive on the left as they always have. Hong Kong’s currency peg to the US dollar is still in place.
Hong Kong remains the gateway to China, a conduit for money and trade in and out of the mainland. The dire predictions of the city’s demise as a financial hub, resulting from the draconian national security law in 2020, have not come to pass. Yes, several thousand professionals and long-time residents departed, but they’ve been replaced by an influx of mainlanders attracted by the city’s excellent schools and lifestyle.
Tourism has recovered, but still lags behind the heady days that preceded the pro-democracy protests of 2019 and the subsequent crackdown. Money is again streaming into Hong Kong’s vast $10 trillion financial market, most of it coming from the mainland. Hong Kong last year was the world’s hottest IPO (initial public offering) market, as Chinese corporates chose Hong Kong as their best bet after New York.
Of course, wide disparities remain as Beijing seeks to integrate the former British colony into the Greater Bay Area (GBA), an agglomeration of 88 million people in 11 huge cities adjacent to Hong Kong. Property prices on the mainland continue their three-year-long decline, while in Hong Kong they are up. In equities, it’s the opposite. Prices on the Shanghai and Shenzhen exchanges were up by 30% in the first half of 2026 while Hong Kong’s Hang Seng index was down by 8%.
Travel restrictions have been streamlined for mainlanders and Hong Kong residents, making it relatively easy to cross back and forth.
Many mainland visitors go to Hong Kong for the day and then retreat to Shenzhen with its much lower prices to spend the night. Special buses carry Hong Kongers with one-day memberships to Sam’s Club in Shenzhen and then return to Hong Kong. An increasing number of people choose to live in Shenzhen and work in Hong Kong.
During my June visit to Hong Kong, I made a one-and-one-half-day excursion to Shenzhen, the closest mainland city to Hong Kong. Shenzhen is the tech center of the Greater Bay Area and home to the electric vehicle success story, BYD, Telcom giant Huawei, and Tencent, the huge entertainment and internet conglomerate.
Five decades ago, Shenzhen was a sleepy fishing village, but it’s been transformed by the free-market opening launched by President Deng Xiaoping in 1978. With a population of 18 million, Shenzhen is far bigger than Hong Kong and is the world’s fastest-growing city.
The high-speed train from Hong Kong to Shenzhen takes only 15 minutes. The ride is so smooth you’re hardly aware that the train is moving. The staff is immaculately dressed, the coach spotless, and the two stations are highly automated and efficient. I spent the night in an ultra-modern, high-end hotel near the convention centre.
China’s great firewall
The internet connection was free and of the highest quality, but when opening your laptop, you come face to face with China’s great firewall. There was no Google, no Facebook, no Yahoo, no YouTube, no X, no Instagram. There were 42 channels on the TV, all of them in Chinese. All communication at the front desk was done by phone translation app, as not one of the very friendly staff spoke English.
In the 1980s, Nobel Prize-winning economist Milton Friedman described Hong Kong as a free market utopia.
Having made multiple visits, Friedman extolled the entrepreneurial spirit of Hong Kongers and called the British territory a haven for people seeking freedom. He identified private property, low taxation, limited government, an independent judiciary and free media as key elements in Hong Kong’s success.
“Free markets,” said Friedman, “are essential to individual freedom.”
What would Friedman say about today’s Hong Kong, where an independent judiciary and free media have been severely curtailed?
My guess is he would find himself in agreement with Chris Patten, the last British governor of Hong Kong. Patten wrote on July 1st, the 29th anniversary of the territory’s handover to China, that “The draconian national security law has dismantled the rule of law and fundamental rights guaranteed under the Sino-British joint declaration and basic law in Hong Kong.”
Remarkably resilient
Throughout its history, Hong Kong has been remarkably resilient, and that is certainly the case today. The city remains an important financial centre, but one increasingly dominated by Chinese entities.
Talk to Uber and taxi drivers, service workers in hotels and restaurants, as well as to local professionals, and there are two responses to the question of how things have been over the past two years.
One response is a concise “No comment,” the other “Much better”, because stability has returned, foreigners are dribbling back in, and the chaos of the pro-democracy movement is over.
In sum, Hong Kong is a vibrant, wonderful, and complex place. But beneath the surface it has become repressive. Civic discourse hardly exists, and the media are restricted. People know the rules, and the red lines that must not be crossed.
The views of the writer are not necessarily the views of the Daily Friend or the IRR.
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