Impact of US trade policy shifts on Hong Kong ‘primarily psychological’: Paul Chan

US trade policy changes and interest rate trends will likely have a significant impact on Hong Kong's economy, but Finance Secretary Paul Chan Mo-po claims the effect will be mainly psychological, according to a radio interview. Chan expressed optimism for continued growth momentum throughout the second half of the year, despite acknowledging external risks stemming from psychological factors.

The US represents Hong Kong's fourth-largest export market, although smaller than Southeast Asia and other regions. In the first half of 2026, the economy grew by 5.1 percent, the strongest performance in nearly five years. The government raised its full-year growth forecast to between 3.5 and 4.5 percent. Chan pointed to growth in retail, property, and stock markets, with the catering sector stabilizing in recent months.

He cited private investment's three consecutive quarters of double-digit expansion, driven by artificial intelligence. Chan predicted that AI would serve as a catalyst, benefiting various sectors through innovation and technology. While noting that the catering industry faces challenges, Chan encouraged businesses to upgrade or transform.

The Northern Metropolis mega-infrastructure project in the New Territories is expected to yield results by the end of the year, with major stakeholders moving in, though the identities of the investors are yet to be revealed.