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After the Second World War, London underwent a profound transformation from a global trading port to an offshore financial center. In 1964, London ranked among the top three ports in Europe, handling as much as 61.3 million tons of cargo. However, by the 1980s, with the widespread adoption of large ocean-going vessels and container technology, the local enclosed docks were geographically and structurally unable to meet the demands of modern cargo transport. As a result, the volume of goods handled dropped sharply to 25 million tons, causing London’s port to lose its leading position.

Prof. Heiwai Tang, Associate Dean of the HKU Business School and Director of the Asia Global Institute, has highlighted the need for Hong Kong to diversify its economy beyond its current narrow structure. To drive sustainable growth, he calls for the development of "new industries" and introduces a groundbreaking method to assess their economic contributions. This innovative approach enables the government to track industrial trends, design targeted policies, and measure their effectiveness with precision. Applying this method, Prof. Tang’s research uncovers the substantial potential of new industries to expand Hong Kong’s GDP. Fueled by rapid advancements in innovation and technology, sectors like "research, design, testing, and environmental engineering" saw their value added soar from HK$3.3 billion to HK$13.3 billion between 2000 and 2023. Similarly, "computer programming, data, and industrial internet services" has surged from HK$5 billion to HK$25.5 billion in the same period. Beyond these emerging sectors, Prof. Tang underscores Hong Kong’s pivotal role in the global supply chain. He notes that productive services, ranging from logistics to legal services, are essential in supporting not only local industries but also worldwide supply networks, making them a vital component of Hong Kong’s economic future.

Will Hong Kong continue its economic boost thanks to AI-supported manufacturing? Hong Kong's industrial sector may continue to add a major boost to the city’s economy. In a recent study commissioned by the Federation of Hong Kong Industries and conducted by the Hong Kong Institute of Economics and Business Strategy at the University of Hong Kong, the potential of "Made-in-Hong Kong" products to shine was highlighted. Specifically, this would come through technology, automation, and strategic government support. The study found that in 2023, the industrial sector added about HK$127 billion to the economy thanks to new high-end manufacturing in microelectronics, biotechnology, and the food industry. Prof. Heiwai Tang, Associate Dean of HKU Business School and Director of the Asia Global Institute, led the study that emphasised the importance of adapting to the changing global landscape. While many companies have successfully reduced their reliance on the US market, those who haven't embraced transformation face significant financial risks. The report suggested Hong Kong was on the right track by strengthening its collaboration within the Greater Bay Area, ASEAN, and other regions. Commenting on the effect of not responding to the evolving market conditions, Prof. Tang said, “The first consequence is one would incur significant financial losses, and secondly, if one were to try to set up a new factory now, it would take years before seeing profits.”

Will consumers pay more because of double tariffs from China due to the trade war? Prof. Heiwai Tang, Associate Dean of HKU Business School and Director of the Asia Global Institute, offered his perspective on how the trade war has placed foreign companies in China at the centre of a double-tariff squeeze. He was included in a Financial Times article on the broader implications for businesses and economies worldwide.

After seven years of negotiations, the world's largest free trade agreement—the Regional Comprehensive Economic Partnership (RCEP)—officially took effect on January 1, 2022. Member countries account for nearly 30% of the world's population and over one-third of global GDP. Amid the ongoing fragmentation of the global economy, RCEP is viewed with high expectations. This agreement brings together diverse countries in the Asia-Pacific region with varying scales and systems, showcasing the potential and resilience of regional inclusive cooperation. Three years into its implementation, what impact has RCEP had on the trade landscape of the Asia-Pacific region? How will it reshape the trading models among member countries?

In a recent Financial Times article, Prof. Heiwai Tang, Associate Dean of HKU Business School and Director of the Asia Global Institute, offered his perspective on how the trade war has put foreign companies in China in the middle of a double-tariff squeeze. “Foreign firms are really being squeezed in the Chinese market,” said Prof. Tang. “If they import, they pay the Chinese tariffs. When they export back to the US, they pay the US tariffs.” He emphasised that these companies are essentially being “hit twice.” Foreign manufacturers in China face steep tariffs—125% on imported components and 145% on exports to the US. With international companies accounting for nearly one-third of China’s total trade, this impact is far-reaching. US corporations like Apple and Tesla, which rely heavily on China as a manufacturing base, are especially vulnerable to these double tariffs.

Prof. Heiwai Tang, Associate Dean of HKU Business School and Director of the Asia Global Institute, recently spoke on CNA. He shared his analysis of the evolving US-China trade war and the impacts these changes will have on businesses in Hong Kong, the Greater Bay Area, Mainland China, and beyond. Prof. Tang spoke on the impact of the latest tariffs: Greater Bay Area: The Guangdong Province, a hub for high-tech manufacturing, shows stronger resilience to trade shocks compared to other regions in China due to generally higher profit margins. Domestic Growth: China Private Consumption has been lower than 40% of its Nominal GDP. China needs to boost domestic consumption, a critical driver of economic stability to fight off the external pressures. Multilateralism: China remains committed to a multilateral, open trading system even as U.S.–China tensions rise and geopolitical strains prompt it to diversify partnerships beyond the United States. Hong Kong: The depreciation of the US dollar against non-RMB currencies could attract more tourists and bolster local consumption. Prof. Tang explained that businesses must adapt to these challenges, and therefore, we need a strategic approach to foster greater multilateral engagement.

At the South China Morning Post SCMP forum, “Redefining Hong Kong Series 2025: Budget Edition,” Associate Dean of HKU Business School and Director of the Asia Global Institute Prof. Heiwai Tang emphasised that Hong Kong's debt-to-GDP ratio is significantly lower than other developed economies such as Singapore, Japan, and the U.S. This leaves much room for the government to proactively use government-backed bonds to invest in new growth drivers, given the historically positive economic returns on investments in large infrastructure projects. In a related article published in the Singapore-based The Straits Times, Prof. Tang shared insights on upgrading Hong Kong's economic sectors that were consistent with the views mentioned earlier. “Hong Kong’s highly ranked and globally recognised universities have lots of great basic scientific and academic research that should have some commercial value that needs to be realised,” Prof. Tang said. He also stressed the importance of fostering better synergy between Hong Kong and other cities in the Greater Bay Area. With these efforts, Hong Kong can unlock new opportunities and solidify the city’s role as more than just a financial centre.

Associate Dean of HKU Business School and Director of the Asia Global Institute Prof. Heiwai Tang shared his views on the Hong Kong budget during interviews with the South China Morning Post SCMP and Hong Kong Economic Journal. He highlighted that the government is taking "a conservative approach" to address the significant deficit, with a proposed 2% reduction in recurrent expenditure for the 2025-26 financial year, followed by similar cuts in the following two years. He argued that increasing this reduction to a more ambitious 3% may be necessary to address the structural deficit, especially given that the government's ability to boost revenue to match rising spending is in question. Regarding Hong Kong's projected debt-to-GDP ratio of up to 16.5% over the next five years, Prof. Tang described it as at a "completely safe" level. As for renminbi bonds, they appeal to institutions that require and hold RMB. Such state-owned enterprises have good cashflow, so investments in RMB bonds with a maturity period of 3-5 years is considered more effective. Prof. Tang also emphasised that issuing bonds aimed at institutional investors is more cost-effective. With the current stock market doing well, retail investors require higher yields of at least 4% to 4.5% to be interested in bonds. Therefore, he recommended maximising institutional market engagement, as a yield of 3.5% is still appealing to institutional investors.