As it loses its access to the West, can Hong Kong refashion itself into a financial bridge to Central Asia?
As the global economy undergoes a reordering, Hong Kong faces pressure to diversify and strengthen its international partnerships. Once seen as a bridge between East and West, the city is now repositioning itself as a financial and regulatory hub linking China’s capital networks with emerging markets in Eurasia, especially Central Asia.
This deliberate shift results from a convergence of pressures, including the intensification of the US-China rivalry, the financial repercussions of the Russia-Ukraine war, and reputational damage from the 2019 protests and the subsequent 2020 national security law. These factors are compelling Hong Kong to seek new footholds in under-engaged yet strategically pivotal regions spanning Central Asia and the broader Middle East and North Africa (MENA).
Hong Kong’s Economic Realignment
Hong Kong’s capital markets are already showing signs of adaptation. In early 2025, IPO activity on the Hong Kong Stock Exchange (HKEX) reached HKD 17.7 billion across 15 deals—almost triple the amount from the previous year and the strongest since 2021, according to KPMG. Yet, mainland Chinese issuers still dominate, reflecting the city’s narrowing market exposure and underscoring the urgency of diversification as Western investors reassess their commitments amid rising reputational and political risks.
The city’s evolving financial strategy aims to reconcile two key imperatives: aligning with Beijing’s goals—such as supporting the Belt and Road Initiative and shielding Chinese capital from Western sanctions—while maintaining its appeal as a neutral, globally connected financial hub. This balancing act makes Central Asia a logical and increasingly attractive vector for Hong Kong’s markets, as it is non-aligned, increasingly sophisticated in finance, and receptive to diversified funding sources.
Central Asia’s Financial Ascent
Within Eurasia, Kazakhstan and Uzbekistan lead in financial innovation. The Astana International Financial Centre (AIFC), launched in 2018, now ranks first in Eastern Europe and Central Asia on the Global Financial Centres Index. As of 2024, it recorded a market capitalization of $76 billion and an annual trading volume exceeding $1.3 billion, hosting 4,030 firms—including PwC, EY, and Binance—from 85 countries.
Hong Kong-based institutions are positioning themselves to benefit from this growth by partnering with the AIFC on IPOs, bond issuances, and cross-border fundraising—an agenda highlighted at AIFC Connect events in Seoul and Hong Kong in May 2025. AIFC’s regulator, AFSA, and Uzbekistan’s National Agency of Perspective Projects signed a cooperation roadmap in August 2024 to explore IPOs and listings, including green bonds and sukuk (Sharia law-compliant securities) for Uzbek companies, as well as to share sandbox experience for innovative financial solutions. Bilateral cooperation also includes AFSA’s memorandum of understanding (MoU) with Korea’s Financial Services Commission and AIFC’s MoU with the Law Society of Hong Kong.
Uzbekistan has quickly become a key focus for Hong Kong. Since 2016, President Shavkat Mirziyoyev’s government has implemented extensive economic liberalization reforms, including the introduction of a modern public-private partnership law, the privatization of more than 16,000 state assets, and the development of a corporate bond market. The Tashkent Stock Exchange’s capitalization has quadrupled from $5 billion in 2017 to $19.5 billion in May 2024, according to CIED data.
This trajectory was showcased at the August 2025 Uzbekistan-China Business Forum in Hong Kong, which drew over 150 participants and led to the creation of the Center for Investment and Green Industry Development of Uzbekistan in the HKSAR. Built as a permanent institutional bridge, the center will channel investment into renewables, smart agriculture, and manufacturing. High-level meetings on trade growth, infrastructure financing, and professional-services cooperation took place alongside this effort. Educational diplomacy also featured, with Hong Kong promoting a Belt and Road scholarship program to attract Uzbek students—expanding human-capital and professional networks that support deal flow.
The Role of Gulf Capital, Islamic Finance, and Triangular Diplomacy
Hong Kong’s outreach to the Gulf Cooperation Council (GCC) adds another layer of complexity. Bilateral trade with the GCC reached $21.6 billion in 2023, with the UAE ($16 billion) and Saudi Arabia ($1.36 billion) dominating. In late 2024, the Hong Kong Monetary Authority signed MoUs with Saudi Arabia’s Public Investment Fund (PIF) and the UAE Central Bank to connect debt markets and promote cross-border issuance and investment.
A notable precedent is the Albilad CSOP MSCI Hong Kong China ETF, listed on Tadawul, which has attracted over HKD 10 billion (approximately $1.28 billion) at launch—demonstrating how sharia-compliant products can channel Gulf liquidity toward Asia. In addition to Hong Kong’s Saudi sukuk ETF launch and HKEX-Tadawul cooperation (including with HKEX’s planned Riyadh office), this offers a viable path for “triangular financing”—Gulf capital intermediated via Hong Kong into sectors such as renewable energy, transportation, and SME finance in Asia, including Central Asia.
Within this, green sukuk are a practical tool: Saudi PIF and leading UAE issuers have utilized the format, and global green and sustainability sukuk continued to grow in 2024, while Hong Kong’s previous sovereign sukuk provides a readily available legal and tax platform.
Competition and Strategic Positioning
Hong Kong’s pivot competes directly with other rising Eurasian financial powers, such as Singapore and the UAE. Singapore offers political stability, access to the ASEAN market, and globally trusted arbitration services. The UAE’s Dubai International Financial Centre has become a hub for Islamic finance and Gulf-linked capital flows, with a growing focus on infrastructure in Africa and South Asia.
The strategic equation shifted after the first Central Asia-GCC Summit in Jeddah in July 2023, where the UAE, along with Saudi Arabia and Qatar, pledged record investments in the region: $13.1 billion in deals between Tashkent and Riyadh, and $17.6 billion in Qatari-Kazakh investment plans—figures rivaling China’s earlier commitments.
Even so, Hong Kong retains enduring comparative advantages. First, its common-law framework under “one country, two systems” offers direct access to Chinese capital markets, policy banks, and SOEs while maintaining a common-law legal system and global regulatory connections. It can also leverage China’s role within the Shanghai Cooperation Organization (SCO) to promote commercial engagement—without requiring official Hong Kong Government participation—by structuring sanction-compliant trade finance, sovereign issuance, and debt solutions for Central Asian industries.
Ultimately, the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) further strengthens Hong Kong’s role as a financial technology hub. Joint innovation with Shenzhen and Guangzhou can be tested on a GBA-wide scale and then expanded to Astana and Tashkent through cross-regional fintech collaborations and capital-raising platforms, with Hong Kong serving as the financial gateway and policy incubator in cooperation with AIFC and the Tashkent Stock Exchange.
Is Hong Kong an Architect or Instrument?
By interlinking three critical nodes—Greater China, the Gulf, and Central Asia—Hong Kong is testing whether financial diplomacy can be more than a branding exercise. Its Eurasian pivot is not simply geographic diversification; it is an attempt to redefine the city’s role from transactional hub to regulatory architect and investment catalyst in a multipolar economy.
Whether this pivot succeeds will depend on execution. In the short-term period, tangible benchmarks could include the closure of a Central Asia-origin green sukuk arranged in Hong Kong, the first enforcement of a Hong Kong-seated mediation award in a Central Asian court, or the launch of a cross-listed IPO between the AIFC and HKEX.
For Central Asia, the opportunity lies in accessing financial innovation, diversified capital pools, and a semi-detached channel for engaging China without overexposure to political risk. For Hong Kong, the region offers both a proving ground to restore global relevance and a laboratory for redefining financial diplomacy in a multipolar era—one sukuk, one IPO, and one enforceable award at a time.
About the Authors: Alouddin Komilov and Pengshan Pan
Alouddin Komilov is a policy analyst and the head of the International Political Development Project at the Center for Progressive Reforms, and also serves as an adjunct assistant professor at Webster University in Tashkent.
Pengshan Pan is a Research Fellow at the Greater Eurasia Research Center, located at New Uzbekistan University in Tashkent and the Hong Kong University of Science and Technology.
Image: Guitar Photographer/ Shutterstock.com.
