TL;DR
Hong Kong handled more than half of China’s $239 billion in chip imports in the first five months of 2026, a record share, as AI demand reshapes Asian trade. The city’s free port status and air cargo network have made it the region’s crucial semiconductor broker, although that role leaves it exposed to tensions between the United States and China.
Hong Kong has become the main artery for high-tech products entering and leaving China, and its chip trade has reached record levels. The city accounted for more than half of China’s $239 billion in semiconductor imports in the first five months of 2026. according to a Bloomberg review of official data.
A decade ago that proportion was barely a third. Between January and May, Hong Kong re-exported $124 billion worth of chips to the mainland, about 52% of China’s total purchases.
Official figures published in late June showed that the city’s trade with China grew almost 50% in May from a year earlier. Bloomberg reports that this is the fastest rate since 1992, outside of the pandemic years.
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“Hong Kong’s strong air cargo network and free port status have made it a perfect trading hub for semiconductors, which are high-value, low-weight and time-sensitive,” Natixis senior economist Gary Ng told Bloomberg. “Chip manufacturers can ship through Hong Kong on a frequent and stable schedule or be stored for future sales with flexibility.”
A 2 trillion dollar business network
The former British colony operates as a free port with no import tariffs or capital controls, in contrast to the financial restrictions and bureaucracy of the mainland. This has made it a critical cog in the AI-driven trading system taking shape across Asia, where governments such as South Korea is investing hundreds of billions in chips and data centers.
Economists at HSBC estimate that AI trade within Asia has doubled from pre-pandemic levels to nearly $2 trillion in 2025. Hong Kong alone exported nearly $159 billion in AI-related goods last year, according to consultancy Oxford Economics, the fifth-largest total in Asia and more than Japan.
“Hong Kong’s strength lies in facilitating the movement of AI-related goods rather than producing them,” Oxford Economics economist Yongshi Mai told Bloomberg.
AI-related electronics now account for 57% of the city’s exports, up from 44% in 2024, according to investigation by the Hong Kong Trade Development Council (HKTDC). Barclays raises the proportion to 70%.
The advice this week more than doubled its export growth forecast for 2026 for the city at more than 20%, citing an AI-driven “technological upward cycle.” The boom helped Hong Kong’s economy expand 5.9% in the first quarter, its fastest pace in almost five years.
Caught between Washington and Beijing
The role of the intermediary is twofold. Hong Kong lacks the chip factories of Taiwan and South Korea or the weight of the mainland market, leaving it exposed to The vagaries of the US-China chip war..
During Donald Trump’s first presidency, Washington stripped the city of its special customs privileges, treating it as part of China. Since Trump returned to the White House and Tighter restrictions on China’s access to advanced US chipsHong Kong has increased purchases of semiconductors made in the United States, acquiring many of them from third countries.
Bloomberg suggests these are likely chips left out of the restrictions, although the data does not specify which models are moving. Asian transshipment routes have come under increasing scrutiny, with US and Taiwanese authorities already investigating alleged smuggling of Nvidia chips across the region.
Mainland companies may also prefer Hong Kong intermediaries because payments and currency conversion are easier than dealing directly with overseas suppliers. “As an intermediary, Hong Kong has figured out a way to handle payments,” Stanford University researcher and former Hong Kong lawmaker Charles Mok told Bloomberg.
The geopolitical exposure is pushing the city to look for new markets, with CEO John Lee personally. leading trade missions to the Middle East, Central Asia and Southeast Asia. His June trip to Kazakhstan and Uzbekistan produced 96 deals worth more than $1.65 billion.
For now, AI is where the growth is
Around 40% of the chips handled by Hong Kong are supplied by China itself, and a fifth come from Taiwan, followed by Singapore and South Korea. The city has overtaken the mainland as Taiwan’s top chip export market, according to Bloomberg calculations, a change not yet visible in Taiwan’s headline trade figures.
China’s own semiconductor exports shot up 111% in May to $36 billion, the fastest growth since 2013, even as the continent remains a net importer of advanced chips and races to build national alternatives. In May alone, Hong Kong absorbed more than $40 billion in Chinese exports, the biggest monthly haul since 2015.
Semiconductors generated more than a third of that export value, according to Chinese customs data. Meanwhile, for much shipping, Hong Kong’s intermediary role has been fading for years as the mainland ports of Shanghai, Ningbo and Shenzhen ship goods directly to global markets.
However, in higher-value trade, the city has held its own. International investors continue to trust their common law courts more than the mainland’s legal system, even as Beijing tightens its political control.
“When it comes to products that have very high intellectual property content, Hong Kong still has a role in ensuring quality, verifying standards and protecting intellectual property,” University of Hong Kong economics professor Heiwai Tang told Bloomberg. “Hong Kong still has all the institutional advantages.”
The city’s aviation hub status is another advantage, because the mainland applies stricter controls on electronic products transported by air. “This is something that other transshipment hubs like Singapore simply cannot do,” Nam Pak Hong Association vice president Michael Li Chi Fung told Bloomberg.
