WFY’26: Hong Kong’s factoring market adapts as exports surge 15.4%

Hong Kong’s position as a major Asian trade and financial hub continues to evolve as Chinese companies internationalise, supply chains shift and exporters respond to changing tariffs, interest rates and geopolitical risk. In this country report, Nikhil Dhar, Head of Structured Trade, Global Trade Solutions at HSBC, examines how these changes are shaping Hong Kong’s factoring and receivables finance market.

The article included in the World Factoring Yearbook 2026 (WFY’26) explores a market where factoring volumes remained broadly resilient in 2025 despite changing trade flows, while lower interest rates, increased use of receivables finance, credit insurance and the growing importance of ASEAN are reshaping corporate financing strategies. It also considers how tariff uncertainty and supply-chain diversification could affect Hong Kong exporters through the remainder of 2026.

Below is an excerpt from his article.

The second half of 2025 saw two major themes, the first of which was lower exports of consumer goods, particularly to the US where the first half of 2025 saw significant growth in advance of the impending tariffs in the second half of the year. Secondly, at the same time the increase in semiconductor demand boosted exports during Q4 2025 particularly (with continued demand felt in Q1 2026).

Interest rates have significantly dropped since late 2025, which has led to a switch from using cash to bank facilities. The push for factoring facilities in 2025 and 2026 has been driven by financing receivables with lower interest rates and protecting buyers against credit risk, especially as geopolitical tensions including US-imposed tariffs and the Middle East conflict remain the key focus for HK corporates, including the credit worthiness of their existing debtor book and any additional new buyers. Owing to the rise in oil prices and the impact of tariffs on inflation, expectations for inflation have changed and reversed the forecasts for interest rates for 2026.

Insurance underwriting increased in 2025, but certain industries have been closely scrutinised especially where sensitivity remains regarding the nature of the product, especially relevant in the semiconductor space, with some insurers taking divergent views in other sectors (i.e. textile and garments).

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To read the whole article and 50 other specialist articles and country market reviews, order World Factoring Yearbook 2026 here.