Bankers Risk US Backlash Over Chinese Funding Boom in Hong Kong

Hong Kong’s long-beleaguered financial industry is entering a lucrative but risky era on the front lines of China's economic rivalry with the US.

Fueled by a surge in capital raising by Chinese corporate giants like battery maker Contemporary Amperex Technology Co. Ltd and Tesla Inc. rival BYD Co., business is finally booming for dealmakers in the city. First-time share sales have topped $16 billion this year, and PwC projects the market will close 2025 as the world’s biggest venue for listings. The city’s stock market is up 24%, eclipsing gains in the US and Europe. Corporate debt issuance is on course for an all-time high. Bankers and lawyers say they are busier than they’ve been in years, with the frenetic pace forcing them to turn down clients and hire staff to ease the load.

The burst of activity has brought an end to a yearslong slump that wiped more than $2 trillion from the local stock market and brought dealmaking to a virtual halt. But it has also put Hong Kong — and its bankers — in a perilous position.

The city has become inextricably tied to President Xi Jinping’s priority industries, risking backlash from Washington politicians who are increasingly questioning where Hong Kong ends and China begins. In a potential sign of things to come, JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon was forced to defend his bank’s role on the CATL deal after facing criticism from US lawmakers.