Hong Kong’s promotion of its advantages and opportunities has moved up a gear. High-profile delegations, led by chief executive John Lee, are traversing the 10-member Association of Southeast Asian Nations (ASEAN) countries talking up the Special Administrative Region’s strengths and attractions – or, as Lee puts it, ‘telling good Hong Kong stories’.
During a recent seven-day trip to Indonesia, Malaysia and Singapore, a delegation of Hong Kong business and legal representatives signed 33 agreements and memorandums of understanding covering areas including trade and commerce, investment and finance, as well innovation and technology, logistics, academic research and cultural exchange.
Strategic location
According to Hong Kong’s Commerce and Economic Development Bureau, the ASEAN member bloc is the SAR’s second largest trading partner after mainland China. The trade in goods between Hong Kong and ASEAN reached an all-time high of HK$1,294bn (US$165bn) in 2022. In a bid to increase its slice of the ASEAN business pie, Hong Kong is promoting its strategic location as the ‘connecting’ partner for ASEAN members as they seek opportunities in mainland China, particularly the Greater Bay Area.
There are compelling economic reasons why Hong Kong should look to increase trade with its regional neighbours. The World Economic Forum has predicted that in the next 10 years, ASEAN will add 140 million consumers to the global market. According to the OECD Economic Outlook published in June, the 2023 economic growth forecast for the ASEAN bloc is 4.6%, while the broader global GDP growth for 2023 is projected to be 2.7%, the lowest annual rate since the global financial crisis in 2008, with the exception of the pandemic year of 2020.
Within 20 years, RCEP is expected to eliminate more than 90% of regional tariffs
At the same time that Hong Kong is promoting itself as the trade transit hub for ASEAN, efforts have been stepped up to boost regional support for the Regional Comprehensive Economic Partnership (RCEP). The world’s largest free trade bloc – consisting of the 10 ASEAN members and major trading partners Australia, China, Japan, South Korea and New Zealand – covers nearly a third of the world’s population and about 30% of global GDP. Within 20 years, RCEP is expected to eliminate more than 90% of regional tariffs.
With this in mind, to enhance the SAR’s positioning as a super-connector to mainland China, the government has rolled out various initiatives and funding schemes, including the Hong Kong Investment Corporation, to identify and target promising investment opportunities. A co-investment fund of HK$30bn (US$3.8bn) has also been established to attract companies to Hong Kong and invest in them.
Food for thought
With enterprises from Muslim ASEAN member countries, including Indonesia and Malaysia, expressing an interest in listing on the Hong Kong bourse, Christopher Hui, Hong Kong’s Secretary for Financial Services and the Treasury – offering an element of lateral thinking – said the government would explore if it was necessary to open more halal restaurants in the city. As Hui pointed out, food is a necessity if people are to feel at home in Hong Kong, and to explore business opportunities in the SAR.
Partnerships are built on an understanding and appreciation of similarities and differences, and while Hong Kong has much to gain from trade talks in ASEAN, recent initiatives underpin the importance of friendship and empathy in Hong Kong’s international relations journey.
