Some of Hong Kong’s leading business figures and companies accompanied Hong Kong’s Chief Executive and senior government officials to Riyadh on 5 February, the first of three stops on the week-long mission to Saudi Arabia and the United Arab Emirates.
An important part of the trip was to let the Middle East know that Hong Kong is back in business, and that we also have a more competitive and diversified economy than before the pandemic. The visit also coincided with the launch of the Hello Hong Kong campaign, as part of the city’s relaunch and rebranding strategy.
“Hong Kong has long been the Asia-Pacific region’s multi-level bridge for foreign and Mainland Chinese businesses and investors. As our integration with the Mainland continues to deepen, so, too, do the opportunities for Hong Kong – and the economies and companies that work with Hong Kong,” Chief Executive John Lee told the media in Riyadh.
The 30-member delegation comprised a wide cross-section of Hong Kong Inc., from investment funds, banks, innovation and technology, exhibitions, trading and professional services. The Chamber’s Chairman Betty Yuen, General Committee members Peter Lam and Benjamin Hung, as well as Belt & Road Co-convenor Nicholas Ho joined the mission.
Commenting on the trip after returning to Hong Kong, Yuen said: “The impression I had during the visit was that there was definitely interest in working with Hong Kong, but their level of understanding about how to do business with Mainland China and Hong Kong was not very high. We need to explain more about the business environment in Hong Kong and how we play the facilitator role between the Mainland and the world.”
As a first step towards bridging the knowledge gap on both sides, 13 Memoranda of Understanding or Letters of Intent were signed during the mission covering finance, innovation technology, business, transportations and energy. These included an MOU signed by Yuen with the Riyadh Chamber Chairman Ajlan bin Abdul Aziz Al Ajlan.
“I think those MOUs we signed during the trip are bridges to foster better communication on both sides. We look forward to working with the Riyadh Chamber to help our members expand business and investment between Hong Kong and Saudi Arabia,” she said.
Diversifying risks and opportunities
Benjamin Hung, HKGCC General Committee Member and Chief Executive Officer, Asia, Standard Chartered, who also joined the mission, said sovereign wealth funds in the Middle East were keen to allocate more capital to Mainland China as part of diversification efforts.
“Many hope to gain access to China’s capital pool, but they are not very familiar with cross-boundary investment channels in Hong Kong that could help them tap into China’s population of 1.4 billion,” he said.
During meetings in Saudi Arabia and UAE, Hung pointed out the advantages offered by the Shenzhen-Hong Kong Stock Connect, Shanghai-Hong Kong Stock Connect and Bond Connect. However, he said it could take time to develop these areas of cooperation.
“This mission was an important first step towards improving mutual trust and bridging the knowledge gap. Our next step will be working with sovereign wealth funds in the Gulf states to see how best to allocate more assets to Mainland China. Hong Kong will have absolute advantages, especially in facilitating transactions in renminbi. We should seize this opportunity,” he said.
Nicholas Ho, Co-convenor of HKGCC’s Belt & Road Working Group, said Hong Kong had a lot to offer the Middle East, especially with regards to services. “They are restructuring their economy and I think Hong Kong can play an important role in that development with our professional services and international experience,” he said.
Yuen echoed his view: “We saw a lot of Hong Kong service providers and Mainland businesses were already doing very well in Saudi Arabia,” she said. “I think a lot more Hong Kong and Mainland companies would like to have the opportunity to invest and find business partners in Saudi Arabia. This is where SMEs from both places can play a very important role as a connector. They can help each other understand the regulations, the culture as well as markets, and the key to success is to have a local partner,” Yuen said.
Like Hong Kong, Ho said Saudi Arabia is also trying to rebrand itself through mega events and projects. Although the financial return on such events may be nominal, they will help bring people to the country to see for themselves that their previous perceptions and reality are very different.
“There is no better promotion of a country than for people to go and see for themselves the reality. When I talk to people overseas, many believe that there are still protests in Hong Kong and lockdowns. The media paints a narrative which becomes embedded in people’s minds, so it is essential that we go out and tell Hong Kong’s good stories, as well as encourage people to come here to see Hong Kong for themselves,” Ho added.
Similarly, the perceptions that people have of Saudi Arabia also differ from reality, since the Saudi Crown Prince implemented many reforms for women’s rights, including the choice of wearing a hijab, or headscarf. Yuen said she had very candid exchanges with senior women executives in Saudi Arabia and that the narrative the international media paints of the country is very different from reality.
Saudi Arabia has set a target of having 50% of its power generated from renewable sources by 2030 and to be net zero by 2060. As the world’s second-largest oil producer after the United States, achieving such ambitious targets will be no easy feat. As a result, delegates said the Saudis were very receptive to new technologies and green initiatives that would help them hit those targets and keep projects like Saudi Arabia’s Vision 2030 and its planned smart city NEOM on track.
The delegation headed to Abu Dhabi, UAE, on 7 February. The UAE was Hong Kong’s largest trading partner in the Middle East region, and enjoying double-digit growth.
At a business forum and dinner with H.E. Dr Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade, the minister stressed the strength and durability of the strategic relations between the United Arab Emirates and the People’s Republic of China, which are witnessing continuous development, especially in the areas of economics and trade.
“The value of foreign trade between the UAE and Hong Kong amounted to about AED32 billion (US$8.7 billion) during the first nine months of 2022, achieving a growth of 36% compared to the same period in 2021, while Hong Kong was among the top 10 trading partners for the UAE during 2021, with a contribution of more than 2% of the UAE’s total non-oil trade,” he said.
General Committee member and HKTDC Chairman Dr Peter K N Lam mentioned in his opening remarks at the forum that Dubai and Hong Kong were natural partners when it came to creating business opportunities.
Summing up the mission, Yuen said: “From our meetings with officials, chambers of commerce and businesses, it was clear that Saudi Arabia and the UAE welcome deeper and broader ties with Hong Kong. I think there are real opportunities in these countries for mutually beneficial cooperation, and we look forward to working with our new friends to help our members expand their business and markets.”