Hong Kong is back on the global stage after Chief Executive John Lee led a delegation of high-level officials and industry leaders on a successful mission to Singapore, Indonesia and Malaysia in July. As the HKSAR Government looks beyond Western markets to widen the scope of economic cooperation, the Chief Executive reiterated that the purpose of re-engaging with South Asia was not just to seize business opportunities and boost growth, but also to “build friendship, create goodwill and strengthen partnerships.”
At a welcome dinner in the Lion City, the first stop on the week-long tour, Lee extolled the many benefits of doing business with Hong Kong. “Twenty-six years ago, our prominent advantages under ‘one country, two systems’ started and have been as robust as ever: free flow of capital, low and simple tax system, commitment to the rule of law, a capitalist way of life, and a cosmopolitan society,” he said.
The delegation to the three ASEAN countries consisted of five top officials and more than 30 industry leaders from Hong Kong’s finance, investment, business, legal, logistics, and innovation and technology sectors, including Chamber Chairman Betty Yuen.
The trip was the Chief Executive’s second to South-east Asia and his third outreach initiative since taking office last year, after visiting Saudi Arabia and the United Arab Emirates in February.
Hong Kong has signed a total of 33 Memorandums of Understanding with the three economies across a wide range of sectors. The deals have come at a time when the city’s trade remained weak: Hong Kong’s exports fell by 15.6% in May over a year ago, the 13th monthly decline in a row, while imports dropped by 16.7%, year on year, for the 11th straight monthly contraction.
Commenting on the trip after returning to Hong Kong, Yuen said: “While the city has strong trade ties with advanced economies, which continue to be strengthened, we should also be open to other avenues of growth, which is the purpose of such missions.
“The impression I got during the tour was that companies are very willing to do business with us, especially in our role as a gateway to the Greater Bay Area (GBA) and the Mainland. The mission has not only deepened goodwill and strengthened political connections, but it has also thrown open doors for opportunities and investment.”
Peter Lam, HKGCC General Committee member and Chairman of the Hong Kong Trade Development Council (HKTDC) said: “Everywhere we went, we felt the warmth and hospitality of the local business community, who expressed great support for Hong Kong and a desire to utilize the city as a business and investment platform. Through government-level meetings led by the Chief Executive as well as meetings between the Hong Kong delegation, local officials and leading enterprises in Singapore, Indonesia and Malaysia, Hong Kong’s major chambers, companies and institutions got a better understanding of local market potential and can explore business opportunities with local partners.”
New Global Economic Engine
Lee has predicted that the ASEAN region is on track to take over as the world’s biggest economic engine. It is Hong Kong’s second-largest trading partner after the Mainland: Hong Kong-ASEAN merchandise trade totalled US$167 billion in 2022, 13.7% of the city’s global total.
Lam pointed out that ASEAN businesses already have a strong presence in Hong Kong – more than 650 regional headquarters and offices, as well as local offices, were set up last year. Over 80 ASEAN-headquartered companies are listed on HKEX.
Moreover, the International Monetary Fund recently upgraded growth projections for the ASEAN Five – Singapore, Malaysia, Vietnam, Indonesia and the Philippines – from 4.3% to 4.6% this year (53% faster than the global average).
Guy Bradley, HKGCC General Committee Vice Chairman and Chairman of John Swire & Sons (HK) Limited, said the Government’s ongoing efforts to strengthen ties with ASEAN, including through the recent delegation, were very welcome. “We hope it will open more opportunities and enhance Hong Kong’s role as a super-connector between the Mainland and the rest of world. We see great potential in South-east Asia’s dynamic markets and already have several exciting developments underway across the region,” he stated, adding that the company’s beverages arm had recently made significant investments in South-east Asia by acquiring bottling businesses in Vietnam and Cambodia. “We will continue to look for investment opportunities such as these that align with our strategic objective of growing our core businesses.”
During the trip, Lee took the opportunity to seek support for Hong Kong to join the RCEP (Regional Comprehensive Economic Partnership), the world’s largest free-trade pact, which covers a third of the population and about 30% of global gross domestic product.
“We concur with ASEAN’s commitment to regional cooperation as founding members of the RCEP,” Lee said in Singapore, adding that Hong Kong was determined to pursue early accession to RCEP. Singaporean Deputy Prime Minister Heng Swee Keat said the city state supported Hong Kong’s bid to join the RCEP, especially with the rise of protectionism after pandemic-related supply chain disruptions.
Two-way Investment Flows
Pointing out that Hong Kong is a preferred destination for corporations looking to tap into both Chinese and international markets, Yu Sun, HKGCC General Committee member and Vice Chairman and Chief Executive, Bank of China (Hong Kong), said the city acts as an unparalleled bridge between Mainland and the rest of the world.
“Being backed by the Motherland and connecting to the world under One Country, Two Systems, Hong Kong leverages its expertise in providing offshore RMB services, serving as a global gateway for businesses seeking access to the vast Chinese market. It enables businesses to efficiently conduct cross-border trade and investment,” he said.
Sun added that the trip by the Hong Kong delegation was highly valued and warmly embraced, highlighted by the record number of deals signed. “The visit garnered significant attendance from prominent political and business figures from the three nations. Influential leaders from major corporations also extended their hospitality to the Chief Executive, showcasing their keenness to strengthen connections.”
The sheer range of the bilateral agreements also reflects Hong Kong’s strategic pursuit of high-quality growth. In his meetings with the political leaders of the three economies, the Chief Executive stressed that Hong Kong was working on developments in eight key areas under China’s 14th Five-Year Plan. These include international finance, innovation and technology, cultural exchange, trade, shipping, aviation, legal and dispute resolution services, as well as intellectual property.
In Singapore, the two sides signed seven deals covering trade, financial services, research and fintech, and promised to revisit the civil servant exchange programme that stalled due to travel restrictions during the Covid pandemic. During a meeting with Prime Minister Lee Hsien Loong, the Chief Executive highlighted Hong Kong’s strategic location as a super-connector to the GBA, and offering “enviable access” to China, the world’s second-largest economy. The Prime Minister also called for stronger ties between the two financial hubs and expressed confidence in Hong Kong’s continued prosperity under “One Country, Two Systems.”
Hong Kong has inked 15 agreements with Indonesia in green finance, maritime services, meteorology, aerospace, and promotion of sustainable finance. These include a collaboration between the Hong Kong stock exchange and Indonesia’s bourse over cross-border listings, joint product development and the promotion of sustainable finance.
“ASEAN businesses show strong interest in leveraging Hong Kong's unique role as the international business hub of the GBA to tap into opportunities in the vast Mainland market,” explained Lam. “Secretary for Financial Services and the Treasury Christopher Hui said many Indonesian state-owned enterprises had expressed interest in dual listing in Hong Kong. The mutual recognition of the stock exchanges of the two places confirmed during the visit will greatly facilitate this process.”
In Jakarta, the Indonesian arm of Hutchison Ports made a deal with HSBC (Hong Kong) to promote shared maritime trade. The banking giant will also collaborate with venture capital fund Gobi Partners to support entrepreneurs using TaqwaTech to serve the Islamic economy.
Apart from meeting with Indonesian President Joko Widodo, Lee joined a business luncheon with nearly 300 political and industry leaders, and underlined the many advantages Hong Kong offers as a well-connected business centre, and said efforts were being made to diversify markets to become more conducive for Islamic finance.
In Malaysia, the last stop of the tour, Lee met with Prime Minister Anwar Ibrahim for talks on collaboration in the trade, technology and tourism sectors. One of the most significant partnerships to result from the mission was the agreement between Hong Kong’s MTR Corporation and Malaysia’s state-owned Mass Rapid Transit (MRT) Corporation to use MTR Corp’s rail plus property model for transit-oriented development at the station connecting to Singapore. It was among 11 deals signed in Kuala Lumpur in various fields from education to trade.
Future-forward Business Hub
During a luncheon with business elites in the Malaysian capital, Lee said seizing opportunities was “Mission Possible,” with the 33 deals reflecting the fact that Hong Kong was being given “exceptional attention.”
Underlining the achievement, Lam said the visit served to bolster the ties between Hong Kong and ASEAN. The number of agreements signed far exceeded expectations, which demonstrated exceptionally strong willingness among the three ASEAN countries to deepen collaboration and ties with the international business hub of Hong Kong, he added.
Summing up the tour, Yuen said her understanding was that the Chief Executive was clear about the importance of such outreach initiatives. “These trips should not be seen as symbolic but as missions of substance, allowing a wider network of connections with a cross-section of like-minded international industry heavyweights and political leaders.
“As we reach out to more overseas partners in our pursuit of economic growth, let us not forget that the goal is also to dispel misconceptions and tell the real stories of Hong Kong to the world, thus inspiring more confidence in potential investors. With the ASEAN mission, our Chief Executive has done exactly that.”
7 MOUs signed in Singapore:
- InvestHK and Blockchain Association Singapore (BAS)
- Hong Kong Science & Technology Group (HKSTP) and
- Global Entrepreneurship Network (GEN)
- HKTDC and Singapore Business Federation (SBF)
- CCB International (Holdings) Ltd and Mirxes Holding Company Limited
- HSBC and Keppel
- City University of Hong Kong and National University of Singapore (NUS)
- Xgate and Singapore Retailers Association (SRA)
15 MOUs and SPAs (Share Purchase Agreement) signed in Jakarta:
- Hong Kong Observatory and The Agency for Meteorology, Climatology, and Geophysics of the Republic of Indonesia (BMKG)
- HKEX and Indonesia Stock Exchange (IDX)
- [SPA] Value Partners Group and STAR Asset Management
- BOC International Holding Ltd and Tsingshan Industry, and BOC HK Jakarta Branch
- BOC International Holding Ltd and J&T Jitu Express, and BOC HK Jakarta Branch
- Chinese Asset Management Association of Hong Kong (HKCAMA) and Indonesia Asset Management Association
- CCB International (Holdings) Ltd and J&T Jitu Express
- Hong Kong Aerospace Technology Group and Bakrie & Brothers
- HKTDC and Indonesian Ministry of Trade
- HKTDC and Indonesian Ministry of Industry
- HKTDC and KADIN
- HSBC and Hutchison Ports Indonesia
- InvestHK and KADIN
- Media Asia Group Holdings Limited and MNC Media & Entertainment
- Templewater Limited and China International Marine Containers (Group) Ltd. (CIMC) and Eternal Tsingshan Group Ltd.
11 MOUs signed in Kuala Lumpur:
- MTR Corporation Limited and Mass Rapid Transit Corporation Sdn. Bhd. (MRT)
- Federation of Hong Kong Industries and Federation of Malaysian Manufacturers
- FWD Group Holdings Limited (FWD Group) and FWD Insurance Berhad (FWD Insurance)
- HKTDC and MATRADE
- HKTDC and NCCIM
- HSBC and Gobi Partners
- WeLab and HSBC
- City University of Hong Kong and Malaysia Digital Economy Corporation
- A&A (Digital business consulting) Limited and MyTOWN Shopping Centre
- Shangri-La International Hotel Management Pte Ltd and Far East Group
- CCB International (Holdings) Ltd and Affin Hwang Investment Bank Berhad