Against a backdrop of global economic and trade shifts, the U.S.-China agreement on tariff reduction has provided relief to Hong Kong businesses. However, it is crucial for companies to adapt quickly and actively explore emerging markets to diversify investment risks.

The temporary suspension of U.S. tariff measures may temporarily cool the Sino-U.S. trade war, allowing the two nations to resume normal trade relations. During this reprieve, it is believed that U.S. importers could place new orders or process shipments that were previously delayed. 

Meanwhile, Hong Kong businesses can ramp up production to meet peak-season orders for back-to-school and holiday shopping, alleviating cash flow issues caused by earlier shipment disruptions from the tariff war. Since fund circulation takes time, I hope the Hong Kong Monetary Authority and the banking sector will offer flexibility and support to help businesses overcome these difficulties.

As uncertainties in global trade relations persist, market diversification has become imperative. Last month, Chief Executive John Lee led a delegation of representatives from the HKSAR Government, the Hong Kong business community, and Mainland businesses to Qatar and Kuwait. Leveraging its interconnectivity advantages, the city acted as a bridge between the Mainland and international markets to assist Mainland businesses in their global expansion.

Expanding into emerging markets is no easy feat. Besides seeking a stable, business-friendly environment and reliable partners, it is also essential to meet the specific demands of these new markets. Middle Eastern countries have focused on economic diversification in recent years, showing strong interest in finance, I&T and new energy. Urban planning and green infrastructure also present significant growth potential. 

As an international financial hub with mature stock and bond markets and rapid growth in green finance, Hong Kong is well-positioned to serve as a financing platform for green infrastructure. Furthermore, Hong Kong and the Mainland possess extensive experience in green construction, electric vehicles and new energy, providing ample opportunities for exchange and collaboration.

During the mission, the HKSAR Government signed MoUs and agreements with the Qatari and Kuwaiti governments and businesses, covering areas such as economic cooperation, finance and technology. As these agreements lay a solid foundation for future collaboration, Hong Kong businesses should seize this opportunity to pursue new growth and partnerships in these markets.

Jeffrey Lam
jeffrey@jeffreylam.hk