By Tu Haiming

Chief Executive John Lee Ka-chiu’s six-day visit to three ASEAN countries——Laos, Cambodia and Vietnam——proved to be fruitful and promising in cementing 55 agreements and memorandums of cooperation, all of which centered on winning the solid support for Hong Kong’s accession to the Regional Comprehensive Economic Partnership （RCEP）, the main objective of the visit.

Lee wrapped up the outcome of the visit in five aspects; namely, building government-to-government ties; reaching a consensus on cooperation; consolidating and expanding business networks and promoting fresh business cooperation; joining hands in the Belt and Road Initiative; and moving further toward gaining RCEP membership.

The Association of Southeast Asian Nations （ASEAN） as a whole is the third-largest economy in Asia and the fifth-largest in the world, ranking as the second-largest trading partner of the Hong Kong Special Administrative Region. Trade volume between the two sides reached a whopping $144.6 billion last year, or 13 percent of the city’s foreign trade, which makes ASEAN a potential candidate to Hong Kong’s trade partner landscape. The third ASEAN visit during Lee’s tenure since he took office in 2022 indicates the huge and fast-growing potential for cooperation.

It is time for Hong Kong to give ASEAN its rightful place after decades of being an afterthought when the city focused mainly on the European and US markets. To effectively tap the ASEAN market, I believe the city should focus on leveraging its strengths to best serve the needs of ASEAN countries. In this regard, three promising aspects can be considered.

First, tourism. ASEAN countries have rich tourism resources, ranging from pure natural scenery to exotic ethnic heritage, ideal for cultural tourists. In addition to the diversified resources, the low price is another advantage.

The geographical proximity of ASEAN countries to Hong Kong, an international transportation hub, should be leveraged to attract domestic and international visitors.

The 144-hour visa-free entry policy allows foreign group visitors traveling from Hong Kong and Macao access to other cities in the Guangdong-Hong Kong-Macao Greater Bay Area. Group visitors from ASEAN countries, for example, can also travel via Hong Kong to other Chinese mainland destinations such as Hainan province, which allows foreign visitors a visa-free stay of up to six days. This will further increase the number of visitors to superconnector Hong Kong.

As an international metropolis, Hong Kong is well placed to promote tourism to ASEAN countries, especially Laos and Cambodia, which are little known for their rich tourism resources and low-cost travel experience. The city can explore the various tourism resources offered by ASEAN countries, harness its advantages in advertising campaigns, role of transit location positioning, and its financing capability to jointly develop tourism resources with ASEAN countries to expand the tourism market. This will help achieve win-win and realize mutual benefits for both sides.

Second, trade and commerce. As ASEAN countries are not developed uniformly, different strategies should be adopted in cooperation with the associated countries.

Labor costs are comparatively cheap in the less-developed countries, which will be a market niche for Hong Kong to exploit in the international market. Taking Cambodia as an example, its workers’ salaries and housing rents are only one-tenth and one-sixth of Hong Kong’s respectively, making its production highly competitive in terms of price. Hong Kong can play its role in branding Cambodian products for the global market. Hong Kong companies should find it highly lucrative to reach out to ASEAN countries for low-cost products and then market them globally.

For better-developed countries like Thailand, entrepreneurs will find it beneficial to register a company there for tax reduction purposes. There is also a mutual legal assistance agreement between Hong Kong and Thailand, which provides convenient legal protection for businesses.

Third, finance. Currently, there are approximately 100 companies in ASEAN seeking listing on the Hong Kong Stock Exchange. It is reported that more are in the IPO pipeline.

While ASEAN’s rapid economic growth has generated strong demand for financing, ASEAN countries have become China’s largest trading partner after the two sides expanded cooperation. Here, Hong Kong can serve as a two-way financing platform for ASEAN projects on the mainland and Chinese projects in ASEAN, both of which have strong financing needs. Attracting more ASEAN companies to list in Hong Kong will be the highlight of Hong Kong-ASEAN economic cooperation.

Family wealth management is another area of cooperation that Hong Kong can tap into. Since its establishment in June 2021 till March 2024, the FamilyOfficeHK team, an independent office set up under InvestHK to promote the family-office businesses in the city, is reported to have received more than 650 inquiries about setting up family offices in Hong Kong, mainly from the mainland, ASEAN countries, the Middle East, Europe, and the Americas.

In his reply to a lawmaker at the Legislative Council meeting on April 24, Secretary for Financial Services and the Treasury Christopher Hui Ching-yu said 136 family offices were either assisted by the Family Office HK team in setting up or expanding their business in Hong Kong, or have indicated their intention to set up or expand their business in the city. Among them, 82 are from the mainland, 27 are from Europe, 13 are from the Asia-Pacific region, and nine are from the Middle East. Given the more than 650 inquiries, the small figure suggests enormous upward potential.

ASEAN firms preferred to be listed in Singapore in the past, but with the rapid increase in trade between the mainland and ASEAN, choosing to list in Hong Kong is more conducive to developing their business on the mainland. Family wealth management is a new and fast-growing service demanded by ASEAN countries. Hong Kong and Singapore each has their own allure to family offices, and Hong Kong is encouraged to capitalize on the opportunity to lead their way to the city.

Speaking at the opening ceremony of the National Security Education Day this year, Xia Baolong, director of the Hong Kong and Macao Work Office of the Communist Party of China Central Committee, warned that Hong Kong’s traditional advantages would not remain static, and maintaining the city’s “golden brand” requires constant effort. Its unique status and advantages, he said, were created in the course of its development, and should be reinforced and enhanced along the path.

The author is vice-chairman of the Committee on Liaison with Hong Kong, Macao, Taiwan and Overseas Chinese of the National Committee of the Chinese People’s Political Consultative Conference, and chairman of the Hong Kong New Era Development Thinktank.

The views do not necessarily reflect those of Bauhinia Magazine.

Source: China Daily