Hong Kong’s Financial Secretary John Tsang Chun-wah led a business delegation to Kazakhstan last month to explore trade and economic cooperation opportunities with the Central Asian nation.
Hong Kong has traditionally over-relied on property, finance, retail and tourism, leaving the city’s economic structure not quite well-balanced.
Singapore, in contrast, is more diversified, as it is underpinned by sectors like finance, oil services, electronics and biotech.
Hong Kong had in the past missed an opportunity to build up its internet sector. The city now cannot afford to forego the opportunities stemming from China’s Belt and Road initiative.
Many projects along the Belt and Road routes would be infrastructure ventures such as rail lines, highways, oil & gas pipelines, power plants, etc. According to the Asian Development Bank, Belt and Road regions would require investment of about US$8 trillion by 2025.
The big infrastructure projects would lead to huge demand for professional services in fields such as design, operation, legal consultancy, etc.
Leveraging Hong Kong’s finance and legal expertise, the city’s professionals should be able to provide top-notch services in those areas.
China is keen to open up new markets to inject growth momentum for its export sector and counter the effects of emerging trade protectionism in Europe and the US.
Through the Belt and Road initiative, Beijing hopes to strengthen its trade relations with nations along the routes. As an entrepot, Hong Kong has the chance to benefit from China’s initiatives.
If the city seizes the opportunity well, it can diversify its market base and become less dependent on western countries.
Since Hong Kong people are not familiar with some Belt and Road countries, there are many things the government can do to help.
For starters, authorities should encourage local companies to cooperate with experienced mainland peers.
Hong Kong can also offer scholarships for youth from Belt and Road nations and local universities can provide tailor-made courses for the foreign students.
The students can then become part of a talent pool to facilitate future business cooperation with their countries.
To develop a deeper understanding of the potential trade partners, Hong Kong needs to step up related research.
This article appeared in the Hong Kong Economic Journal on Oct. 5.
Translation by Julie Zhu
[Chinese version 中文版]
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