Hong Kong is mainland China’s bridgehead for foreign economic co‑operation. (shutterstock.com)

The Third Plenary Session of the CPC Central Committee highlighted efforts to optimise the co‑ordination for opening up on regional basis and improve the mechanisms for high‑quality co‑operation under the Belt and Road Initiative (BRI). The government will also continue to encourage domestic enterprises to “go global”. In Hong Kong, the Chief Executive’s 2024 Policy Address called for further efforts to attract mainland enterprises to set up international or regional headquarters in the city and assist them in “going out” through Hong Kong’s platforms. In fact, Hong Kong has always been mainland China’s bridgehead for foreign economic co‑operation as well as mainland enterprises’ preferred platform for “going global”.

Following a similar study in 2023, HKTDC Research conducted a new questionnaire survey in the Yangtze River Delta (YRD) in August 2024 to understand the operational challenges facing mainland enterprises in the current fast‑changing economic environment, their direction for “going out” and the services support they need. The survey shows that 90.7% of respondents planned to “go global” to expand international business in the next one‑to‑three years, reflecting the direction most enterprises are still actively taking to explore international business opportunities despite numerous challenges. Moreover:

• 93.9% of respondents said they are facing challenges in market demand, shipping/geopolitics and financing. Compared with the survey findings of 83.9% in 2023, mainland enterprises are obviously encountering more difficulties now.
• As many as 95.2% of “go global” mainland enterprises focus on the BRI, the Regional Comprehensive Economic Partnership (RCEP) and other emerging markets, substantially more than the 2023 survey finding of 72.8%. Among them, 83.0% intended to explore business opportunities in RCEP countries.
• 77.2% said they would go to Hong Kong to find the services support they need for international business, including marketing/product design/e-commerce, financing and risk management, and professional services, suggesting that the city is mainland enterprises’ preferred platform for “going out”.

Actively “Going Out” for Investment and Development

The Third Plenary Session of the 20th Central Committee of the Communist Party of China (Third Plenum) held from 15‑18 July 2024 called for efforts to steadily expand institutional opening‑up, deepen foreign trade structural reform and regulatory regime reform for foreign investment and outward investment, and optimise the co‑ordination for opening up on regional basis, including improving the mechanisms for high‑quality co‑operation under the Belt and Road Initiative. [1] On the one hand, the new edition of the negative list for foreign investment access recently issued by the central government [2], which completely removes all restrictions on such investment access in the manufacturing sector, is further attracting foreign investment into China. On the other hand, the central government also continues to support mainland enterprises in “going global” to co‑operate with overseas partners in arranging international business and expanding overseas markets.

The 14th Five-Year Plan [3] specifically supports efforts of Hong Kong and Macao to better integrate into the overall development of the country and supports their participation in, and contribution to, the country’s comprehensive opening‑up and development of a modern economic system as well as fostering the two cities as functional platforms for the BRI. As an effective services platform for international trade and business, Hong Kong is a “super connector” and “super value‑adder” between mainland enterprises and the rest of the world and is assisting these enterprises in “going out” to explore new markets and opportunities, including the BRI and other emerging markets. In the Policy Address delivered on 16 October 2024, the Chief Executive of the HKSAR also proposed to step up efforts to attract mainland enterprises to set up international or regional headquarters in Hong Kong, providing one‑stop, diversified professional advisory services for mainland enterprises in the city looking to “go global”.

In fact, companies around the world are taking a fresh look at their international expansion strategies and many hope to resume their pace of foreign investment to further boost their businesses. According to the 2024 annual report released by the United Nations Conference on Trade and Development (UNCTAD) [4], although global foreign direct investment (FDI) decreased by 2% to US$1.3 trillion in 2023, the decline was substantially smaller than the 12% in 2022, suggesting global businesses are actively exploring strategies to resume foreign investment.

Meanwhile, the statistical bulletin released by the Ministry of Commerce in September 2024 [5] showed that mainland China’s outward direct investment flow reached US$177.29 billion in 2023, an increase of 8.7% on the previous year, ranking third in the world after the US (US$404.32 billion) and Japan (US$184.02 billion) and maintaining a top three position for 12 consecutive years. These figures suggest that mainland enterprises are “going out” to reconstruct their international business development pattern after the pandemic.

According to the Ministry of Commerce [6], from January to August 2024, China’s non‑financial outward direct investment reached US$94.09 billion, up 12.4% year on year. Of this, the non‑financial direct investment in BRI countries totalled US$20.51 billion, up 2.2% year on year.

It is worth noting that Hong Kong is the primary destination of mainland enterprises’ outward direct investment. In 2023, mainland China’s FDI outflow to Hong Kong reached US$108.77 billion, up 11.5%, accounting for 61.4% of mainland China’s total FDI outflow. Based on the cumulative FDI outflow at the end of 2023, China’s FDI stock in Hong Kong amounted to US$1,752.5 billion, up 10.3% year on year, accounting for 59.3% of China’s total outward FDI stock.

In 2023, mainland enterprises’ FDI in BRI countries reached US$40.71 billion (up 31.5% year on year), accounting for 23.0% of China’s FDI outflows. Their investment in the 10 ASEAN countries reached US$25.12 billion (up 34.7% year on year), accounting for 14.2% of China’s FDI outflows. These figures suggested that mainland enterprises are attaching greater importance to BRI countries, including ASEAN partners, when looking to “go global”, not just developed countries.

Although Hong Kong is mainland China’s largest destination of outward direct investment, the majority of companies concerned are mainly using Hong Kong’s platform and services, including legal, advisory, accounting and other diversified professional services to aid their overseas expansion. In addition to a strategic location and matured market environment, the free flow of capital in Hong Kong also facilitates foreign exchange and cross‑border fund movements. This further attracts mainland companies to establish a presence in Hong Kong to handle their business within the city and in overseas markets. As a functional platform, Hong Kong can assist mainland companies in formulating a more comprehensive strategy for their global business development to tap into the vast opportunities in BRI countries and other overseas markets.

YRD Companies Going Out: 2024 Survey Results

HKTDC Research conducted a questionnaire survey in Nanjing in August 2024 to gauge the “go global” intentions of companies in the YRD [7]. The survey received 457 responses. Deducting those from government departments, chambers of commerce and non‑mainland companies, 343 were valid responses completed by mainland companies mainly operating in the YRD. This was a new survey since the questionnaire conducted by HKTDC Research on the mainland, primarily in the Greater Bay Area, in mid‑2023 [8]. The 2024 survey results are as follows:

• Facing more business challenges
• 93.9% of the surveyed companies said they are facing all kinds of challenges, mainly problems arising from market demand/economic factors (44.4%), international shipping/geopolitical challenges (40.1%) and financing and risks (37.0%). Compared with the survey findings of 83.9% in 2023, mainland enterprises are obviously facing more challenges now.

• Continuing to “go out” to explore opportunities
• Similar to the survey last year, 90.7% of respondents said they planned to “go global” to expand international business in the next 1-3 years, reflecting that as new opportunities for foreign economic co-operation and new markets arise, many mainland companies are re-examining their development strategies, actively planning their international business development and continuing to “go global” for overseas market investments.

• Attaching greater importance to the development of overseas markets
• Among those mainland companies that planned to expand overseas business, 71.8% chose to focus on marketing and sales, almost three times higher than that of other strategies (just 26.9% chose marketing and sales in 2023), suggesting they are attaching greater importance to the development of overseas markets. Other areas of focus include setting up factories (27.5%), overseas sourcing (20.6%) and logistics and transportation (11.1%).

• Actively exploring BRI-related opportunities
• When asked about their target markets for “going global”, as many as 95.2% of respondents said they will focus on tapping business opportunities in BRI, RCEP and other emerging markets (just 72.8% in 2023). In particular, 83.0% said they intend to go to RCEP countries, while close to 40% hope to develop overseas business in other BRI and emerging markets, and just 30.6% aim to go to advanced countries (as many as 65.1% in 2023). This shows that mainland companies are now focusing more on BRI- and RCEP-related opportunities.

• Hong Kong: Mainland enterprises’ preferred platform for “going out”
• Surveyed mainland enterprises with plans to “go global” said Hong Kong is mainland enterprises’ preferred services platform for expanding overseas. Some 77.2% of them see the city as their preferred services platform for developing various types of businesses overseas as opposed to 62.1% in 2023. Although this survey mainly focused on YRD enterprises, which are geographically quite a distance from Hong Kong, the survey findings show that they also hope to choose Hong Kong’s services to help them tap business opportunities worldwide.

• Needing diversified services support
• Mainland enterprises need a wide range of professional services to develop international business. As many as 87.5% of surveyed enterprises said they are seeking services on marketing, product design and e-commerce. The reason is that most “go global” enterprises mainly focus on marketing and sales (see previous paragraphs for details). Other services needs include financing and risk management (29.6%), professional services (26.7%) and product standards, ESG and supply chain management (17.4%).

[For more details on the results of the 2023 survey, please refer to Hong Kong: The Premier Platform for Mainland Companies to Expand into the BRI and RCEP Markets]

Appendix:

[1] Source: “Communique of the Third Plenary Session of the 20th CPC Central Committee”

[2] For more details, please refer to: 2024 Negative List for Foreign Investment Access to Take Effect in November

[3] Source: “Outline of the 14th Five‑Year Plan for National Economic and Social Development and Long‑Range Objectives Through the Year 2035”

[4] Source: “2024 World Investment Report” of the United Nations Conference on Trade and Development (UNCTAD)

[5] Source: “Statistical Bulletin of China’s Outward Foreign Direct Investment 2023” of the Ministry of Commerce

[6] Source: Ministry of Commerce

[7] The HKTDC Research questionnaire survey was conducted on the sidelines of the SmartHK Suzhou‑Hong Kong High‑Quality Development Co‑operation Conference held by the HKTDC in Nanjing in August 2024.

[8] HKTDC Research conducted a questionnaire survey in the Greater Bay Area and the Yangtze River Delta region in 2023 to learn about mainland enterprises’ “go global” strategies. For more details, please refer to: Hong Kong: The Premier Platform for Mainland Companies to Expand into the BRI and RCEP Markets

Original article published in https://research.hktdc.com

Experts look to new trade routes and digitalisation to support supply chain transformation

Supply chain disruptions and technology integration were the hot topics at the recently concluded Asian Logistics, Maritime and Aviation Conference in Hong Kong with attendees concluding that businesses must be agile and resilient in their response to climate change, geopolitical tensions and other major issues facing the industry.

Conference attendees noted that supply chain disruption has exposed the vulnerabilities associated with concentrated distribution hubs, and that to build more resilient networks, businesses are exploring alternative trade routes.

"I think the government has to develop new trade links such as how the Hong Kong SAR government is working very closely with the Belt and Road countries and regions,” said Hong Kong Air Cargo Terminals Chief Executive Wilson Kwong.

Despite the time and effort required to set up new routes, nevertheless, the logistician is confident that Hong Kong’s status as an international aviation hub will ensure that it is best placed to take advantage of improved connectivity to global markets.

“With the commencement of the three-runway system, the cargo capacity of the Hong Kong International Airport will be raised to 10 million tonnes per annum in the next decade,” he disclosed.

“Working with a government that facilitates business, a business-friendly Airport Authority, and a very engaging and cooperative community, leads me to be very positive about the future."

Across more than 20 conference sessions, over 2,200 participants from over 30 countries and regions discussed the latest insights on major issues facing the industry.

Industry players noted that in today's rapidly changing global landscape, the dynamics of supply chains are undergoing a substantial transformation.

While speakers identified innovation and digitalisation as the key competencies for logistics business to successfully deal with external change, attendees also acknowledged the pace of technological change is unprecedented.

“Compared to the other industrial revolutions of our past, in this digital revolution the difference is that it's an extremely fast-moving technology and the windows of opportunity are open for a very short period. If you don’t capture it, then you lose something,” observed Shamika N. Sirimanne, Director, Division on Technology and Logistics, UN Trade & Development.

“It's a concern with this new technology. It's a different technology than what you have experienced.”

The annual conference brought together leading logistics industry experts, new energy and digital innovators, and sustainability and strategy leads from major corporations to examine how global trade trends are impacting key issues affecting supply chain management. These include supply chain diversification, sustainability and green energy, and the benefits and challenges offered by AI and new tech.

Apart from talks, this year’s event also featured an exhibition of close to 90 industry service providers from around the world, including freight forwarding, logtech, maritime, port and supply chain management services and more.

Over 300 business-matching sessions were held during the conference to help connect shippers with service providers and to facilitate industry-wide collaboration.

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HKTDC helps businesses connect with Thai officials and discover market opportunities

Thailand has emerged as one of the most favoured destinations for Hong Kong exporters seeking to expand their markets.

Thailand offers an attractive business environment based on its large youth population, a rapidly growing middle class, advances in information technology and increasingly developed infrastructure.

Two local SMEs discovered these advantages during a recent visit to the Thai Consulate General in Hong Kong, organised by the HKTDC’s Transformation Sandbox (T-box) business support programme.

Baide Juye Group produces cosmetics and beauty products and intends to invest HK$10 million (US$1.3 million) to set up a production line in Thailand.

“We became a T-box member last year and took part in a T-box visit to the Indian Consulate in Hong Kong to learn more about the Indian market,” said Group President Mr Huang Shao-ju.

“This year's visit to the Thai Consulate-General allowed us to learn more about the requirements for setting up a cosmetics factory in Thailand, including how to obtain a licence from the Department of Business Development and the process of applying for a Foreign Business Licence.”

Andy Cheung, Director of garment manufacturer Ludwick Ltd, said that they had attempted to enter the Thailand before the pandemic, but lacked understanding of the local market. “We currently export our clothing products to Singapore, Malaysia, the Middle East and other places. Thai clothing is light and thin, which is our ideal sales market. This visit has enabled us to meet Thai representatives and learn about the details of entering the Thai market.”

With a population of more than 66 million, Thailand’s GDP exceeded US$500 billion last year, giving it a per capita GDP of US$7,300. The per capita figure increased 2% compared to 2022, reflecting the continued rise in local incomes, which will help drive consumption and overall economic development.

According to Consul General Chaturont Chaiyakam, under the Thailand 4.0 strategy, the country's manufacturing sector is moving up the value chain and leveraging the power of innovation and technology to transform the economy and improve livelihoods.

A priority development is the Eastern Economic Corridor, which will focus on smart electronics, new-generation automobiles, digital services, high-end medical and healthcare tourism, biotech and future food products.

On the trade front, Thailand encourages free trade and continues to launch incentives to strengthen its position as a preferred investment destination. These include a range of business tax exemptions and discounts for foreign investment projects.

Trade between Hong Kong and Thailand is flourishing. From January to July this year, total bilateral trade exceeded US$9.2 billion, representing an increase of 23% over the same period last year.

While the value of goods imported into Hong Kong (US$6.5 billion) exceeds those in the other direction (US$2.6 billion), exports from Hong Kong to Thailand are growing strongly, with a 74% increase in the first half of 2024 compared to a 10% increase in the value of imports.

Free of charge, T-box is open to all companies registered in Hong Kong and provides participants with a tailored package, including advice, workshops, market insights and networking opportunities. In the past four years, over 4,300 SMEs have participated in the three-month programme.

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AFC Capital Partners eyes new sources of capital in Hong Kong

Africa stands on the brink of an economic transformation, thanks to a young population and an abundant supply of the natural resources and critical minerals that the world needs to decarbonise.

Elie Aloko, Vice President, Business Development at AFC Capital Partners (ACP), is engaging investors around the world – from Asia, in particular – to turn this promise into reality. 

ACP is the asset management arm of Africa Finance Corporation (AFC), an investment-grade multilateral finance organisation established in 2007 to accelerate industrial and infrastructure development in Africa.

To date, AFC has invested over US$13.5 billion across 36 African countries.

“We want to see more investment coming from Asia, to develop infrastructure and set up productive industries in Africa,” Mr Aloko said, speaking to Hong Kong Means Business at the recent Belt and Road Summit in Hong Kong.

“It’s no longer a story where Africa is a solution to the world by providing the natural resources, but how Africa can be part of that solution with globally competitive industries, creating value through local manufacturing and processing,” he added. 

ACP was established three years ago with a mandate to manage capital from African and overseas institutional investors – such as pension funds, insurance companies and sovereign wealth funds – to help diversify AFC’s sources of funding. 

These investors tend to be unaware of the opportunities that Africa offers.

“The Belt and Road Summit is a great platform to engage with professional institutional investors, and tell them what is happening in Africa,” Mr Aloko said.

“Whether we like it or not, Asian private and institutional capital has been remote from Africa. We don’t see the traction we want to see.”

Mr Aloko took to the stage at the Belt and Road Summit in Hong Kong to introduce the Infrastructure Climate Resilient Fund (ICRF), which aims to mobilise and deploy US$1 billion in Africa.

The world’s largest multilateral climate fund, the UN Green Climate Fund, has already committed US$240 million to the ICRF. 

“We see ourselves as an investors’ gateway to Africa,” Mr. Aloko said. “Our role in the coming years will be to mobilise large pools of capital from all over the world, including Asia, to invest in bankable infrastructure and industrial projects.”

In April, AFC published its first State of Africa’s Infrastructure Report, a new annual study that aims to quantify and prioritise infrastructure investment in Africa.

This report has already helped AFC map out strategic trade corridors and landmark projects that can fast-track sustainable growth in Africa.

Many investors from outside Africa have a high perceived risk on the continent, Mr Aloko said, pointing to a 2020 Moody’s study that showed lower default rates for infrastructure debt in Africa compared to other regions of the world, apart from the Middle East.

“There’s a strong bias in how Africa risk is perceived. We are not saying Africa is without risk, but the perception of risk is higher than what the actual numbers reveal.”

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Event will host 80+ key officials and business leaders.

This year’s Belt and Road Summit – a key platform for Hong Kong to promote the Belt and Road Initiative (BRI) – is bringing together more than 80 officials and business leaders to discuss collaboration opportunities in BRI markets.

The Summit, which is taking place on 11-12 September at the Hong Kong Convention and Exhibition Centre, is organised by the Hong Kong SAR Government and the Hong Kong Trade Development Council (HKTDC).

The Business Plenary on the first day – featuring Hong Kong, Mainland China and overseas business leaders – will look at Hong Kong’s role in facilitating cooperation as well as how companies are responding to the current global landscape.

The second day’s Business Plenary will explore opportunities in the Middle East and other Belt and Road markets, another key topic for this year’s event.

“The Belt and Road Summit will deepen international business cooperation and consolidate Hong Kong's position as the preferred business platform for the Belt and Road Initiative,” said Algernon Yau, Secretary for Commerce and Economic Development for the Hong Kong SAR Government.

As China looks for ways to drive more collaboration between Belt and Road markets, Hong Kong can play an even more active role as a global hub for investment, trade and innovation, Mr Yau explained.

Dr Peter K N Lam, Chairman of the HKTDC, highlighted the business support that HKTDC provides to foster closer cooperation, including business delegations and outreach activities to Belt and Road countries and regions.

The main theme for this year’s Summit is Building a Connected, Innovative and Green Belt and Road.

This year’s event is also introducing a Green Chapter, reflecting its focus on sustainability, with thematic sessions on green construction, innovation, finance and more.

Sessions that are part of the Finance Chapter will analyse opportunities to leverage Hong Kong's financial services, while the Youth Chapter will host young business leaders who will share their views on BRI opportunities.

This year’s Summit will also feature two new thematic sessions, on multi-dimensional connectivity and people-to-people exchanges.

Investment and business matching services remain an integral part of the Summit. Business matching meetings will run on-site on 11-12 September and online on 16-17 September.

Organisers expect to match more than 280 investment projects, with more than 800 one-to-one project matching meetings already lined up.

Project investment sessions will focus on four main areas: energy, natural resources and public utilities; innovation and technology; urban development; and transport and logistics infrastructure.

The Summit’s exhibition will gather over 100 exhibitors across three zones.

A Hong Kong Zone will showcase Hong Kong service providers. A Global Investment Zone will present large-scale investment projects and opportunities as well as major cultural and technological developments. An InnoTech Zone will feature cutting-edge innovations and solutions from exhibitors around the globe.

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Annual event attracted thousands for deal-making opportunities.
 

The 9^th Belt and Road Summit finished in Hong Kong last Friday, bringing to a close a packed two-day schedule of pitching, deal-making and networking events focused on developing business in the Belt and Road countries and regions.

Under the banner of “Building a Connected, Innovative and Green Belt and Road”, the summit was co-organised by the Government of the Hong Kong Special Administrative Region (HKSAR) and the Hong Kong Trade Development Council (HKTDC) as a key event celebrating the 75^th anniversary of the founding of the People’s Republic of China.

Over 6,000 business participants from more than 70 countries and regions attended the event.

Over 280 investment projects were matched at the event in sectors, including energy, public utilities, technology, urban development and transport and logistics infrastructure.

25 G2G and B2B memoranda of understanding were announced between government bodies and companies from Hong Kong, Mainland China, ASEAN - Indonesia, Malaysia, Vietnam - and the Middle East - Bahrain, Kuwait, the United Arab Emirates - Kazakhstan and more.

An agreement between the HKTDC and the Ministry of Commerce of Cambodia promises to facilitate trade missions and business matching between Cambodian and Hong Kong companies as well as promoting Hong Kong's advantages to Cambodian businesses.

Many projects announced at the summit have a focus on sustainability and technology solutions. Farmacy International from Hong Kong and FutureBright Society Enterprise from Australia announced a strategic joint venture that aims to drive sustainability in agricultural innovation and develop scalable green food networks across Australia and New Zealand.

State-Owned Enterprise of Indonesia - Perumda Varia Niaga Samarinda, LINKTA Technologies Holdings from Indonesia and Rainmaker Ventures Holdings from Hong Kong announced that they will cooperate to develop investment in smart chicken farms and agriculture in Nusantara, Indonesia’s new capital region.

More than 110 exhibitors promoted products and services at the summit including more than 50 trade and service enterprises from Mainland China, which highlighted innovative achievements in areas, such as greentech, culture and creativity, cross-border e-commerce, cloud services and big data.

Featured speakers at the summit included John Lee, Chief Executive of the HKSAR, Dr Peter K N Lam, Chairman of the HKTDC, Li Yongjie, Deputy China International Trade Representative of the Ministry of Commerce, Gou Ping, Vice Chairman of the State-owned Assets Supervision and Administration Commission, and Xiao Weiming, Deputy Secretary-General of the National Development and Reform Commission.

A keynote address was delivered by H.E. Nguyen Hoa Binh, Permanent Deputy Prime Minister of Vietnam.

Other speakers included Paul Chan, Financial Secretary of the HKSAR Government, Chen Liang, Chairman of the Board of Directors and Chairman of the Management Committee of China International Capital Corporation Limited, and Dilma Rousseff, President of New Development Bank.

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A series of agreements are bringing the two regional hubs closer together.

Trade and investment opportunities are continuing to open up between Bahrain and Hong Kong.

The Bahrain Chamber of Commerce and Industry and the Hong Kong Trade Development Council (HKTDC) signed an MoU at September’s Belt and Road Summit in Hong Kong, paving the way for business missions, conferences and training programs as well as new formalised channels for information exchange and collaboration. 

“Information flow is important, but human connectivity is even more important,” said Mohamed Abduljabbar Alkoheji, Second Vice-Chairman of the Bahrain Chamber, in an interview with Hong Kong Means Business.

“It is very important that both sides understand each other,” Mr Alkoheji added, emphasising the value of exchange programs for businesses, entrepreneurs and students to foster deeper connections.

Mr Alkoheji spoke alongside other heavyweight business leaders from Belt and Road countries and regions at a Business Plenary session at the Summit, exploring new opportunities created by the Belt and Road Initiative and the role Hong Kong can play.

The MoU follows two major bilateral deals that Bahrain and Hong Kong signed in March: a comprehensive avoidance of double taxation agreement (CDTA) and an Investment Promotion and Protection Agreement (IPPA). 

These pacts help create financial safeguards to encourage more direct investment and joint venture deals between the two regional hubs. 

As part of the IPPA deal, the Hong Kong SAR Government’s Dedicated Fund on Branding, Upgrading and Domestic Sales (BUD) fund – which provides financial assistance to local businesses expanding abroad – has extended its reach to include Bahrain.

The Bahrain Chamber also signed an MoU with the Hong Kong General Chamber of Commerce in April to help facilitate mutual growth.

Governments from Hong Kong and Bahrain have been engaging more closely  in recent years, Mr Alkoheji noted, in a bid to strengthen economic and trade ties.

“Both countries have agreed that we should be focusing more on business relations,” he said. “That's why we've been here. We came here three months ago, and we’re here today. That shows our commitment.”

Bahrain and Hong Kong share many similarities, Mr Alkoheji pointed out, as financial and logistics centres that can facilitate access to larger regional markets while serving as gateways connecting the East and West.

In May, Bahrain’s King Hamad bin Isa Al Khalifa and Chinese President Xi Jinping signed a comprehensive strategic partnership, pledging closer cooperation on a range of areas, including investment, transport, renewable energy and the digital economy.

Both Bahrain and Hong Kong are also positioning themselves as innovation centres as part of their development plans, especially as a fintech and start-up hub.

“In Bahrain, we are moving from red tape to the red carpet,” Mr Alkoheji said.

Tamkeen, a labour fund set up to support the growth of the private sector in Bahrain, has provided BD2 billion (US$5.3 billion) in direct and indirect support since it was set up in 2006, with a particular focus on SMEs.

The initiative is an integral part of the Bahrain Economic Vision 2030, a far-reaching program unveiled in 2008 to strengthen and diversify the Kingdom’s economy.

Bahrain’s GDP recorded 2.4% year-on-year growth in real terms during 2023, driven primarily by a 3.4% expansion in the non-oil sector, according to preliminary data released by the Information and eGovernment Authority, while the oil sector witnessed a 2.4% year-on-year decline, making the island nation one of the most diversified economies in the Gulf Cooperation Council trading bloc. 

The financial services sector maintained its position as the largest contributor to GDP in 2023, accounting for 17.8% of GDP.

The Bahrain Chamber, which has around 40,000 corporate members, is organised around 10 committees representing different commercial sectors, including technology, health, finance and logistics.

The MoUs that the Chamber has signed can make it easier to connect these sectors with their counterparts in Hong Kong.

“Structure is very important in any aspect of business,” Mr Alkoheji said. “Our communication needs to be very clear in terms of what it is required to do business in Hong Kong. The MoUs that we have signed corroborate the need to focus more on our relationship.”

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Finance company uses Hong Kong success to aid enterprises expand along Belt and Road.

The critical role of Hong Kong as a financing hub for Mainland Chinese companies keen to expand internationally emerged as a strong theme at this year’s Belt and Road Summit in Hong Kong.

At a symposium discussing trade in services, senior executives from mainland-invested technology and finance firms emphasised that Hong Kong’s international business environment acts as a springboard, from which mainland companies can expand into international markets.

Huatai International serves as one such example, an investment firm with roots in the mainland that has expanded globally using Hong Kong as a launchpad.

In his company’s efforts to internationalise and expand, Huatai CEO Dr Levin Wang rated Hong Kong’s financial markets as “absolutely critical” to developing Huatai’s ability to provide equity and debt financing to both Chinese enterprises going abroad and local enterprises in the domestic and overseas markets.

Last year, Huatai International's revenue exceeded HK$10 billion, making it the highest-earning mainland-funded brokerage in Hong Kong and second in the number of IPOs brought to market in Hong Kong.

In fact, a key message from the symposium is that mainland-funded finance companies now play a larger role in Hong Kong financial markets than ever before, accounting for about two-thirds of the market.

According to Dr Wang, Huatai’s success in Hong Kong has given it the confidence to pursue opportunities in markets as diversified as Saudi Arabia, Japan and Southeast Asia.

“As a mainland-based financial company, our role is to support mainland companies with financial services, as they expand abroad.”

“The experience we have gained in Hong Kong’s highly competitive and developed financial markets has given us great confidence in developing cross-border stocks, bonds, commodities and financial derivatives.”

“With the significant opportunities open to companies in the Belt and Road Initiative, Huatai will expand to provide services in the Belt and Road countries and regions.”

Observing that Chinese industrial parks have been set up in Saudi Arabia, Malaysia, Indonesia and other countries, Dr Wang predicts that as Chinese companies start to cluster, their demand for financial services will also increase, providing Huatai with opportunities to explore new markets.

Looking ahead, he suggested that Chinese securities firms should use Hong Kong's unique advantages to capture the continued growth of the middle class in Belt and Road markets and move their business steadily forward.

"We can use Hong Kong as the 'bridgehead' for our internationalisation and a hub to connect across markets.”

“This means first building a good bridge of investment products, second being a good 'tour guide' for overseas clients investing in China and, finally, helping more mainland enterprises to go global”.

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