Hong Kong: A Key Player in Belt and Road Initiative, Particularly in Southeast Asia
Shenzhen, China – Hong Kong, a strategic gateway connecting Chinawith the world, is poised to play a crucial role in the Belt and Road Initiative (BRI), particularly in Southeast Asia. This is according to a recent reportby the China Development Institute (CDI), a national high-end think tank based in Shenzhen.
The report, titled Commentary on the 20thAnniversary of Hong Kong’s Return: Southeast Asia is a Key Area for Hong Kong’s Participation in the Belt and Road Initiative, highlights the unique advantages Hong Kong possesses in facilitating the BRI’s 21st Century Maritime Silk Roadinitiative, which primarily targets Southeast Asia.
Hong Kong is a vital hub for shipping routes connecting the Far East, East Asia, Southeast Asia, Europe, and the Mediterranean, the report states. It is a key maritime gateway for Asia andthe world, connecting China with Southeast Asian countries and serving as a crucial gateway for economic and trade cooperation between mainland China and Southeast Asia.
Hong Kong’s Strategic Advantages
The report emphasizes Hong Kong’s strong historical and contemporary ties with Southeast Asia, evident in its significant investment and trade relations with the region.In 2013, Singapore was among the top 10 recipients of Hong Kong’s outward foreign direct investment (OFDI). Other Southeast Asian countries also remain key destinations for Hong Kong’s investment, particularly in sectors like commercial services, real estate, finance, manufacturing, and insurance.
Furthermore,Southeast Asia holds a prominent position in Hong Kong’s external trade. In 2016, four Southeast Asian countries were among the top 10 destinations for Hong Kong’s external trade, accounting for over 10% of its total trade volume. Notably, Hong Kong’s exports to ASEAN (Association of SoutheastAsian Nations) grew by 8.6% in 2016, demonstrating the strong growth trajectory of trade between Hong Kong and Southeast Asia.
The report also highlights the role of Hong Kong as a crucial transshipment hub for trade between mainland China and Southeast Asia. Currently, 10%of the trade between mainland China and Southeast Asia is transacted through Hong Kong, and this proportion is expected to increase with the BRI’s implementation.
Leveraging Hong Kong’s Strengths
Hong Kong’s strengths in international finance, trade, shipping, professional services, and international talent make it an idealpartner for Southeast Asian countries in BRI projects.
- Financial Hub: As a leading international financial center and a rapidly developing offshore RMB center, Hong Kong can provide financing services for infrastructure development, industrial park construction, and investment projects in Southeast Asia.
- Trade and Logistics: Hong Kong’s status as a majorinternational trade and shipping hub, with the world’s busiest container port and a well-developed international trade network, will play a crucial role in facilitating trade flows along the BRI routes.
- Professional Services: Hong Kong’s expertise in legal and international arbitration services, recognized globally, will help mitigate risks and facilitatethe implementation of BRI projects in Southeast Asia.
- International Talent: Hong Kong’s diverse and highly skilled workforce, proficient in multiple languages and possessing expertise in investment management, will contribute significantly to BRI projects in Southeast Asia.
Focus Areas for Collaboration
The report identifies four key areas where Hong Kong candeepen its collaboration with Southeast Asian countries:
- Financial Facilitation: Hong Kong should strive to attract investment institutions like the Asian Infrastructure Investment Bank (AIIB) and the Silk Road Fund to establish branches in Hong Kong, facilitating financing for BRI projects.
- Professional Services Partnership: Hong Kong should collaborate withmainland Chinese companies, leveraging its expertise in professional services to jointly go global and support BRI projects in Southeast Asia.
- Free Trade Zone Network: Hong Kong should actively participate in the Regional Comprehensive Economic Partnership (RCEP) and play a key role in expanding the free trade zone network between China and Southeast Asia.
*People-to-People Exchange: Hong Kong should strengthen its people-to-people exchanges with Southeast Asian countries, fostering cultural understanding and promoting the BRI’s connectivity of hearts and minds.
Conclusion
The report concludes that Hong Kong is strategically positioned to play a pivotal role in the BRI, particularly in SoutheastAsia. By leveraging its unique advantages in finance, trade, logistics, professional services, and international talent, Hong Kong can contribute significantly to the success of the BRI, fostering economic growth and strengthening regional cooperation.
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