A ferry crosses Victoria Harbour in Hong Kong on Nov 13, 2021. (BERTHA WANG / AFP)
Most companies in the Guangdong-Hong Kong-Macao Greater Bay Area exploring further expansion in the 10-member Association of Southeast Asian Nations bloc, attach high value to financial services in the Hong Kong Special Administrative Region and frequently use the services.
A survey report, Trade and Investment between GBA and ASEAN and the roles of Hong Kong, by the Hong Kong Trade Development Council and leading ASEAN banking group UOB, found that Hong Kong’s services including banking and finance, legal, dispute resolution, intellectual property, meetings, incentives, conferencing and exhibition services, logistics and supply chain management, sales and marketing, as well as research and development, are highly valued by GBA companies.
Since June 2019, Hong Kong’s merchandise trade with the Association of Southeast Asian Nations has grown to exceed HK$1 trillion ($128.2 billion) as of 2020. Trade in services was worth HK$137 billion as of 2018
Referring to financial services, HKTDC Research Director Nicholas Kwan, said Monday that fundraising by companies going public via the Hong Kong Stock Exchange “is a very important part of it.”.
“On the other hand, companies are looking for generic banking services, like forex hedging and remittances,” he said. “To some extent, they need treasury services. For Greater Bay Area companies with headquarters in Hong Kong and in other parts of the GBA, they face issues like how do they make the best use of funding, which is mostly in RMB, in ASEAN countries. Such remittances as well as hedging requirements are probably the most important part of financial services.”
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The report shows that about 60 percent of the 657 GBA-based companies surveyed are eager to extend their footprint into ASEAN over the next three years.
UOB Managing Director and CEO for Greater China, Christine Ip, said the bank has “a very focused strategy” and “we will be one of the biggest ASEAN banks in Southeast Asia.” UOB, has 22 branches in the Chinese mainland serving the wholesale banking needs of corporates. Wholesale banking, retail, and global markets are UOB’s three core businesses, and the bank is positioned to support increasing economic flows and greater connectivity between ASEAN and Greater China.
“We have a very focused strategy on the Chinese mainland, Hong Kong and Taiwan, helping the corporates as they venture abroad. We also want ASEAN players to come to Hong Kong and China. Through the whole system and through the supply chain we will be able to connect the dots for all our customers.” In the past decade, the bank’s foreign direct investment advisory unit has supported cross-border investments of 3,500 companies.
The survey findings were released weeks ahead of the Regional Comprehensive Economic Partnership coming into effect, alongside the Hong Kong-ASEAN free trade pact that came into effect in February.
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Economist Kwan said that while it is too soon to assess the impact of the FTA, “the cross-effect would be interesting to understand”.
“On top of the FTA, we are now approaching the RCEP.”
Kwan said he was keen to evaluate “to what extent the FTA can help Hong Kong leverage ourselves into RCEP. We will do more research on that”.
Since June 2019, Hong Kong’s merchandise trade with ASEAN has grown to exceed HK$1 trillion ($128.2 billion) as of 2020. Trade in services was worth HK$137 billion as of 2018.
