Hong Kong has a greater role to play in the fast-growing China-Southeast Asia trade relationships, as it can leverage its financial and service expertise to support the economic upgrade efforts in the burgeoning region, the Hong Kong Trade Development Council said on Tuesday.

Experts from the official businesses advisory body underscored Hong Kong’s strategic position as a regional connector while speaking at a news conference on the business potential of Vietnam, Laos, and Cambodia — nations that Chief Executive John Lee Ka-chiu will visit later this month.

Irina Fan Yuen-yee, the council’s director of research, said that in 2022, two-thirds of China’s overseas direct investments to economies that are engaged in the Belt and Road Initiative flowed to the 10 member states of the Association of Southeast Asian Nations — including the three nations that Lee will visit. The share was around 50 percent in 2013.

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In 2023, the Chinese mainland and the Hong Kong Special Administrative Region were the second- and third-largest investors in ASEAN, accounting for 7.4 percent and 6.5 percent respectively of the bloc’s total overseas investment, Fan said. 

Hong Kong’s logistical prowess has established it as a key re-export hub in the China-ASEAN trade landscape, she added.

In addition, Hong Kong’s financial and professional services are well positioned to assist ASEAN countries in capital acquisition and economic transformation

The rapid expansion of Chinese investments in ASEAN has benefited Hong Kong businesses. A 2023 survey by the council showed that over 90 percent of enterprises from the Guangdong-Hong Kong-Macao Greater Bay Area relied on Hong Kong’s professional services to maintain or expand their presence in the ASEAN market. 

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Fan said that trade between China and ASEAN has evolved beyond goods transactions, and export of production capacity, such as building factories and production lines overseas, has become a major trend.

This requires these globally expanding enterprises to establish local business networks, mobilize funds, carry out marketing strategies, and obtain legal and accounting support — areas in which Hong Kong excels, she said.

In addition, Hong Kong’s financial and professional services are well positioned to assist ASEAN countries in capital acquisition and economic transformation. 

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For example, Laos, seeking full recovery from the COVID-19-induced recession, is open to investment to bolster its renewable energy capacity, with electricity being an important export for the landlocked country, said Henry Cheung, an economist of the council’s Asian and emerging markets research team.

Cambodia’s plan to expand its digital infrastructure, such as by adding a wider electronic payment network as part of its economic transition strategy, presents an opportunity for Hong Kong’s robust financial technologies to play a part, Cheung said.

Another Asia-focused economist, Edmund Lo, said Hong Kong’s green financial markets and international connectivity can help Vietnam, a longtime trading partner of the city, implement green infrastructure projects to meet its ambitious 2050 net-zero emissions goal.

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Vietnam’s booming e-commerce market and its consumers’ demand for imported products also spell business opportunities for Hong Kong enterprises, he added.

Additionally, because many ASEAN countries report an urgent need to improve transport infrastructure and efficiency, Hong Kong’s innovation and technology companies can find prospects in the field, such as smart logistics solutions.

Contact the writer at williamxu@chinadailyhk.com