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Duty visit to Saudi Arabia and Bahrain

I attended the 6th Future Investment Initiative in Riyadh, Saudi Arabia and spoke in the forum's plenary session "The New Global Order: View from the State Room".

Last week, my colleagues and I visited Bahrain and Saudi Arabia, and participated in the Future Investment Initiative (FII) conference in Riyadh. This was my first visit to the Gulf region of the Middle East as Financial Secretary, and it was also my first overseas visit since the outbreak of the COVID-19 pandemic nearly three years ago. The trip was very fruitful. In addition to meeting with local government officials as well as representatives of sovereign wealth funds and enterprises, I also introduced Hong Kong’s distinctive advantages and promoted Hong Kong as a distinctive platform for bringing together capital and opportunities to political and business leaders there, told the good stories of Hong Kong, and established extensive connections.

The Middle East is rich in resources. People used to have the impression that economies in the region focused on trading natural resources commodities. However, as there have been changes to the international situation and the market, they are also actively seeking to change. They are deeply interested in different investment opportunities, and have set specific goals in driving their own economic diversification. For example, Vision 2030 put forward by Saudi Arabia seeks to reduce reliance on oil by opening up, promoting reforms, stepping up economic diversification, and attracting more private and foreign investment.

Meeting with the Minister of Investment of Saudi Arabia, Mr Khalid Al-Falih (right).

Many officials and business representatives whom we met acknowledged that our visit not only showed the importance we attach to the Middle East region, but it was also at a very suitable timing. With rapid changes to the geopolitical situation, many Middle East countries have gradually realised that it is necessary to diversify risks and channel investments into more different categories. The Mainland and Asia as a whole provide the needed opportunities for them. They generally agree that Hong Kong, as an international financial centre, provides an ideal platform for them to invest in the Mainland and develop in other Asian markets. Whenever I explained how the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) has brought together an international financial centre, an advanced innovation and technology hub and a high-end manufacturing base, and that it is a consumer market with a population of more than 80 million, our counterparts showed keen interest in the development potential of this urban economic agglomeration. They agreed that more in-depth exploration of investment and cooperation opportunities in the GBA is warranted.

However, they also raised a similar question: as they were not too familiar with the market conditions in the Mainland, Hong Kong and the GBA, they hoped to have reliable partners as intermediaries to enter our market in the most efficient way. This would not only reduce investment risk, but also help businesses to be built and to grow more quickly.

Having a luncheon meeting with the Minister of Finance and National Economy, Sheikh Salman bin Khalifa Al Khalifa (second right) in Brahain.

On the financial markets, our counterparts were keen to understand how Hong Kong, as the world's largest offshore Renminbi (RMB) business centre, would enable investors to make better and more diversified investments with the RMB they receive in trading activities. They also had a keen interest in the mutual market access arrangements between the Mainland and Hong Kong capital markets, especially as the two-way flow channel would not only let them invest in the Mainland stock market directly, but also allow companies listed in Hong Kong to attract Mainland and international capital. Moreover, they are also interested in the development of green finance in Hong Kong. As the top issuance location of green bonds in Asia, Hong Kong is very attractive to the Middle East region, which is now actively promoting green and sustainable development.

The 6th Edition FII of in Riyadh, Saudi Arabia’s capital, brought together over 6,000 leaders from across the globe, from the fields of politics, business, finance and investment, and sustainable development, to explore the new challenges brought by the changing global order. The line-up of the event reflected the growing power of the Middle East in the global political, business, and financial arenas. During the event, I was invited to be one of the speakers at a plenary titled “Investing in Humanity: Enabling a New Global Order”. I introduced Hong Kong’s advantages under "One Country, Two Systems", the high efficiency of our financial markets, future opportunities brought by the GBA, and the efforts made by the new-term Government in attracting businesses and talents, and facilitating international trade and investment. We also held several bilateral meetings throughout the three-day programme, thereby exchanging views with business representatives.

Meeting with the Chief Executive Officer of the Sovereign Wealth Fund of Bahrain, Mumtalakat, Mr Khalid Al Rumaihi (second left).

During the FII, many senior executives from international financial firms told me that they would be heading to Hong Kong shortly to attend the upcoming Global Financial Leaders' Investment Summit (“the Summit”). They were eargerly looking forward to the event, which would be held in Hong Kong for the first time and also the first physical large-scale financial conference in Hong Kong since the pandemic. The Summit will be an occasion which allows participants to, in another venue and setting as well as seeing from new perspectives, discuss issues on the marco economy and investment, as the world undergoes great changes. Such issues include how the global investment community would address and manage a complex set of risks and challenges, and harness the power of finance to contribute to the well-being of the global community.

As the global economy face severe challenges, we should be united and work together to find a new way out. However, some foreign politicians, eyeing narrow-minded political interests, have attempted to politicize the event and smear the regular exchanges in the financial sector. They have even tried to interfere with the event on an antagonistic mindset. Such a narrow vision and negative practice would not only harm others without bringing benefits, but would ultimately disrupt global financial developments.

The world urgently needs the emergence of a new order and a new development model. A long-term, huge trend will reshape the trajectory of world economic development and accelerate the shift of the global economic centre of gravity, as well as adjustments to the distribution of supply chains and market structure. In this profound transformation process, the world needs to take a forward-looking perspective and focus on the rising opportunities. The upcoming Summit provides an ideal platform for discussion of relevant issues.

It is unfortunate that I tested positive for COVID-19 under a rapid antigen test at the end of my trip to the Middle East, and I had to extend my stay in Riyadh. I thank friends and others for their best wishes. My symptoms have been gradually subsiding, and I am now in good condition. I would endeavor to return to Hong Kong as soon as possible upon fulfilling the health requirements. I hope to attend the Summit in person and meet the participating financial leaders. Even if I am unable to do so, I will certainly join the Summit through video.

October 30, 2022