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Capitalising on Hong Kong's Advantages to Seize New Opportunities

Last week, I had the pleasure of joining over 130 members of the "Hong Kong Team", comprising representatives from the Government, public organisations, business sectors and startups, to attend the "Think Business, Think Hong Kong" event and the "Hong Kong Dinner" organised by the Hong Kong Trade Development Council in Jakarta, Indonesia. During our visit, we called on various Indonesian officials to enhance exchanges and connections between Hong Kong and Indonesia, in finance, innovation, business, and more. We also promoted Hong Kong's role and strengths as a "super connector" and "super value-adder".

Overall, the Indonesian economy is vibrant, brimming with business opportunities and significant growth potential. The country is very welcoming to Hong Kong and Mainland enterprises. As ASEAN's largest economy, Indonesia has experienced rapid economic growth in recent years, averaging a remarkable 4.2% annual growth rate over the past decade. Its youthful population, as well as an expanding middle class and burgeoning consumer market, have made it a key destination for many foreign investors.

Attending and speaking at the "Think Business, Think Hong Kong" event organised by the Hong Kong Trade Development Council in Jakarta, Indonesia.

Under the strategic framework of "Golden Indonesia 2045," the country is actively advancing initiatives in infrastructure, digital economy and green transformation, while attracting more foreign investments to accelerate modernisation and promote leapfrogging economic development. It is clear that Indonesia will have a substantial demand for infrastructure investments and a strong need for innovative and green technologies.

Hong Kong and Indonesia enjoy a close economic and trade relationship. In fact, Hong Kong is the second largest source of foreign investment in Indonesia. Statistics indicate that from 2018 to 2022, over 8,400 investment projects originated from Hong Kong, amounting to a total investment of approximately US$18.5 billion. Many entrepreneurs and investors from the Mainland and beyond are utilising Hong Kong as a gateway to invest in Indonesia.

During this visit, through speeches, meetings and networking activities, we took the opportunity to explain how Hong Kong can support Indonesia’s development and create value across various key sectors. As an international financial centre, Hong Kong offers a full range of fund raising options. Through Hong Kong’s mutual market access arrangements with the Mainland, Indonesian enterprises can list on the Hong Kong Stock Exchange and access both Mainland and international capital. For infrastructure and green projects, there are numerous fundraising avenues available, including issuing bonds in various currencies, establishing real estate investment trusts and securitising projects. In light of the disaster risks posed by climate change, they can also consider issuing catastrophe bonds in Hong Kong to transfer part of the risks to interested international investors.

Meeting with Dr Sri MulyaniIndrawati, Minister of Finance.

Meeting with Dr AirlanggaHartarto, Coordinating Minister for Economic Affairs.

Meeting with the Minister of Investment and Downstream Industry of Indonesia, Mr Rosan Perkasa Roeslani.

Innovation and technology are also an area in which they are highly interested. Hong Kong has made impressive strides in recent years in fields such as artificial intelligence, green technology, construction technology and digital assets, with many local startups successfully expanding to overseas markets with their innovative solutions.

During our trip to Indonesia, over 20 startups from Cyberport and the Hong Kong Science and Technology Parks (HKSTP) participated, showcasing their innovative products and services to the local market. The innovative technologies, experiences, and development visions of these companies attracted many potential business partners eager to explore collaborative projects.

Among them, 10 startups from the HKSTP engaged in over 50 business matching sessions in Indonesia, with more than 30 projects entering the contract negotiation stage, representing a potential business volume exceeding US$5 million.

Furthermore, 14 startups from Cyberport also engaged in exchanges with local government and business leaders, with significant interest from local developers in applying Hong Kong's smart city solutions to their projects. Notably, 3 startups in the fields of artificial intelligence and Web 3.0 signed memoranda of understanding with Indonesian companies, with a view to implementing collaborative projects there within this year.

Exchanging views with the startups from HKSTP in the "Think Business, Think Hong Kong" event in Jakarta, Indonesia.

Beyond finance and innovation and technology, Hong Kong serves as a crucial bridge connecting our country with the rest of the world, and plays an essential role in promoting trade and bilateral investments. In recent years, our country’s relationship with Indonesia has deepened, with both sides advancing a comprehensive strategic partnership and a community with a shared future. Many Mainland enterprises are increasing their investments in Indonesia. They recognise the country as a pivotal link in their global industrial and supply chain strategies, while also supporting the country’s industry diversification and technological enhancements, thereby creating more job opportunities there. During our discussions with executives of local Chinese enterprises, they acknowledged that when Mainland companies "go global", Hong Kong can provide robust support in areas such as supply chain management, trade financing, corporate treasury management, professional consulting, and talent development. With the advantages under the "one country, two systems", Hong Kong can also serve as a base for Indonesian companies looking to expand into the Mainland and North Asian markets.

In terms of cultural and educational exchanges, both parties are making significant strides. From January to November last year, the number of visitors from Indonesia to Hong Kong surged by nearly 50%, while visitors from other Southeast Asian countries like the Philippines, Malaysia, and Vietnam also increased by around 60%. Deeper people-to-people bonds will foster greater economic and trade collaboration, and help showcase and exemplify Hong Kong's soft power. Indeed, during this visit, both sides expressed a desire for more Indonesian students to study in Hong Kong, and to promote more youth exchange programmes, thereby reinforcing the future economic, business, cultural exchanges and mutual understanding between our two economies.

Meeting with H.E. Dr Kao Kim Hourn, Secretary-General of ASEAN.

Meeting with Ambassador Wang Lu Tong, Chinese Ambassador to Indonesia.

Meeting with Ambassador HouYan Qi, Chinese Ambassador to ASEAN.

Meeting with members from China Chamber of Commerce in Indonesia and exchange views on issues of mutual concern.

Besides going on duty visits outside Hong Kong, we also continue to invite guests to come to the city, showcasing Hong Kong's new advantages and potential. The first major event will be the "18th Asian Financial Forum" opening this week, where some 3,600 financial, political and business leaders from about 50 countries and regions will gather. This year, the Forum will introduce a new session, namely the "Gulf Cooperation Council Chapter", to explore new ways to deepen financial cooperation between Hong Kong and the Middle East, as well as promoting more bilateral capital flows.

Emerging markets in the Middle East, ASEAN and other regions in the "Global South" are currently experiencing rapid economic growth. Many governments are eager to accelerate economic development and invest heavily in infrastructure. These all present new development opportunities for Hong Kong’s businesses, and we must seize them.

By effectively leveraging our unique role to connect with both the Mainland and the world, we can support the development of enterprises in emerging markets and promote faster and higher-level regional economic growth. In doing so, Hong Kong stands to benefit and achieve sustained and better development.

January 12, 2025