China’s active promotion of multilateralism through such measures as the Belt and Road Initiative, Guangdong-Hong Kong-Macao Greater Bay Area, and Regional Comprehensive Economic Partnership (RCEP) has contributed to its own economic transformation and given impetus to economic development in the Asia-Pacific region.
The 16th Asian Financial Forum held in January adopted a physical-digital hybrid format, following two online-only editions during the COVID-19 pandemic, themed Accelerating Transformation: Impact, Inclusion, and Innovation. Dr Levin Wang, Chief Executive Officer of Huatai Financial Holdings (Hong Kong) Limited, told the Panel Discussion on Asia-led Multilateralism that economic and trade exchanges in the Asia-Pacific had become increasingly close under multilateralism and Mainland China’s economic restructuring, and the Hong Kong Special Administrative Region’s international advantages had become a platform for regional enterprises to collaborate. He was bullish on Asia's development.
3 Ms drive economic integration
“If there are only three words to describe the Asian economies, they are ‘diversity’, ‘complementarity’, and ‘multilateralism’. Japan and Korea are already developed countries. Mainland China and India are economic giants. Vietnam and Thailand are rising stars of the Asian economy. The Asia-Pacific countries are complementing each other in terms of production, consumption, and trade, and are achieving economic growth through cooperation-based integration. Dr. Wang believed the APAC countries and region are on the verge of an all-win situation under multilateralism.”
The first M is Made in Asia, he said. People are familiar with Made in China, but as the economy moves up the value chain it is likely to invest in and empower neighbouring economies. RCEP’s low tariffs, easier market access and other benefits will help transform and bolster Asia’s supply chain and illuminate the Made in Asia brand globally.
The second M is Middle Class. The rise of the middle class in Asia is driving demand in the consumer market and supply chain integration. As Asia's largest economy, the mainland has benefited from capital liberalisation and market opening up, with a growing middle class opening up opportunities in the financial sector, bringing the third M – management of wealth, a blue-ocean market.
“According to some research, the number of millionaires in Asia will surpass 76 million by 2030, reflecting the fact that the demand for wealth management has become a new blue ocean market for investment banks and the financial sector as the region’s affluent population continues to grow," said Dr. Wang.
Hong Kong ideal platform
Dr. Wang said the mainland government had loosened restrictions on foreign shareholding in financial institutions many times in recent years to promote the opening up of the mainland financial industry. One favoured niche sector was the silver-hair market.
“The market reform of the pension system in the mainland and the gradual liberalisation of the commercial pension market have opened up many opportunities for private and foreign insurance companies, with market estimates reaching US$60 billion this year alone,” he said.
As mainland investors seek offshore financial products and promote capital liberalisation, Dr. Wang believes Hong Kong, as an international financial centre and an asset management hub in Asia, is an ideal platform to bring in international capital and to help mainland enterprises go global.
"There is an increasing demand for [qualified domestic institutional investor] funds, Shanghai-Hong Kong Stock Connect and Cross-border Wealth Management Connect (WMC) from mainland investors. Mainland households’ outward investment is expected to grow at a compound annual growth rate (CAGR) of 18% in the coming decade. This will provide huge business opportunities for banks, security companies, fund managers, etc," Dr Wang said.
Supply chain landscape
The China-led Belt and Road Initiative and the GBA plan, together with the RCEP agreement – comprising the 10 ASEAN countries plus the mainland, Japan, Korea, Australia and New Zealand – are reshaping the Asian landscape with the world's largest free trade agreement, further bringing huge business and investment opportunities to the Asia-Pacific region and the world.
Dr. Wang said the world was in the middle of a new round of supply chain shifts. As the mainland upgrades its industrial proficiency, it’s also taking advantage of those multilateral initiatives to export raw materials, technology, capital and expertise to help neighbouring Asian economies build up their production bases and strengthen their labour-intensive industry.
“Driven by multilateralism, there will be more manufacturing power houses and industrial clusters across Asia, building deeper supply chain interdependency. We will eventually see more high-speed growth miracles in Asian countries. That is the emerging story of Made in Asia,” he said.
HKTDC, Huatai form partnership
To help mainland enterprises seize opportunities from the Dual Circulation Strategy laid out in China’s 14th Five-Year Plan, the Hong Kong Trade Development Council (HKTDC) and Huatai International Financial Holdings Company Limited (Huatai International) announced they would become strategic partners to jointly promote the dual circulation strategy and leverage the Hong Kong platform to facilitate cross-border deal flows.
HKTDC and Huatai will work towards three major objectives. Firstly to help mainland enterprises go global while attracting foreign investment into the domestic market, achieving a triple-win for project owners, investors and Hong Kong service providers. Secondly to reinforce and promote Hong Kong as an effective platform for mainland enterprises to invest overseas, Thirdly to create strong synergy through the integration of the two parties’ business platforms and investor and resource networks.
In addition, to capitalise on GBA opportunities under the national policy, the HKTDC is preparing to organise SmartHK in Guangzhou to promote Hong Kong's professional services to enterprises in the mainland.
Huatai International representatives will be in the star-studded speaker lineup to discuss opportunities and help companies leverage financial strategies to allocate assets or raise capital to expand their presences in the GBA and other domestic and overseas markets.
Huatai International will also participate in the HKTDC-organised business matching activities in the mainland for the benefit of Hong Kong’s services industry. These include financial services or cross-border investment missions, fundraising roundtables and “Hong Kong Team” missions. The aim is to provide practical advice and support to facilitate mainland enterprises’ internationalisation, fundraising and business-expansion needs.