Hong Kong Welcomes Saudi Elite: Amidst a backdrop of economic challenges and geopolitical uncertainties, Hong Kong has made a historic move by hosting an investment conference welcoming Saudi Arabian elites. The Hong Kong government, stock exchange, and Future Investment Initiative Institute arranged the two-day event, a vital step in boosting Hong Kong-Saudi Arabia relations. Hong Kong is actively seeking new business partners to navigate US-China tensions, which have increased concerns about Western corporations’ operations in the semi-autonomous Chinese city.
The conference represents a milestone for Hong Kong’s economy, which has suffered from lost foreign talent, decreasing housing prices, and fewer foreign firms using the city as a regional base. Hong Kong’s embrace of Saudi Arabia is seen as an opportunity to diversify its business partnerships during a worldwide slowdown.
Willy Lam, senior China fellow of the Jamestown Foundation, a US think tank, has described the summit as “a shot in the arm” for Hong Kong’s economy. Lam emphasizes the potential economic benefits of establishing stronger ties with Saudi Arabia, given the size of its economy and its trusted alliance with China. The two countries had previously signed a strategic partnership agreement in the preceding year, laying the groundwork for increased collaboration.
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George Chan, a Shanghai-based global IPO leader for EY, highlights the summit as a strategic move for Hong Kong to diversify its economic partnerships in response to complex global challenges. He notes that as geopolitical shifts prompt Middle Eastern countries to diversify their investments, Hong Kong stands out as an ideal destination due to its ability to bridge mainland China, Asia, and global capital flows.
The move to welcome Saudi Arabian elites is also seen as a response to Hong Kong’s struggling Initial Public Offering (IPO) market, which is experiencing its worst year since 2003. The city is actively working to revive its IPO market, and the summit presents an opportunity to attract potential listings, including the possibility of a blockbuster listing from state-owned oil company Saudi Aramco, which had previously gone public in Riyadh in 2019.
The Hong Kong stock exchange has made it easier for a secondary listing to occur. In September, it added the Saudi stock exchange to its list of recognized exchanges, allowing Saudi-listed companies to apply for a secondary listing in Hong Kong. Additionally, the recent introduction of Asia’s first exchange-traded fund (ETF) to track Saudi Arabian equities further demonstrates Hong Kong’s commitment to expanding its economic ties with the Middle East.
In summary, Hong Kong’s embrace of Saudi Arabian elites reflects a strategic move to deepen economic ties, attract investment, and position itself as a crucial player in connecting Middle Eastern economies with the vibrant Asian market. This diplomatic and economic initiative is essential for Hong Kong as it navigates challenges and seeks new avenues for growth and collaboration on the global stage.