China’s BRI brings firms from Hong Kong to Vietnam
China’s BRI brings firms from Hong Kong to Vietnam
Hong Kong companies are moving to Vietnam for investment and business purposes, capitalising on opportunities arising from China’s Belt and Road Initiative.
Margaret Fong, executive director of the Hong Kong Trade and Development Council (HKTDC), said, “Hong Kong could be Vietnam’s partner in exploring new business opportunities arising from the Belt and Road Initiative (BRI). We believe that there are many things we can do together with Vietnam as Hong Kong is now focused on going international.”
According to Fong, the HKTDC will host the In Style Hong Kong Expo in Ho Chi Minh City this September. The expo is a two-day B2B trade exposition, showcasing a wide variety of quality branded and designer-led lifestyle products from Hong Kong companies.
In March, a delegation of 60 Hong Kong companies in the finance, legal, accounting, and infrastructure sectors also paid a working visit to Vietnam to seek business and investment opportunities. Hong Kong is looking to enhance investment and business collaboration with Vietnam under the BRI.
Hong Kong has recently hosted the third Belt and Road Summit which welcomed some 5,000 participants from 55 countries and regions.
On the framework of the summit, Vincent HS Lo, chairman of the HKTDC, told VIR that there are many investment opportunities in Vietnam under the BRI. When starting to invest in the market, infrastructure such as power, railways, and highways, is the primary requirement. From infrastructure development, investment in other fields such as manufacturing, trading, tourism, and real estate will follow.
Lo further noted that Vietnam needs to prepare and make certain changes to accommodate the new wave of foreign investment. It is important to have the trust that this investment will benefit the country. At the same time, Vietnam should provide some form of guarantee for the investment so that investors can see a return.
As the sixth-largest economy of ASEAN, Vietnam is set to become a close economic partner of Hong Kong. In the near future, business ties between Hong Kong and Vietnam will strengthen thanks to the ASEAN-Hong Kong Free Trade Agreement, and the Investment Agreement signed late last year. From as early as January 1, 2019, Hong Kong and Vietnam will enjoy a freer flow of goods, services, and investments.
“With the signing of the FTA and the BRI, there would be more room for Hong Kong investment in Vietnam and also the other way around,” said Edward Yau, secretary for commerce and economic development of the Hong Kong Special Administrative Region Government. “We also believe that Hong Kong can serve as a gateway for strong businesses between Vietnam and China. This would create more demand for professional services such as banking, insurance, construction, architecture, arbitration, and city development.”
Indeed, Hong Kong has long been a conduit for trade and commerce between the Chinese mainland and the rest of the world, and this role is further strengthened under the BRI. As the commercial and investment hub of BRI, Hong Kong enjoys unique advantages to tap these opportunities.
Given the territory’s many qualities, such as a common law system, independent judiciary, low and simple tax regime, advanced financial and investment infrastructure, extensive international networks with free flow of information, capital, and goods, Hong Kong can serve as an ideal platform for capital formation and financing for global investors.
