Hong Kong actively forging close ties with the Arab States of the Gulf

January 7, 2025
In News and Views

Hong Kong is strengthening its ties with the Gulf Cooperation Council (GCC) states—Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE—focusing on key areas such as trade, investment, finance, and technology. These partnerships reflect a shared ambition to foster economic diversification and tap into emerging markets, particularly in Asia.

With its strategic location and robust business environment, Hong Kong is ideally placed to act as a bridge between the dynamic economies of the Middle East and the thriving markets of Mainland China and Southeast Asia. For GCC nations, Hong Kong offers a gateway to Asia’s unparalleled growth potential, while for Hong Kong, the GCC provides a vital link to the global energy sector and a region ripe with investment opportunities.

The GCC’s Vision for Diversification and Growth

The GCC states have all outlined ambitious economic transformation plans aimed at reducing dependence on hydrocarbons and fostering sustainable growth across diverse sectors. These visions align seamlessly with Hong Kong’s expertise and capabilities.

UAE Vision 2031: A roadmap that sets ambitious targets for innovation, economy, and sustainability. It’s complemented by regional strategies like Abu Dhabi Vision 2030, which focuses on fostering a diversified economy, and Dubai Vision 2030, aimed at creating a global hub for business and tourism.
Saudi Vision 2030: A comprehensive plan that focuses on empowering citizens, boosting economic diversity, and attracting international investment. With major projects like NEOM and the Red Sea Development, Saudi Arabia is positioning itself as a global leader in innovation and sustainable development.
Bahrain Economic Vision 2030: Launched in 2008, it emphasises sustainability, competitiveness, and justice as the pillars for long-term growth. Bahrain has made significant strides in developing its financial services, logistics, and manufacturing sectors.
Oman Vision 2040: Aims to foster a knowledge-based economy through investments in sectors like technology, logistics, and tourism while reducing reliance on hydrocarbons.
Qatar National Vision 2030: Focuses on sustainable development across four pillars: human, social, economic, and environmental. Qatar is diversifying its economy through significant investments in infrastructure and tourism.
Kuwait Vision 2035: Seeks to transform Kuwait into a regional trade and financial hub by promoting private sector-led growth and investing in renewable energy, healthcare, and technology.

These visions are underpinned by significant reforms, foreign investment incentives, and ambitious infrastructure projects, making the GCC an attractive partner for Hong Kong’s outward-facing economy.

Hong Kong’s Role in GCC Economic Transformation

Hong Kong has long been recognised as a global financial hub, and its unique position under the “one country, two systems” framework offers GCC countries unparalleled access to Mainland China. Hong Kong’s robust legal system, business-friendly environment, and world-class infrastructure make it an ideal partner for GCC states seeking to diversify their economies.

A Gateway to Asia

As a major logistics hub, Hong Kong is well-equipped to handle the GCC’s trade and investment needs. In 2023, Hong Kong re-exported USD324 million worth of goods from the GCC to Mainland China and USD11.3 billion from Mainland China to the GCC. These figures highlight Hong Kong’s vital role in connecting the GCC with the Asian market.

The Belt and Road Initiative (BRI), which aims to promote global trade and infrastructure development, provides further opportunities for collaboration. The GCC is a critical region within the BRI framework, and Hong Kong’s expertise in project financing and risk management makes it a valuable partner in realising these ambitious goals.

Financial and Professional Services

Hong Kong’s financial services sector is another key area of opportunity for GCC countries. With a low tax regime and a transparent legal framework, Hong Kong offers a stable and secure environment for investment. GCC investors can leverage Hong Kong’s expertise in banking, asset management, and green finance to support their economic diversification efforts.

Additionally, Hong Kong’s professional services—ranging from architecture and legal advice to logistics and management—can help GCC states maximise the economic benefits of their transformation initiatives.

Strengthening Trade and Investment

Trade between Hong Kong and the GCC has been steadily growing, with total merchandise trade reaching HKD169 billion (USD21.6 billion) in 2023. Oil and hydrocarbons remain the GCC’s primary exports, but there is increasing diversification into sectors like manufacturing, technology, and renewable energy.

Hong Kong has also been proactive in forging stronger trade ties. Agreements like the Investment Promotion and Protection Agreements (IPPA) with the UAE, Kuwait, and Bahrain underscore Hong Kong’s commitment to fostering a stable and transparent business environment. These agreements provide protections for investors, ensuring that their investments are secure and that disputes are resolved fairly.

The establishment of the Hong Kong Economic and Trade Office (HKETO) in Dubai and a consulting office in Riyadh further highlights Hong Kong’s dedication to deepening relationships with the GCC. Plans to expand InvestHK offices to Egypt and Turkey will only strengthen these ties.

Collaborating on Green Finance and Technology

Sustainability and innovation are key focus areas for both Hong Kong and the GCC. Hong Kong’s leadership in green finance makes it an ideal partner for GCC states looking to fund renewable energy projects and other sustainable initiatives.

In 2023, Hong Kong’s Financial Secretary Paul Chan led a delegation to Saudi Arabia, highlighting the city’s commitment to green finance and technology. A strategic cooperation agreement between the Hong Kong Science and Technology Parks Corporation and a Saudi venture capital firm was a notable outcome of this visit, paving the way for collaborative innovation.

Start-ups and technology also represent significant growth areas. With its vibrant tech ecosystem, Hong Kong can support the GCC’s efforts to foster innovation and build knowledge-based economies.

The Sovereign Group: Bridging Two Regions

Sovereign Group’s presence in both Hong Kong and the GCC positions it uniquely to facilitate business between these two dynamic regions. For Middle Eastern companies looking to expand into Asia or Hong Kong firms seeking opportunities in the Gulf, Sovereign offers the expertise and resources to navigate complex business landscapes.

From market entry and corporate structuring to tax planning and compliance, Sovereign ensures that businesses can operate seamlessly and efficiently. Our multilingual team—fluent in English, Cantonese, Mandarin, and Arabic—provides tailored solutions to meet the unique needs of our clients.

Looking Ahead

The economic transformation underway in the GCC aligns perfectly with Hong Kong’s strengths as a global financial and business hub. By fostering deeper ties, both regions stand to benefit from increased trade, investment, and innovation.

As the GCC continues to diversify its economies and Hong Kong expands its global reach, the opportunities for collaboration are immense. Whether through the Belt and Road Initiative, green finance, or professional services, the future looks bright for businesses operating in these two regions.

For more information on how Sovereign can support your business ambitions in Hong Kong or the GCC, please get in touch with us today.

Contact Alan Fong

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Hong Kong actively forging close ties with the Arab States of the Gulf

Hong Kong’s Role in GCC Economic Transformation

Strengthening Trade and Investment

Collaborating on Green Finance and Technology

The Sovereign Group: Bridging Two Regions

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