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

Hong Kong is actively strengthening co-operation with the six member states of the Gulf Cooperation Council (GCC) – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE) – in areas such as trade, investment, finance and technology.

All the GCC countries are committed to diversifying their economies away from hydrocarbons and Hong Kong is perfectly positioned as a strategic platform for GCC investors to tap into the rapidly growing markets in the Asia Pacific region, particularly to Mainland China and the Association of Southeast Asian Nations (ASEAN).

GCC countries are already Hong Kong’s valued investment partners. Total merchandise trade between Hong Kong and GCC amounted to HKD169 billion (USD21.6 billion) in 2023.

The GCC is one of the important regions in China’s Belt and Road Initiative, which aims to facilitate connectivity and unimpeded trade, promote cultural bonds, and advance financial integration and regional cooperation.

As a vibrant and attractive financial and business hub that serves as the principal gateway to China, Hong Kong offers a number of key advantages – business-friendly environment, a low and simple tax system, robust rule of law, a very free economy, world-class infrastructure, cutting-edge innovation and technology capabilities, and strong intellectual property protection.

Hong Kong is also encouraging GCC investors to make use of the logistical, architectural, financial, legal, accounting, management and other professional services available in Hong Kong to maximise the economic benefits from this unique regional cooperation initiative.

Each Gulf state has mapped out its targets for economic and social transformation in a ru’ya (vision), which aim to create a social and business‑friendly environment, enhance fiscal sustainability and resilience, invest in strategic industries, transition away from hydrocarbon production, enhance domestic demand and develop digital and green infrastructure.

• ‘We the UAE 2031’ is a comprehensive roadmap that outlines the country’s aspirations and goals for the future. It sets a clear vision for the UAE to become a global leader in various sectors, including economy, innovation, infrastructure, and quality of life. The vision focuses on three main pillars: a cohesive society, a competitive economy, and a sustainable environment. The UAE Vision is accompanied by variants in their respective Emirates such as Abu Dhabi Vision 2030 and Dubai Vision 2030.
• Saudi Vision 2030 is a blueprint launched in 2016 that is diversifying the economy, empowering citizens, creating a vibrant environment for both local and international investors, and establishing Saudi Arabia as a global leader. The Vision is designed to unfold in stages, each lasting five years and building on the last. The first phase set the foundation, implementing structural and comprehensive reforms in the public sector, the economy and society. The second phase of Vision 2030 has accelerated efforts, providing an enhanced focus on strategies, as well as further investments in key sectors and ambitious projects. This has yielded tangible results across the country. The third phase will focus on sustaining the transformation’s impact and leveraging new growth opportunities.
• Bahrain Economic Vision 2030 was launched in 2008, embodying a comprehensive plan for the Kingdom of Bahrain. It aims to find a clear approach to developing the economy, focusing on the main goal of improving living standards for all citizens, and based on three principles: sustainability, competitiveness and justice. The Economic Development Board (EDB) has initiated an on-going programme of economic and institutional reform and has coordinated with other ministries to compile the first National Economic Strategy, which serves as a roadmap to achieve the Vision.
• Omani Vision 2040, launched in 2020, aims to transform Oman’s economy by seeking to reduce dependence on hydrocarbons, foster a knowledge-based economy, and ensure sustainable and inclusive growth through sector-specific investments, decentralisation and economic and fiscal reforms. The government is sanctioning sector-specific investments targeting manufacturing, tourism, logistics, fisheries and technology.
• Qatar National Vision QNV 2030, launched in 2008, sets four pillars for achieving sustainable development: human development, social development, economic development and environmental development. Qatar has formulated three national development strategies, each building on its predecessor and setting measurable medium-term objectives, culminating in the Third National Development Strategy 2024 – 2030. The economic development pillar aims to balance hydrocarbon reserves and production, develop a vibrant non-oil economy, maintain financial stability, promote open markets, and create a business environment that attracts both domestic and foreign investment.
• Kuwait Vision 2035, first adopted in 2017, is an undergoing strategic development plan which sets out a transformative agenda aimed at fostering a business-friendly climate where the private sector leads economic growth, enhances competition and improves productivity. Kuwait aims to reduce its dependency on the oil industry and create more job opportunities in the private sector, focusing on infrastructure and construction, renewable energy, IT, software development and technology, and healthcare. Vision 2035 is also aimed at expanding the national labour force in the private sector by 69%, promoting industry growth in areas such as logistics, manufacturing and trade through the establishment of specialised economic zones.

Merchandise trade accounts for around 75% of the GCC’s total trade in goods and services. Mainland China is the bloc’s largest trading partner. Export composition is highly concentrated, with oil and other fuels accounting for over 75% of total exports. Major import categories are more diverse, and include machinery, raw materials and vehicles.

In 2023, mainland China was the largest export destination, accounting for 20.7% of the GCC’s total exports. India ranked second with a 11.8% share, followed by Japan (11.1%), South Korea (9.5%) and the US (3.6%). Hong Kong ranked 11th with 2%.

On the import side, mainland China was also the largest supplier of imports, accounting for 21.9 % of total imports in 2023. This was followed by India (10.1%), the US (9.5%), Japan (4.3%) and Germany (4.3%). Hong Kong ranked 9th with 3.3%.

Hong Kong is a strong connector between the GCC and mainland China more broadly. In 2023, Hong Kong re‑exported USD324 million worth of goods from the GCC to mainland China. Re‑exports from the mainland to GCC countries reached USD11.3 billion, equivalent to 75% of total exports from Hong Kong to the GCC, or 10% of the mainland’s exports to the GCC.

In 2019, the UAE and Hong Kong signed the Investment Promotion and Protection Agreement (IPPA). Kuwait also established an IPPA with Hong Kong in 2013, and Bahrain signed one in 2024. GCC businesses have also been establishing local offices in Hong Kong, including Saudi Arabia’s Public Investment Fund (PIF) and UAE’s Dubai Chambers.

In 2019, the Hong Kong government established the Hong Kong Economic and Trade Office in Dubai (Dubai HKETO), the first ETO in the Middle East region. The office underscored the significance of partnering with the UAE and the GCC. It has also now set up a consulting office in Riyadh, Saudi Arabia, through which it is actively reaching out to all GCC countries.

Hong Kong is also striving to expand the reach of its trade and investment offices to the wider Middle East region. It is set to open Invest Hong Kong Consulting offices in Egypt and Turkey.

In April, Hong Kong Chief Executive John Lee met with the visiting GCC Secretary-General Jasem Mohamed Albudaiwi. The meeting was a follow up to their meeting in Saudi Arabia in February last year to exchange views on further strengthening co-operation between Hong Kong and GCC member states in such areas as trade, investment, finance and technology.

Lee said that his government was actively forging close ties with GCC member states to promote exchanges on various aspects. As part of these efforts, the HKSAR Government held the eighth Belt and Road Summit with the addition of the Middle East Forum last September to focus on the new developments and opportunities arising from the Middle East markets under the development of the Belt and Road Initiative, while the Asian Financial Forum held in January this year was well received with many political and business leaders of GCC member states.

In addition, the principal officials of the HKSAR government have visited a number of GCC member countries to learn more about the latest developments of the Arab States of the Gulf and introduce Hong Kong’s development opportunities to local political, business and professional sector leaders.

Lee welcomed enterprises and investors of the GCC member states to capitalise on Hong Kong’s distinctive advantages under the “one country, two systems” principle, as a strategic location on the doorstep of Mainland China, as well as its world-class financial infrastructure and rich pool of professionals, to tap into the vast opportunities offered by the Belt and Road Initiative and the Guangdong-Hong Kong-Macao Greater Bay Area development.

In October, Hong Kong Financial Secretary Paul Chan led a delegation from the financial and innovation sectors on a visit to Saudi Arabia to attend the Future Investment Initiative in Riyadh. While participating in a panel discussion, he stated that Hong Kong is actively promoting the development of green finance and green technology.

He emphasised that the city could provide capital support for infrastructure and green projects in the Global South and guide funding to new projects through innovative financial products, such as securitised loans.

He also witnessed the signing of a strategic co-operation agreement between the Hong Kong Science & Technology Parks Corporation and a venture capital firm in Saudi. The signatory parties will share resources, recommend start-ups to each other, facilitate connections within their start-up networks, and jointly engage in market promotion and events.

The Sovereign Group

The Sovereign Group’s strong presence in both Hong Kong and the Middle East positions us uniquely to help businesses expand across Asia and the GCC countries. Hong Kong offers access to the Asian market, a transparent legal system, low taxes, and a robust financial services sector. These attributes make it an attractive destination for Middle Eastern businesses seeking growth opportunities.

Conversely, Hong Kong-based businesses are increasingly expanding into the Middle East, particularly the UAE and Saudi Arabia, driven by significant economic development and infrastructure projects. The region’s stability, security, and business-friendly environment provide an ideal platform for entrepreneurs and companies alike.

The Belt and Road Initiative is a monumental opportunity for businesses, facilitating infrastructure investment and trade across the Middle East, Asia, and beyond. The Sovereign Group is here to help you navigate these opportunities with our deep understanding of both regions. Our team speaks fluent English, Cantonese, Mandarin, and Arabic, enabling smooth communication and seamless business operations.