Hong Kong businesses are increasingly turning to Saudi Arabia as their top choice for supply chain diversification amid changing trade conditions, according to an HSBC survey.
Nearly a fifth of Hong Kong businesses identified Saudi Arabia as their preferred market to expand production, followed by mainland China at 14 per cent, according to the survey released on Thursday. Interest was strongest among technology, media and telecommunications firms.
Favourable policies bolstered the trend, the study said, including a proposed US$1 billion fund between the Hong Kong Monetary Authority and Saudi Arabia’s sovereign wealth fund to help companies from Hong Kong and other Greater Bay Area cities expand into the Middle Eastern country. The fund would be launched “soon”, said Hong Kong Financial Secretary Paul Chan Mo-po on Tuesday.
Last month, Chan led a 40-member delegation to Riyadh, which yielded five memorandums of understanding (MOUs) that involved collaboration in investment and technology. Maphive Technology signed an MOU with a subsidiary of Olayan Saudi Holding, part of the hospitality and events sector, while GoGoChart, a Hong Kong digital marketing start-up, struck an initial accord with an investment fund in the kingdom.
In a separate survey in June, half of the Hong Kong respondents named mainland China as their top pick, while a quarter identified South Asia – which has benefited from Hong Kong and Beijing’s efforts to forge stronger ties amid a tense US-China trade relationship.
