Lee’s Silk Road caravan has high expectations

Chief Executive (CE) John Lee Ka-chiu’s 60-strong trade delegation from Hong Kong and the mainland to Central Asia next month will lift the near isolated states to the world markets.

Hong Kong will be the super- connector, offering its internationally renowned financial services as a fundraising platform to ease the flow of trade between central and east Asia and to the rest of the world. And it will be a super value-added delegation with the CE leading a delegation that, for the first time, combines Hong Kong’s finance, legal, and logistics firms with mainland energy, mining, and pharma companies. This Hong Kong + Mainland model is likely be a forerunner to future trade missions actively packaging cross-border deals, providing project structuring, risk management, and post-investment services.

The target destinations are Kazakhstan (bordering China at its north) and Uzbekistan (at its south) but were recognised in 2013 as being an integral part of the cog in China’s Belt and Road Initiative (BRI). The two countries are both Hong Kong's key trading partners in Central Asia, taking up 59.7 per cent and 13.2 per cent of Hong Kong's total exports respectively to the area.

Hong Kong’s cooperation with Central Asia gathered pace last week when Hong Kong and Kazakhstan officially established a comprehensive framework for cross-border criminal justice, signing three major bilateral agreements on Friday that govern the extradition of fugitives, mutual legal assistance in criminal investigations, and the transfer of prisoners.

China’s deepening ties with Kazakhstan have provided a strong incentive for Hong Kong to extend its reach to Central Asia, especially after Chinese President Xi Jinping’s visit to Kazakhstan last year, which elevated bilateral relations to new heights. During that visit Xi promoted high-quality belt and road cooperation, pledged 1.5 billion yuan (US$209 million) towards livelihood and development projects in the region and signed a landmark permanent friendship pact.

In 2024, Kazakhstan attracted US$6.2 billion in investment from the mainland, taking up 52 per cent of what Beijing poured into Central Asia, while Uzbekistan drew US$2.2 billion.

According to statistics from the Hong Kong Trade Development Council, Hong Kong, meanwhile, exported US$313.4 million worth of goods – mostly telecommunications equipment and computers – to Central Asia last year, while imports from the region totalled just US$10.3 million. In 2025, more than 35.5 per cent of Hong Kong’s exports to the region were telecommunications equipment, and 16.4 per cent were computers, while apparatus and semiconductors made up 6.1 and 5.7 per cent respectively.

However, local economists have warned that as Central Asian economies were still developing, it might take time for Hong Kong to realise significant economic gains.

Kazakhstan is also leveraging Hong Kong's financial advantages to develop fintech and digital assets. Hong Kong is expected to focus on aviation, by introducing direct passenger and cargo flights to the region, as well as offering its professional financial services to companies who seek to raise funds for their ventures.

Hong Kong could also assist Central Asian businesses by providing regional logistics management and distribution hub services, advising them on international trade compliance and quality control, while connecting firms to clients in the Greater Bay Area and Southeast Asia.

Kazakhstan’s consul general in Hong Kong, Bauyrzhan Dosmanbetov, has been a driving force behind the Hong Kong/China mission to the Central Asian countries. In an interview with the local press, he said the lack of direct flights was currently the only missing piece in an otherwise rapidly growing puzzle of cooperation, pledging to make flight resumption a key priority for the consulate. He added that his government is in talks with major carriers over direct flights between the country and Hong Kong.

Kazakhstan aims to deepen its financial services cooperation with Hong Kong, viewing it as an ideal fundraising hub to access renminbi capital through bond issuances.

Dosmanbetov said Kazakhstan was also very interested in offshore renminbi trading, given it had a lot of projects with mainland China and needed the currency.

He added that Hong Kong, which had abundant capital, served as an ideal fundraising hub. “Hong Kong is the only financial and stock exchange hub within six hours flight to our country. It is the closest one,” he said.

He said there was also a notable 30 to 40 per cent increase in inquiries from Hong Kong logistics firms looking to make use of the Middle Corridor to mitigate risks. The Middle Corridor, previously known in the days of Marco Polo as the Silk Road, is a multimodal logistics route that connects China and Europe via Kazakhstan in Central Asia, Azerbaijan and Georgia in the South Caucasus, the Caspian Sea and Turkey.

From the perspective of Uzbekistan, the BRI could help open the corridor to the Persian Gulf, enabling expansion of commercial and trade routes for the country. Exporting Uzbek goods to more regions is a highly attractive incentive for Uzbekistan. At the First Belt and Road Forum held in Beijing May 2017 both presidents, Shavkat Mirziyoyev of Uzbekistan and Xi, spoke positively of future collaboration in BRI advancement. During those meetings, the two countries signed 115 deals worth more than $23 billion on enhancing their cooperation in electrical power, oil production, chemicals, architecture, textiles, pharmaceutical engineering, transportation, infrastructure and agriculture. In 2019 Uzbekistan established a new government group in charge of aligning their own country's development plan with China's BRI ambitions. China is Uzbekistan's largest trade partner (both in imports and exports) and has more than 1,500 Chinese businesses within its territory.

In preparation for this large trade mission, the sherpas must already be in the Central Asian countries firming up deals, ready for signatures from the heads of industry and government officials thus laying the groundwork for the future as a hedge against the uncertainties arising from the Israeli/Palestine/Iran/Ukraine/Russian conflicts.

Mark Pinkstone

** 博客文章文責自負,不代表本公司立場 **

Financial Secretary Paul Chan Mo-po is currently flying the Hong Kong flag through Europe selling the city as the super-connector between China and the rest of the world, as well as it being the global wealth management hub.

Backing up Chan’s claims is the assessment of the International Monetary Fund (IMF), that Hong Kong has reinforced its position as a global financial center and super-connector between the Chinese mainland and the rest of the word. The city’s economy continues to recover from the COVID pandemic stronger than expected, supported by robust technology-related exports, improved private demand and a rebound in financial market activity.

It is the super-connector role that is central to sustaining Hong Kong’s position as a leading offshore renminbi (RMB) hub, as well as its involvement in the Guangdong-Hong Kong-Macau Greater Bay area and, of course, the Northern Metropolis development. Hong Kong is the primary gateway linking China with the rest of the world, a position reinforced by its status as an international financial center and its unique "one country, two systems" framework. Hong Kong also acts as a "super value-adder" by providing high-level professional services, legal expertise, and supply chain management that help mainland enterprises expand overseas, and global companies access the Chinese market.

Equity fundraising and asset management activity, key elements in Chan’s European mission, have picked up since the pandemic alongside improved market sentiment, reinforcing Hong Kong’s role as a global financial center and super-connector between the Chinese mainland and the rest of the world, particularly in its role as a leading fundraising hub and premier offshore renminbi center.

Hong Kong, with its common law legal system and headquarters for the International Arbitration Center, is a catalyst for China’s economy accounting for about two thirds of China’s inward foreign direct investment (FDI) and outward direct investments passing through the city. So, it not only provides a channel for goods and services to go global but also catalyses the international usage of renminbi (RMB) along the process. Since the launch of the pilot scheme for cross-border trade settlement in renminbi in 2009, RMB trade settlement handled by banks in Hong Kong sees exponential growth, recording RMB 64 trillion (HK$73.6 trillion) in 2024 (the latest available figure) or a quarter of China’s cross border trade in goods.

However, it still has a bit more to go to be a dominant settlement currency. In December 2024 the RMB was the fourth most active currency after the US, EUR and GBP, overtaking the Japanese Yen for the position. Using RMB for settlement allows companies to avoid the two to three per cent higher administrative costs associated with USD transactions, eliminates the need for currency hedging against RMB volatility, and provides access to Chinese trade finance products.

The IMF report goes on with a bullish Hong Kong line, citing the Middle East crisis, which Hong Kong could rapidly “transmit” given the city’s “high degree of openness and financial interconnectedness.” It predicts that over the medium term, growth is projected to normalize to around 2.25 per cent.

“The Hong Kong economy expanded robustly in the first quarter of 2026. Looking ahead, Hong Kong's economic growth outlook is positive, underpinned by strong global demand for AI-related electronics, sustained growth in visitor arrivals and robust cross-boundary financial activities,” the IMF concluded.

Chan’s European mission kicked off in Paris where he attended a meeting of the Association Francaise de la Gestion Financiere (AFG), the French asset management association which has shown a keen interest in expanding its presence in Hong Kong amid market diversification and significant growth potential in the Greater Bay Area asset management market. It also offers a pool of potential investors in the Northern Metropolis project.

The AFG is a must target for Hong Kong seeking to boost it FDIs. Some 330 member firms account for 90 per cent of the US$5.8 trillion (HK$45.4 trillion) in assets under management in France, while assets under management in Hong Kong jumped to HK$35.14 trillion (US$4.48 trillion) in 2024, just $41 million (US$5.2 million) short of the 2021 record.

While the Financial Secretary makes progress in Europe, the upcoming visit by Hong Kong Chief Executive John Lee to Kazakhstan and Uzbekistan in early June indicates a strategic shift eastward in these efforts. Together, their activities create a strong two-pronged effect: Chan attracts Western capital seeking access to China’s mainland market, while Lee opens new growth pathways along the Belt and Road, channeling Central Asian investment into Hong Kong and beyond. This joint effort directly supports Hong Kong’s role in China’s 15th Five-Year Plan (2026–2030), which highlights high-quality development, enhanced regional connectivity, and a “dual circulation” economic strategy. By positioning Hong Kong as a “hub-to-hub” bridge between Central Asia and East Asia and reaffirming its status as a global wealth management centre, the two officials are aiding the city in fulfilling its role as a premier offshore RMB centre, a super-connector, and a catalyst for cross-border trade and investment in line with the national blueprint.

The official visits overseas by Chan carries a simple message, Hong Kong is open for business. His purpose, as with other visits by government officials, is to counter, in part, all the negative publicity generated by the Jimmy Lai trial which suggests there are flaws in Hong Kong’s legal system, the backbone to the city’s successes.