One week’s work nets about $10.35 billion

When Chief Executive (CE) John Lee stepped off his plane in Hong Kong, he was full of smiles. He had just completed a very successful trade mission to Central Asia worth about HK$10.35 billion and saw the signing of 96 agreements and Memorandum of Understanding (MOU) covering investment, aviation, cultural exchange and customs. Not bad for one week’s work.

Lee was the leader of a 70 member-strong delegation of officials, businessmen and women and cultural managers from both Hong Kong and the mainland. It was an action-packed series of meetings, banquets and visits to the two key Central Asian cities of Kazakhstan and Uzbekistan.
The trip was so successful that Hong Kong’s status as a “super-connector” has been upgraded a “super-value-adder agent,” proactively integrating into the “Silk Road Economic Belt,” and strengthening its functional platform role within the “Belt and Road Initiative.”

There are a number of similarities between Hong Kong and Kazakhstan which make partnerships there more palpable. The Astana International Financial Centre (AIFC), a special economic zone in the capital, applies common law and international arbitration, as well as special tax and currency regulatory regimes, and houses the Astana International Exchange.

A major item on the agenda was with Hong Kong’s three major innovation and technology parks (Cyberport, Science Parks, and Hong Kong-Shenzhen Innovation and Technology Park), who signed a technology cooperation pact with Kazakhstan, enabling mainland technology firms to connect with Central Asia through Hong Kong and advance cooperation in artificial intelligence and digital infrastructure. Kazakhstan will hold a roadshow in Hong Kong to attract investors and professional service institutions next year.

Central Asia can become a strategic logistics hub for Hong Kong as wars in the Middle East and Europe persist, with cargo volume between the city and two countries in the region surging nearly fivefold year on year.

With this in mind, the Hong Kong Airport Authority and Cathay Pacific secured operational agreements with Almaty International Airport in Kazakhstan. Cathay announced that it plans to operate three direct flights per week connecting Hong Kong to Almaty, starting in the first quarter of next year.

Several business entities among the delegation signed individual MOUs with their counterparts in the two countries, covering sectors such as finance, asset management, aviation, media, agriculture and new energy.

MOUs, a common vehicle used for cooperation between parties, are usually non-binding and outline only broad intentions and mutual understanding. These are often upgraded to Memoranda of Agreement (MOA) which is more detailed and often includes legally enforceable obligations.

A number of the agreements were signed by state-backed investment bank China International Capital Corporation Limited (CICC) as well as their Kazakh partners, including one with the Sovereign Wealth Fund Samruk-Kazyna.

The Chinese Manufacturers' Association of Hong Kong, the Federation of Hong Kong Industries and the Hong Kong General Chamber of Commerce also secured deals.

During the visit, coordinated and promoted by senior Hong Kong government officials, Shandong-based private enterprise Xinfa Group reached an agreement with Kazakhstan to invest about HK$117.5 billion in developing a large-scale industrial park spanning over 3,000 hectares, encompassing the entire industrial chain from mining and smelting to new materials manufacturing. The Hong Kong platform acted as the liaison point for the Kazakh investment negotiations, financing plan coordination and legal framework setup, highlighting Hong Kong’s vital role in supporting mainland asset-heavy enterprises to expand internationally.

For the first time, two local news bodies, the Newspaper Society of Hong Kong and the Hong Kong News Executives’ Association, signed an MOU with one of Kazakhstan’s largest state-owned conglomerates to strengthen collaboration in journalism and information exchange. Separately, the South China Morning Post sealed a partnership with Astana International Financial Centre Authority to boost ties between Central Asia, Hong Kong and mainland China, and entered into an agreement with the Autonomous Cluster Fund “Astana Hub”, alongside Gobi Partners and the Khan Tengri Innovation Hub of China, to strengthen economic and business ties.

The visit exemplified a proactive effort and successful practice in cementing Hong Kong’s positioning and fulfilling national missions. The upgrading from a “super-connector” to a “super-value-adder agent,” proactively integrates the “Silk Road Economic Belt,” and strengthening its functional platform role within the “Belt and Road Initiative.” This aligns closely with the national “15th Five-Year Plan” directives.

“Central Asia could be the next Middle East, becoming a terminal connecting Asia and Europe,” the HK Airport Authority chairman Fred Lam told a radio programme, citing the region’s location sitting between the Middle East and Russia, both of whose cargo businesses were disrupted by military conflicts.

Chief Executive John Lee said the trip had numerous achievements, including cooperation at government level, and expediting consultations on signing a comprehensive double taxation avoidance agreement as well as discussions on an investment protection agreement.

Diplomatically, Uzbekistan agreed to set up a consulate in Hong Kong next year.

It is unlikely for Hong Kong to secure immediate gains from the developing Central Asian region but one can argue that a farsighted view is needed. As the offshore renminbi market continues to deepen, Hong Kong can provide diverse support for enterprises in terms of financing, onshore and offshore bond issuance, and cross-border cash management.

Mark Pinkstone

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Hong Kong has done it again! It has knocked Switzerland off its perch for the top spot as the world’s largest cross-border wealth hub. But the irony is that Hong Kong has no borders while Switzerland has four with neighbouring countries: Germany, France, Italy and Austria..

The boost to Hong Kong’s international financial status came from an initial public offering (IPO) bonanza and capital inflows from China’s mainland, which shares a boundary with Hong Kong. Countries share borders with neighbouring countries but technically share boundaries with counties or provenances within the country. Hong Kong is a Special Administrative Region (SAR) of China with a high degree of autonomy. For example, both have different currencies, legal systems etc.

That very fine distinction was overlooked by Boston Consulting Group (BCG) when analysing cross-border wealth distribution. BCG is an American global management consulting firm founded in 1963. It is one of the "Big Three" (also known as "MBB", representing the first initials of world's three largest management consulting firms by revenue) along with McKinsey & Company and Bain & Company.

The BCG report revealed that Hong Kong's cross-border wealth management assets reached US$2.95 trillion — a 10.7 per cent year-on-year surge. That figure edged past Switzerland's US$2.94 trillion by about US$10 billion, making Hong Kong the world's largest cross-border wealth management center for the first time.

BCG projects that cross-border wealth managed in Hong Kong will grow at roughly 9 per cent annually between 2025 and 2030, compared to only about 6 per cent for Switzerland. Bloomberg goes further. By 2030, the gap in assets under management between the two centers is forecast to widen to about US$600 billion. Today's slim lead is not a finish line — it is the opening lap of a far larger structural shift, said Bloomberg, indicating that the financial future for Hong Kong appears robust.

Last year, Hong Kong reclaimed the global IPO crown for the first time since 2019, with 114 listings raising US$37.2 billion.

The city retained pole position as the world’s largest IPO market by proceeds in the first quarter of this year. A total of 37 companies raised about US$13.26 billion on the Hong Kong stock exchange’s (HKEX) main board in the three months to March 31, representing a 453 per cent increase from a year earlier.

About 500 listing candidates, most of which were mainland-based, are now waiting to raise funds in the city, up from 300 at the end of last year, according to HKEX.

The BCG report received wide international coverage including the Financial Times, Reuters, Associated Press and Canada’s National Post all noting that the surge in capital flow into Hong Kong helped topple Switzerland’s long-standing status as the traditional safe haven.

Across this international media coverage, one competitive advantage of Hong Kong was repeatedly emphasized — its connectivity function under "One Country, Two Systems." The Associated Press highlighted how Hong Kong's close ties with the mainland market have driven its wealth management business. Reuters likewise noted that Hong Kong "is cementing its role as China's gateway to global markets."

The current trade mission to Central Asia by a 60-member strong delegation from the mainland and Hong Kong led by Chief Executive John Lee is indicative of the aggressive nature the city is taking to maintain its ranking as the world’s top financial hub. Besides businessmen and women in the delegation drumming up partnerships between Central and East Asia, there is a bevy of financiers with deep pockets willing to invest in new proposals. Representatives of the Hong Kong Stock Exchange is also there promoting the bourse’s advantages for primary and secondary listings. This and future trade missions will surely broaden Hong Kong’s global client base while consolidating its role as China's gateway.