Hong Kong strategically leverages its geographical location and regional expertise to foster mutually beneficial collaborations with the Middle East trading partners. Its partnership with the United Arab Emirates (UAE) offers diverse development opportunities spanning logistics, technology, energy, and finance, effectively showcasing Hong Kong’s unique role as a global-facing regional hub.
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Several Gulf states have witnessed substantial growth in their banking sectors following the COVID-19 pandemic, with the top 30 banks in the region experiencing a 13% increase in their combined assets, reaching $2.5 trillion by the end of 2021.
Hong Kong has tapped into this burgeoning market through partnerships established between the Saudi Central Bank (SAMA), the Central Bank of the United Arab Emirates (CBUAE), and the Hong Kong Monetary Authority (HKMA).
These collaborations not only promote innovation in the fintech and financial sectors but also facilitate knowledge sharing on regulatory development, while offering diverse perspectives for engagement with other regional financial players.
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While Hong Kong has previously engaged in Islamic banking, recent Memoranda of Understanding (MoUs) will further enrich these collaborations through increased cooperation in fintech, cross-listings, and environmental, social, and governance (ESG) areas.
These experiences provide a strong foundation for discussions on financial infrastructure, financial market connectivity across jurisdictions, and developments in virtual assets and regulations.
The UAE and Saudi Arabia are actively pursuing advancements in the fintech sector, with the UAE’s fintech market projected to have a transaction value of $39.3 billion in 2023, expected to grow over 15% by 2028.
Despite challenges related to capital liquidity, talent retention, and a less dynamic IPO market, Hong Kong’s status as a global fintech hub positions it as the ideal partner for countries aiming to strengthen their presence in this market and open doors for cross-border investment opportunities.
Governments in the Gulf region are making efforts to attract technology companies, with initiatives like the UAE’s NextGen FDI technology initiative aiming to draw digitally enabled companies specializing in advanced technology applications. Hong Kong-based technology players, such as the Hong Kong Science and Technology Parks Corporation (HKSTP), are engaging with these emerging opportunities, fostering collaborations and investments in the Middle East.
To celebrate the 10th anniversary of the Belt and Road Initiative, the Hong Kong government hosted the Belt and Road Summit, where the Financial Services and the Treasury Bureau (FSTB) signed a Memorandum of Understanding (MoU) with the Department of Economy and Tourism of the Government of Dubai in the UAE.
This MoU aims to strengthen bilateral relations and cooperation in financial services, including wealth management, family offices, fintech, virtual assets, and green finance. InvestHK will actively participate in its implementation, indicating promising prospects for further collaboration between Hong Kong and the Middle East.
As we explore the prospects in the Middle East, it becomes evident that Hong Kong’s access to resources within the Greater Bay Area, coupled with its thriving banking, fintech, and innovation and technology ecosystems, can provide substantial support for these new ventures. By means of MoUs, collaborations on Central Bank Digital Currencies (CBDCs), joint events, and deeper engagement in emerging financial systems, Hong Kong is well-placed to establish stronger regional partnerships while reinforcing its status as a global link to diverse markets.
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Copyright © Chandrawat & Partners. All Rights Reserved.
Chandrawat & Partners stands as a dynamic and rapidly expanding full-service firm, specializing in the delivery of exceptional professional and corporate services to a diverse clientele, both foreign and local. We proudly represent companies and individuals across a wide spectrum of sectors through distinct entities established in various countries worldwide.
Chandrawat & Partners stands as a dynamic and rapidly expanding full-service firm, specializing in the delivery of exceptional professional and corporate services to a diverse clientele, both foreign and local. We proudly represent companies and individuals across a wide spectrum of sectors through distinct entities established in various countries worldwide.
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