Hong Kong attracts multinational expansion following economic revival

Multinational corporations are increasingly looking towards Hong Kong, leveraging its strategic initiatives and enhanced connectivity with the Chinese mainland to bolster their Asian market presence.

In the first half of 2024, Invest Hong Kong played a pivotal role in supporting 322 companies as they either established or expanded their operations in the region. Half of these companies originated from the Mainland, with the remainder hailing from global economies including the United States, Britain, Singapore, and France.

Alpha Lau, Invest Hong Kong’s director-general of investment promotion, highlighted Hong Kong’s appeal, stating that it continues to be one of Asia’s leading financial and commercial hubs. This sentiment is echoed by multinational companies that are expanding or establishing new footprints in the territory, aiming to capitalise on business opportunities both in the mainland and across Asia.

For instance, Switzerland’s Partners Group, a notable player in private markets investment management, inaugurated an office in Hong Kong in June. Henry Chiu, the head of the Hong Kong office, emphasized the strategic benefits of their location, noting its potential for distribution deals in Greater China and broader investment opportunities across Asia.

Hong Kong’s renowned status as a premier wealth management hub and its substantial talent pool are also significant factors driving their expansion.

In the retail sector, The Macallan, under Edrington, launched its first flagship concept store in Hong Kong, marking the beginning of an ambitious global expansion that includes 22 new stores set to open by the end of 2024. Jaime Martin Chocano, managing director of North Asia at Edrington, expressed that Hong Kong represents a long-term investment for The Macallan, acknowledging the city’s historical significance as the brand’s gateway to the Asian market.

The region’s aviation and retail sectors are poised for further growth, according to Arnold Cheng, director of Guangdong-Hong Kong-Macao Greater Bay Area at John Swire & Sons (China) Limited. He also anticipates a boost in tourism, spurred by recent policy enhancements. These include the expansion of the individual travel endorsement scheme and an increase in the duty-free shopping quota for mainland visitors, which are expected to attract more tourists to the region.

Additionally, the asset management sector is benefiting from strengthened market connectivity. Martin Lau, CEO of trust services and insurance at Principal Hong Kong, pointed to the improved cross-boundary Wealth Management Connect Scheme and mutual recognition of funds as pivotal enhancements that have made Hong Kong an increasingly attractive market.

With these developments, Hong Kong is not only enhancing its competitive edge but also affirming its position as a crucial gateway for multinational enterprises looking to penetrate the Asian markets. The city’s recent climb in the World Competitiveness Yearbook 2024, where it ranked fifth globally, highlights its effectiveness in maintaining a conducive environment for business and investment.