INA: Hong Kong must resurrect itself as the gateway to North Asia for Asean

The head of Indonesia’s sovereign wealth fund has said Hong Kong will be back post-Covid, and the city offers a huge opportunity for Southeast Asia.
INA: Hong Kong must resurrect itself as the gateway to North Asia for Asean

When it comes to the competition between Singapore and Hong Kong as Asia’s top finance and trade hub, it’s a fact universally acknowledged that Hong Kong is the doorkeeper for North Asia, while Singapore’s turf is South and South East Asia.

However, the head of Indonesia’s newly minted sovereign wealth fund — Dr Ridha Wirakusumah, Chief Executive Officer at the Indonesia Investment Authority (INA) — has said that a stronger post-Covid Hong Kong should pivot towards South East Asia, opening up valuable South East Asian markets for North Asia.

“It’s extremely obvious that post-Covid Hong Kong should resurrect itself again as one of the (region’s) most important financial centres, [and not lose] out to the other financial centre which happens to be Singapore,” Wirakusumah told the Hong Kong Trade and Development Corporation’s Belt and Road Summit on Thursday (Sep 1).

“I’m not one to underplay Singapore because it’s also very, very important to us as our neighbour, but I think Hong Kong offers so much more in terms of size and also access to North Asia.”


Wirakusumah told a breakout session on fostering trade and investment connectivity in the RCEP (Regional Comprehensive Economic Partnership) that while Hong Kong and Singapore shared a similar GDP, Hong Kong’s stock exchange was eight times the size of Singapore’s.

“As such, it’s a lot more powerful in terms of raising financing,” he said, adding that the only missing piece for Hong Kong was an active trade with Southeast Asia.

“If you look at the North Asian countries — namely Hong Kong, China, Taiwan, Japan and Korea — you’ll notice that they are mostly developed and they are richer countries than their Southeast Asian counterparts. However, the Southeast Asian counterparts make up for these shortcomings by their exciting growth and their youth demographic.”

He said half of Indonesia’s population were 30 years old or younger, and that this demographic was repeated across Southeast Asia as well.

“If Hong Kong can actually take a lot more proactive role in going into and understanding what Southeast Asia needs, I think the Southeast Asian countries would appreciate not only the capital but also the expertise and the technologies it provides.”

Southeast Asia, he said, could provide an unbelievable market for many of North Asia’s advances in technology and digital for example, which then becomes mutually beneficial for both regions.


​Heiwai Tang, Director at the Asia Global Institute and a Victor and William Fung Professor in Economics at HKU Business School, said that while the RCEP free trade agreement had many challenges ahead in its journey towards a zero-tariff regime — in particular the  knitting together of a mosaic of different trade jurisdictions across the region — the great opportunity for Hong Kong was that it geographically sits in the centre of the RCEP agreement.

“Hong Kong is located at the centre of RCEP – if you visualise RCEP as a sun dial, you have mainland China, South Korea, Japan to the north of Hong Kong. To the south of Hong Kong, you have ASEAN, New Zealand, and Australia, so there’s a lot of trade data flows going through Hong Kong.

“And maybe we shouldn’t be too obsessed with physical trade, but also think about trade-related services and the role of Hong Kong as an offshore trade manager. A lot of trade will happen between the countries of RCEP, but the goods don’t have to pass through Hong Kong.

“That management would require talent, would require financing, risk management, and all these are going to contribute towards Hong Kong being an international centre in finance trade professional services,” he said, adding that this was the expectation of Beijing for Hong Kong’s role going forward.


Tang said that where Singapore had been stealing a march on Hong Kong was in areas of insurance and risk management, for which there will always be an increasing need in the region.

“Hong Kong still has a lot of room in which to expand,” he told the panel.

“In insurance, for example, there’s been a huge need for insurance products due to climate risk, due to the ageing population, because of all the challenges that developing countries have been facing in South East Asia.

“Singapore has been really active in selling risk management products to different Asian economies. Of course, being part of ASEAN, it’s easier for them to do so, but I’m sure there’s room for Hong Kong to penetrate into different professional service markets.”

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