Hong Kong, Saudi Arabia sign 6 bilateral deals to forge closer economic ties

Hong Kong and Saudi Arabia have signed six bilateral agreements to forge closer ties between stock exchanges, business associations and technology firms, with the city’s leader vowing the two economies are “entering a new level of cooperation”.

But Chief Executive John Lee Ka-chiu, concluding his first day of a visit to the Saudi capital Riyadh, stopped short of reporting substantial progress on his government’s efforts to attract state oil giant Aramco or its subsidiaries to consider a secondary listing in Hong Kong, South China Morning Post reports.

“Aramco’s business is mainly located in the eastern part of Saudi Arabia. It may not be possible for me to [proceed] all the way to the east,” the city leader on Sunday night told the press, including Riyadh-based media outlets.

“But we will be looking at all sorts of scales of developing relationships with enterprises including Aramco of course … I will be telling them about different opportunities.”

The world’s largest oil company is headquartered in Dharan, a four-hour drive from Riyadh. Aramco and three of its subsidiaries are listed domestically.

On Monday afternoon, Lee and his 30-strong delegation will fly out of Saudi Arabia after attending a flagship technology conference, and visit Abu Dhabi in the United Arab Emirates as his second stop on his week-long Middle East trip.

At an investment forum attended by hundreds of business representatives in Riyadh on Sunday night, four memorandums of understanding (MOU) and two letters of intent (LOI) were exchanged.

Among them were MOUs between Hong Kong Exchanges and Clearing (HKEX) and Saudi Tadawul Group Holding Company, as well as the Hong Kong General Chamber of Commerce (HKGCC) and Riyadh Chamber.

Hong Kong artificial intelligence firm SenseTime also exchanged an MOU with King Abdullah Financial District and Sela, a cultural tourism event management company in Saudi Arabia, to deepen collaboration in areas including smart city and digital tourism.

“SenseTime will integrate our leading artificial intelligence technology, years of customer service and project landing experience with local needs in Saudi Arabia,” said Xu Li, chairman and CEO of SenseTime.

Lee, meanwhile, described Saudi Arabia as having a “highly performing” government with “a strong will” to realise its long-term vision aimed at diversifying its economy away from oil revenue.

“I am pleased to announce that Hong Kong and the Kingdom of Saudi Arabia are entering a new level of cooperation. Our two governments are now in discussion on a number of collaboration agreements,” he told the audience.

He said another MOU would be announced soon in promoting direct investment cooperation, which he added could “fast track business and investment collaboration”.

At the forum held in a giant hall of a hotel, promotional videos of “Hello Hong Kong” were shown to the business leaders in Riyadh – the first time at an overseas official event since the latest global campaign’s introduction last week. Booths about the West Kowloon Cultural District and its two flagship museums were also erected at the venue.

“Hong Kong is now seamlessly connected to the world again. There is no isolation, no quarantine and no restrictions for you to come to Hong Kong,” Lee said, as the border between mainland China and the city fully reopened on Monday.

He said the Hong Kong Monetary Authority would lead a financial delegation to Saudi Arabia and other Middle East locations later this year to further explore cooperation opportunities.

He also revealed the “Aramco Team Series”, a Saudi Arabian-funded international golf tournament, would be held in Hong Kong for the first time in October.

At the same event, Saudi minister of investment Khalid Al-Falih endorsed Hong Kong’s role “not only as a gateway to China, but also to Asia”. He named financial services, banking and insurance as some areas of collaboration.

“Given the quality and scale of partnership …We are delighted that we are taking the next step to elevate our relationships,” the top official said.

Riyadh Al-Zamil, an entrepreneur and founder of a consulting firm in the Saudi capital, said Hong Kong delegates were “very proactive” in forging ties with Middle East businesses. Compared with Singapore, he said, Hong Kong had advantages in advancing family capital businesses.

“Family offices here want to have closer eyes on where opportunities are. We have never found a place better than Hong Kong due to its proximity to mainland China,” said Al-Zamil, also a board member of the Riyadh Chamber of Commerce.

In Saudi Arabia, foreign direct investment inflows increased by 10.7 per cent in the third quarter last year on an annual basis. In the same period, around 928 investment licences were issued, an increase of 8.8 per cent.

Real gross domestic product registered a growth of 8.8 per cent in the third quarter last year. The rise was attributed to a surge in oil activities by 14.2 per cent and an increase in non-oil activities by 6 per cent.