APEC meeting offers chance to deepen economic cooperation and services

The 33rd Asia-Pacific Economic Cooperation Finance Ministerial Meeting, which began in the Hong Kong Special Administrative Region on Tuesday, offers a platform for strengthening economic cooperation among member economies, economists told China Daily.

With the Hong Kong SAR and most Association of Southeast Asian Nations economies being APEC members, they can utilize this opportunity to discuss ways to step up economic cooperation, experts added.

For example, Hong Kong can play an important role in supporting the supply-chain restructuring process within the 11-member ASEAN grouping by providing a host of professional services.

READ MORE: HK, ASEAN can ‘drive economic cooperation across APEC’

Citing Asia’s strong interregional trade backed by market diversification and deeper trade ties, the International Monetary Fund (IMF) projects that Asia will contribute two-thirds of global economic growth in the next few years.

ASEAN economies, in particular, have benefited from a technology boom and strong growth in exports of semiconductors and an artificial intelligence infrastructure.

“The rise of technology has provided a sizable boost to several major Asian economies, with export growth having risen sharply in the first half of this year,” said Krishna Srinivasan, director of the IMF’s Asia and Pacific Department. He added that this was driven by technology products, strong demand for AI infrastructure, and investment in data centers.

Asia’s export strength extends beyond the technology boom, with trade — including nontechnology exports — performing better than expected despite tariffs. This was supported by the diversification of export markets, robust intraregional trade, and more trade agreements.

“Growth, surprisingly, has been stronger in India, while South Korea and some ASEAN economies have seen significant growth on the back of the technology boom,” Srinivasan said.

New calling

Besides strong exports, supply-chain restructuring serves as another driver of economic transformation in ASEAN economies.

To diversify risk and reduce dependency, many companies have adopted the “China Plus One” strategy, maintaining operations in China while establishing production or sourcing capacity in at least one other economy.

However, as this strategy becomes less effective amid widespread tariffs imposed by the United States, many companies are shifting to hedging strategies, localizing production and exploring domestic markets. During this process, they are seeing increasing demand for professional services to facilitate supply-chain restructuring.

Tang Hei-wai, associate vice-president (global) and director at the University of Hong Kong’s Asia Global Institute, said Southeast Asia had benefited greatly from the signing of trade pacts under the Regional Comprehensive Economic Partnership — a massive free trade agreement established by 15 Asia-Pacific economies, including 10 ASEAN members — robust infrastructure, and openness to foreign direct investment.

He said that Hong Kong, as a financial and professional services hub, can support ASEAN economies in restructuring their supply chains through trade finance and insurance.

Once Hong Kong successfully accedes to the RCEP, “it can help some of the grouping’s economies overcome challenges in supply-chain restructuring, especially when it comes to financial support and offering professional services, such as insurance, and supply-chain management,” Tang told China Daily.

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Hong Kong Financial Secretary Paul Chan Mo-po said that besides ASEAN, Middle Eastern and Central Asian countries can also leverage Hong Kong’s professional services to promote economic growth.

“As Middle Eastern and Central Asian economies continue to develop and diversify, the SAR can support their economic growth by mobilizing long-term capital, broadening currency options, and managing and sharing risks,” Chan said.

He said international multilateral organizations, financial institutions and insurers can cooperate by using innovative methods to promote more efficient capital mobilization and risk management.

“With Hong Kong’s concentration of relevant professional expertise, abundant capital and extensive experience, the city can help structure projects to make them bankable, fostering a virtuous cycle in driving growth and investment opportunities,” Chan said.

Contact the writers at oswald@chinadailyhk.com