Introduction

As Hong Kong's economy continues to push boundaries, a significant delegation of business leaders is poised to engage with Southeast Asia at a major trade promotional event set for this Wednesday in Jakarta, Indonesia. This forum, aptly themed "Think Business, Think Hong Kong," comes at a pivotal moment, as many industry executives focus their sights on expanding into the vibrant Southeast Asian markets, particularly Indonesia, known for its dynamic and youthful demographic.

Southeast Asia's Economic Potential

With a population exceeding 280 million and a median age of around 30, Indonesia stands out due to its potential to outpace its ASEAN counterparts in economic growth. Business leaders believe that fostering robust ties with ASEAN markets, including the upcoming integration into the Regional Comprehensive Economic Partnership (RCEP)—the world’s largest free trade agreement by GDP—will be critical for Hong Kong’s economic future.

Forum Details

The conference, organized by the Hong Kong Trade Development Council, is expected to attract around 1,000 local business representatives and Indonesian government officials. Attendees will discuss emerging economic trends and opportunities across Hong Kong, Indonesia, and the broader region. The focus will cover crucial sectors such as robotics, artificial intelligence, and sustainable technologies.

Insights from Industry Leaders

Rex Sham, co-founder of Insight Robotics, shared insights on the advantages of investing in Indonesia's educated and cost-effective workforce. The company has established operations in the country, offering innovative solutions for forest fire detection and pest management—services that align with Indonesia's environmental sustainability goals.

Kevin To, the founder of One Energy and an advocate for environmental innovations, is looking to tap into Indonesia's vast motorcycle market, which boasts approximately 120 million units. He notes that the push for carbon neutrality opens avenues for promoting electric vehicles, making Southeast Asia, particularly Indonesia, an attractive landscape for investment.

Leapstack International, a tech firm based in Hong Kong, is considering relocating its Southeast Asian service hub from Vietnam to Indonesia, reflecting the nation's rapid economic growth and increasing demand for modern financial products—especially regarding educational and healthcare insurance, as noted by Stanley Chow, Leapstack's COO.

Improving Trade Relations

Trade relationship dynamics between Hong Kong and Indonesia are strengthening, with Hong Kong ranking as the second-largest source of foreign direct investment in Indonesia in 2023, with an infusion of $3.769 billion. Moreover, the overall investments from Hong Kong have reached $17.253 billion, positioning it as Indonesia's sixth-largest investor.

Strategic Cooperation

Significantly, in 2023, Hong Kong's chief executive, John Lee Ka-chiu, led a high-profile delegation across ASEAN countries, culminating in a strategic visit to Indonesia, which resulted in the signing of 15 memorandums of cooperation in Jakarta. Since January 2023, RCEP's implementation has removed tariffs on over 65% of goods exchanged between China and Indonesia, marking a significant step towards enhanced trade flow.

RCEP Membership Goals

The inclusion of Hong Kong into RCEP is a key objective for local business leaders. Chow emphasized that membership would drastically diminish trading barriers, boost competitiveness through lower tariffs, and simplify the regulatory landscape for foreign investment, which could facilitate easier access to the Indonesian market.

Sham also indicated that while high-value tech products tend to be insulated from the impacts of tariffs, RCEP membership would best serve Hong Kong companies offering lower-value products, allowing for greater market penetration and competitive viability against local players.

Looking Ahead

As the forum approaches, Sham aims to leverage his keynote address to articulate the distinctive advantages Hong Kong provides—such as its common law framework and competitive economic environment. Despite its numerous benefits, many Southeast Asian businesses remain unaware of the opportunities Hong Kong can offer.

In a world rapidly evolving towards globalization, the interaction between Hong Kong and Indonesia during this Jakarta forum could set the stage for significant advancements in trade, technology, and sustainable development across the region. Investing in Hong Kong is not just about commercial gain; it also opens the door to tapping into local talents and extending influence into the mainland Chinese market, promising an exciting trajectory for bilateral partnerships.