In this article, we uncover the strategic position of Hong Kong in Asia's next growth chapter. We explore the factors that contribute to Hong Kong's appeal as a global business hub and engage in a dialogue with Philip Hu, Founding Member and Managing Director of Primavera Capital, to gain valuable insights into the city's business and investment outlook. Primavera is a premier Asia-Pacific based investment firm that has led landmark investments in portfolio companies such as Yum China (the largest restaurant company in China, including brands like KFC and Pizza Hut), Envision (one of the largest wind turbine manufacturers globally), and Xpeng (a leading electric vehicle company). Primavera has 100+ portfolio companies across PE, VC, and Credit strategies.
Hong Kong's geographical location and global leading infrastructure make it a key gateway to both North and South Asia, but also the rest of the world. Its pro-business environment, stability and safety, and transparent legal framework create an ideal ecosystem for businesses and investors. Hong Kong's global connectivity positions it as a strategic hub for trade and investment.
Interviewer: Welcome, Philip. What makes Hong Kong appealing as a business and investment hub?
Philip: Hong Kong's stability, low tax regime, business-friendly policies, and robust financial sector make it an attractive destination. The city's talent pool, drawn from world-class universities, and its focus on research and development contribute to its position as a hub for emerging industries.
Interviewer: Do you have any examples to share that highlight Hong Kong's growth potential?
Philip: One example of many is the expansion of UBS here. Hong Kong is home to UBS’ Asia headquarters and they are doubling their office space to take up a whole office tower. UBS is one of the largest wealth managers globally with approximately USD4 trillion in invested assets. This is roughly the size of Japan or Germany’s economies in nominal terms. When such an organization on a global scale chooses Hong Kong as their Asia HQ, it carries meaning on the city’s growth potential. Hong Kong is also home to over 2,700 family offices, which is double the number in Singapore. This highlights the city's appeal as a strategic location to manage wealth with various government policies becoming even friendlier to attract more capital.
In terms of logistics, Hong Kong, for the 13th time since 2010, retained its crown as the busiest cargo airport hub in the world. Global leading companies like DHL and Alibaba’s logistics arm, Cainiao, have further setup critical infrastructure here, with some logistics companies expanding capacity by 50% or more.
For innovation and energy transition, CATL, the world's largest electric vehicle battery manufacturer, is establishing their global headquarters in Hong Kong. This demonstrates the city's attractiveness to cutting-edge industries as Hong Kong is making meaningful strides in diversifying its economy and embracing advanced technologies and sustainable solutions.
Hong Kong is strengthening its position as a research and development center across multiple sectors. We are seeing global healthcare companies coming in, such as AstraZeneca, building a major R&D center here that would cover areas of treatment for autoimmune diseases, oncology, and rare diseases.
In terms of events, the latest Rugby Sevens here had 40% of the tickets sold internationally to visitors from countries like the UK, Australia, and Japan. The event represents the ongoing international appeal and vibrancy of Hong Kong.
Hong Kong is not just limited to financial services and it will continue to be much, much more.
Hong Kong as a "Superconnector"
Interviewer: Do you have any examples that demonstrate Hong Kong's role as a "superconnector" between Asia and the rest of the world?
Philip: Hong Kong's strategic location and robust infrastructure make it an ideal platform for businesses to access both the Asian and the global markets. Many multinational companies also choose Hong Kong as their entry point into China, for example, utilizing its business-friendly environment and connectivity. China accounts for 48% of Asia’s GDP in PPP terms and remains an important driver of global growth for some to come. Hong Kong also hosts a plethora of global conferences and events that attract businesses and people from around the world, really making its mark as a global bridge between different regions.
Emerging Industries Fueling Growth
Interviewer: Are there any emerging industries that are driving growth in Hong Kong?
Philip: Hong Kong excels globally in the areas of fintech, logistics, energy transition, and biotech, among others. As mentioned earlier, the city continues to attract some of the world’s largest and most influential companies across multiple sectors to setup regional or global headquarters as well as R&D or logistics centers, etc. It also has a robust and growing startup scene, with a number of unicorns that have been born and bred here.
Interviewer: What do you personally appreciate the most about Hong Kong?
Philip: Having lived and worked in multiple places, I have always gravitated back to Hong Kong. There are few cities on this planet that provide such a blend of a truly urban, global city married with the ease of access to really stunning and unique natural beauty, which makes this place truly special. You really can have it all, from going hiking, taking a boat trip, relaxing on the beach, and also indulging in shopping, fine dining, and nightlife, all in a single day. The city's efficiency, cultural offerings, and diverse entertainment options make it a vibrant and exciting place to live and work.
Hong Kong's strategic position as a global business hub in Asia's next growth chapter is evident. Its stability, connectivity, and business-friendly environment make it an appealing destination for investors and businesses worldwide. The city's focus on emerging industries, innovation, and sustainability further positions it as a strategic powerhouse for the region. As we move beyond the headlines, it becomes clear that Hong Kong's potential for growth and success is set to soar in the coming years.
ABOUT PHILIP HU
Philip is a Founding Member and Managing Director of Primavera Capital. He sits on the Leadership Committee, Investment Committees, Strategic Partnerships Committee, Portfolio Management Committee, ESG Committee, Operations Committee, among others. Prior to Primavera, he held positions in investment banking based in Hong Kong and in a hedge fund based in San Francisco. He holds a Bachelor of Science from Cornell University.
If you are interested in more news, consider following Philip’s LinkedIn here.
