AIIB keen to fund projects in Northern Metropolis, Hong Kong finance chief says

The China-led Asian Infrastructure Investment Bank (AIIB) has expressed interest in financing projects in the Northern Metropolis mega development, Hong Kong’s finance chief has said.

Financial Secretary Paul Chan Mo-po also told the media on Sunday that global finance leaders had set aside their political differences during the Asia-Pacific Economic Cooperation (Apec) finance ministers’ meeting held in Hong Kong last week and reached a consensus on promoting digital infrastructure, employment and youth exchange.

“Speaking of AIIB, they are very interested in infrastructure development in Northern Metropolis, as this is their own expertise,” Chan said on a radio show, referring to the government’s plan to turn 30,000 hectares of land bordering mainland China into a technology and housing hub.

“They told us that … if there are any Northern Metropolis projects open for co-investment, [they will be] very interested. When there are any specific projects, we will explore ways for cooperation.”

The Beijing-headquartered bank is expanding its presence in Hong Kong, with plans to open a local office by the end of the year, its second outside mainland China after the launch of its Abu Dhabi operational hub in 2023.

AIIB president Zou Jiayi led a delegation to the finance ministers’ meeting on October 20 and 21. A day before the meeting, Zou met with Hong Kong Chief Executive John Lee Ka-chiu and Secretary for Financial Services Christopher Hui Ching-yu at Government House in Central to exchange views.

Set up in 2016, AIIB is a multilateral development bank with 111 members worldwide. It is focused on financing infrastructure with sustainability such as carbon neutrality, technology-enabled project and green economic transformation.

The bank has become more active in the city in recent years through issuing Hong Kong dollar bonds.

Chan said it had been difficult to reach a consensus among Apec member economies because of their political differences and different phases of development.

“Our main ideas remain neutrality, communication, commitment and mutual respect, trying to identify common grounds for collaboration,” he said.

Besides infrastructure development, financial leaders also discussed the digital economy and corresponding services and financing tools, as well as employment and youth exchange.

“Whether it was at the International Monetary Fund and the World Bank annual meetings in Bangkok, or this time, employment issues are nearly always placed as the first priority,” he said.

Finance ministers of the 21 member economies signed a joint statement at the Apec meeting pledging cooperation on digital infrastructure financing.

The document states that public organisations in the region will foster an environment that catalyses financing for digital infrastructure, and also encourages the private sector to commit investments.

Development banks such as AIIB are also urged to get involved in digital infrastructure projects, especially by offering financing options.

Chan said many regional economies were keen on improving their infrastructure, and Hong Kong was ready to provide support as a destination for listing and securitising their assets.

The finance chief also touched on the work of Hong Kong’s Office for Attracting Strategic Enterprises (OASES), which announced on Thursday a new batch of 18 enterprises planning to increase their presence in Hong Kong, bringing the total number of firms helped by OASES to 142.

The government estimated it would bring in some HK$84 billion (US$10.7 billion) worth of investment and create some 26,700 jobs. Chan noted that some of the companies had established a footprint in Hong Kong before ramping up their operations with the help of OASES.

“We hope these companies will not only conduct retail businesses but also establish their research and development (R&D) hubs and regional headquarters here,” he said.

“We will cooperate from the perspective of [providing a] policy package and could hopefully improve local employment.”

In his weekly blog, also published on Sunday, Chan revealed that among the 142 companies supported by OASES, nearly 90 per cent would establish R&D centres in Hong Kong and 70 per cent of them planned to set up their regional headquarters in the city.

“They bring not only funds and employment opportunities but also functions including decision making, R&D and business coordination,” he wrote.

“The conglomeration of these high value-added rings is the key to converting enterprise investment into Hong Kong’s long-term competitiveness.”