Andrew Weir, Regional Senior Partner and Global Chairman of Real Estate and Construction, KPMG, explains why Hong Kong firms are ideally placed to guide international investment in Belt and Road projects.
Hong Kong’s long-established reputation as the gateway to and from the Chinese mainland means it’s ideally placed to facilitate international investment in Belt and Road opportunities, according to Andrew Weir, Regional Senior Partner and Global Chairman of Real Estate and Construction, KPMG. He is also Convenor of the new International Market Working Group of the Hong Kong Trade Development Council’s (HKTDC) Belt and Road Committee.
The group is one of five recently set up by the HKTDC to focus specifically on driving engagement with global investors, and to highlight Hong Kong’s natural advantages which, Weir explains, go well beyond the city’s global reputation as a financial centre. Weir believes Hong Kong is well placed to become the offshore service centre for Belt and Road opportunities. Its key advantages include human capital, expertise, professional services, transport and logistics, and the rule of law.
With more than 25 years of international and regional experience, Weir is confident about his role leading the new International Market Working Group’s efforts to encourage global connectivity and deal matching as well as affirming Hong Kong’s reputation as the region’s services hub when it comes to sealing deals connected to Belt and Road development.
Aside from promoting Hong Kong attributes to new investors, the group will encourage international cooperation and help local companies capitalise on opportunities created by this global initiative.
Team Hong Kong
In his role as KPMG’s Regional Senior Partner and Global Chairman of Real Estate and Construction, Weir said Hong Kong’s status as one of the world’s major global financial centres means it is already well placed when it comes to infrastructure financing.
“Hong Kong has so many advantages, it has wonderful examples of public-private partnerships, has design and quality controls and is clean and green,” Weir said.
Weir feels the Belt and Road Initiative is at a turning point. He believes the private sector, typically banks, conglomerates and consortiums are getting increasingly interested in opportunities in the region and in ASEAN countries. He said more enlightened firms, including private equity, are also taking a look at Belt and Road opportunities.
Weir said firms in Hong Kong can help international investors by providing invaluable local advice about entering or exploring specific Belt and Road-related sectors. This includes introductions to owners, projects or specific companies, advice about acquisition strategy, assistance with capital raising (e.g. for IPOs), modelling of investments, and acquisition of financial and commercial projects.
Here in Hong Kong, KPMG has already partnered with and supported a diverse range of investors seeking to explore Belt and Road opportunities.
These include working with Standard Chartered, assisting China Everbright International Group’s aims to further its global reach, and exploring returns for Blackstone, one of the world’s leading investment firms.
He said KPMG also works with clients to facilitate tax and acquisition structures, provides advice about deals, issues and new company structures, as well as financial guidance and strategic advice about market entry.
Going beyond infrastructure
He explains that he sees the HKTDC Belt and Road International Market Working Group’s role taking a further step, going beyond the Initiative’s initial focus on infrastructure, to focusing on connectivity. The group will actively educate international investors, to showcase Hong Kong’s potential as a business and service hub, and to encourage investors to look at the region’s potential with fresh eyes.
“The working group needs to position the Hong Kong story as a centre of excellence for doing business. As a gateway to the region, Hong Kong has a natural position and tradition of trade. The challenge for the working group will be to open up discussion in different pockets of demand.
Joint benefits
Growing connectivity and deal matching with international clients is also a two-way street
Increasingly, it is about helping a diverse range of business partnerships form joint ventures and strategic alliances that share a specific idea or goal.
Weir views this form of coming together of large organisations as a means by which they can pool their resources and share ideas for a single specific project, taking what he calls an “asset-light approach”. Such an arrangement creates obvious cost savings for both entities while keeping the companies entirely separate. This form of cooperation is particularly suited to technology and clean energy. One example Weir mentioned where this has been successful is an engineering alliance between a Chinese enterprise and a German clean energy company.
Looking ahead
The HKTDC can help investors with problem-solving and market entry as well as facilitating professional services to provide strategic advice to global investors about ways to access to the broad range of projects that fall into the sweeping Belt and Road investment radius.
Weir explains the next step for the HKTDC’s International Market Working Group will be to create a Belt and Road Global Forum linking global chambers of commerce and business groups, a move that will serve to position Hong Kong as a facilitator and centre of excellence for the commercialisation of Belt and Road opportunities.
