Hong Kong, Saudi Arabia eye deeper cooperation, Arab expansion into Asia

Hong Kong’s finance minister has discussed deeper cooperation with his Saudi counterpart during a meeting in Switzerland, while calling on Arab firms to expand into mainland China and Asian markets via the city.

On his first day in Davos for the World Economic Forum’s Annual Meeting, Financial Secretary Paul Chan Mo-po also met Nigeria’s vice-president Kashim Shettima, an American stablecoin issuer and an Israeli artificial intelligence (AI) unicorn.

The city government on Tuesday said that during the meeting with Saudi Arabia’s finance minister Mohammed Al-Jadaan, Chan hailed the “encouraging progress” in cooperation over the past two years and looked forward to boosting bilateral financial and business ties.

“Chan emphasised that Hong Kong, with its unique advantages under ‘one country, two systems’, serves as an international financial centre connecting the mainland and the world,” a government spokesman said, referring to the city’s governing principle.

“He welcomed Saudi Arabia’s capital and enterprises to utilise Hong Kong as a high-quality platform to expand into the mainland and the Asian markets.”

Hong Kong authorities have been keen on tapping into wealthy Middle Eastern markets. The Saudi Exchange was recognised by the Hong Kong stock exchange, allowing potential secondary listings in the city. A new exchange-traded fund (ETF) tracking Saudi equities was also listed in the city.

Paul Chan aims to ‘clear up doubts about Hong Kong’ at Davos forum

As political and business leaders gathered in Davos for the annual event, the city government said Chan, accompanied by Secretary for Commerce and Economic Development Algernon Yau Ying-wah, aimed to explain the latest developments in Hong Kong and promote new advantages and opportunities.

The finance minister on Monday also met Jeremy Allaire, CEO of stablecoin issuer Circle Internet Financial and Ori Goshen, co-CEO of artificial intelligence company AI21 Labs.

Circle, founded in 2013 and headquartered in Boston, is the issuer of the world’s second-largest stablecoin, USD coin (USDC). It was reportedly planning to go public this year, marking a significant milestone in merging cryptocurrency with traditional financial markets.

AI21 Labs is an Israeli generative AI start-up backed by Intel to compete against OpenAI and Anthropic among other players. The Tel Aviv-based company, founded in 2017, was able to secure rounds of funding during a time when the country was at war.

The finance minister told them that Hong Kong was pressing ahead with developing digital assets in a “prudent and orderly manner”, according to the spokesman.

Chan also said the authorities were consulting the public on regulating stablecoins to set an appropriate regulatory framework and promote the responsible and sustainable development of the industry.

‘Hong Kong is an ideal option for foreign investment despite market pressures’

He welcomed fiat-based stablecoin companies to set foot in Hong Kong to provide more innovative and convenient financial services to the community and called on AI companies to consider the city as a gateway to the Asian market.

Last year, the scandal involving JPEX, an unlicensed cryptocurrency exchange, cast a shadow over Hong Kong’s aspirations to become a global virtual asset hub and revealed regulatory gaps soon after the city rolled out rules requiring cryptocurrency exchanges to meet investor protection standards.

More than 2,000 people have come forward as victims in the case involving alleged losses of about HK$1.6 billion (US$204.5 million). The total number of arrests linked to the platform rose to 66 as of November, but no one has been charged yet.