Hong Kong commissioner: Huge room to grow ties with Laos

Hong Kong: As Laos plays a greater role in regional logistics, there is huge room for Hong Kong to grow ties and economic cooperation with the country, the city’s commissioner, Nicholas Ho, has said.
To forge closer ties with Laos and the broader ASEAN region, Chief Executive of the Hong Kong Special Administrative Region (HKSAR) John Lee led a high-profile delegation that landed in Vientiane for a historic visit in July – a trip that also brought him to Cambodia and Vietnam. 

Mr Nicholas Ho.

In Laos, 12 memoranda of understanding were signed with Hong Kong, covering areas including investment promotion, trade and economic partnership, customs collaboration, financial services, and education, paving ways to foster mutually beneficial engagement.
Talking to Vientiane Times during the 9th Belt and Road Summit in Hong Kong on September 11-12, Mr Ho said the successful historic visit by Mr Lee has opened “a new era of Laos-Hong Kong collaboration.”
Laos’ strategic location, which sits in the centre of Indochina and shares a border with mainland China, has bolstered the country’s potential to become an investment destination.
Laos’s potential is amplified by the opening of the Laos-China railway in December 2021 as part of the broader Belt and Road Initiative, which has transformed the only landlocked country in ASEAN into a land-linked country and an important connector in the region.
During their stay in Laos, the Hong Kong delegation, which included Mr Ho, visited the Vientiane station on the Laos-China railway, which links the Lao capital with China’s southwest Yunnan province.
“The Chief Executive talked to passengers when they arrived. It was a surprise because this high-speech rail has created many economic opportunities,” the commissioner said, referring to the commute by rail that massively cut travelling time from a few days to just eight or nine hours on routes between the Lao capital and northern Laos as well as to the Chinese province.
As part of the pan-Asia rail network that links Kunming, the capital of Yunnan, to Singapore via Laos, Thailand, and Malaysia, the rail route has become an important gateway between Southeast Asia and China.
Recently, ASEAN Express - a freight train system linking Malaysia to Thailand, Laos and Chongqing in China - completed its first round trip, taking just nine days for a one-way journey compared to 14 to 21 days by sea, resulting in approximately 20 percent cost savings.
Positioning itself as a ‘super connector’ between China and the world, Hong Kong has a role to play in logistics services, leveraging the city’s advantages of being a global finance and trade hub, the commissioner said.
“Hong Kong can be the trading hub, branding hub and also finance hub,” Mr Ho noted, adding that green energy also boasts opportunities.
As a leading global issuer of green finance, Hong Kong can be a vital source of green financing to help countries in the region pursue their green and sustainable development drive.

The entrance to Hong Kong Polytechnic University, which has signed a Memorandum of Understanding with Vientiane Secondary School on the provision of scholarships for Lao secondary school students.

In 2023, the total amount of green and sustainable debt issued in Hong Kong surpassed US$50 billion. Out of this, the total amount of green and sustainable bonds arranged for issuance in the city ranked first in the Asian market, accounting for 37 percent of the total.
Hong Kong Mortgage Corporation Limited has also set its footprint in the field in Laos, contributing US$30 million as part of the $692.55 million financial package led by the Asian Development Bank to finance the construction of a 600-megawatt wind power plant in Sekong and Attapeu provinces in southern Laos, which is said to be the largest one in Southeast Asia.
“Hong Kong has a green standard of financing that allows international projects and Belt and Road projects to apply to and get access to funding and international partners,” Mr Ho said.
Bank of China’s Vientiane Branch, a subsidiary of Bank of China Hong Kong, has been operating in Laos, facilitating business operations and transactions, he added. 
Naming hospitality and tourism as areas of potential, Mr Ho said Hong Kong companies are already operating hospitality businesses in Luang Prabang, a world heritage site in northern Laos where the Laos-China railway runs through.
The launch of a once-a-week direct flight (on Saturday) between Hong Kong and Vientiane since April this year has forged closer ties between businesses and strengthened people-to-people links, the commissioner added. Scholarship programmes, which Hong Kong will offer to Laos, are also set to enhance goodwill, people-to-people and cultural exchanges.
During the Chief Executive’s visit, Hong Kong Polytechnic University, a leading university in the city, signed a memorandum of understanding with Vientiane Secondary School, with the university to provide scholarships to secondary school students.
Laos’ untapped potential in agriculture and Hong Kong’s expertise in financial services, engineering, architecture, and innovation are other opportunities for both sides to work together and figure out cooperation projects, the commissioner said.
Addressing the 2024 Hong Kong-ASEAN Summit on September 13 in the Chinese city, Deputy Minister of Finance Phouthanouphet Saysombath said Laos has been developing 12 special economic zones, with facilities in place and incentives offered to attract investment and trade.
Companies carrying out manufacturing operations in the SEZs enjoy investment incentives such as tax breaks, low labour costs, and cheap electricity. Additionally, manufacturers in SEZs enjoy privileged access to major markets in countries that provide exemptions or reductions of import tariffs on goods made in Laos, with an unlimited quota. Approximately 42 countries and territories extend such special treatment to Laos.
Looking to the future, Mr Ho recommended more interactions between both sides, saying Laos should showcase the country’s potential and incentives to Hong Kong businesses to encourage them to go to Laos.
With much potential remaining untapped, Commissioner Ho said the Chief Executive’s visit is a “golden opportunity” to kick off Laos-Hong Kong relations and explore new opportunities in the new era.

By Souksakhone Vaenkeo
 (Latest Update September 19, 2024)