'Asia buys Asia' reshapes global investment flows, HSBC CEO says
HSBC chief executive Georges Elhedery said at a Hong Kong summit that an 'Asia buys Asia' trend has added 1.8 per cent to Asian GDP over five years. He noted deepening ties between Asia and the Middle East, while a Bank of China executive highlighted Hong Kong's role as a super connector for offshor
A profound shift in global capital flows is under way as Asian and Middle Eastern economies deepen their economic ties, HSBC chief executive Georges Elhedery said on Tuesday, calling it the 'Asia buys Asia' phenomenon. He estimated the trend has contributed 1.8 per cent to Asian gross domestic product over the past five years.
Speaking at the 5th Global Financial Leaders' Investment Summit in Hong Kong, Elhedery outlined five key areas driving the transformation, from intra-regional trade growth to cultural affinity between West Asia and Southeast Asia. 'ASEAN was the first part of the channel in trade ahead of the US and Europe, and that's demonstrating much bigger consumer market, much bigger investment flow for manufacturing,' he said.
He noted that trade integration has accelerated through agreements such as the United Arab Emirates's 40 trade deals signed in five years and the recently concluded India-Gulf Cooperation Council trade agreement, with ASEAN-GCC negotiations also under way. The Asia-Middle East corridor has emerged as a powerhouse of global capital, Elhedery said, adding that both regions are now home to nine of the world's 10 largest sovereign wealth funds. 'More and more, that capital is looking for opportunities now within the Asian Middle East, and the demand for resilience-built infrastructure investments across the board is basically driving that capital to reinvest back onshore,' he said.
Cultural ties are reinforcing these economic connections, Elhedery added, noting that India views the Middle East as 'West Asia,' reflecting a geographic and cultural continuity that facilitates trade. Growing Indian and Chinese diasporas across these regions are further strengthening commercial links.
Bank of China vice chairman and president Hui Zhang emphasised Hong Kong's irreplaceable position in facilitating this diversification. He said the city is both a 'super connector' between China and global markets and a premier offshore yuan hub. 'Hong Kong accounts for more than 75 per cent of the payment for offshore RMB transactions,' Zhang said, adding that recent policies from the People's Bank of China supporting Hong Kong's offshore yuan centre status will further enhance its role. Zhang identified four key advantages for Hong Kong: its connector role for Chinese enterprises going global and foreign firms entering China, offshore yuan capabilities, financial innovation in emerging commodity transactions, and its concentration of international finance talent.
On market diversification, Elhedery highlighted gold as an increasingly important tool, citing its role as a risk-off asset, long-term inflation hedging properties, and intrinsic industrial value. He said HSBC has expanded its gold capabilities in Hong Kong, now operating one of the world's top three gold tokens and announcing vault storage capacity for 100 to 150 tons of gold. 'It's a demonstration of the strong appetite for gold as a diversification asset,' he said.