International briefing: Investor initiatives to drive Hong Kong business communications in 2021

Long-established as a leading international financial centre, Hong Kong endured a turbulent 2020.

Of course, it was not alone in this regard. However, on-going socio-political unrest has continued to drive an international media narrative focussed on whether such turbulence will drive investors to other Asia Pacific hubs such as Singapore, Sydney, or Tokyo.

As Hong Kong seeks to solve what has been referred to as an ‘existential crisis’ and emerge stronger in 2021 a number of its strategic investor initiatives are likely to lead the news agenda.

Below we highlight some of the key themes and consider the implications for regional communications strategy.

The Greater Bay Area

The Greater Bay Area Initiative (GBA) is a driving force in Hong Kong’s resilience-building efforts. At around 56,000 square kilometres and covering 72 million people, the GBA accounts for just 1% of China’s entire landmass, but around 12% of GDP ($1.7 trillion USD). With improved market access and talent flows, the initiative should bolster Hong Kong’s reputation by building on its pro-business environment and common law system.

The development of the GBA will continue to be watched closely by the international investment community, and the media will retain a strong interest in the implications of its successes and failures.

‘Homecoming’ IPOs   

Hong Kong stock exchange recorded its most active year since 2011 in 2020 which is widely expected to be a prelude to a similarly vibrant market in 2021 despite continued challenges due to COVID-19. The increase in fundraising is mainly attributable to homecoming listings, which in 2020 amounted to approximately 34 percent of funds raised and included big names such as Alibaba.

The trend stems from reforms to regulation that had inhibited unicorns from listing in prior years. As a result, more US-listed PRC tech companies are expected to conduct a homecoming in the next year feeding both the regional business narrative and global news agenda.

A global ESG hub

Sustainable investment has been one of the fastest growing areas in recent years shifting from a niche area into the mainstream. To ensure competitiveness in the long run as a leading international financial centre, Hong Kong has nurtured the development of an ESG ecosystem and encouraged businesses to proactively integrate ESG into corporate behaviour.

In 2019, $10billion (USD) of green bonds were arranged and issued in Hong Kong, a threefold increase on 2017. Media interest will remain strong in these areas as Hong Kong continues to make further strides in incorporating ESG thinking into existing systems and frameworks, and growing its pool of ESG investment talent.

A sharper focus on fintech

Contrary to international views of the region, Hong Kong isn’t as digitally savvy as often perceived, having allowed competitors to catch up in recent years. However, now a strategic sector, fintech is benefiting from significant investment aimed at fostering growth and building a world-class hub.

Correspondingly, the media are approaching fintech with a sharper focus. The South China Morning Post has launched a new consumer tech bulletin, Abacus, and broadsheet newspapers are increasingly covering fintech news across the board. Trending topics include the launch of virtual banks and fledgling digital currencies backed by China.

Communications strategy

Communications planning must adapt to the reality of this media landscape. Businesses should revisit their strategic positioning in order to capture the opportunities presented and keep them under review throughout the coming year.

Irrespective of how the trends described pan out, media competition remains fierce for those trying to tell their stories. Limited journalist capacity means reporting will continue to focus on news surrounding large companies or big events. For smaller companies, communications must be smarter, more effective, and aware of the increased need to show ESG credentials.

Of course, the turbulence is not over yet. Stakeholder and crisis communications remain core to ensuring business continuity. Foremost among which, employee communications are vital to making sure that people know where their organisation stands. These must be managed carefully as associated risks may arise in relation to partners, sponsorships and advertising, as well the use of social media at both a corporate and an employee level.

This briefing was produced in collaboration with Paradigm Consulting. More information on Infinite Global’s international services can be found here.