On his second visit to the Middle East since taking office, Chief Executive John Lee Ka-chiu led a delegation to Qatar and Kuwait with 30 business representatives from the Hong Kong Special Administrative Region and 20 entrepreneurs from the nation’s coastal regions, including Zhejiang and Fujian. The visit was aimed at strengthening business and people-to-people ties between the region and the city.

The trip marks Hong Kong’s enthusiasm for the Middle East, the chief executive having previously visited Saudi Arabia and the United Arab Emirates in 2023. Lee was reported as saying that the visit would “break new ground” for collaborative projects spanning trade, aviation, and legal services to promote the Belt and Road Initiative.

Hong Kong is both visionary and pragmatic to look to the Middle East. First, the region has positioned itself as one of the most critical emerging capital markets in the world. The oil monarchies of the Persian Gulf, including Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates, are initiating a post-oil transition by accumulating enormous sovereign wealth funds that have been used to unlock huge investments across the globe, positioning themselves as a key source of economic growth. As a global financial center, the SAR’s cultivation of such capital is critical, and likewise the city provides an essential nexus for such investments to reach a global platform in China itself, as well as in Asia and beyond.

Second, the Gulf states of the Middle East provide a leading alternative market during a time of geopolitical uncertainty and instability. The world is changing, and certainly not for the better. Traditional capital markets, such as the United States and the United Kingdom, are fraught with political instability and unpredictability. Not only has the former become increasingly hostile toward China as a whole, the HKSAR included, but the US is actively seeking to rip up global economic integration with protectionism, challenging the ethos of free and open markets that Hong Kong was built upon.

Washington’s tariff war damaged international investor confidence and hurt markets all over the world. Therefore, in seeking new sources of capital, it is essential for Hong Kong to hedge its bets. The Gulf states are known for their domestic stability and also their neutral position in geopolitics, remaining open to business engagement between the West and China alike. As they are primarily oil exporting states that are increasingly dependent on tourism and financial markets to propel their economic futures, they are likewise defensive of the multilateral trading and economic system, and have no interest in engaging in aggressive protectionism such as the US. This makes them reliable partners when it comes to deepening economic ties.

Hong Kong is adapting to keep up with this ever-changing game. The legacy markets of old are declining and becoming less prosperous, and the rise of “big capital” in the Middle East has become the “new game in town”, which even countries such as Britain are chasing

Thirdly, with such in mind, the global economy is shifting. Although Hong Kong rose to prominence as a “Western-centric” financial center in the latter half of the 20th century, global growth is becoming more diversified and multipolar with the rise of new emerging markets, which is slowly shifting the balance of power away from the West. As old sources of capital, such as the UK, experience stagnation, investors are continually looking for new sources of growth. Again, the Gulf states, which sit in the geostrategic position of the Middle East, offer a gateway to many developing and emerging economies.

Thus, Hong Kong is adapting to keep up with this ever-changing game. The legacy markets of old are declining and becoming less prosperous, and the rise of “big capital” in the Middle East has become the “new game in town”, which even countries such as Britain are chasing. Hong Kong, after all, remains one of the world’s leading financial centers, and the resources, infrastructure, and economic opportunities it offers cultivate the expanding economic vision of those countries accordingly. With this, a blueprint is laid out to navigate the storms of the disruption coming from Washington.

The author is a British political and international-relations analyst.

The views do not necessarily reflect those of China Daily.