Hong Kong should leverage its unique status as the leading hub for multinational supply chains to help businesses navigate geopolitical tensions and fast-moving technological changes, an industry launch event was told on Friday.

Government officials, business leaders and industry scholars gathered for the launch of the HKUST Li & Fung Supply Chain Institute, a partnership between The Hong Kong University of Science and Technology and the Fung Group company to explore new research areas and develop cutting-edge solutions in the supply chains field. It also seeks to promote collaboration and talent development in the industry.

Unveiling the 2024-25 Budget in February, Financial Secretary Paul Chan Mo-po vowed to develop Hong Kong into a multinational supply chain management center that provides consulting services, trade financing and corporate training to enterprises

“As geopolitical tensions continue, the need for Chinese mainland enterprises to manage risk through diversification, including restructuring their supply chains, is great and urgent,” Acting Financial Secretary Michael Wong Wai-lun said at the opening ceremony.

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“Hong Kong is uniquely positioned to help these enterprises to overcome the challenges involved.”

Unveiling the 2024-25 Budget in February, Financial Secretary Paul Chan Mo-po vowed to develop Hong Kong into a multinational supply chain management center that provides consulting services, trade financing and corporate training to enterprises.

Wong said that Hong Kong will maintain its international character, attracting talent and strategic enterprises in sectors including life sciences, artificial intelligence, data science, financial technology, advanced manufacturing and new energy. Such companies will need supply chain management services once they have settled in Hong Kong, he added.

Wong also noted that Hong Kong provides different types of supply chain management services. He gave examples of the Hong Kong Trade Development Council’s Transformation Sandbox that offers one-stop consultancy services; the Hong Kong Monetary Authority’s Commercial Data Interchange to facilitate streamlined credit loan approval; and HKMA’s mBridge project to make Hong Kong among the first places in the world to settle cross-border transactions using central bank digital currencies.

Speaking at the launch ceremony held in the Asia Society Hong Kong Center in Admiralty, business leaders emphasized how heightened geopolitical tensions and accelerating technological shifts are disrupting global supply chains.

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“In the next five to 10 years, we will see a complete pattern of indirect trade instead of direct trade, leading to a total fragmentation of supply chains,” Fung Group Chairman Victor Fung Kwok-king noted. “Hong Kong is a tremendous global practitioner of supply chains. We are a supply chain management center.”

“We are really excited to work together, to create synergy, to advance knowledge in supply chain management, while leveraging and capitalizing Hong Kong’s unique position as the leading hub of resilient multinational supply chains,” said Nancy Ip Yuk-yu, HKUST president.

The institute will also serve as a platform for knowledge-sharing, collaboration and talent development in the supply chain industry.