October 2018 News and updates

Secretariat: Content partner: HKTDC NEWS

HKTDC Belt and Road outreach: Exploring business and investment collaboration opportunities

Three recent outreach activities organised by the Hong Kong Trade Development Council (HKTDC) promoted Hong Kong’s role as a facilitator and commercial hub for the Belt and Road to key markets including the Chinese mainland, ASEAN, Central Asia and Central Europe.

MAINLAND-HONG KONG JOINT INVESTMENT AND PARTNERSHIP MISSION TO KAZAKHSTAN, GEORGIA AND AUSTRIA, 17-26 The Mainland-Hong Kong Joint Investment and Partnership Mission to Kazakhstan, Georgia and SEPTEMBER 2018 Austria visited TU Wien Plus-Energie-Bürohochhaus in Vienna on 24 September n September 2018, the HKTDC and the Ministry of Commerce of People’s Republic of China (MOFCOM) jointly city development and TU Wien Plus- Georgia, which recently signed a Free Iorganised a mission to Kazakhstan, Energie-Bürohochhaus, one of the Trade Agreement (FTA) with Hong Georgia and Austria to explore business world’s first plus-energy high-rise office Kong at the third Belt and Road Summit and investment collaboration buildings, in Vienna. held in Hong Kong in June 2018. opportunities in these three key markets During the mission, the HKTDC Hong Kong Mission Leader and along the Silk Road Economic Belt. signed a Belt and Road Strategic HKTDC Deputy Executive Director The delegation, comprising some 60 Partnership Agreement with the Raymond Yip said: “Through this joint investors and services professionals Industrial & Commercial Bank of China investment and partnership mission, we from the Chinese mainland and Hong (Almaty) and a Memorandum of hope companies from the Chinese Kong, networked with local government Understanding (MoU) with Enterprise mainland and Hong Kong will get a agencies and project owners, learned Georgia, Georgia’s trade and more comprehensive understanding about investment and business investment promotion agency, to about the investment needs and opportunities in the three countries, and strengthen information exchange on tremendous opportunities available in visited infrastructure and smart city Belt and Road development and other the Central Asian and Central projects such as the Chinese-Kazakh trade and investment projects, as well European markets. It is our hope to joint venture Asia Steel Pipe as to facilitate participation in the bring potential investment from the Corporation, the Park of Innovative events and missions to be organised by mainland to Kazakhstan, Georgia and Technologies and DAMU Logistic the three parties. Austria, especially into its infrastructure Centre in Almaty, a large-scale The mission is the first Mainland- development under the Belt and Road residential and business development Hong Kong joint delegation organised Initiative, with potential deals to be by China’s Hualing Corporation in by the HKTDC to Kazakhstan, and the facilitated by Hong Kong services Tbilisi, and the Aspern Seestadt smart first HKTDC mission to visit Austria and providers.”

Belt and Road Global Forum update (October 2018) 2 HKTDC NEWS

BELT AND ROAD BUSINESS MISSION TO SHENZHEN, 31 MAY 2018 This May, the HKTDC, the Economic, Trade and Information Commission of Shenzhen Municipality and the Hong Kong and Macau Affairs Office of the Shenzhen Municipal People’s Government jointly organised a Hong Kong business mission to Shenzhen, one of Hong Kong’s key partners in Guangdong-Hong Kong-Macau Bay Area development and in exploring Belt and Road opportunities. The Hong Kong delegation, comprising some 30 business leaders representing various sectors including finance and investment, logistics, infrastructure and real estate, information technology, manufacturing HKTDC Chairman Vincent HS Lo attended the "Indonesia-Hong Kong Strategic Partnership" seminar and professional services, met with held in Jakarta on 25 April Shenzhen government officials, visited local projects and enterprises, and attended a Shenzhen-Hong Kong Federation of Industry and Commerce leaders and project owners. roundtable to discuss collaboration co-organised a Hong Kong-Shanghai Chief Executive of the Hong Kong opportunities in smart city development, joint infrastructure investment mission Special Administrative Region Carrie infrastructure investment, e-commerce to Manila, the Philippines and Jakarta, Lam delivered a keynote speech at and other fields under the Belt and Indonesia in April 2018 to discuss the “Indonesia-Hong Kong Strategic Road Initiative. cooperation and investment Partnership on the Belt and Road The mission promoted Hong Kong’s opportunities driven by growing Initiative” seminar and luncheon, advantages as a one-stop platform for intra-regional cooperation in Asia under where a MoU was signed between mainland companies’ outbound the Belt and Road Initiative. the HKTDC and the Indonesia investment, and helped Hong Kong The delegation comprised some 40 Investment Coordination Board businesses keep abreast of the investors and services professionals (BKPM) to further promote investment mainland’s market potential and from Hong Kong and Shanghai with cooperation between Indonesia and connected them to potential partners interest and expertise in finance, Hong Kong. from Shenzhen. consultancy, architecture, energy, HKTDC Chairman Vincent HS Lo Mission Leader Jonathan KS Choi, waste and water treatment, said: “Indonesia, being the biggest Deputy Chairman of the HKTDC Belt engineering and construction, legal and economy in Southeast Asia and a and Road Committee, said: “Shenzhen accounting, transportation as well as founding member of the ASEAN and Hong Kong are key cities in both other sectors. community, plays a very important the Belt and Road Initiative and the During the four-day programme of role in shaping the Belt and Road. I Guangdong-Hong Kong-Macau Bay meetings, visits and networking am pleased that the long-time trust Area development plan. Strengthening sessions, the delegation met with we have shared with Indonesia will cooperation between Shenzhen and government departments including the give us a head start to work together. Hong Kong will allow both cities to play Philippine National Economic and The Philippines is one of the fastest a more catalytic and leading role in Development Authority, the Philippine growing economies in ASEAN and driving forward the development of both Department of Trade and Industry, the has a young workforce. Offering a initiatives.” Philippine Economic Zone Authority, combination of capital, professional the Indonesian Ministry of National expertise and production capability HONG KONG-SHANGHAI MISSION Development Planning Board and the from Hong Kong and Shanghai, we TO THE PHILIPPINES AND Indonesian Ministry of Transportation, hope to collaborate with partners in INDONESIA, 23-26 APRIL 2018 and learned about collaboration these two countries to turn investment The HKTDC and the Shanghai opportunities from local business opportunities into viable ventures.”

Belt and Road Global Forum update (October 2018) 3 BIG PICTURE

Managing risk for Belt and Road projects through Hong Kong

Hong Kong’s position as a regional centre for insurance and gateway to and from China is helping international investors reduce risk, according to Marsh Hong Kong’s Lei Yu.

egarded as “Asia’s insurer”, Hong Kong’s insurance industry dominates the region. Having moreR than 160 insurance companies and reinsurers licenced locally creates a competitive market with the expertise to connect and advise investors worldwide. Lei Yu, Managing Director and Chief Executive Officer of Marsh (Hong Kong) Limited, says Hong Kong has an exceptional depth of regional knowledge about local liabilities plus highly-skilled associated professional services providers who have strong internationally-recognised centre for connections with insurers globally. She financial, legal and professional believes the scene is set for dynamic services is crucial for deal makers growth in Hong Kong, making it the venturing into unfamiliar territory since go-to destination for international it provides the expertise to guide them investors seeking to mitigate their risks through the challenges they face. while investing in Belt and Road Yu says for Belt and Road projects, projects. investors making cross-border deals Chief Executive of the Hong Kong need to pay attention to local Special Administration Region Carrie conditions such as the political climate, Lam recently added to the optimism of local laws, financial environment and Hong Kong’s insurance industry by economic development. announcing that the China Banking Yu thinks companies tend to focus and Insurance Regulatory too much on the upside of potential Commission is to give preferential opportunities coming out of a deal, treatment to Hong Kong’s reinsurance instead of looking at the potential for a companies that work with mainland Lei Yu, Marsh Hong Kong downside, and how best to protect their insurance companies seeking to do investment if that happens. She says business offshore. In addition, Hong HK$50 million (US$6.36 million) over there are four areas deal makers must Kong's Insurance Authority is three years to boost industry training. assess before signing contracts: establishing a facilitation platform for Belt and Road opportunities with the STEPS TO MITIGATE RISK • Political and geopolitical risk Hong Kong government providing Hong Kong’s status as an • Natural disaster risk

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• Operational risk Having Hong Kong’s regional savvy terrorism and cyber security. • Commercial risk insurers work alongside mainland Even when due diligence has been investors helps reduce cross-border covered, unexpected losses can Surprisingly, commercial risk is often issues. For example, when a Chinese occur. At this stage, according to Yu, it overlooked. For example, Marsh's mainland corporate and a regional is still not too late if investors act research reveals not all deals are set company co-invest, Hong Kong’s swiftly. “Insurance doesn’t cover 100% on firm ground, with more than 50% of more experienced industry, with its of losses. There will always be risk large infrastructure projects not international pool of talent and sharing, with limits to indemnity and bankable without either multilateral or perspectives, can provide deductibles that corporates need to government bank support. In tandem professional advice on regional consider. It may be too late to buy with identifying risk, deal makers need jurisdictions which vary in the insurance after the event, but there to undertake thorough due diligence maturity of their investment products. are many other ways to mitigate risks and maintain proper management from, for example, a disaster or regime oversight over local projects. MITIGATING LOSS change,” she says. Although Hong Kong’s insurers have a Yu recommends engaging a risk HONG KONG ADVANTAGES long history of underwriting large adviser to help assess damage, reduce Marsh Hong Kong operates as a risk infrastructure projects, the associated potential losses and reassess risks in consultant for local and cross-border risks and exposure can be sizeable. the future. Alternatively, Hong Kong’s projects, providing technical expertise During a panel discussion at the Belt experienced loss adjusters can use and analysis, quantifying risk, and Road Summit organised by the their forensic insurance expertise to assessing the level investors are HKTDC in June 2018 in Hong Kong, examine contracts for clauses or willing to individually bear and then experts explained that more than 50 potential grey areas that could open transferring that knowledge to an types of risks are associated with the way to a claim or support an industry partner. Investors who are large-scale infrastructure projects. investor’s position. In either managing risk in this way with a While these may range from natural circumstance, whether prior or post knowledgeable consultancy disasters and legal liability, new investment, Hong Kong’s insurance, undertake extensive due diligence insurance solutions are swiftly being services industries and arbitration are which also helps to make a project adopted to provide cover for political helping reduce risks for those seeking more bankable, explains Yu. and environmental risks, as well as to invest in Belt and Road projects.

Belt and Road Global Forum update (October 2018) 5 INVESTOR DIALOGUE

Putting captive insurance to work with Belt and Road projects

Only three companies based in Hong Kong use captive insurance to protect their Belt and Road projects but with encouragement, others could follow their pioneering lead.

nsuring against risk is a key component of doing business globally. Companies unfamiliar with regional Iconditions, politics, regulations, languages, cultures and legislatures are most at danger of putting their operations at risk of financial loss when they lack the requisite knowledge. This applies, of course, to Belt and Road projects. The complexity surrounding these projects not only corporation, it’s also able to gather deep involves construction and infrastructure local knowledge about both risks and the investment worth billions of US dollars, it environment likely to impact on returns. also involves a network of businesses, From a risk perspective, Chow says it governments, authorities, financing, makes sense to set up a captive insurer subcontractors and supply chains all entity if your corporation believes it can wanting to protect their own investments price risk better than a general insurer. and shareholders. Insuring through a commercial insurance Comprehensive insurance against loss company means paying a premium that or legal repercussions is one way of takes into account losses and claims by reducing corporate liabilities within these the general insuring public. projects and jurisdictions. This Directly tapping reinsurers reduces transaction is normally carried out using costs by being able to access more commercial insurers and reinsurers, a competitive rates. It can also be tailored delegation that’s particularly necessary to cover risks which are not easily with potentially large claims. insurable, such as cyber security or In Hong Kong, the Sinopec Group, a terrorism, and to reduce costs since a global petroleum, petrochemical and Andrew Chow, Sinopec Insurance single entity’s loss experience is usually energy conglomerate and one of the better than the market average. A world’s top chemical producers, has taken the flexibility to negotiate directly with company using captive insurance is also a different approach. It is one of the three reinsurers. Sinopec Insurance's Chief not paying any intermediary payments. Hong Kong-based Chinese state-owned Risk Officer Andrew Chow sees captive Internationally, captive domicile centres enterprises (SOEs) using captive insurance as a sophisticated form of such as Bermuda and Luxemburg offer insurance to cover their own groups' risks. self-insurance. “A captive insurance encouraging tax breaks. In Asia, company is owned by the parent Malaysia and Singapore also offer HOW CAPTIVE INSURANCE WORKS company and can only write risk for the attractive tax incentives to enterprises Working outside the commercial parent group.” Since a captive insurer setting up captive insurance in their insurance market gives captive insurers focuses on protecting only its own jurisdictions.

Belt and Road Global Forum update (October 2018) 6 INVESTOR DIALOGUE

According to Chow, Hong Kong is also commercial hub for Belt and Road arising from projects between a good location to set up captive projects and deep pool of professional subsidiaries and associates. This insurance. Factors in its favour include a services, Hong Kong is ideally-placed could reduce the overall cost of free market economy and currency to help mainland enterprises create insurance, reduce avoidable losses exchange, an internationally-recognised their own captive insurers, a move and increase overall risk management legal system, mature markets and global Chow says would also benefit Hong capabilities. connectivity with reinsurers, lawyers and Kong’s insurance industry. Another option would be for Hong loss adjusters. The only downside, he Sinopec’s extensive global Kong to host a centralised data source says, is Hong Kong would need to investments means the or pool of information about Belt and develop greater expertise in managing conglomerate's expertise in Road risk, where captive insurers captive insurance. Since this expertise is recognising and assessing risks to could share their local knowledge and readily available internationally, Chow Belt and Road projects is expertise. feels these skills could be sourced as unprecedented, and that many of its Currently all three captive insurers required. projects are aligned directly with the in Hong Kong, the Sinopec Group, Belt and Road Initiative, particularly China General Nuclear Power Group REDUCING LOSS THROUGH since a number of countries within its (CGN) and China National Offshore KNOWLEDGE reach have rich oil, gas and energy Oil Corporation (CNOOC) individually Assessing risk in Belt and Road resources. For instance, its oil and gas hold risk assessment data for their jurisdictions is extraordinarily complex, exploration and development projects own purposes but do not share their spanning everything from legal and include 11 countries and span 18 collective knowledge. contract risk, to environmental and projects along the Belt and Road, In Sinopec’s case, the group’s global political uncertainty. encompassing Russia, Kazakhstan, knowledge base is gathered from 25 “Risk identification is not easy. It’s a Saudi Arabia, Indonesia and countries in which it operates. Having mixture of art and science,” says Chow. Myanmar, while refinery investments a centralised database in Hong Kong “Without a full understanding, you will include India, Malaysia and Thailand. where information is shared globally never fully identify risk, and only by As Chow mentioned during panel would, Chow believes, benefit correctly identifying risk can you then discussions at the 2018 Belt and Road corporates seeking to explore manage it.” Summit, by setting up a captive potential Belt and Road projects from insurer operation in Hong Kong, SOEs outside the region, as well as those in TAKING THE LEAD and large organisations could pool Asia looking to expand their With its unique position as the and share their knowledge about risks operations.

Belt and Road Global Forum update (October 2018) 7 MARKET VIEW

Strengthening Hong Kong’s position as Asia’s insurance hub

Recent policy changes and industry-led developments are positive steps for Hong Kong’s insurers and should encourage more international firms to relocate their headquarters to the city.

t’s little wonder that Asia Insurance’s Hong Kong Chief Executive Officer, Winnie Wong, Idescribes the local market as crowded. No fewer than 160 separate insurance firms have operations in the city, offering an array of services with their extensive skills, exceptional regional experience and long- established global networks. However, she says, a number of them have been relocating their headquarters elsewhere. Banking and Insurance Regulatory As the gateway to Belt and Road Commission (CBIRC) agreed to give investments, Hong Kong’s preferential treatment to mainland experienced professional services insurers ceding business to Hong within the insurance industry are an Kong-based reinsurance companies, essential part of the investment under the China Risk Oriented process, from preventing risk before Solvency System (C-ROSS) a contract is signed, to bankability agreement. and ensuring the long-term success The official announcement stated: of each project. “CBIRC supports Hong Kong being the For Wong, it’s all about finding (Chinese) mainland’s overseas risk solutions. “People always talk about management platform to assist risk, but insurance is actually the mainland enterprises in going global... solution. I’m a very positive person, The preferential factor under C-ROSS and I think that if we position will be applicable to high-quality Hong ourselves well, Hong Kong insurers Kong reinsurers, which will foster the will be known for our solutions. We development of the reinsurance are very close to Belt and Road Winnie Wong, Asia Insurance business in Hong Kong.” decision makers but we’ve not been The move has obvious benefits. promoting ourselves correctly.” "game-changer" and a new initiative by China’s investors will gain greater Wong believes two new Hong Kong’s Insurance Authority (IA) access to insurers with extensive developments in particular are likely to connect Belt and Road investors regional knowledge and the ability to to give Hong Kong’s industry a boost. with local industry experts. help them better mitigate risk in Belt These include a recent joint and Road infrastructure and investment agreement with the Chinese mainland STRONGER TIES REDUCE RISKS projects, and it will also strengthen which Wong describes as a In July 2018, the IA and the China Hong Kong’s position as the

Belt and Road Global Forum update (October 2018) 8 MARKET VIEW

reinsurance hub of Asia. • Risk mitigation agencies. For example, Wong and a Wong says this development now • Risk transference – deciding which panel of local insurers and reinsurers gives Hong Kong a competitive edge risks will be transferred to an insurer formed the Hong Kong China War over other Asian insurance hubs such or risk manager Risk Syndicate in 2017, to assess the as Singapore. This is because the new • Risk retention – deciding on the impact armed conflict would have on category for Hong Kong places it as degree of risk an investor is shipping and maritime investments. close to "onshore" as possible. Under comfortable to retain in-house Other such panels could be formed C-ROSS, the capital requirement for to find solutions for political risk (since Hong Kong-based reinsurers to do As part of its strategy to position without political risk cover it is difficult business with the Chinese mainland Hong Kong as a risk management to get funding from banks in some would be lower than other "offshore" centre, the IA recently released jurisdictions), terrorism, cyber security countries and regions. This would plans to launch an insurance and cyber liability, kidnap and ransom therefore increase the competitiveness facilitation platform to connect Belt as well as construction risks, and to and attractiveness of Hong Kong as a and Road investors to local insurers, devise tailor-made solutions to reinsurance hub for the region. reinsurers, insurance brokers and warranty and indemnity. Given the The decision is also important for related professional service size of Hong Kong’s industry, finding China’s state-owned enterprises providers. solutions to such a diverse range of (SOEs) and large private corporations As well as providing connectivity, risks would need independent which she points out have sometimes the IA hopes this will strengthen the oversight. underestimated the risks involved in local industry by encouraging more “No single company in Hong Kong emerging markets. Violations of local corporates to place their insurance can lead this sort of initiative, so we requirements and problems in claims and reinsurance in Hong Kong. need the Insurance Authority to take have proved costly to these entities. Wong says the IA has been very the lead,” Wong says. Given the responsive, and is actively consulting recent innovative developments and MOVING IN THE RIGHT DIRECTION with the industry to explore support being shown by the Chinese From an investor’s perspective, finding opportunities for education, mainland and local authorities solutions to risk involves a number of promotion and networking. together with industry drivers such as steps, according to Wong. These Winnie Wong, it seems Hong Kong’s include: STRENGTH IN UNITY insurers are setting the pace in Not all of Hong Kong’s insurance helping to find effective solutions and • Risk awareness initiatives are being driven by limit corporate risks posed by Belt • Risk identification government or government and Road investments.

Belt and Road Global Forum update (October 2018) 9 VISUAL BELT AND ROAD

Arbitration jumps as Belt and Road investment increases

Disputes handled by the Hong Kong International Arbitration Centre have reached record levels with one in four cases involving Chinese mainland and Belt and Road jurisdictions.

ast year, the Hong Kong announced, there have been 362 involved parties from the Chinese International Arbitration Centre arbitration cases where at least one of mainland and those from a Belt and (HKIAC) responded to 532 new the parties was from a Belt and Road Road jurisdiction. By 2017 this had risen casesL involving disputing parties. The jurisdiction, according to statistics to 25%, reflecting the growing trust outcomes of 297 cases were decided compiled by HKIAC. Chinese state-owned enterprises by its independent and internationally- Disputes occur across all sectors. In (SOEs) and private businesses place in recognised panel of expert arbitrators. 2017, HKIAC figures indicate the Hong Kong as a centre for mediation. Many of these commercial majority of arbitration cases involved “Chinese (mainland) companies feel disagreements involved a complex international trade (31.9%), followed by they have an affinity with Hong Kong, chain of investments worth billions of corporate, banking and financial and foreign investors know there are no US dollars. services (19.7%) and construction surprises,” said HKIAC’s Secretary- As the Belt and Road Initiative gains (19.2%). Maritime disputes accounted General Sarah Grimmer. “Predictability momentum, HKIAC’s overall case load for 8.8% of the case load, closely is important. Parties know Hong Kong is has increased 20% year-on-year. Since followed by professional services (8.1%). regulated, has a rule of law, and that the 2013, when the Initiative was In 2014, only 11% of the disputes centre is independent and neutral.”

2017 disputes handled by HKIAC (by sector) In 2017, HKIAC registered cases concerning disputes arising from a wide range of sectors. A breakdown of those sectors is provided below:

31.9% 19.2% 13.5% 8.8% 8.1% INTERNATIONAL CONSTRUCTION CORPORATE MARITIME PROFESSIONAL TRADE SERVICES

6.2% 4.6% 1.9% 1.2% 4.6% BANKING AND INTELLECTUAL ENERGY INSURANCE OTHERS FINANCE SERVICES PROPERTY

Belt and Road Global Forum update (October 2018) 10 VISUAL BELT AND ROAD

WHY CHOOSE HONG KONG? far-reaching enforceability, court of the parties named in an arbitration There are a number of reasons for rulings in one jurisdiction may not be hearing simply do not turn up or turn up using Hong Kong as a jurisdiction for enforceable in another. Language for a limited period of time, but the arbitration. A key one, Grimmer says, barriers and different legal systems tribunal can still make a ruling and the is the city’s robust confidentiality add further complexity to international corporate bringing the case to the provisions that attract corporates parties seeking restitution via tribunal can still win, despite the looking to avoid messy publicity about traditional court systems or arbitration absence of the other party. internal grievances. In addition, where in other jurisdictions. Vincent Connor, Partner and Head of there is a need to move swiftly in order “For example, you might have won Pinsent Masons’ Hong Kong office, to prevent the loss of assets, or your award but depending what you also advises against taking complex destruction of potential evidence, have put in your arbitration clause, commercial issues relating to Belt and Hong Kong courts issue urgent relief your award might not be enforced. Road infrastructure projects to court. notices in a timely manner. That goes into the heart of dispute He suggests these are better handled As one of the 159 signatories to the resolution because that’s the only through arbitration, which draws on the New York Convention, decisions reason you go into arbitration. If you expertise within arbitration panels to handed down by HKIAC are can’t get your money, you’ve wasted ensure a focused, professional enforceable across many jurisdictions. your time,” says Grimmer. approach that quickly identifies issues In comparison to arbitration’s According to Grimmer, around 15% and provides resolution.

Arbitration 2014-2017: Cases handled by HKIAC involving the Chinese mainland and Belt and Road jurisdictions

RUSSIA

KOREA BANGLADESH EGYPT TAIWAN SAUDI ARABIA INDIA THAILAND PHILIPPINES SINGAPORE MALAYSIA INDONESIA

MAURITIUS SOUTH AFRICA

Belt and Road Global Forum update (October 2018) 11 VISUAL BELT AND ROAD

Connor believes Hong Kong’s professional services have a big role to play in helping corporates in the stages before arbitration, in supporting the parties involved, narrowing the gap between them and helping them resolve issues together through mediation. Knowing the strengths and weaknesses in a case is key to dispute resolution. Connor concludes: “Having access to absolutely cutting-edge engineering advice, top-of-the-class construction law advice, and people who can show you how to prove your claim or show you what you think is a huge loss is unprovable, can get a party into a framework where it really understands Sarah Grimmer, HKIAC Vincent Connor, Pinsent Masons Hong Kong how strong or how weak its position is.” and infrastructure projects. Hong Kong’s arbitrators include CHINA AND BEYOND With many parties involved in the corporates from the Chinese mainland, Hong Kong’s growing appeal is also supply chain, arbitration allows parties Bangladesh, Egypt, India, Indonesia, directly linked to increasing awareness to determine the applicable law, Malaysia, Mauritius, Russia, among investors that their contracts language, and whether disputes under Singapore, Korea, Thailand, need to include an enforceable more than one contract with different Philippines, South Africa and Saudi arbitration clause that clearly states the parties can be run together before the Arabia. location where parties will seek same tribunal hearing, thereby saving arbitration. This is especially important time and costs, and lowering the risk of SPREADING THE MESSAGE for international transactions since the differing outcomes from different Another reason why demand for HKIAC’s dispute resolution has the tribunals. HKIAC arbitration is also increasing is advantage of neutrality, flexibility, due to its targeted promotional work in enforceability and language. REDUCING RISK FROM THE START the region. Last year, Grimmer’s team “Hong Kong’s traditional status as the In the euphoria of having just won an began a three-year outreach project connecting jurisdiction between agreement for a large-scale Belt and directed at emerging markets that are Chinese and non-Chinese parties is Road project, Grimmer would like those the recipients of Chinese outbound more and more relevant as Chinese drawing up contracts to think ahead investment. This Hong Kong initiative mainland parties enter contracts with and decide at the onset of a planned seeks to encourage these jurisdictions foreign parties,” says Grimmer. project where arbitration and dispute to use HKIAC arbitration clauses to The outflow of Chinese mainland resolution will be sought in case reduce risks associated with entering investment to Asian jurisdictions for something goes wrong. In order to into large-scale projects and their Belt and Road projects, combined with encourage more businesses to associated foreign direct investment growing foreign investment into these consider arbitration, HKIAC posts (FDI) risks. To date, ASEAN countries projects, creates increasing complexity simple yet effective clauses free of including Vietnam, Cambodia, in business arrangements, especially charge on its website. Indonesia, Thailand and Myanmar are when it comes to large construction Among those seeking recourse with participating in this programme.

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