A study conducted by UPS found that Asian markets are becoming the global epicentre for new consumer demand, with trade among 12 key markets, or Asia-12, making up 88% of global trade today.
UPS noted in its report that, in particular, Hong Kong will continue to be an integral part of intra-Asia trade, with mainly the high-tech segment driving trade value with the other 11 top Asian markets to more than US$1 trillion by 2030.
The study — titled "Clearing The Runway for Intra-Asia Trade", also found that trade among the Asia-12 could more than double in value from US$6.4 trillion in 2020 to US$13.5 trillion by 2030.
HK's trade prospects driven by strong middle-class
"Hong Kong has witnessed trade growth with other Asian countries of 2.2% annually over the past decade, accounting for 11% of intra-Asia trade in 2020," the report said.
It added that this has been in no small part due to its status as an established global and regional finance hub supported by an increasingly wealthy and urbanised Asian population.
"Rapid digitalisation will also continue to play into Hong Kong's reputation for manufacturing high-tech products such as broadcasting equipment, circuits, and mobile phones, all of which gained renewed importance during the pandemic," the UPS report said.
It further noted that the high-tech segment accounted for 65% of Hong Kong's intra-Asia trade value in 2020 and will remain its key growth pillar in the coming decade.
The study also identified the top intra-Asia trade lanes for businesses to prioritise in order to better hedge against supply chain shocks that tend to impact Hong Kong's economy more disproportionately than others, given its high dependency on the free flow of goods and people.
The high-tech segment, for instance, will see trade with Australia and ASEAN markets continue to hold the greatest promise.
Similarly, the report said industrial manufacturing and automotive (IM&A) segment could nearly double, led by trade with Indonesia, while the healthcare segment could increase six-fold by 2030, led by trade with the Philippines and Vietnam.
Meanwhile, the study said addressing trade barriers stimulated by the pandemic is essential to ensure growth.
"Hong Kong businesses surveyed cited lack of harmonisation of standards, shortage of labour and skills in the logistics industry, and poor engagement of Micro, Small & Medium Enterprises (MSMEs) as the top three challenges impeding regional trade," it said.
The study added that in order to remain competitive and unlock more trade opportunities, businesses in Hong Kong must work towards diversifying their supply networks, digitalising operations, and integrating MSMEs into global supply chains.
It further said that through public-private collaboration, regional trade could be further strengthened through standard harmonisation, tariff reduction, and promoting supply chain resilience.
"As the three-runway system of the Hong Kong International Airport set to officially commence operations in 2024, Hong Kong businesses, especially MSMEs, which constitute more than 98% of all business establishments, are uniquely positioned to capitalise on the opportunities from exponential growth in intra-Asia trade," said Lauren Zhao, Managing Director, UPS Hong Kong and Macau.