[HONG KONG] Hong Kong is in talks with several Chinese electric-vehicle (EV) makers to establish local EV manufacturing, according to people familiar with the matter, as the financial hub looks to advanced industries to diversify its ailing economy.
The city’s officials aim to develop an EV assembly base – a relatively complex process requiring advanced skills, the people said, asking not to be identified discussing private deliberations. They are weighing potential sites in Hong Kong’s New Territories that border mainland China, they added.
The talks have included state-owned automaker FAW Group, one of the people said.
Hong Kong has “been proactively facilitating the development of strategic industries, including advanced manufacturing” as part of its 2022 I&T development blueprint, the city’s Innovation, Technology and Industry Bureau said in response to a Bloomberg News query. FAW didn’t immediately respond to a request for comment.
Hong Kong is turning to new industries to spur growth after years of economic challenges fuelled by political crackdowns, Covid-19 isolation and a property slump, which have undermined the city’s status as a premier financial hub. Policymakers have even resorted to drastic measures such as cutting thousands of civil servant jobs and raising taxes, as they seek to balance the government’s books and buffer the economy from global trade uncertainties.
Although Hong Kong is promoting itself as an advanced manufacturing hub to lure investment and create jobs, the city’s high land and labour costs will test that ambition. Adding to the hurdles, China’s own EV industry is struggling with overcapacity – with factories producing only half of their planned output – and a bruising price war that has forced a rare government intervention.
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Still, companies across China’s EV supply chain – from battery makers to parts suppliers – have been setting up shop in Hong Kong to leverage its financial system for their global expansion. The world’s largest battery maker, Contemporary Amperex Technology, opened its international headquarters in the city and launched its debut on the local stock exchange in May in the world’s biggest listing this year.
Other firms that have invested billions of dollars building bases in Hong Kong include autonomous driving outfits Black Sesame Technologies and Beijing Horizon Robotics Technology R&D. BLOOMBERG
