LCQ7: Developing the halal market
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Question:
It has been reported that the global Muslim population currently exceeds 2 billion, representing about 25 per cent of the world's total population. Based on the State of the Global Islamic Economy Report 2022 released by DinarStandard in 2023, Muslims spent US$2.29 trillion in 2022 on, among others, food, pharmaceuticals, cosmetics, fashion and travel, and the global Islamic finance assets are expected to reach US$5.96 trillion by 2026. There are views that Hong Kong should expand its share of the international halal market in the countries along the Belt and Road, and strengthen industrial co-operation with the relevant countries. Regarding the development of the halal market, will the Government inform this Council:
(1) whether it has kept information on the Gross Domestic Product (GDP) contributed to Hong Kong by the halal industry; if so, of the respective GDP generated in Hong Kong in each of the past five years by the products or industries in the halal market (i.e. (i) food and beverages, (ii) pharmaceutical and health products, (iii) cosmetics, (iv) fashion, (v) hotel and tourism, and (vi) financial services); if not, whether it has plans to compile statistics and keep the relevant information from now on;
(2) whether it has kept information on Hong Kong enterprises which have exported goods to Muslim countries; if so, of the number of Hong Kong enterprises which have exported goods to Muslim countries in each of the past five years, the types of their goods and the respective GDP involved; if not, whether it has plans to compile statistics and keep the relevant information from now on;
(3) whether it knows if the products currently re-exported through Hong Kong can be sold in the relevant Muslim countries after being certified by the Incorporated Trustees of the Islamic Community Fund of Hong Kong in accordance with Islamic law and procedures; if so, of the details; if not, what channels are available for such re-exported products to be sold in Muslim countries; and
(4) whether it has plans to introduce a "halal certification system" and conduct mutual recognition of halal certification with major Muslim countries, so as to become a core corridor for certification and trade between related Mainland production enterprises and the halal consumer market, thereby promoting a steady growth in the trading volume of halal products in Hong Kong; if so, of the details; if not, the reasons for that?
Reply:
President,
Upon consulting the Culture, Sports and Tourism Bureau and the Financial Services and the Treasury Bureau, the consolidated reply to the Hon Yung Hoi-yan's question is as follows:
Emerging markets such as the Middle East, the Association of Southeast Asian Nations (ASEAN) and other countries along the Belt and Road (B&R) have been the Government's valued trade and economic partners. These countries' economic development is growing rapidly and their markets possess vast potential, alongside enormous population of Muslims. The Government has been actively encouraging various sectors of society to seize business opportunities in these markets, so that they can develop in areas such as trade, tourism and finance and provide products and services tailored to the needs of these emerging markets, including the Muslim population therein.
According to the information provided by the Census and Statistics Department (C&SD), the total value of Hong Kong's domestic exports to Muslim countries (Note) increased from HK$2.7 billion in 2020 to HK$5.5 billion in 2024 whilst the total value of Hong Kong's re-exports to Muslim countries increased from HK$178.8 billion in 2020 to HK$215.8 billion in 2024, recording an average annual growth rate of about 19.0 per cent and 4.8 per cent respectively in the past five years. The values of Hong Kong's domestic exports and re-exports to individual Muslim countries in the past five years are at Appendices 1 and 2 respectively. Amongst others, major commodities of Hong Kong's domestic exports to Muslim countries include "beverages", "jewellery, goldsmiths' and silversmiths' wares, and other articles of precious or semi-precious materials" and "petroleum, petroleum products and related materials", whilst major commodities of Hong Kong's re-exports to Muslim countries include "telecommunications and sound recording and reproducing apparatus and equipment", "electrical machinery, apparatus and appliances, and electrical parts thereof" and "office machines and automatic data processing machines". The C&SD does not separately maintain information about the number of companies in Hong Kong exporting products to Muslim countries nor the relevant value of gross domestic product.
Besides, although the "halal industry" does not have standard international industrial classifications like the retail and the catering industries rendering it impossible to draw up corresponding statistical coverage of the "halal industries" for compiling relevant information, the Government has been actively encouraging various sectors of society to seize opportunities in these halal markets, including promoting developments in areas such as trade, tourism and finance.
In terms of trade, meeting the requirements for relevant halal product certifications and understanding the opportunities and challenges within the relevant markets are crucial. In this regard, the Hong Kong Trade Development Council (HKTDC) has been conducting research on individual key halal markets to understand their latest developments, and providing practical information to Hong Kong businesses, including the information on relevant product certification bodies. Furthermore, the HKTDC has also been providing various platforms to promote business opportunities in the halal market. For example, the HKTDC has been promoting different high-quality halal products and food, as well as related trading of products, at its annual Food Expo PRO to help the catering industry to expand its network and businesses. To assist Hong Kong enterprises in grasping the opportunities of the halal food market and facilitate buyers in procurement, the HKTDC introduced the Halal Showcase and added halal food and beverage labels to relevant exhibitors in the 2024 Food Expo PRO. The event also offered different seminars, explaining the requirements of halal food certification and analysing market opportunities and challenges, in order to promote multi-faceted business opportunities relevant to halal food to the businesses.
In 2025-26, the HKTDC will arrange for local halal food manufacturers to participate in its Food Expo PRO to strengthen their collaboration with other halal food markets, as well as set up relevant pavilions at the Food Expo PRO to showcase more halal food and products and further explore Islamic business opportunities.
At the same time, the Government strives to assist Hong Kong enterprises in developing more diversified markets and enhancing their competitiveness through various funding schemes and support measures. Among others, the Dedicated Fund on Branding, Upgrading and Domestic Sales provides funding support for enterprises to develop business in 40 economies with which Hong Kong has signed free trade agreements and/or investment promotion and protection agreements (IPPAs), including seven Muslim countries. Also, the SME Export Marketing Fund provides funding support for enterprises to participate in export promotion activities, promoting appropriate products and services to the Muslim population in markets outside Hong Kong.
The Government will continue to actively explore emerging markets, including ASEAN, the Middle East and markets along the B&R, which have large Muslim population. The Government has been actively visiting ASEAN Member States to maintain close communication. For example, from 2022 to 2024, the Chief Executive led delegations to visit seven ASEAN Member States, concluding nearly 90 memoranda of understanding (MOU) and agreements, which helped create business opportunities for Hong Kong and strengthened friendships between the two places. The Government has also been actively reaching out to potential partners in the region, and signed an IPPA with Bahrain in March 2024, which is the third IPPA signed with economies in the Middle East region after the ones with Kuwait and the United Arab Emirates. At the same time, we are exploring the signing of IPPAs with Saudi Arabia, Bangladesh, Egypt and Peru.
In view of the huge economic potential of the countries along the B&R (including those with large Muslin population), Invest Hong Kong (InvestHK) set up consultant offices in Cairo, the capital of Egypt, and Izmir, the third largest city in Türkiye, within 2024-25 according to the 2023 Policy Address and 2024-25 Budget. This will be beneficial to attracting capital and enterprises from these two member states of the Organisation of Islamic Cooperation and seizing relevant business opportunities.
In respect of tourism, the Chief Executive stated in the 2024 Policy Address that the Government would actively develop visitor sources from the Middle East and ASEAN which have large Muslim population to seize opportunities. It is estimated that by 2028, there will be 250 million Muslim visitors worldwide and tourism receipts will reach US$225 billion.
To encourage the travel trade to enhance Muslim-friendly tourism facilities, the Hong Kong Tourism Board (HKTB) has commissioned the internationally recognised halal travel promotion company CrescentRating since 2024 to carry out a series of work to study how Hong Kong can further enhance its "Muslim-friendly" tourism facilities, and assess local hotels, attractions and meetings, incentive travels, conventions and exhibitions (MICE) venues based on categories and standards on par with international benchmarks while taking into account Hong Kong's actual situation. As at mid-April this year, 61 hotels, and five attractions and MICE venues have successfully applied for and obtained the ratings from CrescentRating.
Besides, to encourage restaurants to obtain halal-related certification, the HKTB works with local halal certification authority, the Incorporated Trustees of the Islamic Community Fund of Hong Kong (Board of Trustees, BOT), to promote existing accreditations in the city and encourage food and beverage establishments to apply for certification. As at mid-April this year, the number of certified restaurants has increased from about 100 at the beginning of 2024 to more than 170, which also include high-end Chinese restaurant, Cantonese restaurant and contemporary Hong Kong-style noodle restaurants. In addition, four brands in the city are now offering halal-certified bakery products to provide more choices of souvenirs for Muslim visitors.
Regarding financial services, the Government amended the laws in 2013 and 2014 to provide a tax structure for sukuk comparable with that for conventional bonds, and to allow for the issuance of sukuk under the Government Bond Programme. Thereafter, the Government issued three sukuk, totalling US$3 billion, under the Government Bond Programme, to demonstrate the viability of Hong Kong's finance platform and that our legal, regulatory and taxation framework can readily support sukuk issuances of different structures. Besides, an array of Islamic financial products and services have been introduced in Hong Kong, including the listing of global sukuk on the Hong Kong Exchanges and Clearing Limited (HKEX), Shariah-compliant equity indices and Islamic banking windows. Asia's first exchange-traded fund (ETF) tracking the Saudi Arabia market was also listed on the HKEX in November 2023.
In the area of investment co-operation, the Hong Kong Monetary Authority signed an MOU with the Public Investment Fund of Saudi Arabia (PIF) to jointly anchor a new investment fund of US$1 billion to facilitate companies with nexus to Hong Kong and the Greater Bay Area to develop their business in Saudi Arabia. The Government will continue to expand market development efforts, including promoting the advantages of Hong Kong's financial system and market, so as to explore further collaboration with Islamic markets in the area of finance.
Note: The "Muslim countries" as mentioned in this reply refer to the 57 Members of the Organisation of Islamic Cooperation.
Ends/Wednesday, April 30, 2025
Issued at HKT 16:29
Issued at HKT 16:29
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