Fostering Global Development against Geopolitical Headwinds

Fung emphasized on the ongoing geopolitical and economic turmoil, particularly the strained US-China relations and their impact on global trade. He voiced his conviction that these tensions would continue at least the following five years, signaling a challenging environment for global businesses. Despite these difficulties, Fung remains optimistic as he identifying emerging economies as crucial players in shaping future global trade dynamics. While the economic center of gravity is shifting towards Asia, the next 5 to 10 years will still see the US and European markets dominate global demand, accounting for nearly half of the world’s consumption.

Fung discussed how firms have adapted to these challenges by shifting production from China to other developing countries, such as Viet Nam, to avoid tariffs and geopolitical pressures. This shift has created new, more decentralized global supply chains, which Fung saw as a “new round of globalization”. While China is losing some of the labor-intensive segments of the supply chain, the direction of supply is shifting upstream to technology-intensive and capital-driven production. The result is a pattern of indirect exports, whereby developing economies increasingly participate in global trade, often by adding local content to products before they are exported, a process that echoes the historical “flying geese” model of economic development.

In this context, the role of Chinese medium-sized enterprises, which are believed to be leading the new wave of globalization. These companies, especially those located in China's economic centers such as the Greater Bay Area and the Yangtze River Delta, are well positioned to expand globally. Fung further underscored the need for these companies to consistently adhere to environmental and social standards as they grow, a key point in driving sustainable development in emerging markets. He suggested that Hong Kong, with its strong infrastructure and business acumen, could play a key role in helping these enterprises go global, while ensuring that they comply with the necessary certifications and standards. Fung concluded by underlining the potential risks and rewards of this new phase of globalization, stressing the need to manage the process carefully in order to avoid any negative impact on developing economies and global markets.

The global economy is undergoing a profound transformation under the influence of geopolitical tensions, technological advances and the evolution of supply chains.

Victor Fung was emphatic in highlighting how the tensions between the United States and China have accelerated the diversification of global value chains, thereby creating opportunities for emerging markets, such as Viet Nam, Mexico and India, to attract foreign direct investment and move up the value chain. Medium-sized enterprises were recognized as critical for navigating decentralized production systems and promoting sustainable trade practices. However, challenges persisted, involving rising protectionism, supply-side constraints and disruptions to traditional trade flows.

Noeleen Heyzer argued in response that while climate change remains a serious threat, it also opens up the door to innovation through renewable energy, green technologies and sustainable business practices. She advocated prioritizing environmental, social and governance (ESG) principles to ensure inclusive and resilient economic development.

Rakesh Mohan followed by highlighting India's economic progress, driven by digital infrastructure such as the India Stack, which emphasizes the importance of labor-intensive manufacturing and its progress towards digital inclusiveness, but also stated that this all needs to promote industrial growth, private investment, and workforce participation.

Regarding the implications of global capital flows and geopolitics, Heiwai Tang remarked that a rise in interest rates in developed economies could shift investment to emerging markets as well, creating vulnerabilities for countries that depended on foreign funding. Regional financial centers, such as Hong Kong, were contented as crucial in facilitating trade finance and supporting the globalization of medium-sized enterprises.

The panelists therefore concurred that regional cooperation and multilateralism had to be developed to address the fragmentation of global governance, and that emerging markets played a central role in shaping the future of globalization. While geopolitical tensions and economic disruptions posed risks, they also created avenues for transformation through regional integration, technological innovation and sustainability-driven policies. By capitalizing on these opportunities, emerging markets can lead the way in creating a more inclusive and equitable global economy.

Keynote speech by Michael Spence, Advisory Board Chairman, Asia Global Institute
Spence reflected on the expanding role of philanthropy in addressing global and local challenges. He highlighted how philanthropy increasingly overlaps with ESG, social entrepreneurship, and impact investing, driving change in areas like climate action and education. Drawing on historical examples like the Italian Renaissance, where wealthy patrons supported art and for recognition, Spence emphasized the importance of societal norms and incentives in motivating giving. He noted similar modern parallels, such as the Met Gala, which combines philanthropy with visibility and cultural significance. However, he raised concerns about smaller causes, such as homelessness, which often lack the same recognition mechanisms, urging innovative solutions to support underfunded yet impactful initiatives. Spence underscored philanthropy’s cultural diversity, from religious obligations in the Muslim world to alumni loyalty in the US. He also explored motivations for giving, ranging from altruism to a desire for social acknowledgment. As Asia’s economies grow wealthier, he encouraged integrating philanthropy into societal frameworks, emphasizing sustainability and fostering norms that promote giving back. Spence concluded by calling for equitable systems to broaden philanthropy’s reach and amplify its role in addressing global and societal needs.

Panel Discussion:
The evolving role of philanthropy and capital from various sectors can be leveraged for greater impact, given the changing landscape of philanthropy in tackling systemic global challenges such as climate change and inequality.

Michael Spence opened by highlighting the transformation of philanthropy, which increasingly blends traditional giving with modern approaches such as ESG investments and impact initiatives. He emphasized that social norms and cultural values play a critical role in shaping philanthropy’s effectiveness, citing examples ranging from Renaissance patrons to contemporary cultural events like the Met Gala.

Hakan Bulgurlu underscored the vital role of businesses in combating climate change by embedding sustainability into their operations and prioritizing innovation for energy efficiency. Sharing Beko’s achievement of a 50% reduction in carbon emissions over the past decade, Bulgurlu warned of the severe risks posed by climate inaction, including mass displacement and disruptions to global systems. He also advocated for the establishment of global regulations to enforce sustainable practices uniformly.

Jun Ma discussed the catalytic potential of green finance in mobilizing private sector capital for sustainability. He outlined four essential pillars for building a functional green financial system: clear taxonomies to prevent greenwashing, robust disclosure standards, diverse financial instruments, and incentives such as subsidies or guarantees to ensure project viability. Ma highlighted China’s leadership in green finance and stressed the importance of international collaboration to create standardized frameworks for climate initiatives.

Lok Yim provided insights from the banking sector, noting the transformative impact of private wealth on philanthropy, particularly as younger, value-driven generations increasingly align their investments with social causes. He emphasized banks’ growing role in guiding clients toward impactful philanthropy, encouraging them to start small and refine their strategies over time. However, he acknowledged the challenge of balancing clients’ desire for discretion with the need to inspire broader participation and amplify impact.

The panel collectively highlighted the urgent need for action and collaboration across sectors, emphasizing philanthropy’s evolving capacity to address critical global issues through innovative and sustainable approaches.