Mainland enterprises are now adopting increasingly comprehensive global business strategies when it comes to their international expansion plans. This has seen them targeting trade with the world’s most advanced economies, as well as with many of the Belt and Road Initiative (BRI) aligned territories and the key emerging economies. The dynamic evolution of their approach is highlighted by new research from the Hong Kong Trade Development Council (HKTDC), which also details the pivotal role Hong Kong plays in helping such businesses overcome a variety of related challenges, including shifting global trade policies, rising protectionism, and ongoing supply chain reconfigurations.In terms of the priorities of such globally-minded businesses, the HKTDC survey showed that 82% have plans in place to expand their existing overseas operations, while 63% are focused on developing new overseas business activities. In addition, some 54% plan to enhance their overseas sourcing operations, while 47% aim to expand their overseas sales networks, and 36% intend to enhance their overseas technology cooperation programmes.
Highlighting the upside for Hong Kong, Bruce Pang, Director of HKTDC Research, said: “With the overseas expansion strategies of Mainland enterprises now extending to supply chain integration, cross-border investment and higher value-added business activities, the need for highly professional support services has continued to grow. As the first-choice professional services hub for the majority of the surveyed enterprises, Hong Kong’s unique connectivity and unrivalled expertise have ensured it is playing an ever more significant role in helping Mainland business seize global opportunities.
“With many of these opportunities now stemming from the BRI economies, next month’s Belt and Road Summit is certain to bolster cross-regional cooperation and help Mainland businesses find the ideal Hong Kong partner for their global expansion plans”.
Balancing advanced and emerging market opportunities
Highlighting the significance of the Belt and Road markets within the global expansion strategies of many Mainland enterprises, 94% of surveyed companies confirmed their interest in developing business in these territories, a significant increase on the 73% recorded for a comparable survey in 2023. In addition, 91% of respondents are prioritising expanding their existing ASEAN activities, particularly within Singapore (49%), Vietnam (46%), Thailand (44%) and Malaysia (41%).
Looking further afield, 48% of surveyed enterprises intend to target Europe’s more advanced markets, while 47% plan to further develop their engagement with the US and Canada. Alongside this, interest in the Middle East rose from 33% in 2023 to 46% this year, while the proportion looking to expand into Latin America doubled from 17% to 34%. Compared with the 2023 survey, companies evidenced a far greater overall inclination to target all of the major overseas markets.
Global expansion fueled by evolving business environments
In addition to the uncertainties arising from changes in US trade policy, Mainland enterprises’ primary concerns include intensified competition from other regions (61%), geopolitical tensions (55%), rising Mainland costs (51%), and tariff and non-tariff trade barriers (50%).
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