The report also found that 72% of GBA-based manufacturing companies have already committed to actively bolstering the resilience of their supply chains, with the remainder expected to follow suit within two years. In another positive finding, a significant proportion of survey respondents saw Hong Kong as an indispensable link between the GBA and the ASEAN bloc, while also having a high regard for the city’s expertise in the green finance and professional services sectors.

The report’s conclusions were based on an in-depth survey of more than 600 GBA-based companies conducted in the third quarter of 2024. Within its comprehensive remit, the research also set out to determine the key drivers of supply chain diversification, identify the overseas markets GBA businesses are primarily targeting and evaluate the success of the green and sustainable development initiatives implemented by such enterprises.

In order to track the evolving trends, the survey findings were compared with the results of two HKTDC-UOB Hong Kong studies conducted in 2023: Navigating Connectivity – Exploring ASEAN Opportunities for the Greater Bay Area and Sustainability in the GBA: Unlocking Opportunities and Empowering Growth.

Strengthening Supply Chain Resilience

For most GBA-based businesses, the mainland remained their preferred choice when it came to both diversifying their supply chain arrangements and broadening their range of production options. For those looking to diversify their supply chains by incorporating overseas locations, ASEAN was the number one choice, with 84% of the surveyed enterprises indicating they had plans in place to maintain or expand their production/sourcing activities within the bloc. The primary reason for this preference (as cited by 39% of respondents) was the positive nature of China-ASEAN trade relations, with the benefits accruing from both the Regional Comprehensive Economic Partnership (RCEP) agreement and the Belt and Road Initiative (BRI) also widely acknowledged.

Of the individual ASEAN markets, Singapore, Malaysia and Indonesia were the preferred choices for both current and future business activities. The rising level of business interest in the Philippines, Cambodia, Laos and Brunei, however, was also notable.

The key challenges to successfully entering the various ASEAN markets, meanwhile, were seen as finding suitable and capable local service providers (as cited by 32% of respondents), followed by maintaining data security (25%) and finding talent with the required expertise (25%). Tellingly, many of the issues designated as primary concerns in the 2023 study – difficulties in navigating local government policies and regulations relating to foreign investment and culture/language barriers – featured less prominently in the more recent survey.

In line with the perceived success of the overall upgrade programme, the majority of survey respondents (60%) now see the GBA’s supply chains as characterised by a high level of innovation, collectively underpinned by the extensive deployment of effective digital solutions.

Click here to continue