A landmark report, GBA Supply Chain Diversity: Enhancing Connectivity Among ASEAN, Hong Kong, and the Mainland, released by the Hong Kong Trade Development Council (HKTDC) and UOB Hong Kong, highlights transformative progress among manufacturing businesses in the Greater Bay Area (GBA). Over 90% of GBA-based manufacturers have either completed or initiated their supply chain transformation, marking a significant step toward resilience, sustainability, and ASEAN market integration.
The findings, based on a comprehensive survey of over 600 GBA enterprises, underscore Hong Kong’s pivotal role as a super-connector between Mainland China and ASEAN countries. The report also sheds light on emerging trends in green finance and ESG investments.
Strengthening Supply Chain Resilience
A notable 72% of surveyed GBA companies are actively working to enhance supply chain resilience, with the rest set to follow within two years. Mainland China remains the top choice for supply chain diversification, but ASEAN markets, bolstered by the Regional Comprehensive Economic Partnership (RCEP) and the Belt and Road Initiative (BRI), are becoming increasingly attractive.
Key highlights from the survey include:
- ASEAN Focus: 84% of respondents plan to maintain or expand production and sourcing activities in ASEAN countries.
- Top ASEAN Markets: Singapore, Malaysia, and Indonesia lead in popularity, while interest is growing in the Philippines, Cambodia, Laos, and Brunei.
- Challenges: Identifying capable local service providers (32%), maintaining data security (25%), and sourcing skilled talent (25%) are the primary hurdles for GBA businesses entering ASEAN markets.
In contrast to earlier studies, barriers like navigating local regulations and cultural differences have become less significant, reflecting the region’s improving business environment.
The survey also highlighted the GBA’s supply chains as highly innovative, supported by advanced digital solutions, with 60% of respondents acknowledging their effectiveness.
ESG and Sustainability Take Center Stage
Environmental, social, and governance (ESG) initiatives are gaining momentum among GBA businesses. The survey revealed that:
- 81% of companies have active green and sustainable development programs, up from 65% in 2023.
- Companies plan to increase ESG investment by 25% over the next two years, with average budgets rising from HK$371,333 in 2023 to HK$462,535 in 2024.
Irina Fan, Director of Research at HKTDC, emphasized the broader impact of this trend:
“With approximately three million enterprises in the GBA, the planned increase in ESG spending could translate to an estimated HK$1.3 trillion in total ESG investments.”
Adaline Zheng, CEO of UOB Hong Kong, echoed this sentiment, highlighting the role of collaboration:
“By connecting GBA businesses with ASEAN markets, we empower them to thrive in competitive landscapes while contributing to a sustainable future.”
Hong Kong: The Super-Connector Between GBA and ASEAN
Hong Kong continues to solidify its position as a vital link between the GBA and ASEAN. Survey respondents gave Hong Kong an impressive eight out of 10 for connectivity with both ASEAN and Mainland GBA cities, reflecting its growing significance.
In green finance and professional services, Hong Kong’s reputation has grown notably:
- 80% of respondents expressed a willingness to utilize Hong Kong’s green professional services, up from 70% in 2023.
This recognition underscores Hong Kong’s strategic importance in supporting GBA businesses, particularly in sustainable development and international market expansion.
Key Takeaways from the Report
The 2024 findings align with previous HKTDC-UOB studies but also highlight new trends:
- ASEAN markets remain critical for diversification, with robust trade agreements driving collaboration.
- GBA supply chains are becoming more innovative, leveraging digital technologies for efficiency.
- ESG investments are surging, signaling a commitment to sustainability.
By serving as a gateway to ASEAN markets, Hong Kong reinforces its unique value proposition, fostering connectivity, innovation, and sustainable growth across the region.
About the GBA and Related Resources
The Greater Bay Area (GBA) comprises nine mainland cities in Guangdong province, alongside Hong Kong and Macao. As a hub for trade, innovation, and sustainability, the GBA is poised to become a global economic powerhouse.
For more insights and to download the full report in Chinese, visit the HKTDC Research or UOB Hong Kong websites.
