Enterprises in the Guangdong-Hong Kong-Macao Greater Bay Area are intensifying their expansion into ASEAN markets in response to escalating global trade tensions and supply chain pressures. A joint study by UOB Hong Kong and the Hong Kong Trade Development Council indicates that 73% of surveyed GBA companies plan to accelerate their business development in ASEAN over the next three years, aiming to boost growth and enhance supply chain resilience.
ASEAN as a Strategic Growth Engine
The study highlights ASEAN’s growing importance as a key market for GBA enterprises, with Singapore, Vietnam, Thailand, Malaysia, and Indonesia identified as top destinations. Companies are allocating an average of 30% additional resources to support this expansion, with Vietnam receiving the highest increase at 47%. Strategic focuses include driving sales growth in Thailand, Vietnam, and Indonesia, while expanding production and sourcing bases, particularly in Vietnam, Thailand, and Malaysia.
Even in Singapore, where GBA firms have an established presence, businesses intend to commit an average of 23% extra resources, especially for financing and regional office setup. The report notes a 25 percentage point year-on-year rise in GBA businesses seeking to expand or maintain sales operations in ASEAN, with 98% targeting these markets. Additionally, 91% plan to expand or maintain ASEAN-based production and sourcing hubs, a 7 percentage point increase from 2024, reflecting efforts to diversify supply chains and mitigate external risks.
Challenges in ASEAN Expansion
Despite the momentum, GBA enterprises face significant hurdles in ASEAN expansion. The most cited challenge is finding suitable local partners, reported by 47% of respondents, a figure that has risen by 24 percentage points since 2024. Cultural and language barriers affect 46% of companies, up 23 percentage points, while difficulties in sourcing specialist talent impact 40%, a 15 percentage point increase. These challenges underscore the need for trusted advisors and cross-border support to navigate local markets effectively.
ESG Commitments and Hong Kong’s Role
The study reveals growing ESG commitments among GBA companies, with 83% currently implementing green initiatives, a slight increase from 2024. Furthermore, 96% plan to increase or maintain ESG funding over the next two years, with 66% intending to boost investment—a 26 percentage point jump from 2024. The average intended ESG funding is now HK$874,771, nearly double the previous year’s figure.
Hong Kong is reaffirmed as a critical platform for GBA enterprises expanding into ASEAN and advancing ESG goals. The city’s connectivity with both GBA cities and ASEAN is rated 7.9 out of 10, and its green services score 8.8 out of 10. Among enterprises accelerating ASEAN development, two-thirds have leveraged Hong Kong’s platform. Over 90% of respondents are considering or increasing their use of Hong Kong’s sustainable development services, with high demand for green financial products, ESG reporting, and green asset valuation.
The report is based on insights from more than 600 businesses across Hong Kong and key mainland GBA cities, including Dongguan, Foshan, Guangzhou, Shenzhen, and Zhongshan. It examines how GBA enterprises are adjusting strategies amid global challenges and highlights Hong Kong’s role as a superconnector in facilitating ASEAN expansion and ESG advancement.
