In this Oct 3, 2016 file photo, a rainbow appears in the air over the city of Guangzhou, South China's Guangdong province. (PHOTO / VCG VIA CHINADAILY.COM.CN)
Business confidence in the Guangdong-Hong Kong-Macao Greater Bay Area continued to improve in the fourth quarter last year, with the Standard Chartered GBA Business Confidence Index rising above the 50 neutral mark for the first time since the novel coronavirus struck the region, the bank’s latest survey released on Tuesday showed.
Based on quarterly surveys of over 1,000 companies in five major industries operating across the 11-city cluster, the survey showed the index rose to 50.2 in the fourth quarter from 42.4 in the previous quarter, indicating business activities and sentiment continued to recover as the pandemic eased.
Based on quarterly surveys of over 1,000 companies in five major industries operating across the 11-city cluster, the survey showed the index rose to 50.2 in the fourth quarter from 42.4 in the previous quarter, indicating business activities and sentiment continued to recover as the pandemic eased
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However, the forward-looking “expectations” index eased to 54.1 in the period from 56.2 prior. While still in expansion territory, the level reflects a more normalized pace of improvement.
COVID-19 remains business people’s biggest concern this year, followed by a further escalation of US-China tensions, and the volatility of yuan.
The survey was conducted in collaboration with the Hong Kong Trade Development Council. The five major industries surveyed are manufacturing and trading, retail and wholesale, financial services, professional services, and innovation and technology.
Improvement of business sentiment in the region was led by production, sales, orders and profits. By sectors, manufacturing and trading overtook innovation and technology to become the best-performing industry, boosted by robust production and exports.
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Manufacturing respondents also largely saw their borrowing costs bottom out as monetary policy turned neutral, but this was offset by improved surplus cash and receivables turnover.
By cities, pandemic-haunted Hong Kong Special Administrative Region performed the worst, with the index standing at 34.9 in the fourth quarter, much lower than Foshan, Shenzhen, Dongguan and the Macao SAR, whose indexes have all surpassed 50.
But the HKSAR still saw the index increase by 5.3 points from the third quarter.
Dongguan and Foshan outperformed as the cities continued to enjoy a positive spillover from Shenzhen and Guangzhou.
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Respondents said they plan to reaccelerate wage hikes this year, engage the domestic market more than global markets, and expand operations in large mainland cities in the Bay Area. Companies expect the region to maintain a competitive edge over other economic zones in the Chinese mainland, while noting the quality of talent in the Bay Area needs further improvement.
Over 90 percent of companies surveyed said they have or plan to have exposure to the domestic market, on the back of the mainland’s expected stronger performance in 2021 compared with most global markets. This was followed by less than 40 percent saying they would or have boosted exposure to the US and European markets.
Shenzhen and Guangzhou remain companies’ top choices for their operation and expansion plans, with Dongguan and Foshan catching up.
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