Survey: Over 60% of mainland enterprises turn to HK in aid of their global expansion plans

Over 60% of mainland enterprises favour Hong Kong as a source of professional-service support for international expansion due to geopolitical tensions, falling demand and economic uncertainties, a Hong Kong Trade Development Council’s (HKTDC) survey found.

Conducted between May and July this year, HKTDC Research surveyed 791 mainland enterprises operating primarily in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) and the Yangtze River Delta (長江三角洲) region. The survey aims to improve understanding of the enterprises' overseas expansion plans and build up a clearer picture of diverse challenges they face.

According to the survey, around 90% of mainland China-based companies planned to expand their level of international business activity in the next one to three years. 62.1% wanted to use Hong Kong-based professional services to help their expansion, while only 47.7% would opt for mainland service providers. 

The survey also showed that 60% of mainland enterprises preferred engaging Hong Kong-based professional service providers to ensure successful international expansion.

“In more specific terms, most Greater Bay Area-based businesses designated Hong Kong as their preferred service provider locale, while their Yangtze River Delta counterparts divided their needs more or less evenly across Hong Kong and Shanghai,” said Wing Chu, principal economist of HKTDC Research.

The four priority expansion areas among mainland businesses appear to be logistics and transport (28.8%), marketing and sales (26.9%), factories (23.3%) and overseas procurement (15.9%), said the survey. 

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On the other hand, the survey found that 83.9% of survey participants were driven to expand internationally by concerns over long-term viability of their traditional markets.

While more than 70% (71.6%) of expansion-oriented mainland businesses focused on countries that were Regional Comprehensive Economic Partnership (RCEP) signatories or Belt and Road Initiative (BRI) beneficiaries, 64.3% expressed interest in venturing into the emerging markets along the routes of the BRI and beyond, including those located in the Middle East, Central and Eastern Europe, South America or Africa.

Irina Fan, director of HKTDC Research, said: “This survey more than confirms Hong Kong’s status as a ‘super-connector’, uniquely well-positioned to help mainland companies make good decisions on their global expansion plans. Within the shifting global economic landscape, Hong Kong’s well-established business platform remains a preeminent resource."

"The city’s extensive array of premium financial and professional services and comprehensive international network make it the perfect partner for any business looking to optimise its outcomes within the RCEP region, along the BRI routes or, indeed, pretty much anywhere else in the world," she added.

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