GBA survey indicates continued improvement

The last quarter of 2020 saw a continued improvement in business confidence in the Guangdong-Hong Kong-Macau Greater Bay Area (GBA), according to a study by Standard Chartered Bank.

Based on quarterly surveys of over 1,000 companies in the area conducted in collaboration with the Hong Kong Trade Development Council, the GBA Business Confidence Index (GBAI) showed continued recovery.

Its “current performance” index for business activity rose above the 50 neutral mark to 50.2 in the fourth quarter from 42.4.

And while the forward-looking “expectations” index eased to 54.1 from 56.2 prior, it remains comfortably in expansion territory, reflecting a more normalized pace of improvement with China having passed the steepest part of its post-COVID-19 recovery, the survey noted.

A detailed breakdown suggested a broad-based recovery led by production, sales, orders and profits. The innovation and technology sector was overtaken by manufacturing and trading, which posted a sector-best 51.6 for “current performance” and 55.4 for “expectations,” boosted by robust production and exports.

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.

Citywise, the subindexes for Dongguan and Foshan outperformed as the cities continued to play catch-up, enjoying a positive spillover from Shenzhen and Guangzhou.

Respondents plan to reaccelerate wage rises in 2021, engage the domestic market more than global regions, and expand operations in larger GBA cities, according to the report.

Those surveyed also expected the GBA to maintain a competitive edge over other economic zones in China, while citing quality of talent as an area of improvement.