The Chamber’s Greater Bay Area (GBA) Working Group conducted a survey among Chamber members to gauge their views on the future development of the GBA. The report was conducted during August to October 2018.
The survey received 102 completed responses from middle to senior level business executives across different industries. Respondents are mainly from professional services (21%), financial services (13%), manufacturing (12%), trade (12%) and logistics (11%). The size of respondents’ companies varies from fewer than 50 employees (49%), 50-500 (26%), to 500 and above employees (25%). Slightly less than half of them (44%) have no employee working in the GBA, a quarter of them (26%) have more than 100 employees working in the GBA and 17% of the companies have fewer than 10 employees working in the GBA. Big corporations certainly are ahead of SMEs in exploring the GBA market.
When asked about the opportunities in the GBA, while two-third of the respondents (64%) believe that there are significant business opportunities for their company arising from the GBA initiative, one-third of the respondents (34%) are not sure. This indicates that businesses are generally quite positive on the GBA’s prospects.
When it came to actual investment planning in Mainland China in the upcoming three to five years, most of the respondents (74%) who plan to invest in Mainland China will allocate an investment budget ranging from $5 million to $50 million in the GBA.
Almost a quarter of the respondents (23%) state that they would allocate 50-100% of their investment budget to the GBA. Over a quarter of the respondents (31%) would allocate 10-50% of their investment budget to the GBA, while below one-fifth of the respondents (16%) would put less than 10%. Our members are clearly planning to invest more in the GBA.
In terms of considering which cities to invest in within the GBA, three-quarters of the respondents (74%) consider that business opportunity is the most important factor. Tax rate (33%) and entry barrier (33%) are the next in line. Shenzhen (34%), Guangzhou (18%) and Dongguan (14%) are the cities that attract most respondents, which are obvious choices considering their leading economic performances.
In terms of hurdles for companies to operating in the Mainland, the respondents report that market entry restrictions (49%), unfamiliarity with the compliance environment (45%) and business environment (32%) are the three major hurdles.
Higher individual tax (70%), medical system (56%) and education for their children (48%) are the three major concerns holding employees back from commuting to and/or stationing in the GBA. Recent tax reforms and relaxation in both the medical and education markets in Mainland China may have partly addressed these concerns.
In view of the aforementioned concerns, most of the survey respondents support the recognition of Hong Kong professionals like lawyer (77%), accountants (75%) and doctor (63%) to practise in the GBA.
When asked what information respondents are interested in regarding the GBA, most businesses (95%) would like to be updated about government policies related to doing business in the GBA, daily news update (56%) and real-life case sharing (55%).
PC Yu, Convenor of the GBA Working Group, said that the next step of the group will focus on lobbying the Mainland and Hong Kong Governments to address members’ difficulties in expanding their businesses in the GBA. The group will also carry out further study on providing more useful information on the GBA for our members.