In this undated photo, skyscrapers border the lush green landscaping in Shenzhen's central business district. (PHOTO / IC)
The GBA business confidence index slipped 2.4 points in the fourth quarter to 50.3, but the outlook is still optimistic, according to a survey by the Standard Chartered and Hong Kong Trade Development Council.
A score above 50 on the survey’s indexes suggests respondents’ growing confidence in the business environment, while a reading below 50 reflects a pessimistic sentiment.
READ MORE: Business leaders encouraged to seize GBA opportunities
Kelvin Lau Kin-hang, Standard Chartered Hong Kong’s senior economist for Greater China, said it is hard to eliminate lagging factors of China’s third-quarter GDP immediately, thereby deflating the Guangdong-Hong Kong-Macao Greater Bay Area’s business confidence. However, he added, he believes the central government’s policies will help to stabilize economic growth.
Hong Kong’s business confidence index climbed above 50 for the first time this year. The survey said it indicates the city will return to economic expansion after COVID-19 shocks and political turmoil
The figure, based on interviews conducted between September and November, fully captures the impact of power outages, rising costs and COVID-19 clusters.
Premier Li Keqiang in December laid out how the Chinese government will adopt a market-based approach to increasing financial support for micro, small and medium-sized enterprises to help them weather the supply-chain disruptions, rising raw material and land-rental costs, and power shortages.
China increased coal output and import, and allowed the fluctuation of coal-fired power prices up to 20 percent from base levels.
The government will also boost efforts to ensure the coronavirus containment during the 2022 Spring Festival travel rush.
Hong Kong’s business confidence index climbed above 50 for the first time this year. The survey said it indicates the city will return to economic expansion after COVID-19 shocks and political turmoil. The strong performance benefits from Hong Kong’s zero-coronavirus strategy, which stimulates a strong domestic demand.
ALSO READ: GBA firms eyeing ASEAN expansion value HK financial services
The business confidence index, bellwether of the business sentiment of the Greater Bay Area, is based on an analysis of over 1,000 regional enterprises’ operations, business environment and expansion plans.
The expectations index decreased from 57.9 in the third quarter to 53.6, but remained at a growing confidence level. The survey said it reflects that expectations caught up with reality after a too-modest 1.4 points drop in the third quarter.
Lau expects that the instability in the fourth quarter of last year will remain in the first quarter of 2022, and the business confidence index in the first quarter in 2022 will hover around 50.