This undated photo shows a night view of Zhuhai, a Guangdong province city in the Guangdong-Hong Kong-Macao Greater Bay Area city cluster. (PHOTO / CHINA DAILY)
Business confidence in the Guangdong‑Hong Kong‑Macao Greater Bay Area has “plenty of room” for a rebound as economic activities pick up following the reopening of the boundary with the Chinese mainland, according to a survey released by Standard Chartered on Wednesday.
Though the bank’s survey shows the GBA Business Confidence Index fell to its “bottom level”, dipping 1.8 points quarter-on-quarter to 39.5 in the fourth quarter of last year, the index has yet to fully capture China’s recent COVID-19 relaxation efforts, which only started halfway through the survey period.
Irina Fan, director of research at HKTDC, expressed optimism that the index will report an increase in the coming quarter as the resumption of normal travel between the Chinese mainland and Hong Kong will facilitate the flow of both people and logistics
“Any boost from rising reopening hopes was also quickly overshadowed by the onset of the first COVID exit wave,” said Kelvin Lau Kin-hang, Standard Chartered Hong Kong’s senior economist for Greater China.
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“This also means plenty of room for the Greater Bay Area’s sentiment to play catch-up in the first half of 2023, assuming the impact of future COVID waves will diminish over time,” Lau said.
The GBA Business Confidence Index is compiled quarterly by Standard Chartered Bank and the Hong Kong Trade Development Council, with no fewer than 1,000 enterprises in key business sectors across the Greater Bay Area as respondents. An index reading above 50 suggests respondents’ growing confidence in the business environment, while a score below 50 indicates pessimism.
Irina Fan, director of research at HKTDC, expressed optimism that the index will report an increase in the coming quarter as the resumption of normal travel between the Chinese mainland and Hong Kong will facilitate the flow of both people and logistics, providing strong support for economic recovery.
Lau, however, cautioned that externally-oriented industries should brace for a weak start to 2023 due to the region’s vulnerability to softening external demand, which could persist as the US and Europe flirt with recession.
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“Industrial production could also face lingering COVID disruptions in the short term, plus further drags from a weak housing market before significant policy easing comes through,” he added.
evanliu@chinadailyhk.com