Chen Xiaochun

654789759@qq.com

ALMOST a quarter of Hong Kong-based small and medium enterprises (SMEs) plan to expand their business into other cities of the Guangdong-Hong Kong-Macao Greater Bay Area (GBA), according to a survey by the Hong Kong Productivity Council (HKPC) yesterday.

A total of 24% of those SMEs surveyed said they have already expanded business or considered boosting their investment in other GBA cities, the survey shows.

Among these SMEs, more than 70% plan to expand their sales, while more than 40% want to expand their outsourcing of professional services or consultancy services and 36% intend to boost their purchasing.

The three industries with the highest proportion of interest in expanding their business to other GBA cities are information and communications (56%), professional and business services (31%) and manufacturing (29%), according to the survey.

Currently, more than 11% of those surveyed have already had sales business in other GBA cities, of which 41% said that their turnover in other GBA cities accounted for 50% or more of the firms’ total.

As many as 27%, 13% and 6% of those surveyed have already had procurement, production and outsourcing of professional services or consultancy services in other GBA cities respectively.

“The survey shows that Hong Kong SMEs are attracted to expand their business to other GBA cities because of the larger market size, lower costs, more business partners, suppliers and outsourced service providers compared with Hong Kong and other places,” said Edmond Lai, chief digital officer of HKPC.

The survey shows that the SMEs’ understanding of local policies, regulations and market conditions is the most decisive factor in determining whether to expand business in other GBA cities.

The top challenges that Hong Kong SMEs face when expanding their business in other GBA cities include foreign exchange control measures on the mainland, unfamiliarity with local laws, regulations and taxation systems, products or services that are not suitable for other GBA cities and different customer need between Hong Kong and other GBA cities.

The HKPC yesterday also released a Hong Kong SME leading business index for the first quarter of 2023, with the index rebounding by 2.5 to 46.7 to show that Hong Kong SMEs are seeing rays of hope with the gradual border reopening with the mainland and relaxation of the pandemic measures.