The latest Standard Chartered Greater Bay Area Business Confidence Index (GBAI), jointly released by Standard Chartered and the Hong Kong Trade Development Council, indicates business sentiment for most companies in the Greater Bay Area remained steady amid persistent external uncertainties in the fourth quarter of 2025. Following a rebound in the previous quarter, the GBAI indices showed a moderate quarter-on-quarter retreat, attributed to diminishing returns from front-loading activities and a more cautious approach to investment, financing, and capacity utilization.
The "current performance" index for business activity retreated to 50.3 from 54.7 in the previous quarter, while the "expectations" index dropped to 51 from 55.7. Despite these declines, both indices remained in expansionary territory, suggesting that GBA businesses maintained a broadly positive outlook. A mixed picture emerged in the sub-indices, with "new orders," "fixed asset investment," and "profit" falling below the 50 watershed level for current performance, seen as a correction following the end of front-loading in earlier quarters. Subdued growth in loans and fixed-asset investment in the Chinese Mainland also contributed to this slight downward trend.
In contrast, expectations remained relatively positive, with sub-indices for "production/sales," "new orders," and "profits" all staying in expansionary territory. These outcomes suggest robust demand is likely to persist through the first quarter of 2026 and beyond. Hong Kong's readings were well above the survey average, with the "current performance" sub-index up 5.7 points to 57.9 and the "expectations" reading up 1.8 points to 55.4. This sustained recovery was attributed to the city's "professional services" and "retail/wholesale" sectors.
Wing Chu, Deputy Director of Research at HKTDC, noted that following the extension of the trade truce between the US and China, business sentiment in Hong Kong continued to improve, allowing the city to outperform its peer cities across the GBA. This momentum is expected to remain intact, supported by buoyant business activity and the professional services sector's solid performance. The HKTDC will continue to support GBA enterprises in leveraging Hong Kong's professional services to expand globally and capitalize on opportunities in emerging markets, including those in the Middle East.
The survey also examined GBA businesses' interest in expanding into the Middle East, with over half of respondents (54.8%) expressing interest. The UAE (53.9%) and Saudi Arabia (53.2%) were selected as the top two priority markets. Among companies interested in or already expanding into the Middle East, nearly 60% were engaged in trading/distribution activities, followed by manufacturing (42.7%) and logistics/storage (28.3%). Despite optimism, businesses identified challenges, including "lack of understanding of local laws and regulations" (50.4%), "opaque local regulatory environment and restrictions on foreign investment" (43.1%), and "cultural and business differences" (42%).
To manage these challenges, 99.2% of respondents considered Hong Kong's world-class services pivotal to the success of their Middle East expansion plans, particularly the city's professional services sector in navigating regulatory and compliance requirements. Hunter Chan, Economist for Greater China at Standard Chartered, emphasized that with increasingly complex geopolitical risks, global corporates are exploring new markets, giving rise to emerging trade corridors. The survey aligns with the Hong Kong Government's policy focus to leverage Hong Kong's advantages as a "go global" platform and deepen economic ties with the Middle East. Chan noted that Hong Kong can further leverage its unique position as a "super-connector," becoming a springboard for enterprises to develop overseas markets. For more details, the Standard Chartered GBA Business Confidence Index Report and HKTDC Research provide additional insights.
