The cities of Zhuhai, Shenzhen, and Dongguan are the most favored in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) for business expansion over the next three years, the second-quarter GBA Business Confidence Index (GBAI) reported July 5.

The report by the Hong Kong Trade Development Council and Standard Chartered Bank is the first forward-looking quarterly survey on the region's business environment. It canvasses more than 1,000 enterprises from five major industries in 11 GBA cities to learn about their operation and credit situation, as well as prospects for the next quarter.

Hengqin Financial Industry Service Base [Photo courtesy Zhuhai Daily]

Enterprises from the emerging professional service sector showed particular interest in expanding in Zhuhai over the next three years. Those engaged in innovation and technology, financial services, and professional services will focus on their development in Shenzhen, Guangzhou, and Hong Kong, while Dongguan is favored by sci-tech enterprises and Macao is popular among retailers and wholesalers.

Quality and mobility of the talent pool, infrastructure and transport, and population and consumption capability are the three factors most valued by interviewees. Liu Jianheng, senior economist of Greater China Standard Chartered Bank, said labor quality and talent availability have long been a priority for interviewees and are the only factors that rank among the top three in all five industries.

On the back of a resilient post-epidemic recovery, the business confidence of GBA enterprises has been boosted in the second quarter with the GBAI rising from 53 in the first quarter to 58.7. Of note, production/retail, new orders, and profits showed a strong growth in the "operation index."

Nicholas Kwan, director of research at the Hong Kong Trade Development Council, forecast that the index of the third quarter would be lower than the second due to the rising price of raw materials and inflation. Growth in the second half of this year will slow down compared with the first half.