The latest Standard Chartered Greater Bay Area Business Confidence Index (GBAI), jointly released by Standard Chartered and the Hong Kong Trade Development Council (HKTDC), shows that business sentiment in the Greater Bay Area (GBA) remained steady in the fourth quarter of 2025 despite persistent external uncertainties. The GBAI indices experienced a moderate quarter-on-quarter retreat after a rebound in the previous quarter, attributed to diminishing returns from front-loading activities and cautious investment approaches amid ongoing external uncertainties.
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. Both indices remained in expansionary territory, indicating that GBA businesses maintained a broadly positive outlook. However, sub-indices for “current performance” such as “new orders”, “fixed asset investment”, and “profit” all fell below the 50 watershed level, seen as a correction following earlier front-loading and subdued loan and investment growth in the Chinese Mainland. Conversely, “expectations” sub-indices for “production/sales”, “new orders”, and “profits” stayed in expansionary territory, suggesting robust demand may persist into 2026.
Hong Kong’s readings were well above the survey average, confirming the city’s economic rebound remained on course. The “current performance” sub-index rose 5.7 points to 57.9 and the “expectations” reading increased 1.8 points to 55.4, driven by the “professional services” and “retail/wholesale” sectors. Wing Chu, Deputy Director of Research at HKTDC, noted that following the extension of the US-China trade truce, business sentiment in Hong Kong continued to improve, allowing the city to outperform its GBA peers. He added that the HKTDC will continue to support GBA enterprises in leveraging Hong Kong's professional services to expand globally, including into emerging markets in the Middle East.
The survey also examined GBA businesses’ interest in expanding into the Middle East. Over half of respondents (54.8%) expressed interest, with the UAE (53.9%) and Saudi Arabia (53.2%) as top priority markets. Among companies interested or already active in the Middle East, nearly 60% were engaged in trading/distribution, followed by manufacturing (42.7%) and logistics/storage (28.3%). However, businesses cited top challenges: “lack of understanding of local laws and regulations” (50.4%), “opaque local regulatory environment” (43.1%), and “cultural and business differences” (42%). To address these, 99.2% of respondents considered Hong Kong’s world-class services pivotal, particularly its professional services in navigating regulatory and compliance requirements.
Hunter Chan, Economist, Greater China at Standard Chartered, emphasized that with complex geopolitical risks, corporates are diversifying supply chains and exploring new markets, aligning with Hong Kong Government’s “GoGlobal Task Force” to deepen economic ties with the Middle East. He noted that almost all respondents indicated Hong Kong services are needed to overcome local regulatory and cultural challenges. The GBAI, jointly presented by Standard Chartered and HKTDC, is a forward-looking quarterly survey examining business sentiment and synergistic effects in the GBA, based on over 1,000 responses. The full report is available at Standard Chartered GBA Business Confidence Index Report and HKTDC Research at HKTDC Research.
