A survey of manufacturers in Guangdong, Hong Kong and Macao has found 84% of those exploring supply chains outside of China intend to do so in ASEAN countries. However, finding capable service providers and ensuring data security form the main obstacles to successfully entering ASEAN markets.
The survey - GBA Supply Chain Diversity: Enhancing Connectivity Among ASEAN, Hong Kong, and the Mainland - was conducted by the Hong Kong Trade Development Council and UOB Hong Kong to understand how manufacturers in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) are transforming their supply chains to meet oncoming challenges. 600 companies took part in the survey conducted in the third quarter of 2024.
More than 90% of surveyed businesses have either completed their supply chain transformation or have the process well underway, according to the report.
For most respondents, the mainland remained their preferred choice when it comes to both diversifying their supply chain arrangements and broadening their range of production options.
For those looking to diversify their supply chains by incorporating overseas locations, ASEAN was the first choice, with 84% of the surveyed enterprises indicating they had plans in place to maintain or expand their production/sourcing activities within the bloc. The primary reason for this preference (as cited by 39% of respondents) was the positive nature of China-ASEAN trade relations.
Singapore, Malaysia and Indonesia were the preferred ASEAN choices for both current and future business activities, however respondents also indicated rising interest in the Philippines, Cambodia, Laos and Brunei.
When considering the key challenges to successfully entering ASEAN, respondents cited finding capable local service providers (32% of respondents), followed by maintaining data security (25%) and finding staff with the required expertise (25%).
Another clear finding of the 2024 survey was the success Hong Kong has found in carving out a unique niche as the GBA-ASEAN superconnector.
Respondents gave an 8 out of 10 score when evaluating Hong Kong’s connectivity to ASEAN and Hong Kong’s connectivity with Guangdong, an increase from last year.
In a further endorsement, 80% of respondents indicated a willingness to both learn more about Hong Kong’s green professional services and to use such services more frequently, a significant increase on the 2023 figure of 70%.