82% of Chinese firms eye overseas growth, with Hong Kong top service support choice

A recent survey by the Trade Development Council (TDC) has revealed that more than 80% of Chinese companies plan to expand their presence overseas. Hong Kong is the top choice for a professional services platform to support this growth, according to the survey. The Belt and Road Initiative, a global infrastructure and trade program, is the primary target for expansion, with 94% of respondents interested in this opportunity.

The TDC surveyed 2,015 mainland enterprises, with 82% planning to expand existing operations and 63% looking to develop new overseas business.

Cherry Yeung Chui-lai, a senior economist at TDC, explained that expanding overseas has become a mandatory option for Chinese enterprises due to geopolitical tensions, rising costs, and other factors. Interest in Belt and Road countries has significantly increased compared to the 2023 survey, where only 73% of polled Chinese enterprises mentioned plans to expand into these markets.

Chu Wing-chor, deputy director of research at TDC, stated that many companies are eager to align with the national strategy. The survey also found that 91% of respondents prioritize expanding their existing operations in ASEAN markets, particularly Singapore, Vietnam, Thailand, and Malaysia. There is a growing interest in European and US markets, with 48% of respondents planning to enter Europe’s most advanced economies and 47% targeting the United States and Canada. Additionally, 46% are considering the Middle East, and 34% are looking at Latin America.

When asked about their top concerns regarding overseas expansion, mainland businesses cited intensified competition from other regions, geopolitical tensions, rising costs, and uncertainties arising from US trade policy. Different types of companies face varying challenges when going overseas, with 65% of manufacturers concerned about rising mainland labour, production, and transportation costs, and 65% of service industry enterprises more concerned about market competition from other regions.

The survey found that 83% of respondents view Hong Kong as their first choice for professional services support, citing advantages such as Hong Kong's unique connectivity and unrivaled expertise. Hong Kong is set to host the 11th Belt and Road Summit on September 9 and 10, featuring a "Go Global Chapter" focusing on overseas expansion opportunities and the city's strengths in professional services.