Greater Bay Area Business Confidence Reaches Multi-Year High Amid Trade Truce Extension
TL;DR
Standard Chartered's GBAI shows business confidence at multi-year highs, offering companies competitive advantages through increased new orders and profit expectations amid trade stability.
The Standard Chartered GBAI methodology surveys 1000+ companies quarterly, measuring eight sub-indices that track current performance and expectations across multiple business sectors.
Improved business confidence across the Greater Bay Area creates economic stability that supports job security and community prosperity through sustained trade dialogue.
Hong Kong showed the strongest confidence surge with an 8.3 point jump, while companies combat excessive competition through brand building and value-added services.
The latest Standard Chartered Greater Bay Area Business Confidence Index (GBAI) reveals a significant improvement in business sentiment across the region, with indices climbing to multi-year highs in the third quarter of 2025. The quarterly survey, jointly conducted by Standard Chartered and the Hong Kong Trade Development Council, showed broad-based recovery in both current business performance and future expectations, largely attributed to reduced external uncertainty following the extension of the US-China trade truce.
The current performance index for business activities increased to 54.7 from 53.1 in the second quarter, while the expectations index rose more substantially to 55.7 from 52, marking four-year and two-year highs respectively. This improvement occurred during the survey period from early August to early September, when the US extended its trade truce with China by another 90 days to November while also reaching multiple trade agreements with other major trading partners.
The constructive dialogue between China and the US contributed to diminished tariff uncertainty and a more stable external environment, supporting the quarter-on-quarter recovery in business sentiment. Nearly all sub-indices showed improvement, with six of the eight current performance components registering gains. New orders demonstrated the most significant increase, jumping 8 points to 57.5 from 49.5 in the previous quarter, while prices of finished goods and services rose 4.1 points to 58.8.
Business outlook optimism was even more pronounced, with all expectations sub-indices remaining well above the neutral mark. Production and sales showed the strongest rebound among the eight main sub-indices with a 5.3-point increase, followed by financing scale (4.8 points), fixed asset investment (4.2 points), and profit expectations (3.9 points). The comprehensive survey data is available through HKTDC Research at https://research.hktdc.com/en/article/MjE0MTkwOTU3MA.
Irina Fan, Director of Research at HKTDC, noted that nearly all current performance and expectations indices rose quarter-on-quarter across GBA cities. Hong Kong demonstrated the strongest confidence growth among all cities, with current performance and expectations sub-indices increasing 8.3 points and 7.3 points to 52.2 and 53.6 respectively, supported by continued trade frontloading and robust financial activities.
Hunter Chan, Economist for Greater China at Standard Chartered, commented that the survey findings align with market optimism observed during the third quarter following the trade truce extension and expectations of continued dialogue between the two countries. However, he cautioned that persistent trade uncertainty could potentially dampen business sentiment again. With increasing external uncertainties and competition challenges in mainland China, the trend of diversification continues, as evidenced by 24.5% of GBA corporations exploring overseas markets to mitigate potential risks.
The survey also examined the impact of excessive competition, or anti-involution, on GBA businesses. Most respondents (63.5%) indicated they had not been affected by excessive domestic competition, while 3.1% reported benefiting from it. Approximately 29% experienced moderate impact and 5% reported significant impact. Among affected businesses, over 70% saw negative effects on profit and sales, while only around 40% indicated disruptions to hiring and investment.
Companies are adopting multiple strategies to address competition challenges, including brand building and marketing (36.3%), cost control and inventory management (35.6%), and providing value-added services (29.7%). The full report and supporting materials can be accessed at http://bit.ly/4oiGQDU. The GBAI represents the first forward-looking quarterly survey examining business sentiment and synergistic effects across GBA cities and industries, compiled from responses of more than 1,000 companies across multiple sectors including manufacturing, trading, retail, wholesale, financial services, professional services, and innovation technology.
Curated from NewMediaWire