- Reflecting a broad-based recovery in business sentiment from tariff shock in Q3
HONG KONG, Oct 15, 2025 - (ACN Newswire) - Standard Chartered and the Hong Kong Trade Development Council (HKTDC) jointly released the latest Standard Chartered Greater Bay Area Business Confidence Index (GBAI). The latest quarterly survey showed a broad-based recovery in business confidence in the third quarter towards current business performance and business outlook, likely supported by reduced external uncertainty following the extension of the US-China trade truce.
The Q3 GBAI indices rose to multi-year high levels. The 'current performance' index for business activities edged up to 54.7 from 53.1 in Q2, while the 'expectations' index rose to 55.7 from 52 in Q2, marking a four-year and two-year high respectively.
During the survey period of early August to early September, though the US' reciprocal tariffs came into effect, the US extended the trade truce with China by another 90 days to November and reached multiple trade agreements with major trading partners.
Amid the constructive dialogue between China and the US, the tariff uncertainty diminished and the overall external environment became relatively stable, supporting a quarter-on-quarter recovery in business sentiment.
Almost all the 'current performance' and 'expectations' sub-indices rebounded. For 'current performance', six of the eight index components saw quarter-on-quarter improvement, led by a sharp 8pts increase in 'new orders' (57.5 in Q3 from 49.5 in Q2) and 4.1pts increase in 'prices of finished goods/services' (58.8 in Q3 from 54.7 in Q2).
The positivism in business outlook was more noticeable with all 'expectations' sub-indices staying well above the neutral mark. 'Production/sales' saw the strongest rebound (+5.3pts) among the eight main sub-indices, followed by 'financing scale' (+4.8pts), 'fixed asset investment' (+4.2pts) and 'profit' (+3.9pts).
Irina Fan, Director of Research, HKTDC, said: 'Across GBA cities, nearly all 'current performance' and 'expectations' rose quarter-on-quarter. In particular, Hong Kong saw the strongest rise in confidence among all cities, with the 'current performance' and 'expectations' sub-indices edging up a respective 8.3 pts and 7.3 pts to 52.2 and 53.6 in the quarter, underpinned by the continued trade frontloading and robust financial activities.'
Hunter Chan, Economist, Greater China, Standard Chartered, said: 'The survey findings are in line with the positivism we have seen across the markets in the third quarter following the extension of US-China trade truce and expectation of continued dialogue between the two countries during the survey period. However, the persisted trade uncertainty may hold back the business sentiment again. With increasing external uncertainties and the competition challenges in the Chinese Mainland, we believe the trend of diversification will continue. It is consistent with the findings that exploring overseas markets (24.5%) remains one of the strategies that GBA corporates are adopting to mitigate the potential risks.'
On the other hand, there has been increasing discussion and concern on 'anti-involution'. The survey also examined the impact of excessive competition among businesses and how GBA companies tackle those challenges.
Most of the respondents (63.5%) indicated that they had not been affected by excessive domestic competition, while 3.1% of respondents said they benefited from it. About 29% reported a moderate impact and the remaining 5% indicated a significant impact.
Among those businesses affected by involution, over 70% saw a negative impact on profit and sales, while only around 40% indicated disruptions to hiring and investment.
The companies appear to be adopting multiple strategies to address the challenges from involution, including brand building and marketing (36.3%), cost control / inventory management (35.6%) and providing value-added services (29.7%).
About the GBAI
The GBAI is the first forward-looking quarterly survey in the market that looks at the business sentiment and synergistic effects in cities and industries across the GBA. It is compiled based on a survey of more than 1,000 companies in the GBA covering the manufacturing and trading, retail and wholesale, financial services, professional services and innovation and technology sectors. The index enables investors and businesses to better understand the current business climate, gauge future performance prospects and formulate their market strategies for the GBA.
Related materials
HKTDC Research: https://research.hktdc.com/en/article/MjE0MTkwOTU3MA
Report and photos download: http://bit.ly/4oiGQDU
Hunter Chan (left), Economist, Greater China, Standard Chartered, and Irina Fan (right), Director of Research, HKTDC, announced the latest GBA Business Confidence Index (GBAI) on 15 October 2025.
Hunter Chan (right), Economist, Greater China, Standard Chartered shared the latest findings from thematic questions on 'involution', Irina Fan (right), Director of Research, HKTDC, announced the highlights of the quarterly survey.
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About HKTDC
The Hong Kong Trade Development Council (HKTDC) is a statutory body established in 1966 to promote, assist and develop Hong Kong's trade. With over 50 offices globally, including 13 in Mainland China, the HKTDC promotes Hong Kong as a two-way global investment and business hub. The HKTDC organises international exhibitions, conferences and business missions to create business opportunities for companies, particularly small and medium-sized enterprises (SMEs), in the mainland and international markets. The HKTDC also provides up-to-date market insights and product information via research reports and digital news channels. For more information, please visit:www.hktdc.com/aboutus. Follow us on @hktdc and LinkedIn
Source: HKTDC
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