Greater Bay Area: businesses upbeat on tech investment despite China crackdown, survey shows

About 89 per cent of them plan spend more on technology, fintech or data-sensitive industry over the next 12 months: CPA Australia survey
Assessment based on a survey of 258 respondents from May to July when regulatory crackdown in China intensified

Banking & finance

Enoch Yiu

Published: 11:33am, 2 Sep 2021

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Businesses in Hong Kong and their counterparts in the Greater Bay Area intend to boost investments and embrace more technology in their operations despite ongoing regulatory crackdown in the industry, according to a survey.

About nine in 10 respondents, or 89 per cent, said they would spend more money on technology, fintech or data-sensitive industry over the next 12 months, CPA Australia said in a survey published on Thursday.

The accounting body collected responses from 258 participants from various industries in Hong Kong, Macau, and nine mainland cities in the southern Guangdong province, which together make up the Bay Area economic development zone.

The survey was conducted from May to July, during which Beijing widened its regulatory crackdowns from antitrust measures against internet-platform operators to shutting down for-profit after-school tutoring and scrutinising data security, among others. The actions triggered a trillion-dollar sell-off in Chinese tech stocks globally in July.

Eden Wong, deputy president of Greater China division. Photo: CPA Australia website

“This implies the regulatory measures in the sector have not affected their intention to keep abreast with technology trends and demands in the Bay Area,” said Eden Wong, deputy president of Greater China division at CPA Australia. “Proper regulation would help the sector develop and grow in a healthier manner over the long term.”

About 72 per cent of respondents said technology investment can help increase business efficiencies, while 43 per cent agreed the outlay can enhance customer experience, the survey showed. About 41 per cent of them believed the adoption can help save operating costs.

Wong said while China’s tightening regulations have affected sentiment towards the tech sector and hurt market valuations in the short term, the measures are expected to promote a healthy and competitive environment and offer better privacy protection for consumers.

Many of the respondents are keen to invest or widen the adoption of cloud technology, video conference technology, artificial intelligence and data analytics, he added.

They also added that financial technology or fintech will improve collaboration among the 11 Greater Bay Area cities, Wong said of the survey outcome. Since 2019, Beijing has introduced incentives to attract talent and capital to the Bay Area to mirror the successes of similar ideas in Tokyo and San Francisco.

The Wealth Management Connect scheme, which allows cross-selling of investment products within the Greater Bay Area, will be the next big thing to drive its growth. Banks will require big investments in fintech and cybersecurity capability to support such projects and cross-border capital flows, Wong said.

The impending Connect scheme will allow Hong Kong and Macau residents to buy mainland Chinese investment products sold by banks in the Bay Area. Similarly, residents of the nine Guangdong cities can invest in products sold by banks in Hong Kong and Macau.

This article appeared in the South China Morning Post print edition as: Businesses keen on tech investment despite Beijing crackdown, survey finds