China’s Greater Bay Area factories mostly staying put, but many have diversified abroad, survey finds
- While most manufacturers said they did not have firm plans to relocate operations outside China earlier this year, external and domestic headwinds have persisted
- Greater Bay Area firms choosing to shift factory operations overseas cite improved labour pools and supplies, access to new customers and various other incentives and benefits
Manufacturers across China’s main economic and export engine – the Greater Bay Area – have really had to rein in their business plans this year, with small and medium-sized firms in a particularly difficult position, according to an annual survey.
Information on the ground earlier this year indicated that companies in the region had a weak appetite for long-term investments, such as production expansions. And many were shelving or decelerating plans to move capacity outside China or to invest in technological upgrades, according to Standard Chartered’s annual survey of manufacturers operating in the Greater Bay Area.
The survey results, released on Monday, reflected interviews with more than 200 manufacturing companies in April and May about their operations and business outlook. Most of the firms are headquartered in Hong Kong, Taiwan and mainland China, with factories in the bay area covered by the development plan.
Back in the year’s second quarter, most Greater Bay Area manufacturers also did not have concrete plans to relocate operations out of China, the survey showed.
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“The survey results could have been worse, considering that this year’s survey was conducted in the two months [April and May] that the Covid resurgence peaked and growth troughed in China,” it said. “We believe some of the results could be less favourable if the survey were conducted today, given how many of the external and domestic headwinds have lingered since.”