[Sponsored Article] Responding to higher operating costs, disrupted supply chains, a continuing trade war, and global pandemic impact, many of Hong Kong’s small- and medium-sized enterprises have begun searching for alternative supply chain, manufacturing, and investment options. Industrial parks across Belt and Road economies present a range of solutions for manufacturers and exporters. Outward-looking companies in key sectors, including financial services, professional services, real estate management, technology, and green/smart city expertise, will also find new opportunities. While large-scale infrastructure projects have often dominated the headlines on the subject of the Belt and Road, industrial parks have become increasingly central to the development of this initiative, not least because industrial parks are key to creating tangible local social and economic activity and distributing their benefits. Industrial parks also bring together global, regional, and local businesses to foster creative synergy and serve as a springboard into new and challenging markets. And by concentrating and integrating related industries and infrastructure, industrial parks enable efficiencies of scale and help to simplify operations and diversify risks. One concept, many instances There are currently about 20 Overseas Economic and Trade Cooperation Zones along the Belt and Road certified by the Chinese Ministry of Commerce. Adding in industrial parks (in operation and in development) with significant private Chinese investment, there are more than 80 Belt and Road-related sites across Asia, Europe, the Middle East, and Africa, and the number of national-level industrial parks in each region is even higher. To date, quite a few Hong Kong companies have successfully set up a base in less-well-advertised sites as well as the better-promoted parks. A typical Belt and Road industrial park includes a range of industries, operations, and scales, and SMEs are a prominent feature in nearly every single one. For example, the Thai-Chinese Rayong Industrial Zone, the cornerstone of Thailand’s Eastern Economic Corridor initiative, hosts more than 75 Chinese manufacturers with a focus on auto parts, electronics and appliances, and construction materials. Nearby Amata City Chonburi Industrial Estate is home to corporate giants Sony, Toyota, and Mitsubishi Heavy Industries; but also a variety of small- and medium-sized companies. SMEs considering relocating or expanding via the industrial park route should clearly identify their own needs, while paying close attention to the advantages and challenges of each site. Links to infrastructure is a must, but infrastructure development levels can vary widely: a more mature, stable, and efficient installation usually means correspondingly higher startup and operating costs. Meanwhile, SMEs favouring the potential of newly emerging markets such as East Africa (e.g., Djibouti Free Trade Zone) or Indonesia (Karawang being the most widely-promoted manufacturing option) should carefully consider the relatively steeper challenges they will face when it comes to cultural differences, logistics and facilities management, and community support. Intangibles like staff willingness to acquire local knowledge and adapt to local conditions and culture are often more difficult to assess, but need to be factored in. Opportunities for Hong Kong SMEs For Hong Kong manufacturers planning to relocate their production base, weighing the pros and cons of each option usually boils down to several factors: political and currency stability, ease and cost of relocation, operational support, robust security and infrastructure, access to existing and potential new markets, workforce and local culture. On this score, Belt and Road industrial parks offer a solid value proposition. For the services sector, the Belt and Road Initiative’s increasing emphasis on sustainability, plus the next-phase development of industrial park ecosystems – residential as well as commercial – offer the clearest opportunities that play to Hong Kong’s strengths in services. To attract new investment and remain competitive, industrial parks will increasingly need to meet global standards and adopt global practices. At the very least, expertise in green city planning and management, project financing and risk assessment, business support services, architecture and design are all potential growth areas. Aside from weighing the advantages and opportunities, manufacturers have tough decisions to make in changing their supply chains. They often lack the resources, time and networks to do the necessary groundwork, get informed advice, and contact the right people who can help open doors. Services providers also depend on corporations and investors to support their businesses. How can Hong Kong help? Hong Kong has long been the dominant gateway connecting China to the rest of the world, as a trade hub, manufacturing nexus, and Asia’s top financial and professional services centre. Building on this wealth of experience and expertise, Hong Kong led the way in developing the Pearl River Delta region’s vast potential to become the manufacturing powerhouse it is today. The Hong Kong Trade Development Council (HKTDC) has been there throughout, helping the city’s economy transition from a manufacturing base to an international trade hub to a global financial centre. With more than 50 years of experience in promoting Hong Kong’s external trade, the HKTDC is the go-to organisation for help with new business opportunities and up-to-date trade and market insights. To help the city’s businesses tackle the challenges that lie ahead, the HKTDC is supporting Hong Kong’s continuing evolution as part of the Guangdong-Hong Kong-Macao Greater Bay Area. Support for Hong Kong’s SMEs is key to the organisation’s work, which features a full array of robust tools, promotions, and initiatives for exploring new business opportunities. Among the most well received have been the manufacturing partnership and investment missions to Belt and road markets, the HKTDC Belt and Road Portal which provides in-depth information on the Overseas Economic and Trade Cooperation Zones, and project pitching and breakout sessions dedicated to industrial park opportunities at the annual Belt and Road Summit. T-Box – a free SME support programme Building on this range of initiatives, the HKTDC has recently launched a support programme called Transformation Sandbox (T-box). T-box is an SME support programme that helps Hong Kong companies enhance their business’s competitiveness and achieve transformation goals in the areas of branding, e-commerce, manufacturing partnerships and new markets. The HKTDC’s dedicated T-box staff work with you to identify your goals and provide support over a three-month period, with group and individualised services including advisory, workshops, government funding information, market knowledge, and networking opportunities. Drawing on its network of 50 offices around the world, the HKTDC’s business advisory partners are here to provide an overview of the manufacturing landscape, regulations and industrial parks in the ASEAN region and other Belt and Road economies to aid your relocation decisions. T-Box members can also join the HKTDC’s international trade fairs, industry conferences and outbound missions, where they can meet with important local business chambers and government officials, visit industrial parks, and learn about investment and tax regulations. T-Box is free and open to Hong Kong-registered companies. Please visit the T-box website for details.