Standard Chartered GBA Business Confidence Survey shows calm before tariff storm in Q1

April 15, 2025 at 05:57 AM EDT

HONG KONG, Apr 15, 2025 - (ACN Newswire) – The latest Standard Chartered GBA Business Confidence Index (GBAI) jointly published by Standard Chartered and the Hong Kong Trade Development Council (HKTDC) today indicated broad-based improvement in business sentiment in the region for the first quarter of 2025.

The GBAI “current performance” index for business activity rose to 53.5 in Q1 from 50.7 prior – the highest since Q2-2024. Six of the eight index components rose quarter-on-quarter, and all previous sub-50 underperformers rallied back above the neutral mark, namely “capacity utilisation” (+3.2pts), “raw material inventory” (+9.0pts), “financing scale” (+3.2pts) and “profits” (+3.1pts).

The GBAI “expectations” index for business activity improved in tandem with its “current performance” counterpart, to 54.3 in Q1 from 52.9 in Q4-2024. Encouragingly, seven of eight expectation sub-indices rose quarter-on-quarter, led by a 3.1 percentage point increase in “profits” and a 2.8 percentage point increase in “raw material inventory”.

All the city sub-indices, be it “current performance” or “expectations”, rose quarter-on-quarter, with Shenzhen being the only exception. Hong Kong extended its rising “current performance” streak to four straight quarters, to 53.5; its “expectations” index jumped to 56.9 – bested only by Guangzhou – from 50.8 prior. Guangzhou’s current and expectation prints stood at 60.3 and 58.0, respectively, the highest among cities.

This showed that GBA companies weathered the initial rounds of US tariff hikes (10%+10%) well, in part thanks to the DeepSeek breakthrough lifting market sentiment as well as the rising prospect of more policy stimulus from China’s policymakers. However, respondents’ more-upbeat outlook in February-March (when the Q1 survey was conducted) likely did not prepare them for recent events – US’ announcement of sweeping and sizeable reciprocal tariff hikes on China and most other countries.

Kelvin Lau, Senior Economist, Greater China and North Asia, Standard Chartered, said: “Given the urgency to stabilise market sentiment following the tariff-induced sell-off, the likelihood of China cutting the reserve requirement ratio and/or policy rate (7-day reverse repo rate) in April has materially increased. We expect that both monetary and fiscal policies on the Mainland will stay supportive. Meanwhile, Hong Kong would need to ramp up short-term support to SMEs and continue to diversify its trade to facilitate more non-US trade corridors. Our next survey, to be conducted in May-June, should provide a better view of the readiness of GBA businesses to live with high tariffs.”

More consumption boosts welcomed

Looking ahead, 41% of respondents saw a positive impact from the consumption boosting initiatives announced by China in January. Meanwhile, 38% said the consumer goods trade-in programme would bring positive impact on their business. When asked what else the government could do to expand the consumption-supportive measures, the most popular suggestion was “relax market access for private sector and foreign investment to help boost services consumption”.

Wing Chu, Principal Economist (Greater China Research Team), HKTDC, said: “Boosting domestic demand is one of the government’s top priorities, as highlighted in the Government Work Report delivered by Chinese Premier Li Qiang in March. More than 50% of respondents have indicated that they are either already well positioned to tap into the mainland consumer market or are currently expanding or planning to expand their operations to do so. Additional supportive measures from the government could further bolster their businesses.”

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

Standard Chartered GBA Business Confidence Index Report: https://www.sc.com/hk/gba/gba-index-report/
HKTDC Research: https://research.hktdc.com/en/article/MTk4MDY0MTYwOQ

(From left) Kelvin Lau, Senior Economist, Greater China and North Asia, Standard Chartered, and Wing Chu, Principal Economist (Greater China Research Team), HKTDC, announced the latest GBA Business Confidence Index (GBAI) today (15 April 2025).

Kelvin Lau, Senior Economist, Greater China and North Asia, Standard Chartered

Wing Chu, Principal Economist (Greater China Research Team), HKTDC

Media enquiries

Corporate Affairs Department Standard Chartered Bank (Hong Kong) Limited
Flora Chiu
Tel: (852) 3843 2285
Email: flora.chiu@sc.com

Communications & Public Affairs Department HKTDC
Katy Wong	Clayton Lauw
Tel: (852) 2584 4524	Tel: (852) 2584 4472
Email: katy.ky.wong@hktdc.org	Email: clayton.y.lauw@hktdc.org

About Standard Chartered

We are a leading international banking group, with a presence in 53 of the world’s most dynamic markets. Our purpose is to drive commerce and prosperity through our unique diversity, and our heritage and values are expressed in our brand promise, here for good.

Standard Chartered PLC is listed on the London and Hong Kong stock exchanges.

The history of Standard Chartered in Hong Kong dates back to 1859. It is currently one of the Hong Kong SAR’s three note-issuing banks. Standard Chartered incorporated its Hong Kong business on 1 July 2004, and now operates as a licensed bank in Hong Kong under the name of Standard Chartered Bank (Hong Kong) Limited, a wholly owned subsidiary of Standard Chartered PLC.

For more stories and expert opinions please visit Insights at sc.com. Follow Standard Chartered on X, LinkedIn, Instagram and Facebook.

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.

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