Hong Kong enterprises expand against the trend: ASEAN and Mainland China become strategic focus

Amid escalating global geopolitical uncertainties and rising trade frictions, Hong Kong enterprises are advancing cross-border expansion with a more selective strategy. According to UOB's "Business Outlook Study 2026," although the business confidence index for Hong Kong enterprises dropped from 73% in 2024 to 63% in 2025, as many as 79% of surveyed companies still plan to expand into overseas markets within the next three years. This seemingly contradictory trend reflects deep shifts in Asia's regional economic landscape: enterprises are no longer solely pursuing scale growth; instead, they are placing resilience and regional diversification at the core of their strategy.

Regional Expansion Priorities: ASEAN and Mainland China

The study shows that around half of the surveyed companies had already conducted overseas business by 2025, with ASEAN (33%) and Mainland China (26%) continuing to be the most preferred destinations for expansion. This choice aligns closely with Hong Kong's traditional role as a "super connector"—it serves both as a gateway for foreign capital into Mainland China and as a hub for Chinese capital and technology to connect with the ASEAN market. Notably, ASEAN's appeal stems not only from its young demographic and rapidly growing consumer markets but also from the deepening of the global "China+1" supply chain strategy—many multinationals are shifting some production capacity from China to ASEAN countries such as Vietnam, Indonesia, and Thailand to reduce reliance on a single market.

George Tung, CEO of UOB Hong Kong, noted that enterprises are currently prioritizing resilience, supplemented by selective growth strategies. This means Hong Kong companies are no longer blindly chasing short-term opportunities, but are hedging risks through regional diversification. For example, 86% of surveyed companies regard supply chain management as a strategic priority, with 38% indicating they are strengthening their supply networks within ASEAN and the region. Additionally, 27% of companies are diversifying suppliers, 27% are exploring alternative sourcing strategies, and 26% are advancing supply chain digitalization.

Digital Transformation: The Gap Between Investment and Results

The study also reveals the determination and challenges Hong Kong enterprises face in digitalization. 93% of companies have adopted digital solutions, and about 80% plan to increase digital spending in 2026. In the technology, media, and telecommunications sectors, over 90% of companies say they will increase their AI budgets in the coming year. These investments are primarily focused on boosting productivity (36%), improving customer experience (33%), and optimizing decision-making (30%).

However, a noteworthy figure is that only 53% of companies believe their digital initiatives have achieved the expected results. This suggests that digital transformation is not an overnight process—acquiring technology is easy, but organizational change, talent alignment, and process reengineering often lag. For Hong Kong enterprises, the key to future competition may not lie in "whether to go digital," but in "how to digitalize effectively."

ESG: From Optional to MandatoryIn terms of environmental, social, and governance (ESG) factors, 86% of enterprises recognize their importance, and nearly half have already implemented sustainable initiatives. Companies believe that the main benefits of ESG include competitive advantage (38%), brand value (37%), and long-term resilience (35%). However, the report also clearly points out that "limited financial incentives and non-financial technical and consulting support remain challenges"—meaning that without systematic ecological collaboration, companies' ESG progress may fall into a dilemma of "willing but unable."

Asian Business Ecosystem: Hong Kong's New Role

Taken together, UOB's research not only depicts the strategic priorities of Hong Kong enterprises but also reflects the evolving direction of the Asian business ecosystem. Hong Kong enterprises are shifting from traditional trade intermediaries to regional integrators: leveraging their strengths in finance, law, and compliance, they assist global clients in deploying into ASEAN and Mainland China; at the same time, through supply chain regionalization, digitalization, and ESG practices, they enhance their position in the value chain.

It is noteworthy that behind Hong Kong enterprises' "expansion against the trend" lies confidence in long-term regional growth potential. As one of the fastest-growing regions globally, ASEAN's digital economy, new energy, and manufacturing upgrades are attracting substantial foreign investment; although Mainland China's growth has slowed, its vast market size and technological innovation capabilities remain assets that companies cannot ignore. Hong Kong's role lies precisely in connecting these two engines—the data from this research indicates that Hong Kong enterprises are ready to accelerate on this track.