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Hong Kong's small and medium-sized enterprises (SMEs) are seeking funding support and easier loan access, as rising costs have landed at the top of their list of worries, according to DBS Bank (Hong Kong).
Operational costs had become the top concern for 60 per cent of the city's SMEs, according to the bank's survey of 400 SME representatives last month. A year ago, the top concern was geopolitical uncertainties, cited by 53.3 per cent of respondents.
The survey found that more than half of the city's SMEs were hoping that Financial Secretary Paul Chan Mo-po would reveal some support for them on Wednesday in his budget address. Government help for expansion into new markets in Asia and the Middle East was on the wish list of about a third of the SMEs, as was help with business matching and networking. More than a quarter were looking for support in technology and innovation.
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"SMEs are the backbone of Hong Kong's economy, yet many face challenges in managing operational costs, maintaining cash flow and expanding into Asia," said Lareina Wang, executive director and head of SME Banking at DBS Hong Kong.
With Donald Trump's return to the White House, businesses have been anticipating rising costs owing to tariffs that he vowed to impose on imported goods from trading partners including China. Trump's policies have also clouded the outlook for the pace and amount of interest-rate cuts by the US Federal Reserve this year.
Just over half of local SMEs held a "neutral economic outlook" for Hong Kong, the survey found.
Still, more than half of the respondents anticipated business growth over the next 12 months, while 28 per cent expected business to remain stable.
Given their concern over rising costs, more than three quarters of SMEs said they were focusing on consistent cash flow and cost management, followed by market expansion at 56 per cent and marketing and branding at 31 per cent.
"Notably, more Hong Kong SMEs are prioritising the implementation of sustainable practices (23 per cent) in their operations than last year (14 per cent)," the study said.
In terms of target markets for expansion, local businesses saw mainland China as the top priority at 66 per cent, followed by the Greater Bay Area at 45 per cent. Across Asia, Singapore, Indonesia, Malaysia and Vietnam piqued the most interest for expansion.