As businesses in the Guangdong-Hong Kong-Macao Greater Bay Area take to the world stage, consultancy firms are cashing in by helping them to gain a foothold in emerging markets. Zhang Tianyuan reports from Hong Kong.

As enterprises in the Guangdong-Hong Kong-Macao Greater Bay Area make a beeline for expansion overseas and come to grips with the importance of intellectual property, the demand for advisory services is set to grow, creating vast opportunities for international consultancies, according to New York-based global consulting firm, Alvarez & Marsal.

Many Chinese mainland companies are exploring opportunities abroad, with high-tech firms leading the pack, using Hong Kong as a gateway to reach global markets, says Eden Chen, managing director of Alvarez & Marsal’s disputes and investigations practice.

A survey jointly published by the Guangdong Council for the Development Promotion of Small and Medium Enterprises and The Economic Observer last year showed that 25 percent of 104 SMEs interviewed had made investments overseas, choosing member states of the Association of Southeast Asian Nations and countries involved in the Belt and Road Initiative as their prime destinations.

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Another 40 percent of respondents said they planned to invest abroad.

“The GBA is home to many innovative high-tech firms that are eyeing expansion abroad, but they often run into problems in their journey,” says Chen. “As they’re unfamiliar with the laws and regulations in those countries, they may not understand the legal costs they’re likely to incur, as well as the compliance obstacles they may face in certain markets.”  

As more high-tech firms in the GBA become global industry leaders, they are becoming more familiar with intellectual property protection.

As Chinese companies move up the value chain, they not only focus on technological innovation, but also on protecting their assets, says Chen. “They’re willing to pay more attention to, and are more aware of protecting their own intellectual property and dealing with any IP claim from another party.”

Alvarez & Marsal notes that many companies do have frameworks for data leakage protection and use legal counsels and forensic technology service providers to address various challenges in global markets.

Betting big on the bounty of opportunities in the 11-city cluster, the consulting firm opened a new office in Shenzhen, Guangdong province, this year — its fourth in the country after Beijing, Shanghai and the Hong Kong Special Administrative Region.

“We have ambitious expansion plans in South China. The GBA is a thriving hub of economic activity. We believe that businesses in this area need help to navigate the evolving demands and changes in the market,” says Davin Teo, managing director of Alvarez & Marsal. He also heads the company’s disputes and investigations Asia practice unit, as well as the region’s forensic technology team.

The company also intends to make a foray into Guangdong’s provincial capital, Guangzhou — another core city in the region.

The GBA occupies less than 0.6 percent of the nation’s land area yet accounts for about one-ninth of the country’s total economic output. The region’s gross domestic product reached 14 trillion yuan ($1.97 trillion) last year, and is home to over 60,000 national high-tech enterprises, nine mega technological infrastructures and 50 key laboratories.

The Shenzhen-Hong Kong-Guangzhou cluster has ranked second among the world’s top scientific and technological innovation clusters for four consecutive years, according to the Global Innovation Index rankings released by the World Intellectual Property Organization.

Chen says Alvarez & Marsal is attracted to the GBA by its favorable business incentives.

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The mainland and Hong Kong authorities jointly launched a pilot program in December, making it easier for cross-border data to be transferred within the GBA. The program, initiated by the Innovation, Technology and Industry Bureau and the Cyberspace Administration of China, breaks down information barriers and reduces compliance costs of cross-border personal data flow for enterprises, thereby facilitating the provision of cross-border services and benefiting businesses and individuals in the region.

The project’s first phase, involving the banking, credit referencing and healthcare sectors, enables residents on both sides to apply for loans more easily as banks can get easier access to their credit records. It also benefits those seeking medical treatment as they are able to share their medical records with hospitals on either side of the border.

Alvarez & Marsal is also upbeat about China’s growth prospects, saying it is “firmly committed” to investment and expansion in the country. “China will become the most important market in Asia in the foreseeable future,” says Teo.

The number of mainland firms in the consultancy’s client portfolio has surged from 10 percent to more than 50 percent in the past eight years.

Contact the writer at tianyuanzhang@chinadailyhk.com