As Hong Kong marks 29 years since its return to Chinese sovereignty, local businesses and officials are highlighting the opportunities and challenges arising from closer integration with the mainland under Beijing’s Greater Bay Area (GBA) initiative. This master plan aims to connect Hong Kong with Macau and nine cities in Guangdong province to create a dynamic economic region, while Hong Kong balances its unique status under the “one country, two systems” framework.

Several Hong Kong enterprises are actively expanding their mainland operations to tap into the vast Chinese market and more reliable supply chains. Materials scientist Eddie Yu, founder of biodegradable materials company OKOSix, started his business in Hong Kong in 2021 amid the Covid-19 pandemic. The company has since seen strong demand in Western markets including Canada, Europe and Australia, and recently established its regional headquarters at the Hong Kong Science Park Shenzhen Branch. Yu confirmed plans to build a factory in Guangdong, signaling a deepening mainland presence.

Similarly, Sandbox VR, a virtual reality gaming firm founded in Hong Kong in 2017, leverages the city’s strategic location and talent pool, which has grown with the inflow of professionals from the GBA. Although the company relocated its headquarters to Silicon Valley in 2019 to focus on Western markets, it maintains operations in Hong Kong, Macau, and Shanghai. CEO Steve Zhao noted that geopolitical tensions have prompted caution among tech startups, particularly in sectors like biotech, but for Sandbox’s entertainment business, risks have been comparatively limited.

The integration drive is also seen as an asset for sectors beyond technology. Drone Solutions Asia, founded by Australian entrepreneur Dylan Tyack in 2024, uses Hong Kong’s dense urban environment as a testing ground for its facade-cleaning drones. The company benefits from the city’s proximity to Shenzhen’s innovation ecosystem, its English-speaking environment, and regulatory advantages, positioning Hong Kong as a gateway for expanding throughout Asia. Meanwhile, Aritone Group, a cross-border healthcare provider, reports increasing demand from mainland patients seeking medical services in Hong Kong, attributing this growth to improved access under the GBA framework.

Despite these benefits, concerns persist over maintaining Hong Kong’s distinctiveness amid integration. The city’s free flow of information, a transparent regulatory environment, and autonomous legal system are widely viewed as critical to sustaining its competitiveness in finance, innovation, and trade. Michelle Zhou Tongjin, managing director of Aritone Group, emphasized the importance of preserving Hong Kong’s efficient regulatory regime, particularly in the medical sector, to avoid delays in accessing new treatments.

At the same time, geopolitical tensions have intensified scrutiny from Western governments, complicating Hong Kong’s business environment. Relations between the U.S. and China pose the leading challenge for American Chamber of Commerce members in Hong Kong, with concerns growing over the city’s perceptions abroad and the blurring of distinctions between Hong Kong and the mainland. Wilson Chan Wai-shun, co-founder of the Pagoda Institute, highlighted increasing Western wariness toward Hong Kong entities in sensitive industries, underscored by restrictions on access to advanced U.S. technologies and sanctions compliance challenges.

The interplay of integration efforts and international pressures places Hong Kong at a crossroads. Experts caution that while cooperation with the mainland may drive economic and technological growth, preserving the city’s regulatory independence, open internet access, and capital mobility is essential to maintaining its global appeal. Hong Kong’s role as a “para-diplomatic” connector between mainland firms and overseas markets is viewed as a strategic advantage, and government delegations are actively promoting mainland enterprises’ international expansion.

As Hong Kong approaches its 30th anniversary as a Special Administrative Region, the city’s ability to balance deeper ties with the mainland while safeguarding its unique legal and economic systems will be crucial in sustaining its position as a global business hub.