Hong Kong is dramatically benefiting from the decision of the European Union and the US government to reimpose quotas and restrictions on apparel and textile imports from mainland China, senior industry executives confirmed in Hong Kong on 6 October.
The Special Administrative Region (SAR) could enjoy a significant revival as a manufacturing base if some form of quota system remains in place through to 2009 and beyond.
Felix Chung, Chairman of the Hong Kong Apparel Society, told a press conference at Interstoff Asia: "Hong Kong manufacturers are in a more positive situation than the Chinese because there are no limitations on exports and because we are benefiting from the OPA [Outwards Processing Arrangements] system, which gives us a flexible way of producing."
OPA allows manufacturers to claim their goods are made in Hong Kong, provided some work on the goods takes place there.
Hong Kong's textile and clothing re-exports to the EU and the US rose 80 per cent and 33 per cent, respectively, from April through July, according to the Hong Kong Trade and Industry Department.
Combined re-exports to the two markets totalled HK$57.2bn ($7.3bn) in the second quarter of 2005, up 49 per cent from a year earlier.
But to maintain the pace of development, the SAR urgently needs skilled labour with the technical expertise to revive manufacturing. In recent weeks, it has emerged that the Hong Kong government is actively considering a more flexible approach to allowing specialist labour from the mainland into Hong Kong.
Felix Chung said: "This has been requested by the trade for a long time... The Hong Kong government understands the need for this... We expect a happy ending."
He said: "A lot of the Hong Kong-invested factories, especially in the Pearl River Delta area, want to reopen their factories or expand their factories in Hong Kong. But we don't have sufficient skilled labour."
He added: "If we can find the local labour here, then that's fine. Or if we can retrain, that's also fine. But importation of labour seems to be the only way. There are actually quite a lot of Chinese manufacturers who approach us, wanting to understand more about us...Eventually, Chinese investors will hopefully open factories here, using the OPA systems. This would help the Hong Kong economy, no matter where they're from."
Chung said the situation was playing to the advantage of Hong Kong. "The garment industry can be the first starter to get industry back to Hong Kong."
Back in the mid-1970s, Hong Kong's textile industry employed around half of the manufacturing workforce, or around 350,000 workers, compared to only 41,000 in March this year.
Willy Lin, vice-chairman of the Textile Council of Hong Kong, who was also speaking at the press conference, said the scheme for importing labour was not new - and has been in place for more than a decade. He was also anxious to play down fears that a new scheme would have an impact on job opportunities for local workers.
