Staggering from Hong Kong's decades- long industrial downturn, labor leaders capitulated Tuesday to demands by manufacturers to import low-wage textile workers from the mainland.
In return, employers agreed for the first time to impose minimum wages in specific cases.
The Labour Advisory Board, a 12- strong policy unit composed equally of employer and employee representatives, agreed to a government proposal to import up to 5,000 mainland textile and garment workers on a minimum wage of HK$200-HK$235 a day.
The trial scheme, which is expected to pass through the Legislative Council and the Executive Council in the next two months, would require existing factories to employ one local employee for every four mainlanders hired. New or returning factories would need to hire a local for each mainlander.
"We agreed to try the program because we think it'll create employment opportunities for local workers," said Poon Siu-ping, vice chairman of the Federation of Hong Kong and Kowloon Labour Unions, who estimates up to 5,000 new jobs for locals will be forged.
The plan also calls for a matching minimum wage for the local textile workers hired in this program, or at least HK$4,000-HK$4,700 each month and HK$24,000-HK$28,200 over a six- month period, depending on their skills.
Currently, many in the industry don't receive a basic salary and instead are paid piecemeal and there's presently no minimum wage for workers in any private industry.
But in his policy address last month, Chief Executive Donald Tsang promised to look into the issue and, despite often heated opposition from employer groups, the government is now conducting a consultation on the issue, to be completed next month.
The need for ramping up the local textile industry arose recently, when the United States and the European Union began reimposing a slate of limits on apparel imported from the mainland, forcing manufacturers to return to Hong Kong.
"Since there aren't many specialized workers in the territory, mainlanders will allow employers to ramp up production," said Fan Ling-sum, vice chairman of the Hong Kong General Chamber of Textiles.
Until the end of last year, the US and the EU imposed a worldwide system of quotas, called the Multi-Fiber Agreement, to protect their home industries. After the system expired, the importing countries were permitted to impose special limits on China if its exports rose too quickly.
And they have. Mainland textile and garment exports are expected to rise by 60 percent this year. Last week, China and the US finally reached an agreement after three months of negotiations prompted by the US blocking the import of various textile goods such as bras and sox.
The deal, similar to one inked with the EU in June, severely limits the growth of textile imports for the next three years.
This has been a boon for Hong Kong. In September, the value of domestically produced apparel rose to HK$8 billion, up 18.1 percent over the previous September. For the first eight months of the year, the value dropped 30.5 percent year on year.
Business leaders are pushing for the proposal to be implemented quickly, since orders tend to fall in the first half of the year.
"The business world changes rapidly," says Federation of Hong Kong Industries deputy chairman Clement Chen. "If we don't cash in, business will go to Southeast Asia."
Under the government's proposal, there will be a monitoring body composed of representatives from employers, employees, the Labour Advisory Board and the Labour Department.
In addition, a hotline for local and mainland workers will be set up for them to report any cases of exploitation by employers.
