Hong Kong industries have long been able to benefit from their close ties with the mainland and, with the introduction of various agreements under CEPA (Closer Economic Partnership Arrangement), have found new ways to tap into the vast China market.
Kenneth Ting, chairman of the Federation of Hong Kong Industries (FHKI) has tracked these developments over the years and believes more changes are still to come. He emphasises, though, that shifting the manufacturing base across the border does not signal the end of the industry in Hong Kong. The model has obviously changed, but according to the FHKI's "Made in PRD Study", over 50,000 factories which have been set up with Hong Kong investment and expertise are now employing as many as 10 million mainland workers and generate substantial annual profits.
"We should keep looking forward," Mr Ting says. "Society and the framework for industry have been changing, so we should compare ourselves with the most advanced countries in the region and build on our strengths." In this respect he points out that the free access to information and technical support are crucial and that the mainland needs to maintain progress in these areas. However, the availability of land, labour and resources at comparatively lower prices are major advantages.
As a representative of local industry, the FHKI has been working with various government bodies on programmes designed to enhance new business opportunities. It recommends and comments on possible policy changes and aims to direct attention to key issues. As examples, Mr Ting notes the recent efforts to promote brand building and Q-Mark registration among manufacturers plus initiatives to help them resolve operational problems. "We also set up the PRD Council to give local manufacturers more opportunities to develop contacts, exchange information and learn about policy changes," he adds.
In his view, Hong Kong's standing as a well regarded international business centre with a sound legal system provides a solid base for industry to attract overseas investors. Jacky Cheung, chairman and CEO of Shinhint Acoustic Link Holdings Ltd fully agrees. "We have noticed a considerable growth in demand from companies based in Europe wanting to establish partnerships with Hong Kong businesses," he says. The orders they place may be comparatively smaller than those from US buyers, but they often require higher standards of quality, design and production.
"Globalisation, the Internet and the greater need for transparency and social responsibility have changed the face of the industry," Mr Cheung says. "However, by anticipating change and embracing advances in technology we can adapt and overcome whatever challenges confront us."
Mr Ting does not believe that shortage of talent will be a major concern. The mainland will continue to provide an essential pool of labour to support the expansion of operations. "Hong Kong youngsters may no longer want to work on a factory production line, but they still have many opportunities to specialise and build a career in areas like design and technical support," he says.
He notes that the key to running a business with successful China-based operations is to understand regional differences and unique local policies. "For instance, there are stricter environmental measures to observe in Dongguan," says Mr Ting. "Considerations like these must be taken into account before you decide about buying land or investing in certain types of technology or production."
Words of wisdom
Being selected as one of the winners of the Young Industrialist Awards of Hongkong in 2005 provided Jacky Cheung with deserved recognition and a definite career boost. He notes that the basic requirements for any winner can be summarised in the acronym ICAC, standing in this case for integrity, commitment, achievement and contribution.
Mr Cheung thinks the recognition gained has helped to boost the morale of his staff, which has led to higher quality and better production figures. He believes that participating in the contest was a good way of improving both the company and his own career. Having accumulated 15 years' work experience, he has clear ideas about what it takes to succeed.
"It is important to recognise the strengths and weaknesses of your company and to be able to predict possible market changes and how new technology may affect your products," he says. "Apply your knowledge appropriately and your company will find a way to achieve success."