Positive future seen for Hong Kong's clothing industry
HONG KONG (JP): Chinese people believe in four essentials in their day-to-day life -- clothing, food, lodging and transportation -- in that order of priority.
This means there will always be a demand for the clothing industry and it will remain a prosperous business.
It also means Hong Kong will maintain its status as one of the most important international fashion centers despite Hong Kong's hand over to China on July 1.
The hand over is hot on everyone's lips, including Hong Kong government officials and businessmen. Many believe the hand over will not only have a major impact on the textile and apparel industry in Hong Kong and other emerging Asian countries, but on a global scale as well. Emerging Asia has always had a major influence on textile and supporting industries throughout the world.
But several Hong Kong government officials and businessmen have assured the world there will no change in this thriving industry.
Hong Kong's Deputy Secretary for Trade and Industry Tam Wing Pong told The Jakarta Post during the 13th convention of the International Apparel Federation (IAF) here on May 12 and May 13 that Hong Kong's clothing industry will not be affected by the coming transition.
"I am pleased to assure you that clothing produced by Hong Kong will continue to bear the name of Hong Kong as its place of origin. Hong Kong's free trade policy has been a well-proved recipe for our past success and we will certainly not give it up easily," Tam said.
He added the transition will certainly change Hong Kong's national identity but it will not change the way people think, administer and do business.
"We shall change with the world but we will not change just for the transition," Tam said.
Under a Sino-British joint declaration, Hong Kong has been promised that it will continue to enjoy a high degree of autonomy and that the existing way of life will not change for 50 years after the transition.
Tam said Hong Kong will continue its existing economic policy which embraces free trade, an open market, fair competition and a level playing field, among others. Hong Kong, as China's newest special administrative region (SAR) as of July 1, will continue to be a separate customs territory.
He said Hong Kong's economic success is largely due to the clothing industry.
Humble
It was a humble beginning for local industrialists after World War II, but they have made every effort to transform Hong Kong into one of the world's leading garment manufacturers and exporters. Many international fashion apparels are made in Hong Kong and Hong Kong's fashion designers are gaining international recognition due to their quick response to trends, inventiveness, workmanship and the quality of their products.
Today, the clothing industry is still the largest in the manufacturing sector in Hong Kong. In 1995, the industry employed more than 110,000 workers, representing 29 percent of its working population, with a gross output of HK$73,800 million making up 31.9 percent of its domestic exports.
According to Asia Pacific Profiles, Hong Kong's consumer expenditures on clothing and footwear reached 20 percent of the territory's total US$49.96 billion in 1993.
But Hong Kong, like other clothing exporting countries, also faces problems in the industry. These arise from trade restriction measures imposed by major importing countries such as the United States and some European countries, Tam said.
The textile and clothing industry remains one of the few areas where protectionism is condoned, he said.
International textile and clothing trade has been frequently disrupted by various protectionist measures such as antidumping actions, transitional safeguards, unilateral changes of origin rules and others.
The rules of origin, for instance, have created a lot of hardship for exporters. These rules have caused obstruction to trade and have also undermined the globalization process in the clothing industry. The globalization process will enable the industry to benefit from the competitive advantages of different locations.
"Hong Kong will continue to work hard in multilateral forums, particularly in the World Trade Organization (WTO), for a truly liberalized international trading regime to safeguard and advance the legitimate interest of our industry and our traders," Tam said.
Nowadays, bilateral trade relations are subject to a large number of uncertainties and non-trade related factors. "Again, using Hong Kong as an example, we find ourselves from time to time caught in the cross fire between two of our biggest trading partners, the United States and China," he said.
A trade dispute between the two of them would have a serious effect on the economic well-being of Hong Kong, he said.
"The latest situation is that we find ourselves in the perennial debate on the granting of Most Favored Nation (MFN) trading status for China by the United States," he said.
If the status was not maintained, Hong Kong's projected economic growth would be curtailed by up to 2.8 percent with 86,000 jobs lost, he said.
Hong Kong economic officials estimate that trade worth about HK$246 billion (US$32 billion) would be at stake if China's MFN status was not renewed, with losses mostly from decreased transshipment activities.
But last Tuesday Washington announced it would extend China's trade access under the MFN status.
Hong Kong was delighted at U.S. President Bill Clinton's decision to renew China's MFN trading status for another year. With the extension of China's MFN status, people's confidence in Hong Kong can be strengthened as a result of the enhanced Sino- U.S. trade relationship.
Optimism
Assistant professor at the Institute of Textiles and Clothing at the Hong Kong Polytechnic University, Yuen Lan Priscilla Chan, said optimism still flourishes in Hong Kong's textile and clothing industry.
Many foreign and local clothing manufacturing companies still operate their businesses from their Hong Kong headquarters.
"Some companies have established factories in several Asian and South American countries for efficiency," she said.
"The hand over will not change the current system of Hong Kong's clothing industry. It has already reached maturity," she said.
Managing director of Sterling Products Ltd., Kenneth K.K. Wang agreed, agreed that Hong Kong textile and clothing manufacturers have mastered the technology, management and marketing systems know-how.
"In this era of change, many of Hong Kong's success factors can be copied by our competitors," he said.
Hong Kong manufacturers, he said, have already adopted a quick response service and do not tolerate redundant processes in a bid to lower costs.
Wang said Hong Kong is fortunate that it has competent agencies such as the Productivity Council, whose Textile Apparel Division can undertake consultancy projects.
Research and training centers are available at a number of institutions, including the Polytechnic University which trains undergraduate and post-graduate students. The Polytechnic University's Institute of Clothing and Textiles also possesses a center of excellence, where research work can be carried out and specialized databases can be kept for reference.
Indonesia
Some trading partners, including Britain and Indonesia, still see bright prospects for Hong Kong's clothing industry.
Indonesian Minister of Industry and Trade Tunky Ariwibowo said Hong Kong will remain a major business center in the Asian region.
"Indonesian businessmen will gain many benefits if Hong Kong's status is not changed," he said.
Director of UK Apparel & Textile Challenge, Ken Watson, said Hong Kong is still one of the most sophisticated retailing centers in Asia and a major stepping stone to the larger Chinese market for the next millennium.
Watson said the number of companies entering the retail market in China grows every day. Many of them use Hong Kong as a logistical center and a center of management expertise and joint venture partners.
"Hong Kong should be seen as part of China. The maturity of its retail sector and the high costs of its property should be viewed both in terms of its domestic market and marketing access to China and Asia," Watson said. (raw)