This undated file photo shows a bird’s-eye view of Hong Kong. (PHOTO PROVIDED TO CHINA DAILY)
To drive Hong Kong’s reindustralization, the government should select a few industries to build core technological competence, strengthen producer services and transform the city into an Asian regional hub of manufacturing development, and review economic data to reflect industrial development, the Federation of Hong Kong Industries said.
This comes from an FHKI report, funded by the Trade and Industry Department, and conducted by a research team from the Hong Kong Centre for Economic Research under the University of Hong Kong.
The research is supported by integrated research methods such as big data analysis, surveys of 231 Hong Kong manufacturers, in-depth interviews and focus groups, as well as research to understand the current operations of Hong Kong manufacturers and their business strategies.
The major push for industrial development in Hong Kong will be the mainland market – the world’s only major economy which posted positive growth last year – when global economic recovery is clouded by uncertainties.
Paul Chan Mo-po, Hong Kong's financial secretary
“This research examines the current conditions, challenges and opportunities of Hong Kong industries and provides (an) important reference for formulating forward-looking policies to propel the development of manufacturing sector and producer services,” FHKI Chairman Daniel Yip Chung-yin said.
Hong Kong manufacturers generated HK$680.1 billion (US$87.55 billion) worth of profit in the Chinese mainland, equivalent to 23.7 percent of the city’s GDP in 2019, according to the report.
The FHKI identified advanced electronics, food technology and food processing, recycling and environmental industry, and biotechnology as the four major sectors that Hong Kong government should provide focused investments to develop core technology and a talent pool.
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The city’s largest industry chamber suggested the government facilitate universities to introduce more diversified applied technology degree courses and subjects to nurture more professionals who can better grasp high value-added technologies in the manufacturing process of the four industries.
The Hong Kong government should also enhance upstream and downstream producer services as well as advanced manufacturing procedures by utilizing the Guangdong-Hong Kong-Macao Greater Bay Area and Southeast Asia as bases for mass production, so that it can transform Hong Kong into a regional hub of manufacturing development.
If the producer services item is removed from all the services industry categories, producer services contributed 42.2 percent of Hong Kong’s GDP in 2019, from 28.7 percent in 1980, according to the report.
To cement the city’s producer services hub status, the FHKI envisioned the administration proactively negotiating favourable policies for Hong Kong enterprises to capture the vast opportunities across Asia, including streamlining trade procedures, aligning product standards, obtaining preferential investment terms, and promoting “Made by Hong Kong” brands in emerging markets.
The FHKI also recommended that the government review economic data to reflect industrial development in Hong Kong, for example, to disaggregate “producer services” from other categories of the services industry; updating industrial classifications more frequently; and conducting census on offshore production activities of Hong Kong manufacturers.
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“The major push for industrial development in Hong Kong will be the mainland market – the world’s only major economy which posted positive growth last year – when global economic recovery is clouded by uncertainties,” Financial Secretary Paul Chan Mo-po said in the opening remarks of the FHKI presentation on Wednesday.
Chan said the central government’s policy of promoting dual circulation will lead to a surge in consumption and investment so that some Hong Kong manufacturers have changed their business focus away from the traditional United States and European markets toward the vast mainland market.
Hong Kong also fosters regional collaboration, for example, through facilitating its manufacturers to explore the mainland consumption market, and striving to become a member of the Regional Comprehensive Economic Partnership, forged in November 2020, to create business opportunities for the city’s enterprises.