A survey by the Chinese University of Hong Kong with the support of the Better Hong Kong Foundation shows over 80% of the manufacturers and nearly 60% of services provider interviewed reported growth in business as a result of cross border investment and relocation of industrial bases. The research reveals that the HKSAR administrations should develop a comprehensive policy to support small and medium-size enterprises to facilitate research and development activities of local business in order to further develop tourism and logistics related industries, and to maintain a sustainable economic growth in the territory and the Pearl River Delta.
The 2002 survey aims to review and evaluate the operational issues facing Hong Kong manufacturing and logistics related service industries. The survey indicates that Hong Kong authorities should design and implement measures or policies conducive to faster and more efficient flow of passenger and cargo traffic. The administration should further encourage more liberal human capital, resources and information flows. The authorities¡¦ should also push for an early implementation of closer economic relations arrangement. (Table 1)
Professor Chyau Tuan, Chairman of the Committee says, ¡§The economy between Hong Kong and the Pearl River Delta has become more and more integrated since China¡¦s open door policy in the 1980¡¦s. The economic growth in Hong Kong and Guangdong, especially in recent years, manifests the importance of interactivities in the region within the sphere of the ¡¥core-periphery system¡¦. Such a mega city economy is so unique and becomes the comparative advantage in mobilized FDI for the region.¡¨
The survey was conducted between July and August 2002, with questionnaire sent to 4,442 manufacturing and logistics-related (trading, transport, storage, business services, information, etc.) companies registered in Hong Kong. A total of 192 questionnaires were returned, constituting a response rate of 5%. Among them, 70 were in the manufacturing and 122 in services business.
Major Findings
The survey indicates that cross-border investment have great impact on Hong Kong¡¦s economy. 87.3% of the manufacturers said both value of production and sales volume had been increased since relocation of manufacturing process began. The logistics related operations reported an increase of 56.3% in business.
On the question of how much cross border production had directly affected employment in Hong Kong, 37% of the logistics and related servicing companies interviewed had hired more people as permanent staff; and 46% said the number of local staff remained unchanged; whilst 17% reported a decrease. For the manufacturers interviewed, 34% had increased employing local staff; and 2% reported no change but 64% stated a decrease. On the parts of work skills required for their local employees and value added created by their local operations, different industries presented varied views.
Concluding remarks
¡§The survey has deepened our understanding of the effects of economic integration between Hong Kong and the Pearl River Delta Region throughout these years. It provides clear directions for future development in the region and for policy of SAR government to enable such a development. Hong Kong needs to strengthen its competitiveness and to leverage its superior economic fundamentals (such as institutional infrastructure, global networking and openness of society, etc.) for continuous growth. The HKSAR government has a critical part to play. We support the administration¡¦s efforts to remove snarls that complicate traffics and commerce; to facilitate movement of goods and services and to foster an even freer flow of capital, human resources and information between Hong Kong and the region. The Foundation will continue to work with various organizations for a closer Hong Kong-Pearl River Delta economic symbiosis.¡¨ concluded Mr. George Yuen, Chief Executive of The Better Hong Kong Foundation.
For enquiries, please contact Mr. Kim Wan of The Better Hong Kong Foundation at 2861 2622 or by fax at 2861 3361.
Table 1 The Expectations on HKSAR Economic Policy (%)
Manufacturing Industry | Logistic Services | |
(1) To Implement a positive and comprehensive policy for SMEs (including financing, market information, trade promotion, and training) | 62.32(Remarks) | 52.54 |
(2) To Speed up the two-way exchange of people, materials, capital and information between Hong Kong and the Pearl River Delta Region | 47.83 | 49.15 |
(3) To hasten the development of a “Closer Economic Partnership Agreement” between Hong Kong and the mainland | 41.43 | 40.68 |
(4) To enable closer coordination in the economic planning and decision-making between Hong Kong and the Guangdong Province | 36.23 | 40.68 |
(5) To implement a positive and comprehensive industry policy (foster selective industries to engage in R&D) | 30.43 | 29.66 |
(6) To eliminate monopoly and increase market competition | 23.19 | 37.29 |
(7) Others | 5.71 | 14.41 |
Remarks: Multiple answers and the total percentage may exceed 100%
The manufacturing business and all related to providing logistics services are calculate separately
Samples Distribution: 70 manufacturing business and 122 services provider business