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Sunday, 2 November 2008
Factory owners in delta considering a move back to HK
After nearly a decade running manufacturing businesses in the Pearl River Delta, some Hong Kong factory owners are considering moving back home as the global financial crisis bites deeper and mainland-Hong Kong cost differentials narrow.
Factory owners in delta considering a move back to HK
Yau Chui-yan 2 November 2008
After nearly a decade running manufacturing businesses in the Pearl River Delta, some Hong Kong factory owners are considering moving back home as the global financial crisis bites deeper and mainland-Hong Kong cost differentials narrow.
The crisis is hitting Hong Kong- invested small and medium-sized businesses on the mainland as banks dramatically tighten up on credit lines and export orders plummet.
Joseph Wong Pang-sui, chairman of the Hong Kong Association of International Co-operation of Small and Medium Enterprises, said an increasingly difficult business environment on the mainland was causing members to think about moving back to Hong Kong.
Mr Wong said business conditions on the mainland were becoming more complicated.
“Even if the costs in Hong Kong were double those on the mainland, some factory owners would still want to move back because of efficiency and the legal system,” Mr Wong said.
“Nowadays, we have to spend 70 per cent of our time [on the mainland] dealing with different policies while only 30 per cent of time is spent doing real business.”
Jimmy Wan, who has run a toy factory in Dongguan since the early 1990s, echoed his views.
“What troubles us is not only increasing costs but the constant changing of policies,” he said. “Since implementation of the labour contract law early this year, we are being troubled by workers who are not willing to work on Saturday if they are not paid overtime.”
Mr Wan was especially unhappy that he was being forced to make benefit payments to workers that he had not been obliged to pay over the past 10 years.
“It is bearable when we can make money like we did in the past, but it becomes unbearable when there is no profit.”
He said he hoped the Hong Kong government would provide assistance, such as studying the possibility of establishing an industrial area in the Lok Ma Chau Loop that offered lower rents and reconsidering policies on imported labour.
The Lok Ma Chau Loop is a 96-hectare area on the border formed by the straightening of the Shenzhen River and earmarked as an area for industrial development.
“We could employ those unemployed people in their 50s from Hong Kong, while a certain number of mainland workers could be allowed to work in the Lok Ma Chau Loop at the same time,” Mr Wan said.
Kwok Yiu-ming, who has a plastics factory in the delta and one in Chongqing , said he was considering a return to Hong Kong, especially for hi-tech manufacturing.
“Hong Kong’s economy keeps on going down,” he said. “I believe the economy between the two regions are going to be very close in three to five years.”
But Eddie Li Sau-hung, vice-president of the Chinese Manufacturers’ Association of Hong Kong, said the idea was unrealistic.
“It took 10 years to develop the West Kowloon area,” he said. “It might take at least 20 years to develop an industrial area in the Lok Ma Chau Loop. The only way these Hong Kong manufacturers can save themselves from stiff competition is to develop their own brands.”
The government has said it is examining ways to support Hong Kong businesses. It has said that enterprises may consider moving to the three industrial estates run by the Hong Kong Science and Technology Parks Corporation if they wanted to return to Hong Kong.
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Factory owners in delta considering a move back to HK
Yau Chui-yan
2 November 2008
After nearly a decade running manufacturing businesses in the Pearl River Delta, some Hong Kong factory owners are considering moving back home as the global financial crisis bites deeper and mainland-Hong Kong cost differentials narrow.
The crisis is hitting Hong Kong- invested small and medium-sized businesses on the mainland as banks dramatically tighten up on credit lines and export orders plummet.
Joseph Wong Pang-sui, chairman of the Hong Kong Association of International Co-operation of Small and Medium Enterprises, said an increasingly difficult business environment on the mainland was causing members to think about moving back to Hong Kong.
Mr Wong said business conditions on the mainland were becoming more complicated.
“Even if the costs in Hong Kong were double those on the mainland, some factory owners would still want to move back because of efficiency and the legal system,” Mr Wong said.
“Nowadays, we have to spend 70 per cent of our time [on the mainland] dealing with different policies while only 30 per cent of time is spent doing real business.”
Jimmy Wan, who has run a toy factory in Dongguan since the early 1990s, echoed his views.
“What troubles us is not only increasing costs but the constant changing of policies,” he said. “Since implementation of the labour contract law early this year, we are being troubled by workers who are not willing to work on Saturday if they are not paid overtime.”
Mr Wan was especially unhappy that he was being forced to make benefit payments to workers that he had not been obliged to pay over the past 10 years.
“It is bearable when we can make money like we did in the past, but it becomes unbearable when there is no profit.”
He said he hoped the Hong Kong government would provide assistance, such as studying the possibility of establishing an industrial area in the Lok Ma Chau Loop that offered lower rents and reconsidering policies on imported labour.
The Lok Ma Chau Loop is a 96-hectare area on the border formed by the straightening of the Shenzhen River and earmarked as an area for industrial development.
“We could employ those unemployed people in their 50s from Hong Kong, while a certain number of mainland workers could be allowed to work in the Lok Ma Chau Loop at the same time,” Mr Wan said.
Kwok Yiu-ming, who has a plastics factory in the delta and one in Chongqing , said he was considering a return to Hong Kong, especially for hi-tech manufacturing.
“Hong Kong’s economy keeps on going down,” he said. “I believe the economy between the two regions are going to be very close in three to five years.”
But Eddie Li Sau-hung, vice-president of the Chinese Manufacturers’ Association of Hong Kong, said the idea was unrealistic.
“It took 10 years to develop the West Kowloon area,” he said. “It might take at least 20 years to develop an industrial area in the Lok Ma Chau Loop. The only way these Hong Kong manufacturers can save themselves from stiff competition is to develop their own brands.”
The government has said it is examining ways to support Hong Kong businesses. It has said that enterprises may consider moving to the three industrial estates run by the Hong Kong Science and Technology Parks Corporation if they wanted to return to Hong Kong.
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