Industry development
Industry played an important and pivotal role in Hong Kong’s turning from a small fishing village to the cosmopolitan city today. Hong Kong industries underwent the stages of emerging, prospering and decline, and these changes had much to do with the local, neighbouring, and international economic, political and social events. These significant events included – World War II, Korean War, the Chinese Cultural Revolution, China's reform and opening up, Sino-British negotiations on Hong Kong’s future, the return of Hong Kong, the Asian financial crisis, SARS, the world financial tsunami, and so on.
The main driving force of Hong Kong industry had been the small and medium manufacturers, who were ever sensitive to changes, rapidly adaptable to different product lines, possessing good manufacturing techniques, and having international networks and vision, thereby successfully addressing the past challenges one after another.
Early 20th Century – Hong Kong’s Budding Industry
In the 1900s, the manufacturing industry in Hong Kong slowly developed, usually with homes being the production unit to provide the required labour. Household necessities were manufactured, such as clothes, matches, soap, coal, and rattan ware. Small to medium-scale Chinese enterprises also emerged; for example, the cosmetic brand “Two Sisters” was started in 1898.
1920’s and 1930’s – Chinese Goods were More in Demand
The textile industry started and then flourished. At the same time, industries which required little technology but were labourintensive emerged; these were light industries which fulfilled export demands, including rubber-soled shoes, electric torches, metal ware, enamel ware and so on.
However, Hong Kong goods at that time were not always competitive, and Chinese goods were more in favour. Hong Kong goods were seen as foreign products by the China mainland and there were no preferential tariffs. Therefore local factoryowners formed the “Chinese Manufacturers Association of Hong Kong” to change the view of the Chinese government. In 1938, the first Hong Kong Brands and Products Expo was held, which was extremely popular, while “Hong Kong Brands” gained their appeal in the public’s eye.
Post-World War II – The First Round of Economic Transformation
After World War II, Hong Kong industries picked up again. China’s involvement in the Korean War led to an embargo on its goods by the United Nations, and Hong Kong’s commerce, which relied heavily on re-exports of Chinese goods, was adversely affected.As a result, Hong Kong sought an alternative by developing its own industries. By 1949, the Civil War in China caused many entrepreneurs and industrialists to flee from Shanghai to Hong Kong. Apart from bringing sizeable capital with them, they also came with technology, machinery, experienced technicians and modern management abilities. This turned a new chapter of history for Hong Kong industries. At the same time, large numbers of refugees came from the mainland to Hong Kong, and a labour market was formed which was sizeable and cheap. Hong Kong industries benefited from these favourable conditions and grew to strength.
1950’s and 1960’s – The Blooming of Cottage Industries
Cottage industries flourished and these small factories mainly manufactured products which required low technology, such as weaving wigs, making clothes (with sewing-machines), cutting thread knots, assembling parts and putting together plastic flowers. Most of these were family businesses and when work was busy, neighbourhood women would be asked to help. So such home-based women workers might be described as Hong Kong’s industrial reserve army. With the rapid development of the local textile industry, the garment industry also strengthened. Plastics and electronics industries advanced at the same time, achieving another economic transformation of Hong Kong.
1970’s and 1980’s – From Blooming to Withering
Industries grew in leaps and bounds; in the 1970’s Hong Kong’s industries were at their peak. Manufacturing industries represented 30% of the gross national product, and consumed 40% of the labour force. By the early 1980s, Hong Kong had some of the highest global rankings by export volumes of watches, toys and garments. This enabled Hong Kong’s rapid economical growth and local living standards were much improved. “Made in Hong Kong” was recognised internationally as a good branding; apart from being high calibre, durable and affordable, Hong Kong product designs and their overall packaging and business operations were also up to international standards. Another major advantage was Hong Kong industry’s flexibility to changes, which brought miracle after miracle for Hong Kong’s recognition in the international arena.
However, good times did not last, and in the 1980’s, China’s reform and opening up provided a range of preferential policies to investors, so that Hong Kong businesses moved their factories to the Pearl River Delta, with only their headquarters remaining behind. Hong Kong’s industry suffered a steep decline from that time.
Industrial Decline of Hong Kong?
Many factories’ production lines had by and large moved northwards, and by 2007, the manufacturing industries in Hong Kong declined so much that there were only 12,000 factories employing less than 150,000 persons.
It is indisputable that a large number of factories have moved out of Hong Kong, but important decision-making and strategising, product design, market promotion, etc. are still the responsibility of Hong Kong staff. Low-technology industries have declined. If industries in Hong Kong need to survive, they have to create new business models and / or turn to high technology.
