Manufacturing in Hong Kong

Manufacturing started in the 19th century after the Taiping Rebellion and continues today, although it has largely been replaced by service industries, particularly those involving finance and real estate.

[3] Guangdong officials fled to Hong Kong because of the Taiping Rebellion in the 1850s and 60s, bringing in capital and boosting manufacturing.

[5] Nevertheless, Hong Kong's manufacturing sector was still behind most industrialised cities as the source of capital was rather narrow and was largely limited to Guangdong entrepreneurs.

There are several factors leading to the rise of manufacturing in the 1920s and 30s, including a decline in European industries,[5] the tax reduction granted by the Ottawa Agreement of 1932, and the relocation of factories from Mainland China to Hong Kong.

[6] However, a series of favourable events led to another surge in manufacturing in 1935, including a decline in Japanese and Italian goods, the stabilisation of exchange rates, an expansion in mainland markets, and the rise of the Malay Archipelago.

[10] In 1954, the United Nations bought 10 ships from Cheoy Lee Shipyard to assist in the revival of Korea.

After the Second Sino-Japanese War, Chinese businesses bought huge numbers of machines and facilities to restore their pre-war production.

When the Civil War broke out, many businesses moved those facilities to Hong Kong warehouses to continue production.

This encouraged overseas investment and allowed developed technology to be imported to Hong Kong, boosting manufacturing there.

[13] Flip clocks manufactured by Twemco became a symbol of Hong Kong's precision engineering capability during this era.

[18] After the industrialisation of Hong Kong, it faced two major crises in the 1970s, namely the oil crisis and the rise of other industrial states and cities with similar economic structures, such as Singapore, South Korea, Taiwan, Brazil and Mexico.

[19] This was also due to the fact that Western countries imposed severe restrictions on textile imports, while toys, electronics and watches enjoyed lower tariffs.

For example, Hong Kong bought raw material from Taiwan, Singapore and Korea to reduce reliance on Japan.

[21] In this period, industrial areas were spread all over the city, especially in the New Territories, where new towns, such as Tuen Mun and Shatin, were built.

Another problem was the increasing protectionism of Western countries, causing some privileges to be removed and extra restrictions placed on Hong Kong products.

[22] Meanwhile, the economic reforms in Mainland China provided a favourable condition for building factories there.

[28][29] Mainland China had labour and land and looser pollution control than Hong Kong.

[29] Therefore, Hong Kong industrialists took advantage of Mainland China's pull factors by relocating their factories there.

The roads, ports and communication networks of the Pearl River Delta were rapid, and places such as Guangzhou and Foshan had good light industry bases.

[32] Some industrialists relocated their factories to nearby countries such as Thailand,[32] India, the Philippines, Myanmar, Bangladesh, Vietnam, Indonesia, and Malaysia.

The first, 'made in Hong Kong', refers to the process in which all power, resources (apart from raw materials imported from foreign countries), labour, capital, design and management occur in Hong Kong, and the products are either sold locally or exported overseas.

The Pearl River Delta faced serious water pollution and much farmland was turned into industrial uses.

Therefore, the economy of the Pearl River Delta was boosted alongside the improvement of living standards.

[40] The relocated factories needed support services including shipping, insurance, and above all, finance.

Due to more people working in the tertiary sector, Hong Kong's economy grew increasingly reliant on service industries.

However, the dependence on such industries caused a loss of competitiveness between products produced by Hong Kong-based manufacturers and those from the international market.

[42] As a result, the government of Hong Kong has tried to develop knowledge-based, high-technology and higher-value-added industries.

Research centres have been set up to support such industries, notably the Hong Kong Science and Technology Park.

[47] In the 21st century, industrialists in Shenzhen have expressed interest in cooperating with Hong Kong in high-technology manufacturing industries.

They want to share business-related information with Hong Kong and use the city's financial services such as the electronics industry.