Hong Kong Clothing: Waiting for China
A Textiles Intelligence research report on the future of Hong Kong's clothing industry under Chinese rule
Hong Kong is the world's biggest exporter of clothing, with 13% of world trade. Yet the industry hardly existed before the early 1950s. This Textiles Intelligence report looks at the prospects for the survival of Hong Kong's clothing industry following the Chinese takeover in 1997, and the impact of Chinese rule and rising costs on the clothing industry's future. It traces how an industry built from almost nothing within four decades came to lead world clothing exports, how the international trading regime of quotas and the Multi-Fibre Arrangement shaped its growth, and how its manufacturers spread production offshore while keeping Hong Kong as their organising centre. Textiles Intelligence, formed in 1992 as a spin-off from the Economist Intelligence Unit, supplies global business information to the fibre, textile and apparel industry, with customers in more than 60 countries across five continents.
From Almost Nothing to the World's Biggest Clothing Exporter
Part 2 of the report tells the industry's story. Chapter 2 covers the development of Hong Kong's textile and clothing industries — historical background and the role of government. Chapter 3 profiles the apparel industry itself: its present structure, investment, employment, labour costs and industry costs; material supply, yarn and thread and fabrics; production trends in overall and detailed review; and overseas trade, with Hong Kong as a garment exporter, its trading pattern and export trade, and its role as China's entrepot. That entrepot role is the hinge of the whole report: Hong Kong's clothing trade was already bound up with China long before the 1997 takeover formalised the relationship.
Trade Relations, Quotas and the MFA
Part 3 examines Hong Kong's textile trade relations. Chapter 7 sets out the international trading regime — textiles and the GATT, fiscal controls, physical regulation and the Multi-Fibre Arrangement. Chapter 8 assesses the MFA's achievement, its effect on world trade and its industrial impact. Chapter 9 covers Hong Kong's trade relations: restraints on its export trade, Hong Kong strategy, and its position with the USA, the EC member states and other outlets. Chapter 10 explains the textile export control system — the export control regime, quota allocation and the market in transferred quota — and Chapter 11 reviews Hong Kong's performance in its major agreements with the USA, the EC and other markets. Appendices add Hong Kong's usage of US textile and apparel quotas and a list of leading Hong Kong knitting and apparel manufacturers.
The Diaspora and the Future
Part 4 follows the diaspora of the Hong Kong clothing industry: its offshore capability, the rationale for the movement overseas, the merits of alternative investment locations, and relations with overseas associates, including the organisation of Hong Kong's international enterprises and a case study of Onwell Holdings Ltd as an example of centralised operations. Part 5 then judges the future: factors affecting the industry, the end of the MFA and the attitudes and negotiating positions of the parties in early 1990, the consequences for Hong Kong in 1991, Hong Kong's relationship with China — preserving a distinct identity, the legal position and the practical independence of the industry — and final prospects, including whether Hong Kong remained an attractive location, the economics of clothing production there, Hong Kong as a marketing centre, and the confidence factor.
Common Questions
How big was Hong Kong's clothing trade?
Hong Kong was the world's biggest exporter of clothing, with 13% of world trade — an industry that hardly existed before the early 1950s.
What question does the report set out to answer?
Whether Hong Kong's clothing industry would survive following the Chinese takeover in 1997, and what impact Chinese rule and rising costs would have on its future — including its role as China's entrepot and as a marketing centre.
What is the diaspora covered in the report?
The spread of Hong Kong clothing production offshore: the rationale for moving overseas, the merits of alternative investment locations, and how Hong Kong firms organised their international enterprises, with a case study of Onwell Holdings Ltd.