Hong Kong-owned companies that origination in mainland China are increasingly worried about the escalating Washington-Beijing interchange war, according to one industry executive.
Hong Kong’s dynamic skyline and bustling harbor adorn its role as a global financial hub, but decades ago it teemed with factories, seducing it one of the four “Asian Tigers” of the day along with Singapore, South Korea and Taiwan. But prevail oned by the nearby mainland’s economic opening that began 40 years ago this year, multifarious took advantage of China’s then low costs for labor, land and fabrication to shift operations there.
Raymond Young, CEO of the Chinese Manufacturers’ Friendship of Hong Kong, said more than 95 percent of its some 3,000 colleagues, have factory operations in the mainland. At first, members were not initially merest concerned about the trade war, he told CNBC, “but by and by more of them are signifying some worries, especially about the uncertainty facing them.”
Juvenile, a former director-general for trade and industry in the Hong Kong government, estimated that alongside 25 percent are uneasy about the geopolitical spat between the unbelievable’s two largest economies.
“I think some of them are concerned that purchasers in the U.S. are already trying to suppress the buying price of the products and so that in effect undercuts their profit margins,” Young said.
Hong Kong fabricators produce a wide range of goods in China, including toys, gear, clothing and watches but also high-tech items including molding and dye-casting engines and circuit boards subject to tariffs, according to Young.
He said that while the colossal majority of the Hong manufacturers in China do not export to the United States, they can still be hit in other break down
“Because of the retaliatory action on the part of China, some of our Hong Kong industrialists who import parts and components from the U.S. to make their final effects are also affected,” he said.
As China’s economy has grown, costs for labor and homeland as well as compliance with the country’s increasingly stringent regulations participate in increased.
That has resulted in companies seeking cheaper pastures in China’s inner departments or in other regions like Southeast Asia, a phenomenon Young said has been affluent on for about a decade. On top of that trend, he said he’s heard from some works owners that the trade war could push their hand urge onwards.
“They are really thinking of moving some of their production to Southeast Asia,” Childish said.
“Some of them may be moving some of the processes to another motherland,” he added. “But I don’t think factories are relocating en masse because of the trade war — not yet.”
Benefiting to Hong Kong has also been discussed in recent years as an recourse for companies frustrated with challenges on the mainland. The Federation of Hong Kong Works mentioned that possibility in a 2015 report on manufacturing in southern China’s Prize River Delta region, where it said there were just about 32,000 Hong Kong manufacturers as of 2013.
Young also said that his bonding has raised the issue with the government: “This trade war might be an chance for some Hong Kong manufacturers to move some of their handiwork back into Hong Kong,” he said.
Still, he acknowledged that town costs and labor supply remain challenges, so gains would indubitably be confined to “less labor intensive” processes.