Prospects for the Textile and Garment Industry in Hong Kong

Hong Kong is the world’s third largest exporter of garments, behind China and the EU, and a major exporter of textiles—reflecting its favoured position as one of Asia’s most prominent trading hubs.

Textile and clothing exports stood at US$40 bn in 2008, representing 11% of total exports from the territory. Most of this trade, however, comprises re-exports of goods originating in mainland China and other low cost Asian countries.

Hong Kong’s domestic textile and garment sectors have been declining due to high manufacturing costs. In particular, labour and land costs are significantly higher than in most other Asian countries.

Not surprisingly, there has been a strong trend, evident since the late 1980s, for manufacturers to subcontract operations to lower cost countries, especially mainland China.

Even so, Hong Kong still retains an important garment manufacturing industry which is the territory’s largest manufacturing activity. There is an emphasis on producing goods for the luxury market where innovation and fashion are essential attributes in attracting sophisticated international consumers.

Important links have been established with some of the world’s most famous and exclusive brands. Moreover, the textile and garment industries remain at the centre of the territory’s economy. The industries employ around 147,000 people, of whom 117,000 are involved in the export/import trade.

Looking ahead, Hong Kong will face growing competitive pressures as the textile and garment industries in other Asian countries expand and build up their design and manufacturing capabilities—and these pressures will need to be accommodated. On the other hand, business opportunities are being boosted by the ever closer business and economic links which are being developed between Hong Kong and mainland China.