HONG KONG TEXTILE INDUSTRY

This research paper traces and analyzes the development of the textile industry of Hong Kong and its current and probable future role in the economy of the crown colony and in world export markets. Hong Kong has a thriving textile industry which has two primary components: (1) garment manufacturing on the island and in mainland China; and (2) the provision of central services in connection with the China trade in textiles. The textile industry of Hong Kong is already undergoing and will continue during the coming decade to experience a difficult period of adjustment to changing international political and economic developments which may limit the attractiveness of the industry to private investors from outside mainland China.

Cline (1990) defines the textile industry as one which "encompasses the production of yarns, fabric (primarily for use in apparel), and finished goods such as bedding and carpets as well as industrial materials such as fabric for tires" (p. 26). The textile industry of Hong Kong is almost exclusively involved in the clothing and apparel business and the fibers, natural and synthetic, which are used therein.

Hong Kong is a leading exporter of domestically manufactured yarn and fabrics and finished clothing and apparel. It is also a re-exporter of textiles, primarily those sourced in and/or assembled in the People's Republic of China. Unlike its principal Asian competitors, Hong Kong imports all of the raw materials, equ

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aller, 1994, p. 69). The GATT tariff reductions and quota eliminations represent an enormous potential long term opportunity for East Asian textile exporters. GATT economists predict that the world market for- textiles and apparel, currently approximately $250 billion, will increased by 60 percent in the case of clothing and 34 percent in the case of other textiles by the year 2005. Waller (1994) states that for East Asian textile exporters "as a region of mostly fast-growing, trade-oriented economies . . . gains are likely to be disproportionately high" (p. 64). Hong Kong textile and apparel exporters are likely to suffer intermediate term detriments as well as to reap benefits under the new GATT treaty. As Chau Tak-hand, the Hong Kong Secretary of Trade and Industry has said: "We have been able to maintain a garment industry mainly because of [MFA) quotas." He added: "We should not keep industries artificially alive" (Waller, 1994, p. 69). As quotas expand at accelerating rates, textile makers in lower labor cost countries like India, Pakistan, the Philippines and elsewhere may benefit at the expense of higher labor cost countries like Hong Kong, South Korea and Taiwan. India and Pakistan have already obtained higher text

Category: Foreign - H